Alligators

Over the weekend, First Draft linked to this story about the business strategy employed by major insurance companies. Anyone even remotely familiar with the "boxing match" (insurers' term not mine) going on in New Orleans over the past two years will recognize this behavior. But who knew they actually planned it this way?

The Alligator

One McKinsey slide displayed at the Kentucky hearing featured an alligator with the caption ``Sit and Wait.'' The slide says Allstate can discourage claimants by delaying settlements and stalling court proceedings.

By postponing payments, insurance companies can hold money longer and make more on their investments -- and often wear down clients to the point of dropping a challenge. ``An alligator sits and waits,'' Golden told the judge, as they looked at the slide describing a reptile.

McKinsey's advice helped spark a turnaround in Allstate's finances. The company's profit rose 140 percent to $4.99 billion in 2006, up from $2.08 billion in 1996. Allstate lifted its income partly by paying less to its policyholders.

Similarly, the city seems to feel as though it has successfully sat and waited out hundreds of property owners in New Orleans as it has begun proceeding with its list of unwanted demolitions. It seems to me that had this process begun a year ago, there would have been a much stronger outcry. Today.. it barely even makes the news.