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insurance companies
Insurance Companies Are Not Good Neighbors to Have in a Climate Crisis
Major insurers are denying legitimate claims following extreme weather events while underwriting fossil fuels and lining their CEOs’ pocketbooks.
Oct 16, 2024
Do you know that you’re in good hands with Allstate? Or how about State Farm? Do you know that, like a good neighbor, State Farm is there? Of course you do. Insurance companies have been blasting slogans like these at us for years now. In 2022 alone, Allstate spent $617 million on advertising. State Farm spent an even more whopping $1.05 billion.
But if insurance giants like State Farm truly rated as our “good neighbors,” they’d be behaving—in real life—quite a bit differently than their award-winning advertising suggests.
In hurricane-plagued Florida, for instance, State Farm last year denied 46.4% of homeowner claims, refusals that directly impacted over 76,000 households.
Another reform approach might more quickly catch the attention of top insurance industry boards of directors: tying an insurance company’s tax rate to the ratio between that company’s CEO pay and the paychecks of the firm’s workers.
“Property insurers who deny legitimate claims,” notes Martin Weiss, the founder of the nation’s only independent insurer rating agency, “are sending the implicit message, ‘If you don’t like it, sue us.’”
To add injury to that insult, Weiss adds, Florida Gov. Ron DeSantis had just before last year signed into law new legislation that makes policyholder lawsuits against insurers “far more difficult.”
For recently retired State Farm CEO Michael Tipsord, insurance industry lobbying victories along that Florida line have helped him pocket some stunning personal rewards. Tipsord pulled down $24.4 million in compensation two years ago, almost $4 million more than his industry’s second-highest 2022 CEO pay total. Tipsord had pocketed even more, $24.5 million, in 2021.
“CEOs are living high on the hog while increasing insurance premiums for people living paycheck to paycheck,” the Consumer Federation of America’s Michael DeLong charged last October. “Insurers are telling regulators that ordinary consumers have to pay much more for auto and home insurance because the companies are struggling with inflation and climate change, but they are quietly handing CEOs gigantic bonuses.”
Overall, DeLong’s Consumer Federation reports, the chief execs at America’s ten largest personal insurance lines collected over a quarter-billion dollars in CEO compensation for their services in 2021 and 2022.
If we really had a “good neighbor” at State Farm—or any other insurance giant—those companies wouldn’t have been spending recent years denying relief to the victims of climate change. They would have been insisting instead that lawmakers crack down on the fossil-fuel corporate giants doing so much to foul our planet.
Top insurers did make an early feint in that direction over a half-century ago. Way back in 1973, notes Peter Bosshard, the global coordinator of the U.S.-based Insure Our Future campaign, “the insurance industry first warned about climate risks.” But that warning, in the years to come, wouldn’t stop insurers from “underwriting and investing in the expansion of fossil fuels.”
Giant insurance companies that actually took climate science seriously, Bosshard observes, would have been “suing fossil fuel companies, to make polluters pay for the growing costs of climate disasters and keep insurance affordable for climate-affected communities.”
Insurers haven’t been doing any of that.
”Insurers talk a lot about their climate commitments and supporting their clients through the energy transition, but this is plain greenwashing,” charges Ariel Le Bourdonnec, a Reclaim Finance insurance activist. “They are still profiting from providing cover that allows companies to develop new fossil fuel projects. Insurers could be a force for change, but instead they are undermining climate action.”
Other critics are emphasizing that insurance industry execs have gone beyond “greenwashing” to “bluelining,” as Lilith Fellowes-Granda, a Center for American Progress associate director, points out. These execs are increasing prices and withdrawing services “from regions they perceive to be at high environmental risk.” These moves typically hit hardest on the “communities most vulnerable to the effects of climate change.”
Climate activists are advocating for a variety of policy changes to reverse these dynamics, everything from making sure property insurers must share the risks they cover to ensuring underserved communities access to affordable insurance.
Another reform approach might more quickly catch the attention of top insurance industry boards of directors: tying an insurance company’s tax rate to the ratio between that company’s CEO pay and the paychecks of the firm’s workers.
Inside the insurance industry, as in every other major U.S. economic sector, that ratio between CEO and worker has soared over recent decades.
In 2023, the chief executive at Chubb Ltd., Evan Greenberg, took home $27.7 million, enough to make him that year’s top-paid American property and casualty insurer. Those millions added up to 452 times more than the annual pay of the typical Chubb employee. In 2022, Greenberg pocketed a mere 346 times his company’s typical employee pay.
Back in 1965, the Economic Policy Institute noted last month in its latest annual CEO pay report, the top execs at major U.S. corporations only averaged 21 times what typical American workers earned. Nearly a quarter-century later, in 1989, CEOs were still only averaging 61 times worker pay.
How could we restore greater equity to corporate compensation and, at the same time, give top corporate executives an incentive to care about more than simply maximizing their own personal compensation? Lawmakers at the state and federal levels have over recent years advanced dozens of proposals that tie corporate tax rates to the size of the gap between top executive and worker pay.
In all these proposals, the higher a corporation’s CEO-worker pay ratio, the higher that corporation’s tax rate.
The Institute for Policy Studies has compiled an exhaustive guide to these CEO-worker pay gap proposals. Maybe the winds of Hurricane Milton will help give these moves the momentum they need to turn into law—and give top execs a reason to care about something more than the size of their own personal pay.
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Climate Coalition Targets Big Banks and Insurance Giants With New Shareholder Campaign
"The planet is running out of time and the banks are running out of excuses," said climate leader Bill McKibben.
Mar 01, 2023
A coalition of more than 240 advocacy groups on Wednesday launched a "Shareholder Showdown" campaign in support of shareholder resolutions urging climate action and respect for Indigenous rights at major U.S. and Canadian banks and insurance companies.
According to campaign coordinator Stop the Money Pipeline, the resolutions—which were filed by investors including the New York City and state pension funds, Sierra Club Foundation, and others—would require banks and insurance companies to "phase out their financing of companies engaged in fossil fuel expansion, report on projects that could violate Indigenous rights, use absolute emissions rather than emissions intensity targets, disclose 2030 transition plans, and hold directors accountable at banks that are not aligned with 1.5°C pathways."
The resolutions were timed to precede the companies' annual general meetings.
"This campaign is called Shareholder Showdown because we're in for a real fight—we're up against some globally powerful institutions," Arielle Swernoff, Stop the Money Pipeline's U.S. banks campaign manager, explained in an opinion piece published Wednesday by Common Dreams. "But organized people can achieve anything, and together we will stop the flow of money to fossil fuels and climate destruction."
\u201cToday we\u2019re launching our new campaign: #ShareholderShowdown! \n\nThis spring: banks + insurers will have their annual shareholder meetings, where they'll vote on resolutions needed to keep global warming below 1.5\u00b0C\u2026or decide to keep business as usual. \ud83d\udcb0\ud83d\udd25\n#StoptheMoneyPipeline\u201d— Stop the Money Pipeline (@Stop the Money Pipeline) 1677684715
Bill McKibben, co-founder of the climate group 350.org, said in a statement that "the planet is running out of time and the banks are running out of excuses—everyone from the pope to the secretary-general of the [United Nations] have called on them finally to act with clarity and conviction to help with the planet's greatest crisis, and shareholders should demand no less."
Among the resolutions filed are:
- An Indigenous rights reporting requirement filed by Sisters of St. Joseph for Peace at Citigroup;
- An absolute emissions target disclosure mandate filed by New York City Comptroller Brad Lander and three city pension systems at Bank of America, Goldman Sachs, JPMorgan Chase, and Royal Bank of Canada; and
- Measures filed by As You Sow requiring JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley to publicly disclose their 2030 plans for transitioning lending and investment portfolios away from fossil fuels.
"Climate change is an existential crisis that can overwhelm a person in scale and size, impossible to address," said Tara Houska of the Giniw Collective, an Indigenous women and two-spirit-led frontline resistance group fighting fossil fuel projects like Line 3 in Minnesota.
"Big bank shareholders possess an enormous amount of influence on the world's emissions," Houska added. "A roomful of people can impact the disastrous course we are currently on. No more lip service or empty greenwashing—we need action, now."
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Clinton Camp says She's Been Forced to the Left Enough Already
Clinton ally tells The Hill, "I don't know what's left to extract."
Apr 29, 2016
Fresh after Bernie Sanders' call for "a fifty-state strategy... to plant the flag of progressive politics" nationwide, new reporting on Friday suggests that Hillary Clinton's campaign won't budge further to the left.
After Clinton claimed more victories in Connecticut, Delaware, Maryland, and Pennsylvania this week, Sanders said, "We are in this race until the last vote is cast," adding that his campaign would head "to the Democratic National Convention in Philadelphia with as many delegates as possible to fight for a progressive party platform."
Observers say that steps forward on issues that would constitute such a platform can already be seen in the race. As Max Ehrenfreund writes at Washington Post's Wonkblog Friday,
In the course of fending off Sanders's challenge, Clinton appears to have conceded to him on a couple of major economic policy issues. The former U.S. senator and secretary of state has abandoned the centrist positions she previously held on trade and Social Security and taken stances closer to Sanders's views.
Ehrenfreund writes that that's not all that surprising, given the factors that are different from Sanders. He points to data from the Pew Research Center showing Americans' attitudes on various issues, including race, poverty, regulation, and foreign policy, are becoming more progressive. He notes the influence of politicians like Sen. Elizabeth Warren (D-Mass.) in areas like Social Security.
However, Amie Parnes writes at The Hill, "Clinton supporters argue the former Secretary of State has already been forced to the left by Sanders, and can't risk moving further ahead of a general election."
While political talk show host Bill Press told The Hill that Clinton should not "move back to the center," Rep. Emanuel Cleaver (D-Mo.) told the political website that her campaign couldn't make any more leftward concessions, saying, "I don't know what's left to extract."
Cleaver added that "[Sanders has] already impacted this election probably more than anyone else, including Donald Trump," and then suggested it was time for Sanders to help gather support for his rival.
Parnes also cites an anonymous Clinton ally who said, "We can't do it," regarding meeting some of Sanders' policy demands.
As Sanders sees it, the Democratic Party as a whole is in crisis, saying Thursday that it "has not been clear about which side they are on on the major issues facing this country."
Speaking to thousands at a rally in Eugene, Ore., Sanders said, "The Democratic Party has to reach a fundamental conclusion: Are we on the side of working people or big money interests? Do we stand with the elderly, the children, and the sick and the poor, or do we stand with Wall Street speculators and the drug companies and the insurance companies?"
Sanders added, "Now our job is not just to revitalize the Democratic Party—not only to open the doors to young people and working people—our job is to revitalize American democracy."
Ehrenfreund concludes in his piece that despite securing the Democratic presidential nomination, Sanders' successful pushes on key issues mean "he might be on the winning side in the contest over the party's future."
Bloomberg's delegate tracker shows Clinton leading Sanders with 1,645 pledged delegates compared to his 1,318.
The next Democratic primary is in Indiana, with 92 delegates, on May 3.
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