Allstate vs the State of Florida

This is a fascinating exchange between Deputy Insurance Commissioner Belinda Miller and Allstate Floridian Vice-President Bonnie Gill. The dialogue is about how ALLstate sets it's rates.

Miller: "You have to insure to two Hurricane Andrews in one year? Why to that level?"

Gill: "We have a very fragile surplus position."

Miller: "Was your decision driven by rating agency A.M. Best?"

Gill: "We are protecting our surplus."

Miller: "Was that decision driven by A.M. Best?"

"Gill: "In part, yes."

Gill can actually say "very fragile surplus" with a straight face. Well done!

A.M. Best rates Allstate's financial books for stockholders. Allstate used a A.M. Best's hurricane catastrophe model without the state of Florida's approval.

This is getting interesting. I hope Charlie Crist keeps digging into the working of the insurance agency.