An executive for insurance giant State Farm was fired this week after he was recorded on an undercover video making comments about the insurer’s premium increases in response to Southern California wildfires.
Haden Kirkpatrick, who worked as State Farm’s vice president for innovation and venture capital, was surreptitiously recorded on a video published by O’Keefe Media Group. The Los Angeles Times reported that he claims he was fired over the recording.
“Our people look at this and say, ‘S—, we’ve got like maybe $5 billion that we’re short if something happens.’ We’ll go to the Department of Insurance and say, ‘We’re overexposed here, you have to let us catch up our [rates].’… He’ll say ‘Nah.’ And we’ll say, ‘OK, then we are going to cancel these policies,'” Kirkpatrick said.
He also said “there never should be houses built in the first place” in areas like the Pacific Palisades because of the fire risk, saying that residents want “natural areas around them for the ego” but that the area is a “f—ing desert, and so it dries out and it’s a tinderbox.”
STATE FARM ASKS CALIFORNIA TO APPROVE RATE HIKES AFTER WILDFIRE
Kirkpatrick told the Times that he was fired by the company for the remarks that he explained were recorded during a Tinder date in January that he believes was a setup, but otherwise declined to comment to the outlet.
State Farm told FOX Business, “Any characterization of State Farm General’s communications in connection with our rate request as ‘manipulation’ of the rate process or of the public is false. This person was never involved in or had any responsibility for business decisions related to State Farm General or its California operations, including anything to do with our pending rate applications or the emergency interim rate request.”
“As we have shared publicly regarding his comments: ‘These assertions are inaccurate and in no way represent the views of State Farm. They do not reflect our position regarding the victims of this tragedy, the commitment we have demonstrated to the people of California, or our hiring practices across the Company,’” the statement continued.
AMERICANS’ INSURANCE RATES ARE SOARING AND LAWSUITS PLAY A SIGNIFICANT ROLE
In early February, State Farm requested an emergency rate increase that would average 22% for California homeowners insurance policies because of the wildfires, saying it had paid out over $1 billion to customers and will “ultimately pay out significantly more, as collectively these fires will be the costliest disasters in the history of State Farm General.”
The insurance company noted that over the past nine years, State Farm General has paid out $1.26 for every $1 in premium it has collected — resulting in more than $5 billion in cumulative underwriting losses. It estimated that its direct losses from the Los Angeles area wildfires are about $7.6 billion, including reported and non-reported claims, and has paid out $1.75 billion for 9,500 claims as of Feb. 25.
California Insurance Commissioner Ricardo Lara met with State Farm on Feb. 26 after initially denying the rate hike request to allow the insurer to explain what actions it has taken to improve its financial condition.
State Farm said after the meeting it “took the opportunity to reiterate with Commissioner Lara the urgency needed to approve State Farm General’s interim rate request so that State Farm General can continue helping California customers.”
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