How to Ruin an Insurance Company

So I get this invitation to speak to a ballroomful of insurance executives (which I have to do on my own nickel, lest the trial lawyers who oppose my auto-insurance-reform efforts claim that I work for the insurers) and it seems they have assigned me a topic.

In my own mind, my topic is surely going to be, “How to Fix the Damn Auto Insurance Mess, and Why You Guys Owe it to Your Customers (and Your Shareholders, in the Case of a Mutual Company) to Help.” But that’s not what I see on the fax.

The fax is a little blurry, but as I first run my eye across it, it appears I am to address the question:

“How I Would Ruin an Insurance Company.”

Well, that’s easy!

First, I told them, I would fire the underwriting department. Taking a leaf from AT&T, I’d just have one simple flat rate for all. AT&T offers 15 cents a minute, and they have those funny commercials where the guy just can’t believe how simple it is. I’d do the same thing: young, old, good driver, bad driver — everybody pays the same.

Second (although, in truth, first would be more than enough), I would shift all the company’s reserves from bonds to a couple of high-tech stocks.

Third, I read them a clip from Chuck Shepherd’s News of the Weird column: “In July, according to a fire department official in Pullman, Washington, the cause of a fire in a parked truck was the magnification of the sun through a plastic prism hanging from the truck’s ceiling, onto a stack of papers. The truck’s owner said the prism was a gift from his insurance company.”

So for the holidays, I told them, I would send everyone prisms.

The fax, as it turned out, was assigning me the topic, “How I’d Run an Insurance Company,” which I was much less well qualified to address. But that didn’t matter, because after the part about the prisms I simply segued into “How to Fix the Damn Auto Insurance Mess, and Why You Guys Owe it to Your Customers (and Your Shareholders, in the Case of a Mutual Company) to Help.”

My speech, I will throw modesty to the wind and say, was worth every penny they paid for it.

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