by Kim Pederson…….
I received my auto insurance policy billing schedule the other day and was surprised to see my premium going from $86 per month to $120. The policy premium climbed from $1150 for the year to $1446, which is about a 26% boost. When I expressed my surprise via email at the price change for the same insurance coverage next year as this year and asked why I hadn’t been notified about the hike and the reason for it, I received these responses:
“There are many factors which contribute to the rating of your automobile insurance policy. In order for us to provide you with a full explanation…please contact one of our insurance representatives.”
“In addition, you have indicated that you did not receive and [sic] notice of the change in premium. An email with a link to your renewal policy was sent on November 1, 2016. The renewal policy is the notification of what the renewal premium will be.”
Did the renewal policy notification mention a price increase? No. Did I go read the new policy as I was advised to do? No. My bad.
Anyway, now I am wondering where my 26% in additional dollars will be going. We did change cars in July of this year, buying a new VW instead of leasing new as we had before. That likely had something to do with it. But what else? After a little snooping (very little), I discovered that the insurance company’s CEO received a 58% pay raise in 2013 from the year before (a trend that probably has continued), going from $11.2 million to $17.7 million. The company’s stock price, hence its valuation, rose 61% in 2013 over the previous year. So it appears the shareholders got a hefty raise, too. Part of what earned the CEO his generous new salary was the fact that he had sold assets and reduced the company’s workforce by 3,700 people, which cuts costs. Thus he delivered results that “exceeded financial plan and were significant improvements over the prior year.” No word in the article on whether the 3,700 jettisoned employees still have jobs with their new owner, whoever that is.
I’m not saying my insurance company is a bad insurance company. Indeed, it has won many awards for being an excellent place to work, environmentally responsible, a reliable insurance provider, and so on. Still at the top of its “Financial performance, customer value, and character” web page is the line “Total Shareholder Value: We are focused on maintaining the best Total Shareholder Return (TSR) in the industry.” There’s the proverbial rub.
For some reason, all this made me think about Scrooge McDuck, the Disney character with the Scottish accent and assets of “one multiplujillion, nine obsquatamatillion, six hundred and twenty-three dollars and sixty-two cents.” Scrooge, Donald Duck’s rich uncle, started out his career as a mean and miserly old man (see the panel above and think Mr. Burns on The Simpsons). He later became more of a role model, in fact a “charitable and thrifty hero, adventurer, explorer, and philanthropist.”
Scrooge’s creator, Carl Barks, sums up his view of capitalism this way:
They say that wealthy people like the Vanderbilts and Rockefellers are sinful because they accumulated fortunes by exploiting the poor. I feel that everybody should be able to rise as high as they can or want to, provided they don’t kill anybody or actually oppress other people on the way up. A little exploitation is something you come by in nature. We see it in the pecking order of animals—everybody has to be exploited or to exploit someone else to a certain extent. I don’t resent those things.
At this point, I’m not sure how to feel about having to pay 26% more for my car insurance. Nothing is getting cheaper these days, certainly, including the costs that businesses incur. So the increase might be justified. On the other hand, if the CEO of my company has gotten similar raises since 2013, he would now be making somewhere in the neighborhood of $35 million per year while the hourly customer service representatives, such as the one I would call if I chose to query my higher rate, probably still make around $15 per hour. I doubt that much of the CEO’s riches will trickle down to those individuals, much less to me, my wife, and my cats unless we all buy stock in the company.
There’s been a great debate for some time over whether corporations are “people” as they are now defined by law. If they are people, maybe they should ignore Bark’s idea (and some probably do) that everyone has to exploit or be exploited. Maybe they should take a lesson from Scrooge himself. When someone wanted his Number One Dime (i.e., the first dime he earned and the one that has brought him luck and fortune ever since) in exchange for his kidnapped nephews Huey, Dewey, and Louie, McDuck exclaims, “That dime’s not worth ten cents next to the safety of my boys!” Hear, hear.
* One of Scrooge’s first panels in Christmas on Bear Mountain. Apparent scan made by the original uploader User:Wikipedical. Interior artwork from Four Color Comics #178 “Christmas on Bear Mountain,” (December 1947). Art by Carl Barks. Fair use.
Visit Kim Pederson’s blog RatBlurt: Mostly Random Short-Attention-Span Musings.