McKinsey consulted with State Farm on Xactware estimates following Katrina – Schafer v State Farm

If you type “McKinsey” into “Search” at the top of the page, you’ll find a multi-page listing of related SLABBED posts. What you will read, however, is far from a glowing report on a Company that touts, “Our alumni number more than 18,000, and work in virtually every business sector in over 80 countries” on its website.

One of the recurring questions about McKinsey is what role the Company’s consulting played in the way insurers handled policyholders’ claims following Hurricane Katrina. McKinsey was a named defendant in the anti-trust case filed by former Louisiana Attorney General Foti who accused the Company of “advising insurers to ‘stop ‘premium leakage’ by undervaluing claims using the tactics of deny, delay, and defend’ “.

After the case was dismissed, State Farm spokesman Phil Supple commented, “We felt these allegations were completely unfounded from the outset, and we’re pleased the court today agreed with our position”. State Farm continued to maintain that position in Schafer v State Farm, according to the Schafer’s Reply Memorandum in Support of Motion to Compel.

In its Opposition, State Farm stated: “McKinsey has not provided any services or documents to State Farm in connection with the adjustment or handling of Hurricane Katrina property claims, and McKinsey materials accordingly are wholly irrelevant here.” The Gourgues affidavit (attached to State Farm’s Opposition) states, in part: “Since that time [1998], however, McKinsey & Co. has provided no services to State Farm that have impacted the handling of Hurricane Katrina property claims in Louisiana.”

However, the Schafers also say, “This is just not true” and provide supporting documentation for their claim. Continue reading “McKinsey consulted with State Farm on Xactware estimates following Katrina – Schafer v State Farm”