Agent Informer
News stories of interest to Allstate Agency Owners published by the National Association of
Professional Allstate Agents, Inc. This complimentary issue of Agent Informer is meant to acquaint you with our
email publications. NAPAA membership includes weekly newsletters as well as other membership benefits.
July 29, 2008
National Association of Professional Allstate Agents, Inc.
To: Allstate Agency Owners
From: The National Association of Professional Allstate Agents, Inc.
Subject: Windows Mobile for NRG
After reviewing the latest offering from Sprint/Microsoft, NAPAA is impressed with its features, accessories
and overall value. This special offer is outlined below. We believe it is a good deal for Allstate agents and think
you’ll agree.
Allstate, in preparation for the roll out and implementation of its NRG initiative, has been working with various
vendors to bring agencies new technologies to make it easier for them to do business. The Sprint/Microsoft
deal, recently announced by Allstate, lets agents access company email on mobile devices, allowing them to
send and retrieve emails from allstate.com from nearly any location. So, even when you’re away from the
office, you can create and send new messages or respond to emails in real time. We believe this technology will
be a huge benefit for busy agency owners. With this tool, agency owners could almost manage their agencies
from home!
In addition to special pricing, Allstate agents will also receive the following as part of the package:
- Free Mobile Phones from Sprint (Brand New Windows Mobile 6 devices - see below)
- Free Training from Microsoft
- Free Bluetooth Accessory Pack (Retail Value $109.99)
- Custom ordering and Support (AllstateAgent.CallSprint.com)
There are two ways to order your Free Phone:
*To order online click here www.AllstateAgent.CallSprint.com
*To order by phone call (888) 804-8591
Both the Website and the toll free number are specific to this offer. You can also ask questions and choose the
right device and plan for your business.
Once you receive your free phone, it will be necessary to set up your email account with Allstate. To set up
your account, please visit the Agency Gateway and search for “PDA.”
This is a revolutionary change in the way agents can conduct business at Allstate. NAPAA felt it was important
to bring this message to you. You should also know that NAPAA is not being compensated for sending this
email to you. I hope you found this information useful.
Best regards,
Jim Fish
Jim Fish
Executive Director
National Association of Professional Allstate Agents, Inc.
NAPAA President conducts Agent Communication Meetings
July 28, 2008, NAPAA Headquarters
NAPAA will be hosting a series of Agent Communication Meetings across the country in the upcoming months.
We begin this road show in Florida, where a series of meetings will be held this week to answer questions and
concerns facing Florida Agents.
NAPAA President, Bob Isacsen, NAPAA Attorney Dirk Beamer, and NAPAA Lobbyist Keri Rayborn will
conduct the FL meetings which are open to all Allstate agents and staff.
Wed - July 30
1:30pm – Hilton Miami Airport – 5101 Blue Lagoon Drive, Miami 305-262-1000
6:00pm – Marriot Coral Springs – 11775 Heron Bay Blvd, Coral Springs, 954-753-5598
Thurs - July 31
9:30am – Embassy Suites Palm Beach Gardens, 4350 PGA Blvd. (at I95) 561-622-1000
6:00pm – Hilton Garden Inn Ft Myers, 12600 University Dr, 239-790-3500
Friday - August 1
10:00am – Hampton Inn Sarasota I-75 Bee Ridge, 5995 Cattleridge Rd. 941-371-1900
3:30pm – Embassy Suites Tampa Airport/Westshore, 555 North Westshore Blvd. 813-875-1555
Admission is free; for more information, please call : 877.627.2248
The National Association of Professional Allstate Agents, Inc. is a nonprofit professional trade
association for Allstate agents. NAPAA provides its members with reliable communications on issues
that affect agency owners and their customers every week. NAPAA further serves its members by
acting on their behalf and speaking with a distinct and unfettered voice on a wide range of
issues. Our operations, including our publications, Website and office expenses are funded by
member agents who pay membership dues.
NAPAA is dedicated to advancing the interests of Allstate agency owners and their customers by
promoting professionalism and ethical practices. By becoming a member of NAPAA, you are joining a
special group of Allstate agents.
As a rule, NAPAA members are the first to find out about breaking news about the company and the
industry. As an example, NAPAA broke the news about what happened to agents in Canada last year
– no one else was covering the story. We continue to follow this story and our members hear the
latest updates first. The Canadian Experiment story is just one of several that the company would
prefer you didn’t know about.
Staying informed so that you are better able to make educated decisions about your business and
your career is just one of the many benefits of NAPAA. Unity and strength are essential for a strong
agent association. By joining NAPAA today you can help us grow even stronger. Please support
NAPAA with your membership today.
Click here to join online: Join NAPAA or Make a 2 minute call now – 877-627-2248 – We’ll complete your
membership application for you!
NAPAA is a professional trade association, membership dues are $350 per year, or $29 per month by EFT,
and are tax deductible as an ordinary business expense.
Analysts lower full-year estimates on Allstate
Analysts lower Allstate estimates, concerned by life insurance segment, investment portfolio
July 24, 2008, Associated Press
NEW YORK (Associated Press) - Following a 98 percent drop in Allstate Corp.'s second-quarter profit, analysts
expressed concern over the future of the insurer's life insurance segment and the inherent risk in its investment
portfolio.
Late Tuesday, the Northbrook, Ill.-based company reported net income below Wall Street's estimates, due to a
record level of second-quarter catastrophe losses. The company also said its net investment income declined 14
percent, due to exposure to certain real estate and financial services-related assets, while operating income from its
life insurance segment, Allstate Financial, also declined.
Lehman Brothers analyst Jay Gelb subsequently lowered his full-year profit estimate to $5.40 per share from $5.45
per share. Analysts polled by Thomson Financial, on average, forecast earnings of $5.50 per share for the year.
Gelb cut his estimate due to management's outlook for Allstate Financial. The company expects this business to
generate quarterly operating income in the range of 65 percent to 75 percent of recent periods, which Gelb
estimates as being in the $100 million range going forward. Management could seek strategic alternatives for this
segment, said Gelb, who has an "Equal Weight" rating and a $49 target price on the stock.
On the other hand, Wachovia Securities analyst Susan Spivak Bernstein, is concerned by the company's investment
portfolio.
"While Allstate is proactively seeking to mitigate its investment risk, we can't foresee a situation where there will not
be additional writedowns," she wrote in a note to clients.
Bernstein's "Market Perform" rating on the stock reflects uncertainty surrounding the investment portfolio, as well as
the company's high catastrophe exposure.
Lower forecasted investment yields also led Friedman, Billings, Ramsey & Co. analyst Bijan Moazami to lower 2008
estimates on the company, to $5.55 per share from $5.70 per share.
Shares dipped 83 cents, or 1.8 percent, to $45.34 Thursday. Shares have traded between $42.51 and $59.23 in the
past 12 months.
Employer Has Burden Of Proof In Age Cases, Says High Court
June 19, 2008, By Arthur D. Postal, NU Online News Service [Excerpt]
The Supreme Court ruled today that it is an employer’s responsibility to prove that an employee was laid off for
reasons other than age.
Interpreting the Age Discrimination in Employment Act of 1967, the court held that an employer bears “both the
burden of production and the burden of persuasion” for the “reasonable factors other than age.” The decision
was handed down in Meacham vs. Knolls Atomic Power Laboratory, 06-1505.
The case dealt with whether the burden of proof will rest with employees who file suit claiming age bias, or with
the employer letting them go.
Paul Mickey, a partner and employment practices specialist at Steptoe & Johnson here in Washington, said he
is advising that, as a result of this decision, “it is vital for an employer taking steps that may disproportionately
affect older workers--such as implementing a reduction-in-force--to be prepared to support its actions with solid
analysis and documentation, so as to meet its burden of persuading the judge or jury that it was motivated by
good business justifications and not by age bias."
The case that was decided involved Knolls Atomic Power Laboratory, a government-owned naval research
facility. The justices, by 7-1, said employers defending themselves in certain age discrimination cases must
provide convincing evidence that factors other than age were the basis for their decisions involving a worker.
At the Knolls research facility there were involuntary layoffs in 1996 that were based on number of years on the
job, performance and skills.
Justice David H. Souter said the “text and structure of the reasonable factors other than age” affirmative
defense under the ADEA showed that Congress meant to create an “affirmative defense for which the burden
of persuasion falls on the employer.” He said earlier court precedents made clear that a disparate-impact claim
under the ADEA must isolate and identify “the specific employment practices that are allegedly responsible for
any observed statistical disparities.”
Justice Souter said, “This is not a trivial burden, and it ought to allay some of the concern that recognizing an
employer’s burden of persuasion on an RFOA [reasonable factor other than age] defense will encourage strike
suits or nudge plaintiffs with marginal cases into court; but in the end, such concerns have to be directed at
Congress, which set the balance by both creating the RFOA exemption and writing it in the orthodox format of
an affirmative defense.”
Customer moving out of state?
Do your customer a favor. Call 877-627-2248 or go to www.napaausa.org and click on Agent to Agent
Referral. We'll give you the name of a NAPAA member who can help your client in their new area.
Join NAPAA now to get your name on the referral map.
Allstate Settles Bad-faith Lawsuit
July 10, 2008, By Dan Margolies, The Kansas City Star
A bad-faith case against Allstate Insurance that drew national attention and prompted the judge to levy fines
against the insurer topping $7 million has been settled on undisclosed terms.
A court hearing on whether to approve the settlement has been scheduled for July 21, the day the case was
scheduled to go to trial before Jackson County Circuit Judge Michael Manners.
Attorneys for both sides declined to disclose the terms of the settlement. Mike Siemienas, a spokesman for
Allstate, the nation’s second-biggest home and auto insurer, said the company was pleased the case had been
resolved but declined to elaborate.
The case stemmed from a collision on Interstate 70 near the U.S. 65 exit. On Sept. 15, 2000, Warrensburg
resident Dale Deer stopped in a construction zone. Some time later, a car driven by Paul Aldridge of Hawaii
and traveling an estimated 70 miles an hour slammed into the rear of Deer’s pickup truck.
Deer staggered out of the truck. He was taken to a hospital and released later that day. In 2003, he was
diagnosed with severe damage to his back and neck, which doctors attributed to the accident.
Deer sued Allstate and Aldridge for his medical expenses, which ran into the hundreds of thousands of dollars.
Allstate eventually agreed to pay him $750,000 plus interest. That would have ended the matter, but Allstate
did not pay him. Deer sued the insurer again. This time Allstate settled for about $1.2 million.
In the meantime, Aldridge also sued Allstate, claiming that it had mishandled his case and acted in bad faith.
Attorneys for both Aldridge and Deer sought Allstate documents to show how the company set up a claims
payment system in the 1990s that low-balled clients and allowed the company to reap huge profits.
Allstate refused to produce the documents, which it said contained trade secrets used to create policies and
claims procedures. Releasing them, it said, would give the plaintiffs’ lawyers information on trial strategy.
The documents included slides prepared in the early 1990s by McKinsey & Co., a consulting firm that allegedly
advised Allstate to settle claims quickly for pennies on the dollar and fight claimants who resisted — for years,
if necessary. One slide was titled “Good Hands or Boxing Gloves,” an allusion to the insurer’s “You’re in good
hands with Allstate” slogan.
After Allstate refused to turn over the documents, Manners last September held the insurer in contempt and
fined it $25,000 per day. The fine eventually grew to more than $7 million.
In November, the Missouri Supreme Court ordered Allstate to disclose the documents. Allstate turned over
more than 120,000 pages.
The documents have figured prominently in other litigation and regulatory proceedings. In January, Florida’s
insurance commissioner, Kevin McCarty, suspended Allstate’s authority to sell insurance in that state after it
resisted subpoenas to produce the documents. A Florida appeals court later upheld McCarty’s ruling.
The suspension was lifted after Allstate furnished a sworn affidavit stating that it had turned over the
documents and would comply with additional document requests.
In April, Allstate posted on the Internet 150,000 pages of documents related to its claims-handling practices. In
an accompanying statement, Allstate said, “Public criticisms by people with a vested interest in creating an
inaccurate picture of the company’s claim practices have been based unfairly on only snippets from the
documents taken out of context. Because of the need to address misunderstandings resulting from the growing
misplaced focus by our critics on very small pieces of the whole, we have decided to make the documents
public.”
Study Reveals Worst Insurers
July 9, 2008, By Anita Lee, the Sun Herald
Allstate is the nation's worst insurance company for consumers, an association of lawyers who sue big
business concludes in a report released Wednesday. "The rankings show a distinct pattern of insurance
industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against
policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive
profits," the American Association for Justice concludes.
Researchers spent six months compiling information from court documents, SEC and FBI records, state
insurance department investigations and complaints, nationwide news accounts, and testimony of former
insurance agents and adjusters.
"We're not surprised we're being targeted by the trial and personal injury lawyers because Allstate has been at
the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by
lawyers," Allstate spokesman Michael Siemienas said Wednesday.
"If trial lawyers and personal injury lawyers don't like Allstate, the facts show that consumers do." The AAJ
says the U.S. insurance industry collects more than $1 trillion in premiums annually, and has $3.8 trillion in
assets, surpassing the Gross Domestic Products of all countries but the United States and Japan.
Robert Hartwig of the industry-sponsored Insurance Information Institute said consumers should consider the
source: litigious attorneys who help drive up insurance costs. He also said the industry has paid out nearly
$300 billion to tens of millions of policyholders across the country over the past 20 years.
The top 5 offenders on the list:
1. ALLSTATE - CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets:
$156.4 billion. "According to investigations and documents Allstate was forced to make public, the company
systematically placed profits over its own policyholders... The amount Allstate paid in claims dropped from 79
percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from
63 percent to just 47 percent.
2. UNUM - CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4
billion. "Unum, one of the nation's leading disability insurers, has long had a reputation for unfairly denying and
delaying claims.."
3. AIG - CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion;
assets, $1.06 trillion; "AIG executives have also come under fire for opportunistically seeking price increases
during catastrophes. Now the company has been labeled 'the new Enron' because of charges of multibilliondollar corporate fraud."
4. STATE FARM - CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion;
assets, $181.4 billion. "In many cases, the company has gone to extreme lengths to avoid paying claims,
including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering
engineering reports regarding damage after Hurricane Katrina."
5. CONSECO - CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets:
$33.5 billion. "Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the
deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to
pay out claims, its customers will die."
Email letter to Allstate President Tom Wilson
July 10, 2008
Hi Tom,
I’m sure you’ve seen the news article [above]. This is the kind of press that makes it difficult for agents to sell
the Allstate brand to new clients. This story, along with others from Florida, Missouri and Canada, only serve to
tarnish the Allstate brand.
NAPAA believes it is paramount for the success of the company and its agents to preserve the dignity and
integrity of the Allstate brand. We could be invaluable in helping the company better understand what is
happening at the field level.
NAPAA representatives stand ready to meet personally with you in order to help resolve this and other critical
issues. To arrange a mutually convenient meeting, please contact me at your convenience.
Respectfully,
Jim Fish
Jim Fish
Executive Director
National Association of Professional Allstate Agents, Inc.
877-269-3474
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Romero vs Allstate Update
July 28, 2008, NAPAA Headquarters
The Romero plaintiffs and EEOC each filed briefs on June 2, 2008 in connection with the appeals taken from
Judge Fullam's decision of June 20, 2007, which granted summary judgment in favor of Allstate. Allstate was
to have filed its opposition within 30 days. NAPAA has learned that Allstate has requested and been granted
additional time to respond. We will continue to monitor the case, and update agents as we learn more. See
details and history at the Allstate Agents Litigation Website.
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What’s Next in Florida?
July 23, 2008, NAPAA Headquarters, Gulfport, MS
Many Florida Allstate agents believe that the events regarding the suspension of Allstate’s Certificates of
Authority in Florida are over. Not true.
If you recall, on May 14th the First District Court of Appeal's Final Opinion denied Allstate’s motions for
rehearing, lifting the stay on the suspension. The suspension lasted only two days before the Florida Office of
Insurance Regulation stayed the suspension following receipt of an affidavit from Allstate certifying that it had
complied with Florida law by freely providing all documents requested by the Office of Insurance Regulation.
Allstate continued its appeal to the Supreme Court of Florida, where on June 18th, The Court denied Allstate's
petition for review, declining to accept jurisdiction. Case 08-782 Documents
In the interim, the Florida Division of Administrative Hearings was drawn into the fray. Initially, the hearing had
been set for June 16th. On May 20th, Allstate and the OIR filed a joint Motion for Continuance with the DOA,
requesting the June 16th hearing be rescheduled to a later date. On May 29th, The State of FL Division of
Administrative Hearings granted the Motion for Continuance and moved the June 16th hearing to September
15th. DOA Order. This proceeding involves three allegations:
1. Allstate’s alleged failure to comply with the document request
2. Falsely asserting trade secrets and
3. False certification of its September rate filing.
So, Allstate still has to clear at least one more hurdle before this matter can be put to rest. The company could
be in for an uphill battle, however. The mood of the regulators and the insuring public are not industry friendly
at the moment.
Agents in Florida will now watch closely as the OIR begins the process of reviewing the State Farm request for
47.1% rate increase filed this week. The State Farm request will be the subject of a hearing scheduled for
August 12th, in Tallahassee. This also figures to be a contentious hearing.
NAPAA continues to closely monitor the events in Florida. NAPAA President Bob Isacsen, attorney Dirk
Beamer, and lobbyist Keri Rayborn will be conducting agent communication meetings in several Florida cities
from July 30th through August 1st.
UPS Versus FedEx in Ohio Tax Showdown
June 24, 2008, By John Hughes, Bloomberg [Excerpt]
A secret report from a lobbyist who represents United Parcel Service Inc. prompted an Ohio state investigation
into employment practices of FedEx Corp., leading to a finding that FedEx owed back taxes and interest.
Kenneth Kies, a Washington tax lawyer and lobbyist whose firm has been paid US$540,000 by UPS since
2002, sent Ohio officials a 562-page report in December 2006 alleging that FedEx misclassified truck drivers
as contractors. A copy of the report, including a cover letter in which Mr. Kies asked for confidentiality, was
released to Bloomberg News by Ohio officials.
"We took it and opened our own investigation," said Judi Cicatiello, Ohio's unemployment compensation
deputy director. She said it was "very" unusual to get such detailed allegations. Her agency determined in May
2007 that the drivers were employees and FedEx owed US$654,000 in taxes and interest. The company is
appealing.
The report is the first disclosure indicating that UPS may have played a role in prompting an investigation of
FedEx's employment of 15,000 drivers as independent contractors. The strategy gives FedEx a cost
advantage over UPS, whose 91,800 drivers are covered by a contract with the Teamsters Union.
The benefit for companies such as Memphis, Tennessee-based FedEx may be as much as 30% compared
with treating the workers as employees and providing retirement and health benefits, said Marick Masters, a
professor at the University of Pittsburgh's Katz School of Business who studies labor issues.
Since 2002, FedEx has gained 9 percentage points in market share on Atlanta-based UPS. Neither company
discloses wage and benefit expenses by employee type.
The dispute may affect other industries. Companies that use some of the 10.3 million people working as
independent contractors in the U.S. include Home Depot Inc., Allstate Corp. and Avon Products Inc., FedEx
Chief Executive Officer Fred Smith said Jan. 10 on a call with analysts. Newspaper publishing companies also
have faced scrutiny over whether their carriers are employees or independent contractors.
FedEx's labor practices have been under investigation in 25 states and prompted a lawsuit as a class action
covering drivers in 20 states. FedEx said in December that it may have to pay US$319-million in back taxes
and penalties to the Internal Revenue Service for worker misclassification in 2002.
California Orders Allstate to Cut Home Insurance Rates 28.5%
July 10, 2008, By Lilla Zuill, Reuters
Allstate Corp. will have to lower its rates on California homeowner policies by 28.5 percent making an
estimated $255 million in annual savings for consumers, the state's Insurance Commissioner Steve Poizner
said.
Allstate spokesman Peter DeMarco, in a statement, said the company was "disappointed" in the order but
planned to comply.
Northbrook, Illinois-based Allstate had initially filed for a 9.3 percent increase in homeowners insurance rates,
according to Poizner's statement.
He ordered the rate reduction after an administrative law judge recommended the cut. Consumers will save an
average of $242 per policy on an annual basis, according to the statement.
The rate order follows one earlier this year, forcing Allstate to cut its auto policy rates in California by 15.9
percent
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Allstate Insurance Faces $60 Million Lawsuit after Restructuring
June 25, 2008, Canadian Employment Law Today
Allstate Canada’s attempts to cut costs by consolidating offices has left it facing a $60 million class-action
lawsuit from some of its former agents.
On July 24, 2007, the insurance company announced it would be moving its 450 agents from 256
neighbourhood offices across Canada into 100 larger offices, beginning in May 2008. Most agents weren’t
pleased, particularly senior agents, some of whom ran the neighbourhood offices as their own businesses,
handling the hiring of staff and management of finances. However, under the consolidation, the 100 new
offices will be owned and run by Allstate.
The consolidation also outlined significant changes to the contract terms of the agents, including taking away
sales commissions on policy renewals. Allstate said it would guarantee agents’ level of pay for two years, but
most didn’t bite as the changes would result in overall pay cuts for many, some by as much as 50 per cent.
Agents tried to discuss the situation with the company but it wouldn’t budge from its position. More than 70
agents have since quit, though Allstate told the Toronto Star it had hired sufficient replacements. When some
tried to continue working with clients as independent brokers, Allstate sued them for breaching non-compete
agreements they had signed.
However, in March, the Ontario Superior Court of Justice found the agreements weren’t valid, considering the
way Allstate and changed their contract terms and ruled the company couldn’t enforce them. On May 20, three
agents, Mark Cassels of Hamilton, along with Esther Kafka and Ken Patel of Windsor, launched a class action
lawsuit on behalf of all the agents for making “substantive material changes to the employment contract terms
with all of its sales agents,” which was a breach of contract and the Employment Standards Act. They also
claimed Allstate’s guarantee of their level of income for two years was unlikely to be borne out.
The case hasn’t been heard yet, but in the March decision that struck down the non-compete agreements, the
court said there was a good chance Allstate will be found to have repudiated its employment contracts with the
changes.
Allstate Comments on California Homeowners Rate Ruling
July 10, 2008, Company Press Release [Excerpt]
Allstate Senior Corporate Relations Manager Peter DeMarco today issued the following statement regarding
the California Department of Insurance's order to lower Allstate's homeowners rates in California by 28.5%:
"While we are disappointed in this order, we respect the authority of the Department and will comply. We are
reviewing the order in detail and communicating with the Department about the process for adjusting the rates
of our 850,000 homeowners policyholders in the state. Californians can continue to rely on more than 1,300
Allstate agents to help them with insurance and retirement needs."
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Florida Supreme Court Declines Jurisdiction in Allstate Matter
June 20, 2008, By Brent Kallestad, Associated Press [Excerpt]
The Florida Supreme Court declined Wednesday to grant Allstate Corp. an injunction to force Florida insurance
regulators to let the company write new car insurance and other policies in the state.
The company sought the action after the Office of Insurance Regulation ordered it to stop writing the policies
for failing to comply with requests for documents on its business practices. However, Allstate since turned over
most of the documents and was allowed to resume its entire line of business in Florida.
The company had turned to the Supreme Court after the 1st District Court of Appeal rejected its effort for an
injunction last month.
"The Supreme Court's decision reassures Floridians that the office has full access to insurers' books and
records and upholds the office's actions in its efforts to protect consumers,'' state Insurance Commissioner
Kevin McCarty said June 18.
Allstate officials did not immediately return phone messages for comment on the court's decision.
If the high court accepted the case it could have effected Allstate's scheduled September hearing before the
Department of Administrative Hearings, said Ed Domansky, spokesman for the Office of Insurance Regulation.
The scheduled weeklong hearing involves the alleged failure of Allstate's 10 Florida companies to comply with
the document request, falsely asserting trade secrets and the false certification of its September 2007 rate
filing.
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Report: Data Breaches Up 69 Percent
July 11, 2008, NU Online News Service
A study by a nonprofit group that works to prevent fraud takes note of a news report that insurers and other
businesses, governments and universities disclosed a 69 percent increase in data breaches in the first half of
2008 compared with a similar period in 2007.
The Identity Theft Resource Center in San Diego tracked 342 data-breach reports from Jan. 1 to June 27, said
a Washington Post story. More than one-third of the reports came from businesses, a 27 percent increase over
total breaches in 2007. The center found that data breaches among health care providers and banks also
increased. They now account for 15 percent and 10 percent of the breaches, respectively.
Hacking was the least-cited cause of data breaches in the first six months of this year. Instead, lost or stolen
laptops and other digital storage media remain the most frequently cited cause of data breaches, accounting
for more than 20 percent of all reported cases, the article noted.
Within the insurance industry, Willis Group Holdings brokerage said recently that the company along with
police was investigating the loss of an unspecified amount of computer data affecting a number of clients and
employees.
In a statement that was limited in detail Willis said it was looking into the loss of data on backup tapes. The
loss occurred recently while in transit to a storage facility. Willis said the tapes “were inadvertently misplaced.”
The brokerage is working with law enforcement to recover the tapes and an investigation is continuing. Citing
the involvement of law enforcement, a spokesman for the firm said he could not say where the tapes were lost
or how many individuals could be affected. He did say the loss was not global and it affected a small portion of
clients and Willis associates.
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Note on letters: The opinions expressed in letters are not necessarily those of NAPAA. Letters should be brief and are subject
to editing. We will publish letters anonymously; however, we will not accept letters sent anonymously.
The views expressed by NAPAA, or any of its positions relative to its activities and those of its members' actions on behalf
of this organization, are expressly those of NAPAA, and do not reflect the views or opinions of Allstate Insurance
Company, or any of its affiliates.
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permission from NAPAA.
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E-mail: ExecutiveDirector@napaausa.org
Fax: 866/627-2232
National Association of Professional Allstate Agents, Inc. (NAPAA)
P.O. Box 7666, Gulfport, MS 39506-7666
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877/627-2248
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866/627-2232
E-mail:
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