Former State Farm Vice President Haden Kirkpatrick was fired by the insurance giant this week after he was recorded during a Tinder date in January speaking about the company's premium hikes in response to the California wildfires.
He was recorded undercover saying that the California subsidiary's request for a premium rate hike was 'kind of' orchestrated 'but not in the way you would think.'
"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 had said.
He added that 'there never should be houses built in the first place' in areas like the Pacific Palisades, given the fire risk, saying that residents want 'natural areas around them for the ego' but the area is a 'f---ing desert, and so it dries out, and it's a tinderbox.'
State Farm Asked For A 22% Homeowner Insurance Premium Hike
State Farm General, the subsidiary and California's top home insurer, had filed for an emergency 22% rate hike for its homeowner policies, citing the wildfires and a £3.86 billion ($5 billion) drop in its surplus account in the past decade. It claims to have paid £0.97 ($1.26) for every £0.77 ($1) in premium collected and explained that it has over just £773.26 million ($1 billion) in surplus to handle another catastrophe.
A company executive told Insurance Commissioner Ricardo Lara that if the rate hikes weren't approved, the company 'may have to take actions that we otherwise don't want to take'.
State Farm estimated that the 7th January fires in California would cost around £5.87 billion ($7.6 billion), and its net losses could be near £463.95 million ($600 million) despite reinsurance. As of 25th February, State Farm had disbursed £1.35 billion ($1.75 billion) for 9,500 claims.
Kirkpatrick Claims The Date Was A Setup
The LA Times reported that Kirkpatrick, who worked for the insurer's innovation and venture capital segment, claims he was fired due to the recording, which was published by O'Keefe Media Group.
The former vice president detailed that his remarks were recorded during a Tinder date in January. He believes it was a setup.
State Farm released a statement in response to the video release, stating that 'the individual in the video is no longer associated with State Farm' and his 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 insurer told FOX Business that '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.'
Meanwhile, LA-based advocacy group Consumer Watchdog sent a letter to Lara, urging the commissioner to investigate Kirkpatrick's remarks, which it said 'suggest that State Farm is not simply reacting to financial risk but is deliberately using cancellations and the threat of future cancellations to pressure the Department of Insurance for rate increases.'
