Posted on March 30, 2021

Insurance Companies, Reaping Benefits from Protests, Get in Line with Black Lives Matter

Aaron Sibarium, Washington Free Beacon, March 23, 2021

Following the death of George Floyd, the world’s largest insurance companies spoke up in favor of Black Lives Matter. Even as they were paying out unprecedented claims due to the destruction caused by Black Lives Matter protesters and those seizing their mantle, the companies issued statements and coughed up donations to support the movement.

This summer’s unrest cost the industry more than a billion dollars in riot damage, the largest such loss in U.S. history. Those losses are now in danger of affecting employees’ pay, industry insiders said, but not their employers’ stance: As of February 18, Chubb was planning a panel with Black Lives Matter whose promotional materials included a pro-Black Panther documentary and an enjoinder to “stay woke,” according to emails reviewed by the Washington Free Beacon.

For insiders who have seen up close the costs of the riots, the move is unsettling. “It’s just one of many examples of corporate virtue-signaling,” one Chubb employee told the Free Beacon. “It certainly doesn’t represent the opinions and values of most people who work in the company. We’re not Google or Facebook.”


At first glance, the stance adopted by insurance giants might seem like a case of ideology trumping interests. {snip}

But something funny happened: Shareholders didn’t lose money from the unrest. Instead, insurance stocks rose in the face of riot-related payouts. Chubb and AIG finished 2020 in about the same financial condition they entered it, overcoming a COVID-induced shock that temporarily wiped out their gains from the previous year.

That may be because the insurance industry stands to lose little from the destruction in the long run, one economist suggested—especially as many of the destroyed businesses were underinsured.”

In Minneapolis, for example, insurance covered only half the city’s losses, which were concentrated among immigrant- and minority-owned stores. That will increase demand for property insurance and drive up rates, according to R.J. Lehmann, a senior fellow of insurance policy at the International Center for Law and Economics.

It’s never good for insurers to have to pay out claims, Lehmann told the Free Beacon, but it is good for them if businesses are worried about civil unrest. “Higher uncertainty makes more people want to buy coverage,” he said, “and makes them willing to pay more for coverage.”