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The surge in Allstate’s share price was accompanied by a dramatic fall in the “pure loss ratio,” the measure of claims payouts divided by premium income, before factoring in operating costs. In 1987, Allstate paid out 70.9 cents in claims for every dollar it took in. By 1997, two full years into the McKinsey makeover, the ratio had fallen to 58.2. By 2006, after spiking a year earlier amid huge claims resulting from Hurricane Katrina, it was 47.6.
i am going to become the joker
The insurance adjuster’s role had been greatly diminished. During her father’s time, setting a value for a claim had been a skill. Under Allstate’s new system, the computer would spit out an estimate. This was Colossus, a program that analyzed hundreds of different injuries entered by adjusters like her. As Brady soon learned, Colossus had been tweaked to lowball claims amounts. It was then her job to persuade the policyholder to accept a claim even lower than the one disgorged by Colossus.
Mark Romano, one of the people responsible for tweaking Colossus so that it favored the insurer, worked out of Allstate’s headquarters in Northbrook, Illinois. “I could turn the knob, so to speak, and increase the values of cases, or I could turn the knob down and decrease the value,” he said.
When payout data indicated something was amiss, Romano took to the road to find out what was going on. He and his colleagues discovered that adjusters were entering an unusual amount of herniated disk injuries into Colossus, a far more valuable claim than a “soft tissue” claim like whiplash. Romano was told to “calibrate” the claims teams across the country, telling them to reduce the number of herniated disk claims “regardless if a neurologist or an orthopedic surgeon or a radiologist or whomever said it was a herniated disk.”
Skilling infused Enron with ideas he had learned at McKinsey, including the importance of periodically culling the herd. Either advance in the firm or leave. McKinsey called it “up or out.” At Enron it was “rank and yank.” McKinsey validated Enron’s strategy, including risk taking, securitizing loans to gas purchasers, and its “asset light” approach. As the McKinsey Quarterly explained, Enron became a world leader in private power generation “because it saw that profit did not depend on construction and operation skills, but on deal structuring and risk allocation.”
According to QuantumBlack’s home page, it helped a soccer team assess the “health of its players and identify the physical metrics that might signal impending injuries.” QuantumBlack’s evaluations were so detailed they included taking saliva samples. “Using objective medical markers and information from prior injuries, we identified the features that correlate to injury onset in the hamstring, upper leg, and lower leg,” the company said. As if to differentiate its work from the speculative chatter of sports radio and TV analysts, the company reported that its blind historical testing “correctly forecast 170 out of 184 non-impact muscle injuries.”
so bleak
Some McKinsey consultants, especially younger ones, were bothered that the firm would so willingly help the House of Saud, a family from Riyadh whose patriarch conquered much of the Arabian Peninsula in the 1920s and whose sons have overseen a ruthless theocratic autocracy ever since. They argued that the firm should reduce, or possibly even end, its work there. Said one, “Saudi Arabia is a country that shouldn’t exist.”
not wrong lol
The people who remained would have to work harder. McKinsey calculated that 1.7 percent of a doctor’s time was lost to tea breaks and said £400 million in savings could be realized if weak medical providers “achieve standard performance.”
But slashing jobs wasn’t enough. McKinsey also called for the end of “low value added healthcare interventions.” Translation: cutting back on what McKinsey deemed unnecessary medical procedures. For example, reducing certain hysterectomies by 70 percent could yield £80.6 million in savings; another £118 million could be saved by cutting knee joint surgeries by 30 percent.
"Honey, you can't do anything," she said. "The time for doing anything has come and gone. It's too late to do anything. I wanted to like it here. I thought we'd go on picnics and take drives together. But none of that happened. You're always busy. You're off working, you and Jill. You're never at home. Or else if you are at home you have the phone off the hook all day. Anyway, I never see you," she said.
this feeling of relying on another person who can disappoint you: something neil got a glimpse of and turned his back on early on
[...] She puts an arm around my neck, draws me to her, and then begins to cry. But she stops almost at once and steps back, pushing the heel of her hand against her eyes. "I said I wouldn't do that, and I won't. But let me get a last look at you anyway. I'll miss you, honey," she says. "I'm just going to have to live through this. I've already lived through things I didn't think were possible. But I'll live through this, too, I guess." [...]
She says, I loved you so much once. I loved you to the point of distraction. I did. More than anything in the whole wide world. Imagine that. What a laugh that is now. Can you imagine it? We were so intimate once upon a time I can't believe it now. I think that's the strangest thing of all now. The memory of being that intimate with somebody. We were so intimate I could puke. I can't imagine ever being that intimate with somebody else. I haven't been.
She says, After that time, when you went away, nothing much mattered after that. Not the kids, not God, not anything. It was like I didn't know what hit me. It was like I had stopped living. My life had been going along, going along, and then it just stopped. It didn't just come to a stop, it screeched to a stop. I thought, If I'm not worth anything to him, well, I'm not worth anything to myself or anybody else either. That was the worst thing I felt. I thought my heart would break. What am I saying? It did break. Of course it broke. It broke, just like that. It's still broke, if you want to know. And so there you have it in a nutshell. [...]