Playing games with disaster
When Manchester United backtracked on sponsorship talks with an offshore gambling company and plumped for the American insurance giant AIG instead, United’s Chief Executive was quick to heap on the platitudes. “I think AIG is the right company for Manchester United,” said David Gill. “[We assessed AIG’s] size and structure, the culture and ethos. We believe we have found a good bedfellow.”
Try talking to New Orleanians about AIG’s ethos and you’re likely to get a pretty violent response. The firm were the underwriters for the Louisiana Citizens Fair Plan (known as FAIR), an insurance deal for the poorest residents who couldn’t afford their own private policies. Already trapped in an income bracket that made them the most vulnerable to natural and economic disasters, these were the citizens who needed financial assistance most when Katrina took aim and destroyed their homes, livelihoods and, in many cases, their families.
And what was the response of AIG (the world’s fourth largest company, net profits annually exceeding $9 billion)? There wasn’t one. Emails, calls and letters from desperate policyholders went ignored and unanswered, even as floodwaters slowly rotted the city. “This is the worst case that we have seen of a complete failure of an insurance company to respond to the immediate and dire situation of Katrina policyholders,” said Joanne Doroshow, co-founder of an insurance reform group, at the time. “Many FAIR policyholders were struggling economically before the storm hit, and some are now reaching the point of severe impoverishment due to AIG's failure to help them.”
AIG wasn’t the only culprit; other big companies played a role in what amounted to a morally despicable (and potentially criminal) neglect of duty to their customers. “Many policyholders who were exhausted, traumatized, and without food, water or a roof over their heads, looked to their insurance carriers to come to their aid as they struggled to survive – but what many found was not help at all, but rather resistance by insurance companies to pay them anything, leaving victims frustrated and angry, not to mention destitute,” explains Doroshow. But with their name plastered over every United shirt, and flashing up in the extensive media coverage of the Premiership, AIG have become a particularly recognisable brand in Britain, where few people are aware of their transatlantic behaviour.
What’s even more galling is that many people are still being cold-shouldered a year later, including some who remain unable to get through to AIG to ask about their claim, and others who have been informed that the insurer will simply not pay out. A class action against the firm has been filed on behalf of the 400,000 FAIR policyholders, and others are pursuing private cases. One New Orleans resident who has joined legal action against AIG (but who does not wish to be identified while the case is still pending) is planning to construct a giant banner on his roof denouncing the company – a statement that will be visible to every single visitor arriving by plane to the city’s airport.
Whether Manchester United’s sponsors will take any notice is another matter – they are no stranger to corporate scandal and negative publicity. They claim to have made a huge loss from Katrina (though the impact on them and other insurance companies has been overstated), yet the real losers are those trying to rebuild in New Orleans today. Insurance premiums have soared and in some cases an upscale but unremarkable house can now cost over $17,000 to insure annually, depressing the property market and making it harder for scattered New Orleanians to return.
All of which would make David Gill’s comments (made seven months after the hurricane) amusingly silly, if they weren’t so tragically wrong.