A Letter to My Mutual Insurance Company

State Farm Customer Service
One State Farm Plaza
Bloomington, Illinois 61710

January 11, 2018

To Whom It May Concern,

As a policyholder of State Farm Mutual I am writing to request proxy form for the upcoming annual meeting. Please send one for me at the address below at your earliest convenience.

I would also like to register a complaint. As a mutual insurance company owned by its policyholders, State Farm should more actively encourage policyholders to participate in governance. In an age when online portals and email are the norm, requiring a mailed letter to request a ballot constitutes an outright hindrance to such participation. It would seem appropriate to me for policyholders to be able to vote through the statefarm.com online portal, and to receive an email reminder for when they might do so. Through the portal, they might also learn about the issues facing the company and the board tramadol candidates. Anything less strikes me as an act of purposeful disenfranchisement.

Far from being something to hide from, policyholder ownership should be part of what makes State Farm strong. It places the company in a long tradition of people-powered business that depends more on cooperation than greed and competition. It insulates the company from the profit-seeking short-termism that burdens investor-owned firms. And at a time when many people, especially young people, harbor deep skepticism about corporate power, policyholder ownership is a way of setting State Farm apart and winning over a new generation of customers. Encouraging participation in governance would help the company more fully benefit from this model, and it would signal to policyholders that the company takes their ownership seriously.

Thank you for considering my concerns and for sending my proxy form.

Best wishes,
Nathan Schneider

5 thoughts on “A Letter to My Mutual Insurance Company”

  • Nathan, I think I’ve relayed at least generally my concerns with ill informed or fitted democratic management of business operations let alone complex ones. We want our values expressed in these entities we own. But few of us have expertise to make any kind of sophisticated business decisions or the wisdom to determine when practicality trumps an ideological value. But, again, we want to be engaged not only to keep our decision makers keenly attuned to agreed values, and to keep them personally honest, but also for the sake of the vibrancy of the organization.

    For most of us State Farm does a good job (probably better than most insurance companies) and that’s sufficient. So, we can give attention to matters that we are competent to attend to.

    But, by all means, push them (us) into the 21st Century. If failure to provide electronic participation is informed by personal desire to hoard power by all means, put a stop to that. If it’s informed by an institutional wisdom, best to get informed by that along the way as you press for electronic participation.

    Quite likely, there is concern that political passions of one stripe or another, uninformed by technical business expertise, are a danger to successful running of the enterprise. But, I could be wrong.

  • Thanks Nathan. I have been active in the Australian cooperative and mutual scene for 30 years, and tried (unsuccessfully) to get our established credit union, mutual and cooperative societies to take seriously their mutual structures and develop a culture of participative governance that might distinguish them from corporate and public sector organizations. I have written many letters like your Letter to My Mutual Insurance Company, all to no avail. I thought initially that these societies would respond positively to young idealistic people like myself wanting to help them recover their heritage. I later concluded that these societies have been captured by their managements, who practice ‘purposeful disenfranchisement’ as a management strategy.

    In 2012 I established a co-operative reform group to try and bring people together, globally, to address this problem of how to mutualise our mutual societies. http://www.civilsociety.org.au/cooperativereform.htm

    After some initial enthusiasm, we ran into a strategic brick wall. How to enrol hundreds and thousands of members of societies to democratize their organizations? The constant refrain we encountered was ‘Why not put this same energy into forming new societies?’ This had a strong logic to it, but it too has its many strategic obstacles. We couldn’t find a way to take it forward, though the need for it remains very strong.

    In part because of this experience in the mutual sector, and in part because the same problem of managerial capture pervades our political and social institutions, I have in more recent years moved towards a conviction that we need ‘opt-in’ movements to renew mutualism (reform of existing bodies does not seem to work). In Australia we formed The Mutual Society in 2017. http://www.mutualsociety.wordpress.com

    The Mutual Society is both a combination of 19th century mutuality and 21st century tech, with a recovery of locality and small group methodologies to strengthen the relational fabric (small group life is perhaps the location for the revival of participative governance). Our thinking is that an opt-in Society with 10% market share (10% of society as members with our own businesses and institutions) would, in practice, shape the economic and social dynamics of the whole society, and force existing mutuals and other kinds of organisation (through competitive pressure if not through persuasion) to do things differently.

  • State Farm is in need of an intervention by it’s owners. It’s well insulated Board of crony rubber stamp holders has allowed the company to become an a purveyor of broken promises and bad faith serviced by employees who have no accountability within a “team” concept. An avalanche of proxies is exactly what is needed to wrestle this once fine company back from the echo-chamber torpidity that results in $7,000,000,000.00 underwriting losses. It is basic common sense that a professional claims staff provides service while managing costs. Instead State Farm continues to cut professional employees, outsourcing adjustment services to providers who, off course, reward themselves under direct repair programs. I mean, if you could write your own checks, wouldn’t you make them big? State Farm has always been obsessed with cost cutting. Unfortunately the nimrods cut the “cost” that manages claims expense and the much larger claims expense exploded. Proxy fight, proxy fight, proxy fight (unless they simply put themselves out of business first).

  • I have an 87 year old mother-in-law that I have to cut the grass for. I was cutting the grass and a rock was thrown into a car side window. The cost was $116,00 and the claim was denied. My mother-in-law has had insurance with State Farm beginning in 1951 and only two claims. State Farm is losing the people that made them great. We have changed to Farm Bureau, all eight polices.

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