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Allstate Insurance Co.’s phenomenal growth in profits is directly tied to its drastic reduction in claims payments: The insurer offers paltry sums for legitimate claims, counting on its customers’ unwillingness to slog through drawn-out litigation. That’s no dark secret or allegation. It’s a company policy called “Claims Core Process Redesign,” devised by powerhouse corporate consultants McKinsey & Co. Its bland-sounding name hides a relentless drive to maximize shareholder profits at the expense of Allstate’s customers.

Insurance companies regularly plead poverty, blaming trial lawyers, natural disasters, and even their own policyholders for their allegedly falling fortunes. But a look at their ledgers shows they are misleading the public. The industry’s profits are skyrocketing, its executives are getting huge bonuses, and earnings have hit record heights–all while these companies deny coverage to their own customers for everything from Katrina damage to car crashes.

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