Law Professor Jay M. Feinman has written a book on this system, his website DELAYDENYDEFEND.com opens as below:-
His EXCERPT gives a detailed account of the system and how insurance companies such as the Insurance Australia Group, IAG, use it to increase their profits by illegally cheating their policyholders.
All the insurance companies operated by IAG operate the DELAY, DENY, DEFEND system.
IAG employed the consulting firm McKinsey & Company who first suggested this system.
McKinsey & Company was hired to help the company raise their bottom line.
Once employed, McKinsey helped each company establish a ‘three D approach’ for handling customers:
Delay, Deny and Defend.
IAG’s insurance companies were taught to deny the claim, delay the payment and DO ANYTHING to defend against the lawsuit.
This approach taught IAG’s insurance companies the value of using their litigation team to defend against lawsuits brought upon because of not paying claims.
“Profits over policyholders” is a slogan used by these insurance companies as an approach in handling their business.
Basically, IAG’s insurance companies do anything possible to gain profits, even at the expense of their policyholders.
These IAG companies identify their company goal as earning the maximum amount of return for their shareholders as possible
In New Zealand, where the Courts only rarely award PUNITIVE DAMAGES and then the sum awarded is very small, $85,000 is the largest to date, IAG can operate the system with minimal risk.
In the United States, the DELAY DENY, DEFEND system has virtually been wiped out, $28 billion in damages was the largest ever punitive damages award to an individual plaintiff (in 2000, $145 billion in punitive damages was awarded by a Florida jury, but the case was a class-action with over 500,000 plaintiffs).
As you can see reading the details on this website, IAG have saved paying out on our initial claims of $2.5M for the house, $100,000 for the Contents, $43,000 for the cars and $21,000 in extra costs awarded under the policy. With damages and interest this would now be over $6,000,000. If they ever get punished the punitive damages will hardly affect them when they are compared to the saving that not paying out has allowed them to make.
When you read the Case Study you will see how IAG made an lowball offer on the day after the fire, delayed the investigation endlessly, deny the claim was valid without any actual evidence and then defended against the lawsuits that followed with courts full of fancy suited lawyers. A textbook application of the DELAY, DENY, DEFEND system.