But where I saw strength, critics saw weakness. They believed the story lacked balance and unfairly used anecdotes, even if true, to tar an entire industry.
Sam Friedman, a Deadline Club member and editor-in-chief of National Underwriter, a trade publication, in an online column called the series a “hatchet job” and asked readers to write to the Deadline Club to deny Bloomberg a prize.
In one of his posts, Friedman said he anticipated being dismissed as an “industry shill” but that he found the piece so one-sided and misleading that even its nomination was a travesty.
In an email to me, Friedman says that if he influenced the club, “so be it.”
This particular article, “The Insurance Hoax,” was a hatchet job, plain and simple. Not only did it have numerous factual errors, but the publication did not grant industry representatives a fair opportunity to refute the central assertions in the article, nor did they publish any corrections or even a letter offering the other side, to my knowledge.
In addition, the article painted the entire industry with a single brush, which I feel is unfair, considering that the overwhelming majority of Katrina claims were, in fact, paid, and that the industry laid out tens of billions to rebuild these flood-prone areas—often when the cause, wind or flood, was not clear.
He also takes issue with my findings that Bloomberg did not make factual errors:
Wow, so as long as something is “factual,” it is “accurate” in your view, even if taken totally out of context? Two plus two does equal four, but if there are six elements, and one arbitrarily decides to ignore the other two, the story is fine??? Very odd logic, sir.
The fight shifted venues earlier this year when the Deadline Club named “Hoax” as a finalist in four categories, sparking objections from Friedman, Hartwig, and others who pointed to what they saw as the series’s flaws and called on the club to reconsider. The club then wrote Bloomberg.
According to Winkler’s letter, Paradis on May 5 emailed a four-page memo to Bloomberg with nine “allegations of inaccuracy” and said the club’s research “highlighted parts of the article with incorrect, inexplicable or questionable material.” The issue at this point was whether the stories should be disqualified from the contest altogether.
On May 9, Paradis and other club officials reviewed the stories in a conference call with Bloomberg editors.
In the end, the club took a middle path: it denied the series an award but left it as a finalist. Paradis declined to discussion how the club made its awards judgments but emphasized that the series was not removed as a finalist.
Still, someone has to settle this “error” question. So, ladies and gentlemen, if I could ask you to kindly step behind CJR’s specially reinforced, lead-lined blast barrier: The Audit is going in.
In his August 2007 letter to Bloomberg Markets’ Henkoff, Hartwig lays out several alleged errors, including one that is indeed a flat mistake: Bloomberg said the storm killed “more than 16,000” people when the figure was closer to 1,600.
Bloomberg agreed and corrected it in the text (though it doesn’t note the correction online).
The rest are actually disagreements, and I’ll handle the closest calls:
Alleged error: Bloomberg said insurers paid out only 55 percent of premiums to policyholders in 2006; Hartwig says the correct number is 65 percent.
The Audit explains: Bloomberg is relying on a figure known as the “loss ratio,” which is the amount actually paid to policyholders excluding various expenses directly associated with the claim, including legal fees, the cost of adjusting and investigating the claim, etc.
Hartwig says it is irresponsible and misleading to exclude these expenses, which also benefit policyholders. I say that Bloomberg language was precise: it was characterizing the amount paid to policyholders. It has a more than reasonable basis for its position (and is not alone in making it), and did not make an error.
Alleged error: Bloomberg said insurer profits since 1994 increased by “an annual average of 46 percent.” Hartwig says the correct figure is 15.9 percent.