Due by 8pm today!
Jeff Rommel’s introduction to Florida could be described as trial by hurricane. Rommel took over Florida operations for Nationwide Insurance in 2004. Over a 2-month period that year Florida experienced its worst hurricane season in historyfour major hurricanes (Charley Frances Ivan and Jeanne) slammed the state causing an estimated $40 billion in damage. In the hurricanes’ wake Nationwide received more than 119000 claims collectively worth $850 million.
Although dealing with those claims was difficult even more difficult was Rommel’s later decision to cancel approximately 40000 homeowners’ policies. Nationwide received a huge amount of media attention as a result almost all negative. In reflecting on the decision Rommel said Pulling out was a sound business decision. Was it good for the individual customer? No I can’t say it was. But the rationale was sound.
Hurricanes aren’t the only weapons in nature’s arsenal and the insurance industry is hardly the only industry affected by nature. Consider the airline industry. American Airlines has 80000 employees 4 of whom make decisions to cancel flights. One of them is Danny Burgin. When a weather system approaches Burgin needs to consider a host of factors in deciding which flights to cancel and how to reroute affected passengers. He argues that of two major weather factors winter snowstorms and summer thunderstorms snowstorms are easier to handle because they are more predictable.
Don’t tell that to JetBlue however. On February 14 2007 JetBlue was unprepared for a snowstorm that hit the East Coast. Due to the lack of planning JetBlue held hundreds of passengers on its planes at JFK in some cases for as long as 10 hours (with bathrooms closed!). To the stranded travelers JetBlue’s tepid offer of a refund was just as outrageous. For a carrier that prided itself on customer service and had regularly been rated the top US airline in customer satisfaction it was a public relations disaster. Linda Hirneise an analyst at J.D. Power said It did not appear JetBlue had a plan. In defending the airline JetBlue’s founder and then-CEO David Neeleman said Is our good will gone? No it isn’t. We fly 30 million people a year. Ten thousand were affected by this. In responding to another interviewer he said You’re overdoing it. Delta screwed people for two days and we did it for three and a half okay? So go ask Delta what they did about it. Why don’t you grill them? Eventually though Neeleman himself was affected by it and he stepped down.
Based on the above reading and learning from your assigned readings respond to the following questions: