Advising Capitol Hill on insurance

While other companies have been asking lawmakers for aid and support during the coronavirus pandemic, insurance company Allstate has spent its time lobbying against government intervention in their work.

The head of Allstate’s D.C. office, Saat Alety, successfully lobbied Congress against retroactively rewriting business interruption insurance contracts to cover lost income due to COVID-19 closures, an idea Democrats were pushing.

“The COVID-19 story that we have to tell in the insurance industry and for Allstate is a fascinating one. I would categorize this concept of government retroactively rewriting insurance policies as one of the worst ideas that emerged as a solution to the pandemic,” Alety told The Hill in a recent interview.

“Obviously the small-business community is in pain in this country, and Congress has tried to give them some relief and probably needs to do more, but having government rewrite our policies is to the extreme detriment of our policy holders, meaning that the premiums that we collect for these policies and for this business interruption coverage is meant for instances where there’s physical damage to the buildings or to the businesses,” he said.

Alety led efforts on information sharing and communicating with members of Congress on the issue and argued that when not disease but natural disasters such as hurricanes and wildfires do damage to businesses, that is when these policies kick in.

“Lo and behold, after all of that, we have now had a summer of record-level natural disasters, record level of damage from civil disorder … and that is what the insurance industry is there for, for its customers,” he said.

President Trump weighed in on the issue during a press conference in April, noting that when he was in the private sector, he had business interruption insurance for when a business was interrupted by a hurricane “or whatever it may be.”

“You have people — I speak mostly to the restaurateurs, where they have a restaurant, they’ve been paying for 25, 30, 35 years — business interruption. They’ve never needed it. All of a sudden, they need it. And I’m very good at reading language. I did very well in these subjects. OK? And I don’t see the word ‘pandemic’ mentioned,” said the president, who also received letters from GOP members on the issue.

Alety, who is approaching his second anniversary with Allstate, learned valuable lessons in lobbying for the push-back effort, one being that facts and figures matter.

“Once we were able to show policymakers: These are the reserves we hold, they were collected to cover certain risks and those risks include the natural disasters that could very well be hitting this country soon … that resonated. It resonated with people who were able to see the statistics and fact-based arguments that we were making,” he said.

Another lesson was in the value of a wide range of relationships at the Capitol, especially those made prior to the coronavirus pandemic that he could lean on when everything turned virtual.

“The notion that we’re an industry that is concerned about X, Y and Z committees was just totally thrown out the window when you realize that the House Small Business Committee was becoming a powerhouse in Congress, authoring hundreds of millions of dollars in spending,” he said. “It’s important to have relationships that cross into different committees and different areas of jurisdiction.”

Prior to Allstate, Alety worked on the Hill for former Reps. Judy Biggert (R-Ill.) and Ed Royce (R-Calif.) and most recently was banking aide to Sen. Tim Scott (R-S.C.), who was an Allstate agency owner before he ran for office.

“There’s no doubt that my time with Allstate as a franchise owner, so to speak, allowed me to see my entrepreneurial skills and abilities flourish and then sharpen,” Scott told The Hill. “It’s really exciting and ironic that Saat, with his great marketing skills and abilities, is now taking on the world and will one day be the CEO of Allstate.”

Alety, 31, is the youngest person to lead a Fortune 100 D.C. office, having assumed his current role at Allstate at 29. An Indian American, he immigrated with his family from the United Kingdom in 1998.

“I’m often the only person who looks like me in the room, in the government affairs profession. I think things are getting better. It’s a pipeline issue. If the faces of the folks who work in government change, then I think that will lead to the faces of the folks in government affairs changing,” he said. “The folks who advocate on behalf of corporate America should look like their work forces that they represent and the customer bases that their companies serve.”

Looking forward, Alety said that the national conversation on race and equity is very important for Allstate, both internally and externally as the company works to answer tough questions about racial inequalities and customer relationships.

“The scrutiny from regulators and legislatures on underwriting factors used by insurers and whether the use of credit scoring is something that is creating racial inequities on how our products are priced, that will be a big issue for the industry moving forward, and Allstate will be interactive and constructive in its response to that,” he said.