Saturday, January 26, 2013

Is Fidelity National Title Employees Motivated to Not Pay Claims

"The quality of Fidelity's customer service and the level of employee loyalty and commitment are enhanced by our employee stock ownership. Stock ownership serves as a motivational force for Fidelity employees who recognize the Company's success is dependent upon their efforts and contributions." 

I guess that the discussion here is relevance.  I believe that it is relevant but this is, of course, my opinion.

It seems to me that this comes down to the bottom line of profit of the company.  If the employees have stock ownership and the higher the value of the stock the wealthier the are.  And the way to increase the value of the stock is to increase the bottom line which means to increase the profitability of the company.  And a good way to increase the profitability is to collect insurance premiums and not pay claims.

At least that is the way I do the math.  Now I could be wrong and I would certainly welcome an explanation that corrects this - not just an opinion but an actual explanation.

And to me this seems to create a conflict of interest with the employees as the fewer claims they pay the higher the value of the stock.