Natural Disasters Jeff Rommel

Natural Disasters

Case Chapter 6

Case Background

Jeff Rommel was very unfortunate, because he had to confront one of the worst two months of hurricane season in Florida; it was about 40 billions of dollars in damages. The claims were huge. He had to cancel many policies, and this cause many negative media reaction, that affect them a lot. But insurances were not the only affected with natural disasters, also airlines were very affected with this whole hurricane and weather situation. Jet Blue was one of this affected airline, with long hours trips due to the weather, and closed bathroom, but off course they refund to the passengers their money. Fortunately CEO David Neeleman knew exactly how to handle the situation, and the responses to the media.

1. Insurance companies in the state of Florida earned record profits in 2006, suggesting that Nationwide's decision to cancel policies in light of the calm hurricane seasons (in Florida) in 2005-2007 may have cost the company potential revenue and customer goodwill. Do you think Rommel's quote about making a ''sound business decision'' reveals any perceptual or decision-making biases? Why or why not?

Rommel confronts a very hard situation with the worst hurricane season in Florida, he to the news was not really a positive impact he stated: “"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." Overconfidence bias is identified as ''the tendency to overestimate the probability that one's judgment in arriving at a decision in correct''. Rommel's quote about making a ''sound business decision'' reveals overconfidence decision-making biases.

In the other hand, is ''a tendency to fixate on initial information, and to then fail to adjust adequately for subsequent information''. His decision also disclose an anchoring bias as it is look like that Nationwide did not take into consideration some information that others did.

2. Review...