To identify the worst insurance companies for consumers, researchers at the American Association for Justice (AAJ) conducted a comprehensive investigation of thousands of
court documents, SEC and FBI records, state insurance department investigations and complaints, news accounts from across the country, and the testimony and depositions
of former insurance agents and adjusters. The AAJ final list includes companies across a range of different insurance fields, including homeowners and auto insurers, health insurers, life insurers, and disability insurers.
Allstate stood out as the worst insurance company for consumers,. The AAJ reported that Allstate’s concerted efforts to put profits over policyholders has earned its place as the worst insurance company in America. According to CEO Thomas Wilson, Allstate’s mission is
clear: “our obligation is to earn a return for our shareholders.” Unfortunately, that dedication to shareholders has come at the expense of policyholders. The company that publicly touts its “good hands” approach privately instructs agents to employ a “boxing gloves” strategy against its own policyholders. A former Allstate adjuster Jo Ann Katzman, reported that “We were told to lie by
our supervisors—it’s tough to look at people and know you’re lying.”
The insurance industry has so much excess cash it may spark a downturn in the industry. According to analysts at Standards & Poor’s, U.S. insurers are sitting on too much capital, and will likely endure at least three years of negative performance as a result.
According to the report, the ten worst insurance companies are:
1. Allstate
2. Unum
3. AIG
4. State Farm
5. Conseco
6. WellPoint
7. Farmers
8. UnitedHealth
9. Torchmark
10. Liberty Mutual
The report pointed out that the U.S. insurance industry takes in over $1 trillion in
premiums annually. It has $3.8 trillion in assets, more than the GDPs of all but two countries in the world. Over the last 10 years, the property/casualty insurance industry has enjoyed average profits of over $30 billion a year. The life and health side of the insurance industry
has averaged another $30 billion.
The CEOs of the top 10 property/casualty firms earned an average $8.9 million in 2007. The CEOs of the top 10 life and health insurance companies earned even more—an average $9.1 million. And for the entire industry, the median insurance CEO’s cash compensation
still leads all industries at $1.6 million per year.
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