The Ten Worst Insurance Companies In America

The Ten Worst Insurance
Companies In America

How They Raise Premiums,
Deny Claims, and Refuse Insurance
to Those Who Need It Most

How the study was conducted:

To identify the worst insurance companies for consumers, researchers at the American Association for Justice (AAJ) undertook 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. Our final
list includes companies across a range of different insurance fields, including homeowners and auto insurers, health insurers, life insurers, and disability insurers.

Who Made the List

The Ten Worst
Insurance Companies

1. Allstate
2. Unum
3. AIG
4. State Farm
5. Conseco
6. WellPoint
7. Farmers
8. UnitedHealth
9. Torchmark
10. Liberty Mutual

Allstate—The Worst Insurance Company in America

One company stood out above all others. 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.1 In the words of former Allstate adjuster Jo Ann Katzman, “We were told to lie by our supervisors—it’s tough to look at people and know you’re lying.

CEO: Thomas Wilson
2007 compensation $10.7 million
(predecessor Edward Liddy made $18.8 million in compensation and an additional $25.4 million in retirement benefits)
HQ: Northbrook, IL
Profits: $4.6 billion (2007)
Assets: $156.4 billion8

There is no greater poster child for insurance industry greed than Allstate. 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 a price. According to investigations and documents Allstate was forced to make public, the company systematically placed profits
over its own policyholders. The company that publicly touts its “good hands” approach privately instructs agents to employ a hardball “boxing gloves” strategy
against its own policyholders.”

Conclusion

The insurance industry is in dire need of reform. For too many insurance companies, profits have clearly trumped fair dealing with policyholders. The industry has done all it can to maximize its profits and rid itself of claims.
Allstate CEO Thomas Wilson outlined the strategy when he said the company had “begun to think and act more like a consumer products company.”176 Allstate has enjoyed a return double that of the S&P 500, but its policyholders have suffered cancellations, nonrenewals, and punishing loss-prevention techniques. 177Wilson has been unrepentant: “Our obligation is to earn a return for our shareholders.” 178 Wilson is one of many insurance leaders who have lost
sight of their legal and ethical responsibility to policyholders. Now they answer only to Wall Street. The time is due for insurance reform that will level the playing field for consumers.

Three Pro-Consumer Insurance Reforms

1. Require Insurers to Work in Good Faith with Consumers

Many states have introduced, and some have passed, “Insurer Fair Conduct” bills which establish a private right of action by a first and/or third party against insurers for failure to act in good faith. Insurers must be held to fair conduct standards when evaluating and settling claims.

2. Require Prior Approval of Rate Increases

Require insurers to obtain commissioner’s approval of proposed rate increases of 10 percent or greater, and authorize interested parties to intervene in rate proceedings. In most states, insurers can raise rates without the approval of the Insurance Commissioner. Rates are either automatically approved absent action on the part of the Commissioner, or the Commissioner has no authority to
disapprove increases. The goal is to explicitly authorize— or even require—the Commissioner to hold a hearing prior to approval.

3. Establish an Insurance Consumer Advocate

States should ensure there is a consumer advocate either on the state’s Insurance Commission or within the office of the Insurance Commissioner. Some states have already done so. For example, in 1991, the West Virginia legislature created the Office of Consumer Advocacy, charged with representing consumers’ interests in health care issues. The Consumer Advocate is also authorized to represent the public interest in matters coming before the Insurance Commission.

 

To read more about the Worst Insurance Companies please click here to read the article by AAJ.