Allstate heads list of "worst insurers"
The Mississippi Sun Herald published a consumer report prepared by the American Association of Justice, confirming trial lawyers' belief that Allstate is far and away the "nation's worst insurance company for consumers". We would agree.
In earlier blog entries, particularly "good hands or boxing gloves", you can read details of why both attorneys who handle disputes involving insurers, and regulators, consider Allstate to be dishonest and unreasonable. One simple example: after a change in policy to maximize profits, Allstate managed to reduce payouts on claims from 79 percent of premiums in 1996 to less than 58 percent of premiums within ten years. Its payouts on auto coverage are just 47 percent of premiums. No wonder it has enough money (and incentive) to advertise at every football game and on every television station. That is a good percentage of profit on premiums collected: a very reputable insurance rating agency terms that level of profit on collected premiums to be "excessive". Allstate's profits for 2007 were $4.6 BILLION dollars.
The disability insurer UNUM was a distant second as "worst" insurer. It reported profits of $679 million (and paid its CEO $7 million dollars--or more than one percent of its profit). We've encountered--and defeated--UNUM's wrongful denial of benefits on several occasions and would not disagree with this assessment, either.
AIG was rated third worst, and we wouldn't be surprised if its claims ethics are influenced by its overall corporate ethics. AIG has been labeled "the new Enron" after multi-billion dollars claims of corporate fraud were brought by government regulators. The story of related indictments and convictions can also be found in an earlier blog entry.
State Farm and Conseco rounded out the worst five, nationally. State Farm was caught forging signatures on earthquake waivers, apparently, after Hurricane Katrina, and also apparently altered engineering reports regarding damage suffered by insureds. Conseco sells long-term care policies to the elderly and has been repeatedly charged with delaying payment until its insureds die and lose any benefit of the policy purchased. Its CEO, parenthetically, collected $2.6 million dollars in compensation on $180 million in profits reported for 2007. Not a bad gig, if you can get it.