In July 2008, the American Association of Justice (AAJ) named “the ten worst insurance companies in America.” The criteria employed to be awarded this dubious honor was an exhaustive study of the number and nature of denial of claims, premium increases, and refusal to write insurance policies requested by consumers.
AAJ researchers reviewed thousands of court documents, as well as records from the Securities & Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) and state insurance departments investigations and complaints. News reports and testimony from the insurers’ former agents and adjusters were also considered.
Included in the review of insurance companies were a range of different insurance fields, including homeowners and auto insurers, health insurers, life insurers, and disability insurers.
The list of the ten worst insurance companies is as follows (companies in bold do business in Washington State):
- Allstate – Allstate’s concerted efforts to put profits over policyholders has earned its place as the worst insurance company in America.
Unum - AIG – One of the world’s biggest insurers, on September 16, 2008, Federal authorities effectively seized control of AIG, with an $85 billion bail-out.
- State Farm – Insures approximately one-fifth of the passenger cars in America.
- Conseco
- WellPoint
- Farmers – It is the third largest insurance group in the US servicing more than 10 million households in 41 states. Farmers Group Inc. is a wholly owned subsidiary of Zurich Financial Services of Switzerland.
- UnitedHealth
- Torchmark
- Liberty Mutual – It is the fourth largest property and casualty insurer in the United States based on 2008 direct written premiums.
The AAJ report details the wrongful and questionable strategies and tactics of the “ten worst” companies. These abusive behaviors included raising premiums; changing the content of policies without notifying policyholders; use of a combination of lowball settlement offers and hardball litigation tactics; purposeful delaying of claims to increase the likelihood that the claimant gives up pursuit of fair settlement; systematically violating state insurance regulations; fraudulently denying or low-balling claims using phony medical reports, policy misrepresentations, and biased investigations; and use of all manner of tricks to deny or delay claims, including locking checks in a safe until claimants complained; delaying payment of attorney fees until they were a year old; disposing of important correspondence during routine “pizza parties”; and routinely fighting claimants for years in court over mundane claims.
The severity of insurance company abusive behaviors are heightened when considering the following:
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 of $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.
Over the last 10 years, the property/casualty insurance industry has enjoyed average profits of more than $30 billion a year. The life and health side of the insurance industry has averaged another $30 billion.
The U.S. insurance industry takes in more than $1 trillion in premiums annually. It has $3.8 trillion in assets, more than the GDPs of all but two countries in the world (United States and Japan).
Although the AAJ report was issued in July 2008, the offensive and wrongful behaviors of the insurance industry continue to the present. The best defense against insurance company abuse is the continued exercise of citizen rights in the civil justice system.
If you are treating a patient with one of the above-noted insurers, we recommend that you advise him/her to have a consultation with an experienced attorney. The playing field needs to be leveled early on in a claim, before the insurer’s tactics kick into gear. On a daily basis we work to assure that insurance companies provide fair and reasonable compensation to our clients. Consultations are complimentary at Adler Giersch PS.
