The American Association for Justice, an organization of personal injury attorneys, often has to go up against insurance companies. So they might be considered a good source for knowing which ones actually pay and which do not.
Drum roll please - The number one worst insurer for consumers is Allstate, says AAJ.
AAJ investigators sorted through thousands of legal documents, financial filings, as well as complaints filed with state insurance departments, the Securities and Exchange Commission, and FBI records, to determine how many claims were paid and how often the company employed hardball tactics against policyholders.
“While Allstate publicly touts its ‘good hands’ approach, it has instead privately instructed its agents to employ a ‘boxing gloves’ strategy against its policyholders,” said American Association for Justice CEO Jon Haber says in a statement. “Allstate ducks, bobs and weaves to avoid paying claims to increase its profits.”
Allstate is known to force consumers to accept lowball claims or to deny claims altogether. One Allstate employee reported that supervisors told agents to lie and blame fires on arson, and in turn, were rewarded with portable refridgerators.
Among other wrongdoings AAJ found were extravagant salaries for upper-ranked executives and raising premiums while hoarding profits.
Rounding out the rest of the Top Ten are:
* Unum – which sells disability insurance. In 2005, Unum agreed to a settlement with insurance commissioners from 48 states over their practices.
* AIG – The world’s biggest insurer, AIG’s slogan was “we know money,” and is accused of engaging in massive corporate fraud and claims abuses, paying $1.6 billion to settle a host of charges.
* State Farm – Lawyers are familiar with State Farm’s deny and delay tactics, especially during Hurricane Katrina.
* Conseco – Conseco sells long-term care policies, typically to the elderly, unfortunately a delay may mean that the insured either died or gave up. Company was fined for filing misleading financial statements with regulators.
* WellPoint – Health insurer with a long history of putting profits ahead of policyholders, canceling policies of pregnant women and chronically ill.
* Farmers – Swiss-owned ranks at or near the bottom of homeowner satisfaction surveys, partially based on its “Quest for Gold” policy that offered incentives to those agent with low claims payout goals.
* UnitedHealth – Following an SEC investigation, the former CEO had to return more than $600 million in compensation.
* Torchmark – According to Hoover’s In-Depth Company Records, Torchmark’s very origins were little more than a scam devised to prey on low-income Southerners and minority policyholders.
* Liberty Mutual – Like Allstate and State Farm, Liberty Mutual hired consulting giant McKinsey to adopt aggressive tactics.
While the insurance industry has relied on McKinsey Consultants to determine how best to attain and retain profitability, over the last decade the industry has enjoyed annual profits exceeding $30 billion while taking in more than $1 trillion in premiums annually.
CEOs took home an average of $8.9 million in 2007, while median company CEOs can earn $1.6 million per year.
CNN reported last year that McKinsey Consultants has coached insurers on how to play hardball in minor-crash claims that might result in soft tissue injuries, which are difficult to prove. The end result has been billions in profits to the insurance industry as large insurers have adopted a take-it-or-leave-it strategy.
Earlier this year, the Consumer Federation of America (CFA) came to the very same conclusions about the insurance industry as AAJ. The group was joined by several state and national consumer organizations in issuing its report and finding that during a three-year period, from 2004 to 2007, the industry recorded profits at more than $253 billion.
Insurers are just one of the industries behind the tort reform movement which has capped awards to the injured and resulted in fewer payouts to consumers when they are harmed. #