Insurance companies and insurance industry advocates consistently point to insurance fraud as a reason for higher insurance premiums. But, if insurance fraud is such a problem, why are property insurers still reaping massive profits? With profits like these, is there really justification for consistently raising premiums?
|
Revenues |
Profits |
|||||
|
Rank |
Company |
Fortune 500 rank |
$ millions |
% change from 2009 |
$ millions |
% change from 2009 |
|
(mutual) |
37 |
63,176.7 |
2.8 |
1,762.8 |
129.9 |
|
|
(stock) |
7 |
136,185.0 |
21.1 |
12,967.0 |
61.0 |
|
|
17 |
104,417.0 |
1.2 |
7,786.0 |
N.A. |
||
|
82 |
33,193.0 |
6.8 |
1,678.0 |
64.0 |
||
|
89 |
31,400.0 |
-1.9 |
928.0 |
8.7 |
||
|
106 |
25,112.0 |
1.8 |
3,216.0 |
-11.2 |
||
|
117 |
22,383.0 |
-9.4 |
1,680.0 |
N.A. |
||
|
127 |
20,265.0 |
-2.3 |
959.0 |
33.9 |
||
|
145 |
17,946.1 |
2.2 |
2,637.4 |
-12.7 |
||
|
164 |
14,963.3 |
2.7 |
1,068.3 |
1.0 |
||
|
168 |
14,621.0 |
3.5 |
1,288.0 |
128.4 |
||
|
185 |
13,319.0 |
2.3 |
2,174.0 |
-0.4 |
||
|
285 |
8,527.7 |
-2.0 |
279.2 |
-35.2 |
||
|
358 |
6,491.8 |
0.6 |
487.1 |
89.6 |
||
Are insurers increasing profits by instituting a program of delaying, denying and litigating against legitimate insurance claims?
CNN’s Anderson Cooper provided a report detailing Allstate Insurance Company’s delay, denial and lengthy legal battle against its insureds to avoid paying relatively small insurance claims. Reporter Drew Griffin interviewed insurance insider, Jim Mathis, who stated that during his time in the insurance industry some insurers took a position of delaying, denying, and then forcing legitimate claims into litigation, and reaped billions in profits in doing so.
https://youtube.com/watch?v=IvPW087RiJ8%3Frel%3D0
Often, the insurer’s reason for delaying or denying payment of claims is alleged insurance fraud by the claimant. However, in the Allstate cases discussed in the CNN report, the insurer’s allegation of insurance fraud was pretext for denying payment of small, legitimate claims. Given insurers’ enormous profits and ever increasing premiums, it may be that insurance fraud isn’t actually a problem for insurance companies—rather it is a convenient pretext for delaying, denying and litigating legitimate insurance claims.
