On December 13, 2011, The Huffington Post published an article all policyholders should read and heed. It is important to know how the insurance industry is making money by delaying claims and how it has shifted from a service industry to an industry that is driven by profit. It’s time for each state’s Department of Insurance to enforce their unfair business practice statutes on insurance carriers that profit by stalling and delaying the claims process to the detriment of the insured. The article is entitled, Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers, and reports that since the mid-1990s, "a new profit-hungry model, combined with weak regulation, has upended that ancient social contract" between insurers and their customers.

According to the article, the industry shifted from service driven to profit driven when McKinsey & Company sold Allstate and other leading insurance companies a "new system to boost the bottom line." The article states that rather than adjusting claims the traditional way, which gave claim managers wide latitude to serve customers, insurers embraced a computer-driven method that produced purposefully low offers to claimants.

The article explains that this strategy "put profits above all," and insurers like Allstate have certainly gained: Allstate made $4.6 billion in profits in 2007, double its earnings in the 1990s. The stunning increase came through "driving down loss values to an average of 30 percent below the actual market cost" — that is, paying dramatically less on claims. Apparently, the companies that take in 70 percent of total insurance profits in the United States "now abuse their obligations to their policyholders."

According to NAIC data, claim delays have long been the most frequent cause of policyholder complaints. As of November 28, 2011, the NAIC received 11,053 delay-related complaints this year alone, comprising almost a quarter of the year’s total complaints. This data only reflects confirmed complaints — the ones that state insurance commissions have investigated — so the actual number of delayed claims is likely much higher.