2007 INSURANCE COMPLAINT RANKINGS

In yesterday's New York Law Journal, there was an article: The Insurance 'Top 10,' Notice of Lawsuit Trigger, authored by Norman H. Dachs, Esq. and Jonathan A. Dachs, Esq., of Shayne, Dachs, Stanisci, Corker & Sauer.

In the article they discuss, among other things, "the state of New York Insurance Department's "Annual Ranking of Automobile Insurance Complaints."

Here is the relevant part:

2007 Annual Ranking

The 2007 "Annual Ranking of Automobile Insurance Complaints," which is based upon data for the calendar year 2006, ranks 44 automobile insurance companies or groups of companies by the number of private passenger automobile insurance complaints upheld against them and closed by the Insurance Department in 2006, divided by their 2005-2006 average private passenger automobile premium volume in New York state.

In 2006, the Insurance Department's Consumer Services Bureau received a total of 7,914 private passenger auto insurance complaints (down from 9,939 the year before), of which 1,629 (up from 1,600) were upheld. Neither commercial auto complaints nor complaints made directly to the insurer are included in determining the complaint ratios. An upheld complaint occurs when the department agrees with a consumer that an auto insurer made an inappropriate decision. Typical complaints are those involving monetary disputes, such as the value of a total loss. Complaints about policy terminations and the promptness of insurance payments are also common.

The 2006 average complaint ratio for all companies or groups, including those with less than $10 million in premiums, was 0.16 per $1 million in premiums (up from 0.15 in 2005). This equates to approximately one upheld complaint for every $6.2 million in premiums paid to insurance companies. This average ratio was derived by dividing the number of complaints upheld against all companies in 2006 (1,629) by the average premium for 2005-2006 for all companies ($10.1 billion).

Of the top 10 finishers in 2006, five - Atlantic, Amica Mutual, Erie, Preferred Mutual, and Electric - were in the top 10 in 2005 as well. Electric, Amica and Preferred Mutual finished in the top 10 in each of the previous three annual rankings. Of the three-largest New York state auto insurers, only Berkshire-Hathaway (GEICO) showed improvement in its rankings. Allstate moved from a rank of 26th in 2005 to 30th in 2006; State Farm moved from 14th to 16th position, but with a complaint ratio of 0.08 (the same as in 2005), State Farm ranked the best among the state's biggest three insurers. State Farm has finished in the top 25 in each of the past five annual rankings.

Berkshire-Hathaway (GEICO) remained the largest private passenger auto insurer in New York based on 2005-2006 average premiums, with a 20 percent market share (increased from 17.9 percent the year before). Overall, the top 10 auto insurers comprised 79 percent of the market in the current ranking, up from 77.6 percent the previous year.

Tables

The first table for this article, lists the "Top 10," i.e., the 10 companies with the fewest complaints against them, or, the 10 best performers of 2006. For purposes of comparison, companies' rankings in 2005 and 2004 are also shown.

The second table, reveals the opposite side of the spectrum; it lists the 10 auto insurers with the worst performance record for the calendar year 2006, i.e., the "Bottom 10." In this table, the company with the highest ratio is ranked first; the company with the lowest ratio is ranked last. Thus, those ranked at the top of this list had the worst performance. These companies' rankings in 2005 and 2004 are also shown. Six of the insurers with the highest complaint ratios - Long Island Ins. Co., Infinity, American International, Tri-State Consumer, Credit Suisse, and Hanover - were carryovers from the previous year's "Bottom 10."

The third table, lists the performance records of the 10-largest auto insurers in New York State. As can be seen, 79 percent of auto insurance consumers purchase their insurance from one of these 10 companies. State Farm was the only insurer among the four-largest insurers to lose market share over the year, falling from a 10.8 percent share to a 10.0 percent share. Several smaller insurers among the 10-largest auto insurers also lost market share, including St. Paul Travelers, Liberty Mutual, and Central Services.