### Insurance Giants Under Fire for Claim Denials and Executive Pay

In recent years, insurance companies like State Farm and Allstate have spent colossal amounts on advertising campaigns, with Allstate dishing out $617 million and State Farm a staggering $1.05 billion in 2022. However, their actions off-screen have raised serious concerns about their commitment to policyholders.

State Farm, which touts itself as a good neighbor, denied 46.4% of homeowner claims in hurricane-stricken Florida last year, affecting over 76,000 households. Martin Weiss, founder of the independent insurer rating agency Weiss Ratings, points out that insurers who deny legitimate claims are essentially encouraging policyholders to sue if they are unhappy with the decision. Making matters worse, Florida Governor Ron DeSantis signed a legislation that makes it more challenging for policyholders to sue insurers.

The financial rewards for insurance executives tell an even more complex story. Michael Tipsord, who recently retired as CEO of Allstate, earned $24.4 million two years ago, topping the industry's pay chart by almost $4 million over his nearest competitor. While insurance execs enjoy these hefty bonuses, premiums for consumers continue to climb, ostensibly due to challenges like inflation and climate change.

The Consumer Federation of America reports that the CEOs of the top ten personal insurance companies in the U.S. collectively earned over a quarter-billion dollars in compensation in 2021 and 2022. Critics argue that if these companies were genuinely concerned about climate change, they would have supported action against fossil fuel industries instead of exacerbating environmental issues.

Peter Bosshard from Insure Our Future explains that the insurance industry first warned about climate risks back in 1973 but continued to invest in fossil fuels. Rather than combatting climate change earnestly, insurers have been accused of greenwashing—profiting from policies that support new fossil fuel projects while claiming environmental responsibility.

Lilith Fellowes-Granda of the Center for American Progress emphasizes that this behavior goes beyond greenwashing to what she terms "bluelining"—raising prices and withdrawing services in high-risk environmental areas, targeting vulnerable communities most affected by climate change.

To counter these issues, climate activists are calling for policy changes. One proposed approach is to link an insurance company's tax rate to the ratio between its CEO's compensation and the average worker's pay. This idea builds on data showing vast disparities in pay; for instance, Chubb Ltd.'s CEO Evan Greenberg earned $27.7 million in 2023, equating to 452 times the average Chubb employee's salary.

The pay gap was far less pronounced decades ago. In 1965, top execs earned 21 times what typical American workers made, a figure that increased to 61 times by 1989. Lawmakers have floated several proposals to tie corporate tax rates to these pay gaps, aiming to encourage more equitable pay distribution.

As these proposals gain traction, there's hope that they might reform not only executive compensation but also the broader corporate behavior of America's largest insurers.