The Best Insurance Companies in America in 2022

The Best Insurance Companies in America in 2022
Photo by Andrea Piacquadio from Pexels

The last 12 months have been turbulent for most areas of the economy. The Covid-19 pandemic is still wreaking havoc on healthcare systems and businesses worldwide, and the consequences of climate change have only exacerbated the problem. Despite these difficulties, insurers, or organizations that cover consumers against large risks, have had a fantastic year, particularly in the stock market. The iShares U.S. Insurance Company ETF has returned 45% over the last 12 months, compared to a solid 32% for the S&P 500.

 

Piper Sandler’s senior insurance sector analyst Paul Newsome says, “On an absolute basis, it’s been a tremendous performance this year.”

 

For insurers, the most significant change brought about by Covid-19 has been a greater reliance on digital tools in sales and claims processing in the absence of face-to-face interactions, as well as a greater awareness of mortality among consumers who have sat on their couches watching news coverage of devastating death tolls.

 

Frank Spencer, vice president of life insurance sales for Nationwide Mutual Insurance Company, has witnessed a significant loss of life lead to his company’s highest year of life insurance premiums in 2020, with 2021 on track to break that record.

 

“Unfortunately, because of the pandemic, the American public is acutely aware of mortality,” Spencer says. During the pandemic, a run on life insurance wasn’t the only major change; in-person interactions, which were once a big part of the insurance industry, have been increasingly replaced by app-based claims, online billing, and other virtual replacements that have become necessary in a time of social distancing.

 

Spencer adds, “We probably got five years’ worth of digital adoption in 2020.” However, according to Beth Riczko, president of property and casualty personal lines at Nationwide, the change was due less to technology improvements by the firms and more to consumers electing to use technologies developed long before lockdowns and mask laws.

 

“There was a considerable focus on establishing digital skills in the sector before Covid, but acceptance was fairly delayed,” she adds.

 

According to Riczko, the emerging area of insurtech has also had a role, with many legacy corporations such as Nationwide cooperating with these startups to expand their digital suite.

 

Some of the industry’s technology advances were well adapted to the specific circumstances of the last 18 months. For example, telematics is used by Nationwide and some of its competitors, allowing drivers to exchange data on their vehicle usage and driving behavior and insurance companies to customize plans based on that data. This technology enabled the Columbus, Ohio-based insurance to provide pay-per-mile programs when many people were spending more time at home, an option Riczko utilizes for her own family and is related to the company’s history.

 

Farm Bureau Mutual Vehicle Insurance Company was created in the 1920s to provide farmers with automobile insurance that was more in line with their driving habits when charged similar rates to their counterparts in densely populated urban regions.

 

In our inaugural ranking of America’s Best Insurance Companies, Nationwide is one of a few companies recognized as the best insurance company in five of the seven categories, including auto, homes, renters, term life, and permanent life.

 

Forbes teamed with Statista to survey over 16,000 customers and gather their input on their performance to identify which companies were best servicing customers.

 

Allstate, American Family Insurance, Erie Insurance, Farm Bureau Insurance, Liberty Mutual, Progressive, State Farm, and USAA are among the five companies that Nationwide has recognized. USAA, situated in San Antonio, Texas, received the greatest marks in the poll, placing first in permanent life, term life, homeowners, and renters insurance, and second in vehicle insurance, trailing only Seattle-based PEMCO.

 

The North American Pet Health Insurance Association estimates that more than $2 billion in total premiums will be sold in 2020, according to the increasing field of pet insurance, which recently set record levels—because of pandemic pet adoption—with more than $2 billion in total premiums sold in 2020. Twenty companies were also honored in the field of dental insurance, which might be thrown into disarray if provisions suggested under the “Build Back Better” proposal to add dental, vision, and hearing coverage to Medicare are approved.

 

Insurance companies are also keeping an eye on components in the Build Back Better proposal to increase Medicaid’s long-term care coverage. This policy shift being proposed in Washington, D.C. has already been implemented in some forms across the country, most notably in the state of Washington, which has imposed a required income tax on citizens without long-term care coverage. Long-term care is a major business line for some of these insurance companies. During the worst of the epidemic, it was a hot topic when the virus destroyed assisted living facilities.

 

While the industry is working on another large-scale global crisis that will transform how it operates: climate change, the light at the end of the Covid tunnel is shaping with the development of vaccines and medicines and increased immunity across the United States. According to the scientific agreement, with extreme weather expected to grow over the next century, insurers will face increased responsibility and payouts as wildfires, floods, and storms become more common. Insurers that have paid out claims and gone on the ground to respond to everything from wildfires in California to an active hurricane season in the southeast to the deep freeze in Texas have already felt the effects of climate change.

 

“The insurance sector is concerned about weather trends and catastrophic disasters,” Riczko says. “On the inside, it’s about ensuring that we have enough money to meet our clients’ needs and that we’re ready to respond wherever the event takes place.”

 

Despite the hurdles ahead, Morningstar senior equity analyst Brett Horn believes the insurance industry’s prognosis is positive, having recently experienced price rises prompted by inflation and lower interest rates.

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