Top 10 insurance executives made more than $134 million, while raising rates
A Consumer Federation of America (CFA) report found executives of the top 10 largest insurance companies received $134 million in total compensation in 2024, while their customers faced sizable premium hikes and increasingly widespread non-renewal notices.
Auto insurance costs were 7% higher in May 2025, compared to May 2024, while industry profits increased to $169 million in 2024, an Oct. 22 release about the report says.
“2024 was a bad year for policyholders, but another great year for insurance company shareholders and their CEOs,” said Michael DeLong, CFA’s Research and Advocacy Associate. “Insurance companies told regulators they had to charge consumers billions more in 2024 to stay afloat, but customers were just paying the price for insurer greed and executive excess.”
The report found Allstate had the largest auto insurance increase of the top 10 carriers at 12.2%. Compensation for its CEO/board chairman/president increased from $16.5 million to $26.1 million in 2024.
Liberty Mutual’s auto insurance increased by 9.9%, the second largest increase, while compensation for its chairman/CEO/president dropped from $10.3 million to $10.2 million.
Farmer’s Insurance had the third-highest increase of 9.8%, with its CEO’s compensation increasing from $3.4 million to $5.1 million.
State Farm saw the fourth-highest increase in auto insurance premiums at 8% with its CEO/president’s compensation increasing from $3.6 million to $4.4 million
Travelers Insurance had a premium increase of 7.4% with the chairman/CEO’s compensation increasing from $22.7 million to $23 million.
Data from the report comes from filings made with the Nebraska Department of Insurance, which is required to provide information about salaries, bonuses, and additional compensation of their CEOs and other top executives to sell policies in the state.
“Since the data reported to the department may exclude compensation paid to the executives by affiliated insurance companies, it is likely that the compensation figures below underrepresent what some of the executives actually earned,” the release says.
CFA says it is calling on lawmakers to adopt strong “prior approval” oversight of insurance company rates. This should require insurers to disclose and justify both their claims costs and administrative expenses, including executive compensation.
“CFA points to the California Department of Insurance rule that limits the amount of executive compensation that can be passed on to policyholders in their insurance rates as a model that other states should adopt,” the release says.
The law, 10 CCR §2644.10, provides the Department of Insurance with a formula to determine the “maximum permissible executive compensation” for the five highest-paid executives at each insurer. Any compensation in excess of the amount must be excluded as an expense when calculating the need for a lower rate.
“Most Americans are required to buy insurance products, which means that lawmakers and regulators have a special obligation to make sure the premiums we are charged are reasonable,” DeLong said. “That must include protecting policyholders’ pocketbooks from these extraordinary CEO pay packages that are currently pushed onto our premium.”
Illinois Gov. JB Pritzker called for changes in legislation after State Farm hiked homeowners insurance by 27.2% in July.
The Chicago Tribune says it’s likely that an amended bill filed in January by Sen. Michael Hastings is the “starting point for any debate on the issue.” The legislation would establish a rate review process for auto and homeowner insurance.
The bill, SB0268, states that its purpose is to limit unjustified increases in homeowners’ and automobile insurance premiums, ensure transparency in rate-setting practices, and grant the Department of Insurance greater oversight authority to protect consumers.
Images
Photo courtesy of tadamichi/iStock