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Insurance Companies: Is Bigger Always Better?

Published September 27, 2019

3 minute read

Joshua Williams

By Joshua Williams

Choosing an insurance company is not an easy task. There are so many to choose from. So you need to do your homework to be as sure as possible you are making the right choice.

Which is the best option? Should you go for the larger companies? Or are smaller and more customer orientated companies best? This article will look into some of the largest insurance companies, review their performance, and provide some good tips to help make your choice a little easier.

What Are the Biggest/Best Insurance Companies?

Deciding which are the largest insurance companies is a complicated question. You can look at market value, profitability, customer service, or any other benchmark when deciding which company is the biggest or best. Even when you decide which benchmark to work with, there are all kinds of grey areas. Take, for instance, insurance companies that reinsure other insurance companies. Does an entire insurance company count as one client?

There are various insurance watchdogs that keep an eye on insurance companies and their performance, and they all come up with different top 10 lists.

If you look at Forbes 2009 top 10 global insurances by market value, you would find that the American International Group tops the list at $172 billion. AXA comes second with $66 billion. The German corporation Allianz Worldwide is a close third at $65.5 billion. Japan’s Manulife Financial is fourth with $50.52 billion in market value.

However, other consultancy groups come up with different lists working with similar variables.

If you measure insurance companies by their number of clients, AIG is one of the largest in the world with over 74 million customers. That is a huge number; it is larger than the populations of Spain or California. However, most would agree that AIG is not currently the best insurance provider in the world. In fact, it would probably top other not so flattering lists.

That is not to say that size is not important. In fact, it was AIG huge size that stopped it from going bankrupt. It was so big that the U.S government could not afford to let it go down.

Size is also important for insurers because it allows them to offset losses in one area with profits of another enabling a large company to survive financial meltdowns like the one we are currently experiencing.

The largest insurer in the U.S and probably in the world by number of clients is State Farm Insurance. This company provides more automobile and home insurance policies than any other insurer in the U.S. and boasts over 78.8 million policies. Does this make it the best?

Consumer Reports

A great way to review the standing of an insurance company is to check some of the industry watchdogs that monitor insurers and rate them based on their size, strength, and customer satisfaction. This will help you review insurance companies on the basis of factors that matter to you as a client.

A great company with honest and informative reviews on the top insurance providers is Consumer Reports. They are industry leaders in providing insurance company reviews. It is after all the experience of other consumers that will inform your choice of insurance best.

For instance, what would you think if you read a consumer rating of one out five on a particular insurance company with the following review? “Don’t do it! They sold us ‘extended coverage’ on our old home, then refused to pay our claim when plumbing busted. Cost us $7,000. BEWARE!” Of course, this could be a one-off review by an angry person who chose the wrong kind of insurance cover.

However, if by searching Consumer Reports, you find a trend where various clients of a particular company are consistently unsatisfied with their service you might take it into account when making a decision.

Final Thoughts

Cover your bases and stick with insurance companies that have a proven track record of customer satisfaction and show good financial health. Size and number of clients are only two factors of many to take into account when choosing which insurance company suits you best.

Insurance Text in Blue and Chrome

Olivier Le Moal / Shutterstock

Joshua Williams

Contributor

Joshua is a freelance writer with years of experience blogging about business and finance, and a whole host of other things too. When he's not writing, he enjoys camping with his dog, a golden retriever named Oakley.

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