While insurance costs soar, top execs reap hefty salaries
A recent study by the Consumer Federation of America (CFA) highlighted that CEOs of the top ten personal lines insurance companies in the U.S. garnered significant salaries and bonuses. This contrasts sharply with the increasing insurance rates, creating difficulties for many policyholders.
The Consumer Price Index for August indicated a 19% rise in auto insurance costs compared to 2022. Out of the major insurance companies, six CEOs each took home more than $12 million in 2022. Collectively, these ten executives received over $130 million in the same year. Their earnings for 2021 and 2022 combined exceeded a staggering $253 million.
| Insurer | Exec | 2021 Comp ($M) | 2022 Comp ($M) |
| Allstate | Thomas Wilson | 18.4 | 18.9 |
| AmFam | Jack Salzwedel | 6.8 | 6.7 |
| Berkshire Hathaway | Todd Combs | 13.6 | 13.6 |
| Farmers | Jeff Dailey | 7.9 | 9.7 |
| Liberty Mutual | David Long | 12.2 | 15.4 |
| Nationwide | Kirt Walker | 4 | 3.5 |
| Progressive | Tricia Griffith | 14.5 | 12.8 |
| State Farm | Michael Tipsord | 24.5 | 24.4 |
| Travelers | Alan Schnitzer | 19.1 | 20.8 |
| USAA | Wayne Peacock | 1.9 | 4.8 |
| Total | 122.9 | 130.6 |
“CEOs are living high on the hog while increasing insurance premiums for people living paycheck to paycheck,” said Michael DeLong, CFA’s Research and Advocacy Associate. “Insurers are telling regulators that ordinary consumers have to pay much more for auto and home insurance because the companies are struggling with inflation and climate change, but they are quietly handing CEOs gigantic bonuses. Drivers are required to buy auto insurance and homeowners have to buy coverage to satisfy their loan requirements, so there needs to be more scrutiny of the rate hikes companies are demanding and the huge CEO paydays that are funded with customer premiums.”
Data from Nebraska’s Department of Insurance underpins this analysis. However, the reported figures might not encapsulate the full earnings of these executives, given potential additional payments from affiliated entities.
These pay packages for insurance CEOs coincide with premium hikes. For instance:
- Jeff Dailey of Farmers received an almost $2 million increment in 2022. Concurrently, the company upped its homeowners insurance premiums by over $575 million in 42 states, restricted its offerings in California, discontinued renewing a significant portion of its homeowners insurance policies in Florida, and downsized its staff by 11%.
- In 2022, Liberty Mutual awarded its CEO David Long over $15 million, alongside a surge in homeowners insurance rates by nearly $730 million.
- State Farm compensated its CEO, Michael Tipsord, with over $24 million while increasing auto insurance rates multiple times in Illinois, escalating auto rates by 17% in Louisiana, and increasing homeowners insurance rates by 28.1% in California. Additionally, they ceased accepting new applications for homeowners insurance in California.
