Home Insurance Executives Are Raking It In—At Your Expense
Performance-based pay packages incentivize claim denials and other harmful practices
By Dan Wagner and Kenny Stancil
Notwithstanding home insurers’ public griping about underwriting losses, the industry is more profitable than ever. Executive compensation is increasing thanks in large part to so-called performance-linked pay packages that incentivize claim denials and other anti-consumer practices. As we detail below, a review of the uneven industry data available from public filings reveals just how well insurance executives are doing at the expense of their customers.
The U.S. property and casualty insurance industry, which includes home and auto, had a banner year in 2024. Profits hit an all-time high of nearly $167 billion, up 91% from 2023 and 330% from 2022. The bulk of the industry’s profits come from investment income, though P&C insurers also cleared more than $25 billion in underwriting profit last year. And that’s based on a dubious method of calculating underwriting gains: The industry classifies overhead expenses, including office space, advertising, and commissions, as underwriting losses. But if you look strictly at the ratio of claims paid out relative to premiums collected, insurers are coming out on top in the vast majority of the country’s ZIP codes.
Those record profits come at the expense of aspiring homeowners, who are facing unjustified premium hikes and coverage withdrawals. While most borrowers finance their homes for 30 years, insurers reprice risk annually. This temporal imbalance is a major problem. Home insurance is becoming so expensive that a growing number of households, especially first-time home buyers, are struggling to make their monthly mortgage payments. The dwindling availability and affordability of insurance also hurts renters by making it harder for developers to build.
If one were to listen only to the P&C industry, they could be forgiven for assuming that insurers are struggling. The industry’s claims of massive “losses,” however, are not reflected in the financial reality outlined above. Shareholders and executives continue to make a killing year in and year out. Take, for instance, Slide Insurance CEO Bruce Lucas and his wife, Slide’s COO. They brought home compensation worth $21 million and $16.5 million, respectively, last year, as Florida homeowners endured surging premiums. Their joint total compensation across 2022 and 2023 topped $50 million.[1]
Troublingly, at most big insurance companies, executives can collect such lavish pay packages without scrutiny or oversight. Most of the top writers of homeowners insurance are structured as mutual companies, like State Farm and Liberty Mutual, or exchanges, like Farmers, that do not sell shares to the public — and therefore need not file public reports on executive compensation with the Securities and Exchange Commission.[2]
This is an indictment of the existing regulatory structure. A 1945 law called the McCarren-Ferguson Act immunizes most insurance companies from federal regulation. State insurance regulators, meanwhile, are largely captured and allow the industry to operate in the shadows with little transparency.
But we’re not completely in the dark on executive compensation. Nine of the top 25 writers of U.S. homeowners policies in 2024, comprising 24% of the market, are publicly traded on U.S. exchanges.[3] Reports they filed with the SEC this year detail compensation to their highest-paid executives. These data show that despite the P&C industry’s pessimistic narrative, executive pay is on the rise.
At these nine companies, forty-two top executives collectively took home $310.1 million — about $7.3 million each, on average, according to a new Public Citizen-Revolving Door Project analysis of proxies filed this year. Pay increased at all nine companies in 2024 from 2023 by an average of 30%. (The increases ranged from 4.5% at Travelers to 114% at Mercury General.)[4]
At Allstate, the biggest homeowners writer in the group with 9% national market share,[5] pay leapt 75%[6] — and CEO Thomas Wilson took home compensation worth $26.1 million, up from $16.5 million in 2023.[7] That included perks like $70,000 for use of a company jet.[8] Other highly-paid standouts include Chubb CEO Evan Greenberg, whose compensation rose 9% to $30.1 million,[9] and Travelers CEO Alan Schnitzer, whose compensation edged up 1.4% to $23.1 million.[10]
The lavish pay packages do not appear linked to companies’ sizes: Average pay per billion dollars of market capitalization ranged from about $47,000 at Progressive to $3.5 million at Universal Insurance Holdings.[11]
What they do have in common is their linkage to “performance metrics” that tend to benefit shareholders at the expense of consumers. At big companies like Allstate,[12] Chubb,[13] and The Hartford,[14] 92% to 95% of CEO compensation is considered “at risk,” meaning it is linked to things like the so-called combined ratio — that misleading underwriting metric, mentioned earlier, that lumps in overhead costs while also comparing premiums collected to claims paid out. To goose the combined ratio, an executive can simply instruct claims handlers to deny or delay a higher percentage of homeowners’ legitimate claims.
Likewise, to boost another key metric — Return on Equity (ROE) — a company could spend heavily on share buybacks, rewarding shareholders by cutting the number of shares outstanding, while reducing funds available to pay claims or provide coverage in more vulnerable areas. Refusing to renew policies for higher-risk policyholders boosts the combined ratio and ROE. Increasing deductibles and premiums likewise can help “improve” ROE, leading to steep executive pay increases like that seen at Allstate.
In short, pay packages at top insurance companies incentivize corporate leaders to improperly deny claims, withdraw from areas where they could afford to provide coverage, and implement other measures that ultimately harm their customers.
In the absence of data, we can only guess that the same conditions hold at large mutual insurers like State Farm.
Notably, there are other metrics companies could use that would align executives with consumers. For instance, firms could boost remuneration for executives who minimize claims processing time or reduce the percentage of claims that end up in litigation. Instead, the industry is actively choosing to reward anti-consumer actions.
Much attention is being paid, justifiably, to the health insurance industry’s plan to hike premiums amid record profits. We shouldn’t lose sight of the fact that the home insurance industry is following the same playbook.
Most damning of all, the industry continues to invest in and underwrite coal, oil, and gas even though fossil fuel pollution is exacerbating the extreme weather that insurers point to as justification for policy cancellations and rate hikes. U.S.-based insurance firms are estimated to hold between $536 billion and $582 billion in fossil fuel-related assets, and they also make billions every year from underwriting dirty energy projects.
Once again, there is an opportunity here to align executives’ and consumers’ interests. Premiums from fossil fuel underwriting constitute a small portion of the P&C industry’s total premiums. As climate-related damages mount, the industry must reconsider its willingness to jeopardize the planet’s livability for a relatively insignificant sum of money.
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[1] https://www.sec.gov/Archives/edgar/data/1886428/000119312525125836/d739486ds1.htm#tx739486_11 p. 132
[2] https://content.naic.org/sites/default/files/research-actuarial-property-casualty-market-share.pdf
[3] https://docs.google.com/spreadsheets/d/1SUHLwqDGcu8LGYN0zSlt3D1JpvTKmR-BKi83s5kc1DY/edit?gid=874294211#gid=874294211 First sheet “Market Share”. NOTE: Data from this workbook are drawn from the workbook “Public Insurer Comp Details,” linked in footnote 9. Data in the latter are imported automatically from SEC filings by the Alphasense database.
[4] https://docs.google.com/spreadsheets/d/1SUHLwqDGcu8LGYN0zSlt3D1JpvTKmR-BKi83s5kc1DY/edit?gid=874294211#gid=874294211 Second sheet “Cumulative Data”
[5] https://content.naic.org/sites/default/files/research-actuarial-property-casualty-market-share.pdf
[6] https://docs.google.com/spreadsheets/d/1SUHLwqDGcu8LGYN0zSlt3D1JpvTKmR-BKi83s5kc1DY/edit?gid=874294211#gid=874294211 Second sheet “Cumulative Data”
[7] https://docs.google.com/spreadsheets/d/1MWH57qTaMLOnsqWb0ktN7PM6-Fp2uxGolzXJNhxY4PU/edit?gid=443474557#gid=443474557 first sheet “ALL” — Note tables within this sheet were imported automatically from SEC filings using the AlphaSense database.
[8] https://www.allstateproxy.com/media/wrxcxc2u/437787-1-_111_allstate-corporation_nps_workiva_wr-proxy-only.pdf p. 72, second table
[9] https://docs.google.com/spreadsheets/d/1MWH57qTaMLOnsqWb0ktN7PM6-Fp2uxGolzXJNhxY4PU/edit?gid=443474557#gid=443474557 Sheet “CB”
[10] Ibid., sheet TRV
[11] https://docs.google.com/spreadsheets/d/1SUHLwqDGcu8LGYN0zSlt3D1JpvTKmR-BKi83s5kc1DY/edit?gid=874294211#gid=874294211 Second sheet “cumulative data” column H
[12] https://www.allstateproxy.com/media/wrxcxc2u/437787-1-_111_allstate-corporation_nps_workiva_wr-proxy-only.pdf p. 15 under “Target Compensation Mix”
[13] https://s201.q4cdn.com/471466897/files/doc_financials/2024/ar/Chubb-Limited-2025-Proxy-Statement.pdf p. 10 (95% for CEO)
[14] https://www.sec.gov/ix?doc=/Archives/edgar/data/874766/000087476625000040/hig-20250410.htm#i0a170623c29f430584be6ffc4c3e442a_85 p. 8 above the two bar charts “approximately 93%…”