You're applying legitimate principles and experiences of companies involved with the production and sale of tangible products to a very specific area of the financial services sector where the "product" or "service" offered cannot easily be seen until.
If you buy a Ford or a Yugo and the thing turns out to be a crappy car, you'll find out pretty quickly that this is the case. The problem with a crappy insurance company is that you may not find out just how bad it is until you've been paying premiums for years -- and you need that insurance company in a big way when facing a serious injury or illness.
You keep ignoring AIG. Is that...er...was that...some backwater Podunk, unregulated insurance company?