I don't have a policy with that insurance company so I don't feel victimized at all. I guess we cancel each other out.
Even if the insurance industry was completely free-market driven, the necessity of one company to raise prices opens up the opportunity for its competitors to raise prices.
Eventually one might hope that insurance companies that tolerate fraud would go out of business, but this can take some time.
I don't know about the disability business, but my understanding is that insurers of real property sell off some of their risk to other companies as a way to insure themselves against catastrophic loss and they buy the risk of others. This would slow down the demise of incompetent companies even more and spread the cost of the incompetence.