No position in the car is entirely crash-safe (Unless your car is a tank). However, given that this is recommended by insurance companies, I have to assume that there's at least some significant amount of statistical truth in there.
It's more than an insurance recommendation - the United States and Canada have the strictest child-seat laws in the world AFAIK (my wife is a public health nurse who, among delivering babies and teaching new parents about babies, also teaches the proper use of car seats).
In Canada, children must be in an approved car seat for their weight and height with proper non-expired safety certification markings. The car seat must be installed according to manufacturers directions. That means, de facto, that children under 23 lbs and approximately 9 months old must remain in rear-facing seats. The car seat manufacturer requirements are what set the rules, but there is a stringent list of additions recommendations: children should only be moved to forwarding facing when three criteria are met: 22 lbs, 1 year of age, able to walk independently. Rumour has it those recommendations are actually set to become ever more stringent in both Canada and the US. Child seats also cannot be installed in the passenger seat - kids seats must be installed in the second (or third) row of seating in a vehicle. Part of this is because the front of the vehicle is disproportionately affected in accidents; part of this is because of the now-mandatory front and side-curtain airbags in most new vehicles. The back seat is even safer in side impacts - car seats have side-impact test ratings, and are actually designed to flip up and roll against the backseat, creating a cocoon for the child inside.
Anecdotal note: My wife and I were shocked when we went to the UK last fall at how lax the UK requirements were concerning child seats and their installation.
The result is that the US and Canada have among the best crash data in the world as far as infant survival of serious car accidents. The unintended consequences is that it becomes much easier to forget a young child in the car if the conditions are right.