That sucks. I'm the shipping manager where I work and we ship almost exclusively UPS. We have mostly good experience with them. More so than FedEx or DHL. But it does vary in different regions for all those companies.
Be prepared to fight tooth and nail for that insurance claim. UPS is particularly tough on paying out. They will deny it and deny it and deny it until you wear them down. It can take upwards of two months. Bottom line is that they HAVE to reimburse you if you took out the insurance. If the box was damaged like that when you sent it, then the UPS store, driver, and regional hub should have never accepted the package. Since the box is so destroyed, it stands to reason that whatever tore the box up also damaged the bike. That logic alone should be enough to convince them that it was their fault. You'll have to escalate the process to a supervisor or manager though. The first level people they have on the phone at UPS claims are only there to deny deny deny. You can't get anywhere with them. They probably save the company a ton of money.
They're going to take the bike after they pay out your claim though. So don't get rid of it or resend it to this guy if you want the disbursement. If you don't have it when they come to get it, they'll be on your a**.