State Farm Returns to Profit in 2018

In 2018, State Farm experienced a property-casualty underwriting gain, as well as increases in total revenue, net income and net worth. As the number one Auto and Homeowners insurer in the U.S., State Farm remains committed to serving its policyholders. The State Farm property-casualty (P-C) group of companies reported a combined underwriting gain of $1.7 billion in 2018 on earned premium of $65.2 billion, compared to an underwriting loss of $6.5 billion on earned premium of $63.9 billion in 2017. The 2018 underwriting gain, combined with investment and other income of $4.7 billion, resulted in a P-C pre-tax operating gain of $6.3 billion. The underwriting gain in 2018 was driven by lower losses, which included a decrease in catastrophe losses compared to 2017.

Source: State Farm | Published on March 1, 2019

State Farm non-renewing 72,000 CA policies

The net worth for the State Farm group ended the year at $100.9 billion compared with $97.0 billion at year-end 2017. The increase was primarily due to the P-C pre-tax operating gain, which was partially offset by a decrease in the value of the P-C companies' unaffiliated stock portfolio, driven by declines in the U.S. equities market.

"As a mutual company, we strive to achieve results that allow us to maintain the financial strength necessary to serve our customers and deliver on the promises we make to be there when the unexpected happens," said Senior Vice President, Treasurer and Chief Financial Officer Jon Farney. "While 2018 was a profitable year for State Farm, we view our financial results over a longer period of time. Over the last three years, we have increased our financial strength even with a combined underwriting loss, all while helping millions of our customers recover from the unexpected and live life confidently with the protection that we provide. We have been able to achieve these results because we manage our business responsibly for the long-term, and our agents, their teams and our employees are committed to serving our customers and our communities."

Total revenue, which includes premium revenue, earned investment income and realized capital gains (losses) was $81.7 billion for 2018 compared to $78.3 billion for 2017. State Farm reported net income of $8.8 billion in 2018, compared to $2.2 billion of net income in 2017. The State Farm insurance operations consist of eleven P-C companies and two life companies, each of which is managed on an individual affiliate level. The P-C companies are primarily engaged in automobile, health, homeowners, commercial multiple peril (CMP) and reinsurance lines of business. The life companies are primarily engaged in individual life insurance and annuity business. The State Farm group also provides banking products and makes mutual funds available through affiliated companies. State Farm provides insurance and financial services products across nearly 83 million policies and accounts.

Auto – The State Farm auto insurance business represented 65 percent of the P-C companies' combined net written premium. Earned premium was $42.7 billion. Incurred claims and loss adjustment expenses were $31.2 billion and all other underwriting expenses totaled $10.4 billion. The underwriting gain was $1.1 billion.

Comparable 2017 figures were: earned premium, $41.6 billion; incurred claims and loss adjustment expenses, $34.2 billion; all other underwriting expenses, $10.2 billion; underwriting loss, $2.8 billion.