State Farm recorded a net loss of $6.3 billion in 2023 due in part to what the company said was a ‘significant” increase in the severity of damage claims from homeowners’ insurance policyholders.
Still, Bloomington-Normal’s largest employer’s net loss last year was smaller than 2022, when State Farm suffered a $6.7 billion net loss.
Announcing its 2023 results on Thursday, State Farm said it remains “financially strong” as its auto insurance firm’s net worth rose by $3.5 billion to $134.8 billion last year.
Earned auto insurance premium, the amount policyholders pay to the company, rose to $56.1 billion in 2023, up from $45.7 billion the previous year. Still, State Farm recorded an underwriting loss for auto insurance of $9.7 billion, better than the company’s $13.4 billion underwriting loss a year earlier.
The category that includes homeowners’ policies showed State Farm collected $30.5 billion in premiums last year, up from $27.6 billion in 2022. However, underwriting losses were at $4.7 billion in 2023, compared to an underwriting gain of $849 million the year before.
Auto insurance accounts for 64% of premiums paid to State Farm’s property and casualty companies, while homeowners’ policies represent 35%.
“While we improved overall auto lines profitability in 2023, our results remain below the level we expect and we’re taking a state-specific approach as we operate,” Senior Vice President, Treasurer and Chief Financial Officer Mark Schwamberger said in a prepared statement.
“Catastrophe losses were widespread in 2023, and our claims and operations team members, along with the State Farm independent contractor agents, responded throughout the year to help customers. State Farm Mutual Automobile Insurance Company remains financially strong, and it is that strength that allows us to handle uncertainty and serve more customers in more ways over the long term,” Schwamberger also said.