State Farm Insurance Cos., the nation’s largest personal lines insurer, announced yesterday that its net income dropped 60 percent in 2000 due to a combination of increased claims and reduced rates.
Net income from all sources, after federal income tax, for all State Farm affiliates (including non-insurance affiliates) was $408.1 million in 2000, down $626 million from 1999. Revenue, which includes net investment gain and other income, for all affiliates was $47.9 billon for 2000, an increase of $3.2 billion over the 1999 figure.
Meanwhile, State Farm Mutual’s net worth, after going up by $4 billion in 1999, decreased last year by $2.1 billion to $43.7 billion. The primary reason for this decline was State Farm Mutual’s pre-tax operating loss of $1.9 billion, which includes a $3.3 billion underwriting loss, an incurred dividend of $1.0 billion, and net investment income earned and other income of $2.4 billion. State Farm Mutual’s net worth is also affected by the results of operations of affiliates as reflected in the unrealized loss for the year of $711.5 million.
State Farm’s auto insurers—State Farm Mutual Automobile Insurance Company, State Farm Indemnity Company and State Farm County Mutual Insurance Company of Texas—reported 2000 earned premiums of $25.1 billion, an increase of 1.0 percent from 1999. With an underwriting loss of $3.6 billion, a record-breaking $1.0 billion dividend to policyholders and a net investment gain (including capital gains) of $5.4 billion, net income from all sources after federal income taxes was $557.6 million.
The three auto insurance companies reported 2000 incurred claims and loss expenses of $23.2 billion, up from the 1999 figure of $21.4 billion.
State Farm Mutual’s property insurance affiliates—State Farm Fire and Casualty Company, State Farm General Insurance Company, State Farm Lloyds and State Farm Florida—reported an underwriting loss of $2.0 billion on earned premiums of $9.5 billion. These results, combined with a net investment gain of $1.3 billion, resulted in a net loss (after federal income tax) of $410.1 million, compared with a $21.1 million net loss in 1999.
The State Farm group insures about 38 million cars and 15 million homes in the United States and Canada.
Topics Profit Loss
Was this article valuable?
Here are more articles you may enjoy.
USAA Renter’s Insurance Policyholder Charged with Multiple Counts of Fraud 
Applied Systems Acquires Insurance AI Platform Planck 
How California’s Homeowners Insurance Crisis Is Affecting Brokers 
Black Bear and Cub Destroy Car After Getting Trapped Inside 
