|State Farm Income Gets Big Boost In
National Underwriter News
Feb. 25, 2005
State Farm reported net income nearly doubled for 2004, helped by improved investment returns.
In its earnings report, the Bloomington, Ill.-based property-casualty insurance giant credited its strong insurance operating results, as well as the $1.6 billion realized and unrealized gain on its p&c companies' stock portfolios, for the higher annual profit.
For overall p&c operations, after-tax net income for 2004 was reported at $5.1 billion, compared with a $2.5 billion profit for 2003.
Among its various p&c lines of business, the auto business--which represents 65 percent of State Farm's P&C Companies' combined net written premium--reported $1.8 billion of underwriting profit, a sharp contrast to 2003 when it reported an underwriting loss of $33 million.
Earned premiums for the auto business for 2004 were $31.5 billion, an increase of 1.4 percent from 2003. The incurred claims and loss expenses were $23 billion, better than $24.2 billion reported for 2003.
The homeowners and commercial multiple peril lines of business also recorded improved underwriting results. The 2004 underwriting profit for these lines was $700 million, much higher than the gain of $13 million for 2003.
Earned premiums were $14.2 billion, an 11.4 percent increase from 2003. The 2004 incurred claims and loss expenses were $9.3 billion, as compared with $8.7 billion a year earlier.
State Farm's homeowners and commercial multiple peril lines of business--which include State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company and State Farm Florida Insurance Company--represents 31 percent of State Farm P&C Companies' combined net written premium.
State Farm insures almost 40 million cars and over 15 million homes in the United States and Canada. The State Farm group of companies offers auto insurance, as well as homeowners, non-medical health, and life insurance through some 17,000 agents.