BLOOMINGTON, Ill., Feb. 28, 2020 /PRNewswire/ -- In 2019, State Farm property and casualty insurance companies experienced growth in policies while reporting lower earned premium compared to 2018. The decrease in property-casualty (P-C) earned premium reflects a focus on returning value to customers in the form of lower premiums when appropriate. The State Farm life insurance companies paid out nearly $600 million in dividends to policyholders and ended 2019 with $959 billion in total life insurance in force. As the number one Auto and Homeowners insurer in the U.S. and a leader in individual life insurance, State Farm is committed to serving its policyholders and remains a strong choice for insurance and financial services needs.
"Our focus of putting customers first for nearly 98 years continues to underscore our position as the national leader in protecting people. Each year we help millions of our customers recover from the unexpected and live life confidently with the protection we provide," said Senior Vice President, Treasurer and Chief Financial Officer Jon Farney. "Our financial strength, along with our local presence and broad product offerings have earned us the loyalty of our customers and are the reasons more customers are choosing State Farm. Our agents, their teams and our employees are committed to providing customers and communities with the products and service they expect from their Good Neighbor."
The State Farm P-C group of companies reported a combined underwriting gain of $777 million in 2019 on earned premium of $64.8 billion, compared to an underwriting gain of $1.7 billion on earned premium of $65.2 billion in 2018. The 2019 underwriting gain, combined with investment and other income of $5.0 billion, resulted in a P-C pre-tax operating gain of $5.7 billion. The lower underwriting gain in 2019 was driven by higher losses and lower earned premium compared to 2018. Total revenue, which includes premium revenue, earned investment income and realized capital gains (losses) was $79.4 billion for 2019 compared to $81.7 billion for 2018. State Farm reported net income of $5.6 billion in 2019, compared to $8.8 billion of net income in 2018. The net worth for the State Farm group ended the year at $116.2 billion compared with $100.9 billion at year-end 2018. The change was primarily due to an increase in the value of the P-C companies' unaffiliated stock portfolio, driven by increases in the U.S. equities market.
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 84 million policies and accounts.
Auto – The State Farm auto insurance business represented 64 percent of the P-C companies' combined net written premium. Earned premium was $41.5 billion. Incurred claims and loss adjustment expenses were $32.0 billion and all other underwriting expenses totaled $10.3 billion. The underwriting loss was $764 million.
Comparable 2018 figures were: earned premium, $42.7 billion; incurred claims and loss adjustment expenses, $31.2 billion; all other underwriting expenses, $10.4 billion; underwriting gain, $1.1 billion.
Homeowners, CMP, Other – The net written premium for the remainder of the State Farm P-C business represented 35 percent of the P-C companies' combined net written premium. Earned premium was $22.4 billion. Incurred claims and loss adjustment expenses were $14.8 billion and all other underwriting expenses totaled $5.6 billion. The underwriting gain was $2.0 billion.
Comparable 2018 figures were: earned premium, $21.6 billion; incurred claims and loss adjustment expenses, $15.0 billion; all other underwriting expenses, $5.7 billion; underwriting gain, $928 million.
Health – The individual health insurance operations for State Farm Mutual Automobile Insurance Company reported an underwriting loss of $66 million, excluding the change in the premium deficiency reserve. Net written premium was $707 million.
Comparable figures for 2018 were: underwriting loss, $91 million; net written premium, $703 million.
Life – In 2019, State Farm Life Insurance Company and State Farm Life and Accident Assurance Company reported premium income of $5.5 billion and $578 million in dividends to policyholders. Net income for 2019 was $673 million. There was $959 billion in total life insurance in force at the end of 2019.
Comparable 2018 figures were: premium income, $5.4 billion; dividends to policyholders, $577 million; net income, $706 million; total life insurance in force, $927 billion.
State Farm Bank® – Net income in 2019 was $59 million and total assets for State Farm Bank, F.S.B. were $16.4 billion as of year-end 2019.
Comparable figures for 2018 were: net income, $35 million; total assets, $16.9 billion.
Investment Planning Services – Total assets under management for the Investment Planning Services operation at the end of 2019 were $12.7 billion. State Farm VP Management Corp. and State Farm Investment Management Corp. reported a combined net loss of $22 million in 2019.
Comparable figures for 2018 were: total assets under management, $11.2 billion; net income, $7 million.
Although financial information is presented on a group/line of business basis, State Farm Mutual Automobile Insurance Company and each of its affiliates must meet solvency and regulatory requirements on an individual entity-by-entity basis without regard to the solvency or financial condition of any other affiliated entity.
State Farm Bank, Bloomington, Illinois, is a Member FDIC and an Equal Housing Lender. Insurance and securities products offered by affiliated companies of State Farm Bank are not FDIC insured, are not guaranteed by State Farm Bank and are subject to investment risk, including possible loss of principal invested.
Securities distributed by State Farm VP Management Corp.
State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products. Neither State Farm nor its agents provide investment, tax, or legal advice.
Roszell Gadson, APR
Phone: (770) 243-9049
Email: [email protected]
SOURCE State Farm