BLOOMINGTON, Ill., March 1, 2013 /PRNewswire/ -- In the midst of hail and wind events, western wild fires and Hurricane Sandy, State Farm sustained its financial strength while helping millions of Auto, Home and Business policyholders recover from the unexpected. Combined net worth for the State Farm group increased $4.6 billion in 2012, ending the year at $65.4 billion. The increase in net worth was primarily related to the property-casualty (P-C) affiliates' pre-tax operating profit of $2.7 billion and a $1.9 billion increase in the value of P-C affiliates' unaffiliated stock portfolio.
"Policyholders look to State Farm to help them rebuild and recover in the face of the unexpected. During 2012, we were able to do that while continuing to grow as a company and build out new platforms to better meet customers' rapidly evolving needs," said State Farm Executive Vice President, Treasurer and Chief Financial Officer Paul Smith.
Total revenue, which includes premium revenue, earned investment income, and realized capital gains (losses), was $65.3 billion for 2012 compared with $64.3 billion for 2011. State Farm reported an after-tax net income of $3.2 billion in 2012, compared with $0.8 billion in net income in 2011. The increase was driven primarily by improved underwriting results.
Financial results for State Farm affiliated companies are incorporated in the State Farm group's financial results. However, each affiliate's individual results vary. State Farm insurance operations consist of nine P-C insurers and three life insurers, each of which is managed on an individual affiliate level. The P-C insurers are primarily engaged in automobile, health, homeowners, commercial multiple peril (CMP), and reinsurance lines of business. The net results of State Farm Mutual Automobile Insurance Company (State Farm Mutual), State Farm Indemnity Company, State Farm Guaranty Insurance Company, State Farm County Mutual Insurance Company of Texas, and Oglesby Reinsurance Company include the Auto business as well as the Health and reinsurance lines. The net results of State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company, and State Farm Florida Insurance Company reflect the Homeowners, CMP, and other P-C lines of business. State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd., and State Farm Life and Accident Assurance Company write the Life and Annuity business. The State Farm group also provides banking products and mutual funds through affiliated companies. State Farm provides insurance and financial services products across more than 81 million policies and accounts.
Auto – State Farm auto insurance business represents 61 percent of the P-C companies' combined net written premium. Earned premium was $32.2 billion, an increase of 1.4 percent from 2011. Incurred claims and loss adjustment expenses were $25.5 billion. The underwriting loss was $1.3 billion.
Comparable 2011 figures were: earned premium, $31.7 billion; incurred claims and loss adjustment expenses, $26.1 billion; underwriting loss, $1.9 billion.
Homeowners, CMP, Other – The net written premium for State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company, and State Farm Florida Insurance Company represents 35 percent of the P-C companies' combined net written premium. Earned premium was $18.3 billion, an increase of 1.5 percent from 2011. Incurred claims and loss adjustment expenses were $13.5 billion. The underwriting loss was $0.3 billion.
Comparable 2011 figures were: earned premium, $18.0 billion; incurred claims and loss adjustment expenses, $15.4 billion; underwriting loss, $2.6 billion.
Health – The individual health insurance operations for State Farm Mutual reported an underwriting loss of $97 million, excluding premium deficiency reserve. Net written premium was $690 million.
Comparable figures for 2011 were: underwriting loss, $60 million; net written premium, $692 million.
Property-Casualty (P-C) – The combined underwriting loss was $1.7 billion on earned premium of $52.3 billion. These results, combined with investment and other income of $4.5 billion, resulted in a pre-tax operating profit of $2.7 billion. The after-tax net income for the P-C companies was $2.6 billion.
Comparable 2011 figures were: earned premium, $51.4 billion; underwriting loss, $4.5 billion; investment and other income, $4.3 billion; pre-tax operating loss, $0.2 billion; net income, $0.2 billion.
Life – State Farm life affiliates – State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd., and State Farm Life and Accident Assurance Company – added $27 billion of total life insurance in force during the year, bringing the companies' total insurance in force to $805 billion at the end of 2012. The life affiliates also reported $620 million in dividends to policyholders in 2012.
The life affiliates reported premium income of $4.8 billion in 2012, an increase of $94 million compared with 2011. In 2012, after-tax net income was $471 million. Net income was $625 million in 2011.
State Farm Bank® – After-tax net income in 2012 was $53 million and total assets for State Farm Bank, F.S.B. were $14.2 billion as of year-end 2012. Comparable figures for 2011 were: after-tax net income, $32 million; total assets, $14.7 billion.
Mutual Funds – Total assets under management for the retail Mutual Fund operations at the end of 2012 were $7.6 billion, compared with $6.0 billion at the end of 2011. State Farm VP Management Corp. and State Farm Investment Management Corp. reported a combined after-tax net loss of $4 million in 2012, following after-tax net income of $1 million in 2011.
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.
Investing involves risk, including potential for loss. 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.
Before investing, consider the funds' investment objectives, risks, charges and expenses. Contact State Farm VP Management Corp. (1-800-447-4930) for a prospectus or summary prospectus containing this and other information. Read it carefully. AP2013/02/0867
SOURCE State Farm