State Farm underwriting losses widen to $6.5bn in 2017
The State Farm property/casualty (P&C) group of companies reported a combined underwriting loss of $6.5 billion in 2017 on earned premium of $63.9 billion, compared to an underwriting loss of $5.5 billion on earned premium of $61.7 billion in 2016.
The 2017 underwriting loss, combined with investment and other income of $4.8 billion, resulted in a P&C pre-tax operating loss of $1.7 billion. The underwriting loss in 2017 was driven by significant catastrophe losses. Even with these operating losses, each of the State Farm companies remains financially strong, the firm said.
"In 2017, State Farm helped our customers recover from unexpected losses, including several catastrophic events,” chief financial officer Jon Farney. “While we had operating losses for the year, we are built to handle these events and we continue to be 'good neighbours' and have the financial resources to be there in our customers' time of need," Farney added.
"Our employees, agents, and agent team members are making significant changes and process improvements across our company to better serve our customers. We will continue becoming a leaner and stronger company in our pursuit of helping customers recover from the unexpected and being there to help life go right."
Total revenue, which includes premium revenue, earned investment income and realized capital gains (losses) was $78.3 billion for 2017 compared to $76.1 billion for 2016. State Farm reported net income of $2.2 billion in 2017, compared to $0.4 billion of net income in 2016.
The State Farm insurance operations consist of eleven P&C companies and two life companies. 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 mutual funds through affiliated companies.
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