Even though State Farm’s auto businesses suffered a loss in 2013, the property/casualty companies reported a $230 million underwriting gain, State Farm reported on Friday.
The $230 million gain of $230 million on earned premium of $54.5 billion compared with an underwriting loss of $1.7 billion in 2012, State Farm said, adding that overall P/C operating profit was $4.3 billion investment and other income of $4.1 billion
Net income for the P/C companies was $4.6 billion.
State Farm’s auto insurance business, representing 61 percent of the P/C companies’ combined premium, suffered an underwriting loss was $2.4 billion.
Over the weekend, Berkshire Hathaway’s chairman, Warren Buffett, highlighting a $1.1 billion underwriting profit at Berkshire’s GEICO auto insurance businesses in 2013, drew a comparison to State Farm, noting that State Farm had posted an underwriting loss in nine of the 12 years ending in 2012.
In conjunction with its earnings statement, State Farm Executive Vice President, Treasurer and Chief Financial Officer Paul Smith, said, “State Farm’s priority, as it has been throughout our 91-year history, is to focus on our customers’ needs and expectations and maintain the long-term financial strength they depend on. We have thousands of opportunities to connect with customers every day as they continue to turn to us for the brand they trust and the products they desire.”
For homeowners, commercial multiple peril and other lines written through State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company, and State Farm Florida Insurance Company, the underwriting gain was $2.1 billion.
Individual health insurance operations for State Farm Mutual reported an underwriting loss of $46 million.
Earned premiums for auto and the property lines each increased about 4.0 percent in 2013—with auto insurance premiums increasing 3.9 percent to $33.4 billion, and the other P/C lines, 4.0 percent to $19.0 billion.
The 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, 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 life affiliates reported net income was $493 million in 2013.
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 83 million policies and accounts.
Source: State Farm