State Farm’s property-casualty underwriting loss widened last year. The nation’s largest insurer reported a $6.5 billion underwriting loss in 2017, compared to $5.5 billion in 2016.
The figure includes a $2.8 billion underwriting loss for State Farm’s auto insurance business.
Overall, the insurer reported a pre-tax operating loss of $1.7 billion for its 11 property-casualty businesses, on $78.3 billion of revenue (up from $76.1 billion in 2016).
Net income grew from $0.4 billion in 2016 to $2.2 billion in 2017.
“In 2017, State Farm helped our customers recover from unexpected losses, including several catastrophic events,” said Senior Vice President, Treasurer and 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 neighbors’ and have the financial resources to be there in our customers’ time of need.”
Despite the underwriting losses, State Farm’s net worth in 2017 grew to $97 billion, up from $87.6 billion in 2016. State Farm attributed the growth to gains in its stock portfolio and the revised corporate tax rate.
Earned premium increased to $63.9 billion, up from $61.7 billion in 2016.
“Our employees, agents and agent team members are making significant changes and process improvements across our company to better serve our customers,” Farney added. “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.”