BLOOMINGTON, Ill. – State Farm saw a net loss of $6.3 billion in 2023 due in part to what the company calls a “significant” increase in the severity of damage claims from homeowners’ policies.
Bloomington-Normal’s largest employer’s net loss in 2023 was less than in 2022, when State Farm suffered a $6.7 billion net loss.
Reporting 2023 results on Thursday, State Farm said the company remains “financially strong”, as its auto insurance division’s net worth grew by $3.5 billion in 2023 to $134.8 billion.
Earned auto insurance premiums increased to $56.1 billion in 2023, up from $45.7 billion in 2022. Still, State Farm recorded an underwriting loss of $9.7 billion for auto insurance, beating the company’s $13.4 billion underwriting loss the previous year.
State Farm collected $30.5 billion in premiums in the category including homeowners’ insurance last year, up from $27.6 billion in 2022. However, the company’s underwriting losses totaled $4.7 billion in 2023, as compared to an underwriting gain of $849 million in 2022.
Auto insurance accounts for 64% of premiums paid to State Farm’s property and casualty companies, while homeowners’ policies represent 35% of premiums.
“While we improved overall auto lines profitability in 2023, our results remain below the level we expect and we’re taking a state-specific approach as we operate,” Senior Vice President, Treasurer and Chief Financial Officer Mark Schwamberger said in a prepared statement.
“Catastrophe losses were widespread in 2023, and our claims and operations team members, along with the State Farm independent contractor agents, responded throughout the year to help customers. State Farm Mutual Automobile Insurance Company remains financially strong, and it is that strength that allows us to handle uncertainty and serve more customers in more ways over the long term,” Schwamberger added.
The net worth for State Farm Mutual Automobile Insurance Company ended 2023 at $134.8 billion, as compared to $131.2 billion at the end of 2022.
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