Auto and homeowners insurer State Farm has announced its 2023 financial results, reporting earned premium of $87.6 billion and a combined underwriting loss of $14.1 billion across its P&C group of companies.
This result compared to an underwriting loss of $13.2 billion on earned premium of $74.3 billion in 2022.
According to the firm, the change over 2022 reflects improvement in auto lines underwriting results which was offset by the significant increase in homeowners incurred catastrophe claims.
In the auto insurance sector, State Farm reported an underwriting loss of $9.7 billion, compared to the $13.4 billion reported in the year prior.
The homeowners, commercial multiple peril (CMP), and other lines experiencing a $4.7 billion underwriting loss. This compares to an underwriting gain of $849 million in 2022.
State Farm’s health insurance sector saw an underwriting loss of $106 million, which compares to the $81 million reported in 2022. While the life insurance sector saw a net income of $1.2 billion in 2023, the year prior, the insurer reported $588 million of net income for the sector.
The 2023 underwriting loss, combined with investment and other income of $5.6 billion, resulted in a P&C pre-tax operating loss of $8.5 billion, which compares to the $8.3 billion loss reported in 2022.
State Farm reported net income of $1.2 billion for its life insurance companies. Overall, the insurer reported a net loss of $6.3 billion in 2023, compared to a net loss of $6.7 billion in 2022.
Additionally, in 2023, State Farm also experienced growth in policies as it added over 3 million policies and accounts across all product lines, bringing the total count now stands at 94 million.
The net worth for State Farm Mutual Automobile Insurance Company ended 2023 at $134.8 billion compared to $131.2 billion at year-end 2022.
Senior Vice President, Treasurer and Chief Financial Officer Mark Schwamberger, said: “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.
“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.”
The results come a year after the insurer’s decision to withdraw from the California homeowners’ market; a decision that was not going to affect personal auto coverage in the state, according to the firm.
State Farm General Insurance Company, the firm’s homeowners insurer in California, had stated that it will “cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023.”
It also cited exposure related issues and a challenging reinsurance market environment among the reasons why they decided to retire from the market in the state.
