State Farm Announces 2013 Financial Results

BLOOMINGTON, Ill., Feb. 28, 2014 /PRNewswire/ -- The State Farm property-casualty (P-C) companies reported an underwriting gain of $230 million in 2013 on earned premium of $54.5 billion, compared with an underwriting loss of $1.7 billion in 2012.  The underwriting gain, combined with investment and other income of $4.1 billion (down $0.4 billion from 2012), resulted in a P-C pre-tax operating profit of $4.3 billion.  The combined net worth for the State Farm group ended the year at $75.9 billion compared with $65.4 billion at year-end 2012.  The increase reflects the P-C pre-tax operating profit and includes a $6.4 billion increase related to the P-C companies' unaffiliated stock portfolio, which is primarily invested in the U.S. equities market.

"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.  In each of those interactions, we aim to provide consistently remarkable experiences," said State Farm Executive Vice President, Treasurer and Chief Financial Officer Paul Smith.

Total revenue, which includes premium revenue, earned investment income, and realized capital gains (losses), was $68.3 billion for 2013 compared with $65.3 billion for 2012.  State Farm reported net income of $5.2 billion in 2013, compared with $3.2 billion in net income in 2012.   

Financial results for the State Farm affiliated companies are incorporated in the State Farm group's financial results.  However, each affiliate's individual results vary.  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 (CMP), 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 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. 

Auto – The State Farm auto insurance business represents 61 percent of the P-C companies' combined net written premium.  Earned premium was $33.4 billion, an increase of 3.9 percent from 2012.  Incurred claims and loss adjustment expenses were $27.0 billion.  The underwriting loss was $2.4 billion. 

Comparable 2012 figures were: earned premium, $32.2 billion; incurred claims and loss adjustment expenses, $25.5 billion; underwriting loss, $1.3 billion. 

Homeowners, CMP, Other – The net written premium for State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company, and State Farm Florida Insurance Company represents 35 percent of the P-C companies' combined net written premium.  Earned premium was $19.0 billion, an increase of 4.0 percent from 2012.  Incurred claims and loss adjustment expenses were $11.6 billion.  The underwriting gain was $2.1 billion. 

Comparable 2012 figures were: earned premium, $18.3 billion; incurred claims and loss adjustment expenses, $13.5 billion; underwriting loss, $326 million. 

Health – The individual health insurance operations for State Farm Mutual reported an underwriting loss of $46 million, excluding premium deficiency reserve.  Net written premium was $699 million. 

Comparable figures for 2012 were: underwriting loss, $97 million; net written premium, $690 million. 

Property-Casualty (P-C) – The combined underwriting gain was $230 million on earned premium of $54.5 billion.  These results, combined with investment and other income of $4.1 billion, resulted in a pre-tax operating profit of $4.3 billion.  The net income for the P-C companies was $4.6 billion. 

Comparable 2012 figures were: earned premium, $52.3 billion; underwriting loss, $1.7 billion; investment and other income, $4.5 billion; pre-tax operating profit, $2.7 billion; net income, $2.6 billion. 

Life – The State Farm life affiliates – State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd., and State Farm Life and Accident Assurance Company – added $25 billion of total life insurance in force during the year, bringing the companies' total insurance in force to $830 billion at the end of 2013.  The life affiliates also reported $576 million in dividends to policyholders in 2013. 

The life affiliates reported premium income of $5.1 billion in 2013, an increase of $335 million compared with 2012.  In 2013, net income was $493 million.  Net income was $471 million in 2012. 

State Farm Bank^®– Net income in 2013 was $48 million and total assets for State Farm Bank, F.S.B. were $15.8 billion as of year-end 2013.  Comparable figures for 2012 were: net income, $53 million; total assets, $14.2 billion.       

Mutual Funds – Total assets under management for the retail Mutual Fund operations at the end of 2013 were $9.2 billion, compared with $7.6 billion at the end of 2012.  State Farm VP Management Corp. and State Farm Investment Management Corp. reported a combined net income of $2 million in 2013, following a net loss of $4 million in 2012. 

State Farm Bank, Bloomington, Illinois, is a Member FDIC and an Equal Housing Lender.  Insurance and securities products offered by affiliated companies of State Farm Bankare not FDIC insured, are not guaranteed by State Farm Bank and are subject to investment risk, including possible loss of principal invested. 

Investing involves risk, including potential for loss.  State Farm VP Management Corp. is a separate entity from those State Farm Entities which provide banking and insurance products. 

Before investing, consider the funds' investment objectives, risks, charges and expenses.  Contact State Farm VP Management Corp. (1-800-447-4930) for a prospectus or summary prospectus containing this and other information.  Read it carefully.  

SOURCE State Farm