State Farm reports record net worth in 2013

Feb. 28--BLOOMINGTON -- State Farm increased it's net worth by 16 percent to $75.9 billion in 2013, the highest net worth in the company's 91-year history.

The positive earnings report, released Friday, was due to a gain in underwriting and more income from investments, said company officials.

McLean County's largest employer also reported a $2 billion jump in net income in 2013. State Farm's property-casualty companies, which includes auto and homeowner insurance, grew its pre-tax operating profits by 59 percent, from $2.7 billion in 2012 to $4.3 billion in 2013.

The jump in profits and net worth was due to a positive year for State Farm's stock investments, said spokesman Dick Luedke. About 60 percent of the gain in net worth can be attributed to stock investments.

"Net worth is everything we have and that's a lot. It did go up and it was a significant increase. About two-thirds of it was an increase in the value of our stock portfolio," Luedke said. "It was a very good year for those who invested in stocks and bonds."

Although 2013 had major catastrophic weather events, none were major enough to have a significant impact on State Farm's finances, leading to a $230 million underwriting gain in 2013 on earned premium of $54.5 billion, compared to an underwriting loss of $1.7 billion in 2012.

"The business is volatile. When you look at one year of results you can't get too wrapped up in that. It's kind of like looking at one inning of a baseball game," Luedke said.

For example, Luedke added, in 2006 the company grew it's net worth by 16 percent, but in 2008 the net worth decreased by 16 percent.

State Farm CEO Edward Rust, Jr., had a base salary of $1.75 million in 2013, but combined with bonuses and incentives, earned $11.56 million last year. His total compensation in 2012 was $9.64 million, which included the same base salary of $1.75 million.

Rust's base salary has been $1.75 million each year since 2001. His compensation is based on the previous three years of financial results, growth in business, customer retention and employee satisfaction, Luedke said.

This story will be updated.

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