How Good Is State Farm Auto Insurance – Bloomington, IL, February 27, 2023 – In 2022, State Farm insurance companies posted record losses due to rapidly increasing claims burdens and significant additions to claims that occurred in the previous accident year. While State Farm has had unfavorable business results in the auto sector, State Farm Mutual Automobile Insurance Company remains financially strong. Public life insurance companies paid nearly $600 million in dividends to policyholders and issued a record $110 billion in new policies, bringing individual life insurance in force to $1.1 trillion at the end of 2022. As the number one auto and home insurer in the US and a leader in individual life insurance, State Farm is committed to serving its policyholders and remains a strong choice for insurance and financial services needs.
“While 2022 was a year of significant growth at State Farm, our annual operating results were not at the level we expected as we consider each branch’s financial strength and long-term performance. At the same time, the organization remains financially strong,” said Senior Vice President, Treasurer and Chief Financial Officer John Farney. “We are delighted to have been able to help our customers during the pandemic and are here to help them cope with the current period of high inflation. As we take actions to improve our operational performance, we look forward to helping more people in more ways as we move into the next 100 years.”
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State Farm Mutual Automobile Insurance Company’s net worth ended the year at $131.2 billion, compared to $143.2 billion at the end of 2021 and $126.1 billion at the end of 2020. The change in 2022 includes a notable decline in the equity value of non-affiliated P-C portfolio companies driven by the decline in the US stock market along with the pre-tax operating loss of the P-C group of companies. The State Farm P-C group of companies reported $74.3 billion in earned premiums and a total loss of $13.2 billion. That result compares to a $4.7 billion loss on $67.2 billion in earned premium in 2021, along with $401 million in dividends to State Farm Mutual Automobile Insurance Company policyholders. Insurance results in 2022 reflect significantly higher auto lines claims, as well as higher accident-free homeowners claims and another year of accident activity nationwide. The 2022 insurance loss, combined with investment and other income of $4.9 billion, resulted in P-C’s pre-tax operating loss of $8.3 billion, which compares to a loss of $313 million reported in 2021 and a profit of $4.5 billion reported in 2020. Total revenue, which includes premium income, earned investment income and realized capital gains (losses), was $89.3 billion for 2022, compared to $82.2 billion in 2021 .State Farm reported a net loss of $6.7 billion in 2022 compared to $1.3 billion in net income in 2021.
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State Farm’s insurance operations consist of thirteen P-C companies and two life insurance companies, each of which is managed at the individual branch level. P-C firms primarily deal in auto, healthcare, homeowners, commercial multiple risk (CMP) and reinsurance. Life insurance companies primarily deal with individual life insurance and annuity business. The State Farm Group offers third-party mutual funds and third-party banking products through State Farm affiliates that act as intermediaries between third parties and State Farm customers. State Farm provides insurance and financial services in more than 91 million policies and accounts.
Auto – State Farm’s insurance business represents 61 percent of the combined net written premium of P-C companies. The premium won was 45.7 billion dollars. Claims incurred and loss adjustment costs were $48.4 billion, and all other insurance costs were $10.8 billion. The signing loss was $13.4 billion.
The comparisons for 2021 were: earned premium, $41.5 billion; incurred damages and loss adjustment costs, $34.6 billion; all other signing costs, $10.3 billion; loss from signing, $3.5 billion. Dividends to policyholders of State Farm Mutual Automobile Insurance Company totaled $401 million.
Homeowners, CMP, Other – Net written premium for the rest of the State Farm P-C business represents 37 percent of the combined net written premium of the P-C companies. The premium won was 27.6 billion dollars. Claims incurred and loss adjustment costs totaled $20.0 billion, and all other insurance costs totaled $6.7 billion. Earnings since signing were $849 million.
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The comparisons for 2021 were: earned premium, $24.7 billion; incurred damages and loss adjustment costs, $19.5 billion; all other signing costs, $6.3 billion; loss since signing, $1.1 billion.
Health – The individual health insurance operations for State Farm Mutual Automobile Insurance Company reported a loss of $81 million, excluding the change in the premium deficiency reserve. The net written premium was 723 million dollars.
Life – In 2022, State Farm Life Insurance Company and State Farm Life & Accident Insurance Company recorded $6.2 billion in premium income and $603 million in policyholder dividends. Net income for 2022 is $588 million. At the end of 2022, individual life insurance was $1.1 trillion.
Comparisons for 2021 are: premium income, $5.7 billion; dividends to policyholders, $593 million; net profit, $929 million; individual life insurance in force, $1.1 trillion.
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Investment Planning Services – Total assets under management for Investment Planning Services operations at the end of 2022 were $12.4 billion. State Farm VP Management Corp. and State Farm Investment Management Corp. reported an overall net loss of $43 million in 2022.
Although financial information is presented on a group/business basis, State Farm Auto Insurance Company and each of its affiliates must meet the solvency and regulatory requirements of individual entities without regard to the solvency or financial condition of any other related party.
State Farm VP Management Corp. is a separate legal entity from those state-owned agricultural enterprises that provide banking and insurance products. Neither State Farm nor its agents provide investment, tax or legal advice.
For more than 100 years, State Farm’s mission has been to help people manage the risks of everyday life, recover from the unexpected and achieve their dreams. State Farm and its subsidiaries are the largest providers of auto and home insurance in the United States. More than 19,400 agents and 67,000 employees service more than 91 million policies and accounts – including auto, fire, life, health, commercial and financial services accounts. Commercial auto insurance is also available, along with coverage for renters, business owners, boats and motorcycles. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked #44 on the Fortune 500 list of the 2023 largest companies. For more information, visit http://www.statefarm.com. State Farm Auto Insurance Review (2024) Our State Farm Auto Insurance Review found that State Farm Insurance’s rating from A.M. The best is A++, while the BBB gives the company an A+. State Farm auto insurance rates average $86 per month. State Farm Steer Clear and Drive Safe & Save can help young and high-risk drivers get lower rates.
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Leslie Kasperowicz graduated from the University of Winnipeg with a BA in Social Sciences. She spent several years as a CSR at Farmers Insurance, gaining a solid understanding of insurance products, including home, life, auto and commercial, and working directly with insurance clients to understand their needs. Since then, she has used this knowledge in more than ten years of writing, primarily in insurance…
Kristen is a licensed insurance agent working in the Boston area. He has over 20 years of experience advising individuals and companies on which insurance policies best suit their needs and budget. She knows that everyone has their own unique needs and circumstances and is passionate about advising others on what policy is right for them. Licensed in Massachusetts, New Hampshire, …
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With a significant market share, State Farm is one of the largest auto insurance companies in the United States. It offers several discounts for younger people or those who can prove they are safe drivers. From wide coverage options and discounts to excellent customer service, State Farm has earned its place as America’s largest insurance company.
Although reviews of State Farm auto insurance are mostly positive, you may be able to find better coverage elsewhere. Be sure to compare offers from as many companies as possible to find the best prices.
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