Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

State Farm Posts $5 Billion Loss for 2001

Bloomington, Ill. -- State Farm reported an after-tax net loss from all sources of $5.0 billion in 2001, compared with an after-tax net income of $0.4 billion in 2000. The deterioration is due to increased insurance operating losses and significantly reduced realized capital gains.

Premium revenue for State Farm was $40.0 billion for 2001, an increase of $2.4 billion over the 2000 figure of $37.6 billion. Total revenue, which includes premium revenue, earned investment income and realized capital gains, was $46.7 billion for 2001, a decrease of $1.2 billion from the 2000 figure of $47.9 billion. Total revenue would have increased except for a reduction in realized capital gains from $3.4 billion in 2000 to $0.3 billion in 2001.

Net worth for State Farm Mutual, the parent company of the group, declined by $5.7 billion to $38.0 billion. The primary reason for this decline was State Farm Mutual's pre-tax operating loss of $2.9 billion, which includes a $5.3 billion underwriting loss and net investment income earned and other income of $2.4 billion. Unrealized losses (after taxes) on the unaffiliated stock portfolio driven by the general market decline in 2001 amounted to $2.8 billion. State Farm Mutual's net worth is also affected by the results of operations of affiliates, which resulted in a loss for the year of $2.3 billion.

State Farm's insurance operations consist of seven property-casualty insurers and two life insurers. The property-casualty insurers are primarily engaged in automobile, health, homeowners, and commercial multiple peril (CMP) lines of business. The net results of State Farm Mutual Automobile Insurance Company, State Farm Indemnity Company and State Farm County Mutual Insurance Company of Texas reflect the auto and health business. 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 property-casualty lines of business. State Farm Life Insurance Company and State Farm Life and Accident Assurance Company write the life and annuity business. The State Farm group insures more than 39.7 million cars and almost 15.5 million homes in the United States and Canada.

State Farm's auto business represents about 70 percent of the property-casualty business written by the group. Earned premiums were $25.6 billion, an increase of 7.0 percent from 2000. The incurred claims and loss expenses were $25.3 billion. The underwriting loss was $5.6 billion.

Comparable 2000 figures were: earned premiums, $23.9 billion; incurred claims and loss expenses, $22.2 billion; underwriting loss, $3.7 billion before dividends to policyholders of $1.0 billion. In the Property-Casualty (P-C) segment, the combined underwriting loss was $9.3 billion on earned premiums of $36.9 billion. These results, combined with net investment income earned and other income of $3.4 billion, resulted in a pretax operating loss of $5.8 billion. After-tax net loss for the PC companies, which includes $0.3 billion of realized capital gains, was $5.1 billion. Comparable 2000 figures were: earned premiums, $34.6 billion; underwriting loss, $5.6 billion; dividends to policyholders, $1.0 billion; net investment income earned and other income, $3.5 billion; pretax operating loss, $3.1 billion; realized capital gains, $3.4 billion; net income, $0.1 billion.

©2002 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?