State Farm, the nation’s largest property/casualty insurer by market share, suffered a $939 million underwriting loss in 2014, it was revealed this week.
The loss represents roughly 1.7% of State Farm’s $57 billion in earned premium for the year and stands in sharp contrast to 2013’s $20 million underwriting gain and $54.5 billion in earned premium.
State Farm still reported an operating profit thanks to earned investment income and realized capital gains, though its $4.2 billion net income represents a moderate, 20% decline from 2013’s %.2 billion net income. Net worth also increased to a record $80 billion, up 5.4% from a net worth of $75.9 billion in 2013.
Other results include a 5.6% increase in State Farm’s earned auto insurance premium to $35.3 billion. Homeowners’ insurance, typically more volatile due to extreme weather events, reported an underwriting gain of $1.9 billion.
“It was a good year,” said company spokesman Dick Luedke. “We did have underwriting losses, but they were more than made up for (through investments) in the positive economic climate.”
Luedke added that underwriting losses are not uncommon at State Firm. The firm has reported losses six out of the past seven years.
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