While continuing to be shrouded in controversy as it threatens to drop more policies if its California rate hike is rejected, State Farm reported a $5.3 billion net income in 2024, reversing a $6.3 billion net loss in 2023, driven by capital gains and a significant reduction in its pretax operating loss.
Read more: State Farm threatens to drop more policies
That loss, which included underwriting results and $6 billion in investment and other income, narrowed to $111 million from $8.5 billion the previous year.
Automobile underwriting results showed significant improvement, though the company noted an increase in homeowners’ catastrophe claims. Meanwhile, State Farm’s property and casualty companies’ earned premium rose to $103 billion from $87.6 billion. The combined underwriting loss narrowed to $6.1 billion from $14.1 billion in 2023.
The auto insurance underwriting loss, which accounts for 65% of the company’s property and casualty net written premium, decreased to $2.7 billion in 2024 from $9.7 billion a year earlier.
Chief financial officer Mark Schwamberger stated that State Farm will continue to take a "state-specific approach" to its operations. He emphasized the financial strength of each affiliate as key to maintaining commitments to policyholders.
Schwamberger also noted that the company processed over 11,750 claims and paid nearly $2.2 billion in losses related to the Los Angeles wildfires in January.
State Farm Life Insurance Co. and State Farm Life and Accident Assurance Co. reported a net income increase to $1.7 billion from $1.2 billion, with $1.18 trillion in individual life insurance in force at year-end.
State Farm released its annual results two days after Schwamberger met with California Insurance Commissioner Ricardo Lara and other officials to discuss the company’s request for emergency action on interim property rate increases ranging from 15% to 38%. However, Lara said the company has not provided sufficient evidence to justify emergency property rate hikes.
The insurer has warned regulators that it may cancel a significant number of policies if its request for an emergency rate hike is denied. The company said it has met with Lara again to push for an immediate 22% increase in homeowner premiums, as well as hikes for rental and condo policies due to the massive wildfire-related losses.
In January, State Farm said it had paid out nearly $500 million in claims following the Los Angeles wildfires, processing a total of 10,100 claims for home and auto damage resulting from the fires.
