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Bloomington, IL,
26
February
2016

State Farm® Announces 2015 Financial Results

Bloomington, Ill., February 26, 2016 - The State Farm property-casualty (P-C) companies reported an underwriting loss of $2.1 billion in 2015 on earned premium of $58.6 billion, compared with an underwriting loss of $939 million in 2014. The 2015 underwriting loss, combined with investment and other income of $4.0 billion (down $0.3 billion from 2014), resulted in a P-C pre-tax operating profit of $1.9 billion. The combined net worth for the State Farm group ended the year at $82.7 billion compared with $80.0 billion at year-end 2014. The increase reflects the P-C pre-tax operating profit and includes a $1.8 billion decrease related to the P-C companies' unaffiliated stock portfolio, which is primarily invested in the U.S. equities market.

"We remain the national leader in auto, home and individual life insurance, because State Farm has helped people with their insurance and financial services needs for nearly 94 years. We are financially strong, so we can stand behind our promises to our customers and help them live life confidently, every day. In addition to online and mobile self-service choices, more than 160,000 State Farm employees, agents and agent team members stand ready to help customers, anytime, anywhere. And we're proud of being a good neighbor, helping to create thriving communities through volunteerism and financial support," said Senior Vice President, Treasurer and Chief Financial Officer Jon Farney.

Total revenue, which includes premium revenue, earned investment income, and realized capital gains (losses), was $75.7 billion for 2015 compared with $71.2 billion for 2014. State Farm reported net income of $6.2 billion in 2015, compared with $4.2 billion in net income in 2014. The increase in net income included a $3.0 billion increase in realized capital gains due to two corporate mergers impacting stocks owned within the unaffiliated stock portfolio.

Financial results for the State Farm affiliated companies are incorporated in the State Farm group's financial results. The State Farm insurance operations consist of nine P-C insurers and two life insurers, each of which is managed on an individual affiliate level. The P-C insurers are primarily engaged in automobile, health, homeowners, commercial multiple peril (CMP), and reinsurance lines of business. The net results of State Farm Mutual Automobile Insurance Company (State Farm Mutual), State Farm Indemnity Company, State Farm Guaranty Insurance Company, State Farm County Mutual Insurance Company of Texas, and Oglesby Reinsurance Company include the automobile business as well as the health and reinsurance lines. 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 P-C 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 also provides banking products and mutual funds through affiliated companies. State Farm provides insurance and financial services products across more than 83 million policies and accounts.

Auto – The State Farm auto insurance business represented 62 percent of the P-C companies' combined net written premium. Earned premium was $36.3 billion, an increase of 2.7 percent from 2014. Incurred claims and loss adjustment expenses were $31.0 billion. The underwriting loss was $4.4 billion.

Comparable 2014 figures were: earned premium, $35.3 billion; incurred claims and loss adjustment expenses, $29.5 billion; underwriting loss, $3.4 billion.

Homeowners, CMP, Other – The net written premium for State Farm Fire and Casualty Company, State Farm Lloyds, State Farm General Insurance Company, and State Farm Florida Insurance Company represented 34 percent of the P-C companies' combined net written premium. Earned premium was $19.9 billion, an increase of 0.4 percent from 2014. Incurred claims and loss adjustment expenses were $12.2 billion. The underwriting gain was $2.1 billion.

Comparable 2014 figures were: earned premium, $19.8 billion; incurred claims and loss adjustment expenses, $12.5 billion; underwriting gain, $1.9 billion.

Health – The individual health insurance operations for State Farm Mutual reported an underwriting loss of $98 million, excluding premium deficiency reserve. Net written premium was $667 million.

Comparable figures for 2014 were: underwriting loss, $44 million; net written premium, $680 million.

Property-Casualty (P-C) – The combined underwriting loss was $2.1 billion on earned premium of $58.6 billion. These results, combined with investment and other income of $4.0 billion, resulted in a pre-tax operating profit of $1.9 billion. The net income for the P-C companies was $5.6 billion.

Comparable 2014 figures were: earned premium, $56.9 billion; underwriting loss, $939 million; investment and other income, $4.3 billion; pre-tax operating profit, $3.4 billion; net income, $3.6 billion.

Life – In 2015, State Farm Life Insurance Company and State Farm Life and Accident Assurance Company reported premium income of $5.5 billion and $582 million in dividends to policyholders. Net income for 2015 was $667 million. There was $844.8 billion in total life insurance in force at the end of 2015.

Comparable 2014 figures were: premium income, $5.2 billion; dividends to policyholders, $574 million; net income, $522 million; total life insurance in force, $819.8 billion.

State Farm Bank® – Net income in 2015 was $45 million and total assets for State Farm Bank, F.S.B. were $16.7 billion as of year-end 2015. Comparable figures for 2014 were: net income, $64 million; total assets, $16.8 billion.

Mutual Funds – Total assets under management for the retail Mutual Fund operations at the end of 2015 were $11.3 billion, compared with $10.6 billion at the end of 2014. State Farm VP Management Corp. and State Farm Investment Management Corp. reported combined net income of $12 million in 2015, following net income of $13 million in 2014.

 

State Farm Bank, Bloomington, Illinois, is a Member FDIC and an Equal Housing Lender. Insurance and securities products offered by affiliated companies of State Farm Bank are not FDIC insured, are not guaranteed by State Farm Bank and are subject to investment risk, including possible loss of principal invested.

Securities Issued by State Farm VP Management Corp. For more information, call 800-447-4930.

State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products. Neither State Farm nor its agents provide investment, tax, or legal advice. AP2016/02/0297

About State Farm

The mission of State Farm is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams. State Farm and its affiliates are the largest providers of auto and home insurance in the United States. Its nearly 19,000 agents and nearly 70,000 employees serve more than 84 million policies and accounts – more than 81 million auto, fire, life, health and commercial policies, and more than 2 million bank accounts. Commercial auto insurance, along with coverage for renters, business owners, boats and motorcycles, is available. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked No. 35 on the 2016 Fortune 500 list of largest companies. For more information, please visit http://www.statefarm.com.