You are here:HomeNews CenterInsurance News2017State Farm Profit Plunges $7 Billion

State Farm Profit Plunges $7 Billion

State Farm Mutual Automobile Insurance Co., the largest U.S. property-casualty insurer, said annual profit fell 94 percent on car insurance claims costs...
March 7, 2017

Profit Down

State Farm Mutual Automobile Insurance Co., the largest U.S. property-casualty insurer, said annual profit fell 94 percent on car insurance claims costs. Net income dropped to $400 million from $6.2 billion in 2015, when results included one-time gains in the stock portfolio tied to pharmaceutical deals, the Bloomington, Illinois-based company said in a statement. The underwriting loss from auto insurance widened to $7 billion from $4.4 billion.

State Farm is among property-casualty insurers pressured by rising costs on auto policies as smartphones distract drivers and repair costs climb.

“Loss costs throughout the auto-insurance industry have been increasing at an unexpected pace,” Berkshire Chairman Warren Buffett said in his annual letter to shareholders.

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