State Farm reported an increase in its combined networth in 2010 by $3.1 billion to end the year at $61.2 billion. The primary reason for the improvement was a $1.9 billion increase in the value of the property-casualty (P/C) companies' unaffiliated stock portfolio (net of deferred tax). The increase comes after a $4.8 billion increase in net worth in 2009, which followed a $10.4 billion decrease in 2008.
State Farm group's net worth is 40 percent higher than it was 10 years ago.
The P/C companies reported a $3.1 billion underwriting loss in 2010, a $0.6 billion improvement from 2009.
"2010 was another economically challenging year for many of our customers," said State Farm Senior Vice President, Treasurer and Chief Financial Officer Paul Smith. "State Farm has maintained the financial strength needed to serve our customers. We attribute that strength not only to our continued focus on the customer, but also to our commitment to the fundamentals of our business."
State Farm reported $1.8 billion in after-tax net income in 2010, compared with $0.8 billion in net income in 2009. The improvement in 2010 was driven by the P-C companies' improved results.
"While it is productive to examine our financial results each year," said Smith, "our priority is to achieve long-term operating results that allow us to maintain a level of financial strength that ensures long-term sustainability. This strategy is what has allowed us to fulfill the promises we have made throughout the 88 years we have been in business."
The P/C companies reported a pre-tax operating gain of $1.0 billion in 2010, which includes the underwriting loss of $3.1 billion, offset by investment and other income of $4.1 billion. This compares with a pre-tax operating gain of $0.4 billion in 2009, which included investment and other income of $4.1 billion and an underwriting loss of $3.7 billion. The State Farm group's net worth is also affected by the results of operations of non-P?C affiliates, which resulted in a gain of $0.6 billion in 2010.
Total revenue, which includes premium revenue, earned investment income and realized capital gains (losses), was $63.2 billion for 2010 compared with $61.5 billion for 2009.