State Farm posts 56% decline in earnings in 2011
By National Underwriter
By Warren S. Hersch
Multiline insurer State Farm Mutual Automobile Insurance Co. posted a 56% decline in earnings and a slight increase in revenue in 2011, according to the company’s year-end financial results.
State Farm, Bloomington, Ill. reported an after-tax net income of $0.8 billion in 2011, down from $1.8 billion in net income in 2010. Company revenue in 2011 (including premium revenue, earned investment income and realized capital gains) was $64.3 billion, up from $63.2 billion for 2010.
Combined net worth for the State Farm group declined in 2011 by $0.4 billion to end the year at $60.8 billion. This includes a $0.2 billion decrease in net worth related to the property-casualty (P-C) companies' unaffiliated stock portfolios. The results also reflect a $0.2 billion pre-tax operating loss for the P-C companies, which includes an underwriting loss of $4.5 billion, $1.3 billion higher than the underwriting loss in 2010. State Farms says the 2011 underwriting results were negatively impacted by catastrophic events.
"Our 2011 financial results must be viewed in the context of five catastrophe events that are among the 25 largest in our history," says State Farm Senior Vice President, Treasurer and Chief Financial Officer Paul Smith.
State Farm also reports that its life insurance affiliates—State Farm Life Insurance Company, State Farm International Life Insurance Company Ltd. and State Farm Life and Accident Assurance Company—added $21 billion of total life insurance in force during the year, bringing the companies' total insurance in force to $779 billion on Dec. 31, 2011. The life affiliates also reported $638 million in dividends to policyholders in 2011.
The life affiliates reported premium income of $4.7 billion in 2011, an increase of $52 million compared with 2010. In 2011, after-tax net income was $625 million. Net income was $456 million in 2010.
In other company news:
CNO Financial Group, Inc., Carmel, Ind., has approved an additional $100 million to repurchase the company's outstanding common stock. The amount is in addition to the approximately $30 million remaining on its previous authorization, for a combined repurchase authority totaling $130 million.
Old Republic International Corp., Chicago, (NYSE: ORI), declared a quarterly cash dividend on the common stock of 17.75 cents per share. The dividend is payable March 20, 2012, to shareholders of record on March 12, 2012. Subject to board approval of each quarter's new rate, the full year's cash dividend will amount to 71 cents per share compared to 70 cents paid in 2011.
Colonial Life & Accident Insurance Co., Columbia, S.C., says it will donate $100,000 over the next three years to the Celebrate Freedom Foundation to avail middle and high school students of access to expanded educational opportunities. The foundation’s educational programs focus on “STEM” subjects—science, technology, engineering and math—that are considered essential to the nation’s competitiveness and leadership role in the world economy.
Colonial Life says the goal is to encourage students to learn more about and pursue careers in fields that rely on these skills.
Originally published on LifeHealthPro.com