State Farm reported a notable improvement in its financial results for 2024, cutting its underwriting loss to just over $6 billion from $14 billion in 2023. This recovery was largely driven by its auto insurance segment, which saw losses drop by $7 billion year-over-year, though the sector still ended in the red.
The insurer posted a net income of $5.3 billion in 2024, a stark turnaround from the $6.3 billion net loss in 2023. Contributing to this recovery was a $3 billion impact from realized capital gains, net of tax. Total revenue surged to $123.0 billion, an 18% increase from the prior year’s $104.2 billion.
Auto insurance earned premiums climbed 20% to $67.5 billion, with underwriting losses improving to $2.7 billion -- down from $9.7 billion in 2023. This translated to an auto combined ratio of approximately 104, more than 13 points better than 2023’s 117. Property insurance, meanwhile, faced slower improvement, with earned premiums rising 13.1% to $34.5 billion, but underwriting losses only improving by $1.2 billion, settling at $3.5 billion.
Comparing its performance to competitors, State Farm’s personal auto loss and loss adjustment expense (LAE) ratio dropped nearly 11.9 points, surpassing the improvements seen at Progressive, GEICO and Allstate. However, its 83.3 loss and LAE ratio remained higher than GEICO’s 81.5 combined ratio, while Progressive’s combined ratio stood at 88.1. Progressive also outpaced State Farm in auto earned premium growth, reporting a 24% increase compared to State Farm’s 20%.
State Farm’s parent company, State Farm Mutual Automobile Insurance Company, ended 2024 with a net worth of $145.2 billion, up from $134.8 billion the previous year.
“The financial strength of State Farm Mutual Automobile Insurance Company and each of its affiliates is key to fulfilling our promises to customers,” the company said in a news release.
The insurer also addressed the impact of the January 2025 California wildfires, reporting it has processed more than 11,750 fire and auto claims and paid out nearly $2.2 billion as of Feb. 26.
Meanwhile, scrutiny over the financial stability of State Farm General, its California homeowners insurance subsidiary, continued. During a meeting with California Insurance Commissioner Ricardo Lara, State Farm executives emphasized the need for an emergency interim rate increase of 22% to maintain State Farm General’s financial viability.
Dan Krause, president and CEO of State Farm General, said this increase would provide a “positive sign” for future financial support requests to the parent company’s board.
When questioned about the potential for non-renewals in California, Treasurer and CFO Mark Schwamberger acknowledged that without the necessary rate adjustments and capital infusion, further policy cancellations could be inevitable.
“To the degree you cannot be self-sustaining and don’t have the capital to stand behind promises, we’re left with no other alternative,” he told Lara.
Despite these challenges, State Farm executives reiterated their commitment to California, citing the company’s nearly 100-year history in the state and support for regulatory reforms under the Sustainable Insurance Strategy. “We want to be here for 100 more, but we’ve got to be able to have this -- for State Farm General to survive,” Krause emphasized.
