State Farm posts a BIG underwriting loss in 3rd Quarter

Excerpts from the link below: H/T a reader


Rapid increases in costs to repair and replace vehicles appears to have significantly impacted costs to close both new and older claims in the third quarter, an S&P Global Market Intelligence analysis of newly filed statutory financials by the No. 1 U.S. private auto insurer concludes.

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The State Farm Mutual Automobile Insurance Co. property and casualty group posted a net underwriting loss of $4.57 billion in the third quarter, an amount that was approximately $1 billion larger than any previous underwriting loss attributable to that group in a single quarter in at least the last 21 years. The group generated net underwriting losses of $3.22 billion in the second quarter of 2022 and $3.56 billion in the third quarter of 2021 amid inflationary pressures on the auto business and elevated catastrophe losses.

The top-tier mutual was responsible for $4.18 billion of the group’s tally. This amount appears to rank as the largest net underwriting loss for any individual U.S. P&C insurer in any quarter in at least 21 years without adjusting for inflation, surpassing the $3.44 billion in red ink that Allstate Insurance Co. posted in the third quarter of 2005 when Hurricane Katrina struck the Gulf Coast.

Auto physical damage losses from Hurricane Ian undoubtedly had a negative impact on State Farm’s historically challenging results, but data in the top-tier mutual’s statutory filings suggest inflationary pressures played an even more significant role.

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10 thoughts on “State Farm posts a BIG underwriting loss in 3rd Quarter

    1. with an overall surplus significantly north of $100 billion, sf more than likely will not go the way of sears and km anytime soon. they may, however, eventually migrate the hq out of il to atlanta, dallas or phoenix, much the way caterpillar, boeing and others have done recently.


  1. I know I have noticed this, and I’m sure others have too. there seems to be a LOT more bad wrecks and little “fender benders” as well the past year or so. Not exactly sure why, I do have a few theories but the thing is, there ARE more wrecks which means more claims, and as costs soar, and will continue to soar, insurance is going to soar as well. It’s set in motion now and it’s going to be VERY difficult to stop. State Farm needs to figure it out one way or another, as do other insurance companies. Repair places have people over a barrel so to speak and can raise their costs accordingly. maybe go back to learning how to just REPAIR dents and dings instead of replacing entire panels/sides/sections etc. of cars for every little dent and ding, that might help.


    1. Probably because people in this community treat traffic signals as mere suggestions. The police do absolutely NOTHING about it.


  2. They are going for their ESG score and their shady data sharing and attorney and legal network make the top on a shady industry. Image is everything. $$$$. Technocratic frauds. Gone woke long time ago.


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