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March 01, 2012 at 09:05 AM
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.
Experts from insurance companies ranging from property/casualty to life insurance will discuss their companies’ economic position at the New York Society of Security Analysts’ (NYSSA’s) 16th Annual Insurance Conference from March 19–20, 2012.
Robert P. Hartwig, president and economist at Insurance Information Institute, will provide an outlook for the industry on day one of the conference. On the second day, Stephen L. Way, chairman and CEO at Houston International Insurance Group, will examine the industry from a private equity perspective.
Nationwide Mutual Insurance Co., Columbus, Ohio, the official insurance provider of the Central Intercollegiate Athletic Association (CIAA), has donated $120,000 donation to the CIAA college scholarship fund, as part of its ongoing support of CIAA institutions and students. To date, Nationwide has contributed more than $600,000 to the CIAA scholarship fund.
Still River Retirement Planning Software, Inc., Harvard, Mass., is offering a new software tool to help sell fixed annuities in both the qualified and the non-qualified markets. The product, RetirementWorks with Annuities, produces a retirement analysis that illustrates hypothetical future cash flows for an individual or household both with and without the purchase of a fixed annuity. The software also evaluates the “with” and “without” alternatives under various scenarios (a “normal” scenario, as well as several financially adverse scenarios); and it produces a report card that grades the
The Principal Financial Group Inc., Des Moines, Iowa (NYSE: PFG), has entered an agreement to purchase a 60% indirect ownership of Claritas Administração de Recursos Ltda. / Claritas Investments, Ltd. The company did not disclose the purchase price.
