STATE FARM’S INCOME FALLS 34% ON RATE CUTS AND REFUNDS

US insurer State Farm saw its 2020 net earnings fall 34% to $3.7bn after cutting motor rates by an average 11% nationally for total policyholder savings of $2.2bn, and returning another $2bn to customers in the form of dividends and premium refunds in recognition of fewer miles driven and claims amid pandemic-related lockdowns. Operating income in its property/casualty segment fell 21% to $4.5bn. With the refunds, rate cuts and dividends, the segment’s underwriting income fell 59% to $777m on earned premiums of $65.1bn, up 1.1%. The group’s motor business swung to underwriting income of $3.5bn from a loss of $764m on earned premiums of $41.3bn, down 0.5%. Its homeowners, commercial multi-peril and “other” business swung to an underwriting loss of $1.6bn from income of $2bn owing to record catastrophe activity during the year. The division’s earned premiums grew 2.2% to $22.9bn.