STATE FARM POSTS 61% DROP IN EARNINGS IN 2000

Illinois-based State Farm Insurance Cos has posted a 2000 net income of $408.1m, marking a decline of 61% that was largely tied to underwriting losses in its p/c operations and a record $1bn dividend payment to motor policyholders. The group, which has reduced rates in an effort to recover recently lost market share, had an operating loss of $1.9bn on revenues of $47.9bn, up 7.2%. Its three motor insurance subsidiaries had combined net income of $557.6m, down 31%, as investment gains more than offset their $3.6bn underwriting loss and $1bn dividend payout. Earned premiums increased by 1% to $25.1bn. The group’s four property insurance affiliates posted a net loss of $410.1m — almost 20 times larger than the year-earlier loss of $21.1m — as investment gains failed to offset underwriting losses of $2bn. The group’s two life affiliates recorded net income of $252.5m, an increase of 14%, on premiums of $3bn, up 3.4%.