STATE FARM NARROWS 2002 LOSS TO $2.8BN

Illinois-based State Farm has posted a 2002 net loss of $2.8bn, nearly halving the $5bn loss that it posted a year earlier. The company, the largest personal lines p/c insurer in the US, said that results reflected higher premiums in its motor and homeowners’ lines, plus tax recoverables. Premiums written for the year increased 11% to $44.4bn, including $3.4bn of life premiums. Its p/c operations had an underwriting loss of $6bn on earned premiums of $41bn, resulting in a net loss for the year of $2.7bn, down from $5.1bn. The mutual insurer said that its net worth fell by $6.3bn to $31.8bn at year-end. Analysts have noted that State Farm is likely to continue to raise rates and lose business to other motor and homeowners’ insurers. Merrill Lynch’s Jay Cohen said in a research note that the group’s “poor results should continue to provide a healthy environment for the bigger, better auto carriers over the next year”.