State Farm reported a $10.4 billion decline in net worth primarily as a result of market conditions. At the end of 2008, the Bloomington, Ill.-based company's net worth stood at $53.3 billion. State Farm stated that losses related to its P&C companies' stock portfolio accounted for most of the decline.
The company sustained an after-tax net loss of $542 million in 2008, compared with $5.46 billion net income in 2007. It cites "extraordinary levels" of catastrophe damages as the reason behind the loss. The operating loss for State Farm follows five consecutive years of net income. The average annual amount of net income for State Farm through the first nine years of this decade is $1.6 billion.
Michael Tipsord, vice chairman, treasurer, and chief financial officer at State Farm, cautioned against attributing "too much significance to short-term operating results without first considering the level of financial strength."
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