State Farm Insurance reported a $2 billion increase in net income in 2015, but much of that resulted from capital gains on stock investments State Farm has in other companies.
Net income for 2015 was $6.2 billion compared to $4.2 billion the previous year. State Farm spokesman Dave Phillips said the company benefited from its investment in the stock of companies that merged last year.
"Two mergers between four companies, specifically pharmaceuticals, and that helped with investment strategy and the investment profits of the company."
The Bloomington-based insurer experienced an underwriting loss for the second year in a row. The overall underwriting loss was $2.1 billion compared to $939 million a year earlier. Phillips said most of those losses occurred in the auto insurance division.
"With the increased volume of traffic and the increased distances of travel, there was an increase in collisions, damages which were also tied to the cost of vehicle repair."
Phillips said income from auto premiums increased 2.7%, but the underwriting loss from claims also went up, by $1 billion. Underwriting losses from homeowners' claims improved last year as a result of better weather and fewer natural disasters.
