What is State Farm financial rating?
AM Best has downgraded the financial strength rating to B (Fair) from A (Excellent) of State Farm General Insurance Company, the unit of the personal lines giant that provides California homeowners business.
AM Best has downgraded the financial strength rating to B (Fair) from A (Excellent) of State Farm General Insurance Company, the unit of the personal lines giant that provides California homeowners business.
Auto and homeowners insurer State Farm has announced its 2023 financial results, reporting earned premium of $87.6 billion and a combined underwriting loss of $14.1 billion across its P&C group of companies. This result compared to an underwriting loss of $13.2 billion on earned premium of $74.3 billion in 2022.
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score☉ in the U.S. reached 714.
Allstate and State Farm have similar customer satisfaction ratings, but Allstate coverage costs almost twice as much as State Farm's on average. Allstate offers tourist car insurance for travelers in Mexico, a type of coverage not offered by State Farm.
Financially strong for 100 years
When you buy auto insurance from State Farm, you'll be backed by the financial strength of a company that is able to pay your claims today, tomorrow, and well into the future.
California's largest home insurer, State Farm, plans to drop tens of thousands of policyholders later this year because of significant wildfire risk. Those customers will not have their policies renewed once their current contract is up. Many of them live in Contra Costa, Sonoma, Santa Clara and Santa Cruz Counties.
State Farm Mutual Automobile Insurance Company remains financially strong, and it is that strength that allows us to handle uncertainty and serve more customers in more ways over the long term.”
“In 2023, State Farm property and casualty insurance companies experienced growth in policies while also reporting underwriting losses due to continued elevated claims severity and significant catastrophe activity, for both the auto and homeowners insurance companies,” the company said in a media statement.
State Farm sustained a record-breaking $13.2 in underwriting losses (many for auto claims) in 2022. The losses — and associated premium increases — are largely attributed to a few factors: Inflation continues to be higher than normal. Labor and parts costs have gone up for repairs.
What is the AM Best rating for State Farm insurance?
Friday, AM Best downgraded the financial strength rating of State Farm General to “B” (fair) from “A” (excellent) and the long-term issuer credit rating to “bb+” (fair) from “a” (excellent).
Five independent agencies—A.M. Best, Fitch, Kroll Bond Rating Agency (KBRA), Moody's and Standard & Poor's—rate the financial strength of insurance companies. Each has its own rating scale, its own rating standards, its own population of rated companies, and its own distribution of companies across its scale.
| A.M. Best | Fitch Ratings | |
|---|---|---|
| 1. | A++ Superior | AAA Exceptionally Strong |
| 2. | A+ Superior | AA+ Very Strong |
| 3. | A Excellent | AA Very Strong |
| 4. | A- Excellent | AA- Very Strong |
Considering State Farm and Geico are the two biggest auto insurance companies in the U.S., most drivers can find what they need from either company, whether that's minimum or full coverage. However, there are a few key differences between State Farm vs. Geico when it comes to auto insurance options.
State Farm Is Cheaper for High Coverage
For drivers who seek a high coverage auto insurance policy for additional financial security, State Farm's average rate is cheaper than the national average while Farmers' average rate is higher than the national average and more expensive than State Farm's rate.
Who is more expensive, Allstate or State Farm? Allstate's average auto insurance rates are significantly higher than State Farm's. The average annual cost of a full-coverage policy from Allstate is $2,598. For State Farm, the average annual cost is $1,697.
| Insurance Company | Best for | Bankrate Score |
|---|---|---|
| USAA | Best overall | 4.7 Rating: 4.7 stars out of 5 |
| Allstate | Best overall | 4.2 Rating: 4.2 stars out of 5 |
| Lemonade | Best for digital experience | 3.8 Rating: 3.8 stars out of 5 |
| Chubb | Best for high-value home coverage | 4.3 Rating: 4.3 stars out of 5 |
In terms of market share, State Farm is the number one car insurance company in the U.S. According to the NAIC, State Farm held 15.9% of the auto insurance market in 2021, writing over $41.6 billion in premiums.
The insurer plans to send non-renewal notices to 72,000 home and apartment policyholders starting this July. State Farm plans to stop renewing home and apartment insurance policies in California beginning July 3.
The insurer blames the rising risk of natural disasters like wildfires in California and the state's outdated regulations.
How many customers State Farm have?
State Farm and its affiliates are the largest providers of auto and home insurance in the United States. Its more than 19,400 agents and 67,000 employees serve over 91 million policies and accounts – including auto, fire, life, health, commercial policies and financial services accounts.
The question regarding why State Farm does not do business in Massachusetts relates to the complexities of the insurance market and the regulatory environment of the state. Previously, the Massachusetts auto insurance market was highly regulated, with the state setting the rates that insurers could charge customers.
In October 2020, Rosenberg-Wohl filed suit, alleging breach of the policy and bad faith. That lawsuit was removed to federal court and was dismissed based on the one-year limitation provision. It is currently on appeal. Another action alleges a violation of California's unfair competition law.
How much does Jake from State Farm make? The original Jake, the real-life State Farm agent named Jake Stone, made around $10,000 for his role as himself in the commercial. Kevin Miles, the new Jake, earns around $10,000 to $15,000 for his ads. He's also a social media influencer with a net worth of $2 million.
