(Bloomberg) – State Farm Mutual Automobile Insurance Co., the largest U.S. property-casualty insurer, said annual profit fell 94 percent on car insurance claims costs.
Net income dropped to $400 million from $6.2 billion in 2015, when results included one-time gains in the stock portfolio tied to pharmaceutical deals, the Bloomington, Illinois-based company said Tuesday in a statement. The underwriting loss from auto insurance widened to $7 billion from $4.4 billion.
|Distracted drivers, repair costs
State Farm is among property-casualty insurers pressured by rising costs on auto policies as smartphones distract drivers and repair costs climb. Travelers Cos. said last month it had begun to increase auto premiums because of higher expenses, following Allstate Corp. and Berkshire Hathaway Inc.'s Geico.
“Loss costs throughout the auto-insurance industry have been increasing at an unexpected pace,” Berkshire Chairman Warren Buffett said in his annual letter to shareholders Saturday.
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