State Farm office in Downtown Baltimore, MD. August 20, 2020.Photo: Diego M. Radzinschi/ALM

State Farm’s new voluntary exit program and workforce realignment process could mean job cuts in limited scenarios for some employees.

“These changes are part of our continued efforts to shape a stronger, more flexible organization for the future,” State Farm spokesperson Gina Morss-Fischer told PropertyCasualty360.com.

“Each business area will determine if, when, and how it will use the new program and process based on its needs,” she said. “We don’t have any actual or forecasted numbers to share with you at this time, and we do not anticipate involuntary exits outside of limited scenarios based on business area needs."

State Farm, the largest property and casualty insurer in the U.S., employs more than 65,000 people nationwide. Currently, the carrier faces continued criticism in California following the LA County wildfires in January when the insurer requested an immediate 22% rate increase for homeowners, along with a 38% increase for rental dwellings and a 15% increase for renters and condo owners.

In May, California Insurance Commissioner Ricardo Lara approved the emergency rate hike request after an administrative law judge ruled in favor of the carrier. The ruling stemmed from a three-day hearing in April and also required the company receive an immediate $400 million cash infusion from its parent company to address its serious financial condition.

In August, California legislators representing Altadena-area fire victims demanded Commissioner Lara investigate State Farm’s market conduct and freeze any rate hikes until the fire victims are fully recovered.

Led by state Sen. Sasha Renée Pérez (D-Alhambra) and Fifth District Supervisor Kathryn Barger, the LA Times reported the lawmakers singled out State Farm General at a news conference on Aug. 25.

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