State Farm reported a $10.4 billion decline in net worthprimarily as a result of market conditions. At the end of 2008, theBloomington, 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 in2008, compared with $5.46 billion net income in 2007. It cites"extraordinary levels" of catastrophe damages as the reason behindthe loss. The operating loss for State Farm follows fiveconsecutive years of net income. The average annual amount of netincome for State Farm through the first nine years of this decadeis $1.6 billion.

Michael Tipsord, vice chairman, treasurer, and chief financialofficer at State Farm, cautioned against attributing "too muchsignificance to short-term operating results without firstconsidering the level of financial strength."

"This concept is as relevant to 2007 when State Farm achievedrecord levels of profit as it is to 2008 when we experiencedsignificant losses," he explained. "The more important message isthat the positive results from 2003 through 2007 enabled State Farmto endure a record level decline in net worth during 2008 and stillend the year with over $53 billion in net worth."

The P&C companies posted a pre-tax operating loss of $2.1billion in 2008, compared to a pre-tax operating profit of $5.1billion the year prior. Total revenue, which includes premiumrevenue, earned investment income and realized capital gains(losses), was $61.3 billion for 2008, compared with the 2007 figureof $61.6 billion.