Financial Operations of Insurers According to the Insurance Information Institute (III), the largest writer of property/casualty insurance by direct premiums written in 2020, is State Farm Mutual Automobile Insurance. The 2020 annual report to policy holders can be found below and contains data for 2019 and 2020: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Statement of Condition (in Millions of Dollars) Assets 2020 2019 Cash and Short Term Investments $ 3,969 $ 2,434 Bonds 58,902 55,759 Unaffiliated Common & Preferred Stocks 65,404 58,802 Equity in Insurance Subsidiaries 46,160 45,233 Other Assets 19.500 16,248 Total Assets Liabilities Claims and Claim Expenses $ 31,701 $ 32,544 Unearned Premiums 12,688 13,022 Other Liabilities 23,494 16,752 Surplus Funds for Protection of State Farm Mutual Policyholders, including the Investment Fluctuation Reserve $ 75,649 $ 65,907 Funds Assigned for Protection of Customers of Subsidiaries 46,542 47,141 Funds Assigned for Catastrophe Reinsurance Assumed from Affiliates 3,861 3,110 Total Liabilities and Surplus Summary of Operating Data (in Millions of dollars) 2020 2019 Premium Earned $ 41,986 $ 42,137 Less: Dollars for Claims 22,748 27,536 Expenses for Paying Claims 4,679 5,065 Service and Administrative Fees 10.144 10,299 Underwriting Gain or (Loss) 4,415 (763) Plus: Investment Gain and Other Income 2.659 3,456 Income before Dividends and Taxes 7,074 2,693 Less: Dividends to Policyholders 1,929 Income Taxes incurred (Recoverable) 927 383 Net Income 0 Part 1: Balance Sheet A) Fill in the assets portion of the table and calculate Total Assets (8 points) B) Fill in the liabilities portion of the table and calculate Total Liabilities (8 points) C) Fill in the surplus portion of the table and calculate Surplus (8 points) Part 2: Income and Expense Statement D) Fill in the table and calculate Net Income (8 points) E) Calculate the Loss Ratio (8 points) F) Calculate the Expense Ratio (8 points) G) Calculate the Combined Ratio (8 points) To forecast 2021 values, assume that the growth rate in the values between 2020 and 2019 will remain the same for 2021. The growth rate can be calculated via the following formula: To calculate the 2021 values (where X is any specific variable), apply the Future Value formula as follows: In part 2 of the project, the following formulas are utilized: (Assume that premiums written = premiums earned) Note: Be sure to format dollar values to Currency with no decimal points and rates to Percentages with two decimal places. In your report, comment on the balance sheet of State Farm, how it has changed over time, and how it is forecasted to change. In addition, comment on the Net Income and Combined Ratio and how these values have changed over time. How is the company performance in underwriting and performance overall? FINC 4354 - Project 2 - Financial Opera of Last Nam Name Party Base Shoc A) 201 30 Ae Cath and Short Terms Gww Rates 3021 Stock Equity in Other And Total Art BI 2019 20 Gran 2020 Claims and Camp Unced Premium Other Liebes Total Liabile Gras Surplus Protection of Policyholds Protection of Comes Sudanes Catastrophe Reise And Allies Surplus Total Liabilities and Surplus Part 2) In Espen Sale D 2019 30 GR 2001 Operating Data Premium Dallars Sur Service and Administrative For Underwriting Gain (...) Investmend there Inca care vidends and lates Desidends toolicy Helden Income Taxes comedecowable Netcome SE S3 132 2019 Lati 2019 3021 Rate G 2019 Combined Ratio Financial Operations of Insurers According to the Insurance Information Institute (III), the largest writer of property/casualty insurance by direct premiums written in 2020, is State Farm Mutual Automobile Insurance. The 2020 annual report to policy holders can be found below and contains data for 2019 and 2020: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Statement of Condition (in Millions of Dollars) Assets 2020 2019 Cash and Short Term Investments $ 3,969 $ 2,434 Bonds 58,902 55,759 Unaffiliated Common & Preferred Stocks 65,404 58,802 Equity in Insurance Subsidiaries 46,160 45,233 Other Assets 19.500 16,248 Total Assets Liabilities Claims and Claim Expenses $ 31,701 $ 32,544 Unearned Premiums 12,688 13,022 Other Liabilities 23,494 16,752 Surplus Funds for Protection of State Farm Mutual Policyholders, including the Investment Fluctuation Reserve $ 75,649 $ 65,907 Funds Assigned for Protection of Customers of Subsidiaries 46,542 47,141 Funds Assigned for Catastrophe Reinsurance Assumed from Affiliates 3,861 3,110 Total Liabilities and Surplus Summary of Operating Data (in Millions of dollars) 2020 2019 Premium Earned $ 41,986 $ 42,137 Less: Dollars for Claims 22,748 27,536 Expenses for Paying Claims 4,679 5,065 Service and Administrative Fees 10.144 10,299 Underwriting Gain or (Loss) 4,415 (763) Plus: Investment Gain and Other Income 2.659 3,456 Income before Dividends and Taxes 7,074 2,693 Less: Dividends to Policyholders 1,929 Income Taxes incurred (Recoverable) 927 383 Net Income 0 Part 1: Balance Sheet A) Fill in the assets portion of the table and calculate Total Assets (8 points) B) Fill in the liabilities portion of the table and calculate Total Liabilities (8 points) C) Fill in the surplus portion of the table and calculate Surplus (8 points) Part 2: Income and Expense Statement D) Fill in the table and calculate Net Income (8 points) E) Calculate the Loss Ratio (8 points) F) Calculate the Expense Ratio (8 points) G) Calculate the Combined Ratio (8 points) To forecast 2021 values, assume that the growth rate in the values between 2020 and 2019 will remain the same for 2021. The growth rate can be calculated via the following formula: To calculate the 2021 values (where X is any specific variable), apply the Future Value formula as follows: In part 2 of the project, the following formulas are utilized: (Assume that premiums written = premiums earned) Note: Be sure to format dollar values to Currency with no decimal points and rates to Percentages with two decimal places. In your report, comment on the balance sheet of State Farm, how it has changed over time, and how it is forecasted to change. In addition, comment on the Net Income and Combined Ratio and how these values have changed over time. How is the company performance in underwriting and performance overall? FINC 4354 - Project 2 - Financial Opera of Last Nam Name Party Base Shoc A) 201 30 Ae Cath and Short Terms Gww Rates 3021 Stock Equity in Other And Total Art BI 2019 20 Gran 2020 Claims and Camp Unced Premium Other Liebes Total Liabile Gras Surplus Protection of Policyholds Protection of Comes Sudanes Catastrophe Reise And Allies Surplus Total Liabilities and Surplus Part 2) In Espen Sale D 2019 30 GR 2001 Operating Data Premium Dallars Sur Service and Administrative For Underwriting Gain (...) Investmend there Inca care vidends and lates Desidends toolicy Helden Income Taxes comedecowable Netcome SE S3 132 2019 Lati 2019 3021 Rate G 2019 Combined Ratio