S&P; Lowers Credit Rating on State Farm
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State Farm, the nation’s largest insurance company, was stripped of is triple-A rating for credit and financial strength by Standard & Poor’s because of record losses last year--an action that may increase pressure on the company to further raise auto and homeowner premiums to boost its sagging finances.
State Farm already has filed to hike rates in California by about 5% on auto insurance and 6.7% on homeowner coverage, a company spokesman said.
The insurer posted a net loss last year of $5 billion on rising claims and lower investment returns.
S&P; lowered its rating for Bloomington, Ill.-based State Farm by one notch to double-A plus, pointing to a $9.3-billion loss from its core property- casualty businesses in 2001.
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