Is State Farm profitable?
Yes, State Farm is profitable overall. State Farm added 130 million new life insurance policies in 2025, which likely contributed to its $12.9 billion net income in 2025, more than double the $5.3 billion net income in 2024 and a stark contrast to the $6.3 billion net loss in 2023.
Alternatives to State Farm
While you can't buy State Farm stock because it's not a publicly traded company, you can buy stock in similar companies. Here are three possibilities:
1. Progressive
An important metric for insurance companies is their combined ratio, which is the ratio of losses incurred (from claims and expenses) to premiums collected. A combined ratio exceeding 100% means an insurer is paying out more than it's taking in through premiums.
Progressive has one of the lowest combined ratios among insurers. Its net combined ratio for the second quarter of 2026 was 87.3%, meaning that for every $100 in premiums collected, it paid out $87.30. By comparison, the 2023 industrywide combined ratio for property and casualty insurers was 92.2%.
The insurer has a strong track record of increasing its premiums written. In 2025, its net premiums written increased to $83.2 billion, an 11.8% year-over-year jump. Progressive also pays a small dividend. As of mid-2026, its annual yield was 0.18%.
2. Chubb
Warren Buffett has lamented in the past that neither Progressive nor its rival, GEICO, which Buffett's Berkshire Hathaway (BRK.A -1.08%)(BRK.B -1.15%) owns, can beat State Farm in terms of market share. Of course, since State Farm is a mutual company, not even the Oracle of Omaha can invest.
One insurance stock Berkshire has been loading up on, though, is Chubb (CB -0.81%), a leading global provider of various commercial and personal insurance products. In May 2024, Berkshire Hathaway had amassed a $12.5 billion stake in Chubb, a position it began building in mid-2023 after requesting and receiving confidentiality from the U.S. Securities and Exchange Commission.
The position isn't too surprising, given Buffett's affinity for insurance stocks. The company trades at almost 13 times trailing earnings, suggesting it's a good value play, and its combined ratio of 83.8% underscores its underwriting strength. Chubb is also a reliable dividend payer, with an annual yield of about 1.13% based on its stock price as of mid-2024.
3. Prudential
Unlike State Farm, whose bread and butter is property and casualty insurance, Prudential is a leading life insurance provider. In 2026, it held the fourth-largest market share of life insurance premiums and was the fifth-largest life insurance company by total assets.
Although State Farm also offers life insurance policies, its market share is only about half of Prudential's. Prudential is also a leading provider of investment products, including workplace retirement accounts like 401(k)s.
Prudential is a strong dividend stock. Its annual yield was 4.56% in mid-2026, more than four times the yield of the S&P 500 index.
The company increased its pretax adjusted operating income in 2025 by 12% over the previous year, posting strong growth in its retirement business and benefiting from higher interest rates. The company has also taken cost-saving steps, like shuttering Assurance IQ, an insurance tech start-up it acquired in 2019 for $2.35 billion. Prudential also focuses on growing its international markets, particularly in Africa and Asia.
