State Farm Gets S&P Global Downgrade in California

For the second time in a couple of months, State Farm got a downgrade from S&P Global. In May S&P dropped the rating from AA to A+. So going from A+ to A- isn’t a huge drop but it’s also not unexpected. The reason given ties back to lots of exposure in California and S&P says it is seeing a weak operating performance.

The positive for State Farm in California is a change by S&P from a CreditWatch negative to stable.

‘The outcome was anticipated, and our approach is unchanged,” State Farm said. “We remain deeply concerned about the financial position of State Farm General, as it is difficult to match price to risk in California. To ensure the long-term sustainability of State Farm General, we are being diligent in our efforts to turn around the financial stability of the company.”

It’s also better than the rating A.M Best did in 2024. It dropped the rating from A to B.

State Farm also said it is taking steps to improve the financial health of State Farm General. It did so by infusing $400 million into State Farm Mutual Auto last June.

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