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BLOOMINGTON - Benefiting from its size and presence throughout the country, Bloomington-based State Farm Insurance Cos. is expected to announce a third straight year of profitability today, industry analysts said.

This, despite the fact that the year was marred by hurricanes along the Gulf Coast that should also produce record payouts from insurers, according to the New York-based Insurance Information Institute, a leading industry analyst.

It's uncertain what State Farm's payout will be, but the information is expected to be outlined in the company's 2005 financial report, filed today with the Illinois Division of Insurance.

That report also will show State Farm earning a profit, said Robert Hartwig, the Insurance Information Institute's chief economist.

"Insurance companies are going to be profitable despite the hurricanes because areas outside the Gulf Coast were very profitable this year," he said.

State Farm earned $5.3 billion in 2004 and $2.8 billion in 2003 after losing $1.6 billion in 2002 and $5 billion in 2001.

Compared to 2004, last year will be a "sub par" year for State Farm, Hartwig added.

George Flanigan, an insurance industry professor at Illinois State University, agreed.

"So we had a bad time down there, but things are going good in Illinois. Things are going good in California. Things are going good in Maine. That tends to water things down," Flanigan said. "State Farm is just such a large company, a good company, an efficient company."

Industrywide, insurers garnered record profits in the first half of the year, before Hurricane Katrina swept through the Gulf Coast in late August, Hartwig said.

They did it by aligning risk with premiums, he said. In other words, insurance costs increased in high-risk areas of the country, a trend that should continue, he said.

Speaking to The Pantagraph in late October, State Farm Chairman and Chief Executive Officer Ed Rust Jr. said hurricanes wiped out those profits.

According to the Insurance Information Institute, the hurricanes of 2005 produced a combined $60 billion in insured losses. That would be the most costly natural disaster in American history, Hartwig said.

And State Farm is the largest property insurer in the area impacted.

Still, reinsurance protects companies like State Farm from these types of catastrophes, Flanigan pointed out.

"I'm sure a lot of it didn't fall directly on State Farm," Flanigan said, explaining reinsurance would cover some of State Farm's losses in the Gulf Coast.

Even so, Flanigan expects 2005 was a tough year on State Farm.

"When I say it was a tough year, I mean they probably didn't make as much profit as they would have liked," he said.

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