State Farm employees in Bloomington, Illinois, are about to get a letter that could change their careers. The insurance giant just announced a voluntary exit program, giving staff the option to leave with benefits. The company didn’t rule out layoffs if participation is low.

State Farm tries to balance underwriting losses and rising claims in the homeowner insurance business

Gina Morss-Fischer, a State Farm spokesperson, explained that each business unit will decide how and when to implement the program based on its operational needs.

She added that the number of employees in McLean County, home to roughly 13,000 State Farm workers, isn’t expected to drop “significantly.”

The last voluntary exit plan at the company was rolled out in 2017.

The move comes amid mounting pressure on the insurer’s finances

The State Farm property-casualty group posted $103 billion in earned premium in 2024. It reported a combined underwriting loss of $6.1 billion.

Auto insurance improvements helped. In other words, as many drivers experienced recently, it raised premiums.

After all, fixing large, heavy SUVs and EVs, both of which are all the more popular than compact sedans, isn’t getting any cheaper.

Still, homeowners’ catastrophe claims offset some of those gains. Auto insurance alone brought in $67.5 billion in earned premium. Losses and expenses still left a $2.7 billion underwriting deficit, down from $9.7 billion the year before, Repairer Driven News explained.

Consumers have already noticed the pinch

In California, the company secured a 17% emergency rate increase in May after wildfire claims. It’s seeking another 11% hike in homeowners’ rates.

Illinois homeowners saw a 27.2% increase this summer. The spike sparked a sharp rebuke from Governor JB Pritzker. Calls for legislative action to prevent “severe and unnecessary rate hikes” followed.

State Farm remains the nation’s largest auto and property insurer, but its dominance is boldly challenged by Progressive

Progressive now sits within a single percentage point of market share.

Analysts say insurers, including State Farm, are turning to AI and technology to cut costs, and voluntary exits or early retirements are likely tools as the workforce adapts to new systems

Gerald Glombicki of Fitch Ratings noted that insurers are increasingly leaning on these strategies to offset rising expenses without hitting policyholders even harder.

For State Farm, how many employees take the offer (and how it affects service in its home county) remains to be seen.