S&P cuts State Farm outlook to negative

Standard & Poor's said it revised its outlook on State Farm Mutual Automobile Insurance Co., its related entities and State Farm Life Insurance Co. to negative from stable.

The agency also said that it affirmed its AA counterparty credit and financial strength ratings on all of the core companies.

S&P added that it considers State Farm Life to be core to the property/casualty companies under its group methodology criteria, so they have the same ratings and outlook.

"We revised the outlook to negative because State Farm's capital adequacy declined a significant 16% in 2008," explained credit analyst Neil Stein.

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