INSURANCE

State Farm’s Earnings Fall Sharply: State Farm Mutual Automobile Insurance Co. said its 1994 earnings fell by more than two-thirds on losses from last year’s Northridge earthquake. The largest U.S. home and auto insurer said net income for the year fell 68% to $524.4 million from $1.66 billion in 1993. State Farm joined other major insurers, such as Allstate Corp., which were hurt by the Jan. 17, 1994, temblor. The insured damage was estimated at $10.4 billion, which is expected to rank the quake as the second-costliest U.S. catastrophe. State Farm’s $2.53 billion in quake costs “contributed heavily to the red ink in the financial results of our property and casualty insurers,” said John J. Killian, vice president and controller of State Farm, a mutual insurer owned by its policyholders. In December, State Farm raised its estimate of quake costs by 26% to $2.53 billion, based on about 114,000 claims. It said the total is expected to stand.