NEW YORK — State Farm Insurance Cos. said Tuesday that it plans to consolidate some offices in California, affecting more than 1,200 jobs.
The Bloomington, Ill., mutual insurer plans to close operations centers in Westlake Village and Costa Mesa, and reduce the number of claims locations to 20 from 66 offices in the next 18 to 24 months.
Company-owned locations that are closed will be sold.
The restructuring won’t immediately result in loss of jobs. Affected employees are expected to be offered relocation, reassignment and severance opportunities, the company said.
State Farm employs about 6,000 people in California. The insurer also has about 1,800 independent contract agents in California.
The move will cut expenses by at least $69 million annually, the company said.
The restructuring is one of several efforts by State Farm, the nation’s largest property-casualty insurer, to reduce its expenses and underwriting losses. The company lost $5 billion in 2001 as claims costs escalated and weak equity markets cut into its investment income. State Farm reported net income of $400 million in 2000.
Last month, State Farm, which insures more than 15 million homes nationwide, said it had placed a moratorium on new homeowners policies in 17 states, including California, and had restricted sales of new homeowners policies in six other states.
The moratoriums and restrictions on new sales are expected to be temporary and reflect profitability and other issues on a state-by-state basis.