State Farm CEO is betting big on AI—and contemplating the company’s future in California

In today’s CEO Daily: Diane Brady interviews State Farm CEO Jon Farney on the tough economics of insurance.

The big leadership story: What Cerebras’ mega debut means for more AI listings

The markets: In the red as investors track developments out of Beijing.

Plus: All the news and watercooler chat from Fortune.

Good morning. State Farm CEO Jon Farney is trying to transform the future of the country’s largest auto and home insurer while dealing with the realities of today. The 104-year-old mutual insurer just launched its “Next Gen Good Neighbor” offering, an AI-powered tool that makes it easier for customers to file claims. State Farm has had a banner year on some fronts. At the same time, it’s facing legal action from California regulators over charges that it mishandled claims from the L.A. wildfires last year. Farney says climate change and regulatory challenges have made the state a tough place to operate. I spoke with Farney about leading change in this environment.

On making money: State Farm posted record results in 2025 and announced a $5 billion dividend to auto policyholders—its largest ever. But it also raised homeowner rates in California, where it insures more than a million homes and paid out more than $5.7 billion in claims from the wildfires. The economics are tough. “Our company that provides homeowners insurance in........

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