- 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 California was worth $4 billion in 2017, and it’s worth a lot less than that now,” he told me. “We have to make choices, because our number one thing is to keep the promises that we make to customers.”
On the climate reckoning: The industry’s risk models haven’t kept pace with reality. “Used to be a tornado would be an isolated event, going to one town and helping them rebuild,” Farney said. “Now there’s a spawn of tornadoes that hit 10 different sites the same night.” His prescription: match price to individual risk and insist on competitive markets. “If there are markets where regulators have an impact on the ability of insurance companies to compete, we don’t think customers win.”
On the power of AI: Farney announced a “Human + Digital” initiative this week, including a partnership with OpenAI and new AI tools to speed up claims and sharpen underwriting. (Here’s his blog post with more.) “We don’t want to just be the 1971 company that Barry Manilow wrote about … We want to be a next-generation good neighbor that’s powered by technology and AI and a culture of speed,” he said. “Our message is, we think these are powerful tools to position State Farm for another decades-long type of success. We want the right combination of people for the moments that matter most and great technology so customers can do things on their own terms.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top leadership news
Cerebras’ mega debut
Cerebras Systems made its Nasdaq debut Thursday in a blockbuster IPO that could be a sign of optimism for other AI-related infrastructure listings expected later this year. The chipmaker's CEO told Fortune that demand for AI infrastructure is anything but speculative.
More crypto hacking
A new CrowdStrike report, shared first with Fortune, found that North Korea-linked cyber groups stole $2 billion in crypto last year, a 51% jump year-over-year. The financial services industry is next in the crosshairs, the report warns.
Too burnt out to job hunt
More than half of U.S. workers have stopped job hunting to protect their mental health, according to a new Glassdoor poll of more than 1,300 professionals. Glassdoor company reviews mentioning burnout surged 65% year-over-year in Q1 2026.
The markets
S&P 500 futures are down 1.09% this morning. The last session closed up 0.77%. The STOXX Europe 600 was down 1.35% in early trading. The U.K.’s FTSE 100 was down 1.48% in early trading. Japan’s Nikkei 225 was down 1.99%. South Korea’s KOSPI was down 6.12%. China’s CSI 300 was down 1.12%. Hong Kong’s Hang Seng was down 1.62%. India’s NIFTY 50 is down 0.24%. Bitcoin was steady at $80K.
Around the watercooler
Business formations hit all-time high as ‘under-employed’ Americans turn to side hustles to make ends meet by Eleanor Pringle
Nonprofit CEOs say Trump’s economy is driving surging demand—and they’re pushed to the brink by Sydney Lake
Blackstone COO Jon Gray predicts ‘huge boom’ in blue-collar jobs—his own data center company is hiring 30,000 new roles by Preston Fore
CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.
