State Farm Returns $1 Billion in Dividends to Auto Insurance Policyholders

Strategic Insights -

State Farm, the largest personal lines insurance company in the United States, has announced a return of $1 billion in premiums to its policyholders in 49 states, the District of Columbia, and three Canadian provinces. This move comes as the company's board of directors approved a policyholder dividends program, which will see policyholders receive a one-time return of premium based on recent financial results. This development builds on the company's history of returning dividends to policyholders, with a total of $3.3 billion paid out since 1991.

Key Takeaways:

  • State Farm will return $1 billion in premiums to its policyholders across 49 states, the District of Columbia, and three Canadian provinces as part of its latest policyholder dividends program.
  • The program was approved by the State Farm Mutual board of directors and will see policyholders receive a one-time return of premium by check or credit to their accounts over the next renewal cycle.
  • This development is the latest in a long history of State Farm returning dividends to its policyholders, with a total of $3.3 billion paid out since 1991.
  • State Farm's dividends are a one-time return of premium based on recent financial results, and the company does not plan for dividends when setting prices.
  • The company has reduced rates by 5.2 percent in Arkansas since 1997.
  • Arkansas customers will receive a return of $6.7 million in premiums, which eclipses the previous high of $892 million returned in 35 states and the District of Columbia in 1998.

Statistics:

  • $1 billion: The total amount of premiums being returned to State Farm policyholders across 49 states, the District of Columbia, and three Canadian provinces.
  • $6.7 million: The amount of premiums being returned to Arkansas customers.
  • 49 States: The number of states where policyholders will receive a return of premiums.
  • 3 Canadian provinces: The number of provinces in Canada where policyholders will receive a return of premiums.
  • $3.3 billion: The total amount of dividends paid to auto insurance policyholders since 1991.
  • 1997: The year in which State Farm began reducing rates by 5.2 percent in Arkansas.
  • 1998: The year in which State Farm returned $892 million in premiums to policyholders in 35 states and the District of Columbia.

Sources:

  • PR Newswire, "State Farm Returns $1 Billion in Dividends to Auto Insurance Policyholders"
  • State Farm Mutual Automobile Insurance Company (Company Announcements)