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

State Farm Mutual Automobile Insurance Company is returning $1 billion in premium paid by its policyholders in 49 states, the District of Columbia, and three Canadian provinces. This is part of the company's latest policyholder dividends program, approved by the State Farm Mutual board of directors. Policyholders will receive their dividend by check or a credit to their accounts over the next renewal cycle. This announcement marks the latest in a series of dividend payments made by State Farm to its auto insurance policyholders, with a total of about $3.3 billion paid since 1991.

Key Takeaways:

• State Farm is returning $1 billion in premium paid by its policyholders in 49 states, the District of Columbia, and three Canadian provinces.
• The dividend program was approved by the State Farm Mutual board of directors and will be distributed over the next renewal cycle.
• Policyholders will receive their dividend by check or a credit to their accounts.
• This announcement marks a significant increase from the previous high of $892 million in dividends returned to policyholders in 35 states and the District of Columbia in June 1998.
• State Farm has reduced rates by 12.3 percent in Texas since 1997.
• The program announced today brings the total amount of dividends State Farm has paid to auto insurance policyholders to about $3.3 billion since 1991.
• Dividends are a one-time return of premium based on recent financial results.
• State Farm does not plan for dividends when setting prices, but returns money to customers when financial results are better than anticipated and business conditions permit.

Statistics:

• $1 billion: The amount of premium paid by policyholders in 49 states, the District of Columbia, and three Canadian provinces that State Farm will return.
• $892 million: The previous high of dividends returned to policyholders in 35 states and the District of Columbia beginning June 1998.
• $178.6 million: The amount distributed to Texas customers as part of the previous dividend program.
• 12.3%: The reduction in rates in Texas since 1997.
• $3.3 billion: The total amount of dividends State Farm has paid to auto insurance policyholders since 1991.
• $88 million: The amount returned to Texas auto insurance policyholders as part of the latest dividend program.

Sources:

• State Farm Mutual Automobile Insurance Company press release, June 12.
• State Farm Mutual board of directors meeting, June 12.