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State Farm Plans $7.2 Million in Dividends for Alabama Auto Insurance Policyholders

10 September 1997

State Farm Plans $7.2 Million in Dividends for Alabama Auto Insurance Policyholders

    BLOOMINGTON, Ill., Sept. 10 -- State Farm Mutual Automobile
Insurance Company, the largest personal lines insurance company in the United
States, announced today it plans to pay dividends of  $7.2 million to its
Alabama auto insurance policyholders.  The Alabama dividends are part of a
national program under which State Farm Mutual and its New Jersey affiliate,
State Farm Indemnity Company, will pay nearly $700 million to its auto
insurance customers in 30 states and the District of Columbia.
    The dividends will be paid by check or a credit to State Farm Mutual
customers' accounts over a six-month period beginning Nov. 1.  State Farm will
return 3.6 percent of its semiannual premium on  its 701,000 Alabama policies.
    The $692.3 million in dividends brings to about $1.5 billion the total
amount of dividends State Farm has paid to auto insurance policyholders since
1991.
    Dividends are a one-time return of premium based on recent claims
experience.  When State Farm's frequency and costs of claims are less than
anticipated and business conditions permit, dividends allow State Farm to
quickly return money to customers.
    Changes in claims experience that are believed to indicate long-term
trends typically are reflected in rate adjustments.  State Farm Mutual
adjusted its auto insurance rates in Alabama on July 1, 1997, resulting in no
change in average premiums.

SOURCE  State Farm Mutual Automobile Insurance Company