State Farm to Return Nearly $900 Million to Auto Insurance Customers
8 June 1998
State Farm to Return Nearly $900 Million to Auto Insurance Customers BLOOMINGTON, Ill., June 8 -- State Farm Mutual Automobile
Insurance Company announced today that auto insurance policyholders in 35
states and the District of Columbia will receive dividends totaling nearly
$900 million.
The return of premiums, approved today by the State Farm Mutual board of
directors, will be paid by check or a credit to current customers' accounts
over the next renewal cycle beginning today. The $891.6 million in dividends
to policyholders brings to about $2.4 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.
Today's announcement comes on the heels of State Farm Mutual's previous
record high policyholder dividend, a $651 million program reaching customers
in 29 states and the District of Columbia over a six-month period beginning
last November.
State Farm also lowered auto insurance premiums in 34 states in 1997 and
in 21 states so far in 1998. Favorable claims trends allowed the company to
lower its overall average rates by 1.6 percent companywide in 1997 -- the
first such reduction in auto insurance premiums since 1974.
The size of each customer's dividend will vary from one state to another.
The percent of semiannual premium to be returned by State Farm Mutual, the
estimated total dollar amount that will be returned in each state and the
District of Columbia, and the number of policies affected are:
State Percent Amount Policies
Alabama 9.0 $18.5 million 703,100
Alaska 18.6 $6.2 million 100,800
California 15.4 $172 million 2,951,200
Colorado 15.5 $38.9 million 727,200
Connecticut 6.2 $1.2 million 43,600
D.C. 9.6 $1.6 million 38,000
Florida 7.4 $62.9 million 2,104,500
Georgia 3.6 $14.4 million 1,276,200
Hawaii 20.0 $11.3 million 119,000
Idaho 8.1 $3.3 million 176,900
Illinois 15.5 $112.1 million 2,231,100
Indiana 6.8 $17.6 million 926,400
Iowa 3.6 $3.5 million 441,900
Kansas 5.9 $6.7 million 464,700
Kentucky 2.3 $3.4 million 498,700
Louisiana 2.1 $7.3 million 862,200
Massachusetts* 10.0 $1.2 million 13,200
Michigan 4.9 $22.0 million 1,223,300
Minnesota 4.2 $11.2 million 907,200
Mississippi 9.9 $12.6 million 412,500
Missouri 14.0 $35.9 million 907,600
Montana 5.8 $2.4 million 176,200
Nebraska 5.7 $4.5 million 335,800
New Hampshire 13.0 $3.8 million 96,000
New Mexico 11.8 $10.4 million 261,600
Oklahoma 7.5 $10.8 million 498,700
Oregon 4.8 $7.3 million 557,900
Rhode Island 20.0 $300,000 4,800
South Dakota 20.0 $4.9 million 107,300
Tennessee 9.9 $23.3 million 841,200
Texas** 16.9 $178.6 million 1,895,200
Utah 20.0 $17.4 million 292,800
Virginia 3.5 $8.7 million 632,200
Washington 19.1 $37.6 million 620,800
Wisconsin 12.4 $14.4 million 474,500
Wyoming 12.6 $3.4 million 122,400
* Massachusetts policies are annual, and dividend percent shown applies to
the policyholders' annual premium for the expiring term.
** Texas dividends are subject to approval by the state Department of
Insurance.
