Auto Rates Drop for Nation's Top Insurer for Fourth Straight Year

State Farm® Auto Rate Level Declines Nearly 15 Percent

BLOOMINGTON, IL, FEBRUARY 25, 2008 -- State Farm® auto insurance rates declined 4.9 percent in 2007, the fourth consecutive year of rate level* decline for the nation’s largest insurer.  State Farm’s protection against the financial cost of auto accidents was 14.8 percent less expensive at year-end 2007 than it was at year-end 2003.

“We are thrilled to have been able to reduce the cost of auto insurance during a time when the cost of almost everything else has been increasing,” said State Farm Vice President and Actuary Kathleen Pechan.  “Partly because of our customers’ safe driving habits, the frequency of auto accidents has been dropping since 2003.”

State Farm’s auto insurance rate level over this four-year period declined the most (29.2 percent) in New Jersey, where auto insurance costs have historically been the highest in the country.  State Farm officials credit an improved regulatory environment there in addition to the steady decrease in claims.

New York is second (27.0 percent).  Colorado, Connecticut and Minnesota are third, fourth and fifth.  Oklahoma, Arizona, California, Indiana and Massachusetts complete the top ten.

State Farm’s rate level was lower on Dec. 31, 2007 than it was on Dec. 31, 2003 in every jurisdiction in the country. See list of State Farm auto insurance rate level changes by state from Jan. 1, 2004 to Dec. 31, 2007.

“Our status as a mutual insurance company provides us with a distinct advantage,” said Pechan.  “Our desire to lower our premiums when possible is supported by our ability to focus more on the long term interests of our customers since we don’t have public stockholders who tend to focus on short term results.”

In addition to the $4.5 billion reduction in premiums over the last four years, State Farm issued dividends in 2006 and 2007 to most of its 40 million policyholders totaling nearly $1.5 billion.

* To the extent that an individual customer purchases more insurance coverage by, for example, purchasing a newer, more expensive vehicle, his or her premium will increase even while the rate level remains the same.  As a result, lower rate levels do not necessarily equate to lower premiums.

About State Farm

State Farm® insures more cars and homes than any other insurer in the U.S., the leading insurer of watercraft and is also a leading insurer in Canada. State Farm's 17,300 agents and 67,600 employees serve over 77 million auto, fire, life and health policies in the United States and Canada, and more than 1.9 million bank accounts. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked No. 31 on the Fortune 500 list of largest companies. For more information, please visit statefarm.com® or in Canada statefarm.ca®.