1.25 Billion Dividend

State Farm announces $1.25 billion mutual auto policyholder dividend - testing

When you buy a product, it’s rare you get any of your money back. But that’s what’s happened for millions of State Farm Mutual policyholders who will receive dividends totaling $1.25 billion, as State Farm Mutual’s Board of Directors declared the largest dividend in Company history.

“As a mutual company, State Farm’s primary obligation is to its policyholders.”
Michael Tipsord – Vice Chairman, Treasurer and Chief Financial Officer

Auto policyholders in 46 states, the District of Columbia and the Canadian province of New Brunswick who were insured with State Farm Mutual as of December 31, 2006, will receive their dividend near the time of their next policy renewal. 

“As a mutual company, State Farm’s primary obligation is to its policyholders,” said Michael Tipsord, Vice Chairman, Treasurer and Chief Financial Officer. “At State Farm®, we work hard to be good stewards for our policyholders and to provide them with the very best combination of product, price, service and financial stability.” 

“One way we provide value to State Farm Mutual auto policyholders is to pay dividends to them when financial results and business conditions permit. Our customers’ safe driving habits have contributed to our positive auto underwriting results, and we are delighted to pass along the benefits from those results to them,” Tipsord said.

Dividend distribution began in early April and will continue throughout the year. Those receiving a dividend of at least $15 will receive it by check. For those receiving a dividend of less than $15, a credit in the amount of the dividend will be applied the next time the customer receives a premium notice. 

In addition to the $1.25 billion Mutual dividend, State Farm’s New Jersey policyholders insured by State Farm Indemnity received $130 million in dividends in December 2006.

The New Jersey dividend is notable considering the Company made plans to withdraw from the volatile New Jersey auto market in 2001. Regulatory reforms allowed State Farm to stay in the New Jersey market.