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State Farm to Return $35.9 Million to Missouri Auto Insurance Policyholders

8 June 1998

State Farm to Return $35.9 Million to Missouri Auto Insurance Policyholders

    BLOOMINGTON, Ill., June 8 -- State Farm Mutual Automobile
Insurance Company, the largest personal lines insurance company in the United
States, announced today it will return $35.9 million in premium paid by its
Missouri auto insurance policyholders.
    State Farm Mutual policyholders in 35 states and the District of Columbia
will receive a total of $891 million in the company's latest policyholder
dividends program, which was approved today by the State Farm Mutual board of
directors.
    The dividends will be paid by check or a credit to current State Farm
Mutual customers over the next renewal cycle. State Farm will return
14 percent of its semiannual premium on  its 907,600 Missouri policies.
    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 beginning last November. That
program distributed dividends over a six-month period, including $19.4 million
to its Missouri customers.
    The program announced today 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.
    Changes in claims experience that are believed to indicate long-term
trends typically are reflected in rate adjustments.  State Farm Mutual reduced
its auto insurance rates in Missouri an average of 4.1 percent effective
Jan. 1.