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State Farm Plans $20.9 Million in Dividends for New York Auto Insurance Policyholders

10 September 1997

State Farm Plans $20.9 Million in Dividends for New York 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  $20.9 million to its New
York auto insurance policyholders.
    The New York 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. 15.  State Farm
will return 4.8 percent of its semiannual premium on its 1,066,300 New York
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 subsequent rate adjustments.  State Farm
Mutual reduced its auto insurance rates in New York an average of 4.1 percent
effective July 1, 1997.

SOURCE  State Farm Insurance