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Auto Club to Return $109 Million in Dividends

10 December 1998

Auto Club to Return $109 Million in Dividends to Auto and Watercraft Insurance Customers

    LOS ANGELES--Dec. 9, 1998--The Automobile Club of Southern California Wednesday announced that it will return $109 million through dividends to auto and watercraft insurance policyholders in 1999, matching its 1998 dividend payout.
    The $109 million dividend distribution in both 1998 and 1999 sets a record high for the company. Both auto insurance and watercraft policy-holders will receive dividends averaging $136.
    Dividends will be paid either by a credit to current members' accounts or by check as policies come up for renewal. The Auto Club has paid over $457 million in dividends to policyholders since 1990.
    "We are delighted that lower claims costs have allowed us to once again return money in dividend form to our members," said Thomas McKernan, Auto Club president and chief executive officer. "Good driving habits, less fraud and fewer court cases really can result in lower insurance costs. As a not-for-profit company, we are able to pass these savings directly to our members rather than giving them to stockholders in the form of profits."
    The latest dividend announcement from the Auto Club comes in addition to a 25% reduction in auto insurance premium costs over the past five years, resulting in a $700 million savings for its members.
    "The Auto Club will continue to work aggressively to provide our members with quality insurance and service with affordable premiums," said McKernan. "Staying competitive has allowed us to provide members both premium cost reductions and dividends."
    The Auto Club began returning dividends to auto insurance policyholders in 1913, one year after it began offering insurance to members. Dividends for that year were $15,000. Since 1990 the following dividends have been distributed to Auto Club policyholders:

         1990 -----  $37 million
         1991 -----   81 million
         1992 -----   41 million
         1993 -----   51 million
         1994 -----   42 million
         1995 -----   44 million
         1996 -----   64 million
         1997 -----  100 million
         1998 -----  109 million
         1999 -----  109 million

    The Automobile Club of Southern California has been serving members since 1900. Today, the Auto Club's members benefit by the organization's emergency road service, insurance products and services, travel agency, financial products, automotive pricing, buying and financing programs, automotive testing and analysis, trip planning services, highway and transportation safety programs and legislative advocacy. Information about these products and services is available on the Auto Club's Web site at www.aaa-calif.com.