State Farm to Return Over $1 Billion to Policyholders

June 13, 2000

State Farm Mutual Automobile Insurance Co. will pay dividends of just over $1 billion to auto insurance policyholders in 49 states, the District of Columbia and three Canadian provinces.

The return of premiums, approved yesterday by the State Farm Mutual board of directors, betters the previous high of $892 million announced in June in 1998. With this dividend, State Farm will have returned more than $3.3 billion to policyholders in seven dividends since 1991.

Dividends are a one-time return of premium based on recent financial results. State Farm doesn’t plan dividends when setting prices, but does return money to customers when financial results are better than anticipated and business conditions permit.

“As a mutual company, State Farm’s primary obligation is to its policyholders,” said Vincent J. Trosino, president and chief operating officer.

The size of each customer’s dividend will vary from state to state, but the average per insured vehicle will be about $29. The vast majority of policyholders will receive their dividend by check during the six-month policy renewal cycle beginning today. The dividend for the 2 percent of households receiving less than $10 will be credited to their State Farm account.

State Farm’s New Jersey policyholders are not included in this dividend because they are insured by a different company, State Farm Indemnity. New Jersey policyholders received a return of premium in 1997 and 1998 and a 16 percent rate reduction in March 1999. In Canada, State Farm Mutual markets auto insurance in only three provinces, Alberta, Ontario and New Brunswick, where a dividend is being paid. Texas dividends are subject to approval by the state Department of Insurance. Canadian policyholders will receive their dividend payments in Canadian dollars.

The states and provinces, number of vehicles insured by State Farm, the estimated total dollar amount that will be returned, and the average amount per vehicle:

State

Vehicles

Insured Amount

Amt./Vehicle

Alabama

721,895

$39,600,000

$55

Alaska

101,015

1,500,000

15

Alberta

59,119

1,300,000

22

Arizona

532,238

7,900,000

15

Arkansas

445,425

6,700,000

15

California

2,818,085

182,600,000

65

Colorado

776,735

11,600,000

15

Connecticut

43,340

3,600,000

82

Delaware

127,332

9,500,000

75

Dist. of Col.

40,694

3,300,000

80

Florida

2,212,371

100,300,000

45

Georgia

1,369,404

28,100,000

21

Hawaii

115,704

8,700,000

75

Idaho

172,538

2,500,000

15

Illinois

2,312,647

34,300,000

15

Indiana

957,658

14,200,000

15

Iowa

452,898

6,600,000

15

Kansas

460,572

22,100,000

48

Kentucky

516,174

12,700,000

25

Louisiana

894,154

31,500,000

35

Maine

114,242

1,700,000

15

Maryland

686,712

45,800,000

67

Mass.

13,831

600,000

46

Michigan

1,252,614

18,500,000

15

Minnesota

916,576

13,400,000

15

Mississippi

431,919

6,500,000

15

Missouri

929,721

13,800,000

15

Montana

170,480

2,500,000

15

Nebraska

347,205

5,000,000

15

Nevada

202,503

3,000,000

15

New Brunswick

26,119

600,000

22

New Hamp.

99,120

5,800,000

59

New Mexico

257,642

16,400,000

64

New York

1,103,424

16,500,000

15

North Car.

884,077

13,200,000

15

North Dakota

87,176

3,700,000

42

Ohio

1,567,247

46,100,000

29

Oklahoma

510,076

7,500,000

15

Ontario

639,119

13,700,000

22

Oregon

567,058

9,400,000

17

Penn.

1,563,857

23,300,000

15

Rhode Island

5,065

300,000

64

South Car.

801,789

19,200,000

24

South Dakota

110,706

1,600,000

15

Tennessee

887,311

13,300,000

15

Texas

2,870,454

88,000,000

31

Utah

296,848

13,700,000

46

Vermont

42,199

600,000

15

Virginia

958,040

14,300,000

15

Washington

621,644

37,600,000

60

West Virginia

393,761

5,900,000

15

Wisconsin

492,471

13,500,000

27

Wyoming

116,730

1,900,000

16

Total Return: $1,005,500,000

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