State Farm Insurance: Wikis

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Encyclopedia

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State Farm
Type Mutual (main company)
Founded June 7, 1922[1]
Founder(s) George J. Mecherle
Headquarters Bloomington, Illinois, U.S.
Number of locations 17,000 agents
391 claim offices
24 operations centers[2]
Area served USA and Canada
Key people Edward B. Rust, Jr. (Chairman/CEO)
Industry Finance and Insurance
Services Insurance, Banking, Investing
Revenue US$61.611 billion (2007) 1.8%[3]
Net income US$3.664 billion (2007) US$687 million[4]
Total assets US$104.842 billion (2007) US$6.494 billion[4]
Total equity US$58.142 billion (2006)[5]
Employees 68,000[2]
Divisions Insurance; mutual funds; State Farm Bank
Subsidiaries see Companies below
Website www.statefarm.com
State Farm Insurance "Fire Building" in downtown Bloomington, Illinois.

State Farm Insurance is a group of insurance and financial services companies. It is the largest automobile insurer in the United States continuously since 1942[1] and insures more cars and homes in the United States than any other insurer.[2]

The group's main company is State Farm Mutual Automobile Insurance Company, a mutual insurance firm that also owns the other State Farm companies. The corporate headquarters are in Bloomington, Illinois.

State Farm is ranked 31st in the 2009 Fortune 500, which lists American companies by revenue.[6] According to the Fortune Global 500, State Farm is also the world's largest mutual "P&C" (property & casualty insurance) firm.[5] In October 2008, State Farm Insurance Companies in Canada was named one of Greater Toronto's Top Employers by Mediacorp Canada Inc., which was announced by the Toronto Star newspaper.[7]

Contents

History

State Farm was founded in 1922 as a mutual automobile insurance company owned by its policyholders. Despite the company's name, State Farm did not initially begin as a crop insurance company. Specifically, State Farm specialized in auto insurance for farmers. Founder George J. Mecherle believed that since farmers drove less and had fewer losses than city drivers, they should pay less for insurance. His idea was popular with farmers and made his new company successful. Since its inception, State Farm has expanded its services into other popular types of insurance, such as homeowners and life insurance, in addition to banking and financial services.[1]

State Farm's well-known jingle ("Like a good neighbor, State Farm is there") was written by American songwriter Barry Manilow in 1971.[8]

State Farm has grown to include 67,000 employees and 17,000 agents servicing 77 million policies in the United States and Canada, and serving more than 1.9 million bank accounts.[2] As of 2005, State Farm is insuring about 40 million vehicles.[9]

Edward B. Rust, Jr. is chairman of the board and chief executive officer of State Farm Mutual Automobile Insurance Company, and president and chief executive officer of State Farm Fire and Casualty Company, State Farm Life Insurance Company, and other principal State Farm affiliates.

On March 1, 2007, State Farm Mutual Automobile Insurance Company announced it will pay $1.25 billion in dividends to its mutual auto insurance policyholders in 46 states, the District of Columbia and the Canadian province of New Brunswick.[10]

Companies

State Farm Mutual Automobile Insurance Company also owns the other State Farm Companies:[1]

  • State Farm Fire and Casualty Company
  • State Farm Life Insurance Company
  • State Farm Life and Accident Assurance Company (NY/CT/WI)
  • State Farm County Mutual Insurance Company of Texas (TX auto)
  • State Farm Mutual Insurance Company of Texas (TX preferred auto)
  • State Farm Indemnity Company / State Farm Guaranty Insurance Company (NJ auto)
  • State Farm General Insurance Company (CA home)
  • State Farm Florida Insurance Company (FL home)
  • State Farm Lloyds (TX home/commercial)
  • State Farm Bank, F.S.B.
  • State Farm Investment Management Corp. (SFIMC)
  • State Farm VP Management Corp. (SFVPMC)

CEOs

CEO Years Served
George J. Mecherle 1922–1937
Raymond Mecherle 1937–1954
Adlai Rust 1954–1970
Edward B. Rust, Sr. 1970–1985
Edward B. Rust, Jr. 1985–Present

Financial services

In recent years, State Farm has expanded into the financial services arena, such as banking and mutual funds. These are separate from its insurance products. This has expanded its competition beyond the traditional P&C insurance companies like GEICO, Progressive, and USAA to include competition with leading banks and investment companies like Bank of America, Citi, JP Morgan Chase, Wells Fargo, Fidelity Investments, Charles Schwab, and E*TRADE.[citation needed]

State pullouts

In early 2009, State Farm's Florida subsidiary, the state's largest insurer, got out of the homeowner's insurance business in Florida after state regulators refused to approve a 47% increase in insurance premiums. State Farm said that, in Florida, it had paid out $1.21 in claims for every dollar in premiums since 2000. Several other home insurers have pulled out of Florida as well; many homeowners are now using the Citizens Property Insurance Corporation run by the state government.[11]

Criticism

A 2007 investigation by CNN reported that major car insurance companies, including State Farm and Allstate Insurance, are increasingly fighting claims from those injured by their insured members. In some cases the settlement proposed amounts to just $50 or the threat that any lawsuit would be made so expensive and time-consuming that it wouldn't be worth the victim's time. State Farm and Allstate have denied these allegations.[12] This followed on the heels of criminal investigations by the states of Louisiana and Mississippi, which found that State Farm had wrongly denied claims stemming from Hurricane Katrina.[13] However much corruption on the case causes confusion on the real outcome. Richard F "Dickie" Scruggs plead guilty in March for his role in trying to pay Judge Henry Lackey of Mississippi a $50,000 bribe for a favorable ruling in a dispute involving a $26.5 million settlement after Hurricane Katrina.[14]

Competition

State Farm's top automobile insurance competitors, based on premium written, include Allstate, Progressive, GEICO, Zurich Financial Services, Nationwide, USAA, Liberty Mutual, American International Group, and American Family Insurance Group.[15]

Non-insurance-related

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Sponsorships

State Farm sponsors the annual Lone Star Showdown

Services

State Farm in partnership with several U.S. highway authorities operates a service called the State Farm Safety Patrol which provides free roadside assistance to stranded motorists on participating highways, when you call the designated telephone number for the Safety Patrol they will respond and provide the following services: fuel refills; radiator refills; engine oil refills. Safety Patrol personnel are also CPR and Automated External Defibrillator certified. They work to reduce accident rates, minimize the duration time of incidents, assist disabled drivers and remove road debris. Highways which currently participate includes, E-470[16] in Denver, Colorado, Florida's Turnpike in the State of Florida[17] and the Pennsylvania Turnpike in the Commonwealth of Pennsylvania[18].

See also

References

  1. ^ a b c d ""State Farm Companies"". State Farm Mutual Automobile Insurance Company. http://www.statefarm.com/about/companie.asp. Retrieved 2008-05-28. 
  2. ^ a b c d ""Fast facts about State Farm"". State Farm Mutual Automobile Insurance Company. http://www.statefarm.com/about/media/fastfact.asp. Retrieved 2008-05-28. 
  3. ^ "State Farm Insurance Cos.". Fortune 500, 2008. 2008-05-05. http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/10199.html. Retrieved 2008-04-24.  (Note: Based on 2006 accounting figures.)
  4. ^ a b "2007 Annual Report to State Farm Mutual Policyholders" (PDF). State Farm Mutual Automobile Insurance Company. 2008-03-04. http://www.statefarm.com/_pdf/2007annualreport.pdf. Retrieved 2008-03-27. 
  5. ^ a b "State Farm Insurance Cos.". Fortune Global 500, 2007. 2007-07-23. http://money.cnn.com/magazines/fortune/global500/2007/snapshots/10199.html. Retrieved 2007-03-27.  (Note: Based on 2006 accounting figures.)
  6. ^ http://money.cnn.com/magazines/fortune/fortune500/2009/snapshots/10199.html
  7. ^ "Reasons for Selection, 2009 Greater Toronto's Top Employers Competition". http://www.eluta.ca/top-employer-state-farm-insurance-companies. 
  8. ^ State Farm – 1960s & 1970s
  9. ^ http://www.statefarm.com/_pdf/2005_yearinreview.pdf
  10. ^ State Farm Announces $1.25 Billion Mutual Auto Policyholder Dividend
  11. ^ "Florida's Unnatural Disaster: Charlie Crist, taxpayers and the next hurricane.". The Wall Street Journal. 2009-02-04. http://online.wsj.com/article/SB123371173559046209.html. Retrieved 2009-03-29. 
  12. ^ Auto insurers play hardball in minor-crash claims - CNN.com
  13. ^ Federal judge rejects $50M State Farm settlement
  14. ^ Class-Action Lawyer Gets 5 Years in Bribery Case
  15. ^ http://www.iii.org/media/facts/statsbyissue/auto/
  16. ^ State Farm Safety Patrol on E-470 official website
  17. ^ State Farm Safety Patrol on Florida's Turnpike and the Sawgrass Expressway official website
  18. ^ State Farm Safety Patrol on the Pennsylvania Turnpike official website

External links



Simple English

State Farm Insurance is an insurance agency with headquarters in Bloomington, Illinois. They serve both the U.S. and Canada. They sponsor the Lone Star Showdown.



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