Car insurance customers of State Farm will receive a one time distribution this summer, the company said, totaling $5 billion across more than 49 million vehicles.
State Farm Mutual Automobile Insurance Company said the payments will average about $100 per vehicle and will vary by state of residence and premiums paid.
The insurer said the dividend follows a year of stronger than expected underwriting performance and shrinking auto repair costs, which helped lower auto rates in 40 states.
Jon Farney, State Farm Mutual president and CEO, said the mutual company model allowed the firm to provide value directly to customers while maintaining financial strength to keep future promises.
Context And Related Data
CBS News reported the Bloomington, Illinois based company told the outlet the cash distribution will not be issued as a credit, and that more refund details will be shared in coming months.
State Farm provides insurance for autos, homes and small businesses and the company said it has nearly 97 million policyholders, according to CBS News reporting.
The insurer also said auto rate reductions are averaging about 10 percent, and that total premium savings to consumers amounted to roughly $4.6 billion.
Federal consumer price data cited in reporting showed motor vehicle insurance prices fell 0.4 percent from December to January and were 0.5 percent higher year over year.
The broader consumer price index rose 2.4 percent annually, while auto repair costs increased 0.2 percent month over month and were 5.7 percent higher than a year earlier.
Other insurers have acted similarly, with USAA reported to have delivered about $3.8 billion in savings to customers last year, according to the articles.
State Farm framed the dividend as the largest in company history and said lower collision frequency contributed to its decision to return cash to policyholders.
