- State Farm is returning $5 billion to its auto customers.
- Clients can expect a check of around $100 this summer.
- Company’s net profit soared $7.6 billion in the past year.
Insurance companies are rarely the ‘good guys,’ but State Farm is trying to be a good neighbor by announcing plans to return $5 billion to its automotive customers. The money will come this summer as part of a one-time dividend.
The payment will be spread across more than 49 million vehicles and customers can expect to receive around $100 per vehicle. However, this will “vary by state and premiums paid.”
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The insurance giant, which presumably spent a small fortune on having Patrick Mahomes star in a number of commercials, said the dividend was made possible due to their “financial strength” and “stronger than expected underwriting performance.” They added that “as a mutual company, State Farm is uniquely positioned to provide value directly to customers rather than shareholders.”
State Farm went on to say that “downward trending auto repair costs and frequency of collisions” allowed them to lower automotive insurance rates in 40 states recently. Prices have dropped by an average of 10% and this will reportedly save customers $4.6 billion.
CEO Jon Farney said, “State Farm Mutual is able to provide value directly to our customers, while maintaining financial strength to keep our promises in the future. That translated this year to lower auto rates and cash back in the form of a $5 billion policyholder dividend.”
Of course, the story is more complicated than that. Looking into the financials, State Farm’s net income soared from $5.3 billion in 2024 to $12.9 billion last year. That’s an increase of $7.6 billion, so a $5 billion dividend still leaves plenty of money left over.
