State Farm Insurance is a group of
insuranceIn law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
and
financial services Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
companies in the United States. The company also has operations in Canada.
The group's main business is
State Farm Mutual Automobile Insurance Company, a
mutual insuranceA mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders. The primary form of financial business set up as a mutual company in the United States has been mutual insurance. Under this idea, what would have been profits are...
firm that also owns the other State Farm companies. The corporate headquarters are in
Bloomington, IllinoisBloomington is a city in McLean County, Illinois, United States and the county seat. It is adjacent to Normal, Illinois, and is the more populous of the two principal municipalities of the Bloomington-Normal metropolitan area...
.
State Farm is ranked 34th in the 2010
Fortune 500The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
, which lists American companies by revenue. According to the
Fortune Global 500The Fortune Global 500 is a ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by Fortune magazine....
, State Farm is also the world's largest mutual "P&C" (
propertyProperty insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main...
&
casualty insuranceCasualty insurance, often equated to liability insurance, is used to describe an area of insurance not directly concerned with life insurance, health insurance, or property insurance. It is mainly used to describe the liability coverage of an individual or organization's for negligent acts or...
) firm. In October 2008, State Farm Insurance Companies in Canada was named one of
Greater Toronto's Top EmployersGreater Toronto's Top Employers is an annual competition that recognizes the best places to work in the Greater Toronto Area...
by Mediacorp Canada Inc., which was announced by the
Toronto StarThe Toronto Star is Canada's highest-circulation newspaper, based in Toronto, Ontario, Canada. Its print edition is distributed almost entirely within the province of Ontario...
newspaper.
History
State Farm was founded in 1922 by retired farmer
George J. MecherleGeorge Jacob "G.J." Mecherle was the founder of State Farm Insurance, headquartered in Bloomington, Illinois. Mecherle, a farmer who became an insurance agent also, founded State Farm after becoming dissatisfied with the insurance rates charged to farmers, as those rates included the risks of...
as a
mutualA mutual, mutual organization, or mutual society is an organization based on the principle of mutuality. Unlike a true cooperative, members usually do not contribute to the capital of the company by direct investment, but derive their right to profits and votes through their customer relationship...
automobile insurance company owned by its policyholders. The firm originally specialized in auto insurance for farmers. The company later expanded its services into other types of insurance, such as homeowners and life insurance, in addition to banking and financial services.
State Farm's jingle ("Like a good neighbor, State Farm is there") was written by American songwriter
Barry ManilowBarry Manilow is an American singer-songwriter, musician, arranger, producer, conductor, and performer, best known for such recordings as "Could It Be Magic", "Mandy", "Can't Smile Without You", and "Copacabana ."...
in 1971. A cover was released by
WeezerWeezer is an American alternative rock band. The band currently consists of Rivers Cuomo , Patrick Wilson , Brian Bell , and Scott Shriner . The band has changed lineups three times since its formation in 1992...
in 2011.
As of December 2008 State Farm had 67,000 employees and 17,000 agents. March 2009 figures show the group servicing 77 million policies in the United States and Canada, of which over 40,000,000 are for automobiles, and more than 2 million bank accounts.
Edward B. Rust, Jr. is the current
chairmanThe Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
and
CEOA chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of State Farm Mutual Automobile Insurance Company, as well as 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.
Companies
State Farm Mutual Automobile Insurance Company is the parent company of several wholly owned State Farm
subsidiariesA subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
:
- State Farm Fire and Casualty Company
- State Farm Life Insurance Company
- State Farm Life and Accident Assurance Company (NY/CT
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
/WIWisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...
)
- State Farm County Mutual Insurance Company of Texas (TX
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
auto)
- State Farm Mutual Insurance Company of Texas (TX
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
preferred auto)
- State Farm Indemnity Company / State Farm Guaranty Insurance Company (NJ
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
auto)
- State Farm General Insurance Company (CA
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
home)
- State Farm Florida Insurance Company (FL
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
home)
- State Farm Lloyds (TX
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
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 George Jacob "G.J." Mecherle was the founder of State Farm Insurance, headquartered in Bloomington, Illinois. Mecherle, a farmer who became an insurance agent also, founded State Farm after becoming dissatisfied with the insurance rates charged to farmers, as those rates included the risks of...
|
1922–1937 |
| Raymond Mecherle |
1937–1954 |
| Adlai Rust |
1954–1970 |
| Edward B. Rust, Sr. |
1970–1985 |
| Edward B. Rust, Jr. |
1985–Present |
Financial services
State Farm has expanded into the financial services arena, such as banking and mutual funds.
The bank opened in May 1999 and is operated by State Farm Financial Services, FSB, a subsidiary of State Farm Mutual Automobile Insurance Co. These are separate from its insurance products. State Farm Bank does not have branch offices. Its regular banking services, which include checking and savings accounts, certificates of deposit, and money market accounts, are available to consumers countrywide via the Internet or over the phone, and through agents in Arizona, Illinois, Missouri, Nevada, or New Mexico. Home mortgages are available countrywide over the phone or through agents in those five states.
Florida withdrawal and reentry
In early 2009, State Farm's
FloridaFlorida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
subsidiary, the state's largest insurer, threatened to withdraw from writing property insurance business in Florida after state regulators refused to approve a 47% property rate increase. 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. State Farm has since decided to remain in Florida, although with a reduced amount of property policies.
In 2010 State Farm and Renaissance jointly formed DaVinci Reinsurance Ltd. which insured more than 3.5 million homes in 2010.
Criticism
A 2007 investigation by CNN reported that major car insurance companies, including State Farm and
Allstate InsuranceThe Allstate Corporation is the second-largest personal lines insurer in the United States and the largest that is publicly held. The company also has personal lines insurance operations in Canada. Allstate was founded in 1931 as part of Sears, Roebuck and Co., and was spun off in 1993...
, 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 would not be worth the victim's time. State Farm and Allstate have denied these allegations. 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.
Richard F "Dickie" ScruggsRichard F. "Dickie" Scruggs is an American former A6A naval aviator, a prominent trial lawyer, one of the richest men in Mississippi, and the brother-in-law of former U.S. Senate Majority Leader Trent Lott. Scruggs first came to the public eye after successfully suing the asbestos industry on...
pleaded 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.
Competition
State Farm's top automobile insurance competitors, based on premium written, include
AllstateThe Allstate Corporation is the second-largest personal lines insurer in the United States and the largest that is publicly held. The company also has personal lines insurance operations in Canada. Allstate was founded in 1931 as part of Sears, Roebuck and Co., and was spun off in 1993...
,
ProgressiveThe Progressive Corporation , known as the Progressive Casualty Insurance Company through its subsidiaries, provides personal automobile insurance, and other specialty property-casualty insurance and related services in the United States....
,
GEICOThe Government Employees Insurance Company is an auto insurance company. It is a wholly owned subsidiary of Berkshire Hathaway that as of 2007 provided coverage for more than 10 million motor vehicles owned by more than 9 million policy holders. GEICO writes private passenger automobile insurance...
,
Zurich Financial ServicesZurich Financial Services AG is a major financial services group based in Zurich, Switzerland.-History:The Company was founded in 1872 as subsidiary of the Schweiz Marine Insurance Company under the name Versicherung Verein...
,
NationwideNationwide Mutual Insurance Company & Affiliated Companies is a group of large U.S. insurance and financial services companies based in Columbus...
,
USAAUnited Services Automobile Association is a Fortune 500 financial services company offering banking, investing, and insurance to people and families that serve, or served, in the United States military. In 2011, there were 8.4 million members. The company reported a net worth of $19.3 billion in...
,
Liberty MutualLiberty Mutual Group, more commonly known by the name of its primary line of business Liberty Mutual, is a diversified global insurer and the third largest property and casualty insurer in the United States based on 2010 net written premium. It is the 82nd company on the Fortune 500 list for 2011...
,
American International GroupAmerican International Group, Inc. or AIG is an American multinational insurance corporation. Its corporate headquarters is located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in...
, and American Family Insurance Group.
Sponsorships
- State Farm Arena, a multi-purpose complex that features concerts and sports events.
- State Farm Classic
The LPGA State Farm Classic is a golf tournament for professional female golfers that is part of the LPGA Tour. It has been played annually since 1976 in Springfield, Illinois, United States. From 1976 through 2006, the tournament was held at The Rail Golf Course...
, a golf tournament for professional female golfers that is part of the LPGA Tour.
- State Farm Holiday Classic
The State Farm Holiday Classic, named after the title sponsor State Farm Insurance, is the largest co-ed, high school holiday basketball tournament in the United States, with 64 teams...
, an annual high schoolHigh school is a term used in parts of the English speaking world to describe institutions which provide all or part of secondary education. The term is often incorporated into the name of such institutions....
holiday basketballBasketball is a team sport in which two teams of five players try to score points by throwing or "shooting" a ball through the top of a basketball hoop while following a set of rules...
tournament held in Bloomington-Normal, Illinois each December.
- State Farm Hall of Business, College of Business Building at Illinois State University
Illinois State University , founded in 1857, is the oldest public university in Illinois; it is located in the town of Normal. ISU is considered a "national university" that grants a variety of doctoral degrees and strongly emphasizes research; it is also recognized as one of the top ten largest...
in Normal, IllinoisNormal is an incorporated town in McLean County, Illinois, United States. It had a population of 52,497 as of the 2010 census. Normal is the smaller of two principal municipalities of the Bloomington-Normal metropolitan area...
, since 2010.
- State Farm Lone Star Showdown
The State Farm Lone Star Showdown was the official moniker for all varsity men's and women's athletics competitions between the University of Texas and Texas A&M University...
, moniker for all varsity athletics competitions between Texas A&M UniversityTexas A&M University is a coeducational public research university located in College Station, Texas . It is the flagship institution of the Texas A&M University System. The sixth-largest university in the United States, A&M's enrollment for Fall 2011 was over 50,000 for the first time in school...
and The University of Texas at AustinThe University of Texas at Austin is a state research university located in Austin, Texas, USA, and is the flagship institution of the The University of Texas System. Founded in 1883, its campus is located approximately from the Texas State Capitol in Austin...
.
- State Farm Research Center
The State Farm Research and Development Center opened in January 2005 at the University of Illinois’ Research Park. State Farm has been involved in academic programming, student assistance and research at U of I for over 35 years, but this facility allows for a captive audience of college interns...
, a research extension of State Farm Insurance located at the University of Illinois at Urbana-ChampaignThe University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...
.
- State Farm Territorial Cup Series
The State Farm Territorial Cup Series is the yearlong competition between Arizona Wildcats and Arizona State Sun Devils. The series includes head to head competitions in 18 different sports....
, moniker for all varsity athletics competitions between the University of ArizonaThe University of Arizona is a land-grant and space-grant public institution of higher education and research located in Tucson, Arizona, United States. The University of Arizona was the first university in the state of Arizona, founded in 1885...
and Arizona State UniversityArizona State University is a public research university located in the Phoenix Metropolitan Area of the State of Arizona...
.
- State Farm Sales Lab, a clinical sales training center at the University of Central Missouri
The University of Central Missouri is a four-year public institution in Warrensburg, Missouri.- History :...
, where the national State Farm Marketing and Sales Competition is held.
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 debrisRoad debris, a form of road hazard, is debris on or off a road. Road debris includes substances, materials, and objects that are foreign to the normal roadway environment...
. Highways which currently participate includes,
E-470E-470 is a 46-mile limited-access tollway traversing the eastern portion of the Denver-Aurora Metropolitan Area in Colorado. The toll road is not a state highway, but is instead maintained by the E-470 Public Highway Authority.-Route description:...
in
Denver, ColoradoThe City and County of Denver is the capital and the most populous city of the U.S. state of Colorado. Denver is a consolidated city-county, located in the South Platte River Valley on the western edge of the High Plains just east of the Front Range of the Rocky Mountains...
,
Florida's TurnpikeFlorida's Turnpike , designated as the Ronald Reagan Turnpike, and originally known as the Sunshine State Parkway is a north–south toll road that runs through 11 counties in the Florida peninsula, from U.S...
in the State of
FloridaFlorida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
and the
Pennsylvania TurnpikeThe Pennsylvania Turnpike is a toll highway system operated by the Pennsylvania Turnpike Commission in the Commonwealth of Pennsylvania, United States. The three sections of the turnpike system total . The main section extends from Ohio to New Jersey and is long...
in the Commonwealth of
PennsylvaniaThe Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
.
The State Farm Youth Advisory Board, composed of thirty students from across the United States and Canada, helps the company design and implement their largest service-learning initiative, which is targeted at addressing issues important to State Farm and communities across the United States and Canada. Every year, the Board is granted $5 million to distribute to local community projects across the United States and Canada.
External links