State Farm Insurance

From Wikipedia, the free encyclopedia
  (Redirected from State Farm)
Jump to: navigation, search
State Farm Insurance
Type Mutual (main company)
Industry Insurance
Founded June 7, 1922; 92 years ago (1922-06-07) [1]
Founder(s) George J. Mecherle
Headquarters Bloomington, Illinois, U.S.
Number of locations 18,000 agents
343 claim offices
30 operations centers[2]
Area served USA and Canada
Key people Edward B. Rust, Jr. (Chairman & CEO)
Services Insurance, Banking, Investing
Revenue US$68.291 billion (2013) Increase4.6%[3]
Net income US$5.2 billion (2013) IncreaseUS$2 billion[3]
Total assets US$224.694 billion (2013) [4]
Total equity US$75.900 billion (2011)
Employees 65,000[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 is a group of insurance and financial services 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 insurance firm that also owns the other State Farm companies. The corporate headquarters are in Bloomington, Illinois.

State Farm is ranked 44th in the 2013 Fortune 500, which lists American companies by revenue.[5]

History[edit]

State Farm was founded in 1922 by retired farmer George J. Mecherle as a mutual 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.

The State Farm jingle ("Like a good neighbor, State Farm is there") was written by American songwriter Barry Manilow in 1971. A cover was released by Weezer in 2011.[6][7]

As of December 2013 State Farm had 65,000 employees and 18,000 agents. February 2014 figures show the group servicing 80 million policies in the United States and Canada, of which over 44,000,000 are for automobiles, 27,000,000 are for fire, 7,000,000 for life, and more than 2 million bank accounts.

Edward B. Rust, Jr. is the current chairman and CEO of State Farm Mutual Automobile Insurance Company,[2] 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.[citation needed]

[edit]

State Farm's tri-oval logo from 1953 to 2012.

The State Farm interlocked tri-oval logo was created in the mid-to-late 1940’s and was later updated in 1953. For nearly 60 years, this design was critical to its brand image.

On December 15, 2011, State Farm decided to transform their interlocked tri-oval logo to a simpler, contemporary logo to showcase the company’s core service offerings of auto, fire, and life. The new logo was introduced January 1, 2012, marking the company’s 90th anniversary. It consists of a simple three-oval design adjacent to the State Farm wordmark. According to Pam El, Marketing Vice President at State Farm, a change in image was needed to employ a bolder presence that could compete in today’s digital world.[8]

Companies[edit]

State Farm Mutual Automobile Insurance Company is the parent company of several wholly owned State Farm subsidiaries:[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)
  • State Farm International Service, Inc.
  • State Farm Associate's Funds Trust
  • State Farm Mutual Fund Trust
  • State Farm Investor Services (Canada) Co.
  • State Farm Finance Corporation of Canada
  • SF Insurance Placement Corporation of Canada
  • Insurance Placement Services, Inc.
  • State Farm International Life Insurance Company Ltd.
  • Plaza One Realty Co.
  • State Farm Guaranty Insurance Company
  • State Farm Variable Product Trust

[edit]

This commercial structure is from State Farm's "Get to a Better State" campaign. State Farm premiered its “get to a better state” campaign in June 2011 with an increased spending budget. As a result State Farm’s brand awareness and favorability has gone up considerably. This campaign focuses on making humor out of unfortunate problems we all face at one time or another. These commercials then make light of the situation by demonstrating how easy it is to contact an agent and correct the problem that has occurred. Each of these commercials follows a similar structure. A group of one to three people find themselves in an unfortunate situation. Someone in the group will then call on their State Farm agent by singing the jingle “like a good neighbor, State Farm is there”. A State Farm agent will then appear and help the group out with their problem. There are a few commercials that deviate from this structure, but still follow the same ultimate pattern.[citation needed]

State Farm also has commercials beginning with the words "State of..." and another word describing the certain commercial. One notable commercial shows a man awake at 3:00 in the morning on the phone with his State Farm agent. This certain commercial begins with State of Unrest. The man's wife sees him talking on the phone in a secretive way. She is suspicious and asks who is on the phone, to which her husband says: "It's Jake from State Farm". The man's wife then takes the phone and asks, "What are you wearing, 'Jake from State Farm?'", to which the agent responds in a timid way, "Uh, khakis". Still believing he's a female, the wife says, "She sounds hideous", where the husband replies, "Well she's a guy, so…"[9]

CEOs[edit]

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[edit]

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.[10]

Back in the 1950s, State Farm held a contest, among the agents, to come up with ideas to expand the State Farm business. Robert H Kent, agent in Chicago, came up with the idea of providing auto loans to existing policyholders. Robert H Kent was friends with a local bank president at LaSalle NW, and the two teamed up to pilot the auto finance program. State Farm liked the idea so much, that it was rolled out to all the agents. Robert H Kent received royalties on the program for 20 years. This is a significant event, as it created the first marketing partnership between insurance companies and banks.

Florida withdrawal and reentry[edit]

In early 2009, the State Farm Florida 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.[11] State Farm has since decided to remain in Florida, although with a reduced amount of property policies.[12]

In 2010, State Farm and Renaissance jointly formed DaVinci Reinsurance Ltd. which insured more than 3.5 million homes in 2010.[13]

Criticism[edit]

A 2007 investigation by CNN reported that major car insurance companies, including State Farm and Allstate Insurance, are increasingly fighting claims from those alleging injury. Some injured parties argued these were unfair practices. State Farm and Allstate have denied these allegations.[14] This followed on the heels of criminal investigations by the states of Louisiana and Mississippi, alleging that State Farm had wrongly denied claims stemming from Hurricane Katrina.[15] Plaintiff's attorney Richard F "Dickie" Scruggs later 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 related case involving a $26.5 million settlement after Hurricane Katrina.[16] This was widely viewed as a major victory and exoneration for State Farm.

Competition[edit]

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.[17]

Non-insurance-related[edit]

Sponsorships[edit]

State Farm sponsored the annual Lone Star Showdown

Services[edit]

State Farm Safety Patrol – 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. Most 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. Turnpikes which currently participate include, Florida's Turnpike in the State of Florida[18] and the Pennsylvania Turnpike in the Commonwealth of Pennsylvania.[19]

See also[edit]

References[edit]

  1. ^ a b "State Farm Companies". State Farm Mutual Automobile Insurance Company. Retrieved May 28, 2008. 
  2. ^ a b c "Fast facts about State Farm". State Farm Mutual Automobile Insurance Company. Retrieved July 30, 2014. 
  3. ^ a b "State Farm Announces 2013 Financial Results". 'State Farm'. February 28, 2014. Retrieved July 30, 2014. 
  4. ^ "Fortune 500 2014". Fortune. 2014. Retrieved July 30, 2014. 
  5. ^ "Fortune 500 2013 - Fortune on CNNMoney.com". CNN. Retrieved June 12, 2013. 
  6. ^ State Farm – 1960s & 1970s
  7. ^ Weezer cover of State Farm jingle
  8. ^ "State Farm Contemporizes Its Brand Logo". State Farm. Retrieved February 5, 2013. 
  9. ^ "State Farm ads creating a beer-like buzz". Articles.chicagotribune.com. 2011-12-11. Retrieved 2014-08-04. 
  10. ^ "Insure- State Farm Loans". Insure.com. Retrieved February 28, 2011. 
  11. ^ "Florida's Unnatural Disaster: Charlie Crist, taxpayers and the next hurricane.". The Wall Street Journal. February 4, 2009. Retrieved March 29, 2009. 
  12. ^ State Farm will stay, Florida insurance regulators say | Tampa Bay Times. Tampabay.com (2009-12-16). Retrieved on 2013-08-17.
  13. ^ Reed, Matt (March 3, 2011). "Insurers still like Florida". Florida Today (Melbourne, Florida). pp. 1B. 
  14. ^ "Auto insurers play hardball in minor-crash claims". CNN (CNN.com). Retrieved May 24, 2010. 
  15. ^ Federal judge rejects $50M State Farm settlement
  16. ^ Class-Action Lawyer Gets 5 Years in Bribery Case
  17. ^ Auto Insurance. III. Retrieved on 2013-08-17.
  18. ^ State Farm Safety Patrol on Florida's Turnpike and the Sawgrass Expressway official website
  19. ^ State Farm Safety Patrol on the Pennsylvania Turnpike official website

External links[edit]