State Farm
 | |
| Company type | Mutual |
|---|---|
| Industry | Finance and Insurance |
| Founded | 1922 |
| Headquarters | Bloomington, Illinois |
Key people | Edward B. Rust Jr., CEO & Chairman |
| Products | Insurance, Banking, & Investing |
| Revenue | $59.2239 billion USD (2006) [1] |
Number of employees | 68,000 |
| Website | www.statefarm.com |
State Farm Insurance Companies are a group of large US insurance and financial services companies started in 1922 by former farmer George J. Mecherle (pronounced Ma-herl). The corporate headquarters is in Bloomington, Illinois.
History
State Farm was founded 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.
State Farm has grown to include 68,000 employees and 17,000 agents servicing 74 million policies in the United States and Canada, and serving more than 1.8 million bank accounts.
Edward B. Rust, Jr. is chairman of the board and chief executive officer of State Farm Mutual Automobile Insurance Company, Bloomington, Ill. He is also 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.[1]
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 Allstate, GEICO, Progressive, Farmers Insurance Group, 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.
Criticism
A recent 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. [2]
Competition
Major insurance competitors include Allstate, American Family Insurance, Farmers Insurance Group, Nationwide, Progressive, GEICO, and USAA.
Trivia
- State Farm is America's largest automobile insurance provider, covering "about one in every 5 vehicles" in the USA according to the company. [2]
- The well-known jingle ("Like a good neighbor, State Farm is there") is just the tag ending on a full-length song. The song was written by then-soon-to-be-famous American songwriter Barry Manilow in 1971.
- State Farm's internal newsletter is called the ALFI, which stands for "Auto, Life, Fire Insurance"
- As of the 2005 annual report[3], State Farm is insuring about 40 million vehicles. Relatively speaking, the vehicles lined up bumper-to-bumper would encircle the plant Earth four and a half times. That is also roughly 112,500 miles.