State Farm Mutual Automobile Insurance Co. announced Thursday that it will distribute $5 billion in one-time dividend checks to qualifying auto policyholders. According to the company, the payment represents the largest dividend in its history.
The insurer said it will issue payments across more than 49 million vehicles. California drivers insured by State Farm Mutual are among those who can expect to receive checks.
Each qualifying driver will receive approximately $100 per vehicle this summer. However, State Farm noted that exact payment amounts will vary by state and by the premiums paid.
The company attributed the dividend to stronger-than-expected underwriting performance. In a news release, State Farm said the financial results enabled it to return value directly to policyholders while maintaining financial strength.
State Farm also referenced recent rate reductions totaling $4.6 billion annually. The company positioned the dividend as an additional benefit alongside those lower rates.
“As a mutual company with a customer-first focus, State Farm Mutual is able to provide value directly to our customers while maintaining financial strength to keep our promises in the future,” State Farm President and CEO Jon Farney said in a statement. “That translated this year to lower auto rates and cash back in the form of a $5 billion policyholder dividend.”
The one-time dividend payments are scheduled to be mailed this summer.
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