State Farm

State Farm
Mutual (main company)
Industry Insurance
Founded June 7, 1922; 96 years ago (1922-06-07)[1]
Founder George J. Mecherle
Headquarters Bloomington, Illinois, United States
Number of locations
18,000 agents
343 claim offices
30 operations centers[2]
Area served
United States
Key people
Michael Tipsord (Chairman, President & CEO)[3]
Services Insurance, Banking, Investing
Revenue Increase $87.6 billion USD (2017)[4]
Decrease $2.2 billion USD (2017)[4]
Increase $241.183 billion USD (2015)[5]
Increase $75.900 billion USD (2013)[6]
Number of employees
70,425[2]
Divisions Insurance; mutual funds; State Farm Bank
Subsidiaries see Companies below
Website www.statefarm.com

State Farm is a large group of insurance and financial services companies throughout the United States with corporate headquarters in Bloomington, Illinois. The group's main business is State Farm Mutual Automobile Insurance Company, a mutual insurance firm that also owns the other State Farm companies.

Overview

State Farm is the largest property and casualty insurance provider in the United States. It is also the largest auto insurance provider in the United States.[7] State Farm is ranked 33rd in the 2017 Fortune 500, which lists American companies by revenue.[8]

State Farm relies on exclusive agents (also known as captive agents) to sell insurance. Only State Farm agents can sell State Farm insurance, and their agents can only sell State Farm products.[9][10]

State Farm's top automobile insurance competitors, based on premium written, include Farmers Insurance, Allstate, Progressive, GEICO, Zurich Financial Services, Reliance Partners, Nationwide, USAA, Liberty Mutual, American International Group, and American Family Insurance Group.[11]

Financial services

State Farm Insurance in Ontario.

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. Home mortgages are available countrywide over the phone or through agents.[12]

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, a State Farm 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 event created the first marketing partnership between insurance companies and banks.

History

State Farm Insurance "Fire Building" in downtown Bloomington, Illinois.

State Farm was founded in 1922 by retired farmer George J. Mecherle as a mutual automobile insurance company owned by its policyholders. The firm specialized in auto insurance for farmers and later expanded services into other types of insurance, such as homeowners and life insurance, and then 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.[13][14] State Farm's first commercial jingle was created for The Jack Benny Program in the 1960s.[15]

As of December 2017, State Farm had 70,000 employees and 19,000 agents.[16] 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.

Michael Tipsord is Chairman and CEO of State Farm Mutual Automobile Insurance Company,[2] and president and chief executive officer of State Farm Fire and Casualty Company, State Farm Life Insurance Company, and other principal State Farm affiliates.[]

In 2014, the company sold its operations in Canada to Desjardins Group, which is continuing to use the State Farm name.[17] Canadian policies were transferred to be underwritten by Desjardins Group on January 1, 2015. The State Farm brand continued to be used for agents and marketing until 2018.[17][18] In 2018, State Farm Canada was officially rebranded to Desjardins Insurance through Desjardins Agents.[19] The whole transition will be completed by December 31 in 2019.[20]

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

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

On December 23, 2011, State Farm decided to transform its interlocked tri-oval logo to a contemporary logo to showcase the company's core service offerings of auto, fire, and life. The new logo was introduced January 1, 2012, in celebration of 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.[21]

CEOs

CEO Years Served
George J. Mecherle 1922-1937(14)
Raymond Mecherle 1937-1954(16)
Adlai Rust 1954-1970(15)
Edward B. Rust, Sr. 1970-1985(14)
Edward B. Rust, Jr. 1985-2015(29)
Michael Tipsord 2015-Present(3)

Subsidiaries

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)
  • Dover Bay Specialty Insurance Company[22]
  • 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
  • Amberjack Ltd. (Real Estate)[23]

Marketing and promotions

Advertisements

This commercial structure is from State Farm's "Get to a Better State" campaign that premiered 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 that are commonly faced. 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.[]

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 a State Farm representative. This certain commercial begins with State of Unrest. The man's wife sees him talking on the phone in a secretive manner. 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..."[24] In May 2015, a variation of State of Unrest premiered, starring The Coneheads from Saturday Night Live, with Dan Aykroyd and Jane Curtin reprising their respective roles as Beldar and Prymaat. This started an ad campaign with that later added Laraine Newman as Connie.

In late 2014, State Farm released a critically acclaimed commercial showing a man (played by Justin Bartha) who says that he will "never" do something (such as getting married, having kids, moving to the suburbs, and buying a minivan), only to do all of those. At the end of the commercial, he admits that he is "never letting go." The commercial is based on the saying "never say never" and how people say that they will "never" do something, only to do it anyway.[25]

The Hoopers is a series of State Farm commercials focusing on a family, including NBA players Chris Paul playing the father, DeAndre Jordan playing the mother, Kevin Love playing the son, Kevin Garnett playing the grandfather and Damian Lillard playing the baby. Additionally, a State Farm agent plays the role of a helpful neighbor in the set of commercials.[26]

The commercial series currently has four commercials made, including "Robbed","Dropping Dimes", "No Good Clipper" and "The Hawks and The Hornets".

Sponsorships

State Farm sponsored the annual Lone Star Showdown

Services

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 a driver calls 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[27] and the Pennsylvania Turnpike in the Commonwealth of Pennsylvania.[28] In Ohio, State Farm-branded safety patrol vans service major highways in the Cincinnati, Toledo, Cleveland, Columbus, Dayton, Akron, and Canton areas on weekdays.[29]

Controversies and criticism

Florida threatened withdrawal

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 million USD 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.[30] State Farm has since decided to remain in Florida, although with a reduced amount of property policies.[31]

In 2010, State Farm and Renaissance jointly formed DaVinci Reinsurance Ltd. which insured more than 3.5 million homes in 2010.[32]

Criticism

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.[33] 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.[34] 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 USD bribe for a favorable ruling in a related case involving a $26.5 million USD settlement after Hurricane Katrina.[35]

Lawsuits

In 1993, Todd Hindin filed a lawsuit against State Farm for allegedly keeping a list of prominent Jewish lawyers referred to within State Farm as the "Jewish Lawyers List". Any claims made by clients of these attorneys were automatically forwarded to State Farm's fraud unit, purely on the basis of the religion and national origin of the lawyers. These claims would then be neither settled nor paid. State Farm initially claimed that this was not a matter of discrimination, but of coincidence. However, Dr. Frank Taylor (an experienced economist on retainer for the Appellants) discovered that despite the fact that the population of the states involved had Jewish populations between 2-5% of the total population, the list was composed of nearly 80% religiously or ethnically Jewish lawyers. Individuals who had worked for State Farm, including former Divisional Claim Superintendent Ron Middler, testified that the list was indeed used to discriminate against ethnic minorities. State Farm paid out $30 million to Todd Hindin and his clients for discrimination on the basis of religion and national origin.[36]

Documents that Hindin uncovered would assist in another case in 2003, Campbell v. State Farm, in which State Farm had to pay out $145 million in punitive damages after acting in bad-faith. State Farm had refused to pay damages to the families of two individuals who were victims in a car accident that Campbell was responsible for, despite originally informing Campbell and his family "that their assets were safe, that they had no liability for the accident, that [State Farm] would represent their interests, and that they did not need to procure separate counsel."[37]

See also

References

  1. ^ a b "State Farm Companies". State Farm Mutual Automobile Insurance Company. Retrieved 2017.
  2. ^ a b c "Fast facts about State Farm". State Farm Mutual Automobile Insurance Company. Retrieved 2014.
  3. ^ "State Farm CEO". Retrieved 2018.
  4. ^ a b "State Farm Announces 2016 Financial Results". 'State Farm'. February 28, 2017. Retrieved 2017.
  5. ^ "Fortune 500 2015". Fortune. 2015. Retrieved 2017.
  6. ^ "Fortune 500 2014". Fortune. 2014. Retrieved 2014.
  7. ^ "Facts + Statistics: Insurance company rankings | III". www.iii.org. Retrieved 2018.
  8. ^ "Fortune 500 2013 - Fortune on CNNMoney.com". CNN. Retrieved 2013.
  9. ^ Silver, Lawrence; Stevens, Robert E.; Clow, Kenneth (2010). Concise Encyclopedia of Insurance. Routledge. p. 9. ISBN 9781136966743.
  10. ^ Zevnik, Richard (2004). The Complete Book of Insurance: Understand the Coverage You Really Need. SphinxLegal. p. 17. ISBN 9781572483835.
  11. ^ Auto Insurance. III. Retrieved on 2013-08-17.
  12. ^ "Financial Services - State Farm®". State Farm. Retrieved 2018.
  13. ^ "State Farm Story - State Farm®". State Farm. Retrieved 2018.
  14. ^ rmarshall. "Weezer Releases Brilliant State Farm Insurance Jingle (Really!) - Prefixmag.com". Retrieved 2018.
  15. ^ "No, Apple, you did not invent the word "App" - Bizarre Records". bizarrerecords.com. Retrieved 2018.
  16. ^ "State Farm CEO - State Farm®". State Farm. Retrieved .
  17. ^ a b "Montreal's Desjardins Group takes over State Farm Canada". Retrieved 2018.
  18. ^ "Change in Canada". statefarm.ca. State Farm Canada. Retrieved 2015.
  19. ^ "Desjardins outlines 18-month plan to re-brand State Farm". Retrieved 2017.
  20. ^ "State Farm brand in Canada to become Desjardins Insurance". www.newswire.ca. Retrieved .
  21. ^ "State Farm Contemporizes Its Brand Logo". State Farm. Retrieved 2013.
  22. ^ "About Dover Bay Insurance - State Farm ®". doverbay.statefarm.com. Retrieved 2018.
  23. ^ "Amberjack Ltd State Farm Mutual Automobile Insurance Co - Bloomington, IL(Illinois) - Joesdata.com". www.joesdata.com. Retrieved 2018.
  24. ^ "State Farm ads creating a beer-like buzz". Articles.chicagotribune.com. 2011-12-11. Retrieved .
  25. ^ "State Farm Shows You How to Fit 60 Seconds of Story Into a 30-Second Spot". Retrieved 2018.
  26. ^ "State Farm TV Commercial, 'Meet the Hoopers' Ft. Chris Paul, Kevin Love". ispot.tv. Retrieved 2016.
  27. ^ State Farm Safety Patrol on Florida's Turnpike and the Sawgrass Expressway official website Archived April 10, 2009, at the Wayback Machine.
  28. ^ "State Farm Safety Patrol on the Pennsylvania Turnpike official website". Archived from the original on March 20, 2015. Retrieved 2018.
  29. ^ Wert, Mark (August 4, 2014). "Like a good neighbor (you know the rest)". The Cincinnati Enquirer. Gannett Company. Retrieved 2015.
  30. ^ "Florida's Unnatural Disaster: Charlie Crist, taxpayers and the next hurricane". The Wall Street Journal. February 4, 2009. Retrieved 2009.
  31. ^ State Farm will stay, Florida insurance regulators say | Tampa Bay Times Archived May 13, 2013, at the Wayback Machine.. Tampabay.com (2009-12-16). Retrieved on 2013-08-17.
  32. ^ Reed, Matt (March 3, 2011). "Insurers still like Florida". Florida Today. Melbourne, Florida. pp. 1B.
  33. ^ "Auto insurers play hardball in minor-crash claims". CNN. CNN.com. Retrieved 2010.
  34. ^ "Federal judge rejects $50 million USD State Farm settlement". Retrieved 2018.
  35. ^ Bhattarai, Abha (June 28, 2008). "Class-Action Lawyer Gets 5 Years in Bribery Case". Retrieved 2018 – via NYTimes.com.
  36. ^ "Hindin v. State Farm - The Landmark Claims Practice Case That Few Know About Finally Ends | Property Insurance Coverage Law Blog | Merlin Law Group". Property Insurance Coverage Law Blog. 2014-02-07. Retrieved .
  37. ^ "State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003)". Justia Law. Retrieved .

External links


  This article uses material from the Wikipedia page available here. It is released under the Creative Commons Attribution-Share-Alike License 3.0.

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