State Farm Insurance is a large group of mutual insurance companies throughout the United States with corporate headquarters in Bloomington, Illinois.
State Farm is the largest property and casualty insurance provider, and the largest auto insurance provider, in the United States. State Farm is ranked 42nd in the 2022 Fortune 500, which lists American companies by revenue.
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 sell only State Farm products.
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.[9]
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.
State Farm was founded in June 1922 by retired farmer George J. Mecherle as a mutual automobile insurance company owned by its policyholders.[10] The firm specialized in auto insurance for farmers and offered better rates than rival companies, which must also cover expensive premiums of the urban motorists.[11] It later expanded services into other types of insurance, such as homeowners and life insurance, and then to banking and financial services.
As of December 2017, State Farm had 70,000 employees and 19,000 agents.[12] 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 L. Tipsord is chairman and CEO of State Farm Mutual Automobile Insurance Company,[3] and 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]
By 2017, State Farms announced its plan to exit eleven facilities in America with the goal of streamlining and improving processes.[13] In 2014, it already sold its operations in Canada to Desjardins Group, which continued to use the State Farm name.[14] 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.[14][15] In 2018, State Farm Canada was officially rebranded to Desjardins Insurance through Desjardins Insurance Agents.[16] The whole transition was completed in 2019.
