Sunday, March 23, 2008

State Farm Dividend – 2008

As a Mutual company, State Farm is owned by its policyholders. Earlier this month, they announced a $614m dividend for many of their life insurance customers/owners.

Unfortunately, it looks like P&C customers won't get big dividends we got last year. According to their news release, the combined companies had a net income of $5.46 billion. Although the press release is not clear, it looks like they will be investing the profits in growing their loss reserves. Given the decline in underwriting profit on their large auto book and the uncertainty in the investment market, it is probably a good strategy.



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