State Farm to Pay Record $5 Billion Dividend to Auto Clients

State Farm Mutual Automobile Insurance Co. will pay a $5 billion cash dividend to its auto-insurance customers after posting strong underwriting profits.

The payments average $100 per vehicle, State Farm said in a statement. It’s the largest dividend in the company’s 103-year history.

“We don’t have shareholders; we don’t have a stock price to protect,” Chief Executive Officer Jon Farney said in a call with reporters. “So when we have stronger-than-expected operating performance, we have a lot of choices about how to put those results to work for the people that we serve.”

State Farm’s auto insurance business posted a $4.6 billion underwriting gain in 2025, compared to a $2.7 billion loss in the previous year.

The dividend illustrates a reversal of fortunes for large U.S. auto insurers, which sustained underwriting losses after the Covid-19 pandemic amid supply chain disruptions and surging car-part prices. Premium increases have since allowed them to post stronger earnings.

In recent months, improving underwriting conditions have enabled State Farm to decrease auto insurance rates by an average of 10% across 40 states, according to the statement.

Last year, the Los Angeles wildfires and intense storms continued to pressure the rest of State Farm’s property and casualty business, which includes homeowners insurance. The unit recorded underwriting losses of $3.1 billion last year, compared to $3.6 billion the year before.