The State Farm Story
A Insurance Article Contributed by Shobha Cutting
The State Farm - the Beginning
Founder of the State Farm enterprise, George J. Mecherle, was an illustrious farmer who lived on his farm with his wife. As the health of his wife began to fail, life at the farm became difficult. They decided to move to Bloomington, where Mr Mecherle took up a job as a salesman of an insurance company. He was a successful salesman but did not think that some of the policies of his company were suited to the need of farmers. Having been a farmer himself, he was familiar with the needs of that community.
When he suggested to his employer that he improve the policies of the insurance company so it would become more appealing to farmers, his employer remarked that Mr Mecherle should start his own insurance company, if he thought that policies needed alterations. So he did. He started State Farm in 1922 as a mutual automobile insurance company owned by its policyholders.
Today, his enterprise has developed into a major group of companies in the insurance and related businesses. The better-known companies of the Group are discussed in the following paragraphs.
State Farm Mutual Automobile Insurance Company
Among the first of the Group, initially this company focused on accomplishing the basic auto insurance requirements of Illinois farmers through a common organization owned by the customers. The State Farm insurance company by the year 1942 was the country's principal auto insurance provider and continues to hold that rank ever since. Being a mutual insurance company, State Farm Mutual Automobile Insurance therefore does not have shareholders. In 1965, this company began dealing in health insurance and today it ranks 13th among all companies writing individual health insurance.
State Farm Life and Accident Assurance Company
It was incorporated in 1961 to deal with life insurance business in Connecticut, New York and Wisconsin. As per the official data available in 1999, State Farm life group ranked fifth among all life insurance groups doing business in the United States. Ever since 1998, State Farm Life Insurance Company and State Farm Life and Accident Assurance Company has been marketing its principal products including annuities through State Farm VP Management Corporation.
State Farm Fire and Casualty Company
The State Farm Fire and Casualty Company commenced business in 1935. The company deals in homeowners insurance, boat owners insurance and many other such commercial lines. Ever since 1964, State Farm Fire and Casualty Company has been the nation's leading insurer of homes and pleasure boats.
State Farm County Mutual Insurance Company of Texas
This company was acquired by the State Farm Group in 1961 and protects higher-risk motorists in that state. Earned premiums at year-end 1999 were more than $4.7 million. Assets totaled $43.5 million.
State Farm General Insurance Company
Incorporated in 1962 as a property insurance company.
State Farm Federal Savings Bank
The bank, formally chartered in November 1998 as State Farm Bank, F.S.B., is called "State Farm Bank". Its focus is on consumer-oriented financial facilities, complementing State Farm's insurance focus on personal lines.
State Farm Investment Management Corp.
This company is managing the State Farm Mutual Funds and the investment options for State Farm Variable Products. It has over 30 years experience managing investment company business.
