While competition in personal auto insurance is rising to levels high enough to dent customer retention at GEICO, a giant mutual insurer and a reciprocal exchange have both tapped into a customer-friendly option unavailable to large stock insurers.
State Farm and USAA recently announced multibillion-dollar policyholder dividends that are “historically large” for the industry and the companies, S&P GMI noted in a research note this week. “These dividends, unique to mutual and reciprocal exchange business models, aim to enhance customer retention amid rising competition,” S&P GMI said.
State Farm is set to return $5 billion to policyholders via dividends, the insurer announced last week. That represents 7.2% of State Farm’s estimated 2025 private auto net premiums earned of $69.4 billion.
At USAA, roughly $4 billion of dividends going out to members in 2025 represented a higher percentage of the military insurer’s auto earned premiums—nearly 10%, according to S&P GMI’s calculations.
At 7.2% of premiums, State Farm’s latest dividend marks a significant increase from the 4.7% dividend rate in 2020, S&P GMI said, offering a graph (shown above) that shows little or no dividends in the intervening years, when State Farm suffered large underwriting losses. The 2020 amount included COVID-19-related refunds, S&P GMI said.
USAA announced financial rewards of about $3.8 billion in 2025, with specific allocations detailed in a filing with the New York State Department of Financial Services, S&P GMI said, noting that this included dividends from USAA Casualty Insurance Co., Garrison Property & Casualty Insurance Co., and USAA General Indemnity Co.
The graph accompanying the S&P GMI report (and shown above) reveals that USAA’s dividends, on a percentage of premiums basis, exceeded the 10% of 2025 back in 2020 while remaining below 6% for 2021-2024.
Together, the two companies’ dividends put the dollar-level of industry dividends at a record high for this century, S&P GMI showed in the graph below.