State Farm Mutual Automobile Insurance Company A
May 28, 2009
Steve Harr, FCAS, MAAA, FCIA
Actuary and Assistant Secretary-Treasurer
One State Farm Plaza, D4
Bloomington, Illinois 61710
HOME OF FI CES: BLOOMINGTON, I LLINOIS 6 1 7 10-0001
Automoblile Insurance Rate Board
200 Terrace Building
9515 – 107 Street
Edmonton, AB T5K 2C3
STATEMENT OF STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
I appreciate the opportunity to provide comments to the Board regarding the annual review of auto insurance
premiums for basic coverage in Alberta.
The State Farm Mutual Automobile Insurance Company is the largest insurer of automobiles in North America.
State Farm commenced writing auto insurance in Canada in June of 1938.
State Farm is a multiple line insurance organization insuring over 1 million automobiles in Canada, of which 102,000
are in Alberta. In addition, we have over 900,000 Property and Casualty (P&C) policies other than automobile
insurance and over 250,000 Life Insurance policies in Canada. State Farm’s Canadian Headquarters is in Aurora,
Ontario. There are 44 exclusive State Farm insurance agents in Alberta, in addition to a variety of different
employees residing and working in Alberta to support their efforts.
It is worth noting that the automobile insurance marketplace in Alberta is very competitive. State Farm is one of a
number of insurance companies writing automobile insurance in Alberta. However, since the introduction of the
Risk Sharing Pool (RSP), the RSP has become one of the larger insurers in Alberta. This creates significant
concerns for a properly functioning competitive marketplace and was not the intent of the RSP. The grid rate level
needs to be established at a high enough ceiling that it performs its intended function and also allows the
competitive marketplace to operate underneath it. The maximum premium grid should not restrict ra