Financial Services
State Farm has expanded into the financial services arena, such as banking and mutual funds. The bank opened in May 1999 and is operated by State Farm Financial Services, FSB, a subsidiary of State Farm Mutual Automobile Insurance Co. These are separate from its insurance products. State Farm Bank does not have branch offices. Its regular banking services, which include checking and savings accounts, certificates of deposit, and money market accounts, are available to consumers countrywide via the Internet or over the phone, and through agents in Arizona, Illinois, Missouri, Nevada, or New Mexico. Home mortgages are available countrywide over the phone or through agents in those five states.
Back in the 1950's, State Farm held a contest, among the agents, to come up with ideas to expand State Farm's business. Robert H Kent, agent in Chicago, came up with the idea of providing auto loans to existing policyholders. Robert H Kent was friends with a local bank president at LaSalle NW, and the two teamed up to pilot the auto finance program. State Farm liked the idea so much, that it was rolled out to all the agents. Robert H Kent received royalties on the program for 20 years. This is a significant event, as it created the first marketing patnership between insurance companies and banks.
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