State Farm Invests $1.2 Billion in ADT
State Farm recently announced a $1.2 billion equity investment in ADT Inc. resulting in State Farm owning approximately 15% of ADT after the equity investment and related transactions close. This partnership launches State Farm into a new category, allowing the company to reimagine the homeownership experience and innovate new ways to apply Smart Home technology to home insurance, with customer benefits that may include lowered costs, reduced claims, and smart home security devices that help to proactively mitigate loss caused by water, fire, or intrusion.
“As the industry leader, we’ve always recognized our responsibility to go beyond insurance and find ways to build stronger and safer communities for our customers and the neighborhoods we serve,” said Paul Smith, Chief Operating Officer at State Farm. “This partnership with ADT gives State Farm the opportunity to provide Smart Home technology that takes us from our ‘repair and replace’ model to a ‘predict and prevent’ mindset. These innovations will help us take the next step into the future of home insurance and add more value for our customers.”
As part of this new partnership, and by building upon ADT’s existing relationship with Google, the companies will combine next-generation security, innovative smart home technology and reimagined risk-mitigation capabilities to monitor, detect, help prevent and optimize against homeownership risks.
With 13.7 million homeowners policies in force, State Farm will invest up to $300 million in an opportunity fund to support product innovation, technology and marketing that will differentiate and improve the customer experience for homeowners.
The companies will embark in the product innovation, technology development and marketing process together under the fund investment.