The Big Dog Is Off the Tech Porch: State Farm as ‘Next Gen Good Neighbor’

You’d have to roll back the calendar a few decades to find a time when competitive moves by the nation’s biggest auto and home insurer were described with the phrase, “The big dog is off the porch.”

Still, against the backdrop of competition surging in the personal lines insurance market, it was hard for this “mature” journalist not to draw a parallel to the price wars of the late 1990s and AI wars that seem to be revving up in 2026 when reading today’s State Farm media statement detailing the carrier’s “Next Gen Good Neighbor” vision.

The statement, as well as blog items posted on State Farm’s website last week from President and Chief Executive Officer Jon Farney and from Joe Park, executive vice president and chief digital information officer, promise a future-ready carrier that will focus “on even faster and simpler claims service; more competitive prices that match price to risk; and data-driven underwriting.”

Related State Farm content: A Next Gen Good Neighbor; Empowering Next Gen Good Neighbors

“Technology underpins Next Gen Good Neighbor, building on the personal relationships that remain the foundation of State Farm,” the statement says, revealing AI-powered tools, like one for State Farm agents that summarizes customers’ top-of-mind household concerns, and another that connects customers to support services at the start of a claims process.

Is the big dog off the tech porch with a competitive strategy to surpass national carriers barking about their AI initiatives? Or regionals touting their local human presence?

During an interview with Carrier Management, Farney didn’t buy into the idea that the timing of the announcement was meant to signal State Farm throwing down a tech gauntlet to competitors. But the “we have both” human and digital message is spot on, he agreed, suggesting the announcements of State Farm’s in-progress technology transformation are more appropriately seen as a reminder to State Farm employees and agents about the foundation the insurance leader is building upon with technology that will enhance their ability to deliver on promises to customers.

“We are saying to our people [that] our jobs every day [are] to make sure we’re taking care of customers today. And we believe we have a job to help customers prepare for the future,” Farney told Carrier Management.

“And, yes, we believe that there are immensely human moments in the insurance world. While there are massive amounts of data and all kinds of information that help us run our business, this is a people-helping-people type of business. We want to be sure that our people know our technology is [here] so they can help people—serve them better.”

State Farm Is There With AI Coworkers

“In a world that can feel increasingly disconnected, State Farm agents provide local presence, trusted guidance, and community. And as we modernize, we’re doing it with the clear principle that technology should strengthen human connection, not substitute for it,” Farney wrote in a blog post last week, titled “A Next Gen Good Neighbor.”

“We need transformation just because customers continue to change,” Farney told Carrier Management. “We’re a growing company. We have great financial strength to be able to meet our promises. We have a strong brand and we have great people. But we know that customers are changing. And as we look forward, what a Next Gen Good Neighbor is, is it keeps those strengths, but it builds on them by adding speed and more technology,” he said.

“While there are massive amounts of data and all kinds of information that help us run our business, this is a people-helping-people type of business. We want to be sure that our people know our technology is [here] so they can help people—serve them better.”

Jon Farney, State Farm

Farney noted that State Farm brought Park on as head of technology last year. “He’s helping us bring in more AI tools that we can use to help empower our employees, our agents—all of our people to serve customers better.”

Earlier this year, Park and OpenAI both announced a partnership through which State Farm became one of the first participants in OpenAI’s Frontier platform—a new platform that helps enterprises build, deploy, and manage AI agents that can do real work,” according to OpenAI.

OpenAI explained that Frontier “gives AI agents the same skills people need to succeed at work: shared context, onboarding, hands-on learning with feedback, and clear permissions and boundaries. That’s how teams move beyond isolated use cases to AI coworkers that work across the business.”

At State Farm, by “implementing AI thoughtfully, we are taking practical steps to make insurance more accessible, affordable, and responsive,” said Park at the time of the announcement.

In a more recent blog post last week, Park described one of his earliest experiences visiting a State Farm agent’s office and witnessing the connection that agent made to the customer—sitting with the customer and asking thoughtful questions but also having to “navigate screen after screen” to piece together a full customer picture from disparate systems.

“We have a systems problem. Too many disconnected tools. Too much time spent finding information instead of helping customers,” Park wrote in his May 7 blog post, “Empowering Next Gen Good Neighbors.”

That’s changing according to today’s media statement, which announces that State Farm is “consolidating disconnected systems into a single insurance platform, bringing data together so it is consistent and usable,” and so that work can flow without friction.

In addition to noting State Farm’s work with OpenAI, the announcement says that State Farm is working with other leading technology companies “to apply AI strategically” (without specifically naming the other tech companies). And beyond adding AI coworkers to the mix through the OpenAI partnership, the announcement says that State Farm is intent on making the insurer “a destination for well-versed top talent with the knowledge and expertise to execute State Farm’s technological transformation.”

Park, who transitioned to State Farm from his previous role as chief digital and technology officer of Yum! Brands in October last year, offered a picture of the unified technology-build last week, imagining a scenario where a customer starts the claim process via State Farm’s mobile app, “and at the same moment, the claims representative has everything needed to move forward—no chasing information. And if the customer calls, the agent sees the same complete, up-to-date view.”

Beyond the single insurance platform, today’s media announcement refers to several AI tools woven into the connected system that support the Next Gen Neighbor vision:

In the claims area, the company is piloting an AI-powered virtual assistant to streamline initial loss reporting—quickly connecting customers to support services and gathering information needed to help. In addition, “tools that streamline intake, triage, and documentation” are helping claims professionals make coverage and payment decisions.

For agents, there is Navi, an AI-powered digital assistant embedded within State Farm’s agent management platform, which is being rolled out to give agents a faster path to price quotes, policy details and other answers. Navi will soon include the ability to check quote statuses and generate customer insight lists, State Farm promises.

Household Story is another AI tool for agents—this one, an AI-powered customer intelligence tool that provides “an instant summary of each household’s active concerns,” along with tailored product recommendations to address them.

Bridging the agent and claims world, the announcement also refers to a new agent-initiated loss-reporting tool. This one is not identified as an AI tool. According to the announcement, this tool allows agents to submit claims for customers at their request without having to make a call.

“Every claim represents a customer who is counting on State Farm to deliver on its promise. State Farm is making the end-to-end claims process faster, from first notice of loss to payment delivered, so customers can start repairs sooner and recover more quickly,” the May 12, 2026 State Farm announcement says.

For agents, another important part of State Farm’s tech transformation—soon to come—is a “single point of entry for operations support, making it easier for them to get the information they need without navigating multiple systems,” the media statement says.

Transformation in Progress

What is Farney’s personal favorite new tool? CM asked the CEO who served in many leadership roles in finance and planning before ascending to his current position on June 1, 2024. Is there something that resonates based on challenges he faced in the past?

In a financial role, “you always have questions as you’re looking at markets: ‘How do we meet what customers want in that market? Where is our opportunity to serve their needs better? How fast are we growing in this ZIP code vs. that one? And does that make sense? Do we have our pricing models tuned right so we’re pricing the best we possibly can for our customers?'”

“The work to compile that information in the past [was] significant. The ability of these tools to help you really empower employees to make faster judgments, make choices that increase the velocity of your business to serve customers better is one from my personal past that’s very exciting,” Farney said.

Stepping back from his own experience, Farney offered, “There’s not a role I see in the organization that can’t be empowered with better data and tools,” suggesting that improved technology can quickly provide clarity to a frontline representative answering a customer with a billing question or to a corporate communications professional handling an enterprise issue. “It can be empowering to our people in order to serve our customers in almost every role.”

Farney confirmed that although State Farm is making a public announcement about its technology transformation today, it has been in progress for some time. “I don’t know if there’s ever a period that you’re not in transformation,” he said, referring to past transformations of pricing models and corporate structure, among others.

Today’s press release, for example, notes that State Farm continues to build underwriting and pricing models with advanced data, going on to reference the existing Drive Safe & Save telematics program as an example of personalized risk-based pricing already offered for auto insurance.

Beyond past transformational efforts, State Farm is now trying to position itself differently with the announcement about the Next Gen Good Neighbor vision. “With so many questions in the world about AI and so much discussion going on, we’re trying to remind our people of the strengths—of who we are, and the things that we need to improve on in order to be able to serve people for a long time.”

“I’ve been with State Farm for 30-some years, coming up on two years in the CEO role. And my team and I have been working on this for a while. But really, we’re ready to be sure that our customers, our agents, and our employees know where we are, know all these great things about us, but also know that we don’t have our sights set on the past. We have our sights set on the future,” Farney said.

The announcement comes at a time when personal lines insurers face the challenge of increasingly competitive insurance market, customers face affordability challenges, and State Farm itself is being scrutinized for its claims handling practices in the media and with regulators.

Does the Next Gen Good Neighbor announcement timing have anything to do with any of those things? Does the introduction of any of these tools help State Farm to solve any of those problems, CM asked the CEO.

“In a big business, you always have issues that you’re working on. What we’re focused on is the future and positioning our people to understand how these tools and new technology, along with a culture of speed, can position us to serve customers’ needs even better into the future.”

“We’re ready to be sure that our customers, our agents, and our employees know where we are, know all these great things about us, but also know that we don’t have our sights set on the past. We have our sights set on the future,” Farney said.

“All of the things that you bring up are issues that all businesses have to deal with at different times. This is about our future, who we are becoming, and hanging on to our strengths from the past, not in response to anything in particular going on in the greater environment.”

As to the affordability challenges of customers, today’s media statement suggests that lower prices could follow from transformation efforts. “State Farm will continue delivering value to customers by finding new efficiencies in the way it works, improving processes, and developing and supporting employees and agents,” the release says in a section headed, “More competitive prices.” The statement also reminds readers that as a mutual, State Farm serves customers rather than shareholders—a difference demonstrated with the February announcement of a $5 billion dividend for State Farm Mutual Automobile Insurance Company auto customers.”

What the Competition Is Doing

Publicly traded personal lines competitors have offered a variety of reports on their companies’ use of AI, their customer targets, and insurance market conditions at recent investor meetings and during conferences with analysts. While some, like Berkshire Hathaway CEO Greg Abel, spoke broadly about multi-year efforts to build technology to support price-to-risk and customer-segmentation goals, others have announced launches of specific AI tools—among them, a fully agentic intelligent voice service to handle customer claim calls at Travelers.

More recently, Allstate CEO Tom Wilson, asked whether AI tools can make agents more productive during a first-quarter 2026 earnings call, noted that Allstate currently has “something called customer engagement sidekick” in market today. “If you’re doing 50 calls a day or something like that, it’s always good to have somebody say, ‘Hey, this is what I’m kind of hearing. Maybe you should go here. Here’s the tonality,'” Wilson said, offering sample assists from the sidekick to improve customer interactions.

“AI can also just sell directly. And we’re live in the market doing that right now on a particular product,” Wilson said. He didn’t reveal the product but described the AI direct sales initiative as a learning experience in three states. “It’s closing policies. We’re just seeing what we learn from that,” Wilson said.

Progressive CEO Tricia Griffith also addressed a question about the distribution impact of AI during a fourth-quarter 2025 earnings call—specifically the question of whether AI agents could change the personal lines distribution equation for Progressive.

“If we can make it easy for our customers, [then] we want to be where, when and how customers want to shop and be serviced. And some of that might be through an agentic AI agent,” she said, noting specifically that Progressive’s direct channel could “change dramatically” with AI agents delivering some Progressive policies. But she also sees a continued role for independent agents because customers with more complex needs desire “knee-to-knee” interactions to feel comfortable about their coverage decisions, she said.

Earlier this year, Griffith delivered commentary about how Progressive’s investments in “technology and process improvements to improve efficiency, accuracy, speed, and our work environment” will enhance the ability to price insurance competitively in her letter to shareholders in the company’s 2025 annual report. Simultaneously, the letter noted the internal staffing impacts that have come as a result of tech improvements.

“While our staff at year end was up by nearly 4,000 more people from the prior year end, headcount has been declining modestly since the end of the third quarter, and we expect to handle significantly more customers through 2026 without increasing our headcount. People are a significant portion of our NAER [non-acquisition expense ratio] and LAE [loss adjustment expense] and consequently this will help improve those ratios, especially in light of less tailwind from changes in average premium,” she wrote.

“We are very clear that our strategy is not to be the low-cost leader in the industry but to have a competitive cost structure which, in concert with industry-leading pricing segmentation and accurate claims handling, ensures competitive prices for new and existing customers,” she wrote, indicating Progressive’s intention to continue to drive down the NAER and LAE ratios over the long term to fuel future growth.

More recently, during a first-quarter 2026 earnings call, Griffith and Personal Lines President Pat Callahan spoke about an increased focus on customers who bundle home and auto in 2026, following a year in which Progressive’s written premium growth for just private passenger auto represented 86% of the growth recorded by the top 10 carriers ($8.9 billion for Progressive vs. $10.4 billion for the top 10, according to Griffith).

“It’s an area where captive or exclusive agent companies own a large portion of that market share,” Callahan said, noting a high level of competition for bundlers. “And as we know, those companies that are mutuals or in some cases reciprocals have different objective[s] and a different time horizon for how they think about pricing their products.”

All Customers Wanted

During our recent interview, Farney said that customers are changing, prompting CM to ask whether State Farm is looking to attract a new cohort of policyholders. Is the current distribution of customers skewed to younger or older customers? Renters or bundlers? And is that changing?

“We’re a mutual company. So, we want to serve all customers really well,” he stated. “Our past success in our current book is largely bundlers. We were bundling before bundling was cool,” he said, also referring to State Farm’s “extremely large auto business” and it’s leading position in the homeowners market—”double our closest competitor.”

“We insure about one in every five homes in America. So, we want to continue to be able to package the right products to meet the customers’ needs. And when we do that, we can also offer them the best price possible because we understand those risks across all their product lines even better,” he said, referring to actuarially justified discounts available as customers insure more things.”

“We think that those customers have their needs served wonderfully by State Farm, and they also are more sticky. They stick with State Farm longer,” he said, referring to bundlers.

“At the same time, we know [that] different customers want different things. And so that’s where we think this combination of the best technology and the best people can meet a broad range of customers’ needs,” Farney stated.

Leading Transformation

Asked about his role in leading State Farm’s technology transformation, Farney said it’s most important to set the stage where people can be at their best. “As CEO, I’m talking with our people a lot about what it means to become a Next Gen Good Neighbor. But rather than setting every choice, what you’re really trying to do is set the ethos—stay true to our values and unleash the power of new tools so that people can be their best at meeting customers’ needs and finding the opportunities that help us serve customers better.”

“That’s what I really view my job as—it’s telling the story and positioning people to be their best.”

Will employees’ roles be changing, and how else are leaders preparing them for the changes ahead?

“You have to step back and [ask], ‘Am I creating the right context for people? Am I positioning them to make this longer-term journey successful?'” Farney replied.

“That is a series of a lot of conversations,” he said, referring to the need to give leaders closest to the workforce “the context of what our mission is today and what we’re trying to become.”

Then, leaders’ roles are to be “in constant communication” so that employees “can be co-creators of our future. We think our people are incredibly important in helping create our future.”

“We have new executives that join our team and we say, ‘Go out and get close to customers. Spend time in agents’ offices so that you can see what today’s problems are and what tomorrow’s opportunities are,” Farney said.

Farney is set to meet with agents this week and says visits aren’t as much about showcasing new tools as they are about delivering similar messages. “They will again be co-creators of their future.”

“We’re really setting a vision of what a Next Gen Good Neighbor is and how their role is so critical in being a local face of State Farm in their community to serve customers’ needs.”

“We’re going to invest in them …. We know they’re an important part of our past. We believe they’re a really important part of our future too,” Farney concluded.