State Farm Accounting Careers in Insurance

1. State Farm Accounting Careers in Insurance Indiana University SCOOP Session - Financial Opportunities September 20, 2005

2. Why Have Insurance?

3. What is Insurance? • Promise • Transfer of Risk • Indemnity Principal • Social Device

4. Types of Insurance • Property • Casualty • Life • Health

5. Insurance Industry • Around 5,000 domestic insurance companies • 2.1 million jobs as of May 2005 • $956 billion in premiums in 2004 (P/C & L/H) • Industry return on equity in 2004: 14.1% in P/C, 14.4% in L/H

6. Regulation Highly regulated by each state

7. Accounting PracticesGAAP vs. Statutory Accounting • Statutory Emphasis is on Insolvency • Not all Company Assets are “Admitted” • States Perform Various Insolvency Tests from Financial Statements

8. Operating Statement Earned Premiums (Sales) - Losses (Cost of Goods Sold) - Operating Expenses --------------------------------------------- = Underwriting Profit/Loss +/- Investment Income --------------------------------------------- = Operating Net Income

9. Statement of Assets and LiabilitiesAdmitted vs. Non-Admitted Premium Receivables + Investment Assets - Loss Reserves - Unearned Premiums - Operating Liabilities --------------------------------------------- = Policyholder Protection Fund

10. State Farm Facts • Ranked #19 within Fortune 500 • 23 affiliated companies • Mutually owned company • Over 75 million policies/accounts in force • $149.8 billion in assets • State Farm associates • 16,800 agents • 69,000 total employees • 1,800 Accounting employees * Figures as of 12/04

11. State Farm Product Lines • Auto • #1 U.S. auto insurer since 1942 • 18.2% market share • Nearly 40 million Auto policies • Fire • #1 U.S. home insurer since 1964 • 22.5 % market share • Over 25 million Fire policies • Leading insurer of pleasure boats *Figures as of 12/04

12. State Farm Product Lines • Financial Services • Life • Health • State Farm Bank® • State Farm Mutual Funds®

13. Corporate Headquarters

14. Corporate South

15. Accounting Structures • Centralized vs. De-centralized • Corporate • Zone Offices • Insurance Support Centers (ISC’s)

16. The Zones

17. Financial Reporting & Analysis Tax Investment Accounting Accounting Benefits Loss Reserves Data Management Services Auditing Treasury Services General Accounting Services Corporate Functions

18. Compliance Change Management Financial Shared Services Accounts Payable Agency Compensation Employee Compensation Travel & Expense Corporate Functions(cont.)

19. Corporate Positions • Business Analyst • Current Systems Support • New Systems Development • Finance Analyst • General Finance Departments • Supervisor • First-line supervision • Functional units

20. Zone Positions • Supervision • Premium Payment Processing • Claims Support • Agency Compensation • Transformational / Expense Analysis

21. Business Analyst Problem Solving Project Development Operational Assistance Coordination Communication Functional Area of Expertise Supervisor People Skills Performance Management Organization & Planning Problem Solving Time Management Communication Coordination Job Duties

22. Professional Development • In-House Courses • Insurance Education • ChFC, CLU, CPCU • Professional Designations • CPA, CMA, MBA

23. Competitive salary Paid time off Types of Insurance 401(k) matching Pension plans Alternative work arrangements Work environment/dress code Affinity groups/activities/sports Key Benefits to Consider

24. What We’re Looking For • Accounting and other business majors with a minimum of 9 hours of Accounting • CIS/MIS hours are beneficial • Leadership, communication skills, analytical thinking, learning agility, etc. • 3.2 GPA overall and in major

25. Contact Information Need More Information? Visit us at: www.statefarm.com Like a Good Neighbor, State Farm is There.®