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Indiana University POOP Session – Financial Opportunities January 28, 2003

Indiana University POOP Session – Financial Opportunities January 28, 2003. DEFINITION. Promise Transfer of Risk Indemnity Principle Social Device. REGULATION. Highly Regulated By the States. FINANCIAL STATEMENTS. GAAP vs. Statutory Accounting. Operating Statement

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Indiana University POOP Session – Financial Opportunities January 28, 2003

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  1. Indiana University POOP Session – Financial Opportunities January 28, 2003

  2. DEFINITION • Promise • Transfer of Risk • Indemnity Principle • Social Device

  3. REGULATION • Highly Regulated By the States

  4. FINANCIAL STATEMENTS GAAP vs. Statutory Accounting • Operating Statement • Statement of Assets and Liabilities

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

  6. STATEMENT OF ASSETS AND LIABILITIESAdmitted vs. Non-Admitted Premium Receivables + Investment Assets - Loss Reserves - Unearned Premiums - Operating Liabilities --------------------------------------------- = Policyholder Protection Fund

  7. TYPES OF INSURANCE • Life • Health • Property • Casualty

  8. STATE FARM PRODUCT LINES Auto Health Fire Life Financial Services SF Bank Mutual Funds

  9. INDUSTRY SCOPE • 7,200 domestic insurance companies • 2.3 million jobs • $3.4 trillion assets • $900 billion premiums Source Insurance Information Institute 2000 Fact book

  10. STATE FARM’S INDUSTRY POSITION • Ranked #25 within Fortune 500 • #1 U.S. Auto insurer since 1942 • Insure 1 of every 5 automobiles • Met goal - 40 million Auto policies by 2003 • #1 U.S. Home insurer since 1964 • Insure 1 of every 4 homes • Top U.S. insurer of pleasure boats

  11. ACCOUNTING STRUCTURE • Centralized vs. De-centralized • Corporate • Zone Offices • Insurance Support Centers (ISC’s) • Supervisory vs. Analytical

  12. CORPORATE FUNCTIONS • Financial Reporting & Analysis • Tax • Investment Accounting

  13. CORPORATE FUNCTIONS • Accounting Benefits • Loss Reserves • Data Management Services

  14. CORPORATE FUNCTIONS • Auditing • Treasury Services • General Accounting Services

  15. CORPORATE FUNCTIONS • Financial Shared Services • Accounts Payable • Agency Compensation • Employee Compensation • Travel & Expense • Shared Services Process Analysis

  16. CORPORATE FUNCTIONS • Compliance • Change Management

  17. SYSTEMS • Financial Business Analyst • Current Systems Support • New Systems Development • Create and maintain detailed operating procedures

  18. ZONE OFFICE FUNCTIONS • Premium Payment Processing • Cash Disbursements / Claims Support • Agency Compensation • Self Audits • Transformational / Expense Analysis

  19. GENERAL DUTIES • People Skills • Organization & Planning • Problem Solving • Time Management • Communication • Coordination

  20. SPECIFIC DUTIES Analysts • Project Development • Operational Assistance • Functional Area of Expertise Supervisors • Performance Management

  21. TECHNICAL TRAINING • On-Line Operating Procedures • Hardware and Software • PeopleSoft Application • Microsoft • Numerous proprietary applications • Supervisory Skills • CD-ROM Leadership Development Series

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

  23. CAREER PATHS Stability Diversity Opportunity Mobility

  24. IDEAL CANDIDATES • Accounting majors with a minimum of 9 hours of CIS/MIS • Finance and Other majors with a minimum of 9 hours of Accounting and 9 hours of CIS/MIS • CIS/MIS majors with a minimum of 9 hours of Accounting • “B+” GPA overall and in major

  25. Real world experiences Technical skills GPA Leadership qualities Personal presentation Attitude Ability to learn Problem analysis and analytical thinking Customer service orientation Adaptability, drive and initiative Proven track record Passion for work IMPORTANT TRAITS

  26. BENEFITS • Medical and Life Insurance • Defined-Benefit Retirement Plan • Profit Sharing (401K match) • Education Costs • Flexible Work Hours

  27. STATE FARM DATA

  28. STATE FARM DATA • 19 Affiliated Companies • Mutually owned company • 71.6 million policies in force • $117 billion in Assets (12/31/01) • State Farm Associates • 16,500 Agents • 78,155 Total Employees • About 2,000 Accounting Employees Source August 2002 People Counts

  29. WWW.STATEFARM.COM

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