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Indiana University SCOOP Session – Financial Opportunities February 8, 2005

Indiana University SCOOP Session – Financial Opportunities February 8, 2005. DEFINITION. Promise Transfer of Risk Indemnity Principle Social Device. TYPES OF INSURANCE. Life Health Property Casualty. INDUSTRY SCOPE. Almost 5,000 domestic insurance companies

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Indiana University SCOOP Session – Financial Opportunities February 8, 2005

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  1. Indiana University SCOOP Session – Financial Opportunities February 8, 2005

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

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

  4. INDUSTRY SCOPE • Almost 5,000 domestic insurance companies • 2.3 million jobs in 2003 (2.1% average over past 10 years) • $885 billion in premiums in 2002 (P/C & L/H) • Industry rate of return in 2002: 3.2% in P/C, 1.0% in L/H

  5. REGULATION • Highly Regulated By the States

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

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

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

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

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

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

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

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

  14. CORPORATE FUNCTIONS • Compliance • Change Management

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

  16. DAILY DUTIES - ANALYST • Problem Solving • Project Development • Operational Assistance • Coordination • Communication • Functional Area of Expertise

  17. ZONE STRUCTURE

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

  19. DAILY DUTIES - SUPERVISION • People Skills • Performance Management • Organization & Planning • Problem Solving • Time Management • Communication • Coordination

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

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

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

  23. STATE FARM DATA • 20 Affiliated Companies • Mutually owned company • 74 million policies and accounts in force • $136 billion in Assets (12/31/03) • State Farm Associates • 17,00 Agents • 72,000 Total Employees • About 2,000 Accounting Employees Source 2003 Annual Report

  24. STATE FARM’S INDUSTRY POSITION • Ranked #18 within Fortune 500 • #1 U.S. Auto insurer since 1942 • 19% Market Share at end of 2003 • Almost 40 million Auto policies • #1 U.S. Home insurer since 1964 • 22% Market Share at end of 2003 • Currently almost 25 million Fire policies • Top U.S. insurer of pleasure boats

  25. CAREER PATHS Diversity Opportunity Mobility

  26. 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

  27. 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

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

  29. WWW.STATEFARM.COM

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