1. Indiana University POOP Session – Financial Opportunities September 24, 2002

2. DEFINITION Promise Transfer of Risk Indemnity Principle Social Device

3. REGULATION Highly Regulated By the States

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

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 LIABILITIES Admitted 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. People Skills Organization & Planning Problem Solving Time Management Communication Coordination GENERAL DUTIES

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. IMPORTANT TRAITS  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

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

27. STATE FARM DATA

28. 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