1. Indiana University SCOOP Session – Financial Opportunities September 28, 2004

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 Operating Statement Statement of Assets and Liabilities GAAP vs. Statutory Accounting

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 LIABILITIES Admitted vs. Non-Admitted Premium Receivables +Investment Assets -Loss Reserves -Unearned Premiums -Operating Liabilities --------------------------------------------- =Policyholder Protection Fund

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

10. 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

11. 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

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

13. CORPORATE FUNCTIONS Financial Reporting & Analysis Tax Investment Accounting

14. CORPORATE FUNCTIONS Accounting Benefits Loss Reserves Data Management Services

15. CORPORATE FUNCTIONS Auditing Treasury Services General Accounting Services

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

17. CORPORATE FUNCTIONS Compliance Change Management

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

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

20. ZONE STRUCTURE

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

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

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

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

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. 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

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

29. WWW.STATEFARM.COM