Indiana University Corporate Accounting POOP Session February 1, 2000
DEFINITION Promise Transfer of Risk Indemnity Principle Social Device
REGULATION Highly Regulated By the States
GAAP vs. Statutory Accounting FINANCIAL STATEMENTS GAAP vs. Statutory Accounting Operating Statement Statement of Assets and Liabilities
OPERATING STATEMENTS - Losses (Cost of Goods Sold) Earned Premiums (Sales) - Losses (Cost of Goods Sold) - Operating Expenses --------------------------------------------- = Underwriting Profit/Loss +/- Investment Income = Net Income
STATEMENT OF ASSETS AND LIABILITIES Admitted vs. Non-Admitted Premium Receivables + Investment Assets - Loss Reserves - Unearned Premiums - Operating Liabilities --------------------------------------------- = Policyholder Protection Fund
TYPES OF INSURANCE Life Health Property Casualty
PROPERTY AND CASUALTY LINES Personal Auto Home Liability Commercial Workers Comp Malpractice Aviation Toxic Waste
STATE FARM COMPANIES Auto (Health) Fire Life Bank
STATE FARM IN THE FORTUNE 500 With over 40 billion dollars in combined revenue, State Farm is currently the 12th largest revenue earner in the country. But in the insurance industry…..
INDUSTRY POSITIONS Enjoy a tremendous market share. * State Farm has been the largest insurer of automobiles since 1942. * We also insure more homes than any other company. We’ve been number 1 since 1964. * With over 250 billion dollars of ordinary life insurance in force, State Farm ranks number 6. * State Farm ranks number 8 overall in the health insurance industry. Of companies writing individual health policies, we rank 2nd. Policies in force 35,019,774 14,163,912 5,535,848 1,123,546
Source Insurance Information Institute 1999 Fact book INDUSTRY SCOPE 7,900 domestic insurance companies 2.3 million jobs $3.4 trillion assets $900 billion premiums Source Insurance Information Institute 1999 Fact book
ACCOUNTING STRUCTURE Centralized vs. De-centralized Corporate Regional Offices Insurance Support Centers (ISC’s) Supervisory vs. Analytical
CORPORATE FUNCTIONS Financial Reporting & Analysis Tax Investment Accounting
CORPORATE FUNCTIONS Mutual Funds/Accounting Benefits Loss Reserves Data Management Services
CORPORATE FUNCTIONS Auditing Treasury Services General Accounting Services
CORPORATE FUNCTIONS Financial Shared Services Accounts Payable Agency Compensation Employee Compensation Travel-Expense Shared Services Process Analysis
CORPORATE FUNCTIONS Compliance Change Management
SYSTEMS Financial Business Analyst Current Systems Support New Systems Development Create and maintain detailed operating procedures 30 Month Accounting Business Analyst Trainee
REGIONAL OFFICE FUNCTIONS Premium Payment Processing Cash Disbursements / Claims Support Agency Compensation Self Audits Transformational / Expense Analysis
TECHNICAL TRAINING Operating Procedures Hardware and Software Supervisory Skills
PROFESSIONAL DEVELOPMENT In-House Courses Insurance Education ChFC, CLU, CPCU Professional Designations CPA, CMA, MBA
DAILY DUTIES - SUPERVISION People Skills Performance Management Organization & Planning Problem Solving Time Management Communication
DAILY DUTIES - ANALYST Problem Solving Project Development Operational Assistance Coordination Communication Functional Area of Expertise
BENEFITS Medical and Life Insurance Defined-Benefit Retirement Plan Profit Sharing (401K match) Education Costs Flexible Work Hours
CAREER PATHS Stability Diversity Opportunity Mobility
STATE FARM DATA
Source June 1999 People Counts STATE FARM DATA 16 Affiliated Companies Over $111 Billion in Assets (12/31/98) Approximately 150,000 State Farm Associates 16,221 Agents 80,429 Employees 1,932 Accounting Employees Source June 1999 People Counts
WWW.STATEFARM.COM