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Indiana University Corporate Accounting POOP SessionSeptember 19, 2000
DEFINITIONDEFINITION• Promise
• Transfer of Risk
• Indemnity Principle
• Social Device
REGULATIONREGULATION• Highly Regulated By the States
FINANCIAL STATEMENTSFINANCIAL STATEMENTS
• Operating Statement
• Statement of Assets and Liabilities
GAAP vs. Statutory AccountingGAAP vs. Statutory Accounting
OPERATING STATEMENTSOPERATING STATEMENTS
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
STATEMENT OF ASSETS AND LIABILITIES
Admitted vs. Non-Admitted
Premium Receivables+ Investment Assets- Loss Reserves- Unearned Premiums- Operating Liabilities---------------------------------------------= Policyholder Protection Fund
TYPES OF INSURANCETYPES OF INSURANCE
• Life
• Health
• Property
• Casualty
• Personal– Auto– Home– Liability
• Commercial– Workers Comp– Malpractice– Aviation– Toxic Waste
PROPERTY AND CASUALTY LINES
PROPERTY AND CASUALTY LINES
STATE FARM COMPANIESSTATE FARM COMPANIES
Auto (Health)
Fire
Life
Bank
STATE FARM IN THE FORTUNE 500
INDUSTRY POSITIONS
Policies in force 35,019,774 14,163,912 5,535,848 1,123,546
INDUSTRY SCOPEINDUSTRY 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 STRUCTUREACCOUNTING STRUCTURE
• Centralized vs. De-centralized– Corporate
– Regional Offices
– Insurance Support Centers (ISC’s)
• Supervisory vs. Analytical
CORPORATE FUNCTIONSCORPORATE FUNCTIONS
• Financial Reporting & Analysis
• Tax
• Investment Accounting
CORPORATE FUNCTIONSCORPORATE FUNCTIONS
• Mutual Funds/Accounting Benefits
• Loss Reserves
• Data Management Services
CORPORATE FUNCTIONSCORPORATE FUNCTIONS
• Auditing
• Treasury Services
• General Accounting Services
CORPORATE FUNCTIONSCORPORATE FUNCTIONS
• Financial Shared Services
– Accounts Payable
– Agency Compensation
– Employee Compensation
– Travel-Expense
– Shared Services Process Analysis
CORPORATE FUNCTIONSCORPORATE FUNCTIONS
• Compliance
• Change Management
SYSTEMSSYSTEMS
• Financial Business Analyst– Current Systems Support– New Systems Development– Create and maintain detailed operating
procedures• 30 Month Accounting Business
Analyst Trainee
REGIONAL OFFICE FUNCTIONS
REGIONAL OFFICE FUNCTIONS
• Premium Payment Processing
• Cash Disbursements / Claims Support
• Agency Compensation
• Self Audits
• Transformational / Expense Analysis
TECHNICAL TRAININGTECHNICAL TRAINING
• Operating Procedures
• Hardware and Software
• Supervisory Skills
PROFESSIONAL DEVELOPMENT
PROFESSIONAL DEVELOPMENT
• In-House Courses
• Insurance Education
–ChFC, CLU, CPCU
• Professional Designations
–CPA, CMA, MBA
• People Skills
• Performance Management
• Organization & Planning
• Problem Solving
• Time Management
• Communication
DAILY DUTIES - SUPERVISIONDAILY DUTIES - SUPERVISION
DAILY DUTIES - ANALYSTDAILY DUTIES - ANALYST
• Problem Solving
• Project Development
• Operational Assistance
• Coordination
• Communication
• Functional Area of Expertise
BENEFITSBENEFITS
• Medical and Life Insurance
• Defined-Benefit Retirement Plan
• Profit Sharing (401K match)
• Education Costs
• Flexible Work Hours
CAREER PATHSCAREER PATHS
StabilityStability
DiversityDiversity
OpportunityOpportunity
MobilityMobility
STATE FARM DATASTATE FARM DATA
STATE FARM DATASTATE FARM DATA• 16 Affiliated Companies
• 66.7 Million State Farm policies in force
• Approximately 150,000State Farm Associates– 16,200 Agents– 79,300 Employees– 1,900 Accounting Employees
WWW.STATEFARM.COM