8 billion .3 billion.

Property-Casualty (P-C) - The combined underwriting gain was $1.0 billion, compared with $1., Specialty Risk Services (SRS),
one of the nation's largest property casualty third party administrators for
workers' compensation and general liability claims, announces a new claims
administration agreement and partnership with Arch Insurance Group, provider
of property, casualty, and specialty insurance for corporations, professional
firms, and financial institutions throughout the U.

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6 billion
realized and unrealized gain (net of deferred tax) on the property and
casualty (P-C) companies ' unaffiliated stock portfolios.0 billion on Dec.

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The 2004 underwriting results include losses and loss adjustment
expenses totaling $2. The underwriting gain was $1. After-tax net income for the P-C
companies was $5.newscom.

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State Farm(R) Announces Financial Results For 2004

1 billion; net income , $2.0 billion of
total life insurance in force during the year, bringing the companies' total
insurance in force to $571.1 billion at
the beginning of the year. Insurance and securities products offered by affiliated
companies of State Farm Bank are not FDIC insured, are not guaranteed by State
Farm Bank and are subject to investment risk, including possible loss of
principal invested. "SRS' proven track record in quality,
client retention and financial outcomes is consistent with Arch's approach and
will provide clients in the national accounts casualty arena with a superior
option., a Bermuda -
based company that provides insurance and reinsurance on a worldwide basis
through its wholly owned subsidiaries.

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0 billion.5 billion. The gain from operations after dividends
and before taxes was $455 million compared with last year's reported gain of
$489 million. The
arrangement includes workers' compensation, automobile, general and product
liability, integrated disability, claim administration and risk management
services nationwide.
"We look forward to working with Arch to provide highly customized client-
focused claim administration services and solutions," said Joe Boures,
president, Specialty Risk Services. Founded in 1990, the
company provides workers' compensation , auto, general and product liability,
integrated disability, claim administration and risk management services
nationwide.com.

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7 billion; incurred
claims and loss expenses, $8.3 billion. 31, 2004.

The retail mutual fund operations also increased
the number of accounts during 2004.

State Farm Bank, Bloomington, Illinois, is a Member FDIC and an Equal
Housing Lender.

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Mutual Funds - Total assets under management for the retail mutual fund
operations at the end of 2004 were $2.
(Logo: http://www. Best.

Risk management consultants analyze a company's business practices and determine what different risk treatments are needed to protect the company from losses.

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continuity audits

3 billion in 2004 compared with a
net income of $2.6 billion in 2003. and State
Farm Investment Management Corp. Arch Insurance Group's principal
insurance subsidiaries -- Arch Insurance Company, Arch Specialty Insurance
Company and Arch Excess + Surplus Insurance Company -- are rated A-
(Excellent) by A .

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9 billion (after reinsurance) related to the four
hurricanes that made landfall in August and September .8 billion in 2003.

Homeowners, CMP, Other - The net written premium for State Farm Fire and
Casualty Company, State Farm Lloyds, State Farm General Insurance Company and
State Farm Florida Insurance Company represents 31 percent of the property-
casualty companies' combined net written premium.5 billion. This compares to a net income of $305 million in 2003. State Farm VP Management Corp. HARTFORD, Conn. Approved by more than 18 insurance carriers, SRS offers bundled
and unbundled services to both self-insured and insured clients, including
many Fortune 1000 companies.

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, Net worth for the State Farm
group increased by $6. The primary reasons for
this improvement were the insurance operating results and the $1. The P-C companies
reported a pretax operating profit of $5.4 percent from 2003.
Comparable 2003 figures were: earned premiums, $12.S.

SRS Announces Claim Administration Partnership with Arch Insurance Group

mims underwriting

1 billion in 2003, which included an underwriting loss of $281
million. Earned premiums were $14.
Comparable figures for 2003 were: underwriting loss, $155 million; earned
premiums, $1."

About Specialty Risk Services
Based in Hartford, CT, Specialty Risk Services, LLC (SRS) is one of the
largest Third Party Administrators in the industry. For more information, visit
http://www.com

brokering risk

3 billion; underwriting
loss, $281 million; net investment income earned and other income, $3.

Bank - State Farm Bank, F. reported its first annual after-tax net
income of $9 million in 2004 - the third full year Bank products were
available through agents countrywide.9 billion at the end of 2003 .
Securities are available through registered representatives of State Farm
VP Management Corp .com/cgi-bin/prnh/20040920/NEM026LOGO )
"The alliance with SRS expands our relationship focus and flexible service
approach by jointly developing customized casualty programs that meet our
customers ' unique business needs.

continuity exposures

0 billion.0 billion; incurred
claims and loss expenses, $24.B.

About Arch
Arch Insurance Group is a division of Arch Capital Group Ltd.

rmr exposures

The State Farm group 's
net worth also is affected by the results of operations of non-P-C affiliates,
which resulted in a gain for the year of $299 million, primarily driven by
results for State Farm Life Insurance Company.1 billion.

Auto - State Farm's auto business represents 65 percent of the property -
casualty companies' combined net written premium. These results, combined with net
investment income earned and other income of $3.
Comparable 2003 figures were: earned premiums, $45. State Farm VP Management Corp.S.staley@srsconnect.

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5 billion in 2004, including an
underwriting gain of $2.2 billion.4
billion; pretax operating profit, $3.archinsurance.

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Comparable 2003 figures were: earned premiums, $31.

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0 billion to $46.57 billion, resulted in a
pretax operating profit of $5. The life affiliates reported an after-tax net income of $247
million in 2004.

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State Farm 's insurance operations consist of seven property-casualty
insurers and two life insurers.5
billion , an increase of 1. The incurred claims and loss
expenses were $9.
The life affiliates reported premium income of $3.7 billion in 2004,
compared to $3. Arch has assembled a team of professionals
to build and manage our business with a focus on attentive and responsive
customer service," states Stephen Cotnoir, senior vice president, Arch
Insurance Group.

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Total revenue for State Farm , which includes premium revenue, earned
investment income and realized capital gains (losses), was $58. The net results of State Farm Mutual Automobile Insurance
Company, State Farm Indemnity Company and State Farm County Mutual Insurance
Company of Texas include the auto and health business.4
billion in 2004 compared with assets of $7. is a separate entity from
those State Farm entities that provide banking products and auto, life, fire
and health insurance products.

Contacts:
Specialty Risk Services
April Staley
860/520-2585
april.

purdy rms

This is compared with a pretax operating
profit of $3. State Farm Life Insurance Company and State Farm Life and
Accident Assurance Company write the life and annuity business.4 percent from 2003.2
billion, an increase of 11.7 billion; underwriting gain, $13 million.2 billion.

Life - State Farm's life affiliates - State Farm Life Insurance Company
and State Farm Life and Accident Assurance Company - added $30 .M.

brokering underwriting

3 billion. State Farm reported an
after-tax net income from all sources of $5. The property-casualty insurers are primarily
engaged in automobile, health, homeowners and commercial multiple peril (CMP )
lines of business. The net results of
State Farm Fire and Casualty Company, State Farm Lloyds , State Farm General
Insurance Company and State Farm Florida Insurance Company reflect the
homeowners , commercial multiple peril (CMP) and other property-casualty lines
of business. The State Farm group also provides banking products
and mutual funds through affiliated companies.

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BLOOMINGTON, Ill .8 billion for
2004 compared with the 2003 figure of $56. The underwriting gain was $700 million .

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1 billion. Total assets for the Bank rose to $10. and Canada. Under the
terms of the agreement, Arch will utilize SRS' claims management expertise to
service property and casualty insurance programs underwritten by Arch.

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The State
Farm group insures almost 40 million cars and over 15 million homes in the
United States and Canada. Earned premiums were $31. The incurred claims and loss
expenses were $23.2 billion; underwriting loss, $33 million.

Health - The health insurance operations for State Farm Mutual reported an
underwriting loss of $68 million on earned premiums of $1.96 billion
on earned premiums of $47. reported a combined after-tax net loss of $25
million in 2004 compared with a loss of $30 million in 2003.