When Al Annexstad signs his name, he adds a big, round smiley-face after the 'Al.'

He has a lot to smile about these days. As chairman, president, and CEO of Owatonna-based Federated Insurance Companies, Annexstad oversees a company with $4.5 billion in assets, a surplus nearing $1.5 billion, and annual premiums at almost $1.4 billion.

Annexstad says he draws the smiley face as a reminder that 'happy people with positive attitudes can accomplish unimaginable things together. And it reminds us to keep our daily trials in perspective.

For 41 years, Annexstad has steered Federated through an increasingly turbulent and competitive insurance industry. Influential components he has implemented during his tenure include a nationwide direct-sales force, a network of association partnerships, and relationships with attorneys to help clients with succession planning. Such demonstrated leadership in sales and marketing led to his appointment as CEO in 1999, and has helped Federated become a major national player in the commercial-insurance market.

Annexstad learned about finance at an early age in his hometown of St. Peter. He sold Christmas cards from his church (earning 50 cents per box), shucked corn, delivered 106 newspapers every Sunday morning, and worked at Bob Wettergren's dairy, Bill Francis's hardware store, Henry Komatz's construction company, and in the kitchen at Gustavus Adolphus College, where his mother was employed. His father died when Annexstad was five; his mother, he says, was 'a saint, with the work ethic of a coal miner. My mother taught me early on that if I was going to have a quality life, I would have to make it for myself."

Annexstad was selling furniture to help pay for his educational expenses at Mankato State University when a Federated Insurance sales manager caught up with him on a street corner. He'd heard countless good things about young Al from the people of St. Peter —and he was looking for talent. Annexstad had planned to be a teacher and a basketball coach, but the opportunity presented by the sales manager changed Annexstad's mind.

In 1965, after he finished his student teaching, Annexstad became a Federated marketing representative. His territory extended from Mankato to Shakopee — and he was starting from scratch. "I was selling Al Annexstad," he says with a laugh. Three years later, Federated promoted him to district marketing manager and transferred him to Indiana. Over the next 10 years, Annexstad not only expanded Indiana sales, but also opened Federated offices in Ohio, Michigan, Wisconsin, Illinois, and Kentucky. He was promoted to director of field operations and moved to Atlanta in 1982, and in four years doubled the number of clients in the southern states.

"I learned early on that if you treat people with great respect, do what you promise, and make a habit of doing things that less industrious people don't like to do, people will buy from you," he says. "These lessons have never betrayed me."

Of all his contributions to the company, Annexstad says he has cared most about his creation of Federated's first business plan and his development of its national direct sales force. Unlike most commercial-insurance companies, which sell through independent brokers, Federated relies on direct-sales employees. "We deliver value in a consistent and timely way across the country, which is something that many insurers, and I suspect many businesses in general, have difficulty with," he says. "We have almost every zip code in America covered by a Federated salesperson."

Annexstad also drove the development of Federated's affinity-group marketing strategy. Nearly 400 state, regional, and national affinity groups that serve Federated's targeted industries exclusively recommend Federated to their members. "It's been a nice