Financial Highlights

From a financial perspective, 2007 was an excellent year. Despite the challenging economic environment – primarily due to subprime mortgage market losses which created turmoil in fixed income markets – we exceeded our goals. Earnings set an all-time record, well ahead of goal, and total equity increased six percent.

We remained strongly capitalized on both an absolute basis and compared to our peers. Our capital grew significantly due to our long-term equity strategy, very positive returns from our alternative investments and the high quality of our assets. Despite the deterioration of the credit markets, the quality of our bonds remained excellent and well above historical industry averages. We have no significant asset quality concerns.

Condensed Consolidated
December 31, 2007 and 2006

in thousands	2007	2006
Insurance in force	$634,764,900	$575,411,200
Assets	26,853,100	25,833,900
Revenues	2,857,000	2,596,400
Operating Earnings*	167,900	144,800
Policyholder Benefits and Dividends**	1,744,200	1,602,300
Surplus	2,893,700	2,728,300

*Operating earnings equal net income less realized investment gains and losses net of taxes.
** Policyholder benefits and dividends equal the sum of policyholder benefits, policyholder dividends and interest credited.