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100 top life insurers posted record earnings in 2005: five companies earned more than $1 billion last year.

ONE HUNDRED COMPANIES, comprising 84% of life insurance industry assets, reported a record $28 billion in operating earnings in 2005, according to data from Insurance Consulting & Analysis, L.L.C. Operating earnings for the Townsend 100 Companies rose 130% from 2001 to 2005.

Earnings gains in the last four years arose from reductions in crediting rates by life insurers on interest-sensitive products, and increased assets and management fees on variable products resulting from a recovery in the stock market, and net capital gains.

However, significant increases in shareholder dividend payments held surplus growth to a modest 3.5% gain in 2005, after gains of 11.6% in 2004 and 16.7% in 2003. The latter was the highest gain since a 19.4% surplus gain in 1993, when companies propped up surplus to build risk-based capital ratios, to counter rating agency downgrades and to assuage solvency scares.

During 2003-2005, the payout ratio (shareholder dividends as a percent of operating earnings) for the Townsend 100 Companies showed an increasing trend of 37%, 56% and 74%, respectively. Life insurers are distributing their earnings, and keeping their capital growth down, to improve their returns on equity for shareholders.

Growth in aggregate dollar shareholder dividends has been accelerated by the conversion of several large mutual companies to stock companies: Metropolitan, Prudential, Equitable and John Hancock. Also, United Healthcare and AFLAC have been very profitable in the health insurance sector.

Only 10 of the Townsend 100 Companies had an operating loss in 2005, compared to 13, 19, 26, 12 and 7 companies, respectively, for 2000-2004. Losses exceeding $100 million were reported by Transamerica Occidental at $438 million and Fidelity & Guaranty at $195 million.

But, 46 of the Townsend 100 Companies reported a net capital loss in 2005, compared to 88, 48 and 31, respectively, in 2002-2004, as net capital gains fell sharply from $10 billion in 2004 to $5.9 billion in 2005. Largest net capital losses were posted by AGC Life at $387 million; Transamerica Occidental, $377 million; and Genworth Life, $361 million.

Only five of the Townsend 100 Companies reported both operating losses and net capital losses in 2005, compared to 11, 12, 20, 4 and 3 companies, respectively, for 2000-2004.

Shareholder dividend payments by the Townsend 100 Companies set a record of $20.7 billion in 2005, 10% over the previous record of $18.9 billion set in 2001 when several mutual companies converted to stock companies and paid large dividends to their new parent companies.

Shareholder dividends paid out exceeded surplus paid in by $22.9 billion in 2005, more than doubling the previous record of $9.4 billion in 2004. Surplus paid in for the Townsend 100 Companies set a record $13.4 billion in 2002 but has declined each year since then and was negative in 2005 (due to the acquisition of some Travelers business by Metropolitan Life).

Shareholder dividend payments alone resulted in surplus declines for 16 of the Townsend 100 Companies in 2005. In total, 29 companies had surplus declines in 2005, compared to only 10 companies in each of 2003 and 2004.

Table 1 shows the components of surplus changes for the Townsend 100 Companies for the years 2001-2005. Surplus includes the asset valuation reserve and the interest maintenance reserve, while operating gain excludes amortization of the interest maintenance reserve.

Table 2 shows new surplus paid in, shareholder dividends paid out and the net result for the Townsend 100 Companies for the years 1997-2005. Shareholder dividends have exceeded new surplus paid-in in seven of the last nine years, as the life industry tries to minimize capital accumulation and raise returns on equity.

Table 3 shows net investment yield on mean invested assets, return on mean equity, and the capital ratio (total surplus to invested assets) for the Townsend 100 Companies for the years 1997-2005.

Net investment yield declined 151 basis points in the last five years, from 7.38% to 5.87%, but fell only three basis points in 2005. The life industry yield fell below 6% in 2004 and 2005, its lowest ratios since 1965.

Spurred by strong operating earnings, return on mean equity in both 2003 and 2004 set a record high of 11.1% for the 16-year history of this column but eased back to 10.8% in 2005. The last three years reflect the impact of large mutual companies converting to stock ownership and striving to achieve higher returns on equity, and sharp declines in life industry crediting rates on interest-sensitive products.

Capital ratios peaked at 12.0% at Dec. 31, 1999, then declined to 10.1% at Dec. 31, 2002. The three-year decline in capital ratio reversed itself in 2003, exceeding 11% at year-end 2004 and 2005. The improvement in capital ratio can be attributed to both the increase in operating earnings and achieving net capital gains in each year from 2003-2005.

The large table on page 8 shows the components of surplus changes for each of the individual companies in the Townsend 100. Surplus indudes the AVR and IMR, while operating gain excludes amortization of the IMR.

Eighteen of the Townsend 100 Companies had operating gains exceeding $500 million in 2005 and comprised 60% of the Townsend 100 composite earnings. Five companies earned more than $1 billion and accounted for 270/0 of the Townsend 100 composite earnings: United Healthcare, $1.804 billion; Prudential, $1.706 billion; Teachers Insurance & Annuity, $1.55 billion; Metropolitan Life, $1.33 billion; and AFLAC, $1.243 billion.

Five companies had net capital gains exceeding $600 million in 2005 and comprised 74% of the Townsend 100 composite net capital gains: Metropolitan Life, $1.095 billion; New York Life, $936 million; Teachers Insurance & Annuity, $910 million; AXA Equitable, $876 million; and Northwestern Mutual, $610 million.

Only 29 companies in the Townsend 100 paid in new surplus funds in 2005, totaling $3.1 billion, down sharply from 42 companies totaling $5.5 billion in 2004. Two corporate transactions accounted for more than half of the 2004 paid-in surplus.

Meanwhile, 59 companies in the Townsend 100 paid record shareholder dividends of $20.7 billion in 2005, 39% higher than the previous record of 56 companies paying $14.9 billion in 2004. Shareholder dividends exceeded: $100 million for 36 of 100 companies; $200 million for 31 companies; $300 million for 22 companies; $400 million for 19 companies; $500 million for 13 companies; and $600 million for eight companies. Capital continues to flee the life industry.

Largest shareholder dividend payments in 2005 were Metropolitan Life, $3.2 billion; Travelers, $1.537 billion; Prudential, $1,486 billion; and United Healthcare, $1.4 billion.

Largest aggregate surplus gains in 2005 were Teachers Insurance & Annuity, $2.3 billion; Northwestern Mutual, $1.3 billion; AFLAC, $1.1 billion; and AXA Equitable, $1 billion.

Largest percentage surplus gains in 2005, excluding new surplus paid in, were achieved by ING Life of America, 50%; United Healthcare, 41%; AFLAC, 39%; and General American, 28%.

Twenty-nine of the Townsend 100 Companies had surplus declines in 2005. The largest percentage surplus declines were Travelers Insurance, 43%; Metropolitan Tower, 41%; Farmers New World, 40%; and Genworth Life & Annuity, 39%. All four companies paid large shareholder dividends in 2005.

Frederick S. Townsend, President of the Townsend Independent Actuarial Research Alliance (TIARA), produces Due Diligence Reports on life insurance companies and can be reached at ftownsend@snet.net. Laurie Dallaire can be reached at ldallaire@ic-a.com.
TOWNSEND 100

2005 SURPLUS CHANGE

(Companies with 84% of industry assets; sorted alphabetically; data in
$millions)

                             12/31/04                  Net
                             Surplus,    Operating   Capital   Surplus
Company                      AVR & IMR     Gain       Gains    Paid-In

AETNA LIFE INS. CO., CT         2,949        801        39          0
AGC LIFE INS. CO.               8,029        745      (387)       282
AIG ANNUITY                     4,187        461        87          0
AIG LIFE INS. CO.                 882        156       (38)      (150)
AIG SUNAMERICA LIFE               859        151        (8)        18
ALLIANZ LIFE OF N. AMER.        2,638        418        (3)         0
ALLSTATE LIFE, IL               3,917        436      (170)       (26)
ALLSTATE LIFE, NY                 382         42       (10)        20
AMERICAN ENTERPRISE               606         (9)       (0)         0
AMERICAN EQUITY INV.              636         44       (23)       100
AMERICAN FAMILY LIFE            2,926      1,243       353          0
AMERICAN GEN'L L & A              686        311       (26)         0
AMERICAN GEN'L LIFE, TX         4,953        656       145          0
AMERICAN INT'L LIFE               682        163       (19)         0
AMERICAN INVESTORS, KS            451         49       (23)         8
AMERICAN NAT INS. CO.           2,252        122        33          8
AMERICAN UNITED LIFE              716         44        (7)         0
AMERUS LIFE INS. CO.              418         72         6         37
AVIVA LIFE                        444          3       (14)        35
AXA EQUITABLE LIFE              5,252        841       786         65
BANKERS LIFE & CAS., IL           540          6        14        161
CHASE INS. LIFE & ANN.            488         15        (2)         0
CM LIFE INS. CO.                  438        100       (51)         0
CONNECTICUT GENERAL             2,925        696        20          0
COUNTRY LIFE INS. CO.           1,051         38       (48)         0
FARMERS NEW WORLD               1,179        152         5          0
FIDELITY & GUARANTY             1,061       (195)      (15)       151
FIRST COLONY LIFE               1,105        (28)        3          0
GENERAL AMERICAN LIFE           1,344        (42)        9          3
GENWORTH LIFE & ANNUITY         1,013        133        (8)         0
GENWORTH LIFE INS.              3,696        641      (361)         0
GREATAMERICAN LIFE INS            667        114       (54)         0
GREAT-WEST L & A                1,692        317       (50)         3
GUARDIAN LIFE                   3,708        208       150          0
HARTFORD LIFE & ACC.            5,345        660      (137)      (963)
HARTFORD LIFE & ANN.            1,366        211       (10)         0
HARTFORD LIFE INS. CO.          3,545        149       221          0
IDS LIFE INS. CO.               2,585        333        41        650
ING LIFE INS. & ANN.            1,696        211        51          0
ING LIFE INS., AMER.              388         60        88          0
ING USA ANNUITY & LIFE          1,799         58        (6)       100
JACKSON NATIONAL                3,658        574       183        261
JEFFERSON PILOT FIN'L           1,126        298       (14)         0
JEFFERSON-PILOT LIFE            1,003        108        (7)         0
JOHN HANCOCK LIFE               5,468        361       440        320
JOHN HANCOCK LIFE (USA)         1,881        (57)      152         26
JOHN HANCOCK VARIABLE             861        161        (0)         0
LIBERTY LIFE OF BOSTON            361         29        17        100
LIFE INVESTORS INS. CO.           825         42        13        (60)
LINCOLN NATIONAL LIFE           3,374        463         4          0
MASSMUTUAL LIFE INS.            7,430        472       398          0
METROPOLITAN LIFE, NY          12,628      1,330     1,095          3
METROPOLITAN TOWER              1,408         88       268         50
MIDLAND NATIONAL LIFE             917        178         5          0
MINNESOTA LIFE INS. CO.         1,648        107        48         20
MONUMENTAL LIFE                 1,199        264        36          0
MONY LIFE INS. CO.                936        160        (7)         0
MUTUAL OF AMERICA                 909        115         7          0
NATIONAL LIFE INS. CO., VT        684        122       (40)         0
NATIONAL WESTERN                  584         57        19          3
NATIONWIDE LIFE & ANN.            263        (16)       (1)         0
NATIONWIDE LIFE INS.            2,696        481       (61)         0
NEW YORK LIFE INS. & ANN.       2,466        207        18          0
NEW YORK LIFE INS. CO.         11,861        636       939          0
NORTHWESTERN MUTUAL            12,425        554       610          0
OHIO NATIONAL LIFE                738        105        (6)         0
PACIFIC LIFE                    3,135        184        57          0
PENN MUTUAL LIFE                1,243        189      (102)         0
PEOPLES BENEFIT LIFE              737         95        (5)         0
PHOENIX LIFE                    1,054        104       (13)         0
PRINCIPAL LIFE INS. CO.         3,647        662       (18)       208
PROTECTIVE LIFE INS. CO.        1,520         48        14          0
PROVIDENT LIFE & ACC.           1,543        115        34          0
PRUCO LIFE INS. CO., AZ           622        (13)        4          0
PRUDENTIAL INS. CO.            11,802      1,706      (106)      (764)
PRUDENTIAL RETIREMENT           2,081        (10)      (67)       (12)
REASSURE AMERICA LIFE             651         53        19       (220)
RELIASTAR LIFE INS. CO.         1,728        179       (10)       200
RGA REINSURANCE                   907        (76)        1          8
SECURITY LIFE OF DENVER         1,255        136        12        303
SOUTHERN FARM BUREAU            1,300        134        29          0
STANDARD INS. CO.               1,008        204        (1)         3
STATE FARM LIFE                 4,729        281        94          0
SUN LIFE ASSUR. CN US           1,919        120        14          0
SUNAMERICA LIFE INS. CO.        5,900        313       402         19
SWISS RE LIFE & HEALTH          2,214        430       149       (238)
SYMETRA LIFE INS. CO.           1,365        135        64          0
TEACHERS INS. AND ANN.         14,727      1,550       910          0
TRANSAMER FINANCIAL               826        104        (3)         0
TRANSAMER LIFE                  3,278        250       117       (348)
TRANSAMER OCCIDENTAL            3,263       (438)     (377)         0
TRAVELERS INS. CO., CT          8,861        891      (227)    (2,572)
UNION FIDELITY LIFE             1,910        100        72          0
UNITED HEALTHCARE               1,385      1,804       135          0
UNITED OF OMAHA                 1,326        102      (101)         0
UNUM LIFE OF AMERICA            1,351        247       (21)         0
USAA LIFE INS. CO.                913        116         9          0
VARIABLE ANNUITY LIFE           3,257        703        54          0
WESTERN & SOUTHERN              3,316        114        27          0
WESTERN-SOUTHERN                  568         87        (0)         0

Townsend 100                  254,184     28,040     5,861     (2,190)
Co. Composite

                                                       12/31/05
                             Shareholder   All Other   Surplus,
Company                       Dividends     Changes    AVR & IMR

AETNA LIFE INS. CO., CT          (544)         185        3,430
AGC LIFE INS. CO.                (540)        (196)       7,934
AIG ANNUITY                         0            6        4,742
AIG LIFE INS. CO.                 (61)           8          797
AIG SUNAMERICA LIFE               (25)         (14)         982
ALLIANZ LIFE OF N. AMER.         (105)        (138)       2,810
ALLSTATE LIFE, IL                (262)          36        3,930
ALLSTATE LIFE, NY                   0            2          435
AMERICAN ENTERPRISE                 0            4          601
AMERICAN EQUITY INV.                0          (43)         714
AMERICAN FAMILY LIFE             (526)          75        4,072
AMERICAN GEN'L L & A             (225)         (26)         719
AMERICAN GEN'L LIFE, TX          (441)         (20)       5,294
AMERICAN INT'L LIFE               (50)         (10)         767
AMERICAN INVESTORS, KS              0           (3)         483
AMERICAN NAT INS. CO.             (79)          35        2,371
AMERICAN UNITED LIFE              (35)         (20)         698
AMERUS LIFE INS. CO.                0           (2)         530
AVIVA LIFE                          0            6          474
AXA EQUITABLE LIFE               (500)        (161)       6,283
BANKERS LIFE & CAS., IL             0          (13)         706
CHASE INS. LIFE & ANN.              0          (13)         488
CM LIFE INS. CO.                    0           (4)         483
CONNECTICUT GENERAL              (857)          15        2,798
COUNTRY LIFE INS. CO.              (8)         (27)       1,007
FARMERS NEW WORLD                (611)         (21)         704
FIDELITY & GUARANTY                 0          (41)         962
FIRST COLONY LIFE                 (91)          16        1,006
GENERAL AMERICAN LIFE             (13)         417        1,718
GENWORTH LIFE & ANNUITY          (450)         (68)         620
GENWORTH LIFE INS.               (355)         (15)       3,606
GREATAMERICAN LIFE INS              0            6          733
GREAT-WEST L & A                 (221)         (42)       1,698
GUARDIAN LIFE                       0         (103)       3,963
HARTFORD LIFE & ACC.             (594)          58        4,370
HARTFORD LIFE & ANN.                0          (25)       1,543
HARTFORD LIFE INS. CO.           (498)           5        3,423
IDS LIFE INS. CO.                (380)           3        3,232
ING LIFE INS. & ANN.                0          (52)       1,906
ING LIFE INS., AMER.                0           46          582
ING USA ANNUITY & LIFE              0           28        1,978
JACKSON NATIONAL                 (411)        (166)       4,099
JEFFERSON PILOT FIN'L            (211)          14        1,212
JEFFERSON-PILOT LIFE              (89)         (20)         995
JOHN HANCOCK LIFE                (690)        (209)       5,690
JOHN HANCOCK LIFE (USA)          (200)         (68)       1,734
JOHN HANCOCK VARIABLE            (175)         (30)         817
LIBERTY LIFE OF BOSTON              0           (2)         505
LIFE INVESTORS INS. CO.           (70)          (4)         746
LINCOLN NATIONAL LIFE            (200)          45        3,686
MASSMUTUAL LIFE INS.                0         (146)       8,154
METROPOLITAN LIFE, NY          (3,200)         153       12,009
METROPOLITAN TOWER               (927)         (59)         828
MIDLAND NATIONAL LIFE             (45)          14        1,068
MINNESOTA LIFE INS. CO.           (13)          (1)       1,809
MONUMENTAL LIFE                  (255)         (45)       1,199
MONY LIFE INS. CO.                (75)          84        1,096
MUTUAL OF AMERICA                   0          (24)       1,007
NATIONAL LIFE INS. CO., VT         (9)          (5)         752
NATIONAL WESTERN                   (1)          (7)         654
NATIONWIDE LIFE & ANN.              0            1          246
NATIONWIDE LIFE INS.             (185)          (2)       2,930
NEW YORK LIFE INS. & ANN.           0          (39)       2,652
NEW YORK LIFE INS. CO.              0         (619)      12,817
NORTHWESTERN MUTUAL                 0          153       13,741
OHIO NATIONAL LIFE                (28)         (14)         796
PACIFIC LIFE                        0            7        3,383
PENN MUTUAL LIFE                    0          (11)       1,319
PEOPLES BENEFIT LIFE                0            1          828
PHOENIX LIFE                      (35)          10        1,119
PRINCIPAL LIFE INS. CO.          (200)          12        4,311
PROTECTIVE LIFE INS. CO.            0          (39)       1,543
PROVIDENT LIFE & ACC.            (155)         (38)       1,500
PRUCO LIFE INS. CO., AZ             0          (17)         597
PRUDENTIAL INS. CO.            (1,486)        (652)      10,499
PRUDENTIAL RETIREMENT            (136)         (29)       1,826
REASSURE AMERICA LIFE               0          152          655
RELIASTAR LIFE INS. CO.             0          (42)       2,055
RGA REINSURANCE                     0          168        1,007
SECURITY LIFE OF DENVER             0           72        1,777
SOUTHERN FARM BUREAU               (0)           6        1,468
STANDARD INS. CO.                 (71)        (104)       1,039
STATE FARM LIFE                    (0)          63        5,167
SUN LIFE ASSUR. CN US            (200)          14        1,867
SUNAMERICA LIFE INS. CO.         (480)        (617)       5,536
SWISS RE LIFE & HEALTH              0           33        2,588
SYMETRA LIFE INS. CO.               0           (9)       1,555
TEACHERS INS. AND ANN.              0         (119)      17,068
TRANSAMER FINANCIAL                (5)          17          939
TRANSAMER LIFE                      0           (1)       3,296
TRANSAMER OCCIDENTAL             (300)         616        2,763
TRAVELERS INS. CO., CT         (1,537)        (377)       5,040
UNION FIDELITY LIFE                 0          (17)       2,065
UNITED HEALTHCARE              (1,400)          36        1,959
UNITED OF OMAHA                   (35)         (18)       1,273
UNUM LIFE OF AMERICA                0          (53)       1,523
USAA LIFE INS. CO.                (52)           8          994
VARIABLE ANNUITY LIFE            (400)         (68)       3,546
WESTERN & SOUTHERN                  0           (8)       3,449
WESTERN-SOUTHERN                    0            7          663

Townsend 100                  (20,748)      (2,099)     263,048
Co. Composite

                             12 Month
Company                      % Change

AETNA LIFE INS. CO., CT        16.3%
AGC LIFE INS. CO.               1.2%
AIG ANNUITY                    13.2%
AIG LIFE INS. CO.              10.8%
AIG SUNAMERICA LIFE            14.3%
ALLIANZ LIFE OF N. AMER.        6.5%
ALLSTATE LIFE, IL               0.4%
ALLSTATE LIFE, NY              14.0%
AMERICAN ENTERPRISE             0.9%
AMERICAN EQUITY INV.           12.2%
AMERICAN FAMILY LIFE           39.2%
AMERICAN GEN'L L & A            4.8%
AMERICAN GEN'L LIFE, TX         6.9%
AMERICAN INT'L LIFE            12.3%
AMERICAN INVESTORS, KS          7.1%
AMERICAN NAT INS. CO.           5.3%
AMERICAN UNITED LIFE           -2.5%
AMERUS LIFE INS. CO.           27.0%
AVIVA LIFE                      6.6%
AXA EQUITABLE LIFE             19.6%
BANKERS LIFE & CAS., IL        30.9%
CHASE INS. LIFE & ANN.         -0.1%
CM LIFE INS. CO.               10.2%
CONNECTICUT GENERAL            -4.3%
COUNTRY LIFE INS. CO.          -4.2%
FARMERS NEW WORLD             -40.3%
FIDELITY & GUARANTY            -9.4%
FIRST COLONY LIFE              -9.0%
GENERAL AMERICAN LIFE          27.8%
GENWORTH LIFE & ANNUITY       -38.8%
GENWORTH LIFE INS.             -2.4%
GREATAMERICAN LIFE INS          9.9%
GREAT-WEST L & A                0.3%
GUARDIAN LIFE                   6.9%
HARTFORD LIFE & ACC.          -18.2%
HARTFORD LIFE & ANN.           12.9%
HARTFORD LIFE INS. CO.         -3.4%
IDS LIFE INS. CO.              25.1%
ING LIFE INS. & ANN.           12.4%
ING LIFE INS., AMER.           50.1%
ING USA ANNUITY & LIFE         10.0%
JACKSON NATIONAL               12.1%
JEFFERSON PILOT FIN'L           7.7%
JEFFERSON-PILOT LIFE           -0.8%
JOHN HANCOCK LIFE               4.1%
JOHN HANCOCK LIFE (USA)        -7.8%
JOHN HANCOCK VARIABLE           5.1%
LIBERTY LIFE OF BOSTON        -39.9%
LIFE INVESTORS INS. CO.        -9.6%
LINCOLN NATIONAL LIFE           9.2%
MASSMUTUAL LIFE INS.            9.7%
METROPOLITAN LIFE, NY          -4.9%
METROPOLITAN TOWER            -41.2%
MIDLAND NATIONAL LIFE          16.5%
MINNESOTA LIFE INS. CO.         9.8%
MONUMENTAL LIFE                 0.0%
MONY LIFE INS. CO.             17.2%
MUTUAL OF AMERICA              10.8%
NATIONAL LIFE INS. CO., VT      9.8%
NATIONAL WESTERN               12.0%
NATIONWIDE LIFE & ANN.         -6.1%
NATIONWIDE LIFE INS.            8.7%
NEW YORK LIFE INS. & ANN.       7.5%
NEW YORK LIFE INS. CO.          8.1%
NORTHWESTERN MUTUAL            10.6%
OHIO NATIONAL LIFE              7.8%
PACIFIC LIFE                    7.9%
PENN MUTUAL LIFE                6.1%
PEOPLES BENEFIT LIFE           12.4%
PHOENIX LIFE                    6.2%
PRINCIPAL LIFE INS. CO.        18.2%
PROTECTIVE LIFE INS. CO.        1.5%
PROVIDENT LIFE & ACC.          -2.8%
PRUCO LIFE INS. CO., AZ        -4.1%
PRUDENTIAL INS. CO.           -11.0%
PRUDENTIAL RETIREMENT         -12.2%
REASSURE AMERICA LIFE           0.5%
RELIASTAR LIFE INS. CO.        18.9%
RGA REINSURANCE                11.1%
SECURITY LIFE OF DENVER        41.7%
SOUTHERN FARM BUREAU           13.0%
STANDARD INS. CO.               3.1%
STATE FARM LIFE                 9.3%
SUN LIFE ASSUR. CN US          -2.7%
SUNAMERICA LIFE INS. CO.       -6.2%
SWISS RE LIFE & HEALTH         16.9%
SYMETRA LIFE INS. CO.          13.9%
TEACHERS INS. AND ANN.         15.9%
TRANSAMER FINANCIAL            13.8%
TRANSAMER LIFE                  0.6%
TRANSAMER OCCIDENTAL          -15.3%
TRAVELERS INS. CO., CT        -43.1%
UNION FIDELITY LIFE             8.1%
UNITED HEALTHCARE              41.4%
UNITED OF OMAHA                -4.0%
UNUM LIFE OF AMERICA           12.7%
USAA LIFE INS. CO.              8.8%
VARIABLE ANNUITY LIFE           8.9%
WESTERN & SOUTHERN              4.0%
WESTERN-SOUTHERN               16.7%

Townsend 100                    3.5%
Co. Composite

Data Source: National Underwriter Insurance Data Services
and Insurance Consulting & Analysis, LLC

TABLE 1

SURPLUS CHANGES

Townsend 100 Life Insurance Companies
(data in $millions)

                         2001      2002      2003      2004      2005

BEGINNING SURPLUS       185,480   187,441   195,173   228,757   254,184
OPERATING EARNINGS       12,200    16,223    23,441    26,849    28,040
NET CAPITAL GAINS        -9,388   -17,933    10,015    10,045     5,861
SURPLUS PAID-IN          12,262    13,357     7,142     5,541    -2,190
SHAREHOLDER DIVIDENDS   -18,944    -8,724    -8,668   -14,924   -20,748
ALL OTHER CHANGES         4,490     3,836       578    -1,008    -2,099
ENDING SURPLUS          186,099   194,201   227,682   255,261   263,048
PERCENTAGE CHANGE          0.3%      3.6%     16.7%     11.6%      3.5%

Source: National Underwriter Insurance Data Services and Insurance
Consulting & Analysis, LLC

TABLE 2--TOWNSEND 100

NET SURPLUS PAID-IN
(data in $millions)

        Surplus    Shareholder    Net Surplus
YEAR    Paid-In     Dividends       Paid-in

1997      4,280       -7,465         -3,184
1998      3,179       -9,389         -6,209
1999      4,052       -6,597         -2,545
2000     10,677       -9,775            902
2001     12,262      -18,944         -6,683
2002     13,357       -8,724          4,634
2003      7,142       -8,668         -1,526
2004      5,541      -14,924         -9,382
2005     -2,190      -20,748        -22,938

Source: National Underwriter Insurance Data Services and
Insurance Consulting & Analysis, LLC

TABLE 3--TOWNSEND 100

RATIOS
(data in $millions)

           Net        Return
        Investment    On Mean    Capital
YEAR      Yield       Equity      Ratio

1997      7.66%        9.17%     11.49%
1998      7.37%        6.81%     11.74%
1999      7.28%        7.99%     11.97%
2000      7.38%        9.33%     11.75%
2001      7.09%        6.57%     10.85%
2002      6.58%        8.50%     10.11%
2003      6.11%       11.09%     10.74%
2004      5.90%       11.09%     11.10%
2005      5.87%       10.84%     11.01%

Source: National Underwriter Insurance Data Services and
Insurance Consulting & Analysis, LLC
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Author:Townsend, Frederick S.; Dallaire, Laurie
Publication:National Underwriter Life & Health
Geographic Code:1USA
Date:May 15, 2006
Words:3637
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