About A life and supplemental health insurer  specializing in the middle-income market  through premier niche distribution systems . . .  Torchmark provides protection-oriented life and supplemental health insurance to middle-income Americans through its premier niche distribution organizations. We succeed in this market while many life insurers have moved up-scale seeking the smaller high-income market focused on asset accumulation. To understand our successful strategy and how we have used it to build a profitable, predictable, stable, cash-generating company, is to understand our market and products, as well as our expertise and discipline necessary to execute our strategy. customers who need a basic “protection” insurance program, those who are the largest segment of the population. We believe the  exodus by many insurers  from the middle-income market stems from lack  of expertise in profitably marketing protection-type insurance, as well as lack  of the necessary expense  control discipline. Torchmark capitalizes on its expertise in these areas. Torchmark is well known in the industry as one of the most cost- efficient providers of life and health insurance. We  further exploit our understanding of the middle- income market by segmenting our marketing efforts by various niche distribution methods, including direct response and various types of agencies, as well as affinity groups within the broader market, for example, senior-age customers, the military and labor union members.  We market to financially under-served “middle- income” households, those with annual incomes of $25 thousand to $75 thousand. These 50 million households comprise 46% of all U.S. households (U.S. Census Bureau, 2001 Income Statistics) and Torchmark has policies in force in 4 million of those households. In the last few decades, many other life insurers have followed other financial institutions by targeting the smaller, more affluent sector of the population with a focus on selling highly competitive, lower profit margin insurance products with asset accumulation features. The more affluent sector with household incomes exceeding $75 thousand comprises only 25% of total households (U.S. Census Bureau, 2001 Income Statistics). Fewer insurers target potential Torchmark is well known in the industry as one of the most cost-efficient providers of life and health insurance, in part because of efficiencies gained from integrating administrative functions of its operating subsidiaries and focusing on protection life and health products. Lesser known is our corporate commitment to minimizing acquisition Torchmark Corporation • About Torchmark OUR MARKETS  2