LIBERTY NATIONAL LIFE Globe Life is an industry leader in all these aspects of the direct response business. Its competitive advantages include an experienced management team, a vast customer base and knowledge of demographics of the middle-income market, as well as its low cost, highly efficient production facilities. Globe has been marketing by direct response for over 40 years. Most of the management team has been with Globe for almost 20 years. In a business where gains are made by extensive, on-going testing and where solutions to challenges are often counter-intuitive, the importance of the collective experience of management cannot be overstated. Our extensive database of demographic information about prospective, existing and former policyholders provides opportunities for new “add on” sales.  For example, we have learned that prospects  who responded to a solicitation, but did not buy a policy, are much more likely to buy in the future. Using these kinds of data has led to our success with follow-up mailings, one of our more profitable secondary markets. The primary direct response production shop is in Oklahoma City with a union shop in Waco, Texas. Many direct response companies outsource most of their production, as did Globe at one time. But over a decade ago, we begin to bring all our operations in house, from making envelopes to trucking our mailings to post offices around the country. Since that time, our total cost per thousand of pieces mailed has grown only ten percent, in spite of massive increases in postage costs, because we have been able to bring down the non-postage costs of the packages by 34%. We also benefit from the advantage of economies of scale as our growing mail volume provides for increased price advantages in purchasing paper and other supplies, as well as increased postage savings as we presort our mailings for the post office. The Liberty National Agency success story is about the hometown culture in the southeast, the same hometowns where our agents and their families live and are active in the community. The 2001 median annual income per household in Alabama was just over $35 thousand, which fits our target market of “middle-income” America. National emerged as a cost- efficient, career-agent based life and health insurer whose “middle-income” target market is in seven southeastern states, with almost one-half of its business in Alabama. company and the acquisition of Globe Life And Accident led to the incorporation of Torchmark Corporation. By the early ‘90s, debit collection was no longer efficient and was replaced by modern premium billing and collection methods. Liberty As was the practice at the time, each week agents collected premiums in cash from their customers, known as “debit collections.” In the 1960s the company expanded into supplemental health policies, primarily cancer coverages, that also had market appeal to the company’s customer base. In the late 1970s, the formation of an up-stream holding Alabama today. In its early years the company grew by first selling burial policies and later traditional life insurance to “lower middle-income” customers. life and health insurers in the southeastern United States and the largest domestic life insurer in Founded in Alabama in 1900, the company now known as Liberty National Life Insurance Company grew to become one of the best known traditional Birmingham, Alabama 6 The Liberty success story is about the hometown culture in the southeast. Torchmark Corporation • About Torchmark