Integrity. Strength. Execution ... No Compromises.

The world of financial services is everchanging, with new challenges and pressures to face, new opportunities to consider, and new needs to meet for our policyholders, our producers and our associates.

That’s why at The Lafayette Life Insurance Company, we’re perhaps most proud of what has never changed at our organization: our Integrity, our Strength and our Execution — we make no compromises.

Our expectations for ourselves and our business associates do not falter in good times or in bad. We are committed to outstanding long-term performance, and know that we have to execute every day to meet our goals and our customers’ needs. But even more than that, we’re committed to our tradition of honesty and trust that we have cultivated for more than a century.

In 2009, we saw the value of that intense commitment to no compromises, as we enjoyed our second best year in history in new life earned premium, even in the midst of challenging financial times. Further, we recorded our third best year ever in new annuity premium.

Why was 2009 so successful for Lafayette Life? I believe that, now more than ever, customers and financial services professionals are recognizing the value of a financially strong company that makes sound investment decisions. There has been a flight to quality, and to highly rated companies. And as a member company of Western & Southern Financial Group, Lafayette Life meets these financial tests.

Our performance goes beyond new business. Recognizing the importance of wise money management, we kept both our spending and expenses under plan, all while embracing a new innovation initiative that we believe will pay dividends for many years to come.

In October 2009, we were also pleased to welcome Lawrence J. O’Brien, CLU, MA, MBA, as our new Senior Vice President and Chief Marketing Officer at Lafayette Life. Larry’s contributions to our marketing strategy and team will help continue the proud tradition we’ve built so carefully at Lafayette Life.

The following highlights of 2009 underscore our dedication to Integrity, Strength and Execution — with no compromises.

Record Performance in New Life Earned Premium and New Annuity Premium. After experiencing our best-ever year for new sales of life premium in 2008, we followed up boldly with the second best year in Lafayette Life’s history in 2009, with premium in excess of $40 million for the year. Further, we produced $176 million in New Annuity premium, which is not only the third best year in our history, but represents 44 percent growth over 2008.
No Compromises in Stability and Financial Strength. Year after year, Lafayette Life excels at the primary indicator of financial strength: our insurance industry ratings. In 2009, we were rated A+ Superior by A.M. Best, AA Very Strong by Fitch, AA+ Very Strong by Standard & Poor’s, and earned a Comdex Ranking of 97 out of 100. Simply stated, unquestionable strength!
A Drive to Innovation. Under the direction of Bill Olds, Senior Vice President, Projects and Planning, Lafayette Life is working closely with our colleagues at Western & Southern Financial Group on an Enterprise-wide Innovation Initiative, which has already helped us realize a significant gain in operational performance and effi ciencies as we undertake a true cultural shift emphasizing innovation. As we work to provide better service and support to our customers, we will continue to drive innovation from the bottom up, throughout our company.
Continued Service to the Lafayette Community. For over a century, Lafayette Life and its associates have demonstrated extraordinary caring, not only for our customers but also for our community. In 2009, to more than 100 local non-profit organizations serving human needs, education, child welfare, athletics and the arts. As just one example of our leadership in charitable giving and volunteerism, Lafayette Life has a decades-long tradition of outstanding support for United Way, donating unparalleled amounts for an organization of our size. With nearly 100 percent participation and great generosity from our employees and the Foundation, Lafayette Life’s total gift in 2009 of $141,000 put us in the Top 10 for community giving and was recognized by United Way in awarding us their Best Overall Campaign award. Exemplary corporate citizenship will continue to be part of the very fabric of our culture, as it is with the entire Western & Southern Financial Group.

As I review our efforts for 2009 and look forward to 2010, I particularly note Lafayette Life’s history of outstanding growth. We have more than doubled our total assets over the past 10 years. We have experienced a 12 percent Compound Annual Growth Rate (cagr) in ordinary life first year earned premium over the same period. And, we’ve consistently grown our annuity premium during that time, all while maintaining our pledge to our clients and our partners to operate with unfailing honesty and committed customer service. This level of excellence is simply what you can expect from The Lafayette Life Insurance Company: Integrity, Strength, and Execution… with No Compromises.

Sincerely,

Jerry B. Stillwell, CLU, ChFC, RHU, LLIF, LUTCF
President and Chief Executive Officer
The Lafayette Life Insurance Company