Press Release - JUNE 10, 2011

A.M. Best Affirms Ratings of Torchmark Corporation and Its Subsidiaries


CONTACTS:
 
Tom Zitelli
Financial Analyst
(908) 439-2200, ext. 5412
tom.zitelli@ambest.com

Carl Austin
Assistant Vice President
(908) 439-2200, ext. 5500
carl.austin@ambest.com

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK, N.J. - JUNE 10, 2011
A.M. Best Co. has affirmed the financial strength ratings (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of the life/health subsidiaries of Torchmark Corporation (Torchmark) (McKinney, TX) [NYSE: TMK]. A.M. Best also has affirmed the ICR of "a-" and all existing debt ratings of Torchmark. The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.)

The rating affirmations reflect Torchmark's established market niches, continued strong earnings and solid capitalization. Through multiple distribution channels, Torchmark specializes in providing life and supplemental health insurance to middle class Americans. Key subsidiaries of Torchmark include American Income Life Insurance Company (American Income), which focuses on labor unions, and Liberty National Life Insurance Company (Liberty National), a leading provider of individual whole life and term insurance to the middle and lower-middle income marketplace. Additionally, Globe Life and Accident Insurance Company (Globe Life) remains one of the largest direct response writers of life insurance in the country. These companies have produced consistent individual life insurance premiums and earnings for Torchmark. A.M. Best views favorably that the majority of Torchmark's premiums and earnings (both statutory and GAAP) are derived from life insurance, which is seen as more creditworthy than annuities and health products.

The capitalization of Torchmark's operating entities remains solid, supported by strong operating results. Recent results were aided by improved expense management and better persistency within some of Torchmark's subsidiaries. A.M. Best expects the group's overall capitalization to be maintained at or above current levels, despite significant dividends from the operating companies and plans to repurchase stock in the near term ($391 million over the last five quarters). A.M. Best notes that Torchmark has consistently maintained financial leverage and interest coverage ratios that are well within the guidelines for its current ratings.

While sales of Torchmark's life insurance products continue to provide the corporation with the majority of its earnings, A.M. Best remains concerned about the ongoing premium challenges within some product lines and the impact it will have on Torchmark's future growth. Although the agent count has improved within American Income's distribution force, Liberty National and United American Insurance Company (United American), continue to have challenges recruiting and maintaining agents. A.M. Best notes that Torchmark has been working on plans to improve the retention and the quality of its agency force. However, until the number of agents stabilizes, Torchmark will continue to see decreasing sales in most of Liberty National's and United American's lines of business.

In addition to decreasing health premiums due primarily to the competitive Medicare supplement environment, A.M. Best remains concerned about the relatively long duration of Torchmark's fixed income portfolio that remains susceptible to large fluctuations in market value, should interest rates rise. While the organization maintains a manageable level of below investment grade bonds, it has an elevated exposure to "bbb" category securities within its fixed income portfolio. Given the characteristics of its investment portfolio, if a downturn in the credit cycle occurs, A.M. Best believes Torchmark would incur sizeable impairments, which would likely stress its targeted level of risk-adjusted capital.

The FSRs of A+ (Superior) and ICR of "aa-" have been affirmed for the following life/health subsidiaries of Torchmark Corporation:

· Liberty National Life Insurance Company

· Globe Life and Accident Insurance Company

· United American Insurance Company

· First United American Life Insurance Company

· American Income Life Insurance Company

· National Income Life Insurance Company


The following debt ratings have been affirmed:

Torchmark Corporation—

- AMB-1 on commercial paper

Torchmark Corporation—

- "a-" on $100 million 7.375% senior unsecured notes, due 2013

- "a-" on $250 million 6.375% senior unsecured notes, due 2016

- "a-" on $300 million 9.25% senior unsecured notes, due 2019

- "a-" on $200 million 7.875% senior unsecured notes, due 2023



Torchmark Capital Trust III—

- "bbb" on $120 million 7.10% trust preferred securities, backed by junior subordinated debentures, due 2046

The following indicative debt ratings available under the shelf registration have been affirmed:

Torchmark Corporation—

-"a-" on senior unsecured debt

-"bbb+" on subordinated debt

-"bbb" on preferred stock

Torchmark Capital Trust IV and V—

-"bbb" on trust preferreds

The principal methodology used in determining these ratings isBest's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Life and Health Insurers"; "Rating Health Insurance Companies"; "A.M. Best Ratings & the Treatment of Debt"; "Commercial Paper Methodology"; "Equity Credit for Hybrid Securities"; and "Rating Members of Insurance Groups." Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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