| OneAmerica's Strong Financial Results Continue in 2010 As we near the midway mark in 2010, we are in a unique position in the marketplace: providing exceptional value to the consumer and backing it with equally impressive financial strength. The following message from our Chairman, President, and CEO Dayton Molendorp offers you more details on how well we have performed so far in 2010. It all starts with you, our distribution partners, and we are sincerely appreciative. The Care Solutions continue to grow in prominence. Our guarantees have never been more meaningful. Thank you for your business and your confidence in us! Chris Coudret, CLU, ChFC Executive Vice President, State Life The OneAmerica enterprise followed its record-breaking results in 2009 with a strong start to 2010. The first quarter was marked by strong sales momentum and earnings, and continued favorable performance in our bond and mortgage portfolios. Our firm position in the retirement services and asset-based long-term care markets continues to generate strong sales growth. Highlights of our 2010 results to date include: - We continue to hold one of the most solid investment portfolios in the industry. We experienced no investment write-downs in first quarter, and the market value of our bond portfolio was strong at 106.5 percent of book value.
- Our exposure to the recent weakening of the European markets has been limited. We had no investments in government bonds issued by the impacted countries. Our investment grade corporate bonds within the region were equivalent to less than 2 percent of our invested assets. We've invested carefully in solid companies such as local utilities.
- Our sales growth continues to be exceptionally strong. Through April, sales were 19.7 percent over the same period in 2009, driven by retirement services and asset-based long-term care product lines.
- We continue to hold capital well in excess of what is required for our current ratings. Our combined statutory capital is more than $1.1 billion.
- Earnings for the first quarter continued the string of strong quarterly earnings that began in the second quarter of 2009. GAAP pre-tax operating income for the first quarter was $36.5 million, $17 million over the prior year period earnings. Strong earnings enable us to continue to build capital strength and invest in growth.
- The OneAmerica insurance companies have maintained their strong ratings. Earlier this month, A.M. Best affirmed our ratings and raised our outlook from stable to positive. Our financial strength ratings are as follows:
· Standard and Poor 's: AA - "Very Strong" ( AUL; State Life) · A.M. Best : A "Excellent" (AUL; State Life; Pioneer Mutual Life) The economic climate continues to be volatile. Through it all, our commitment remains the same--to be there when our customers need us most. We believe that our long-term view and focus on the customer are timeless values that will enable our success in any market environment. | 
