##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q



---

(Mark One)

|      |  |                                                                                        
|----- |  | ---------------------------------------------------------------------------------------
|/ x / |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|/   / |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-15166

AMERUS GROUP CO.

(Exact name of Registrant as specified in its charter)


|                                                                    |  |                                                
|------------------------------------------------------------------- |  | -----------------------------------------------
|IOWA
(State or other jurisdiction of
incorporation or organization) |  | 42-1458424
(I.R.S. Employer
Identification No.)

699 Walnut Street
Des Moines, Iowa 50309-3948
(Address of principal executive offices)

Registrants telephone number, including area code (515) 362-3600

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.      Yes / x /   No /   /

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).      Yes / x /   No /   /

The number of shares outstanding of each of the Registrants classes of common
stock on October 28, 2003 was as follows:

|             |  |                  
|------------ |  | -----------------
|Common Stock |  | 39,177,326 shares

Exhibit index  - Page 42
Page 1 of 50

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TABLE OF CONTENTS



|                                                   |                                                                                               |                                                 |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                    
|                                                   | Item 1. Financial Statements                                                                 
|                                                   |                                                                                               | CONSOLIDATED BALANCE SHEETS                    
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME              
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
|                                                   |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS          
|                                                   |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                                                   | Item 2. Managements Discussion And Analysis Of Financial Condition And Results Of Operations
|                                                   | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                   | Item 4. Controls and Procedures                                                              
|PART II - OTHER INFORMATION                       
|                                                   | Item 1. Legal Proceedings                                                                    
|                                                   | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                        
|INDEX TO EXHIBITS                                 
|Statement Re: Computation of Earnings Per Share   
|Computation of Ratios of Earnings to Fixed Charges
|Certification of Chief Executive Officer          
|Certification of Chief Financial Officer          
|Certification of Chief Executive Officer          
|Certification of Chief Financial Officer          



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INDEX

|                               |  |                                                                                            |    |          |    | 
|------------------------------ |  | ------------------------------------------------------------------------------------------ | -- | -------- | -- | 
|                               |  |                                                                                            |    | Page No.
|                               |  |                                                                                            |    |         
|PART
I - FINANCIAL INFORMATION |  |                                                                                            | 4  |         
|Item 1.                        |  | Financial Statements                                                                       |    |          | 4  | 
|                               |  | Consolidated Balance Sheets                                                                |    |          |    | 
|                               |  | September 30, 2003 (Unaudited) and December 31, 2002                                       |    |          | 4  | 
|                               |  | Consolidated Statements of Income (Unaudited)                                              |    |          |    | 
|                               |  | For the Three and Nine Months Ended September 30, 2003 and 2002                            |    |          | 6  | 
|                               |  | Consolidated Statements of Comprehensive Income (Unaudited)                                |    |          |    | 
|                               |  | For the Three and Nine Months Ended September 30, 2003 and 2002                            |    |          | 7  | 
|                               |  | Consolidated Statements of Stockholders Equity                                            |    |          |    | 
|                               |  | For the Nine Months Ended September, 2003 (Unaudited) and
the Year Ended December 31, 2002 |    |          | 8  | 
|                               |  | Consolidated Statements of Cash Flows (Unaudited)                                          |    |          |    | 
|                               |  | For the Nine Months Ended September 30, 2003 and 2002                                      |    |          | 9  | 
|                               |  | Notes to Consolidated Financial Statements
(Unaudited)                                     |    |          | 11 | 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations      |    |          | 25 | 
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                 |    |          | 37 | 
|Item 4.                        |  | Controls and Procedures                                                                    |    |          | 39 | 
|PART
II - OTHER INFORMATION    |  |                                                                                            | 40 |         
|Item 1.                        |  | Legal Proceedings                                                                          |    |          | 40 | 
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                           |    |          | 40 | 
|Signatures                     |  |                                                                                            | 41 |         
|Index to Exhibits              |  |                                                                                            | 42 |         

2



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SAFE HARBOR STATEMENT

All statements, trend analyses and other information contained in this
report relative to markets for our products and trends in our operations or
financial results, as well as other statements which include words such as
anticipate, believe, plan, estimate, expect, intend, and other
similar expressions, constitute forward-looking statements under the Private
Securities Litigation Reform Act of 1995. Factors that may cause our actual
results to differ materially from those contemplated by these forward-looking
statements include, among others, the following possibilities: (a) general
economic conditions and other factors, including prevailing interest rate
levels and stock and bond market performance, which may affect our ability to
sell our products, the market value of our investments and the lapse rate and
profitability of policies; (b) our ability to achieve anticipated levels of
operational efficiencies and cost-saving initiatives and to meet cash
requirements based upon projected liquidity sources; (c) customer response to
new products, distribution channels and marketing initiatives; (d) mortality,
morbidity, and other factors which may affect the profitability of our
insurance products; (e) our ability to develop and maintain effective risk
management policies and procedures and to maintain adequate reserves for future
policy benefits and claims; (f) changes in the federal income tax and other
federal laws, regulations, and interpretations, including currently proposed
federal measures that may significantly affect the insurance business including
limitations on antitrust immunity, minimum solvency requirements, and changes
to the tax advantages of life insurance and annuity products or programs with
which they are used; (g) increasing competition in the sale of insurance and
annuities and the recruitment of sales representatives; (h) regulatory changes,
interpretations or pronouncements, including those relating to the regulation
of insurance companies and the regulation and sale of their products; (i) our
ratings and those of our subsidiaries by independent rating organizations which
we believe are particularly important to the sale of our products; (j) the
performance of our investment portfolios; (k) the impact of changes in
standards of accounting; (l) our ability to integrate the business and
operations of acquired entities; (m) expected protection products and
accumulation products margins; (n) the impact of anticipated investment
transactions; and (o) unanticipated litigation or regulatory investigations or
examinations.

There can be no assurance that other factors not currently anticipated by
us will not materially and adversely affect our results of operations. You are
cautioned not to place undue reliance on any forward-looking statements made by
us or on our behalf. Forward-looking statements speak only as of the date the
statement was made. We undertake no obligation to update or revise any
forward-looking statement.

3



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PART I - FINANCIAL INFORMATION




Item 1. Financial Statements




AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS
($ in thousands)

|                                     |                                                     |                           |                   |         |               |            |              |         |            |            | 
|------------------------------------ | --------------------------------------------------- | ------------------------- | ----------------- | ------- | ------------- | ---------- | ------------ | ------- | ---------- | ---------- | 
|                                     |                                                     |                           |                   |         | September 30, |            | December 31,
|                                     |                                                     |                           |                   |         | 2003          |            | 2002        
|                                     |                                                     |                           |                   |         |               |            |             
|                                     |                                                     |                           |                   |         | (unaudited)   |            |              |         |           
|Assets                               |                                                     |                           |                   |         |               |            |              |        
|Investments:                         |                                                     |                           |                   |         |               |            |              |        
|                                     | Securities available-for-sale at fair value:        |                           |                   |         |               |            |              |         |           
|                                     |                                                     | Fixed maturity securities |                   | $       | 14,218,810    |            |              | $       | 13,328,902 |           
|                                     |                                                     | Equity securities         |                   |         | 71,475        |            |              |         | 63,345     |           
|                                     |                                                     | Short-term investments    |                   |         | 23,308        |            |              |         | 32,318     |           
|                                     | Securities held for trading purposes at fair value: |                           |                   |         |               |            |              |         |           
|                                     |                                                     | Fixed maturity securities |                   |         | 1,840,758     |            |              |         | 1,843,868  |           
|                                     |                                                     | Equity securities         |                   |         | 537           |            |              |         |           |           
|                                     | Mortgage loans                                      |                           |                   | 939,975 |               |            |              | 883,034 |           
|                                     | Real estate                                         |                           |                   | 33      |               |            |              | 476     |           
|                                     | Policy loans                                        |                           |                   | 491,512 |               |            |              | 496,753 |           
|                                     | Other investments                                   |                           |                   | 389,756 |               |            |              | 283,794 |           
|                                     |                                                     |                           |                   |         |               |            |              |         |            |           
|                                     |                                                     |                           | Total investments |         |               | 17,976,164 |              |         |            | 16,932,490 | 
|Cash and cash equivalents            |                                                     |                           | 681,607           |         |               |            | 102,612      |        
|Accrued investment income            |                                                     |                           | 198,515           |         |               |            | 185,660      |        
|Premiums, fees and other receivables |                                                     |                           | 40,886            |         |               |            | 13,082       |        
|Reinsurance receivables              |                                                     |                           | 663,020           |         |               |            | 865,930      |        
|Deferred policy acquisition costs    |                                                     |                           | 1,001,877         |         |               |            | 884,239      |        
|Value of business acquired           |                                                     |                           | 428,459           |         |               |            | 454,159      |        
|Goodwill                             |                                                     |                           | 224,075           |         |               |            | 218,995      |        
|Property and equipment               |                                                     |                           | 49,016            |         |               |            | 74,188       |        
|Other assets                         |                                                     |                           | 332,818           |         |               |            | 326,397      |        
|Separate account assets              |                                                     |                           | 243,464           |         |               |            | 235,913      |        
|                                     |                                                     |                           |                   |         |               |            |              |         |            |           
|                                     |                                                     |                           | Total assets      |         | $             | 21,839,901 |              |         | $          | 20,293,665 | 
|                                     |                                                     |                           |                   |         |               |            |              |        

See accompanying notes to consolidated financial statements.

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AMERUS GROUP CO.
CONSOLIDATED BALANCE SHEETS (Continued)
($ in thousands)

|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |           |            |            | 
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | ------------------------------------------ | --------- | ------------- | ---------- | ------------ | --------- | ---------- | ---------- | 
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           | September 30, |            | December 31,
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           | 2003          |            | 2002        
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |             
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           | (unaudited)   |            |              |           |           
|Liabilities and Stockholders Equity                         |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |          
|Liabilities:                                                 |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |          
|                                                             | Policy reserves and policyowner funds:                                                                                                                                                            |                                         |                                            |           |               |            |              |           |           
|                                                             |                                                                                                                                                                                                   | Future life and annuity policy benefits |                                            | $         | 16,723,784    |            |              | $         | 16,244,016 |           
|                                                             |                                                                                                                                                                                                   | Policyowner funds                       |                                            |           | 1,537,345     |            |              |           | 1,335,144  |           
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |           |            |           
|                                                             |                                                                                                                                                                                                   |                                         | 18,261,129                                 |           |               |            | 17,579,160   |          
|                                                             | Accrued expenses and other liabilities                                                                                                                                                            |                                         |                                            | 869,770   |               |            |              | 283,836   |           
|                                                             | Dividends payable to policyowners                                                                                                                                                                 |                                         |                                            | 353,828   |               |            |              | 303,062   |           
|                                                             | Policy and contract claims                                                                                                                                                                        |                                         |                                            | 32,731    |               |            |              | 39,569    |           
|                                                             | Income taxes payable                                                                                                                                                                              |                                         |                                            | 31,274    |               |            |              | 61,325    |           
|                                                             | Deferred income taxes                                                                                                                                                                             |                                         |                                            | 83,251    |               |            |              | 16,499    |           
|                                                             | Notes payable                                                                                                                                                                                     |                                         |                                            | 552,670   |               |            |              | 511,353   |           
|                                                             | Separate account liabilities                                                                                                                                                                      |                                         |                                            | 243,464   |               |            |              | 235,913   |           
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |           |            |           
|                                                             |                                                                                                                                                                                                   |                                         | Total liabilities                          |           |               | 20,428,117 |              |           |            | 19,030,717 | 
|Stockholders equity:                                        |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |          
|                                                             | Preferred Stock, no par value, 20,000,000 shares
authorized, none issued                                                                                                                          |                                         |                                            |          |               |            |              |          |           
|                                                             | Common Stock, no par value, 230,000,000 shares
authorized; 43,816,580 shares issued and
39,171,878 shares outstanding in 2003;
43,656,280 shares issued and 39,011,578 shares
outstanding in 2002 |                                         |                                            | 43,817    |               |            |              | 43,656    |           
|                                                             | Additional paid-in capital                                                                                                                                                                        |                                         |                                            | 1,183,541 |               |            |              | 1,179,646 |           
|                                                             | Accumulated other comprehensive income                                                                                                                                                            |                                         |                                            | 114,197   |               |            |              | 88,522    |           
|                                                             | Unearned compensation                                                                                                                                                                             |                                         |                                            | (1,730    | )             |            |              | (458      | )         
|                                                             | Unallocated ESOP shares                                                                                                                                                                           |                                         |                                            | (1,406    | )             |            |              | (1,443    | )         
|                                                             | Retained earnings                                                                                                                                                                                 |                                         |                                            | 229,857   |               |            |              | 109,517   |           
|                                                             | Treasury stock, at cost (4,644,702 shares in 2003
and 2002)                                                                                                                                       |                                         |                                            | (156,492  | )             |            |              | (156,492  | )         
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |           |            |           
|                                                             |                                                                                                                                                                                                   |                                         | Total stockholders equity                 |           |               | 1,411,784  |              |           |            | 1,262,948  | 
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |           |            |           
|                                                             |                                                                                                                                                                                                   |                                         | Total liabilities and stockholders equity |           | $             | 21,839,901 |              |           | $          | 20,293,665 | 
|                                                             |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |          
|See accompanying notes to consolidated financial statements. |                                                                                                                                                                                                   |                                         |                                            |           |               |            |              |          

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AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except share data)

|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |            |  
|--------------------------------------------- | -------------------------------------------------------------------------------- | - | ---------------------------------------- | ---------- | --------------------------------------- | - | ----------- | ---------- | ---- | - | --------- | ---------- |  | - | --------- | ---------- | -
|                                              |                                                                                  |   | For The Three Months Ended September 30, |            | For The Nine Months Ended September 30,
|                                              |                                                                                  |   | 2003                                     |            | 2002                                    |   | 2003        |            | 2002
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |     
|                                              |                                                                                  |   |                                          |            |                                         |   | (unaudited) |            |      |   |          
|Revenues:                                     |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Insurance premiums                                                               |   | $                                        | 64,355     |                                         |   | $           | 80,926     |      |   | $         | 225,597    |  |   | $         | 263,262    |  
|                                              | Product charges                                                                  |   |                                          | 40,634     |                                         |   |             | 37,054     |      |   |           | 136,168    |  |   |           | 111,110    |  
|                                              | Net investment income                                                            |   |                                          | 244,278    |                                         |   |             | 256,732    |      |   |           | 751,098    |  |   |           | 748,399    |  
|                                              | Realized/unrealized gains (losses) on investments                                |   |                                          | 8,542      |                                         |   |             | (21,951    | )    |   |           | 75,365     |  |   |           | (122,574   | )
|                                              | Other income                                                                     |   |                                          | 17,757     |                                         |   |             | 20,634     |      |   |           | 53,073     |  |   |           | 53,568     |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |            |  
|                                              |                                                                                  |   | 375,566                                  |            |                                         |   | 373,395     |            |      |   | 1,241,301 |            |  |   | 1,053,765 |           
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|Benefits and expenses:                        |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Policyowner benefits                                                             |   |                                          | 195,020    |                                         |   |             | 225,201    |      |   |           | 673,145    |  |   |           | 643,648    |  
|                                              | Underwriting, acquisition and other expenses                                     |   |                                          | 40,734     |                                         |   |             | 38,485     |      |   |           | 114,533    |  |   |           | 122,276    |  
|                                              | Demutualization costs                                                            |   |                                          |           |                                         |   |             | 722        |      |   |           |           |  |   |           | 1,186      |  
|                                              | Restructuring costs                                                              |   |                                          | 1,551      |                                         |   |             | 2,569      |      |   |           | 17,415     |  |   |           | 10,780     |  
|                                              | Amortization of deferred policy acquisition costs
and value of business acquired |   |                                          | 47,780     |                                         |   |             | 35,289     |      |   |           | 147,755    |  |   |           | 103,452    |  
|                                              | Dividends to policyowners                                                        |   |                                          | 22,016     |                                         |   |             | 24,377     |      |   |           | 86,330     |  |   |           | 72,000     |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |            |  
|                                              |                                                                                  |   | 307,101                                  |            |                                         |   | 326,643     |            |      |   | 1,039,178 |            |  |   | 953,342   |           
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|Income before interest and income tax expense |                                                                                  |   | 68,465                                   |            |                                         |   | 46,752      |            |      |   | 202,123   |            |  |   | 100,423   |           
|Interest expense                              |                                                                                  |   | 7,864                                    |            |                                         |   | 6,414       |            |      |   | 22,238    |            |  |   | 18,778    |           
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |            |  
|Income before income tax expense              |                                                                                  |   | 60,601                                   |            |                                         |   | 40,338      |            |      |   | 179,885   |            |  |   | 81,645    |           
|Income tax expense                            |                                                                                  |   | 19,766                                   |            |                                         |   | 13,848      |            |      |   | 59,545    |            |  |   | 25,978    |           
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |            |  
|Net income                                    |                                                                                  | $ | 40,835                                   |            |                                         | $ | 26,490      |            |      | $ | 120,340   |            |  | $ | 55,667    |           
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|Net income per common share:                  |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Basic                                                                            |   | $                                        | 1.04       |                                         |   | $           | 0.67       |      |   | $         | 3.07       |  |   | $         | 1.38       |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Diluted                                                                          |   | $                                        | 1.03       |                                         |   | $           | 0.66       |      |   | $         | 3.05       |  |   | $         | 1.36       |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|Weighted average common shares outstanding:   |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Basic                                                                            |   |                                          | 39,208,151 |                                         |   |             | 39,497,355 |      |   |           | 39,144,872 |  |   |           | 40,327,236 |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           
|                                              | Diluted                                                                          |   |                                          | 39,650,473 |                                         |   |             | 39,835,426 |      |   |           | 39,453,126 |  |   |           | 40,812,121 |  
|                                              |                                                                                  |   |                                          |            |                                         |   |             |            |      |   |           |            |  |   |           |           

See accompanying notes to consolidated financial statements.

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AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)

|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |         |         |  
|---------------------------------- | ----------------------------------------------------------------- | --------------------------------------------------------------------------- | ------ | ---------------------------------------- | ------- | --------------------------------------- | ------ | ------- | ------- | ---- | ------- | ------- | ------ | - | ------- | ------- | ------- | -
|                                   |                                                                   |                                                                             |        | For The Three Months Ended September 30, |         | For The Nine Months Ended September 30,
|                                   |                                                                   |                                                                             |        | 2003                                     |         | 2002                                    |        | 2003    |         | 2002
|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |     
|                                   |                                                                   |                                                                             |        | (unaudited)                             
|Net income                         |                                                                   | $                                                                           | 40,835 |                                          |         | $                                       | 26,490 |         |         | $    | 120,340 |         |        | $ | 55,667  |        
|Other comprehensive income (loss): |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |        
|                                   | Unrealized gains (losses) on securities:                          |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |         |        
|                                   |                                                                   | Unrealized holding gains (losses) arising during period                     |        |                                          | (46,732 | )                                       |        |         | 71,793  |      |         |         | 84,644 |   |         |         | 39,933  |  
|                                   |                                                                   | Less: Reclassification adjustment for gains (losses)
included in net income |        |                                          | 27,370  |                                         |        |         | (15,625 | )    |         |         | 45,143 |   |         |         | (57,085 | )
|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |        
|                                   | Other comprehensive income (loss), before tax                     |                                                                             |        | (74,102                                  | )       |                                         |        | 87,418  |         |      |         | 39,501  |        |   |         | 97,018  |        
|                                   | Income tax expense related to items of other
comprehensive income |                                                                             |        | 25,936                                   |         |                                         |        | (30,596 | )       |      |         | (13,826 | )      |   |         | (33,956 | )      
|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |        
|                                   | Other comprehensive income (loss), net of taxes                   |                                                                             |        | (48,166                                  | )       |                                         |        | 56,822  |         |      |         | 25,675  |        |   |         | 63,062  |        
|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |        
|Comprehensive income (loss)        |                                                                   | $                                                                           | (7,331 | )                                        |         | $                                       | 83,312 |         |         | $    | 146,015 |         |        | $ | 118,729 |        
|                                   |                                                                   |                                                                             |        |                                          |         |                                         |        |         |         |      |         |         |        |   |         |        

See accompanying notes to consolidated financial statements.

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AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
September 30, 2003
($ in thousands)



|                             |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |        |        |  
|---------------------------- | ----------------------------- | ------------------------------------------------------------------------ | ------ | ------------ | --- | ------- | --------- | ---------- | ------ | ------------- | ------ | ----------- | ------ | - | ---- | ------ | ------ | -
|                             |                               |                                                                          |        |              |     |         |           |            |        |               |        | Accumulated |        |   |      |       
|                             |                               |                                                                          |        |              |     |         |           | Additional |        | Other         |        |             |        |  
|                             |                               |                                                                          |        |              |     |         |           | Paid-In    |        | Comprehensive |        | Unearned   
|                             |                               |                                                                          |        | Common Stock |     | Capital |           | Income     |        | Compensation 
|                             |                               |                                                                          |        |              |     |         |           |            |        |              
|Balance at December 31, 2001 |                               | $                                                                        | 43,506 |              |     | $       | 1,177,688 |            |        | $             | 12,669 |             |        | $ | (727 | )     
|2002:                        |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |       
|                             |                               | Net income                                                               |        |              |    |         |           |            |       |               |        |             |       |   |      |        |       |  
|                             |                               | Net unrealized gain (loss) on securities                                 |        |              |    |         |           |            |       |               |        |             | 73,646 |   |      |        |       |  
|                             |                               | Net unrealized gain (loss) on derivatives
designated as cash flow hedges |        |              |    |         |           |            |       |               |        |             | 3,434  |   |      |        |       |  
|                             |                               | Stock issued under various incentive
plans, net of forfeitures           |        |              | 150 |         |           |            | 5,730  |               |        |             |       |   |      |        | 269    |  
|                             |                               | Stock issued under exercise of warrants                                  |        |              |    |         |           |            | (3,802 | )             |        |             |       |   |      |        |       |  
|                             |                               | Purchase of treasury stock                                               |        |              |    |         |           |            |       |               |        |             |       |   |      |        |       |  
|                             |                               | Dividends declared on common stock                                       |        |              |    |         |           |            |       |               |        |             |       |   |      |        |       |  
|                             |                               | Allocation of shares in leveraged ESOP                                   |        |              |    |         |           |            | 30     |               |        |             |       |   |      |        |       |  
|                             |                               | Minimum pension liability adjustment                                     |        |              |    |         |           |            |       |               |        |             | (1,227 | ) |      |        |       |  
|                             |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |       
|Balance at December 31, 2002 |                               |                                                                          | 43,656 |              |     |         | 1,179,646 |            |        |               | 88,522 |             |        |   | (458 | )     
|2003 (unaudited):            |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |       
|                             |                               | Net income                                                               |        |              |    |         |           |            |       |               |        |             |       |   |      |        |       |  
|                             |                               | Net unrealized gain (loss) on securities                                 |        |              |    |         |           |            |       |               |        |             | 23,510 |   |      |        |       |  
|                             |                               | Net unrealized gain (loss) on derivatives
designated as cash flow hedges |        |              |    |         |           |            |       |               |        |             | 2,165  |   |      |        |       |  
|                             |                               | Stock issued under various incentive
plans, net of forfeitures           |        |              | 161 |         |           |            | 11,162 |               |        |             |       |   |      |        | (1,272 | )
|                             |                               | PRIDES purchase contract adjustment
and allocated fees and expenses      |        |              |    |         |           |            | (7,267 | )             |        |             |       |   |      |        |       |  
|                             |                               | Allocation of shares in leveraged ESOP                                   |        |              |    |         |           |            |       |               |        |             |       |   |      |        |       |  
|                             |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |       
|                             | Balance at September 30, 2003 |                                                                          | $      | 43,817       |     |         | $         | 1,183,541  |        |               | $      | 114,197     |        |   | $    | (1,730 | )     
|                             |                               |                                                                          |        |              |     |         |           |            |        |               |        |             |        |   |      |       

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                             |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |           |          |  
|---------------------------- | ----------------------------- | ------------------------------------------------------------------------ | ------ | ----------- | ------ | -------- | ------- | -------- | ------- | ------------- | -------- | -------- | -------- | ----- | --------- | --------- | -------- | -
|                             |                               |                                                                          |        | Unallocated |        |          |         |          |         |               |          |          |          | Total
|                             |                               |                                                                          |        | ESOP        |        | Retained |         | Treasury |         | Stockholders'
|                             |                               |                                                                          |        | Shares      |        | Earnings |         | Stock    |         | Equity       
|                             |                               |                                                                          |        |             |        |          |         |          |         |              
|Balance at December 31, 2001 |                               | $                                                                        | (224   | )           |        | $        | 62,187  |          |         | $             | (56,582  | )        |          | $     | 1,238,517 |          
|2002:                        |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |          
|                             |                               | Net income                                                               |        |             |       |          |         |          | 62,866  |               |          |          |         |       |           |           | 62,866   |  
|                             |                               | Net unrealized gain (loss) on securities                                 |        |             |       |          |         |          |        |               |          |          |         |       |           |           | 73,646   |  
|                             |                               | Net unrealized gain (loss) on derivatives
designated as cash flow hedges |        |             |       |          |         |          |        |               |          |          |         |       |           |           | 3,434    |  
|                             |                               | Stock issued under various incentive
plans, net of forfeitures           |        |             |       |          |         |          |        |               |          |          | 1        |       |           |           | 6,150    |  
|                             |                               | Stock issued under exercise of warrants                                  |        |             |       |          |         |          |        |               |          |          | 12,205   |       |           |           | 8,403    |  
|                             |                               | Purchase of treasury stock                                               |        |             | (2,522 | )        |         |          |        |               |          |          | (112,116 | )     |           |           | (114,638 | )
|                             |                               | Dividends declared on common stock                                       |        |             |       |          |         |          | (15,536 | )             |          |          |         |       |           |           | (15,536  | )
|                             |                               | Allocation of shares in leveraged ESOP                                   |        |             | 1,303  |          |         |          |        |               |          |          |         |       |           |           | 1,333    |  
|                             |                               | Minimum pension liability adjustment                                     |        |             |       |          |         |          |        |               |          |          |         |       |           |           | (1,227   | )
|                             |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |          
|Balance at December 31, 2002 |                               |                                                                          | (1,443 | )           |        |          | 109,517 |          |         |               | (156,492 | )        |          |       | 1,262,948 |          
|2003 (unaudited):            |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |          
|                             |                               | Net income                                                               |        |             |       |          |         |          | 120,340 |               |          |          |         |       |           |           | 120,340  |  
|                             |                               | Net unrealized gain (loss) on securities                                 |        |             |       |          |         |          |        |               |          |          |         |       |           |           | 23,510   |  
|                             |                               | Net unrealized gain (loss) on derivatives
designated as cash flow hedges |        |             |       |          |         |          |        |               |          |          |         |       |           |           | 2,165    |  
|                             |                               | Stock issued under various incentive
plans, net of forfeitures           |        |             |       |          |         |          |        |               |          |          |         |       |           |           | 10,051   |  
|                             |                               | PRIDES purchase contract adjustment
and allocated fees and expenses      |        |             |       |          |         |          |        |               |          |          |         |       |           |           | (7,267   | )
|                             |                               | Allocation of shares in leveraged ESOP                                   |        |             | 37     |          |         |          |        |               |          |          |         |       |           |           | 37       |  
|                             |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |          
|                             | Balance at September 30, 2003 |                                                                          | $      | (1,406      | )      |          | $       | 229,857  |         |               | $        | (156,492 | )        |       | $         | 1,411,784 |         
|                             |                               |                                                                          |        |             |        |          |         |          |         |               |          |          |          |       |           |          

See accompanying notes to consolidated financial statements.

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AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)

|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |            |          |          |         |  
|------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ---------------------- | -------- | --------------------------------------- | ------- | ---------- | -------- | -------- | ------- | -
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          | For The Nine Months Ended September 30,
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          | 2003                                    |         | 2002      
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |           
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          | (unaudited)                            
|Cash flows from operating activities  |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |           
|                                      | Net income                                                                        |                                                                                                                   | $                                                      | 120,340                |          |                                         | $       | 55,667     |         
|                                      | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                                                                                   |                                                        |                        |          |                                         |         |            |         
|                                      |                                                                                   | Product charges on universal life
and annuity products                                                            |                                                        |                        | (115,734 | )                                       |         |            | (105,970 | )       
|                                      |                                                                                   | Interest credited to policyowner account
balances                                                                 |                                                        |                        | 357,606  |                                         |         |            | 328,655  |         
|                                      |                                                                                   | Change in option value of equity-indexed products
and market value adjustments on total
return strategy annuities |                                                        |                        | 22,527   |                                         |         |            | (41,110  | )       
|                                      |                                                                                   | Realized/unrealized (gains) losses on investments                                                                 |                                                        |                        | (75,365  | )                                       |         |            | 122,574  |         
|                                      |                                                                                   | DAC and VOBA amortization                                                                                         |                                                        |                        | 147,755  |                                         |         |            | 103,452  |         
|                                      |                                                                                   | DAC and VOBA capitalized                                                                                          |                                                        |                        | (299,565 | )                                       |         |            | (289,273 | )       
|                                      |                                                                                   | Change in:                                                                                                        |                                                        |                        |          |                                         |         |            |          |         
|                                      |                                                                                   |                                                                                                                   | Accrued investment income                              |                        |          | (12,855                                 | )       |            |          | (15,238  | )      
|                                      |                                                                                   |                                                                                                                   | Reinsurance receivables                                |                        |          | 279,984                                 |         |            |          | (104,959 | )      
|                                      |                                                                                   |                                                                                                                   | Securities held for trading purposes:                  |                        |          |                                         |         |            |          |          |        
|                                      |                                                                                   |                                                                                                                   |                                                        | Fixed maturities       |          |                                         | 44,166  |            |          |          | 299,674 |  
|                                      |                                                                                   |                                                                                                                   |                                                        | Equity securities      |          |                                         | (473    | )          |          |          | 12,013  |  
|                                      |                                                                                   |                                                                                                                   |                                                        | Short-term investments |          |                                         |        |            |          |          | (3,927  | )
|                                      |                                                                                   |                                                                                                                   | Liabilities for future policy benefits                 |                        |          | (233,796                                | )       |            |          | 489,022  |        
|                                      |                                                                                   |                                                                                                                   | Accrued expenses and other liabilities                 |                        |          | 530,153                                 |         |            |          | (63,474  | )      
|                                      |                                                                                   |                                                                                                                   | Policy and contract claims and other
policyowner funds |                        |          | 46,069                                  |         |            |          | 19,613   |        
|                                      |                                                                                   |                                                                                                                   | Income taxes:                                          |                        |          |                                         |         |            |          |          |        
|                                      |                                                                                   |                                                                                                                   |                                                        | Current                |          |                                         | (30,051 | )          |          |          | (60,244 | )
|                                      |                                                                                   |                                                                                                                   |                                                        | Deferred               |          |                                         | 53,425  |            |          |          | 51,382  |  
|                                      |                                                                                   | Other, net                                                                                                        |                                                        |                        | 16,099   |                                         |         |            | (19,264  | )       
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |            |         
|                                      |                                                                                   | Net cash provided by operating activities                                                                         |                                                        |                        | 850,285  |                                         |         |            | 778,593  |         
|                                      |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |            |         
|Cash flows from investing activities: |                                                                                   |                                                                                                                   |                                                        |                        |          |                                         |         |           
|                                      | Purchase of fixed maturities available-for-sale                                   |                                                                                                                   |                                                        | (9,308,393             | )        |                                         |         | (5,049,012 | )       
|                                      | Proceeds from sale of fixed maturities available-for-sale                         |                                                                                                                   |                                                        | 6,615,403              |          |                                         |         | 3,379,047  |         
|                                      | Maturities, calls and principal reductions of
fixed maturities available-for-sale |                                                                                                                   |                                                        | 2,027,662              |          |                                         |         | 531,840    |         
|                                      | Purchase of equity securities                                                     |                                                                                                                   |                                                        | (8,267                 | )        |                                         |         | (58,417    | )       
|                                      | Proceeds from sale of equity securities                                           |                                                                                                                   |                                                        | 13,695                 |          |                                         |         | 769        |         
|                                      | Change in short-term investments, net                                             |                                                                                                                   |                                                        | 4,595                  |          |                                         |         | (8,768     | )       
|                                      | Purchase of mortgage loans                                                        |                                                                                                                   |                                                        | (143,567               | )        |                                         |         | (53,375    | )       

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AMERUS GROUP CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
($ in thousands)

|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |            |  
|------------------------------------------------ | ------------------------------------------------------------------------- | ----------------------------------------- | ------- | --------------------------------------- | -------- | ---- | ------- | ---------- | ---------- | -
|                                                 |                                                                           |                                           |         | For The Nine Months Ended September 30,
|                                                 |                                                                           |                                           |         | 2003                                    |          | 2002
|                                                 |                                                                           |                                           |         |                                         |          |     
|                                                 |                                                                           |                                           |         | (unaudited)                            
|                                                 | Proceeds from repayment and sale of mortgage loans                        |                                           | $       | 92,414                                  |          |      | $       | 77,002     |           
|                                                 | Purchase of real estate and other invested assets                         |                                           |         | (339,763                                | )        |      |         | (16,998    | )         
|                                                 | Proceeds from sale of real estate and other
invested assets               |                                           |         | 226,853                                 |          |      |         | 64,700     |           
|                                                 | Change in policy loans, net                                               |                                           |         | 5,241                                   |          |      |         | 9,704      |           
|                                                 | Other assets, net                                                         |                                           |         | (3,464                                  | )        |      |         | (5,537     | )         
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|                                                 |                                                                           | Net cash used in investing activities     |         |                                         | (817,591 | )    |         |            | (1,129,045 | )
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|Cash flows from financing activities:            |                                                                           |                                           |         |                                         |          |      |         |           
|                                                 | Deposits to policyowner account balances                                  |                                           |         | 1,684,637                               |          |      |         | 1,563,532  |           
|                                                 | Withdrawals from policyowner account balances                             |                                           |         | (1,182,474                              | )        |      |         | (1,292,534 | )         
|                                                 | Change in debt, net                                                       |                                           |         | (102,433                                | )        |      |         | (50,576    | )         
|                                                 | Stock issued under various incentive plans, net of
forfeitures            |                                           |         | 10,051                                  |          |      |         | 5,510      |           
|                                                 | Purchase of treasury stock                                                |                                           |         |                                        |          |      |         | (114,638   | )         
|                                                 | Proceeds from issuance of OCEANs                                          |                                           |         |                                        |          |      |         | 179,358    |           
|                                                 | Proceeds from issuance of PRIDES                                          |                                           |         | 136,483                                 |          |      |         |           |           
|                                                 | Retirement of company-obligated mandatorily
redeemable capital securities |                                           |         |                                        |          |      |         | (20,805    | )         
|                                                 | Allocation of shares in leveraged ESOP                                    |                                           |         | 37                                      |          |      |         |           |           
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|                                                 |                                                                           | Net cash provided by financing activities |         |                                         | 546,301  |      |         |            | 269,847    |  
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|                                                 |                                                                           | Net increase (decrease) in cash           |         |                                         | 578,995  |      |         |            | (80,605    | )
|Cash and cash equivalents at beginning of period |                                                                           |                                           | 102,612 |                                         |          |      | 179,376 |           
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|Cash and cash equivalents at end of period       |                                                                           | $                                         | 681,607 |                                         |          | $    | 98,771  |           
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|Supplemental disclosure of cash activities:      |                                                                           |                                           |         |                                         |          |      |         |           
|                                                 | Interest paid                                                             |                                           | $       | 29,642                                  |          |      | $       | 28,815     |           
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           
|                                                 | Income taxes paid                                                         |                                           | $       | 15,102                                  |          |      | $       | 22,690     |           
|                                                 |                                                                           |                                           |         |                                         |          |      |         |            |           

See accompanying notes to consolidated financial statements.

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AMERUS GROUP CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)



|(1) |  | CONSOLIDATION AND BASIS OF
PRESENTATION
|--- |  | ---------------------------------------

The accompanying unaudited consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States (GAAP) for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by GAAP for annual financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included. All adjustments were of a normal
recurring nature, unless otherwise noted in the Notes to Consolidated Financial Statements. Operating results
for the nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2003. The consolidated balance sheet at December 31, 2002 has been derived from
the audited financial statements at that date but does not include all of the information and footnotes required
by GAAP for complete financial statements. For further information and for capitalized terms not defined in this
Form 10-Q, refer to the consolidated financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2002.

The accompanying consolidated financial statements include the accounts and operations of the
Company and its wholly-owned subsidiaries, principally AmerUs Life Insurance Company (ALIC), AmerUs Annuity Group
Co. and its subsidiaries (collectively, AAG), AmerUs Capital Management Group, Inc. (ACM), and ILICO Holdings,
Inc., the holding company of Indianapolis Life Insurance Company (ILIC) and its subsidiaries (collectively,
ILICO). Effective June 30, 2003, IL Annuity and Insurance Company (IL Annuity), a wholly-owned subsidiary of
ILIC, was merged into ILIC. All significant intercompany transactions and balances have been eliminated in
consolidation.

The Company has certain stock-based employee compensation plans which are accounted for under
the recognition and measurement principles of the Accounting Principles Boards Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. The plans are stock option plans for which no
stock-based employee compensation cost is reflected in net income, as all options granted under those plans had
an exercise price equal to the market value of the underlying common stock on the date of grant. The following
table illustrates the effect on net income and earnings per share if the Company had applied the fair value
recognition provisions of Statement of Financial Accounting Standards (SFAS) 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation:

|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |      | 
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ---------------------------------------- | ---- | --------------------------------------- | - | ------ | ---- | ---- | - | ------- | ---- |  | - | ------ | ---- | 
|                                                                                                                                            |                       |   | For The Three Months Ended September 30, |      | For The Nine Months Ended September 30,
|                                                                                                                                            |                       |   | 2003                                     |      | 2002                                    |   | 2003   |      | 2002
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |     
|                                                                                                                                            |                       |   | ($ in thousands, except share data)     
|Net income, as reported                                                                                                                     |                       | $ | 40,835                                   |      |                                         | $ | 26,490 |      |      | $ | 120,340 |      |  | $ | 55,667 |     
|Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related tax effects |                       |   | (1,014                                   | )    |                                         |   | (996   | )    |      |   | (3,092  | )    |  |   | (4,098 | )   
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|Pro forma net income                                                                                                                        |                       | $ | 39,821                                   |      |                                         | $ | 25,494 |      |      | $ | 117,248 |      |  | $ | 51,569 |     
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|Earnings per share:                                                                                                                         |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|                                                                                                                                            | Basic - as reported   |   | $                                        | 1.04 |                                         |   | $      | 0.67 |      |   | $       | 3.07 |  |   | $      | 1.38 | 
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|                                                                                                                                            | Basic - pro forma     |   | $                                        | 1.02 |                                         |   | $      | 0.65 |      |   | $       | 3.00 |  |   | $      | 1.28 | 
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|                                                                                                                                            | Diluted - as reported |   | $                                        | 1.03 |                                         |   | $      | 0.66 |      |   | $       | 3.05 |  |   | $      | 1.36 | 
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     
|                                                                                                                                            | Diluted - pro forma   |   | $                                        | 1.00 |                                         |   | $      | 0.64 |      |   | $       | 2.97 |  |   | $      | 1.26 | 
|                                                                                                                                            |                       |   |                                          |      |                                         |   |        |      |      |   |         |      |  |   |        |     

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Certain amounts in the 2002 financial statements have been reclassified to conform to the 2003 financial
statement presentation.



|(2) |  | EARNINGS PER SHARE
|--- |  | ------------------

Basic earnings per share of common stock are computed by dividing net income by the
weighted-average number of common shares outstanding during the period. Diluted earnings per share assumes the
issuance of common shares applicable to stock options and warrants calculated using the treasury stock method.

Diluted earnings per share applicable to the Companys Optionally Convertible Equity-linked
Accreting Notes (OCEANsSM) are determined using the if-converted method for the number of days in the period in
which the common stock price conversion condition is met. The common stock price conversion condition was not
met for the nine months ended September 30, 2003 and 2002. No undistributed net income has been allocated to the
convertible securities holders since their participation in dividends with common stockholders is limited to the
amount of the annual regular dividend.

Diluted earnings per share applicable to the Companys
PRIDESSM securities are determined using
the treasury stock method as it is currently anticipated that holders of the PRIDES are more likely to tender
cash in the future for the securities forward contract. The PRIDES did not have any dilution impact for
earnings per share for the nine months ended September 30, 2003.



|(3) |  | CLOSED BLOCK
|--- |  | ------------

The Company has established two closed blocks, which we refer to as the Closed Block. The first was
established on June 30, 1996 in connection with the reorganization of ALIC from a mutual company to a stock
company. The second was established as of March 31, 2000 in connection with the reorganization of ILIC from a
mutual company to a stock company. Insurance policies which had a dividend scale in effect as of each Closed
Block establishment date were included in the Closed Block. The Closed Block was designed to provide reasonable
assurance to owners of insurance policies included therein that, after the reorganization of ALIC and ILIC,
assets would be available to maintain the dividend scales and interest credits in effect prior to the
reorganization if the experience underlying such scales and credits continues.

Summarized financial information of the Closed Block as of September 30, 2003 and December 31, 2002 and
for the three months and nine months ended September 30, 2003 and 2002 are as follows:

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|                                                                                         |                   |   |                  |           |              |   |           |           | 
|---------------------------------------------------------------------------------------- | ----------------- | - | ---------------- | --------- | ------------ | - | --------- | --------- | 
|                                                                                         |                   |   | September 30,    |           | December 31,
|                                                                                         |                   |   | 2003             |           | 2002        
|                                                                                         |                   |   |                  |           |             
|                                                                                         |                   |   | ($ in thousands)
|Liabilities:                                                                             |                   |   |                  |           |              |   |           |          
|Future life and annuity policy benefits                                                  |                   | $ | 2,837,215        |           |              | $ | 2,840,041 |          
|Policyowner funds                                                                        |                   |   | 9,083            |           |              |   | 4,400     |          
|Accrued expenses and other liabilities                                                   |                   |   | 43,500           |           |              |   | 44,295    |          
|Dividends payable to policyowners                                                        |                   |   | 172,917          |           |              |   | 147,177   |          
|Policy and contract claims                                                               |                   |   | 9,679            |           |              |   | 10,390    |          
|Policyowner dividend obligation                                                          |                   |   | 167,963          |           |              |   | 118,623   |          
|                                                                                         |                   |   |                  |           |              |   |           |          
|                                                                                         | Total Liabilities |   |                  | 3,240,357 |              |   |           | 3,164,926 | 
|                                                                                         |                   |   |                  |           |              |   |           |          
|Assets:                                                                                  |                   |   |                  |           |              |   |           |          
|Fixed maturity securities available-for-sale at fair value                               |                   |   | 2,043,771        |           |              |   | 1,970,659 |          
|Mortgage loans                                                                           |                   |   | 83,563           |           |              |   | 90,872    |          
|Policy loans                                                                             |                   |   | 346,029          |           |              |   | 354,784   |          
|Other investments                                                                        |                   |   | 8,356            |           |              |   | 1,047     |          
|Cash and cash equivalents                                                                |                   |   | 2,494            |           |              |   | 6,178     |          
|Accrued investment income                                                                |                   |   | 32,937           |           |              |   | 30,726    |          
|Premiums and fees receivable                                                             |                   |   | 33,329           |           |              |   | 16,999    |          
|Other assets                                                                             |                   |   | 26,448           |           |              |   | 23,917    |          
|                                                                                         |                   |   |                  |           |              |   |           |          
|                                                                                         | Total Assets      |   |                  | 2,576,927 |              |   |           | 2,495,182 | 
|                                                                                         |                   |   |                  |           |              |   |           |          
|Maximum future earnings to be recognized from assets and
liabilities of the Closed Block |                   | $ | 663,430          |           |              | $ | 669,744   |          
|                                                                                         |                   |   |                  |           |              |   |           |          

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|                                                       |  |                                          |         |      |  |   |         |  
|------------------------------------------------------ |  | ---------------------------------------- | ------- | ---- |  | - | ------- | -
|                                                       |  | For The Three Months Ended September 30,
|                                                       |  | 2003                                     |         | 2002
|                                                       |  |                                          |         |     
|                                                       |  | ($ in thousands)                        
|Operations:                                            |  |                                          |         |      |  |   |         |  
|Insurance premiums                                     |  | $                                        | 43,037  |      |  | $ | 61,547  |  
|Product charges                                        |  |                                          | 1,560   |      |  |   | 3,500   |  
|Net investment income                                  |  |                                          | 37,350  |      |  |   | 40,315  |  
|Realized gains (losses) on investments                 |  |                                          | 3,915   |      |  |   | (1,126  | )
|Policyowner benefits                                   |  |                                          | (55,427 | )    |  |   | (70,101 | )
|Underwriting, acquisition and other expenses           |  |                                          | (744    | )    |  |   | (968    | )
|Dividends to policyowners                              |  |                                          | (19,962 | )    |  |   | (22,132 | )
|                                                       |  |                                          |         |      |  |   |         |  
|Contribution from the Closed Block before income taxes |  | $                                        | 9,729   |      |  | $ | 11,035  |  
|                                                       |  |                                          |         |      |  |   |         |  

|                                                       |  |                                         |          |      |  |   |          |  
|------------------------------------------------------ |  | --------------------------------------- | -------- | ---- |  | - | -------- | -
|                                                       |  | For The Nine Months Ended September 30,
|                                                       |  | 2003                                    |          | 2002
|                                                       |  |                                         |          |     
|                                                       |  | ($ in thousands)                       
|Operations:                                            |  |                                         |          |      |  |   |          |  
|Insurance premiums                                     |  | $                                       | 160,853  |      |  | $ | 195,657  |  
|Product charges                                        |  |                                         | 7,784    |      |  |   | 6,941    |  
|Net investment income                                  |  |                                         | 114,666  |      |  |   | 117,292  |  
|Realized gains (losses) on investments                 |  |                                         | 11,259   |      |  |   | (1,880   | )
|Policyowner benefits                                   |  |                                         | (183,946 | )    |  |   | (214,850 | )
|Underwriting, acquisition and other expenses           |  |                                         | (2,991   | )    |  |   | (3,704   | )
|Dividends to policyowners                              |  |                                         | (77,611  | )    |  |   | (65,437  | )
|                                                       |  |                                         |          |      |  |   |          |  
|Contribution from the Closed Block before income taxes |  | $                                       | 30,014   |      |  | $ | 34,019   |  
|                                                       |  |                                         |          |      |  |   |          |  

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(4) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company accounts for derivatives, including certain derivative
instruments embedded in other contracts, at fair value. Accounting for gains
and losses resulting from changes in the values of derivatives is dependent
upon the use of the derivative and its qualification for special hedge
accounting.
During the first nine months of 2003 and 2002, realized/unrealized gains
(losses) on investments included an unrealized gain of $23.0 million and an
unrealized loss of $47.8 million, respectively, from the change in fair value
on call options used as a natural hedge of embedded options within
equity-indexed products. Additionally, the first nine months of 2003 and 2002
included an unrealized gain of $10.8 million and an unrealized loss of $16.8
million, respectively, from the change in fair value on the trading securities
backing the total return strategy products. Policyowner benefits included an
offsetting adjustment to (increase) reduce contract liabilities for fair value
changes in options embedded within the equity-indexed products and fair value
changes on total return strategy annuity contracts of ($22.5) million and $41.1
million for the first nine months of 2003 and 2002, respectively. Accumulated
Other Comprehensive Income (AOCI) included an unrealized gain of $2.2 million
and $2.3 million from the fair value change in interest rate swaps used to
hedge the floating rate funding agreement liability during the first nine
months of 2003 and 2002, respectively. In 2002, the Company undesignated a
cash flow hedge and is now amortizing the amount in AOCI to earnings over the
remaining life of the swap, which amounted to $3.2 million and $2.7 million in
expense in the first nine months of 2003 and 2002, respectively. The Company
estimates that $1.0 million of after-tax derivative losses, included in AOCI
will be reclassified into earnings within the next twelve months.

The following table summarizes the income (loss) impact of the market
value adjustments on trading securities and derivatives and the cash flow hedge
amortization for the first nine months ended September 30, 2003 and 2002:

|                                                     |                 |   |                                         |       |      |   |         |         |  
|---------------------------------------------------- | --------------- | - | --------------------------------------- | ----- | ---- | - | ------- | ------- | -
|                                                     |                 |   | For The Nine Months Ended September 30,
|                                                     |                 |   | 2003                                    |       | 2002
|                                                     |                 |   |                                         |       |     
|                                                     |                 |   | ($ in thousands)                       
|Fixed maturity securities held for trading           |                 | $ | 10,839                                  |       |      | $ | (16,792 | )      
|Options on equity-indexed products                   |                 |   | 22,960                                  |       |      |   | (47,763 | )      
|Equity-indexed and total return strategy
liabilities |                 |   | (22,527                                 | )     |      |   | 41,110  |        
|Cash flow hedge amortization                         |                 |   | (3,241                                  | )     |      |   | (2,659  | )      
|DAC amortization impact of
net adjustments above     |                 |   | (2,819                                  | )     |      |   | (676    | )      
|                                                     |                 |   |                                         |       |      |   |         |        
|                                                     | Pre-tax total   |   |                                         | 5,212 |      |   |         | (26,780 | )
|Income taxes                                         |                 |   | (1,824                                  | )     |      |   | 9,373   |        
|                                                     |                 |   |                                         |       |      |   |         |        
|                                                     | After-tax total |   | $                                       | 3,388 |      |   | $       | (17,407 | )
|                                                     |                 |   |                                         |       |      |   |         |        

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(5) NOTES PAYABLE

Notes payable consist of the following:

|                                                                                                               |  |                  |         |              |  |   |         | 
|-------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | ------------ |  | - | ------- | 
|                                                                                                               |  | September 30,    |         | December 31,
|                                                                                                               |  | 2003             |         | 2002        
|                                                                                                               |  |                  |         |             
|                                                                                                               |  | ($ in thousands)
|Federal Home Loan Bank community investment
long-term advances maturing at various dates
through June 12, 2012 |  | $                | 13,475  |              |  | $ | 13,871  | 
|OCEANs due on March 6, 2032                                                                                    |  |                  | 187,350 |              |  |   | 186,233 | 
|PRIDES notes (A)                                                                                               |  |                  | 143,750 |              |  |   |        | 
|Senior notes bearing interest at 6.95%
due June, 2005                                                          |  |                  | 125,000 |              |  |   | 125,000 | 
|Revolving credit agreement                                                                                     |  |                  | 10,000  |              |  |   | 113,000 | 
|Surplus notes bearing interest at 8.66% due on
April 11, 2011                                                  |  |                  | 25,000  |              |  |   | 25,000  | 
|AmerUs Capital I 8.85 % Capital
Securities Series A due February 1, 2027                                       |  |                  | 48,095  |              |  |   | 48,095  | 
|AmerUs Capital II 7.00 % Quarterly
Income Preferred Securities due July 27, 2003                               |  |                  |        |              |  |   | 154     | 
|                                                                                                               |  |                  |         |              |  |   |         | 
|                                                                                                               |  | $                | 552,670 |              |  | $ | 511,353 | 
|                                                                                                               |  |                  |         |              |  |   |         | 

(A)  On May 28, 2003, the Company issued $125.0 million of PRIDES which were
registered on Form S-3 filed with the Securities and Exchange Commission. On
June 5, 2003, the underwriters exercised their over-allotment option in full
and the Company issued an additional $18.8 million of PRIDES. The PRIDES
initially consist of a $25 senior note and a contract requiring the holder to
purchase the Companys common stock. The note has a minimum term of 4.75
years, which may be extended by the Company in certain circumstances. The
PRIDES have quarterly payments of interest at an annual rate of 5.5 percent and
quarterly contract adjustment payments at an annual rate of 0.75 percent, both
payable on February 16, May 16, August 16 and November 16 of each year,
commencing August 16, 2003. Under the purchase contract, holders of each
contract are required to purchase the Companys common stock on the settlement
date of August 16, 2006 based on a specified settlement rate, which will vary
according to the applicable market value of the Companys common stock at the
settlement date. The value of the common stock to be issued upon settlement of
each purchase contract will not exceed $25, the stated value of the PRIDES,
unless the applicable market value of the Companys common stock (which is
measured by the common stock price over a 20-day trading day period) increases
to more than $33.80 per share. The present value of the contract adjustment
payment, amounting to $2.9 million, has been reflected as an other liability
with a corresponding charge to additional paid-in capital. Subsequent contract
adjustment payments will be allocated between the liability and interest
expense based on a constant rate over the life of the PRIDES. Expenses
incurred with the offering were allocated between

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the senior notes and the purchase contracts. The expenses allocated to the
senior notes, amounting to $0.8 million, have been capitalized and will be
recognized as interest expense over the term of the notes. The amount
allocated to the purchase contracts, totaling $4.4 million, was charged to
additional paid-in capital.

(6) FEDERAL INCOME TAXES

The effective income tax rate for the three months and nine months ending
September 30, 2003 and 2002, respectively, varied from the prevailing corporate
rate primarily as a result of tax-exempt income and a dividends received
deduction in 2003 and non-deductible demutualization costs, low income housing
and rehabilitation credits, and tax-exempt income in 2002.

(7) RESTRUCTURING CHARGES

During the third quarter of 2001, the Company began consolidating various
functions in connection with a restructuring of its protection products and
accumulation products operations and investment activities. The objective of
the restructuring plan is to eliminate duplicative functions for all business
units and to reduce ongoing costs. Corporate administrative functions are being
transitioned so they are performed primarily in Des Moines, Iowa. Protection
products administrative processes are being transitioned so they are performed
primarily in Des Moines; Woodbury, New York; or outsourced. Accumulation
products functions have been transitioned so they are primarily performed in
Topeka, Kansas. Investment activities have been restructured to eliminate
certain real estate management services which have been outsourced.

The Company has listed its office building located in Indianapolis,
Indiana, with a real estate broker. During the second quarter of 2003, the
Company began to substantially vacate this location as a result of staff
reductions. In addition, the Company also selected a new location in the
second quarter of 2003 for those employees who are going to continue to work in
Indianapolis. Most of the remaining Indianapolis employees moved to the new
space during August 2003. On June 30, 2003, the Company determined that the
plan of sale criteria in SFAS 144, Accounting for the Impairment or Disposal
of Long-Lived Assets, had been met. Accordingly, the carrying value of the
building was adjusted to its fair value less costs to sell, amounting to $15.5
million, which was based upon comparable properties recently marketed in
Indianapolis. The resulting $7.7 million pre-tax impairment loss was recorded
as restructuring cost in the consolidated statement of income during the second
quarter of 2003. The carrying value of the building that is held for sale is
included in the other assets line item of the consolidated balance sheet.

During the second quarter of 2003, the Company initiated and executed a
restructuring plan to merge one of its subsidiaries, IL Annuity, into its
parent, ILIC. The merger was effective June 30, 2003 and total restructuring
costs associated with this plan amounted to $2.5 million pre-tax, which
primarily consisted of legal, accounting, and printing costs and the write off
of $2.2 million of insurance licenses.

Restructuring charges have been included as a separate item in the
consolidated statement of income and include severance and termination benefits
for additional benefits provided to previously terminated individuals during
the first nine months of 2003 and benefits associated with the elimination of
approximately 90 positions for the nine months ended September 30, 2002. The
other costs in the nine months ended September 30, 2003, primarily related to
the impairment loss on the Indianapolis office building, expenses associated
with the merger of IL Annuity into ILIC, and systems conversion costs. Other
costs in the nine months ended September 30, 2002, primarily consisted of
systems conversion and relocation of employees. A summary of the pre-tax
restructuring charges are as follows:

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|                                   |  |                  |       |        |  |             |        |             |  |               |      |          |  |            |         |   |  |   |       | 
|---------------------------------- |  | ---------------- | ----- | ------ |  | ----------- | ------ | ----------- |  | ------------- | ---- | -------- |  | ---------- | ------- | - |  | - | ----- | 
|                                   |  | Accrual at       |       |        |  |             |        |             |  |               |      | Payments |  | Accrual at
|                                   |  | December 31,     |       | 2003   |  | Other       |        | and         |  | September 30,
|                                   |  | 2002             |       | Charge |  | Adjustments |        | Write-downs |  | 2003         
|                                   |  |                  |       |        |  |             |        |             |  |              
|                                   |  | ($ in thousands)
|Severance and termination benefits |  | $                | 5,133 |        |  | $           | 1,062  |             |  | $             | (381 | )        |  | $          | (3,875  | ) |  | $ | 1,939 | 
|Other costs                        |  |                  | 1,012 |        |  |             | 16,795 |             |  |               | (61  | )        |  |            | (17,501 | ) |  |   | 245   | 
|                                   |  |                  |       |        |  |             |        |             |  |               |      |          |  |            |         |   |  |   |       | 
|                                   |  | $                | 6,145 |        |  | $           | 17,857 |             |  | $             | (442 | )        |  | $          | (21,376 | ) |  | $ | 2,184 | 
|                                   |  |                  |       |        |  |             |        |             |  |               |      |          |  |            |         |   |  |   |       | 

|                                   |  |                  |       |        |  |             |        |          |  |               |      |   |  |   |         |            |  |   |       | 
|---------------------------------- |  | ---------------- | ----- | ------ |  | ----------- | ------ | -------- |  | ------------- | ---- | - |  | - | ------- | ---------- |  | - | ----- | 
|                                   |  | Accrual at       |       |        |  |             |        |          |  |               |      |   |  |   |         | Accrual at
|                                   |  | December 31,     |       | 2002   |  | Other       |        | Cash     |  | September 30,
|                                   |  | 2001             |       | Charge |  | Adjustments |        | Payments |  | 2002         
|                                   |  |                  |       |        |  |             |        |          |  |              
|                                   |  | ($ in thousands)
|Severance and termination benefits |  | $                | 2,065 |        |  | $           | 5,627  |          |  | $             | (151 | ) |  | $ | (5,876  | )          |  | $ | 1,665 | 
|Other costs                        |  |                  | 36    |        |  |             | 5,542  |          |  |               | (238 | ) |  |   | (4,207  | )          |  |   | 1,133 | 
|                                   |  |                  |       |        |  |             |        |          |  |               |      |   |  |   |         |            |  |   |       | 
|                                   |  | $                | 2,101 |        |  | $           | 11,169 |          |  | $             | (389 | ) |  | $ | (10,083 | )          |  | $ | 2,798 | 
|                                   |  |                  |       |        |  |             |        |          |  |               |      |   |  |   |         |            |  |   |       | 

Additional charges will be incurred for continuing restructuring
activities primarily involving severance or relocation benefits for affected
employees and various administrative, financial, and actuarial system
conversion costs. Expenditures for all restructuring activities are expected
to be completed by the fourth quarter of 2003.

(8) COMMITMENTS AND CONTINGENCIES

In recent years, the life insurance industry, including the Company and
its subsidiaries, have been subject to an increase in litigation pursued on
behalf of purported classes of insurance purchasers, questioning the conduct of
insurers in the marketing of their products. The Company is often involved in
litigation and other proceedings, including class actions, reinsurance claims
and regulatory proceedings, arising in the ordinary course of its business.
Some of these claims and legal actions are in jurisdictions where juries are
given substantial latitude in assessing damages, including punitive damages.
Although no assurances can be given and no determinations can be made at this
time, the Company believes that the ultimate liability, if any, with respect to
these claims and legal actions, would have no material effect on its results of
operations and financial position.

(9) OPERATING SEGMENTS

The Company has two operating segments: Protection Products and
Accumulation Products. Products generally distinguish a segment. A brief
description of each segment follows:

Protection Products. The primary product offerings consist of
interest-sensitive whole life, term life, universal life and equity-indexed
life insurance policies. These products are marketed on a national basis
primarily through a Preferred Producer agency system, a Personal Producing
General Agent (PPGA) distribution system and Independent Marketing
Organizations (IMOs).

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Accumulation Products. The primary product offerings consist of
traditional fixed annuities and equity-indexed annuities, marketed on a
national basis primarily through IMOs and independent brokers, and insurance
contracts issued through funding agreements.

The Company uses the same accounting policies and procedures to measure
operating segment income and assets as it uses to measure its consolidated
income from operations and assets with the exception of the elimination of
certain items which management believes are not necessarily indicative of
overall operating trends. These items are shown between adjusted pre-tax
operating income and income from continuing operations on the following
operating segment tables and are as follows:



| | 1) |  | Realized gains and losses on open block investments.                                                                
| | -- |  | --------------------------------------------------------------------------------------------------------------------
|
| | 2) |  | Market value changes and amortization of assets and
liabilities associated with the accounting derivatives, such as:



| |  |  | Unrealized gains and losses on open block options and
securities held for trading.                                
| | - |  | ------------------------------------------------------------------------------------------------------------------
|
| |  |  | Change in option value of equity-indexed products and
market value adjustments on total return strategy annuities.
|
| |  |  | Cash flow hedge amortization.                                                                                     



| | 3) |  | Amortization of deferred policy acquisition costs (DAC) and
value of business acquired (VOBA) related to the realized gains and
losses on the open block investments and the derivative adjustments.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 4) |  | Demutualization costs.                                                                                                                                                                              
|
| | 5) |  | Restructuring costs.                                                                                                                                                                                
|
| | 6) |  | Non-recurring reinsurance adjustments.                                                                                                                                                              
|
| | 7) |  | Other income from non-insurance operations.                                                                                                                                                         

These items will fluctuate from period to period depending on the
prevailing interest rate and economic environment, or are not continuing in
nature, or are not part of the core insurance operations. As a result,
management believes they do not reflect the ongoing earnings capacity of the
Companys operating segments.

Premiums, product charges, policyowner benefits, insurance expenses,
amortization of DAC and VOBA and dividends to policyowners are attributed
directly to each operating segment. Net investment income and closed block
realized gains and losses on investments are allocated based on
directly-related assets required for transacting the business of that segment.
Other revenues and benefits and expenses which are deemed not to be associated
with any specific segment are grouped together in the All Other category.
These items primarily consist of holding company revenues and expenses and the
operations of the Companys real estate management subsidiary.

Assets are segmented based on policy liabilities directly attributable to
each segment. There are no significant intersegment transactions.
Depreciation and amortization, excluding amortization of DAC and VOBA as
previously discussed, are not significant. There have been no material changes
in segment assets since December 31, 2002.

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Operating Segment Income
($ in thousands)
(unaudited)

|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       |         |        | 
|----------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- | ---------- | - | ------------------------------------- | - | ------------ | - | --------- | - | ------------ | - | ----- | - | ------- | ----- | ------- | ------ | 
|                                                |  |                                                                                                                   |            |   | Three Months Ended September 30, 2003
|                                                |  |                                                                                                                   |            |   |                                      
|                                                |  |                                                                                                                   |            |   | Protection                            |   | Accumulation |   |           |   |              |   | Total
|                                                |  |                                                                                                                   |            |   | Products                              |   | Products     |   | All Other |   | Consolidated
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |             
|Revenues:                                       |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      
|                                                |  | Insurance premiums                                                                                                |            | $ | 62,640                                |   |              | $ | 1,482     |   |              | $ | 233   |   |         | $     | 64,355  |       
|                                                |  | Product charges                                                                                                   |            |   | 28,770                                |   |              |   | 11,864    |   |              |   |      |   |         |       | 40,634  |       
|                                                |  | Net investment income                                                                                             |            |   | 76,412                                |   |              |   | 166,355   |   |              |   | 1,511 |   |         |       | 244,278 |       
|                                                |  | Realized gains (losses) on closed block investments                                                               |            |   | 3,915                                 |   |              |   |          |   |              |   |      |   |         |       | 3,915   |       
|                                                |  | Other income                                                                                                      |            |   | 1,037                                 |   |              |   | 15,549    |   |              |   | 169   |   |         |       | 16,755  |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       |         |       
|                                                |  |                                                                                                                   | 172,774    |   |                                       |   | 195,250      |   |           |   | 1,913        |   |       |   | 369,937 |      
|Benefits and expenses:                          |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      
|                                                |  | Policyowner benefits                                                                                              |            |   | 85,628                                |   |              |   | 114,015   |   |              |   | (704  | ) |         |       | 198,939 |       
|                                                |  | Underwriting, acquisition, and other expenses                                                                     |            |   | 17,608                                |   |              |   | 19,537    |   |              |   | 3,589 |   |         |       | 40,734  |       
|                                                |  | Amortization of DAC and VOBA, net of
open block gain/loss adjustment of $2,347                                    |            |   | 18,938                                |   |              |   | 26,495    |   |              |   |      |   |         |       | 45,433  |       
|                                                |  | Dividends to policyowners                                                                                         |            |   | 22,016                                |   |              |   |          |   |              |   |      |   |         |       | 22,016  |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       |         |       
|                                                |  |                                                                                                                   | 144,190    |   |                                       |   | 160,047      |   |           |   | 2,885        |   |       |   | 307,122 |      
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       |         |       
|Adjusted pre-tax operating income               |  | $                                                                                                                 | 28,584     |   |                                       | $ | 35,203       |   |           | $ | (972         | ) |       |   | 62,815  |      
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      
|                                                |  | Realized gains (losses) on open block investments                                                                 |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       | 5,855   |       
|                                                |  | Unrealized gains (losses) on open block options and
trading investments                                           |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       | (1,228  | )     
|                                                |  | Change in option value of equity-indexed
products and market value adjustments
on total return strategy annuities |            |   |                                       |   |              |   |           |   |              |   |       |   |         | 4,682 |        
|                                                |  | Cash flow hedge amortization                                                                                      |            |   |                                       |   |              |   |           |   |              |   |       |   |         | (763  | )      
|                                                |  | Amortization of DAC and VOBA due to open
block gains and losses                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       | (2,347  | )     
|                                                |  | Restructuring costs                                                                                               |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       | (1,551  | )     
|                                                |  | Other income from non-insurance operations                                                                        |            |   |                                       |   |              |   |           |   |              |   |       |   |         |       | 1,002   |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      
|Income before interest and income tax (expense) |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   | 68,465  |      
|Interest (expense)                              |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   | (7,864  | )    
|Income tax (expense)                            |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   | (19,766 | )    
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      
|                                                |  |                                                                                                                   | Net income |   |                                       |   |              |   |           |   |              |   |       |   |         |       | $       | 40,835 | 
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |   |         |      

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##### Table of Contents



Operating Segment Income
($ in thousands)
(unaudited)

|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   |         |        | 
|----------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- | ---------- | - | ------------------------------------- | - | ------------ | - | --------- | - | ------------ | - | ----- |  | ------- | - | ------- | ------ | 
|                                                |  |                                                                                                                   |            |   | Three Months Ended September 30, 2002
|                                                |  |                                                                                                                   |            |   |                                      
|                                                |  |                                                                                                                   |            |   | Protection                            |   | Accumulation |   |           |   |              |   | Total
|                                                |  |                                                                                                                   |            |   | Products                              |   | Products     |   | All Other |   | Consolidated
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |             
|Revenues:                                       |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  
|                                                |  | Insurance premiums                                                                                                |            | $ | 77,736                                |   |              | $ | 2,958     |   |              | $ | 232   |  |         | $ | 80,926  |       
|                                                |  | Product charges                                                                                                   |            |   | 26,509                                |   |              |   | 10,545    |   |              |   |      |  |         |   | 37,054  |       
|                                                |  | Net investment income                                                                                             |            |   | 84,202                                |   |              |   | 171,398   |   |              |   | 1,132 |  |         |   | 256,732 |       
|                                                |  | Realized gains (losses) on closed block investments                                                               |            |   | (1,126                                | ) |              |   |          |   |              |   |      |  |         |   | (1,126  | )     
|                                                |  | Other income                                                                                                      |            |   | 1,068                                 |   |              |   | 16,521    |   |              |   | 773   |  |         |   | 18,362  |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   |         |       
|                                                |  |                                                                                                                   | 188,389    |   |                                       |   | 201,422      |   |           |   | 2,137        |   |       |  | 391,948 |  
|Benefits and expenses:                          |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  
|                                                |  | Policyowner benefits                                                                                              |            |   | 100,876                               |   |              |   | 127,068   |   |              |   | 538   |  |         |   | 228,482 |       
|                                                |  | Underwriting, acquisition, and other expenses                                                                     |            |   | 17,722                                |   |              |   | 17,422    |   |              |   | 3,341 |  |         |   | 38,485  |       
|                                                |  | Amortization of DAC and VOBA, net of
open block gain/loss adjustment of $4,616                                    |            |   | 15,287                                |   |              |   | 24,618    |   |              |   |      |  |         |   | 39,905  |       
|                                                |  | Dividends to policyowners                                                                                         |            |   | 24,377                                |   |              |   |          |   |              |   |      |  |         |   | 24,377  |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   |         |       
|                                                |  |                                                                                                                   | 158,262    |   |                                       |   | 169,108      |   |           |   | 3,879        |   |       |  | 331,249 |  
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   |         |       
|Adjusted pre-tax operating income               |  | $                                                                                                                 | 30,127     |   |                                       | $ | 32,314       |   |           | $ | (1,742       | ) |       |  | 60,699  |  
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  
|                                                |  | Realized gains (losses) on open block investments                                                                 |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | (10,506 | )     
|                                                |  | Unrealized gains (losses) on open block options and
trading investments                                           |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | (10,319 | )     
|                                                |  | Change in option value of equity-indexed
products and market value adjustments
on total return strategy annuities |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | 5,242   |       
|                                                |  | Cash flow hedge amortization                                                                                      |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | (1,961  | )     
|                                                |  | Amortization of DAC and VOBA due to open
block gains and losses                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | 4,616   |       
|                                                |  | Demutualization costs                                                                                             |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | (722    | )     
|                                                |  | Restructuring costs                                                                                               |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | (2,569  | )     
|                                                |  | Other income from non-insurance operations                                                                        |            |   |                                       |   |              |   |           |   |              |   |       |  |         |   | 2,272   |       
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  
|Income before interest and income tax (expense) |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  | 46,752  |  
|Interest (expense)                              |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  | (6,414  | )
|Income tax (expense)                            |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  | (13,848 | )
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  
|                                                |  |                                                                                                                   | Net income |   |                                       |   |              |   |           |   |              |   |       |  |         |   | $       | 26,490 | 
|                                                |  |                                                                                                                   |            |   |                                       |   |              |   |           |   |              |   |       |  |         |  

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##### Table of Contents



Operating Segment Income
($ in thousands)
(unaudited)

|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   |         |         | 
|----------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- | ---------- | - | ------------------------------------ | - | ------------ | - | --------- | - | ------------ | - | ------ | - | --------- | - | ------- | ------- | 
|                                                |  |                                                                                                                   |            |   | Nine Months Ended September 30, 2003
|                                                |  |                                                                                                                   |            |   |                                     
|                                                |  |                                                                                                                   |            |   | Protection                           |   | Accumulation |   |           |   |              |   | Total 
|                                                |  |                                                                                                                   |            |   | Products                             |   | Products     |   | All Other |   | Consolidated
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |             
|Revenues:                                       |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  
|                                                |  | Insurance premiums                                                                                                |            | $ | 219,313                              |   |              | $ | 3,724     |   |              | $ | 980    |   |           | $ | 224,017 |        
|                                                |  | Product charges                                                                                                   |            |   | 104,912                              |   |              |   | 31,256    |   |              |   |       |   |           |   | 136,168 |        
|                                                |  | Net investment income                                                                                             |            |   | 240,863                              |   |              |   | 504,212   |   |              |   | 6,023  |   |           |   | 751,098 |        
|                                                |  | Realized gains (losses) on closed block investments                                                               |            |   | 11,259                               |   |              |   |          |   |              |   |       |   |           |   | 11,259  |        
|                                                |  | Other income                                                                                                      |            |   | 3,083                                |   |              |   | 45,962    |   |              |   | 700    |   |           |   | 49,745  |        
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   |         |        
|                                                |  |                                                                                                                   | 579,430    |   |                                      |   | 585,154      |   |           |   | 7,703        |   |        |   | 1,172,287 |  
|Benefits and expenses:                          |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  
|                                                |  | Policyowner benefits                                                                                              |            |   | 278,909                              |   |              |   | 363,390   |   |              |   | (814   | ) |           |   | 641,485 |        
|                                                |  | Underwriting, acquisition, and other expenses                                                                     |            |   | 59,224                               |   |              |   | 52,251    |   |              |   | 11,224 |   |           |   | 122,699 |        
|                                                |  | Amortization of DAC and VOBA, net of
open block gain/loss adjustment of $12,800                                   |            |   | 59,421                               |   |              |   | 75,534    |   |              |   |       |   |           |   | 134,955 |        
|                                                |  | Dividends to policyowners                                                                                         |            |   | 86,330                               |   |              |   |          |   |              |   |       |   |           |   | 86,330  |        
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   |         |        
|                                                |  |                                                                                                                   | 483,884    |   |                                      |   | 491,175      |   |           |   | 10,410       |   |        |   | 985,469   |  
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   |         |        
|Adjusted pre-tax operating income               |  | $                                                                                                                 | 95,546     |   |                                      | $ | 93,979       |   |           | $ | (2,707       | ) |        |   | 186,818   |  
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  
|                                                |  | Realized gains (losses) on open block investments                                                                 |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | 30,307  |        
|                                                |  | Unrealized gains (losses) on open block options and
trading investments                                           |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | 33,799  |        
|                                                |  | Change in option value of equity-indexed
products and market value adjustments
on total return strategy annuities |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | (22,527 | )      
|                                                |  | Cash flow hedge amortization                                                                                      |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | (3,241  | )      
|                                                |  | Amortization of DAC and VOBA due to open
block gains and losses                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | (12,800 | )      
|                                                |  | Non-recurring reinsurance adjustments                                                                             |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | 3,854   |        
|                                                |  | Restructuring costs                                                                                               |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | (17,415 | )      
|                                                |  | Other income from non-insurance operations                                                                        |            |   |                                      |   |              |   |           |   |              |   |        |   |           |   | 3,328   |        
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  
|Income before interest and income tax (expense) |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   | 202,123   |  
|Interest (expense)                              |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   | (22,238   | )
|Income tax (expense)                            |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   | (59,545   | )
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  
|                                                |  |                                                                                                                   | Net income |   |                                      |   |              |   |           |   |              |   |        |   |           |   | $       | 120,340 | 
|                                                |  |                                                                                                                   |            |   |                                      |   |              |   |           |   |              |   |        |   |           |  

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##### Table of Contents



Operating Segment Income
($ in thousands)
(unaudited)

|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |         |        | 
|----------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ---------- | ------- | ------------------------------------ | - | ------------ | ------- | --------- |  | ------------ | ------ | ------ |  |  | --------- | ------- | ------ | 
|                                                |                                                                                                                   |            |         | Nine Months Ended September 30, 2002
|                                                |                                                                                                                   |            |         |                                     
|                                                |                                                                                                                   |            |         | Protection                           |   | Accumulation |         |           |  |              |        | Total 
|                                                |                                                                                                                   |            |         | Products                             |   | Products     |         | All Other |  | Consolidated
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |             
|Revenues:                                       |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        
|                                                | Insurance premiums                                                                                                |            | $       | 256,430                              |   |              | $       | 5,767     |  |              | $      | 1,065  |  |  | $         | 263,262 |       
|                                                | Product charges                                                                                                   |            |         | 79,826                               |   |              |         | 31,284    |  |              |        |       |  |  |           | 111,110 |       
|                                                | Net investment income                                                                                             |            |         | 248,044                              |   |              |         | 496,286   |  |              |        | 4,069  |  |  |           | 748,399 |       
|                                                | Realized gains (losses) on closed block investments                                                               |            |         | (1,880                               | ) |              |         |          |  |              |        |       |  |  |           | (1,880  | )     
|                                                | Other income                                                                                                      |            |         | 3,013                                |   |              |         | 44,962    |  |              |        | 2,325  |  |  |           | 50,300  |       
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |         |       
|                                                |                                                                                                                   |            | 585,433 |                                      |   |              | 578,299 |           |  |              | 7,459  |        |  |  | 1,171,191 |        
|Benefits and expenses:                          |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        
|                                                | Policyowner benefits                                                                                              |            |         | 310,910                              |   |              |         | 369,461   |  |              |        | 1,728  |  |  |           | 682,099 |       
|                                                | Underwriting, acquisition, and other expenses                                                                     |            |         | 63,003                               |   |              |         | 48,810    |  |              |        | 10,463 |  |  |           | 122,276 |       
|                                                | Amortization of DAC and VOBA, net of
open block gain/loss adjustment of $9,902                                    |            |         | 44,126                               |   |              |         | 69,228    |  |              |        |       |  |  |           | 113,354 |       
|                                                | Dividends to policyowners                                                                                         |            |         | 72,000                               |   |              |         |          |  |              |        |       |  |  |           | 72,000  |       
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |         |       
|                                                |                                                                                                                   |            | 490,039 |                                      |   |              | 487,499 |           |  |              | 12,191 |        |  |  | 989,729   |        
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |         |       
|Adjusted pre-tax operating income               |                                                                                                                   | $          | 95,394  |                                      |   | $            | 90,800  |           |  | $            | (4,732 | )      |  |  | 181,462   |        
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        
|                                                | Realized gains (losses) on open block investments                                                                 |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | (56,139 | )     
|                                                | Unrealized gains (losses) on open block options and
trading investments                                           |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | (64,555 | )     
|                                                | Change in option value of equity-indexed
products and market value adjustments
on total return strategy annuities |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | 41,110  |       
|                                                | Cash flow hedge amortization                                                                                      |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | (2,659  | )     
|                                                | Amortization of DAC and VOBA due to open
block gains and losses                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | 9,902   |       
|                                                | Demutualization costs                                                                                             |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | (1,186  | )     
|                                                | Restructuring costs                                                                                               |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | (10,780 | )     
|                                                | Other income from non-insurance operations                                                                        |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           | 3,268   |       
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        
|Income before interest and income tax (expense) |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  | 100,423   |        
|Interest (expense)                              |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  | (18,778   | )      
|Income tax (expense)                            |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  | (25,978   | )      
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        
|                                                |                                                                                                                   | Net income |         |                                      |   |              |         |           |  |              |        |        |  |  |           | $       | 55,667 | 
|                                                |                                                                                                                   |            |         |                                      |   |              |         |           |  |              |        |        |  |  |           |        

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##### Table of Contents



(10) EMERGING ACCOUNTING MATTERS

In February 2003, the Financial Accounting Standards Boards Derivatives
Implementation Group issued SFAS 133 Implementation Issue No. B36, Embedded
Derivatives: Bifurcation of a Debt Instrument that Incorporates both Interest
Rate Risk and Credit Risk Exposures that are Unrelated or Only Partially
Related to the Creditworthiness of the Issuer of that Instrument, or DIG Issue
B36. DIG Issue B36 applies to modified coinsurance and coinsurance funds
withheld reinsurance agreements where interest is determined by reference to a
pool of fixed maturity assets or a total return debt index. Such arrangements
in which funds are withheld by the ceding insurer cause the reinsurer to
recognize a receivable from the ceding insurer as well as a liability
representing reserves for the insurance coverage assumed under the reinsurance
arrangements. The terms of the reinsurers receivable provide for the future
payment of principal plus a rate of return on either its general account assets
or a specified block of those assets which is typically composed of fixed-rate
debt securities. DIG Issue B36 considers the reinsurers receivable from the
ceding company to contain an embedded derivative that must be bifurcated and
accounted for separately under SFAS 133. DIG Issue B36 is effective for
quarters beginning after September 15, 2003. The adoption of DIG Issue B36
will not have a material effect on the consolidated financial statements upon
adoption on October 1, 2003.

The Financial Accounting Standards Board has deferred the effective date
for applying provisions of Financial Accounting Standards Board Interpretation
No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB
No. 51, (FIN 46) for interests in variable interest entities (VIEs) acquired
before February 1, 2003. The initial application date is delayed until the end
of the period ending after December 15, 2003, to allow time for certain
implementation issues to be addressed through modification of FIN 46. The
Company owns an investment in a trust, which has issued trust preferred
securities. The trust meets the definition of a VIE and analysis is continuing
to determine the appropriate primary beneficiary and related accounting. If
the Company was not considered the primary beneficiary of the trust, the trust
would no longer be consolidated. At September 30, 2003, non-consolidation of
the trust and removal of related intercompany eliminations would result in
increases of approximately $3 million to other invested assets and to notes
payable. It is anticipated that there would be no effect to stockholders
equity or net income upon adoption of FIN 46 as the Company intends to apply
the provisions on a prospective basis.

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Item 2. Managements Discussion And Analysis Of Financial Condition And Results Of Operations

The following analysis of the consolidated results of operations and
financial condition of AmerUs Group Co. should be read in conjunction with the
consolidated financial statements and related notes.

Results of Operation

We are a holding company whose subsidiaries are primarily engaged in the
business of marketing, underwriting and distributing a broad range of
individual life, annuity and insurance deposit products to individuals and
businesses in 50 states, the District of Columbia and the U.S. Virgin Islands.
We have two reportable operating segments: protection products and accumulation
products. The primary offerings of the protection products segment are
interest-sensitive whole life, term life, universal life and equity-indexed
life insurance policies. The primary offerings of the accumulation products
segment are individual fixed annuities and funding agreements.

FINANCIAL HIGHLIGHTS

Our financial highlights are as follows:

|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |        |         | 
|--------------------------------- | --------------------- | -------------------------------------- | ------ | ---------------------------------------- | ------ | --------------------------------------- | ------ | ----------------------------------- | ------ | ---- | ------ | ------- | ------- | - | ------- | ------ | ------- | 
|                                  |                       |                                        |        | For The Three Months Ended September 30, |        | For The Nine Months Ended September 30,
|                                  |                       |                                        |        | 2003                                     |        | 2002                                    |        | 2003                                |        | 2002
|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |     
|                                  |                       |                                        |        |                                          |        |                                         |        | ($ in thousands, except share data) |        |      |        |        
|Segment pre-tax operating income: |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |       
|                                  | Protection Products   |                                        | $      | 28,584                                   |        |                                         | $      | 30,127                              |        |      | $      | 95,546  |         |   | $       | 95,394 |        
|                                  | Accumulation Products |                                        |        | 35,203                                   |        |                                         |        | 32,314                              |        |      |        | 93,979  |         |   |         | 90,800 |        
|                                  | Other operations      |                                        |        | (972                                     | )      |                                         |        | (1,742                              | )      |      |        | (2,707  | )       |   |         | (4,732 | )      
|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |        |        
|                                  |                       | Total segment pre-tax operating income |        |                                          | 62,815 |                                         |        |                                     | 60,699 |      |        |         | 186,818 |   |         |        | 181,462 | 
|Non-segment expense, net (A)      |                       |                                        | 21,980 |                                          |        |                                         | 34,209 |                                     |        |      | 66,478 |         |         |   | 125,795 |       
|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |        |        
|                                  | Net income            |                                        | $      | 40,835                                   |        |                                         | $      | 26,490                              |        |      | $      | 120,340 |         |   | $       | 55,667 |        
|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |        |        
|Diluted earnings per share        |                       | $                                      | 1.03   |                                          |        | $                                       | 0.66   |                                     |        | $    | 3.05   |         |         | $ | 1.36    |       
|                                  |                       |                                        |        |                                          |        |                                         |        |                                     |        |      |        |         |         |   |         |        |        

|                     |  |               |            |              |  |   |            | 
|-------------------- |  | ------------- | ---------- | ------------ |  | - | ---------- | 
|                     |  | September 30, |            | December 31,
|                     |  | 2003          |            | 2002        
|                     |  |               |            |             
|Total assets         |  | $             | 21,839,901 |              |  | $ | 20,293,665 | 
|Stockholders equity |  | $             | 1,411,784  |              |  | $ | 1,262,948  | 



| | (A) |  | Non-segment expense, net consists primarily of open block gains and
losses, derivative related market value adjustments,
non-insurance operations, non-recurring reinsurance adjustments,
restructuring costs, interest expense, and income taxes.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating segment income decreased for the protection products segment in
the third quarter of 2003 and increased slightly for the first nine months of
2003, compared to the respective periods in 2002. Lower net investment income
and the cost of a new reinsurance agreement entered into during the quarter
contributed to the decrease in our protection products pre-tax operating
segment income in the third quarter of 2003. Year-to-date, higher product
margins experienced during the first half of 2003 resulted in the increase in the nine months operating income of the protection products
segment. Operating income for the accumulation products segment increased in
the three

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months and nine months ended September 30, 2003 as compared to the
respective periods in 2002. The higher margins on equity indexed annuities and
additional income from funding agreements increased accumulation products
segment earnings in 2003.

Net income increased in the 2003 periods compared to the respective 2002
periods primarily due to increased realized gains on open block investments and
increased net unrealized gains from SFAS 133 related market value adjustments
on trading securities, derivatives and certain equity-indexed contracts.

Total assets increased $1.5 billion during the first nine months of 2003
primarily as a result of additional invested assets under management and the
utilization of securities lending arrangements and dollar-roll repurchase
investment transactions.

Stockholders equity increased $148.8 million for the first nine months of
2003 primarily as a result of year-to-date net income of $120.3 million and the
increase in accumulated other comprehensive income for unrealized investment
gains of $25.7 million.

PROTECTION PRODUCTS

Our protection products segment primarily consists of interest-sensitive
whole life, term life, universal life and equity-indexed life insurance
policies. These products are marketed on a national basis primarily through a
Preferred Producer agency system, PPGA distribution system and IMOs. Included
in protection products is the closed block of ALIC and the closed block of
ILIC, established when the companies reorganized from mutual companies to stock
companies. When protection products are sold, we invest the premiums we
receive in our investment portfolio and establish a liability representing our
commitment to the policyholder. We manage investment spread by seeking to
maximize the return on these invested assets, consistent with our
asset/liability and credit quality needs. We enter into reinsurance
arrangements in order to reduce the effects of mortality risk and the statutory
capital strain from writing new business. All income statement line items are
presented net of reinsurance amounts. Protection products in force totaled
$84.1 billion at September 30, 2003 and $80.6 billion at December 31, 2002.
Protection products in force is a non-GAAP financial measure utilized by
investors, analysts and the Company to assess the Companys position in the
industry. We do not believe there is a comparable GAAP financial measure. A
summary of our protection products segment operations follows:

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|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |         | 
|--------------------------------------------------------------- | -------------------------------------------------------------------- | --------------------------- | ------ | ---------------------------------------- | ------- | --------------------------------------- | ------ | ---------------- | ------- | ---- | ------ | ------- | ------- | - | ------ | ------- | ------- | 
|                                                                |                                                                      |                             |        | For The Three Months Ended September 30, |         | For The Nine Months Ended September 30,
|                                                                |                                                                      |                             |        | 2003                                     |         | 2002                                    |        | 2003             |         | 2002
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |     
|                                                                |                                                                      |                             |        |                                          |         |                                         |        | ($ in thousands) |         |      |        |        
|Revenues:                                                       |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |        
|                                                                | Insurance premiums                                                   |                             | $      | 62,640                                   |         |                                         | $      | 77,736           |         |      | $      | 219,313 |         |   | $      | 256,430 |        
|                                                                | Product charges                                                      |                             |        | 28,770                                   |         |                                         |        | 26,509           |         |      |        | 104,912 |         |   |        | 79,826  |        
|                                                                | Net investment income                                                |                             |        | 76,412                                   |         |                                         |        | 84,202           |         |      |        | 240,863 |         |   |        | 248,044 |        
|                                                                | Realized gains (losses) on closed block investments                  |                             |        | 3,915                                    |         |                                         |        | (1,126           | )       |      |        | 11,259  |         |   |        | (1,880  | )      
|                                                                | Other income                                                         |                             |        | 1,037                                    |         |                                         |        | 1,068            |         |      |        | 3,083   |         |   |        | 3,013   |        
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |        
|                                                                |                                                                      | Total revenues              |        |                                          | 172,774 |                                         |        |                  | 188,389 |      |        |         | 579,430 |   |        |         | 585,433 | 
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |        
|Benefits and expenses:                                          |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |        
|                                                                | Policyowner benefits                                                 |                             |        | 85,628                                   |         |                                         |        | 100,876          |         |      |        | 278,909 |         |   |        | 310,910 |        
|                                                                | Underwriting, acquisition and other expenses                         |                             |        | 17,608                                   |         |                                         |        | 17,722           |         |      |        | 59,224  |         |   |        | 63,003  |        
|                                                                | Amortization of DAC and VOBA, net of open block
gain/loss adjustment |                             |        | 18,938                                   |         |                                         |        | 15,287           |         |      |        | 59,421  |         |   |        | 44,126  |        
|                                                                | Dividends to policyowners                                            |                             |        | 22,016                                   |         |                                         |        | 24,377           |         |      |        | 86,330  |         |   |        | 72,000  |        
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |        
|                                                                |                                                                      | Total benefits and expenses |        |                                          | 144,190 |                                         |        |                  | 158,262 |      |        |         | 483,884 |   |        |         | 490,039 | 
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |        
|Adjusted pre-tax operating income - Protection Products segment |                                                                      | $                           | 28,584 |                                          |         | $                                       | 30,127 |                  |         | $    | 95,546 |         |         | $ | 95,394 |        
|                                                                |                                                                      |                             |        |                                          |         |                                         |        |                  |         |      |        |         |         |   |        |         |        

Adjusted pre-tax operating income from our protection products decreased
5.1% in the third quarter of 2003 and increased 0.2% in the first nine months
of 2003 compared to the respective 2002 periods. The operating income
of the closed block decreased $1.3 million in the third quarter of
2003 and $4.0 million in the first nine months of 2003, compared to
the same periods in 2002, as the closed block continues to reflect
the declining closed block glide path. Open block operating income
decreased $0.2 million in the third quarter of 2003 and increased
$4.2 million in the first nine months of 2003, compared to the
respective 2002 periods. Lower net investment income
and the cost of a new reinsurance agreement entered into during the quarter
contributed to the decrease in our open block protection products pre-tax operating
segment income in the third quarter of 2003. Year-to-date, higher product
margins experienced during the first half of 2003 resulted in the
increase in the nine months open block operating income. The key drivers of our
protection products business include sales, persistency, net investment income,
mortality and expenses.

Sales.Sales are presented as annualized premiums, which are measured in
accordance with industry practice, and represent the amount of new business
sold during the period. Sales are a non-GAAP financial measure for an insurance
company for which there is no comparable GAAP financial measure. We use sales
to measure the productivity of our distribution network and as a basis for
compensation of sales and marketing employees and agents. Sales are also a
leading indicator of future revenue trends. However, revenues are driven by
prior period sales as well as current period sales and therefore, a
reconciliation of sales to revenues would not be meaningful or determinable.
The following table summarizes annualized premiums by life insurance product:

|                                      |                               |  |                                          |        |                                         |  |                  |        |      |  |        |        |  |  |        |         | 
|------------------------------------- | ----------------------------- |  | ---------------------------------------- | ------ | --------------------------------------- |  | ---------------- | ------ | ---- |  | ------ | ------ |  |  | ------ | ------- | 
|                                      |                               |  | For The Three Months Ended September 30, |        | For The Nine Months Ended September 30,
|                                      |                               |  | 2003                                     |        | 2002                                    |  | 2003             |        | 2002
|                                      |                               |  |                                          |        |                                         |  |                  |        |     
|                                      |                               |  |                                          |        |                                         |  | ($ in thousands) |        |      |  |       
|Traditional life insurance:           |                               |  |                                          |        |                                         |  |                  |        |      |  |        |        |  |  |        |        
|                                      | Whole life                    |  | $                                        | 364    |                                         |  | $                | 1,468  |      |  | $      | 584    |  |  | $      | 3,728   | 
|                                      | Interest-sensitive whole life |  |                                          | 3,764  |                                         |  |                  | 3,427  |      |  |        | 16,602 |  |  |        | 24,913  | 
|                                      | Term life                     |  |                                          | 3,421  |                                         |  |                  | 4,246  |      |  |        | 10,761 |  |  |        | 12,761  | 
|Universal life                        |                               |  | 7,553                                    |        |                                         |  | 9,914            |        |      |  | 23,931 |        |  |  | 24,639 |        
|Equity-indexed life                   |                               |  | 11,449                                   |        |                                         |  | 9,277            |        |      |  | 36,676 |        |  |  | 30,037 |        
|                                      |                               |  |                                          |        |                                         |  |                  |        |      |  |        |        |  |  |        |         | 
|Direct first year annualized premiums |                               |  | 26,551                                   |        |                                         |  | 28,332           |        |      |  | 88,554 |        |  |  | 96,078 |        
|Private label term life premiums      |                               |  | 488                                      |        |                                         |  | 2,071            |        |      |  | 4,181  |        |  |  | 6,715  |        
|                                      |                               |  |                                          |        |                                         |  |                  |        |      |  |        |        |  |  |        |         | 
|                                      | Total                         |  | $                                        | 27,039 |                                         |  | $                | 30,403 |      |  | $      | 92,735 |  |  | $      | 102,793 | 
|                                      |                               |  |                                          |        |                                         |  |                  |        |      |  |        |        |  |  |        |         | 

Direct first year annualized premiums decreased 6.3% in the third quarter
and 7.8% on a year-to-date basis in 2003 compared to the same periods in 2002.
We continue to focus our marketing efforts on equity-indexed life products. In
the first nine months of 2003, sales of equity-indexed life products were $36.7
million as compared to

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$30.0 million for 2002. We are a leading writer of
equity-indexed life products in the United States. Sales of traditional and
universal life insurance products have declined as we have re-priced our
products and discontinued our par whole life product. In addition,
interest-sensitive whole life sales were lower in the first nine months of 2003
due to uncertainty in government tax policy and regulation.

Premiums and Product Charges.We recognize premiums on traditional life
insurance policies as revenues when the premiums are due. Amounts received as
payments for universal life and equity-indexed life insurance policies are not
recorded as premium revenue, but are instead recorded as a policyowner
liability. Revenues from the universal life and equity-indexed life policies
consist of product charges for the cost of insurance, policy administration and
policy surrender and are included on the line item product charges. All
revenue is reported net of reinsurance ceded.

Insurance premium revenue was lower in the third quarter and first nine
months of 2003 as compared to the same periods in 2002 primarily due to lower
sales of traditional products, additional premiums ceded, and a decline in
closed block in force business. Product charge revenue was higher in the third
quarter and first nine months of 2003 as compared to the same periods in 2002
due to the growth in the equity-indexed life block of business and fluctuations
in reinsurance premiums.

Persistency.Annualized lapse rates were 6.2% in the first nine months
of 2003 compared to 7.5% in the first nine months of 2002. Our persistency
experience remained within our pricing assumptions.

Net Investment Income.Net investment income decreased for the third
quarter and first nine months of 2003 as compared to the same periods a year
ago. The decrease in net investment income was a result of low interest rates
and increased prepayments of mortgage-backed securities in the third quarter of
2003. The year-to-date effective yield of the investment portfolio was 6.65%
compared to 7.17% a year ago.

Mortality and Benefit Expense.We experienced favorable mortality in the
third quarter and first nine months of 2003 as compared to the same periods a
year ago. In addition, due to the reinsurance arrangements we have put in
place over the last twelve months for mortality, policyowner benefits declined
in the third quarter and first nine months of 2003 compared to the same periods
in 2002.

Underwriting, Acquisition and Other Expenses.Expenses decreased for the
third quarter and year-to-date periods of 2003 compared to the respective
periods in 2002. The decrease was primarily due to increased reimbursement
from reinsurers of non-deferrable commission and expense allowances as more
policies are subject to reinsurance and expense changes resulting from the
restructuring activities.

Amortization of DAC and VOBA.The amortization of DAC and VOBA increased
for the third quarter and year-to-date periods of 2003 as compared to the same
periods a year ago. DAC and VOBA are generally amortized in proportion to
policy gross margins which increased in both periods of 2003 compared
to 2002, resulting in higher amortization expense.

Dividends to Policyowners.Dividend expense decreased for the third
quarter of 2003 and increased for the first nine months of 2003 compared to the
respective 2002 periods. Dividend expense includes increases or decreases to
the closed block policyholder dividend obligation liability carried on the
consolidated balance sheet. To the extent cumulative actual earnings of the
closed block exceed the cumulative expected earnings based on the actuarial
calculation at the time of formation of the closed block (which we refer to as
the closed block glide path), a policyholder dividend obligation is recorded.
The higher realized gains in both periods of 2003 as compared to 2002 increased
closed block earnings, which in turn were added to the policyholder dividend
obligation liability. Lower
investment income was experienced in the closed block which decreased
dividend expense offsetting the increase for

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realized gains for both periods.
In addition, the reinsurance adjustment related to the settlement activity of
the closed block in the second quarter of 2003 caused an increase in the
dividend expense and related policyholder dividend obligation liability for the
first nine months of 2003. See Non-Recurring Expenses section of this
discussion for additional information. As a result of this accounting
treatment, operating earnings only include the predetermined closed block glide
path.

Outlook.We expect to continue to shift our sales to higher return
products, in particular the equity-indexed life products. We also expect to
continue to realize operating efficiencies created by the restructuring of the
protection products operations and centralization of our administrative
functions.

ACCUMULATION PRODUCTS

Our accumulation products segment primary offerings consist of individual
fixed annuities and funding agreements. The fixed annuities are marketed on a
national basis primarily through IMOs and independent brokers. Similar to our
protection products segment, we invest the premiums we receive from
accumulation product deposits in our investment portfolio and establish a
liability representing our commitment to our policyowner. We manage investment
spread by seeking to maximize the return on our invested assets consistent with
our asset/liability management and credit quality needs. When appropriate, we
periodically reset the interest rates credited to our policyowner liability.
Accumulation products in force totaled $11.5 billion at September 30, 2003 and
$11.3 billion at December 31, 2002. Accumulation products in force is a
non-GAAP financial measure utilized by investors, analysts and the Company to
assess the Companys position in the industry. We do not believe there is a
comparable GAAP financial measure. A summary of our accumulation products
segment operations follows:

|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |         |         | 
|----------------------------------------------------------------- | -------------------------------------------------------------------- | --------------------------- | -------------- | ------- | ---------------------------------------- | ------- | --------------------------------------- | ------- | ---------------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | 
|                                                                  |                                                                      |                             |                |         | For The Three Months Ended September 30, |         | For The Nine Months Ended September 30,
|                                                                  |                                                                      |                             |                |         | 2003                                     |         | 2002                                    |         | 2003             |         | 2002  
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |       
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         | ($ in thousands) |         |        |         |        
|Revenues:                                                         |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |        
|                                                                  | Immediate annuity and supplementary contract premiums                |                             | $              | 1,482   |                                          |         | $                                       | 2,958   |                  |         | $      | 3,724   |         |         | $      | 5,767   |        
|                                                                  | Product charges                                                      |                             |                | 11,864  |                                          |         |                                         | 10,545  |                  |         |        | 31,256  |         |         |        | 31,284  |        
|                                                                  | Net investment income                                                |                             |                | 166,355 |                                          |         |                                         | 171,398 |                  |         |        | 504,212 |         |         |        | 496,286 |        
|                                                                  | Other income                                                         |                             |                | 2,898   |                                          |         |                                         | 2,938   |                  |         |        | 8,753   |         |         |        | 8,741   |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|                                                                  |                                                                      |                             | Total revenues |         |                                          | 182,599 |                                         |         |                  | 187,839 |        |         |         | 547,945 |        |         |         | 542,078 | 
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|Benefits and expenses:                                            |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |        
|                                                                  | Policyowner benefits                                                 |                             |                | 114,015 |                                          |         |                                         | 127,068 |                  |         |        | 363,390 |         |         |        | 369,461 |        
|                                                                  | Underwriting, acquisition and other expenses                         |                             |                | 9,401   |                                          |         |                                         | 8,394   |                  |         |        | 22,536  |         |         |        | 23,826  |        
|                                                                  | Amortization of DAC and VOBA, net of open block
gain/loss adjustment |                             |                | 26,495  |                                          |         |                                         | 24,618  |                  |         |        | 75,534  |         |         |        | 69,228  |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|                                                                  |                                                                      | Total benefits and expenses |                |         | 149,911                                  |         |                                         |         | 160,080          |         |        |         | 461,460 |         |        |         | 462,515 |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|IMO operations:                                                   |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |        
|                                                                  | Other income                                                         |                             |                | 12,651  |                                          |         |                                         | 13,583  |                  |         |        | 37,209  |         |         |        | 36,221  |        
|                                                                  | Other expenses                                                       |                             |                | 10,136  |                                          |         |                                         | 9,028   |                  |         |        | 29,715  |         |         |        | 24,984  |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|                                                                  |                                                                      | Net IMO operating income    |                |         | 2,515                                    |         |                                         |         | 4,555            |         |        |         | 7,494   |         |        |         | 11,237  |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        
|Adjusted pre-tax operating income - Accumulation Products segment |                                                                      | $                           | 35,203         |         |                                          | $       | 32,314                                  |         |                  | $       | 93,979 |         |         | $       | 90,800 |        
|                                                                  |                                                                      |                             |                |         |                                          |         |                                         |         |                  |         |        |         |         |         |        |         |        

Adjusted pre-tax operating income from our accumulation products
operations increased 8.9% in the third quarter of 2003 and 3.5% in the first
nine months of 2003 compared to the respective 2002 periods. The higher
margins on equity-indexed annuities and the additional income from funding
agreements increased accumulation products earnings in 2003. The increase was
partially offset by lower contributions from IMO operations. The drivers
of profitability in our accumulation products business are deposits,
persistency, investment spread, expenses and IMO operations.

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Deposits.Deposits are presented as collected premiums, which is measured
in accordance with industry practice, and represent the amount of new business
sold during the period. Deposits are a non-GAAP financial measure for an
insurance company for which there is no comparable GAAP financial measure. We
use deposits to measure the productivity of our distribution network and as a
basis for compensation of sales and marketing employees and agents. The
following table summarizes our accumulation products segment deposits:

|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |           | 
|---------------------------------- | ------------------------- | ------------------------ | ------- | ---------------------------------------- | ------- | --------------------------------------- | ------- | ---------------- | ------- | ---- | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                   |                           |                          |         | For The Three Months Ended September 30, |         | For The Nine Months Ended September 30,
|                                   |                           |                          |         | 2003                                     |         | 2002                                    |         | 2003             |         | 2002
|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |     
|                                   |                           |                          |         |                                          |         |                                         |         | ($ in thousands) |         |      |           |          
|Annuities                          |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |          
|                                   | Deferred fixed annuities: |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |          
|                                   |                           | Traditional annuities    |         | $                                        | 103,966 |                                         |         | $                | 311,857 |      |           | $         | 347,828   |   |           | $         | 782,248   | 
|                                   |                           | Equity-indexed annuities |         |                                          | 392,630 |                                         |         |                  | 161,185 |      |           |           | 993,075   |   |           |           | 487,828   | 
|                                   | Variable annuities        |                          |         | 682                                      |         |                                         |         | 1,561            |         |      |           | 2,570     |           |   |           | 6,042     |          
|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |           | 
|                                   | Total Annuities           |                          |         | 497,278                                  |         |                                         |         | 474,603          |         |      |           | 1,343,473 |           |   |           | 1,276,118 |          
|Funding agreements                 |                           |                          |        |                                          |         |                                         | 400,000 |                  |         |      |          |           |           |   | 750,000   |          
|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |           | 
|                                   |                           | Total                    |         |                                          | 497,278 |                                         |         |                  | 874,603 |      |           |           | 1,343,473 |   |           |           | 2,026,118 | 
|Reinsurance assumed                |                           |                          |        |                                          |         |                                         |        |                  |         |      |          |           |           |   |          |          
|Reinsurance ceded                  |                           |                          | (5,345  | )                                        |         |                                         | (49,593 | )                |         |      | (20,964   | )         |           |   | (53,975   | )        
|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |           | 
|Total deposits, net of reinsurance |                           | $                        | 491,933 |                                          |         | $                                       | 825,010 |                  |         | $    | 1,322,509 |           |           | $ | 1,972,143 |          
|                                   |                           |                          |         |                                          |         |                                         |         |                  |         |      |           |           |           |   |           |           |           | 

Total annuity deposits increased 5.3% year-to-date for 2003 compared to
2002. The increase was from our sales of equity-indexed annuities as consumers
continue to favor these products. We slowed our 2003 traditional annuity sales
due to the low interest rate environment and have focused on sales of our
higher returning equity-indexed products.

We placed fixed rate funding agreements totaling $400 million and $750
million in the third quarter and first nine months of 2002, respectively.
Funding agreements are insurance contracts for which we receive deposit funds
and for which we agree to repay the deposit and a contractual return for the
duration of the contract. Total funding agreements outstanding as of September
30, 2003 amounted to $1.125 billion.

Product Charges.The deposits we receive on accumulation products are not
recorded as revenue but instead as a policyowner liability. Surrender charges
are recorded as revenue as an annuity product charge. Product charges in 2003
were comparable to the respective 2002 periods.

Persistency.Withdrawals represent funds taken out of accumulation
products by policyowners not including those due to the death of policyowners.
Annuity withdrawal rates without internal replacements continued to improve in
2003 and amounted to 8.8% and 11.1% for the first nine months of 2003 and 2002,
respectively. Annuity withdrawals without internal replacements totaled
$1,063.5 million and $1,174.0 million for the first nine months of 2003 and
2002, respectively.

Our withdrawal experience remained within our pricing assumptions.
Withdrawal rates declined for the first nine months of 2003 as compared to 2002
as our annuity products provide a favorable investment return in this current
low interest rate environment.

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Investment Spread.Investment results and interest crediting rates were
as follows for traditional annuities:

|                       |                   |  |                                         |      |      |  |      |      |  
|---------------------- | ----------------- |  | --------------------------------------- | ---- | ---- |  | ---- | ---- | -
|                       |                   |  | For The Nine Months Ended September 30,
|                       |                   |  | 2003                                    |      | 2002
|                       |                   |  |                                         |      |     
|Investment yield       |                   |  | 5.96                                    | %    |      |  | 6.71 | %   
|Average crediting rate |                   |  | 4.12                                    | %    |      |  | 4.66 | %   
|                       |                   |  |                                         |      |      |  |      |      |  
|                       | Investment spread |  |                                         | 1.84 | %    |  |      | 2.05 | %
|                       |                   |  |                                         |      |      |  |      |      |  

The investment spread on traditional annuities decreased 21 basis points
to 184 basis points in the first nine months of 2003 compared to the first nine
months of 2002. Crediting rates were lowered throughout 2002 and the first
nine months of 2003 to correspond with the decline in investment yields caused
by lower rates on new and reinvested funds. At September 30, 2003, the account
value of traditional annuities totaled $7.1 billion of which $3.6 billion did
not have a differential between the credited rate and minimum guarantee rate
and as such, could not be lowered. Additionally, traditional annuities with
account values totaling $1.3 billion have multi-year interest rate guarantees
for which the credited rate cannot be decreased until the end of the multi-year
period. At the end of the multi-year guarantee period, we will have the
ability to lower the crediting rate to the minimum guaranteed rate by an
average of approximately 275 basis points. Also, at September 30, 2003,
account values of equity-indexed annuities totaled $4.1 billion, which provide
guaranteed rates based on a cumulative floor over the term of the product. Due
to these limitations on the ability to lower interest crediting rates and the
potential for additional credit defaults and lower reinvestment rates on
investments, we could experience additional spread compression in future
periods.

Funding agreement income increased $5.4 million in the first nine months
of 2003 compared to the first nine months of 2002. The increase was primarily
due to the $875 million of the agreements placed throughout 2002.

IMO Operations.IMOs have contractual arrangements to promote our
insurance products to their networks of agents and brokers. Additionally, they
also contract with third party insurance companies. We own five such IMOs. The
income from IMO operations primarily represents annuity commissions received by
our IMOs from those third party insurance companies. Net IMO operating income
decreased $3.7 million between the first nine months of 2003 and the first nine
months of 2002 due to increased expenses.

Outlook.We anticipate increased product sales from our IMOs but
decreased product sales from other distribution channels as we manage our sales
in this current low interest rate environment. We also expect to continue the
shift of our product mix to higher return products, in particular the
equity-indexed annuity products. We will continue to manage our spreads as we
strive for our desired profitability in this economic environment.

OTHER

The other segment is our non-core lines of business outside of protection
and accumulation products. These lines of business include holding company
revenues and expenses, operations of our real estate management subsidiary, and
accident and health insurance. The adjusted pre-tax operating loss in the
first nine months of 2003 decreased as compared with the first nine months of
2002 due to higher investment income of our real estate management subsidiary.

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INCOME STATEMENT RECONCILIATION

A reconciliation of our segment pre-tax operating income to net income as
shown in our consolidated statements of income follows:

|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |         |         | 
|---------------------------------------------------- | --------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------ | ---------------------------------------- | ------ | --------------------------------------- | ------ | ---------------- | ------ | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | 
|                                                     |                                                           |                                                                                                                   |                                        |        | For The Three Months Ended September 30, |        | For The Nine Months Ended September 30,
|                                                     |                                                           |                                                                                                                   |                                        |        | 2003                                     |        | 2002                                    |        | 2003             |        | 2002   
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |        
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        | ($ in thousands) |        |         |        |        
|Segment pre-tax operating income:                    |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |       
|                                                     | Protection Products                                       |                                                                                                                   | $                                      | 28,584 |                                          |        | $                                       | 30,127 |                  |        | $       | 95,546 |         |         | $       | 95,394 |        
|                                                     | Accumulation Products                                     |                                                                                                                   |                                        | 35,203 |                                          |        |                                         | 32,314 |                  |        |         | 93,979 |         |         |         | 90,800 |        
|                                                     | Other operations                                          |                                                                                                                   |                                        | (972   | )                                        |        |                                         | (1,742 | )                |        |         | (2,707 | )       |         |         | (4,732 | )      
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |        
|                                                     |                                                           |                                                                                                                   | Total segment pre-tax operating income |        |                                          | 62,815 |                                         |        |                  | 60,699 |         |        |         | 186,818 |         |        |         | 181,462 | 
|Non-segment items - increases (decreases) to income: |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |       
|                                                     | Realized and unrealized losses on assets and liabilities: |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |        
|                                                     |                                                           | Realized gains (losses) on open block investments                                                                 |                                        |        | 5,855                                    |        |                                         |        | (10,506          | )      |         |        | 30,307  |         |         |        | (56,139 | )      
|                                                     |                                                           | Unrealized gains (losses) on open block options and
trading investments                                           |                                        |        | (1,228                                   | )      |                                         |        | (10,319          | )      |         |        | 33,799  |         |         |        | (64,555 | )      
|                                                     |                                                           | Change in option value of equity-indexed products
and market value adjustments on total return
strategy annuities |                                        |        | 4,682                                    |        |                                         |        | 5,242            |        |         |        | (22,527 | )       |         |        | 41,110  |        
|                                                     |                                                           | Cash flow hedge amortization                                                                                      |                                        |        | (763                                     | )      |                                         |        | (1,961           | )      |         |        | (3,241  | )       |         |        | (2,659  | )      
|                                                     |                                                           | Amortization of DAC & VOBA due to open block
realized gains and losses                                            |                                        |        | (2,347                                   | )      |                                         |        | 4,616            |        |         |        | (12,800 | )       |         |        | 9,902   |        
|                                                     | Non-recurring income (expenses):                          |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |        
|                                                     |                                                           | Reinsurance adjustments                                                                                           |                                       |        |                                          |        |                                        |        |                  |        | 3,854   |        |         |         |        |       
|                                                     |                                                           | Demutualization costs                                                                                             |                                       |        |                                          |        | (722                                    | )      |                  |        |        |        |         |         | (1,186  | )     
|                                                     |                                                           | Restructuring costs                                                                                               | (1,551                                 | )      |                                          |        | (2,569                                  | )      |                  |        | (17,415 | )      |         |         | (10,780 | )     
|                                                     | Other income from non-insurance operations                | 1,002                                                                                                             |                                        |        |                                          | 2,272  |                                         |        |                  | 3,328  |         |        |         | 3,268   |        
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |        
|                                                     |                                                           |                                                                                                                   | Income from continuing operations      |        |                                          | 68,465 |                                         |        |                  | 46,752 |         |        |         | 202,123 |         |        |         | 100,423 | 
|Interest expense                                     |                                                           |                                                                                                                   | (7,864                                 | )      |                                          |        | (6,414                                  | )      |                  |        | (22,238 | )      |         |         | (18,778 | )     
|Income tax expense                                   |                                                           |                                                                                                                   | (19,766                                | )      |                                          |        | (13,848                                 | )      |                  |        | (59,545 | )      |         |         | (25,978 | )     
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |        
|                                                     |                                                           |                                                                                                                   | Net income                             |        | $                                        | 40,835 |                                         |        | $                | 26,490 |         |        | $       | 120,340 |         |        | $       | 55,667  | 
|                                                     |                                                           |                                                                                                                   |                                        |        |                                          |        |                                         |        |                  |        |         |        |         |         |         |        |        

Realized and Unrealized Gains (Losses) on Assets and Liabilities.
Realized gains (losses) on open block investments will fluctuate from period to
period depending on the prevailing interest rate, the economic environment and
the timing of investment sales and impairments. Realized gains on open block
investments in the first nine months of 2003 included $9.5 million of gains on
sales of investments previously impaired and written-down in 2002 or 2003,
primarily American Airlines, Dynegy Holdings, and Intermedia Communications.
The realized losses, amounting to $10.5 million in the third quarter of 2002
and $56.1 million in the first nine months of 2002, primarily consisted of
realized losses and writedowns on investments mainly related to Worldcom, Inc.
and its related entities.

Unrealized gains (losses) on open block options and trading investments
also will fluctuate from period to period depending on the prevailing interest
rate, the economic environment and the timing of investment sales and
impairments. We use options to hedge our equity-indexed products. In
accounting for derivatives, we adjusted our options to market value, which, due
to the economic environment and stock market conditions, resulted in an
unrealized gain of $7.6 million and $23.0 million in the third quarter and
first nine months of 2003, respectively, and an unrealized loss of $13.0
million and $47.8 million in the third quarter and first nine months of 2002,
respectively. In addition, we also have trading securities that back our total
return strategy fixed annuity products. The market value adjustment on the
trading securities resulted in a loss of $8.8 million and a gain of $10.8
million in the third quarter and first nine months of 2003, respectively, and a
gain of $2.7 million and a loss of $16.8 million in the third quarter and first
nine months of 2002, respectively. Most of the unrealized gains and losses on
the options and trading securities are offset by similar adjustments to the
option portion of the equity-indexed product reserves and to the total return
strategy annuity reserves. The reserve adjustments are reflected in
policyowner benefits expense in the

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consolidated statements of income and are included in the fair value
change of $4.7 million and ($22.5) million in the third quarter and first nine
months of 2003, respectively, and $5.2 million and $41.1 million in the third
quarter and first nine months of 2002, respectively, explained in the following
paragraph.

The fair value change in options embedded within our equity-indexed
products and the fair value changes on our total return strategy fixed annuity
contracts are being recorded at fair value. As previously discussed, these
fair value changes are offset by similar adjustments to unrealized gains
(losses) on investments related to the fair value changes on the options that
hedge the equity-indexed products and on the trading securities that back the
total return strategy products.

Non-recurring Income (Expenses).Reinsurance related adjustments in the
first nine months of 2003 consist of the release of a $8.2 million liability in
conjunction with the settlement and amendment of a reinsurance arrangement and
a $4.3 million true-up of pre-2003 reinsurance settlements under a reinsurance
arrangement between ILIC open block and closed block. Both of the reinsurance
adjustments were recorded in the second quarter of 2003.

Restructuring costs relate to our consolidation of various functions in
connection with a restructuring of our protection products and accumulation
products operations and investment activities which began in the third quarter
of 2001. The objective of the restructuring plan is to eliminate duplicative
functions for all business units and to reduce on-going operating costs.
Corporate administrative functions are being transitioned so they are performed
primarily in Des Moines, Iowa. Protection products administration processes
are being transitioned so they are performed in Des Moines; Woodbury, New York;
or outsourced. Accumulation products functions have been transitioned to
Topeka, Kansas. Investment activities have been restructured to eliminate
certain real estate management services which have been outsourced.

The Company listed its office building located in Indianapolis, Indiana,
with a real estate broker. During the second quarter of 2003, the Company
began to substantially vacate this location as a result of staff reductions.
In addition, the Company also selected a new location in the second quarter of
2003 for those employees who are going to continue to work in Indianapolis.
Most of the remaining Indianapolis employees moved to the new space during
August 2003. On June 30, 2003, the Company determined that the plan of sale
criteria in SFAS 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, had been met. Accordingly, the carrying value of the building was
adjusted to its fair value less costs to sell, amounting to $15.5 million,
which was based upon comparable properties recently marketed in Indianapolis.
The resulting $7.7 million pre-tax impairment loss was recorded as
restructuring cost in the consolidated statement of income during the second
quarter of 2003. The carrying value of the building that is held for sale is
included in the other assets line item of the consolidated balance sheet.

During the second quarter of 2003, the Company initiated and executed a
restructuring plan to merge one of its subsidiaries, IL Annuity, into its
parent, ILIC. The merger was effective June 30, 2003 and total restructuring
costs associated with this plan amounted to $2.5 million pre-tax, which
primarily consisted of legal, accounting, and printing costs and the write off
of $2.2 million of insurance licenses.

The restructuring charges expensed in the first nine months of 2003
included pre-tax severance and termination benefits of $0.7 million for
severance accrual adjustments and other pre-tax costs of $16.7 million
primarily related to the impairment loss on the Indianapolis office, expenses
associated with the merger of IL Annuity into ILIC, and systems conversion
costs. For the first nine months of 2002, restructuring charges included
pre-tax severance and termination benefits of $5.5 million for the elimination
of approximately 90 positions and other pre-tax costs of $5.3 million. An
accrual for severance and termination benefits not yet paid amounted to $2.2
million at September 30, 2003. Additional charges will be incurred for
continuing restructuring activities primarily involving severance or relocation
benefits for affected employees and various administrative, financial and
actuarial system conversion costs. Expenditures for all restructuring
activities are expected to be completed by the fourth quarter of 2003.

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Interest expense increased for the third quarter and year-to-date periods
of 2003 as compared to the same periods a year ago. The increase was primarily
due to interest associated with the PRIDESSM securities of $143.8 million
issued in the second quarter of 2003.

Liquidity And Capital Resources

AmerUs Group Co.

As a holding company, AmerUs Group Co.s cash flows from operations
consist of dividends from subsidiaries, if declared and paid, interest from
income on loans and advances to subsidiaries (including a surplus note issued
to us by ALIC), investment income on our assets and fees which we charge our
subsidiaries, offset by the expenses incurred for debt service, salaries and
other expenses.

We intend to rely primarily on dividends, interest income and fees from
our insurance subsidiaries in order to make dividend payments to our
shareholders. The payment of dividends by our insurance subsidiaries is
regulated under various state laws. Generally, under the various state
statutes, our insurance subsidiaries dividends may be paid only from the
earned surplus arising from their respective businesses and must receive the
prior approval of the respective state regulators to pay any dividend that
would exceed certain statutory limitations. The current statutes generally
limit any dividend, together with dividends paid out within the preceding 12
months, to the greater of (i) 10% of the respective companys policyowners
statutory surplus as of the preceding year end or (ii) the statutory net gain
from operations for the previous calendar year. Generally, the various state
laws give the state regulators discretion to approve or disapprove requests for
dividends in excess of these limits. Based on these limitations and 2002
results, our life insurance subsidiaries could pay us an estimated $82.3
million in dividends in 2003 without obtaining regulatory approval. Our
subsidiaries paid us $85.0 million in the first nine months of 2003 and
included dividends for which we obtained regulatory approval. For the remaining
period of 2003, additional dividends of $44.4 million can be paid by our life
insurance subsidiaries without regulatory approval. We also consider
risk-based capital levels, capital and liquidity operating needs, and other
factors prior to paying dividends from the insurance subsidiaries.

We have a $175 million revolving credit facility with a syndicate of
lenders (which we refer to as the Revolving Credit Agreement). As of September
30, 2003, there was a $10 million outstanding loan balance under the facility.
The Revolving Credit Agreement provides for typical events of default and
covenants with respect to the conduct of business and requires the maintenance
of various financial levels and ratios. Among other covenants, we (a) cannot
have a leverage ratio greater than 0.35:1.0, (b) cannot have an interest
coverage ratio less than 2.50:1.0, (c) are prohibited from paying cash
dividends on common stock in excess of an amount equal to 3% of consolidated
net worth as of the last day of the preceding fiscal year, and (d) must cause
our insurance subsidiaries to maintain certain levels of risk-based capital.
We closely monitor all of these covenants to ensure continued compliance.

On May 28, 2003, we issued $125 million of PRIDES securities. On June 5,
2003, the underwriters exercised their over-allotment option in full and we
issued an additional $18.8 million of PRIDES. The PRIDES initially consist of
a $25 senior note and a contract requiring the holder to purchase AmerUs Group
common stock. The note has a minimum term of 4.75 years, which may be extended
by AmerUs Group in certain circumstances. The PRIDES offer quarterly payments
at an annual rate of 5.5 percent and quarterly contract adjustment payments at
an annual rate of 0.75 percent, both payable on February 16, May 16, August 16
and November 16 of each year, commencing August 16, 2003. Under the purchase
contract, holders of each contract are required to purchase AmerUs Group Co.
common stock at the settlement date of August 16, 2006 based on a specified
settlement rate, which will vary according to the applicable market value of
AmerUs Group Co. common stock at the settlement date. The value of AmerUs
Group Co. common stock to be issued upon settlement of each purchase contract
will not exceed $25, the stated value of the PRIDES, unless the applicable
market value of AmerUs Group Co. common stock (which is measured by the common
stock price over a 20-day trading day period) increases to more than $33.80 per
share. The PRIDES were registered with the Securities and Exchange Commission
on Form S-3 by means of a prospectus supplement filed on May 22, 2003, as
further supplemented on May 23, 2003.

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The proceeds from the PRIDES were used to repay borrowings on the
Companys Revolving Credit Agreement and for general operating purposes. The
senior note component of the PRIDES ranks equally with all other senior debt of
the Company.

Our Board of Directors approved a stock purchase program effective August
9, 2002, under which we may purchase up to three million shares of our common
stock at such times and under such conditions, as we deem advisable. The
purchases may be made in the open market or by such other means as we determine
to be appropriate, including privately negotiated purchases. The purchase
program supercedes all prior purchase programs. Approximately 2.3 million
shares remain available for repurchase under this program. We consider a
variety of factors such as liquidity needs, capital levels and stock price in
determining whether to repurchase shares. We do not anticipate any purchases of
our common stock in 2003.

We manage liquidity on a continuing basis. One way is to minimize our
need for capital. We accomplish this by attempting to use our capital as
efficiently as possible and by developing capital-efficient products in our
insurance subsidiaries. We also manage our mix of sales by focusing on the
more capital-efficient products. In addition, we use reinsurance agreements,
where cost-effective, to reduce capital strain in the insurance subsidiaries.
We also focus on optimizing the consolidated capital structure to properly
balance the levels and sources of borrowing and the issuance of equity
securities.

Insurance Subsidiaries

The cash flows of our insurance subsidiaries consist primarily of premium
income, deposits to policyowner account balances, income from investments,
sales, maturities and calls of investments and repayments of investment
principal. Cash outflows are primarily related to withdrawals of policyowner
account balances, investment purchases, payment of policy acquisition costs,
payment of policyowner benefits, payment of debt, income taxes and current
operating expenses. Insurance companies generally produce a positive cash flow
from operations, as measured by the amount by which cash flows are adequate to
meet benefit obligations to policyowners and normal operating expenses as they
are incurred. The remaining cash flow is generally used to increase the asset
base to provide funds to meet the need for future policy benefit payments and
for writing new business.

Management believes that the current level of cash and available-for-sale
and short-term securities, combined with expected net cash inflows from
operations, maturities of fixed maturity investments, principal payments on
mortgage-backed securities and its insurance products, will be adequate to meet
the anticipated short-term cash obligations of the life insurance subsidiaries.

Matching the investment portfolio maturities to the cash flow demands of
the type of insurance being provided is an important consideration for each
type of protection product and accumulation product. We continuously monitor
benefits and surrenders to provide projections of future cash requirements. As
part of this monitoring process, we perform cash flow testing of assets and
liabilities under various scenarios to evaluate the adequacy of reserves. In
developing our investment strategy, we establish a level of cash and securities
which, combined with expected net cash inflows from operations, maturities of
fixed maturity investments and principal payments on mortgage-backed
securities, are believed adequate to meet anticipated short-term and long-term
benefit and expense payment obligations. There can be no assurance that future
experience regarding benefits and surrenders will be similar to historic
experience since withdrawal and surrender levels are influenced by such factors
as the interest rate environment and general economic conditions and the
claims-paying and financial strength ratings of the insurance subsidiaries.

We take into account asset/liability management considerations in the
product development and design process. Contract terms for the
interest-sensitive products include surrender and withdrawal provisions which
mitigate the risk of losses due to early withdrawals. These provisions
generally do one or more of the following: limit the amount of penalty-free
withdrawals, limit the circumstances under which withdrawals are permitted, or
assess a

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surrender charge or market value adjustment relating to the underlying assets.
The following table summarizes statutory liabilities for interest-sensitive
life products and annuities by their contractual withdrawal provisions at
September 30, 2003 (including liabilities in the closed block and the general
account):

|                                                        |                                 |   |                 |        | 
|------------------------------------------------------- | ------------------------------- | - | --------------- | ------ | 
|                                                        |                                 |   | ($ in millions)
|                                                        |                                 |  
|Not subject to discretionary withdrawal                 |                                 | $ | 514             |       
|Subject to discretionary withdrawal with adjustments:   |                                 |   |                 |       
|                                                        | Specified surrender charges (A) |   |                 | 8,409  | 
|                                                        | Market value adjustments        |   |                 | 3,027  | 
|                                                        |                                 |   |                 |       
|                                                        | Subtotal                        |   |                 | 11,436 | 
|                                                        |                                 |   |                 |       
|Subject to discretionary withdrawal without adjustments |                                 |   | 2,034           |       
|                                                        |                                 |   |                 |       
|Total                                                   |                                 | $ | 13,984          |       
|                                                        |                                 |   |                 |       



| | (A) |  | Includes $1,330 million of statutory liabilities with a contractual surrender charge of less
than five percent of the account balance.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------

In addition to the interest-sensitive products, an insurance subsidiary is
party to a $250 million fixed rate funding agreement issued in 1999. Under the
agreement, a five-year floating rate insurance contract was issued to a
commercial paper conduit which was swapped to a fixed-rate. During 2002, our
insurance subsidiaries placed additional funding agreements totaling $875
million in six to ten year fixed rate insurance contracts. The assets backing
the funding agreements are legally segregated and are not subject to claims
that arise out of any other business of the insurance subsidiaries. The
funding agreements are further backed by the general account assets of the
insurance subsidiaries. The segregated assets and liabilities are included
with general account assets in the financial statements. The funding
agreements may not be cancelled unless there is a default under the agreements,
but the insurance subsidiaries may terminate the agreements at any time.

We also have variable separate account assets and liabilities representing
funds that are separately administered, principally for variable annuity
contracts, and for which the contractholder bears the investment risk.
Separate account assets and liabilities are reported at fair value and amounted
to $243.5 million at September 30, 2003. Separate account contractholders have
no claim against the assets of the general account. The operations of the
separate accounts are not included in the accompanying consolidated financial
statements.

Through their respective memberships in the Federal Home Loan Banks (FHLB)
of Des Moines and Topeka, ALIC and American are eligible to borrow under
variable-rate short term fed funds arrangements to provide additional
liquidity. These borrowings are secured and interest is payable at the current
rate at the time of each advance. There were no borrowings under these
arrangements outstanding at September 30, 2003. In addition, ALIC has
long-term fixed rate advances from FHLB outstanding of $13.5 million at
September 30, 2003.

The insurance subsidiaries may also obtain liquidity through sales of
investments. The investment portfolio as of September 30, 2003 had a carrying
value of $18.0 billion, including closed block investments.

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The level of capital in the insurance companies is regulated by risk-based
capital formulas and is monitored by rating agencies. In order to maintain
appropriate capital levels, it may be necessary from time to time for AmerUs
Group Co. to provide additional capital to the insurance companies.

The Company participates in dollar-roll repurchase agreement transactions.
Such transactions involve the sale of a mortgage-backed security to a holding
institution and a simultaneous agreement to purchase a substantially similar
security for forward settlement at a lower dollar price. The proceeds are
invested in short-term investments at a positive spread until the settlement
date of the similar security. During this same time period, the Company will
continue to reflect the mortgage-backed security sold to the holding
institution as a fixed maturity security, the cash received for such security
as cash and cash equivalents, and the Companys repurchase obligation as an
other liability. The amount outstanding to repurchase securities under
dollar-roll repurchase agreements was $92.6 million at September 30, 2003.

The Company also participates in a securities lending program whereby
certain fixed maturity securities from the investment portfolio are loaned to
other institutions for a short period of time. The Company receives a fee in
exchange for the loan of securities and requires initial collateral equal to
102 percent of the market value of the loaned securities to be separately
maintained. Securities with a market value of $471.0 million were on loan
under the program and the Company has cash collateral under its control of
$480.2 million at September 30, 2003.

At September 30, 2003, the statutory surplus of the insurance subsidiaries
was approximately $760 million. Management believes that each life insurance
company has statutory capital which provides adequate risk based capital that
exceeds required levels.

In the future, in addition to cash flows from operations and borrowing
capacity, the insurance subsidiaries may obtain their required capital from
AmerUs Group Co.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

The main objectives in managing our investment portfolios and our
insurance subsidiaries are to maximize investment income and total investment
returns while minimizing credit risks in order to provide maximum support to
the insurance underwriting operations. Investment strategies are developed
based on many factors including asset liability management, regulatory
requirements, fluctuations in interest rates and consideration of other market
risks. Investment decisions are centrally managed by investment professionals
based on guidelines established by management and approved by the boards of
directors.

Market risk represents the potential for loss due to adverse changes in
the fair value of financial instruments. The market risks related to our
financial instruments primarily relate to the investment portfolio, which
exposes us to risks related to interest rates, credit quality and prepayment
variation. Analytical tools and monitoring systems are in place to assess each
of these elements of market risk.

Interest rate risk is the price sensitivity of a fixed income security to
changes in interest rates. Management views these potential changes in price
within the overall context of asset and liability management. Actuarial
professionals estimate the payout pattern of our liabilities, primarily lapses,
to determine duration, which is the present value of the fixed income
investment portfolios after consideration of the duration of these liabilities
and other factors, which management believes mitigates the overall effect of
interest rate risk.

For variable and equity-indexed products, profitability on the portion of
the policyowners account balance invested in the fixed general account option,
if any, is also affected by the spreads between interest yields on investments
and rates credited to the policies. For the variable products, the policyowner
assumes essentially all the investment earnings risk for the portion of the
account balance invested in the separate accounts. For the equity-indexed
products, we purchase call options that are designed to match the return owed
to contract holders who elect to

37



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##### Table of Contents



participate in one or more market indices. Profitability on the portion of the
equity-indexed products tied to market indices is significantly impacted by the
spread on interest earned on investments and the sum of (1) the cost of
underlying call options purchased to match the returns owed to contract holders
and (2) the minimum interest guarantees owed to the contract holder, if any.
Profitability on the equity-indexed products is also impacted by changes in the
fair value of the embedded option which provides the contract holder the right
to participate in market index returns after the next anniversary date of the
contract. This impacts profitability as we primarily purchase one-year call
options to fund the returns owed to the contract holders at the inception of
each contract year. This practice matches with the contract holders rights to
switch to different indices on each anniversary date. The value of the forward
starting options embedded in the equity-indexed products can fluctuate with
changes in assumptions as to future volatility of the market indices, risk free
interest rates, market returns and the lives of the contracts.

The following table provides information about our fixed maturity
investments and mortgage loans for both our trading and other than trading
portfolios at September 30, 2003. The table presents amortized cost and
related weighted average interest rates by expected maturity dates. The
amortized cost approximates the cash flows of principal amounts in each of the
periods. The cash flows are based on the earlier of the call date or the
maturity date or, for mortgage-backed securities, expected payment patterns.
Actual cash flows could differ from the expected amounts.

|                                                    |  |                     |     |      |  |      |       |      |  |      |       |      |  |            |       |      |  |            |       |   |  |   |       |   |  |   |       |           |  |   |        |  |  |   |        | 
|--------------------------------------------------- |  | ------------------- | --- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---------- | ----- | ---- |  | ---------- | ----- | - |  | - | ----- | - |  | - | ----- | --------- |  | - | ------ |  |  | - | ------ | 
|                                                    |  | Expected Cash Flows
|                                                    |  | Remaining           |     |      |  |      |       |      |  |      |       |      |  |            |       |      |  |            |       |   |  |   |       |   |  |   |       | Amortized |  |   |        | 
|                                                    |  | 2003                |     | 2004 |  | 2005 |       | 2006 |  | 2007 |       | 2008 |  | Thereafter |       | Cost |  | Fair Value
|                                                    |  |                     |     |      |  |      |       |      |  |      |       |      |  |            |       |      |  |           
|                                                    |  | ($ in millions)    
|Fixed maturity securities
available-for-sale        |  | $                   | 444 |      |  | $    | 1,444 |      |  | $    | 1,297 |      |  | $          | 1,116 |      |  | $          | 1,149 |   |  | $ | 1,277 |   |  | $ | 6,907 |           |  | $ | 13,634 |  |  | $ | 14,219 | 
|Average interest rate                               |  |                     | 5.8 | %    |  |      | 6.5   | %    |  |      | 5.9   | %    |  |            | 6.4   | %    |  |            | 6.6   | % |  |   | 5.6   | % |  |   | 5.3   | %         |  |   |        |  |  |   |        | 
|Fixed maturity securities
held for trading purposes |  | $                   | 12  |      |  | $    | 183   |      |  | $    | 157   |      |  | $          | 200   |      |  | $          | 199   |   |  | $ | 214   |   |  | $ | 876   |           |  | $ | 1,841  |  |  | $ | 1,841  | 
|Average interest rate                               |  |                     | 1.3 | %    |  |      | 1.5   | %    |  |      | 1.6   | %    |  |            | 1.8   | %    |  |            | 2.6   | % |  |   | 2.8   | % |  |   | 4.5   | %         |  |   |        |  |  |   |        | 
|Mortgage loans                                      |  | $                   | 14  |      |  | $    | 63    |      |  | $    | 66    |      |  | $          | 63    |      |  | $          | 62    |   |  | $ | 71    |   |  | $ | 601   |           |  | $ | 940    |  |  | $ | 1,016  | 
|Average interest rate                               |  |                     | 7.9 | %    |  |      | 7.8   | %    |  |      | 7.7   | %    |  |            | 7.7   | %    |  |            | 7.7   | % |  |   | 7.6   | % |  |   | 7.5   | %         |  |   |        |  |  |   |        | 
|Total                                               |  | $                   | 470 |      |  | $    | 1,690 |      |  | $    | 1,520 |      |  | $          | 1,379 |      |  | $          | 1,410 |   |  | $ | 1,562 |   |  | $ | 8,384 |           |  | $ | 16,415 |  |  | $ | 17,076 | 
|                                                    |  |                     |     |      |  |      |       |      |  |      |       |      |  |            |       |      |  |            |       |   |  |   |       |   |  |  

In accordance with our strategy of minimizing credit quality risk, we
consistently invest in high quality marketable securities. Fixed maturity
securities are comprised of U.S. Treasury, government agency, mortgage-backed
and corporate securities. Approximately 66% of fixed maturity securities are
issued by the U.S. Treasury or U.S. government agencies or are rated A or
better by Moodys, Standard and Poors, or the NAIC. Less than 7.5 % of the
bond portfolio is below investment grade. Fixed maturity securities have an
average maturity of approximately 7.18 years.

Prepayment risk refers to the changes in prepayment patterns that can
either shorten or lengthen the expected timing of the principal repayments and
thus the average life and the effective yield of a security. Such risk exists
primarily within the portfolio of mortgage-backed securities. Management
monitors such risk regularly. We invest primarily in those classes of
mortgage-backed securities that have average or lower prepayment risk.

Our use of derivatives is generally limited to hedging purposes and has
principally consisted of using interest rate swaps and options. These
instruments, viewed separately, subject us to varying degrees of market and
credit risk. However when used for hedging, the expectation is that these
instruments would reduce overall market risk. Credit risk arises from the
possibility that counterparties may fail to perform under the terms of the
contracts.

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Equity price risk is the potential loss arising from changes in the value
of equity securities. In general, equities have more year-to-year price
variability than intermediate term grade bonds. However, returns over longer
time frames have been consistently higher.

All of the above risks are monitored on an ongoing basis. A combination
of in-house systems and proprietary models and externally licensed software are
used to analyze individual securities as well as each portfolio. These tools
provide the portfolio managers with information to assist them in the
evaluation of the market risks of the portfolio.




Item 4. Controls and Procedures

(a)  Based upon their evaluation as of the end of the period covered by
this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures as
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as
amended, are effective for recording, processing, summarizing and reporting the
information we are required to disclose in our reports filed under such act.

(b)  There was no change in our internal control over financial reporting
during our last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

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##### Table of Contents






PART II - OTHER INFORMATION




Item 1. Legal Proceedings

In recent years, the life insurance industry,
including the Company and its subsidiaries,
have been subject to an increase in litigation
pursued on behalf of purported classes of
insurance purchasers, questioning the conduct
of insurers in the marketing of their
products. The Company is often involved in
litigation and other proceedings, including
class actions, reinsurance claims and
regulatory proceedings, arising in the
ordinary course of its business. Some of these
claims and legal actions are in jurisdictions
where juries are given substantial latitude in
assessing damages, including punitive damages.
Although no assurances can be given and no
determinations can be made at this time, the
Company believes that the ultimate liability,
if any, with respect to these claims and legal
actions, would have no material effect on its
results of operations and financial position.




Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------

A list of exhibits included as part of this report is set forth in the
Exhibit Index which immediately precedes such exhibits and is hereby
incorporated by reference herein.



| | (b) |  | The following report on
Form 8-K was filed during the quarter ended
September 30, 2003:                                                                   
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | Form 8-K dated August 7, 2003 announcing the release of second
quarter 2003 earnings. Supplemental financial information of AmerUs
Group Co. was attached.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

|                        |  |    |  |     |  |                                                                                                               
|----------------------- |  | -- |  | --- |  | --------------------------------------------------------------------------------------------------------------
|DATED: November 7, 2003 |  |    |  |     |  | AMERUS GROUP CO.                                                                                              
|                        |  |    |  |     |  |                                                                                                               
|                        |  | By |  | /s/ |  | Melinda S. Urion                                                                                              
|                        |  |    |  |    
|                        |  |    |  |     |  | Melinda S. Urion
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|                        |  |    |  |     |  |                                                                                                               
|                        |  | By |  | /s/ |  | Brenda J. Cushing                                                                                             
|                        |  |    |  |    
|                        |  |    |  |     |  | Brenda J. Cushing
Senior Vice President and Controller
(Principal Accounting Officer)                         

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AMERUS GROUP CO. AND SUBSIDIARIES




INDEX TO EXHIBITS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|No.     |  | Description                                                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.1     |  | Plan of Reorganization dated October 27, 1995, filed as Exhibit 2.1 to
the Registration Statement of AmerUs Life Holdings, Inc. on Form S-1,
Registration Number 333-12239, is hereby incorporated by reference.                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.2     |  | Amended and Restated Agreement and Plan of Merger, dated as of September
19, 1997 and as amended and restated as of October 8, 1997, by and among
AmerUs Life Holdings, Inc., AFC Corp. and AmVestors Financial Corporation
(AmVestors), filed as Exhibit 2.2 to the Registration Statement of
AmerUs Life Holdings, Inc. on Form S-4, Registration Number 333-40065 is
hereby incorporated by reference.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.3     |  | Agreement and Plan of Merger, dated as of August 13, 1997 and as amended as of September
5, 1997, among AmerUs Life Holdings, Inc., a wholly owned subsidiary of AmerUs Life Holdings, Inc. and Delta Life
Corporation, filed as Exhibit 2.2 to Form 8-K of AmerUs Life Holdings, Inc. dated October 8, 1997, is hereby incorporated
by reference.                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.4     |  | Combination and Investment Agreement, dated February 18, 2000, among American Mutual
Holding Company, AmerUs Life Holdings, Inc., Indianapolis Life Insurance Company and The Indianapolis Life Group of
Companies, Inc., filed as Exhibit 2.1 to AmerUs Life Holdings, Inc.s report on Form 8-K/A on March 6, 2000, is hereby
incorporated by reference.                                                 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.5     |  | Purchase Agreement, dated as of February 18, 2000, by and between American Mutual
Holding Company and AmerUs Life Holdings, Inc., filed as Exhibit 2.5 on Form 10-K, dated March 8, 2000, is hereby
incorporated by reference.                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.6     |  | Agreement and Plan of Merger, dated December 17, 1999, by and between American Mutual
Holding Company and AmerUs Life Holdings, Inc., filed as Exhibit 2.6 on Form 10-K, dated March 8, 2000, is hereby
incorporated by reference.                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.7     |  | Amendment No. 1 to Agreement and Plan of Merger, dated February 18, 2000, by and between
American Mutual Holding Company and AmerUs Life Holdings, Inc., filed as Exhibit 2.7 on Form 10-K, dated March 8, 2000, is
hereby incorporated by reference.                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.8     |  | Letter Agreement, dated December 17, 1999, by and between American Mutual Holding
Company and AmerUs Life Holdings, Inc., filed as Exhibit 2.8 on Form 10-K, dated March 8, 2000, is hereby incorporated by
reference.                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.9     |  | Notification Agreement, dated as of February 18, 2000, by and among American Mutual
Holding Company, AmerUs Life Holdings, Inc. and Bankers Trust Company, filed as Exhibit 2.9 on Form 10-K, dated March 8,
2000, is hereby incorporated by reference.                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.10    |  | Amendment No. 2 to Agreement and Plan of Merger, dated April 3, 2000, by
and between American Mutual Holding Company and AmerUs Life Holdings,
Inc., filed as Exhibit 2.10 on Form 10-Q, dated May 15, 2000, is hereby
incorporated by reference.                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.11    |  | Amendment No. 1 to the Purchase Agreement, dated April 3, 2000, by and
between American Mutual Holding Company and AmerUs Life Holdings, Inc.,
filed as Exhibit 2.11 on Form 10-Q, dated May 15, 2000, is hereby
incorporated by reference.                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.12    |  | Amendment to Combination and Investment Agreement dated February 18, 2000
among American Mutual Holding Company, AmerUs Life Holdings, Inc.,
Indianapolis Life Insurance Company and The Indianapolis Life Group of
Companies, Inc., dated September 18, 2000, filed as Exhibit 2.2 to Form
8-K12G3 of the Registrant dated September 21, 2000, is hereby incorporated
by reference.                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|2.13    |  | Stock Purchase Agreement, dated January 1, 2002, by and among AmerUs
Annuity Group Co.,
and the Stockholders of Family First Advanced Estate Planning and Family
First Insurance Services, filed as Exhibit 2.13 on Form 10-Q dated August
12, 2002, is hereby incorporated by reference.                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|3.1     |  | Amended and Restated Articles of Incorporation of the Registrant filed as
Exhibit 3.1 on Form
10-Q, dated November 14, 2000 is hereby incorporated by reference.                                                                                                                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|3.2     |  | Amended and Restated Bylaws of the Registrant, filed as Exhibit 4.2 on
Form S-8, dated June 13 2003, is hereby incorporated by reference.                                                                                                                                                                                                                                                                  

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|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------- | ---- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |      | Description
|           |      |            
|           | 4.1  |             |  | Amended and Restated Trust Agreement dated as of February 3, 1997 among
AmerUs Life Holdings, Inc., Wilmington Trust Company, as property trustee,
and the administrative trustees named therein (AmerUs Capital I business
trust), filed as Exhibit 3.6 to the registration statement of AmerUs Life
Holdings, Inc. and AmerUs Capital I on Form S-1, Registration Number
333-13713, is hereby incorporated by reference.
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.2  |             |  | Indenture dated as of February 3, 1997 between AmerUs Life Holdings, Inc.
and Wilmington Trust Company relating to the Companys 8.85% Junior
Subordinated Debentures, Series A, filed as Exhibit 4.1 to the
registration statement of AmerUs Life Holdings, Inc. and AmerUs Capital I
on Form S-1, Registration Number, 333-13713, is hereby incorporated by
reference.                                                  
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.3  |             |  | Guaranty Agreement dated as of February 3, 1997 between AmerUs Life
Holdings, Inc., as guarantor, and Wilmington Trust Company, as trustee,
relating to the 8.85% Capital Securities, Series A, issued by AmerUs
Capital I, filed as Exhibit 4.4 to the registration statement on Form S-1,
Registration Number, 333-13713, is hereby incorporated by reference.                                                          
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.4  |             |  | Amended and Restated Declaration of Trust of AmerUs Capital II, dated as of July 27, 1998,
among AmerUs Life Holdings, Inc., First Union Trust Company and the administrative trustees
named therein, relating to AmerUs Life Holdings, Inc.s 7.0% ACES Units, filed as Exhibit 4.5
on Form 10-Q, dated August 13, 1998, is hereby incorporated by reference.                                                            
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.5  |             |  | Certificate of Trust of AmerUs Capital III filed as Exhibit 4.7 to the registration statement of
AmerUs Life Holdings, Inc., AmerUs Capital II and AmerUs Capital III, on Form S-3 (No.
333-50249), is hereby incorporated by reference.                                                                                                                                                                                  
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.6  |             |  | Common Trust Securities Guarantee Agreement, dated as of July 27, 1998, by AmerUs Life
Holdings, Inc., relating to AmerUs Life Holdings, Inc.s 7.0% ACES Units, filed as Exhibit 4.7
on Form 10-Q, dated August 13, 1998, is hereby incorporated by reference.                                                                                                                                                           
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.7  |             |  | QUIPS Guarantee Agreement, dated as of July 27, 1998, by AmerUs Life Holdings, Inc.,
relating to AmerUs Life Holdings, Inc.s 7.0% ACES Units, filed as Exhibit 4.8 on Form 10-Q,
dated August 13, 1998, is hereby incorporated by reference.                                                                                                                                                                             
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.8  |             |  | Master Unit Agreement, dated as of July 27, 1998, between AmerUs Life
Holdings, Inc. and First Union National Bank relating to AmerUs Life
Holdings, Inc.s 7.0% ACES Units, filed as Exhibit 4.9 on Form 10-Q, dated
August 13, 1998, is hereby incorporated by reference.                                                                                                                                               
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.9  |             |  | Senior Indenture, dated as of June 16, 1998, by and between AmerUs Life
Holdings, Inc. and First Union National Bank, as Indenture Trustee,
relating to the AmerUs Life Holdings, Inc.s 6.95% Senior Notes, filed as
Exhibit 4.14 on Form 10-Q, dated August 13, 1998, is hereby incorporated
by reference.                                                                                                              
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.10 |             |  | Subordinated Indenture, dated as of July 27, 1998, by and between AmerUs
Life Holdings, Inc. and First Union National Bank, as Indenture Trustee,
relating to AmerUs Life Holdings, Inc.s 6.86% Junior Subordinated
Deferrable Interest Debentures, filed as Exhibit 4.15 on Form 10-Q, dated
August 13, 1998, is hereby incorporated by reference.                                                                      
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.11 |             |  | First Supplement to Indenture dated February 3, 1997 among American
Mutual Holding Company, AmerUs Life Holdings, Inc. and Wilmington Trust
Company as Trustee, relating to the Companys 8.85% Junior Subordinated
Debentures, Series A, dated September 20, 2000, filed as Exhibit 4.14 on
Form 10-Q dated November 14, 2000, is hereby incorporated by reference.                                                      
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.12 |             |  | Assignment and Assumption Agreement to Amended and Restated Trust
Agreement, dated February 3, 1997 between American Mutual Holding Company
and AmerUs Life Holdings, Inc., dated September 20, 2000, filed as Exhibit
4.15 on Form 10-Q dated November 14, 2000, is hereby incorporated by
reference.                                                                                                                    
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.13 |             |  | Assignment and Assumption to Guaranty Agreement, dated February 3, 1997
between American Mutual Holding Company and AmerUs Life Holdings, Inc.,
dated September 20, 2000, filed as Exhibit 4.16 on Form 10-Q, dated
November 14, 2000, is hereby incorporated by reference.                                                                                                                                               
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.14 |             |  | First Supplement to Subordinated Indenture, dated July 27, 1998, relating
to AmerUs Life Holdings, Inc.s 6.86% Junior Subordinated Deferrable
Interest Debentures, among American Mutual Holding Company, AmerUs Life
Holdings, Inc. and First Union National Bank, as Indenture Trustee, dated
September 20, 2000, filed as Exhibit 4.17 on Form 10-Q, dated November 14,
2000, is hereby incorporated by reference.    
|           |      |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                           
|           | 4.15 |             |  | First Supplement to Master Unit Agreement dated July 27, 1998, relating
to AmerUs Life Holdings, Inc.s 7.0% ACES units, between American Mutual
Holding Company and First Union National Bank, as Unit                                                                                                                                                                                                                   

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|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|---------- | ----- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNo. |       | Description
|           |       |            
|           |       |             |  | Agent, dated September 20, 2000, filed as Exhibit 4.18 on Form 10-Q,
dated November 14, 2000, is hereby incorporated by reference.                                                                                                                                                                                                                                       
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.16  |             |  | Assignment and Assumption Agreement to the QUIPS Guarantee Agreement
dated July 27, 1998, relating to AmerUs Life Holdings, Inc.s 7.0% ACES
units, between American Mutual Holding Company and AmerUs Life Holdings,
Inc., dated September 20, 2000, filed as Exhibit 4.19 on Form 10-Q, dated
November 14, 2000, is hereby incorporated by reference.                  
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.17  |             |  | Assignment and Assumption Agreement to the Common Trust Securities
Guarantee Agreement dated July 27, 1998, relating to AmerUs Life Holdings,
Inc.s 7.0% ACES units, between American Mutual Holding Company and AmerUs
Life Holdings, Inc., dated September 20, 2000, filed as Exhibit 4.20 on
Form 10-Q, dated November 14, 2000, is hereby incorporated by reference.
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.18  |             |  | First Supplement to Purchase Contracts between American Mutual Holding
Company and Holders, as specified, dated September 20, 2000, filed as
Exhibit 4.21 on Form 10-Q, dated November 14, 2000, is hereby incorporated
by reference.                                                                                                                                    
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.19  |             |  | First Supplement to Senior Indenture dated June 16, 1998, relating to
AmerUs Life Holdings,
Inc.s 6.95% Senior Notes, among American Mutual Holding Company, AmerUs
Life Holdings, Inc. and First Union National Bank, as Trustee, dated
September 20, 2000, filed as Exhibit 4.23 on Form 10-Q, dated November
14, 2000, is hereby incorporated by reference.          
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.20  |             |  | Indenture dated as of March 6, 2002 between AmerUs Group Co. and BNY
Midwest Trust Company, as Trustee, filed as Exhibit 4.1 on form 8-K/A,
dated February 28, 2002, is hereby incorporated by reference.                                                                                                                                                                
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.21  |             |  | Registration Rights Agreement dated as of March 6, 2002 between AmerUs
Group Co. and Credit Suisse First Boston Corporation, filed as Exhibit 4.2
on Form 8-K/A, dated February 28, 2002, is hereby incorporated by
reference.                                                                                                                                           
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.22  |             |  | Form of Purchase Contract Agreement between AmerUs Group Co. and Wachovia
Bank, National Association (formerly known as First Union National Bank),
as Purchase Contract Agent, filed as Exhibit 4.1 on Form 8-A12B, dated May
22, 2003, is hereby incorporated by reference.                                                                                            
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.23  |             |  | Form of Pledge Agreement among AmerUs Group Co., BNY Midwest Trust
Company, as Collateral Agent, Custodial Agent and Securities Intermediary
and Wachovia Bank, National Association (formerly known as First Union
National Bank), as Purchase Contract Agent, filed as Exhibit 4.2 on Form
8-A12B dated May 22, 2003, is hereby incorporated by reference.             
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.24  |             |  | Form of Remarketing Agreement among AmerUs Group Co., Wachovia Bank,
National Association (formerly known as First Union National Bank), as
Purchase Contract Agent, and the Remarketing Agent named therein, filed as
Exhibit 4.3 on Form 8-A12B dated May 22, 2003, is hereby incorporated by
reference.                                                               
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.25  |             |  | Form of Income PRIDES (included in Exhibit 4.1 as Exhibit A thereto),
filed as Exhibit 4.1 on Form 8-A12B, dated May 22, 2003, is hereby
incorporated by reference.                                                                                                                                                                                                      
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.26  |             |  | Officers Certificate attaching form of Senior Notes initially due 2008,
filed as Exhibit 4.7 on Form 8-A12B, dated May 22, 2003, is hereby
incorporated by reference.                                                                                                                                                                                                   
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 4.27  |             |  | Form of Purchase Agreement between AmerUs Group Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, filed as Exhibit 1.1 on Form 8-K,
dated as of May 28, 2003, is hereby incorporated by reference.                                                                                                                                                             
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 11*   |             |  | Statement Re: Computation of Earnings Per Share.                                                                                                                                                                                                                                                                                                                         
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 12*   |             |  | Computation of Ratios of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                      
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 31.1* |             |  | Certification of Chief Executive Officer of Periodic Report Pursuant to
Rule 13(a)  15(e) or Rule 15(d)  15(e).                                                                                                                                                                                                                                                        
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 31.2* |             |  | Certification of Chief Financial Officer of Periodic Report Pursuant to
Rule 13(a)  15(e) or Rule 15(d)  15(e).                                                                                                                                                                                                                                                        
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 32.1* |             |  | Certification of Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                                          
|           |       |             |  |                                                                                                                                                                                                                                                                                                                                                                          
|           | 32.2* |             |  | Certification of Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                                          

* Included herein.

44