Operating Fundamentals Dividends are a major determinant of a policy's true cost. Policy persistency is the best single measure of policyowner satisfaction. This degree of policyowner loyalty promotes growth and helps to keep operating expenses per policy low. Disability income claim experience continued the improvement seen in 1998. Investment Performance General account investment performance continued to reflect the benefits of a balanced and diversified investment philosophy.
Bonds are the foundation of the company's investments.
The company continues to be an active mortgage lender, investing largely in office and warehouse buildings, shopping centers and apartments. Mortgages are well diversified by property type and geographic location. Equity investments, including public common stocks, real estate, private equities and subsidiary investments, produced superior returns again in 1999. Financial Strength Surplus provides the company and its policyowners protection against the unexpected and supports a long-term investment strategy by cushioning against market volatility. This reflects the company's conservative application of statutory accounting principles.