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. The company enters 2000 with the financial strength to meet future challenges and to assure financial security. For over 90 years, the company's Trustees have annually named an outside group of three to five policyowners to make an independent and completely unrestricted evaluation of the company's operations, management and strategic plans.