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## CITIZENS, INC. 

## SEGMENT OPERATIONS 

Our business is comprised of two operating business segments, as detailed below. 

• Life Insurance 

• Home Service Insurance 

Our insurance operations are the primary focus of the Company, as those operations generate most of our income. The amount of insurance, number of policies issued, and average face amounts of policies issued during the periods indicated are shown below. 

<img src='content_image/1037873.jpg'>

The number of policies issued decreased 8.7% and 8.9% for the Life Insurance and Home Service Insurance segments in 2019 and 2018, respectively. The decline in the number of new business applications in our Life Insurance segment is driven by ceasing sales in Brazil and terminating agreements with several independent consultants in Latin America who did not align with our vision, values and culture. Excluding these two factors, the number of policies issued by our international business increased during 2018 and 2019 as we invested heavily in our sales and marketing activities and achieved better alignment with our independent consultants on vision, value and strategy. While the number of policies issued has declined in the Life Insurance and Home Service Insurance segments during 2019, the average face amount issued has increased, resulting in overall premium income not declining at the same rate as policy issuances. 

These segments are reported in accordance with U.S. GAAP. The Company evaluates profit and loss performance based on net income before federal income taxes. 

<img src='content_image/1037872.jpg'>

