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health care inflation every year, annual premium rate increases for the Medicare supplement policies are necessary. While federal law controls some of the terms under which premiums may be increased, state laws and politics also affect the approvals required from state regulators. Obtaining timely rate increases is of critical importance to success in this market and we have both the discipline and experience to successfully get our necessary rate approvals. 

In managing this product line we are dedicated to preserving our profit margins, even at the expense of top-line sales growth, if necessary. 

Our expertise and discipline to execute our strategy resides in our niche distribution systems . . . 

## AMERICAN INCOME LIFE 

Waco, Texas 

American Income Life Insurance Company, one of Torchmark’s wholly owned subsidiaries, is a great example of a life insurance distribution organization that has a strong niche culture within the “middle-income America” demographic. AIL is a “union label” company that has endorsements 

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One of our fastest growing sales organizations, AIL was acquired by Torchmark in 1994. The company was founded in the early ‘50s by one of the more colorful insurance entrepreneurs of the time, Bernard Rapoport, well known as a philanthropist and as an activist in Democratic politics. The company began marketing to labor union members in the early ‘60s, a clear affinity given Mr. Rapoport’s social and political orientation. 

at the local union level which support our sales representatives’ focus on selling to union members. 

While Mr. Rapoport is no longer involved in day-to- day activities, the culture he established still pervades the organization and since that time, union members have remained AIL’s primary market focus. Those forty years of experience in 

the union market coupled with the cultural support from the home office give us a level of expertise in this niche that would be difficult for competitors to match. This market strategy takes full advantage of the close affinity union members have for their organizations which translates into a 

strong tendency that a union endorsement will greatly increase the likelihood that members will purchase one of our policies. Among all the niche markets in which Torchmark operates, we find the affinity of union members to be one of the strongest. Further, there really are no competitors attempting to sell life insurance to union members. Our success is governed by our discipline to efficiently market our products by growing and motivating our sales force while maintaining our profit margins on our sales. Currently, AIL has the highest profit margin of all Torchmark companies. 

Looking to the future, AIL is disciplined to develop the most modern and efficient methods of reaching 

labor union members and other similar market niches while maintaining the culture that gives us our advantage. In recent years we have begun marketing to credit union members using similar 

techniques and products which have been successful in the labor union market. We have also implemented more streamlined administrative procedures, ones that we perfected at sister 

We find the affinity of union members to be one of the strongest among our niche markets. 

## “A Excellent” 

A.M. Best Rating 

## “AA Excellent” 

Standard & Poor’s Rating for Financial Strength 

