Shenandoah Life Insurance Company’s GAAP financial results were reported
by Robert W. Clark, President and Chief Executive Officer, at the company’s annual
policyholders meeting on Friday, April 27, 2007, at the home office of the company in Roanoke, Virginia.

For 2006, Shenandoah Life posted excellent financial results as records were set in operating earnings, net income, total assets and policyholders’ equity. Total 2006 revenue was $260.9 million. The company’s operating gain before income taxes was $19.3 million, an increase of 3%, and net income increased 4% to $14.6 million. Total assets increased 4% to $1.9 billion, and policyholders’ equity increased 5% to $223.5 million.

Strong investment performance in the individual line of business and favorable loss ratios in the group line of business were significant contributors to the 2006 financial results. Net investment income increased 4% to $80.3 million. Both the yield and the credit quality of the investment portfolio remained very strong in 2006. The commercial mortgage portfolio was a stellar performer, growing almost 20% to $183.2 million. At the end of the year, the portfolio yield on the total invested assets was 6.37% and 97% of the securities in the fixed income segment were rated investment grade.

The company reported growth in both individual and group life insurance in force for 2006. Individual life insurance in force increased 10% during the year to $12.3 billion. Group life insurance in force increased 4% to $2.7 billion.

The reported information was derived from Shenandoah Life’s audited GAAP and statutory
financial statements, a reconciliation of which is available in the company’s 2006 Annual Report to Policyholders, which was published in March and posted on the company’s Web site, www.shenlife.com.