Adjusted operating income¹ was $47.2 million, compared with $48.5 million in second quarter 2011. Higher expenses contributed to the slight decline.

Net income of $43.8 million reflected net realized investment losses of $6.4 million versus second quarter 2011 net income of $58.1 million, which included net investment gains of $14.1 million.

Benefits operating income declined from year-ago levels due to a higher loss ratio of 65.5% and higher expenses.

Deferred Annuities earnings increased on higher account values and higher interest spread compared with second quarter 2011.

Income Annuities results benefited from an improved interest margin and mortality gains.

Life earnings fell as a result of higher individual claims and expenses.

Grow & Diversify initiatives lowered adjusted operating income per share by $0.04, in line with expectations.

Three Months Ended

June 30

Six Months Ended

June 30

(In millions, except per share data)

Net Income

Per Diluted Share of Common Stock

Adjusted Operating Income

Per Diluted Share of Common Stock

Three Months Ended

June 30

Six Months Ended

June 30

(In millions)

Benefits

Deferred Annuities

Income Annuities

Life

Other

Pretax Adjusted Operating Income

Less: Income Taxes**

Adjusted Operating Income

Pretax adjusted operating income was $16.3 million, compared with $19.0 million in second quarter 2011. The decline stemmed from a less favorable loss ratio and increased expenses largely associated with the build-out of Symetra’s group life and disability income insurance business.

Loss ratio was 65.5%, compared with 62.4% in the prior-year period. The second quarter 2012 loss ratio was adversely affected by adjustments totaling $3.3 million, primarily related to reinsurance. In addition, the claims experience of the medical stop-loss business acquired from American United Life Insurance Company (AUL) exceeded the long-term Benefits loss ratio target range of 63%–65%, but was still in line with deal expectations. Given the July 1, 2011 transaction date, Symetra’s second quarter 2011 loss ratio does not include AUL claims experience.

Sales of $35.6 million were up significantly from $23.4 million in second quarter 2011, driven by strong stop-loss production.

Pretax adjusted operating income was $23.8 million, up from $21.1 million in second quarter 2011. Higher fixed account values and higher interest spread led to the increase in earnings. Pricing discipline on new and existing business and higher prepayment investment income contributed to the higher spread. This improvement was partially offset by higher operating expenses related primarily to the development and launch of Symetra True Variable Annuity.

Total account values were $11.7 billion at quarter-end, up 7.3% from $10.9 billion at the end of second quarter 2011.

Sales were $325.5 million, compared with $446.5 million in second quarter 2011. Low interest rates continued to dampen fixed annuity sales. While sales were down in second quarter 2012, production across Symetra’s bank partner platforms was more evenly distributed relative to prior quarters. Sales of Symetra Edge Pro^® fixed indexed annuity grew for the fourth consecutive quarter — a trend that will be difficult to sustain if interest rates remain low.

Pretax adjusted operating income was $16.8 million, compared with $12.6 million in second quarter 2011. The positive variance was due mainly to a higher interest spread and more favorable mortality experience, partially offset by lower income from funding services activity. Increased allocations to commercial mortgage loans improved the interest spread.

Mortality gains were high again at $6.4 million, compared with mortality gains of $4.9 million in second quarter 2011.

Sales were $95.3 million, a marked improvement over sales of $38.7 million in the same quarter of 2011. Supporting the increase were shorter-duration single premium immediate annuity (SPIA) sales strategies to help customers maximize retirement income.

Pretax adjusted operating income was $13.2 million, compared with $17.3 million in second quarter 2011. The year-over-year decrease in earnings was the result of higher individual claims and increased operating expenses associated with bringing on new brokerage general agency (BGA) distribution partners and opening a new Symetra office in Waltham, Mass.

Sales of individual life products were $3.2 million, up from $2.9 million in the same quarter a year ago. With recent changes to Symetra’s single premium life product given sustained low interest rates, third quarter 2012 individual life sales are expected to decline.

Pretax adjusted operating losses were $7.5 million, compared with losses of $2.4 million in second quarter 2011. The Other segment includes unallocated corporate income and expenses, interest expense on debt and other income outside of Symetra’s four business segments. Second quarter 2012 results reflected lower investment income related to alternative and tax credit investments.

Net realized investment losses were $6.4 million, down from net gains of $14.1 million in second quarter 2011. Lower gains on sales of fixed maturities and increased impairments drove the decline. A year ago, Symetra posted a $28.2 million gain, primarily from the sale of certain residential mortgage-backed securities to manage prepayment risk. By comparison, second quarter 2012 gains from fixed maturity sales were $17.3 million. Impairment losses for the quarter were $9.4 million, compared with $2.8 million in second quarter 2011.

Symetra’s equity portfolio posted net investment losses of $9.4 million, largely due to the performance of the common stock portfolio. This compares with net losses of $7.7 million in second quarter 2011. The company’s common stock portfolio, which is marked to market and is included in the company’s overall net realized investment results, had negative returns of -4.9% in second quarter 2012, compared with the S&P 500 Total Return Index result of -2.8%.

Total stockholders’ equity, or book value, as of June 30, 2012, was $3,378.4 million, or $24.46 per share, compared with $3,154.7 million, or $22.85 per share, as of March 31, 2012.

Adjusted book value as converted,¹ as of June 30, 2012, was $2,408.5 million, or $17.44 per share, up from $2,372.7 million, or $17.19 per share, as of March 31, 2012.

Risk-based capital (RBC) ratio for Symetra Life Insurance Company at the end of second quarter 2012 was estimated at 474%. Statutory capital and surplus, including asset valuation reserve (AVR), was $2,108.1 million.

Provision for income taxes was $13.6 million, down $10.6 million from second quarter 2011. The decrease stemmed from lower pretax income and increased tax benefits from tax credit investments, which reduced the company’s effective tax rate. Symetra’s effective tax rate for second quarter 2012 was 23.7%, compared with 29.4% for the same period in 2011.

changes in the interest rate environment;

Benefits Division loss ratio relative to long-term target;

timing and success of product launches;

amount of issuance and yields on commercial mortgage loans;

increases or decreases in the amount of prepayments in the investment portfolio;

returns on alternative investment portfolio;

mortality experience;

life and annuity sales levels; and

achievement of target cash balances.

Adjusted operating income is defined by the company as net income, excluding after-tax net investment gains (losses) and including after-tax net realized gains (losses) on Symetra’s fixed indexed annuity (FIA) product.

Adjusted operating income per diluted share is defined as adjusted operating income divided by diluted common shares outstanding.

Adjusted book value is defined as stockholders’ equity, less accumulated other comprehensive income (loss), or AOCI.

Adjusted book value, as converted, is defined as stockholders’ equity, less AOCI plus the assumed proceeds from exercising the outstanding warrants.

Adjusted book value per share, as converted, is calculated as adjusted book value, as converted, divided by the sum of outstanding common shares and shares subject to outstanding warrants.

estimates or projections of revenues, net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share, market share or other financial forecasts;

trends in operations, financial performance and financial condition;

financial and operating targets or plans; and

business and growth strategy, including prospective products, services and distribution partners.

the effects of dramatic fluctuations in interest rates and a prolonged low interest rate environment;

general economic, market or business conditions, including further economic downturns or other adverse conditions in the global and domestic capital and credit markets;

the effects of changes in monetary policy, government programs to stimulate mortgage refinancing and significant increases in corporate refinance activity;

the performance of Symetra’s investment portfolio;

the continued availability of quality commercial mortgage loan investments and Symetra’s continued capacity to invest in commercial mortgage loans;

Symetra’s ability to successfully execute on its “Grow & Diversify” strategy;

recorded reserves for future policy benefits and claims subsequently proving to be inadequate or inaccurate;

deviations from assumptions used in setting prices for insurance and annuity products or establishing cash-flow testing reserves;

continued viability of certain products under various economic, regulatory and other conditions;

market pricing and competitive trends related to insurance products and services;

changes in amortization of deferred policy acquisition costs and deferred sales inducements;

financial strength or credit ratings changes;

the availability and cost of capital and financing;

the continued availability and cost of reinsurance coverage;

changes in laws or regulations, or their interpretation, including those that could increase Symetra’s business costs and required capital levels;

the ability of subsidiaries to pay dividends to Symetra;

the effects of implementation of the Patient Protection and Affordable Care Act;

the effects of implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; and

the risks that are described from time to time in Symetra’s filings with the U.S. Securities and Exchange Commission, including those in Symetra’s 2011 Annual Report on Form 10-K and 2012 quarterly reports on Form 10-Q.

Six Months Ended

June 30

Revenues

Premiums

Net investment income

Policy fees, contract charges and other

Net realized investment gains (losses):

Total other-than-temporary impairment losses on securities

Less: portion of losses recognized in other comprehensive income

Net impairment losses recognized in earnings

Other net realized investment gains

Total net realized investment gains (losses)

Total revenues

Benefits and expenses

Policyholder benefits and claims

Interest credited

Other underwriting and operating expenses

Interest expense

Amortization of deferred policy acquisition costs

Total benefits and expenses

Income from operations before income taxes

Provision (benefit) for income taxes

Current

Deferred

Total provision for income taxes

Net income

Net income per common share

Basic

Diluted

Weighted-average number of common shares outstanding

Basic

Diluted

Cash dividends declared per common share

Non-GAAP financial measures

Adjusted operating income

Reconciliation to net income

Net income

Less: Net realized investment gains (losses) (net of taxes)^**

Add: Net realized losses – FIA (net of taxes)^***

Adjusted operating income

Historical financial information has been restated to reflect the retrospective adoption of a new accounting standard for deferred acquisition costs on Jan. 1, 2012 as described in our 2011 report on Form 10-K and our first quarter 2012 report on Form 10-Q.

Net realized investment gains (losses) are reported net of taxes of $(2.2), $4.9, $6.8, and $10.4 for the three and six months ended June 30, 2012 and 2011, respectively.

Net realized losses – FIA are reported net of taxes of $(0.4), $(0.2), $0.0 and $(0.0) for the three and six months ended June 30, 2012 and 2011, respectively.

Assets

Total investments

Other assets

Separate account assets

Total assets

Liabilities and stockholders’ equity

Policyholder liabilities

Notes payable

Other liabilities

Separate account liabilities

Total liabilities

Common stock and additional paid-in capital

Retained earnings

Accumulated other comprehensive income, net of taxes

Total stockholders’ equity

Total liabilities and stockholders’ equity

Book value per share^**

Non-GAAP financial measures

Adjusted book value

Reconciliation to stockholders’ equity

Total stockholders’ equity

Less: AOCI

Adjusted book value

Add: Assumed proceeds from exercise of warrants

Adjusted book value, as converted

Adjusted book value per share, as converted^***

Historical financial information has been restated to reflect the retrospective adoption of a new accounting standard for deferred acquisition costs on Jan. 1, 2012 as described in our 2011 report on Form 10-K and our first quarter 2012 report on Form 10-Q.

Book value per share is calculated based on stockholders’ equity divided by outstanding common shares plus shares subject to outstanding warrants, totaling 138.107 and 137.613 as of June 30, 2012 and December 31, 2011, respectively.

Adjusted book value per share, as converted, is calculated based on adjusted book value, as converted, divided by outstanding common shares plus shares subject to outstanding warrants, totaling 138.107 and 137.613 as of June 30, 2012 and December 31, 2011, respectively.

Segment pretax adjusted operating income (loss)

Benefits

Deferred Annuities

Income Annuities

Life

Other

Subtotal

Add: Net realized investment gains (losses)

Less: Net realized losses – FIA

Income from operations before income taxes

Reconciliation of revenues to operating revenues

Revenues

Less: Net realized investment gains (losses)

Add: Net realized losses – FIA

Operating revenues

ROE

Average stockholders’ equity^**

Non-GAAP financial measures

Operating ROAE

Average adjusted book value^***

Historical financial information has been restated to reflect the retrospective adoption of a new accounting standard for deferred acquisition costs on Jan. 1, 2012 as described in our 2011 report on Form 10-K and our first quarter 2012 report on Form 10-Q.

Average stockholders’ equity is derived by averaging ending stockholders’ equity for the most recent five quarters.

Average adjusted book value is derived by averaging ending adjusted book value for the most recent five quarters.