Torchmark Corporation Insurance Investor Conference February 24, 2009

TorchmarkCorporation

Insurance Investor ConferenceFebruary 24, 2009

$6.00

5.00

4.00

3.00

2.00

1.00

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

3.21

4.594.99

5.455.80

4.23

2.94


Net Operating Income Per ShareNet Operating Income Per Share

10-Year Compound Annual Growth Rate – 9.3%

3.873.51

2.64

2


Underwriting

3

Underwriting Income2008

Underwriting Income2008


($ in millions)

American Income

Direct Response

Liberty National

Military

UA Independent

UA Branch

Other

Total

$474 $128 38%

511 92 27%

287 53 15%

201 43 13%

32 1 0%

17 3 1%

95 20 6%

$1,617 $340 100%

$73 $23 19%

45 3 3%

135 28 24%

0 0 0%

357 39 33%

341 25 21%

0 0 0%

$951 $118 100%

$547 $151 33%

556 95 21%

422 81 18%

201 43 9%

389 40 9%

358 28 6%

95 20 4%

$2,568 $458 100%

Life U/W Share ofPremium Inc. U/W Inc.

Health U/W Share ofPremium Inc. U/W Inc.

Total Life and Health U/W Share ofPremium Inc. U/W Inc.

Underwriting Income is premium and other operating income less policy obligations, commission and other acquisition and administrative expenses.

4

Net Life SalesNet Life Sales

(8%)

(5%)

1%

12%

13%

13%

13%

13%

NetSales

Change fromYear-AgoQuarter


$62.4

67.4

66.1

68.3

70.5

76.0

75.0

77.0

1Q 07

2Q 07

3Q 07

4Q 07

1Q 08

2Q 08

3Q 08

4Q 08

($ in millions)

5


Investments

6

Investment Portfolio at 12/31/08Investment Portfolio at 12/31/08

Fixed Maturities

Equities

Mortgage Loans

Investment Real Estate

Policy Loans

Other Long-Term Investments

Short-Term Investments

TOTAL

$9,610

17

17

2

360

53

131

$10,190

94%

0%

0%

0%

4%

1%

1%

100%

78%

3%

10%

1%

4%

3%

1%

100%

AmortizedCost

% of Total Industry


($ in millions)

7


Fixed Maturities by Type12/31/08

Fixed Maturities by Type12/31/08

Corporates $7,463 $(1,188) BBB+ 78%

Redeemable Preferred Stock:

U.S. 1,334 (384) BBB+ 14%

Foreign 115 (52) BBB+ 1%

Municipals 261 (44) AA 3%

Government-Sponsored Enterprises 202 (8) AAA 2%

Government & Agencies 23 2 AA+ 0%

Residential Mortgage-Backed Securities 23 2 AAA 0%

Commercial Mortgage-Backed Securities 17 0 AAA 0%

CDO’s 131 (117) A- 1%

Other Asset-Backed Securities 41 (4) A- 0%

TOTAL $9,610 $(1,793) BBB+ 100%

AmortizedCost

Net Unreal.

Gain (Loss)

AverageRating

% of Total

AmortizedCost

($ in millions)

8


Net Unrealized LossesFixed Maturities

Net Unrealized LossesFixed Maturities

($ in millions)

Net Unrealized Losses:

12/31/08 $1,793

06/30/08 670

Increase in Unrealized Losses* $1,123

*% of Increase in Unrealized Losses From Fixed Maturities With:

No Change in Rating 74%

One Notch Downgrade 18%

9


Fixed Maturities by Sector12/31/08

Fixed Maturities by Sector12/31/08

Financial – Life/Health/PC Insurance $1,764 $(494) BBB+ 18%

Financial – Bank 1,659 (328) A 17%

Financial – Other 508 (185) BBB+ 5%

Utilities 1,105 (60) BBB+ 11%

Transportation & Other Industrials 831 (82) BBB+ 9%

Energy 793 (96) BBB 8%

Consumer – Non-cyclical 644 (54) BBB+ 7%

Consumer – Cyclical 471 (117) BBB 5%

Communications 600 (103) BBB- 6%

Basic Materials 578 (107) BBB 6%

Other 657 (167) AA 7%

TOTAL $9,610 $(1,793) BBB+ 100%

Amort.Cost

NetUnreal.Loss

AverageRating

% of TotalAmort.Cost

($ in millions)

10


Investment Grade:

AAA $492 ($9) 5%AA 442 (27) 5%A 3,366 (511) 35%BBB 4,597 (995) 48%25%

8,897 (1,542) 92.6% 94%

Below Investment Grade:

BB 470 (150) 5% 3%B 131 (50) 1% 2%Less Than B 112 (51) 1% 1%

713 (251) 7.4% 6%

TOTAL $9,610 ($1,793) 100% 100%

AmortizedCost

Net Unreal.Loss

% of AmortizedCost to Total

TMK Industry

}

Fixed Maturities by RatingFixed Maturities by Rating

($ in millions)

69%

11


Capitalization and Liquidity

12


Capitalization12/31/08

Capitalization12/31/08

Insurance Company

Risk Based Capital Capital $1,281Required Capital $389Company Action Level RBC 329%

Corporate

Debt to CapitalCommercial Paper $304 7.0%Senior Debentures & Notes 602 13.9%Trust Preferred 120 2.7%

Total Debt $1,026 23.6%Equity, Excluding FAS 115 3,318

Total Capitalization $4,344

($ in millions)

13


Insurance Companies Net Cash FlowInsurance Companies Net Cash Flow

Cash From Operations

Insurance Underwriting $485Excess Investment Income 608Income Taxes and Parent Expenses (180)

Net Cash From Operations $931 $940 - $960

Investment Maturities 587

Net Cash Flow $1,518 $1,540 - $1,560

($ in millions)

2008 2009 E

$494 608

(171)

587 600

14


Parent Company Free Cash FlowParent Company Free Cash Flow

($ in millions)

Insurance Companies:

Net Cash Flow $1,518Less Cash Retained 1,081Cash Dividended to TMK $437

Torchmark Parent Company

Dividends Received FromInsurance Companies $437

Less Cash Outflow:Interest Expense 62Dividends to Shareholders 49Other, Net (17)

Net Outflow $94

Free Cash Flow $343 $320 - $330

2008 2009 E

15


2009 Debt Maturities2009 Debt Maturities

($ in millions)

Cash Needed for 2009 Debt Maturities:

Commercial Paper $305 Senior Notes Due 8/09 99

$404

Sources of 2009 Debt Repayment

> Preference is to Refinance> Sources of Cash if Refinancing Terms Aren’t Favorable

2009 Free Cash Flow $325Loans From Subsidiaries 390Issuance of Preferred Shares to Subs 335Draw Down Bank Line 400Other Sources 400

$1,850

16


Long-Term Debt MaturitiesLong-Term Debt Maturities

Maturity Schedule

’09 ’11 ’13 ’15 ’17 ’19 ’21 ’23 ’25 ’27 ’29 ’31 ’33 ’35 ’37 >

$300

250

200

150

100

50

0

$250

$99 $94

$166

$120

($ in millions)

17


Share Repurchases

18

2009*

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

$29.45

$55.86

$65.39

$57.47

$53.15

$51.39

$38.17

$37.82

$37.25

$23.22

$32.50

$36.63

500

7,638

6,150

5,575

5,647

5,221

5,902

4,817

4,265

5,806

5,398

3,436

4.7 – 4.9

9.6

12.0

11.5

11.6

12.1

9.9

10.8

11.6

7.9

12.3

15.4

Share RepurchasesShare Repurchases


No. of Shares(in 000’s)

AveragePrice

PERatio

Year

* Information based on transactions thru 2/17/09 and management’s guidance for 2009 operating income per share.

19


SummarySummary

Core Operations• Steady earnings per share growth• Straightforward protection coverage – minimal exposure to variable annuities• Double-digit growth in life sales• Strong growth in agent recruiting at Liberty National and American Income• Stable persistency in life business

Investments• Primarily investment grade fixed maturities• Little exposure to equities, mortgages, real estate• No direct exposure to subprime or Alt A mortgages• No credit default swaps or other derivatives• Ratio of invested assets to equity is 3X versus peer average of 7X

Capitalization and Liquidity• Well capitalized• Strong and consistent free cash flow• More than sufficient liquidity to retire debt

Share Repurchase Program• Still the best use of free cash flow along with possible retirement of debt• Program will be continued prudently

20

This presentation may contain forward-looking statements within the meaning of the federal

securities laws. These prospective statements reflect management’s current expectations, but are not

guarantees of future performance. Accordingly, please refer to Torchmark’s cautionary statement

regarding forward-looking statements, and the business environment in which the Company operates,

contained in the Company’s Form 10-K for the period ended December 31, 2007, and subsequent

Forms 10-Q, on file with the Securities and Exchange Commission, and on the Company’s web site at

www.torchmarkcorp.com on the Investor Relations page. Torchmark specifically disclaims any

obligation to update or revise any forward-looking statement because of new information, future

developments or otherwise.

This presentation contains certain financial measures that differ from the comparable GAAP

measures. Reconciliations between the non-GAAP measures and the comparable GAAP measures

may be found on the Company’s web site at www.torchmarkcorp.com on the Investor Relations page

under SEC filings (form 10-K for 2007) and subsequent quarterly earnings press releases.

TorchmarkCorporation21


Documents

Torchmark Corporation Insurance Investor Conference February 24, 2009