Adjusted operating income¹ was $32.9 million, or $0.24 per diluted share, compared with $51.1 million, or $0.37 per diluted share, in fourth quarter 2011. Grow & Diversify initiatives lowered adjusted operating income per share by $0.05.

Net income was $31.0 million, or $0.22 per diluted share, compared with net income of $73.7 million, or $0.54 per diluted share, in fourth quarter 2011. Equity gains from mark-to-market accounting were substantially lower in fourth quarter 2012 than the same quarter in 2011.

Benefits operating income declined from year-ago levels due to a higher loss ratio.

Deferred Annuities earnings grew on higher account values.

Income Annuities earnings decreased as a result of a lower interest spread.

Individual Life earnings were down due to lower bank-owned life insurance (BOLI) return on assets (ROA), higher individual claims and increased operating expenses.

Three Months Ended

December 31

Twelve Months Ended

December 31

(In millions, except per share data)

Net Income

Per Diluted Share of Common Stock

Adjusted Operating Income

$

51.1

$

185.3

Per Diluted Share of Common Stock

$

0.37

$

1.34

$

1.38

Return on Equity

Operating Return on Average Equity

Investment income of $10.8 million, related to investment prepayments (primarily bond make-whole payments in the Deferred Annuities segment), offset by related increased amortization of $2.5 million.

Operating expense charges of $4.6 million, including expenses related to the exploration of an acquisition opportunity that did not come to fruition.

Reserve increase and higher claims, resulting in a $3.8 million decline in Benefits earnings related to the limited benefit medical business.

Reserve increases of $2.1 million, resulting in a charge against earnings of $1.1 million in Income Annuities, and a charge of $1.0 million in the Individual Life segment.

A deferred tax asset adjustment, resulting in a $4.7 million increase in income tax expense.

Three Months Ended

December 31

Twelve Months Ended

December 31

(In millions)

Benefits

Deferred Annuities

Income Annuities

Individual Life

Other

Pretax Adjusted Operating Income¹

Less: Income Taxes**

Adjusted Operating Income

Pretax adjusted operating income was $12.4 million, compared with $24.2 million in fourth quarter 2011. For full-year 2012, pretax adjusted operating income was $70.5 million, compared with $79.1 million in 2011. Operating income decreased in fourth quarter and full-year 2012 due to a less favorable loss ratio. Higher operating expenses, mainly related to the expansion of Symetra’s group life and disability income insurance business, also contributed to the earnings decline.

Loss ratio was 67.7%, compared with a favorable 59.6% in fourth quarter 2011. For full-year 2012, the Benefits loss ratio was 65.1%, compared with 63.1% for 2011. The fourth quarter 2012 loss ratio reflected higher medical stop-loss claims compared with the same quarter a year ago, and an additional $3.8 million in claims and reserves related to the limited benefit medical line. The full-year loss ratio of 65.1% was in line with the company’s long-term target range of 63%–65%.

Sales of $25.7 million were down slightly, compared with $26.5 million in fourth quarter 2011. For full-year 2012, sales were $159.3 million, up from $118.7 million in the

prior year. Consistent pricing and strong producer relationships led to an excellent year of medical stop-loss sales. Group life and disability income sales also contributed to the full-year improvement with sales of $15.6 million in 2012, up from $4.3 million in 2011.

Pretax adjusted operating income was $29.1 million, compared with $27.5 million in fourth quarter 2011. For the full year, pretax adjusted operating income totaled $102.7 million, compared with $95.8 million in 2011. Earnings increased in both fourth quarter and full-year 2012 primarily due to higher fixed and fixed indexed annuity account values. This improvement was mostly offset by higher operating expenses related to Symetra True Variable Annuity^®. In fourth quarter 2012, investment prepayment-related income, net of amortization, boosted earnings by $7.1 million, compared with a net increase of $6.3 million in fourth quarter 2011.

Total account values were $11.8 billion at year-end, up 4% from $11.3 billion at the end of 2011.

Sales were $300.8 million, compared with $356.8 million in fourth quarter 2011. For full-year 2012, sales were $1,146.6 million, down from $1,815.3 million in 2011. Deferred annuity sales, although up from third quarter 2012 sales of $166.5 million, continued to feel the effects of low interest rates. Fixed indexed annuity (FIA) sales for fourth quarter 2012 were $115.8 million, up $90.0 million over the same quarter in 2011. For the full year, FIA sales grew to $292.6 million, compared with $45.3 million in 2011 (Symetra Edge Pro^® fixed indexed annuity launched in April 2011). True VA sales fell short of expectations in 2012.

Pretax adjusted operating income was $5.1 million, compared with $6.5 million in fourth quarter 2011. Fourth quarter 2012 results reflected lower income from decreased funding services activity and a lower interest spread driven by a $1.1 million reserve increase. The earnings decline was partially offset by better mortality experience. For the full year, pretax adjusted operating income was $45.0 million, up from $35.1 million in 2011. The increase was due primarily to favorable mortality experience and higher fee revenue on sales of third-party structured settlements, partially offset by lower income from reduced funding services activity.

Mortality losses were $0.9 million in fourth quarter 2012, compared with mortality losses of $3.9 million in fourth quarter 2011. On a full-year basis, mortality gains were $12.9 million in 2012, compared with mortality gains of $0.3 million in 2011.

Sales were $57.6 million in fourth quarter 2012 and $258.2 million for the full year. This compares with sales of $54.1 million in the same quarter of 2011 and $221.9 million for full-year 2011. Sales were up due to the effectiveness of shorter-duration single premium immediate annuity (SPIA) sales strategies to help customers maximize retirement income. In December 2012, Symetra discontinued sales of structured settlement annuities; however, the company will continue to service the existing block of business.

Pretax adjusted operating income was $5.5 million, compared with $18.1 million in fourth quarter 2011. For the full year, pretax adjusted operating income was $47.0 million, compared with $65.3 million in 2011. Fourth quarter 2012 operating income fell $3.8 million due to a decrease in BOLI ROA stemming from higher BOLI claims and lower investment yields. Individual life claims, which fluctuate from quarter to quarter, increased $2.8 million over fourth quarter 2011, though mortality was in line with expectations. Increased operating expenses of $3.2 million also contributed to the fourth quarter earnings decline. For the year, lower BOLI ROA, higher individual life claims and increased operating expenses accounted for the overall decrease in earnings.

Sales of individual life products were $1.3 million in fourth quarter 2012, down from $3.1 million in the same quarter a year ago. Full-year 2012 sales were $9.1 million, compared with $11.7 million in 2011. Fourth quarter and full-year results reflected lower single premium life sales due to product changes made in response to sustained low interest rates. Sales of Symetra Classic Universal Life fell short of expectations in 2012. For the full year, BOLI sales were $2.0 million in 2012, compared with no sales in 2011.

Pretax adjusted operating loss was $5.3 million, compared with a loss of $5.2 million in the same quarter a year ago. The Other segment includes unallocated corporate income and expenses, interest expense on debt and other income outside of Symetra’s four business segments. Fourth quarter 2012 results included expenses related to the company’s exploration of an acquisition opportunity that did not come to fruition. For full-year 2012, the Other segment had a pretax adjusted operating loss of $26.1 million, compared with a loss of $10.7 million in 2011. Full-year results included an $11.6 million decrease in net investment income, primarily due to tax credit investments, which lowered Symetra’s income tax expense in 2012 compared with 2011.

Symetra’s equity portfolio is marked to market and consists of the company’s common stock and other equity-like investments. This portfolio posted net investment gains of $3.1 million, compared with net gains of $38.5 million in fourth quarter 2011, reflecting lower equity market growth. For the full year, net realized investment gains on the equity portfolio were $36.7 million, compared with net losses of $9.1 million in 2011.

Net realized investment losses were $3.9 million, compared with net gains of $34.1 million in fourth quarter 2011, driven by smaller gains in the equity portfolio. For full-year 2012, net realized investment gains were $31.1 million, compared with net gains of $7.2 million in 2011. Significantly improved equity returns for the year were slightly offset by higher impairments of $29.0 million, compared with impairments of $14.1 million in 2011.

Total stockholders’ equity, or book value, as of Dec. 31, 2012, was $3,630.1 million, or $26.29 per share, compared with $3,641.2 million, or $26.37 per share, as of Sept. 30, 2012.

Adjusted book value as converted,¹ as of Dec. 31, 2012, was $2,477.0 million, or $17.94 per share, up from $2,455.0 million, or $17.78 per share, as of Sept. 30, 2012.

Risk-based capital (RBC) ratio for Symetra Life Insurance Company at the end of 2012 was 486%. Statutory capital and surplus, including asset valuation reserve (AVR), was $2,173.9 million. A $25 million pretax statutory reserve was established to address the risk related to low interest rates, mainly in Symetra’s structured settlement and immediate annuity blocks of business.

Provision for income taxes in the fourth quarter 2012 was $12.9 million, compared with $32.2 million in fourth quarter 2011. The decrease reflects lower pretax income from fluctuations in net realized investment returns, offset by a $4.7 million deferred tax asset adjustment. Symetra’s effective tax rate for fourth quarter 2012 was 29.4%, compared with 30.4% for the same period in 2011. Symetra’s effective tax rate in 2012 was 24.0%, compared with 28.3% in 2011, reflecting increased benefits from tax credit investments.

changes in the interest rate environment;

Benefits Division loss ratio relative to long-term target;

maintaining current distribution relationships and success with new distribution partners;

timing and levels of life and annuity sales;

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;

managing operating expense levels;

timing and amount of common stock buybacks;

changes in expenses related to legal proceedings or regulatory investigations; 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) related to Symetra’s fixed indexed annuity (FIA) products.

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

Pretax adjusted operating income is defined as adjusted operating income on a pretax basis. It also represents the cumulative total of segment pretax adjusted operating income, which at the segment level is a GAAP measure.

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.

Operating return on average equity is defined as adjusted operating income for the most recent four quarters, divided by average ending adjusted book value for the most recent five quarters.

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;

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

stock repurchase program.

the effects of 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 and fiscal policy;

the effects of changes in 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 strategies;

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, reserve levels 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;

our ability to implement effective and sufficient risk management policies and procedures, including hedging strategies;

the initiation of legal or regulatory investigations against us and the results of any legal or regulatory proceedings;

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.

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 recognized in other comprehensive income

Net impairment losses recognized in earnings

Other net realized investment gains (losses)

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 gains (losses) - FIA (net of taxes)***

Adjusted operating income

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***

Segment pretax adjusted operating income (loss)

Benefits

Deferred Annuities

Income Annuities

Individual Life

Other

Subtotal

Add: Net realized investment gains (losses)

Less: Net realized gains (losses) - FIA

Income from operations before income taxes

Reconciliation of revenues to operating revenues

Revenues

Less: Net realized investment gains (losses)

Add: Net realized gains (losses) - FIA

Operating revenues

ROE

Average stockholders’ equity**

Non-GAAP financial measures

Operating ROAE

Average adjusted book value***