Profile: Delphi Financial Group, Inc. (DFG.N)

Delphi Financial Group, Inc. (Delphi) is a holding company whose subsidiaries provide integrated employee benefit services. The Company manages all aspects of employee absence and provides the related insurance coverage, such as long-term and short-term disability, excess workers’ compensation, group life, travel accident and dental. The Company’s asset accumulation business emphasizes individual fixed annuity products. Delphi offers its products and services in all 50 states, the District of Columbia and Canada. The Company’s two segments are group employee benefit products and asset accumulation products.

The Company has three operating subsidiaries, Reliance Standard Life Insurance Company (RSLIC), Safety National Casualty Corporation (SNCC) and Matrix Absence Management, Inc. (Matrix). RSLIC and its subsidiary, First Reliance Standard Life Insurance Company (FRSLIC), underwrite a portfolio of group life, disability travel accident and dental insurance products targeted principally to the employee benefits market. RSLIC also markets asset accumulation products, primarily fixed annuities, to individuals and groups. SNCC focuses primarily on providing excess workers’ compensation insurance to the self-insured market, while Matrix provides integrated disability and absence management services to the employee benefits market across the United States.

Group Employee Benefit Products

Delphi is a provider of group life, disability and excess workers’ compensation insurance products to small and mid-sized employers, with more than 30,000 policies in force. It also offers travel accident, voluntary accidental death and dismemberment, and group dental insurance. The Company markets its group products to employer-employee groups and associations in a variety of industries. It insures groups ranging from two to more than 5,000 individuals, although the size of an insured group generally ranges from 10 to 1,000 individuals. Delphi markets its employee benefit products on an unbundled basis and as part of an Integrated Employee Benefit program that combines employee benefit insurance coverages and absence management services. The Company also offers a group limited benefit health insurance product, which provides employee-paid coverage for hourly, part-time or other employees with seasonal or other irregular work schedules who would generally not be eligible for other employer-provided health insurance plans.

Asset Accumulation Products

The Company’s asset accumulation products consist of fixed annuities, primarily single premium deferred annuities (SPDAs) and flexible premium annuities (FPAs). An SPDA provides for a single payment by an annuity holder to the Company and the crediting of interest by the Company on the annuity contract at the applicable crediting rate. An FPA provides for periodic payments by an annuity holder to the Company, the timing and amount, of which are at the discretion of the annuity holder, and the crediting of interest by the Company on the annuity contract at the applicable crediting rate. Interest credited on SPDAs and FPAs is not paid to the annuity holder but instead accumulates and is added to the annuity contract’s account value. During the year ended December 31, 2008, the Company’s SPDA products accounted for $209 million of asset accumulation product deposits, of which $185.8 million was attributable to the market value adjustment (MVA) annuity product, and 16.1 million was attributable to the indexed annuity.

Other Products and Services

Delphi provides integrated disability and absence management services on a nationwide basis through Matrix. The Company's disability and absence management services are designed to assist clients in identifying and minimizing lost productivity and benefit payment costs resulting from employee absence due to illness, injury or personal leave. The Company offers services, including event reporting, leave of absence management, claims and case management and return to work management. The Company provides these services on an unbundled basis or in an Integrated Employee Benefit program that combines these services with various group employee benefit insurance coverage.