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A Message on Guardian's Financial Strength and Investment Results:
{ts '2008-03-28 00:00:00.000'}





March 28, 2008                                             Dennis J. Manning, CLU, ChFC President and Chief Executive Officer

A Message on Guardian's Financial Strength and Investment Results:
Dear Valued Policyholders,
I'd like to update you on Guardian's very strong overall financial condition and successful investment performance in light of recent financial news. The media continues to be filled with coverage of the market turmoil surrounding structured finance securities and sub-prime mortgages that began last August, the resulting liquidity and credit crisis of recent weeks, and the Federal Reserve's very aggressive actions to alleviate the crisis and restore confidence in the financial markets. I want to assure you that Guardian has minimal exposure to these asset classes, our financial position remains strong, and our investment portfolio continues to perform very well.
Outstanding Financial Strength
Guardian had outstanding financial results in 2007, as evidenced by our record dividend payout, key financial indicators, and ratings upgrade from Fitch. Our capital, which serves as a cushion to absorb the financial effect of potential adverse events and as a source of continuing future income, grew from $ 4.3 billion to $ 4.6 billion in 2007. Our company's capitalization ratio of 16.3% , a standard industry measure of financial strength, is among the best in the industry. In addition to the Fitch upgrade of their rating of Guardian from AA to AA+ ("Very strong"), the rating agency Moody's rates Guardian Aa2 ("Excellent"); S&P rates our company AA ("Very strong"), with a positive outlook; and A.M. Best rates Guardian A+ ("Superior"), also with a positive outlook.
Successful Investment Performance
Our long-term investment strategy is to generate attractive investment returns for our participating policyholders in a manner consistent with our prudent approach to risk management and a high degree of diversification across different types of assets. The strong performance of our team of investment professionals has enabled us to successfully navigate the tumultuous markets of 2007 that have continued into the beginning of this year. Our 2007 investment results demonstrate the successful execution of our well-designed strategy, and our investment portfolio continues to perform well during the ongoing market volatility.
Guardian has never invested in CDOs (Collateralized Debt Obligations) or CLOs (Collateralized Loan Obligations). Guardian's exposure to sub-prime asset backed securities is very minimal. As of 12/31/07, less than 1% of our invested assets, or $24.0 million, was in sub-prime asset-backed securities. All of these are AAA-rated mortgages that were originated in 2005 or earlier, and they are fixed rate instruments, so they are therefore not subject to payment shock from adjustable rate resets. Guardian has no exposure to sub-prime Adjustable Rate Mortgages (ARMs) which are the predominant cause of the sub-prime crisis.
Guardian will continue to actively manage our investment portfolio with the goal of providing competitive policyholder dividends while protecting our company's financial strength throughout the market conditions we experience. Our skilled team of investment professionals, using the proven methods that have served us so well in recent months, continues to closely monitor our holdings to actively manage the risk profile of our portfolios and identify opportunities.
Strong Liquidity
Guardian, like most life insurance companies, does not have the kind of short-term obligations that led to the liquidity concerns currently rampant in the market. Guardian maintains a high-quality investment portfolio of over $30 billion that is invested to meet our long-term obligations to policyholders.
I want to assure you that Guardian's financial position remains extremely strong and that our investment portfolio continues to perform well despite the current uncertain markets. We will continue to follow the prudent, successful financial and investment strategies that have served us so well in recent months to meet our long-term obligations and help yield strong long-term results.


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