Adjusted book value per share, as converted was $16.51 per share as of Sept. 30, 2011, compared with $16.49 per share as of June 30, 2011. Symetra Life Insurance Company ended third quarter 2011 with an estimated risk-based capital (RBC) ratio of 455% and statutory capital and surplus, including asset valuation reserve (AVR), of $1,996.7 million. The estimated RBC ratio for third quarter 2011 reflected the decline in equity investments and the AUL transaction. On Jan. 1, 2012, the company will retrospectively adopt the new DAC accounting standard. The adoption of this standard is expected to reduce Symetra’s Dec. 31, 2010 book value by 0.8% to 1.2% and adjusted book value by 1.3% to 1.7%. This new accounting standard is not applicable to the company’s statutory capital and surplus nor will it affect Symetra’s RBC or holding company liquidity position.
Although we have not yet completed our statutory financial statements for the third quarter, we estimate our RBC ratio will be within the range of 500% and 540% at the end of September. Despite our expectation for higher spending in the fourth quarter, I am confident we will achieve our 2011 objective of growing operating earnings per diluted share at 8%, excluding the impact of the yen. If the yen averages 75 to 80 to the dollar for the last three months of the year, we would expect reported operating earnings for the fourth quarter to be in the range of $1.45 to $1.52 per diluted share. Under that exchange rate assumption, we would expect full year operating earnings of $6.30 to $6.37 per diluted share. “Looking ahead, I want to reiterate our expectation that 2012 operating earnings per diluted share will increase 2% to 5% on a currency neutral basis. Furthermore, once the effects of our proactive investment derisking program and low interest rates have been integrated into our financial results, we believe the rate of earnings growth in future years should improve.”