Guardian continued to improve its 2010 financial position with a strong second quarter. Sales results were positive and we advanced our ongoing efforts to expand our nationwide Financial Representative field force. Our investments portfolio outperformed its benchmarks while protecting our capital, and we continued to enhance products, service capabilities, and operational efficiency throughout our organization.

Financial Highlights
Guardian is in strong financial position as evidenced by the following results through the first six months:

• Reported statutory operating income, the primary way we build capital and surplus, was $204 million.
• Capital, which serves to offset potential adverse events and functions as a source of continuing future income, was $5 billion.
• Capitalization ratio, a standard industry measure of capital strength, was 15.7%.

Maintained Strong Ratings
Our strong financial performance contributed to Standard & Poor's recent affirmation of Guardian’s AA+ (Very Strong) credit rating with a “Stable” outlook. S&P cited our strong capitalization, operating performance, investment management and liquidity, and competitive position. This affirmation is validation of our enterprise risk management strategy, which continues to enable us to maintain strong financial strength ratings within a challenging economic environment.

Managing the Markets
Guardian’s investment portfolio performed well through the first half of 2010, during a period of increased market volatility. Our investment portfolio’s total return was 6.78% year to date, and both our public fixed income and equity portfolios outperformed their benchmarks. We continue to hedge Guardian's consolidated equity exposure to protect our capital while allowing us to participate in the equity market. In addition, our company successfully negotiated a strategic partnership with real estate investment management firm Lowe Enterprises, Inc.

Guardian is in rock solid financial shape, and thanks to the hard work of our associates, we’re executing well against our key objectives. We intend to maintain this effort and continue to focus on achieving positive results for the remainder of 2010.

Sincerely,

Dennis J. Manning
President & Chief Executive Officer