Henry H. Gibbel
- Chairman/CEO

Henry R. Gibbel
- President/COO

For historic purposes, let’s first reflect on 3 of the top headlines for 2007:

• Americans will recall the Virginia Tech massacre that took the lives of 32 innocent people on their college campus.
• The country’s mortgage crisis with a record-setting wave of mortgage foreclosures coupled with the meltdown in the housing market.
• The Iraq war, for the third consecutive year, with the surge that sent more U.S. troops and helped reduce the overall level of violence.

A few reflections as CEO and President:

• It’s a pleasure to go to work daily with a dedicated, professional and caring staff, who is our Company’s most valuable asset. As example, for the 14^th consecutive year, Lititz Mutual has attained 100% United Way employee participation.
• Our work environment, throughout our family of four Companies, fosters honesty, integrity and upholds our professional ethical reputation. Not perfect, but we work at it daily.
• Our challenge in the Industry-wide competitive “soft market” is to continue to manage risk profitably with a goal of 100% combined loss and expense ratio that has been achieved the last 3 years.

Each insurance company maintains records on its own performance, weighing loss against gain, need against risk, always keeping a wary eye on insurance cycles. As in previous years, Lititz Mutual’s continuing vigilance and expertise on matters of property insurance is demonstrated by the following 2007 financial scorecard.

In 2007 our solid balance sheet shows Assets of $256.9 million and Policyholders Security Account of $161.5 million. Our operating results reveal an underwriting gain of $3.8 million and a composite loss and expense ratio of 93.5%, improved from 97.8% in 2006.

This past year was notable that the U.S. mainland was not plagued with a major hurricane or other major catastrophic disaster with the exception of the California wildfires.

Today Lititz Mutual remains a steady and dependable force in the Industry. We continue to demonstrate both effective and responsive service to our agents and policyholders, and consider this service a foundation of our Company’s philosophy. Service does make a difference.

Insuring is an art. Thanks to Lititz Mutual’s client-focused staff and agents, our approach to the art of insuring is a consistent reliable and efficient reflection of the Company’s A+ (Superior) A. M. Best’s Rating.