ULLICO Inc. Reports Third Quarter 2006 Net Income of $4.2 Million and Solid Operating Earnings of $1.2 Million

WASHINGTON,DC,November 28,2006 - ULLICO Inc.,the union-owned multiline insurance and investment holding company,today reported consolidated net income of $4.2 million for the quarter ended Sept. 30,2006. This is compared with net income of $0.6 million for the same period in 2005. Operating income before nonrecurring transactions for the current quarter was $1.2 million,compared with $2.4 million in the same period last year.

Net income for the current quarter included a net one-time gain of $3.0 million representing the resolution of certain residual litigation and other issues stemming from periods prior to 2003. This compares with a net one-time loss of $1.8 million last year in nonrecurring transactions related to the sale of limited partnership investments.

Highlights for the Quarter

• Property and Casualty earnings of $2.0 million with net earned premium up 13 percent due to strong sales in the Fiduciary and Union Liability lines and a 96 percent renewal rate in the core Fiduciary business line.
• Investment Services earnings remain strong at $5.9 million due to continued growth in assets under management. J for Jobs revenue is up 15 percent from last year,driven by increased market values on the underlying portfolio of loans and modest growth in new deposits.
• Life and Health produced strong earnings of $2.5 million in its Group Life line and $1.1 million in its Medical Stop Loss line,offset by reserve strengthening in Group Health and two other lines of business.
• Continued reduction in overall SG&A expenses resulting from the company's focus on cost containment.

Year-to-Date Consolidated Results

Year-to-date consolidated operating income before nonrecurring transactions declined from $7.0 million in 2005 to $5.7 million for the first nine months of 2006. The decline in operating income is due to lower favorable reserve development this year in the Medical Stop Loss and Group Health lines of business and improved earnings and positive reserve development in Group Life. The Property and Casualty business unit continues building momentum,with increases in net earned premium,improvement in claims and reduction in the overall loss ratio from 44 percent to 42 percent. In Investment Services,assets under management in J for Jobs grew to another all-time high of $2.7 billion and the year-to-date earnings for Trust Fund Advisors Inc. increased to $0.4 million in 2006 from $0.2 million in 2005.

Year-to-date consolidated net income decreased from $20.2 million at Sept. 30,2005,to $9.8 million at Sept. 30,2006,principally because of a net $15.9 million gain recognized during the first half of 2005 from the sale of several of the company's former subsidiaries and blocks of business. Net one-time gains totaled $4.1 million at Sept. 30,2006,due to several legal settlements received net of related legal fees.

Premium and fee revenue for the nine months declined from $269.0 million in 2005 to $217.5 million in 2006. This reflects a decline of $34.9 million in the Life and Health business unit,concentrated in the Group Health,Medical Stop Loss and Direct Marketing lines,as well as the absence of $18.8 million of revenue on units sold in early 2005. However,core revenue on the company's Group Life,Fiduciary and Union Liability and J for Jobs products produced solid growth for the period.

"I am pleased with ULLICO's performance and the company's continued momentum," said ULLICO Inc. Chairman Joseph J. Hunt. "Our commitment to our key multi-employer trust fund and union customer base and our growing investment in market expertise should allow ULLICO to continue to deliver strong performance."

"We have faced very difficult market conditions this year with aggressive pricing from competitors,a distracted market and our internal management transition," said Mark Singleton,president and CEO. "Our ability to grow revenue in many of our core lines of business and continue to produce operating profits in these conditions is a reflection of the dedication and professionalism of the entire ULLICO team."