FBL Financial Group Special Committee Sends Letter to Shareholders Regarding Proposed Transaction With Farm Bureau Property & Casualty Insurance Company

FBL Financial Group, Inc. (NYSE:FFG) (“FBL Financial Group”) today sent the following letter to shareholders regarding the previously announced definitive agreement under which Farm Bureau Property & Casualty Insurance Company (“FBPCIC”) will acquire all of the outstanding shares of FBL Financial Group Class A and Class B common stock, excluding shares owned by FBPCIC and the Iowa Farm Bureau Federation, for $56.00 per share in cash:

April 20, 2021

Dear Fellow Shareholder,

The Special Meeting of Shareholders to vote on the proposed sale of FBL Financial Group, Inc. (“FBL Financial Group” or the “Company”) to Farm Bureau Property & Casualty Insurance Company (“FBPCIC”) is fast approaching on April 29, 2021, and shareholders have a very important decision to make.

Your vote FOR the transaction on the WHITE proxy card is critical to securing your $56.00 per share in cash – a compelling valuation and opportunity to realize immediate and certain value.

Consider the Facts Before Casting Your Vote

• Independent Proxy Advisor Recommendation. Glass Lewis & Co. (“Glass Lewis”), a leading independent proxy advisory firm, has recommended that FBL Financial Group’s shareholders vote “FOR” the proposed transaction, reinforcing our strong view that this is the right transaction.
  • In its report, Glass Lewis notes that the analysis presented by Capital Returns Management (“CRM”) in its opposition to the transaction is “largely flawed and lacking in the necessary nuance” and acknowledges that “reasonable safeguards” were put in place by FBL Financial Group’s Board of Directors (the “Board”) to protect the Company’s unaffiliated shareholders. ¹
• Rigorous and Independent Process. The proposed transaction follows an in-depth three-month process undertaken by the Special Committee of the Board (the “Special Committee”), made up of independent and unaffiliated directors and supported by independent legal and financial advisors.
• Detailed Analysis. The Special Committee carefully evaluated FBPCIC’s offer with the support of independent financial advisors based on several methodologies, including a detailed intrinsic valuation analysis and an actuarial report, and in the context of the Company’s long-term prospects for value creation.
• Compelling Value vs. Standalone Prospects. The $56.00 per share offer represents a 30% to 40% premium to the Company’s standalone implied value if it were to trade in line with peers on an earnings multiple basis.

After careful review and vigorous negotiation – and in light of the meaningful headwinds facing the Company – the Special Committee is confident that this is the right transaction for FBL Financial Group’s unaffiliated shareholders.

Do Not be Misled

Institutional Shareholder Services, Inc. (“ISS”), another proxy advisory firm, issued a report recommending that shareholders vote against the transaction. We believe that the ISS report ignores important facts regarding the Special Committee’s process, FBL Financial Group’s standalone prospects, weaker financial performance relative to industry peers and the compelling valuation offered by the transaction. Our strong view is that following the ISS recommendation could lead unaffiliated shareholders to leave significant value on the table.

Our view is reiterated by Glass Lewis, which notes that it has “significant doubts whether the Company’s common shares would be able to sustain trading at a price level consistent with the merger consideration in the absence of the proposed merger.” ²

In addition, we believe, as highlighted in the Glass Lewis report, that CRM’s analysis is misleading and their perspective is flawed. The proposed transaction reflects months of tough negotiation, rigorous analysis by financial experts with deep insurance industry expertise, and the thoughtful consideration of a highly-qualified Special Committee comprised of unaffiliated, independent Directors focused on maximizing value for fellow unaffiliated shareholders. We confidently urge shareholders to vote FOR the proposed transaction on the WHITE proxy card today.

Your Vote is Important! Secure Your Cash Value and Vote for the Proposal on the WHITE Proxy Card Today!

Your vote is important, as a failure to vote will have the same effect as a vote against the transaction. No matter how many shares you own, we urge you to sign and return the enclosed WHITE proxy card and vote FOR the proposal to approve the transaction and secure your certain, immediate and compelling value of $56.00 per share in cash. You should discard any gold proxy cards you may receive from CRM. If you have already cast your vote on another proxy card, you have every right to revoke your prior vote by simply using the WHITE proxy card to vote again, as only your latest-dated proxy will count. Please vote your WHITE proxy card today, either by Internet, phone or mail. If you have questions about how to vote your shares, please immediately contact Okapi Partners, our proxy solicitor, at (877) 629-6357 or at info@okapipartners.com.

Sincerely,

The Special Committee of the FBL Financial Group Board of Directors

About FBL Financial Group

FBL Financial Group is a holding company with the purpose to protect livelihoods and futures. Operating under the consumer brand name Farm Bureau Financial Services, its affiliates offer a broad range of life insurance, annuity and investment products distributed by multiline exclusive Farm Bureau agents. Helping complete the financial services offering, advisors offer wealth management and financial planning services. In addition, FBL Financial Group manages all aspects of two Farm Bureau affiliated property-casualty insurance companies for a management fee. Headquartered in West Des Moines, Iowa, FBL Financial Group is traded on the New York Stock Exchange under the symbol FFG. For more information, please visit www.fblfinancial.com and www.fbfs.com.

Additional Information and Where to Find It

In connection with the proposed transaction, FBL Financial Group has filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement on Schedule 14A and a Schedule 13e-3 Transaction Statement, and may file other documents with the SEC regarding the proposed transaction. This press release is not a substitute for the definitive proxy statement or any other document that FBL Financial Group may file with the SEC. INVESTORS IN, AND SECURITY HOLDERS OF, FBL FINANCIAL GROUP ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the definitive proxy statement and accompanying WHITE proxy card, any amen