Delphi Financial 8-K Delphi Financial Reports 13% Increase in 2007 Operating EPS to $3.24; 2007 Net Income Per Share Reaches $3.19

Exhibit 99.1

News

For Immediate Release

Contact:	Bernard J. Kilkelly
	Vice President, Investor Relations
Phone :	212-303-4349
E-mail:	bernie-kilkelly@dlfi.com

Delphi Financial Reports 13% Increase in 2007 Operating EPS to $3.24;
2007 Net Income Per Share Reaches $3.19

Wilmington, Delaware – February 12, 2008 – Delphi Financial Group, Inc. (NYSE: DFG) announced today that net income in the fourth quarter of 2007 was $41.7 million or $0.81 per share, compared to $40.2 million or $0.78 per share in the fourth quarter of 2006. Net income for full-year 2007 was $164.5 million or $3.19 per share, compared with $142.1 million or $2.79 per share a year ago.

Operating earnings ⁽¹⁾ in the fourth quarter of 2007 increased 7% to $42.3 million from $39.5 million in the fourth quarter of 2006. Operating earnings per share rose 6% to $0.82 from $0.77 a year ago. For full year 2007, operating earnings increased 15% to $167.2 million compared to $145.6 million a year ago, while operating earnings per share grew 13% to $3.24 per share from $2.86 per share for full-year 2006. Annualized operating return on beginning equity⁽²⁾ in the fourth quarter of 2007 was 14.4%, up from 14.0% in the fourth quarter of 2006.

Core group employee benefit premiums in the fourth quarter of 2007 grew 10% from the fourth quarter a year ago, reaching $312 million. This growth was driven by a 15% increase in group life premiums and a 13% increase in group disability premiums at Delphi’s Reliance Standard Life (RSL) subsidiary. The combined ratio in group employee benefits insurance in the fourth quarter of 2007 was 92.3%, compared with 93.6% in the fourth quarter of 2006. For the full-year 2007, the combined ratio in group employee benefits insurance was 92.4%, compared with 93.2% in 2006.

Robert Rosenkranz, Chairman and Chief Executive Officer, commented, “Delphi’s strong performance in the fourth quarter was driven by ongoing margin improvement in our insurance businesses, as we benefited from our pricing discipline at RSL and continued favorable market conditions for Safety National’s excess workers’ compensation insurance. In Safety National’s important January renewal season, we achieved strong renewals of our customer base, modest improvements in contract terms and slight declines in rates, which rose 60% from 2001 to 2007. Our investment results in the fourth quarter showed improvement from the third quarter of 2007, but our fixed income yields continue to be constrained by the low interest rate environment.”

Mr. Rosenkranz added, “Delphi’s earnings per share growth in the past five years has met or exceeded our expected long-term growth rate of 10-12%. We currently expect operating earnings per share in 2008 to be in a range of $3.45 to $3.60. The midpoint of this range represents 12% growth over the midpoint of the initial 2007 range of guidance we provided in February of last year. 2007 results

Delphi Financial Reports 13% Increase in 2007 Operating EPS to $3.24 Page 2

exceeded our initial expectations; our caution about 2008 reflects the flattened market in excess workers’ compensation and turbulent investment and economic climates. Longer term, we continue to be optimistic about growth prospects of our insurance businesses and our ability to capitalize on our leadership positions in our attractive niche markets. Delphi also has a strong balance sheet which gives us excellent financial flexibility to capitalize on attractive growth opportunities and to return value to shareholders through share repurchases. In the fourth quarter of 2007, Delphi repurchased 1,616,200 shares at a volume weighted average price of $37.47.”

Delphi’s net investment income in the fourth quarter of 2007 was $67.4 million, down from $69.9 million in the same quarter a year ago. For the full year 2007, net investment income rose 6% to $270.5 million from $255.9 million the prior year. Invested assets at December 31, 2007 were $5.0 billion, an increase of 11% from $4.5 billion at December 31, 2006. The tax equivalent yield on the Company’s investment portfolio in the fourth quarter of 2007 was 5.9%, compared to 6.6% in the fourth quarter of 2006. For the full year 2007, the tax equivalent yield was 6.2% compared to 6.6% for the prior year. Book value per share before accumulated other comprehensive income and loss ⁽³⁾ rose 4% to $24.34 at December 31, 2007, from $23.35 at December 31, 2006.

Conference Call

On February 13, 2008 at 11:00 AM (Eastern time), Delphi will broadcast the Company’s fourth quarter 2007 earnings teleconference live on the Internet, hosted by Robert Rosenkranz, Chairman and Chief Executive Officer. Investors can access the broadcast atwww.delphifin.com by clicking on the webcast icon on the home page. It is advisable to register at least 15 minutes prior to the call to download and install any necessary audio software. The online replay will be available on Delphi’s website for one week beginning at approximately 1:00 PM (Eastern time) on February 13, 2008. Investors can also download Delphi’s fourth quarter 2007 statistical supplement from the Company’s website atwww.delphifin.com.

In connection with, and because it desires to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Delphi cautions readers regarding certain forward-looking statements in the foregoing discussion and in any other statements made by, or on behalf of, Delphi, whether in future filings with the Securities and Exchange Commission or otherwise. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results, prospects, outlooks or other developments. Some forward-looking statements may be identified by the use of terms such as “expects,” “believes,” “anticipates,” “intends,” “judgment,” “outlook” or other similar expressions. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic, competitive and other uncertainties and contingencies, many of which are beyond Delphi’s control and many of which, with respect to future business decisions, are subject to change. Examples of such uncertainties and contingencies include, among other important factors, those affecting the insurance industry generally, such as the economic and interest rate environment, federal and state legislative and regulatory developments, including but not limited to changes in financial services, employee benefit and tax laws and regulations, changes in accounting rules or interpretation, market pricing and competitive trends relating to insurance products and services, acts of terrorism or war, and the availability and cost of reinsurance, and those relating specifically to Delphi’s business, such as the level of its insurance premiums and fee income, the claims experience, persistency and other factors affecting the profitability of its insurance products, the performance of its investment portfolio and changes in Delphi’s investment strategy, acquisitions of companies or blocks of business, and ratings by

Delphi Financial Reports 13% Increase in 2007 Operating EPS to $3.24 Page 3

major rating organizations of Delphi and its insurance subsidiaries. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Delphi. Delphi disclaims any obligation to update forward-looking information.

Delphi Financial Group, Inc. is an integrated employee benefit services company. Delphi is a leader in managing all aspects of employee absence to enhance the productivity of its clients and provides the related insurance coverages: group life, long-term and short-term disability, excess workers’ compensation for self-insured employers, travel accident, dental and limited benefit health insurance. Delphi’s asset accumulation business emphasizes individual fixed annuity products. Delphi’s common stock is listed on the New York Stock Exchange under the symbol DFG and its corporate website address iswww.delphifin.com.

(1)	Operating earnings, which is a non-GAAP financial measure, consist of income from continuing operations excluding after-tax realized investment gains and losses, and the loss on redemption of junior subordinated deferrable interest debentures, as applicable. The Company believes that because realized investment gains and losses, redemption of junior subordinated deferrable interest debentures, and discontinued operations arise from events that, to a significant extent, are within management’s discretion and can fluctuate significantly, thus distorting comparisons between periods, a measure excluding their impact is useful in analyzing the Company’s operating trends. Redemption of junior subordinated deferrable interest debentures occur based on management’s decision to exercise its ability to redeem the outstanding debentures. Investment gains or losses may be realized based on management’s decision to dispose of an investment, and investment losses may be realized based on management’s judgment that a decline in the market value of an investment is other than temporary. Discontinued operations occur based on management’s decision to exit or sell a particular business. Thus, realized investment gains and losses, losses on redemption of junior subordinated deferrable interest debentures and results from discontinued operations are not reflective of the Company’s ongoing earnings capacity, and trends in the earnings of the Company’s underlying insurance operations can be more clearly identified without the effects of these items. For these reasons, management uses the measure of operating earnings to assess performance and make operating plans and decisions, and analysts and investors typically utilize measures of this type when evaluating the financial performance of insurers. However, gains and losses of these types, particularly as to investments, occur frequently and should not be considered as nonrecurring items. Further, operating earnings should not be considered a substitute for net income, the most directly comparable GAAP measure, as an indication of the Company’s overall financial performance and may not be calculated in the same manner as similarly titled captions in other companies’ financial statements.  For reconciliations of the respective operating earnings amounts for the indicated periods to the corresponding net income amounts, see the table captioned “Non-GAAP Financial Measures – Reconciliation to GAAP” which follows. All per share amounts are on a diluted basis.
(2)	Annualized operating earnings return on beginning equity, which is a non-GAAP financial measure, is based on operating earnings, as defined in the preceding footnote (1) (rather than the most directly comparable GAAP measure, net income), divided by beginning shareholders’ equity. For the reasons that the Company believes that the calculation of this non-GAAP measure based upon operating earnings is useful, see such footnote. For reconciliations of the respective annualized operating earnings return on equity amounts for the indicated periods to the corresponding annualized net income return on equity amounts, see the table captioned “Non-GAAP Financial Measures – Reconciliation to GAAP” which follows.
(3)	Diluted book value per share before accumulated other comprehensive income and loss, which is a non-GAAP financial measure, is based on shareholders’ equity excluding the effect of accumulated other comprehensive income and loss. The Company believes that, because accumulated other comprehensive income and loss fluctuates from period to period primarily due to changes in the value of its assets resulting from variations in market interest rates, while the values of its liabilities are not similarly marked to market in determining diluted book value per share (the most directly comparable GAAP measure), this non-GAAP measure is useful in analyzing the Company’s operating trends. For reconciliations of the respective diluted book value per share before accumulated other comprehensive income and loss amounts for the indicated dates to the corresponding diluted book value per share amounts, see the table captioned “Non-GAAP Financial Measures – Reconciliation to GAAP” which follows.

DELPHI FINANCIAL GROUP, INC.
Non-GAAP Financial Measures
Reconciliation to GAAP
(Unaudited; in thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	12/31/2007			12/31/2006			12/31/2007			12/31/2006
Income Statement Data
Operating earnings (Non-GAAP measure)	$	42,307		$	39,515		$	167,170		$	145,561
Net realized investment (losses) gains, net of taxes		(632	)		664			(1,233	)		(558	)
Loss on redemption of junior subordinated deferrable interest debentures, net of taxes		—			—			(1,425	)		—
Income from continuing operations		41,675			40,179			164,512			145,003
Discontinued operations, net of taxes		—			(3	)		—			(2,935	)
Net income (GAAP measure)	$	41,675		$	40,176		$	164,512		$	142,068
Diluted results per share of common stock:
Operating earnings (Non-GAAP measure)	$	0.82		$	0.77		$	3.24		$	2.86
Net realized investment (losses) gains, net of taxes		(0.01	)		0.01			(0.02	)		(0.01	)
Loss on redemption of junior subordinated deferrable interest debentures, net of taxes		—			—			(0.03	)		—
Income from continuing operations		0.81			0.78			3.19			2.85
Discontinued operations, net of taxes		—			—			—			(0.06	)
Net income (GAAP measure)	$	0.81		$	0.78		$	3.19		$	2.79
Annualized operating earnings return on beginning equity		14.4	%		14.0	%		15.3	%		14.1	%
Annualized net income return on beginning equity (GAAP measure)		14.2	%		14.2	%		15.1	%		13.8	%

	12/31/2007			12/31/2006
Balance Sheet Data
Shareholders’ equity, excluding accumulated other comprehensive (loss) income	$	1,183,887		$	1,155,675
Add: Accumulated other comprehensive (loss) income		(42,497	)		19,133
Shareholders’ equity (GAAP measure)	$	1,141,390		$	1,174,808
Diluted book value per share of common stock, excluding accumulated other comprehensive (loss) income (Non-GAAP measure)	$	24.34		$	23.35
Add: Accumulated other comprehensive (loss) income		(0.77	)		0.35
Diluted book value per share of common stock (GAAP measure)	$	23.57		$	23.70

Please see footnotes 1 through 3 of the press release to which this table is attached for important information regarding these non-GAAP financial measures.

DELPHI FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; in thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	12/31/2007			12/31/2006			12/31/2007			12/31/2006
Revenue:
Premium and fee income	$	331,633		$	318,159		$	1,304,161		$	1,156,578
Net investment income		67,369			69,897			270,547			255,871
Net realized investment (losses) gains		(972	)		1,022			(1,897	)		(858	)
Loss on redemption of junior subordinated deferrable interest debentures		—			—			(2,192	)		—
		398,030			389,078			1,570,619			1,411,591
Benefits and expenses:
Benefits, claims and interest credited to policyholders		236,681			234,525			944,901			847,486
Commissions and expenses		96,674			90,727			365,671			330,681
		333,355			325,252			1,310,572			1,178,167
Operating income		64,675			63,826			260,047			233,424
Interest expense:
Corporate debt		3,897			5,143			16,870			20,172
Junior subordinated debentures		3,239			—			7,891			—
Junior subordinated deferrable interest debentures underlying company-obligated mandatorily redeemable capital securities issued by unconsolidated subsidiaries		476			1,324			2,727			5,211
Income tax expense		15,388			17,180			68,047			63,038
Income from continuing operations		41,675			40,179			164,512			145,003
Discontinued operations, net of taxes		—			(3	)		—			(2,935	)
Net income	$	41,675		$	40,176		$	164,512		$	142,068
Basic results per share of common stock:
Income from continuing operations	$	0.84		$	0.80		$	3.27		$	2.92
Discontinued operations		—			—			—			(0.06	)
Net income	$	0.84		$	0.80		$	3.27		$	2.86
Weighted average shares outstanding		49,859			49,932			50,269			49,631
Diluted results per share of common stock:
Income from continuing operations	$	0.81		$	0.78		$	3.19		$	2.85
Discontinued operations		—			—			—			(0.06	)
Net income	$	0.81		$	0.78		$	3.19		$	2.79
Weighted average shares outstanding		51,393			51,285			51,579			50,939
Dividends paid per share of common stock	$	0.09		$	0.08		$	0.35		$	0.31

DELPHI FINANCIAL GROUP, INC.
SUMMARIZED CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands)

	12/31/2007			12/31/2006
Assets:
Investments:
Fixed maturity securities, available for sale	$	3,691,694		$	3,377,578
Short-term investments		286,033			400,239
Other investments		1,010,141			705,563
		4,987,868			4,483,380
Cash		51,240			48,204
Cost of business acquired		174,430			267,920
Reinsurance receivables		402,785			410,593
Goodwill		93,929			93,929
Other assets		260,602			251,975
Assets held in separate account		123,956			114,474
Total assets	$	6,094,810		$	5,670,475
Liabilities and Shareholders’ Equity:
Policy liabilities and accruals	$	2,353,375		$	2,107,644
Policyholder account balances		1,083,121			1,119,218
Corporate debt		217,750			263,750
Junior subordinated debentures		175,000			—
Junior subordinated deferrable interest debentures underlying company-obligated mandatorily redeemable capital securities issued by unconsolidated subsidiaries		20,619			59,762
Other liabilities and policyholder funds		979,599			830,819
Liabilities related to separate account		123,956			114,474
Total liabilities		4,953,420			4,495,667
Shareholders’ equity:
Class A Common Stock		487			480
Class B Common Stock		59			57
Additional paid-in capital		509,742			474,722
Accumulated other comprehensive (loss) income		(42,497	)		19,133
Retained earnings		828,116			763,386
Treasury stock, at cost		(154,517	)		(82,970	)
		1,141,390			1,174,808
Total liabilities and shareholders’ equity	$	6,094,810		$	5,670,475

DELPHI FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)

	Twelve Months Ended
	12/31/2007			12/31/2006			12/31/2005
Operating activities:
Net income	$	164,512		$	142,068		$	113,334
Adjustments to reconcile net income to net cash provided by operating activities:
Change in policy liabilities and policyholder accounts		245,031			270,620			227,188
Net change in reinsurance receivables and payables		5,335			5,160			13,818
Amortization, principally the cost of business acquired and investments		73,084			70,935			62,014
Deferred costs of business acquired		(108,574	)		(100,260	)		(89,601	)
Net realized losses (gains) on investments		1,897			858			(9,003	)
Net change in federal income tax liability		23,757			28,590			16,924
Other		(21,723	)		(15,046	)		(25,274	)
Net cash provided by operating activities		383,319			402,925			309,400
Investing activities:
Purchases of investments and loans made		(1,210,252	)		(1,119,894	)		(1,946,034	)
Sales of investments and receipts from repayment of loans		550,991			747,841			1,408,018
Maturities of investments		171,927			206,223			180,292
Net change in short-term investments		114,206			(305,849	)		1,484
Change in deposit in separate account		8,948			(2,008	)		(5,876	)
Net cash used by investing activities		(364,180	)		(473,687	)		(362,116	)
Financing activities:
Deposits to policyholder accounts		116,729			200,820			102,708
Withdrawals from policyholder accounts		(159,035	)		(131,229	)		(101,701	)
Borrowings under revolving credit facility		112,000			31,000			88,000
Principal payments under revolving credit facility		(158,000	)		(2,000	)		(11,000	)
Change in liability for Federal Home Loan Bank Advances		—			—			(30,000	)
Proceeds from the issuance of junior subordinated debentures		172,309			—			—
Redemption of junior subordinated deferrable interest debentures underlying company-obligated mandatorily redeemable capital securities issued by unconsolidated subsidiaries		(37,728	)		—			—
Purchase of treasury stock		(62,417	)		(16,577	)		(7,079	)
Other financing activities		39			24,695			15,957
Net cash (used) provided by financing activities		(16,103	)		106,709			56,885
Increase in cash		3,036			19,711			4,169
Cash at beginning of period		48,204			28,493			24,324
Cash at end of period	$	51,240		$	48,204		$	28,493