<PAGE> 1
TOUCHSTONE
VARIABLE ANNUITY
TOUCHSTONE
SELECT
VARIABLE ANNUITY
* Emerging Growth
* International Equity
* Income Opportunity
* Value Plus
* Growth & Income
* Balanced
* Bond
* Standby Income
SEMIANNUAL REPORT
JUNE 30, 1998
7141-9806
<PAGE> 2
This booklet contains the Semi-Annual Reports which reflect the results of the
TOUCHSTONE VARIABLE ANNUITY and the TOUCHSTONE SELECT VARIABLE ANNUITY, flexible
purchase payment deferred variable annuity contracts, issued by WESTERN-
SOUTHERN LIFE ASSURANCE COMPANY ("Western-Southern"). Included in this booklet
are the Semi-Annual reports for Western-Southern's Separate Account 1 and the
investment portfolios underlying the Touchstone Variable Annuity and the
Touchstone Select Variable Annuity. These Semi-Annual Reports are bound together
for your convenience.
<PAGE> 3
Dear Fellow Contract Owner:
As pleased overall as we are with our investment performance at Touchstone
during the past 6 months, we must be realistic. Over most of the century, for
example, the U.S. stock market has returned an average of 11% to 12% per year,
not per quarter. We encourage you to keep that in mind should the market regress
to its pattern of more moderate performance. But when will this happen?
The answer is, nobody really knows. And the only consensus seems to be that
there is no consensus. For example, are stock prices really too high? Or have
the old valuation rules outlived their usefulness? Is the Asian economic crisis
keeping global inflation in check and interest rates low? Or is it simply
waiting in the wings, ready to waylay corporate profitability?
Going forward, companies that can perform on their own merits will most
likely be the ones offering the best opportunities. Those are the kinds of
companies our portfolio managers are proud to find, one at a time, no matter how
the market's doing.
We're also proud to introduce a new addition to our family of Funds and
Variable Annuities: the Touchstone Value Plus Portfolios. These Portfolios,
managed by Fort Washington Investment Advisors, seek long-term capital growth by
investing primarily in large cap stocks that are considered fundamentally
undervalued. These are sound companies with unique competitive advantages and
proven management.
Our other outstanding portfolio managers also keep their ears to the
ground. They listen and watch for major forces that drive the markets, such as
corporate restructurings, the retirement plan revolution, the move to liquidity,
and the mainstreaming of technology -- forces that have made the U.S. the envy
of the global economy, and are now beginning to make their way overseas. Beyond
finding individual companies that may benefit from these forces, our job is to
look forward and see how Touchstone can best take advantage of these trends to
better serve you.
I'd like to take this opportunity to thank you for the success we've shared
together. We appreciate your continued confidence and investment in the
Touchstone Family of Funds and Variable Annuities.(1)
Sincerely,
/s/ EDWARD G. HARNESS
Edward G. Harness
President and Chief Executive Officer
Touchstone Family of Funds
P.S. Please visit us on the World Wide Web at www.touchstonefunds.com
- ------------------------------
(1) Touchstone Variable Annuities are underwritten by Western-Southern Life
Assurance Company, Cincinnati, Ohio. Touchstone Family of Funds and Variable
Annuities are distributed by Touchstone Securities, Inc., member NASD and
SIPC. For a prospectus containing more information, including all fees and
expenses, call (800) 669-2796. Please read the prospectus carefully before
investing or sending money.
<PAGE> 4
[This Page Intentionally Left Blank]
<PAGE> 5
[TOUCHSTONE LOGO]
TOUCHSTONE
Western-Southern Life
Assurance Company
Separate Account 1
------------------------------------------
SEMIANNUAL REPORT
JUNE 30, 1998
------------------------------------------
<PAGE> 6
[This Page Intentionally Left Blank]
<PAGE> 7
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1
Statement of Net Assets
June 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at current market value:
Select Advisors Variable Insurance Trust
Emerging Growth Portfolio (1,520,883 shares, cost
$22,588,936) $ 24,759,979
International Equity Portfolio (1,624,866 shares,
cost $20,406,911) 24,113,013
Balanced Portfolio (2,164,647 shares, cost
$30,510,350) 32,188,307
Income Opportunity Portfolio (3,097,673 shares, cost
$35,299,546) 33,021,190
Standby Income Portfolio (1,573,432 shares, cost
$15,745,071) 15,734,319
Value Plus Portfolio (107,471 shares, cost
$1,039,532) 1,057,511
Select Advisors Portfolios
Growth & Income Portfolio II (69.594893% beneficial
interest $41,244,632) 47,480,458
Bond Portfolio II (55.595318% beneficial interest
$16,217,003) 17,398,317
------------
Total Assets 195,753,094
------------
LIABILITIES
Accounts Payable 9,555
------------
Total Liabilities 9,555
------------
Total net assets $195,743,539
============
NET ASSETS
Variable annuity contracts $195,742,225
Retained in the variable account by Western-Southern Life
Assurance Company 1,314
------------
Total net assets $195,743,539
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 8
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1
Statement of Operations and Changes in Net Assets
For the period from January 1, 1998 to June 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY
GROWTH EQUITY BALANCED OPPORTUNITY INCOME
TOTAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Dividends and capital gains $ 1,925,792 $ -- $ -- $ 309,866 $ 1,256,813 $ 359,113
Miscellaneous income (loss) 30,265 895 10,196 832 2,004 3,620
EXPENSES:
Mortality and expense risk, and
administrative charge 1,045,584 133,938 121,743 170,009 187,206 89,309
------------ ----------- ----------- ----------- ----------- -----------
Net investment income (loss) 910,473 (133,043) (111,547) 140,689 1,071,611 273,424
------------ ----------- ----------- ----------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on investments 7,678,811 701,740 3,528,796 1,221,004 (1,245,521) (891)
Realized gain (loss) on investments 443,221 267,110 104,079 107,247 (33,509) (1,701)
------------ ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments 8,122,032 968,850 3,632,875 1,328,251 (1,279,030) (2,592)
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 9,032,505 835,807 3,521,328 1,468,940 (207,419) 270,832
------------ ----------- ----------- ----------- ----------- -----------
Contract owners activity:
Payments received from contract owners 70,478,069 7,853,578 6,676,990 11,905,464 11,975,617 9,086,356
Net transfers between sub-accounts
and/or fixed account 717,595 1,197,180 1,290,200 1,094,149 (414,342) (4,757,846)
Withdrawals and surrenders (4,994,111) (692,540) (516,294) (882,020) (883,049) (379,455)
Contract maintenance charge (38,620) (5,596) (4,681) (5,581) (7,454) (1,825)
------------ ----------- ----------- ----------- ----------- -----------
Net increase from contract activity 66,162,933 8,352,622 7,446,215 12,112,012 10,670,772 3,947,230
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets 75,195,438 9,188,429 10,967,543 13,580,952 10,463,353 4,218,062
------------ ----------- ----------- ----------- ----------- -----------
Net assets, at beginning of period 120,548,101 15,571,456 13,145,364 18,607,225 22,557,696 11,517,000
------------ ----------- ----------- ----------- ----------- -----------
Net assets, at end of period $195,743,539 $24,759,885 $24,112,907 $32,188,177 $33,021,049 $15,735,062
============ =========== =========== =========== =========== ===========
<CAPTION>
VALUE GROWTH &
PLUS INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -----------
<S> <C> <C> <C>
INCOME:
Dividends and capital gains $ -- $ -- $ --
Miscellaneous income (loss) (799) 10,334 3,183
EXPENSES:
Mortality and expense risk, and
administrative charge 463 251,585 91,331
---------- ----------- -----------
Net investment income (loss) (1,262) (241,251) (88,148)
---------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on investments 17,979 2,863,888 591,816
Realized gain (loss) on investments (5) -- --
---------- ----------- -----------
Net realized and unrealized gain (loss)
on investments 17,974 2,863,888 591,816
---------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 16,712 2,622,637 503,668
---------- ----------- -----------
Contract owners activity:
Payments received from contract owners 151,687 16,331,336 6,497,041
Net transfers between sub-accounts
and/or fixed account 890,268 2,009,753 (591,767)
Withdrawals and surrenders (1,510) (1,263,052) (376,191)
Contract maintenance charge -- (10,628) (2,855)
---------- ----------- -----------
Net increase from contract activity 1,040,445 17,067,409 5,526,228
---------- ----------- -----------
Net increase (decrease) in net assets 1,057,157 19,690,046 6,029,896
---------- ----------- -----------
Net assets, at beginning of period -- 27,783,481 11,365,879
---------- ----------- -----------
Net assets, at end of period $1,057,157 $47,473,527 $17,395,775
========== =========== ===========
</TABLE>
Statement of Operations and Changes in Net Assets
For the year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY
GROWTH EQUITY BALANCED OPPORTUNITY INCOME
TOTAL SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Dividends and capital gains $ 5,409,296 $ 834,976 $ 709,520 $ 1,376,386 $ 2,070,121 $ 418,293
Miscellaneous income (loss) 3,218 3,731 2,880 (2,658) (3,840) 328
EXPENSES:
Mortality and expense risk, and
administrative charge 939,202 122,709 108,285 135,364 179,897 103,640
------------ ----------- ----------- ----------- ----------- -----------
Net investment income (loss) 4,473,312 715,998 604,115 1,238,364 1,886,384 314,981
------------ ----------- ----------- ----------- ----------- -----------
Net change in unrealized appreciation
(depreciation) on investments 4,261,510 1,424,333 71,338 292,397 (1,073,439) (10,274)
Realized gain (loss) on investments 735,060 360,604 196,132 25,029 154,273 (978)
------------ ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments 4,996,570 1,784,937 267,470 317,426 (919,166) (11,252)
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 9,469,882 2,500,935 871,585 1,555,790 967,218 303,729
------------ ----------- ----------- ----------- ----------- -----------
Contract owners activity:
Payments received from contract owners 85,891,128 9,661,438 8,570,847 12,652,990 17,117,095 14,114,244
Net transfers between sub-accounts
and/or fixed account 414,133 764,178 877,161 1,086,970 (243,339) (5,891,834)
Withdrawals and surrenders (2,638,983) (384,782) (287,848) (364,055) (532,734) (293,869)
Contract maintenance change (23,424) (3,521) (3,073) (3,299) (4,491) (1,006)
------------ ----------- ----------- ----------- ----------- -----------
Net increase from contract activity 83,642,854 10,037,313 9,157,087 13,372,606 16,336,531 7,927,535
------------ ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets 93,112,736 12,538,248 10,028,672 14,928,396 17,303,749 8,231,264
Net assets, at beginning of period 27,435,365 3,033,208 3,116,692 3,678,829 5,253,947 3,285,736
------------ ----------- ----------- ----------- ----------- -----------
Net assets, at end of period $120,548,101 $15,571,456 $13,145,364 $18,607,225 $22,557,696 $11,517,000
============ =========== =========== =========== =========== ===========
<CAPTION>
GROWTH &
INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C> <C>
INCOME:
Dividends and capital gains $ -- $ --
Miscellaneous income (loss) 3,168 (391)
EXPENSES:
Mortality and expense risk, and
administrative charge 207,267 82,040
----------- -----------
Net investment income (loss) (204,099) (82,431)
----------- -----------
Net change in unrealized appreciation
(depreciation) on investments 3,058,688 498,467
Realized gain (loss) on investments -- --
----------- -----------
Net realized and unrealized gain (loss)
on investments 3,058,688 498,467
----------- -----------
Net increase (decrease) in net assets
resulting from operations 2,854,589 416,036
----------- -----------
Contract owners activity:
Payments received from contract owners 17,225,945 6,548,569
Net transfers between sub-accounts
and/or fixed account 1,881,077 1,939,920
Withdrawals and surrenders (560,767) (214,928)
Contract maintenance change (6,180) (1,854)
----------- -----------
Net increase from contract activity 18,540,075 8,271,707
----------- -----------
Net increase (decrease) in net assets 21,394,664 8,687,743
Net assets, at beginning of period 6,388,817 2,678,136
----------- -----------
Net assets, at end of period $27,783,481 $11,365,879
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 9
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Western-Southern Life Assurance Company Separate Account 1 (the "Account")
is a unit investment trust registered under the Investment Company Act of 1940
(the "1940 Act"), established by the Western-Southern Life Assurance Company
(the "Company"), a life insurance company which is a wholly-owned subsidiary of
The Western and Southern Life Insurance Company ("Western & Southern"). The
Account is a funding vehicle for individual variable annuity contracts, and
commenced operations on February 23, 1995 with the issuance of the first
Touchstone Variable Annuity contract. The first Touchstone Select Variable
Annuity contract was issued on March 2, 1998.
The variable annuity contracts are designed for individual investors and
group plans that desire to accumulate capital on a tax-deferred basis for
retirement or other long-term objectives. The variable annuity contracts are
distributed across the United States through a network of broker-dealers and
wholesalers.
2. SIGNIFICANT ACCOUNTING POLICIES
The Account has eight investment sub-accounts, each of which invests in the
corresponding portfolio (a "Portfolio") of Select Advisors Variable Insurance
Trust or of Select Advisors Portfolios, each of which is an open-ended
diversified management investment company. Each sub-account's value fluctuates
on a day to day basis depending on the investment performance of the Portfolio
in which the sub-account is invested. A contractholder may also allocate funds
to the Fixed Account, which is part of the general account of the Company. Due
to exemptive and exclusionary provisions, interests in the Fixed Account have
not been registered under the Securities Act of 1933 (the "1933 Act") and the
Company's general account has not been registered as an investment company under
the 1940 Act. Sub-account transactions are recorded on the trade date and income
from dividends is recorded on the ex-dividend date. Realized gains and losses on
the sales of investments are computed on the basis of specific identification.
Upon annuitization, the contract assets are transferred to the general
account of the Company. Accordingly, contract reserves are recorded by the
Company. See the related prospectus for a more detailed understanding of the
annuity contracts.
3. CONTRACT CHARGES
Certain deductions for administrative and risk charges are deducted from
the contract value in order to compensate the Company for administrative
expenses and for the assumption of mortality and expense risks. These charges
are made daily at an annual effective rate of 1.35% for the Touchstone Variable
Annuity. For the Touchstone Select Variable Annuity the effective rates are
1.35% for the Standard Death Benefit (Option 1), 1.45% for the Annual Step Up
Death Benefit (Option 2) and 1.55% for the Accumulating Death Benefit (Option
3).
The Company also deducts an annual contract maintenance charge from the
contract value on each contract anniversary and upon any full surrender. For the
Touchstone Variable Annuity the contract maintenance charge is $35 for the first
ten Contract Years and the lesser of (a) $35 and (b) 0.17% of the Contract Value
after the tenth Contract Anniversary. For the Touchstone Select Variable
Annuity, the contract maintenance charge is $40 for the first ten Contract
Years, and if the Contract Value is less than $50,000 after the tenth Contract
Anniversary, the charge is the lesser of (a) $40 and (b) 0.14% of the Contract
Value.
Since no deduction for a sales charge is made from the payments received
from contract owners, a surrender charge is imposed on certain surrenders and
partial withdrawals to cover expenses relating to promotion, sale and
distribution of the contracts. The surrender charge is assessed on each
redemption, except for certain amounts excluded from charges under the contract.
For the Touchstone Variable Annuity, this charge ranges from 7% to 0% depending
on the number of years since the payment was received. For the Touchstone Select
Variable Annuity, this charge ranges from 8% to 0%, depending on the number of
years since the payment was received.
3
<PAGE> 10
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
4. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
5. TAXES
The Account is not taxed separately because the operations of the Account
are part of the total operations of the Company. The Company is taxed as a life
insurance company under the Internal Revenue Code. Under existing federal income
tax law, no taxes are payable on the investment income or on the capital gains
of the Account.
6. PURCHASES AND SALES OF INVESTMENTS
The following table shows aggregate cost of shares and beneficial interests
of the Portfolios purchased and proceeds from shares and beneficial interests of
the Portfolios sold by the corresponding sub-accounts for the period January 1,
1998 to June 30, 1998.
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ----------
<S> <C> <C>
Select Advisors Variable Insurance Trust
Emerging Growth Portfolio $ 9,342,444 $1,122,743
International Equity Portfolio 7,788,299 453,498
Balanced Portfolio 12,907,516 654,669
Income Opportunity Portfolio 12,730,110 987,491
Standby Income Portfolio 10,127,472 5,906,833
Value Plus Portfolio 1,039,827 291
Select Advisors Portfolios
Growth & Income Portfolio II 18,742,303 1,909,212
Bond Portfolio II 6,965,958 1,525,335
</TABLE>
7. UNIT VALUES
The following table shows a summary of units outstanding for variable
annuity contracts for the period January 1, 1998 to June 30, 1998. Eight unit
values are calculated for the Touchstone Variable Annuity. Eight unit values are
calculated for each of the death benefit options in the Touchstone Select
Variable Annuity.
<TABLE>
<CAPTION>
TRANSFERS
BEGINNING UNITS UNITS BETWEEN SUB- ENDING UNIT ENDING
UNITS PURCHASED REDEEMED ACCOUNTS UNITS VALUE VALUE
--------- --------- -------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Touchstone Variable Annuity
Emerging Growth 921,086 410,121 (39,626) 68,677 1,360,258 17.753079 $ 24,148,769
International Equity 939,980 387,470 (32,451) 82,363 1,377,362 17.165699 23,643,377
Balanced 1,153,567 654,663 (51,842) 66,383 1,822,771 17.214941 31,378,902
Income Opportunity 1,296,326 631,569 (49,852) (25,408) 1,852,635 17.445988 32,321,052
Standby Income 1,033,781 767,489 (33,825) (415,834) 1,351,611 11.367391 15,364,290
Value Plus -- 14,544 (137) 89,637 104,044 9.818293 1,021,534
Growth & Income 1,658,720 853,584 (70,025) 107,813 2,550,092 18.278423 46,611,669
Bond 936,431 487,351 (30,601) (48,239) 1,344,942 12.589367 16,931,965
------------
Total -- Touchstone Variable
Annuity 191,421,558
</TABLE>
4
<PAGE> 11
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRANSFERS
BEGINNING UNITS UNITS BETWEEN SUB- ENDING UNIT ENDING
UNITS PURCHASED REDEEMED ACCOUNTS UNITS VALUE VALUE
--------- --------- -------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Touchstone Select Variable Annuity --
Option 1
Emerging Growth -- 17,303 -- -- 17,303 10.116422 175,045
International Equity -- 721 -- -- 721 11.225802 8,096
Balanced -- 4,204 -- -- 4,204 10.347604 43,497
Income Opportunity -- 5,748 -- -- 5,748 9.796706 56,310
Standby Income -- 11,585 -- -- 11,585 10.138822 117,453
Value Plus -- 4 -- -- 4 9.818293 39
Growth & Income -- 9,959 -- -- 9,959 10.236801 101,953
Bond -- 516 -- -- 516 10.235787 5,279
------------
Total -- Touchstone Select Variable
Annuity -- Option 1 507,672
Touchstone Select Variable Annuity --
Option 2
Emerging Growth -- 29,887 (61) 1,286 31,112 10.113068 $ 314,639
International Equity -- 26,067 (56) (597) 25,414 11.222086 285,195
Balanced -- 45,096 (61) 1,265 46,300 10.344165 478,936
Income Opportunity -- 40,199 (68) 1,427 41,558 9.793456 406,994
Standby Income -- 19,464 -- (7,227) 12,237 10.135458 124,032
Value Plus -- 1,038 (19) 2,603 3,622 9.816701 35,555
Growth & Income -- 47,142 (69) 1,316 48,389 10.233806 495,202
Bond -- 23,183 -- 64 23,247 10.233475 237,899
------------
Total -- Touchstone Select Variable
Annuity -- Option 2 2,378,452
Touchstone Select Variable Annuity --
Option 3
Emerging Growth -- 12,018 (7) -- 12,011 10.109703 121,432
International Equity -- 15,716 (6) -- 15,710 11.218361 176,239
Balanced -- 27,784 (45) -- 27,739 10.340730 286,842
Income Opportunity -- 24,229 (52) -- 24,177 9.790197 236,693
Standby Income -- 12,760 -- -- 12,760 10.132093 129,287
Value Plus -- 3 -- -- 3 9.815111 29
Growth & Income -- 25,928 (50) -- 25,878 10.228822 264,703
Bond -- 21,575 (5) -- 21,570 10.228759 220,632
------------
Total -- Touchstone Select Variable
Annuity -- Option 3 1,435,857
Total $195,743,539
============
</TABLE>
5
<PAGE> 12
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1--TOUCHSTONE VARIABLE
ANNUITY
Supplementary Information-selected Per Share Data and Ratios
(Selected data for a share of accumulation unit outstanding throughout each
year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY
GROWTH EQUITY BALANCED OPPORTUNITY INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
Per share data
Investment income $ -- $ -- $ 0.184061 $ 0.767918 $ 0.301723
Expenses 0.116894 0.105156 0.112493 0.118542 0.074863
---------- ---------- ---------- ---------- ----------
Net investment income (loss) (0.116894) (0.105156) 0.071568 0.649376 0.226860
Net realized and unrealized gain (loss) on
investments 0.964429 3.286131 1.013203 (0.604638) (0.000123)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.847535 3.180975 1.084771 0.044738 0.226737
Beginning of period 16.905544 13.984724 16.130170 17.401250 11.140654
---------- ---------- ---------- ---------- ----------
End of period $17.753079 $17.165699 $17.214941 $17.445988 $11.367391
========== ========== ========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.66% 0.65% 0.67% 0.67% 0.66%
Ratio of investment income-net to average net
assets(%) -0.66% -0.60% 0.55% 3.86% 2.01%
<CAPTION>
VALUE GROWTH &
PLUS* INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -----------
<S> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
Per share data
Investment income $ -- $ -- $ --
Expenses 0.021545 0.119699 0.082314
---------- ---------- ----------
Net investment income (loss) (0.021545) (0.119699) (0.082314)
Net realized and unrealized gain (loss) on
investments (0.160162) 1.648167 0.534240
---------- ---------- ----------
Net increase (decrease) in net asset value (0.181707) 1.528468 0.451926
Beginning of period 10.000000 16.749955 12.137441
---------- ---------- ----------
End of period $ 9.818293 $18.278423 $12.589367
========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.09% 0.67% 0.64%
Ratio of investment income-net to average net
assets(%) -0.24% -0.64% -0.61%
</TABLE>
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1--TOUCHSTONE VARIABLE
ANNUITY**
- --------------------------------------------------------------------------------
<TABLE>
EMERGING INTERNATIONAL INCOME STANDBY
GROWTH EQUITY BALANCED OPPORTUNITY INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1997
Per share data
Investment income $ 0.914814 $ 0.759815 $ 1.297872 $ 2.211330 $ 0.586459
Expenses 0.197048 0.179407 0.200630 0.227065 0.146437
---------- ---------- ---------- ---------- ----------
Net investment income (loss) 0.717766 0.580408 1.097242 1.984265 0.440022
Net realized and unrealized gain (loss) on
investments 3.369931 1.053431 1.250190 (0.310492) (0.010786)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 4.087697 1.633839 2.347432 1.673773 0.429236
Beginning of year 12.817847 12.350885 13.782738 15.727477 10.711418
---------- ---------- ---------- ---------- ----------
End of year $16.905544 $13.984724 $16.130170 $17.401250 $11.140654
========== ========== ========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 1.32% 1.33% 1.21% 1.29% 1.40%
Ratio of investment income-net to average net
assets(%) 7.70% 7.43% 11.11% 13.57% 4.26%
<CAPTION>
GROWTH &
INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1997
Per share data
Investment income $ -- $ --
Expenses 0.204446 0.156956
---------- ----------
Net investment income (loss) (0.204446) (0.156956)
Net realized and unrealized gain (loss) on
investments 2.792923 0.899266
---------- ----------
Net increase (decrease) in net asset value 2.588477 0.742310
Beginning of year 14.161478 11.395131
---------- ----------
End of year $16.749955 $12.137441
========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 1.21% 1.17%
Ratio of investment income-net to average net
assets(%) -1.19% -1.17%
</TABLE>
- ------------------------------
* Calculation of the Value Plus Unit Values began May 1, 1998, when that
sub-account commenced operations.
** The first Touchstone Select Variable Annuity contract was issued on March 2,
1998. This supplementary information for the year ended December 31, 1997
relates only to the Touchstone Variable Annuity.
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 13
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1--
TOUCHSTONE SELECT VARIABLE ANNUITY--OPTION 1**
Supplementary Information-selected Per Share Data and Ratios
(Selected data for a share of accumulation unit outstanding throughout each
year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY
GROWTH EQUITY BALANCED OPPORTUNITY INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
Per share data
Investment income $ -- $ -- $ 0.110636 $ 0.289183 $ 0.184488
Expenses 0.046345 0.048813 0.046925 0.045709 0.045514
---------- ---------- ---------- ---------- ----------
Net investment income (loss) (0.046345) (0.048813) 0.063711 0.243474 0.138974
Net realized and unrealized gain (loss) on
investments 0.162767 1.274615 0.283893 (0.446768) (0.000152)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.116422 1.225802 0.347604 (0.203294) 0.138822
Beginning of period 10.000000 10.000000 10.000000 10.000000 10.000000
---------- ---------- ---------- ---------- ----------
End of period $10.116422 $11.225802 $10.347604 $ 9.796706 $10.138822
========== ========== ========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.66% 0.65% 0.67% 0.67% 0.66%
Ratio of investment income-net to average net
assets(%) -0.66% -0.60% 0.55% 3.86% 2.01%
<CAPTION>
VALUE GROWTH &
PLUS* INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -----------
<S> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED
Per share data
Investment income $ -- $ -- $ --
Expenses 0.021545 0.046866 0.045636
---------- ---------- ----------
Net investment income (loss) (0.021545) (0.046866) (0.045636)
Net realized and unrealized gain (loss) on
investments (0.160162) 0.283667 0.281423
---------- ---------- ----------
Net increase (decrease) in net asset value (0.181707) 0.236801 0.235787
Beginning of period 10.000000 10.000000 10.000000
---------- ---------- ----------
End of period $ 9.818293 $10.236801 $10.235787
========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.09% 0.67% 0.64%
Ratio of investment income-net to average net
assets(%) -0.24% -0.64% -0.61%
</TABLE>
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1--
TOUCHSTONE SELECT VARIABLE ANNUITY--OPTION 2**
- --------------------------------------------------------------------------------
<TABLE>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS*
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
Per share data
Investment income $ -- $ -- $ 0.110613 $ 0.289120 $ 0.184458 $ --
Expenses 0.049743 0.052391 0.050366 0.049060 0.048851 0.023128
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) (0.049743) (0.052391) 0.060247 0.240060 0.135607 (0.023128)
Net realized and unrealized gain (loss) on
investments 0.162811 1.274477 0.283918 (0.446604) (0.000149) (0.160171)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.113068 1.222086 0.344165 (0.206544) 0.135458 (0.183299)
Beginning of period 10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
---------- ---------- ---------- ---------- ---------- ----------
End of period $10.113068 $11.222086 $10.344165 $ 9.793456 $10.135458 $ 9.816701
========== ========== ========== ========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.66% 0.65% 0.67% 0.67% 0.66% 0.09%
Ratio of investment income-net to average net
assets(%) -0.66% -0.60% 0.55% 3.86% 2.01% -0.24%
<CAPTION>
GROWTH &
INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED
Per share data
Investment income $ -- $ --
Expenses 0.050305 0.048988
---------- ----------
Net investment income (loss) (0.050305) (0.048988)
Net realized and unrealized gain (loss) on
investments 0.284111 0.282463
---------- ----------
Net increase (decrease) in net asset value 0.233806 0.233475
Beginning of period 10.000000 10.000000
---------- ----------
End of period $10.233806 $10.233475
========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.67% 0.64%
Ratio of investment income-net to average net
assets(%) -0.64% -0.61%
</TABLE>
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY SEPARATE ACCOUNT 1--
TOUCHSTONE SELECT VARIABLE ANNUITY--OPTION 3**
- --------------------------------------------------------------------------------
<TABLE>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS*
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
Per share data
Investment income $ -- $ -- $ 0.110590 $ 0.289056 $ 0.184428 $ --
Expenses 0.053140 0.055969 0.053805 0.052410 0.052187 0.024709
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) (0.053140) (0.055969) 0.056785 0.236646 0.132241 (0.024709)
Net realized and unrealized gain (loss) on
investments 0.162843 1.274330 0.283945 (0.446449) (0.000148) (0.160180)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value 0.109703 1.218361 0.340730 (0.209803) 0.132093 (0.184889)
Beginning of period 10.000000 10.000000 10.000000 10.000000 10.000000 10.000000
---------- ---------- ---------- ---------- ---------- ----------
End of period $10.109703 $11.218361 $10.340730 $ 9.790197 $10.132093 $ 9.815111
========== ========== ========== ========== ========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.66% 0.65% 0.67% 0.67% 0.66% 0.09%
Ratio of investment income-net to average net
assets(%) -0.66% -0.60% 0.55% 3.86% 2.01% -0.24%
<CAPTION>
GROWTH &
INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED
Per share data
Investment income $ -- $ --
Expenses 0.053733 0.052327
---------- ----------
Net investment income (loss) (0.053733) (0.052327)
Net realized and unrealized gain (loss) on
investments 0.282555 0.281086
---------- ----------
Net increase (decrease) in net asset value 0.228822 0.228759
Beginning of period 10.000000 10.000000
---------- ----------
End of period $10.228822 $10.228759
========== ==========
Ratios
Ratio of operating expense to average net
assets(%) 0.67% 0.64%
Ratio of investment income-net to average net
assets(%) -0.64% -0.61%
</TABLE>
- ------------------------------
* Calculation of the Value Plus Unit Values began May 1, 1998, when that
sub-account commenced operations.
** Supplementary information for the year ended December 31, 1997 is not
available for the Touchstone Select Variable Annuity as the first contract
was issued on March 2, 1998.
The accompanying notes are an integral part of the financial statements.
7
