Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Unum Group | unm12312012cover8-k.htm |
| EX-99.1 - EXHIBIT - Unum Group | unm12312012exhibit991.htm |
Exhibit 99.2
Unum Group
Statistical Supplement Fourth Quarter 2012
TABLE OF CONTENTS
(dollars in millions, except share data and where noted)
Interim Results are Unaudited
Page | |||
Segment operating results exclude net realized investment gains or losses, non-operating retirement-related gains or losses, and income tax. | |||
See "Notes to Statistical Supplement" on page 15 for a discussion of non-GAAP financial measures and significant transactions and events. | |||
N.M. = not a meaningful percentage | |||
Unum Group Financial Highlights
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Financial Results | |||||||||||||||||||
Premium Income | $ | 1,937.2 | $ | 1,888.5 | $ | 7,716.1 | $ | 7,514.2 | $ | 7,431.4 | |||||||||
Segment Operating Revenue | $ | 2,633.6 | $ | 2,597.4 | $ | 10,459.2 | $ | 10,282.9 | $ | 10,168.5 | |||||||||
Net Realized Investment Gain (Loss) | 24.6 | 7.4 | 56.2 | (4.9 | ) | 24.7 | |||||||||||||
Revenue | $ | 2,658.2 | $ | 2,604.8 | $ | 10,515.4 | $ | 10,278.0 | $ | 10,193.2 | |||||||||
Net Income (Loss) | $ | 233.9 | $ | (369.0 | ) | $ | 894.4 | $ | 284.2 | $ | 878.7 | ||||||||
Assets | $ | 62,236.1 | $ | 59,555.2 | $ | 56,602.7 | |||||||||||||
Stockholders' Equity | $ | 8,612.6 | $ | 8,169.7 | $ | 8,484.9 | |||||||||||||
2012
Effective January 1, 2012, we adopted an accounting standards update regarding the capitalization of costs associated with the acquisition of insurance contracts and applied the amendments retrospectively. Operating income by segment has been adjusted to reflect our retrospective adoption.
We previously allocated the amortization of prior period actuarial gains or losses, the component of the net periodic benefit costs for our pensions and other postretirement benefit plans which we consider to be non-operating, to our Corporate segment. During the first quarter of 2012, we determined that we would modify our segment reporting. Effective January 1, 2012, the amortization of prior period actuarial gains or losses is no longer included in operating income or operating loss by segment. Prior period segment results for our Corporate segment have been adjusted to conform to current year reporting.
2011
Year ended 12/31/2011 results include the following:
• | A deferred acquisition costs impairment charge of $196.0 million before tax and $127.5 million after tax related to our long-term care closed block business. |
• | A reserve charge of $573.6 million before tax and $372.8 million after tax related to our long-term care closed block business. |
• | A reserve charge of $183.5 million before tax and $119.3 million after tax related to our individual disability closed block business. |
• | An income tax benefit of $41.3 million due to a final settlement with the Internal Revenue Service with respect to our appeal of audit adjustments for the tax years 1996 to 2004. |
• | An income tax charge of $18.6 million related to the repatriation of £150.0 million of dividends from our U.K. subsidiaries. |
2010
Year ended 12/31/2010 results include a tax charge of $10.2 million to reflect the impact of a tax law change.
1 | ||
Unum Group Per Common Share Information
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Net Income | |||||||||||||||||||
Basic | $ | 0.86 | $ | (1.26 | ) | $ | 3.18 | $ | 0.94 | $ | 2.70 | ||||||||
Assuming Dilution | $ | 0.85 | $ | (1.26 | ) | $ | 3.17 | $ | 0.94 | $ | 2.69 | ||||||||
Dividends Paid | $ | 0.130 | $ | 0.105 | $ | 0.470 | $ | 0.395 | $ | 0.350 | |||||||||
Price (UNM closing price on last trading day of period) | $ | 20.82 | $ | 21.07 | $ | 24.22 | |||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||||||||
(in millions) | per share | (in millions) | per share | (in millions) | per share | ||||||||||||||||||
As Adjusted | |||||||||||||||||||||||
Book Value | |||||||||||||||||||||||
Total Stockholders' Equity, As Reported | $ | 8,612.6 | $ | 31.87 | $ | 8,169.7 | $ | 27.91 | $ | 8,484.9 | $ | 26.80 | |||||||||||
Net Unrealized Gain on Securities | 873.5 | 3.23 | 614.8 | 2.11 | 416.1 | 1.31 | |||||||||||||||||
Net Gain on Cash Flow Hedges | 401.6 | 1.48 | 408.7 | 1.39 | 361.0 | 1.14 | |||||||||||||||||
Subtotal | 7,337.5 | 27.16 | 7,146.2 | 24.41 | 7,707.8 | 24.35 | |||||||||||||||||
Foreign Currency Translation Adjustment | (72.6 | ) | (0.26 | ) | (117.6 | ) | (0.41 | ) | (107.1 | ) | (0.34 | ) | |||||||||||
Subtotal | 7,410.1 | 27.42 | 7,263.8 | 24.82 | 7,814.9 | 24.69 | |||||||||||||||||
Unrecognized Pension and Postretirement Benefit Costs | (574.5 | ) | (2.13 | ) | (444.1 | ) | (1.51 | ) | (318.6 | ) | (1.00 | ) | |||||||||||
Total Stockholders' Equity, Excluding AOCI | $ | 7,984.6 | $ | 29.55 | $ | 7,707.9 | $ | 26.33 | $ | 8,133.5 | $ | 25.69 | |||||||||||
1. 1 | ||
Unum Group Consolidated Statements of Operations
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Revenue | |||||||||||||||||||
Premium Income | $ | 1,937.2 | $ | 1,888.5 | $ | 7,716.1 | $ | 7,514.2 | $ | 7,431.4 | |||||||||
Net Investment Income | 643.0 | 634.6 | 2,515.2 | 2,519.6 | 2,495.5 | ||||||||||||||
Net Realized Investment Gain (Loss) | 24.6 | 7.4 | 56.2 | (4.9 | ) | 24.7 | |||||||||||||
Other Income | 53.4 | 74.3 | 227.9 | 249.1 | 241.6 | ||||||||||||||
Total Revenue | 2,658.2 | 2,604.8 | 10,515.4 | 10,278.0 | 10,193.2 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 1,689.2 | 2,381.5 | 6,722.2 | 7,209.5 | 6,354.1 | ||||||||||||||
Commissions | 226.4 | 216.5 | 917.2 | 879.2 | 855.4 | ||||||||||||||
Interest and Debt Expense - Non-recourse Debt | 2.8 | 2.8 | 11.5 | 11.5 | 12.9 | ||||||||||||||
Interest and Debt Expense - All Other Debt | 35.3 | 32.4 | 133.9 | 131.8 | 128.9 | ||||||||||||||
Deferral of Acquisition Costs | (119.7 | ) | (107.8 | ) | (467.3 | ) | (442.5 | ) | (422.5 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 93.1 | 91.8 | 378.7 | 365.7 | 373.3 | ||||||||||||||
Impairment of Deferred Acquisition Costs | — | 196.0 | — | 196.0 | — | ||||||||||||||
Other Expenses | 408.4 | 408.9 | 1,569.7 | 1,593.5 | 1,571.2 | ||||||||||||||
Total Benefits and Expenses | 2,335.5 | 3,222.1 | 9,265.9 | 9,944.7 | 8,873.3 | ||||||||||||||
Income (Loss) Before Income Tax | 322.7 | (617.3 | ) | 1,249.5 | 333.3 | 1,319.9 | |||||||||||||
Income Tax Expense (Benefit) | 88.8 | (248.3 | ) | 355.1 | 49.1 | 441.2 | |||||||||||||
Net Income (Loss) | $ | 233.9 | $ | (369.0 | ) | $ | 894.4 | $ | 284.2 | $ | 878.7 | ||||||||
Average Weighted Shares Outstanding | |||||||||||||||||||
Basic | 273,444,807 | 292,624,885 | 281,355,942 | 302,399,783 | 325,839,020 | ||||||||||||||
Dilutive Securities: | |||||||||||||||||||
Options and Other Nonvested Stock Awards | 168,399 | — | 400,901 | 1,171,250 | 1,382,036 | ||||||||||||||
Assuming Dilution | 273,613,206 | 292,624,885 | 281,756,843 | 303,571,033 | 327,221,056 | ||||||||||||||
Actual Number of Shares Outstanding | 270,205,185 | 292,715,954 | 316,573,452 | ||||||||||||||||
2 | ||
Unum Group Sales Data by Segment
Three Months Ended | Year Ended | |||||||||||||||||||||
12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||||
Unum US | $ | 281.2 | $ | 268.4 | 4.8 | % | $ | 760.5 | $ | 707.3 | $ | 643.4 | ||||||||||
Unum UK | £ | 13.9 | £ | 23.9 | (41.8 | ) | £ | 59.5 | £ | 62.7 | £ | 77.2 | ||||||||||
Colonial Life | $ | 126.6 | $ | 126.4 | 0.2 | $ | 361.9 | $ | 365.9 | $ | 358.8 | |||||||||||
3 | ||
Unum Group Sales Data for Unum US Segment
Three Months Ended | Year Ended | |||||||||||||||||||||
12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||||
Sales by Product | ||||||||||||||||||||||
Group Disability, Group Life, and AD&D | ||||||||||||||||||||||
Group Long-term Disability | $ | 86.8 | $ | 75.2 | 15.4 | % | $ | 182.2 | $ | 165.0 | $ | 148.2 | ||||||||||
Group Short-term Disability | 46.3 | 40.8 | 13.5 | 97.4 | 84.9 | 80.3 | ||||||||||||||||
Group Life | 85.3 | 88.4 | (3.5 | ) | 188.0 | 185.3 | 166.9 | |||||||||||||||
AD&D | 9.5 | 8.7 | 9.2 | 19.5 | 17.6 | 18.1 | ||||||||||||||||
Subtotal | 227.9 | 213.1 | 6.9 | 487.1 | 452.8 | 413.5 | ||||||||||||||||
Supplemental and Voluntary | ||||||||||||||||||||||
Individual Disability - Recently Issued | 12.2 | 15.0 | (18.7 | ) | 57.0 | 55.6 | 42.7 | |||||||||||||||
Voluntary Benefits | 41.1 | 40.3 | 2.0 | 216.4 | 198.9 | 187.2 | ||||||||||||||||
Subtotal | 53.3 | 55.3 | (3.6 | ) | 273.4 | 254.5 | 229.9 | |||||||||||||||
Total Sales | $ | 281.2 | $ | 268.4 | 4.8 | $ | 760.5 | $ | 707.3 | $ | 643.4 | |||||||||||
Sales by Market Sector | ||||||||||||||||||||||
Group Disability, Group Life, and AD&D | ||||||||||||||||||||||
Core Market (< 2,000 lives) | $ | 141.1 | $ | 144.8 | (2.6 | ) | $ | 334.9 | $ | 322.1 | $ | 294.0 | ||||||||||
Large Case Market | 86.8 | 68.3 | 27.1 | 152.2 | 130.7 | 119.5 | ||||||||||||||||
Subtotal | 227.9 | 213.1 | 6.9 | 487.1 | 452.8 | 413.5 | ||||||||||||||||
Supplemental and Voluntary | 53.3 | 55.3 | (3.6 | ) | 273.4 | 254.5 | 229.9 | |||||||||||||||
Total Sales | $ | 281.2 | $ | 268.4 | 4.8 | $ | 760.5 | $ | 707.3 | $ | 643.4 | |||||||||||
3. 1 | ||
Unum Group Sales Data for Unum UK Segment
Three Months Ended | Year Ended | |||||||||||||||||||||
(in millions of dollars) | 12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | 12/31/2010 | ||||||||||||||||
Sales by Product | ||||||||||||||||||||||
Group Long-term Disability | $ | 16.1 | $ | 17.1 | (5.8 | )% | $ | 51.2 | $ | 47.8 | $ | 53.1 | ||||||||||
Group Life | 5.3 | 18.3 | (71.0 | ) | 38.0 | 43.8 | 57.3 | |||||||||||||||
Supplemental and Voluntary | 0.9 | 2.2 | (59.1 | ) | 4.9 | 8.6 | 8.8 | |||||||||||||||
Total Sales | $ | 22.3 | $ | 37.6 | (40.7 | ) | $ | 94.1 | $ | 100.2 | $ | 119.2 | ||||||||||
Sales by Market Sector | ||||||||||||||||||||||
Group Long-term Disability and Group Life | ||||||||||||||||||||||
Core Market (<500 lives) | $ | 7.9 | $ | 12.6 | (37.3 | ) | $ | 38.7 | $ | 37.5 | $ | 51.6 | ||||||||||
Large Case Market | 13.5 | 22.8 | (40.8 | ) | 50.5 | 54.1 | 58.8 | |||||||||||||||
Subtotal | 21.4 | 35.4 | (39.5 | ) | 89.2 | 91.6 | 110.4 | |||||||||||||||
Supplemental and Voluntary | 0.9 | 2.2 | (59.1 | ) | 4.9 | 8.6 | 8.8 | |||||||||||||||
Total Sales | $ | 22.3 | $ | 37.6 | (40.7 | ) | $ | 94.1 | $ | 100.2 | $ | 119.2 | ||||||||||
(in millions of pounds) | ||||||||||||||||||||||
Sales by Product | ||||||||||||||||||||||
Group Long-term Disability | £ | 10.1 | £ | 10.8 | (6.5 | ) | £ | 32.3 | £ | 29.8 | £ | 34.4 | ||||||||||
Group Life | 3.3 | 11.7 | (71.8 | ) | 24.1 | 27.5 | 37.1 | |||||||||||||||
Supplemental and Voluntary | 0.5 | 1.4 | (64.3 | ) | 3.1 | 5.4 | 5.7 | |||||||||||||||
Total Sales | £ | 13.9 | £ | 23.9 | (41.8 | ) | £ | 59.5 | £ | 62.7 | £ | 77.2 | ||||||||||
Sales by Market Sector | ||||||||||||||||||||||
Group Long-term Disability and Group Life | ||||||||||||||||||||||
Core Market (<500 lives) | £ | 5.0 | £ | 8.0 | (37.5 | ) | £ | 24.4 | £ | 23.4 | £ | 33.5 | ||||||||||
Large Case Market | 8.4 | 14.5 | (42.1 | ) | 32.0 | 33.9 | 38.0 | |||||||||||||||
Subtotal | 13.4 | 22.5 | (40.4 | ) | 56.4 | 57.3 | 71.5 | |||||||||||||||
Supplemental and Voluntary | 0.5 | 1.4 | (64.3 | ) | 3.1 | 5.4 | 5.7 | |||||||||||||||
Total Sales | £ | 13.9 | £ | 23.9 | (41.8 | ) | £ | 59.5 | £ | 62.7 | £ | 77.2 | ||||||||||
3. 2 | ||
Unum Group Sales Data for Colonial Life Segment
Three Months Ended | Year Ended | |||||||||||||||||||||
12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||||
Sales by Product | ||||||||||||||||||||||
Accident, Sickness, and Disability | $ | 78.2 | $ | 81.4 | (3.9 | )% | $ | 233.0 | $ | 242.9 | $ | 237.4 | ||||||||||
Life | 23.1 | 22.8 | 1.3 | 67.3 | 65.5 | 65.7 | ||||||||||||||||
Cancer and Critical Illness | 25.3 | 22.2 | 14.0 | 61.6 | 57.5 | 55.7 | ||||||||||||||||
Total Sales | $ | 126.6 | $ | 126.4 | 0.2 | $ | 361.9 | $ | 365.9 | $ | 358.8 | |||||||||||
Sales by Market Sector | ||||||||||||||||||||||
Commercial | ||||||||||||||||||||||
Core Market (<1,000 lives) | $ | 79.7 | $ | 80.3 | (0.7 | ) | $ | 248.3 | $ | 248.0 | $ | 237.4 | ||||||||||
Large Case Market | 19.1 | 20.5 | (6.8 | ) | 40.9 | 43.9 | 47.4 | |||||||||||||||
Subtotal | 98.8 | 100.8 | (2.0 | ) | 289.2 | 291.9 | 284.8 | |||||||||||||||
Public | 27.8 | 25.6 | 8.6 | 72.7 | 74.0 | 74.0 | ||||||||||||||||
Total Sales | $ | 126.6 | $ | 126.4 | 0.2 | $ | 361.9 | $ | 365.9 | $ | 358.8 | |||||||||||
3. 3 | ||
Unum Group Consolidated Balance Sheets
December 31, | |||||||
2012 | 2011 | ||||||
Assets | As Adjusted | ||||||
Investments | |||||||
Fixed Maturity Securities | $ | 44,973.0 | $ | 42,486.7 | |||
Mortgage Loans | 1,712.7 | 1,612.3 | |||||
Policy Loans | 3,133.8 | 3,051.4 | |||||
Other Long-term Investments | 625.0 | 639.2 | |||||
Short-term Investments | 1,460.3 | 1,423.5 | |||||
Total Investments | 51,904.8 | 49,213.1 | |||||
Cash and Bank Deposits | 77.3 | 116.6 | |||||
Accounts and Premiums Receivable | 1,632.6 | 1,672.2 | |||||
Reinsurance Recoverable | 4,842.6 | 4,854.6 | |||||
Accrued Investment Income | 694.6 | 681.8 | |||||
Deferred Acquisition Costs | 1,755.5 | 1,677.1 | |||||
Goodwill | 201.7 | 201.2 | |||||
Property and Equipment | 501.6 | 493.3 | |||||
Other Assets | 625.4 | 645.3 | |||||
Total Assets | $ | 62,236.1 | $ | 59,555.2 | |||
Liabilities | |||||||
Policy and Contract Benefits | $ | 1,484.6 | $ | 1,494.0 | |||
Reserves for Future Policy and Contract Benefits | 44,694.4 | 43,051.9 | |||||
Unearned Premiums | 426.7 | 433.2 | |||||
Other Policyholders’ Funds | 1,644.9 | 1,625.9 | |||||
Income Tax Payable | 54.2 | 38.2 | |||||
Deferred Income Tax | 269.4 | 44.7 | |||||
Short-term Debt | 455.8 | 312.3 | |||||
Long-term Debt - Non-recourse | 562.5 | 632.5 | |||||
Long-term Debt - All Other | 2,192.9 | 1,937.7 | |||||
Other Liabilities | 1,838.1 | 1,815.1 | |||||
Total Liabilities | 53,623.5 | 51,385.5 | |||||
Stockholders’ Equity | |||||||
Common Stock | 36.0 | 35.9 | |||||
Additional Paid-in Capital | 2,607.7 | 2,591.1 | |||||
Accumulated Other Comprehensive Income (Loss) | |||||||
Net Unrealized Gain on Securities Not Other-Than-Temporarily Impaired | 873.5 | 614.8 | |||||
Net Gain on Cash Flow Hedges | 401.6 | 408.7 | |||||
Foreign Currency Translation Adjustment | (72.6 | ) | (117.6 | ) | |||
Unrecognized Pension and Postretirement Benefit Costs | (574.5 | ) | (444.1 | ) | |||
Retained Earnings | 7,371.6 | 6,611.0 | |||||
Treasury Stock | (2,030.7 | ) | (1,530.1 | ) | |||
Total Stockholders’ Equity | 8,612.6 | 8,169.7 | |||||
Total Liabilities and Stockholders’ Equity | $ | 62,236.1 | $ | 59,555.2 | |||
4 | ||
Unum Group Deferred Acquisition Costs by Segment
Unum US | Unum UK | Colonial Life | Closed Block | Consolidated | |||||||||||||||
Balances at December 31, 2009, as adjusted | $ | 932.4 | $ | 40.8 | $ | 593.5 | $ | 217.6 | $ | 1,784.3 | |||||||||
Capitalized | 207.8 | 15.1 | 196.8 | 2.8 | 422.5 | ||||||||||||||
Amortized | (192.6 | ) | (13.6 | ) | (150.1 | ) | (17.0 | ) | (373.3 | ) | |||||||||
Adjustment Related to Unrealized Investment Gains/Losses | (3.9 | ) | — | (12.2 | ) | — | (16.1 | ) | |||||||||||
Foreign Currency | — | (1.3 | ) | — | — | (1.3 | ) | ||||||||||||
Balances at December 31, 2010, as adjusted | 943.7 | 41.0 | 628.0 | 203.4 | 1,816.1 | ||||||||||||||
Capitalized | 220.3 | 15.4 | 203.1 | 3.7 | 442.5 | ||||||||||||||
Amortized | (188.1 | ) | (15.3 | ) | (151.2 | ) | (11.1 | ) | (365.7 | ) | |||||||||
Impairment of Deferred Acquisition Costs | — | — | — | (196.0 | ) | (196.0 | ) | ||||||||||||
Adjustment Related to Unrealized Investment Gains/Losses | (4.1 | ) | — | (15.5 | ) | — | (19.6 | ) | |||||||||||
Foreign Currency | — | (0.2 | ) | — | — | (0.2 | ) | ||||||||||||
Balances at December 31, 2011, as adjusted | 971.8 | 40.9 | 664.4 | — | 1,677.1 | ||||||||||||||
Capitalized | 249.2 | 11.8 | 206.3 | — | 467.3 | ||||||||||||||
Amortized | (196.5 | ) | (15.7 | ) | (166.5 | ) | — | (378.7 | ) | ||||||||||
Adjustment Related to Unrealized Investment Gains/Losses | (0.2 | ) | — | (11.8 | ) | — | (12.0 | ) | |||||||||||
Foreign Currency | — | 1.8 | — | — | 1.8 | ||||||||||||||
Balances at December 31, 2012 | $ | 1,024.3 | $ | 38.8 | $ | 692.4 | $ | — | $ | 1,755.5 | |||||||||
4. 1 | ||
Unum Group Balance Sheets by Segment - December 31, 2012
Unum US | |||||||||||||||||||||||||||||||||||
Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Investments | $ | 10,088.7 | $ | 2,646.6 | $ | 4,202.5 | $ | 16,937.8 | $ | 3,675.2 | $ | 2,521.4 | $ | 27,498.4 | $ | 1,272.0 | $ | 51,904.8 | |||||||||||||||||
Deferred Acquisition Costs | 47.4 | 40.8 | 936.1 | 1,024.3 | 38.8 | 692.4 | — | — | 1,755.5 | ||||||||||||||||||||||||||
Goodwill | 2.5 | — | 187.5 | 190.0 | 11.7 | — | — | — | 201.7 | ||||||||||||||||||||||||||
All Other | 646.3 | 149.4 | 443.4 | 1,239.1 | 250.1 | 221.1 | 5,570.8 | 1,093.0 | 8,374.1 | ||||||||||||||||||||||||||
Total Assets | $ | 10,784.9 | $ | 2,836.8 | $ | 5,769.5 | $ | 19,391.2 | $ | 3,975.8 | $ | 3,434.9 | $ | 33,069.2 | $ | 2,365.0 | $ | 62,236.1 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 8,847.6 | $ | 1,749.1 | $ | 3,456.7 | $ | 14,053.4 | $ | 2,821.9 | $ | 1,878.2 | $ | 29,497.1 | $ | — | $ | 48,250.6 | |||||||||||||||||
Debt | 63.1 | — | — | 63.1 | — | — | 564.3 | 2,583.8 | 3,211.2 | ||||||||||||||||||||||||||
All Other | 362.1 | 123.2 | 451.3 | 936.6 | 112.7 | 305.9 | 124.4 | 682.1 | 2,161.7 | ||||||||||||||||||||||||||
Total Liabilities | 9,272.8 | 1,872.3 | 3,908.0 | 15,053.1 | 2,934.6 | 2,184.1 | 30,185.8 | 3,265.9 | 53,623.5 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,513.3 | 913.9 | 1,688.0 | 4,115.2 | 866.4 | 1,097.7 | 2,462.6 | (1,204.4 | ) | 7,337.5 | |||||||||||||||||||||||||
Net Unrealized Gain/Loss on Securities and Net Gain on Cash Flow Hedges | (1.2 | ) | 50.6 | 173.5 | 222.9 | 174.8 | 153.1 | 420.8 | 303.5 | 1,275.1 | |||||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,512.1 | 964.5 | 1,861.5 | 4,338.1 | 1,041.2 | 1,250.8 | 2,883.4 | (900.9 | ) | 8,612.6 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 10,784.9 | $ | 2,836.8 | $ | 5,769.5 | $ | 19,391.2 | $ | 3,975.8 | $ | 3,434.9 | $ | 33,069.2 | $ | 2,365.0 | $ | 62,236.1 | |||||||||||||||||
Allocated stockholders' equity is determined on the basis of an internal allocation formula that reflects the volume and risk components of the business and aligns with the Company's target capital levels for regulatory and rating agency purposes. This formula is modified periodically to recognize changes in the views of capital requirements.
4. 2 | ||
Unum Group Balance Sheets by Segment - December 31, 2011 - As Adjusted
Unum US | |||||||||||||||||||||||||||||||||||
Group Disability | Group Life and Accidental Death & Dismemberment | Supplemental and Voluntary | Total Unum US | Unum UK | Colonial Life | Closed Block | Corporate | Consolidated | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Investments | $ | 10,017.5 | $ | 2,424.6 | $ | 3,735.4 | $ | 16,177.5 | $ | 3,293.6 | $ | 2,294.8 | $ | 25,615.9 | $ | 1,831.3 | $ | 49,213.1 | |||||||||||||||||
Deferred Acquisition Costs | 39.4 | 32.0 | 900.4 | 971.8 | 40.9 | 664.4 | — | — | 1,677.1 | ||||||||||||||||||||||||||
Goodwill | 2.5 | — | 187.5 | 190.0 | 11.2 | — | — | — | 201.2 | ||||||||||||||||||||||||||
All Other | 616.1 | 124.7 | 503.5 | 1,244.3 | 203.8 | 208.6 | 5,823.6 | 983.5 | 8,463.8 | ||||||||||||||||||||||||||
Total Assets | $ | 10,675.5 | $ | 2,581.3 | $ | 5,326.8 | $ | 18,583.6 | $ | 3,549.5 | $ | 3,167.8 | $ | 31,439.5 | $ | 2,814.8 | $ | 59,555.2 | |||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Reserves and Policyholder Benefits | $ | 8,913.9 | $ | 1,661.9 | $ | 3,270.3 | $ | 13,846.1 | $ | 2,491.8 | $ | 1,768.3 | $ | 28,498.8 | $ | — | $ | 46,605.0 | |||||||||||||||||
Debt | 79.0 | — | — | 79.0 | — | — | 597.6 | 2,205.9 | 2,882.5 | ||||||||||||||||||||||||||
All Other | 207.1 | 12.5 | 341.2 | 560.8 | 114.0 | 248.8 | 38.8 | 935.6 | 1,898.0 | ||||||||||||||||||||||||||
Total Liabilities | 9,200.0 | 1,674.4 | 3,611.5 | 14,485.9 | 2,605.8 | 2,017.1 | 29,135.2 | 3,141.5 | 51,385.5 | ||||||||||||||||||||||||||
Allocated Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Other Allocated Stockholders' Equity | 1,477.7 | 867.4 | 1,587.8 | 3,932.9 | 756.1 | 1,030.9 | 2,006.0 | (579.7 | ) | 7,146.2 | |||||||||||||||||||||||||
Net Unrealized Gain/Loss on Securities and Net Gain on Cash Flow Hedges | (2.2 | ) | 39.5 | 127.5 | 164.8 | 187.6 | 119.8 | 298.3 | 253.0 | 1,023.5 | |||||||||||||||||||||||||
Total Allocated Stockholders' Equity | 1,475.5 | 906.9 | 1,715.3 | 4,097.7 | 943.7 | 1,150.7 | 2,304.3 | (326.7 | ) | 8,169.7 | |||||||||||||||||||||||||
Total Liabilities and Allocated Stockholders' Equity | $ | 10,675.5 | $ | 2,581.3 | $ | 5,326.8 | $ | 18,583.6 | $ | 3,549.5 | $ | 3,167.8 | $ | 31,439.5 | $ | 2,814.8 | $ | 59,555.2 | |||||||||||||||||
4. 3 | ||
Unum Group Financial Results by Segment
Three Months Ended | Year Ended | ||||||||||||||||||||
12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | % Change | ||||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||||
Premium Income | |||||||||||||||||||||
Unum US | $ | 1,117.6 | $ | 1,083.0 | 3.2 | % | $ | 4,456.5 | $ | 4,296.0 | 3.7 | % | |||||||||
Unum UK | 175.5 | 169.2 | 3.7 | 694.6 | 687.6 | 1.0 | |||||||||||||||
Colonial Life | 301.9 | 289.2 | 4.4 | 1,194.5 | 1,135.3 | 5.2 | |||||||||||||||
Closed Block | 342.2 | 347.1 | (1.4 | ) | 1,370.5 | 1,395.3 | (1.8 | ) | |||||||||||||
1,937.2 | 1,888.5 | 2.6 | 7,716.1 | 7,514.2 | 2.7 | ||||||||||||||||
Net Investment Income | |||||||||||||||||||||
Unum US | 240.5 | 238.8 | 0.7 | 952.3 | 951.4 | 0.1 | |||||||||||||||
Unum UK | 50.3 | 50.6 | (0.6 | ) | 170.8 | 189.9 | (10.1 | ) | |||||||||||||
Colonial Life | 35.1 | 32.8 | 7.0 | 138.6 | 132.4 | 4.7 | |||||||||||||||
Closed Block | 317.1 | 300.8 | 5.4 | 1,230.5 | 1,189.7 | 3.4 | |||||||||||||||
Corporate | — | 11.6 | (100.0 | ) | 23.0 | 56.2 | (59.1 | ) | |||||||||||||
643.0 | 634.6 | 1.3 | 2,515.2 | 2,519.6 | (0.2 | ) | |||||||||||||||
Other Income | |||||||||||||||||||||
Unum US | 31.5 | 30.7 | 2.6 | 124.6 | 121.6 | 2.5 | |||||||||||||||
Unum UK | — | 0.2 | (100.0 | ) | 0.1 | 0.3 | (66.7 | ) | |||||||||||||
Colonial Life | 0.1 | 0.1 | — | 0.3 | 0.5 | (40.0 | ) | ||||||||||||||
Closed Block | 21.2 | 25.5 | (16.9 | ) | 100.1 | 106.1 | (5.7 | ) | |||||||||||||
Corporate | 0.6 | 17.8 | (96.6 | ) | 2.8 | 20.6 | (86.4 | ) | |||||||||||||
53.4 | 74.3 | (28.1 | ) | 227.9 | 249.1 | (8.5 | ) | ||||||||||||||
Total Operating Revenue | |||||||||||||||||||||
Unum US | 1,389.6 | 1,352.5 | 2.7 | 5,533.4 | 5,369.0 | 3.1 | |||||||||||||||
Unum UK | 225.8 | 220.0 | 2.6 | 865.5 | 877.8 | (1.4 | ) | ||||||||||||||
Colonial Life | 337.1 | 322.1 | 4.7 | 1,333.4 | 1,268.2 | 5.1 | |||||||||||||||
Closed Block | 680.5 | 673.4 | 1.1 | 2,701.1 | 2,691.1 | 0.4 | |||||||||||||||
Corporate | 0.6 | 29.4 | (98.0 | ) | 25.8 | 76.8 | (66.4 | ) | |||||||||||||
$ | 2,633.6 | $ | 2,597.4 | 1.4 | $ | 10,459.2 | $ | 10,282.9 | 1.7 | ||||||||||||
5 | ||
Unum Group Financial Results by Segment
Three Months Ended | Year Ended | ||||||||||||||||||||
12/31/2012 | 12/31/2011 | % Change | 12/31/2012 | 12/31/2011 | % Change | ||||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||
Unum US | $ | 1,177.4 | $ | 1,145.1 | 2.8 | % | $ | 4,686.3 | $ | 4,552.1 | 2.9 | % | |||||||||
Unum UK | 190.8 | 168.1 | 13.5 | 734.2 | 687.1 | 6.9 | |||||||||||||||
Colonial Life | 268.8 | 257.1 | 4.6 | 1,059.1 | 998.1 | 6.1 | |||||||||||||||
Closed Block | 651.7 | 1,595.7 | (59.2 | ) | 2,605.6 | 3,520.3 | (26.0 | ) | |||||||||||||
Corporate | 35.2 | 48.2 | (27.0 | ) | 134.3 | 155.2 | (13.5 | ) | |||||||||||||
2,323.9 | 3,214.2 | (27.7 | ) | 9,219.5 | 9,912.8 | (7.0 | ) | ||||||||||||||
Income (Loss) Before Income Tax, Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss | |||||||||||||||||||||
Unum US | 212.2 | 207.4 | 2.3 | 847.1 | 816.9 | 3.7 | |||||||||||||||
Unum UK | 35.0 | 51.9 | (32.6 | ) | 131.3 | 190.7 | (31.1 | ) | |||||||||||||
Colonial Life | 68.3 | 65.0 | 5.1 | 274.3 | 270.1 | 1.6 | |||||||||||||||
Closed Block | 28.8 | (922.3 | ) | (103.1 | ) | 95.5 | (829.2 | ) | (111.5 | ) | |||||||||||
Corporate | (34.6 | ) | (18.8 | ) | (84.0 | ) | (108.5 | ) | (78.4 | ) | (38.4 | ) | |||||||||
309.7 | (616.8 | ) | 150.2 | 1,239.7 | 370.1 | 235.0 | |||||||||||||||
Income Tax Expense (Benefit) | 84.7 | (248.1 | ) | 134.1 | 352.2 | 61.6 | N.M. | ||||||||||||||
Income (Loss) Before Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss | 225.0 | (368.7 | ) | 161.0 | 887.5 | 308.5 | 187.7 | ||||||||||||||
Net Realized Investment Gain (Loss), Net of Tax | 16.4 | 4.8 | 241.7 | 37.1 | (3.6 | ) | N.M. | ||||||||||||||
Non-operating Retirement-related Loss, Net of tax | (7.5 | ) | (5.1 | ) | 47.1 | (30.2 | ) | (20.7 | ) | 45.9 | |||||||||||
Net Income (Loss) | $ | 233.9 | $ | (369.0 | ) | 163.4 | $ | 894.4 | $ | 284.2 | 214.7 | ||||||||||
5. 1 | ||
Unum Group Quarterly Historical Financial Results by Segment
12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | |||||||||||||||||||||||||||
As Adjusted | |||||||||||||||||||||||||||||||||||
Premium Income | |||||||||||||||||||||||||||||||||||
Unum US | $ | 1,117.6 | $ | 1,111.9 | $ | 1,115.0 | $ | 1,112.0 | $ | 1,083.0 | $ | 1,074.4 | $ | 1,069.8 | $ | 1,068.8 | $ | 1,060.3 | |||||||||||||||||
Unum UK | 175.5 | 175.2 | 173.2 | 170.7 | 169.2 | 175.5 | 175.8 | 167.1 | 170.5 | ||||||||||||||||||||||||||
Colonial Life | 301.9 | 299.4 | 296.9 | 296.3 | 289.2 | 283.7 | 282.0 | 280.4 | 273.6 | ||||||||||||||||||||||||||
Closed Block | 342.2 | 342.9 | 342.5 | 342.9 | 347.1 | 347.6 | 347.4 | 353.2 | 363.8 | ||||||||||||||||||||||||||
1,937.2 | 1,929.4 | 1,927.6 | 1,921.9 | 1,888.5 | 1,881.2 | 1,875.0 | 1,869.5 | 1,868.2 | |||||||||||||||||||||||||||
Net Investment Income | |||||||||||||||||||||||||||||||||||
Unum US | 240.5 | 236.3 | 236.9 | 238.6 | 238.8 | 240.0 | 238.9 | 233.7 | 242.3 | ||||||||||||||||||||||||||
Unum UK | 50.3 | 34.8 | 49.2 | 36.5 | 50.6 | 43.3 | 51.1 | 44.9 | 48.6 | ||||||||||||||||||||||||||
Colonial Life | 35.1 | 33.9 | 34.0 | 35.6 | 32.8 | 32.5 | 35.8 | 31.3 | 31.4 | ||||||||||||||||||||||||||
Closed Block | 317.1 | 307.3 | 304.5 | 301.6 | 300.8 | 300.1 | 294.5 | 294.3 | 291.8 | ||||||||||||||||||||||||||
Corporate | — | 6.9 | 8.9 | 7.2 | 11.6 | 13.3 | 16.8 | 14.5 | 20.2 | ||||||||||||||||||||||||||
643.0 | 619.2 | 633.5 | 619.5 | 634.6 | 629.2 | 637.1 | 618.7 | 634.3 | |||||||||||||||||||||||||||
Other Income | |||||||||||||||||||||||||||||||||||
Unum US | 31.5 | 31.3 | 30.7 | 31.1 | 30.7 | 30.4 | 29.5 | 31.0 | 32.6 | ||||||||||||||||||||||||||
Unum UK | — | — | — | 0.1 | 0.2 | — | — | 0.1 | 0.1 | ||||||||||||||||||||||||||
Colonial Life | 0.1 | — | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.1 | 0.2 | ||||||||||||||||||||||||||
Closed Block | 21.2 | 26.4 | 26.6 | 25.9 | 25.5 | 26.4 | 26.7 | 27.5 | 28.6 | ||||||||||||||||||||||||||
Corporate | 0.6 | 0.4 | 1.5 | 0.3 | 17.8 | 2.2 | (0.4 | ) | 1.0 | 1.6 | |||||||||||||||||||||||||
53.4 | 58.1 | 58.9 | 57.5 | 74.3 | 59.1 | 56.0 | 59.7 | 63.1 | |||||||||||||||||||||||||||
Total Operating Revenue | |||||||||||||||||||||||||||||||||||
Unum US | 1,389.6 | 1,379.5 | 1,382.6 | 1,381.7 | 1,352.5 | 1,344.8 | 1,338.2 | 1,333.5 | 1,335.2 | ||||||||||||||||||||||||||
Unum UK | 225.8 | 210.0 | 222.4 | 207.3 | 220.0 | 218.8 | 226.9 | 212.1 | 219.2 | ||||||||||||||||||||||||||
Colonial Life | 337.1 | 333.3 | 331.0 | 332.0 | 322.1 | 316.3 | 318.0 | 311.8 | 305.2 | ||||||||||||||||||||||||||
Closed Block | 680.5 | 676.6 | 673.6 | 670.4 | 673.4 | 674.1 | 668.6 | 675.0 | 684.2 | ||||||||||||||||||||||||||
Corporate | 0.6 | 7.3 | 10.4 | 7.5 | 29.4 | 15.5 | 16.4 | 15.5 | 21.8 | ||||||||||||||||||||||||||
$ | 2,633.6 | $ | 2,606.7 | $ | 2,620.0 | $ | 2,598.9 | $ | 2,597.4 | $ | 2,569.5 | $ | 2,568.1 | $ | 2,547.9 | $ | 2,565.6 | ||||||||||||||||||
6 | ||
Unum Group Quarterly Historical Financial Results by Segment
12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | |||||||||||||||||||||||||||
As Adjusted | |||||||||||||||||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||||||||||||||
Unum US | $ | 1,177.4 | $ | 1,163.2 | $ | 1,169.9 | $ | 1,175.8 | $ | 1,145.1 | $ | 1,135.6 | $ | 1,132.6 | $ | 1,138.8 | $ | 1,140.5 | |||||||||||||||||
Unum UK | 190.8 | 182.5 | 192.4 | 168.5 | 168.1 | 184.1 | 171.7 | 163.2 | 171.4 | ||||||||||||||||||||||||||
Colonial Life | 268.8 | 264.6 | 263.4 | 262.3 | 257.1 | 249.6 | 246.1 | 245.3 | 247.8 | ||||||||||||||||||||||||||
Closed Block | 651.7 | 651.0 | 647.9 | 655.0 | 1,595.7 | 643.3 | 638.2 | 643.1 | 655.0 | ||||||||||||||||||||||||||
Corporate | 35.2 | 34.7 | 36.3 | 28.1 | 48.2 | 36.3 | 33.4 | 37.3 | 37.6 | ||||||||||||||||||||||||||
2,323.9 | 2,296.0 | 2,309.9 | 2,289.7 | 3,214.2 | 2,248.9 | 2,222.0 | 2,227.7 | 2,252.3 | |||||||||||||||||||||||||||
Income (Loss) Before Income Tax, Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss | |||||||||||||||||||||||||||||||||||
Unum US | 212.2 | 216.3 | 212.7 | 205.9 | 207.4 | 209.2 | 205.6 | 194.7 | 194.7 | ||||||||||||||||||||||||||
Unum UK | 35.0 | 27.5 | 30.0 | 38.8 | 51.9 | 34.7 | 55.2 | 48.9 | 47.8 | ||||||||||||||||||||||||||
Colonial Life | 68.3 | 68.7 | 67.6 | 69.7 | 65.0 | 66.7 | 71.9 | 66.5 | 57.4 | ||||||||||||||||||||||||||
Closed Block | 28.8 | 25.6 | 25.7 | 15.4 | (922.3 | ) | 30.8 | 30.4 | 31.9 | 29.2 | |||||||||||||||||||||||||
Corporate | (34.6 | ) | (27.4 | ) | (25.9 | ) | (20.6 | ) | (18.8 | ) | (20.8 | ) | (17.0 | ) | (21.8 | ) | (15.8 | ) | |||||||||||||||||
309.7 | 310.7 | 310.1 | 309.2 | (616.8 | ) | 320.6 | 346.1 | 320.2 | 313.3 | ||||||||||||||||||||||||||
Income Tax Expense (Benefit) | 84.7 | 86.7 | 84.8 | 96.0 | (248.1 | ) | 97.5 | 111.1 | 101.1 | 101.3 | |||||||||||||||||||||||||
Income (Loss) Before Net Realized Investment Gain (Loss) and Non-operating Retirement-related Loss | 225.0 | 224.0 | 225.3 | 213.2 | (368.7 | ) | 223.1 | 235.0 | 219.1 | 212.0 | |||||||||||||||||||||||||
Net Realized Investment Gain (Loss), Net of Tax | 16.4 | 13.8 | (1.4 | ) | 8.3 | 4.8 | (15.9 | ) | (2.2 | ) | 9.7 | 17.2 | |||||||||||||||||||||||
Non-operating Retirement-related Loss, Net of tax | (7.5 | ) | (7.6 | ) | (7.5 | ) | (7.6 | ) | (5.1 | ) | (5.2 | ) | (5.2 | ) | (5.2 | ) | (5.3 | ) | |||||||||||||||||
Net Income (Loss) | $ | 233.9 | $ | 230.2 | $ | 216.4 | $ | 213.9 | $ | (369.0 | ) | $ | 202.0 | $ | 227.6 | $ | 223.6 | $ | 223.9 | ||||||||||||||||
Net Income (Loss) Per Common Share - Assuming Dilution | $ | 0.85 | $ | 0.83 | $ | 0.76 | $ | 0.73 | $ | (1.26 | ) | $ | 0.68 | $ | 0.74 | $ | 0.71 | $ | 0.70 | ||||||||||||||||
6. 1 | ||
Unum Group Financial Results for Unum US Segment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | $ | 1,117.6 | $ | 1,083.0 | $ | 4,456.5 | $ | 4,296.0 | $ | 4,255.4 | |||||||||
Net Investment Income | 240.5 | 238.8 | 952.3 | 951.4 | 941.5 | ||||||||||||||
Other Income | 31.5 | 30.7 | 124.6 | 121.6 | 122.8 | ||||||||||||||
Total | 1,389.6 | 1,352.5 | 5,533.4 | 5,369.0 | 5,319.7 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 816.3 | 787.7 | 3,238.6 | 3,113.5 | 3,124.4 | ||||||||||||||
Commissions | 124.1 | 113.3 | 507.5 | 474.0 | 460.6 | ||||||||||||||
Interest and Debt Expense | 0.3 | 0.2 | 1.1 | 1.0 | 1.2 | ||||||||||||||
Deferral of Acquisition Costs | (66.4 | ) | (52.1 | ) | (249.2 | ) | (220.3 | ) | (207.8 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 47.4 | 47.5 | 196.5 | 188.1 | 192.6 | ||||||||||||||
Other Expenses | 255.7 | 248.5 | 991.8 | 995.8 | 979.7 | ||||||||||||||
Total | 1,177.4 | 1,145.1 | 4,686.3 | 4,552.1 | 4,550.7 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 212.2 | $ | 207.4 | $ | 847.1 | $ | 816.9 | $ | 769.0 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratio | 73.0 | % | 72.7 | % | 72.7 | % | 72.5 | % | 73.4 | % | |||||||||
Other Expense Ratio | 22.9 | % | 22.9 | % | 22.3 | % | 23.2 | % | 23.0 | % | |||||||||
Before-tax Operating Income Ratio | 19.0 | % | 19.2 | % | 19.0 | % | 19.0 | % | 18.1 | % | |||||||||
7 | ||
Unum Group Financial Results for Unum US Group Disability
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Group Long-term Disability | $ | 393.1 | $ | 394.9 | $ | 1,578.8 | $ | 1,580.2 | $ | 1,639.4 | |||||||||
Group Short-term Disability | 120.7 | 116.2 | 476.7 | 455.2 | 430.9 | ||||||||||||||
Total Premium Income | 513.8 | 511.1 | 2,055.5 | 2,035.4 | 2,070.3 | ||||||||||||||
Net Investment Income | 144.6 | 150.8 | 576.9 | 605.0 | 614.6 | ||||||||||||||
Other Income | 23.7 | 22.3 | 93.7 | 89.4 | 86.7 | ||||||||||||||
Total | 682.1 | 684.2 | 2,726.1 | 2,729.8 | 2,771.6 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 434.0 | 432.7 | 1,741.6 | 1,722.1 | 1,747.8 | ||||||||||||||
Commissions | 39.2 | 39.3 | 159.3 | 159.5 | 159.7 | ||||||||||||||
Interest and Debt Expense | 0.3 | 0.2 | 1.1 | 1.0 | 1.2 | ||||||||||||||
Deferral of Acquisition Costs | (8.8 | ) | (5.9 | ) | (26.3 | ) | (21.9 | ) | (18.2 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 5.0 | 4.9 | 18.3 | 19.8 | 20.5 | ||||||||||||||
Other Expenses | 138.9 | 135.9 | 539.0 | 547.0 | 543.7 | ||||||||||||||
Total | 608.6 | 607.1 | 2,433.0 | 2,427.5 | 2,454.7 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 73.5 | $ | 77.1 | $ | 293.1 | $ | 302.3 | $ | 316.9 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratio | 84.5 | % | 84.7 | % | 84.7 | % | 84.6 | % | 84.4 | % | |||||||||
Other Expense Ratio | 27.0 | % | 26.6 | % | 26.2 | % | 26.9 | % | 26.3 | % | |||||||||
Before-tax Operating Income Ratio | 14.3 | % | 15.1 | % | 14.3 | % | 14.9 | % | 15.3 | % | |||||||||
Premium Persistency: | |||||||||||||||||||
Group Long-term Disability | 90.7 | % | 90.2 | % | 89.4 | % | |||||||||||||
Group Short-term Disability | 88.0 | % | 89.9 | % | 88.6 | % | |||||||||||||
Case Persistency: | |||||||||||||||||||
Group Long-term Disability | 88.8 | % | 89.0 | % | 88.4 | % | |||||||||||||
Group Short-term Disability | 88.2 | % | 88.0 | % | 87.3 | % | |||||||||||||
7. 1 | ||
Unum Group Financial Results for Unum US Group Life and Accidental Death & Dismemberment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Group Life | $ | 297.0 | $ | 281.4 | $ | 1,182.1 | $ | 1,106.7 | $ | 1,090.3 | |||||||||
Accidental Death & Dismemberment | 29.1 | 27.6 | 115.3 | 109.2 | 106.1 | ||||||||||||||
Total Premium Income | 326.1 | 309.0 | 1,297.4 | 1,215.9 | 1,196.4 | ||||||||||||||
Net Investment Income | 37.9 | 33.9 | 146.9 | 135.5 | 129.6 | ||||||||||||||
Other Income | 0.4 | 0.5 | 1.9 | 2.2 | 2.4 | ||||||||||||||
Total | 364.4 | 343.4 | 1,446.2 | 1,353.6 | 1,328.4 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 236.5 | 218.5 | 936.4 | 854.6 | 839.9 | ||||||||||||||
Commissions | 26.4 | 24.4 | 104.6 | 95.5 | 89.3 | ||||||||||||||
Deferral of Acquisition Costs | (7.4 | ) | (4.8 | ) | (22.4 | ) | (18.5 | ) | (15.4 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 3.6 | 3.6 | 13.6 | 14.2 | 14.1 | ||||||||||||||
Other Expenses | 50.2 | 49.1 | 193.1 | 199.3 | 196.5 | ||||||||||||||
Total | 309.3 | 290.8 | 1,225.3 | 1,145.1 | 1,124.4 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 55.1 | $ | 52.6 | $ | 220.9 | $ | 208.5 | $ | 204.0 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratio | 72.5 | % | 70.7 | % | 72.2 | % | 70.3 | % | 70.2 | % | |||||||||
Other Expense Ratio | 15.4 | % | 15.9 | % | 14.9 | % | 16.4 | % | 16.4 | % | |||||||||
Before-tax Operating Income Ratio | 16.9 | % | 17.0 | % | 17.0 | % | 17.1 | % | 17.1 | % | |||||||||
Premium Persistency: | |||||||||||||||||||
Group Life | 90.6 | % | 88.0 | % | 91.5 | % | |||||||||||||
Accidental Death & Dismemberment | 90.0 | % | 88.2 | % | 90.7 | % | |||||||||||||
Case Persistency: | |||||||||||||||||||
Group Life | 88.3 | % | 88.6 | % | 88.3 | % | |||||||||||||
Accidental Death & Dismemberment | 88.3 | % | 88.6 | % | 88.4 | % | |||||||||||||
7. 2 | ||
Unum Group Financial Results for Unum US Supplemental and Voluntary
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Individual Disability - Recently Issued | $ | 120.6 | $ | 116.4 | $ | 477.6 | $ | 464.7 | $ | 457.9 | |||||||||
Voluntary Benefits | 157.1 | 146.5 | 626.0 | 580.0 | 530.8 | ||||||||||||||
Total Premium Income | 277.7 | 262.9 | 1,103.6 | 1,044.7 | 988.7 | ||||||||||||||
Net Investment Income | 58.0 | 54.1 | 228.5 | 210.9 | 197.3 | ||||||||||||||
Other Income | 7.4 | 7.9 | 29.0 | 30.0 | 33.7 | ||||||||||||||
Total | 343.1 | 324.9 | 1,361.1 | 1,285.6 | 1,219.7 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 145.8 | 136.5 | 560.6 | 536.8 | 536.7 | ||||||||||||||
Commissions | 58.5 | 49.6 | 243.6 | 219.0 | 211.6 | ||||||||||||||
Deferral of Acquisition Costs | (50.2 | ) | (41.4 | ) | (200.5 | ) | (179.9 | ) | (174.2 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 38.8 | 39.0 | 164.6 | 154.1 | 158.0 | ||||||||||||||
Other Expenses | 66.6 | 63.5 | 259.7 | 249.5 | 239.5 | ||||||||||||||
Total | 259.5 | 247.2 | 1,028.0 | 979.5 | 971.6 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 83.6 | $ | 77.7 | $ | 333.1 | $ | 306.1 | $ | 248.1 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratios: | |||||||||||||||||||
Individual Disability - Recently Issued | 53.2 | % | 52.4 | % | 52.4 | % | 52.2 | % | 53.3 | % | |||||||||
Voluntary Benefits | 52.0 | % | 51.5 | % | 49.5 | % | 50.7 | % | 55.1 | % | |||||||||
Other Expense Ratio | 24.0 | % | 24.2 | % | 23.5 | % | 23.9 | % | 24.2 | % | |||||||||
Before-tax Operating Income Ratio | 30.1 | % | 29.6 | % | 30.2 | % | 29.3 | % | 25.1 | % | |||||||||
Interest Adjusted Loss Ratio: | |||||||||||||||||||
Individual Disability - Recently Issued | 32.0 | % | 30.8 | % | 31.2 | % | 30.8 | % | 32.5 | % | |||||||||
Premium Persistency: | |||||||||||||||||||
Individual Disability - Recently Issued | 91.4 | % | 89.3 | % | 90.7 | % | |||||||||||||
Voluntary Benefits | 78.9 | % | 80.5 | % | 80.1 | % | |||||||||||||
7. 3 | ||
Unum Group Financial Results for Unum UK Segment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Group Long-term Disability | $ | 103.2 | $ | 101.3 | $ | 409.7 | $ | 419.6 | $ | 421.2 | |||||||||
Group Life | 56.7 | 52.0 | 221.3 | 203.6 | 171.6 | ||||||||||||||
Supplemental and Voluntary | 15.6 | 15.9 | 63.6 | 64.4 | 57.8 | ||||||||||||||
Total Premium Income | 175.5 | 169.2 | 694.6 | 687.6 | 650.6 | ||||||||||||||
Net Investment Income | 50.3 | 50.6 | 170.8 | 189.9 | 170.5 | ||||||||||||||
Other Income | — | 0.2 | 0.1 | 0.3 | 1.2 | ||||||||||||||
Total | 225.8 | 220.0 | 865.5 | 877.8 | 822.3 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 133.7 | 117.0 | 541.4 | 493.8 | 435.8 | ||||||||||||||
Commissions | 10.9 | 12.4 | 42.6 | 45.7 | 44.1 | ||||||||||||||
Deferral of Acquisition Costs | (1.9 | ) | (4.2 | ) | (11.8 | ) | (15.4 | ) | (15.1 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 3.9 | 3.8 | 15.7 | 15.3 | 13.6 | ||||||||||||||
Other Expenses | 44.2 | 39.1 | 146.3 | 147.7 | 134.9 | ||||||||||||||
Total | 190.8 | 168.1 | 734.2 | 687.1 | 613.3 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 35.0 | $ | 51.9 | $ | 131.3 | $ | 190.7 | $ | 209.0 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratio | 76.2 | % | 69.1 | % | 77.9 | % | 71.8 | % | 67.0 | % | |||||||||
Other Expense Ratio | 25.2 | % | 23.1 | % | 21.1 | % | 21.5 | % | 20.7 | % | |||||||||
Before-tax Operating Income Ratio | 19.9 | % | 30.7 | % | 18.9 | % | 27.7 | % | 32.1 | % | |||||||||
Premium Persistency: | |||||||||||||||||||
Group Long-term Disability | 84.0 | % | 86.6 | % | 91.3 | % | |||||||||||||
Group Life | 82.5 | % | 89.3 | % | 92.7 | % | |||||||||||||
Supplemental and Voluntary | 84.6 | % | 87.3 | % | 88.9 | % | |||||||||||||
8 | ||
Unum Group Financial Results for Unum UK Segment - Continued
(in millions of pounds, except exchange rate) | Three Months Ended | Year Ended | |||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Group Long-term Disability | £ | 64.3 | £ | 64.5 | £ | 258.4 | £ | 261.6 | £ | 272.3 | |||||||||
Group Life | 35.3 | 33.1 | 139.6 | 127.0 | 110.9 | ||||||||||||||
Supplemental and Voluntary | 9.7 | 10.0 | 40.1 | 40.1 | 37.4 | ||||||||||||||
Total Premium Income | 109.3 | 107.6 | 438.1 | 428.7 | 420.6 | ||||||||||||||
Net Investment Income | 31.3 | 32.2 | 107.7 | 118.4 | 110.2 | ||||||||||||||
Other Income | — | — | — | 0.1 | 0.9 | ||||||||||||||
Total | 140.6 | 139.8 | 545.8 | 547.2 | 531.7 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 83.3 | 74.4 | 341.4 | 307.7 | 281.4 | ||||||||||||||
Commissions | 6.8 | 7.9 | 26.9 | 28.5 | 28.5 | ||||||||||||||
Deferral of Acquisition Costs | (1.2 | ) | (2.6 | ) | (7.5 | ) | (9.5 | ) | (9.6 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 2.4 | 2.3 | 9.9 | 9.4 | 8.6 | ||||||||||||||
Other Expenses | 27.5 | 24.7 | 92.2 | 92.1 | 87.4 | ||||||||||||||
Total | 118.8 | 106.7 | 462.9 | 428.2 | 396.3 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | £ | 21.8 | £ | 33.1 | £ | 82.9 | £ | 119.0 | £ | 135.4 | |||||||||
Weighted Average Pound/Dollar Exchange Rate | 1.606 | 1.570 | 1.584 | 1.603 | 1.543 | ||||||||||||||
8. 1 | ||
Unum Group Financial Results for Colonial Life Segment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Accident, Sickness, and Disability | $ | 182.7 | $ | 175.6 | $ | 724.5 | $ | 695.3 | $ | 661.0 | |||||||||
Life | 53.4 | 50.7 | 209.7 | 190.7 | 176.5 | ||||||||||||||
Cancer and Critical Illness | 65.8 | 62.9 | 260.3 | 249.3 | 238.2 | ||||||||||||||
Total Premium Income | 301.9 | 289.2 | 1,194.5 | 1,135.3 | 1,075.7 | ||||||||||||||
Net Investment Income | 35.1 | 32.8 | 138.6 | 132.4 | 122.5 | ||||||||||||||
Other Income | 0.1 | 0.1 | 0.3 | 0.5 | 0.7 | ||||||||||||||
Total | 337.1 | 322.1 | 1,333.4 | 1,268.2 | 1,198.9 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 158.6 | 151.9 | 627.3 | 589.4 | 534.7 | ||||||||||||||
Commissions | 63.3 | 62.4 | 254.5 | 245.9 | 232.6 | ||||||||||||||
Deferral of Acquisition Costs | (51.4 | ) | (50.4 | ) | (206.3 | ) | (203.1 | ) | (196.8 | ) | |||||||||
Amortization of Deferred Acquisition Costs | 41.8 | 39.7 | 166.5 | 151.2 | 150.1 | ||||||||||||||
Other Expenses | 56.5 | 53.5 | 217.1 | 214.7 | 208.6 | ||||||||||||||
Total | 268.8 | 257.1 | 1,059.1 | 998.1 | 929.2 | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses | $ | 68.3 | $ | 65.0 | $ | 274.3 | $ | 270.1 | $ | 269.7 | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Benefit Ratio | 52.5 | % | 52.5 | % | 52.5 | % | 51.9 | % | 49.7 | % | |||||||||
Other Expense Ratio | 18.7 | % | 18.5 | % | 18.2 | % | 18.9 | % | 19.4 | % | |||||||||
Before-tax Operating Income Ratio | 22.6 | % | 22.5 | % | 23.0 | % | 23.8 | % | 25.1 | % | |||||||||
Persistency: | |||||||||||||||||||
Accident, Sickness, and Disability | 75.7 | % | 73.8 | % | 75.9 | % | |||||||||||||
Life | 85.7 | % | 85.0 | % | 86.0 | % | |||||||||||||
Cancer and Critical Illness | 84.5 | % | 84.0 | % | 84.9 | % | |||||||||||||
9 | ||
Unum Group Financial Results for Closed Block Segment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Premium Income | |||||||||||||||||||
Individual Disability | $ | 181.5 | $ | 192.0 | $ | 736.4 | $ | 787.0 | $ | 847.0 | |||||||||
Long-term Care | 160.4 | 154.6 | 631.9 | 608.1 | 599.2 | ||||||||||||||
All Other | 0.3 | 0.5 | 2.2 | 0.2 | 3.5 | ||||||||||||||
Total Premium Income | 342.2 | 347.1 | 1,370.5 | 1,395.3 | 1,449.7 | ||||||||||||||
Net Investment Income | 317.1 | 300.8 | 1,230.5 | 1,189.7 | 1,166.4 | ||||||||||||||
Other Income | 21.2 | 25.5 | 100.1 | 106.1 | 113.6 | ||||||||||||||
Total | 680.5 | 673.4 | 2,701.1 | 2,691.1 | 2,729.7 | ||||||||||||||
Benefits and Expenses | |||||||||||||||||||
Benefits and Change in Reserves for Future Benefits | 580.6 | 1,324.9 | 2,314.9 | 3,012.8 | 2,259.2 | ||||||||||||||
Commissions | 28.1 | 28.4 | 112.6 | 113.6 | 118.1 | ||||||||||||||
Interest and Debt Expense | 2.5 | 2.6 | 10.4 | 10.5 | 11.7 | ||||||||||||||
Deferral of Acquisition Costs | — | (1.1 | ) | — | (3.7 | ) | (2.8 | ) | |||||||||||
Amortization of Deferred Acquisition Costs | — | 0.8 | — | 11.1 | 17.0 | ||||||||||||||
Impairment of Long-term Care Deferred Acquisition Costs | — | 196.0 | — | 196.0 | — | ||||||||||||||
Other Expenses | 40.5 | 44.1 | 167.7 | 180.0 | 207.9 | ||||||||||||||
Total | 651.7 | 1,595.7 | 2,605.6 | 3,520.3 | 2,611.1 | ||||||||||||||
Operating Income (Loss) Before Income Tax and Net Realized Investment Gains and Losses, as reported | $ | 28.8 | $ | (922.3 | ) | $ | 95.5 | $ | (829.2 | ) | $ | 118.6 | |||||||
Interest Adjusted Loss Ratios, as reported: | |||||||||||||||||||
Individual Disability | 83.7 | % | 180.4 | % | 83.0 | % | 108.0 | % | 85.0 | % | |||||||||
Long-term Care | 89.9 | % | 457.5 | % | 90.1 | % | 179.3 | % | 80.8 | % | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Other Expense Ratio | 11.8 | % | 12.7 | % | 12.2 | % | 12.9 | % | 14.3 | % | |||||||||
Before-tax Operating Income (Loss) Ratio, as reported | 8.4 | % | (265.7 | )% | 7.0 | % | (59.4 | )% | 8.2 | % | |||||||||
Premium Persistency: | |||||||||||||||||||
Individual Disability | 92.5 | % | 92.9 | % | 93.0 | % | |||||||||||||
Long-term Care | 95.8 | % | 96.0 | % | 95.8 | % | |||||||||||||
10 | ||
Unum Group Financial Results for Closed Block Segment - Continued
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Income (Loss) Before Income Tax and Net Realized Investment Gains and Losses, as reported | $ | 28.8 | $ | (922.3 | ) | $ | 95.5 | $ | (829.2 | ) | $ | 118.6 | |||||||
Individual Disability Reserve Charge | — | 183.5 | — | 183.5 | — | ||||||||||||||
Long-term Care Reserve Charge | — | 573.6 | — | 573.6 | — | ||||||||||||||
Impairment of Long-term Care Deferred Acquisition Costs | — | 196.0 | — | 196.0 | — | ||||||||||||||
Operating Income Before Income Tax and Net Realized Investment Gains and Losses, as adjusted | $ | 28.8 | $ | 30.8 | $ | 95.5 | $ | 123.9 | $ | 118.6 | |||||||||
Interest Adjusted Loss Ratios, as adjusted: | |||||||||||||||||||
Individual Disability | 83.7 | % | 84.8 | % | 83.0 | % | 84.7 | % | 85.0 | % | |||||||||
Long-term Care | 89.9 | % | 86.4 | % | 90.1 | % | 84.9 | % | 80.8 | % | |||||||||
Operating Ratios (% of Premium Income): | |||||||||||||||||||
Other Expense Ratio | 11.8 | % | 12.7 | % | 12.2 | % | 12.9 | % | 14.3 | % | |||||||||
Before-tax Operating Income Ratio, as adjusted | 8.4 | % | 8.9 | % | 7.0 | % | 8.9 | % | 8.2 | % | |||||||||
10.1 | ||
Unum Group Financial Results for Corporate Segment
Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2012 | 12/31/2011 | 12/31/2012 | 12/31/2011 | 12/31/2010 | |||||||||||||||
As Adjusted | As Adjusted | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||
Net Investment Income | $ | — | $ | 11.6 | $ | 23.0 | $ | 56.2 | $ | 94.6 | |||||||||
Other Income | 0.6 | 17.8 | 2.8 | 20.6 | 3.3 | ||||||||||||||
Total | 0.6 | 29.4 | 25.8 | 76.8 | 97.9 | ||||||||||||||
Expenses | |||||||||||||||||||
Interest and Debt Expense | 35.3 | 32.4 | 133.9 | 131.8 | 128.9 | ||||||||||||||
Other Expenses | (0.1 | ) | 15.8 | 0.4 | 23.4 | 7.9 | |||||||||||||
Total | 35.2 | 48.2 | 134.3 | 155.2 | 136.8 | ||||||||||||||
Operating Loss Before Non-operating Retirement-related Loss, Income Tax, and Net Realized Investment Gains and Losses | $ | (34.6 | ) | $ | (18.8 | ) | $ | (108.5 | ) | $ | (78.4 | ) | $ | (38.9 | ) | ||||
11 | ||
Unum Group Reserves
December 31, 2012 | |||||||||||||||||||||||||||||
Gross | Total | ||||||||||||||||||||||||||||
Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 7,000.8 | $ | 596.0 | 30.9 | % | $ | 7,596.8 | $ | 61.3 | $ | 7,535.5 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 73.8 | 0.5 | 790.1 | 168.1 | 3.9 | 1,032.0 | 1.0 | 1,031.0 | |||||||||||||||||||||
Individual Disability - Recently Issued | 557.8 | 3.6 | 1,093.2 | 126.0 | 5.0 | 1,777.0 | 91.2 | 1,685.8 | |||||||||||||||||||||
Voluntary Benefits | 1,224.3 | 8.0 | 42.4 | 49.4 | 0.4 | 1,316.1 | 28.6 | 1,287.5 | |||||||||||||||||||||
Unum US Segment | 1,855.9 | 12.1 | 8,926.5 | 939.5 | 40.2 | 11,721.9 | 182.1 | 11,539.8 | |||||||||||||||||||||
Unum UK Segment | 25.6 | 0.2 | 2,251.7 | 142.2 | 9.7 | 2,419.5 | 108.3 | 2,311.2 | |||||||||||||||||||||
Colonial Life Segment | 1,490.3 | 9.7 | 251.4 | 99.4 | 1.4 | 1,841.1 | 9.4 | 1,831.7 | |||||||||||||||||||||
Individual Disability | 985.7 | 6.4 | 10,406.2 | 297.3 | 43.6 | 11,689.2 | 1,492.7 | 10,196.5 | |||||||||||||||||||||
Long-term Care | 5,272.5 | 34.4 | 747.0 | 81.3 | 3.4 | 6,100.8 | 47.0 | 6,053.8 | |||||||||||||||||||||
Other | 5,704.5 | 37.2 | 258.8 | 165.7 | 1.7 | 6,129.0 | 4,829.9 | 1,299.1 | |||||||||||||||||||||
Closed Block Segment | 11,962.7 | 78.0 | 11,412.0 | 544.3 | 48.7 | 23,919.0 | 6,369.6 | 17,549.4 | |||||||||||||||||||||
Subtotal, Excluding Unrealized Adjustment | $ | 15,334.5 | 100.0 | % | $ | 22,841.6 | $ | 1,725.4 | 100.0 | % | 39,901.5 | 6,669.4 | 33,232.1 | ||||||||||||||||
Unrealized Adjustment to Reserves for Unrealized Gain on Securities | 6,277.5 | 351.5 | 5,926.0 | ||||||||||||||||||||||||||
Consolidated | $ | 46,179.0 | $ | 7,020.9 | $ | 39,158.1 | |||||||||||||||||||||||
12 | ||
Unum Group Reserves
December 31, 2011 | |||||||||||||||||||||||||||||
Gross | Total | ||||||||||||||||||||||||||||
Policy | Claim Reserves | Reinsurance | Total | ||||||||||||||||||||||||||
Reserves | % | Incurred | IBNR | % | Total | Ceded | Net | ||||||||||||||||||||||
Group Disability | $ | — | — | % | $ | 7,230.0 | $ | 595.7 | 31.8 | % | $ | 7,825.7 | $ | 63.8 | $ | 7,761.9 | |||||||||||||
Group Life and Accidental Death & Dismemberment | 74.3 | 0.5 | 780.5 | 146.2 | 3.8 | 1,001.0 | 1.0 | 1,000.0 | |||||||||||||||||||||
Individual Disability - Recently Issued | 546.7 | 3.7 | 1,063.9 | 104.5 | 4.8 | 1,715.1 | 91.0 | 1,624.1 | |||||||||||||||||||||
Voluntary Benefits | 1,138.6 | 7.7 | 42.1 | 45.8 | 0.3 | 1,226.5 | 26.5 | 1,200.0 | |||||||||||||||||||||
Unum US Segment | 1,759.6 | 11.9 | 9,116.5 | 892.2 | 40.7 | 11,768.3 | 182.3 | 11,586.0 | |||||||||||||||||||||
Unum UK Segment | 26.2 | 0.2 | 2,118.7 | 121.4 | 9.1 | 2,266.3 | 108.1 | 2,158.2 | |||||||||||||||||||||
Colonial Life Segment | 1,399.5 | 9.5 | 243.2 | 90.1 | 1.4 | 1,732.8 | 12.2 | 1,720.6 | |||||||||||||||||||||
Individual Disability | 1,112.3 | 7.6 | 10,494.0 | 299.1 | 43.9 | 11,905.4 | 1,477.2 | 10,428.2 | |||||||||||||||||||||
Long-term Care | 4,728.3 | 32.1 | 667.8 | 50.3 | 2.9 | 5,446.4 | 48.2 | 5,398.2 | |||||||||||||||||||||
Other | 5,687.9 | 38.7 | 306.5 | 186.7 | 2.0 | 6,181.1 | 4,824.6 | 1,356.5 | |||||||||||||||||||||
Closed Block Segment | 11,528.5 | 78.4 | 11,468.3 | 536.1 | 48.8 | 23,532.9 | 6,350.0 | 17,182.9 | |||||||||||||||||||||
Subtotal, Excluding Unrealized Adjustment | $ | 14,713.8 | 100.0 | % | $ | 22,946.7 | $ | 1,639.8 | 100.0 | % | 39,300.3 | 6,652.6 | 32,647.7 | ||||||||||||||||
Unrealized Adjustment to Reserves for Unrealized Gain on Securities | 5,245.6 | 293.2 | 4,952.4 | ||||||||||||||||||||||||||
Consolidated | $ | 44,545.9 | $ | 6,945.8 | $ | 37,600.1 | |||||||||||||||||||||||
12. 1 | ||
Unum Group Investment Fact Sheet at December 31, 2012
12/31/2012 | 12/31/2012 | 9/30/2012 | |||||||||||||||
Fixed Maturity Securities (Fair Value) | Selected Statistics | ||||||||||||||||
Public | $ | 29,702.2 | 66.0 | % | Duration Weighted Book Yield | 6.47 | % | 6.54 | % | ||||||||
Asset-Backed Securities (1) | 43.0 | 0.1 | Average Duration (in years) | 7.87 | 7.90 | ||||||||||||
Residential Mortgage-Backed Securities (2) | 2,041.4 | 4.5 | . | ||||||||||||||
Commercial Mortgage-Backed Securities | 132.1 | 0.3 | |||||||||||||||
Private Placements | 5,265.0 | 11.7 | |||||||||||||||
High Yield | 3,087.4 | 6.9 | |||||||||||||||
Government Securities | 2,855.8 | 6.4 | |||||||||||||||
Municipal Securities | 1,806.8 | 4.0 | |||||||||||||||
Redeemable Preferred Stocks (3) | 39.3 | 0.1 | |||||||||||||||
Total | $ | 44,973.0 | 100.0 | % | |||||||||||||
Amortized Cost | Fair Value | ||||||||||||||||
Quality Ratings of Fixed Maturity Securities | Schedule BA and Non-Current | ||||||||||||||||
Aaa | 10.5 | % | 10.5 | % | Total Non-Current Investments | $ | 63.3 | $ | 59.0 | ||||||||
Aa | 8.2 | 8.6 | Total Schedule BA Assets | $ | 455.1 | $ | 460.3 | ||||||||||
A | 29.9 | 31.0 | |||||||||||||||
Baa | 43.5 | 42.9 | |||||||||||||||
Below Baa | 7.9 | 7.0 | |||||||||||||||
Total | 100.0 | % | 100.0 | % | |||||||||||||
(1) Includes $0.5 million of high yield asset-backed securities. | |||||||||||||||||
(2) Includes $55.1 million of high yield mortgage-backed securities. | |||||||||||||||||
(3) Includes $16.3 million of high yield taxable municipal securities. | |||||||||||||||||
13 | ||
Unum Group Investment Fact Sheet at December 31, 2012
Fixed Maturity Securities - By Industry Classification - Unrealized Gain (Loss) | ||||||||||||||||||||||||
Classification | Fair Value | Net Unrealized Gain | Fair Value of Fixed Maturity Securities with Gross Unrealized Loss | Gross Unrealized Loss | Fair Value of Fixed Maturity Securities with Gross Unrealized Gain | Gross Unrealized Gain | ||||||||||||||||||
Basic Industry | $ | 2,593.2 | $ | 311.5 | $ | 165.9 | $ | 10.2 | $ | 2,427.3 | $ | 321.7 | ||||||||||||
Capital Goods | 3,898.3 | 556.4 | 173.6 | 6.0 | 3,724.7 | 562.4 | ||||||||||||||||||
Communications | 3,112.2 | 555.9 | 108.5 | 3.3 | 3,003.7 | 559.2 | ||||||||||||||||||
Consumer Cyclical | 1,228.2 | 179.9 | 85.8 | 0.7 | 1,142.4 | 180.6 | ||||||||||||||||||
Consumer Non-Cyclical | 6,035.6 | 1,027.5 | 65.8 | 2.0 | 5,969.8 | 1,029.5 | ||||||||||||||||||
Energy (Oil & Gas) | 3,949.9 | 763.5 | 45.2 | 1.3 | 3,904.7 | 764.8 | ||||||||||||||||||
Financial Institutions | 3,611.5 | 404.9 | 121.8 | 7.6 | 3,489.7 | 412.5 | ||||||||||||||||||
Mortgage/Asset-Backed | 2,216.5 | 288.6 | 8.2 | 0.5 | 2,208.3 | 289.1 | ||||||||||||||||||
Sovereigns | 1,507.0 | 226.6 | — | — | 1,507.0 | 226.6 | ||||||||||||||||||
Technology | 1,047.1 | 147.1 | 71.5 | 0.4 | 975.6 | 147.5 | ||||||||||||||||||
Transportation | 1,434.4 | 267.1 | — | — | 1,434.4 | 267.1 | ||||||||||||||||||
U.S. Government Agencies and Municipalities | 3,155.6 | 636.3 | 79.4 | 8.9 | 3,076.2 | 645.2 | ||||||||||||||||||
Public Utilities | 11,144.2 | 1,849.9 | 257.9 | 15.1 | 10,886.3 | 1,865.0 | ||||||||||||||||||
Redeemable Preferred Stocks | 39.3 | 6.3 | — | — | 39.3 | 6.3 | ||||||||||||||||||
Total | $ | 44,973.0 | $ | 7,221.5 | $ | 1,183.6 | $ | 56.0 | $ | 43,789.4 | $ | 7,277.5 | ||||||||||||
Fixed Maturity Securities - Financial Institutions Classification - Unrealized Gain (Loss) | ||||||||||||||||||||||||
Associations | $ | 13.9 | $ | 1.9 | $ | — | $ | — | $ | 13.9 | $ | 1.9 | ||||||||||||
Banking | 2,157.6 | 207.7 | 121.8 | 7.6 | 2,035.8 | 215.3 | ||||||||||||||||||
Finance Captive | 251.8 | 26.3 | — | — | 251.8 | 26.3 | ||||||||||||||||||
Insurance | 798.6 | 121.3 | — | — | 798.6 | 121.3 | ||||||||||||||||||
Other Financial Institutions | 46.2 | 4.5 | — | — | 46.2 | 4.5 | ||||||||||||||||||
Real Estate Management Services | 343.4 | 43.2 | — | — | 343.4 | 43.2 | ||||||||||||||||||
Total | $ | 3,611.5 | $ | 404.9 | $ | 121.8 | $ | 7.6 | $ | 3,489.7 | $ | 412.5 | ||||||||||||
Gross Unrealized Loss on Fixed Maturity Securities By Length of Time in Unrealized Loss Position | ||||||||||||||||||||||||
Investment-Grade | Below-Investment-Grade | |||||||||||||||||||||||
Category | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||
Less than 91 days | $ | 367.3 | $ | 3.9 | $ | 53.4 | $ | 0.3 | ||||||||||||||||
91 through 180 days | 17.4 | 0.4 | 32.5 | 1.4 | ||||||||||||||||||||
181 through 270 days | 36.0 | 0.4 | 34.3 | 2.6 | ||||||||||||||||||||
271 days to 1 year | 12.7 | 0.3 | 33.2 | 2.5 | ||||||||||||||||||||
Greater than 1 year | 299.3 | 18.4 | 297.5 | 25.8 | ||||||||||||||||||||
Total | $ | 732.7 | $ | 23.4 | $ | 450.9 | $ | 32.6 | ||||||||||||||||
13. 1 | ||
Unum Group Investment Fact Sheet at December 31, 2012
Asset and Mortgage-Backed Securities Portfolio | ||||||||||||||||
Amortized Cost | Fair Value | % of Total Fixed Maturity Securities | Average Rating | |||||||||||||
Asset-Backed Securities | ||||||||||||||||
Credit Cards | $ | 42.0 | $ | 42.5 | 1.9 | % | 0.1 | % | Aaa | |||||||
Home Equity | 0.9 | 0.5 | — | — | Caa2 | |||||||||||
Total | 42.9 | 43.0 | 1.9 | 0.1 | Aaa | |||||||||||
Residential Mortgage-Backed Securities | ||||||||||||||||
Agency CMOs | 1,629.1 | 1,888.7 | 85.2 | 4.2 | Aaa | |||||||||||
Agency Pass-throughs | 89.3 | 97.6 | 4.4 | 0.2 | Aaa | |||||||||||
Non-agency CMOs - Prime | 53.4 | 55.1 | 2.5 | 0.1 | Ba3 | |||||||||||
Total | 1,771.8 | 2,041.4 | 92.1 | 4.5 | Aaa | |||||||||||
Commercial Mortgage-Backed Securities | ||||||||||||||||
Agency CMBS | 113.2 | 132.1 | 6.0 | 0.3 | A3 | |||||||||||
Total | $ | 1,927.9 | $ | 2,216.5 | 100.0 | % | 4.9 | % | Aa1 | |||||||
13. 2 | ||
Unum Group Statutory Capital and Surplus
As of December 31, 2012 | As of December 31, 2011 | |||||||||||||||
Capital and Surplus | AVR | Capital and Surplus + AVR | Capital and Surplus + AVR | |||||||||||||
Traditional U.S. Life Insurance Companies | ||||||||||||||||
Provident Life and Accident | $ | 642.8 | $ | 83.4 | $ | 726.2 | $ | 734.0 | ||||||||
Unum Life of America | 1,573.5 | 190.7 | 1,764.2 | 1,748.3 | ||||||||||||
Paul Revere Life (1) | 368.3 | 37.7 | 406.0 | 448.2 | ||||||||||||
Colonial Life & Accident | 534.9 | 31.1 | 566.0 | 559.1 | ||||||||||||
Provident Life and Casualty | 145.9 | 8.9 | 154.8 | 150.2 | ||||||||||||
First Unum Life | 251.8 | 16.0 | 267.8 | 280.4 | ||||||||||||
Paul Revere Variable (1) | 38.5 | 0.6 | 39.1 | 37.5 | ||||||||||||
(1) Capital and Surplus of Paul Revere Variable is included in Paul Revere Life | ||||||||||||||||
Special Purpose Reinsurance Vehicles | ||||||||||||||||
Tailwind Reinsurance Company | $ | 58.3 | $ | 0.1 | $ | 58.4 | $ | 67.4 | ||||||||
Northwind Reinsurance Company | 1,130.2 | 4.2 | 1,134.4 | 1,162.9 | ||||||||||||
UnumProvident International Ltd. | 576.8 | — | 576.8 | 555.0 | ||||||||||||
Amounts shown are preliminary estimates and may change prior to the regulatory filing of each subsidiary's financial information. | ||||||||||||||||
14 | ||
Unum Group Statutory Operating Results
Twelve Months Ended December 31 | ||||||||||||||||||||||||
Net Gain (Loss) from Operations After Tax | Net Realized Investment Gains (Losses) After Tax and Transfer to IMR | Net Income (Loss) | ||||||||||||||||||||||
Traditional U.S. Life Insurance Companies | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Provident Life and Accident | $ | 168.5 | $ | 172.4 | $ | 0.4 | $ | (2.0 | ) | $ | 168.9 | $ | 170.4 | |||||||||||
Unum Life of America | 225.2 | 227.7 | (22.4 | ) | (28.7 | ) | 202.8 | 199.0 | ||||||||||||||||
Paul Revere Life | 84.2 | 80.6 | (2.5 | ) | 9.2 | 81.7 | 89.8 | |||||||||||||||||
Colonial Life & Accident | 139.8 | 136.6 | (0.1 | ) | (0.6 | ) | 139.7 | 136.0 | ||||||||||||||||
Provident Life and Casualty | 17.9 | 14.5 | (0.1 | ) | — | 17.8 | 14.5 | |||||||||||||||||
First Unum Life | 11.9 | 29.7 | (0.6 | ) | 1.0 | 11.3 | 30.7 | |||||||||||||||||
Paul Revere Variable | 2.3 | 2.5 | — | — | 2.3 | 2.5 | ||||||||||||||||||
Total, as reported | 649.8 | 664.0 | (25.3 | ) | (21.1 | ) | 624.5 | 642.9 | ||||||||||||||||
Intercompany Dividends | (24.0 | ) | (19.7 | ) | — | — | (24.0 | ) | (19.7 | ) | ||||||||||||||
Total, as adjusted | $ | 625.8 | $ | 644.3 | $ | (25.3 | ) | $ | (21.1 | ) | $ | 600.5 | $ | 623.2 | ||||||||||
Special Purpose Reinsurance Vehicles | ||||||||||||||||||||||||
Tailwind Reinsurance Company | $ | 8.4 | $ | 5.4 | $ | — | $ | — | $ | 8.4 | $ | 5.4 | ||||||||||||
Northwind Reinsurance Company | 60.9 | 75.0 | 0.4 | (0.4 | ) | 61.3 | 74.6 | |||||||||||||||||
UnumProvident International Ltd. | (31.9 | ) | (25.0 | ) | 3.0 | 9.6 | (28.9 | ) | (15.4 | ) | ||||||||||||||
Total | $ | 37.4 | $ | 55.4 | $ | 3.4 | $ | 9.2 | $ | 40.8 | $ | 64.6 | ||||||||||||
Three Months Ended December 31 | ||||||||||||||||||||||||
Net Gain (Loss) from Operations After Tax | Net Realized Investment Gains (Losses) After Tax and Transfer to IMR | Net Income (Loss) | ||||||||||||||||||||||
Traditional U.S. Life Insurance Companies | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Provident Life and Accident | $ | 52.2 | $ | 46.9 | $ | 1.4 | $ | 1.4 | $ | 53.6 | $ | 48.3 | ||||||||||||
Unum Life of America | 66.5 | 74.4 | (8.0 | ) | (7.3 | ) | 58.5 | 67.1 | ||||||||||||||||
Paul Revere Life | 20.7 | 28.6 | (1.5 | ) | 1.8 | 19.2 | 30.4 | |||||||||||||||||
Colonial Life & Accident | 39.2 | 35.4 | (0.2 | ) | 1.3 | 39.0 | 36.7 | |||||||||||||||||
Provident Life and Casualty | 5.6 | 0.8 | (0.1 | ) | 0.6 | 5.5 | 1.4 | |||||||||||||||||
First Unum Life | 11.8 | (3.9 | ) | (0.6 | ) | 1.6 | 11.2 | (2.3 | ) | |||||||||||||||
Paul Revere Variable | 0.6 | 0.6 | (0.1 | ) | — | 0.5 | 0.6 | |||||||||||||||||
Total, as reported | 196.6 | 182.8 | (9.1 | ) | (0.6 | ) | 187.5 | 182.2 | ||||||||||||||||
Intercompany Dividends | (5.7 | ) | (4.9 | ) | — | — | (5.7 | ) | (4.9 | ) | ||||||||||||||
Total, as adjusted | $ | 190.9 | $ | 177.9 | $ | (9.1 | ) | $ | (0.6 | ) | $ | 181.8 | $ | 177.3 | ||||||||||
Special Purpose Reinsurance Vehicles | ||||||||||||||||||||||||
Tailwind Reinsurance Company | $ | 1.6 | $ | 1.6 | $ | — | $ | — | $ | 1.6 | $ | 1.6 | ||||||||||||
Northwind Reinsurance Company | 11.8 | 15.5 | (0.1 | ) | — | 11.7 | 15.5 | |||||||||||||||||
UnumProvident International Ltd. | (1.4 | ) | (3.8 | ) | (1.5 | ) | 0.1 | (2.9 | ) | (3.7 | ) | |||||||||||||
Total | $ | 12.0 | $ | 13.3 | $ | (1.6 | ) | $ | 0.1 | $ | 10.4 | $ | 13.4 | |||||||||||
Note: Statutory results for our domestic insurers are reported in conformity with statutory accounting principles as prescribed by the National Association of Insurance Commissioners and adopted by the applicable state laws. For UnumProvident International Ltd., results are reported in conformity with accounting principles as prescribed by applicable Bermuda laws. | ||||||||||||||||||||||||
Amounts shown are preliminary estimates and may change prior to the regulatory filing of each subsidiary's financial information. | ||||||||||||||||||||||||
14. 1 | ||
Unum Life Insurance Company of America - Statutory Basis
Group Accident and Health Statutory Claim Reserves and Liabilities, Net of Ceded
On Claims Incurred Prior to January 1
2012 | 2011 | 2010 | ||||||||||
Reserve Balance from Prior Year End | $ | 6,755.9 | $ | 6,829.4 | $ | 6,880.9 | ||||||
Other Adjustments to Beginning Balance (see Schedule H) | (3.6 | ) | (3.9 | ) | (4.5 | ) | ||||||
Reserve Balance January 1 (a) | 6,752.3 | 6,825.5 | 6,876.4 | |||||||||
Paid on Prior Year Claims | (391.2 | ) | (390.5 | ) | (374.3 | ) | ||||||
Interest Earned on Reserves | 104.5 | 110.7 | 113.0 | |||||||||
Incurred on Prior Year Claims | (109.9 | ) | (122.3 | ) | (113.1 | ) | ||||||
Reserve Balance March 31 | $ | 6,355.7 | $ | 6,423.4 | $ | 6,502.0 | ||||||
Reserve Balance March 31 | $ | 6,355.7 | $ | 6,423.4 | $ | 6,502.0 | ||||||
Paid on Prior Year Claims | (335.8 | ) | (339.9 | ) | (324.2 | ) | ||||||
Interest Earned on Reserves | 96.6 | 104.0 | 108.2 | |||||||||
Incurred on Prior Year Claims | (130.3 | ) | (107.5 | ) | (117.5 | ) | ||||||
Reserve Balance June 30 | $ | 5,986.2 | $ | 6,080.0 | $ | 6,168.5 | ||||||
Reserve Balance June 30 | $ | 5,986.2 | $ | 6,080.0 | $ | 6,168.5 | ||||||
Paid on Prior Year Claims | (315.1 | ) | (316.4 | ) | (304.0 | ) | ||||||
Interest Earned on Reserves | 89.5 | 98.9 | 103.1 | |||||||||
Incurred on Prior Year Claims | (77.6 | ) | (49.4 | ) | (75.1 | ) | ||||||
Reserve Balance September 30 | $ | 5,683.0 | $ | 5,813.1 | $ | 5,892.5 | ||||||
Reserve Balance September 30 | $ | 5,683.0 | $ | 5,813.1 | $ | 5,892.5 | ||||||
Paid on Prior Year Claims | (273.2 | ) | (291.7 | ) | (282.9 | ) | ||||||
Interest Earned on Reserves | 85.3 | 92.5 | 99.0 | |||||||||
Incurred on Prior Year Claims | (93.5 | ) | (111.4 | ) | (76.9 | ) | ||||||
Reserve Balance December 31 on Prior Year Claims | 5,401.6 | 5,502.5 | 5,631.7 | |||||||||
Reserve Balance December 31 on Current Year Claims | 1,280.8 | 1,253.4 | 1,197.7 | |||||||||
Reserve Balance December 31 on Total Claims Incurred (b) | $ | 6,682.4 | $ | 6,755.9 | $ | 6,829.4 | ||||||
(a) balances to Schedule H Part 3 Line 3.2 Column 2 | ||||||||||||
(b) balances to Schedule H Part 2 Line C.1 Column 2 | ||||||||||||
Amounts shown are preliminary estimates and may change prior to the regulatory filing of each subsidiary's financial information.
14. 2 | ||
Reconciliation to Unum Life Insurance Company of America - Statutory Basis
Schedule H Part 3 for Group Accident and Health
2012 | 2011 | 2010 | ||||||||||
Paid on Prior Year Existing Claims - Full Year | $ | 1,315.3 | $ | 1,338.5 | $ | 1,285.4 | ||||||
(balances to Schedule H Part 3 Line 1.1 Column 2) | ||||||||||||
Incurred on Prior Year Claims - Full Year | $ | (411.3 | ) | $ | (390.6 | ) | $ | (382.6 | ) | |||
Interest Earned on Reserves - Full Year | 375.9 | 406.1 | 423.3 | |||||||||
Incurred on Prior Year Claims - Full Year, Excluding Interest Earned | $ | (35.4 | ) | $ | 15.5 | $ | 40.7 | |||||
(balances to Schedule H Part 3 Line 3.3 Column 2) | ||||||||||||
Note: Group A&H for Unum Life Insurance Company of America includes group long- and short-term disability, group accidental death & dismemberment, and group voluntary disability, cancer, and critical illness products reported in our Unum US segment as well as the reinsurance pools reported in our Closed Block segment. | ||||||||||||
Amounts shown are preliminary estimates and may change prior to the regulatory filing of each subsidiary's financial information.
14. 3 | ||
Notes to Statistical Supplement
Non-GAAP Financial Measures
We analyze our Company's performance using non-GAAP financial measures which exclude certain items and the related tax thereon from net income. We believe operating income or loss excluding realized investment gains or losses and non-operating retirement-related gains or losses, both of which are recurring, is a better performance measure and a better indicator of the profitability and underlying trends in our business. Both realized investment gains or losses and non-operating retirement-related gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our Company. The exclusion of these items from our performance does not replace net income or net loss as a measure of our overall profitability. We also believe book value per common share excluding the components of Accumulated Other Comprehensive Income, certain of which tend to fluctuate depending on market conditions and general economic trends, are important measures.
2012 Significant Transactions and Events
Accounting Standards Codification (ASC) 944 "Financial Services - Insurance”
In October 2010, the Financial Accounting Standards Board (FASB) issued an update to address the diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify as deferred acquisition costs. The amendments in the update require that only incremental direct costs associated with the successful acquisition of a new or renewal insurance contract can be capitalized. All other costs are to be expensed as incurred. We adopted this update effective January 1, 2012 and applied the amendments retrospectively, adjusting all prior periods.
Financing
In August 2012, we issued $250.0 million of unsecured senior notes in a public offering. These notes, due in 2042, bear interest at a fixed rate of 5.75% and are payable semi-annually. The notes are callable at or above par and rank equally in right of payment with all of our other unsecured and unsubordinated debt. We also made principal payments of $60.0 million and $10.0 million on our senior secured non-recourse floating rate notes issued by Northwind Holdings, LLC (Northwind) and Tailwind Holdings, LLC (Tailwind), respectively, during the year ended December 31, 2012. At December 31, 2012, short-term debt consisted of $455.8 million of securities lending transactions.
Share Repurchase Program
In July 2012, our board of directors authorized a $750.0 million share repurchase program with an expiration date of January 2014. This program superseded and replaced the February 2011 $1.0 billion share repurchase program. During 2012, we repurchased 23.6 million shares on the open market at a cost of $500.6 million, including commissions of $0.6 million. The dollar value of shares remaining under the $750.0 million repurchase program was approximately $550.0 million at December 31, 2012.
2011 Significant Transactions and Events
Long-term Care Strategic Review
Following a comprehensive and strategic review of our long-term care business, in February 2012 we announced that we would discontinue selling group long-term care. We discontinued selling individual long-term care during 2009. Because both group and individual long-term care are considered closed blocks of business, effective December 31, 2011, we reclassified our long-term care products from the Unum US segment to the Closed Block segment. We also reclassified our other insurance products not actively marketed, including individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities, which were previously reported in the Corporate and Other segment to the Closed Block segment. The inclusion of all closed blocks of
(continued on next page) | 15 | |
business into one operating segment aligns with our reporting and monitoring of our closed blocks of business within a discrete segment and is consistent with our separation of these blocks of business from the lines of business which actively market new products. Prior period segment results have been restated to reflect these changes in our reporting classifications.
As part of the strategic review, and as is typical in the fourth quarter of each year, we analyzed our reserve assumptions for long-term care in conjunction with our annual loss recognition testing. We generally perform loss recognition tests on our deferred acquisition costs and policy reserves in the fourth quarter of each year, but more frequently if appropriate, using best estimate assumptions as of the date of the test. Included in the analysis was a review of our reserve discount rate assumptions and mortality and morbidity assumptions. Our analysis of reserve discount rate assumptions considered the significant decline in long-term interest rates which occurred late in the third quarter of 2011 due to the European Union debt crisis and the Federal Reserve Board's actions, including the announcement of "Operation Twist." We also considered an updated industry study for long-term care experience which was made available mid-year 2011 from the Society of Actuaries. Our analysis of this study, which was completed during the fourth quarter of 2011, showed that lower termination rates than we had previously assumed were beginning to emerge in industry and in our own company experience. Based on our analysis, as of December 31, 2011 we lowered the discount rate assumption to reflect the low interest rate environment and our expectation of future investment portfolio yield rates. We also changed our mortality assumptions to reflect emerging experience due to an increase in life expectancies which increases the ultimate number of people who will utilize long-term care benefits and also lengthens the amount of time a claimant receives long-term care benefits. We changed our morbidity assumptions to reflect emerging industry experience as well as our own company experience. While our morbidity experience is still emerging and is not fully credible, we modified our assumptions to align more closely with the recently published industry study. Using our revised best estimate assumptions, as of December 31, 2011 we determined that deferred acquisition costs of $196.0 million, as adjusted for the January 1, 2012 retrospective adoption of the accounting standards update related to deferred acquisition costs, were not recoverable and that our policy and claim reserves should be increased by $573.6 million to reflect our current estimate of future benefit obligations. These charges decreased our 2011 net income by $500.3 million. The increase in reserves represented a 10.5 percent increase in long-term care policy and claim reserves as of December 31, 2011, which equaled $5.4 billion subsequent to the charge.
Claim Reserve Increase for Individual Disability Closed Block Business
Claim reserves supporting our individual disability closed block of business are calculated using assumptions based on actual experience believed to be currently appropriate. Claim reserves are subject to revision as current claim experience emerges and alters our view of future expectations. Claim resolution rates, which measure the resolution of claims from recovery, deaths, settlements, and benefit expirations, are very sensitive to operational and environmental changes and can be volatile. Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the life of the block of business. We are now able, with a higher degree of confidence, to assess our own experience for older ages in our long duration lifetime claim block as our data has become credible. There is very little industry experience for lifetime disability benefits, as our insurance companies were the primary disability companies in the insurance industry at the time lifetime disability benefits were offered. These benefits were offered during the 1980s and 1990s, recent enough such that claimants are just reaching the older ages and providing us with data to build our claim experience base. Emerging experience indicates a longer life expectancy for our older age, longer duration disabled claimants, which lengthens the time a claimant receives disability benefits. As a result of this experience, as of December 31, 2011 we adjusted our mortality assumption within our claim resolution rate assumption and, as a result, increased our claim reserves for our individual disability closed block of business by $183.5 million and decreased net income by $119.3 million. The increase in reserves represented a 1.5 percent increase in individual disability policy and claim reserves as of December 31, 2011, which equaled $11.9 billion subsequent to the charge.
Share Repurchase Program
In February 2011, our board of directors authorized the repurchase of up to $1.0 billion of Unum Group's common stock, in addition to the amount remaining to be repurchased under the May 2010 $500.0 million authorization. The $1.0 billion share repurchase program had an expiration date of August 2012.
During February 2011, we repurchased 7.1 million shares, at a cost of $200.0 million, using an accelerated repurchase agreement with a financial counterparty. Under the terms of the repurchase agreement, we received a price adjustment based on the volume weighted average price of our common stock during the term of the agreement. The
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price adjustment resulted in the delivery to us of 0.6 million additional shares. In total, we repurchased 7.7 million shares of our common stock under this agreement, which completed the May 2010 $500.0 million repurchase authorization and initiated the $1.0 billion repurchase program.
In addition to these repurchases, during 2011, we repurchased an additional 17.7 million shares on the open market at a cost of $419.9 million for a total repurchase of 25.4 million shares. Pursuant to these repurchase programs, we retired 7.7 million shares during 2011. All other repurchased shares were classified as treasury stock and accounted for using the cost method.
Income Tax
Our income tax for 2011 includes a reduction in federal income taxes of $41.3 million due to a final settlement with the IRS with respect to our appeal of audit adjustments for the tax years 1996 to 2004. Our income tax for 2011 was unfavorably impacted by an $18.6 million tax charge related to the repatriation of £150.0 million of dividends from our U.K. subsidiaries.
Financing
During 2011, the remaining $225.1 million of our 7.625% senior notes due March 2011 matured. We also made principal payments of $74.4 million and $10.0 million on our senior secured non-recourse floating rate notes issued by Northwind and Tailwind, respectively, during 2011. At December 31, 2011, short-term debt consisted of $312.3 million of securities lending agreements.
2010 Significant Transactions and Events
Share Repurchase Program
In May 2010, our board of directors authorized the repurchase of up to $500.0 million of Unum Group's common stock. During 2010, we repurchased 16.4 million shares, at a cost of $356.0 million under this share repurchase program.
Financing
In 2010, we issued $400.0 million of unsecured senior notes in a public offering. These notes, due in 2020, bear interest at a fixed rate of 5.625% and are payable semi-annually.
During 2010, we made principal payments of $58.3 million and $10.0 million on our senior secured non-recourse floating rate notes issued by Northwind and Tailwind, respectively. We also purchased and retired $10.0 million of our 7.08% medium-term notes due 2024.
Tax Law Change
In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law. Among other things, the new legislation reduced the tax benefits available to an employer that receives a postretirement prescription drug coverage subsidy from the federal government under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Under the new legislation, to the extent our future postretirement prescription drug coverage expenses are reimbursed under the subsidy program, the expenses covered by the subsidy will no longer be tax deductible after 2012. Employers that receive the subsidy must recognize the deferred tax effects relating to the future postretirement prescription drug coverage in the period the legislation was enacted. Our income tax expense for 2010 included a non-cash tax charge of $10.2 million to reflect the impact of the tax law change.
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