Unum 2009 Annual Report Download - page 53
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51
Unum 2009 Annual Report
Unum US Supplemental and Voluntary Operating Results
Shown below are financial results and key performance indicators for Unum US supplemental and voluntary product lines.
Year Ended December 31
(in millions of dollars, except ratios) 2009 % Change 2008 % Change 2007
Operating Revenue
Premium Income
Individual Disability — Recently Issued $ 463.7 (1.7)% $ 471.5 3.2% $ 456.7
Long-term Care 594.7 2.4 580.7 9.0 532.9
Voluntary Benefits 492.4 10.2 446.8 10.4 404.7
Total Premium Income 1,550.8 3.5 1,499.0 7.5 1,394.3
Net Investment Income 444.6 17.3 379.1 14.7 330.4
Other Income 27.9 (7.6) 30.2 (8.8) 33.1
Total 2,023.3 6.0 1,908.3 8.6 1,757.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 1,177.6 4.5 1,126.9 5.6 1,067.4
Commissions 269.0 0.6 267.3 9.1 245.1
Deferral of Acquisition Costs (224.9) (2.2) (230.0) 10.7 (207.7)
Amortization of Deferred Acquisition Costs 204.0 8.2 188.6 10.0 171.5
Other Expenses 290.9 2.5 283.7 6.4 266.7
Total 1,716.6 4.9 1,636.5 6.1 1,543.0
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $ 306.7 12.8 $ 271.8 26.5 $ 214.8
Operating Ratios (% of Premium Income):
Benefit Ratios
Individual Disability — Recently Issued 51.4% 53.3% 56.7%
Long-term Care 111.6% 106.1% 106.0%
Voluntary Benefits 56.0% 58.0% 60.1%
Other Expense Ratio 18.8% 18.9% 19.1%
Before-tax Operating Income Ratio 19.8% 18.1% 15.4%
Interest Adjusted Loss Ratios:
Individual Disability — Recently Issued 32.5% 35.9% 40.0%
Long-term Care 76.5% 75.5% 77.7%
Premium Persistency:
Individual Disability — Recently Issued 89.6% 90.7% 90.6%
Long-term Care 95.1% 95.5% 95.4%
Voluntary Benefits 79.9% 80.4% 79.4%
Year Ended December 31, 2009 Compared with Year Ended December 31, 2008
Premium income increased in 2009 relative to the prior year due primarily to sales growth, particularly in the voluntary benefits product line,
partially offset by a slight decline in premium persistency. Net investment income increased relative to the prior year due to higher investment
income related to growth in the level of assets supporting these lines of business, an increased level of prepayment income on mortgage-
backed securities, and a higher yield on the portfolio due to the investment of new cash at higher yields than that of the existing portfolio.
The interest adjusted loss ratio for the individual disability — recently issued line of business declined in 2009 relative to the prior year due
primarily to a more favorable claim recovery rate and a lower number of reopened claims, partially offset by an increase in the paid incidence