Unum 2006 Annual Report Download - page 93

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Other Segment Operating Results
The Other operating segment includes results from Unum US insured products not actively marketed (with the
exception of certain individual income protection products), including individual life and corporate-owned life
insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities.
We expect operating revenue and income resulting from the products that are not actively marketed to decline over
time as these business lines wind down, and we expect to reinvest the capital supporting these lines of business in
the future growth of our Unum US, Unum UK, and Colonial segments.
(in millions of dollars)
2006 % Change 2005 % Change 2004
Operating Revenue
Premium Income $ 4.5 73.1 % $ 2.6 (91.7) % $ 31.3
Net Investment Income 113.2 (6.1) 120.5 (5.3) 127.3
Other Income 33.8 (6.1) 36.0 15.4 31.2
Total 151.5 (4.8) 159.1 (16.2) 189.8
Benefits and Expenses
Benefits and Change in Reserves for
Future Benefits 120.5 (1.4) 122.2 (14.1) 142.3
Commissions 3.0 172.7 1.1 (77.6) 4.9
Deferral of Policy Acquisition Costs - - - N.M. 0.1
Amortization of Deferred Policy Acquisition Costs - N.M. 0.5 N.M. -
Operating Expenses 3.6 (32.1) 5.3 (60.2) 13.3
Total 127.1 (1.5) 129.1 (19.6) 160.6
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses
$
24.4 (18.7)
$
30.0 2.7
$
29.2
N.M. = not a meaningful percentage
Year Ended December 31
Reinsurance Pools and Management
Our reinsurance operations include the reinsurance management operations of Duncanson & Holt, Inc. (D&H) and
the risk assumption, which includes reinsurance pool participation; direct reinsurance, which includes accident and
health (A&H), long-term care (LTC), and long-term disability coverages; and Lloyd’s of London (Lloyd’s)
syndicate participations. During the years 1999 through 2001, we exited our reinsurance pools and management
operations through a combination of a sale, reinsurance, and/or placement of certain components in run-off. During
2006, this line of business reported an operating loss of $6.7 million compared to operating losses of $11.0 million
and $7.5 million in 2005 and 2004, respectively.
Individual Life and Corporate-Owned Life
During 2000, we reinsured substantially all of the individual life and corporate-owned life insurance blocks of
business and ceded approximately $3.3 billion of reserves to the reinsurer. The $388.2 million before-tax gain on
these transactions was deferred and is being amortized into income based upon expected future premium income on
the traditional insurance policies ceded and estimated future gross profits on the interest-sensitive insurance policies
ceded.
Total operating revenue for individual life and corporate-owned life insurance was $37.8 million, $41.0 million, and
$40.0 million in 2006, 2005, and 2004, respectively. Operating income for the same periods was $33.0 million,
$38.8 million, and $38.2 million.