Unum 2007 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2007 Unum annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

Unum 2007 Annual Report 103
In determining when a decline in fair value below amortized cost of a fixed maturity security is other than temporary, we evaluate
the following factors:
 •Theprobabilityofrecoveringprincipalandinterest.
 •Ourabilityandintenttoretainthesecurityforasufcientperiodoftimeforittorecover.
 •Whetherthesecurityiscurrentastoprincipalandinterestpayments.
 •Thesignicanceofthedeclineinvalue.
 •Thetimeperiodduringwhichtherehasbeenasignicantdeclineinvalue.
 •Currentandfuturebusinessprospectsandtrendsofearnings.
 •Thevaluationofthesecurity’sunderlyingcollateral.
 •Relevantindustryconditionsandtrendsrelativetotheirhistoricalcycles.
 •Marketconditions.
 •Ratingagencyactions.
 •Bidandofferingpricesandtheleveloftradingactivity.
 •Adversechangesinestimatedcashowsforsecuritizedinvestments.
 •Anyotherkeymeasuresfortherelatedsecurity.
If we determine that the decline in value of an investment is other than temporary, the investment is written down to fair value,
and an impairment loss is recognized in the current period to the extent of the decline in value. For those fixed maturity securities with an
unrealized loss and on which we have not recorded an impairment write-down, we believe that the decline in fair value below amortized
cost is temporary.
The amortized cost and fair values of fixed maturity securities by maturity date are shown as follows. The maturity dates have not
been adjusted for possible calls or prepayments.
December 31, 2007
(in millions of dollars) Amortized Cost Fair Value
Available-for-Sale Securities
1 year or less $ 260.2 $ 305.0
Over 1 year through 5 years 3,494.3 3,613.5
Over 5 years through 10 years 7,814.1 7,681.6
Over 10 years 19,053.8 19,817.1
30,622.4 31,417.2
Mortgage/Asset-Backed Securities 4,006.8 4,237.5
Total $ 34,629.2 $ 35,654.7
At December 31, 2007, the total investment in below-investment-grade fixed maturity securities was $2,023.8 million or 5.3 percent
of the fair value of invested assets excluding ceded policy loans. The amortized cost of these securities was $2,129.9 million.