Unum 2007 Annual Report Download - page 6

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In every respect, 2007 was a year of significant accomplishment for Unum.
Through the efforts of our 10,000 talented and dedicated employees in the United States and United Kingdom,
we made solid progress in just about every area of the company and, in the process, continued to build on the
momentum that we have established over the past few years. As a result, Unum is a stronger company today
than at any other point in its history.
TO OUR STOCKHOLDERS, CUSTOMERS AND COLLEAGUES
Tom Watjen
President and Chief Executive Officer
Unum Group
A YEAR OF PROGRESS
We met or exceeded our objectives in most of the areas
of the company in 2007; and I would specifically like
to highlight the following:
• Allofourbusinessesperformedwellaswe
delivered strong financial results throughout the year
• Wefurtherstrengthenedourbalancesheet,
including closing the year with $1 billion in holding
company liquidity
• Ourinvestmentportfolioqualityisexcellent
and yielded solid returns despite challenging
financial markets
• Weformalizedacapitalmanagementstrategythat
balances the needs of our company, stockholders
and other stakeholders
• Were-brandedUnumtobetterdescribethe
company we are today
While all of our businesses performed well during the
year, I am particularly encouraged by the improvement
in profitability we achieved in Unum US. Pretax operating
earnings for this unit increased significantly over the
previous year, driven largely by improvements in
claimsmanagementwithinourgrouplong-term
disability business.
In addition, both Unum UK and Colonial Life again
generated record earnings in 2007. Unum UK is a leading
employee benefits provider in the United Kingdom and
continuestocapitalizeonanunderpenetratedincome
protection market. Colonial Life is one of the nation’s
leading providers of voluntary benefits with broad
expertiseinone-to-onebenetscommunication.
The contributions of these three businesses resulted
in pretax operating income for our ongoing businesses
of more than $1 billion in 2007, a first for Unum.
 Ourinvestmentresultsfortheyearweresolidaswell.
Overall,ourportfolioisinexcellentshape,withhistorically
lowlevelsofhigh-yieldbonds,noexposuretosubprime
mortgages and virtually no exposure to the asset classes
troubling financial institutions today. In spite of this, we
recognizetheneedtocontinuouslymonitorourposition
in what will likely remain a challenging environment
throughout 2008.
I am also pleased that for the first time in several
years we began to generate excess capital. We ended
2007 with liquidity in excess of $1 billion, well above
what we need to cover fixed costs and provide a cushion
for business and economic volatility. Although our
4
All in all, 2007 was an outstanding year for
Unum as we strengthened both our operations
and financial position. In doing so, we enter
2008 better prepared for an uncertain
economic environment.