Unum 2007 Annual Report Download - page 7

5
5
first priority is to maintain a strong overall financial
position, our financial flexibility allowed us to begin to
undertake our previously announced $700 million share
repurchase, an action that we believe will benefit all
of our stakeholders.
Finally, we “reintroduced” Unum to the marketplace in
2007 through a brand redesign that better describes
how we benefit businesses and their employees and is,
at the same time, a more accurate reflection of the
company we are today. Feedback from the marketplace
has been very positive as we create better brand
awareness and a more positive image of the company.
All in all, 2007 was an outstanding year for Unum as
we strengthened both our operations and financial position.
In doing so, we are better prepared for an uncertain
economic environment.
A CHALLENGING AND RAPIDLY
CHANGING ENVIRONMENT
As we enter 2008, we do so with less risk to our business
as a result of the actions we have taken to better position
our company, including improving the quality of our
investment portfolio, further diversifying our business,
building a stronger operational platform and developing
greater access to the capital markets. These actions, along
with our solid business plans and a better awareness of
the risks inherent in those plans, will serve us well in this
environment. Moving forward, we will continue to refine
our risk management principles and further embed them
into our corporate culture.
Corporate America in general, and the financial services
industry in particular, are under more scrutiny today than
perhaps they have ever been. Regulators, political leaders
and consumers are all demanding more of our industry.
We’ve learned a lot over the past several years, and we
believe our values, culture and business practices are
well-aligned with today’s expectations. Above all, we
recognize the importance of transparency and openness
in everything we do.
At Unum, we have spent the last several years working
closely with regulators to implement enhanced claim
practices. We have also been a leader in establishing
improved disclosure of sales compensation. We are
working hard to ensure our products, services and
practices anticipate market changes and, as a result,
exceed expectations. We plan to be an industry leader
in this regard.
We believe there is an opportunity to work more closely
with our political leaders – not with narrow special interests
in mind – but rather in a partnership to address some of
society’s broader issues. We understand that our
various stakeholders expect more, and we are prepared
to take an active and visible role in bringing together
public/private solutions.
While the current environment features great demands
and challenges, it also creates unique opportunities –
opportunities that closely parallel Unum’s strategic focus
and vision.
To begin with, healthcare costs have skyrocketed in
recent years and continue to rise. In response, employers
are increasingly cost-sharing with their employees. With
higher costs and deductibles, employees need more
help and education to understand the choices they face.
Additionally, Americans are spending more than they
earn. Savings rates have dropped to levels not seen since
the Great Depression. People have less of a personal
safety net in the event of illness or injury, making the
need for our solutions more important than ever.
At the same time, workforce demographics are rapidly
changing. The population is aging, and employees are
retiring later. In fact, for the first time there are four distinct
generations in the workforce. This presents a number
of challenges for employers, including how to attract
and retain quality employees and how to maximize the
productivity of a diverse workforce. Clearly, a one-size-fits-all
model for benefits will no longer work.
I know of no other benefits provider as uniquely
positioned to capitalize on these opportunities as Unum.
We have a strong base from which to build and a number
of initiatives under way to meet these evolving needs.
POSITIONED FOR THE FUTURE
The theme of this year’s annual report is “future ready,”
which, as we mark our 160th year in business, appropri-
ately expresses how we feel about the opportunities
that lie ahead and our readiness to capitalize on them.
As we look to the future, it’s important to recognize that
Unum is a different company today from what it was
five short years ago:
• Wehavemorediversiedearningswithgreater
sources of growth
• Ourbusinessismoredisciplinedandhighly
focused on specific market segments
• Wehaveastrongerandmoreexiblenancial
platform
While the current environment features
great demands and challenges, it
also creates unique opportunities –
opportunities that closely parallel
Unum’s strategic focus and vision.