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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
72 Unum 2007 Annual Report
The following table shows the length of time the below-investment-grade fixed maturity bonds had been in a gross unrealized loss
position as of December 31, 2007. The relationships of the current fair value to amortized cost are not necessarily indicative of the fair
value to amortized cost relationships for the securities throughout the entire time that the securities have been in an unrealized loss
position nor are they necessarily indicative of the relationships after December 31, 2007.
Unrealized Loss on Below-Investment-Grade Fixed Maturity Bonds
Length of Time in Unrealized Loss Position
As of December 31, 2007
(in millions of dollars)
Fair Value Gross Unrealized Loss
Fair value < 100% >= 70% of amortized cost
<= 90 days $ 186.5 $ 5.6
> 90 <= 180 days 169.5 11.4
> 180 <= 270 days 371.7 19.9
> 270 <= 1 year 63.3 11.3
> 1 year <= 2 years 138.0 19.3
> 2 years <= 3 years 218.0 40.7
> 3 years 109.8 15.7
Total $ 1,256.8 $ 123.9
Fair value < 70% >= 40% of amortized cost
> 2 years <= 3 years $ 16.1 $ 7.9
As of December 31, 2007, we held four securities with a gross unrealized loss of $10.0 million or greater, as shown in the chart below.
Gross Unrealized Losses on Fixed Maturity Bonds
$10.0 Million or Greater
As of December 31, 2007
(in millions of dollars)
Length of Time
Fixed Maturity Bonds Fair Value Gross Unrealized Loss in a Loss Position
Investment-Grade
U.S. Government Sponsored Mortgage Funding Company $ 377.9 $ 22.3 > 3 years
Principal Protected Equity Linked Note 54.0 25.3 > 3 years
Total $ 431.9 $ 47.6
Below-Investment Grade
United Kingdom Based Financial Institution $ 16.5 $ 13.2 > 1 year <= 2 years
U.S. Based Automobile Manufacturer 26.8 10.4 > 2 years <= 3 years
Total $ 43.3 $ 23.6
Unrealized losses on investment-grade fixed maturity securities principally relate to changes in interest rates or changes in market or
sector credit spreads which occurred after the acquisition of the securities. These changes are generally temporary and are not recognized
as realized investment losses unless the securities are sold, it becomes unlikely that we will hold the securities until recovery based on