Unum 2009 Annual Report Download - page 55

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53
Unum 2009 Annual Report
During 2010, we will continue to embed our culture of risk management while maintaining our operating effectiveness, with a focus
on talent development across our businesses. We believe we are well-positioned strategically in our markets and that opportunities for
growth exist in our group core market segment and in the voluntary markets. We will continue to manage our value businesses, which we
define as the group large case market, individual disability, and long-term care product lines, in a disciplined manner for profitability. While
the recession impacted our ability to grow premium income during 2009, we expect to achieve a slight increase in premium income during
2010. We anticipate that the benefit ratio in our group disability product line will begin to level out during 2010. We think future margin
improvement is achievable, although at a slower rate of growth than was achieved for 2008 and 2009, driven primarily by our ongoing
product mix shift and the growth of our voluntary benefits product line.
Unum UK Segment
Unum UK includes insurance for group long-term disability, group life, and individual disability products sold primarily in the United
Kingdom through field sales personnel and independent brokers and consultants.
Operating Results
Shown below are financial results and key performance indicators for the Unum UK segment.
Year Ended December 31
(in millions of dollars, except ratios) 2009 % Change 2008 % Change 2007
Operating Revenue
Premium Income
Group Long-term Disability $503.1 (25.6)% $ 675.9 (10.2)% $ 752.6
Group Life 147.8 (15.3) 174.6 (1.6) 177.4
Individual Disability 35.2 (9.3) 38.8 1.3 38.3
Total Premium Income 686.1 (22.8) 889.3 (8.2) 968.3
Net Investment Income 124.5 (31.6) 181.9 (2.9) 187.4
Other Income 2.4 20.0 2.0 (35.5) 3.1
Total 813.0 (24.2) 1,073.2 (7.4) 1,158.8
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 373.6 (26.9) 511.4 (11.0) 574.3
Commissions 46.7 (20.8) 59.0 (11.9) 67.0
Deferral of Acquisition Costs (29.1) (22.2) (37.4) (9.2) (41.2)
Amortization of Deferred Acquisition Costs 30.5 (5.9) 32.4 (34.4) 49.4
Other Expenses 141.7 (22.9) 183.8 0.2 183.5
Total 563.4 (24.8) 749.2 (10.1) 833.0
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $249.6 (23.0) $ 324.0 (0.6) $ 325.8
Operating Ratios (% of Premium Income):
Benefit Ratio 54.5% 57.5% 59.3%
Other Expense Ratio 20.7% 20.7% 19.0%
Before-tax Operating Income Ratio 36.4% 36.4% 33.6%
Premium Persistency:
Group Long-term Disability 88.6% 87.4% 88.0%
Group Life 80.1% 74.9% 70.5%
Individual Disability 87.6% 87.6% 89.4%