Unum 2010 Annual Report Download - page 55

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Unum 2010 Annual Report
53
Segment Outlook
During 2010, we experienced an unfavorable impact on premium growth as a result of the challenging economic and competitive
pricing environment. We expect this may continue in the near term if current economic and competitive conditions in the U.K. persist. Our
sales growth may also be impacted by a prolonged competitive pricing environment in the U.K. The level of disability claim incidence in
2010 is favorable relative to 2009, but our claim resolution rate is unfavorable to 2009, due in part to the impact of the economic
environment on our ability to resolve claims. We continuously monitor key indicators to assess our risks and attempt to adjust our business
plans accordingly. Continued uctuations in the U.S. dollar relative to the British pound sterling impact our reported operating results.
Our current growth strategy focuses on generating organic growth and expanding our role as the leading provider of group disability
insurance in the U.K. Our strategy for future growth combines optimizing the performance of our existing business while developing new
market opportunities. We intend to optimize performance of the existing business by (i) increasing underwriting and pricing discipline,
(ii) improving our claims management processes, and (iii) expanding our broker market capabilities and sales effectiveness. We intend to
develop new market opportunities by raising awareness of the need for income protection and by offering a suite of employee paid
workplace solutions using integrated products with simpler, dened choices and exible funding options through a streamlined and
efficient platform with online capabilities matched to broker and employer needs.
In the current competitive pricing market and economic environment, we continue to have a cautious outlook for premium growth in
2011 and anticipate negative earnings growth relative to 2010. We anticipate returning to more normalized levels of premium growth
through continued favorable persistency and price increases, as well as increased sales to existing and new customers which we expect to
occur commensurate with the timing of the U.K. economic recovery. We expect our overall benefit ratio to be generally consistent with that
of 2010. We expect our profit margins to continue at a favorable level, although slightly below the level of 2010.