Unum 2010 Annual Report Download - page 56

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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Unum
2010
54
Colonial Life Segment
The Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness
products issued primarily by Colonial Life & Accident Insurance Company and marketed to employees at the workplace through an agency
sales force and brokers.
Operating Results
Shown below are financial results and key performance indicators for the Colonial Life segment.
Year Ended December 31
(in millions of dollars, except ratios) 2010 % Change 2009 % Change 2008
Operating Revenue
Premium Income
Accident, Sickness, and Disability $ 661.0 5.6% $ 625.8 3.1% $ 606.9
Life 176.5 6.6 165.6 5.2 157.4
Cancer and Critical Illness 238.2 6.5 223.7 5.0 213.0
Total Premium Income 1,075.7 6.0 1,015.1 3.9 977.3
Net Investment Income 122.5 7.2 114.3 8.1 105.7
Other Income 0.7 40.0 0.5 25.0 0.4
Total 1,198.9 6.1 1,129.9 4.3 1,083.4
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 534.7 11.3 480.6 3.6 464.0
Commissions 232.6 8.0 215.3 1.7 211.8
Deferral of Acquisition Costs (246.4) 7.6 (229.0) 2.3 (223.8)
Amortization of Deferred Acquisition Costs 187.2 4.9 178.5 7.3 166.4
Other Expenses 208.6 2.5 203.6 3.4 196.9
Total 916.7 8.0 849.0 4.1 815.3
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $ 282.2 0.5 $ 280.9 4.8 $ 268.1
Operating Ratios (% of Premium Income):
Benefit Ratio 49.7% 47.3% 47.5%
Other Expense Ratio 19.4% 20.1% 20.1%
Before-tax Operating Income Ratio 26.2% 27.7% 27.4%
Premium Persistency:
Accident, Sickness, and Disability 75.9% 74.4% 75.8%
Life 86.0% 84.7% 84.7%
Cancer and Critical Illness 84.9% 83.8% 84.0%