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Unum 2010 Annual Report
79
We maintain an ongoing dialogue with the four rating agencies that evaluate us in order to inform them of progress we are making
regarding our strategic objectives and financial plans, as well as other pertinent issues. A significant component of our communications
involves our annual review meeting with each of the four agencies. We hold other meetings throughout the year regarding our business,
including, but not limited to, quarterly updates.
On February 12, 2010, Fitch upgraded its ratings of Unum Group and its operating subsidiaries to BBB and A, respectively, and changed
the outlook for the Company to “stable.” On March 8, 2010, AM Best affirmed its ratings of Unum Group and all of its operating subsidiaries,
with the exception of Paul Revere Variable, and revised the outlook for the Company to “positive.” The rating of Paul Revere Variable was
lowered to B++ due to the continued decline in this subsidiary’s closed block of business. On May 12, 2010, Moody’s upgraded the credit
ratings of Unum Group’s senior debt to Baa3 from Ba1 and the financial strength ratings of each rated individual insurance subsidiary to A3
from Baa1. Moody’s maintained the outlook for the Company as “stable.” On January 26, 2011, AM Best upgraded its ratings of Unum Group
and its operating subsidiaries to bbb and A, respectively, with the exception of Paul Revere Variable which retained its B++ rating, and
revised the outlook for the Company and its subsidiaries to “stable.”
There have been no other changes in any of the rating agencies’ outlook statements or ratings during 2010 or prior to the date
of this filing.
Agency ratings are not directed toward the holders of our securities and are not recommendations to buy, sell, or hold our securities.
Each rating is subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be regarded as an
independent assessment, not conditional on any other rating. Given the dynamic nature of the ratings process, changes by these or other
rating agencies may or may not occur in the near-term. Based on our ongoing dialogue with the rating agencies concerning our improved
insurance risk prole, ournancial exibility, our operating performance, and the quality of our investment portfolio, we do not expect any
negative actions from any of the four rating agencies related to either Unum Group’s current issuer credit ratings or the financial strength
ratings of its insurance subsidiaries. However, in the event that we are unable to meet the rating agency specific guideline values to
maintain our current ratings, including but not limited to maintenance of our capital management metrics at the threshold values stated
and maintenance of our nancial exibility and operational consistency, we could be placed on a negative credit watch, with a potential for
a downgrade to both our issuer credit ratings and our financial strength ratings.
See “Ratings” contained in Item 1 and “Risk Factors” contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2010 for further discussion.