Unum 2011 Annual Report Download - page 4

Unum 2011 Annual Report2
67%
of U.S. workers lack
disability coverage
OUR PERFORMANCE
Despite some persistent challenges,
through the efforts of our nearly 10,000
employees we once again delivered on
our commitments to our customers,
shareholders and all the stakeholders
that are so important to our company.
Although improving, continued high
unemployment in both the U.S. and U.K.
is adversely affecting the growth rates
in our businesses, while this prolonged
period of low interest rates also poses
challenges for our company and industry.
Despite these pressures, in 2011 we
grew the businesses we targeted for
growth, generated solid profitability in
our core businesses, and maintained a
solid financial foundation. Among the
highlights for the year:
• We delivered pre-tax operating income
of $1.3 billion and after-tax operating
earnings of $897 million;
• Earnings per share grew by almost
10 percent, well ahead of the industry
average, while our return on equity
remained above the industry
average; and
• We finished the year with a very strong
balance sheet, investment portfolio
and capital position.
Again this past year we have been
fortunate to have two sources of value
creation: our business operations and
an active program of returning capital to
shareholders through dividend increases
and share buy backs. Since the fourth
quarter of 2007, we have repurchased
nearly $1.7 billion of stock, reducing our
outstanding share count by 19 percent —
the lowest level since 2002 — and raised
our quarterly dividend by 40 percent.
We believe that a business capable of
both growing and returning capital to
shareholders will continue to generate
above-average, long-term returns for
shareholders. While I was not happy with
our stock’s performance in 2011, we
continued to outperform our industry
for the year just as we have over the
past three- and five-year periods.
I mentioned earlier our strong balance
sheet. A significant contributor to that is
our investment portfolio, which continues
to perform well. The emphasis we’ve
placed on sound risk management has
led to steady investment results, and
our credit quality remains among the
best in the insurance industry.
Our success, though, goes well beyond
just financial results. We strive to be a
company that is viewed not just for its
financial performance but as a leader in
our industry, in our communities, and
with our employees — a leader in every
sense of the word. I am very proud of
the kind of company we have become,
and these are just a few examples:
• Our customer satisfaction ratings have
remained at or near record levels;
• Our company and employees continue
to give back to our communities in many
ways, including more than $12 million
in financial and volunteer support to a
broad range of charitable organizations;
• We continue to create a positive work
environment, which is a real competi-
tive advantage, and were named a
“Best Place to Work in Insurance” for
the third consecutive year; and
• We were once again named among
the “Greenest Companies in America.”
Although we have come a long way, this
is no time to relax. The environment will
continue to change, and we will always
be confronted with new issues and
challenges. As our track record indicates,
though, our people are quick to adapt
to the changing environment and don’t
shy away from tough decisions. A recent
example of this was our decision earlier
this year to discontinue the sale of new
group long-term care policies. This was a
difficult decision because we recognize
there’s a need in the market for this
coverage. After a very thorough analy-
sis, however, we concluded that given
30%
of people in
the U.S. have no
life insurance