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Unum 2011 Annual Report
Unum
2011
43
Segment Results
Our reporting segments are comprised of the following: Unum US, Unum UK, Colonial Life, Closed Block, and Corporate. In conjunction
with our long-term care strategic review, effective with the fourth quarter of 2011 we modified our reporting segments to reclassify our
long-term care products from the Unum US segment to the Closed Block segment. We also reclassified our other insurance products not
actively marketed, including individual life and corporate-owned life insurance, reinsurance pools and management operations, group
pension, health insurance, and individual annuities, which were previously reported in the Corporate and Other segment to the Closed
Block segment. The inclusion of all closed blocks of business into one operating segment aligns with our reporting and monitoring of our
closed blocks of business within a discrete segment and is consistent with our separation of these blocks of business from the lines of
business which actively market new products. Prior period segment results have been restated to reflect this change in our reporting
classifications.
Financial information for each of the reporting segments is as follows.
Unum US Segment
The Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and
dismemberment products, and supplemental and voluntary lines of business, which are comprised of individual disability — recently issued
insurance and voluntary benefits products. As previously noted, effective with the fourth quarter of 2011, we reclassified our long-term care
products from the Unum US segment to the Closed Block segment.
Unum US Operating Results
Shown below are financial results for the Unum US segment. In the sections following, financial results and key ratios are also
presented for the major lines of business within the segment.
Year Ended December 31
(in millions of dollars, except ratios) 2011 % Change 2010 % Change 2009
Operating Revenue
Premium Income $4,296.0 1.0% $4,255.4 (0.5)% $4,278.4
Net Investment Income 951.4 1.1 941.5 0.8 934.3
Other Income 121.6 (1.0) 122.8 3.4 118.8
Total 5,369.0 0.9 5,319.7 (0.2) 5,331.5
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 3,113.5 (0.3) 3,124.4 (2.1) 3,192.1
Commissions 474.0 2.9 460.6 2.7 448.3
Interest and Debt Expense 1.0 (16.7) 1.2 (40.0) 2.0
Deferral of Acquisition Costs (333.8) 3.3 (323.2) 0.5 (321.6)
Amortization of Deferred Acquisition Costs 298.7 (3.0) 307.9 4.8 293.8
Other Expenses 995.8 1.6 979.7 (2.0) 999.3
Total 4,549.2 — 4,550.6 (1.4) 4,613.9
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $ 819.8 6.6 $ 769.1 7.2 $ 717.6
Operating Ratios (% of Premium Income):
Benefit Ratio 72.5% 73.4% 74.6%
Other Expense Ratio 23.2% 23.0% 23.4%
Before-tax Operating Income Ratio 19.1% 18.1% 16.8%
.