Unum 2011 Annual Report Download - page 46

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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Unum 2011 Annual Report
44
Unum US Group Disability Operating Results
Shown below are financial results and key performance indicators for Unum US group disability.
Year Ended December 31
(in millions of dollars, except ratios) 2011 % Change 2010 % Change 2009
Operating Revenue
Premium Income
Group Long-term Disability $1,580.2 (3.6)% $1,639.4 (5.1)% $1,726.9
Group Short-term Disability 455.2 5.6 430.9 (0.4) 432.8
Total Premium Income 2,035.4 (1.7) 2,070.3 (4.1) 2,159.7
Net Investment Income 605.0 (1.6) 614.6 (2.4) 629.4
Other Income 89.4 3.1 86.7 (2.5) 88.9
Total 2,729.8 (1.5) 2,771.6 (3.7) 2,878.0
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 1,722.1 (1.5) 1,747.8 (6.2) 1,862.8
Commissions 159.5 (0.1) 159.7 (1.5) 162.2
Interest and Debt Expense 1.0 (16.7) 1.2 (40.0) 2.0
Deferral of Acquisition Costs (61.0) 3.4 (59.0) (5.6) (62.5)
Amortization of Deferred Acquisition Costs 59.9 (5.7) 63.5 (5.6) 67.3
Other Expenses 547.0 0.6 543.7 (5.0) 572.6
Total 2,428.5 (1.2) 2,456.9 (5.7) 2,604.4
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $ 301.3 (4.3) $ 314.7 15.0 $ 273.6
Operating Ratios (% of Premium Income):
Benefit Ratio 84.6% 84.4% 86.3%
Other Expense Ratio 26.9% 26.3% 26.5%
Before-tax Operating Income Ratio 14.8% 15.2% 12.7%
Premium Persistency:
Group Long-term Disability 90.2% 89.4% 86.9%
Group Short-term Disability 89.9% 88.6% 86.8%
Case Persistency:
Group Long-term Disability 89.0% 88.4% 87.4%
Group Short-term Disability 88.0% 87.3% 86.5%
Year Ended December 31, 2011 Compared with Year Ended December 31, 2010
Group disability premium income decreased in 2011 compared to 2010, as the ongoing high levels of unemployment and the
competitive environment continued to pressure our premium income growth. In particular, premium growth from existing customers
continued to be unfavorably impacted by lower salary growth and lower growth in the number of employees covered under an existing
policy. Partially offsetting the unfavorable growth trend from existing customers was higher premium and case persistency for both group
long-term disability and group short-term disability.