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Unum 2011 Annual Report
Unum
2011
51
over year growth in our premium income during 2012. We anticipate that the benefit ratio in our group disability product line will be
generally consistent with the levels of 2011 and 2010, depending on claim incidence rates and claim discount rates. We think future profit
margin improvement is achievable, driven primarily by our continued product mix shift and expense efficiencies as our claims performance
gradually flattens.
We began offering group dental benefits through a partnership with United Concordia, beginning with an initial launch in a selected
market during the fourth quarter of 2011, with additional markets expected to be added throughout 2012. The product offering will include
flexible plan designs aligned with our other employer-sponsored benefit coverages and will be targeted to the group core market segment.
Unum UK Segment
The Unum UK segment includes insurance for group long-term disability, group life, and supplemental and voluntary lines of business.
The supplemental and voluntary lines of business are comprised of individual disability, critical illness, and voluntary benefits products.
Unum UK’s products are sold primarily in the United Kingdom through field sales personnel and independent brokers and consultants.
Operating Results
Shown below are financial results and key performance indicators for the Unum UK segment.
Year Ended December 31
(in millions of dollars, except ratios) 2011 % Change 2010 % Change 2009
Operating Revenue
Premium Income
Group Long-term Disability $419.6 (0.4)% $421.2 (12.7)% $482.4
Group Life 203.6 18.6 171.6 16.1 147.8
Supplemental and Voluntary 64.4 11.4 57.8 3.4 55.9
Total Premium Income 687.6 5.7 650.6 (5.2) 686.1
Net Investment Income 189.9 11.4 170.5 36.9 124.5
Other Income 0.3 (75.0) 1.2 (50.0) 2.4
Total 877.8 6.7 822.3 1.1 813.0
Benefits and Expenses
Benefits and Change in Reserves for Future Benefits 493.8 13.3 435.8 16.6 373.6
Commissions 45.7 3.6 44.1 (5.6) 46.7
Deferral of Acquisition Costs (30.6) 8.1 (28.3) (2.7) (29.1)
Amortization of Deferred Acquisition Costs 29.2 8.1 27.0 (11.5) 30.5
Other Expenses 147.7 9.5 134.9 (4.8) 141.7
Total 685.8 11.8 613.5 8.9 563.4
Operating Income Before Income Tax and Net
Realized Investment Gains and Losses $192.0 (8.0) $208.8 (16.3) $249.6
Operating Ratios (% of Premium Income):
Benefit Ratio 71.8% 67.0% 54.5%
Other Expense Ratio 21.5% 20.7% 20.7%
Before-tax Operating Income Ratio 27.9% 32.1% 36.4%
Premium Persistency:
Group Long-term Disability 86.6% 91.3% 88.5%
Group Life 89.3% 92.7% 80.1%
Supplemental and Voluntary 87.3% 88.9% 88.2%