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Unum 2011 Annual Report
Unum
2011
57
Segment Outlook
Our premium growth in 2011 was in line with the level of growth in 2010 but is below the level of our long-term growth expectations.
We believe slower sales and premium growth levels may continue in the near term if the current economic conditions persist and continue
to affect employment growth and the buying patterns of employees. We expect volatility in net investment income to continue during
2012 as a result of fluctuations in bond calls and other types of miscellaneous net investment income. Periods of economic downturns have
historically had minimal impact on the risk results of Colonial Life, due primarily to a diversified product portfolio that is designed with short
duration, indemnity benefits. We continuously monitor key indicators to assess our risks and attempt to adjust our business plans accordingly.
We believe we have a stable business model, with service levels and customer retention that allow us to focus on and deliver
premium growth despite the recent marketplace changes and uncertainties. We believe we are well positioned for growth and that
opportunities exist to accelerate growth during the next several years by (i) focusing on target market segments, (ii) driving new sales in
the public sector market, (iii) growing the reach and effectiveness of our distribution, and (iv) effectively serving our customers.
During 2012, we expect premium growth to be modest relative to our long-term outlook. We believe that strong profit margins
will continue, and we expect our overall benefit ratio to be generally consistent with the level of 2011. We believe premium growth will
re-accelerate as the economy improves, employment growth resumes, and our growth strategies gain momentum.
Closed Block Segment
As previously noted, effective with the fourth quarter of 2011, we modified our reporting segments. The Closed Block segment now
consists of our closed individual disability and long-term care lines of business, as well as certain other insurance products. The individual
disability line of business generally consists of those policies in-force before the substantial changes in product offerings, pricing, distribution,
and underwriting, which generally occurred during the period 1994 through 1998. A small amount of new business continued to be sold
after these changes, but we stopped selling new individual disability policies in this segment at the beginning of 2004 other than update
features contractually allowable on existing policies. Long-term care includes group long-term care, which we announced in February 2012
that we would discontinue selling, and individual long-term care, which we discontinued selling in 2009. The other insurance products line
of business consists of certain other products no longer actively marketed, including individual life and corporate-owned life insurance,
reinsurance pools and management operations, group pension, health insurance, and individual annuities.