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The executive risk management committee is responsible for overseeing our enterprise-wide risk management program. The CRO,
who is a member of the executive risk management committee, has primary responsibility for our ERM program and is supported by
corporate risk committees and by the risk committees of our three primary operating segments.
Operating segment risk committees for Unum US, Unum UK, and Colonial Life are responsible for oversight of risks specific to their
businesses. These committees are responsible for identifying, measuring, reporting, and managing insurance and operational risks within
their respective areas, consistent with enterprise risk management guidance. Corporate risk committees oversee the operational, global
technology services, investment, and capital management risks on a corporate level.
Risk Appetite Policy
Our risk appetite policy describes the types of risks we are willing to take, as well as the amount of enterprise risk exposure we deem
acceptable in pursuit of our goals, with an objective of clearly defining boundaries for our risk-taking activities.
The starting point of our philosophy and approach to our ERM strategy is our corporate strategy. In contrast to many multi-line peer
companies, we do not offer retirement savings, traditional medical benefits, or property and casualty insurance. Our corporate strategy is
focused on providing group, individual, and voluntary benefits, either as stand-alone products or combined with other coverages, that
create comprehensive benefits solutions for employers. We have market leadership positions in the product lines we offer and have over
160 years of experience. We believe this combination of focused expertise and extensive experience is a competitive advantage that forms
the foundation of our approach to risk management.
Our sound and consistent business practices, strong internal compliance program, and comprehensive risk management strategy
enable us to operate efficiently as well as to identify and address potential areas of risk in our business. We take and manage risks to
achieve our business and strategic objectives, and our risk appetite statement sets boundaries for risk-taking activities that link earnings,
capital, and operational processes, as well as summarizes our most material risk limits and controls. We monitor our risk profile against our
established risk tolerance and limits. Risks falling outside our risk tolerance and limits are reported to the applicable governance group,
where decisions are made pertaining to acceptance of the risk or implementation of remediation plans or corrective actions as deemed
appropriate by that governance group.
Risk Identification and Prioritization
Risk identification and prioritization is an ongoing process, whereby we identify and assess our risk positions and exposures, including
notable risk events. Additionally, we identify emerging risks and analyze how material future risks might affect us. Knowing the potential
risks we face allows us to monitor and manage their potential effects including adjusting our strategies as appropriate and holding capital
levels which provide financial flexibility.
Risk committees have primary responsibility for identifying and prioritizing risks within their respective areas. In addition, we maintain
a risk, ethics, and compliance (REC) leaders program. The goal of the program is to further embed REC management into our culture in a
visible and effective manner. This group assists with the early identification of issues, timely referrals, problem solving, and communication.
Individual employees can report material concerns and identified risks through a variety of options, such as discussion with
management, contacting a REC leader or the ERM team, or utilizing the Company’s anonymous hotline and electronic reporting mechanism.
We face a wide range of risks, and our continued success depends on our ability to identify and appropriately manage our risk exposures.
For additional information on certain risks that may adversely affect our business, operating results, or financial condition see “Cautionary
Statement Regarding Forward-Looking Statements” contained herein and “Risk Factors” contained in Item 1A of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2011.
Unum 2011 Annual Report
Unum
2011
87