Unum 2012 Annual Report Download - page 151

UNUM 2012 ANNUAL REPORT 149
Note 11. Reinsurance
Our reinsurance recoverable at December 31, 2012 relates to 85 companies. Thirteen major companies account for approximately
92 percent of our reinsurance recoverable at December 31, 2012, and are all companies rated A or better by A.M. Best Company (AM Best)
or are fully securitized by letters of credit or investment-grade fixed maturity securities held in trust. Approximately seven percent of our
reinsurance recoverable relates to business reinsured either with companies rated A- or better by AM Best, with overseas entities with
equivalent ratings or backed by letters of credit or trust agreements, or through reinsurance arrangements wherein we retain the assets
in our general account. The remaining one percent of our reinsurance recoverable is held by companies either rated below A- by AM Best
or not rated.
Reinsurance data is as follows:
Year Ended December 31
(in millions of dollars) 2012 2011 2010
Direct Premium Income $7,736.0 $7,521.5 $7,434.3
Reinsurance Assumed 210.9 216.6 241.3
Reinsurance Ceded (230.8) (223.9) (244.2)
Net Premium Income $7,716.1 $7,514.2 $7,431.4
Ceded Benefits and Change in Reserves for Future Benefits $ 591.7 $ 609.2 $ 602.2
We entered into reinsurance agreements, effective January 1, 2013, with external reinsurance partners whereby the agreements
provide 50 percent coverage up to £0.5 million per covered life and 100 percent coverage, per covered life, above that amount for the
existing in-force block of Unum UK group life business as well as new policies issued during the term of the agreements.
Note 12. Segment Information
We have three major business segments: Unum US, Unum UK, and Colonial Life. Our other segments are the Closed Block segment
and the Corporate 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, comprised of recently issued disability insurance and
voluntary benefits products. These products are marketed through our field sales personnel who work in conjunction with independent
brokers and consultants.
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.
The Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness
products marketed to employees at the workplace through an agency sales force and brokers.
The Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products no longer
actively marketed. The individual disability line of business in this segment generally consists of policies we sold prior to the mid 1990s
and entirely discontinued selling in 2004, other than update features contractually allowable on existing policies. Other insurance products
include individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance,
and individual annuities.
The Corporate segment includes investment income on corporate assets not specifically allocated to a line of business, interest expense
on corporate debt other than non-recourse debt, and certain other corporate income and expense not allocated to a line of business.