Unum 2013 Annual Report Download - page 157

UNUM 2013 ANNUAL REPORT / 155
Note 12. Reinsurance
Our reinsurance recoverable at December 31, 2013 relates to 86 companies. Thirteen major companies account for approximately
91 percent of our reinsurance recoverable at December 31, 2013, 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 eight 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) 2013 2012 2011
Direct Premium Income $7,777.3 $7,736.0 $7,521.5
Reinsurance Assumed 203.2 210.9 216.6
Reinsurance Ceded (355.8) (230.8) (223.9)
Net Premium Income $7,624.7 $7,716.1 $7,514.2
Ceded Benefits and Change in Reserves for Future Benefits $ 728.7 $ 591.7 $ 609.2
We entered into reinsurance agreements, effective January 1, 2013, 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.
We entered into a reinsurance agreement effective April 1, 2013 to cede the inforce policies on a small block of individual disability
business in our Unum US segment.
Note 13. Segment Information
We have three principal operating business segments: Unum US, Unum UK, and Colonial Life. Our other segments are the Closed Block
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, which are comprised of individual disability — recently issued 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 lines of business, which include
individual disability and critical illness 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 and marketed to employees at the workplace through an independent contractor 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. We discontinued offering group
long-term care in 2012 and individual long-term care in 2009. Other insurance products include group pension, individual life and corporate-
owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines.