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84 / UNUM 2013 ANNUAL REPORT
Quantitative and Qualitative Disclosures
About Market Risk
Risk Management
Effectively taking and managing risks is essential to the success of our Company. To facilitate this effort, we have a formal Enterprise
Risk Management (ERM) program, with a framework comprising the following key components:
• Risk culture and governance
• Risk appetite policy
• Risk identification and prioritization
• Risk and capital modeling
• Risk management activities
• Risk reporting
Our ERM framework is the ongoing system of people, processes, and tools across our Company under which we intend to function
consistently and collectively to identify and assess risks and opportunities, to manage all material risks within our risk appetite, and to
contribute to strategic decision making. With the goal of maximizing shareholder value, the primary objectives of our ERM framework are
to support Unum Group in meeting its operational and financial objectives, maintaining liquidity, preserving capital adequacy, and
protecting franchise value.
Risk Culture and Governance
We employ a decentralized risk management model under which risk-based decisions are made daily on a local level. To achieve long-
term success, we believe risk management must be the responsibility of all employees. The individual and collective decisions of our
employees play a key role in successfully managing our overall risk profile. We strive for a culture of accountability, risk management, and
strict compliance, and we believe these values allow our employees to feel comfortable identifying issues as well as taking ownership for
addressing potential problems.
Our risk culture is reinforced by our system of risk governance. We employ a multi-layered risk control system. Our three lines of
defense model is depicted below.
1st Line: Own and Manage 2nd Line: Oversee 3rd Line: Independent Assurance
Business processes and procedures Management committees chartered Independent review
employed throughout the Company with oversight of activities within of ERM framework
through which management assumes the 1st and 2nd lines of defense, and risk mitigation
and monitors significant risks mitigation of substantial exposures,
and management of emerging risks