Unum 2015 Annual Report Download - page 155

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Unum 2015 Annual Report
Note 13. Segment Information
We have three principal operating business segments: Unum US, Unum UK, and Colonial Life. Our other segments are Closed Block
and Corporate.
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. The supplemental and voluntary lines of business are comprised of individual
disability 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
dental, 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 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
individual long-term care in 2009 and group long-term care in 2012. Other insurance products include group pension, individual life and
corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines.
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.
Business Acquired
In September 2015, we acquired 100 percent of the common shares and voting interests in National Dental Plan Limited and associated
companies (National Dental) for a total cash purchase price of £35.9 million or $54.3 million. National Dental, a provider of dental insurance
in the U.K. workplace, is reported in our Unum UK segment as part of our supplemental product line. The acquisition of National Dental
extends our market reach, broadening our employee benefit offerings in the U.K. National Dental’s revenues totaled £14.7 million, or
$24.2 million, in 2014. Total assets were £18.6 million, or $28.1 million at the acquisition date, and were primarily comprised of short-term
investments, accounts receivable, and intangible assets attributable to benefits derived from National Dental’s customer relationships
and dental provider network. Total liabilities were £5.0 million, or $7.5 million at the acquisition date, and were primarily comprised of
outstanding claims liabilities, unearned premiums, and a deferred tax liability. The purchase price exceeded the fair value of the identifiable
net assets by £22.3 million, or $33.7 million, and has been identified as goodwill, primarily attributable to the value of adding dental to
our current employee benefit offerings. The goodwill is not deductible for income tax purposes except upon disposition of the acquired
entity. This acquisition, the results of which are included in our consolidated financial statements for the period subsequent to the date of
acquisition, did not have a material impact on revenue or operating results for 2015.