Unum 2015 Annual Report Download - page 60

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Management’s Discussion and Analysis
of Financial Condition and Results of Operations
58 Unum 2015 Annual Report
Year Ended December 31, 2015 Compared with Year Ended December 31, 2014
Premium income increased in 2015 relative to 2014 as a result of sales growth in all lines of business, partially offset by a decline in
persistency. Net investment income was generally consistent in 2015 relative to the prior year, with an increase in the level of invested
assets offset by a decline in yield and lower miscellaneous investment income.
Benefits experience was favorable in 2015 compared to 2014 due to favorable incurred benefits in the accident, sickness, and
disability product line and the release of active life reserves in the cancer and critical illness product lines related to policy terminations.
Commissions and the deferral of acquisition costs were higher in 2015 relative to 2014 due to an increase in deferrable expenses
related to sales growth. The amortization of deferred acquisition costs increased in 2015 compared to the prior year due primarily to
growth in the level of the deferred asset. The other expense ratio was slightly higher in 2015 compared to 2014 due primarily to continued
investment in our business.
Year Ended December 31, 2014 Compared with Year Ended December 31, 2013
Premium income increased in 2014 relative to 2013 due to sales and continued strong persistency. Net investment income was
higher in 2014 relative to 2013 due to an increase in the level of invested assets, partially offset by a decrease in yield on invested assets
and lower miscellaneous investment income.
Favorable benefits experience in 2014 compared to 2013 primarily reflects improved claim experience in the cancer and critical illness
product line. This was partially offset by less favorable experience in the accident, sickness, and disability product line due to a higher average
claim size and in the life product line due to less favorable mortality experience. The release of active life reserves on terminations of older
cases in the accident, sickness, and disability and cancer and critical illness product lines also favorably impacted 2014 relative to 2013.
Commissions and the deferral of acquisition costs were higher in 2014 relative to 2013 due to sales growth. The amortization of deferred
acquisition costs was higher in 2014 compared to 2013 due primarily to continued growth in the level of the deferred asset. The other expense
ratio was higher in 2014 compared to 2013 due primarily to continued investment in our business, higher sales compensation, and a higher
level of allocated retirement-related costs.
Sales
Year Ended December 31
(in millions of dollars) 2015 % Change 2014 % Change 2013
Sales by Product
Accident, Sickness, and Disability $276.1 5.9% $260.7 9.4% $238.2
Life 85.6 8.6 78.8 15.7 68.1
Cancer and Critical Illness 76.8 8.8 70.6 15.2 61.3
Total Sales $438.5 6.9 $410.1 11.6 $367.6
Sales by Market Sector
Commercial
Core Market (< 1,000 lives) $290.8 5.5% $275.6 12.0% $246.0
Large Case Market 54.2 1.9 53.2 8.6 49.0
Subtotal 345.0 4.9 328.8 11.5 295.0
Public Sector 93.5 15.0 81.3 12.0 72.6
Total Sales $438.5 6.9 $410.1 11.6 $367.6