Unum 2015 Annual Report Download - page 61

59
Unum 2015 Annual Report
Year Ended December 31, 2015 Compared with Year Ended December 31, 2014
Sales were higher in 2015 compared to 2014 due to growth in new and existing customer account sales. Commercial market sales
increased in 2015 compared to 2014 due to higher new and existing customer account sales in the core market, which we define as
accounts with fewer than 1,000 lives, and higher existing customer account sales in the large case market. The growth in our public sector
market for 2015 was attributable to new and existing customer account sales. The number of new accounts increased 10.0 percent in 2015
compared to 2014, and the average new case size decreased 7.5 percent.
Year Ended December 31, 2014 Compared with Year Ended December 31, 2013
Sales were higher in 2014 compared to 2013 due to growth in both new and existing customer account sales and across all market
segments. Commercial market sales increased in 2014, with higher sales in both the core commercial market and in the large case
commercial market. The growth in our core commercial market sales for 2014 was primarily attributable to new account sales, although
we also experienced favorable growth in existing account sales. The growth in the large case commercial market was primarily attributable
to higher sales to existing accounts. Public sector sales for 2014 increased due primarily to new account sales. The number of new accounts
increased 13.4 percent in 2014 compared to 2013, and the average new case size increased 5.8 percent.
Segment Outlook
We expect to see continued favorable sales and premium growth trends in 2016. Volatility in net investment income is likely to
continue as a result of fluctuations in miscellaneous investment income. We expect our annual benefit ratio for 2016 to be generally
consistent with the level of 2015. While we expect the low interest rate environment to continue to pressure our profit margins, we believe
our underlying profitability will remain strong.
Disciplined execution of our growth strategy should deliver sales and premium growth that are in line with long-term expectations.
Unfavorable U.S. economic conditions and the increasing competition in the voluntary market are seen as external risks to achievement of
our business plans. We continuously monitor key indicators to assess our risks and attempt to adjust our business plans accordingly.
We believe our success will be driven primarily by execution in the core commercial and public sector segments and through
expansion of the overall market. We believe the current market environment offers considerable opportunities to meet the emerging
needs of employers, brokers, and consumers. We intend to continue to focus on growth, the customer experience, productivity, and talent
development. Key drivers in our 2016 plan include a focus on strategic growth markets, distribution expansion, third-party connectivity,
enrollment solutions, service capabilities, and operational excellence.
Closed Block Segment
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.