Unum 2015 Annual Report Download - page 85
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83
Unum 2015 Annual Report
Risk Management Activities
We accept and manage strategic, credit, and insurance risks in accordance with our corporate strategy, investment policy, and annual
business plans. The following fundamental principles are embedded in our risk management efforts across our Company.
• We believe in the benefits of specialization and a focused business strategy. We seek profitable risk-taking in areas where we have
established risk management skills and capabilities.
• We seek to manage our exposure to insurance risk through a combination of prudent underwriting with effective risk selection,
maintaining pricing discipline, sound reserving practices, claims operational effectiveness, and selective use of reinsurance. Detailed
underwriting guidelines and claim policies are tools used to manage our insurance risk exposure. We also monitor exposures against
internally prescribed limits, and we diversify to reduce potential concentration risk and volatility.
• We maintain a detailed set of investment policies and guidelines, including fundamental credit analysis, that are used to manage our
credit risk exposure and diversify our risks across asset classes and issuers.
• Finally, we foster a culture that embeds our corporate values and our code of conduct in our daily operations and preserves our
reputation with customers and other key stakeholders. We monitor a composite set of operational risk metrics that measure
operating effectiveness from the customer perspective.
Risk Reporting
Regular internal and external risk reporting is an integral part of our ERM framework. Internally, ERM reports are a standard part of
our quarterly senior management and board meetings. The reports summarize our existing and emerging risk exposures, as well as report
against the tolerances and limits defined by our risk appetite policy.
Externally, we are subject to a number of regulatory and rating agency risk examinations, and risk reports are often included. Annually,
we file our Own Risk and Solvency Assessment summary report with the applicable insurance regulators for our U.S. insurance subsidiaries.
This report provides strong evidence of the strengths of our ERM framework, measurement approaches, key assumptions utilized in
assessing our risks, and prospective solvency assessments under both normal and stressed conditions. See “Regulation” contained in
Item 1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for additional information regarding the ORSA.