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Unum Group Posts 4th Quarter 2013 Results

Proquest LLC

Unum Group reported net income of $221.2 million ($0.84 per diluted common share) for the fourth quarter of 2013, compared to net income of $233.9 million ($0.85 per diluted common share) for the fourth quarter of 2012.

In a release on February 4, the Company noted that included in these results are net realized investment gains and losses and non- operating retirement-related gains or losses, the combined impact of which resulted in a net after-tax gain of $4.3 million ($0.02 per diluted common share) for the fourth quarter of 2013, compared to a net after-tax gain of $8.9 million ($0.03 per diluted common share) in the fourth quarter of 2012. Also included are fourth quarter 2013 reserve adjustments for a reserve increase related to unclaimed death benefits ($95.5 million before tax and $62.1 million after tax, or $0.24 per diluted common share) and a reserve reduction related to group life waiver of premium benefits ($85.0 million before tax and $55.2 million after tax, or $0.21 per diluted common share).

Adjusting for these items, after-tax operating income was $223.8 million ($0.85 per diluted common share), in the fourth quarter of 2013, compared to $225.0 million ($0.82 per diluted common share), in the fourth quarter of 2012.

"We had a strong close to the year, with fourth quarter and full year earnings growth consistent with both our own expectations and the outlook we had provided at the start of the year. Through our disciplined underwriting and pricing we have maintained strong risk results across all of our business lines, which have helped us continue to generate strong margins and returns. I am also very encouraged by the sales momentum in our U.S. operations that began to emerge in the third quarter and gained further traction in the fourth quarter," said Thomas R. Watjen, president and chief executive officer. "We enter 2014 with strong positions in our markets, a solid financial base which gives us tremendous financial flexibility to support our businesses while also returning capital to our shareholders, and a commitment to maintaining the discipline which has been at the heart of our past success."

Unum US reported operating income, including the adjustments related to the unclaimed death benefits reserve and the group life waiver reserve, of $226.7 million in the fourth quarter of 2013, compared to $212.2 million in the fourth quarter of 2012. Operating income excluding these adjustments was $217.1 million in the fourth quarter of 2013. Premium income for the segment increased slightly to $1,121.3 million in the fourth quarter of 2013, compared to premium income of $1,117.6 million in the fourth quarter of 2012.

Within the Unum US operating segment, the group disability line of business reported a 6.3 percent decline in operating income, with $68.9 million in the fourth quarter of 2013 compared to $73.5 million in the fourth quarter of 2012, as lower net investment income in the current quarter more than offset favorable risk experience in this line of business. Premium income in group disability declined 0.5 percent to $511.4 million in the fourth quarter of 2013, compared to $513.8 million in the fourth quarter of 2012, driven primarily by a decline in persistency in the group long- term disability product line. Net investment income declined 7.4 percent to $133.9 million in the fourth quarter of 2013, compared to $144.6 million in the fourth quarter of 2012, primarily due to lower levels of miscellaneous investment income. The benefit ratio for the fourth quarter of 2013 was 83.2 percent, compared to 84.5 percent in the fourth quarter of 2012. Underlying these results are favorable incidence rates and continued strong claim recovery experience. Group long-term disability sales declined 3.6 percent to $83.7 million in the fourth quarter of 2013, compared to $86.8 million in the fourth quarter of 2012. Group short-term disability sales increased 17.9 percent to $54.6 million in the fourth quarter of 2013, compared to $46.3 million in the fourth quarter of 2012. Persistency in the group long-term disability line of business was 87.2 percent for full year 2013, compared to 90.7 percent for full year 2012. Persistency in the group short-term disability line of business was 88.0 percent for both full year 2013 and 2012.

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The group life and accidental death and dismemberment line of business reported operating income, including the adjustments related to the unclaimed death benefits reserve and the group life waiver reserve, of $98.3 million in the fourth quarter of 2013, compared to $55.1 million in the fourth quarter of 2012. Operating income excluding these adjustments was $62.4 million in the fourth quarter of 2013, with the increase over the prior year driven by growth in premium income and favorable risk experience. Premium income for this line of business increased 2.1 percent to $332.9 million in the fourth quarter of 2013, compared to $326.1 million in the fourth quarter of 2012, reflecting growth from sales, partially offset by lower persistency. The benefit ratio in the fourth quarter of 2013 was 59.2 percent and excluding the reserve adjustments previously noted was 70.0 percent, compared to 72.5 percent in the fourth quarter of 2012, reflecting more favorable mortality experience. Sales of group life and accidental death and dismemberment products increased 6.1 percent in the fourth quarter of 2013 to $100.6 million, compared to $94.8 million in the fourth quarter of 2012. Persistency in the group life line of business was 88.1 percent for full year 2013, compared to 90.6 percent for 2012.

The supplemental and voluntary line of business reported operating income, including the adjustment to the unclaimed death benefits reserve, of $59.5 million in the fourth quarter of 2013, compared to $83.6 million in the fourth quarter of 2012. Operating income excluding the reserve adjustment was $85.8 million in the fourth quarter of 2013, with the growth over the prior year driven by higher operating income in both the individual disability - recently issued and voluntary benefits lines of business. Premium income for supplemental and voluntary declined slightly to $277.0 million in the fourth quarter of 2013, compared to $277.7 million in the fourth quarter of 2012. The decline resulted from lower premium income from the individual disability - recently issued product line due to a reinsurance agreement entered into during the second quarter of 2013 to cede a small block of individual disability - recently issued business. The interest adjusted loss ratio for the individual disability - recently issued product line in the fourth quarter of 2013 declined to 30.7 percent from 32.0 percent in the fourth quarter of 2012, reflecting favorable claim incidence. The benefit ratio for voluntary benefits was 66.1 percent in the fourth quarter of 2013 and excluding the reserve adjustment previously noted was 49.8 percent in the fourth quarter of 2013 compared to 52.0 percent in the fourth quarter of 2012, also reflecting favorable risk experience. Sales in the individual disability - recently issued line of business increased 27.9 percent in the fourth quarter of 2013 to $15.6 million from $12.2 million in the prior year fourth quarter. Relative to the fourth quarter of 2012, sales in the voluntary benefits line of business declined 1.7 percent in the fourth quarter of 2013 to $40.4 million, compared to $41.1 million in the year ago quarter. Persistency in the individual disability - recently issued product line was 90.5 percent for full year 2013, compared to 91.4 percent for full year 2012. Persistency in the voluntary benefits product line was 77.0 percent for full year 2013, compared to 78.9 percent for 2012.

Unum is a provider of employee benefits products and services and a provider of disability insurance products in the United States and the United Kingdom.

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More information:

www.unum.com

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Copyright: (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.
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