AM Best Affirms Credit Ratings of Unum Group and Its Core U.S. Subsidiaries
The ratings of the core
Unum’s strong balance sheet strength is supported through the organization’s continued profitability and quality investment portfolio. Unum continues to report strong operating results from its core ongoing insurance operations. Premium growth has been steady over the past five years, averaging about 4%. Loss ratios and persistency have been relatively stable, which has driven the organization’s steady operating earnings. Nevertheless, the company did have a reserve charge for its legacy long-term care (LTC) business during the third quarter of 2018. This charge had a material impact on the consolidated GAAP results for the year; however, the company still reported good results, with net income of more than
AM Best views Unum’s asset quality as good as investments are held mainly in investment grade fixed income securities. However, the company does have modest exposure to below investment grade bonds and commercial mortgage loans. Unum’s investment income has been relatively stable with modest impairments. The insurance operation’s liquidity is mainly supported by favorable operating cash flows. Additional financial flexibility is derived from holding company cash and investments, a
Unum maintains a leading market positions in the majority of its core product lines with a diverse nationwide distribution network. Additionally, the company continues to diversify its earnings stream with new product offerings and through growth in its dental and international businesses, which helps to deepen penetration and aid with client persistency. Unum’s enterprise risk management program is well-developed and incorporated into strategy and financial planning for the organization.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed with a stable outlook for the following core
-
Unum Life Insurance Company of America -
Provident Life and Accident Insurance Company -
The Paul Revere Life Insurance Company -
Colonial Life & Accident Insurance Company -
First Unum Life Insurance Company -
Provident Life and Casualty Insurance Company
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have been affirmed with a stable outlook for the following
-
Unum Insurance Company -
Starmount Life Insurance Company
The Long-Term ICR of “bbb” has been affirmed with a stable outlook for
The following Long-Term IR has been assigned with a stable outlook:
-- “bbb” on
The following Long-Term IRs have been affirmed with a stable outlook:
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bbb” on
-- “bb+” on
Provident Financing Trust I—
-- “bb+” on
The following indicative Long-Term IRs under the shelf registration have been affirmed with a stable outlook:
-- “bbb” on senior unsecured
-- “bbb-” on subordinated
-- “bb+” on preferred stock
Unum Group Financing Trust I and II—
-- “bb+” on preferred securities
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Source: AM Best
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