Through injury or illness, Unum works to keep employees employed. A top disability insurer in the US and the UK, it offers short-term and long-term disability insurance, as well as life and accidental death and dismemberment insurance, to individuals and groups in a workplace benefits setting. Specialty coverage offerings include cancer, dental, and travel insurance. US subsidiaries include Unum Life Insurance Company of America, Provident Life and Accident, First Unum Life, Colonial Life & Accident Insurance, and The Paul Revere Life Insurance Company. It operates as Unum Limited in the UK. Unum's products are sold through field sales agents and independent brokers. In 2013, Unum paid out $5.5 billion in benefits.
More than 60% of Unum's annual premiums come from the Unum US segment, which offers group disability, life, and accident policies, as well as supplemental and voluntary policies sold in the workplace setting. The Colonial Life segment -- which offers accident, sickness, disability, and life products sold at the workplace -- accounted for 16% of sales in 2013, while the Unum UK segment represented some 10% of sales. Unum also generates revenue from its closed block business, which services policies in the runoff segments (long-term care, non-workplace individual disability) where the company no longer issues new policies.
The company covers 20 million people worldwide and counts 175,000 business in the US and the US among its customers.
The US market contributes about two-thirds of annual revenues. Unum runs four primary operating centers (in Tennessee, Maine, Massachusetts, and South Carolina) and about 35 sales offices scattered across the US market. Its Unum Limited office is the headquarters for the smaller Unum UK operations.
Sales and Marketing
The company strives to maintain close relationships with its sales force, as well as with its independent agents and brokers, as it relies on these representatives to market its products to employers.
While its overall revenue growth has been slow as of late -- which Unum primarily attributes to economic impacts on US employment levels -- the company believes its strategic restructuring measures will provide for an increase in future sales levels. In 2013, revenues fell a marginal 1% to $10.35 million. The decline was primarily caused by a reduction in premiums which occurred due to reinsurance agreements entered into to cede a portion of US individual disability product lines. Net investment income also declined that year.
Net income fell 4% to $858 million in 2013, due to an increase in commissions expenses as amortization of deferred acquisition costs and higher income tax rates. Cash flow from operations fell from $1.4 billion in 2012 to $1 billion in 2013 due to an increase in cash used in accounts receivable and for income taxes.
Unum seeks to achieve a competitive edge by providing group, individual, and voluntary workplace products that can be combined with other coverage to better integrate benefits for customers. The insurer has stayed ahead of the game in the disability market by sticking to conservative investment and growth strategies, primarily seeking to expand its group product offerings and its geographic presence through organic measures.
The company has especially seen growth in its voluntary benefits products, which allow employees to purchase individual coverage products on a supplemental basis. Such options are increasingly important as economic difficulties put pressure on low and middle-income workers. Unum has also expanded its offering of services to help employers and government agencies manage costs, such as its leave management program, flexible corporate contribution programs, and wellness initiatives.
While expanding in areas where the greatest market needs are seen, the firm also occasionally exits (or places into runoff) certain businesses where demand has slowed.
The company is focused on its infrastructure and employees with an aim towards simplifying products and processes. It hopes to expand into new markets and deepen coverage offerings while broadening employer relationships.