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About Provident Life & Accident Insurance Company

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, supplemental health coverage, and life and accidental death and dismemberment insurance to individuals and groups. Its Colonial Life unit offers expanded cancer, critical illness, vision products, and dental insurance. Additional subsidiaries include Unum Life Insurance Company of America, Provident Life and Accident, First Unum Life, Colonial Life & Accident, and Paul Revere Life Insurance. The company operates as Unum Limited in the UK. Unum's products are sold through field sales agents and independent brokers.

Operations

About 65% 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 under the Unum America and Provident Brands.

The group's Colonial Life segment -- which offers accident, sickness, and disability products -- accounts for nearly 20% of sales, while the Unum UK segment represents more than 5% of sales.

Unum also generates revenue from its Closed Block segment (more than 10% of sales), which services policies in the long-term care and non-workplace individual disability segments, areas the company has exited.

The company covers roughly 36 million people worldwide and counts 193 businesses in the US and UK among its customers (including a third of the Fortune 500).

Geographic Reach

The US market contributes more than 60% of Unum's annual revenue. The company runs four primary operating centers (in Tennessee, Maine, Louisiana, South Carolina) and more than 35 sales offices scattered across the US. Its Unum Limited office in Dorking is the headquarters for the smaller Unum UK operations, which include Ireland. The company entered the Polish market in 2018 through its purchase of Pramerica Zycie.

Sales and Marketing

Unum uses its own sales force, as well as independent agents, consultants, and brokers, to market its products to employers.

Financial Performance

Unum's revenue has inched steadily upward for the past five years thanks to increases in net premiums written. Net income was also on the rise but took a steep dive in 2018.

Revenue rose 3% to $11.6 billion in 2018. Premiums in both the US and the UK rose as usual, but those gains were partially offset by a decrease in net investment income. (Results for the brand-new Polish operations were not material to the year's results.)

Net income fell 47% to $523.4 million in 2018. The decline was primarily due to a reserve increase related to the company's long-term care block of business.

The company ended 2018 with $94 million in net cash, about $17 million more than it had at the end of 2017. Operating activities provided $1.5 billion in cash while investing activities used $930 million and financing activities used another $589.8 million.

Strategy

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.

Specific goals include securing new customers, investing in growth that meets new demands of the market, and expanding into new geographic areas and distribution channels. Acquisitions play a part in reaching these goals. For example, Unum expanded its presence in Europe by acquiring Polish insurer Pramerica Zycie in 2018.

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 run-off) certain businesses where demand has slowed.

Like most insurers, Unum's profit margins have been negatively impacted by ongoing low interest rates. To minimize those effects, the company is gradually increasing its investment activities around alternative assets. 

Mergers and Acquisitions

In 2018 Unum acquired Pramerica Zycie, a Polish life insurer, from Prudential Financial for an undisclosed amount. That deal  allowed Unum to expand its European operations beyond the UK.

Also in 2018 the company acquired dental health maintenance organization Jaimini Health, broadening its dental offerings, especially in California.

Earlier that year Unum purchased Leavelogic, which provides leave management technology. That deal enhanced the firm's existing family leave management offerings for employers.

 

Company Background

Unum traces its roots back to the 1870s, when Provident Life & Accident Insurance was established to provide medical insurance to coal miners.

Provident Life & Accident Insurance Company

1 FOUNTAIN SQ STE 1
Chattanooga, TN 37402-1303
Phone: 1 (423) 755-1011

Stats

Employer Type: Privately Owned
Information Technology Manager: Bob Ballard
Vice President Internet Marketing: John Barnes
Director, Media Relations: Brad Carmony
Employees (This Location): 1,500
Employees (All Locations): 2,000

Major Office Locations

Chattanooga, TN

Other Locations

Glendale, CA
Atlanta, GA
Oakbrook Terrace, IL
Portland, ME
Southfield, MI
Charlotte, NC
Mount Laurel, NJ
Pleasantville, NY
King Of Prussia, PA
Spring, TX
Elm Grove, WI