UPDATE: Deutsche Bank Initiates Unum Group at Buy; Balance Sheet Impairment Fears Overdone

Deutsche Bank initiated coverage on Unum Group

with a Buy rating. Deutsche Bank said, "The market is pricing in $1.4 billion in impairments. We believe that the fear is overblown. The $800 million delta between our worst-case estimate and consensus suggests 10% upside to book valuation. We note that the impairment susceptible business is the closed-block long-term care. With no associated DAC or goodwill, impairments would come from reserve strengthening, and $1.4 billion would amount to 20% strengthening of LTC reserves, mostly due to the interest rate environment." Unum Group closed at $21.60 on Tuesday.