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A.M. Best Comments on Credit Ratings of Unum Group and Its Core U.S. Subsidiaries Following Announcement of Long-Term Care Review


A.M. Best has commented that the Credit Ratings (ratings) of Unum
(Unum) (headquartered in Chattanooga, TN) (NYSE:UNM) and its
insurance subsidiaries remain unchanged following the announcement that
the company will be accelerating its annual long-term care (LTC)
insurance reserve analysis, which is normally completed in the fourth
quarter. Subject to its completion, Unum may need to strengthen its LTC
reserves in the third quarter. Although the company is still assessing
its assumptions, management expects that any reserve strengthening will
predominately be on a GAAP basis and will not exceed $750 million after
tax. Unum also has announced that it will not repurchase any shares
until the reserve review is completed.

While the charge may erase a significant portion of Unum's annual
earnings on a GAAP basis, A.M. Best believes any impact on a statutory
basis will remain manageable, as the company currently maintains a
strong level of risk-adjusted capitalization and adequate liquidity
throughout the organization. A.M. Best notes that Unum held
approximately $1.16 billion of cash and short-term investments at the
holding company level as a capital buffer as of June 30, 2018, which
represents more than seven times its annual interest expense. In
addition, Unum has experienced favorable operating trends in its core
group life and long-term disability lines of business with very
favorable profitability metrics over the past several years, despite the
impact of the low interest rate environment and competitive market
conditions. However, should the level of statutory risk-adjusted
capitalization decline materially, it could result in a negative ratings

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
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