Unum delivers strong operating results and customer focus as it expands footprint and portfolio, CEO McKenney tells shareholders at annual meeting

Business Wire 23-May-2019 11:30 AM

At the annual meeting of shareholders here today, Unum Group (NYSE:UNM) President and CEO Richard P. (Rick) McKenney offered perspective on a year of good operating results, profitable growth, and the expansion of both the company's geographic footprint and portfolio of products and services.

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Richard McKenney (Photo: Business Wire)

"We excelled at serving our customers who rely on us during some of life's most challenging times, and we continued to invest in creating a world-class customer experience," McKenney said. "We also continued our focus on social responsibility, principled governance and environmental stewardship. And, despite industry headwinds, we stayed the course on our capital plans."

In 2018, Unum had record revenues of $11.6 billion and paid more than $7 billion in benefits. The company delivered earnings per share growth of more than 21% and reported after-tax operating income of more than $1.1 billion, among other measures.

"We help protect more than 38 million workers and their families in the event of illness or injury through our disability, life, accident and critical illness coverage," McKenney said. "In addition, we have seen the benefits of disciplined growth in new dental products and dental insurance networks; launched easy-to-use digital tools that help customers easily access and manage their leave benefits and seamlessly integrate with existing HR platforms; introduced a new voluntary benefits offering in the U.K.; and expanded our geographic reach with the acquisition of Pramerica Zycie, a financial protection provider in Poland.

"With these opportunities in front of us, I am excited about where we are headed in 2019."

Separately today, Unum's board of directors authorized the repurchase of up to $750 million of the company's outstanding common stock through Nov. 23, 2020. This new authorization replaces the previous authorization of $750 million that was scheduled to expire on Nov. 24, 2019.

The board of directors also authorized an increase of 9.6 percent in the quarterly dividend paid on its common stock. The new rate of 28.5 cents per common share, or $1.14 per share on an annual basis, will be effective with the dividend expected to be paid in the third quarter of 2019.

Also at today's meeting, McKenney acknowledged the outstanding contributions of Chief Financial Officer Jack McGarry, who earlier this week announced he is retiring from the company in October. Steve Zabel, currently president of Unum's closed block of business, will succeed McGarry as CFO.

Among other voting items, Unum shareholders re-elected 11 directors for terms expiring in 2020: Theodore Bunting, retired group president of utility operations at Entergy Corporation; Susan Cross, former executive vice president and chief actuary of XL Group, Ltd.; Susan DeVore, president and CEO of Premier, Inc.; Joseph Echevarria, retired CEO of Deloitte LLP; Cynthia Egan, retired president of T. Rowe Price Retirement Plan Services; Kevin Kabat, chairman of the board of Unum Group and retired president and CEO of Fifth Third Bancorp; Timothy Keaney, former vice chairman of The Bank of New York Mellon Corporation; Gloria Larson, president of Bentley University; Rick McKenney, president and CEO of Unum Group; Ronald O'Hanley, president and COO of State Street Corporation; and Francis Shammo, retired CFO of Verizon Communications. Michael Caulfield, former president of Mercer Human Resource Consulting, retired from the board today.

ABOUT UNUM GROUP

Unum Group is a leading provider of financial protection benefits in the United States and the United Kingdom and the largest provider of disability income protection in the world. Its businesses are Unum US, Colonial Life, Unum UK, and Unum Poland. Unum's portfolio includes disability, life, accident and critical illness, dental and vision coverage, which help protect millions of working people and their families in the event of an illness or injury. Unum also provides stop-loss coverage to help self-insured employers protect against unanticipated medical costs. The company reported revenues of $11.6 billion in 2018, and provided $7.2 billion in benefits.

SAFE HARBOR STATEMENT

Certain information in this news release constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments and speak only as of the date made. These forward-looking statements, including statements about potential growth opportunity, are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. The following factors, in addition to other factors mentioned from time to time, may cause actual results to differ materially from those contemplated by the forward-looking statements: (1) sustained periods of low interest rates; (2) fluctuation in insurance reserve liabilities and claim payments due to changes in claim incidence, recovery rates, mortality and morbidity rates, and policy benefit offsets due to, among other factors, the rate of unemployment and consumer confidence, the emergence of new diseases, epidemics, or pandemics, new trends and developments in medical treatments, the effectiveness of our claims operational processes, and changes in governmental programs; (3) unfavorable economic or business conditions, both domestic and foreign, that may result in decreases in sales, premiums, or persistency, as well as unfavorable claims activity; (4) legislative, regulatory, or tax changes, both domestic and foreign, including the effect of potential legislation and increased regulation in the current political environment; (5) investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our liabilities; (6) a cyber attack or other security breach could result in the unauthorized acquisition of confidential data; (7) the failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cyber attack, or other event; (8) execution risk related to our technology needs; (9) increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors; (10) changes in our financial strength and credit ratings; (11) damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, external events, and/or inadequate or failed internal controls and procedures; (12) actual experience in the broad array of our products that deviates from our assumptions used in pricing, underwriting, and reserving; (13) changes in accounting standards, practices, or policies; (14) effectiveness of our risk management program; (15) contingencies and the level and results of litigation; (16) availability of reinsurance in the market and the ability of our reinsurers to meet their obligations to us; (17) ineffectiveness of our derivatives hedging programs due to changes in the economic environment, counterparty risk, ratings downgrades, capital market volatility, changes in interest rates, and/or regulation; (18) fluctuation in foreign currency exchange rates; (19) ability to generate sufficient internal liquidity and/or obtain external financing; (20) recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets; and (21) terrorism, both within the U.S. and abroad, ongoing military actions, and heightened security measures in response to these types of threats.

For further discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Part 1, Item 1A "Risk Factors" of our annual report on Form 10-K for the year ended December 31, 2017. The forward-looking statements in this news release are being made as of the date of this news release, and the Company expressly disclaims any obligation to update or revise any forward-looking statement contained herein, even if made available on our website or otherwise.

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