Unum

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For other uses, see Unum (disambiguation).
Unum
Type Public
Traded as NYSEUNM
S&P 500 Component
Industry Employee benefits (disability, life and critical illness insurance)
Founded Tennessee
Headquarters Chattanooga, Tennessee
Key people Thomas R Watjen, President and CEO
Bill Ryan, Chairman of the Board;
Rick McKenney, CFO
Revenue $10.35 billion (2013)[1]
Net income $858.1 million (2013)[1]
Employees 9,200 (2013)[1]
Website www.unum.com

Unum Group NYSEUNM is a Chattanooga, Tennessee-based Fortune 500[2] insurance company formerly known as UnumProvident.[3] Unum Group was created by the 1999 merger of Unum Corporation and The Provident Companies[3] and comprises three distinct businesses — Unum US, Unum UK, and Colonial Life. Its underwriting insurers include The Paul Revere Life Insurance Company and Provident Life and Accident Insurance Company.[1] Unum is the top disability insurer in both the United States and United Kingdom[4] and also offers other insurance products including accident, critical illness and life insurance.[5]

As of December 2013, Unum had 9,200 full-time employees and annual revenue of $10.35 billon.[1] Thomas Watjen has led Unum as its CEO since 2003.[6]

History[edit]

Early History: Unum Corporation[edit]

Union Mutual Life Insurance was incorporated in 1848 in Maine.[7] The company issued its first policy, which covered the life of founder and company president Elisha B. Pratt for $5000, on October 1, 1849.[7] Union Mutual's principal office at the time was located in Boston, Massachusetts, where Pratt resided.[7][8] Union Mutual remained headquartered in Boston until 1881, when the state of Maine passed a law that required the principal office and headquarters of all insurance companies incorporated by the state to be located within the state.[7] The company relocated to Portland, Maine.[7][8]

In 1940, the company acquired most of Massachusetts Accident Company's health and accident insurance business.[8] The acquisition was Union Mutual's first expansion beyond individual life and endowment insurance.[8][9] In 1969, Union Mutual established the insurance industry's first downstream holding company, which facilitated the company's continued expansion and diversification.[10][11] Union Mutual also established its group disability business in the 1960s.[8][9] Group disability would become the company's flagship product.[12][13]

Union Mutual became the first major mutual insurance company to demutualize in 1986.[8] Company CEO Colin Hampton had been pushing for demutualization since 1970 and the company formally began the process of converting to a publicly held company in January 1985.[8][14] Union Mutual, now renamed Unum, began trading on the New York Stock Exchange in November 1986.[10]

The company also began selling off underperforming businesses during the 1980s.[8] From 1982 to 1990, Unum abandoned many insurance products, including medical insurance, individual life insurance, general investment contracts, and individual annuities and pensions.[8] Under the leadership of then-CEO James Orr, the company turned its focus to long-term group disability insurance.[8]

In March 1990, Unum acquired National Employers Life Assurance Holdings, which at the time was the United Kingdom's largest disability insurer.[15] The company later acquired Duncanson & Holt, a reinsurer and insurance underwriter for the accident and health insurance sectors.[16] In 1993, Unum acquired the Colonial Companies, parent company of Colonial Life & Accident Insurance Company.[17] Colonial focused on individual insurance products, including accident, cancer and life insurance policies.[17] Unum began offering individual disability policies under the Unum brand once again in 1995.[8]

Early History: The Provident Companies[edit]

The Provident Companies was founded in Chattanooga, Tennessee in May 1887 as Mutual Medical Aid and Accident Insurance Company. The company originally specialized in providing both medical-aid and accident insurance to employees in high-risk industries, including miners and coal workers.[18] Within a few months, the company’s founders became concerned that a single disease epidemic would bankrupt the company. Mutual Medical Aid and Accident purchased back all outstanding medical-aid policies and reincorporated as Provident Accident Insurance Company. Provident only issued accident policies.

In 1892, Thomas Maclellan and John McMaster purchased a 50% stake in the company for $1000. The two men purchased the remaining 50% equity in 1895 and Mclellan was the company's sole owner and president by 1900.[18] Maclellan reorganized the company from being mutually held to a stock company in 1910.

Thomas Maclellan served as president of Provident until he was struck by an automobile and unexpectedly died 1916.[19] Robert Maclellan, the son of Thomas, assumed the presidency of Provident following his father's death.[19][20] Provident began selling life insurance the following year, in 1917, and the first life insurance policy issued by the company covered Robert Maclellan's life.[20] The company also began offering railroad insurance.[20]

Provident wrote its first group policy in 1924. The company expanded its operations with its 1926 acquisition of Detroit, Michigan-based Standard Accident Company. Provident operated in 34 states by 1928. It also acquired Southern Surety Company in 1931 and Meridian Insurance of West Virginia in 1938.[20] The company expanded into Canada in 1948.[20]

In November 1993, J. Harold Chandler became president and chief executive officer of Provident.[21] Chandler had previously served as a senior executive at NationsBank.[21] Chandler initiated a company-wide restructuring at Provident, which included the 1995 sale of its health-related business to Healthsource for $231 million.[22] Provident also increased its focus on individual disability and life policies with the 1997 acquisition of the Paul Revere Corporation, a Worcester, Massachusetts-based provider of individual disability insurance, from Textron for $1.2 billion.[23] The purchase of Paul Revere made Provident the nation's largest provider of individual disability policies.[23]

Unum Group (1999 — present)[edit]

Unum and Provident announced their intention to merge in November 1998.[12] When the merger was completed in 1999, the new company, named UnumProvident, was the United States' largest disability insurance provider.[24] Then-Unum chairman and chief executive James Orr was retained in as chairman and CEO of UnumProvident, which was headquartered in Portland, Maine.[24]

Company Chief Operating Officer J. Harold Chandler, who had served as Provident's chief executive prior to the merger, succeeded Orr as UnumProvident CEO in November 1999.[25] The company sold Provident National Assurance, a holding company for its life insurance and variable annuity business, to Allstate in 2001.[26] In 2002, UnumProvident relocated its headquarters from Portland, Maine to Chattanooga, Tennessee.[27] The former Provident Companies was headquartered in Chattanooga.[27]

UnumProvident acquired Sun Life Financial's United Kingdom-based group insurance business in 2003.[28] Thomas Watjen replaced Orr as UnumProvident’s chief executive later that year.[6] The company also sold its Japanese and Argentine businesses.[28]

In 2007, UnumProvident was renamed Unum.[29] The Unum moniker was last used by the Unum Corporation prior to the 1999 merger.[29] In 2012 and 2013, Unum partnered with the Consumer Federation of America to release reports which examined the use of disability insurance by American workers.[30][31] According to numbers released by the Bureau of Labor Statistics that were cited by the report, two-thirds of American workers do not carry disability insurance policies.[32] In addition, the report found that, among other things, workers know little about disability insurance, despite expecting financial hardship if they were to become unable to work.[30][31]

Corporate Structure[edit]

Unum Group's Massachusetts headquarters at One Mercantile Place in downtown Worcester, Massachusetts

Unum is headquartered in Chattanooga, Tennessee.[1] The company has additional offices in Portland, Maine; Columbia, South Carolina; Worcester, Massachusetts; Glendale, California; and Dorking, England.[1] Thomas Watjen has served as Unum president and chief executive since 2003.[6] William Ryan is the company's chairman.[33]

Unum is divided into three business segments: Unum US, Unum UK and Colonial Life.[1] It provides disability insurance, as well as group benefits, life insurance and other services.[5][34]

Corporate responsibility[edit]

Unum supports corporate responsibility programs in four categories: community involvement, diversity, public policy, and green initiatives.[35] Unum's global charitable giving topped $13.5 million in 2013, including 100,000 volunteer hours logged by company employees.[36]

Awards[edit]

  • Forbes' America's 100 Most Trustworthy Companies 2013[37]
  • Forbes' America's Most Reputable Companies 2012-2013[37][38]
  • Newsweek's Green Companies 2012[39]
  • Center for Political Accountability recognition 2011[40]
  • Dow Jones Sustainability North American Index 2010-2012[41]
  • Human Rights Campaign Corporation Index 2009-2011[42][43][44]
  • UK Corporate Adviser Awards - Best Group Risk Provider 2012-2013[41]
  • UK Health Insurance Awards - Best Group Risk Provider 2011-2012[41]
  • UK Cover Excellence Awards – Best Group Income Protection 2011[41]

Controversies[edit]

In 2002, Unum received negative attention when several plaintiff's attorneys claimed that the company denied long-term disability insurance claims.[45] Unum stated that "only 2% of the policyholders who filed a claim with the company last year [2001] were found not to be disabled, an amount consistent with prior experience."[46]

In 2004, Unum entered into a regulatory settlement agreement (RSA) with insurance regulators in over 40 states.[47] The settlement related to Unum's handling of disability claims and required the company "to make significant changes in corporate governance, implement revisions to claim procedures and provide for a full re-examination of both reassessed claims and disability insurance claim decisions after the January 2005 effective date of the RSA."[48] The review was completed and a final report issued in April 2008.[48] Mila Kofman, the Maine Superintendent of Insurance, said, "The strong new processes and the resulting change in corporate culture – measured by the very low rate and in some cases the 0% error in claim determinations is remarkable," and that Unum had become "a model for other insurers."[49]

Since 1994, Unum has been advising the United Kingdom government on claims. The company has been involved with the UK's controversial Welfare Reform Bill.[50][51] Unum was investigated by the BBC in England.[52]

See also[edit]

References[edit]

  1. ^ a b c d e f g h "Unum Group 10-K". United States Securities & Exchange Commission. 2013. Retrieved 18 May 2014. 
  2. ^ "Unum Group". Fortune. Retrieved 18 May 2014. 
  3. ^ a b Edward D. Murphy (17 January 2007). "Unum Provident's new name has familiar ring to it: Unum ; A relaunch of the company returns to the Maine name used before a 1999 merger". Portland Press Herald. 
  4. ^ "Unum Group Company Information". Hoovers. Retrieved 18 May 2014. 
  5. ^ a b "Unum Group". Forbes. Retrieved 18 May 2014. 
  6. ^ a b c Edward D. Murphy (1 October 2003). "New chief pledges to rebuild trust in insurer ; UnumProvident's Portland office remains key, Thomas Watjen says". Portland Press Herald. 
  7. ^ a b c d e Chamber of Commerce Journal of Maine 17. 
  8. ^ a b c d e f g h i j k Jay P. Pederson, ed. (2012). "Unum Group". St. James Press 137. pp. 495–504. 
  9. ^ a b "Unum's First 150 Years". Portland Press Herald. 24 November 1998. 
  10. ^ a b Lynn Brenner (31 March 1987). "Union Mutual Likes Its Change into Publicly Held Unum Life". American Banker. 
  11. ^ "Financial Resource Management, Mutual Companies" 3 (1). Record of Society of Actuaries. 1997. Retrieved 18 May 2014. 
  12. ^ a b Dean Lunt (24 November 1998). "Unum, Provident will merge The insurance giant will exploit the strengths of each company and their differing client niches". Portland Press Herald. 
  13. ^ Joseph B. Treaster (24 November 1998). "2 Leading U.S. Disability Insurers Plan Merger". The New York Times. Retrieved 18 May 2014. 
  14. ^ Thomas Watterson (11 February 1995). "Old-line mutual insurer shifting to shareholder-owned". The Christian Science Monitor. Retrieved 18 May 2014. 
  15. ^ Mark Downing (4 October 1990). "Unum TO retain NEL Permanent Health Insurance and hive off the rest OF National Employers Life Assurance". Post Magazine. 
  16. ^ "Business Briefs". The Wall Street Journal. 3 August 1992. 
  17. ^ a b "Company News; Unum to Buy Colonial in $570 Million Stock Deal". The New York Times. 5 December 1992. 
  18. ^ a b "Maclellan Building". The Tennessee Encyclopedia of History and Culture. Retrieved 18 May 2014. 
  19. ^ a b "Maclellans Have Long Been Associated With Provident Insurance". The Chattanoogan. 24 June 2005. Retrieved 18 May 2014. 
  20. ^ a b c d e "History". Hoovers. Retrieved 18 May 2014. 
  21. ^ a b "Provident Life & Accident Insurance Co.". The Wall Street Journal. 11 November 1993. 
  22. ^ "Health Brief -- Healthsource Inc.: Provident Life Businesses Acquired for $231 Million". The Wall Street Journal. 2 June 1995. 
  23. ^ a b Kelly Russell (25 August 1997). "Disability insurance competitors join forces to capture nearly half of country's market". Mississippi Business Journal. 
  24. ^ a b Mike Pare (30 June 1999). "Chattanooga, Tenn.-Based Insurer Provident to Finalize Merger with Unum". KRTBN Knight-Ridder Tribune Business News: Chattanooga Times/Free Press - Tennessee. 
  25. ^ Dean Lunt (2 November 1999). "UnumProvident CEO Orr exits early James F. Orr III, widely credited with building the firm, leaves in a trouble-filled time". Portland Press Herald. 
  26. ^ "Lake County Briefs". Chicago Daily Herald. 10 February 2001. 
  27. ^ a b "In Brief". The Knoxville News-Sentinel. 9 January 2002. 
  28. ^ a b "In Brief: Sun Life Closes Sale Of Its U.K. Group Biz". American Banker. 4 March 2003. 
  29. ^ a b Bill Poovey (16 January 2007). "Insurer UnumProvident shortening its name to Unum". 
  30. ^ a b Ann Carrns (1 May 2012). "Most Workers Lack Disability Insurance, Survey Finds". The New York Times. Retrieved 18 May 2014. 
  31. ^ a b Dave Flessner (24 September 2013). "Study shows critical need for workplace disability insurance". Times Free Press. Retrieved 18 May 2014. 
  32. ^ "Employee Benefits Survey". United States Department of Labor. Retrieved 18 May 2014. 
  33. ^ "Officers & Employees". Hoovers. Retrieved 18 May 2014. 
  34. ^ "Overview". Hoovers. Retrieved 18 May 2014. 
  35. ^ "Responsibility". Unum Group. Retrieved 18 May 2014. 
  36. ^ "Unum Group’s Charitable Giving Tops $13 Million In 2012". The Chattanoogan. 30 January 2013. Retrieved 18 May 2014. 
  37. ^ a b Jacquelyn Smith (4 April 2012). "America's Most Reputable Companies". Forbes. Retrieved 18 May 2014. 
  38. ^ Jacquelyn Smith (24 April 2013). "America's Most Reputable Companies". Forbes. Retrieved 18 May 2014. 
  39. ^ "Green Rankings 2012: U.S. Companies". Newsweek. Retrieved 18 May 2014. 
  40. ^ "CPA Hits Milestone as 85 Companies Adopt Political Disclosure and Accountability". Center for Political Accountability. Retrieved 18 May 2014. 
  41. ^ a b c d "Awards & recognition". Unum Group. Retrieved 18 May 2014. 
  42. ^ "Corporate Equality Index". Human Rights Campaign Foundation. 2009. 
  43. ^ "Corporate Equality Index". Human Rights Campaign Foundation. 2010. Retrieved 18 May 2014. 
  44. ^ "Corporate Equality Index". Human Rights Campaign Foundation. 2011. Retrieved 18 May 2014. 
  45. ^ Gosselin, Peter G. (3 October 2005). "State Fines Insurer, Orders Reforms in Disability Cases". Los Angeles Times. Tribune Company. Retrieved 27 December 2009. 
  46. ^ "UnumProvident Rebuffs Recent Media Allegations; Calls Attention to Facts". UnumProvident. 18 November 2002. Retrieved 1 February 2007. 
  47. ^ "States approve UnumProvident deal ; Forty states agree to the settlement, more than enough to put it into effect, the company says". Portland Press Herald. 22 December 2004. 
  48. ^ a b "Division of Insurance Completes Review of Unum Group Disability Claims Payments, Returns $13 Million to Massachusetts Consumers". US Fed News. 15 April 2008. 
  49. ^ "UNUM Landmark Multi-State Settlement Agreement and Examinations Concluded". Department of Professional & Financial Regulation. Retrieved 18 May 2014. 
  50. ^ Loukas Christodoulou Welfare or Wealth Care? Corporate Watch May 14, 2007
  51. ^ Jonathan Rutherford New Labour and the end of welfare, Compass Online April 25, 2007
  52. ^ "'Rogue' firm advising in UK", BBC, June 6, 2007