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]

Unum became the focus of massive negative media attention in 2002, after several plaintiff's attorneys who had sued the company went to national television outlets claiming that the company had quotas for closing claims. CBS's 60 Minutes aired a very devastating article about Unum's alleged abuses. Among their proof was a notorious "Hungry Vulture Award" offering employee rewards to close claims. Due to its admitted unfair business practices, investigations, and fines, Unum was called an "Outlaw Company" by the former California Insurance Commissioner, John Garamendi[45] (who later became Lieutenant Governor). Unum attempted to counter the accusations by noting 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," and that court judgments in the prior year were in the company's favor 75% of the time, however no attempt was made to clarify the short term vs. long term statistics.[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]

Advising the United Kingdom government on claims since 1994, Unum has been involved with the UK's controversial Welfare Reform Bill.[50][51] Unum was investigated by the BBC in England[52] and were described by critics as a 'rogue firm'.[53][verification needed]

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. "'UnumProvident is an outlaw company. It is a company that for years has operated in an illegal fashion,' said California Insurance Commissioner John Garamendi." 
  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. ^ BBC Reporting Scotland 6pm November 6th 2007
  53. ^ "'Rogue' firm advising in UK", BBC, June 6, 2007