Kevin Kabat becomes board chairman as Tom Watjen retires
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--
At the annual meeting of shareholders today, Unum
(NYSE: UNM) CEO Richard P. (Rick) McKenney addressed the company’s
strong performance, industry leadership, and the growing need for the
financial protection Unum provides.
“2016 was an excellent year for us, continuing a strong track record of
success,” McKenney said. “We delivered on our promises to customers and
shareholders, while continuing to build on the strong Unum brand. The
result was one of the best years in our company’s history.”
“Most importantly,” he added, “we are strategically well-positioned now
and for the future as the need for our products and services is only
increasing.”
In 2016, Unum earned record revenues of nearly $11.1 billion and paid
approximately $6.9 billion in benefits. Over the course of the year,
Unum protected more than 35 million policyholders, helped 189,000
companies attract and retain employees, and assisted 327,000 people in
returning to work following a disability. Unum also achieved
historically high levels of customer and broker satisfaction, and made
strategic investments to support disciplined growth.
Additionally, McKenney noted that Unum’s total shareholder return has
outperformed its peers across multiple indices for the last decade.
“Unum has been a very good performer and an excellent long-term
investment during one of the most challenging economic periods in
memory,” he said. The company generated a 9.76% compound annual return
to shareholders from 2006 through 2016.
“Our mission now is to build on our company’s progress,” he added.
“Although much of the uncertainty from last year continues, we entered
2017 with strong momentum and remain intensely focused on the
disciplined execution of our business plan – and on serving the needs of
working people and their families throughout the U.S. and U.K.”
In discussing the company’s future, McKenney said the need for financial
protection benefits continues to grow.
“One in four U.S. workers between 20 and 50 years old will be out of
work at some point in their career due to a disability,” he said. “We
also know that 40% of families live paycheck-to-paycheck, and half would
have trouble coming up with the money to cover a $2,000 emergency. Yet
most striking of all, 70% of workers lack disability protection.”
To fill the void, Unum has invested heavily in understanding the best
potential coverage options for employees in different life stages.
“Today, there are four distinct generations working side-by-side,”
McKenney noted. “This trend affirms our true purpose of providing
financial security and peace of mind for an increasingly diverse
workforce. It also demands that we push beyond the one-size-fits-all
model and be certain our offerings are valuable for workers in any stage
of their careers.”
McKenney attributed the company’s consistent success to competitive
advantages in claims management, risk management and distribution, as
well as its singular focus on employee benefits.
“Creating new products, enhancing existing offerings, and finding new
ways to create great customer experiences ensure that we remain at the
forefront of the employee benefits market,” he said. “This helps to
emphasize a key differentiator for Unum: Delivering benefits at the
workplace is our sole business. That focus sets us apart from many of
our competitors.”
Also during today’s meeting, Thomas R. Watjen concluded his two-year
term as chairman of the board of directors, following 12 years as the
company’s CEO.
“It’s been an unbelievable privilege to have served as your CEO for over
a dozen years and as your chairman these past two years,” Watjen said.
“I’ll miss being part of this special company and group of people, but I
leave knowing that the company is on sound footing and in good hands.”
McKenney thanked Watjen for his instrumental role in shaping the company
and providing a solid foundation during his time as CEO and chairman of
the board. He also noted that Unum’s position as an industry leader is
stronger than ever, thanks in large part to Watjen’s vision and
leadership.
Kevin Kabat, who has served as the board’s Lead Independent Director
over the past year, becomes the new chairman of Unum’s board of
directors.
“We all have great confidence in Kevin’s ability to lead the board in
its oversight of the company,” McKenney said. “His experience on other
public company boards, as well as his leadership positions on this
board, make him an ideal candidate for this new role.”
Also at today’s meeting, Unum shareholders voted to re-elect 11
directors for terms expiring in 2018: Theodore Bunting, group president
of utility operations at Entergy Corporation; Michael Caulfield, former
president of Mercer Human Resource Consulting; Joseph Echevarria,
retired CEO of Deloitte LLP; Cynthia Egan, retired president of T. Rowe
Price Retirement Plan Services; Pamela Godwin, President of Change
Partners, Inc.; 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 CEO of State Street Global
Advisors and vice chairman of State Street Corporation; and Francis
Shammo, retired CFO of Verizon Communications. Edward Muhl, retired
national leader of PricewaterhouseCoopers LLP, has reached mandatory
retirement age and retired from the board today.
Separately today, Unum’s board of directors authorized an increase of 15
percent in the quarterly dividend paid on the company’s common stock.
The new rate of 23 cents per common share, or 92 cents per share on an
annual basis, will be effective with the dividend expected to be paid in
the third quarter of 2017. The board also authorized the repurchase of
up to $750 million of the company’s outstanding common stock through
Nov. 25, 2018, replacing the previous authorization of $750 million that
was scheduled to expire later this year.
ABOUT UNUM GROUP
Unum Group (www.unum.com)
is a leading provider of financial protection benefits in the United
States and the United Kingdom. Its primary businesses are Unum US,
Colonial Life, Starmount and Unum UK. 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
billion in 2016, and provided $6.9 billion in benefits.
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SAFE HARBOR STATEMENT
Certain information in this press 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 progress and momentum for 2017, 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
government programs; (3) unfavorable economic or business conditions,
both domestic and foreign; (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) increased competition from other insurers and
financial services companies due to industry consolidation, new entrants
to our markets, or other factors; (9) execution risk related to our
technology needs; (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 that deviates from our assumptions used in pricing,
underwriting, and reserving; (13) actual persistency and/or sales growth
that is higher or lower than projected; (14) changes in demand for our
products due to, among other factors, changes in societal attitudes, the
rate of unemployment, consumer confidence, and/or legislative and
regulatory changes, including healthcare reform; (15) effectiveness of
our risk management program; (16) contingencies and the level and
results of litigation; (17) availability of reinsurance in the market
and the ability of our reinsurers to meet their obligations to us; (18)
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; (19)
changes in accounting standards, practices, or policies; (20)
fluctuation in foreign currency exchange rates; (21) ability to generate
sufficient internal liquidity and/or obtain external financing; (22)
recoverability and/or realization of the carrying value of our
intangible assets, long-lived assets, and deferred tax assets; and (23)
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, 2016, and, to the extent
applicable, our subsequent quarterly reports on Form 10-Q. The
forward-looking statements in this press release are being made as of
the date of this press 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170525005691/en/
Unum Group
Investors:
Tom White, 423-294-8996
or
Media:
Jim
Sabourin, 423-294-6300 or 886-750-8686
Source: Unum Group