A.M. Best Assigns Negative Outlook to Ratings of UnumProvident Corp.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 5, 2004 A.M. Best Co. has assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. a negative outlook to the financial strength ratings of A- (Excellent) of UnumProvident Corp.'s (Chattanooga, TN) (NYSE NYSE See: New York Stock Exchange : UNM UNM University of New Mexico UNM UnumProvident Corporation UNM Under New Management UNM United Nations Medal UNM User Name Mapping ) insurance subsidiaries. Concurrently, A.M. Best has assigned a negative outlook to the organization's debt ratings. (See below for a complete list of the ratings.) The rating action reflects A.M. Best's concerns regarding the recently announced $440 million pre-tax ($286 million after-tax) reserve strengthening. This latest round of reserve strengthening was unanticipated by A.M. Best. This charge is in addition to the $454 million pre-tax charge ($295 million after-tax) taken in March 2003. While all disability writers are being challenged in the current environment, UnumProvident seems to be having greater problems with claim incidence and recoveries. This lends some additional concern to A.M. Best, given UnumProvident's concentrated focus in income protection products and the continuing weakness in its core group long-term disability segment. Taking into consideration the continued weakness of the U.S. economy and low interest rate environment, A.M. Best believes UnumProvident will continue to report disappointing results across its income protection product portfolio in the near term. The financial strength ratings of the following subsidiaries of UnumProvident Corp. have been assigned a negative outlook: -- Unum Life Insurance Company of America -- Provident prov·i·dent adj. 1. Providing for future needs or events. 2. Frugal; economical. [Middle English, from Latin pr Life and Accident Insurance Company -- Paul Revere Revere, city (1990 pop. 42,786), Suffolk co., E Mass., a residential suburb of Boston, on Massachusetts Bay; settled c.1630, set off from Chelsea and named for Paul Revere 1871, inc. as a city 1914. Life Insurance Company -- Colonial Life & Accident Insurance Company -- First Unum Life Insurance Company -- Provident Life and Casualty Insurance Company -- Paul Revere Variable Annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. Insurance Company The following debt ratings have been assigned a negative outlook: UnumProvident Corporation-- -- "bbb-" senior debt -- "bb+" subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". -- "bb+" trust preferred -- "bb" preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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