Fitch Ratings Affirms UnumProvident's IDR At 'BBB'; IFS At 'A-'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the debt and Insurer Financial Strength (IFS) ratings of UnumProvident Corporation (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 ) and its wholly owned insurance subsidiaries (see complete list below). The Rating Outlook is Stable. The rating action affects $2.6 billion of debt outstanding. UNM's ratings reflect the company's leadership position in the group income protection and employee benefits market and material progress in restructuring its business to improve profitability since 2003. Repositioning of the group business focused on a more disciplined approach to pricing, renewals and risk selection and on slowing the targeted growth rate. Restructuring of the individual business created a closed block for income protection business and focused new business sales of income protection and long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. sourced from a group or multi-life setting. UNM has increased diversification with a higher proportion of sales coming from the UK and worksite products and has improved business balance focusing away from large employers. Balance sheet risk has been reduced through reserve strengthening and writing off intangibles. The credit exposure in its investment portfolio has been significantly reduced and interest rate risk is better managed. Risk-based capital levels of its operating subsidiaries were at record levels and remain within Fitch's rating expectations. As a result of improved statutory earnings levels, holding company liquidity is improved. Also, UNM began to reduce financial leverage in 2006. Several key challenges remain and are focused on margin and ROE expansion and more consistency in operating results. While the pricing and underwriting issues in the group income protection segment appear to have been effectively addressed, the focal point focal point n. See focus. for improvement in the benefits ratio is the benefits operation, which has underperformed in recent periods. While a plan has been developed to address improvement in claims recovery and claims acceptance rates, Fitch believes this effort represents a considerable challenge that requires a careful balance of resource deployment, service quality assurance as well as customer relationship and personnel management. Fitch's expects profitability to continue to improve in 2006 and will be closely watching progress in the benefits operations area. Although progress there is likely to be slow to materialize, strong performance is expected to continue from targeted segments such as supplemental and voluntary, and the Unum Limited and Colonial business segments. Based in Chattanooga, Tennessee, UnumProvident Corp. is the nation's largest provider of group and individual disability insurance. UNM reported total assets of $50.4 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $7 billion at June 30, 2006. The following ratings are affirmed with a Stable Outlook by Fitch: UnumProvident Corp. --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) 'BBB'; --7.625% notes due March 1, 2011 'BBB-'; --7% notes due July 15, 2018 'BBB-'; --7.25% notes due March 15, 2028 'BBB-'; --6.75% notes due Dec. 15, 2028 'BBB-'; --7.375% notes due June 15, 2032 'BBB-'; --7.25% notes due June 15, 2032 'BBB-'; --8.25% adjustable conversion equity units 'BB+'. Provident Financing Trust I --7.405% junior subordinated capital securities 'BB+'. UnumProvident Finance Company plc, --6.85% senior notes due Nov. 15, 2015 'BBB-'. UnumProvident Group members: Unum Life Insurance Company of America Provident Life & Accident Insurance Company Provident Life and Casualty Insurance Company The 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 The 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 First Unum Life Insurance Company Colonial Life & Accident Insurance Company --Insurer financial strength (IFS) 'A-'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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