Unum Group Reports Third Quarter 2007 Results

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Unum Group (NYSE: UNM) announced today its consequences for the 3rd one-fourth
of 2007. The Company reported nett income of $187.0 million ($0.52 per
diluted common share), compared to a nett loss of $63.7 million ($0.19
per diluted common share) for the 3rd one-fourth of 2006.

Included in the consequences for the 3rd one-fourth of 2007 are nett realized
after-tax investing losings of $30.0 million ($0.08 per diluted common
share), compared to nett realized after taxation investment additions of $3.1
million ($0.01 per diluted common share) in the 3rd one-fourth of 2006. Net realized investing losings for the 3rd one-fourth of 2007 include
after-tax losses of $18.0 million related to to to alterations in the just values
of the embedded derived functions in certain modified coinsurance contracts
and after-tax losses of $12.0 million related to write-downs of certain
investings which the Company no longer have the purpose to throw to
adulthood owed to alterations in the working working capital demands resulting from the
reinsurance dealing involving the Individual Income Protection –
Closed Block section and the Company’s related
capital redisposition plans. Results for the 3rd one-fourth of 2006
included an addition in the claim reappraisal modesty of $325.4 million
before tax, or $211.5 million after taxation ($0.62 per diluted common share)
and $18.5 million before tax, or $12.7 million after taxation ($0.04 per
diluted common share), for the colony understanding concerning the
Company’s agent compensation practices.

Adjusting for the several aforesaid items, income from
continuing trading operations on an after-tax basis was $217.0 million ($0.60
per diluted common share) in the 3rd one-fourth of 2007, compared to
$155.8 million ($0.46 per diluted common share) in the 3rd one-fourth of
2006.

“The 3rd one-fourth goes on a tendency of
steadily improving operating public presentation that began in early 2006,”
said Seth Thomas R. Watjen, president and main executive director officer. “I'm
pleased to state that all three of our concerns made important
parts during the quarter, as both Colonial and Unum United Kingdom once
again delivered outstanding consequences and Unum United States continued
to accomplish consistent, solid improvement in its operating performance. Based on the consequences for this and the past respective quarters, it's unclutter
our scheme is working.

As our public presentation have improved, we've transitioned from a company that
just a few old age ago needful to raise working working capital to one that now bring forths
capital. The successful completion of the securitization of our
Individual Income Protection – Closed Block
concern we announced today speed ups the gait of working capital coevals
at the Company. As a result, we have got formalized our working capital direction
strategy, and with this in head I'm pleased to state that our board of
managers have authorized the redemption of up to $700 million of our
common stock.”

consequences BY SEGMENT

In the followers treatments of the Company’s
operating section results, “operating revenue”
excepts nett realized investing additions and losses. “Operating
income” Oregon “operating
loss” excepts income taxation and nett realized
investing additions and losses.

Unum United States Segment

Unum United States reported operating income of $164.3 million in the 3rd one-fourth
of 2007, compared to an operating loss of $173.2 million in the 3rd
one-fourth of 2006. Included in the consequences for the 3rd one-fourth of 2006
is a claim reappraisal complaint of $291.4 million. Excluding this charge,
income for the section was $118.2 million for the 3rd one-fourth of 2006. Premium income declined 1.8 percentage to $1,255.3 million in the 3rd
one-fourth of 2007, from $1,278.6 million in the 3rd one-fourth of 2006.

Within Unum US, the grouping income protection line of concern reported
operating income of $50.4 million in the 3rd one-fourth of 2007, compared
to an operating loss of $275.0 million in the 3rd one-fourth of 2006. Results for the 3rd one-fourth of 2006 include a claim reappraisal
complaint of $291.4 million in 2006. Excluding the charge, operating income
was $16.4 million for the 3rd one-fourth of 2006. The benefit ratio for
the 3rd one-fourth of 2007 was 92.1 percent, compared to 139.4 percentage in
the 3rd one-fourth of 2006, or 94.5 percentage excluding the complaint taken in
the 3rd one-fourth of 2006. The improvement in the benefit ratio
goes on to be driven by improvements in the claims direction procedure
along with a decrease in paid claims in both the grouping long-term and
short-term income protection lines of concern relation to the 3rd
one-fourth of 2006. Premium income in grouping income protection declined 3.6
percentage to $593.3 million in the 3rd one-fourth of 2007, compared to
$615.7 million in the 3rd one-fourth of 2006. The diminution goes on to be
attributable to the Company’s disciplined
attack to pricing, renewals, and hazard selection. Gross Sales of fully
insured grouping long-term income protection merchandises in the 3rd one-fourth
of 2007 decreased by 5.9 percentage to $23.9 million, compared to $25.4
million in the twelvemonth ago quarter. Gross Sales of fully insured grouping short-term
income protection merchandises declined by 13.3 percentage to $8.5 million in
the 3rd one-fourth of 2007, compared to $9.8 million in the 3rd one-fourth
of 2006. Premium doggedness in the grouping long-term income protection
line of concern was 84.9 percentage through the 3rd one-fourth of 2007,
compared to 87.5 percentage in the first nine calendar months of 2006. Lawsuit
doggedness for this line was 88.1 percentage for the first nine calendar months of
2007, compared to 86.9 percentage for the comparable twelvemonth ago period. Premium doggedness in the grouping short-term income protection line of
concern was 75.5 percentage for the first nine calendar months of 2007, compared to
85.3 percentage for the comparable time period in 2006. Lawsuit doggedness for the
line was 87.1 percentage for the first nine calendar calendar months of 2007, compared to
85.8 percentage in the first nine months of 2006.

The grouping life and accidental decease and taking apart line of concern
reported a 30.7 percentage addition in operating income to $56.2 million in
the 3rd one-fourth of 2007, compared to $43.0 million in the 3rd
one-fourth of 2006. Results for the line go on to reflect a less claim
relative relative incidence charge per unit in grouping life, outweighing a higher degree of incidence in
the accidental decease and taking apart line during the quarter. Premium
income for this line of concern declined 6.4 percentage to $309.6 million
in the 3rd one-fourth of 2007, compared to $330.6 million in the 3rd
one-fourth of 2006, continuing to reflect the Company’s
in progress under control attack to pricing, renewals, and hazard selection. Gross Sales of grouping life merchandises in the 3rd one-fourth of 2007 declined 2.3
percentage to $17.3 million, compared to $17.7 million in the 3rd one-fourth
of 2006. Premium doggedness in the grouping life line of concern was 79.3
percentage for the first nine calendar months of 2007, compared to 80.3 percentage for
the comparable time period in 2006. Lawsuit doggedness for the first nine
calendar months of 2007 was 87.2 percentage and for the comparable time period in 2006
was 86.5 percent.

The Unum United States auxiliary and voluntary lines of concern reported a 1.9
percentage lessening in operating income to $57.7 million in the 3rd
one-fourth of 2007, compared to $58.8 million in the 3rd one-fourth of 2006. Premium income for auxiliary and voluntary lines increased 6.0
percentage to $352.4 million in the 3rd one-fourth of 2007, compared to
$332.3 million in the 3rd one-fourth of 2006. Gross Sales in the voluntary
workplace benefits line of concern increased 11.0 percentage in the 3rd
one-fourth of 2007, gross gross sales in the individual income protection –
recently issued line increased 7.8 percent, and long-term care sales
increased 23.8 percentage compared with the twelvemonth ago quarter.

Unum United Kingdom Segment

Unum United Kingdom reported operating income of $101.0 million in the 3rd one-fourth
of 2007, a 54.2 percentage increase, compared to $65.5 million in the 3rd
one-fourth of 2006. Operating income benefited from a diminution in the
benefit ratio to 53.3 percentage in the 3rd one-fourth of 2007, compared to
67.2 percentage in the 3rd one-fourth of 2006. The less benefit ratio for
the current one-fourth was primarily the consequence of a 3rd one-fourth 2007
accommodation to long-term assumptions for claim militia owed to emerging
experience and the Company’s position of future
events. The accommodation increased 3rd one-fourth section operating income
by approximately $16.6 million. Advantageous currency exchange rates
continued to profit reported consequences for the segment. In local
currency, operating income for the 3rd one-fourth of 2007 increased 43.3
percentage from the 3rd one-fourth of 2006. Premium income increased 12.7
percentage to $247.6 million in the 3rd one-fourth of 2007, compared to
$219.7 million in the 3rd one-fourth of 2006. In local currency, insurance premium
income increased 4.5 percentage compared to the 3rd one-fourth of 2006. Gross Sales decreased 12.6 percentage to $22.2 million in the 3rd one-fourth of
2007, compared to $25.4 million in the 3rd one-fourth of 2006. In local
currency, gross sales for the 3rd one-fourth of 2007 decreased 18.5 percentage
compared to the 3rd one-fourth of 2006.

Colonial Segment

Colonial reported a 20.0 percentage addition in operating income to $62.5
million in the 3rd one-fourth of 2007, compared to $52.1 million in the
3rd one-fourth of 2006. Results in the 3rd one-fourth of 2007 were driven
by continued advantageous claims experience across all major merchandise lines:
income protection, life, and malignant neoplastic disease and critical illness. The benefit
ratio in the 3rd one-fourth of 2007 was 48.6 percent, compared to 52.6
percentage for the same time period in 2006. The Colonial operating section
continued to construct on its merchandise portfolio with the introduction of two
new products: Checkup Bridge 3000 in the 3rd one-fourth of 2007 and
Colonial Health Advantage early in the 4th quarter. Premium income
for the 3rd one-fourth of 2007 increased to $227.0 million, compared to
$212.8 million in the 3rd one-fourth of 2006. Gross Sales increased 2.2 percentage
to $74.5 million in the 3rd one-fourth of 2007 from $72.9 million in the
3rd one-fourth of 2006. New business relationships increased 7.0 percentage in the 3rd
one-fourth of 2007 compared to the 3rd one-fourth of 2006. Average weekly
manufacturers increased 4.2 percentage in the 3rd one-fourth of 2007 compared to
the 3rd one-fourth of 2006, while norm weekly insurance premium per agent
decreased 2.0 percent.

Person Income Protection –
Closed Block Segment

The Individual Income Protection – Closed
Block section reported operating income of $29.4 million in the 3rd
one-fourth of 2007, compared to a loss of $5.3 million in the 3rd one-fourth
of 2006. Results for the 3rd one-fourth of 2006 include a claim
reappraisal complaint of $34.0 million. Excluding this charge, operating
income for the section was $28.7 million in the 3rd one-fourth of 2006. The involvement adjusted loss ratio for the section was 92.4 percentage in the
3rd one-fourth of 2007, compared to 106.2 percentage in the anterior twelvemonth 3rd
quarter. Excluding the claim reappraisal complaint in the 3rd one-fourth
2006, the ratio was 93.0 percentage in the twelvemonth ago quarter.

Other Segment

The Other section reported operating income of $3.6 million in the 3rd
one-fourth of 2007, compared to $7.8 million in the 3rd one-fourth of 2006.

Corporate Segment

The Corporate segment, which includes investing net income on corporate
assets not specifically allocated to a line of business, corporate
involvement expense, and certain other corporate expenses, reported a loss
of $35.7 million in the 3rd one-fourth of 2007, compared to a loss of
$49.1 million in the 3rd one-fourth of 2006. The consequences for 2006 include
the $18.5 million complaint related to the agent compensation colony
agreement. Interest disbursal in the 3rd one-fourth 2007 was $43.9 million,
compared to $44.2 million in the 3rd one-fourth of 2006.

OTHER INFORMATION

Securitization Transaction Announced

In a separate proclamation issued today, Unum Group announced the
completion of the securitization of its closed block of individual
income protection militia with the private offering of $800.0 million
of floating charge per unit insured short letters owed December 1, 2037, by the Company’s
wholly-owned subordinate Northwind Holdings, LLC (Northwind Holdings). The dealing included the intercompany reinsurance of $11.1 billion
of statutory reserves, representing approximately 95 percentage of the
Individual Income Protection – Closed Block
segment, to Northwind Reinsurance Company (Northwind Re), a newly formed
particular intent fiscal prisoner coverage company domiciled in Green Mountain State
and owned by Northwind Holdings. With the hazard transportation to Northwind Re,
the Company’s traditional U.S. coverage
subordinates will let go of extra statutory working capital previously supporting
this reinsured closed block business. The surplus working capital will be
transferred to Unum Group from the ceding companies through
extraordinary dividends. This working working capital construction will let the Company
to go on to fully back up the hazard profile of this closed block of
concern while allowing for redisposition of extra capital to other
uses. The redisposition is expected to construct further value and
fiscal strength to the benefit of Unum Group’s
policyholders, shareholders, and creditors.

Capital Management Scheme
Announced

In response to numerous inquiries from investors on the Company’s
purposes for utilizing any surplus capital, it have recently formalized
its working working capital direction ends and objectives. The first precedence is to
keep sufficient fiscal flexibleness to back up its trading operations over
assorted economical rhythms and to react to chances in the
marketplace while placement the Company for improvements in its recognition
ratings. It have put in topographic point respective fiscal marks which will steer
its working capital direction determinations including: Keep a hazard based working capital ratio of 300 percentage or greater for its
traditional U.S. coverage subsidiaries. This is to be measured on a
weighted-average basis using the NAIC Company Action Degree formula.

Keep purchase at approximately 25 percent. Leverage will be
measured as debt to number working capital (defined as debt plus stockholders’
equity, excluding the nett unfulfilled addition or loss on securities and
the nett addition or loss on hard cash flowing hedges), excluding the non-recourse
debt and associated equity of Tailwind Holdings and Northwind Holdings.

Keep extra working working capital at its retention companies sufficient to cover
one twelvemonth of fixed complaints (measured as involvement disbursal plus common
stock dividends) plus a capital monetary fund which will change with concern and
economical conditions.

Keep a common stock dividend output that is near the median value of its
equal companies.

The Company sees any working working capital above that needful to accomplish and
keep these metrics to be extra capital available to fund share
repurchases, concern growth, or acquisitions. The end in allocating
extra working working capital is to maximise risk-adjusted shareholder tax returns over a
three to five twelvemonth clip period, with share redemption used as the
benchmark for evaluating usages for extra capital.

Shares Outstanding

The Company’s norm figure of shares (000s)
outstanding, assuming dilution, was 360,906.3 for the 3rd one-fourth of
2007, compared to 340,727.7 for the 3rd one-fourth of 2006.

Book Value

Book value per common share as of September 30, 2007 was $21.70,
compared to $22.17 at September 30, 2006. Excluding the nett unfulfilled
addition on securities and the nett addition on hard cash flowing hedges, book value per
common share at September 30, 2007 was $20.36, compared to $19.63 at
September 30, 2006.

Claim Reappraisal Update

The Company have now substantially completed the claim reappraisal
process, as needed by the regulating colony agreements. During the
3rd one-fourth of 2007, 2,533 claims were reviewed, and the reappraisal on the
remaining balance of 210 claims will be completed in the 4th quarter. For the 3rd one-fourth of 2007, the turn over charge per unit was 53 percent, and for
the procedure to day of the month the turn over charge per unit is 41 percent. Any remaining
reappraisal cost will not have got a stuff consequence on the Company’s
operations. The concluding scrutiny under the multi-state regulating
colony understanding have begun, with an awaited completion by
mid-year 2008. Supplemental revelation on the claim reappraisal consequences
for the 3rd one-fourth of 2007 have been posted to the Company’s
website.

OUTLOOK

The Company is revising upward its full twelvemonth 2007 operating net income
counsel to a scope of $2.14 to $2.17 per share, excluding the 2nd
one-fourth claim reappraisal charge, from former counsel of $2.01 to
$2.04 per share, based on the nine calendar months public presentation and current
outlooks for the residual of the year. Incorporated in the Company’s
estimations is continued improvement in the benefit ratio for the Unum United States
grouping income protection line to within its previously stated counsel of
a scope of 90.0 percentage to 92.0 percentage by the end of 2007.

The Company will throw an investor meeting in New House Of York on November 19,
2007, at which clip it means to reexamine its mentality for 2008.

NON-GAAP RECONCILIATION

The Company analyzes its public presentation using non-GAAP fiscal measurements
which except certain points and the related to taxation thereon from nett income. The Company believes operating income or loss, excluding realized
investing additions and losses, which are recurring, and excluding certain
other points specified in the non-GAAP reconciliation, is a better
public presentation measurement and a better index of the profitableness and
implicit in tendencies in its business. Realized investing additions and losings
are primarily dependent on marketplace statuses and general economical events
and are not necessarily related to determinations regarding the Company’s
implicit in business. The exclusion of certain other points specified in
the non-GAAP rapprochement also heightens the apprehension and
comparison of the Company’s public presentation
and the implicit in basics in its operations, but this exclusion is
not an indicant that similar points may not recur. The Company believes
book value per common share excluding unfulfilled additions and losings on
securities and the nett addition or loss on hard cash flowing hedges, which also be given
to fluctuate depending on marketplace statuses and general economical trends,
is an of import measure. For a rapprochement to the most directly
comparable GAAP measures, mention to the attached digest of earnings.

conference call INFORMATION

Unum Group senior direction will host a conference phone call on Thursday,
November 1, 2007 at 9:00 a.m. (EDST) to discourse the consequences of
trading operations for the 3rd quarter. Included in the treatment will be
forward-looking information, such as as counsel on future consequences and
tendencies in operations, as well as other stuff information.

The dial-in figure for the conference phone call is (888) 713-4486 for U.S.
and Canada. For International, the dial-in figure is (913)
312-1439. A unrecorded webcast of the phone call will also be available at
in a listen-only mode. It is recommended that webcast viewing audience entree the “Investor
Information” subdivision of the Company’s
website and opt-in to the webcast 15 proceedings prior to the start of
the call. A rematch of the phone call will be available by telephone set and on the
Company’s website through Thursday, November
8. In concurrence with the Company’s net income
announcement, the Company’s Statistical
Addendum for the 3rd one-fourth of 2007 have been made available on the “Investor
Information” subdivision of the Company’s
website.

ABOUT UNUM GROUP

Unum () is one of the
prima suppliers of employee benefits merchandises and services and the
biggest supplier of grouping and individual disablement income protection
coverage in the United States and the United Kingdom.

safe seaport STATEMENT

Statements in this fourth estate release that are not historical facts, such as as
The Company’s net income per share and Unum United States
grouping income protection benefit ratio guidance, represent “forward-looking
statements” within the significance of the Private
Securities Litigation Reform Act of 1995 and affect hazards and
uncertainnesses that could do existent consequences to differ materially from
those contained in the forward-looking statements. These hazards and
uncertainnesses include such as substances as general economical or concern
conditions; events or effects relating to terrorism, Acts of warfare
and catastrophes, including natural and man-made disasters; competitory
factors, including pricing pressures; legislative, regulatory,
accounting, or taxation law changes; and the involvement charge per unit environment. More
specifically, they include fluctuations in coverage modesty
liabilities; alterations in proposed new gross sales and renewals; fluctuations
between projections and existent experience in doggedness rates,
relative incidence and recovery rates, pricing and underwriting; retained hazards
in the Company’s reinsurance operations;
handiness and cost of reinsurance; the degree and consequences of
litigation, evaluation federal agency actions, and regulating actions and
investigations; existent experience in implementing and complying with the
multistate marketplace behavior regulating colony understandings and the
Golden State Department of Insurance colony agreement; negative mass media
attention; alterations in premises relating to postponed acquisition
costs, value of concern acquired, or goodwill; the degree of pension
benefit costs and funding; investing results, including recognition
impairment of investments; the ability of the Company’s
coverage company subordinates to pay dividends or widen recognition to the
Company and certain of its intermediate retention company subordinates
and/or finance subsidiaries; and effectivity of merchandise support and
client service. For additional information of hazards and uncertainnesses
that could impact existent results, see the Company’s
filings with the Securities and Exchange Commission, including
information inch the subdivisions titled “Cautionary
Statement Regarding Forward-Looking Statements”
and “Risk Factors”
in the Company’s Annual Report on Form 10-K
for the financial twelvemonth ended December 31, 2006 and subsequently filed Form
10-Qs. The forward-looking statements in this fourth estate release are being
made as of the day of the month of this fourth estate release, and the Company expressly
disclaims any duty to update or revize any forward-looking
statement contained herein.

digest OF EARNINGS

(Unaudited)

Unum Group (UNM:NYSE)

and Subsidiaries

($ inch millions, except share data)

Three Months Ended September 30

Nine Months Ended September 30

2007

2006

2007

2006

Operating Gross by Segment

$ 2,656.3

$ 2,612.6

$ 7,915.8

$ 7,837.7

Net Realized Investing Addition (Loss)

(46.1

)

4.8

(39.4

)

1.5

Sum Revenue

$ 2,610.2

$ 2,617.4

$ 7,876.4

$ 7,839.2

Operating Income (Loss) by Segment

$ 325.1

$ (102.2

)

$ 811.2

$ 198.3

Net Realized Investing Addition (Loss)

(46.1

)

4.8

(39.4

)

1.5

Income Tax (Benefit)

92.0

(32.1

)

259.9

70.4

Income (Loss) from Continuing Operations

187.0

(65.3

)

511.9

129.4

Income from Discontinued Operations, Net of Tax

-

1.6

6.9

5.5

Net Income (Loss)

$ 187.0

$ (63.7

)

$ 518.8

$ 134.9

PER share INFORMATION

Assuming Dilution:

Income (Loss) from Continuing Operations

$ 0.52

$ (0.19

)

$ 1.44

$ 0.39

Income from Discontinued Operations, Net of Tax

-

-

0.02

0.02

Net Income (Loss)

$ 0.52

$ (0.19

)

$ 1.46

$ 0.41

Basic:

Income (Loss) from Continuing Operations

$ 0.52

$ (0.19

)

$ 1.46

$ 0.40

Income from Discontinued Operations, Net of Tax

-

-

0.02

0.02

Net Income (Loss)

$ 0.52

$ (0.19

)

$ 1.48

$ 0.42

Leaden Average Park Shares - Basic (000s)

359,741.2

340,727.7

350,665.9

319,209.4

Leaden Average Park Shares - Assuming Dilution (000s)

360,906.3

340,727.7

354,109.5

331,312.5

reconciliation OF NON-GAAP FINANCIAL MEASURES

Three Months Ended

Three Months Ended

September 30, 2007

September 30, 2006

(in millions)

per share(a)

(in millions)

per share(a)

Income from Continuing Operations, As Adjusted

$ 217.0

$ 0.60

$ 155.8

$ 0.46

Adjustments, After Tax

Net Realized Investing Addition (Loss)

(30.0

)

(0.08

)

3.1

0.01

Regulatory Reappraisal Charge

-

-

(211.5

)

(0.62

)

Agent Compensation Settlement

-

-

(12.7

)

(0.04

)

Income (Loss) from Continuing Operations

187.0

0.52

(65.3

)

(0.19

)

Income from Discontinued Operations

-

-

1.6

-

Net Income (Loss)

$ 187.0

$ 0.52

$ (63.7

)

$ (0.19

)

Three Months Ended

September 30, 2006

(in millions)

benefit ratio(b)

Unum United States Group Income Protection

Premium Income

$ 615.7

Benefits and Change in Militia for Future Benefits

858.4

139.4

%

Regulatory Reappraisal Charge

276.4

Benefits and Change in Militia for Future Benefits, Excluding
Regulatory Reappraisal Charge

582.0

94.5

%

As of September 30

2007

2006

(in millions)

per share

(in millions)

per share

Sum Stockholders' Equity, As Adjusted

$ 7,347.2

$ 20.36

$ 6,725.4

$ 19.63

Net Unfulfilled Addition on Securities

346.6

0.96

687.9

2.01

Net Addition on Cash Flow Hedges

137.0

0.38

181.1

0.53

Sum Stockholders' Equity (Book Value)

$ 7,830.8

$ 21.70

$ 7,594.4

$ 22.17

Mentality Range

Twelve Months Ended December 31, 2007

(in millions)

per share(c)

(in millions)

per share(c)

After-tax Operating Income by Section Excluding Net Realized
Investing Gains and Losings and Regulatory Reappraisal Charge

$ 761.4

$ 2.14

$ 772.1

$ 2.17

Regulatory Reappraisal Charge, Net of Tax

(34.5

)

(0.10

)

(34.5

)

(0.10

)

After-tax Operating Income Excluding Net Realized Investing Gains
and Losses

$ 726.9

$ 2.04

$ 737.6

$ 2.07

(a) Assuming Dilution

(b) Benefits and Change in Militia for
Future Benefits as a percentage of Premium Income

(c) Assuming Dilution - Forecasted
Leaden Average Shares of 355.8 million