With respect to sales growth, A.M. Best expects Unum to continue to face the headwinds of a sluggish U.S. economy and elevated unemployment. Also, the extended period of low interest rates may pressure operating earnings through lower new money yields and inforce product pricing assumptions.A.M. Best believes that Unum’s ratings are well positioned at their current levels in the near to medium term. Factors that could lead to negative rating actions include sizable statutory reserve charges, sustained periods of higher than expected claims incidence, duration or severity; or a considerable decline in operating performance or risk-adjusted capitalization relative to A.M. Best’s expectations. The FSR of A (Excellent) and ICRs of “a” have been affirmed for the following core U.S. subsidiaries of Unum Group:
- Unum Life Insurance Company of America
- Provident Life and Accident Insurance Company
- The Paul Revere Life Insurance Company
- Colonial Life & Accident Insurance Company
- First Unum Life Insurance Company
- Provident Life and Casualty Insurance Company
UnumProvident Finance Company plc—-- “bbb” on $400 million ($296.5 million outstanding) 6.85% senior unsecured debentures, due 2015 (fully and unconditionally guaranteed by Unum Group) Provident Financing Trust I— -- “bb+” on $300 million ($226.5 million outstanding) 7.405% capital securities, due 2038 The following indicative debt ratings under shelf registration have been affirmed: Unum Group— -- “bbb” on senior unsecured -- “bbb-” on subordinated -- “bb+” on preferred stock UnumProvident Financing Trust II and III— -- “bb+” on preferred securities The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.