Unum Group is an American insurance company headquartered in Chattanooga, Tennessee. Founded as Union Mutual in 1848 and known as UnumProvident from 1999-2007.[2] The company is part of the Fortune 500.[3] Unum Group was created by the 1999 merger of Unum Corporation and The Provident Companies[2] and comprises four distinct businesses – Unum US, Unum UK, Unum Poland and Colonial Life. Its underwriting insurers include The Paul Revere Life Insurance Company and Provident Life and Accident Insurance Company.[4]
Unum is the top disability insurer in both the United States and United Kingdom[5] and also offers other insurance products including accident, critical illness and life insurance.[6] as well as workplace leave management and mental health. In 2022, Unum insured about 45 million individuals through group policies[7] and reported revenue of $11.991 billion.[1]
History
Founding as Unum corporation
Union Mutual Life Insurance was incorporated in 1848 in Maine.[8] The company issued its first policy, which covered the life of founder and company president Elisha B. Pratt for $5000 (equivalent to $183,120 in 2023), on October 1, 1849.[8] Union Mutual's principal office at the time was located in Boston, Massachusetts, where Pratt resided.[8][9] Union Mutual remained headquartered in Boston until 1881, when the state of Maine passed a law that required the principal office and headquarters of all insurance companies incorporated by the state to be located within the state.[8] The company relocated to Portland, Maine.[8][9]
In 1940, the company acquired most of Massachusetts Accident Company's health and accident insurance business.[9] The acquisition was Union Mutual's first expansion beyond individual life and endowment insurance.[9][10] In 1969, Union Mutual established the insurance industry's first downstream holding company, which facilitated the company's continued expansion and diversification.[11][12] Union Mutual also established its group disability business in the 1960s.[9][10] Group disability would become the company's flagship product.[13][14]
Union Mutual became the first major mutual insurance company to demutualize in 1986.[9] Company CEO Colin Hampton had been pushing for demutualization since 1970 and the company formally began the process of converting to a publicly held company in January 1985.[9][15] Union Mutual, now renamed Unum, began trading on the New York Stock Exchange in November 1986.[11]
The company also began selling off underperforming businesses during the 1980s.[9] From 1982 to 1990, Unum abandoned many insurance products, including medical insurance, individual life insurance, general investment contracts, and individual annuities and pensions.[9] Under the leadership of then-CEO James Orr, the company turned its focus to long-term group disability insurance.[9]
In March 1990, Unum acquired National Employers Life Assurance Holdings, which at the time was the United Kingdom's largest disability insurer.[16] The company later acquired Duncanson & Holt, a reinsurer and insurance underwriter for the accident and health insurance sectors.[17] In 1993, Unum acquired the Colonial Companies, parent company of Colonial Life & Accident Insurance Company.[18] Colonial focused on individual insurance products, including accident, cancer and life insurance policies.[18] Unum began offering individual disability policies under the Unum brand once again in 1995.[9]
Growth as the Provident companies
The Provident companies was founded in Chattanooga, Tennessee in May 1887 as Mutual Medical Aid and Accident Insurance Company. The company originally specialized in providing both medical-aid and accident insurance to employees in high-risk industries, including miners and coal workers.[19] Within a few months, the company’s founders became concerned that a single disease epidemic would bankrupt the company. Mutual Medical Aid and Accident purchased back all outstanding medical-aid policies and reincorporated as Provident Accident Insurance Company. Provident only issued accident policies.
In 1892, Thomas Maclellan and John McMaster purchased a 50% stake in the company for $1000. The two men purchased the remaining 50% equity in 1895 and Maclellan was the company's sole owner and president by 1900.[19] Maclellan reorganized the company from being mutually held to a stock company in 1910.
Thomas Maclellan served as president of Provident until he was struck by an automobile and unexpectedly died 1916.[20] Robert Jardine Maclellan, the son of Thomas and Helen Maclellan, and the maternal grandson of railroad promoter Robert Jardine, assumed the presidency of Provident following his father's death.[20][21] Provident began selling life insurance the following year, in 1917, and the first life insurance policy issued by the company covered Robert Maclellan's life.[21] The company also began offering railroad insurance.[21]
Provident wrote its first group policy in 1924. The company expanded its operations with its 1926 acquisition of Detroit, Michigan-based Standard Accident Company. Provident operated in 34 states by 1928. It also acquired Southern Surety Company in 1931 and Meridian Insurance of West Virginia in 1938.[21] The company expanded into Canada in 1948.[21]
In November 1993, J. Harold Chandler became president and chief executive officer of Provident.[22] Chandler had previously served as a senior executive at NationsBank.[22] Chandler initiated a company-wide restructuring at Provident, which included the 1995 sale of its health-related business to Healthsource for $231 million.[23] Provident also increased its focus on individual disability and life policies with the 1997 acquisition of the Paul Revere Corporation, a Worcester, Massachusetts-based provider of individual disability insurance, from Textron for $1.2 billion.[24] The purchase of Paul Revere made Provident the nation's largest provider of individual disability policies.[24]
Unum Group (1999–present)
Unum and Provident of Chattanooga, Tennessee announced their intention to merge in November 1998.[13] When the merger was completed in 1999, the new company, named UnumProvident, was the United States' largest disability insurance provider.[25] Then-Unum chairman and chief executive James Orr was retained in as chairman and CEO of UnumProvident, which was headquartered in Portland, Maine.[25]
Company Chief Operating Officer J. Harold Chandler, who had served as Provident's chief executive prior to the merger, succeeded Orr as UnumProvident CEO in November 1999.[26] The company sold Provident National Assurance, a holding company for its life insurance and variable annuity business, to Allstate in 2001.[27] In 2002, UnumProvident relocated its headquarters from Portland, Maine to Chattanooga, Tennessee.[28] The former Provident Companies was headquartered in Chattanooga.[28]
Unum received negative attention in 2002, when California regulators fined Unum, and alleged that the company inappropriately denied long-term disability insurance claims.[29] Unum stated that "only 2% of the policyholders who filed a claim with the company last year [2001] were found not to be disabled, an amount consistent with prior experience."[30]
UnumProvident acquired Sun Life Financial's United Kingdom-based group insurance business in 2003.[31]Thomas Watjen replaced Orr as UnumProvident’s chief executive later that year.[32] The company also sold its Japanese and Argentine businesses.[31]
In 2004, Unum entered into a regulatory settlement agreement (RSA) with insurance regulators in over 40 states.[33] The settlement related to Unum's handling of disability claims and required the company "to make significant changes in corporate governance, implement revisions to claim procedures and provide for a full re-examination of both reassessed claims and disability insurance claim decisions after the January 2005 effective date of the RSA."[34] The review was completed in 2008, and resulted in a 41.7% reversal, "in whole or part", and an additional $676.2 million of benefits paid nationwide by Unum.[35] The state of Maine press release announcing the result, praised regulators for their work, and the company for coming into compliance.[35] The company was involved with the UK's controversial Welfare Reform Bill in 2007 and was investigated by the BBC in England at that time.[36][37][38]
In 2007, UnumProvident was renamed Unum.[39] The Unum moniker was last used by the Unum Corporation prior to the 1999 merger.[39] In 2012 and 2013, Unum partnered with the Consumer Federation of America to release reports which examined the use of disability insurance by American workers.[40][41] According to numbers released by the Bureau of Labor Statistics that were cited by the report, two-thirds of American workers do not carry disability insurance policies.[42] In addition, the report found that, among other things, workers know little about disability insurance, despite expecting financial hardship if they were to become unable to work.[40][41]
Richard McKenney has led Unum as its CEO since April 1, 2015.[32] Unum UK entered the dental insurance market with acquisitions of National Dental Plan, then Starmount Life, in 2015 and 2016, respectively.[25] As of December 2016, Unum had 9,400 full-time employees and annual revenues of $11.047 billion.[48]
From 2019, Unum Group has been named annually among The Civic 50 by Points of Light.[49]
In 2022, Unum Group provided coverage to about 45 million people with 10,937 employees,[7] and reported revenue of $11.991 billion.[1]
Unum is divided into five business segments: Unum US, Unum UK, Unum Ireland, Unum Poland and Colonial Life.[4] It is one of the world’s largest providers of employee benefits as group disability insurance, as well as group benefits, life insurance and other services.[6][51]
During the 2010s, Unum collaborated with Oxford Economics, among others, to analyze staff engagement and retention, subsequently designing policies and adding benefits to nurture company loyalty.[52][53] It continually develops policies and programs that target inclusivity,[54][55] compliance security.[56] and environmental sustainability.[56][57]
The company is a long-time participant of the Maine Heart Walk, with COO Mike Simonds serving as the event’s chairman in 2021.[58] Unum Group has been named annually to several Forbes’ lists, including America’s Best Largest Employers and America’s Best Employers for Diversity,[6] and, since 2021, among Ethisphere’s World’s Most Ethical Companies.[56]
Awards
Forbes' America's 100 Most Trustworthy Companies 2013[59]
Forbes' America's Most Reputable Companies 2012–2013[59][60]
^ abEdward D. Murphy (17 January 2007). "Unum Provident's new name has familiar ring to it: Unum; A relaunch of the company returns to the Maine name used before a 1999 merger". Portland Press Herald.
^ abDean Lunt (24 November 1998). "Unum, Provident will merge The insurance giant will exploit the strengths of each company and their differing client niches". Portland Press Herald.
^Mark Downing (4 October 1990). "Unum TO retain NEL Permanent Health Insurance and hive off the rest OF National Employers Life Assurance". Post Magazine.
^"Business Briefs". The Wall Street Journal. 3 August 1992.
^ ab"Company News; Unum to Buy Colonial in $570 Million Stock Deal". The New York Times. Reuters. 5 December 1992.
^ ab"Maclellan Building". The Tennessee Encyclopedia of History and Culture. Retrieved 18 May 2014.
^ ab"Provident Life & Accident Insurance Co". The Wall Street Journal. 11 November 1993.
^"Health Brief -- Healthsource Inc.: Provident Life Businesses Acquired for $231 Million". The Wall Street Journal. 2 June 1995.
^ abKelly Russell (25 August 1997). "Disability insurance competitors join forces to capture nearly half of country's market". Mississippi Business Journal.
^ abcMike Pare (30 June 1999). "Chattanooga, Tenn.-Based Insurer Provident to Finalize Merger with Unum". KRTBN Knight-Ridder Tribune Business News: Chattanooga Times/Free Press - Tennessee.
^Dean Lunt (2 November 1999). "UnumProvident CEO Orr exits early James F. Orr III, widely credited with building the firm, leaves in a trouble-filled time". Portland Press Herald.
^"Lake County Briefs". Chicago Daily Herald. 10 February 2001.
^ ab"In Brief". The Knoxville News-Sentinel. 9 January 2002.
^"States approve UnumProvident deal; Forty states agree to the settlement, more than enough to put it into effect, the company says". Portland Press Herald. 22 December 2004.
^"Division of Insurance Completes Review of Unum Group Disability Claims Payments, Returns $13 Million to Massachusetts Consumers". US Fed News. 15 April 2008.
