AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) for the members of Unum Insurance Group. These companies are the core U.S. life/health (L/H) insurance subsidiaries of Unum Group (Unum) (headquartered in Chattanooga, TN) [NYSE: UNM]. In addition, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the Long-Term Issue Credit Ratings (Long-Term IR) of Unum. The outlook of these Credit Ratings (ratings) is stable. (See below for a complete listing of the L/H subsidiaries and the Long-Term IRs.)

The ratings reflect Unum’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

The group’s affirmation is based partially on Unum’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), adequate liquidity of its balance sheet and a conservatively managed investment portfolio, which has historically performed well over the last few years with higher yields and low defaults. Unum has leveraged investment capabilities and interest rate mitigations strategies to provide income and capital preservation. Unum uses reinsurance also to strategically manage its balance sheet risks and has done so with high quality counterparties. Furthermore, its ratings reflect strong operational performance with emphasis on its accident & health product lines. Sales have been strong over the medium term and retention strategies have supported strong persistency measures in its core product lines. A strong labor market typically correlates with a vibrant employee benefits market; therefore, a weakening economy could temper growth in this space for Unum. Unum has brought innovative capabilities to the market with its HR Connect as the company continues to be a competitive player in the human resources space.

AM Best will continue to monitor Unum’s reserve adequacy on its closed block of long-term care business, which if not managed well could have a material impact on Unum’s balance sheet strength. AM Best notes that Unum has a heavy reliance on reinsurance; however, the company has used its high-quality reinsurance partners to de-risk its balance sheet and does so in conjunction with its hedging program in mitigating interest sensitivity.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following life/health subsidiaries of Unum Group:

• Unum Life Insurance Company of America
• Unum Insurance Company
• 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
• Starmount Life Insurance Company

The following Long-Term IRs have been affirmed with stable outlooks:

Unum Group—

-- “bbb+” (Good) on $275 million 3.875% senior unsecured notes, due 2025

-- “bbb+” (Good) on $500 million 4.50% senior unsecured notes, due 2025

-- “bbb+” (Good) on $250 million 6.75% senior unsecured notes, due 2028

-- “bbb+” (Good) on $200 million 7.25% senior unsecured notes, due 2028

-- “bbb+” (Good) on $400 million 4.00% senior unsecured notes, due 2029

-- “bbb+” (Good) on $250 million 7.375% senior unsecured notes, due 2032

-- “bbb+” (Good) on $250 million 5.75% senior unsecured notes, due 2042

-- “bbb+” (Good) on $250 million 5.75% senior unsecured notes, due 2042

-- “bbb+” (Good) on $450 million 4.50% senior unsecured notes, due 2049

-- “bbb+” (Good) on $600 million 4.125% senior unsecured bonds, due 2051

-- “bbb+” (Good) on $400 million 6.0% senior unsecured notes, due 2054

-- “bbb-” (Good) on $300 million 6.25% junior subordinated notes, due 2058

Provident Financing Trust I—

-- “bbb-” on $300 million 7.405% capital securities, due 2038

The following indicative Long-Term IRs under the shelf registration have been affirmed with the stable outlooks:

Unum Group—

-- “bbb+” (Good) on senior unsecured

-- “bbb” (Good) on subordinated

-- “bbb-” (Good) on preferred stock

Unum Group Financing Trust I and II—

-- “bbb-” (Good) on preferred securities

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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