Lehman/A.M. Best Co. 2nd Annual Conference

"Making an investment in service is key to our growth."
Harold Chandler
Chief Executive Officer
UnumProvident Corp.

Thomas R. Watjen
Executive Vice President, Finance and Risk Management
UnumProvident Corp.

Improved Service, Brand Recognition Are
UnumProvident's Priorities

UnumProvident Corp. (NYSE:UNM) is adjusting to a new business model created by its 1999 merger.

"Making an investment in service is key to our growth," said Harold Chandler, chief executive officer of UnumProvident Corp. Chandler spoke May 21 in New York at the second annual Insurance Conference, co-sponsored by Lehman Bros. and A.M. Best Co.

UnumProvident was created from the merger of Unum Corp., Portland, Maine, and Provident Cos., Chattanooga, Tenn., in a $5 billion stock-swap transaction (BestWire, June 30, 1999). UnumProvident is the leading provider of group long-term, short-term and individual disability-income products in the world.

As the leading seller of group disability market with a 29% market share, Chandler said the company will continue to focus on meeting its customers' needs. One way to do that is to offer choice to customers' employees through payroll-deduction products, such as short- and long-term disability and critical-illness coverage.

UnumProvident also offers long-term-care coverage. Chandler said the company already has demonstrated competencies in this area because of the similarities in the long-term disability and long-term-care products. Chandler said the company also experienced favorable business trends this year. For example, beginning with the third quarter of 2000, sales began to improve, and the first quarter of 2001 showed an 11% increase in sales from the same period in 2000. This turnaround shows that the company is beyond repositioning itself in the marketplace, Chandler said.

He said the company is investing $40 million in service strategies. The company plans to increase the number of customer service representatives it has in the field. Lowering the caseload of the customer service representatives should elicit a more timely response to customers and allow for more cross-selling opportunities, Chandler said. UnumProvident also will be investing in paperless-product information that can be offered to the employees of client companies via their intranets. Chandler said this will make UnumProvident easier to do business with.

In 2000, UnumProvident produced $7 billion in premium income. Unum Life Insurance Company of America has an A.M. Best rating of A+ (Superior).

In 2002 and beyond, the company plans to work on UnumProvident's brand recognition. Chandler said the company will focus on expanding its marketing materials and making them more specific to customers' needs. For example, UnumProvident can provide trends of impairment information in a specific industry, which can be used to expand product sales.

(By Lynna Goch, senior associate editor, Best's Review: Lynna.Goch@ambest.com)