Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance > Term Insurance

UnumProvident Moves To Strengthen Finances

Your article was successfully shared with the contacts you provided.

NU Online News Service, April 25, 2003, 12:47 p.m. EDT – UnumProvident Corp., Chattanooga, Tenn., which today reported a $246 million net loss, says it will be taking aggressive steps to strengthen its finances.

The company says it will reduce the dividend on its common stock to an annual rate of 30 cents per share, from an annual rate of 59 cents per share.

UnumProvident also will develop a more conservative financial model for projecting the performance of new claims, the company says. The new model will reflect the increasing difficulty of making recoveries on claims payments, and it also will lower the discount rate that the company uses to project the amount of invested capital needed to support claims payments.

The new discount rate will reflect the continued low interest rate environment, UnumProvident says.

Other moves include a $454 million increase in group long-term disability insurance reserves; a shift of $285 million in assets from the parent company to the insurance company subsidiaries; and efforts to raise $900 million through the sale of common stock and convertible securities.

UnumProvident predicts the moves will increase its consolidated risk-based ratio to 250% by the end of 2003, from 210% at the end of 2002.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.