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Chattanooga: Insurer Unum says poised for growth

By: Brian Lazenby
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Tom Watjen

Unum Group officials attributed their success during the second quarter to a business plan which they said remains disciplined but still leaves room for growth.

Tom Watjen, Unum president and chief executive, said during a conference call Thursday discussing their latest earnings report, which exceeded Wall Street estimates, is a result of disciplined business planning.

Unum’s stocks closed Thursday at $24.16 a share, up $1.72 or 7.6 percent from Wednesday’s close.

Unum on Wednesday announced that operating income increased 23 percent during the quarter ending June 30 to $223.2 million or 65 cents a share from $181.5 million or 51 cents a share for the same quarter in 2007.

“This is driven primarily by our strong risk trends across all of our business lines,” Mr. Watjen said.

Mr. Watjen became president in 2003 during a time when stock prices tanked from about $19 a share to $6 a share.

Analyst Bruce Cox, with Chicago-based Fitch Ratings, said Unum has made corrections and appears to be moving in the right direction.

“What they have been doing the past few years is trying to right the boat and move things in a direction that is more long-term oriented,” Mr. Cox said.

Under Mr. Watjen’s leadership Unum reduced its portfolio risk and focused on more conservative investments.

“The fundamentals of the business are improved, and they are making progress on their plan,” Mr. Cox said.

Tom White, Unum executive vice president, said the company’s high yield exposure is about 5.3 percent of investment assets.

“Overall we feel very good about the investment portfolio,” Mr. White said. “It remains in excellent shape and is well positioned for what is likely to continue to be a challenging environment.”

Mr. Cox said he is optimistic about Unum’s future based on the positive contributions of each of Unum’s core divisions.

Mr. Watjen said Unum is a very different company today than the troubled company of the recent past.

“We sit here today with a much stronger balance sheet and a lot more financial flexibility,” he said. “We have developed cultures across our businesses that are more disciplined. We want to grow our businesses, but we want to grow in a disciplined fashion.”

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