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Unum Group Posts Second Quarter Profits

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Chattanooga, TNThe only reference to the past misdeeds of Unum life insurance and problems policyholders have had with Unum long-term disability was made not by Unum Provident, but by a financial analyst on the occasion of Unum's Q2 earnings report.

Financial SuccessColin Devine, an analyst with Citigroup Global Markets, was quoted in the Chattanooga Times Free Press yesterday as calling the company a "proven winner.

"Unum's management has steadily put the company's issues behind it to the point that it now possesses the most stable earnings outlook and strongest balance sheet of any of its peers," he said.

The issue about which Devine refers goes back six years when Unum, then called UnumProvident Corp., was accused of failure to pay legitimate claims. The ensuing media firestorm saw the stock value of UnumProvident plummet from $19 to less than one-third, or $6 per share.

Since that time new leadership at the company has focused on remaking the image of the company. That makeover included a name change to Unum Group.

While regular readers to will note that there appear to be continuing problems with the way in which the company handles what are thought to be legitimate claims, the financial fortunes of Unum have improved in recent years.

While acknowledging that the lingering economic recession and troubled financial markets continue to pose a challenging environment, Unum CEO and Chairman Thomas Watjen lauded the company's Q2 results in a conference call to investors and the media August 5th.

"The second quarter was another good one for the company continuing the positive trends we have seen over the past several quarters," Mr. Watjen said. "As we look to the second half of 2009, we remain cautious on the general environment, but confident in our ability to successfully execute our plans and capitalize on opportunities that present themselves to profitably grow our business."

Unum, which is based in Chattanooga, is one of the world's largest insurers. It reported second-quarter operating income of $215.8 million or 65 cents per share. Analysts had expected 61 cents.

The performance represents an increase of 11.2 percent over net Q2 earnings reported in 2008.

Unum Provident has been accused previously of funding its growth and laudable financial performance on the backs of policyholders by denying the payout of legitimate Unum life insurance and Unum long-term disability claims.

However the company's capital has been shifted to more conservative investments, according to the Times Free Press, helping Unum to weather the current economic storm.

Stock closed at $19.75 yesterday.


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