unum group 111907_investor_meeting_presentation

Unum Group 2007 Investor Meeting

November 19, 2007

2

Welcome

Tom White

3

Safe Harbor Statement

Statements in this presentation that are not historical facts, such as our earnings per share, return on equity and our Unum US group income protection benefit ratio guidance, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include such general matters as general economic or business conditions; events or consequences relating to terrorism, acts of war and catastrophes, including natural and man-made disasters; competitive factors, including pricing pressures; legislative, regulatory, accounting, or tax law changes; and the interest rate environment. More specifically, they include fluctuations in insurance reserve liabilities; changes in projected new sales and renewals; variations between projections and actual experience in persistency rates, incidence and recovery rates, pricing and underwriting; retained risks in our reinsurance operations; availability and cost of reinsurance; the level and results of litigation, rating agency actions, and regulatory actions and investigations; actual experience in implementing and complying with the multistate market conduct regulatory settlement agreements and the California Department of Insurance settlement agreement; negative media attention; changes in assumptions relating to deferred acquisition costs, value of business acquired or goodwill; the level of pension benefit costs and funding; investment results, including credit deterioration of investments; the ability of our insurance company subsidiaries to pay dividends or extend credit to us and certain of our intermediate holding company subsidiaries and/or finance subsidiaries; and effectiveness of product support and customer service. For further information of risks and uncertainties that could affect actual results, see our filings with the Securities and Exchange Commission, including information in the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and subsequently filed 10-Q. The forward-looking statements in this presentation are being made as of the date of this presentation, and we expressly disclaim any obligation to update or revise any forward-looking statement contained herein.

4

Agenda

9:00 a.m. Welcome Tom White

Opening Remarks Tom Watjen

Capital Management Bob Greving

Rating Agencies andInterest Rate Management Tom White

Question and Answer

10:15 a.m. Break

10:30 a.m. Operating Segment Reviews- Unum US Kevin McCarthy- Colonial Randy Horn- Unum UK Susan Ring

Concluding Comments Tom Watjen

Question and Answer

12:00 p.m. Lunch

5

Opening Remarks

Tom Watjen

6

Introduction

Charles GlickEVP

General Counsel

Joe FoleySVP & Chief Mkt Ofcr

Eileen FarrarSVP

Human Resources

Bob GrevingEVP

Chief Fin Officer

Frank WilliamsonSVP

Strat Plng & Corp Dev

Tom WhiteSVP

Investor Relations

David FussellSVP

Investments

Bob BestCOO

Unum US

Susan RingCEO

Unum UK

Randy HornPresident & CEO

Colonial

Finan

cial

Oper

atio

ns

• David Parker SVPFinance & Risk Mgmt Colonial

• Martha LeiperSVPPortfolio Management

• Roger MartinChief Financial Officer Unum US

• Martin Moule Chief Financial Officer Unum UK

Kevin McCarthyPresident & CEO

Unum US

Tom WatjenPresident and

Chief Executive Officer

Boardof

Directors

Corporate Staff Operations(Bold name indicates in attendance)

7

Introduction

• Operating earnings increased 30%*– Strong contribution from each business

• Completed claims reassessment process

• Completed securitization

• Formalized capital strategy guidelines– Announced $700 million share repurchase

2007 Highlights

* Nine months 2007 operating results

8

Unum US GIP Benefit Ratio Improvement *

* Excludes claim reassessment impact

95.3%

93.5%

92.4%

93.9%

95.5%

95.1%

94.5%

94.0%

93.4%

92.7%

92.1%92%

93%

94%

95%

96%

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07

Introduction

2007 Highlights

9

4,8235,099

2,000

4,000

6,000

9M-2006 9M-2007

+6%

Unum US GIP

5,0465,506

2,000

4,000

6,000

9M-2006 9M-2007

+9%

Colonial

1,458

1,193

400

800

1,200

1,600

9M-2006 9M-2007

+22%

Unum UK

3,8184,205

2,000

4,000

6,000

9M-2006 9M-2007

+10%

Unum US Group Life

Introduction

2007 Highlights

Growing Case Count in all Segments

10

Introduction

Recent Financial Results

0%

5%

10%

15%

20%

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07

Core Consolidated CDB

Operating Return on Equity

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

2006 2007

Operating EPS

11

Introduction


Unum Stock Price

0

50

100

150

200

Mar-03

Aug-03

Jan-04

Jun-04

Nov-04

Apr-05

Sep-05

Feb-06

Jul-06

Dec-06

May-07

Oct-07

UNM S&P 500

12

0

50

100

150

200

250

300

350

400

450

May-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07

UNM BB 5 yr CDX Investment Grade 5yr CDX

239 bps

0 bps2

1

Introduction


Source: JPMorganNote: CDX are CDS indices traded by the street1 Difference between Unum 5yr CDS and Investment Grade 5yr CDX in May 20042 Difference between Unum 5yr CDS and Investment Grade 5yr CDX in October 2007

Unum CDS Spreads

13

3Q2007

Other0%

Unum US Supplemental& Voluntary

18%

Unum UK12%

Colonial11%IIP-Closed Block

13%

Unum USCore Market

20%

Unum USLarge-Case

26%


13%

IIP-Closed Block16%

Unum USLarge-Case

33%

Colonial9%

Unum UK4%

Other1%

Unum USCore Market

24%

2002

A Different Company

More Diversified Earned Premium Base

14

YTD 20072002

A Different Company

More Diversified Earnings Base*

* Excludes Corporate segment

Colonial13%

Unum UK7%

Other6%

Unum USGIP

27%

Unum USGroup Life

21%


18%

IIP-Closed Block8%

Colonial19%

Unum UK24%

Other1%

IIP-Closed Block9%


18%

Unum USGIP

13%

Unum USGroup Life

16%

15

A Different Company

More Sources of Premium Growth

$ million

$5,057 $5,018

$637 $906$403

$971$1,106

$1,014

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2002 2007 est.

Unum US Colonial Unum UK IIP - Closed Block

+10.3%

% Increase (Decrease)

-0.8%

+140.8%

-8.4%

$7,151

$7,890

+42.3%

16

3/31/03 2007 Guidance

RBC 210% 300%

Cash at Holding Company $ 925$ (755)

Debt to Total Capital (as adjusted) 30.2% 25%

Market Value $2,370 $9,000 (current)

($ millions)

A Different Company

Significant Financial Flexibility

17

Credit Quality of Bond Portfolio

Below Baa 6.3%

Baa37.7%

Aaa22.7%

Aa8.5%

A24.8%

9/30/07

A20.0%

Aa4.1%

Aaa 27.3%

Below Baa 10.5%

Baa38.1%

12/31/02

A Different Company

Solid Investment Portfolio

18

Actual vs. Estimated EPS – Previous 12 Quarters

Source: Company filings, IBES and FactSet

$0.30

$0.35

$0.40

$0.45

$0.50

$0.55

$0.60

Mar-04

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07*

Qu

art

erl

y E

PS

Actual EPS Median Estimate

A Different Company

More Predictable Results

* Includes net investment income, operating earnings as reported $.60

19

Outlook

• A continued move to voluntary products– Underinsured, aging population with limited savings creates demand for

coverage

• Employer budgets under continued pressure– Creates the need for providing simplicity and flexibility

• Market trends likely to lead to increased regulation– Requires management to be more aware of the environment

Environment

20

Outlook

• Consistent execution of our operating plans

• Maintain emphasis on disciplined, profitable growth

• Better leverage our leadership position

Focus

21

Outlook

• Direction of the economy

• Completion of regulatory claims examination

• Consistent execution

Outstanding Issues

22

Outlook

Financial Dynamics

2.3%

15.5%

3Q-2007Leveraged ROE

AllocatedStockholders’ Equity

IIP - Closed Block

Core Operations- Unum US- Colonial- Unum UK

$2,594

$6,392

$1,009

$4,540

32.4%

24.2%

10.2%

$843

3Q-2007Leveraged ROE

Allocated Stockholders’ Equity

Colonial

Unum UK

Unum US

$ Millions

23

Outlook

Earnings Per Share $2.35 to $2.40*

Return on Equity: Core 15.5% to 16.0%

Total Company 11.0% to 11.5%

Capital PositionLiquidity >$300mmLeverage 24% - 25%

RBC 315% - 325%

Short-term Guidance: 2008 Expectations

*Assumes ATOE growth of 9% - 10% and mid-year execution of announced share repurchase.

24

Outlook

15% – 16%15.5%Core Total

20% – 22%24.2%Colonial

26% – 28%32.4%Unum UK

11% - 13%10.2%Unum US

TargetROE

3Q-2007ROE

Long-term Trends: 2009 and Beyond

11.5% - 13.0%11.2%Company Total

2% - 3%2.3%IIP - Closed Block

25

Closing Comments

• Strong Operating Performance

• Completed Claims Reassessment Process

• Completed Closed Block Securitization

• Formalized Capital Management Guidelines– Announced $700 million share repurchase

• Solid Plans for 2008

26

Capital Management

Bob Greving

27

• Capital Management– Northwind– Beyond Northwind

• Enterprise Risk Management

• Guidance for 2008

Agenda

28

Capital Management

29

• The Northwind securitization transaction creates a rating agency and market validated capital structure for our IIP - Closed Block of business that enhances the overall efficiency of our capital.

• The dynamics of the IIP - Closed Block securitization are similar to the mechanics involved in a XXX securitization.

• The basic steps with Northwind involved:Formation of a new holding company (Northwind Holdings, LLC) issuer of $800 million in debt securities; sold in a private placement transaction

Capitalization of a newly created captive reinsurance company (Northwind Re)

Reinsurance of the IIP - Closed Block business

Payment of extraordinary dividends to release excess capital from insurance subsidiaries to holding company

2

Securitization Overview

1

3

4

30

UnumHolding

Company

Northwind Re

Investors(non-recourse

to Unum)

Capital

Bond Insurer

Insurance subs –PLA, PRL, UA

NorthwindHoldings, LLC

Reinsurance contract

Ceding Commission

Premium

DividendsOver Time

Proceeds

Interest andprincipal

DividendsOver Time

Equity

Excess Capital Released with Risk Transfer Credit

wrap

3

12

4

Diagram of Transaction

31

Amount Represented by Unum’s Allocated Stockholders’ Equity

Amount Represented by Non-Recourse Debt

• Financial markets validate appropriate reserves and capital level; less total allocated stockholders’ equity

• Unum capital substituted with debt financing tied to block’s performance; no refinancing risk

• Debt issued is non-recourse to Unum Group creditors

• Transaction yield enhanced financial flexibility at both the subsidiary and holding company levels

$2,594

$2,190

$800

$1,390

($ millions)

Allocated Stockholders’ Equity, IIP – Closed Blockas of September 30, 2007

Pro Forma

Benefits

Actual

Improved Capital Structure

32

• Ceding companies capitalized at 300% RBC

• Northwind Re capitalized at 200% RBC

• Pricing of Northwind Holdings debt validates appropriate capitalization for reinsured policies

• $1.1 billion available for use by Unum Group

Results

($ millions)

Statutory CapitalPotentially

Available fromClosed Block

Non-recourseNorthwind Debt

Capitalization ofNorthwind Re

Net Proceedsfrom

Securitization

+$1,600

-$1,270

+$800

$1,130

Capital Movements

33

• This transaction added to our consistent operating performance, further strengthens our balance sheet position, and creates shareholder value through a share repurchase of up to $700 million.

• The use of Northwind proceeds coupled with the excess capital at the holding company level will be redeployed to meet the following metrics:– Boost RBC to 320%– Reduce debt by $800 million

• $150 million retired in Feb 2007• $150 million PINES call• $400 million debt tender• $100 million other debt retirement

– Target holding company liquidity of $300 million

Northwind Benefits

34

$400m Tender Offer Targets

$175

$325 $332$200

$500

$250 $250$300

$150

$00

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012 2013 2014 2015 2018 2022 2027 2028 2032 2038

Long-term debt New Debt Callable bonds ACES

ACES Participation $150m

$150mPINEScalled

An additional $100 million of debt will be retired during 2008

Debt Maturity Profile

$ millions

35

• RBC increases to 320%

• Leverage maintained at 25%

• Holding company liquidity above target of one year of fixed charges

• Share repurchase of up to $700 million

• ROE enhanced by 70 basis points; EPS increases with share repurchase

Results

HoldingCompany

Liquidity - 2007Estimate Priorto Northwind

Net Proceedsfrom

Securitization

IncreaseCapital &Surplus ofInsurance

Companies

DebtRepurchase

Maximum StockRepurchase

Estimated NetCash Flow for

2008

HoldingCompany

Liquidity - 2008Estimate

+$1,130

-$700

-$350

-$800

($ millions)

$925

>$300

Capital Deployment Plan

36

• We have adopted a formal Capital Management Strategy.

• We intend to manage our business with these threshold targets:– 300% RBC– 25% leverage ratio, excluding non-recourse debt– Holding company cash equal to one year of fixed charges

• We may leverage our working knowledge of the securitization market to add further efficiencies.

Beyond Northwind

37

2007 pro forma

Special purpose reinsurance vehicles

Unum Group Excluding Special

Purpose Reinsurance Vehicles Tailwind UPIL Northwind

1) RBC - Traditional U.S Life Insurance Company 322% 228% 200% 200%

2) Leverage 25.0% 85.7% NM 34.9%

Adjusted for pensions and leases 30.1% 85.7% NM 34.9%

3) EBIT coverage 8.8x 3.0x NM 3.0x

Adjusted for pensions and leases 7.3x 3.0x NM 3.0x

4) Cash coverage 6.6x 4.2x NM 2.9x

Beyond Northwind

NM – not meaningful

38

Enterprise Risk Management

39

• We have established an appropriate governance structure for ERM at the Company.

• Our ERM structure allows for risk management oversight at both an enterprise level as well as a business unit level.

• ERM is embedded within our business planning process down to the functional level.

Board of DirectorsAudit Committee

Unum UKRisk

Committee

Unum USRisk

Committee

ColonialRisk

Committee

CRO

CorporateRisk

Committee

Executive RiskManagementCommittee

Enterprise Risk Management

40

Unum Group

Credit Risk Market Risk Insurance Risk Customers, Products, and ServicesOperational Risk

Portfolio Strategy/Hedging

Interest Rate

Bonds

Reinsurance

Pricing and Underwriting

Reserving

Business Concentrations

Catastrophe

Risk andCapital Allocation

Claims Mgmt

Customer Service

IT Security

Human Resources

Business Continuity

Regulatory and Compliance

Governance and Legal

Products and Services

Distribution

Reputation

Strategic Risk

FX

Rating/Financial Flexibility

Key:Major Risk CategoryRisk Type

Enterprise Risk Map

41

• Enterprise risk management focus areas include:– Credit risk and Interest Rate risk– Business Diversification– Financial Flexibility – including liquidity, capital adequacy, and market access

• Management has taken several steps in these areas to better position the organization’s risk profile, including:– Maintenance of a conservative, high quality asset portfolio– Increased diversification within operating segments and across the organization– A stronger financial platform which includes greater holding company liquidity

and flexibility, as well as stronger subsidiary capital– Development of access to the capital markets through our securitization efforts

and credit facility development

Enterprise Risk Activities

42

Unum Group

Credit Risk Market Risk Insurance Risk Customers, Products, and ServicesOperational Risk

Portfolio Strategy/Hedging

Interest Rate

Bonds

Reinsurance

Pricing and Underwriting

Reserving

Business Concentrations

Catastrophe

Risk andCapital Allocation

Claims Mgmt

Customer Service

IT Security

Human Resources

Business Continuity

Regulatory and Compliance

Governance and Legal

Products and Services

Distribution

Reputation

Strategic Risk

FX

Rating/Financial Flexibility

Key:Major Risk CategoryFocus Areas

Enterprise Risk Areas of Focus

43

Credit Risk

Investment Grade75.7%

Other3.0% Equities

1.1%

Real Estate0.1%

Policy Loans0.5%

High Yield6.0%

ABS/MBS10.8%

Mortgages2.8%

Unum’s Asset Mix as a % of Invested Assets Industry’s Asset Mix as a % of Invested Assets

Investment Grade58.1%

Other2.0% Equities

1.1%

Real Estate0.6%

Policy Loans3.8%

High Yield4.1%

ABS/MBS17.5%

Mortgages12.8%

44

Overexposures

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

A a2 A 1 A 2 A 3 B aa1 B aa2 B aa3 B a1 B a2 B a3 B 1 B 2 B 3 C aa1

4Q02 3Q07

$ million

Credit Risk

Below Inv Grade Credit Exposure

10.8%

8.7%

13.9%

10.0%

8.4%7.6%

6.9%6.4% 6.4%

6.0% 6.0%5.8% 6.0%5.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

12/01 12/02 12/03 12/04 12/05 12/06 9/07

Book Value Market Value

45

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012-2017

GIP IIP LTC

30

40

50

60

70

80

90

Basi

s P

oin

ts

GIP IIP LTC

Mismatch

12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 9/30/07

Asset Duration 7.81 8.95 7.55 7.71 7.66 7.31

Liability Duration 9.33 9.65 8.00 8.09 7.97 8.03

Mismatch (1.52) (0.70) (0.45) (0.38) (0.31) (0.72)

• Mismatch remains within our tolerance level of ± 10% of liability duration.

Cash Flow To Be HedgedInterest Margin

Interest Rate Risk

46

• Strengthened Asset Position.– Reduced exposure to credit risk

– Hedging and reserve crediting strategies have reduced exposure to interest rate risk

• Improved Capital Position.– More capital in holding company, and access to capital through credit

facilities

– Both cash levels and RBC levels are positioned with “rainy day” funds in the event of a 2007-2008 down-turn

Source: Company filings, Factset and IBES1 As of 31-Mar-2003; net of inter-company loans2 As of 31-Dec-20023 As of 31-Mar-20034 Projected at year-end 2007

2003 9/30/2007

Holding Company Liquidity $(755) mm1 $925mm 4

Consolidated Risk-based Capital 210%2 300%

Debt to Total Capital (ex. AOCI) 30.2%3 24.2%

Capital Position

47

Criteria Guideline Year-end 2008

RBC ratio for traditional U.S. Insurance Cos. >300% 320%

Leverage 25% 24%

Coverage

Earnings before interest and taxes/interest 5 – 6x 8.8x

Cash coverage of interest 3 – 4x 6.6x

Holding Company liquidity 1x fixed charges Approx. $300m

Capital Position

48

• Reserves are evaluated annually - at a minimum.

• The IBNR reserve is a relatively small component of the overall reserve. – Address some questions we have had

• The IBNR reserve is set up to pay claims that have been incurred but not yet reported to the company.– It is a relatively short term reserve with approximately 90% typically released

within a year of initial valuation.

• The IBNR reserve increases or decreases based upon the underlying risk including:– The size of the business – measured in premium or lives– The expected claim incidence– The expected average cost of each claim

Reserves

49

• In addition to the normal movements due to the underlying risk we have had movement in the IBNR reserve due to the claim reassessment process.

• Since the beginning of the reassessment process we have recorded IBNR based upon our estimate of the ultimate claims cost and subsequently released those reserves as the claims moved to an approved status.– IBNR reserves are released but flow into paid claims and reserves.

Reserves

50

• Actions in recent years have reduced our exposure to a recession similar to that experienced in 2001-2002.

• During 2001 the primary sensitivities to the slower economic cycle were felt by our investment portfolio and by Unum US disability performance.

• Today we have:– A more diversified business– Stronger operational practices– A lower credit risk profile– Improved management of our investments– Stronger capital and improved liquidity– A more comprehensive enterprise risk management platform

ERM – Summary Comments

51

Guidance for 2008

52

• Earnings per Share: $2.35 to $2.40– After-tax operating earnings: expected growth of 9% to 10%– Share repurchase: expected mid-year 2008 execution of up to $700 million

share repurchase– Unum US: continued improvement in GIP benefit ratio to drive slightly above

trend line earnings growth– Unum UK: below trend line earnings growth reflecting return to more

sustainable long-term benefit ratio– Colonial: below trend line earnings growth reflecting return to more sustainable

long-term benefit ratio– IIP – Closed Block: lower earnings in 2008 reflecting lower net investment

income and continued run-off– Corporate and Other: increased net investment income and lower interest

expense

2008 Guidance

53

Rating Agencies and Interest Rate Management

Tom White

54

• Rating Agency Update

• Interest Rate Management

Agenda

55

Rating Agency Update

56

• Current Financial Strength Ratings:– A.M. Best A- (Negative Outlook)– Fitch A- (Stable Outlook)– Moody’s Baa1 (Negative Outlook)– Standard & Poor’s BBB+ (Positive Outlook)

• We believe that our capital management targets combined with continued consistency in operating results will allow us to achieve our targeted rating.

• Our message to the agencies:– Claim reassessment is complete– GIP results improving and more consistent– Business mix is improving– Franchise is strong– Financial flexibility is strong

Targeting an “A” Rating

57

Actual2005

Actual2006

Forecast*2007

Pro forma**2007

RBC Ratio for traditional US Insurance Companies

308% 300% 305% 320%

Leverage 30% 25% 25% 25%

CoverageEBITCash Coverage of Interest

4.8x4.1x

5.7x5.4x

7.8x5.5x

8.8x6.6x

Holding Company Liquidity $610mm $445mm $925mm >$300mm

* Excludes Northwind transaction** Assumes full year benefit of Northwind transaction


58

Source: JPMorganNote: CDX are CDS indices traded by the street1 Difference between Unum 5yr CDS and Investment Grade 5yr CDX in May 20042 Difference between Unum 5yr CDS and Investment Grade 5yr CDX in October 2007

0

50

100

150

200

250

300

350

400

450

May-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07

UNM BB 5 yr CDX Investment Grade 5yr CDX

239 bps

0 bps2

1

Increasing concerns regarding the sub-prime mortgage market contribute to significant widening of spreads


59

Interest Rate Management

60

• The mission of the Investment Department is to support corporate objectives by delivering consistent, quality net investment income.

• We will quantify and limit interest rate risk. – Asset/liability cash match– Minimize duration mismatch– Hedge future cash flows

• We will invest in assets that support product portfolios in a capital-efficient manner according to pricing and reserving assumptions.

Interest Rate Management: Philosophy

61

Interest Reserve Margins are at or above Target Range

30

40

50

60

70

80

Unum USGIP

Unum USIIP -

RecentlyIssued

IIP - ClosedBlock

LTC Unum UK

Target Range

Basis Points

Interest Reserve Margins as of 9/30/07

Interest Rate Margin

62

4.5

5.0

5.5

6.0

6.5

7.0

Swap

Rat

es

USD SWAP 20Y rate USD SWAP 10Y rate

Note: Hedge activity represented by circles.

Historic 10 & 20 yr Swap Rates (3 yrs Forward)

NUGGETTAG:userName=null&plotName=null

2002 2003 2004 2005 2006 2007

Source: LehmanLive.com

$302 $157 $100

$221

$2,900$800

$110

$170 $230

Hedging Strategies

63

IIP GIP LTC Total

4Q07 $95 $90 $85 $270

2008 $160 $80 $325 $565

2009 $85 – $295 $380

2010 – – $240 $240 2011 – – $205 $205

Total $340 $170 $1,150 $1,660

IIP GIP LTC Total

4Q07 – – – –

2008 $57 – $98 $155

2009 $22 – $138 $160

2010 $38 – $174 $212

2011 $24 – $181 $205

Total $141 – $591 $732

Unhedged Cash FlowsCurrent Hedged Position

Given the current interest rate environment in conjunction with our current hedge position, we anticipate no near-term adjustments to our new claim discount rate.

Hedging Schedule

64

8.02%7.76%

7.15%6.93% 6.85% 6.73% 6.72% 6.69% 6.70%

0%

2%

4%

6%

8%

10%

12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 3/31/07 6/30/07 9/30/07

Current Portfolio Yield 10-Year Treasury

New Money Rates Versus Portfolio Yield

65

• As part of our interest rate management, we monitor the impact of changes of our discount rate on reserve requirements for our business lines.

• As of quarter-end 3Q07, a 25 basis point reduction in our discount rate would have necessitated an increase in product line reserves of– $4 million for Group Long-term Income Protection – $5 million for Individual Income Protection - Closed Block– $1 million for Individual Income Protection – Recently Issued

• We do not anticipate the need to make discount rate changes over the next several quarters.

Discount Rate Sensitivity

66

Operating Segment Review

Unum US

67

• Review of 2007 Business Operations

• Unum US Today

• 2008 Outlook and Opportunities

• Summary

Agenda

68

Review of 2007 Business Operations

69

• Group Income Protection performance and benefit ratio trend has continued to meet stated objectives.

• Initiatives to diversify the business away from a predominantly income protection product base and employer-paid product focus has been met with initial success and we plan to build on this momentum.

• Our growth strategy remains consistent with our commitment to pricing discipline.

2007 Business Operations Review

70

• Group Income Protection performance has had significant and noticeable improvement. – GIP benefit ratio decreased 60 basis points from 2Q07 to 92.1% in 3Q07– Current ratio represents a significant improvement from 3Q06 of 94.5%– Remain on target to achieve 90%-92% target by the end of 4Q07

• We are targeting an 88% to 89% GIP Benefit Ratio in the 2008 to 2009 time frame.– Benefit ratio improvement will be driven by continued sales mix shift,

underwriting discipline and benefit operations improvements

• Improvement to target ranges will result in BTOE/Premium margin of 13.0% to 15.0% for the Unum US operating segment and a leveraged ROE of 11% to 13%.


Group Income Protection

71

• The Benefits Operations organization is now positioned for stable, sustainable performance.

• The key elements of Benefits Operations performance are:– Increased staffing levels, decreased span of control and greater management

involvement in day to day claim decisions– An enhanced claim inventory management system– A greater focus on quality reviews leading to more consistent and predictable

outcomes

• Benefits Center Operations includes Legal Department oversight.– Dedicated team of attorneys provide oversight controls, monitoring and assisting

in both claims response and complaint resolution• Relatively steady decline in the number of new legal cases opened in a given

year – New cases have decreased by 76.7% since 2003

Benefits Operations

72

* Excludes claim reassessment impact

Unum US GIP Benefit Ratio

Benefits Operations

92.4%

95.5%

95.1%

94.5%

94.0%

93.4%

92.7%

92.1%

93.9%

92%

93%

94%

95%

96%

3Q05* 4Q05 1Q06* 2Q06 3Q06* 4Q06 1Q07 2Q07* 3Q07

73

Group Long-term Income Protection

Business Mix Shift

2001 New Sales

9M-2007New Sales

CurrentInforce Mix

2006 New Sales

37% Small

16% Mid

47% Large

28% Small

17% Mid

55% Large

40% Small

20% Mid

40% Large

36% Small

16% Mid

48% Large

40% Small

16% Mid

44% Large

InforceGoal

74

Group Long-term Income Protection-Average Case Size

Business Mix Shift

$18,114

$28,461

$26,412

$30,298

$40,086$39,426$38,469

$10,000

$20,000

$30,000

$40,000

$50,000

2001 2002 2003 2004 2005 2006 9M-07

$ in millions

75

Group Life and AD&D

• Continuing to see a positive trend in the benefit ratio.

• Despite increasing competition, we are maintaining our position while continuing our pricing discipline.

• Bundled with GIP product.

Benefit Ratio

76.3%76.0%76.6%77.0%77.7% 73.9%

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 9M-07

Premium Income

$932 $1,051

$1,399$1,463

$1,623$1,662

$1,606

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2002 2003 2004 2005 2006 9M-06 9M-07

$ in millions

76

93.4%90.2%

85.1%81.0%76.6%

73.1%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 9M-07

42.4%43.5%43.8%46.0%

41.5%39.9%

0%

10%

20%

30%

40%

50%

60%

70%

2002 2003 2004 2005 2006 9M-07

• Better risk-reward tradeoff than “pure” individual business.

• Benefit ratio performance trending lower, as a result of both pricing discipline and a stronger claims management process.

• Complementary line to GIP and VWB.

Multi-Life Sales as % IIP Sales

Interest Adjusted Loss Ratio *

* As adjusted for special items (’04 to ’05)

IIP Recently Issued

77

• Focus has shifted from individual product to group product, leveraging our existing distribution system.

• Maintaining pricing discipline with new policy issuance.

• Rate increase activity is underway on the in-force individual block.

Total LTC Sales$ in millions

$22.2 $28.0

$87.2 $70.9

$38.2 $34.1 $36.1

$0

$20

$40

$60

$80

$100

2002 2003 2004 2005 2006 9M-06 9M-07

LTC Sales Mix

76%70%62%

49%38%

27%

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 9M-07

Group LTC Individual LTC

Long Term Care

78

• We are currently in the process of repricing our individual long- term care product and are seeking approval on a state by state basis.

• For those effected, the repricing will increase premiums by a total of 20.0% to 30.0% within a phased-in two year period.

• Rate increases will impact less than 16% of our current policyholders.

• At present this process has resulted in 46 state approvals and $38.0 million in annual additional premium.

• We are experiencing strong persistency.

Individual LTC Rate Increase Activity

Long Term Care

79

• Positive trends in the benefit ratio as the business mix shifts to disability, accident and supplemental health lines.

• Positive growth trend as VWB portfolio expands into the supplemental health lines.

• Continued opportunities for integration with Group products through Simply Unum offering.

Benefit Ratio

59.4%

77.9% 72.5%

69.0% 66.3% 62.6%

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 9M-07

Premium Income

$302$286

$382

$340

$293

$259

$209$200

$250

$300

$350

$400

2002 2003 2004 2005 2006 9M-06 9M-07

Voluntary Benefits

$ in millions

80

Unum US Today

81

• A more diversified business with a focus on core markets and the emerging employee paid product area.

• A profitable growth focus that emphasizes underwriting discipline rather than sales volume and market share.

• A stronger operational focus on consistent quality enabling us to better withstand any downward economic shift.

Unum US Today

82

Business Mix – Inforce Premium

Portfolio Diversification

GSTIP, 12.0%

IIP RI, 8.0%

VWB, 4.3%

Group Life and AD&D, 30.0%

LTC, 7.4%

GLTIP, 38.3%

2002

GLTIP, 37.9%

GSTIP, 9.7%

Group Life and AD&D, 22.9%

LTC, 10.7%

VWB, 9.0%

IIP RI, 9.6%

3Q2007

83

Services, 15.5%

Education, 7.5%

Transportation and Utilities, 4.8%

Healthcare, 20.8%

Construction and Manufacturing,

17.0%

Other,13.0%

Public Sector,5.0%

Retail,9.0%

Banking and Finance,

7.4%

* In-force premium as of 3Q07

Industry Diversification

84

NYC

WA

OR

NV

AZ NM

TX

OK

KS

COUT

WY

MTND

SD

NEIA

MO

AR

LA

MS

ALGA

FL

SC

NC

KY

IL

MN

WI

IN

VA

NJ

ME

VT

CT

NH

PARI

WV

ID

MD

MA

TN

OH

NY

CA

$5 million - $20 million

$5 million and below



$100 million plus Alaska

Hawaii

DE

Puerto Rico

*In-force premium as of 3Q07.

MI

DC

Geographic Diversification

85

• We have adopted more conservative underwriting practices compared to 2001. – Focus on profitable growth, not market share– Heightened accuracy of rate calculation and the addition of a formal quality

review program

• Significantly higher GLTIP premium per life:

$205

$245

$305

$0

$100

$200

$300

$400

2001 2001* 2007

GLTIP Prem/Life

* Adjusted for salary and aging changes over time.

Pricing Discipline

Underwriting

86

Long-term Disability Incidence Index

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22Quarters from end of 2001 Recession

100%

Incidence Trends

87

Group Long-term Income Protection: Incidence by Case Size

Relative Incidence by Case Size

Small Mid Large

Aggregate

0.80

1.00

1.10

88

• Benefit operations are now positioned for stable, sustainable performance levels.

• Management changes and the new organizational structure have led to improved results.– Increased staffing levels, decreased span of control, and greater management

involvement are paying dividends– The claim inventory management system has improved management

effectiveness

• We are better positioned to maintain performance levels in the event of a potential recession.– Integration issues associated with the merger are behind us– The new claims process forged from the RSA agreement is a more sustainable

business model

Operational Efficiency

Benefits Operations

89

2008 Outlook and Opportunities

90

Business Mix – Sales Premium


Group Core , 33.3%

Group Large, 44.7%

VWB, 7.8%

IIP RI, 8.4%

LTC, 5.8%

2002

Group Large, 23.3%

Group Core,

32.2%

IIP RI, 10.8%

VWB, 26.8%

LTC, 6.9%

3Q2007

91

VWB Sales Growth

$109.3$108.7

$134.2$130.2

$114.1

$105.8

$79.1

$0

$40

$80

$120

$160

2002 2003 2004 2005 2006 9M-06 9M-07

$ in millions


92

Unum Short Term Disability Sales

100% EE Funded100% ER Funded or Mixed

45%

81%

55%19%

2001 2006

• The market continues to move toward greater employee-funding.

• The growth of employee CHOICE elevates the importance of DELIVERY EXCELLENCE to customers and their advisors:– Enrollment– Communication– Individual employee

administration– Post-termination relationship

with carrier (portability)


93

Converging Trends Point to a Customer Solution

Benefits people desireeasy administration

“Just make it easy for me”

Growth in voluntary and mixed funding

“We have no choice but to pass on more of the cost to employees”

One size does not fit all

“I want to provide a plan that will meet the specific needs of my customers.”

Need for reduced complexity

“I want to feel knowledgeable when I talk about this with customers”

Easy administration

Voluntary and mixed funding

Reduced complexityChoice


94

• Simply Unum combines Group & Voluntary coverages on one fully- integrated platform, Unum enrollment resources, and employer cost management capabilities.

• In 3Q07, Simply Unum was launched in four markets.

• Marketplace reaction from brokers and customers has been very positive.

• The national roll-out of Simply Unum is scheduled for 1Q08.

Simply Unum.Simply Better.


95

• Simply Unum offering is geared toward increasing customer integration with customers in the <500 lives group.

• Approximately 60,000 customers in the less than 500 lives segment.

• Have had success in integration with customers with greater than 500 lives.– 80+% of Group Long Term Income Protection customers are integrated with

another group coverage– 15+% of Group Long Term Income Protection customers are integrated with one

of our Voluntary Benefits products or our Individual Income Protection product

Growth Through Customer Integration


96

Case Sales Growth

2003 2007 2011


97

Earned Premium Growth

2003 2007 2011

Total Core & Supp Group Large

Earned premium growth emerges in 2009 as large case earned premium flattens and growth accelerates in group core and supplemental benefits segment.


98

Summary

99

• We will continue to enhance the performance of our Group Income Protection line.– We will meet our 2007 objective of a 90% to 92% benefit ratio within this line– We anticipate to be within a 88% to 89% benefit ratio range by late 2008 to

early 2009

• We are focused on diversifying our product portfolio through new initiatives such as Simply Unum and increased focus on voluntary benefits sales.– Case sales will continue to grow at 10% to 15% per year and core and

supplemental sales premium growth will improve to 10% to 15%

• Our growth strategy remains consistent with our commitment to pricing discipline.– Continued focused renewal program– Continued large case discipline in both sales and in inforce management– BTOE/Premium margin will improve to 13.0% to 15.0% and leveraged ROE will

improve to 11% to 13%

Unum US Summary

100


Colonial

101


• Colonial Today


• Summary

Agenda

102


103


• Sales & Marketing– Continued emphasis on the growth and development of the agency system– Implemented nationwide prospecting program targeted at small employers– Completed next phase of brand development with rollout in January 2008

• Products– Enhanced product manufacturing capabilities and improved speed to market– Broadened product portfolio with a new limited benefit medical plan – Revamped medical gap product to be simpler and more competitive

• Enrollment & Customer Services– Released update to new enrollment platform with expanded capabilities– Introduced new capabilities to enhance service for plan administrators

• Financial Stability– Continued to deliver strong profit margins through disciplined expense and risk

management

104

New Health Products

• Medical gap product– Indemnity insurance plan that offers employees a solution to fill coverage

gaps in their major medical plan

• Group limited benefit medical plan– Designed for employees without major medical coverage – Targeted at small employers – Market for product is growing as employers increasingly abandon

comprehensive health insurance due to escalating costs• Not a major medical plan• Pays for a limited set of benefits at a fixed benefit amount• Includes coverages for prescription drugs and outpatient services• Affordable:

– $50-$200 / month (employee only)– $150-$500 / month (family)


105

2006 2007 % Change

New Rep Contracts 1,886 1,965 4.2%

Tier 1 Producers * 554 630 13.7%

Tier 3 Producers ** 234 291 24.4%

Average Weekly Producers 1,804 1,858 3.0%

Total Sales Reps 6,047 6,345 4.9%

Total District Managers 401 430 7.2%

New Accounts 5,046 5,506 9.1%

September

Sales Metrics

*Tier 1 producers are sales reps who have produced $1,800 in new account opener premium and one new case in their first 52 weeks with Colonial.

**Tier 3 producers are sales reps who have produced $10,000 in new account opener premium and three new cases in their first 52 weeks with Colonial.

106

Sales and Premium

$220.7$213.2

$315.1

$286.4$278.5

$285.2

$257.1

$0

$50

$100

$150

$200

$250

$300

$350

2002 2003 2004 2005 2006 9M-06 9M-07

$ Millions

New Sales

$675.2$636.7

$693.5$741.0

$787.0

$842.1

$624.9

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2002 2003 2004 2005 2006 9M-06 9M-07

$ Millions

Premium

107

Benefit and Expense Ratios

48.3%

52.5%52.4%

55.0%55.1%57.0%56.1%

30%

35%

40%

45%

50%

55%

60%

2002 2003 2004 2005 2006 9M-06 9M-07

Benefit Ratio

19.2%

18.3%

19.2%19.6%

18.4% 18.3%

19.2%

10%

12%

14%

16%

18%

20%

22%

2002 2003 2004 2005 2006 9M-06 9M-07

Expense Ratio

108

Earnings and Margin

$146.7$137.5$155.6

$168.1

$198.7

$148.2

$187.0

$0

$50

$100

$150

$200

$250

2002 2003 2004 2005 2006 9M-06 9M-07

$ MillionsPretax Operating Earnings

27.7%

23.7%23.6%

21.4%21.0%21.2%21.6%

0%

5%

10%

15%

20%

25%

30%

2002 2003 2004 2005 2006 9M-06 9M-07

Pretax Profit Margin

109

Colonial Today

110

Colonial Today

• Financially sound business with consistently strong profit margins and a disciplined approach to risk and expense management.

• Well positioned as a market leader offering enrollment services, benefits communication and a diversified product portfolio.

• Consistently providing top-quality service that is recognized by the industry and creates a market differentiator.

• Limited sensitivity to economic cycles due to broad market reach and low-premium products relative to consumer disposable income.

• Strong leadership team focused on profitable growth in the worksite market.

111

Public Sector16.1%

< 100 Emps30.5%

2,500-9,999 Emps9.1%

100-499 Emps12.2%

> 10,000 Emps22.2%

500-2,499 Emps9.9%

$20+ billion market with < 30% penetration137 million total employees

Source: Eastbridge Consulting / Bureau of Labor Statistics

Industry Market Mix

112

Public Sector26.7%

Core Commercial Market54.8%

All Other Commercial

18.3%

Public Sector20.5%

Core Commercial Market61.2%

All Other Commercial

18.5%

Core market is defined as groups with less than 500 employees.

Colonial Market Mix

New Sales By Market

2002 YTD 2007

113

Colonial Product Mix

New Sales By Product

Life19.6%

Cancer &Critical Illness

15.3%

Disability 38.7%

Accident & Health26.4%

2002

Life20.3%

Cancer &Critical Illness

16.6%

Disability 35.6%

Accident & Health

27.5%

YTD 2007

114

NYC

DC

WA

OR

NV

AZ NM

TX

OK

KS

COUT

WY

MTND

SD

NEIA

MO

AR

LA

MS

ALGA

FL

SC

NC

KY

IL

MN

WI

IN

VA

NJ

ME

VT

CT

NH

PA

RI

WV

ID

MD

TN

OH

NY

CA


$5 million and below



$100 million plus Alaska

Hawaii

DE

In-force premium as of 3Q07

MA

MI

Geographic Distribution

115


116

• Maintain focus on growth and development of agency sales system.– Recruiting and development – Expand sales support team to improve success rate of new reps and managers– Deliver consistent sales performance

• Leverage products and enrollment capabilities.– New limited benefit medical plan will enhance recruiting and sales– Expand enrollment services to increase the number of new accounts and

penetration in existing accounts– Develop and introduce new whole life and universal life products

• Enhance broker distribution and large case capabilities.

• Increase brand awareness with key audiences.– Invest in brand development, product promotion and marketing programs– Distinct brand, complementary with Unum

• Collaborate with Unum US on cross-referral opportunities.

• Expand capacity and depth of talent to drive growth initiatives.


Sales and Premium Growth

117

Multifaceted approach to brand development and implementation

Building Our Brand

Sales organization

Cause marketing & community involvement

Advertising

Marketing campaigns &

collateral

Home office

Trade shows

Colonial

Sales organization Home officeSales organization

Advertising

Home officeSales organization


collateral

Advertising


Cause marketing & community involvement


collateral

Advertising


Media relations

Trade shows Cause marketing & community involvement


collateral

Advertising


118

Summary

119

• Business segment with:– Solid operational foundation– Strong profit margins and predictable cash flows

• Well positioned to capitalize on market shift to employee-paid benefits.

• Market recognizes high value of our innovative products and top- quality service.

• Investing in the business to ensure consistent, profitable sales growth.

• Solid progress toward growth and development of agency sales system.

• Leveraged ROEs expected to remain strong in the 20%-22% range.

Summary

120


Unum UK

121

Agenda


• Unum UK Today


• Summary

122


123

2007 UK Business Operations Review

• Innovative products launched and new service offerings introduced.

• Enhanced core capabilities through market leading techniques.

• Strengthened service proposition and positioned as a service leader.

• Market leader in education on the implications of legislative changes and disability issues.

• Initiated VWB pilots.

• Maintained leadership position in increasingly competitive market.

• Maintained pricing discipline and hit record profits.

124

Operating Income and Margin

Before-Tax Operating Income

$ Millions

BTOE % of Premium

* Before exceptionals

0

50

100

150

200

250

300

2002 2003 2004 2005* 2006 9M - 06 9M - 070%

5%

10%

15%

20%

25%

30%

35%

40%

BTOE BTOE % of premium Income

125

Premium Growth

$785.3

$313.8

$659.1

$477.0

$716.9

$842.8

$611.8

0

300

600

900

2002 2003 2004 2005 2006 9M - 06 9M - 07

$785.3

$313.8

$659.1

$477.0

$716.9

$842.8

$611.8

$ Millions

126

Sales Growth

$94.2

$132.3

$182.5

$128.6

$ 57.0

$ 71.1

$100.5

0

40

80

120

160

200

2002 2003 2004 2005 2006 9M - 06 9M - 07Group New Business Group Expansions Other

$ Millions

$94.2

$132.3

$182.5

$128.6

$ 57.0

$ 71.1

$100.5

127

New Sales and Existing Block by Case Size

Small (<500 lives) Mid (500 - 2,000 Lives) Large (>2,000 Lives)

Group New Sales (Premium)

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 YTD

% N

ew S

ales

Existing Group Block (Premium)

0%

20%

40%

60%

80%

100%

% T

otal

Blo

ck

128

Expense Efficiency

Operating Expense Ratio

26.9%

21.4%19.6%

17.6%18.1%

23.9%

0%

5%

10%

15%

20%

25%

30%

2002 2003 2004 2005 2006 9M-07

129

Unum UK Today

130

Capabilities – Our Platform for the Future

• Service delivery strengthened, and set to be further enhanced through our “Build the Future” programme.

• Recognised as pre-eminent group risk provider in the UK; deep relationships with all major business producers.

• Strong product portfolio.– GIP - traditional strength– GL - now major player– GCI - now market leader– Individual - leading product in market

• Leading edge in risk selection and claims management expertise.

• Strong leadership team – blend of highly experienced market specialists and new talent from wider financial services.

131

Market Position

1 Unum 35% 1 Unum 56%2 Canada Life 18% 2 Canada Life 19%3 Swiss Life 16% 3 Legal and General 8%4 Others 9% 4 Aegon 5%5 Legal and General 8% 5 Norwich Union 4%

1 Canada Life 32% 1 Canada Life 32%2 Others 20% 2 Legal and General 22%3 Swiss Life 18% 3 Unum 18%4 Legal and General 15% 4 Norwich Union 13%5 Unum 4% 5 Aegon 7%

1 Swiss 55% 1 Unum 25%2 Aegon 18% 2 Legal and General 25%3 Unum 13% 3 Aegon 23%4 Canada Life 7% 4 Canada Life 15%5 Legal and General 2% 5 BUPA 8%

GCI 2002 GCI 2006

GIP 2002 GIP 2006

GL 2002 GL 2006

132

Business Mix

Group Long-termIncome Protection

78.1%

Group Life17.7%

Other4.1%

YTD-2007Earned Premium$ 716.9 million

Group Long-termIncome Protection

77.8%

Group Life8.6%

Other13.5%

2002Earned Premium$ 313.8 million

133

Resilience

Diversification

• UK business monitors and manages accumulation of risk.• Strategic focus on new revenue growth (eg, VWB) will realise

further diversification benefits.

Positioning

• Experience suggests that UK business resilient to softer economy:– Strong growth achieved despite 2001/2002 economic slow down– Workers’ benefits protected in employment contracts– UK business coverage often relates to senior executives rather than the whole

workforce

• Performance based on strong claims management and pricing discipline.

134


135

Focus on Growth

• Maintain pricing discipline whilst delivering profitable sales growth and persistency.

• Increase UK market penetration – initiatives to deliver persistency and sales goals:– Launch new product variants to target new market sectors– Restructure GL business– Market new propositions attractive to large, self-insured employers– Establish proactive cross-sell/up-sell campaigns– Add new service offerings

• Leverage US experience to develop a Voluntary Worksite Benefits proposition as a strategic development.

• Maximise short-term growth opportunities, including those presented by legislative changes.

136

Present

Future

Tax Benefits available for the purchase of certain products

Preferential Terms offered, e.g. discounts and reduced underwriting

Simple Purchase of products and services paid for through future wages

Employers permitted to give financial promotions in the workplace.

Regulators pressuring employers to increase financial literacy of workforce.

Unions and Staff Associations are seeking new ways of supporting their members through added value services.

Pensions Review favouring introduction of Personal Accounts in 2011/2012 is likely to provoke a review by employers of existing staff benefits.

Self Provision rather than dependence on State is increasing in emphasis.

Drivers

Scope of drivers is widening

Future Market Change

137

Voluntary Workplace Benefits Initiative

Opportunity to reach new customers and leverage Unum Group assets

• VWB is under penetrated, with limited foothold in the UK.– Relatively small market– Few specialist enrollers/VWB specialists

• VWB offers the opportunity of untapped growth potential.– Estimated current value: £700 million– Worksite penetration: 4-5% of life and pension market– Consumer research estimates 60% of workers have potential interest in worksite

products– Less than 50% of companies have ever been approached

• Unum UK’s likely operating model:– Initially distribute through a selected few working partners– Leverage off US systems and know-how

138

Summary

139

Key Messages

• Reshaped the business to create the UK’s pre-eminent Group Risk provider.

• Positioned as product and service provider.

• Enhanced core capabilities in risk selection and claims management expertise.

• Positioned to leverage parent capabilities to develop UK voluntary worksite benefits market.

• Built a platform for the future that we are confident will be profitable, resilient and conducive to growth.

140

Concluding Comments

141

Concluding Comments

• Strong Operating Performance

• Completed Claims Reassessment Process

• Completed Closed Block Securitization

• Formalized Capital Management Guidelines– Announced $700 million share repurchase

• Solid Plans for 2008

142

Outlook

Short-term Guidance: 2008 Expectations

*Assumes ATOE growth of 9% - 10% and mid-year execution of announced share repurchase.

Earnings Per Share $2.35 to $2.40*

Return on Equity: Core 15.5% to 16.0%

Total Company 11.0% to 11.5%

Capital PositionLiquidity >$300mmLeverage 24% - 25%

RBC 315% - 325%

143

Non-GAAP Reconciliation

144

Reconciliation of Non-GAAP Financial Measures

Regulatory Unum UK Debt Regulatory BrokerReassessment Reserve Extinguishment Reassessment Compensation

As Reported Charge Release As Adjusted As Reported Cost Charge Settlement As Adjusted % Change2007 - 2006

Operating Income (Loss) by Segment Before Income Tax and Net Realized Investment Gain (Loss)Unum US

Group Income Protection 63.7$ (66.2)$ -$ 129.9$ (336.2)$ -$ (364.2)$ -$ 28.0$ Group Life and Accidental Death and Dismemberment 157.1 - - 157.1 131.7 - - - 131.7 Supplemental and Voluntary 178.2 - - 178.2 164.3 - - - 164.3 Total Unum US 399.0 (66.2) - 465.2 (40.2) - (364.2) - 324.0

Unum UK 253.8 - 16.6 237.2 176.0 - - - 176.0 Colonial 187.0 - - 187.0 148.2 - - - 148.2

Primary Operating Segments 839.8 (66.2) 16.6 889.4 284.0 - (364.2) - 648.2 Individual Income Protection - Closed Block 94.5 13.2 - 81.3 42.6 - (47.2) - 89.8 Other 11.2 - - 11.2 18.0 - - - 18.0 Corporate (134.3) - - (134.3) (146.3) (23.1) - (18.5) (104.7) Operating Income by Segment 811.2$ (53.0)$ 16.6$ 847.6$ 198.3$ (23.1)$ (411.4)$ (18.5)$ 651.3$ 30%

(in millions) benefit ratio (in millions) benefit ratio (in millions) benefit ratio (in millions) benefit ratio

Unum US Group Income ProtectionPremium Income 609.3$ 615.7$ 619.8$ 626.0$ Benefits and Change in Reserves for Future Benefits 641.2 105.2% 858.4 139.4% 664.4 107.2% 606.0 96.8%Regulatory Reassessment Charge (76.5) (276.4) (72.8) (27.3) Benefits and Change in Reserves for Future Benefits, Excluding Regulatory Reassessment Charge 564.7 92.7% 582.0 94.5% 591.6 95.5% 578.7 92.4%

Three Months EndedJune 30, 2007 September 30, 2006

Three Months EndedMarch 31, 2006

Three Months EndedSeptember 30, 2005

Nine Months Ended Nine Months EndedSeptember 30, 2007 September 30, 2006

(in millions)(in millions)

Three Months Ended

145


9/30/2007 6/30/2007 3/31/2007 12/31/2006 9/30/2006 6/30/2006 3/31/2006 12/31/2005

Net Income (Loss) 0.52$ 0.43$ 0.51$ 0.80$ (0.19)$ 0.38$ 0.23$ 0.43$ Net Realized Investment Gain (Loss) (0.08) 0.02 (0.01) - 0.01 (0.01) - - Income from Discontinued Operations - - 0.02 0.01 - 0.01 0.01 0.01 After-tax Operating Income (Loss) from Continuing Operations Excluding Net Realized Investment Gain (Loss) 0.60 0.41 0.50 0.79 (0.20) 0.38 0.22 0.42 UK Reserve Release, Net of Tax 0.03 - - - - - - - UK Tax Law Change 0.01 - - - - - - - Regulatory Reassessment Charges, Net of Tax - (0.10) - - (0.62) - (0.17) - Special Tax Items - - - 0.28 - - - 0.03 Broker Compensation Settlement, Net of Tax - - - - (0.04) - - - Cost Related to Early Retirement of Debt, Net of Tax - - - (0.01) - (0.04) (0.01) - Contract Termination Fee, Net of Tax - - - - - - - (0.02) Litigation Costs, Net of Tax - - - - - - - (0.01) After-tax Operating Income from Continuing Operations Excluding Net Realized Investment Gain (Loss) and Special Items 0.56$ 0.51$ 0.50$ 0.52$ 0.46$ 0.42$ 0.40$ 0.42$

9/30/2005 6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004

Net Income (Loss) 0.17$ 0.55$ 0.49$ 0.45$ 0.55$ 0.02$ (1.91)$ Net Realized Investment Gain (Loss) (0.14) 0.13 (0.01) 0.06 0.14 (0.18) 0.05 Income from Discontinued Operations 0.01 - - 0.01 0.01 (0.23) 0.03 After-tax Operating Income (Loss) from Continuing Operations Excluding Net Realized Investment Gain (Loss) 0.30 0.42 0.50 0.38 0.40 0.43 (1.99) Regulatory Reassessment Charges, Net of Tax (0.16) - - (0.29) - - - Special Tax Items 0.03 - 0.10 0.17 - - - SFAS No. 91 Adjustment, Net of Tax - - - 0.07 - - - Boston Seguros Restructuring, Net of Tax - - - 0.01 - - - Individual Income Protection - Closed Block Restructuring, Net of Tax - - - - - - (2.37) Gain on Sale of Netherlands Branch, Net of Tax 0.01 - - - - - - After-tax Operating Income from Continuing Operations Excluding Net Realized Investment Gain (Loss) and Special Items 0.42$ 0.42$ 0.40$ 0.42$ 0.40$ 0.43$ 0.38$

* Amounts per diluted common share

Three Months Ended *

Three Months Ended *

146

As of As of As of As of As of As of As of As ofSeptember 30 June 30 March 31 December 31 September 30 June 30 March 31 December 31

2007 2007 2007** 2006 2006 2006 2006 2005

Total Stockholders' Equity, As Adjusted 7,347.2$ 7,158.2$ 6,705.8$ 6,989.8$ 6,725.4$ 6,800.0$ 6,108.2$ 6,049.9$ Net Unrealized Gain on Securities 346.6 78.0 490.3 534.8 687.9 60.7 256.2 1,040.7 Net Gain on Cash Flow Hedges 137.0 135.4 180.5 194.2 181.1 126.2 203.6 273.3 Total Stockholders' Equity (Book Value) 7,830.8$ 7,371.6$ 7,376.6$ 7,718.8$ 7,594.4$ 6,986.9$ 6,568.0$ 7,363.9$

Average Equity, As Adjusted 7,252.7$ 6,932.0$ 6,636.6$ 6,857.6$ 6,762.7$ 6,454.2$ 6,079.0$

** Average adjusted for cumulative effect of accounting principle changes of $422.5 million effective January 1, 2007

Operating Operating Income (Loss) Income (Loss)

Before Net Allocated Before Net AnnualizedAverage Average Average Realized After-tax After-tax Realized Leveraged

Allocated Allocated Leveraged Investment Special Item Interest Investment Return Equity Debt Equity Gain/Loss Adjustments Expense Gain/Loss On Equity

Three Months Ended September 30, 2007Unum US 4,527.6$ (1,194.1)$ 3,333.5$ 99.4$ -$ (14.1)$ 85.3$ 10.2%Unum UK 962.1 (235.1) 727.0 75.0 (13.3) (2.9) 58.8 32.4%Colonial 835.1 (204.1) 631.0 40.6 - (2.4) 38.2 24.2%Core Operations 6,324.8 (1,633.3) 4,691.5 215.0 (13.3) (19.4) 182.3 15.5%Individual Income Protection - Closed Block 2,627.2 (641.9) 1,985.3 19.1 - (7.7) 11.4 2.3%Corporate and Other (1,699.3) 2,275.2 575.9 (17.1) - 27.1 10.0 6.9%Total 7,252.7$ -$ 7,252.7$ 217.0$ (13.3)$ -$ 203.7$ 11.2%

Three Months Ended June 30, 2007Core Operations 6,183.9$ (1,660.4)$ 4,523.5$ 159.4$ 43.1$ (19.6)$ 182.9$ 16.2%Individual Income Protection - Closed Block 2,657.3 (675.4) 1,981.9 27.8 (8.6) (8.1) 11.1 2.2%Corporate and Other (1,909.2) 2,335.8 426.6 (40.2) - 27.7 (12.5) -11.7%Total 6,932.0$ -$ 6,932.0$ 147.0$ 34.5$ -$ 181.5$ 10.5%

(in millions)

(in millions)


147

Operating Operating Income (Loss) Income (Loss)

Before Net Allocated Before Net AnnualizedAverage Average Average Realized After-tax After-tax Realized Leveraged

Allocated Allocated Leveraged Investment Special Item Interest Investment Return Equity Debt Equity Gain/Loss Adjustments Expense Gain/Loss On Equity

Three Months Ended March 31, 2007Core Operations 6,085.9$ (1,734.5)$ 4,351.4$ 186.4$ -$ (21.0)$ 165.4$ 15.2%Individual Income Protection - Closed Block 2,647.2 (714.7) 1,932.5 14.6 - (8.8) 5.8 1.2%Corporate and Other (2,096.5) 2,449.2 352.7 (26.4) - 29.8 3.4 3.9%Total 6,636.6$ -$ 6,636.6$ 174.6$ -$ -$ 174.6$ 10.5%

Three Months Ended December 31, 2006Core Operations 6,443.0$ (1,791.7)$ 4,651.3$ 272.9$ (81.7)$ (20.6)$ 170.6$ 14.7%Individual Income Protection - Closed Block 2,627.2 (711.2) 1,916.0 18.7 - (8.1) 10.6 2.2%Corporate and Other (2,212.6) 2,502.9 290.3 (17.9) (12.2) 28.7 (1.4) -1.9%Total 6,857.6$ -$ 6,857.6$ 273.7$ (93.9)$ -$ 179.8$ 10.5%

Three Months Ended September 30, 2006Core Operations 6,337.8$ (1,741.1)$ 4,596.7$ (29.6)$ 189.4$ (19.5)$ 140.3$ 12.2%Individual Income Protection - Closed Block 2,610.3 (717.1) 1,893.2 (3.5) 22.1 (8.0) 10.6 2.2%Corporate and Other (2,185.4) 2,458.2 272.8 (35.3) 12.7 27.5 4.9 7.2%Total 6,762.7$ -$ 6,762.7$ (68.4)$ 224.2$ -$ 155.8$ 9.2%

Three Months Ended June 30, 2006Core Operations 6,260.0$ (1,851.9)$ 4,408.1$ 143.0$ -$ (21.6)$ 121.4$ 11.0%Individual Income Protection - Closed Block 2,582.1 (763.9) 1,818.2 21.6 - (8.9) 12.7 2.8%Corporate and Other (2,387.9) 2,615.8 227.9 (37.6) 11.6 30.5 4.5 7.9%Total 6,454.2$ -$ 6,454.2$ 127.0$ 11.6$ -$ 138.6$ 8.6%

Three Months Ended March 31, 2006Core Operations 6,157.7$ (2,062.5)$ 4,095.2$ 89.7$ 47.3$ (23.2)$ 113.8$ 11.1%Individual Income Protection - Closed Block 2,549.0 (853.8) 1,695.2 9.5 8.6 (9.6) 8.5 2.0%Corporate and Other (2,627.7) 2,916.3 288.6 (29.3) 3.4 32.8 6.9 9.6%Total 6,079.0$ -$ 6,079.0$ 69.9$ 59.3$ -$ 129.2$ 8.5%

(in millions)


148

As of As of As of As ofSeptember 30 December 31 December 31 March 31

2007 2006 2005 2003

Debt 2,460.2$ 2,659.6$ 3,261.6$ 2,421.2$ Exclude: 50% of Adjustable Conversion Rate Equity Units (ACEs) - 150.0 437.5 - Tailwind Non-recourse Debt 115.0 130.0 - - Debt, As Adjusted 2,345.2$ 2,379.6$ 2,824.1$ 2,421.2$

Debt 2,460.2$ 2,659.6$ 3,261.6$ 2,421.2$ Total Stockholders' Equity 7,830.8 7,718.8 7,363.9 6,545.3 Exclude: Net Unrealized Gain on Securities and Cash Flow Hedges 483.6 729.0 1,314.0 951.7 Tailwind's Capital and Non-recourse Debt 133.3 162.0 - - Total Debt and Stockholders' Equity, As Adjusted 9,674.1$ 9,487.4$ 9,311.5$ 8,014.8$

Leverage Ratio 24.2% 25.1% 30.3% 30.2%

Twelve MonthsEnded BTOE as a

12/31/2005 Percent of(in millions) Premium Income

Unum UK Segment Operating Income Before Income Tax and Net Realized Investment Gain (Loss), As Reported 187.7$ 23.9% Exclude Gain on Sale of Netherlands Branch 5.7 As Adjusted 182.0$ 23.2%

(in millions)


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