Businessmodel of Unum

Customer Segments

Unum provides a range of group insurance solutions and products to a range of customers, spanning multiple business sectors. These customers can be

• Employers, comprising corporate, commercial, and institutional clients across various business sectors, that provide insurance coverage to their employees via Unum; and
• Employees and Individuals, comprising individuals and families that purchase coverage directly from the Company, and employees of various companies and institutions who are able to purchase insurance products in the workplace. Unum also sells supplemental products to individual retail customers as well as groups of employees, including individual disability, group and individual critical illness, and group dental coverage. Unum does not name an of its clients on its website but does publish customer testimonials from clients operating in the entertainment and healthcare sectors.

Unum operates primarily in the UK and the US, with operating segments dedicated to thee two jurisdictions. The Company also serves, to a limited extent, customer in certain other countries, including Canada.

Value Propositions

Unum provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as a reliable provider of insurance products and solutions, with a positive reputation and a track record for offering high-quality services;
• Its varied portfolio of insurance products, with the Company offering a broad range of insurance products to individuals, families, and employers, including group long-term and short-term disability insurance, group life and accidental death and dismemberment products, sickness coverage, life products, and cancer and critical illness products
• Its multi-channel distribution system, with the Company offering its products and services to customers through various channels, including its own sales personnel and a network of independent brokers, agencies, and consultants;
• Its accessibility, with the Company offering its customers access to an online portal, allowing them to manage their products and plans from anywhere and at any time; and
• Its industry expertise and experience, with the Company employing specialist personnel across its three operating segments, led by a team of experienced industry executives. ### Channels

Unum operates a website at www.unum.com, through which it provides information on its various products, services, and corporate activities. The Company also operates separate but similar websites for its Unum UK and Colonial Life segments at www.unum.co.uk and www.coloniallife.com respectively. While these websites do not host online sales channels, they do offer online customer portals that allows customers to manage their coverage independently.

Unum sells its provide and provides services to customers through its in-house direct sales force, which is organised primarily by operating segment. These sales personnel operate out of the Company’s international network of offices across the US and the UK, including locations in Portland, Chattanooga, and Columbia in the US, and Dorking and Carlow in the UK.

Unum’s Colonial Life segment – which provides various accident, sickness, disability products, and life insurance products – markets and sells its services directly to employees, on both a group and an individual basis, at the workplace through an independent contractor agency sales force and brokers. The Company’s other segments also utilize the services of various insurance broker, independent agencies, and sales representatives to extend its reach.

Customer Relationships

While Unum does not operate an online sales channel, the Company does provide some services to its customers on a self-service basis. This notably includes the Company’s online customer portals, which allow clients to manage their coverage plans, change their account details, and access certain resources without interacting with members of the Company’s sales and support personnel. The Company also provides self-service tools through its website, such as its insurance coverage calculator.

Unum principally sells its products through its own sales representatives, as well as independent brokers and agents, who consult directly with customers, providing personalised advice tailored to the needs and circumstances of each individual client. The Company’s solutions and products often span multiple years, with the Company seeking to establish long-term relationships.

Unum provides a range of resources to customers through its website. This includes general and specific FAQs, video guides, online forms, and learning tools. Customers can also access personal assistance from the Company’s support personnel by contacting the Company online or over the phone. Customers are additionally able to follow Unum’s activities, and interact with its members of staff directly, through its social media accounts, including with Twitter and Facebook.

Key Activities

Unum is a provider of disability insurance products, primarily to customers in the US and the UK. The Company operates through three reportable business segments: Unum US, which offers group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business in the US; Unum UK, which offers individual disability and critical illness products in the UK; and Colonial Life, offers insurance for accident, sickness, and disability products, life products, and cancer and critical illness products.

The Company has two additional segments, Closed Block and Corporate. The Closed Block segment concerns individual and group disability and long-term care insurance products that are no longer actively marketed.

Key Partners

Unum works closely with a network of partner companies and organisations in order to provide reliable and effective services to its customers. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, including suppliers of equipment and services that support the Company’s core operations, as well as companies to which certain non-technical functions can be outsourced;
• Channel and Distribution Partners, comprising the Company’s network of independent consultants, insurance brokers, sales agents, and contractors that offer services and products on the Company’s behalf and extend the Company’s marketing reach;
• Technology Partners, comprising various technology companies, and hardware and software providers that work with the Company to ensure its IT infrastructure and online solutions are up to date;
• Social and Community Partners, comprising charitable organisations and non-profits, with which the Company collaborates on various social and community projects. Unum has launched a number of partnerships in recent years. This includes integration partnerships with software company Flock, a tie-up with online platform Pure Benefits, and a community partnership with the Mental Health Foundation.

Key Resources

Unum’s key resources are its brands, its online platforms, its IT and communications infrastructure, its network of brokers and sales agents, its network of offices, its partnerships, and its personnel.

Unum owns and or leases a number of properties in the US and the UK that are key to the Company’s activities. This comprises the Company’s network of corporate, sales and administrative offices, comprising approximately 2.3 million square feet of office space. The Company’s main offices are based in Chattanooga, Tennessee; Portland, Maine; Columbia, South Carolina; and Dorking, UK.

Cost Structure

Unum incurs costs in relation to the development and maintenance of its online platforms, the maintenance of its IT and communications infrastructure, the operation of its sales and distribution channels, the operation of its office network, the fulfilment of insurance claims, the implementation of advertising and marketing campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 Unum recorded total benefits and expenses in the amount of $9.49 billion. This included benefits and change in reserves for future benefits in the amount of $6.78 billion, commission expenses totalling $996.3 million, and interests and debt expenses in the amount of $152.8 million.

Revenue Streams

Unum generates revenue through the sale of various group and individual insurance products sold to employers, employees, and families. The Company’s revenue is derived primarily from the collection of insurance premiums. It also derives a portion of its revenue from investment income.

In 2015 Unum generated revenue for the year of $10.73 billion, up slightly on the $10.52 billion recorded by the Company the previous year. The majority of this revenue, approximately $8.08 billion, was attributed to premium income. Close to half of the Company’s annual revenue, around $ 4.96 billion, was generated by the Unum US segment. This was followed by the Colonial Life segment, which generated $1.34 billion for the year.