Unum Group SWOT and PESTLE Analysis

Strength

1. Consistent growth in revenue and financial conditions over the past 5 years: Unum’s sales revenue has been showing growth trends for the last five years. The revenue clocked to $ 11,998.9 million in FY2019 showing a significant and consistent revenue growth from $ 10,731.3 million in FY2015. Also, in FY2019 the Earnings per share rose to $5.24 and adjusted operating EPS at an all-time high of $5.44, resulting in another year of record growth. The group exhibited return on equity 17.2% in its core operating segments. The company has paid regular dividends to the shareholders, with a significant increase in the Cash dividend from $ 0.70 per share in 2015 to $ 1.09 per share in 2019. Further the company paid $229 million in dividends and increased the annual dividend rate by 11.2% over the prior year. Unum also accomplished the repurchase of its outstanding shares worth $400 million in 2019. The FY2019 ended by further strengthening the financial foundation of the company, some of the exceptional highlights of the year include scaling up of the Risk-based capital ratio above Unum's target of 350%, Liquidity of more than $860 million of holding company cash, creating strong cash flow due to statutory earnings of $1.1 billion, Low credit losses relative to the industry benchmark, $7 billion claims paid in 2019 and Solid financial strength ratings as of 2020.

2. Strong brand legacy and market position across its business segments: From 17 decades the Unum family of business is providing crucial financial protection to its customers' employees and their families, protecting nearly 38 million people via its primary operating segments. All the three principal operating business segments of Unum group i.e. Unum US, Unum International, and Colonial Life, are leading players in their respective markets. Precisely Unum US is a market leader in group and individual disability benefits in the United States, one of the largest providers of group life and voluntary workplace benefits, and a growing dental and vision carrier. Moreover, Unum UK is the leading provider of group income protection and critical illness coverage in the United Kingdom. Also, Colonial Life is one of America’s leading providers of voluntary worksite benefits, including disability, life, accident, critical illness, cancer, hospitalization, dental and vision coverage. As of early 2020, consolidated incomes generated from Unum US, Unum International, and Colonial Life are approximately 64%, 7% and 18% respectively and remaining 11% generated from the Closed Block operations.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. Insurance subsidiaries subjective to extensive supervision and regulation: Unum Group's insurance subsidiaries are subject to extensive supervision and regulation in the United States and abroad. The primary purpose of insurance regulation is to protect policyholders, not stockholders. The regulatory authorities, including state insurance departments in the United States, the PRA in the United Kingdom, and the KNF in Poland, have broad administrative powers over many aspects of the insurance business. Failure to obtain or maintain necessary licenses, permits, authorizations, or accreditations, could lead to a great cost and adversely impacting the businesses. Further, Changes in the laws and regulations may affect the cost or demand for Unum's products, increase capital and reserving requirements for its insurance subsidiaries, and adversely affect profitability, liquidity, or growth.

2. Impact of Brexit on Unum UK: In January 2020, an official bill was passed formalizing the withdrawal of the U.K. from the EU, with an 11-month transition period to assess a discussion regarding the future relationship. The disruption and uncertainty associated with the withdrawal will have an indirect impact on Unum UK. It could dampen economic growth in the U.K., and correspondingly, the earnings of its U.K. business. The group may also experience volatility in the fair values of their investments in the U.K. and EU-based issuers. Moreover, the withdrawal could lead to revision or forming new tax regulations, that not only disrupt the corporate tax system but make the products less attractive to customers. Further, the company foresees a continued impact on the consolidated financial results due to fluctuations in the British pound sterling to the dollar exchange rate.

Environmental

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