Chattanooga’s biggest company doesn’t see a return to normal until the second half of 2021 amid the pandemic, and officials said a deal unveiled Thursday will free up capital and give it flexibility until the economy recovers.
Unum Chief Executive Richard McKenney said 2021 will be “a transitional year. The pandemic doesn’t end 12/31.”
McKenney told investors and analysts that the agreement to re-insure a big portion of its closed individual disability insurance (IDI) block of business is estimated to free up $600 million in capital.
“It’s a very good transaction,” he said during a webinar on the locally based company’s 2021 outlook.
Unum, which employs nearly 3,000 people in Chattanooga, called the deal a “closed disability block sale.” The agreement to re-insure much of its IDI block will be backed by about $7.1 billion in reserves to a subsidiary of Global Atlantic Financial Group through a co-insurance arrangement, according to Unum.