Chattanooga-based insurer Unum is coming off a record 2022 and targeting new highs this year as the company turns 175 years old, its chief executive officer said.
Also, the business hit an all-time high mark by covering about 45 million people last year, CEO Richard McKenney said in an interview this week.
"That's the most people we've been able to protect," he said at Unum's downtown headquarters, adding, "2022 was the best year ever, and it sets us up for an even better growth trajectory."
Unum, which offers voluntary benefits such as disability, life, dental and vision insurance in workplaces, last year saw revenues climb to a record $12 billion, with total earnings hitting $1.3 billion, said McKenney, the 54-year-old CEO who took the company's helm in 2015.
"Premiums grew every year during the pandemic, even with the headwinds we saw," he said.
But last year, Chattanooga's biggest locally based company gained tailwinds as inflation and interest rates rose, the company CEO said.
"An inflationary environment is actually a good thing for us," he said. "People are getting higher wages. We have to protect more of their income stream."
Also, higher interest rates help grow the company's massive $50 billion investment portfolio, McKenney said.
At the same time, higher inflation means Unum pays its employees more, he said.
"We'll see wage inflation of our own employees and cost base, but we think that it's good to make sure we're taking good care of our employees," McKenney said.
This year, he expects premiums to rise 3% to 5%, which will give the insurer a "pretty significant" boost.
"If you're growing the company 5% a year, you're talking about a half billion dollars coming in," McKenney said.
In addition, Unum officials are projecting signing up more than 1 million customers.
"Because we manage prudently, we'll see that come through earnings as well," the CEO said. He said earnings per share should climb about 10% this year.
"That's something we want to consistently deliver year in and year out," McKenney said.
Over the past year, the company's stock price jumped from $32.76 per share on April 14, 2022, to a high of $46.09 on Oct. 28. The stock has lost some steam but is still solidly higher as it closed at $39.93 on Wednesday.
The business results come as Unum marks its 175th year in 2023, putting it as one of the oldest continually operating companies that calls Chattanooga home.
Unum traces its start to 1848 when Union Mutual was chartered in Maine and later became Unum.
In 1887, Provident Life and Accident Insurance Co. was founded in Chattanooga. A series of mergers and acquisitions from 1993 to 1999 by Unum, Provident, Paul Revere and Colonial Life created what was known as UnumProvident and later Unum. Chattanooga became the headquarters of the insurance powerhouse.
Martha Leiper, the company's chief investment officer, said in an interview earlier this year that the company will celebrate 175 years throughout 2023. She said plans are for a big event in July.
"We're doing it in the U.S., Ireland, the U.K. and Poland," Leiper added.
McKenney said Unum officials "take our history seriously."
"When you work for a company that has that kind of history, you think about decisions you make over a much longer term," he said. "We're here for the long term. We're here to take care of people in a time of need. Making sure we have that good sound footing is paramount."
McKenney said Unum officials are talking about doing 175 events, or so-called "caring spirit moments" that the company can do from a community perspective.
"A big push in 2023 is on the community service front," he said.
UNUM TIMELINE
— 1848: Union Mutual chartered in Maine, later becomes Unum.
— 1864: American reinsurance market born when Union Mutual reinsures Chicago Mutual Life.
— 1887: Provident Life and Accident Insurance Co. founded in Chattanooga, gets start by insuring railroad workers.
— 1937: Colonial Life and Accident Insurance Co. founded in South Carolina in 1937.
— 1939: Provident becomes first insurer to offer disability benefits.
— 1990: Unum expands to United Kingdom
— 1993: Mergers and acquisitions from 1993 to 1999 combine Unum, Provident, Paul Revere and Colonial Life. Initially known as UnumProvident, the company becomes Unum Group in 2007.
— 1999: UnumProvident becomes first to offer employee assistance plan with group disability coverage.
— 2015: Unum expands to dental market with acquisitions of National Dental Plan and Starmount Life. Starmount also offers vision coverage.
— 2023: Company celebrates 175 years
Source: Unum
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.