Unum names new CEO; Q4 operating income up

Courtesy photo Unum Group CFO Richard McKenney has been named CEO, effective April 1.

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By Emily Micucci

Tennessee-based Unum Group has promoted its chief financial officer, Richard McKenney, to succeed retiring CEO Thomas Watjen, the employee-benefits provider announced Tuesday.

McKenney, 46, will become CEO April 1, as well as president. He will also have a seat on the board of directors.

Unum employs about 625 at its downtown Worcester office.

The announcement of the executive change came as Unum (NYSE: UNM) reported a fourth-quarter net loss of $279.1 million. That included an after-tax reserve charge of $453.8 million. Otherwise, the company’s adjusted operating income rose to $228.8 million, or 90 cents per share, compared with $223.8 million, or 85 cents per share, in the fourth quarter of 2013.

The after-tax reserve charge came in the company’s long-term care insurance block, which has been discontinued for new customers, as well as pension plan settlements and investment losses, which resulted in a loss of another $54.1 million, according to an earnings statement.

Unum’s operating earnings beat Zacks Consensus Estimate by two cents. Revenue climbed to $2.65 billion, up from $2.58 billion a year earlier.

Meanwhile, McKenney said in the statement that he is “honored” to serve as Unum’s next CEO, and to build on the foundation that Watjen and other executives have built. Watjen joined Unum in 1994, and was named CEO in 2003. He will remain a director through the company’s 2017 annual meeting.

“Unum is well positioned to capitalize on positive trends in our markets, including strong sales momentum, accelerating premium growth and solid operating margins across the company,” McKenney said.

Watjen called his time as CEO of Unum a “privilege” and said he is “delighted” that McKenney was selected as his successor.

“(I) believe the steps we have taken to secure management continuity and an orderly leadership transition will help ensure Unum can continue to produce outstanding results well into the future,” Watjen said.

Jack McGarry, Unum’s president and CEO of Closed Block Operations, will succeed McKenney as CFO.

“I am very pleased with the way we finished 2014, with continued solid margins in our core business and one of the strongest quartet y premium growth rates we’ve seen in many years,” Watjen CEO said in the earnings statement. “Our top-line growth was driven by a balance of strong sales, solid persistency and continued success with our ongoing renewal and re-pricing actions.

“Today’s low interested rate environment, though, creates significant challenges for us and for our industry, and we are taking the steps within our core business to maintain the solid margins and financial flexibility we’ve worked so hard to attain,” Watjen said.