TEXT-S&P upgrades Unum Group and subsidiaries

Overview
-- Unum Group's operating performance has exceeded its peers'. The
company has also increased its diversification and maintained very strong
capital.
-- We are raising our long-term credit ratings on Unum Group and its U.S.
operating subsidiaries.
-- The stable outlook indicates the limited potential for an upgrade in
the next 12-24 months.

Rating Action
On Oct. 9, 2012, Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Unum Group to 'BBB' from 'BBB-'. At the same
time, we raised our long-term counterparty credit and financial strength
ratings on Unum's U.S. operating subsidiaries (see ratings list) to 'A' from
'A-'. We also revised the group status of Colonial Life & Accident Insurance
Co. to core from strategically important. The counterparty credit and
financial strength ratings on Unum's strategically important U.K. subsidiary,
UNUM Ltd., remain unchanged at 'A-' with a stable outlook.

Rationale
Key factors supporting the upgrade include Unum's stable operating
performance, improved diversification through supplemental and voluntary
product sales, and maintained statutory capital that is in excess of the
rating. For the past several years the company's operating performance has
exceeded its peers'. Pretax GAAP operating earnings (which exclude realized
gains and losses and special charges) were $1.3 billion in 2010 and 2011,
which is in excess of the rating level. We expect operating earnings to
decline slightly in 2012 to $1.2 billion-$1.3 billion, primarily because of
worse-than-expected claims experience in the company's U.K. operations. For
2013, we expect earnings to increase moderately.

Unum has diversified its operations in recent years, primarily through
supplemental and voluntary product sales. The share of consolidated premium
income from Unum's U.S. supplemental and voluntary products and its Colonial
Life & Accident subsidiary, which sells voluntary products through an agency
distribution channel, has grown each year since 2004. They constituted 29% of
premium income in 2010, up from 22% in 2007 and 18% in 2004. Conversely, Unum
U.S.'s group income protection business (long- and short-term disability
insurance), which had exhibited historical earnings volatility, saw its share
of consolidated premium income decline each year since 2004. It dropped to 27%
in 2011 from 29% in 2007 and 34% on 2004. Consolidated total adjusted capital
(including the asset valuation reserve) for Unum U.S. has increased every year
since 2007, and it reached $3.8 billion at year-end 2011, which was a 2%
increase from $3.7 billion in 2010. The company's capital adequacy is in
excess of the rating, based on our model.

For year-end 2012, we expect Unum's sales to reflect continued economic and
payroll weakness, but to improve by about 6% from 2011 levels. We expect the
company's pretax operating income to be $1.1 billion-$1.3 billion, which is
slightly less than 2011 earnings. We expect Unum to maintain a strong balance
sheet with high-quality assets, very strong capitalization, and moderate debt.
If the company meets our expectations, EBITDA interest coverage will be
8x-10x, with an adjusted debt-to-total capital ratio around 25%. We also
expect the company to maintain capitalization at the operating companies at a
level in excess of the ratings.

Nevertheless, the still-weak economy could make it difficult for Unum to
achieve growth and could lead to an increase in disability insurance claims.
Unum still has significant exposure to elevated disability claims, although
not to the same extent as it had in the past.

Outlook
The stable outlook indicates the limited potential for an upgrade in the next
12-24 months. It reflects our expectation that Unum will continue to produce
consistent operating results and diversify its business profile, while
maintaining capitalization in excess of the rating. We expect the rating to be
somewhat constrained by the still-weak economy, which could result in reduced
growth or increased disability insurance claims incidence. We could lower the
ratings if these conditions lower earnings to less than $1 billion or reduce
capitalization to a level commensurate with the rating and the company is not
willing or able to compensate with offsetting changes in financial management
policy.

Related Criteria And Research
-- Methodology For Assessing U.S. Insurers' Capital Adequacy Beyond The
Financial Crisis, May 31, 2011
-- Holding Company Analysis, June 11, 2009
-- Analysis Of North American Life Insurance Operating Performance, May
13, 2009
-- Evaluating Insurers' Competitive Position, April 22, 2009

Ratings List
Upgraded
To From
Unum Group
Senior Unsecured BBB BBB-

Provident Financing Trust I
Preferred Stock BB+ BB

UnumProvident Finance Company plc
Senior Unsecured BBB BBB-

Upgraded; Outlook Action
To From
Colonial Life & Accident Insurance Co.
UNUM Life Insurance Co. of America
Provident Life & Accident Insurance Co.
Paul Revere Life Insurance Co.
First UNUM Life Insurance Co.
Counterparty Credit Rating
Local Currency A/Stable/-- A-/Positive/--
Financial Strength Rating
Local Currency A/Stable/-- A-/Positive/--

Unum Group
Counterparty Credit Rating
Local Currency BBB/Stable/-- BBB-/Positive/--

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.