Unum (previously UnumProvident) and Business


An overview of the business operations of Unum (previously UnumProvident) and how Unum has influenced UK Government policy to the detriment of the disabled.

This page is published in the public domain and is uncopyrighted. Feel free to copy. See Copyleft (http://www.gnu.org/copyleft/)

This website provides information on how Atos runs its business, extracts from the Contract between the DWP and Atos including the MEDICAL CONDITIONS that mean a face to face medical assessment is not always necessary, ASSESSMENTS AND POINTS, the breaches of Contract that occurred in my case, my unsound medical report and the correspondence showing how difficult it is to obtain justice or advice.

The Government is inviting the public to submit petitions. Search epetitions.direct.gov.uk for "DWP" or "Atos" or "disabled" to list relevant petitions including Stop and review the cuts to benefits and services which are falling disproportionately on disabled people, their carers and families (http://epetitions.direct.gov.uk/petitions/20968).

Other ongoing petitions are Petition against constant vilification of sick and disabled claimants and Petition to "Sack Atos Immediately" .

The DWP occasionally consults the public http://www.dwp.gov.uk/consultations/.

Unum (previously UnumProvident) and Business

An overview of the business operations of Unum (previously UnumProvident) and and how Unum has influenced UK Government policy through the Department for Work and Pensions (DWP) to the detriment of the disabled. The Unum UK website is www.unum.co.uk. Unum has set up a website to sell to employers www.backupplan.com.

Topics include statements made by Unum to the UK Parliament's Work and Pensions Select Committee, financial information and supporters, of the Unum "non-medical" model for dealing with medical conditions.

The supporters include Professor Mansel Aylward (previous DWP Chief Medical Officer who left the DWP to direct Cardiff University's UnumProvident Centre for Psychosocial and Disability Research, Dame Carole Black, Lord Freud and Lord Lord Kirkwood of Kirkhope (Chairman of the Unum Customer Advisory Panel when Chair of the UK Parliament's Work and Pensions Select Committee).

If there is a direct relationship between Unum and Atos, its nature is unknown. Unum and Atos were part of the DWP Technical Working Groups that defined the details of the "non-medical" model assessments that were mandatory if a person with a disability was to be eligible to receive benefits. The same private equity funds have interests in both Unum and Atos. Private equity fund managers are not slow to drive companies to maximise profits.


You can click on the name to link to the item on this page.


In July 2008, the American Association for Justice (www.justice.org) published a document "The Ten Worst Insurance Companies In America: How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most". Allstate was the worst and Unum was the second worst.

Allstate's confrontational attitude towards its own policyholders was the brain child of consulting giant McKinsey and Company in the mid-1990s. McKinsey was tasked with developing a way to boost Allstate's bottom line.

McKinsey recommended Allstate focus on reducing the amount of money it paid in claims, whether or not they were valid. When it adopted these recommendations, Allstate made a deliberate decision to start putting profits over policyholders.

The company essentially uses a combination of lowball offers and hardball litigation. When policyholders file a claim, they are often offered an unjustifiably low payment for their injuries, generated by Allstate using secretive claim-evaluation software called Colossus. Those that accept the lowballed settlements are treated with "good hands" but may be left with less money than they need to cover medical bills and lost wages. Those that do not settle frequently get the "boxing gloves": an aggressive litigation strategy that aims to deny the claim at any cost.

Former Allstate employees call it the "three Ds": deny, delay, and defend. One particular powerpoint slide McKinsey prepared for Allstate featured an alligator and the caption "sit and wait" - emphasizing that delaying claims will increase the likelihood that the claimant gives up.

According to former Allstate agent Shannon Kmatz, this would make claims "so expensive and so timeconsuming that lawyers would start refusing to help clients."

Former Allstate adjusters say they were rewarded for keeping claims payments low, even if they had to deceive their customers.


McKinsey and Company (McKinsey & Co.)

McKinsey and Company are important Government and DWP advisors. McKinsey and Company represent the interests of major corporate clients. Most companies usually meet underlings but McKinsey and Company are so important that they meet Ministers and Chief Executives.

  • In January 2012, the Cabinet Office announced the appointment of Tim Kelsey as the new executive director for transparency and open data within the Efficiency and Reform Group (ERG) with immediate effect. For the previous six months Kelsey has been leading on transparency in the ERG on secondment from consultancy firm McKinsey & Co.

  • In November 2010, McKinsey and Company provided hospitality in the form of a dinner for Terry Moran, DWP Chief Executive, Pension, Disability and Carers Service (to 30 November) Director General, Universal Credit (from 1 December).

  • In May 2009, McKinsey and Company were appointed as a supplier to the DWP Cipher Consultancy Services Framework. The Cipher agreement will cost the DWP £500 million and will last four years.

National Audit Office include a summary of a McKinsey Quarterly article, "Five ways CFOs can make cost cuts stick, May 2010" in the NAO document "Reducing Costs in the DWP" published 23 June 2011 (www.official-documents.gov.uk/document/hc1012/hc10/1089/1089.pdf).

  1. Assign accountability at the right level

  2. Focus on how to cut, not just how much

  3. Don't let Profit and Loss Accounting get in the way of cost reduction

  4. Clearly articulate the link between cost management and strategy

  5. Treat cost management as an ongoing exercise

Consider the second (2) point, if the McKinsey & Co. recommendation to Allstate are followed by the DWP (in line with the NAO recommendation): The DWP should focus on reducing the money the DWP pays out in benefits irrespective of whether the claim of the claimant is valid or not. Adding complexity and delaying payment helps the DWP to reduce the money paid out. Formal and informal consultations, independent inquires and name changes such as DLA to PIP, which deliver nothing of substance to claimants, are all delaying tactics deployed to reduce benefits paid. The influence of influential group such as cancer patients needs to be purchased. If cancer patients were "appeased", treated as a special case if you will, perhaps fewer cancer patients would fight for the dying, the sick, the disabled and their carers. Cancer patients have been offered immediate eligibility for the Support Group. Cancer is listed in a medical category along with a number of other equally serious medical conditions. None of these equally serious medical conditions has been offered immediate eligibility for the Support Group.

Consider the third (3) point, focus on units that can best afford to cut. The DWP requires Atos to undertake ten or more assessments per day, Health assessors are wrong target for benefit protests (www.prospect.org.uk/news/id/2011/01223) by Prospect national secretary Geraldine O'Connell news release 11 May 2011. My assessment, brain tumour, lasted one hour and fifty minutes. Atos are required to carry out ten assessments per day. It is believed this number is far higher than previous. If the DWP required Atos to carry out 12 or more assessments per day, further savings pushing towards 20% could be achieved.

Consider the fourth (4) point, change the strategy: The DWP strategy was to provide the best service to claimants. This is not compatible with a 20% budget cut. The DWP new strategy is to provide as poor as possible a service to most claimants, so that budget cuts are achieved year after year. The DWP can always claim that they have listened and helped the cancer patients. Thus the DWP hopes a potential very vocal media threat has been nullified. Cancer patients are as now in the Support Group thus this "concession" is worthless in financial terms to the patient. If it were the case that cancer patients receive more, it follows other patients will receive less. The 20% budget cut will be achieved regardless. This is easier once the largest most vocal, most organised group (cancer patients) are stiffled. Cancer patients enjoy very high awareness, empathy and sympathy across all demographics and this is especially the case in all voter groups. Lord Freud in future years will add Welfare Reform to his list of pups (EuroDisney, EuroTunnel et al) that he can brag about when he is happy to look back and laugh at how easy it was for him to repeatedly sell "pigs in pokes" to a gullible public. Lord Freud, a man of no consequence, is yet another small time snake oil salesman that history will quickly forgets.


Unum are members of the Association of British Insurers (www.abi.org.uk). The ABI meets Ministers and the DWP.

It is believed that Unum learned from McKinsey and Company. and have created the "non-medical" approach to medical condition assessment because their forward projections of liabilities as a result of disability insurance previously written would vastly exceed past, current and future premium income. The financial forecast was so dire that minor changes such as time limiting payments, increasing premiums greatly with age and denying disability insurance to many groups (only sell to the employed through their employers) would not be sufficient to bridge the growing gap between premium income and outgoings. It was the "medical" aspect of the disability insurance that was the problem that needed to be addressed. This was solved at a stroke (no pun intended) by claiming a "non-medical" model should be used.

Research centres and certification of healthcare professionals, funded by Unum and those such as Atos who apply the Unum "non-medical" model, was and is expected to give the "non-medical" approach credence and legitimacy. The medical profession consider rightly that "non-medical" models are outside their remit.

E pluribus Unum James Purnell's reforms of incapacity benefit are inspired by a US company with vested interests and a murky record. Now, that's really sick

By Jonathan Rutherford, Guardian, 17 March 2008

...Unum has built up its influence in Britain. In July 2004, it opened its £1.6m Unum Centre for Psychosocial and Disability Research at Cardiff University. The company appointed Mansel Aylward as director following his retirement from the DWP in April. The launch event was attended by Archie Kirkwood, recently appointed chair of the House of Commons select committee on work and pensions. Malcolm Wicks, minister of state in the DWP, gave a speech praising the partnership between industry and the university.

The aim of the centre is to transform the ideology of welfare and so help develop the market for Unum's products. In 2005, the centre produced a monograph The Scientific & Conceptual Basis of Incapacity Benefits (TSO, 2005) written by Aylward and his colleague Gordon Waddell. It provides the framework for the 2006 welfare reform bill. Its methodology is the same one that informs the work of Unum...


Governments throughout the world faced similar challenges; aging population, increase in the number of working age people with disabilities and lower tax revenues. Unum are key drivers in "health care" insurance associations though which influence on senior Government officials is applied.

The Unum "non-medical" approach, if given credence by Governments, can be easily sold to employers, who face similar challenges to those of Governments.

Unum is wary to undertake the "non-medical" assessments for Governments directly. Unum prefers companies like Atos, a software company relatively new to disability assessments, to undertake the assessments and take the criticism.

Unum prefers to sell to employers who bundle their Unum disability insurance including the "non-medical" assessment as another "benefit" to employees. UK contracts of employment are usually confidential. An employee loses benefits after changing employer. Most disabilities arise years after premiums have been paid and little attention is paid when the insurance is written that a "non-medical" assessment will decide eligibility for payment and that the assessment is wholly dependent on Unum policy at the time. In the UK, the widespread criticism of "Atos" assessments is beneficial to Unum as it undermines confidence in the state provision of disability benefits. Loss of confidence makes it easier to sell to employers.

The training that Unum provided to their "financial advisor" sales people has been published. It was produced by Unum so that Unum can undermine the confidence of their UK target market in the Welfare State and so sell their discredited insurance. http://blacktrianglecampaign.org/2011/09/15/unums-game-plan/

Presentation points:

  • The Claimants progress will be regularly assessed and interviews will be conducted by a third party contractor paid on results.

  • Even the highest rate of benefits will fail significantly short of what most clients need in order to meet their usual household bills.

  • But a significant shortfall continues to exist between state benefit levels and usual levels of household spending, offering a significant opportunity for advice.

Unum do not publish a list of employers who provide Unum insurance to their employees. Unum operate with many names which makes independent research difficult but not impossible.

"A fool and his money is soon parted" seems to me to be an accurate reflection of how Unum will keep premium income greater than outgoings now and into the future.

Unum Product

Unum described their offering in a news release as follows. It is hard to find details of how the Unum "non medical" model for assessing medical conditions is applied and how this relates to denials of claims.

Unum's new Income Protection option offers a back up plan for all

Foundation level cover provides protection for essential financial outgoings should people be unable to work due to illness or injury

Unum is introducing a new foundation level of Income Protection cover, designed to support the nine out of ten UK employees who do not currently have a financial back up plan in place against long term illness or injury. This is intended to relieve the financial burden and stress from an employee and ensure that their essential outgoings, such as mortgage payments, bills and transport costs, can be paid whilst they recover.

Classic Group Income Protection is rich in benefits and offers the best cover available to people on long-term sick leave. However, employers tend to offer it only to their most senior employees. The new foundation level of Income Protection will offer robust cover - up to 60% replacement income with no offset for State benefits - at a lower cost, helping employers to offer everyone in the work place a back up plan.

Unlike other products in the market which stop payment to everybody after a short period of 2 - 5 years, this foundation cover will continue to pay until retirement for those who need it the most - the 30%-35% of our claimants that cannot perform any suited activity and will never return to work. Exposure to Unum's market leading rehabilitation programme will ensure that the majority can return to their own occupation within two years.

Tom Dupuis, Head of Products at Unum UK, says: "In the current economic climate, employees value their benefits package far beyond its short-term monetary value. Income Protection provided through the work place extends the financial security of employees, meaning they have a back up plan in place if they are unable to work due to illness or injury.

"Employers tell us that cost is often a barrier to offering Income Protection to all staff, so we've developed a low cost option, which is still tax deductible. Budget conscious employers can now cover their entire work force, allowing employees to protect their essential outgoings and have access to professional and financial assistance to facilitate a return to work."

For as little as £200 per year per employee, employers will be able to extend Income Protection to entire work forces, rather than solely their senior executives, where cover has historically resided.

As part of the new option, businesses can expect:

  • A replacement income for employees to help them pay for their essential outgoings whilst they recover from a long illness or serious injury. If required, Unum will support the most incapacitated employees with a replacement income all the way through to Policy Terminal Age (e.g. State Pension Age/age 65) when an alternative income (e.g. pension) may become available.

  • Confidence that employers will receive the support they need to help their employees return to work when or if possible.

  • Employees paid direct. Should an employee be unable to return to work and the employment relationship has to cease, Unum will pay the replacement income direct, allowing both parties to move on once any Duty of Care obligations have been met.

  • Easy administration that complements existing procedures and sick pay arrangements, providing absence management support to employers and their business every day (not just when needing to make a claim).

  • An affordable and flexible employee benefit for employers who may have thought they could never afford Income Protection for their entire work force. An option that fits an employer's budget and their staff's needs - and a foundation to build on in the future.

This new cover option ties into Unum's press campaign to educate employers and employees about Income Protection. The campaign, which launched earlier this year, is geared towards raising awareness of the risks employers and employees face without a back up plan in place, and to explain what Income Protection is. The new foundation cover will support Unum's aim to make Income Protection more accessible to the entire UK work force.

Unum's education campaign is running on TV, in newspapers and online through social media.


Unum have withdrawn from selling direct to individuals. I think that says it all. Most reasonable people would some up the situation as: "If you can't take the heat, quit the kitchen and send in someone else to take the heat".

Unum Performance

The lack of merit of the Unum income protection insurance is supported by the numerous cases of Unum declining insurance claims. Unum have stated to Parliament that they support a "non-medical" model for the assessment of medical conditions. Even more disturbing is the following.

Disability Insurer Found Guilty of Social Security Fraud by Mary Williams Walsh published 23 October 2008 by the New York Times

A federal jury in Boston found that Unum, the nation's largest disability insurer, had committed fraud in some cases by requiring customers to apply for Social Security benefits even though it knew they were not eligible.


Why does the Government allow such a company to operate in the UK?

Unum do publish statutory financial information but detailed searches of Unum published information do not reveal statistics on the claims approved, the claims declined and the medical conditions of the claimant. A reasonable person might conclude that if a "non-medical" model for assessment is followed, the medical condition of the claimant is not relevant. This person might further conclude that the assessor does not need medical qualifications to carry out an assessment. This seems to contradict the claims made in January 2012 by Unum (www.backupplan.com) on the front page of Unum's BackUpPlan website.

Income Protection means you still get paid monthly if you're off work long-term due to illness or injury.

Most of us think we're covered if we're off work ill or injured. But that's not always the case.

The US courts discredited Unum's "non-medical" model for assessing medical conditions. Unum was heavily fined in all the US States, required to undertake large numbers of reassessments and use a "medical" model for the assessment of medical conditions. Critics have described the "non-medical" model as pseudo-science hokum. Critics have suggested that Unum invented this "non-medical" model for assessment when Unum was concerned that their insurance premium income would be far exceeded by payments in respect of specific medical conditions.

In the UK, the judiciary consider cases on a case by case basis. Appeals can be made on points of law and it is at this stage that precedents can be set. Clearly a company in such a position as Unum would not be keen to appeal as many claimants might be able to use any precedent set to further their previously declined claims to the detriment of Unum's financial position.

Unum are selling to employers as the contract is between the employer and employee. If an employee disputes the results of the assessment, the employee could sue the employer and the employer may sue Unum. A court action, especially as many would say the employer is defending the indefensible, may bring the employer into disrepute and result in considerable adverse publicity. Unum is in a win-win situation. Unum receives the premiums, denies the claim and thus does not need to payout. The employer is the "patsy".

September 2000 - Til Death Us Do Part

Edited, for clarity, extracts from a Personnel Today article reprinted December 2011.

Permanent health insurance can be an important tool for recruiting and retaining senior executives. But beware - the advantages could be far outweighed by huge penalties if employers fail to heed its hidden dangers.

The rights of employees under PHI schemes were further defined in the subsequent case of Villella v MFI Furniture Centres, 1999, IRLR 468.

Unum accepted the severity of my client's condition (severe heart condition). However Unum declined his claim on grounds that he could perform sedentary work, and that the physical demands of his job were minimal.

Despite the medical evidence, Unum continued to resist the claim, even in the face of requests and representations from my client's MP. There was therefore no alternative but to sue. Two weeks before the trial my client died. Despite this Unum continued to resist the claim...

Employers should therefore be warned. One of your staff may have a persuasive claim for PHI benefits. However, if insurers decline the claim then the employee will be entitled to sue you for those benefits.



Commons 21 Mar 2011 - Work Capability Assessment

Stephen Lloyd: To ask the Secretary of State for Work and Pensions whether his Department has engaged Unum in the (a) design and (b) administration of the (i) work capability assessment and (ii) appeals process. [46816]

Chris Grayling: The work capability assessment was developed in 2008 with the assistance of technical working groups. As you may be aware, the Government consult widely with stakeholders and sources of public and private sector expertise, to ensure that its policies are evidence-based. Two Unum employees, a doctor and an occupational therapist, were invited to join the technical working group that carried out the review of the personal capability assessment. As with all members of the technical working group they were appointed as recognised experts in benefit assessment and in supporting return to work for people with disability.

I can confirm that since the initial review of the personal capability assessment as part of the technical working groups, that representatives of the company, Unum, have not been involved in either the administration or review of the work capability assessment.

The Department of Work and Pension has also not engaged with Unum in the design or administration of the appeals process.

Unum Evidence to the Work and Pensions Committee

These are extracts from evidence provided by Unum to the UK Parliament Work and Pensions Committee.

Unum succeeds in influencing the UK Government.

"We endorse the name of the benefit being changed to the Employment and Support Allowance. We have long argued for this change as it sets the tone for how the benefit is perceived."

Unum is the organ grinder.

"Unum, the UK's largest group income protection insurer Unum(www.unum.co.uk) and Unum Work Matters(www.unumworkmatters.co.uk), has agreed to host in London, England the 2012 International Forum on Disability Management (IFDM) - the tenth anniversary of the conference. Founded by NIDMAR, the IFDM is now under the auspices of the International Disability Management Standards Council (IDMSC), an international multi-stakeholder agency aimed at reducing the human, social and economic costs of disability in the workplace."

Unum does not want some of its work to become public.

"The advisors upon whom NICE relies have been shown to have undeclared vested interests"

December 2002

Memorandum submitted by UnumProvident (EDP 03)


UnumProvident has been operating in the UK for over 30 years, and is the UK's leading provider of income protection insurance. At the end of 2001 in the UK alone, it protected over 737,000 lives and paid benefits to people with disabilities totalling some £116 million. As such, it brings a unique perspective to assist the Committee in its inquiry.

UnumProvident believes that the current welfare, tax and benefits systems can make it difficult for disabled people to return to work. They are overly complex, can provide strong disincentives for disabled people to look for work, for example in terms of structure, payment criteria and terminology, and are in need of radical reform.

Joanne Hindle, Corporate Services Director

13 December 2002


April 2003

Unum view on JobcentrePlus and Support for Disabled People


49. Support for job retention programmes to prevent people from dropping out of the labour market due to failing health or the onset of a disability is widespread. UnumProvident suggests that the failure to offer rehabilitation services is directly linked to the increase in the numbers of people claiming Incapacity Benefits. The Employers Forum on Disability say, "If we are to minimise the numbers of people moving onto disability related benefits in the future and if we are to minimise the risks employers associate with hiring disabled people now, we need to put the provision of retention related services and employer retention related policy much higher up the policy agenda."

11 April 2003


"New Beginnings Advisory Group"

Memorandum submitted by the New Beginnings Advisory Group (EDP 35)


12. Most members of the Group believe greater communication of best practice will create a wider trickle down effect across the country. Job Centre Plus might be the best mechanism to co-ordinate such activity. UnumProvident has worked together with the Department for Work and Pensions and Job Centre Plus to create "The Knowledge" a best practice guide for employers. New Beginnings would like to see more of this kind of activity.


B&Q                              Business in the Community 
CBI                              The Cooperative Bank 
Disability Alliance              Disability Rights Commission  
Employers Forum on Disability    HSBC  
The Institute of Directors       Scottish Power  
The Shaw Trust                   Swiss Re 
UnumProvident                    Barclays Bank

15 April 2003


October 2005

Memorandum submitted by UnumProvident

At the end of 2004, UnumProvident protected over 2.1 million lives through more than 19,800 schemes. During 2004 we paid total benefit claims of over £249 million-of which more than £177 million related to income protection claims.

Our commitment to the wider world of disability and employment is shown by our prime mover support for "Beginnings"[38] and in 2004 our long-term interest in vocational rehabilitation was demonstrated by the appointment of Prof Mansel Aylward to be the first director of the UnumProvident Centre for Psychosocial and Disability Research at Cardiff University. The Centre's research will lead to a better understanding of what makes people incapacitated and how to prevent and support disabling incapacity to help people return to work after illness.


(a) Including: the experience of those who have taken part in different aspects of the Pathways to Work pilots; barriers in accessing support offered through Pathways; awareness of the support available; and views on further reform

(b) Are people with different disabilities and health conditions, in both pilot and non-pilot areas, given appropriate support by Jobcentre Plus? Is there a tendency to help those perceived as closer to the labour market?

(c) How will the reforms help those who are not able, or not yet ready, to work?

No Comment.


(a) Can the reformed systems support those with variable and manageable medical conditions, or those who are able to work part-time? Are those with mental health difficulties adequately supported?

(b) Does the Condition Management Programme provide the right level of support?

No Comment.


(a) Has Pathways successfully worked with healthcare professionals, including GPs, particularly in rehabilitation initiatives such as the Condition Management Programme? How can healthcare professionals be further engaged in the reform of the incapacity benefits system?

No Comment.

Joanne Hindle

3 October 2005


May 2006

Supplementary memorandum submitted by UnumProvident following the publication of the Welfare Reform Green Paper

In 2004 Professor Mansel Aylward was appointed to be the first director of the UnumProvident Centre for Psychosocial and Disability Research at Cardiff University.

3. We endorse the name of the benefit being changed to the Employment and Support Allowance. We have long argued for this change as it sets the tone for how the benefit is perceived.

6. Our extended experience in this field has shown us that the correct model to apply when helping people to return to work is a bio-psychosocial one. This incorporates elements of helping the individual deal with any sickness/illness (bio), motivating them and providing them with the necessary support/advice/information to get back into employment (psycho), and fully understand the social setting of their disability/lack of capacity (social), which can incorporate wider pressures upon them (eg childcare) and employer perceptions of certain conditions.

8. As a private provider, UnumProvident has been working on solutions to this capacity dilemma-which will affect both sectors. In 2005 when we acquired the UK licence for potential solution for this. A programme has been developed by a non-profit organisation in Canada, known as the National Institute of Disability Management and Research (NIDMAR www.nidmar.ca), and consists of Disability Management (DM) Audit Training and DM certification programmes.

20. We would therefore suggest the trialling of a "Functional Restrictions Pad" instead. This could be modelled on the PCA, and would highlight the activities that the individual can do without harming themselves or others...GPs should highlight the therapeutic nature of work.

21. It is known paradox that despite the vast advances in medical treatments in the later half of the 20th century that there is a huge increase in people who are considered too ill to work. This rise in incapacity has taken place from the 1980s onwards and is seen in all developed countries. It cannot be easily explained in medical terms. Clearly the increase in illness is a complex social and psychological problem and definitely not imaginary. The biopsychosocial model of disability not only explains this part of this phenomenon, but also suggest how best to manage it.

22. Managers need to understand that very few illnesses actually cause complete incapacity and that waiting until a member of staff is fully recovered from an illness or injury can be the very worst thing they can do. Similarly, appearing to question the reasons behind an absence can be very counterproductive and unnecessarily confrontational. Adopting an enabling approach seeking to overcome barriers to work is very much more effective.

24. At UnumProvident we have a non-medical, enabling model of rehabilitation and we are working with our partners at the UnumProvident Centre for Psychosocial and Disability Research at Cardiff University to better understand what places people at risk of long-term or chronic illness. Further information about this model can be made available to the committee.

6 May 2006


March 2007

Evidence submitted by Professor Malcolm Hooper (NICE 07)

1. This memorandum relates to the work of NICE in one specific area, namely its Guideline on the management of adults and children with Chronic Fatigue Syndrome/Myalgic Encephalomyelitis ("CFS/ME") currently in preparation, a draft of which was issued on 29 September 2006.

4. The incidence of ME/CFS is rising alarmingly. In order of insurance costs, one of the major medical insurance companies (UNUM Provident) reported in 1993 that ME/CFS came second in the list of the five most expensive chronic conditions, being three places above AIDS. In August 2004 the same company issued a Press Release reporting a 4,000% (four thousand) increase in claims for symptom-based syndromes, including ME/CFS. No other disease category surpassed these rates of increase. UNUM's "CFS Management Plan" states: "UNUM stands to lose millions if we do not move quickly to address this increasing problem". The latest estimate (January 2007) of the economic impact of ME/CFS in the US is between $22-$28.6 billion annually; in Japan it is $10 billion annually.

14. The advisors upon whom NICE relies have been shown to have undeclared vested interests: These psychiatrists and their adherents are heavily involved with the medical insurance industry, including UNUM Provident, Swiss Life, Canada Life, Norwich Union, Allied Dunbar, Sun Alliance, Skandia, Zurich Life and Permanent Insurance, as well as the re-insurers Swiss Re, at which Peter White is Chief Medical Officer. For the way in which these psychiatrists deal with ME/CFS claims, see www.meactionuk.org.uk/Notes_on_the_Insurance_issue_in_ME.htm. For an exposition of their commercial conflicts of interest in relation to the Department of Work and Pensions, see www.meactionuk.org.uk/Obs_on_DLA_ Handbook_for_Gibson.html.

Professor Malcolm Hooper

March 2007


Unum Financial

Unum Group revenue was $10.19 billion in 2010, $10.09 billion in 2009, $9.98 billion in 2008, $10.52 billion in 2007, $10.54 billion in 2006 and $10.44 billion in 2005 (Source: www.wikinvest.com/stock/Unum_Group_(UNM)).

In the United Kingdom, the Financial Services Authority has the ability to bar Unum from conducting business if it fails to comply with regulatory guidelines.

Financial Information Sources

In the US, companies are compelled to publish more information, which is freely available, than companies have to publish in the UK.

As an example this is from Form 10-Q (for the quarterly period ended June 30, 2011) Page 61 Unum UK segment:

In the 6 months to June 2010 persistency was 90.8%.
In the 6 months to June 2011 persistency was 85.0%.

It is pleasing to note that "Group Long-term Disability" Insurance persistency is falling. Increasing numbers are not renewing. A reasonable person might suggest UK employers are now better informed of Unum and are staying clear.

Unum UK (extracts from US company filling; UNM 10-Q filed April 30, 2009 and UNM 8-K filed April 29, 2009).

Unum UK includes insurance for group long-term disability, group life, and individual disability products sold primarily in the United Kingdom through field sales personnel and independent brokers and consultants.

Unum UK Financial

Our reporting segments are comprised of the following: Unum US, Unum UK, Colonial Life, Individual Disability – Closed Block, and Corporate and Other. Measured as a percentage of consolidated premium income for the year ended December 31, 2009, premium income was approximately 65.2 percent for the Unum US segment, 9.2 percent for Unum UK, 13.6 percent for Colonial Life, and 12.0 percent for the Individual Disability - Closed Block and Corporate and Other segments combined.

The Unum UK segment includes group long-term disability insurance, group life products, and individual disability products issued by Unum Limited and sold primarily in the United Kingdom through field sales personnel and independent brokers and consultants. Premium income for this segment totaled $686.1 million in 2009, or £438.7 million in local currency.

Unum UK reported operating income of $62.3 million in the first quarter of 2009, a 26.1 percent decrease compared to $84.3 million in the first quarter of 2008. In local currency, operating income for the first quarter of 2009 increased 1.6 percent, to £43.3 million from £42.6 million in the first quarter of 2008.

The benefit ratio in the first quarter 2009 was 53.3 percent, compared to 57.3 percent in the comparable quarter in 2008, reflecting a lower rate of claim incidence in the group long-term disability line, which was partially offset by an increase in incidence in the group life line. Premium income decreased 32.3 percent to $163.0 million in the first quarter of 2009, compared to $240.6 million in the first quarter of 2008.

In local currency, premium income decreased 6.7 percent to £113.5 million in the first quarter of 2009, compared to £121.6 million in the first quarter of 2008. Premium persistency in the group long-term disability line of business was 90.8 percent in the first quarter of 2009, compared to 84.5 percent for the comparable period in 2008. Premium persistency in the group life line of business was 74.5 percent for the first quarter 2009, compared to 84.3 percent for the first quarter 2008.

Sales increased 4.8 percent to $19.6 million in the first quarter of 2009, compared to $18.7 million in the first quarter of 2008. In local currency, sales for the first quarter of 2009 increased 44.7 percent to £13.6 million, compared to £9.4 million in the first quarter of 2008.

Unum Decline

Unum appears to be retreating from target markets. It seems likely that in the US a cause for this is litigation and fines which in turn has caused the reputation of Unum to suffer. This adverse publicity is known in the UK. In addition Unum's attempts to influence the Government to attack the Welfare State, have achieved some success. The name of Invalidity Benefit has been changed. Benefit payments have been kept low. Unum has spent a lot of resources so that Unum's products of dubious merit are easier to sell.

Unum pulls out of individual income protection - March 2012

Changes to Unum's income protection offer published by Unum March 2012.

Income protection specialist, Unum, has signalled its commitment to focusing on the employer-paid benefits market with the removal from sale of its Individual income protection products. It is retaining its market-leading Executive income protection offering, which is an employer paid product that will be offered alongside its award-winning Group products.

"We believe the workplace is the best place for workers to get income protection," comments Marco Forato, Chief Marketing Officer. "It makes cover more affordable and also enables individuals with pre-existing conditions or high risk people to get cover they may not be approved for with an individual policy."

"While some advisers do specialise in the SME segment, there are over a 150,000 companies in the UK with less than 50 employees and more often than not they don't get the expert support they need. Through their existing relationships with small business owners and directors, who already understand the value of workplace IP through their own Executive policy, IFAs could easily step in and fill this gap."

Forato continues: "In the world of RDR and auto-enrolment, the employer-paid market is a real growth opportunity for Advisers. We will partner with Advisers who have relationships with small business decision makers through our Executive product, helping them bring Group income protection into their discussions."

Unum's existing Personal, Primary and Essential Ability Cover product policyholders will continue to be supported by Unum's market-leading claims management and LifeWorks support services. The products will be closed to future sales from 2nd March, although Unum will honour all valid quotations previously issued, provided the completed application is received by 30 March 2012.


FT Advisor reported the above Unum new release in an article by Marc Shoffman published 8 March 2012

Unum pulls out of individual income protection

...Mark Myers, chief executive of British Friendly, said: "We are very disappointed to see a high quality provider leaving the individual market. Even though they were a competitor we loved their recent adverts, which demonstrated how important IP is to protecting the things that matter most."

Minesh Patel, owner of London-based EA Financial Solutions, said: "I am a strong believer in income protection. I always recommend it, but clients often are resistant to it on the basis of cost...


Unum Group fourth quarter loss reported February 2012

Unum Group reported a fourth-quarter loss of $425.4 million reversing a profit of $225.8 million reported for the same period the previous year. Most of the loss came from a $561 million charge linked to the company's exit from its long term care business. Excluding one-off items, Unum's net operating income for the quarter rose to $227.6 million from $208.6 million. Revenue for the quarter ended 31 December 2011, rose to $2.6 billion from $2.57 billion. Unum Group stock is down 8% over the past 12 months.

Some believe that Unum underestimated the number of claims, underestimated the cost of care and misjudged the life expectancy of their customers. Low interest rates have limited investment income from funds expected to be used to fund claims.

On a marketing level it cannot help Unum sales that every search engine lists the actual experience of Unum customers.

Influential People and Unum

The following are ardent supporters of the "non-medical" model for assessing medical conditions.

Professor Mansel Aylward

DWP Chief Medical Officer who introduced the "non-medical" model from Unum.

In 2004 Professor Mansel Aylward was appointed to be the first director of the UnumProvident Centre for Psychosocial and Disability Research at Cardiff University.

Dame Carole Black

Her support for the "non-medical" model seems rock solid.

Lord Freud

No medical knowledge but has many times strongly supported the "non-medical" model.

In 2003, Freud had become the vice-chairman of investing banking at a major investment bank.

In 2006, Freud was appointed by Prime Minister Tony Blair to provide an independent review of the British welfare to work system. His recommendations called for expanded private sector involvement in the welfare system for substantial resources to be found to help those on Incapacity Benefit back into economic activity and for single parents to be required to work earlier.

In 2008 he was appointed as an adviser to the Labour government when James Purnell was appointed Secretary of State for Work and Pensions. He produced a white paper which would require most people receiving benefits either to participate in some form of employment or prepare formally to find work later.

In 2009, Freud joined the then opposition Conservative Party. He was given a life peerage as Baron Freud, of Eastry in the county of Kent, and became a shadow minister for welfare in the House of Lords.

The Coalition Government appointed Lord Freud as a Parliamentary Under Secretary of State for Work and Pensions.

A BBC article claims Freud was involved in piecing together extremely complex deals such as the flotations of Eurotunnel and EuroDisney, which cost investors millions, and the financing of the Channel Tunnel rail link. Eurotunnel opened in May 1994 one year behind schedule and 2 billion GBP over budget. Freud later admitted the deal was a "shambles" and that he had "successfully sold the market a pup".

Lord Freud reassures

10 March 2011 - Question - Autism: Disability Living Allowance

...we are committed to ensuring that it reflects the needs of all individuals effectively. We recognise that the current assessment criteria for disability living allowance can favour physical impairments and do not always fully reflect the needs of disabled people with mental, intellectual, cognitive and development impairments, including autism...

...One of the things that we want to get absolutely right is how we look after the most vulnerable. The default position is that we would like to see people face to face, but where that is not realistic, helpful or appropriate we will not be doing so. We will also encourage people, autistic people as well as others, to bring a carer, a family member or a professional with them so that we get the best evidence-based result that we possibly can.


Lord Freud supports Unum "non-medical" approach

29 June 2011 - Question - Work Capability Assessments

Entitlement to employment and support allowance (ESA) is based on an assessment of functional capability, not on medical condition or diagnosis....

...So, for example, a decision on entitlement for a customer claiming ESA on the basis of a mental health condition would be based on their ability to carry out the range of activities assessed by the work capability assessment. It is also important to note that, where someone has more than one diagnosis or disabling condition, only the predominant one is currently recorded...


Lord Freud does not support Unum "non-medical" approach

3 October 2011 - Question - Macmillan Cancer Support's estimate

Entitlement to employment and support allowance (ESA) is based on an assessment of functional capability, not on medical condition or diagnosis....

Asked by Lord Morris of Manchester

To ask Her Majesty's Government what is their response to Macmillan Cancer Support's estimate that their proposals to limit contributory employment and support allowance (ESA) to 12 months will result in 7,000 cancer patients losing up to £94 per week in benefits, and that those whose partners earn £7,500 or more a year could lose their ESA altogether.[HL11727]

Lord Freud: The department has carefully considered the position of people with a range of serious and life threatening illnesses-including cancer-in relation to the benefit system. We do not aim to reduce the levels of support for the most severely ill or disabled people but it is clearly important that we ensure it is well targeted, is fair to those on low pay and that the right money goes to the right people.

Following an internal review we have recently made changes to the work capability assessment (WCA) so that more individuals undergoing certain chemotherapy treatments will automatically be placed in the support group without the need for an assessment. Those in the support group, including many cancer patients, will not be affected by the time-limiting measure.

People will still be able to claim income-related employment and support allowance (ESA) subject to meeting the conditions of entitlement. Access to income-related ESA is not affected by this measure. This measure will not leave people destitute-only those who have alternative resources will not qualify for income-related ESA. Typically they would have a partner in full-time work or have savings in excess of £16,000 in order not to qualify for income-related ESA.

Dependent on individual circumstances, a person may be able to claim a number of benefits, for example housing benefit, council tax benefit, pension credit and tax credits. Additionally, those who do not qualify for income-related ESA will still be able to claim ESA on a "credits only" basis so that they can maintain their national insurance contribution record.

A claimant will also retain any entitlement to disability living allowance, provided they continue to meet the qualifying conditions. Not all those affected with cancer will be financially worse off as a result of this measure as some will be fully or partially compensated by income-related ESA.

Additionally, Professor Harrington, as part of his second independent review, asked Macmillan Cancer Support to look in detail at how the WCA assesses people with cancer and to provide him with recommendations for further improvements. We have recently received these recommendations from Professor Harrington. We are considering them carefully to understand whether they will improve the assessment further for individuals with cancer. We will come forward with any proposals shortly.

We are determined that the social security system should support people who are diagnosed with cancer in the most sensitive, fair and appropriate way and have been working with Macmillan Cancer Support and others to achieve this.


Unum meetings with the DWP

16 November 2011 - Question - Insurance: UNUM Provident

Asked by The Countess of Mar

To ask Her Majesty's Government (a) on how many occasions they have met officials from UNUM Provident; (b) on how many occasions officials from UNUM Provident have been members of advisory committees or working groups of the Department for Work and Pensions or the Department of Health, and (c) which other insurance companies have been involved in similar activities.[HL13073]

Lord Freud: An extensive search of recent records within the department was carried out following receipt of your question, and details of meetings between department officials and representatives of UNUM Provident, details of membership of advisory committees or working groups, and details of similar activity with other insurance companies, are listed below. However, it should be noted that there are approximately 100,000 officials within the department and it would not be possible, except at disproportionate cost, to ask each of them whether they have engaged in any such discussions.

(a) on 14 February 2011, UNUM Provident officials met with officials involved in the independent review of sickness absence in Great Britain to discuss a research paper. In February 2011, the Government commissioned the independent review to explore the current sickness absence system, and examine whether the costs associated with sickness absence are appropriately shared between the state, individuals and employers. The independent review is being jointly led by Dame Carol Black and David Frost CBE; and on 18 October 2010, a representative from UNUM Provident, who was part of a delegation from the UK Rehabilitation Council, met with the Minister for Welfare Reform and department officials. A full list of ministerial meetings with external organisations is available at www.dwp.gov.uk/publications/corporate-publications/ministers-meetings-overseas.shtml.

The Minister for Welfare Reform has also attended a round table on 5 October 2010 at the Conservative Party Conference which was jointly hosted by Demos and UNUM.

(b) two working groups were set up in 2006 to review the personal capability assessment for incapacity benefit. One of these groups reviewed the physical descriptors within the assessment, and of the seven meetings for which we have a record there were four meetings which the UNUM Provident representative definitely did not attend; the other looked at the descriptors which assessed mental function, and of the five meetings for which we have a record, the UNUM Provident representative was not recorded as being absent from any of them; and Jack McGarry, CEO of UNUM UK, was nominated to sit on the independent review of sickness absence in Great Britain expert panel by the insurance industry body.

(c) As part of the evidence-gathering process for the independent review of sickness absence in Great Britain, department officials, as well as the independent reviewers, have met with or had contact with a number of insurers in the course of this work-the Association of British Insurers, Aviva, BUPA, Genworth Financial, Legal and General, SwissRe, and GRiD-Group Risk Development.

Ministers and officials meet with representatives of the insurance industry on a regular basis to discuss issues arising from compulsory employer liability insurance.


Lord Kirkwood of Kirkhope

A previous Chair of the Parliamentary Select Committee on Work and Pensions, Lord Kirkwood of Kirkhope, is listed in the House of Lords Register of Interests (Session 2006-2007) as the Chairman of the Unum Customer Advisory Panel for which he received payment from Unum and additional payments for other work for Unum.


*12(d) Non-parliamentary consultant
       Chairman, Unum Customer Advisory Panel

*12(f) Regular remunerated employment
       Head of external relations, office of the Liberal Democrat Leader

*12(i) Visits
       Visit to USA for two conferences on welfare to work (29 October – 5 November 2005).
       Accommodation paid for by the Rockefeller Foundation (New York), the Brico Fund
       Milwaukee) and the Association for Public Policy Analysis and Management

15(d) Office-holder in voluntary organisations
      Trustee, Joseph Rowntree Social Service Charitable Trust
      Director, Joseph Rowntree Reform Trust Limited and subsidiary companies
      Director, Wise Group
      Governor, Pensions Policy Institute
      Trustee, Centre for Reform
      Trustee, Family Budget Unit
      Trustee, Citizens' Inquiry

16(b) Voluntary organisations
      Patron, Roxburgh House Studios (small charity in Hawick promoting
          art for those with mental health problems etc)
      Patron, Terrence Higgins Trust
* indicates financial interest.


Unum and Press Articles

The history of the relationship between Unum and the UK Government.

17 March 2008 - E pluribus Unum

James Purnell's reforms of incapacity benefit are inspired by a US company with vested interests and a murky record. Now, that's really sick

... In 1994, the Tory government hired John LoCascio, second vice-president of giant US disability insurance company, Unum, to advise on reducing the numbers successfully claiming IB. He joined the "medical evaluation group". Another key figure in the group was Mansel Aylward. They devised a stringent "all work test". Approved doctors were trained in Unum's approach to claims management. ...."

...In 1999, New Labour introduced its first Welfare Reform Act. All new claimants had to attend a compulsory work focused interview. Mansel Aylward, now chief medical officer of the DWP, devised a new personal capability assessment (PCA). The emphasis was no longer on entitlement, but on what a person is capable of doing....

...Unum has built up its influence in Britain. In July 2004, it opened its £1.6m Unum Centre for Psychosocial and Disability Research at Cardiff University. The company appointed Mansel Aylward as director following his retirement from the DWP in April...

...The aim of the centre is to transform the ideology of welfare and so help develop the market for Unum's products. In 2005, the centre produced a monograph The Scientific & Conceptual Basis of Incapacity Benefits (TSO, 2005) written by Aylward and his colleague Gordon Waddell. It provides the framework for the 2006 welfare reform bill. Its methodology is the same one that informs the work of Unum...

...California Insurance Commissioner John Garamendi described Unum as, "an outlaw company. It is a company that for years has operated in an illegal fashion"...

...This is the company that has played a leading role in shaping welfare reform in Britain. It has promoted the ideas behind the new work capability assessment. The more stringent the assessment, the more people fail it or fear failing it, and so the larger the potential market in private disability insurance.

Jonathan Rutherford, The Guardian, 17 March 2011.