SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (http://www.rgrdlaw.com/cases/unum-group/) today announced that a class action has been commenced by an institutional investor on behalf of purchasers of Unum Group (NYSE:UNM) securities during an expanded period between October 27, 2016 and May 1, 2018 (the “Class Period”). This action was filed in the Eastern District of Tennessee and is captioned City of Taylor Police and Fire Retirement System v. Unum Group, et al., No. 18-cv-00169.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Unum securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from June 13, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. You can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/unum-group/.
The complaint charges Unum and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Unum offers disability, life, accident, critical illness, dental and vision insurance products and other related services marketed primarily through the workplace in the United States and the United Kingdom. Unum operates through five business segments: Unum U.S., Unum U.K., Colonial Life, Corporate, and Closed Block.
Unum’s Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products that the Company no longer markets. In assessing the performance of Unum’s long-term care insurance, a key metric that investors pay close attention to is the product’s interest adjusted loss ratio. Prior to the Class Period, following a review of its long-term care portfolio to ensure that its underlying assumptions were extremely conservative and unlikely to lead to losses, Unum told investors to expect a long-term loss ratio in the 85% to 90% range.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects. Specifically, defendants failed to disclose that: (i) the Company was experiencing a higher claims incidence for its long-term care business; (ii) the Company was experiencing less favorable policy terminations in connection with its long-term care business; (iii) the Company had grossly miscalculated the actuarial assumptions underlying its long-term care business; (iv) premium price hikes could not sustainably offset increasing losses related to the Company’s long-term care business; (v) the Company was subject to a much greater risk of catastrophic losses and major reserve charges than represented to investors; and (vi) as a result of the foregoing, the Company would not be able to maintain its long-term care interest adjusted loss ratio in the 85% to 90% range. As a result of defendants’ false statements and/or omissions, Unum securities traded at artificially inflated prices during the Class Period.
Then, after the market closed on May 1, 2018, and despite defendants’ prior assurances, Unum stunned investors when it reported that the Company’s first quarter 2018 loss ratio for its long-term care business had ballooned to 96.6%, compared to only 88.6% for the first quarter of 2017. The first quarter 2018 loss ratio also far exceeded the 85% to 90% long-term range and even the “low 90s” near-term range the Company had previously provided to investors. The next day, the Company hosted a conference call to discuss its first quarter 2018 financial results during which the Company’s Chief Financial Officer stated that the volatility experienced in Unum’s long-term care business was expected to “continue in the future.” On this news, the price of the Company’s stock fell $8.12 per share, or nearly 17%, to close at $39.78 per share on May 2, 2018, on abnormally high trading volume.
Plaintiff seeks to recover damages on behalf of all purchasers of Unum securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.
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