Good morning, everyone. We'll go ahead and begin our 2020 Outlook meeting. Hard to believe we're talking about 2020 at this point. My name is Tom White, Head of Investor Relations for Unum, and we appreciate all of you being in attendance here in New York and all of you who have joined on the webcast as well. Our remarks today will include forward-looking statements, which are statements which are not of current or historical fact. As a result, actual results might differ materially from results suggested by these forward-looking statements. Information concerning factors that could cause results to differ appears in our filings with the SEC. I remind you that statements in today's meeting speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements.
The most directly comparable GAAP measures and any reconciliations of non-GAAP measures in today's presentation can be found in the presentation materials. Speaking of which, you should have presentation materials at your seat. If not, just raise your hand and we'll be sure to get a copy to you. Before we kick off, I do want to recognize one who is not with us, and of course, that is John Nadell. John was a true professional, a very insightful analyst, a good friend, and just a good guy to hang around with, from my perspective. He was always the first one to meet me, coming off the podium over here to tell me how much we had sandbagged on our plan for this year.
Please know, to John's coworkers and his family and friends, that the team here at Unum had the utmost respect for John, and we will miss him, as I'm sure you will as well. Our discussion today will follow a similar pattern to recent years. You will hear from our President and CEO, Rick McKenney. Steve Zabel, our CFO, will provide a financial overview and an outline for our expectations for 2020. Steve will also cover the closed block at the end of the presentation. That will be followed by the heads of our three core business segments, Mike Simonds, Tim Arnold, and Peter O'Donnell. We'll leave plenty of time at the end of our presentation to respond to your questions. Now I'll turn the meeting over to Rick McKenney. Rick?
Great. Thank you, Tom, good morning, everybody. Welcome to all here, as Tom mentioned, those on the webcast. We're going to take you through a discussion today of our overall business operations, talk to you a little bit about our strategy in terms of where we are coming off of 2019, and also talk about what 2020 looks like, give you some of our insights as best we have them in terms of what the markets will look like in 2020 and what the corresponding impacts will be on our business. Let me start out, though, talking a little bit about the company. As we step back from where we are as a company today, we enjoy the position of being an employee benefits leader in our markets. It's what we do.
It's our sole focus in the markets today, is making sure we're at the workplace providing those protections that people need. If you look at it today, we have top market positions across that industry, all of the product segments that we have out there, as well as all the segments from a size perspective, from the very smallest employer to the very largest. We do that off an underpinning of history of being a disability expert. We still leverage that today across multiple of our product lines, but we've expanded that capability into a broad set of know-how and capabilities that we have today to serve the broader employee needs at the workplace, staying focused on the employee benefits that we have today.
As a company, being in that position, we've actually benefited from that consistency by having very strong and consistent growth, and the margins in our business, as we'll show you, are quite good. As a result of that as well, and that consistency, that strong capital generation, which has given us flexibility over the years to deploy in different ways, which Steve will tell you a little bit about how we're thinking about that as we wrap up 2019 and head into 2020. Just a quick overview of our product set. We'll get into them in detail by business unit as we go. If you start at the very bottom of this slide and looking at our group disability position, as I mentioned, a long history and expertise that we have.
Getting people back to work is how we focus, and it really connects us with customers in a different way. Moving to the left, our life and accident disability product, AD&D product, actually continues to be a very solid position, and that's kind of our one-two group benefit combination that we bring to the workplace and have been doing so for a very long period of time. If you look at a market that's been growing for us, and we've been in this business for the last several decades, is the supplemental and voluntary business. As that expands to get to individuals, a simpler product set, a knowledge that we have to bring that to base, you'll start to see that becomes a bigger and bigger part of our business.
That's also in combination with Colonial Life, which Tim Arnold will talk about today, which is solely focused on that voluntary market. That's really where our business has shifted over time. You can see at the top the international business. Peter O'Donnell will talk to you about that today. Our operations in the U.K., which we have a very strong market leading position there, and then have also added to that our position in Poland. On the far right, the closed block. We'll talk about that in some depth today. A combination of both our individual disability block, which we sold in the '80s and '90s, and how that's run off and what the profile of that looks like, as well as our long-term care block, both on the individual and group side, and we'll take you into some depth today.
You can see the breadth of our portfolio, the market leading positions, and how that comes across by each of our segments. When you think about the market today and how we've had that leading position, there's a couple of things I'd talk about in terms of how we win in the marketplace today across really all three of our franchises, being here in the U.S. in the Unum franchise, Colonial Life, as well as our international Unum operations. If you look at the first three bullets we have on this page today, this is about how we go to those individual companies, how we talk to the decision makers, and ultimately to their employees. I think if you go across those dimensions, we've had a lot of consistency there, and I think we are recognized by those individuals as a gold standard in the market.
We don't take that lightly. We want to make sure we're continuing to invest and grow those capabilities each day. The bottom two are about our internal capabilities. It's about our people. It's about our culture and having the risk discipline that you've seen from Unum year in, year out, both around pricing, how we go to market, ultimately how we administer claims and take good care of our customers throughout their life cycle and good care of our employers as well. When you think about our market though today, these are our perspectives that keep us very focused on the employee benefits market today.
Two things on the left-hand side of the page, you have to talk about what does the working world look like today, the fragility of Americans here, as well as Britons in terms of where they are in their financial life cycle and making sure that we can take care of them when some of these things hit them, which inevitably will be challenges in their life. We want to make sure we're there to provide that paycheck. On the right-hand side of the page, a stat we continually put out there being a leader in the disability space is that one in four people will become disabled in their working lifetime. It's not something that people appreciate as much, but we want to make sure employers and employees do appreciate that fact so that they're covered in the event that something might happen to them.
A newer piece that we've talking more about is actually leave management services, Mike will talk about that a little bit today. It's an area that continues to grow in the marketplace today and actually something that is highly valued in the workplace to have somebody there with the knowledge and capability to help them administer leaves on behalf of their employees. When you bring that all together and what we're able to do today, you'll look at a footprint that is at scale with 38 million workers covered across the U.S. and the U.K., 195,000 companies ranging in all sizes, making sure that we recognize the specific needs of the companies so that they can actually help their employers to protect themselves or if the company chooses to help protect them. What that results in is last year, 318,000 people back to work.
When you think about that, this is about us having more than just the paycheck, which you'll see in the lower right-hand side, having the empathy and the knowledge to help those individuals get back to work, having an ear that can help them through that process, which inevitably many people will go through. We want to be the company that helps them do that. I think for our company, for our people that work in our company, it's a purpose that continues to drive us every day and a very strong customer focus. As we look to the future, really this is a playbook we've used over several years to think about how we grow the company. Growth is paramount in terms of what we try to do within the company.
If you look at that consistency of execution that we've had, it's combined with some of the areas we want to look to continue to grow. It's not just being about in the markets today. How do we want to expand? We think about it on three fronts. How do we grow the existing business? We'll talk about that as we get into different geographies, different product sets, different distribution. How do we expand our reach? That's both our customers that we have today, as well as new products and new distributions we can bring to those customers. The last is how do we invest in operations?
How do we have the connectivity to invest and really develop what we have as an overall enterprise to make sure we're making the right investments to continue to grow with our customers and provide those new services, both in a technologically enabled way, making sure that they appreciate where we're going. Just to give you a couple of examples of that on the next page. These won't be new, all of them, but I think they're still in the middle of their development. On the left-hand side, the grow the existing business, our dental business both in the U.S. and the U.K. If you recall, when we purchased this business a few years ago, it really was a platform, and it's up to our distribution to continue to grow this with our customers.
We've been successful, but we still feel like we're in the early stages of being able to get our requisite market share in the dental business. We still feel very good about that as the overall package that we bring to the employers. You'll see medical stop loss. We're writing a little bit of this. We announced getting into this market. It's been one we've gotten into slowly, methodically to make sure that we know what we're doing overall. As we continue to grow that business, we do see good opportunity there. Leave management services, something we've been in for a very long period of time, but I think the appreciation of employers around leave management services is changing, Mike will talk about that a little bit in terms of how we grow with those leave management services. Expansion of our reach.
We talk about our Poland acquisition that we have. We just finished the integration of that here in the last couple of months. Feel very good about that position that we have today, combined with our U.K. enterprise, and we see good opportunities of growth as we look to that space. Colonial Life territory expansion. Tim will dissect that a little bit more today and give you a sense of what that looks like. We see our Colonial Life footprint today as a great franchise. We have the ability to grow that both within the United States, many more customers to reach through that. On the right-hand side of the page, the invest in operations is a little bit different than it's been in the past.
This is all about digital and the technological capabilities that we have to connect with our customers in a more digital way. Those investments we've been making over several years, this isn't something new. It's something that we're really starting to make headway in terms of how we connect with those customers. You'll see Unum HR Connect, which is a straight through in terms of an HR benefit platform that we have out there today or the overall human capital management platforms that we continue to connect with. In the U.K., a voluntary platform that is up and running today. We're starting to make headway on having a U.K. voluntary platform, which is really fairly non-existent in the U.K. as a product set, but the needs are very real that we have in the U.K.
The other things that you expect, connectivity, the apps to connect with our customers to make sure that the self-service and the ease of use is very strong. Looking forward to where these investments are making today will pay off, and some of them are already paying off in a very short turnaround time. All that strategy in doing this over the last several years has been about consistency, but it's also been about the growth. We come and talk to you every year about a one-year outlook. I think it's important to look back over the last 5 years, back to 2015, and that we've seen very solid top-line growth, about 5% growth in our premium. As we get to the outlook, you'll see very similar look as we go to 2020, and then our earnings continuing to grow in that 13% here.
I would note that in 2018, was lifted by tax reform, but a very consistent, steady growth that we've seen across our EPS as well. You can see the expectations as we wrap up this year to still be in that 4%-7% range. We'll move on and talk a little bit about 2020. As you put these years together, I think that consistency has shown through over the last several years, and it is with that same playbook of execution, being focused at the workplace and just doing our business very well. Let's talk a little bit about 2020 and our outlook to this year. I'd say that these are our views and they certainly can change. As we look into 2020, you'll see that reflected in our plans, and Steve will talk about that.
On the positive side, this strong labor market continues. Think about that both in terms of low unemployment or strong growth in job creation, but also making sure that we're starting to see wage inflation. Those are all very good for our business when you think about our premiums and the natural growth that we see in just more people at work and higher wages that they're receiving. I think the additional out there, which is a little bit harder to quantify, is benefits are also a differentiator for employers out there. As you think about today's world, low unemployment, you hear about a war for talent, making sure that we're there today because benefits can be a way that employers differentiate, and we see that in our markets today. We also see consumer confidence staying strong.
As you think about our business, making sure that we see in some of our businesses as they have choices around protecting themselves, a good, strong consumer will continue to help what we see as people take up benefits that they're paying for on their own, such as voluntary benefits. The recession risk receding. That's more in terms of the markets and what we see out there. As we look to 2020, I don't think if you've heard us on our calls, we ever really saw it necessarily over the direct horizon. I think as you think about the overall world, I think people are starting to believe that 2020 won't be a year that we see that downturn, which I think if you went back six months ago, was more and more feared. The last thing is Fed easing on hold. That's more of the uncertainty.
I think that that's kind of come down and fairly stopped. That's in a positive only in that it doesn't continue to go down, which I think was an unknown out there. That takes you very quickly over to the right-hand side of the page of the headwinds. We're knowledgeable and reflective on these headwinds. Interest rates are a headwind today. Although we think they've stabilized at the levels that they're at today, they certainly are at low levels. We'll talk more about how that impacts our overall book of business, how it affects the insurance world at large, affects us as well. Interest rates being where they are today is a headwind, although we wrap that into our plans of what we see from a growth. The competitive environment's a little bit different today. We've talked about that really over the last six months.
The way I'd say it's a little bit different is you have 2 types of competition. You just have sheer volume of competition, then you have irrational competitors. I'd say it's much more the volume of competition than anything that's irrational in the market today. We don't mind competition. We can compete on that front. It's the irrational side that makes it very difficult in our business, and we don't see that as much today, particularly in our group lines of business. As we look to voluntary and all the competitors we have out there, it's one that we have a watch on to make sure that that marketplace remains reasonable as well, but we'll continue to show you the growth rates that we've had.
2020 is an election year, without anything specific out there, the political uncertainty we've seen come into the economic markets affects us as well. You can think about that on a variety of fronts, I think we should reflect that it will be a volatile year in 2020, we'll have to keep that. I'd be remiss if I didn't talk about all the great things we have going on in the company. There is an overhang, there is a headwind out there from long-term care specifically. You all recognize that it's reflected in our stock price today, I think that headwind is a challenge that we continue to manage through. We're going to give you a lot of detail on it today, how we think about it, how we manage it.
It certainly is reflective to say it is a headwind that we've been dealing with now for a very long period of time. As we look forward, we see that continuing, although maybe in different ways or in at different levels. It is something that we have to continue to monitor, Steve will talk about that with some specifics. As I look to the outlook for next year, back to those consistency of lines, we still see premiums growing in our core businesses 4%-6%. Our after-tax operating earnings at 4%-7%, consistent with what we went into the year of this year, dealing with some of those headwinds on the interest rate front, also continuing to see that good premium growth.
Those operating trends in our business, the ROEs, the margins that we generate still continuing to be good in 2020. The capital deployment side, as we generate strong capital levels, deploying that in a consistent way with how we've done over several years. We'll dimension that out for you in some more depth as we go through it. As we've done over the last several years, we give you a lot of visibility into what we see. When we look at our outlook, these are the areas that we see us being able to grow. If I were to highlight a couple of things, starting on the left-hand side, our sales growth, you'll see kind of a variation, a little bit lower sales growth than we've seen in recent years. Couple ways to think about that.
One, given the low interest rates, we are going to take some price in this market. That can be a challenge. We've seen that, we think that's rational and reasonable, we'll have to see how that plays out. We've seen some of that competition coming in. Those are the two things where we look on the sales side, still good, still feel very good about the margins we're putting on, because as that translates into premium growth, across the board, mid-single-digit premium growth, that's what we're looking for on the top line, doing so with good margins, good returns on our business. You'll see our operating adjusted earnings across the board, operating earnings across the board, kind of in the low-single-digit. Interest rates certainly a headwind that we have there.
Each of the business lines will talk more specifically about why we see that in the low single-digit. When you bring all that together with the capital management that we can expect to do in 2020, about 4%-7% growth. You'll see we're doing that in our core businesses at very high returns. We still expect to see that in 2020, bringing it all together in an ROE range of kind of 11%-13%, which has been consistent with where we've been. As I wrap up, our story, the Unum story, is one of consistent value creation. Take you back here for a long period of time as we continue to grow the book value per share, ex OCI in the company.
Being a market leader in that space, being in a space that's very good from an overall margin perspective, has led to this strong book value per share growth on a very consistent basis. I think if you think about the solid financial results we've seen through the period of time as well as the business lines that we're in today, we'll see that those good, solid financial results continue to drive consistent capital deployment. With that, let me turn it over to Steve Zabel, our CFO, to talk more about the financials and the outlook for the business. Steve?
Great. Thanks, Rick, and good morning, everybody. I'm going to hit a couple highlights, first of all, just around how we're thinking about wrapping up 2019 as well as going into 2020. First of all, our core businesses continue to provide really good growth, industry-leading returns on single-digit growth. Rick did mention we do think interest rates are a challenge, and I'm going to talk a little bit about how interest rates kind of articulate themselves into each of our product lines because it impacts all of our product lines very differently. We've been seeing some other challenges. The voluntary benefits market has shown slow growth in 2019. We've seen that in our sales growth and our revenue growth. We think that's going to continue on into 2020, but we do still think we can get that mid-single-digit growth there. Brexit has caused a lot of uncertainty.
Been pretty proud of the business being able to grow through that uncertainty. The recent general election hopefully will give a little bit of clarity, and Peter will talk about that a little bit more. That's something we'll have to continue to monitor as we get into 2020. From an LTC perspective, our loss ratio has been pretty steady throughout the year. We're right in the middle of the range that we put out to the market of 85%-90%. We do not anticipate needing to make any adjustments to our GAAP basis reserves as of 12/31/2019. We're pretty much through our process, and so we feel good about that, and really haven't seen anything in our performance throughout the year that would call into question the assumptions that we set now about 18 months ago.
I do want to talk a little bit about cash contributions, though, behind our LTC business. The way to think about that is we have a Fairwind captive as well as business in our New York entity, and those are the two entities that we have really been contributing cash to support our LTC business. If I go back three or four or five years, we had a pretty steady aggregate capital contribution to those legal entities of about $200 million a year, and that had been pretty consistent. We roll into tax reform, and what we saw there was an adjustment to the risk-based capital charges. Not really an impact on our total adjusted capital, but the required capital requirements went up overnight because the tax rate went down. We had to contribute some capital. That impacted our C1 charge quite a bit.
As you can imagine, those products that are pretty asset concentrated, that had a pretty big impact, and that's our LTC block as well as our IDI block. We had to contribute a little bit more capital there. That translated into lagging into that over several years in our First Unum block, just because of how the asset adequacy testing construct works for us in New York. We saw kind of an elevation of that over the last couple years, and we've been contributing right around that $400 million on average range into those two entities over the last couple years. We would see that begin to trend back down.
I would say after we get through the next couple years, see the impact of the low interest rate environment now play through that, as well as see tax reform play all the way through that. We do anticipate that going back down to more of a $200 million range over the longer term. That's something we'll have to manage through in the short term and feel that we'll be able to under our current capital deployment strategy. With that, our capital deployment strategy is supported by very good statutory earnings. I'll talk a little bit about not just our statutory earnings, but some of the other cash flows that go to our holding company that help support our capital deployment strategy. Then I'm going to make a couple comments about our investment strategy. We continue to feel very good about our investment portfolio.
We've had a low level of impairments in that portfolio. A couple special topics I want to hit on. One is what we're doing with our high yield and our alternative asset portfolio, because that's something that's trending over time a little bit differently than what we've seen historically and want to give some clarity about that. Then also talk a little bit about miscellaneous investment income. That more and more is becoming a part of our quarterly earnings discussion, and we thought it'd be good to just step back a little bit and talk about what that really means, what's in there, and what's driving some of the volatility that we have seen over the last year. I'll start out with really closing out 2019. We do expect to generate earnings per share growth in that 4%-7% guidance range.
As you can see on the chart, our core operations are expected to continue earnings growth, which was really consistent with our original expectations. If you look at just our core businesses, the absolute earnings have grown pretty consistently with what we thought coming into the year. There are puts and takes by businesses, but we believe in aggregate, those businesses have delivered. As you can imagine, we've had a slightly lower FX impact throughout the year with what's been going on with the exchange rate over in the U.K. That's been a bit of a headwind. We've also had a higher tax rate, which we've anticipated some of the impacts of tax reform kind of roll off a little bit through our effective tax rate.
I'll talk a little bit when I talk about the 2020 outlook about what to expect from a tax rate perspective overall for the company. Our corporate expenses were a little bit higher. You've probably seen that trend, a little bit higher throughout the year. I'd say it's a couple things. Slightly higher this year in the quarter results. We pre-funded our 2020 debt maturity. We've had to carry double debt service on some of that debt. You've seen that come through. We do expect some of that to continue into 2020, and I'll comment on that a little bit. You can see capital management has been a great driver of overall EPS growth from 2018 into 2019. Just a couple things about our businesses. I'll start with Unum US. Rick mentioned most of this, but continue to have really nice top-line growth.
Our CAGR over this period of time for Unum US has been 5% in a pretty competitive market. Our benefit ratio continues to trend down. That's really a couple things I'd say, continued good claims discipline, but also within Unum US, our mix is starting to shift a little bit to some lower loss ratio products. When you think about many of our growth products, they tend to have lower benefit ratios in them. Overall, you see just a great return on equity up there in the 17%-18% range. We've been able to continue to grow premium, be disciplined about pricing, and you can see it coming through in our overall returns. I'll move to Colonial Life.
2019 has been a little bit of a tougher year, but still, if you go back and you look over the last four or five years, 6.2% cumulative growth are just a great growth story for that business. When you compare it to others in the industry, we feel really good about the growth rate. We've been able to do that while maintaining very consistent loss ratios, a lot of pricing discipline in that market, a lot of good claims management in that market. The scale doesn't do it justice on returns. It looks like it's bouncing around a bit, but when you really look at the range, it stayed in a really tight range between that 16%, 17%, 18% range. Continues to deliver very good returns on nice growth.
Unum UK, we talk a lot about the pressures from Brexit and kind of the stagnation of the economy over there. Within all that, we have still grown top line over there by just over 3%. That says a lot for the business team over there, being able to grow in that market. The benefit ratio has ticked up a little bit. Some of that is really driven by, we have a lot of inflation-based liabilities or inflation-based benefits. As rates over there have adjusted over time, that has adjusted our benefit ratio and the benefits we have to provide. There's some offsets of that in our investment income as we have some floating rate investments that help offset paying off those floating rate benefits.
As you can see over the last several years here, we've had a pretty consistent return on equity there. Continue to feel good about that business, the growth potential, and the overall profitability in really a pretty tough economy and pretty tough political environment. The three topics I'm going to cover, I mentioned earlier, I'm going to hit a little bit on interest rate management and how we're thinking about it across all of our product lines. Hit on capital management generally, not only how we think we're going to end up 2019, but looking forward a little bit, and then talk a little bit about our investment portfolio. Let me start with interest rate management. Recently I talked about this a little bit in one of the fireside chats that I did.
How we're thinking about it is you really have to look at each product line. At the top of the house, you think about our voluntary benefit business, our voluntary products. That makes up about 30% of our premium volume, both in, that's Colonial and our Unum US. Those are very small balance sheets. They're a lot of cash products. You don't have a lot of invested assets behind that. You're able to cycle through an interest rate environment fairly easily with pricing. You're not holding a lot of assets, and you don't have a lot of new money yield risk. You click down to our long-term disability product. That is a product that does have some interest rate sensitivities. We manage our discount rates over time with what we can get in the market around new money rates.
Both Mike and Peter are going to talk a little bit about how we're thinking going into next year about our discount rates. We do think with the interest rate environment, it's probably time for us to think about making a move on discount rates and pricing. That's something that we're very good at in both of those markets. We've been able to execute on putting rate into the market over time. If you go back to the prior pages, you can see we've done that and been able to maintain really good growth within the business. Very good commercial success. It's a muscle we've built over the years and we'll continue to exercise, but they'll talk a little bit more about how we're doing that. We have our closed block, IDI block, and that's pretty asset intensive.
We have about $9 billion in reserves and related assets supporting that. That is a cash-out business at this point. We have very little new money to invest. It's really over the maturity curve as far as money in, money out. We go some quarters where we do not invest a dime in that business because we're able to fund all of our claim payments through the maturity of the investment portfolio. Although there is a little bit of interest rate risk there as far as new money investment, it's pretty mitigated just by the maturity of that block. That leaves you with long-term care. We've talked about long-term care a lot. I'm going to get into a little bit more detail later about how we're approaching new money investment in long-term care.
We do that with a combination of our traditional investment-grade bond portfolio, we do supplement that with thinking about alternative asset investments as well as high yield. I'll get into that in a little bit more detail later. Underlying all that is just we do have assets backing the earnings on capital. That's a little bit tougher to manage. You're pretty much going to just follow rate curves when you think about investing to support our capital base. That's something that we've been able to navigate over time and is built into our overall earnings projections. I'll hit a little bit on some capital management concepts. First of all, steady as it goes. This hasn't changed much in the last couple of years, and you're not going to see a whole lot of change in what we present today.
Our targets are unchanged. We think they support a single A financial strength rating. We're planning to continue to maintain our risk-based capital above the 350. We believe we're going to end 2019 above that 350 and probably have some nice cushion there. We feel good about that. We continue to maintain holding company cash above one times. We also believe we'll have holding company cash in excess of $850 million at the end of the year. Just the outlook to the end of the year, we feel pretty good about where we're going to end up against our targets. Our priorities haven't changed. We're going to continue to invest in our growth businesses, and the team's going to talk a lot about some of the investments we're actually making, a lot of it around digital capabilities.
We think that's going to be a differentiator in the market. What they'll also talk about is we really self-fund that. We don't get up here and talk a lot about earnings trajectories and how they're being adjusted because we're making large investments back into our infrastructure, into our digital technology. We self-fund that. We self-fund that through efficiencies in our core operations, they'll talk a little bit more about that. M&A, as you know, we're pretty opportunistic. We like the things we've purchased. The dental businesses are great. Poland's working out very well. We'll continue to think opportunistically about it. We don't tend to be out there looking for those large in-force deals, we'll continue to see what's out there, and that definitely is a priority.
Those have to rack and stack against how we think about reinvestment in our own stock in repurchases. That also factors into how we think about M&A. We continue to have steady dividend growth, and that we anticipate that continuing as well as a very consistent share repurchase program. Moving on, another topic on capital management, this is really sources. We talk a lot about the consistent statutory earnings that generates off of our operating companies of right around $1 billion. That's been consistent over this period of time, you can see. I also want to talk a little bit about some of the other cash flows that come up to our holding company. One is our U.K. operations generates dividends on an annual basis, and those fluctuate a little bit, but those are over time are a fairly consistent source of cash.
We have some management fees that are paid up to our investment management group, which is able to get that cash up to the holding company. That's funded out of the profitability of our various business lines to manage those portfolios. We have other services agreements directly with the operating companies that generate cash directly to the holding company. In aggregate and on average, that generates about another $200 million of cash up to the holding company on an annual basis. As an example, in 2019, we'll be close to $1.2 billion of cash going up to the holding company from our operations. From an expectation of a cash use, again, this is pretty consistent. I guess the one thing that I'll highlight here is we are anticipating going into 2020 share repurchases consistent with what we've seen over the past years.
That is going to feel pretty much steady as she goes. We do have our 2020 maturity that we anticipate paying off next year. We pre-funded that with one of our issuances in 2019. We do have a note in here about the C1 factor charge. I'll just pause on that a little bit because that's been a little bit of a movie that's played out over time, and to me, it's still uncertain where that's going to go. The NAIC proposed, now some time ago, changes to the C1 factors that are incorporated in the risk-based capital calculation. It looked last year like that was getting pretty close to concluding, and then it just feels like there's a lot of uncertainty now around that again. There's a lot of debate. It's been a little bit radio silent, frankly, at the NAIC about just where that's going to go.
Clearly, that won't be implemented this year. We do have it built into our capital plans that we'll implement it next year. Honestly, that feels a little uncertain even next year what's going to be happening with the implementation of that C1 charge. That would be additional RBC that we would have available to us if that doesn't end up going through as it's currently proposed. As I mentioned earlier, we continue to monitor prevailing interest rates. I mentioned our year-end GAAP reserve process. We're also in the process of our statutory asset adequacy review. That will wrap up at the beginning of next year. Right now, where rates are, we feel very good about where we are and that that's built into our capital deployment plan.
That's something that we have to continue to monitor, just where the financial markets may go, because that tends to be very much a spot rate, what you build in, especially in New York, what you build into your asset adequacy testing. We'll look at that as we finish out the year. I'll say we also monitor what's going on just generally around rating agencies and the regulatory considerations. The regulators are looking at LTC reserving constructs as well as other reserving constructs, we'll continue to monitor that and adapt as those conversations continue. I view as a highlight our 2019 debt issuance activity. I think this was a real win for us.
Just as background, we have not been very active in the debt market generally, historically, we made very much an effort in 2019 to be more active in the market, to do a little bit more marketing with the credit analysts around our story and what that means in the debt market. I think it's been a very good year for us in the debt market. We had two issuances during the year, I'd say the objectives were somewhat different for those two issuances. We had the June issuance, that really gave us a chance to get ahead of our 2020 maturity. Rates were in a really good place for us. We were able to lock in a 4% 10-year deal and really take the 2020 maturity risk off the table. Feel really good about that.
We rolled forward to September, we saw what rates did in September, also just pulsing the market about how our credit was viewed. We really took advantage of a lot of the marketing we had done earlier in the year, as well as the prevailing rates at the time. We were able to do a deal that does really two things, takes some more near-term risk off the table from a maturity perspective. We were able to tender and retire an upcoming 2021 maturity for $350 million. In doing that, we're basically free and clear through 2024 as far as maturities. Felt great about that. We also took the opportunity to take the remaining amount of proceeds and look longer term to some longer-term debt that we had at very high interest rates.
Some of those were in the 6%, 7% range. We were able to selectively tender those very high coupons. All in, we were able to issue at 4.5% for a 30-year deal. Again, just feel really good about execution. We did it in a very short period of time. We actually did it in a week. I think these stats are right. It's like the highest volume ever in the world of debt issuances that week, we were able to come out very quickly, get it executed. Both of our deals, there was high demand for it. They were very much oversubscribed, we feel good about that. In the process, we've kept our net leverage at 27%. That really takes into account the expected maturity of our 2020 debt, but netting that out, we're 27% leverage, which we feel good about.
Really how we think about it gives us some room in 2020 to continue to take advantage of both the accretion of our book value as well as low interest rates. I think we have an opportunity to probably contemplate issuing debt again next year just as good hygiene as we think about our capital stack within the organization. All in, we have a page here that just kind of trends us through time about how we think about our debt stack. Just to ground a little bit, it goes back, grabs three data points, 2014, 2017, and current, and looks at really the tranching of our debt maturities. From on the left, the more recent or the more near-term debt maturities that we do have to the right, the longer term.
You can just kind of visually see we pushed the stack out quite a bit over this time, we feel good about that. The statistics over time, we've kept our coverage pretty consistent, which is very high. That's basically our cash ability to cover debt service in that 9%-10% range. We brought our average coupon down 1% for the entire debt stack over that period of time, and we've extended our years to maturity five years. All in, we just feel great about what we've been able to do there, taking short-term risk off, opportunistically being able to reduce our average coupon, and I could see us continuing to do that into the coming year.
All in, just from a capital deployment perspective, you can see here, going back to just after the financial crisis, we've been able to retire 46% of our outstanding share value, $4.7 billion in share repurchase. We've returned $1.8 billion of capital back to our shareholders through dividends. All in during this period of time, a pretty good return story to our shareholders of $6.5 billion cumulatively during that period of time. That's the capital management story. I'll move on to our invested asset portfolio and make a few comments around this. First of all, our investment strategy is very tailored to our different product lines. We think about investment strategy really in two ways. One, on a portfolio by portfolio basis, what's the right asset allocation to support that line of business from a duration perspective and just from a cash flow perspective?
We step back, and we think holistically about Unum Group, and we think about kind of credit exposures and allocation overall more at the Unum level as far as our targets and what we want the risk profile to be. First of all, I'll say we have a very long duration fixed income focus, as you might imagine, just because of the types of products that we have. We are a strong credit shop. We think that's an advantage to us when we think about how we can win in the market. Our credit shop is one of those areas that we believe we can take advantage of. We've really proven that through multiple cycles. We've been able to manage through those, and we perform well against the benchmark, and I'll show you a little bit about that.
We've maintained an A-minus average credit rating across the portfolio, and that's been very consistent over time. Regardless of what we've had to do behind various product lines, we've been able to keep that very consistent over time. We've talked about this in the past, but we think we have a very unique situation just around how we think about risk-based capital and the capital necessary to support our asset portfolio. We're a heavy C2 shop generally when we look at our consolidated risk profile. What that means is we're able to take more asset risk and not have it be as much of an impact on how we think about risk-based capital. That allows us to invest in certain classes, but it really helps shield us from impairments a little bit as well.
When we run different scenarios around different impairment types of scenarios, we feel pretty good about being able to navigate that, and we've shown we can do that when we had the oil and gas kind of bubble crisis. We were able to navigate that through with just a couple points impact to our risk-based capital percentage. Then on the right side, you'll see just our asset allocation. That hasn't changed much over the years, and we feel very good about the allocation that we have. I'm going to get into a couple points of that a little bit later around high yield and alternatives, as well as there tends to be commentary around our BBB portfolio. I want to get into that a little bit as well. Many of you have seen this chart before. This is our credit losses relative to Moody's Index.
We have shown that we have a track record of lower credit losses versus the market. In our high yield portfolio, we've really experienced pretty equal numbers of upgrades as downgrades, and we've really been able to stay ahead of the curve on that historically. If you look at where we play, and we have some commentary in here about overweight and underweight sectors. I'll just make a general comment. We tend to be overweight in those sectors that have long-lived asset bases. They have longer duration funding needs. That's very consistent with our portfolio and our portfolio of liabilities. They have more stable cash flows, which is what we like in our investment portfolio. They have, I'd say, above average credit quality. The underweight sectors, I would say, would be the opposite. They're shorter duration liabilities, short duration assets.
They tend to have not as stable of cash flows, and we tend to stay away from those. I'll also say, we may be slightly overweight in energy, but we've talked about this in the past. We're more in the midstream pipeline, where we do play in the energy stocks. Those tend to be less volatile with absolute price of oil and gas. They're more driven by volume. They're mostly locked in with kind of future volumes as far as the cash flows of those organizations. Those have performed pretty well for us over time. Over time, we've probably backed out of that sector a little bit, but continue to manage it well and feel very good about our holdings in energy. I'll move on and talk a little bit about our high yield investment and alternatives.
First of all, just kind of an editor's note here. The scale doesn't do justice to where we actually are. We got a little bit out of sync on our scale. On average, the combination of our alternative asset investment portfolio and our high yields has been about 8.2%, 8.3% over this period of time. Again, the scale doesn't really do that justice. We usually try to manage those two portfolios in aggregate at about 8.5%, and we've been able to do that over time. We feel very comfortable with that. What we have seen over the last several years is, first of all, there's been a lot of bond call activity on high yield investments. A lot of firms are doing the same thing that we took advantage of last year, and they're trying to get out of some of these higher coupon securities.
They're calling those, generating some cash flow to us. We've made the choice to start to reinvest at least some of that back into an alternative asset portfolio. What you'll see is just more of a mix shift between these two asset classes versus absolute growth in our concentration in these two asset classes. That's point one I want to make. The other thing is, we don't really have a hard target, but we do think about 10% as probably the upper limit for the combination of these two asset classes. We continue to manage them with quite a bit of room between where we are right now and where our upper target would be related to these. A couple things about our alternative asset portfolio.
First of all, we do have a split between what I call kind of credit underlying investments, real asset, and then there is some equity in there. We think that's a nice split. We tend to invest in structures that have more of their earnings generated off of true cash flows versus market value adjustments. I would say we like cash flows to generate the income in those. We don't like the volatility of what I call pure equity types of alternative assets. We don't have any kind of hedge fund type investments in there, and they've performed very well for us over time and pretty consistent with our expectations. With that said, there will be some volatility, as you know, with those type of assets, and we've seen a little bit of that come through.
On the next page, we wanted to give just a little bit of context around what we call miscellaneous investment income. It's really comprised of two distinct sections there. One is what you'd consider traditional miscellaneous investment income, which is mostly bond calls. Issuers call their bonds, tender their bonds. There's a make whole. We record that upfront in earnings. That's the darker bar on the bottom. There is quite a bit of volatility in that, and we have seen more recently even more volatility in that category. In addition, we do count our alternative investment income as miscellaneous investment income.
Although there has been some volatility there, that is going to be mostly driven by where you are in the J-curve and just the relationship between fees that are coming out of the fund themselves and investment returns coming back into the funds. We feel really good about that portfolio. We think that it is a very good asset class for us for our long-term care book. The majority of this money is supporting our long-term care book. We think it's matched very well, and also has the types of investment profiles that works well with a longer duration liability. We've tried to start to give you more guidance on a quarterly basis as far as the impact of miscellaneous investment income on our results. We'll continue to do that.
As you can see over time, it's averaged about $20 million a quarter, but in no quarter we actually hit exactly on the $20 million. We'll just have to continue to kind of guide you what the volatility and the variability is on a quarterly basis related to this. I'll go to our BBB portfolio. I want to reiterate, we have very strong credit expertise, and we've shown that through our results. We've navigated credit cycles with the level of BBB investments that we currently have and have done that quite successfully. We have roughly 50% of our portfolio in BBB investments. Depending on how it's written up and we were benchmarked, sometimes it looks like we're overweight. What I would say is the denominator in most of those analysis exclude things like U.K. investments, private placements, munis.
When we put that all together and we look at Unum against a Barclays benchmark, we consider ourselves right in line. That's how we think about an overall investment-grade portfolio and where we benchmark against the market. We view it as being very in line. If you look at our BBB-minus portfolio, we would actually be considered underweight on that measurement. If you look at BBBs, we're pretty highly leveraged to the BBB+ as well as the straight BBBs. We've also, in the BBB space, we've seen issuers be pretty aggressive about managing their balance sheets to hold their ratings. We view that as very positive. We stay very close with those issuers as they're thinking about managing their balance sheet and asset sales and that sort of thing. We think they've been very prudent with their balance sheet.
We believe that the BBB rating is very important to them, and they've done a nice job of being able to maintain that. I'll go back to my comment about RBC covariance. We have a pretty good benefit of that. When we do have BBBs that might get downgraded into the high yield, there's a less of an impact on us just because of our risk-based capital construct. I'll move on to 2020, and Rick mentioned most of this, but I'll just hit some highlights. We do look to a 4%-7% EPS growth in 2020 with consistent capital deployment with what we saw in 2019. We're hoping that Brexit will settle down, and Peter will talk a little bit more about that.
I guess we're hopeful that Brexit will settle down after the general election, but we'll have to see how that goes. I mentioned earlier our tax rate is floating up a little bit from what we saw maybe one or two years ago. We think it's going to be in that 20%-21% range. We're going to get closer and closer to just be a statutory rate payer. Consistent capital deployment with what you've seen in 2019. If I think about the walk, our core businesses should continue to grow their underwriting results consistent with top-line growth. When you just look at BTOE related to underwriting margins, which would be premium, less claims, less expenses, that's going to grow pretty consistent with what the revenue is going to grow, mid-single digits. We do believe we have some headwinds from interest rates.
We're going to be able to price for some of that, but it takes several years to get some of that rate through. We think that'll be a bit of a headwind. I mentioned corporate segment. I would think as you're thinking about projecting into 2020, our corporate segment is probably going to have losses in the high $40 million to close to $50 million a quarter. That's probably a good trend to think about. There's a couple things in there. Our debt service continues to tick up a little bit, which is in there, as well as we are making some corporate investments in some of the initiatives that we think will have long-term value to the organization. You can see, again, consistent with past years, we're going to have strong EPS growth due to capital management actions.
You've seen this again. I won't cover the whole thing, but just as an overall, we feel good about the overall growth in our core businesses, both on a sales perspective, a premium perspective, an absolute earnings perspective. You combine that with really good capital management, and we're looking at that 4%-7% EPS growth year-over-year going into 2020. With that, I'll turn it over to the business leaders to talk about the exciting things going on in our various business lines.
Thanks, Steve. Good morning, everyone. My name is Mike Simonds. I've got responsibility for the Unum US business segment. I'm glad to be here with you once again to provide an update on the segment. Over the past six years, it's become somewhat of a really special holiday tradition to be with you here at the Grand Hyatt. As most of you know, Unum US is singularly focused on employee benefits and enjoys market-leading positions and returns across our well-established group disability, group life, voluntary benefit, and individual disability lines. In a couple of minutes, I'll provide an update on two of our newer businesses, dental, vision, and medical stop loss products. Overall, we've grown our business to nearly $6 billion of revenue and over $1 billion in pre-tax operating income.
To give you a sense, the compound annual growth rate over the past five years for both revenue and BTOE has been roughly 5%, that being despite low interest rates and a benefits market that's grown in the low single digits. Our strategy to achieve that growth has remained quite consistent. We're focused on the client experience. We believe an exceptional experience will allow us to maintain very high levels of persistency and provide growth opportunities for us as we bring new products and services to our clients. We build our strategy around a core competence in risk management and distribution, as Rick mentioned. As I will hit on in just a minute, these competencies allow us to maintain stable performance and address challenges such as interest rates, which may require pricing and renewal actions.
There's four points that I would love for you to take away from my comments this morning. First, the franchise is in very good shape, generating consistent, predictable, and we believe market-leading returns. As we look forward to 2020, we will feel some growth pressure from the low interest rate environment and to a lesser extent from competitive trends in the voluntary market. I'll talk a little bit about that as will Tim Arnold. We're very fortunate to have two channels and brands getting after the voluntary market. Setting aside these manageable headwinds, we're very excited about the traction that our growth strategies are generating in the broader benefits market. For mid and large employers, as Rick mentioned, we are winning based on our lead management business and our connectivity into the leading HR platforms.
In the smaller end of the market, we're excited in nearing the launch of our new digital portal, MyUnum, in the first quarter of 2020. That will deliver a very strong client experience where we bundle dental, vision, disability, life, and voluntary on one platform. Finally, it's important to note that while we maintain our performance in the short term, underneath that, we continue to invest in capabilities which will benefit our clients and underpin our long-term growth and margin expansion. Let's start with a couple of trends in the market. As both Rick and Steve mentioned, we're facing additional pressure from low interest rates. That said, it's important to note that this is an issue that we faced really for the better part of a decade to some varying degree, and we've been able to deal with that quite effectively.
That chart on the upper left shows our group disability loss ratio coming down pretty steadily, even as we've had to regularly lower our discount rate on new LTD claims. As we look to 2020, we will have a reduction in the LTD new claim discount rate, and we'll increase prices modestly on new business and renewals. While this will temper growth a bit in the short term, depending on competitor response, these modest price increases position us well to avoid the need down the road for any type of significant price increase, which can be disruptive to our clients, and they help us maintain those returns in the short to midterm. The middle chart illustrates a second lesser pressure to growth, and that's the maturation of the voluntary benefits market. What you see here is industry stats across all carriers.
Nearly 60% of all new sales from the industry are now takeover business from another carrier. Increasingly, voluntary benefits have become a mainstream part of the mid and large employers' benefit package. Our next wave of voluntary products have stronger consumer features and level compensation for our distribution partners. That incentivizes persistency over movement between carriers. I think these new products will take some time to take full hold, which will present a little bit of pressure in the short term. Early signs with those products here in 2019 is quite promising, and we believe the addition of these voluntary products position us really well for the future in this more mature market.
The final chart at the bottom there shows one of the levers that we've been able to use to deal with some of these earnings headwinds over the last several years, and that's good disciplined manage of expenses. As we continue to improve our process, inject automation, and employ digital capabilities, we've been able to bring that OE ratio down, and I would expect that those trends would continue into 2020 and beyond. I'd also note the composition of that operating expense ratio will continue to shift as our fee-based businesses grow quite quickly, particularly our fee-based lead management business. Importantly, underneath that declining expense ratio, we're successfully allocating a significant pool of resources towards investment in our future.
The first priority with these investments is centered on the employer client experience, and we revamped a number of our customer journeys using digital capabilities, and the one that's highlighted here is our onboarding process. This is the first impression a new employer has when onboarding with Unum. We use a really tough bar, and we look at client satisfaction on a 10-point scale, but only count scores of nine or 10 to sort of define as exceptional performance. What you see is really steady improvement from introduction in test and learn in early January of last year to 70%, which we believe is industry-leading based on our benchmarking. That steady, consistent growth around a new digital capability is a competence that we've begun to build as a company that's going to serve us, I think, very broadly.
This focus on the customer experience plays out, you can see to the right side of the page in things like the amount of our new sales that come from existing clients continues to hold steady at over 60%, and also very high persistency levels at over 90%. A great client experience allows us to bring new products and services to market. Certainly, our dental and vision offer headline that list. You can see here growth in group dental sales along with the growth in the size of our network, where in just three years after the acquisition, we now have the number 11 group dental network size, and we continue to grow that network very rapidly. We'll also be rolling out a new DHMO product in California here in 2020, which should further accelerate our growth.
In addition, we're continuing to learn and invest in our medical stop loss business. Our strategy here is centered on the extensive amount of data, both direct and third party, that you can source through the medical stop loss quoting process. We're feeling good about the momentum being built and the new capabilities under development, but also we recognize that this business, medical stop loss, is a long-term play. Not all our investments, of course, are going to take years to play out. We are seeing really good returns in one of our top priorities for investment over the last several years, and that is, as Rick mentioned, in our leave management business. Particularly amongst mid and large size employers, we've really seen explosive growth, which you see in the chart to the right, in managing employee leaves for our corporate clients.
Our national client group, which is large employers with more than 2,000 employees, has been growing in total inclusive of leave at over 7% a year over the past 3 years. Our investments in leave management, our acquisition of LeaveLogic, have played very heavily. Every time we bring a new leave client on, it comes with packaged insured lines, most notably group disability and group life insurance. I think we've really hit a tipping point in the market around managing outsourced leaves for clients. We've been in FMLA administration for nearly 2 decades, but in the last 3 years, as more states have issued paid family medical leave legislation, municipalities have gotten into the game, and there's been an explosion in corporate leaves. Employers are rapidly outsourcing this complexity, and Unum is a beneficiary of that. As a leading disability player, it leverages a lot of our strength.
A good way to think about that is 90% of every short-term disability claim that we see will also have an associated leave event. An employer is going to naturally look to their disability carrier for leave management. Importantly, when we offer disability and leave, we see a much stickier client, 2%-4% higher persistency. That's really important if you think about the environment that we've got right now, where there is a need to pass along some additional price through renewals based on interest rates. Our success in passing along those prices are heightened when we've got the deep, broad relationship that comes with leave management. Another differentiator for us in the large and mid-size employer market has been what we've invested in to connect and actually sit on some of the leading HR platforms.
We started this work a little over 18 months ago with the Workday cloud-based human capital management platform. We are the only certified solution provider on the Workday platform in the benefits and leave space, and we placed over $100 million in new premium on that platform. It delivers a really exceptional client experience, as we're taking advantage of all the data that's inherent on that platform. We're excited here in the fourth quarter to roll out new partnerships with cloud-based solutions from ADP and from Oracle. We feel like this is going to continue to help us drive good, strong, profitable growth on the back of a very strong client experience going forward.
While we've seen this really good, consistent, and actually accelerating growth in the mid and large case market, we think we have an opportunity to really ignite growth in the small employer market, employers with under 500 lives. In the first quarter, as I mentioned, we'll be rolling out our new digital platform for small employers, MyUnum. We've been in test and learn with what we call friends and family clients in the small case market here in the second half of 2019, and we are really excited about the feedback that we're giving. A complete digital experience to those small employers who are stretched from an HR point of view. As part of that bundle, bringing dental and vision, disability, life insurance, and those new consumer-friendly voluntary products all into the mix. We're excited about what's to come in the small employer market.
Finally, before shifting to the outlook, I do want to hit on the impacts of interest rates on the Unum US income statement as we anticipate in 2020. We expect a 2%-3% decrease in Unum US net investment income as we see lower returns on reserve balances and capital. Our asset levels rise only modestly as we focus on more capital-efficient products in our growth profile. We'll also see the cost of new LTD claims rise by approximately $12.5 million in 2020 as we operate with a 25 basis point increase in the discount rate for new incurrals. Between these two factors, NII and the discount rate, we expect in the range of $30-$40 million of pressure to the Unum US income statement that we'll work to offset, as we have over time, through pricing, renewals, and expense actions consistent with our history.
As we look out over the coming years, I do think it's important to note that we do expect earnings growth to migrate up towards that mid-single-digit top line growth as our new growth platforms reach scale and portfolio yields level out. Our outlook for 2020, 3%-5% sales growth, 4%-6% premium growth, 1%-3% BTOE, and a very strong ROE in the 16%-18% range. Overall, we're very bullish about the employee benefits market and excited about the investments we're making in the client experience. I look forward to taking your questions in the Q&A, but for now, I will turn it over to my colleague, Tim Arnold. Tim?
Thank you, Mike. Good morning, everyone. Thank you for coming out on a challenging weather day, at least by South Carolina standards. This is certainly challenging. Happy to talk about Colonial Life, share a little insight into 2019, and then also talk about our 2020 outlook. I think most of you know Colonial Life is a pure play voluntary benefits company. We focus on serving all sizes and segments of the voluntary benefits market, but we have a special emphasis on the core group market. As you see here, almost two-thirds of our premium come from employer customers who have less than 1,000 employees. We also really like the public sector market. That's something that Colonial Life pioneered way back in 1955, and we love that market because the persistency in public sector is extremely strong.
We enjoy very strong market share across most of our portfolio, as you see here. As Mike mentioned on the dental side, we're really excited about the growth rates we're seeing in our dental business. We'll talk a little bit more later on about the large case market. Mike mentioned the competitive nature of that market, certainly something that Colonial Life is not immune to, and you see some pressure here. We've always regarded that market as somewhat opportunistic, and we remain disciplined in the way we serve that marketplace. Colonial Life's focused on providing benefits and increasingly more important, benefits education to America's workers and their families. We're also focused on creating simple, modern, and personal benefit experiences. Our strategic priorities over the last years have not changed. We're focused on growth in our distribution system, the customer experience, productivity, and also talent.
We'll talk more about this later, but we truly believe that talent is a competitive advantage for Colonial Life, and we'll talk about why. To address the question that I'm sure is on everyone's mind, why have we not grown this year the way we have over the past few years? As a quick reminder, over the past five years, Colonial Life's experienced sales growth north of 8%, while the industry's grown between 3% and 4%. During that same period, the top five competitors have grown at closer to 1% to 2%. It's been a challenging industry. We've had a few things that were headwinds this year. We made a strategic business decision in the second quarter of this year to change our recruiting model, and we believe that long term, the new recruiting strategy will pay off.
In the past, we had professional recruiters who helped bring people into our organization then handed those people to our distribution system. What we've seen in our data over the last few years is that people who are recruited by those in our distribution system have a much higher success rate than people who are recruited by professional recruiters. In the second quarter of this year, we shifted responsibility for all recruiting to our distribution system with support from recruiting professionals, but the responsibility now lies with our distribution system. That change is the right change long term, but it did create some headwinds in the number of people who joined our organization in the second and third quarter. We're very excited about the early results we're seeing here in the fourth quarter. We're returning to more normal levels of recruiting.
We also made a conscious decision to terminate or restructure the relationship with three large distribution partners during 2019. It's the first time we've had to do that on my watch here, but it was important that we do that. We also faced some pretty significant headwinds from a growth rate perspective due to the introduction of dental in the second quarter of 2018, which created very strong growth for us in 2018. Finally, we reduced our emphasis on certain very low persistency industries from a new sales perspective. While that created some sales pressure, we think it's the right thing to do overall for long-term revenue growth. Despite those growth results, earnings remain strong. We have outstanding margins. We had significant improvement in our OE ratio in 2019. We remain very confident in our strategy and in the market opportunities.
We'll talk more about that in a few minutes. We're continuing to make investments in our distribution system and digital capabilities in the customer experience and obviously in talent. We believe that we will continue to outpace market growth rates and sales in the future. Our 2020 key priorities really are pretty much unchanged. We're continuing to expand our reach to serve more customers. We focus more on our broker relationships. We'll talk about the brokerage marketplace in a few minutes. We've increased our focus on public sector. You saw the 6% growth rate that we have in public sector in 2019, and we're making great progress in driving adoption and utilization of our digital capabilities. On the efficiency side, in 2019, we introduced something called an agent app, and it's a one-stop shop for all 14,000 of our agents to do business.
It creates the opportunity for them to grab leads, and the whole process of that lead generation and lead follow-up has been automated. It has received incredible adoption. We've been very pleased with the rate of adoption of the tool and the business that we're beginning to see from that tool. Finally, we're creating meaningful and personalized experiences for our customers from enrollment to claims, and we'll talk about that more in just a few minutes as well. Why do we believe that this market is one that still has tremendous potential? We see some data here, 174 million people working in this country. Colonial Life currently insures four and a half million of them, and we're number three in market share. We feel great about the opportunities there.
Also with our existing clients, as a reminder, there are six million businesses in the U.S. that have more than one employee but fewer than 100. We have 95,000 of them total. We see tremendous opportunity to grow our client base there as well. What you see here is among those clients that we do have, only 25% of them have a Colonial Life product. We have 6,000 benefits counselors across the U.S., and those folks are able to go back in and help us with account management and also with re-enrollment strategies and opportunities. We see a real huge opportunity in our existing employer base. How are we getting at all this opportunity? Rick mentioned expanding our footprint.
In 2016, we undertook a number of strategies to grow our footprint in the U.S., made some investments, and this is what our footprint looked like prior to 2016. What you see here is our ability to serve people within a 75-mile radius of one of our offices. That's what it looked like in 2015. These are the places that we've added offices over the last couple of years, and now the footprint, including the new offices, looks like this. We've increased our capacity to serve businesses in the U.S. and employees in the U.S. by 34% since 2018. Some of these offices are just getting up and running. We feel very optimistic about the impact they will have over time. We talked about the broker market. I want to share a little bit about what's happening in the broker market.
We are seeing broker consolidation, that's impacting the average broker's ability to serve the small case market. There is a lot of competition in our space. Mike mentioned it. According to Eastbridge Consulting, there are now 67 companies operating in the voluntary benefits space. Almost all of them are going to market exclusively with a broker strategy, and the overwhelming majority of them are targeting the mid and large case markets. We have a competitive advantage here. We can serve the direct marketplace at about a third of our sales and in-force come to us by going directly to the employer. The broker market remains critically important to us with two-thirds of our sales and in-force. We do surveys annually of our brokers and the results of the most recent survey, which is from the third quarter of 2019, are shown here.
I particularly appreciated that over two-thirds of the people responding to the survey said that they believe that the Colonial Life sales representatives are better and represent a competitive advantage for us. You see the other strengths there, including ease of doing business, the quality of customer service and the claims process, and our ethical standards. The benefits landscape is certainly changing as well. Mike mentioned the importance of technology. There are a number of benefits administration providers out there now, it's become increasingly important for all voluntary benefits carriers to create simple and streamlined connections to those benefits administration companies. Colonial Life now has connections with over 40 benefits administration companies, including all the players who operate in the core market, we're pleased with that. We continue to see benefits cost sharing.
The Business Group on Health recently reported that among companies who offer a consumer-directed, i.e., high deductible healthcare plan, participation rates in those plans has increased from 35% to 46%, and the average out-of-pocket cost for Americans who participate in those plans is now over $7,000. Many of the products that we manufacture and distribute serve that marketplace specifically. There is a need for better benefits education and counseling. With these high deductible healthcare plans, oftentimes people don't really understand the impact that it has on their personal finances. Again, I mentioned earlier, we have 6,000 people who are independent, who are able to help people understand not only the products that we offer, but their medical plan and their other benefits as well. Consumer expectations are changing.
Certainly, people want us to interact with them in a way that's significantly more digital than in the past, they want deeper and more meaningful relationships. We have been making investments in the digital space, as have other parts of the Unum enterprise. Now from quote to claim, we can interact with our consumers on a digital basis. We're pleased with the adoption rates that we're seeing with a lot of our digital capabilities. I would point to a couple. digital postcard is a new capability that we introduced in 2019. It's essentially an email link that our employers can share with all of their employees. They have access to videos. They have access to information regarding our products. They have access to calculator tools that help them understand their personal financial situation and how our benefits can help.
We've seen a dramatic uptake in the people who receive these postcards coming to our enrollments and participating in our products. The other one is claims automation. A couple of years ago, we introduced the ability for someone to submit claim on any device at any time and from any location. We're extremely pleased that now our participation rates on online claim adoption is north of 50%, and we expect to see that continue to grow. We expect to continue to make significant investments in our digital capabilities, and we'll talk later about the impact that's having on some of our outlook. The other thing that serves Colonial Life well is our ability to understand the marketplace. What you see on the left is the changing face of the workforce. It truly is a five-generation workforce now.
What you see on the right, and we've made a lot of progress over the last few years with this, is the distribution of Colonial Life's home office-based workforce. Part of what is helpful to us in understanding the needs of the largest customer group now, which is millennials, is the fact that half of our employees are now millennial. For those who think that millennials don't want to work for an 80-year-old insurance company based in South Carolina, there's proof that actually they do. We're pleased with that. One that may be even more remarkable is our distribution talent. These are all independent people, but the mirroring of the distribution talent with the labor force is quite remarkable. It's almost identical. That's critically important as we go in to serve small businesses, especially who may not be represented by a broker.
It's important to have people who understand the needs of various customer groups. In addition, it's not on the slide, but 48% of our sales force is female. Increasingly, HR professionals who are decision-makers are female, and female business owners is one of the fastest-growing segments of the small business marketplace. In summary, we expect to continue to be consistent in our results. We have strong margins. We did have some unexpected challenges, obviously, in 2019. We're going to continue to invest in our future growth in the ways you see on the slide. While we believe competition is increasing in this marketplace, very few people or competitors have the ability to serve the marketplace the way Colonial Life does with a 14,000-member independent agency distribution system and a little over 6,000 people who can perform benefits counseling in person or with technology.
As we look at our outlook for the year, we expect to return to sales growth that's a multiple of the industry average in 2020. We believe that combined with some of the changes we're making, it will help improve persistency, will drive improved premium growth. Because of primarily the investments we're making in the digital environment, and also some pressure on interest rates, we're not immune to the interest rate pressure either. We will see slightly lower adjusted operating earnings growth in 2020, but keeping very strong margins. Like Mike, I look forward to your questions, and it's my pleasure to introduce our President, CEO of Unum International, Peter O'Donnell.
Thanks, Tim, good morning. It's great to be in New York again, even if the weather does remind me of London. Let's have a look at our slides. The first slide, hope you're all familiar with. This just sets out the Unum International portfolio. I think the big change from last year clearly is the addition of Poland. When I was here a year ago, we had just closed the deal and were discussing how we integrate it. Actually now you can see on the bar on the chart on the right, that we are seeing Poland come through very strongly on the supplemental side. Off to a great start there, as Rick said, and I'll talk a bit more about that in a moment.
I think the other thing I would say is on the other two charts where you see our larger jumbo business actually shrinking. That has been very deliberate. We've been, on the sales side, prudent in that market. We're seeing that as being very competitive. Pricing is very aggressive. Also on the income protection side, we have seen increased incidents on our large clients. We've been really concentrating on persistency and getting rate through, and not chasing down large schemes where we don't believe we can get our returns. On the other side, we are growing the core end, which is the small end of the business. Actually, if you took out the exchange rate impact, that's up just about 10% year-on-year. Really nice growth in that area, where we see good margins, good profitability, and a growing need.
Those are the key changes on the overall bar chart. Looking at this slide, this is really setting out the strategy. I don't think there's anything material here to point out, apart from the way I'm thinking about executing, really. Really during 2019 and over the past couple of years, probably defensively positioned given some of the environmental challenges we faced in the U.K. Not been pushing the accelerator on growth, more focused on margin protection, really. On the Poland side, though, it's an opportunity for us to grow very fast there. Basically how quickly can we scale up that business once we've integrated it? We wanted to land it safely and grow the business, and that's been sort of the emphasis on the execution of the strategy.
Really, as I think about the U.K., I'll come back to that and talk a little bit about how I see that moving forward. In terms of my key messages, I'm going to start with the political environment. Three Bs I want to talk about. Boris, Brexit, and beards. Okay, wait with this. Boris, first of all, I think most businesses would say, the Tory landslide, as it's called, is seen as a positive outcome of what was a challenging choice in terms of the election outcome. When I look upon it and we're getting a business-friendly government, it's in for five years. They will have a very strong domestic policy to address some of the most significant challenges, of which the lack of protection for workers is one. We're going to see some interest in that. I think they're going to invest significantly.
As time goes on, I think business confidence will return. A good thing in the medium term. Brexit is not gone. Many of you will know, Get Brexit Done was a big mantra of that election. Pretty much won the election with that very simple campaign. Getting Brexit done is pretty tricky. We enter a transition period in January. We're not really leaving the EU, we're starting to leave the EU. Then we're setting a cliff edge deadline of the 31st of December 2020, when we'll either have negotiated a trade deal or what we're saying is we're going to go out with a hard exit. That will continue to cause uncertainty for businesses and spook the markets. I think today, the exchange rate has just moved back from that nice 135 that it bounced up to around 131.
I think we'll see some volatility as the media is used to really drive the negotiation strategy with Europe. For businesses, that creates uncertainty. You're not sure what your trading conditions are going to be post that exit, and therefore, you're probably not going to make big decisions about investment until we get through that. I do think they will get through it in 2020, and we will see that return to confidence and that more domestic agenda which plays to businesses during the period of this parliament, probably 2021. What that has meant for us, though, is that there have been some challenging market conditions in 2019, which we expect to continue. I think Steve mentioned the exchange rate. We were hoping for about 130 during the plan. It's been running below that in the 120s.
It's up a bit today, but I think there will be volatility on that exchange rate. The 10-year, down below 1%. That has been tough. It dropped down sort of March, April, when Theresa May went out, to below that 1%. It got down to about 0.5% in September. It's come back to 1.7, 1.8. We expect that to continue. I think businesses will continue to be cautiously positioned, and that's my position as well, to be honest, until we see that Brexit fog disappear. Then I will shave my beard off, which will be delightful for everybody. I did get the beard in, just in case you were wondering. Poland, however, is in a much different position, which is we are going to invest in that business. It has landed very safely into our business. We are seeing great growth. It's a fantastic team.
The market is in a really good positive opportunity. There's a lot of business growth. They've got full employment, good wage inflation, all the things that are conducive to insurance companies doing well. It's not very interest rate sensitive, the products that we've got there. No issues around where the 10-year is there. Really happy about where we're positioned in that market. We're looking to invest and grow that business quite quickly. Moving on. This just points out some of the things I was talking about. There you see GDP. We're expecting to be about 1%, similar for 2020. Poland's at 4%-5%, probably run about 3.5% for 2020. Exchange rate, as I said, $1.30. Then the 10-year, you can see that dip down. For insurance companies with interest rate sensitive products, that's a key challenge.
We, like Mike, have been addressing that over the last number of years by putting rate through, and you can expect to see that continue during 2020. Like the guys, that is not all we have been doing. Actually, there has been a lot going on to position both these businesses for growth. Within the U.K., we have taken the opportunity over the last two, three years to re-platform both our group business and our dental businesses onto new modern platforms. That gives us both efficiency, so we have managed to bring our expense ratio down by becoming more efficient, but also it allows us to move much more into digital sales and servicing. On the right-hand side, you can start seeing that we just launched our online portal, which brokers can come to. Rather than using paper, they can do a quote and buy in under 10 minutes.
We are starting to see that happen now. That is fantastic. We want to move servicing on there next year, and that is a much easier thing when you have got a modern platform. On the dental side, around 30% of our claims are done with no human interaction now because we re-platformed the dental business. We are seeing very significant growth by winning on that service proposition with our corporate clients. Over the last three years, we have grown that by about 54% in a market that is growing around 8%-10%. Vastly outperformed the market there. We will see that start coming through in terms of expense efficiencies and as that investment rolls off in terms of margins. Really happy with that.
Poland, not an insignificant task to get the brand launched, to get the business culture brought in, and also to get the move from Prudential's infrastructure onto Unum's infrastructure, all completed this year. More importantly, the business has not missed a beat in terms of operational performance, meeting its sales goals. Double-digit sales growth, double-digit premium growth. Actually, the products that we have got there have IRRs of around 15%. Although you cannot see that in the US GAAP numbers at the moment because we have got all the acquisition accounting, the underlying margins we are making there will start to come through over the next few years as we grow that business. Feel really good about that. Like Mike, we are also very keen to launch into services to maintain our propositions with large clients and small clients.
We have just launched a new app linked to our back office, which allows employees to access medical services online. Big challenge in the U.K., trying to access GPs. We are giving that to clients as part of our income protection proposition. That will make clients more sticky in our view. That will allow us also to start using that to drive the claims process as they have our app on their phone. That is a big opportunity for us. Last but not least, over the last three years, we have been putting rate through the book, both to address the interest rate pressure, also for large clients, some of that claims incidence.
We successfully have kept our persistency very high and put around 10% of rate through the book to offset the interest rate, discount rate pressure we've been putting through, and also that claims incidence, maintaining those margins. Still more to do there. That discount rate drop you saw on the gilt, we'll have to drop our discount rate again in 2020 by about 50 basis points to reflect the latest view on that gilt. We've already reflected that in new business pricing, we're pricing for that recent drop. That does make us less competitive in the marketplace than some of our competitors, we are focused on margins and proposition, and that allows us to still be successful. The priorities. I just highlight a couple of things there really, which is really a continuation of the story.
Continuing to drive digital services and getting services up and running. Making sure we remain agile to the U.K. market. I've given you probably a bit of a downbeat. I think as some of these domestic policies come on board in 2020, if they can really drive that domestic agenda, that could give significant opportunities, and we want to be ready to go with that. We're staying very close to what the opportunities will be out of that as well. However, just keeping a cautious approach really at the moment. Really continue to drive that price discipline and make ourselves really valuable to our customers, both employers and employees. As I said, Poland, different lens really. We want to grow our life advisors. That's our agency force, similar to what Tim's got. We put about 20% on in 2019.
We want to do that again in 2020. It is a high-value proposition, we want to be cautious about the people we bring in, but really bring them in and get them up and running. We've got fantastic persistency in Poland, over 95%, want to make sure we keep that going. Drive the brand, and really look then to help them develop their group business. That's where our expertise can play. It's primarily at the large client end at the moment, we want to drive that down into the mid to small end of the market, which there's great opportunities for us to use both the U.S. and U.K. capabilities. Also, we've just launched a disability product, which is the first in Poland.
We're going to see how that goes and whether we can get that market up and running, which would be something, again, we're using our core capabilities on. Finally, if you look at our outlook, what I would say is the sales and premium growth are really driven by the Poland business coming through. That's what's driving the ranges to probably a bit higher than if you just looked at the pure U.K. Both sales and premium growth are double digit in Poland, and it's getting to a scale where it does make a difference there. The earnings and ROE are more a U.K. story where, as I said, we're investing in Poland to drive growth. We've got the acquisition accounting, which is dampening those profits in ROE.
The U.K. is really driving the earnings growth into that 2-6 and 12-15 range. Let me stop there and hand it over to Tim. Oh, back to Steve.
Are you going to take this?
I can take that.
Great. Thanks, Peter. I'm back. We're going to talk a little bit about closed block. I've been up here, I think now four years talking about the closed block. Frankly, this page continues to be pretty much the same with the same themes, but I'll cover them. We have two blocks in here, one an individual disability income block. Pretty much in a claim status, there's only about 4% of the reserves left in active life. That's indicative of the age of the active life reserve being 57 years. This is a product that basically terminates by and large at a retirement age. There's a little bit of follow-on coverage that the insured can get. This block will pretty much terminate as policyholders get to retirement age. You can see that in the premium trends.
The premiums on that IDI block decrease between 10% and 12% on an annual basis, and that is what we've seen in 2019 year-over-year. We have the closed long-term care block, that was discontinued in 2009 for individual and in 2011 for the group business. It's predominantly group business. You can see about 85% of the block, the policies are group, with the remainder being individual. Of that group, a vast majority of those are employer paid. What that means is that within an employer, 100% of the employees are covered. That creates a dimension around just risk selection that we like in that you don't really have anti-selection as far as the policyholders choosing to be covered. We like that business. Both blocks are in loss recognition.
From a return perspective, you can pretty much expect your ROEs to just be the after-tax earnings on the capital that back those blocks. When you look at the reserves, you can see the relative reserve levels for the different blocks. I would note for the long-term care block, we give this information periodically. As of September, the difference between our statutory reserve and our GAAP reserve has grown to just over $1 billion. The way to think about that is we view our GAAP reserve as being somewhat representative of our best estimate. We do look at that relationship over time.
When we think about investing in the balance sheet of the LTC business, just because of the trajectory of the statutory reserve and the GAAP reserve, we believe we're building some margin on a period-by-period basis on our stat reserves, just because the statutory reserves grow at a faster rate than our best estimate. If I move on to that strategy, again, this is fairly unchanged. We continue to invest a lot in the financial analysis of the blocks. We've built very good tools. We have that block on a very contemporary system, the PROFIT system. We've invested a lot of time to build that model. We continue to get more and more experience and data every year that factors back into how we think about not just the current performance, but the future performance of our entire closed block business.
We continue to be very aggressive with our LTC rate increase strategy. I've got a slide later on, we really like the regulatory environment right now around rate increases. I've been doing this for over 10 years at this company and others, we've really seen a shift in the regulators and just their acceptance and just understanding of the LTC market and the fact that it is really part of their responsibility to help companies manage these blocks. Part of that responsibility includes approving over some period of time, actuarial justified rate increases. I'm very satisfied right now with the regulatory environment, I'm very satisfied with the progress that we've made in that area, I'll talk a little bit more about that later. Capital management. We still look at opportunities there.
As you can imagine, not a lot of counterparties out there, specifically around the LTC block. We do still look at that. We also explore the IDI block. That's a block that's pretty much in a payout status as far as the claim reserves, and we'll continue to explore different opportunities out there in the market. Around operational effectiveness, there's actually some very neat things going on in the industry right now. Different vendors coming to the LTC market with capabilities to help carriers manage their claims. It's mostly around provider services being provided in home health care settings, or also in facilities. We're starting to pilot some of that.
We think that it's going to be good for the industry over time to really monitor the types of services that are being provided and really just paying the right benefits for services being provided. Key priorities, again, haven't really changed. We're going to continue to forward our financial capabilities and our ability to project the performance of these blocks. We are just over halfway through the 2018 rate increase program, and I'll talk more about that, but we have made progress on that. We continue to devote specific resources to going out with outreach with the states and building those relationships with the state regulators. Capital management is going to be a tool, we hope for us, both in the short term and the long term. We will think about any structural options that might be out there to create financial flexibility behind our closed block.
We've talked a little bit about this. We started disclosing more around our block, if you go back to September of 2018, when we discussed our reserve charge that we took at that time, and we thought it'd be a good time to update it. I think the messages are still the same. We really think about it in three different tranches. On the left, we have our traditional individual block. That's going to look very much like a lot of the other blocks that you'll see out there with other carriers. You're going to have higher predominance of lifetime benefit. You're going to have more inflation incorporated into some of the benefit features. As you go across the spectrum, the majority of our business is in the employer-paid segment. You have very little, if any, lifetime benefits in the block.
Our average daily benefit is quite a bit lower than what you would see in a traditional individual policy, and we have almost no inflation. If you think about the selling process that took place with these different blocks, it really makes sense. The individual business is normally sold by an independent broker across the table. They're looking for a full solution to solve for the long-term care funding requirements. When you look at employer-paid, that's more about an employer wanting to give some benefit to their employer base, but having only so much wallet share that they can devote to this type of product. They tended to put in plans that have much less rich benefits than what might be sold with an individual policy.
From a rate increase strategy, I think the last time we talked on an earnings call, we had just breached the 50% success rate against our target. If you remember, our target built into our 2018 reserve adjustment was just over $1.4 billion. That was split pretty much equally between what we call our old program, and those are really rate increases that were pending with state regulators when we came into that September 2018 discussion. We launched a new program in the latter part of 2018, so that would have been incremental, that had another $700 million of value there. We announced earlier in the year on the old program, we were able to get a pretty significant approval in California. Since that time, we've made further progress on those old pending approvals. A lot of that was in the individual block.
We feel good about the continued progress there, and we'll continue to work that. There's not really one big state left in there. It's a lot of smaller states that we have to work over time. A lot of those states are approving increases. They just approve incremental increases on a year-to-year annual basis. We'll continue to work that process. On the new program, we feel really good, too, because in a very short period of time, we've made good progress on that new program. That program is predominantly in the group space. We have had group approvals or requests historically, and we've had pretty good success, but this was kind of a further test of the regulatory environment and how they'd receive our group requests. Also within that, we have a newer era of group policies that we had never rated in the past.
We've also seen some success on that. We're very satisfied with the progress we're going to make. I guess the comments I'd make around this is good progress really in the last 18 months, but now the real hard part begins as far as working every single state for incremental increases on a year-to-year basis, and we're going to have to continue to work that. We do feel good about the progress we've made. It is going to be several years before we'll work through the rest of these approvals. Loss ratio. On long-term care, we try to get a construct in our earnings calls on a quarterly basis where we talk about more of a rolling average because we think that's the best way to think about it.
There is some seasonality in these blocks based on when mortality trends usually occur within a year and when we see a lot of our incidents within a year. We do think about it more on a rolling average and a longer-term basis. Over the last four quarters, and really since we had our GAAP assumption changes back in September of 2018, we've had right in the middle of the range as far as our cumulative loss ratio of 87.2%. We haven't really seen anything in our experience to date that would change our view of the best estimate assumptions that we do have in our GAAP reserve. I mentioned earlier, we do not anticipate any sort of adjustment to our assumptions at year-end 2019, and we'll continue to monitor the block as we go forward.
I would anticipate there to continue to be volatility, both positive and negative, within this block. If you go back to last fourth quarter of 2018, we had what I call expected high mortality, which is normal for a fourth quarter, combined with very low incidents, which was a little unusual for the fourth quarter, and we were low in the range. As you go quarter to quarter, that will continue to fluctuate. From a new money perspective, we continue cumulatively to exceed our 5.5 new money yield assumption. I mentioned earlier, we're able to do that through really diversifying the portfolio that we invest in. We do take, I'll say, more longer duration risk in this portfolio. We do invest more in high yield type of investments as well as alternative assets. We think it matches well with this type of liability risk.
We're also able to get better yields than you might see in your normal 10-year bond. That's a lever that we've been able to use. At the same time, as I mentioned earlier, we've been able to keep our entire Unum Group credit quality very consistent over time and feel good about the risk that we're taking within the portfolio. That assumption does go through the latter part of 2021, we'll have to continue to monitor rates and where they are and where they go in the future on this assumption. Our closed individual disability block. This is a great block. It's performed very well over the last several years. This is a block that we securitized some time ago. We originally issued $800 million of non-recourse debt to support the capital of this block.
It was very well received by the market at this time. That debt is paid off cumulatively on its amortization schedule. You can see here we're down to $80 million outstanding on that, and we expect to pay that off in 2021. That debt service is funded 100% out of the statutory profits and released capital of this block. It's paid off kind of inherently within the profits generated from the block. Once the debt's paid off, that'll be free and clear to Unum Group. Feel good about how it's performing. The securitization has performed well, and as you can see, the loss ratio has actually trend down over time. We've seen both good incidents and recovery activity on that block. We don't talk about it a lot on earnings calls because we don't have to. That's a good thing.
It performs stable and very well over time. Just in summary, from an outlook perspective, our earnings will be fairly flat in the closed block. It's pretty much just the income that we're going to have on the capital supporting the block. IDI capital's coming down a little bit. LTC's capital is increasing a little bit. I did mention the volatility of miscellaneous investment income. That is highly concentrated. The investment portfolios that would drive that miscellaneous investment income is highly concentrated behind the closed block. You're going to see a little bit more volatility in this block, but we'll describe that as we go through the quarters. Continues to feel good. We continue to feel good about the closed disability block as it winds down. That's really a highlight of how seasoned that it is.
We do continue to dedicate the resources that we need behind our closed block business and feel really good about the management of that block. A little bit of outlook there. Premium growth will continue to decrease in that 2%-4%. That's a combination of the closed disability block decreasing in that 10%-12% range. We're starting to see some of the rate increases that have just been approved come through the premium line item. We're going to see a little bit of uptick on the LTC block as California kind of comes live and is implemented. That'll offset that decrease in IDI premiums a little bit.
Adjusted earnings will be down just a smidge, and then you're going to have your adjusted operating ROE pretty consistent with what you've seen in the past, which is just an after-tax investment income on the capital behind the block. I'll turn it back over to Rick for some closing comments.
Great. Thank you, Steve, for taking us through that. As we wrap up today, I take you back to what we're very excited on, which is the overall franchise, what we're doing on the employee benefit space. We're really excited about a lot of the investments that you heard about earlier today, making different connections with our customers and growing the business in a consistent way as you've seen. Even these investments today will be paying off over the next several years. Very excited about the customer experience and how we enhance that. Steve took you through some dimensions of the closed block, very consistent in how we manage that block of business, doing what we can certainly in the rate increase side, and keeping good monitoring about what the overall position is of that block of business. That takes us all back to the earnings.
Next year, 4.7% EPS growth and also continuing to deliver capital with good, strong financial results and returning that capital to our shareholders as we see appropriate over the course of the year. Let me turn it over to the folks in the room and see what you have for any questions about 2020 or anything else you heard today. Start in the back there. Microphones are coming around. Ryan, you want to go first? If you could announce yourself for the folks on the webcast as well.
This is on, yeah? Can you hear me? Ryan Krueger, KBW. I guess first wanted to ask about voluntary competition. You mentioned it quite a few times. Can you give a little bit more perspective on where this is coming from? Is it new entrants into the space, existing players that are just getting more aggressive? If you could just provide some more perspective on that.
Sure. I'll hit it high level, and I'll turn it over to Mike and Tim to comment on. It's the competition that we talked about, which is just the volume of competitors. It's not necessarily a new entrants to the insurance market, but you had traditional players in other parts of the business now getting into the voluntary benefit space as well. One of the things I'd say is that competition just recognizes it's a great market. We've been saying that for a long period of time, and I think people now are looking at ways that they can get into that market. There's the volume of competition, and then we have to make sure that with that volume, that there's knowledge as they come into the markets.
Although at its surface, these are simpler products to the customer, administering them and doing them well with employers, I think, is important. That's what we're watching. We're seeing that. It's early stages in terms of what we see, but it's something we wanted. I think we talked about it the last couple of calls. It's one of the reasons we're seeing a little bit less growth rates, but we still feel great about that market. Mike, comments, or may we start with Tim?
Yeah. Sure, yeah. I think it's working. It's a bit of both. Not new entrants in terms of people who are not in the insurance industry, but a lot of folks who haven't done voluntary before are coming into this space. We don't see anyone doing anything really transformational or terribly innovative from a product perspective. We see most people coming in targeting the mid and large case market and going about that by trying to offer enhanced commissions or enhanced compensation that would help fund things like benefits technology. As I said earlier, we like the fact that two-thirds of our business is in the less than 1,000 life space. We still see that as a very fertile market. There's a lot of opportunity in that market, a lot of underserved members of the population, both corporately and consumers.
We recognize that there are some people doing things now that, in our view, are not sustainable.
I would just add, on the Unum side is our business is primarily a mid and large employer voluntary benefits business, and I think it's a natural sort of maturation process that's really happening. We have seen more competition, but it's becoming more penetrated as well. The way I look at it, we're very comfortable operating in mature markets, right? There are ways to differentiate yourself and create value for customers. We've been doing it for a long time in disability and life insurance. I think we're just on that natural progression with these voluntary products as well. I think we've got a bit of headwind, but to be honest, I'm pretty optimistic, in the relative midterm.
On the IDI closed block, can you just update us on how much statutory capital is back in that block, and how are you thinking about potential transactions there relative to improving cash flows once the securitization debt is paid off?
I think we have a lot of, and I don't believe we disclosed specifically the amount of capital. I'm looking down at Tom behind the block, but it's south of $1 billion, let's say. We look at all kinds of opportunities there, whether it's a traditional co-insurance arrangement where we're able to get completely off the risk. We clearly would have to think about relevering it. We think that it's proven to have really stable cash flows, so there may be an opportunity there, and we'll continue to explore all those opportunities. I think the key there, though, is we actually really like the business, and so it's not that we don't like the risk of the business, therefore, we're not going to do anything that's uneconomical to us, to the shareholders, because it's generating really good statutory cash flows.
We'll continue to evaluate what's out there and explore as appropriate.
Great. Thanks, Ry. Come down here.
Humphrey Lee from Dowling & Partners. Looking at Unum US and Colonial Life, it seems like the growth is largely coming from the newer business, namely dental, vision, and stop loss. Can you just remind us or update us in terms of your kind of aspiration? I believe dental and vision, you looked at growing that to $500 million of premium over time, where you are right now, and do you still feel comfortable with that? Then on stop loss, I believe you target to become a top 5 player over time. Do you feel like you can grow that organically, or do you think M&A would be in the cards in order for you to achieve that?
Good. Let's talk about dental first. We can talk about both Mike and Tim. Welcome back.
Great. Thanks, Humphrey. Appreciate the question. We did set that goal around $500 million of profitable dental and vision and feel like we're largely on track. I'd say, as always, when you're setting those five years out, there's going to be a little puts and takes. I'd say the Colonial Life distribution is actually a little bit ahead of what we were anticipating. The Unum distribution, a bit behind. Boy, we're excited about that business. We continue to invest. What's unique is it's one manufacturing plant. We've been making investments, for instance, in claims auto adjudication, so don't need any human intervention. We've seen a very significant jump in that percentage in the year, and that's helping us be more efficient and be more competitive across both the Colonial and the Unum brand. Maybe you add, Tim.
I'll just say a couple of things on dental first. Dental is an incredible product that helps people come to the enrollment. People may want dental that might not be thinking about voluntary. What we see is that when people purchase dental, they tend to purchase one or two other Colonial Life products with it. It has coattails as well. We're excited. As Mike said, in total, over the last 18 months, we feel like we're a little bit ahead of plan.
On medical stop loss, very interesting, and we continue to invest in it. It's a small piece of our P&L at this point, but it's got a lot of characteristics. At the end of the day, it's a risk management and distribution play. Our reps calling on brokers who distribute both our traditional group benefits and the medical stop loss benefits. It's clients in that mid to the small end of large that are looking for this to supplement their self-insured health plan. The fit there is really well. The feedback we're getting through just the volume of quotes that we're seeing is that our brand and distribution has a lot of relevance there. It is a long-term play for us. We want to be smart about how we play there, but we like it quite a bit.
Shifting gear, a question for Steve. You talked about for the LTC cash contribution, right now it's around $400 million, expect to go back down to $200 million beyond 2020, assuming stable rates. Can you give us a sense in terms of sensitivity to interest rates, like what do you mean by stable rates? How sensitive to, let's say, 50 basis points of move to interest rates assumptions?
Just kind of as background, the construct that we have with our LTC businesses is we have part of the business is in New York, and that's kind of your traditional cash flow testing, asset adequacy approach. That forces us to use some assumptions that are fairly conservative around interest rates, how you incorporate rate increases into that, and there's some other items that kind of limit the margins that you're able to include in that. That's a spot rate. If you think about where the spot rate is right now, that's incorporated into our capital deployment plan, and we feel like we can manage through that pretty well. We'll see what rates do towards the end of the year, but we think that's going to be pretty manageable.
How that works is if rates stay that way forever, that's kind of what's anticipated into the current testing for asset adequacy. It's not something that has any kind of regression to mean that we'd have to work through over time. We don't really disclose sensitivities around our cash flow testing because there's a lot of other math that goes around it with the other underlying liability assumptions. I can just say where rates are right now, we feel pretty good about our capital deployment plan going into next year.
Just to clarify, what you're saying is if rates stay at the spot rates going forward, you still anticipate the cash contribution to come down from $400 million to $200 million post-2020?
Yeah.
Okay.
We do.
Thank you.
Yep.
Let's go right here.
Thank you. Ian Rai, Bank of America. I want to first ask about LTC. There's a slide where you show how you're getting your yields, and just wanted to know how you're getting the 5.5% yield. Interest rates have obviously come down, yields have come down. So how does that not change kind of the way you're thinking about the trajectory for that yield improvement?
Yeah. What I would say is that that interest rate projection is over the long term. We're not going to change it drastically from year to year based on what the prevailing interest rates are. We still have a belief within that assumption that there will be a regression back to higher levels of interest rates. We have been able to achieve the 5.5% over the last really year and a half to two years since we adjusted the assumption. We're able to do it through a combination of investing in investment-grade, high yield, and alternative investments. The alternative investments, that gives us some really nice yields that are able to bring kind of the aggregate yield on our new money rates up above the 5.5%.
I think in the short term, we can continue to achieve that, but obviously that's a watch area for us because it is an upward-sloping assumption, and that's something that we're going to have to monitor over time.
I know you guys don't talk about it this way, but from a credit quality standpoint, if you were to kind of isolate the portfolio that's backing those liabilities, is there any way to kind of triangulate what that credit rating would be? I understand there's alternative investments involved, but is there any way for us to kind of understand how you're getting those rates in the portfolio?
I would just tell you that we look at credit quality in aggregate. We're not going to disclose credit quality really by block. We also think about it by legal entity, and that has implications to the risk-based capital that we hold in the various entities, and we have to manage our RBC percentage. That's another limiter to what we can do with our investment portfolio. But we do have heavily weighted alternative investment assets behind our LTC portfolio. We think it works with that product just from the dynamics of the liability itself but also helps us achieve our yields. I guess the message that we want to leave you with, we haven't changed kind of our risk profile over the last three to four to five years.
Either if you look at it from an overall credit rating of A- or if you look at it from the percentage of our total asset portfolio behind that's backed by high yield and alternative investment. We haven't taken more risk. We've shifted it a little bit. Clearly, we have to devote a lot of those higher-risk assets to our LTC portfolio.
Great. Lastly, just on the regulatory environment. Is there any push from the NAIC to kind of look at the assumptions that are used across companies? I appreciate that every block is different and has different features, but do you think that some type of standardization would make it easier for you guys to achieve rate increases over time?
Yeah. I would say, we obviously have a lot of conversations with regulators, and we've been very active also. The Actuarial Guideline 51 that came out several years ago, that's evolved. I think it's evolved in a positive way in that a small group of regulators, I'd say they're the experts in the regulatory community around long-term care, have started to gather data from different LTC carriers. It started to look just across those carriers of outliers as people think about assumptions, and they give feedback to the carriers through that process. I think the key in all that, though, is they are very focused on do you have your own data and your own experience to support the assumptions that you have in your reserve adequacy testing?
I think that they even frown a little bit on using industry data when it maybe doesn't represent necessarily your own experience. Now, some carriers have smaller data sets, and they're not able to rely on their data because it's not credible. I think their bias is towards using your own experience because all blocks are different. I think they acknowledge that, and they're more focused on can you support the assumptions that you have in your reserve adequacy properly?
That's good. Great. Thank you.
You can pass it over. Actually, just pass it right over there to Suneet.
Thanks, Rick. Suneet Kamath from Citigroup. Just wanted to go back to the voluntary business again. It seems like the competition is coming from commissions more than features, these upfront commissions. Have you talked to your distribution partners about how they feel about a levelized commission? If others don't follow you down that path, aren't you just going to lose out if there's a bias towards the upfront sell?
Yeah. For Colonial Life, we have engaged in those conversations, and we started helping people understand that level commissions is actually a more sustainable business model for our distribution partners as well. When they sell a very large case, it creates very challenging comparables for them the following year when they're on high-low as well. I would say that we're seeing increasing participation in level commissions. Recently, we're up to about 20% of our new sales that are level. I think it's going to be a challenge because there are some producers who I think are going to be a very hard sell around level. We expect to continue to offer high-low and level, but we also want to make sure that we are behaving rationally where others may not.
Yeah. I'd echo Tim's comments on the Unum side. I'd say, just building on that, just because we also have high-low commissions that work for certain settings, particularly as it's a new client into the voluntary market. It's being more selective about the distribution partners and being sure that they've got a long-term orientation. Similarly, we're about a year and a half in with new products with levelized commissions, and we've seen very steady growth. We're up about a third of new business coming in on it. I really do feel that it's kind of a natural process that we're going into that large case market and it's quite manageable.
At the end of the day, coming back to the other side and competing on the strength of the delivery of the benefit and the quality of the service and the strength of the product itself, I think is a good thing in the long run.
My follow-up is just on LTC. I guess, Steve, you're saying that you think the regulatory environment's pretty positive for rate changes or rate increases. Some of the stuff that we've been reading around states not wanting to subsidize other states is clearly getting the headlines as well. I just want to get a sense of how that factors into your thinking about a more constructive environment.
Yeah. That's definitely a dynamic, and that's a topic of conversation. The NAIC, they put together more recently, they have a lot of different task force over the years around LTC, but they put this kind of executive committee together recently, and that is one of the things they're looking at. They did a survey of the different states and just kind of what their methodology is and how they think about approving actuarial justified rate increases versus having discretion somehow to adjust those down. I'd say it's been acknowledged at the NAIC leadership that there needs to be consistency, and there's discussions that has taken place. I think conclusions that come out of that conversation, those are going to be probably a year in the making as far as them coming out and making statements.
I can just speak to our experience, and our experience has been we're in all states now with approved rate increases. We didn't announce it because it's not very large, but Vermont approved one of our rate increases. That was the last bastion. We feel good about our ability to discuss with regulators, have them be open to the need, and that's kind of the construct we're working off of.
Just last, on number one, do you give us the stat reserve split across those three LTC categories, individual, the group, employer?
I don't have those off the top of my head, sorry.
Yeah. Thanks, Suneet. Pass it straight back.
Thanks. Erik Bass with Autonomous Research. Mike, you had mentioned the voluntary market starting to get a bit more mature. I was just hoping you could talk about some trends you're seeing maybe as you've gone through enrollments in terms of plans that you see adding new benefits, and then how penetration rates or enrollment rates have changed.
I think it is important to note, it's about 60% for the industry is takeover, that still leaves a lot of penetration. In that mid to large case, a product's going to get up into the high 70s, 80% before it's really fully penetrated. There's still room to run in terms of adding new clients. Participation rates within. These are voluntary elected plans, you can have participation if it's a poorly run enrollment at 5%. On average, we're going to see around 15%-20%-22%. Again, as we get better, Tim, actually Peter and I all talked about some of the digital capabilities of being able to access people on their terms in ways that they're comfortable with, an increasingly millennial workforce, we think we can drive that participation rate up as well.
There's real growth there. It's just the basis of competition, I think that's going to change.
Just a follow-up on the leave management services. Is that a revenue opportunity for you, or is that something you bundle as a service that just kind of improves the experience on your block overall?
It's a great question. You see the growth. Think in order of magnitude services for us, about $150 million of revenue. Not hugely consequential, but that's growing at about a third, 30% clip. We actually see that accelerating over the next couple of years, and over time, we really like the profile of that business. Obviously, it's fee-based. There's not capital that we need to manage behind it. I think as we've continued to invest on the technology and the process and the people, we think there's an opportunity to create some differentiation. Down the road, I would just say, think about a leave event. Now we're talking about not just if you've had a personal kind of health issue, sickness, or an accident, which is our traditional business. Now we're pulling in all your loved ones.
Anything that's happening in the family, and that's a pretty and increasingly broad definition. We're going to be at that very meaningful point in somebody's life, and we see that as an opportunity to be more helpful on a lot of different dimensions.
Yeah. That's good.
Can you bring the microphone up to Tom?
Tom Gallagher, Evercore. Tim, the comment on that you terminated three large distributors, did that recently happen? Was that earlier in 2019?
One was first quarter, and the other two were second quarter.
Have you felt the full impact of those changes yet, or is that still on the come?
Yeah. The one that was restructured was frankly just putting a distributor on a level commission basis, and we have not seen the falloff we expected in their sales. The other two, we will realize the full impact by the end of the year.
Can you provide a little color about why you would terminate a relationship? I view this as a very simple business with pretty simple underwriting. What exactly causes that scenario? Have you safeguarded to make sure you won't have more of those going forward?
It's really unusual. As I mentioned earlier, I've been with Colonial Life now for eight and a half years. This is the first time we've had to do this. One was behavioral, one was a quality of business, and one was an industry focus.
What about heading into next year? Do you feel like you've, I don't know, to the extent that you can vet out or make sure this doesn't recur, have you taken any safeguards?
We have, Tom. We put some additional guidelines in place in underwriting. Just to give you some sizing, the three together represent about $30 million of sales on a $600 million goal. It's not insignificant, but I wouldn't want people to think it's a big part of our block.
Got you. Let's see. I guess just a quick one for Steve. The comment you made about the $400 million contribution for LTC. That's inclusive of what you would expect to incur from a year-end cash flow testing standpoint? That's not additive, right?
It's inclusive.
Okay. All right. Thanks.
Good. Thanks, Tom. Actually, just pass it forward to Tom.
Andrew Kligerman, Credit Suisse. Trying to get a little more clarity about the pricing element. I know you've got big upfront commissions, and sometimes you pay administrators. Given this pickup in competition, could you talk about the group involuntary benefits pricing, maybe some absolute number to get a sense, and same thing on Colonial with the voluntary. Where's pricing going?
Let's start in Colonial Life, actually.
Yeah. Our products have a shelf rate, and there's not a lot of negotiation, especially there's none on the individual products. On the group, there's some negotiation, but it's primarily around what kind of enrollment conditions we have. We don't see a lot of price competition on the product itself. Again, the competition's more in the area of commissions and additional funding for employer technology.
Tim, if you had to factor commissions into the whole kind of picture, where would you say pricing has gone in 2019? Has it been down 1% or 2%? Could you give any kind of numeric indication?
When you say pricing?
In other words, if you're encompassing commissions as well as the price you actually charge your client, what happened to the price? If you kind of consider commission part of the price.
Yeah. For us, again, I'm not completely certain I understand the question. Let me take a shot, and then you can tell me whether I got it.
Okay.
We are seeing others who are offering commission rates that we believe to be unsustainable. We haven't changed the commissions that we offer or the prices that we offer, and it's not our intention to do so at this point.
Yeah. I would just say, as a market, we've seen a little bit, but we've maintained where we are. Our cost of goods is unchanged, and we're still winning. I don't want to overplay this too much. Tim's still seeing expected sales growth. We're still seeing it in the U.S. We aren't going backwards, and we're maintaining our discipline, I think is the bottom line. Mike, any other comments around pricing? You got it. I think that's it. Yeah. Similar.
Yeah. Just to put a number on it, where it pressures, it might pressure a couple of points on our ROEs, we're still in a profitable range.
Great. Yeah. When we're talking about competition, Tim, over the last five-plus years, has seen really good growth, outsized market growth. We're tempering that back a little bit. This isn't something that we see as a headwind which will take us in reverse. It's tempering because of what we see in the market dynamics. Importantly, the profitability of the line, which includes all those things we just talked about, still we see as very, very good.
I see. Just along the same lines, Peter, you talked about the U.K. and some jumbo accounts that had some pricing issues. Maybe you could give a little more color on that and what you're seeing in the U.K. in terms of pricing.
Yeah. The jumbo market is very competitive. We have a couple of new entrants, the easiest way to come into our marketplace is to write a big, large scheme and win that. Again, we would see prices that might be 10% below is where we win generally on proposition. If it goes more than 10% for the customer, it gets harder because that's quite a big pound amount, we've been seeing that in the large end where we just haven't been able to get within 10% given interest rate pressure, et cetera. I think in terms of incidence, it's running about 5%-7% up over back to 2016 on those large schemes, basically, we've been pricing that through. It's a watch area for us still, though, because it does move around, these are long-term trends. Basically, that's what we priced in 2019.
That's what we'll price in 2020 because we've seen it too long now not to react to that.
Maybe if I could just sneak one last one in on, you have alts and high yield, and it looked like alts were around 2+% and high yield was about seven. Where would you like to see that balance out in 3-5 years?
Yeah. I could see the alts growing a little bit. Really what we're doing is we're allowing the maturities and the calls on the high yields to fund a little bit how we want to grow the alt portfolio. We don't want to take the combination of those really much higher than where it is right now. It might increase a little bit, but if it does, it'll be more funded off the cash flows of what you can think about it as a combined portfolio somewhere.
Yeah. Actually, Steve mentioned it when he was presenting the charts, the scale's off a little bit.
Yeah.
Alts are actually lower than what you see as a %. I think.
It's like one and a half %.
Yeah, it's more like one and a half %. Yep.
Scale. Right. Got it.
Yeah. The scale.
Okay. Other questions? Tom, did you have a follow question?
Just one for Mike. Your plan is to push through rate increases related to the change in the discount rate. Just given how favorable the performance has been for both you and the industry, are you worried at all about persistency, about what that's going to do to sales? Are you seeing any signs that competitors are doing something similar? Or is that still TBD?
Yeah. Good question. Our first data point is the one/one renewal, so we started leaning into those a bit. That's right in line. It's actually a little bit favorable from a persistency point of view. We'll watch it very closely, because when we think about, particularly in the mid and large case, your manual rates are a part of what you ultimately end up charging. Experience is another component. To the extent experience emerges more favorably, that's a bit of an offset as well. The last point I'd say is we did actually go back and look at about 15 years of data from an industry source and where competitors, where all of us in the industry, tended to look at the relationship between interest rates and new business pricing and that discount rate.
The industry does get there, it just gets there maybe a tick or two slower than some of the bigger players.
Great. I think that's all the questions we have today. I'd like to thank everybody for attending here in person, and those on the webcast as well. We look forward to 2020, taking you through our plans as we execute them over the course of the year. Appreciate your time here. Have a very safe and happy holiday season, and we'll look forward to seeing you in 2020. Thanks.