Disability insurance carrier Unum Group is replacing its top executive with a Maine native, and the company also reported Tuesday that it had a financially difficult fourth quarter.

Unum, which has about 3,000 employees in Portland, said its current president and CEO, Thomas Watjen, plans to retire in April. He will be replaced by Richard McKenney, a native of Eliot and currently the chief financial officer for the company, which is based in Chattanooga, Tennessee. McKenney lives in Tennessee.

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Richard McKenney, left, has been named CEO of Unum, and Jack McGarry, right, has been named CFO. Courtesy Photos

In turn, the open CFO position will be filled by the president and CEO of Unum’s Closed Block Operations division, Jack McGarry, who lives in Maine. A closed block is a group of older insurance policies that the company is no longer selling but on which it continues to pay claims.

The announcement of Watjen’s retirement came on the same day that Unum reported a net loss of $279.1 million for the fourth quarter.

The loss was primarily the result of Unum setting aside an additional $453.8 million to cover anticipated costs related to a closed block of long-term care policies, the company reported. The extra cash reserve resulted from an updated analysis of Unum’s anticipated costs over the next few years based on expectations that interest rates will remain low.

Insurance companies invest their cash reserves to generate income, and the ongoing, prolonged period of low interest rates is making those investments less profitable.

“Our primary challenge is the present low-interest-rate environment, which we don’t expect to improve anytime soon,” Watjen said in a news release. “As we outlined for investors this past December, we expected to increase our long-term care reserves during the quarter to better reflect today’s extremely low level of interest rates.”

Excluding the reserve increase and other one-time losses related to bad investments and the company’s pension plan, Unum reported operating income of $228.8 million, or 90 cents per share, for the quarter, compared with net income of $223.8 million, or 85 cents per share, for the fourth quarter of 2013.

The company generated revenue of $2.64 billion in the fourth quarter, up 2 percent from revenue of $2.59 billion a year earlier.

Despite the one-time expenses, which the company and investors had anticipated, Unum actually outperformed earnings expectations by 2 cents a share.

“We actually had a very good quarter,” with strong sales and high customer satisfaction, McKenney said in an interview Tuesday.

McKenney, who is 46, will be named president on April 1 and then will add CEO to his title at Unum’s annual board of directors meeting in May, the company said.

Watjen, who joined the company in 1994 and has served as CEO since 2003, intends to remain a director at Unum through the 2017 annual meeting, the company said.

The board intends to name Watjen as non-executive chairman in May. Former TD Banknorth Chairman and CEO William Ryan, Unum’s current chairman, will transition to lead independent director until his retirement at age 72 in 2016, the company said.

McKenney said he is looking forward to taking over as head of Unum, which has nearly 10,000 employees worldwide.

“I’m certainly excited about it,” he said. “I’ve got some big shoes to fill.”

Unum, which trades on the New York Stock Exchange under the symbol UNM, reported its quarterly financial results and leadership changes after the market closed Tuesday. Its stock price closed at $32.90, up 94 cents for the day.

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