I analyze securities based on value investing, an owner's mindset, and a long-term horizon. I don't write sell articles as those are considered short theses, and I never recommend shorting.Former advisory representative at Fidelity. I do my own investing now and share my research here.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or ...

Shares of Unum Group (NYSE: UNM ) have been a strong performer over the past year, gaining 38%. However, these gains have stalled out amidst mixed performance and concerns about its long-term care (“LTC”) unit. I last covered shares of Unum inOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me ...

Shares of Unum Group (NYSE: UNM ) have been a strong performer over the past year, gaining 38%. However, these gains have stalled out amidst mixed performance and concerns about its long-term care (“LTC”) unit. I last covered shares of Unum inOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me ...

Core Viewpoint - Unum Group is focused on growth and aims to protect more individuals, currently covering nearly 50 million people across the U.S., U.K., and Poland [2][3]. Group 1: Growth Strategy - The company prioritizes growth by enhancing digital connectivity with individual employers and providing support to their employees during times of need [3]. - Unum Group's growth trajectory is built on the foundation of its existing capabilities and market presence [3].

PresentationAll right. We're going to jump into it here. So first off, thank you. I've got Rick McKenney, CEO of Unum Group; and Steve Zabel, CFO of Unum and I wanted to jump right into it. Maybe if we could start with a more broad question around what your key priorities are as you look out over the next year or two.Richard McKenneyPresident, CEO & Director Yes. Thanks, Alex. Thanks for having us. Thanks everybody who's joining us here today in the room and on the webcast. We've had a good day talking to d ...

Summary of Unum Group FY Conference Call (September 09, 2025) Company Overview - **Company**: Unum Group (NYSE: UNM) - **Industry**: Insurance and Employee Benefits Key Priorities and Growth Strategy - **Growth Focus**: Unum Group aims to protect more individuals, currently covering nearly 50 million people across the U.S., U.K., and Poland, with a goal to increase this number [2][3] - **Digital Connectivity**: Emphasis on enhancing digital connectivity with employers to better serve employees during times of need [3] Sales and Market Environment - **Sales Performance**: The second quarter sales were softer than expected, attributed to market conditions and changes in healthcare affecting employer decisions [4][5] - **Premium Growth**: Achieved a 4.5% premium growth in Q2, with expectations to maintain mid-single-digit growth levels [6] - **Competitive Landscape**: Unum maintains a strong position in the group disability market, with a focus on both pricing and employee experience [8][9] Disability Insurance Insights - **Benefit Ratio Trends**: The benefit ratio for group disability insurance has stabilized around 62%, with expectations for sustainability in performance [16][17] - **Historical Context**: Pre-pandemic benefit ratios were in the low 70% range, with a spike during COVID due to elevated claims [14][15] Group Life Insurance - **Mortality Rates**: The benefit ratio for group life insurance has settled around 70%, consistent with expectations [19] Paid Family Medical Leave - **Regulatory Environment**: The company is adapting to state-level regulations on paid family leave, investing in digital capabilities to assist employers in compliance [20][21] Medical Inflation Impact - **Limited Impact**: Medical inflation has minimal impact on Unum's core products, as many are salary replacement rather than healthcare cost reimbursement [23][25] Technology Investments - **HR Connect**: Continued investment in technology to improve integration with cloud-based systems and enhance user experience [27][28] Colonial Life Business - **Growth Recovery**: Colonial Life is recovering from pandemic-related disruptions, with sales momentum building, albeit at a slower pace than historical growth [30][31][33] Long-Term Care Insurance - **Claim Trends**: Elevated claim counts and severity have impacted underwriting results, but these are expected to normalize [36][39] - **Actuarial Review**: Ongoing actuarial review to assess reserve levels and potential impacts on capital [41][42] Capital Management and Shareholder Returns - **Excess Capital**: Unum has significant excess capital, with plans for share repurchases and dividend increases as part of capital deployment strategy [52][54] - **Investment Strategy**: Focus on credit investments and alternative assets to manage long-term care liabilities [56][57] Market Opportunities - **Supplemental and Voluntary Products**: There is potential for growth in supplemental and voluntary products, driven by increasing market needs [62][64] Conclusion - Unum Group is positioned for growth with a focus on digital connectivity, premium growth, and maintaining competitive advantages in the insurance market. The company is actively managing its capital and adapting to regulatory changes while exploring new market opportunities.

Key Takeaways Q2 premiums rose 4.6% to $2.7B, but higher costs drove a 7.6% jump in benefits and expenses.ROE of 13.44% lagged the industry's 15.02%, signaling weaker capital efficiency.Unum missed earnings estimates in each of the last four quarters, averaging a 4.2% shortfall.Unum Group (UNM) holds the top position in the U.S. disability income market and ranks second in voluntary business. Unum's conservative pricing and reservation practices have contributed to overall profitability. Sustained increase ...

Core Insights - Unum Group reported Q2 2025 earnings per share (Non-GAAP) of $2.07, missing analyst expectations of $2.22 and down from $2.16 in Q2 2024 [1][2] - Revenue increased to $3.36 billion in Q2 2025, up 4.0% from $3.23 billion in Q2 2024, indicating solid premium growth despite weaker profitability [1][2] - Net income decreased to $335.6 million, down 13.8% from $389.5 million in the prior year, raising concerns about claims trends and customer retention [1][2] Financial Performance - Adjusted operating income for Unum US fell 11.0% to $318.2 million, despite a 3.9% increase in premium income [5] - The benefit ratio in group disability insurance rose to 62.2% from 59.1% year-over-year, attributed to lower claim recoveries and larger average claim sizes [5] - Persistency in group long-term disability declined to 90.6% from 93.1%, indicating increased customer turnover [5] Business Segments Overview - Unum US, which accounts for over 65% of total premium income, faced challenges with a decline in adjusted operating income and net investment income [5] - Group life and accidental death & dismemberment insurance saw a 21.2% drop in adjusted operating income, with a worsening benefit ratio of 69.7% [6] - Supplemental and voluntary lines showed resilience with a 6.9% increase in adjusted operating income, although sales of voluntary benefits shrank by 21.8% [6] International Operations - Unum International experienced a 2.1% decline in adjusted operating income, despite an 18.5% increase in premium income in constant currency [7] - The U.K. operation reported a benefit ratio increase to 75.0% from 69.5%, with sales falling by 13.5% [7] Investment Management and Capital Position - Net investment income rose 2.9% company-wide, with variations across segments; Unum US and Closed Block saw declines due to lower asset balances [10] - The company's risk-based capital ratio was approximately 485%, significantly above regulatory minimums, with $2.0 billion in liquidity [11] - Share repurchases reached $300 million, with expectations to meet the upper end of the $500 million to $1.0 billion annual repurchase guidance for 2025 [11] Future Outlook - Management revised full-year 2025 guidance for after-tax adjusted operating income per share to approximately $8.50, emphasizing ongoing share buybacks and capital returns [12] - Investors should monitor stabilization or improvement in benefit ratios and trends in customer retention and new sales volumes, as these factors could impact future earnings [13]

The insurer published its latest set of quarterly results, and probably wishes it hadn't. Management attempted to put a positive spin on the quarter, quoting CEO Richard McKenney as saying that "Core fundamentals remain solid and we continued to deliver strong premium growth in our capital-efficient, high-return businesses." Yet another chop A larger factor in the Unum sell-off was the company's full-year profitability guidance, which was reduced for the second quarter in a row. Over the entirety of 2025, U ...

PART I [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Unum Group's unaudited consolidated financial statements for Q2 and H1 2025, covering balance sheets, income, cash flows, and detailed notes on key financial data [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$62.84 billion** by June 30, 2025, driven by cash growth, while liabilities and stockholders' equity also rose Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments | $45,689.8 | $45,706.3 | | Cash and Bank Deposits | $1,194.8 | $162.8 | | **Total Assets** | **$62,843.8** | **$61,959.3** | | Future Policy Benefits | $37,182.9 | $36,806.4 | | **Total Liabilities** | **$51,523.8** | **$50,998.2** | | Retained Earnings | $13,287.2 | $12,914.0 | | Treasury Stock | $(1,524.5) | $(938.3) | | **Total Stockholders' Equity** | **$11,320.0** | **$10,961.1** | [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) Net income decreased to **$335.6 million** in Q2 2025 and **$524.7 million** in H1 2025, primarily due to a significant net investment loss and higher policy benefits Consolidated Income Statement Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Premium Income | $2,748.0 | $2,627.2 | $5,450.9 | $5,237.5 | | Net Investment Income | $560.7 | $545.1 | $1,073.9 | $1,058.6 | | Net Investment Loss | $(17.7) | $(10.4) | $(224.5) | $(11.6) | | Total Revenue | $3,361.4 | $3,233.4 | $6,453.0 | $6,433.7 | | Income Before Income Tax | $417.0 | $495.5 | $660.6 | $991.2 | | **Net Income** | **$335.6** | **$389.5** | **$524.7** | **$784.7** | | **EPS (Diluted)** | **$1.92** | **$2.05** | **$2.97** | **$4.09** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$701.6 million** in H1 2025, while investing activities provided **$960.7 million**, and financing activities used **$630.3 million** for repurchases and dividends Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $701.6 | $637.4 | | Net Cash Provided (Used) by Investing Activities | $960.7 | $(273.4) | | Net Cash Used by Financing Activities | $(630.3) | $(377.3) | | **Net Increase (Decrease) in Cash** | **$1,032.0** | **$(13.3)** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting principles, fair value measurements, investment portfolio, derivatives, segment performance, employee benefits, stockholders' equity, and recent transactions, including a reinsurance agreement [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=91&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial condition and operations, covering performance, GAAP to non-GAAP reconciliation, consolidated and segment results, investments, liquidity, and capital, highlighting the Fortitude Re transaction and capital deployment [Executive Summary](index=92&type=section&id=Executive%20Summary) Q2 2025 net income was **$335.6 million** ($1.92/share), with after-tax adjusted operating income at **$361.1 million** ($2.07/share), supported by a strong **485% RBC ratio** and **$1.96 billion** liquidity, alongside a Fortitude Re reinsurance transaction Q2 2025 Performance Summary (per diluted share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $1.92 | $2.05 | | After-tax Adjusted Operating Income | $2.07 | $2.16 | - In February 2025, Unum America entered into a master transaction agreement with Fortitude Re, executing a coinsurance agreement in July 2025 to reinsure portions of its Closed Block long-term care and Unum US individual disability businesses[265](index=265&type=chunk) - As of June 30, 2025, the risk-based capital (RBC) ratio for traditional U.S. insurance subsidiaries was approximately **485%**, and available holding company liquidity was **$1,955.7 million**[264](index=264&type=chunk) [Reconciliation of Non-GAAP and Other Financial Measures](index=96&type=section&id=Reconciliation%20of%20Non-GAAP%20and%20Other%20Financial%20Measures) This section reconciles GAAP net income to after-tax adjusted operating income, showing **$335.6 million** net income adjusted to **$361.1 million** after-tax adjusted operating income for Q2 2025, providing a clearer view of underlying business trends Reconciliation of Net Income to After-tax Adjusted Operating Income (in millions) | Description | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | **$335.6** | **$389.5** | **$524.7** | **$784.7** | | Excl: Net Investment Loss (after-tax) | $(13.9) | $(8.2) | $(177.3) | $(9.0) | | Excl: Amortization of Cost of Reinsurance (after-tax) | $(7.7) | $(8.2) | $(15.3) | $(16.4) | | Excl: Non-Contemporaneous Reinsurance (after-tax) | $(3.9) | $(5.5) | $(9.3) | $(11.2) | | **After-tax Adjusted Operating Income** | **$361.1** | **$411.4** | **$726.6** | **$821.3** | [Consolidated Operating Results](index=99&type=section&id=Consolidated%20Operating%20Results) Consolidated total revenue rose **4.0%** to **$3.36 billion** in Q2 2025, but higher policy benefits and a **$17.7 million** net investment loss led to a **15.8%** decrease in income before tax - Premium income increased **4.6%** in Q2 2025 and **4.1%** in H1 2025 year-over-year, driven by growth in all principal operating segments[290](index=290&type=chunk)[293](index=293&type=chunk) - A significant net investment loss was recorded in H1 2025, primarily due to a **$160.9 million** impairment loss on fixed maturity securities intended for transfer in the Fortitude Re reinsurance transaction[296](index=296&type=chunk) - The consolidated benefit ratio, including remeasurement, increased to **71.9%** in Q2 2025 from **68.9%** in Q2 2024, indicating unfavorable overall benefits experience[298](index=298&type=chunk) [Segment Results](index=101&type=section&id=Segment%20Results) This section details segment performance, noting Unum US and Closed Block income declines due to unfavorable benefits, while Unum International and Colonial Life remained stable or grew, and Corporate's loss narrowed [Investments](index=121&type=section&id=Investments) The investment strategy prioritizes high-quality fixed maturity securities, with the portfolio fair value at **$36.0 billion** and a net unrealized loss of **$2.0 billion** as of June 30, 2025, alongside commercial mortgage and private equity portfolios - The investment strategy aims to match asset cash flows and durations with expected liability cash flows, investing primarily in a high-quality, diversified portfolio of fixed maturity securities[371](index=371&type=chunk) Fixed Maturity Securities Portfolio (in billions) | Metric | June 30, 2025 | | :--- | :--- | | Fair Value | $36.0 | | Net Unrealized Loss | $(2.0) | - As part of the reinsurance transaction with Fortitude Re, the company transferred fixed maturity securities with a fair value of **$3.22 billion** and recognized related impairment losses of **$160.9 million** in H1 2025[375](index=375&type=chunk)[266](index=266&type=chunk) - The carrying value of the commercial mortgage loan portfolio was **$2.2 billion**, and the private equity partnership portfolio was **$1.5 billion** as of June 30, 2025[392](index=392&type=chunk)[394](index=394&type=chunk) [Liquidity and Capital Resources](index=128&type=section&id=Liquidity%20and%20Capital%20Resources) Unum Group maintains strong liquidity with **$1.96 billion** in holding company liquidity as of June 30, 2025, actively managing capital through **$505.9 million** in share repurchases and a **$500 million** undrawn credit facility - As of June 30, 2025, Unum Group and its intermediate holding companies had available liquidity of **$1,955.7 million**[400](index=400&type=chunk) - During the first six months of 2025, the company repurchased **7.1 million** shares of common stock for **$505.9 million**[264](index=264&type=chunk) - In April 2025, the company amended and extended its **$500.0 million** senior unsecured revolving credit facility through April 2030; it was undrawn as of June 30, 2025[415](index=415&type=chunk) - In July 2025, as part of the Fortitude Re transaction, the company transferred **$953.5 million** in cash, which included a ceding commission of **$461.7 million**[401](index=401&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=134&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are interest rate and foreign exchange rate risks, with no substantive changes in H1 2025 - The company's primary market risk exposures are interest rate risk and foreign exchange rate risk, with no substantive changes in these exposures or their management during the first half of 2025[441](index=441&type=chunk) [Item 4. Controls and Procedures](index=134&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[442](index=442&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[443](index=443&type=chunk) PART II [Item 1. Legal Proceedings](index=135&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the normal course of business, with further details in Note 13 to the Consolidated Financial Statements - Information on legal proceedings is referenced in Part I, Item 1, Note 13 of the financial statements[446](index=446&type=chunk) [Item 1A. Risk Factors](index=135&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have occurred from the risk factors disclosed in the 2024 Form 10-K[447](index=447&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=135&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased **3,840,822** shares of common stock under a **$1.0 billion** program, with approximately **$700 million** remaining available as of June 30, 2025 Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 1,994,390 | $75.79 | | May 2025 | 1,218,986 | $80.89 | | June 2025 | 627,446 | $80.08 | | **Total Q2** | **3,840,822** | **N/A** | - A **$1.0 billion** share repurchase program was authorized in February 2025, with approximately **$700 million** remaining available as of June 30, 2025[450](index=450&type=chunk) [Item 5. Other Information](index=135&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q2 2025 - During Q2 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading plan[451](index=451&type=chunk) [Item 6. Exhibits](index=136&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Coinsurance Agreement with Fortitude Re, an amended credit agreement, and CEO/CFO certifications - Key exhibits filed include the Coinsurance Agreement with Fortitude Reinsurance Company Ltd. and the Third Amended and Restated Credit Agreement[453](index=453&type=chunk)