Key Takeaways UNM expects 2025 premium growth of 3-6%, operating ROE of 21-23%, and EPS of about $8.50. Unum's Unum U.S. and Colonial Life see strong sales, new dental and vision lines, and risk results. UNM raised its dividend 10% in Q2 2025 and plans buybacks within its $500M-$1B range. Unum Group (UNM) shares are trading at a discount compared to the Zacks Accident and Health Insurance industry. Its forward price-to-book value of 1.2X is lower than the industry average of 1.75X, the Finance sector’s 4.28 ...

Core Insights - Unum Group (NYSE:UNM) is recognized as one of the best life insurance stocks to invest in currently [1] Group and Individual Income Protection - Unum Group provides group and individual income protection insurance solutions across the United States, the United Kingdom, Poland, and other countries [5] Shareholder Returns and Financial Performance - The company plans to return approximately $1.3 billion to shareholders in 2025, supported by strong premiums, a nearly 20% return on equity (ROE), and over $2 billion in holding-company liquidity [4] - Management reported reserve actions totaling $478.5 million pretax, a 4% adjusted premium growth, and robust contributions from Unum US, Colonial Life, and International [4] - The company aims to finish 2025 with a risk-based capital (RBC) ratio above 425% and premium growth similar to the previous year [4] Share Repurchase Program - On December 4, 2025, Unum Group announced a new $1 billion share repurchase program, effective January 1, 2026, with buybacks transitioning from the current program upon its expiration [2] - The repurchases may occur through private agreements, open-market transactions, or predetermined trading strategies, depending on market conditions [2] Debt Issuance - On November 14, 2025, Unum Group completed a $300 million senior notes offering due in 2035 with a 5.250% annual coupon, using net proceeds to repay $275 million in senior notes maturing on November 5, 2025 [3] - The issuance is intended to enhance liquidity and provide balance-sheet flexibility for long-term capital needs [3]

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Core Viewpoint - Unum Group has announced a new share repurchase program, allowing the company to buy back up to $1 billion of its common stock starting January 1, 2026 [1] Summary by Relevant Sections - **Share Repurchase Program** - The board of directors has approved a new program for repurchasing shares [1] - The new program will authorize repurchases of up to $1 billion [1] - The current share repurchase program will remain effective until December 31, 2025, after which the new program will take effect [1]

Core Viewpoint - Unum Group's recent earnings report showed a mixed performance with a decline in operating net income and rising expenses, leading to concerns about future performance as shares have underperformed the S&P 500 [1][2]. Financial Performance - Unum Group reported Q3 2025 operating net income of $2.09 per share, missing the Zacks Consensus Estimate by 2.7% and reflecting a 1.8% year-over-year decrease [2]. - Total operating revenues reached $3.4 billion, a 5% increase year-over-year, driven by higher premium income and other income, beating the Zacks Consensus Estimate by 2.5% [3]. - Premium income increased by 2.2% year-over-year to $2.7 billion, aligning with estimates [3]. Expense Analysis - Total benefits and expenses surged by 38.3% year-over-year to $3.3 billion, primarily due to higher policy benefits and other expenses, exceeding the estimate of $2.8 billion [3]. Segment Performance - Unum U.S. reported premium income of $1.7 billion, up 1.9% year-over-year, but adjusted operating income fell by 7.8% to $334.9 million, missing estimates [4]. - Unum International's premium income rose 14% year-over-year to $281.1 million, with adjusted operating income down 3.7% [5]. - The Unum U.K. line saw premium income increase by 7.6% to £171 million, but adjusted operating income decreased by 10.8% [6]. Benefit Ratio and Sales - The benefit ratio, excluding reserve assumption updates, deteriorated by 430 basis points to 73.8%, mainly due to unfavorable experiences in group long-term disability [7]. - Sales in the Unum U.K. increased by 27.3% to £29.4 million, while Colonial Life's premium income rose by 3.3% to $456.5 million [8][9]. Capital Management - As of September 30, 2025, Unum Group's risk-based capital ratio was approximately 455%, with holding company liquidity at $2 billion and book value per share growing by 8.7% year-over-year to $64.56 [13]. Market Outlook - Following the earnings release, there has been a downward trend in estimates for Unum, indicating a potential shift in market sentiment [14][16]. - Unum currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [16].

Industry Overview - The Zacks Accident and Health Insurance industry is projected to benefit from increased underwriting exposure, driven by prudent underwriting standards among key players like Aflac, Unum Group, Globe Life, and Trupanion [1] - The industry is expected to grow from approximately $300 billion in 2024 to about $420 billion by 2033, reflecting a compound annual growth rate (CAGR) of 3.8% [3] Current Trends - Pricing pressure is anticipated to continue due to inflation, rising medical costs, and demographic changes, with healthcare spending expected to increase by 5.4% annually through 2028 [4] - Claims frequency is improving due to better safety measures and working conditions, which is expected to enhance the industry's performance [5] - The adoption of technology, including AI and data analytics, is accelerating, potentially reducing workers' compensation claim expenses by about 45% [6] Financial Performance - The Accident and Health Insurance industry has underperformed compared to the Finance sector and the S&P 500, with a year-to-date gain of 5.1% versus 14.2% and 18.2% respectively [9] - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 1.72X, significantly lower than the Zacks S&P 500 composite's 8.47X and the sector's 4.18X [11] Company Highlights - **Aflac**: Focuses on voluntary supplemental health and life insurance, with a projected long-term earnings growth rate of 4.6% and a trailing four-quarter earnings surprise of 9.38% [15][16] - **Unum Group**: Expected premium growth of 3-6% for 2025, with a long-term earnings growth rate of 6%, outperforming the industry average [19][21] - **Globe Life**: Positive revenue trends driven by premium growth in life and health insurance segments, with a projected 3.1% year-over-year increase in earnings for 2026 [23][25] - **Trupanion**: Positioned for growth in the pet insurance market, with a consensus estimate suggesting a 9.4% increase in earnings for 2026 and a trailing four-quarter earnings surprise of 235.42% [27][28]

Group 1 - The article reflects on the past performance and transformation of Unum (UNM), suggesting that the author may have been overly optimistic as a major investor in the company [1] - The author has over 10 years of experience in generating value ideas in European and North American markets, indicating a strong background in investment analysis [1] - The author contributes to various investment groups, covering a wide range of markets including Scandinavia, Germany, France, UK, Italy, Spain, Portugal, and Eastern Europe, focusing on reasonably valued stock ideas [1] Group 2 - The article emphasizes the importance of conducting due diligence and research before making any investment decisions, highlighting the risks associated with short-term trading and options trading [2] - It is noted that the author owns European/Scandinavian tickers and Canadian tickers of the companies discussed, which may influence the perspective presented in the article [2] - The article mentions that investing in European/Non-US stocks carries specific withholding tax risks, advising investors to consult tax professionals for guidance [2]

Core Viewpoint - Unum Group has seen significant changes in institutional ownership, with various firms increasing their stakes, indicating growing confidence in the company's prospects. Additionally, recent earnings reports show a slight miss on EPS estimates, but revenue growth remains positive year-over-year. Institutional Holdings - Allworth Financial LP increased its holdings in Unum Group by 104.2% in Q2, owning 4,550 shares valued at $367,000 after purchasing an additional 2,322 shares [2] - Charles Schwab Investment Management Inc. grew its stake by 4.8% in Q1, now owning 5,816,520 shares worth $473.81 million after buying 264,268 shares [3] - Invesco Ltd. increased its holdings by 155.6% in Q1, owning 2,278,473 shares valued at $185.60 million after acquiring 1,387,139 shares [3] - Allianz Asset Management GmbH raised its stake by 11.5% in Q2, now holding 1,537,189 shares worth $124.14 million [3] - Nordea Investment Management AB increased its stake by 3.6% in Q2, owning 1,482,096 shares valued at $119.24 million [3] - Royal Bank of Canada raised its stake by 0.5% in Q1, now owning 1,416,124 shares worth $115.36 million [3] - Institutional investors and hedge funds own 86.57% of Unum Group's stock [3] Insider Activity - EVP Christopher W. Pyne sold 4,000 shares at an average price of $78.04, totaling $312,160, resulting in a 7.22% decrease in his position [4] Analyst Ratings - UBS Group set a price target of $87.00 with a "neutral" rating [5] - Barclays increased its target from $92.00 to $95.00 with an "overweight" rating [5] - Wolfe Research upgraded Unum Group to a "strong-buy" rating [5] - JPMorgan Chase reduced its target from $94.00 to $92.00 with a "neutral" rating [5] - Wells Fargo reduced its target from $100.00 to $98.00 with an "overweight" rating [5] - The average rating is "Moderate Buy" with a consensus target price of $94.67 [5] Financial Performance - Unum Group reported $2.09 EPS for the quarter, missing the consensus estimate of $2.15 by $0.06 [9] - Revenue for the quarter was $3.25 billion, below the analyst estimates of $3.31 billion, but up 5.0% year-over-year [9] - The company has set its FY 2025 guidance at EPS of 9.14 [9] Dividend Information - Unum Group declared a quarterly dividend of $0.46 per share, representing an annualized dividend of $1.84 and a yield of 2.4% [10] - The dividend payout ratio is 35.87% [10] Company Overview - Unum Group provides financial protection benefit solutions primarily in the U.S., U.K., Poland, and internationally, offering various insurance products [11]

Core Points - Unum Group has completed an offering of $300 million in senior notes due in 2035 with a coupon rate of 5.250 percent [1] - The net proceeds from the sale will be utilized for general corporate purposes, including the repayment of $275 million in senior notes that matured in November 2025 [1]

Core Viewpoint - AM Best has assigned a Long-Term Issue Credit Rating of "bbb+" (Good) to Unum Group's recently issued $300 million senior unsecured notes, with a stable outlook [1] Group 1: Credit Rating Details - The Long-Term IR rating of "bbb+" indicates a good credit quality for Unum Group [1] - The outlook for this credit rating is stable, suggesting no immediate changes are expected [1] Group 2: Financial Instrument Information - Unum Group issued $300 million of 5.250% senior unsecured notes due on December 15, 2035 [1] - The proceeds from the issuance will be utilized for general corporate purposes and to repay $275 million of outstanding senior unsecured debt [1]