Unum Group (NYSE:UNM) Q3 2022 Earnings Conference Call November 2, 2022 8:00 AM ET Company Participants Matthew Royal - Chief Risk Officer & SVP, IR Richard McKenney - President, CEO & Director Steven Zabel - EVP & CFO Mark Till - EVP & CEO, Unum International Michael Simonds - EVP & COO Timothy Arnold - EVP, Voluntary Benefits & President, Colonial Life Conference Call Participants Erik Bass - Bernstein Autonomous Ryan Krueger - KBW Alexander Scott - Goldman Sachs Suneet Kamath - Jefferies Tracy Benguigui ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-11294 Unum Group (Exact name of registrant as specified in its charter) Delaware 62-1598430 (State or other jurisdiction of incorpo ...

Unum Group (NYSE:UNM) Q2 2022 Earnings Conference Call August 3, 2022 8:00 AM ET Company Participants Tom White - Senior Vice President of Investor Relations Rick McKenney - President & Chief Executive Officer Steve Zabel - Chief Financial Officer Michael Simonds - Chief Operating Officer Conference Call Participants Alex Scott - Goldman Sachs Ryan Krueger - KBW Erik Bass - Autonomous Research Jimmy Bhullar - JPMorgan Tom Gallagher - Evercore Suneet Kamath - Jefferies Tracy Benguigui - Barclays Operator Hel ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-11294 Unum Group (Exact name of registrant as specified in its charter) Delaware 62-1598430 (State or other jurisdiction of incorp ...

Unum Group (NYSE:UNM) Q1 2022 Earnings Conference Call May 6, 2022 8:00 AM ET Company Participants Tom White - Senior Vice President of Investor Relations Rick McKenney - President and CEO Steve Zabel - CFO Michael Simonds - COO Mark Till - Head International Business Conference Call Participants Erik Bass - Autonomous Research Alex Scott - Goldman Sachs Tracy Dolin-Benguigui - Barclays Tom Gallagher - Evercore Ryan Krueger - KBW Suneet Kamath - Jefferies Jamie Buller - JPMorgan Mark Hughes - Truist Josh Sh ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K (Mark One) ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2021 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-11294 Unum Group (Exact name of registrant as specified in its charter) Delaware 62-1598430 (State or other jurisdiction of incorporati ...

Unum Group (NYSE:UNM) Q4 2021 Earnings Conference Call February 2, 2022 8:00 AM ET Company Participants Tom White - Senior Vice President, Investor Relations Rick McKenney - President & Chief Executive Officer Steve Zabel - Chief Financial Officer Mike Simonds - Chief Operating Officer Mark Til - Vice President Tim Arnold - Executive Vice President of Voluntary Benefits & President of Colonial Life Conference Call Participants Suneet Kamath - Jefferies Ryan Krueger - KBW Alex Scott - Goldman Sachs Tom Galla ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-11294 Unum Group (Exact name of registrant as specified in its charter) Delaware 62-1598430 (State or other jurisdiction of in ...

Unum Group (NYSE:UNM) Q3 2021 Earnings Conference Call November 3, 2021 8:00 AM ET Company Participants Tom White – Investor Relations Richard Mckenney – CEO Steven Zabel – CFO Michael Simonds – COO Mark Til – Vice President Conference Call Participants Ryan Krueger – K BW. Ryan Jimmy Bhullar – JPMorgan Tom Gallagher – Evercore ISI Erik Bass – Autonomous Research Tracy Benguigui – Barclays Humphrey Lee – Dowling & Partners Josh Shanker – Bank of America Operator Hello and welcome to the Unum Group 3Q 2021 E ...

[Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section provides a 'safe harbor' statement for forward-looking information, identifying such statements and outlining numerous assumptions, risks, and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like 'will,' 'may,' 'should,' 'could,' 'believes,' 'expects,' 'anticipates,' 'estimates,' 'plans,' 'assumes,' 'intends,' 'projects,' 'goals,' 'objectives,' or similar expressions[11](index=11&type=chunk) - Key factors that could cause actual results to differ materially include: the impact of the COVID-19 pandemic, sustained periods of low interest rates, fluctuation in insurance reserve liabilities and claim payments, unfavorable economic or business conditions, changes in laws and regulations, cyber attacks, investment results, increased competition, changes in financial strength and credit ratings, and the ability to develop digital capabilities[12](index=12&type=chunk)[13](index=13&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)%3A) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, comprehensive income, stockholders' equity, and cash flows, along with detailed explanatory notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202021%20and%20December%2031%2C%202020) The consolidated balance sheets show the company's financial position at June 30, 2021, and December 31, 2020, indicating a slight increase in total assets and stockholders' equity with stable total liabilities Consolidated Balance Sheet Highlights (in millions of dollars) | Item | June 30, 2021 | December 31, 2020 | Change | % Change | | :--------------------------------- | :------------ | :---------------- | :----- | :------- | | Total Investments | $52,168.9 | $52,683.5 | $(514.6) | -0.98% | | Total Assets | $70,807.9 | $70,625.8 | $182.1 | 0.26% | | Total Liabilities | $59,860.4 | $59,754.8 | $105.6 | 0.18% | | Total Stockholders' Equity | $10,947.5 | $10,871.0 | $76.5 | 0.70% | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202021%20and%202020) The consolidated statements of income show a decrease in net income for both the three and six months ended June 30, 2021, primarily due to debt retirement costs and lower net realized investment gains Consolidated Statements of Income Highlights (in millions of dollars, except share data) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | % Change (3M) | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | % Change (6M) | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------- | :-------------------------- | :-------------------------- | :-------------- | | Total Revenue | $2,993.0 | $3,021.2 | -0.9% | $6,065.0 | $5,892.3 | 2.9% | | Total Benefits and Expenses | $2,730.4 | $2,683.6 | 1.7% | $5,603.6 | $5,352.6 | 4.7% | | Income Before Income Tax | $262.6 | $337.6 | -22.2% | $461.4 | $539.7 | -14.5% | | Total Income Tax Expense | $79.7 | $72.1 | 10.5% | $125.5 | $113.2 | 10.9% | | Net Income | $182.9 | $265.5 | -31.1% | $335.9 | $426.5 | -21.2% | | Basic EPS | $0.89 | $1.30 | -31.5% | $1.64 | $2.10 | -22.0% | | Diluted EPS | $0.89 | $1.30 | -31.5% | $1.64 | $2.10 | -22.0% | - **Cost related to early retirement of debt** was **$67.3 million** for both the three and six months ended June 30, 2021, compared to zero in the prior year periods, significantly impacting income[17](index=17&type=chunk) - **Net realized investment gain decreased significantly from $33.8 million in Q2 2020 to $0.9 million in Q2 2021**, but increased from a loss of **$(110.2) million in H1 2020 to a gain of $85.5 million in H1 2021**[17](index=17&type=chunk) [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202021%20and%202020) The consolidated statements of comprehensive income show a decrease for both the three and six months ended June 30, 2021, mainly due to a significant change in net unrealized gain on securities Consolidated Statements of Comprehensive Income Highlights (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | % Change (3M) | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | % Change (6M) | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------- | :-------------------------- | :-------------------------- | :-------------- | | Net Income | $182.9 | $265.5 | -31.1% | $335.9 | $426.5 | -21.2% | | Change in Net Unrealized Gain on Securities Before Adjustment | $858.8 | $2,507.7 | -65.8% | $(787.2) | $841.0 | -193.6% | | Total Other Comprehensive Income (Loss) | $247.0 | $544.3 | -54.6% | $(152.1) | $289.9 | -152.5% | | Comprehensive Income | $429.9 | $809.8 | -46.9% | $183.8 | $716.4 | -74.3% | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202021%20and%202020) The consolidated statements of stockholders' equity show an increase in total equity at June 30, 2021, driven by net income and common stock activity, partially offset by dividends Consolidated Statements of Stockholders' Equity Highlights (in millions of dollars) | Item | June 30, 2021 | June 30, 2020 | Change | % Change | | :--------------------------------- | :------------ | :------------ | :----- | :------- | | Common Stock | $30.7 | $30.6 | $0.1 | 0.33% | | Additional Paid-in Capital | $2,386.8 | $2,364.1 | $22.7 | 0.96% | | Accumulated Other Comprehensive Income (Loss) | $222.1 | $327.2 | $(105.1) | -32.12% | | Retained Earnings | $11,487.6 | $11,019.2 | $468.4 | 4.25% | | Treasury Stock | $(3,179.7) | $(3,179.7) | $0.0 | 0.00% | | Total Stockholders' Equity | $10,947.5 | $10,561.4 | $385.1 | 3.65% | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202021%20and%202020) The consolidated statements of cash flows indicate a decrease in net cash from operating activities and a shift to net cash used in financing activities for the six months ended June 30, 2021, resulting in a net decrease in cash Consolidated Statements of Cash Flows Highlights (in millions of dollars) | Item | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | Change | % Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :----- | :------- | | Net Cash Provided by Operating Activities | $544.2 | $852.4 | $(308.2) | -36.16% | | Net Cash Used by Investing Activities | $(506.7) | $(1,090.7) | $584.0 | -53.54% | | Net Cash Provided (Used) by Financing Activities | $(111.4) | $319.8 | $(431.2) | -134.84% | | Net Increase (Decrease) in Cash and Bank Deposits | $(73.9) | $81.5 | $(155.4) | -190.68% | | Cash and Bank Deposits at End of Period | $123.1 | $165.6 | $(42.5) | -25.66% | - Operating cash flows were impacted by a **$456.8 million cash payment** to the reinsurer related to the second phase of the Closed Block individual disability reinsurance transaction in Q1 2021[21](index=21&type=chunk) - Financing activities in 2021 included the issuance of **$588.1 million in long-term debt** and repayment of **$500.0 million**, along with **$62.8 million in costs for early debt retirement**[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide essential context and detail for the consolidated financial statements, covering accounting policies, fair value measurements, investments, derivatives, claims liabilities, segment performance, and contingent liabilities [Note 1 - Basis of Presentation](index=11&type=section&id=Note%201%20-%20Basis%20of%20Presentation) The interim financial statements are prepared under U.S. GAAP, with interim results not necessarily indicative of full-year performance, especially considering COVID-19 risks - Interim financial statements are prepared under U.S. GAAP for interim information and do not include all footnotes required for complete financial statements[22](index=22&type=chunk) - Interim results are not necessarily indicative of full-year performance, particularly due to risks and uncertainties associated with COVID-19[23](index=23&type=chunk) [Note 2 - Accounting Developments](index=11&type=section&id=Note%202%20-%20Accounting%20Developments) This note details accounting updates adopted in 2021, including ASC 740 and ASC 326, and outlines outstanding updates like ASC 944 expected to materially impact financial position from January 1, 2023 - The adoption of **ASC 740 'Income Taxes' in January 2021 did not materially affect** the company's financial position or results of operations[24](index=24&type=chunk) - **ASC 326 'Financial Instruments - Credit Losses' was adopted on January 1, 2020**, resulting in an **$18.9 million cumulative-effect reduction to retained earnings**[25](index=25&type=chunk) - **ASC 944 'Financial Services - Insurance' will be adopted on January 1, 2023**, and is expected to have a **material impact on financial position and results of operations**, significantly expanding disclosures[27](index=27&type=chunk) [Note 3 - Fair Values of Financial Instruments](index=13&type=section&id=Note%203%20-%20Fair%20Values%20of%20Financial%20Instruments) This note describes the methodologies and hierarchy (Level 1, 2, 3) used to measure the fair value of financial instruments, providing detailed tables of fair values for assets and liabilities - Financial instruments are classified into a fair value hierarchy: **Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs reflecting management's judgment)**[32](index=32&type=chunk) Total Financial Instrument Assets Carried at Fair Value (in millions of dollars) | Category | June 30, 2021 | December 31, 2020 | | :---------------------------------------- | :------------ | :---------------- | | Fixed Maturity Securities | $43,513.8 | $44,137.3 | | Other Long-term Investments (incl. Derivatives, Equity, Private Equity) | $914.9 | $795.6 | | Total Financial Instrument Assets | $44,428.7 | $44,932.9 | Total Financial Instrument Liabilities Carried at Fair Value (in millions of dollars) | Category | June 30, 2021 | December 31, 2020 | | :---------------------------------------- | :------------ | :---------------- | | Derivatives | $65.6 | $99.5 | | Total Financial Instrument Liabilities | $65.6 | $99.5 | - At June 30, 2021, **25.3% of fixed maturity securities were Level 1, 69.8% were Level 2, and 4.9% were Level 3**[41](index=41&type=chunk)[44](index=44&type=chunk) [Note 4 - Investments](index=30&type=section&id=Note%204%20-%20Investments) This note details the company's investment portfolio, primarily fixed maturity securities and mortgage loans, including their fair values, amortized costs, unrealized gains/losses, and credit loss allowances Fixed Maturity Securities - Fair Value and Unrealized Gains/Losses (in millions of dollars) | Item | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :------------ | :---------------- | | Amortized Cost | $36,910.7 | $36,546.5 | | Gross Unrealized Gain | $6,663.2 | $7,653.5 | | Gross Unrealized Loss | $60.1 | $55.9 | | Fair Value | $43,513.8 | $44,137.3 | - At June 30, 2021, **92.8% of fixed maturity securities were investment-grade**, and **7.2% were below-investment-grade**[74](index=74&type=chunk) - Unrealized losses on investment-grade securities primarily relate to interest rate changes, while below-investment-grade losses are due to credit spreads and specific credit concerns[74](index=74&type=chunk) Mortgage Loans and Allowance for Expected Credit Losses (in millions of dollars) | Item | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :------------ | :---------------- | | Amortized Cost | $2,398.5 | $2,445.2 | | Allowance for Expected Credit Losses | $11.4 | $13.1 | | Carrying Amount | $2,387.1 | $2,432.1 | - The **allowance for expected credit losses on mortgage loans decreased in Q1 2021** due to improved economic conditions and recovery from COVID-19, specifically related to commercial real estate values[96](index=96&type=chunk) Net Investment Income (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Fixed Maturity Securities | $471.4 | $542.5 | $941.2 | $1,082.3 | | Private Equity Partnerships | $51.9 | $(31.3) | $87.8 | $(20.9) | | Total Net Investment Income | $563.5 | $569.0 | $1,112.2 | $1,154.0 | [Note 5 - Derivative Financial Instruments](index=43&type=section&id=Note%205%20-%20Derivative%20Financial%20Instruments) This note outlines the company's use of derivative instruments to manage interest rate, duration, foreign currency, and credit risks, detailing types, associated risks, and collateral arrangements - Derivatives are used for **risk management (interest rate, duration, foreign currency, credit risk)**, not for speculative purposes[112](index=112&type=chunk) - **Credit exposure on derivatives was $1.3 million at June 30, 2021**, and **$0.7 million at December 31, 2020**, mitigated by master netting agreements and cross-collateralization[116](index=116&type=chunk) Notional Amounts of Derivatives (in millions of dollars) | Type | June 30, 2021 | June 30, 2020 | | :------------------- | :------------ | :------------ | | Swaps (Receive Fixed/Pay Fixed) | $798.3 | $663.1 | | Swaps (Receive Fixed/Pay Variable) | $0.0 | $250.0 | | Credit Default Swaps | $11.9 | $10.7 | | Total Return Swaps | $80.8 | $0.0 | | Forwards | $28.1 | $7.6 | | Total | $919.1 | $931.4 | - The aggregate fair value of derivative instruments with credit risk-related contingent features in a liability position was **$44.4 million at June 30, 2021**, and **$59.7 million at December 31, 2020**[118](index=118&type=chunk) [Note 6 - Accumulated Other Comprehensive Income (Loss)](index=53&type=section&id=Note%206%20-%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of accumulated other comprehensive income (loss) (AOCI), including net unrealized gain on securities, net gain on hedges, and reclassifications to the consolidated statements of income Components of Accumulated Other Comprehensive Income (Loss) (in millions of dollars) | Item | June 30, 2021 | March 31, 2021 | December 31, 2020 | | :---------------------------------------- | :------------ | :------------- | :---------------- | | Net Unrealized Gain on Securities | $911.4 | $678.2 | $1,067.7 | | Net Gain on Hedges | $77.5 | $77.1 | $97.8 | | Foreign Currency Translation Adjustment | $(244.7) | $(254.0) | $(261.3) | | Unrecognized Pension and Postretirement Benefit Costs | $(522.1) | $(526.2) | $(530.0) | | Total AOCI | $222.1 | $(24.9) | $374.2 | - **Net other comprehensive income (loss) for the three months ended June 30, 2021, was $247.0 million**, compared to **$544.3 million in the prior year**, primarily due to changes in net unrealized gain on securities[145](index=145&type=chunk) - For the six months ended June 30, 2021, **net other comprehensive income (loss) was $(152.1) million**, a significant decrease from **$289.9 million in the prior year**, mainly driven by the change in net unrealized gain on securities[145](index=145&type=chunk) [Note 7 - Liability for Unpaid Claims and Claim Adjustment Expenses](index=56&type=section&id=Note%207%20-%20Liability%20for%20Unpaid%20Claims%20and%20Claim%20Adjustment%20Expenses) This note details changes in the liability for unpaid claims and claim adjustment expenses, which decreased slightly at June 30, 2021, influenced by reinsurance transactions and claim resolutions Liability for Unpaid Claims and Claim Adjustment Expenses (in millions of dollars) | Item | June 30, 2021 | June 30, 2020 | | :---------------------------------------- | :------------ | :------------ | | Balance at January 1 | $24,180.2 | $23,076.7 | | Net Balance at January 1 | $15,801.3 | $20,829.9 | | Total Incurred | $3,627.9 | $3,315.0 | | Total Paid | $(3,367.1) | $(3,562.5) | | Reserves Ceded Pursuant to Reinsurance Transaction | $(990.0) | $0.0 | | Net Balance at June 30 | $15,072.1 | $20,582.4 | | Balance at June 30 | $24,114.3 | $22,842.6 | - The 'Incurred Related to Prior Years - All Other Incurred' includes a **$133.1 million increase in benefits** due to the realization of previously unrealized investment gains/losses from the Closed Block individual disability reinsurance transaction[149](index=149&type=chunk) - A **reinsurance recoverable of $990.0 million was recognized in Q1 2021** related to ceded reserves from the Closed Block individual disability reinsurance transaction[149](index=149&type=chunk) [Note 8 - Segment Information](index=58&type=section&id=Note%208%20-%20Segment%20Information) This note provides financial results for the company's operating segments: Unum US, Unum International, Colonial Life, Closed Block, and Corporate, detailing premium income, net investment income, and adjusted operating income - The company operates with **three principal operating segments (Unum US, Unum International, Colonial Life)** and **two other segments (Closed Block, Corporate)**[152](index=152&type=chunk) Adjusted Operating Income by Segment (in millions of dollars) | Segment | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | % Change (3M) | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | % Change (6M) | | :------------------ | :-------------------------- | :-------------------------- | :-------------- | :-------------------------- | :-------------------------- | :-------------- | | Unum US | $179.3 | $231.9 | -22.7% | $295.0 | $493.7 | -40.2% | | Unum International | $24.8 | $15.1 | 64.2% | $51.2 | $34.5 | 48.4% | | Colonial Life | $95.8 | $90.9 | 5.4% | $169.1 | $172.0 | -1.7% | | Closed Block | $111.2 | $36.7 | 203.0% | $208.2 | $66.4 | 213.6% | | Corporate | $(48.5) | $(58.1) | 16.5% | $(87.4) | $(104.0) | 16.0% | | Total Adjusted Operating Income | $362.6 | $316.5 | 14.6% | $636.1 | $662.6 | -4.0% | - **Adjusted operating income is used as a key performance measure**, excluding net realized investment gains/losses and amortization of reinsurance costs, to better reflect underlying business trends[155](index=155&type=chunk)[157](index=157&type=chunk) [Note 9 - Employee Benefit Plans](index=61&type=section&id=Note%209%20-%20Employee%20Benefit%20Plans) This note provides details on the company's defined benefit pension and other postretirement benefit (OPEB) plans, including the components of net periodic benefit cost (credit) for U.S. and U.K. plans Total Net Periodic Benefit Cost (Credit) (in millions of dollars) | Plan Type | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | U.S. Pension Benefits | $(1.2) | $(1.0) | $(2.0) | $(2.4) | | U.K. Pension Plan | $(1.1) | $(0.8) | $(2.2) | $(1.7) | | OPEB | $0.5 | $0.9 | $1.1 | $1.7 | | Total | $(1.8) | $(0.9) | $(3.1) | $(2.4) | - The U.S. qualified and non-qualified defined benefit pension plans and the OPEB plan were **closed to new entrants in 2013 and 2012**, respectively[161](index=161&type=chunk) [Note 10 - Stockholders' Equity and Earnings Per Common Share](index=63&type=section&id=Note%2010%20-%20Stockholders'%20Equity%20and%20Earnings%20Per%20Common%20Share) This note details the calculation of basic and diluted earnings per common share, which decreased for both the three and six months ended June 30, 2021, with no share repurchases during H1 2021 Net Income Per Common Share (in millions of dollars, except share data) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $182.9 | $265.5 | $335.9 | $426.5 | | Weighted Average Common Shares - Basic (000s) | 204,504.5 | 203,624.3 | 204,323.1 | 203,466.9 | | Weighted Average Common Shares - Assuming Dilution (000s) | 205,273.8 | 203,671.1 | 205,009.8 | 203,515.2 | | Basic EPS | $0.89 | $1.30 | $1.64 | $2.10 | | Diluted EPS | $0.89 | $1.30 | $1.64 | $2.10 | - **No shares of Unum Group's common stock were repurchased** during the first six months of 2021[166](index=166&type=chunk) [Note 11 - Commitments and Contingent Liabilities](index=64&type=section&id=Note%2011%20-%20Commitments%20and%20Contingent%20Liabilities) This note discusses various litigation matters and regulatory inquiries the company faces, emphasizing the unpredictability of litigation outcomes and the company's approach to reserving for estimated losses - The company is a defendant in various litigation matters, including individual claim lawsuits and class action allegations, and is subject to regulatory inquiries[168](index=168&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) - An estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated[170](index=170&type=chunk) - A securities class action lawsuit (In re Unum Group Securities Litigation) alleging artificially high share prices was **dismissed with prejudice by the district court**, and this dismissal was **affirmed by the Sixth Circuit Court of Appeals on June 28, 2021**[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Note 12 - Other](index=66&type=section&id=Note%2012%20-%20Other) This note covers recent debt activities, including the issuance and early retirement of senior notes, the impact of a U.K. tax rate increase, and the significant Closed Block individual disability reinsurance transaction - In June 2021, the company **issued $600.0 million of 4.125% senior notes due 2051** and **retired $500.0 million of 4.500% senior notes due 2025**, incurring **$67.3 million in early retirement costs**[177](index=177&type=chunk)[178](index=178&type=chunk) - A **U.K. tax rate increase from 19% to 25%** (effective April 1, 2023) resulted in **$24.2 million of additional tax expense in Q2 2021**[180](index=180&type=chunk) - The **allowance for expected credit losses on premiums receivable decreased by $7.8 million in H1 2021** due to improved economic conditions and unemployment levels[181](index=181&type=chunk) - The second phase of the Closed Block individual disability reinsurance transaction in Q1 2021 involved **transferring $767.0 million in assets**, recognizing **$67.6 million in net realized investment gains**, and **ceding $990.0 million in reserves**[184](index=184&type=chunk)[186](index=186&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive analysis of Unum Group's financial condition and results of operations, covering overall performance, segment-specific results, investment strategies, liquidity, capital resources, and the impact of significant events [Executive Summary](index=68&type=section&id=Executive%20Summary) Unum Group reported decreased net income for Q2 and H1 2021 due to debt retirement costs and a UK tax rate increase, though adjusted operating income showed Q2 growth, maintaining a strong capital position despite low interest rate pressures - Unum Group is a leading provider of financial protection benefits in the U.S. and U.K., offering disability, life, accident, critical illness, dental, and vision products primarily through the workplace[187](index=187&type=chunk)[189](index=189&type=chunk) Net Income and Adjusted Operating Income (in millions of dollars, except per share) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $182.9 | $265.5 | $335.9 | $426.5 | | Diluted EPS | $0.89 | $1.30 | $1.64 | $2.10 | | After-tax Adjusted Operating Income | $286.2 | $250.1 | $498.2 | $524.2 | | Adjusted Operating Diluted EPS | $1.39 | $1.23 | $2.43 | $2.58 | - The company's **RBC ratio for U.S. insurance subsidiaries was approximately 375% at June 30, 2021**, indicating a strong capital position[202](index=202&type=chunk) - **Holding company liquidity was $1,717 million**[202](index=202&type=chunk) [Impairment Loss on Right-of-Use Asset](index=70&type=section&id=Impairment%20Loss%20on%20Right-of-Use%20Asset) The company recognized impairment losses on a right-of-use (ROU) asset for office space it no longer plans to use, totaling $13.9 million before tax in Q2 2021 Impairment Loss on ROU Asset (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Impairment Loss (before tax) | $13.9 | $12.7 | | Impairment Loss (after tax) | $11.0 | $10.0 | | Impact per diluted common share | $0.05 | $0.05 | [Closed Block Individual Disability Reinsurance Transaction](index=70&type=section&id=Closed%20Block%20Individual%20Disability%20Reinsurance%20Transaction) The company completed the second phase of a reinsurance transaction in Q1 2021, ceding a substantial portion of its Closed Block individual disability business, resulting in asset transfers and capital release - The **second phase of the reinsurance transaction for Closed Block individual disability business was completed on March 31, 2021**[204](index=204&type=chunk) - Key financial impacts in Q1 2021 included: **$767.0 million in transferred assets**, **$67.6 million in net realized investment gains**, a **$133.1 million increase in benefits and reserves**, and the **release of approximately $200 million in capital**[206](index=206&type=chunk)[207](index=207&type=chunk) - A 12-year volatility cover agreement was amended and restated, with PLC receiving an **$18 million payment from Commonwealth**[205](index=205&type=chunk) [2020 Long-term Care Reserve Increase](index=71&type=section&id=2020%20Long-term%20Care%20Reserve%20Increase) In Q4 2020, the company increased its gross policy and claim reserves by $151.5 million for long-term care, primarily due to an updated interest rate assumption, partially offset by favorable premium rate increase approvals - **Gross policy and claim reserves for long-term care were increased by $151.5 million in Q4 2020**[208](index=208&type=chunk) - The increase was mainly driven by an update to the interest rate assumption, partially offset by favorable premium rate increase approvals and inventory updates[208](index=208&type=chunk) [U.K. Referendum](index=71&type=section&id=U.K.%20Referendum) Following the UK's withdrawal from the EU, the company does not expect significant impact on its UK or Polish operations, but anticipates potential short-term financial market volatility - The company does not expect significant impact on its UK or Polish business operations from the UK's withdrawal from the EU[209](index=209&type=chunk) - Potential short-term volatility in financial markets could impact investment fair values, solvency ratios, or the British pound sterling to dollar exchange rate[209](index=209&type=chunk) [Coronavirus Disease 2019 (COVID-19)](index=71&type=section&id=Coronavirus%20Disease%202019%20(COVID-19)) COVID-19 has caused significant disruption, impacting sales, increasing mortality in life products, and higher claim incidence in disability products, with the ultimate impact remaining uncertain - COVID-19 has caused significant disruption to the global economy and unfavorably impacted the company and the insurance industry[210](index=210&type=chunk) - The company experienced **higher mortality in life product lines** and **higher claim incidence in certain disability product lines**, but results are beginning to return to pre-pandemic levels[213](index=213&type=chunk) - Sales activity has been disrupted, and there's pressure on the number of lives insured, though the **allowance for expected credit losses on premiums receivable has begun to decrease** due to an improved economic outlook[211](index=211&type=chunk)[212](index=212&type=chunk) [Results of Operations](index=71&type=section&id=Results%20of%20Operations) The company experienced sales disruptions and increased claims volatility due to COVID-19, but reduced its allowance for expected credit losses on premiums receivable, with overall benefits experience favorable in Q2 2021 but unfavorable in H1 2021 - Sales activity has been disrupted, leading to potential impacts on premium income and pressure on the number of lives insured[211](index=211&type=chunk)[212](index=212&type=chunk) - The **allowance for expected credit losses on premiums receivable has been reduced** due to an improved economic outlook[212](index=212&type=chunk) - Overall benefits experience was **favorable in Q2 2021 but unfavorable in H1 2021**, with the latter including the reserve recognition impact from the Closed Block individual disability reinsurance transaction[246](index=246&type=chunk) [Financial Condition](index=72&type=section&id=Financial%20Condition) The company's financial condition is stable, with confidence in its investment portfolio's credit quality despite capital market volatility, though sustained low interest rates continue to pressure net investment income yields - The company remains confident in the overall strength and credit quality of its investment portfolio, despite increased capital market volatility and potential for credit losses or ratings downgrades[215](index=215&type=chunk) - **Net investment income yields are pressured by the low interest rate environment**[215](index=215&type=chunk) - Declines in business profitability could lead to write-offs or impairment of intangible/long-lived assets (e.g., goodwill) or the need for a valuation allowance on deferred tax assets[216](index=216&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) The company has strengthened its liquidity position through higher short-term investments and FHLB collateral, maintaining sufficient liquidity and access to capital with significant borrowing capacity and credit facilities - Liquidity position has been strengthened by maintaining **higher short-term investments** and posting **additional collateral to Federal Home Loan Banks (FHLB)**[217](index=217&type=chunk) - The company has **$286.6 million borrowed from FHLBs** and an additional borrowing capacity of approximately **$906 million**[218](index=218&type=chunk) - An unsecured revolving credit facility of **$500 million is available with no outstanding borrowings**, and the company has no significant debt maturities until 2024[218](index=218&type=chunk) [Business Operations](index=73&type=section&id=Business%20Operations) The company successfully implemented business continuation plans to accommodate remote work, avoiding significant disruption to operational processes, financial reporting systems, or internal controls despite travel restrictions - Business continuation plans successfully implemented remote work arrangements, preventing significant disruption to operational processes[220](index=220&type=chunk) - No significant disruption to financial reporting systems or internal controls over financial reporting and disclosure controls and procedures due to COVID-19[220](index=220&type=chunk) [Consolidated Company Outlook](index=73&type=section&id=Consolidated%20Company%20Outlook) The company expects slight premium income growth below historical levels and continued claims volatility in 2021 due to COVID-19 and low interest rates, focusing on growing core businesses through investment and expansion - Full-year premium income is expected to grow slightly from the prior year, but at a rate below historical levels, with continued claims volatility[222](index=222&type=chunk) - **Low interest rates continue to pressure profit margins** by impacting net investment income yields and potentially insurance liability discount rates[223](index=223&type=chunk) - Strategy centers on growing core businesses, investing in operations and technology, and expanding into new adjacent markets through partnerships and effective capital deployment[221](index=221&type=chunk)[224](index=224&type=chunk) [Reconciliation of Non-GAAP and Other Financial Measures](index=73&type=section&id=Reconciliation%20of%20Non-GAAP%20and%20Other%20Financial%20Measures) This section reconciles GAAP net income to 'after-tax adjusted operating income,' a non-GAAP measure, by excluding specific items to provide a clearer view of underlying business profitability - **After-tax adjusted operating income is a non-GAAP measure** used to better indicate profitability and underlying business trends by excluding specific items[226](index=226&type=chunk) Reconciliation of Net Income to After-tax Adjusted Operating Income (in millions of dollars, except per share) | Item | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $182.9 | $265.5 | $335.9 | $426.5 | | Net Realized Investment Gain (Loss) (after tax) | $0.6 | $25.4 | $67.5 | $(87.7) | | Amortization of Reinsurance Cost (after tax) | $(15.5) | $0.0 | $(31.3) | $0.0 | | Early Retirement of Debt Cost (after tax) | $(53.2) | $0.0 | $(53.2) | $0.0 | | ROU Asset Impairment (after tax) | $(11.0) | $(10.0) | $(11.0) | $(10.0) | | UK Tax Rate Increase Impact | $(24.2) | $0.0 | $(24.2) | $0.0 | | After-tax Adjusted Operating Income | $286.2 | $250.1 | $498.2 | $524.2 | | After-tax Adjusted Operating EPS | $1.39 | $1.23 | $2.43 | $2.58 | [Critical Accounting Estimates](index=76&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, requiring significant judgment, include reserves for policy benefits, deferred acquisition costs, investment valuation, pension plans, income taxes, and contingent liabilities, with no significant changes in H1 2021 - Critical accounting estimates include reserves for policy and contract benefits, deferred acquisition costs, valuation of investments, pension and postretirement benefit plans, income taxes, and contingent liabilities[236](index=236&type=chunk) - **No significant changes in critical accounting estimates occurred** during the six months ended June 30, 2021[236](index=236&type=chunk) [Accounting Developments](index=76&type=section&id=Accounting%20Developments) This section refers to Note 2 of the financial statements for detailed information on recent accounting updates and their impact on the company's financial reporting - Refer to Note 2 of the 'Notes to Consolidated Financial Statements' for further information on accounting developments[238](index=238&type=chunk) [Consolidated Operating Results](index=77&type=section&id=Consolidated%20Operating%20Results) Consolidated operating results show a slight increase in total revenue for H1 2021, but a decrease in net income due to early debt retirement costs and lower net realized investment gains in Q2 2021, also impacted by foreign currency fluctuations Consolidated Operating Results (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Total Revenue | $2,993.0 | -0.9% | $3,021.2 | $6,065.0 | 2.9% | $5,892.3 | | Net Income | $182.9 | -31.1% | $265.5 | $335.9 | -21.2% | $426.5 | | Cost Related to Early Retirement of Debt | $67.3 | N.M. | $0.0 | $67.3 | N.M. | $0.0 | | Net Realized Investment Gain (Loss) | $0.9 | -97.3% | $33.8 | $85.5 | -177.6% | $(110.2) | - Foreign currency exchange rate fluctuations, particularly the British pound/U.S. dollar, affect consolidated financial results, with a stronger pound increasing current period results[240](index=240&type=chunk)[241](index=241&type=chunk) - Overall benefits experience was **favorable in Q2 2021 but unfavorable in H1 2021**, with the latter impacted by the Closed Block individual disability reinsurance transaction[246](index=246&type=chunk) [Consolidated Sales Results](index=79&type=section&id=Consolidated%20Sales%20Results) Consolidated sales results show mixed performance across segments for Q2 and H1 2021, with Unum US sales decreasing, Unum International sales increasing, and Colonial Life sales seeing significant growth, reflecting varied market impacts Consolidated Sales Results by Segment (in millions of dollars) | Segment | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :------------------ | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Unum US | $208.6 | -3.1% | $215.3 | $420.0 | -6.9% | $451.1 | | Unum International | $33.1 | 10.0% | $30.1 | $56.3 | 4.3% | $54.0 | | Colonial Life | $111.1 | 53.7% | $72.3 | $201.3 | 17.3% | $171.6 | - Sales generally represent annualized premium income on new sales expected in the next 12 months, not GAAP reported premium income[253](index=253&type=chunk) - COVID-19 caused higher unemployment and uncertainty, disrupting sales processes, but improvements in Q2 2021 led to increased sales in some product lines, though overall pressure remains[254](index=254&type=chunk) [Segment Results](index=80&type=section&id=Segment%20Results) This section provides detailed operating results and key performance indicators for each of the company's reporting segments: Unum US, Unum International, Colonial Life, Closed Block, and Corporate, highlighting segment-specific trends [Unum US Segment](index=80&type=section&id=Unum%20US%20Segment) The Unum US segment reported a significant decrease in adjusted operating income for Q2 and H1 2021, primarily due to unfavorable benefits experience, particularly higher claims incidence in group short-term disability and group life, with overall sales decreasing Unum US Adjusted Operating Income (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Adjusted Operating Income | $179.3 | -22.7% | $231.9 | $295.0 | -40.2% | $493.7 | | Benefit Ratio | 71.7% | | 68.1% | 73.0% | | 66.3% | - Benefits experience was **unfavorable in Q2 and H1 2021** due to higher claims incidence in group short-term disability and higher average claim size/incidence in group life, partly due to COVID-19[263](index=263&type=chunk)[269](index=269&type=chunk) Unum US Total Sales (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :------------------ | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Total Sales | $208.6 | -3.1% | $215.3 | $420.0 | -6.9% | $451.1 | | Group Disability and Group Life and AD&D | $137.0 | -3.1% | $141.4 | $222.4 | 3.4% | $215.1 | | Supplemental and Voluntary | $71.6 | -3.1% | $73.9 | $197.6 | -16.3% | $236.0 | - The segment plans to invest in customer experience, digital capabilities, and product expansion, particularly in leave management services, to drive long-term growth and persistency[278](index=278&type=chunk) [Unum International Segment](index=86&type=section&id=Unum%20International%20Segment) The Unum International segment reported a significant increase in adjusted operating income for Q2 and H1 2021, driven by higher net investment income and lower operating expenses in Unum UK, along with higher premium income in Q2, despite mixed sales performance Unum International Adjusted Operating Income (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Adjusted Operating Income | $24.8 | 64.2% | $15.1 | $51.2 | 48.4% | $34.5 | | Total Premium Income | $183.5 | 16.8% | $157.1 | $357.9 | 11.3% | $321.7 | | Net Investment Income | $35.7 | 35.7% | $26.3 | $61.7 | 16.9% | $52.8 | - Unum UK's adjusted operating income (local currency) increased by **66.3% in Q2 2021** and **48.7% in H1 2021**, due to higher net investment income and lower operating expenses[197](index=197&type=chunk) Unum International Total Sales (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :------------------ | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Total Sales | $33.1 | 10.0% | $30.1 | $56.3 | 4.3% | $54.0 | | Unum UK Sales (local currency) | £21.2 | -3.2% | £21.9 | £35.5 | -7.6% | £38.4 | - The segment aims to expand its group long-term disability market position in the UK, increase participation levels, and develop new distribution channels, while leveraging expertise in Poland[294](index=294&type=chunk) [Colonial Life Segment](index=90&type=section&id=Colonial%20Life%20Segment) The Colonial Life segment reported an increase in adjusted operating income for Q2 2021 but a slight decrease for H1 2021, with premium income declining but sales seeing significant growth driven by improved market conditions Colonial Life Adjusted Operating Income (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Adjusted Operating Income | $95.8 | 5.4% | $90.9 | $169.1 | -1.7% | $172.0 | | Total Premium Income | $419.7 | -4.3% | $438.6 | $846.1 | -3.1% | $873.3 | | Net Investment Income | $41.6 | 13.0% | $36.8 | $79.3 | 6.4% | $74.5 | | Benefit Ratio | 51.7% | | 50.7% | 53.5% | | 51.6% | - Benefits experience was **unfavorable in Q2 2021 (accident, sickness, disability)** and **H1 2021 (life product line due to COVID-19)**[299](index=299&type=chunk) Colonial Life Total Sales (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :------------------ | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Total Sales | $111.1 | 53.7% | $72.3 | $201.3 | 17.3% | $171.6 | | New Accounts Increase | 86.0% | | | 25.1% | | | - The segment plans to invest in new solutions and digital capabilities to expand reach, improve productivity, and enhance customer experience, including an enhanced engagement and enrollment platform[302](index=302&type=chunk) [Closed Block Segment](index=93&type=section&id=Closed%20Block%20Segment) The Closed Block segment's adjusted operating income significantly increased in Q2 and H1 2021, primarily due to the individual disability reinsurance transaction, with long-term care premium income increasing but net investment income declining Closed Block Adjusted Operating Income (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Adjusted Operating Income | $111.2 | N.M. | $36.7 | $208.2 | N.M. | $66.4 | | Total Premium Income | $249.1 | -0.5% | $250.3 | $500.8 | 1.2% | $494.7 | | Net Investment Income | $294.7 | -9.7% | $326.3 | $591.9 | -10.6% | $662.4 | | Long-term Care Interest Adjusted Loss Ratio | 74.6% | | 67.0% | 76.2% | | 74.0% | | Individual Disability Interest Adjusted Loss Ratio | 69.6% | | 89.5% | 69.3% | | 87.1% | - **Long-term care premium income increased due to rate increases**, while individual disability premium income decreased due to policy terminations and maturities[308](index=308&type=chunk) - **Net investment income was lower** due to decreased invested assets from the individual disability reinsurance transaction and lower yields, partially offset by higher miscellaneous investment income from private equity partnerships[309](index=309&type=chunk) - The individual disability reinsurance agreement is expected to result in approximately **$80 million in amortization costs for 2021**, amortized over an estimated 25 years[315](index=315&type=chunk)[316](index=316&type=chunk) [Corporate Segment](index=97&type=section&id=Corporate%20Segment) The Corporate segment's adjusted operating loss declined in Q2 and H1 2021, driven by higher net investment income from increased invested assets and lower operating expenses, encompassing corporate investment income, debt interest, and unallocated expenses Corporate Segment Adjusted Operating Loss (in millions of dollars) | Item | 3 Months Ended Jun 30, 2021 | % Change | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | % Change | 6 Months Ended Jun 30, 2020 | | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | | Adjusted Operating Loss | $(48.5) | 16.5% | $(58.1) | $(87.4) | 16.0% | $(104.0) | | Net Investment Income | $7.9 | 192.6% | $2.7 | $16.0 | 105.1% | $7.8 | | Interest, Debt, and Other Expenses | $138.0 | 87.2% | $73.7 | $186.3 | 49.4% | $124.7 | - The decline in adjusted operating loss was primarily due to **higher net investment income from increased invested assets** and **lower operating expenses**[320](index=320&type=chunk) - The segment expects to continue generating excess capital annually and may experience volatility in net investment income based on asset allocation[321](index=321&type=chunk) [Investments](index=98&type=section&id=Investments) The company's investment strategy focuses on high-quality assets to match liability funding requirements, primarily fixed maturity securities, with a diversified portfolio and risk management emphasizing credit quality and interest rate matching - Investment strategy aims to match asset cash flows and durations with expected liability cash flows and durations, primarily using high-quality fixed maturity securities[323](index=323&type=chunk)[324](index=324&type=chunk) - The Closed Block individual disability reinsurance agreement involved **transferring $226.8 million (amortized cost) in fixed maturity securities**, resulting in a **$67.6 million realized investment gain**[326](index=326&type=chunk) - COVID-19 increased capital market volatility, but the company's fixed income exposure to stressed industries is minimal, and it remains confident in its investment portfolio's credit quality[328](index=328&type=chunk)[329](index=329&type=chunk) Fixed Maturity Securities by Industry Classification (in millions of dollars) - June 30, 2021 | Classification | Fair Value | | :-------------------------- | :------------ | | Basic Industry | $3,220.4 | | Capital Goods | $3,959.3 | | Communications | $2,710.5 | | Consumer Cyclical | $1,622.7 | | Consumer Non-Cyclical | $7,047.9 | | Energy | $3,639.9 | | Financial Institutions | $3,772.4 | | Mortgage/Asset-Backed | $781.2 | | Sovereigns | $1,143.4 | | Technology | $1,841.4 | | Transportation | $2,096.9 | | U.S. Government Agencies and Municipalities | $5,060.4 | | Public Utilities | $6,617.4 | | Total | $43,513.8 | - The **carrying value of mortgage loans was $2,387.1 million at June 30, 2021**, with an **allowance for expected credit losses of $11.4 million**[344](index=344&type=chunk) - The portfolio is well-diversified and has low problem loan incidence[344](index=344&type=chunk) - Investments in private equity partnerships totaled **$858.2 million at June 30, 2021**, generating **$51.9 million in net investment income in Q2 2021**[346](index=346&type=chunk) - The company had **$710.1 million in unfunded commitments** to these partnerships[346](index=346&type=chunk) [Liquidity and Capital Resources](index=104&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily supported by operating cash flows from insurance subsidiaries, supplemented by debt and securities offerings, maintaining a strong capital position with significant holding company liquidity and access to credit facilities - Liquidity is primarily met by cash flows from operations, with premium and investment income as primary sources, and debt/securities offerings as additional sources[351](index=351&type=chunk) - At June 30, 2021, Unum Group and its intermediate holding companies had **$1,717 million in available holding company liquidity**[354](index=354&type=chunk) - The company has **$906 million in additional FHLB borrowing capacity** and a **$500 million unsecured revolving credit facility with no outstanding borrowings**[357](index=357&type=chunk) - The second phase of the Closed Block individual disability reinsurance transaction released approximately **$200 million of capital in Q1 2021**[359](index=359&type=chunk) - The Maine Bureau of Insurance approved a seven-year phase-in for a **$2.1 billion long-term care statutory reserve deficiency**, with the **2020 phase-in amount of $229 million funded by operations**[365](index=365&type=chunk) - **Long-term debt at June 30, 2021, was $3,441.4 million**, with **$600.0 million in new senior notes issued** and **$500.0 million retired in June 2021**[371](index=371&type=chunk)[372](index=372&type=chunk) [Consolidated Cash Flows](index=108&type=section&id=Consolidated%20Cash%20Flows) Consolidated cash flows for H1 2021 show a decrease in operating cash flows, a significant reduction in cash used for investing activities, and a shift to net cash used in financing activities, resulting in an overall net decrease in cash and bank deposits Consolidated Cash Flows (in millions of dollars) | Item | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net Cash Provided by Operating Activities | $544.2 | $852.4 | | Net Cash Used by Investing Activities | $(506.7) | $(1,090.7) | | Net Cash Provided (Used) by Financing Activities | $(111.4) | $319.8 | | Net Change in Cash and Bank Deposits | $(73.9) | $81.5 | - Operating cash flows in H1 2021 were impacted by a **$456.8 million cash payment to the reinsurer** related to the Closed Block individual disability reinsurance transaction[384](index=384&type=chunk) - Financing cash flows in H1 2021 included **$588.1 million from new debt issuance**, **$500.0 million in debt repayment**, and **$17.9 million cash received from a volatility agreement**[388](index=388&type=chunk)[390](index=390&type=chunk) [Ratings](index=109&type=section&id=Ratings) The company's issuer credit ratings and financial strength ratings from major agencies are generally stable, with recent affirmations and outlook revisions to stable from negative by Fitch and AM Best, reflecting improved outlooks and stable metrics - Issuer credit ratings reflect overall financial capacity, while financial strength ratings assess the ability of insurance subsidiaries to meet policyholder obligations[391](index=391&type=chunk) Issuer Credit and Financial Strength Ratings (as of filing date) | Agency | Outlook | Issuer Credit Ratings | Financial Strength Ratings (Select Subsidiaries) | | :------------------ | :------ | :-------------------- | :----------------------------------------------- | | AM Best | Stable | bbb | A (Provident, Unum Life, Colonial Life, Paul Revere, Starmount Life) | | Fitch | Stable | BBB- | A- (Provident, Unum Life, Colonial Life, Paul Revere) | | Moody's | Negative | Baa3 | A3 (Provident, Unum Life, Colonial Life, Paul Revere) | | S&P | Stable | BBB | A (Provident, Unum Life, Colonial Life, Paul Revere, Unum Limited) | - Fitch revised its outlook to **stable from negative on April 8, 2021**, citing a favorable outlook compared to original COVID-19 expectations and stable metrics[396](index=396&type=chunk) - AM Best upgraded Starmount Life Insurance Company's financial strength rating to **A** and revised its outlook to **stable from negative on June 10, 2021**, due to easing balance sheet pressure and favorable profitability trends[397](index=397&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=110&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily interest rate risk and foreign exchange rate risk, with no substantive changes to these risks or their management during the first six months of 2021 - The company is subject to **interest rate risk and foreign exchange rate risk**[401](index=401&type=chunk) - **No substantive changes to market risk or its management occurred** during the first six months of 2021[401](index=401&type=chunk) [Item 4. Controls and Procedures](index=110&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2021, concluding they were effective, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were **evaluated and deemed effective as of June 30, 2021**[402](index=402&type=chunk) - **No material changes to internal control over financial reporting occurred** during the quarter ended June 30, 2021[403](index=403&type=chunk) [PART II - OTHER INFORMATION](index=111&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=111&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the financial statements for information on legal proceedings, indicating no new material updates beyond what is already disclosed - Refer to Part I, Item 1, Note 11 of the 'Notes to Consolidated Financial Statements' for information on legal proceedings[406](index=406&type=chunk) [Item 1A. Risk Factors](index=111&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's annual report on Form 10-K for the year ended December 31, 2020 - **No material changes from the risk factors disclosed** in the annual report on Form 10-K for the year ended December 31, 2020[407](index=407&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not have an open share repurchase program and did not repurchase any shares of its common stock during the second quarter of 2021 - **No open share repurchase program and no common stock repurchases** during the second quarter of 2021[408](index=408&type=chunk) [Item 6. Exhibits](index=112&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the form of senior notes, CEO and CFO certifications under Sarbanes-Oxley, and interactive data files - Exhibits include Form of 4.125% Senior Notes due 2051, CEO and CFO certifications (Section 302 and 906 of Sarbanes-Oxley Act), and Interactive Data Files[410](index=410&type=chunk) [Signatures](index=113&type=section&id=Signatures) The report is duly signed on behalf of Unum Group by Steven A. Zabel, Executive Vice President and Chief Financial Officer, and Cherie A. Pashley, Senior Vice President and Chief Accounting Officer, on August 4, 2021 - The report was signed by Steven A. Zabel, Executive Vice President, Chief Financial Officer, and Cherie A. Pashley, Senior Vice President, Chief Accounting Officer, on August 4, 2021[412](index=412&type=chunk)[413](index=413&type=chunk)