Core Insights - Unum Group's shares have increased by over 50% in the past year, indicating strong market performance [1] - The company's core business is thriving, supported by high interest rates and effective underwriting practices [1] - Recent positive developments regarding long-term care (LTC) exposure suggest improved risk management in this area [1]

Core Viewpoint - Unum Group (UNM) is trading at a discount compared to its industry peers, with a forward price-to-book value of 1.32X, lower than the industry average of 1.89X, indicating potential investment opportunity [1] Financial Performance - Unum Group has a market capitalization of $14.04 billion and an average trading volume of 1.3 million shares over the last three months [2] - The company has a solid track record of beating earnings estimates in three of the last four quarters, with an average beat of 2.94% [2] Stock Performance - UNM shares have gained 8.8% year-to-date, outperforming the industry growth of 4.7% and the Finance sector's growth of 3.5%, while the Zacks S&P 500 composite has declined by 0.9% [4][5] - The stock closed at $79.46, near its 52-week high of $83.96, and is trading above its 50-day and 200-day simple moving averages of $75.22 and $63.06, respectively, indicating strong upward momentum [6] Growth Projections - The Zacks Consensus Estimate for Unum Group's 2025 revenues is $13.44 billion, reflecting a year-over-year improvement of 4.3% [10] - For 2026, the consensus estimates indicate an increase of 8.7% in earnings per share and 4.2% in revenues compared to 2024 estimates [10] - Earnings have grown by 12.9% over the past five years, outperforming the industry average of 3.6% [10] Business Drivers - Premiums are expected to grow due to healthy in-force block growth and higher sales, with projected sales growth of 5-10% and premium growth of 4-7% in 2025 [11] - Unum Group anticipates adjusted operating return on equity (ROE) between 21% and 23% from core business in 2025, with long-term sales growth expected in the range of 8-12% [11] Operational Strength - Unum Group is positioned for growth through operational excellence in its largest segments, Unum U.S. and Colonial Life, supported by strong sales trends and new product line growth [12] - Management estimates sales growth of 5-10% and premium growth of 3.6% for Unum U.S. in 2025, and similar growth expectations for Colonial Life [13] Dividend Policy - Unum Group has a strong history of enhancing shareholder value through consistent dividend increases, with a 15% hike effective in Q3 2024, marking the 15th increase in the last 14 years [14] - The current dividend yield stands at 2.1%, making it attractive for yield-seeking investors [14] Conclusion - Favorable sales trends, strong persistency, and a solid capital position are expected to benefit Unum Group in the long term, making it a wise hold for investors [15]

Core Viewpoint - Unum Group's recent earnings report showed mixed results, with operating net income missing estimates but demonstrating year-over-year growth, indicating both challenges and opportunities for the company moving forward [2][3]. Operational Update - Unum Group reported total operating revenues of $3.2 billion, a 2.5% increase year over year, but missed the consensus estimate by 1.5% [3] - Premium income rose 3.1% to $2.6 billion, aligning with the Zacks Consensus Estimate [3] - Net investment income increased by 2.4% to $543.6 million, surpassing the consensus estimate of $540 million [3] Segment Performance - Unum U.S. reported premium income of $1.7 billion, up 3% year over year, but adjusted operating income decreased by 2.6% to $333.2 million, missing the consensus estimate of $346 million [5] - Unum International saw premium income rise 17.1% to $246.6 million, with adjusted operating income increasing by 4.6% to $37.6 million, though it fell short of the $42 million estimate [5] - The Unum U.K. segment reported premium income of £156.9 million, a 5.2% increase, with adjusted operating income rising 10.7% to £27.6 million [6] Financial Metrics - The benefit ratio, excluding reserve assumption updates, deteriorated by 420 basis points to 72.1% due to unfavorable claims in certain product lines [7] - For 2024, persistency decreased in some product lines but increased in group life [8] - Colonial Life's premium income increased 3.2% to $448.9 million, supported by stable persistency [8] Full-Year Highlights - Adjusted operating income for the full year was $8.44 per share, a 10.1% increase from 2023 [12] - Total premium increased by 4.5% to $10.5 billion [12] Capital Management - As of December 31, 2024, the risk-based capital ratio for Unum's traditional U.S. insurance companies was approximately 430% [13] - The company had holding company liquidity of $2 billion and executed accelerated share repurchase agreements totaling $471 million in Q4 [13] - Book value per share grew 23% year over year to $61.38 [13] Guidance - Unum expects after-tax adjusted operating income per share to grow by 8-12% in 2025, with core operations premium growth projected between 4% and 7% [14] Market Outlook - Estimates for Unum have trended upward recently, indicating a positive outlook for the stock [15][17] - The stock holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [17]

Core Viewpoint - Unum Group's subsidiary, Unum Life Insurance Company of America, has entered into a coinsurance agreement with Fortitude Reinsurance Company to reinsure long-term care reserves and cede individual disability insurance business, expected to close in 2025 [1][2]. Group 1: Transaction Details - Unum America will cede 19% of its total long-term care block and 20% of its in-force individual disability insurance premium to Fortitude Re, effective January 1, 2025 [2]. - The transaction involves ceding $3.4 billion of individual long-term care reserves and approximately $120 million of individual disability insurance in-force premium to Fortitude Re [2]. Group 2: Financial Impact - The transaction is projected to provide Unum Group with an estimated $100 million capital benefit, including a $200 million capital impact from the reinsured long-term care block and a $300 million benefit from the reinsured individual disability insurance block [3]. - Unum Group's Closed Block segment reported a 16.4% decrease in adjusted operating income in 2024, primarily due to unfavorable benefits experience in long-term care [5]. Group 3: Strategic Shift - This agreement allows Unum Group to reduce its exposure to legacy long-term care business and focus on more capital-efficient, higher-returning core businesses [6]. - The company aims to lessen the impact of the closed block segment, which includes insurance products no longer actively marketed [4][6]. Group 4: Stock Performance - Unum Group's shares have increased by 65.6% over the past year, outperforming the industry growth of 33.6% and the Finance sector's growth of 21.7% [7].

Premium Income and Segments - Unum Group's consolidated premium income for the year ended December 31, 2024, was generated as follows: Unum US 65.6%, Unum International 9.0%, Colonial Life 17.0%, Closed Block 8.4%[24] - The Unum US segment's premium income breakdown for 2024 was: Group Disability 46.1%, Group Life and Accidental Death & Dismemberment 28.6%, Voluntary Benefits 12.8%, Individual Disability 8.2%, Dental and Vision 4.3%[27] - In 2024, the Unum International segment's premium income distribution is as follows: Group Long-term Disability 44.0%, Group Life 22.3%, Supplemental 17.4%, and Unum Poland 16.3%[47] - In 2024, the Colonial Life segment's premium income distribution is as follows: Accident, Sickness, and Disability 54.3%, Life 25.7%, and Cancer and Critical Illness 20.0%[59] - Closed Block segment premium income for 2024 consists of approximately 79% from group and individual long-term care and 21% from other insurance products[69] Profitability Factors - The profitability of group long-term and short-term disability insurance is influenced by sales, persistency, investment returns, claims experience, and administrative expenses[34] - Group life insurance products are primarily renewable term life insurance linked to employee wages, with profitability affected by persistency and mortality[37] - Voluntary benefits are sold primarily through payroll deduction and include various insurance products, with profitability impacted by employee participation and claims experience[40] - The profitability of individual disability insurance is influenced by persistency, investment returns, claims experience, and administrative expenses[43] - Profitability of the accident, sickness, and disability product line is influenced by employee participation, persistency, investment returns, claims experience, and administrative expenses[62] - The profitability of group long-term disability insurance is affected by sales, persistency, investment returns, claims experience, and administrative expenses[51] Corporate Strategy and Operations - The company emphasizes the importance of employer-sponsored benefits for financial stability, particularly for lower and middle-income workers[19] - Unum Group's strategy focuses on growing core businesses through operational and technological investments, enhancing customer experiences, and expanding into new markets[21] - The company plans to adjust pricing on new and renewing business to reflect increased costs due to wage inflation[22] Regulatory Environment - Unum Group is subject to extensive regulation in the U.S., U.K., and Poland, which may impact operations[107] - U.S. insurance subsidiaries are regulated by state insurance regulators, focusing on financial matters and market conduct[108] - The U.K. insurance subsidiary, Unum Limited, is regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) for financial health and consumer protection[110] - The Polish insurance subsidiary, Unum Zycie TUiR, is regulated by the Komisja Nadzoru Finansowego (KNF) for financial stability[112] - Risk-based capital (RBC) standards for U.S. life insurance companies are prescribed by the National Association of Insurance Commissioners (NAIC) to assess statutory capital adequacy[114] - The NAIC has developed a group capital calculation (GCC) for assessing risks and financial positions of insurance groups, with annual reporting requirements[117] - The U.K. Solvency II framework requires Unum Limited to adhere to capital adequacy and liquidity requirements, with approval to use an internal model for regulatory capital calculations[120] Taxation and Financial Regulations - The Inflation Reduction Act imposed a 15% corporate alternative minimum tax (CAMT) on corporations with average adjusted financial statement income over $1 billion, effective January 1, 2023[133] - The U.K. corporate tax rate increased to 25% effective April 1, 2023, impacting the financial position of the company[134] - The Organization for Economic Co-operation and Development's Pillar Two model rules for a minimum tax of 15% are adopted by several jurisdictions, including the U.K. and Poland, starting in 2024[135] - The company is subject to various federal, state, and foreign laws regarding financial transparency and anti-money laundering, including the USA PATRIOT Act[138] Employee and Workforce Information - The company employed 11,063 employees as of December 31, 2024, with approximately 85% located in the United States[145] - 65% of the company's employees identify as female, and 20% identify as members of an ethnic or racially diverse group[149] - Approximately 85% of the company's employees are based in the United States, while 15% are international[145] Risk Management and Reinsurance - Unum Group has global catastrophic reinsurance coverage with a total catastrophic coverage of $352.5 million for 2025 after a $150 million deductible[78] - Unum Limited has additional catastrophic coverage of £48.5 million for 2025 after a £77.5 million deductible[79] - Unum Poland has global catastrophic reinsurance coverage of up to zł 200 million for the year, with a maximum retention limit of zł 2 million in 2024 and 2025[80] - In 2024, Unum ceded 20% of the risk for certain blocks of recently issued individual disability policies, increasing to 30% effective January 1, 2025[85] - Unum Group has a quota share reinsurance agreement providing 90% quota share reinsurance on ceded long-term disability claims[84] Investment Strategy - Investment strategy focuses on matching asset cash flows with expected liability cash flows to manage interest rate risk[93] Climate and Sustainability Regulations - The SEC finalized rules on material climate-related disclosures in March 2024, which may affect the company's reporting requirements[139] - The company is subject to the EU Corporate Sustainability Reporting Directive (CSRD), requiring reporting on financial risks due to sustainability-related issues[139] - Regulatory focus on climate change is increasing, with California adopting climate-related financial risk reporting requirements in 2023[139] Competition and Market Environment - The competitive environment includes both traditional and non-traditional competitors, affecting pricing and claims-paying ratings[101] - The company faces significant competition in the insurance market, impacting customer retention and product sales[101] Technology and Innovation - The NAIC's Model Bulletin regarding the use of AI by insurers has been adopted by numerous states, indicating a regulatory focus on AI in the insurance sector[140] - The NAIC's Innovation, Cybersecurity and Technology Committee has established a task force for regulatory oversight of third-party data and predictive models[140] - The company continuously monitors legislative and regulatory developments to assess their potential impact on profitability and resources[141]

Company Overview - Unum (UNM) currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [2][11] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the market [3][11] Price Performance - Over the past week, Unum's shares increased by 0.92%, while the Zacks Insurance - Accident and Health industry remained flat [5] - In the last month, Unum's stock price rose by 6.5%, significantly outperforming the industry's 1.02% [5] - Over the past quarter, Unum's shares have risen by 5.47%, and they are up 58% over the last year, compared to the S&P 500's increases of 1.46% and 22.19%, respectively [6] Trading Volume - Unum's average 20-day trading volume is 1,046,270 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Estimates - In the past two months, four earnings estimates for Unum have been revised upwards, while none have been revised downwards, leading to an increase in the consensus estimate from $9.03 to $9.08 [9] - For the next fiscal year, two estimates have moved upwards, while one has been revised downwards [9] Conclusion - Given the strong price performance, positive earnings estimate revisions, and a favorable Momentum Style Score, Unum is recommended as a solid momentum pick for investors [11]

Core Viewpoint - Unum Group's fourth-quarter 2024 operating net income of $2.03 per share fell short of the Zacks Consensus Estimate by 4.7%, although it represented a 13.4% year-over-year increase [1] Operational Update - Total operating revenues reached $3.2 billion, reflecting a 2.5% year-over-year increase, driven by higher premium income, other income, and improved net investment income, but missed the consensus estimate by 1.5% [3] - Premium income increased by 3.1% year over year to $2.6 billion, aligning with the Zacks Consensus Estimate [3] - Net investment income was $543.6 million, up 2.4%, surpassing the Zacks Consensus Estimate of $540 million [3] - Total benefits and expenses rose by 2.7% year over year to $2.8 billion, primarily due to lower policy benefits [4] Quarterly Segment Update - Unum U.S. reported premium income of $1.7 billion, a 3% year-over-year increase, but adjusted operating income decreased by 2.6% to $333.2 million, missing the Zacks Consensus Estimate of $346 million [5] - Unum International's premium income was $246.6 million, up 17.1% year over year, with adjusted operating income of $37.6 million, a 4.6% increase, but below the Zacks Consensus Estimate of $42 million [5] - Unum U.K. premium income was £156.9 million, a 5.2% increase from the previous year, with adjusted operating income of £27.6 million, up 10.7% year over year [6] Benefit Ratio and Sales - The benefit ratio, excluding reserve assumption updates, was 72.1%, deteriorating by 420 basis points due to unfavorable claims in group long-term disability and group life products, partially offset by favorable claims in supplemental products [7] - Sales increased by 5% [7] Full-Year Highlights - Adjusted operating income for the full year was $8.44 per share, a 10.1% increase from 2023, with total premium income rising by 4.5% to $10.5 billion [12] Capital Management - As of December 31, 2024, the weighted average risk-based capital ratio for Unum Group's traditional U.S. insurance companies was approximately 430%, with holding company liquidity of $2 billion [13] - Book value per share grew by 23% year over year to $61.38, and the company executed accelerated share repurchase agreements totaling $471 million in the fourth quarter [13] Guidance - Unum Group expects after-tax adjusted operating income per share to grow by 8-12% in 2025, with core operations premium growth anticipated between 4% and 7% [14]

Financial Data and Key Metrics Changes - In 2024, the company achieved a 10% growth in earnings per share, exceeding initial expectations of 7% to 9% [12] - The core operations delivered over 20% return on equity (ROE) in 2024, with holding company cash reaching $2 billion and a risk-based capital (RBC) ratio of 430% [14] - The company repurchased approximately $1 billion of shares throughout 2024 and raised its dividend by 15% [13] Business Line Data and Key Metrics Changes - Unum U.S. saw a 6.5% increase in sales, with record absolute sales and nearly 20% growth in the fourth quarter [28] - Colonial Life's full-year adjusted operating earnings increased by 16.6% over 2023, reaching $466.7 million, with a return on equity of 19.7% [42] - Unum International's sales grew by 6.1% for the full year, with premium growth of 9.4% in the U.K. and 24.2% in Poland [28][41] Market Data and Key Metrics Changes - The company expects premium growth in 2025 to be in the range of 4% to 7%, with consolidated sales growth projected in the high single digits [16] - The competitive labor market, wage inflation, and sustained interest rates are seen as supportive factors for business growth [15] Company Strategy and Development Direction - The company aims to enhance its digital capabilities and maintain a customer-centric approach to drive growth [15][16] - Strategic investments will focus on expanding offerings and pursuing selective mergers and acquisitions (M&A) to support internal initiatives [24] - The company plans to continue returning capital to shareholders through regular dividend increases and share repurchases [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of group disability margins, expecting a benefit ratio in the low 60s for the near to midterm [30] - The company anticipates strong operating trends to continue into 2025, with expected earnings per share growth of 8% to 12% [57] - Management highlighted the importance of adapting services to meet changing market needs and maintaining a competitive edge [17] Other Important Information - The company reported that 2024 was the first year in many years that long-term care (LTC) did not consume any capital, indicating improved financial health in this area [13] - The alternative investment portfolio backing LTC produced income of $30.5 million in the quarter, with a yield of 9.1% on an annualized basis [45] Q&A Session Summary Question: What is driving the favorable outlook for group disability? - Management indicated that improved claims recovery and stable incidence rates contribute to confidence in maintaining a low 60% benefit ratio [70][73] Question: How does the competitive environment affect pricing? - Management acknowledged a competitive market but emphasized the importance of delivering high-quality benefits and maintaining stable pricing [78][79] Question: What is the outlook for long-term care risk transfer? - Management noted positive market dynamics for risk transfer but emphasized the complexity of such transactions and the need for careful structuring [82][84] Question: Can you elaborate on capital deployment and M&A considerations? - Management highlighted strong capital generation and the priority of growing the core business, with M&A focused on enhancing capabilities and distribution [92][94] Question: What is the outlook for voluntary benefits? - Management expects a modest increase in the benefit ratio for voluntary benefits, projecting it to be in the mid-40s, while maintaining confidence in the earnings power of this line [114]

2024 Results & 2025 Outlook February 5, 2025 SAFE HARBOR STATEMENT Certain information in this presentation constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments and speak only as of the date made. These forward-looking statements are subject to numerous assumptions, ...

Unum (UNM) reported $3.23 billion in revenue for the quarter ended December 2024, representing a year-over-year increase of 2.4%. EPS of $2.03 for the same period compares to $1.79 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $3.28 billion, representing a surprise of -1.53%. The company delivered an EPS surprise of -4.70%, with the consensus EPS estimate being $2.13.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they ...