Core Viewpoint - Wall Street anticipates a year-over-year increase in Unum's earnings driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Unum is expected to report quarterly earnings of $2.23 per share, reflecting a 3.2% increase year-over-year, with revenues projected at $3.32 billion, up 2.4% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.25% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. Earnings Surprise Prediction - The Zacks Earnings ESP for Unum is -0.79%, suggesting a lower Most Accurate Estimate compared to the Zacks Consensus Estimate, complicating predictions for an earnings beat [12]. Historical Performance - In the last reported quarter, Unum's expected earnings were $2.19 per share, but the actual earnings were $2.04, resulting in a surprise of -6.85%. Over the last four quarters, the company has beaten consensus EPS estimates twice [13][14]. Investment Considerations - While Unum does not appear to be a strong candidate for an earnings beat, investors should consider other factors before making investment decisions related to the stock [17].

Core Insights - Unum Group (UNM) shares have increased by 9.6% year to date, outperforming the Finance sector and the Zacks S&P 500 Composite, which grew by 8.4% and 5.9% respectively [1] - The company's market capitalization stands at $14.07 billion, with an average trading volume of 1.25 million shares over the last three months [1] Valuation Metrics - Unum Group's shares are trading at a forward price-to-book value of 1.25X, which is lower than the industry average of 1.83X, the Finance sector's 4.26X, and the Zacks S&P 500 Composite's 8.42X [3] - The company has a Value Score of A, indicating it is considered affordable compared to its peers [3] Growth Projections - The Zacks Consensus Estimate for Unum Group's 2025 revenues is $13.2 billion, reflecting a year-over-year increase of 2.8% [8] - Expected earnings per share for 2026 indicate a growth of 9.1%, while revenues are projected to increase by 3.5% from 2025 estimates [8] - Long-term earnings growth is anticipated at 7.2%, surpassing the industry average of 6% [8] Analyst Sentiment - The average price target for UNM shares is $94.43, suggesting a potential upside of 17.4% from the last closing price [9] - However, analysts have recently lowered their earnings estimates for 2025 and 2026 by 0.3% and 0.1% respectively over the past 60 days [12] Dividend Performance - Unum Group raised its dividend by 10% in May 2025, marking the 16th increase in 15 years, with a projected payout of $300–$330 million and a payout ratio of approximately 19.4% [12] - The dividend yield stands at 2.1%, slightly above the industry average, making it attractive for income-focused investors [12] Operational Performance - Premium income rose by 3.5% year over year to $2.7 billion in Q1 2025, driven by growth in core segments and the recapture of a previously ceded individual disability block [15] - The company projects sales growth of 5–10%, premium growth of 4%-7%, and a 6–10% increase in after-tax adjusted operating EPS for 2025 [15] - Unum U.S. and Colonial Life segments have shown consistent growth in operating income, with Colonial Life's adjusted operating income up 1.8% to $115.7 million in Q1 2025 [16] Financial Stability - Unum Group maintains a solid capital position, enhancing its financial flexibility and supporting prudent capital outlay [17] - The company has faced challenges such as rising expenses, declining premiums in the Closed Block segment, and muted growth in investment income due to past low-rate investments [18]

Core Viewpoint - Unum Group's shares have increased by approximately 60% over the past year due to strong performance in its growth businesses and reduced concerns regarding its legacy insurance policies [1] Group 1: Company Performance - Unum Group closed a significant transaction on July 1st, indicating active management and strategic positioning [1] - The company's growth businesses are performing well, contributing to the overall positive stock performance [1] Group 2: Market Sentiment - Fears surrounding Unum Group's legacy, toxic insurance policies have lessened, which has positively impacted investor sentiment [1]

Core Insights - Unum Group (UNM) shares are trading at a discount compared to the Zacks Accident and Health Insurance industry, with a forward price-to-book value of 1.23X, lower than the industry average of 1.82X, the Finance sector's 4.16X, and the Zacks S&P 500 Composite's 8.1X [1] - The company has a market capitalization of $13.93 billion and an average trading volume of 1.4 million shares over the last three months [1] Performance Comparison - Unum Group shares have surged 63.5% in the past year, outperforming the industry growth of 27.1%, the Finance sector's 20.4%, and the Zacks S&P 500 composite's 10.8% [3] Technical Analysis - Shares closed at $79.25, near a 52-week high of $84.48, indicating strong investor confidence and potential for further price appreciation [5] - The stock is trading above the 50-day and 200-day simple moving averages of $78.88 and $72.31, respectively, suggesting solid upward momentum [5] Growth Projections - For 2025, Unum U.S. expects sales growth of 5-10% and an adjusted operating return on equity (ROE) of 23-25% [8] - The Zacks Consensus Estimate for Unum Group's 2025 revenues is $13.24 billion, reflecting a year-over-year improvement of 2.7% [10] - Long-term earnings growth is expected at 7.2%, outperforming the industry average of 6% [11] Analyst Sentiment - The average price target for UNM is $92.43 per share, suggesting a potential upside of 17.5% from the last closing price [12] - Recent analyst sentiment has shown some bearish trends, with three of eight analysts lowering estimates for 2025 and two for 2026 [16] Revenue and Premium Growth - 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 [17][19] - Unum Group's operational excellence in its two largest segments, Unum U.S. and Colonial Life, is expected to drive growth [18] Dividend History - Unum Group has consistently increased shareholder value through dividend hikes, with a 15% increase effective in Q3 2024, marking the 15th hike in the last 14 years [20] - The dividend yield stands at 2.12%, making it attractive for yield-seeking investors [20] 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 investment choice [21]

Core Viewpoint - Unum Group has approved a 10% increase in its dividend, making it an attractive option for yield-seeking investors due to its higher dividend yield compared to the industry average [1][2]. Group 1: Dividend and Capital Deployment - The recent dividend hike marks the 16th increase in the last 15 years, with a 10-year CAGR of 10.8% [2]. - The company estimates a dividend payout of $300-$330 million in 2025 [2]. - Unum Group has a strong capital and liquidity position, supported by cash flow generation, which instills confidence in its capital deployment strategy [2][4]. Group 2: Share Buybacks - Unum Group has been actively buying back shares, with a $200 million repurchase in Q1 2025 and plans for at least the same amount in Q2 [3]. - A $1 billion buyback program was approved, starting on April 1, 2025, with expectations to buy back $0.5-$1 billion in shares throughout 2025 [3]. Group 3: Operational Performance - Unum Group is the leading disability income writer and the second-largest writer of voluntary business in the U.S., demonstrating strong operating performance across key insurance segments [5]. - The two primary divisions, Unum U.S. and Colonial Life, have shown ongoing growth in operating income, driven by disciplined sales efforts and increasing premium income [6]. Group 4: Growth Projections - The company forecasts high-single-digit sales growth and 4% to 7% premium growth over the long term, with earnings growth expected between 6% and 10% for 2025 [7]. - Unum Group maintains a robust capital position, with a return on equity of 14.2%, although it lags behind the industry average of 15.5% [7]. Group 5: Stock Performance and Valuation - Shares of Unum Group have gained 6.5%, outperforming the industry growth of 2% and the sector's return of 3.9% [8]. - The current price-to-book multiple is 1.24, above its five-year median of 0.87, indicating that the shares are relatively expensive [9]. - Compared to other insurers like Prudential Financial Inc and Lincoln National Corporation, Unum Group shares are also considered expensive [10]. Group 6: Analyst Sentiment - The Zacks average price target for Unum Group is $92.36 per share, suggesting a potential 16% upside from the last closing price [12]. - However, the consensus estimates for 2025 and 2026 earnings have seen slight declines of 0.7% and 0.6%, reflecting analysts' muted sentiment [12].

Core Insights - Unum Group (NYSE: UNM) has shown strong performance, trading near 52-week highs and outperforming most large-cap financials since the previous analysis in November 2024 [1] Financial Performance - The company has made significant strides in de-risking efforts and has delivered impressive shareholder returns [1] Market Position - Unum Group's stock has been positively received in the market, indicating strong investor confidence and interest [1]

Financial Performance - Total revenue for Q1 2025 was $3,091.6 million, a decrease of 3.4% compared to $3,200.3 million in Q1 2024[22] - Net income for Q1 2025 was $189.1 million, down 52.2% from $395.2 million in Q1 2024[22] - The company reported a net investment loss of $206.8 million in Q1 2025, compared to a net investment loss of $1.2 million in Q1 2024[22] - The company’s total comprehensive income for Q1 2025 was $534.0 million, down from $763.2 million in Q1 2024[24] - For the three months ended March 31, 2025, net investment income was $513.2 million, slightly down from $513.5 million in the same period of 2024[128] - The company recognized a net investment loss of $206.8 million for the three months ended March 31, 2025, compared to a loss of $1.2 million in 2024[129] - Adjusted operating income for the total company was $466.8 million for the three months ended March 31, 2025, compared to the previous year's adjusted operating income[202] - Adjusted operating income for the three months ended March 31, 2025, was $466.8 million, down from $514.5 million in the same period of 2024[213] Revenue and Premiums - Premium income increased to $2,702.9 million in Q1 2025, up 3.5% from $2,610.3 million in Q1 2024[22] - Gross premiums recognized in the statement of income for the three months ended March 31, 2025, were $2.5921 billion, an increase from $2.5078 billion in 2024[167] - The Unum US segment reported a group long-term disability premium income of $504.5 million, slightly down from $516.7 million in the prior year[201] - Colonial Life's accident, sickness, and disability premium income increased to $247.1 million from $243.2 million year-over-year[201] - Unum US segment contributed $1,780.9 million to total premium income, while Unum International and Colonial Life segments contributed $246.7 million and $457.3 million, respectively[202] Assets and Liabilities - Total assets as of March 31, 2025, were $62,459.8 million, an increase from $61,959.3 million at the end of 2024[20] - Total liabilities rose to $51,245.8 million as of March 31, 2025, compared to $50,998.2 million at the end of 2024[20] - Stockholders' equity increased to $11,214.0 million as of March 31, 2025, from $10,961.1 million at the end of 2024[20] - The total liability for future policy benefits decreased to $36.8229 billion as of March 31, 2025, from $38.3828 billion in 2024[165] - The net liability for future policy benefits, after reinsurance recoverable, was $29.9347 billion at the end of the period, down from $30.8788 billion in 2024[165] Investment and Fair Value - The company reported a total of $1,450.6 million in private equity partnerships as part of its long-term investments[66] - The total fair value of private equity partnerships was $1,435.3 million, with unfunded commitments of $777.1 million as of March 31, 2025[61] - Fair value measurements for financial instruments are classified into three levels based on the observability of valuation inputs, with Level 1 representing quoted prices in active markets[46] - The company uses observable and unobservable inputs in measuring the fair value of fixed maturity and equity securities, with Level 1 fair values equating to active TRACE pricing[48] - As of March 31, 2025, total financial instrument assets carried at fair value amounted to $37,313.6 million, with Level 1 assets at $8,063.2 million, Level 2 at $27,669.2 million, and Level 3 at $145.9 million[65] Policy Benefits and Claims - Benefit payments for the period totaled $822.0 million, which is consistent with the previous year's payments of $819.2 million, indicating stability in claims[170] - The total liability for future policy benefits was reported at $8,611.1 million, down from $9,054.0 million in the prior year, marking a decrease of approximately 4.9%[171] - The net liability for future policy benefits stood at $8,492.7 million at the end of Q1 2025, a decrease from $8,848.2 million in Q1 2024, reflecting a reduction of about 4.0%[171] - The expected future benefit payments for the total Unum are projected at $17,799.0 million as of March 31, 2025, compared to $17,908.8 million in the previous year, indicating a decrease of 0.6%[173] Credit Losses and Allowances - The total allowance for credit losses increased from $2.2 million at the beginning of the period to $3.8 million by the end of the period, reflecting credit losses on securities not previously recorded[92] - The allowance for expected credit losses on mortgage loans was $16.6 million as of March 31, 2025, compared to $16.1 million at December 31, 2024[97] - The allowance for credit losses as of March 31, 2025, is $16.6 million, reflecting a slight increase from $16.1 million on December 31, 2024[110] - The company had one specifically identified impaired mortgage loan with a carrying value of $8.7 million as of March 31, 2025, down from $9.2 million at December 31, 2024[113] Regulatory and Accounting Changes - The company adopted ASU 2023-07 for segment reporting, enhancing disclosures of significant expenses for reportable segments, which includes the requirement to disclose the title and position of the Chief Operating Decision Maker (CODM) and how they assess segment performance[31] - The amendments in ASU 2023-09 require greater disaggregation of income tax disclosures, including a quantitative threshold of 5% for specified categories related to income tax rate reconciliation and income taxes paid[35] - The company will adopt ASU 2024-03, which mandates the disclosure of disaggregation of certain income statement expense line items, effective January 1, 2027[38] - The adoption of ASU 2023-09 will expand disclosures but is not expected to impact the company's financial position or results of operations[37] Mortgage Loans and Real Estate - The carrying amount of mortgage loans was $2,204.3 million as of March 31, 2025, down from $2,240.6 million at December 31, 2024[97] - The mortgage loan portfolio is diversified, with the largest property type being industrial at $670.7 million, representing 30.7% of the total[100] - The fair value of mortgage loans was estimated at $1,992.4 million, with a carrying value of $2,187.7 million[79] - The company has $1,975.4 million in mortgage loans, with a carrying value of $2,224.5 million[80] Derivatives and Hedging - The total notional amount of derivative financial instruments is $4,474.3 million, with a fair value of $100.0 million for assets and $220.4 million for liabilities[149] - The total cash flow hedges notional amount is $2,728.1 million, with a fair value of $31.4 million for assets and $187.5 million for liabilities[149] - The aggregate fair value of all derivative instruments with credit risk-related contingent features in a liability position was $220.4 million as of March 31, 2025[136] - The company expects to amortize approximately $6.6 million of net deferred gains on derivative instruments during the next twelve months[138]

Unum Group’s (UNM) first-quarter 2025 operating net income of $2.04 per share missed the Zacks Consensus Estimate by 6.8%. The bottom line decreased 3.8% year over year.The quarterly results reflected higher premiums and solid performances across Unum International, Colonial Life and Closed Block segments, partially offset by weakness in the Unum U.S and Corporate segments. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Unum Group’s Operational Update         Total operating revenu ...

Financial Data and Key Metrics Changes - The company achieved a return on equity (ROE) of over 20% and premium growth exceeding 4% in the first quarter [5][16] - Earnings per share (EPS) was reported at $2.4, reflecting a 3.8% decrease from the previous year due to higher disability claims [5][15] - Statutory earnings were strong at nearly $500 million, bolstered by one-time benefits from restructuring [12][16] Business Line Data and Key Metrics Changes - Unum US saw adjusted operating income decrease by 14.6% to $329.1 million, with premium growth of 4.3% [17][19] - Group disability adjusted operating income fell to $119.2 million, driven by higher incidence rates, with a benefit ratio of 61.8% [18][19] - Colonial Life's operating income increased to $115.7 million, with premium income growing at 2.3% [22][23] Market Data and Key Metrics Changes - The international segment's adjusted operating income rose to $38.7 million, with premium income increasing by 7% year-over-year [20][21] - Unum Poland experienced 18% growth, while the UK business saw a 15% increase in its sub-500 lives core business [21][90] Company Strategy and Development Direction - The company aims to maintain industry-leading margins and grow its top line at mid-single-digit levels, with a full-year growth outlook of 6% to 10% [4][5] - Continued investment in digital capabilities is seen as crucial for enhancing customer interactions and improving persistency [6][9] - The company is actively managing its long-term care block and has executed transactions to reduce risk and release capital [12][25] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment remains favorable, with healthy employment levels and rising wages contributing to business stability [5][6] - The company expects to see a normalization in disability claims and a return to historical levels of incidence rates as the year progresses [35][66] - There is confidence in achieving annual expectations for statutory earnings and maintaining robust capital flexibility [16][30] Other Important Information - The company ended the quarter with record holding company liquidity of $2.2 billion and a risk-based capital (RBC) ratio of 460% [12][30] - Share repurchases in the first quarter amounted to approximately $200 million, with plans to continue this in the second quarter [13][31] Q&A Session Summary Question: Can you provide more details on disability incidents? - Management observed elevated incidents in both short-term and long-term disability early in the quarter, with a normalization expected as the year progresses [34][35] Question: How do you view the economic sensitivity of disability claims? - Management indicated that while submitted claims may rise during economic downturns, this does not necessarily translate to higher paid incidents [37][39] Question: What are the drivers for the reaffirmed growth guidance? - Management highlighted expectations for improved group disability loss ratios, anticipated yield increases, and organic growth as key drivers for the reaffirmed guidance [42][48] Question: Can you elaborate on the impact of technology on persistency? - Management noted that technology investments are expected to enhance persistency, with a significant portion of new business tied to these capabilities [50][51] Question: What are the dynamics around capital deployment and share buybacks? - Management emphasized a dynamic approach to capital deployment, with plans to increase share repurchases while maintaining flexibility for growth investments [70][76]

Financial Data and Key Metrics Changes - The company achieved a return on equity (ROE) of over 20% and premium growth exceeding 4% in the first quarter [7][17] - Earnings per share (EPS) was reported at $2.4, reflecting a 3.8% decrease from the previous year due to higher disability claims [18][19] - Statutory earnings reached nearly $500 million, bolstered by one-time benefits from restructuring [16][19] Business Line Data and Key Metrics Changes - Unum U.S. adjusted operating income decreased by 14.6% to $329.1 million, with premium growth of 4.3% [20][21] - Group disability adjusted operating income fell to $119.2 million, with a benefit ratio of 61.8%, up from 57.5% a year ago [21][22] - Colonial Life segment saw adjusted operating income increase to $115.7 million, with premium income growing at 2.3% [25] Market Data and Key Metrics Changes - Unum International's adjusted operating income increased to $38.7 million, with premium income rising by 7% year-over-year [24] - The UK business reported earnings in the higher £20 million range, while Unum Poland experienced 18% growth [24][89] - The overall persistency rate for Unum U.S. was reported at 89.3%, indicating stable customer retention [20] Company Strategy and Development Direction - The company aims for full-year growth of 6% to 10%, supported by a healthy sales pipeline and digital capabilities [6][11] - Focus on enhancing digital interactions and leave administration services to improve customer engagement and retention [8][11] - Continued active management of the long-term care block, including premium rate increases and reinsurance strategies [14][28] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment remains favorable, with healthy employment levels and rising wages [8][12] - The company expects to see a normalization in disability claims and a return to historical levels of incidence rates [38][67] - Confidence in achieving annual statutory earnings expectations of $1.3 billion to $1.6 billion from traditional insurance subsidiaries [19] Other Important Information - The company ended the quarter with record holding company liquidity of $2.2 billion and a risk-based capital (RBC) ratio of 460% [15][32] - Share repurchases in the first quarter amounted to approximately $200 million, with plans to increase this in the second quarter [16][33] - The company is committed to consistent dividend increases, with announcements expected during the annual shareholder meeting [16] Q&A Session Summary Question: Can you provide more details on disability incidents? - Management observed elevated incidents in both short-term and long-term disability early in the quarter, with a normalization expected as the year progresses [36][38] Question: How do you view the economic sensitivity of disability claims? - Management indicated that while submitted claims may rise during economic downturns, this does not necessarily translate to higher paid claims [40][42] Question: What are the drivers for the reaffirmed growth outlook? - Management highlighted expectations for improved group disability loss ratios, anticipated yield increases, and organic growth as key drivers for the growth outlook [45][51] Question: Can you elaborate on the impact of technology on persistency? - Management noted that technology investments are expected to enhance persistency, with a significant portion of new business tied to these capabilities [53][61] Question: What are the expectations for sales growth throughout the year? - Management anticipates stronger sales momentum in the latter part of the year, particularly in the group segment, driven by a healthy pipeline [78][80]