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]

Group 1: Earnings Performance - Unum reported quarterly earnings of $2.04 per share, missing the Zacks Consensus Estimate of $2.19 per share, and down from $2.12 per share a year ago, representing an earnings surprise of -6.85% [1] - The company posted revenues of $3.3 billion for the quarter, missing the Zacks Consensus Estimate by 1.05%, compared to $3.2 billion in the same quarter last year [2] - Over the last four quarters, Unum has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Group 2: Stock Performance and Outlook - Unum shares have increased by approximately 8.2% since the beginning of the year, contrasting with a -6% decline in the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $2.26 on revenues of $3.35 billion, and for the current fiscal year, it is $9 on revenues of $13.35 billion [7] Group 3: Industry Context - The Insurance - Accident and Health industry, to which Unum belongs, is currently in the top 34% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Unum's stock performance [5][6]

Unum Group Statistical Supplement First Quarter 2025 TABLE OF CONTENTS (in millions of dollars, except share data and where noted) Interim Results are Unaudited Generally Accepted Accounting Principles 1 Our traditional U.S. life insurance companies are Provident Life and Accident Insurance Company, Unum Life Insurance Company of America, First Unum Life Insurance Company, Colonial Life & Accident Insurance Company, The Paul Revere Life Insurance Company, Unum Insurance Company, Provident Life and Casualty ...

Core Viewpoint - Unum Group (UNM) is expected to report improved earnings and revenue for the first quarter of 2025, with a consensus estimate of $3.3 billion in revenues and $2.19 per share in earnings, indicating year-over-year growth [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for UNM's first-quarter revenues is $3.3 billion, reflecting a 4.1% increase from the previous year [1]. - The consensus estimate for earnings is $2.19 per share, which represents a year-over-year increase of 3.3% [2]. Earnings Prediction Model - UNM has an Earnings ESP of -0.58%, as the Most Accurate Estimate of $2.17 per share is lower than the Zacks Consensus Estimate [3]. - UNM currently holds a Zacks Rank of 4 (Sell), indicating a lower likelihood of an earnings beat this quarter [3]. Premium Income and Investment Income - The Zacks Consensus Estimate for premium income is $2.7 billion, suggesting a 5.3% increase from the year-ago quarter [4]. - Net investment income is estimated at $500.5 million, with the Zacks Consensus Estimate at $532 million, indicating potential growth in investment performance [5]. Segment Performance - Unum U.S. and Colonial Life are expected to show strong performance driven by higher premium income and improved benefit experiences across various product lines [6]. - Estimated operating revenues for Unum U.S. are $2 billion, while Colonial Life is projected at $499.6 million [7]. Expense Considerations - Total benefits and expenses are expected to reach $2.8 billion, influenced by increased policy benefits and other operational costs [8]. - Continued share buybacks are anticipated to positively impact the bottom line [8].

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]