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]

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].