Unum(UNM) - 2025 Q2 - Quarterly Results

Financial Highlights Q2 2025 saw premium income growth, but net income and adjusted operating return on equity declined, while the risk-based capital ratio improved Consolidated U.S. GAAP Results (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Premium Income | $2,748.0 | $2,627.2 | $5,450.9 | $5,237.5 | | Adjusted Operating Revenue | $3,379.1 | $3,243.8 | $6,677.5 | $6,445.3 | | Total Revenue | $3,361.4 | $3,233.4 | $6,453.0 | $6,433.7 | | Net Income | $335.6 | $389.5 | $524.7 | $784.7 | | Net Income Per Share (Diluted) | $1.92 | $2.05 | $2.97 | $4.09 | - The weighted average risk-based capital ratio for traditional U.S. life insurance companies was approximately 485% as of June 30, 2025, an increase from ~470% a year prior[5] Adjusted Operating Return on Equity by Segment | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Unum US | 22.5% | 25.5% | 22.6% | 26.3% | | Unum International | 17.4% | 17.6% | 16.1% | 16.0% | | Colonial Life | 18.6% | 20.1% | 18.7% | 20.0% | | Consolidated | 11.3% | 13.1% | 11.4% | 13.2% | Capital Metrics Book value per share increased, share repurchases were substantial, the leverage ratio rose, and holding company liquidity improved Book Value Per Share | Metric | 6/30/2025 | 6/30/2024 | | :--- | :--- | :--- | | Total Stockholders' Equity (Book Value) | $65.76 | $55.63 | | Excluding AOCI | $77.62 | $70.76 | - The company repurchased 3.8 million shares at a cost of $303.3 million in Q2 2025, compared to 3.5 million shares for $179.8 million in Q2 2024[6] - The leverage ratio stood at 23.0% as of June 30, 2025, up from 21.8% a year earlier. Holding company liquidity increased to $1,956 million from $1,281 million over the same period[6] Ratings The company maintains stable credit and financial strength ratings from major agencies including AM Best, Fitch, Moody's, and S&P Unum Group Credit and Financial Strength Ratings | Agency | Senior Unsecured Debt | Financial Strength (Provident Life) | Outlook | | :--- | :--- | :--- | :--- | | AM Best | bbb+ | A | Stable | | Fitch | BBB | A | Positive | | Moody's | Baa2 | A2 | Stable | | S&P | BBB | A | Stable | Consolidated Financial Statements The consolidated financial statements provide an overview of the company's income and balance sheet performance across reporting periods Consolidated Statements of Income Q2 2025 total revenue increased, driven by premium income, but net income declined due to significantly higher policy benefits Consolidated Income Statement Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Premium Income | $2,748.0 | $2,627.2 | | Total Revenue | $3,361.4 | $3,233.4 | | Policy Benefits | $1,976.1 | $1,809.5 | | Total Benefits and Expenses | $2,944.4 | $2,737.9 | | Net Income | $335.6 | $389.5 | Consolidated Balance Sheets Total assets increased to $62.8 billion and stockholders' equity grew to $11.3 billion as of June 30, 2025, driven by retained earnings Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Investments | $45,689.8 | $45,706.3 | | Total Assets | $62,843.8 | $61,959.3 | | Total Liabilities | $51,523.8 | $50,998.2 | | Total Stockholders' Equity | $11,320.0 | $10,961.1 | - The segment balance sheet shows Unum US and the Closed Block hold the largest portions of total assets, with $14.8 billion and $33.3 billion respectively as of June 30, 2025[24] Sales Data by Segment Sales performance across Unum US, Unum International, and Colonial Life segments is presented, highlighting product and regional trends Unum US Segment Sales Unum US segment sales decreased 16.2% to $262.4 million in Q2 2025, with broad declines in Group Long-term Disability and Voluntary Benefits Unum US Sales by Product (in millions) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Group Long-term Disability | $45.1 | $64.8 | (30.4)% | | Group Short-term Disability | $39.3 | $42.3 | (7.1)% | | Group Life and AD&D | $77.2 | $81.9 | (5.7)% | | Voluntary Benefits | $62.2 | $79.5 | (21.8)% | | Total Sales | $262.4 | $313.2 | (16.2)% | Unum International Segment Sales Unum International sales increased 1.1% to $65.0 million in Q2 2025, primarily due to 64.0% growth in Unum Poland, despite Unum UK's decline Unum International Sales (in millions) | Region | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Unum UK (USD) | $50.9 | $55.7 | (8.6)% | | Unum Poland (USD) | $14.1 | $8.6 | 64.0% | | Total Sales (USD) | $65.0 | $64.3 | 1.1% | - In local currency, Unum UK sales decreased by 13.5% to £38.3 million in Q2 2025 from £44.3 million in Q2 2024[14] Colonial Life Segment Sales Colonial Life segment sales increased 2.9% to $126.5 million in Q2 2025, with growth across all product lines, including 4.0% in Cancer and Critical Illness Colonial Life Sales by Product (in millions) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Accident, Sickness, and Disability | $78.0 | $75.8 | 2.9% | | Life | $30.5 | $29.8 | 2.3% | | Cancer and Critical Illness | $18.0 | $17.3 | 4.0% | | Total Sales | $126.5 | $122.9 | 2.9% | Financial Results by Segment Detailed financial performance and key metrics for each operating segment are presented in this section Segment Overview Q2 2025 adjusted operating revenue grew 4.2%, but income before tax and net investment loss fell 14.1%, mainly due to Unum US and Closed Block declines Adjusted Operating Revenue by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Unum US | $2,011.7 | $1,947.2 | 3.3% | | Unum International | $317.6 | $267.3 | 18.8% | | Colonial Life | $505.0 | $486.9 | 3.7% | | Closed Block | $512.8 | $527.7 | (2.8)% | | Total | $3,379.1 | $3,243.8 | 4.2% | Income (Loss) Before Income Tax and Net Investment Loss by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Unum US | $318.2 | $357.5 | (11.0)% | | Unum International | $41.6 | $42.5 | (2.1)% | | Colonial Life | $117.4 | $116.9 | 0.4% | | Closed Block | $(10.8) | $34.3 | (131.5)% | | Corporate | $(31.7) | $(45.3) | (30.0)% | Quarterly Historical Financial Results by Segment Q2 2025 adjusted operating revenue increased sequentially, but income before tax and net investment loss decreased, mainly from the Closed Block segment Quarterly Income (Loss) Before Income Tax and Net Investment Loss (in millions) | Segment | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Unum US | $318.2 | $329.1 | $333.2 | | Unum International | $41.6 | $38.7 | $37.6 | | Colonial Life | $117.4 | $115.7 | $122.7 | | Closed Block | $(10.8) | $8.0 | $12.5 | | Total | $434.7 | $450.4 | $455.6 | Unum US Segment Unum US adjusted operating income declined to $318.2 million in Q2 2025, primarily due to a higher benefit ratio of 60.7%, despite premium income growth Unum US Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Premium Income | $1,798.6 | $1,730.9 | | Adjusted Operating Income | $318.2 | $357.5 | | Benefit Ratio | 60.7% | 58.2% | Unum US Group Disability Group Disability adjusted operating income declined to $124.8 million in Q2 2025, primarily from a benefit ratio increase to 62.2%, with flat premium income Group Disability Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | $797.1 | $797.8 | | Adjusted Operating Income | $124.8 | $153.2 | | Benefit Ratio | 62.2% | 59.1% | Unum US Group Life and Accidental Death & Dismemberment Group Life and AD&D adjusted operating income declined to $70.2 million in Q2 2025, as the benefit ratio rose to 69.7%, outweighing premium income growth Group Life and AD&D Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | $519.2 | $493.9 | | Adjusted Operating Income | $70.2 | $89.1 | | Benefit Ratio | 69.7% | 65.4% | Unum US Supplemental and Voluntary Supplemental and Voluntary adjusted operating income rose to $123.2 million in Q2 2025, driven by 9.8% growth in total premium income to $482.3 million Supplemental and Voluntary Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | $482.3 | $439.2 | | Adjusted Operating Income | $123.2 | $115.2 | | Adjusted Operating Income Ratio | 25.5% | 26.2% | Unum International Segment Unum International adjusted operating income was flat at $41.6 million in Q2 2025, with 18.5% premium income growth offset by increased policy benefits Unum International Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Premium Income | $271.1 | $228.8 | | Adjusted Operating Income | $41.6 | $42.5 | Unum UK Unum UK's adjusted operating income (local currency) declined to £29.4 million in Q2 2025, as the benefit ratio rose to 75.0%, despite 10.0% premium income growth Unum UK Financial Summary (in millions of pounds) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | £166.9 | £151.8 | | Adjusted Operating Income | £29.4 | £32.5 | | Benefit Ratio | 75.0% | 69.5% | Colonial Life Segment Colonial Life segment maintained stable adjusted operating income of $117.4 million in Q2 2025, with 3.6% premium income growth and a steady 48.3% benefit ratio Colonial Life Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | $462.1 | $446.2 | | Adjusted Operating Income | $117.4 | $116.9 | | Benefit Ratio | 48.3% | 47.8% | Closed Block Segment Closed Block segment results deteriorated significantly, with adjusted operating income falling to $3.9 million and a $10.8 million pre-tax loss in Q2 2025 due to higher policy benefits Closed Block Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Premium Income | $216.2 | $221.3 | | Income (Loss) Before Income Tax | $(10.8) | $34.3 | | Adjusted Operating Income | $3.9 | $51.6 | Corporate Segment Corporate segment's adjusted operating loss improved to $31.7 million in Q2 2025, driven by net investment income more than doubling to $32.3 million Corporate Segment Financial Summary (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Investment Income | $32.3 | $14.3 | | Adjusted Operating Loss | $(31.7) | $(45.3) | Investments The company's investment portfolio details asset allocation, yield, duration, and credit quality, highlighting fixed maturity securities - As of June 30, 2025, the investment portfolio is dominated by fixed maturity securities, which have a fair value of $36.0 billion. The portfolio has an earned book yield of 4.47% and an average duration of 8.17 years[57] - The quality of the fixed maturity securities portfolio remains high, with 96.0% rated 'Baa' or better based on fair value[57] - The fixed maturity securities portfolio had a net unrealized loss of $2.0 billion as of June 30, 2025. The largest unrealized losses were in the U.S. Government & Municipalities and Consumer Non-Cyclical sectors[59] Appendix to Statistical Supplement The appendix details significant financial items and reconciles non-GAAP financial measures to their GAAP equivalents Significant Items Major financial events are outlined, including a $175.9 million net investment loss in Q1 2025 from a reinsurance transaction and 2024 reserve assumption updates - In 2025, the company recorded a net investment loss of $175.9 million pre-tax in Q1 and $8.5 million pre-tax in Q2 related to an anticipated reinsurance transaction with Fortitude Reinsurance Company Ltd[62] - In Q3 2024, the company had reserve assumption updates resulting in a net reserve decrease of $357.4 million before tax[65] Non-GAAP Financial Measures Non-GAAP measures, such as adjusted operating revenue and after-tax adjusted operating income, are used to clarify business trends, with detailed reconciliations provided - The company believes non-GAAP measures like 'after-tax adjusted operating income' are better indicators of profitability and underlying business trends by excluding volatile or non-recurring items[67] - Key exclusions from GAAP net income to arrive at after-tax adjusted operating income include: net investment gains/losses, amortization of the cost of reinsurance, non-contemporaneous reinsurance, and reserve assumption updates[72][88][91] - Detailed reconciliation tables are provided to bridge GAAP measures like Total Revenue and Net Income to non-GAAP measures like Adjusted Operating Revenue and After-tax Adjusted Operating Income[74][76][88]