Unum(US:UNM)2023-11-01 20:27Financial Performance - Premium income for Q3 2023 was $2,525.9 million, a 5.7% increase from Q3 2022, and for the first nine months of 2023, it was $7,494.3 million, up 4.0% from the same period in 2022[364]. - Total revenue for Q3 2023 reached $3,092.5 million, reflecting a 4.5% increase compared to Q3 2022, and for the first nine months of 2023, total revenue was $9,240.8 million, a 2.9% increase from the prior year[364]. - Net investment income for Q3 2023 was $526.0 million, a 2.8% increase from Q3 2022, while for the first nine months, it decreased by 2.0% to $1,565.9 million compared to the same period in 2022[364][368]. - The consolidated benefit ratio for Q3 2023 was 77.1%, up from 62.9% in Q3 2022, indicating an unfavorable benefits experience[371]. - Commissions for Q3 2023 were $289.7 million, a 6.7% increase from Q3 2022, driven by higher overall sales and in-force block growth[373]. Segment Performance - The Unum US segment reported sales of $170.9 million in Q3 2023, an 8.5% increase from Q3 2022, and $762.1 million for the first nine months, an 18.1% increase from the same period in 2022[376]. - Adjusted Operating Revenue for the Unum US segment increased to $1,881.9 million in Q3 2023, a 5.9% rise from $1,776.4 million in Q3 2022[382]. - Adjusted Operating Income for the Unum US segment rose to $357.8 million in Q3 2023, a significant 27.4% increase from $280.8 million in Q3 2022[382]. - Adjusted Operating Revenue for Unum US Group Life was $491.0 million in Q3 2023, a 0.8% increase from $487.2 million in Q3 2022[387]. - Total Premium Income for Unum International increased by 21.5% to $210.6 million in Q3 2023, compared to $173.3 million in Q3 2022[407]. Investment and Financial Position - As of September 30, 2023, the total fair value of fixed maturity securities was $34,070.7 million, with net unrealized losses of $4,153.6 million[454]. - The company sold over $700 million of shorter duration bonds in Q3 2023, realizing approximately $35 million in investment losses from these sales[369]. - The carrying value of investments in private equity partnerships increased to $1,280.9 million as of September 30, 2023, from $1,194.3 million at December 31, 2022[472]. - The company has minimal exposure to policy withdrawal risk as the majority of liabilities related to insurance contracts are not interest rate sensitive[450]. - The company anticipates volatility in net investment income due to fluctuations in miscellaneous investment income and changes in market conditions[439]. Assumptions and Sensitivity Analysis - Sensitivity analysis indicates that a 10% change in claim resolution rates for the Unum US group long-term disability product line could result in a $100 million change, which is 1.8% of the liability for future policy benefits[350]. - The liability for future policy benefits is highly sensitive to key assumptions, with significant variability possible in claim costs due to long-term payout periods[355]. - The company updated policyholder lapse and mortality assumptions for DAC amortization during Q3 2023, consistent with related updates for future policy benefits[360]. - The sensitivity analysis for long-term care liabilities indicates that changes in assumptions could materially impact the present value of gross liability cash flows[353]. - The company monitors emerging experience to inform long-term assumptions, particularly for product lines with long-term claim payout periods[355]. Corporate Governance and Future Outlook - The board of directors authorized a share repurchase program of up to $500.0 million beginning January 1, 2024, with $75.9 million remaining under the current program as of September 30, 2023[480]. - The company plans to enhance digital capabilities and technology to improve customer experience and operational efficiency[400]. - The company anticipates increased adjusted operating income growth in 2023 supported by premium growth and improved claim experience[402]. - The company plans to invest in new solutions and digital capabilities to enhance customer experience and drive growth in 2023[429]. - The company has ongoing dialogue with rating agencies regarding its insurance risk profile and financial flexibility[523].