Financial Data and Key Metrics Changes - The second quarter adjusted after-tax operating income per share was $2.07, down from $2.16 in the same period last year, reflecting earnings pressure [21] - Core operations premium growth was 4.6% in the quarter, keeping the company on track to achieve its full-year premium growth outlook of 3% to 6% [21][36] - The company now expects full-year EPS to be approximately $8.5, a notable shift compared to earlier expectations [17][36] Business Line Data and Key Metrics Changes - Unum U.S. segment produced adjusted operating income of $318.2 million in 2025 compared to $357.5 million in 2024 [22] - Group Disability adjusted operating earnings were $124.8 million in 2025, reflecting a benefit ratio of 62.2%, up from 59.1% in the previous year [23] - Colonial Life segment adjusted operating income increased to $117.4 million, driven by premium growth of 3.6% [30] Market Data and Key Metrics Changes - International premiums showed strong growth, with Unum UK generating premium growth of 10% year-over-year in the second quarter [29] - The benefit ratio for Unum UK was 75%, up from 69.5% a year ago, primarily due to inflation differences [29] - Group persistency was reported at 89.7%, increasing sequentially from the first quarter but decreasing from 94% in the same period last year [28] Company Strategy and Development Direction - The company is focused on reducing its long-term care (LTC) exposure while enhancing its core business operations [15][17] - Recent acquisitions include a small block of group business in the UK and a technology solution to enhance the digital platform [19][20] - The company aims to maintain a robust capital position, ending the quarter with $2 billion in holding company cash and a 485% risk-based capital ratio [18][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that results fell short of expectations, particularly in GAAP earnings, but core fundamentals remain solid [8][10] - The company expects sales growth to improve in the second half of the year, despite a slower start [10][36] - Management remains cautiously optimistic about the rest of 2025, citing strong capital generation and premium growth [40] Other Important Information - The company announced a 10% increase in its annual common stock dividend and repurchased $300 million in shares during the second quarter [20] - The LTC net premium ratio was 94.9%, higher than the reported 93.7% in the same year-ago period [31] - The company is actively looking for further opportunities to reduce the size of its LTC footprint [82] Q&A Session Summary Question: Can you unpack the underlying drivers of the elevated claims in group disability? - Management noted that recoveries have been below expectations, with a stable experience in the first two quarters, and higher than expected claim sizes in the second quarter [45][46] Question: Is the lower claimant mortality in LTC a one-off or a normal volatility? - Management views the current quarter's results as an anomaly, with expectations that the volatility will not persist into the back half of the year [55][56] Question: How should we think about the upcoming annual actuarial assumption review? - Management indicated that the GAAP assumption review will be completed in the third quarter, taking into account recent experience [61] Question: Given the excess capital position, why not more buybacks? - Management emphasized a sustainable approach to capital deployment, with plans to return capital to shareholders through dividends and share repurchases [66][68] Question: What are the dynamics behind plans staying with existing carriers? - Management noted that the competitive environment favors incumbent carriers, with companies wanting to protect their blocks due to favorable conditions [87][90]