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 [20] - Full year EPS is now expected to be approximately $8.5, a notable shift compared to earlier expectations [14][39] - Core operations premium growth was 4.6% in the quarter, keeping the company on track to achieve a full year premium growth outlook of 3% to 6% [20] 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 [20] - 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 [21] - Colonial Life segment adjusted operating income increased to $117.4 million, driven by premium growth of 3.6% [28] Market Data and Key Metrics Changes - International premiums showed strong growth, with Unum UK generating a 10% premium growth year-over-year in the second quarter [27] - Persistency in Unum UK was 91.6%, higher than both the first quarter and the same period last year [27] - The overall persistency for Unum U.S. was 89.7%, which increased sequentially from the first quarter but decreased from 94% in the same period last year [26] Company Strategy and Development Direction - The company is focused on reducing its exposure to legacy long-term care (LTC) while positioning itself as a leading employee benefits provider [13][14] - Recent acquisitions in the UK and the U.S. are aimed at enhancing digital capabilities and scaling the business [15][16] - The company plans to continue investing in areas that support growth and improve capital efficiency [17] 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 [5] - The company expects sales growth to improve in the second half of the year, despite a slower start in 2025 [7] - Management remains cautiously optimistic about the rest of 2025, citing strong capital generation and a robust capital position [39] 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 [18] - The alternative investment portfolio yielded 7% this quarter, slightly below the long-term target of 8% to 10% [12][30] - The company is actively looking for further opportunities to reduce the size of its LTC footprint [80] Q&A Session Summary Question: What are the underlying drivers of elevated claims in group disability? - Management noted that recoveries have been slightly below expectations, with a stable experience in the first two quarters, and they expect a benefit ratio of around 62% for the year [46][48] Question: Is the lower claimant mortality a one-off or a normal volatility? - Management views the current quarter's results as an anomaly and does not expect continued pressure in the back half of the year [54] Question: How should we think about sustainable free cash flow conversion? - Management emphasized strong capital generation and plans to return capital to shareholders through dividends and share repurchases, maintaining a focus on sustainable capital deployment [62][66]