Unum (NYSE:UNM) Q4 2025 Earnings call February 06, 2026 08:00 AM ET Company ParticipantsChris Pyne - EVP, Group BenefitsJack Matten - VP of Equity ResearchJohn Barnidge - Managing DirectorJosh Shanker - Managing DirectorMark Till - CEO, Unum InternationalMatt Royal - Head of Investor RelationsRick McKenney - President and CEOSteve Zabel - CFOTim Arnold - EVP, Voluntary Benefits and President, Colonial LifeTom Gallagher - Senior Managing DirectorWes Carmichael - Executive Director of U.S. Life InsuranceConfe ...

Unum (NYSE:UNM) Q4 2025 Earnings call February 06, 2026 08:00 AM ET Speaker8Hello, and welcome to the Unum Group Fourth Quarter 2025 Results and 2026 Outlook. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, press Star one again, and please limit to ...

Wall Street analysts forecast that Unum (UNM) will report quarterly earnings of $2.11 per share in its upcoming release, pointing to a year-over-year increase of 3.9%. It is anticipated that revenues will amount to $3.27 billion, exhibiting an increase of 1.4% compared to the year-ago quarter.Over the last 30 days, there has been a downward revision of 0.4% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their i ...

Core Insights - Unum Group (UNM) is expected to report second-quarter 2025 earnings on July 29, with anticipated improvements in both revenue and earnings compared to the previous year [1][2] - The Zacks Consensus Estimate for UNM's first-quarter revenues is $3.32 billion, reflecting a 2.4% growth year-over-year [1] - The consensus estimate for earnings is $2.23 per share, indicating a year-over-year increase of 3.2% despite a recent downward adjustment of 8 cents in the past 30 days [2] Earnings Prediction Model - The current Earnings ESP for UNM is -0.79%, as the Most Accurate Estimate of $2.21 is lower than the Zacks Consensus Estimate of $2.23, indicating uncertainty in predicting an earnings beat [3] - UNM holds a Zacks Rank of 3, suggesting a hold position [4] Factors Influencing Q2 Results - Premium income is projected at $2.7 billion, representing a 3% increase from the previous year, driven by favorable persistency and improved sales across operating segments [5] - Net investment income is estimated at $543.7 million, supported by higher miscellaneous investment income and increased invested assets, compared to the Zacks Consensus Estimate of $524 million [6] - Performance in Unum U.S. and Colonial Life is expected to benefit from higher premium income and improved benefit experiences across various product lines [7] Segment Revenue Estimates - Unum US operating revenues are estimated at $2 billion, while Colonial Life is projected at $501 million [8] - Unum International is expected to generate $290.2 million in operating revenues, benefiting from expansion and improved performance in its product lines [8] Expense Considerations - Total benefits and expenses are anticipated to reach $2.8 billion, influenced by increased policy benefits, commissions, and other costs [10] - Continued share buybacks are likely to positively impact the bottom line [10]

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]