Unum(US:UNM)2024-01-31 17:31Financial Data and Key Metrics Changes - The company reported a 23% increase in adjusted operating EPS, reaching $7.66 compared to $6.21 in 2022 [18][26] - Full-year premium for core operations increased by 5.2%, with a fourth-quarter increase of 6.1% year-over-year [43][49] - The company ended the year with holding company cash of $1.7 billion and a risk-based capital (RBC) ratio of 415% [29][39] Business Line Data and Key Metrics Changes - Unum U.S. saw adjusted operating income increase by 39.4% to $1.36 billion, driven by strong performance in group disability, which experienced a 56.1% growth in adjusted operating earnings [49] - Colonial Life reported a sales growth of 6.2% and premium growth of 1.4% for the full year, with expectations for further growth in 2024 [53] - Unum International achieved a sales growth of 26.7% and premium growth of 11.6%, significantly exceeding initial expectations [36][52] Market Data and Key Metrics Changes - The company reported a consolidated sales growth of high-single-digits, with premium growth projected in the range of 5% to 7% for 2024 [31] - The U.K. business showed strong growth with a full-year sales increase of 18.6% and premium growth of 11.6% [52] - In Poland, sales increased by 76% and premium growth was 24.2% for the year [52] Company Strategy and Development Direction - The company aims to enhance its core operations and maintain a disciplined approach while continuing to innovate [30][32] - There is a focus on leveraging technology to improve customer experience, with initiatives like HR Connect and MyUnum [33] - The company plans to pursue selective M&A opportunities that align with its growth strategy while continuing to return capital to shareholders [38][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the supportive market backdrop and economic environment for continued growth [30][39] - The company anticipates generating free cash flow between $1.2 billion and $1.4 billion per year, with no additional capital contributions needed for long-term care in 2024 [63][70] - Management highlighted the importance of maintaining strong margins and a disciplined underwriting approach in a competitive market [100] Other Important Information - The company raised its dividend by 10% and plans to double share repurchases in 2024 with a $500 million authorization [27][39] - The effective tax rate for the fourth quarter was elevated at 22.8%, impacting EPS by approximately $0.03 [45] Q&A Session Summary Question: Core business earnings sustainability - Management believes core business earnings can be maintained, with group disability margins expected to remain stable [97][100] Question: Long-term care experience confidence - Management indicated that elevated incidence levels are likely a catch-up from low levels during the pandemic, with expectations for continued monitoring [101][103]