Unum Group

Previous wording

For the first quarter of 2024, we reported net income of $395.2 million, or $2.04 per diluted common share, compared to net income of $358.3 million, or $1.80 per diluted common share, in the first quarter of 2023.

Current wording

For the second quarter of 2024, we reported net income of $389.5 million, or $2.05 per diluted common share, compared to net income of $392.9 million, or $1.98 per diluted common share, in the second quarter of 2023. For the first six months of 2024, we reported net income of $784.7 million, or $4.09 per diluted common share, compared to net income of $751.2 million, or $3.78 per diluted common share in the same period of 2023.

Previous wording

•A net investment loss of $1.2 million before tax and $0.8 million after tax, with a de minimis impact on earnings per diluted common share;

Current wording

•A net investment loss of $10.4 million before tax and $8.2 million after tax, or $0.04 per diluted common share;

Previous wording

•Amortization of the cost of reinsurance of $10.4 million before tax and $8.2 million after tax, or $0.04 per diluted common share; and,

Current wording

•Amortization of the cost of reinsurance of $10.3 million before tax and $8.2 million after tax, or $0.04 per diluted common share; and

Previous wording

•Non-contemporaneous reinsurance of $7.3 million before tax and $5.7 million after tax, or $0.03 per diluted common share.

Current wording

•Non-contemporaneous reinsurance of $7.0 million before tax and $5.5 million after tax, or $0.03 per diluted common share.

Previous wording

•A net investment gain of $0.1 million before tax and $0.1 million after tax, with a de minimis impact on earnings per diluted common share;

Current wording

•A net investment gain of $0.9 million before tax and $0.7 million after tax, with a de minimis impact on earnings per diluted common share;

Previous wording

Excluding these items, after-tax adjusted operating income for the first quarter of 2024 was $409.9 million, or $2.12 per diluted common share compared to $372.6 million, or $1.87 per diluted common share, for the first quarter of 2023. See "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 for further discussion and a reconciliation of these items.

Current wording

Excluding these items, after-tax adjusted operating income for the second quarter of 2024 was $411.4 million, or $2.16 per diluted common share compared to $408.8 million, or $2.06 per diluted common share, for the same period of 2023. After-tax adjusted operating income was $821.3 million, or $4.28 per diluted common share, in the first six months of 2024, compared to $781.4 million, or $3.93 per diluted common share, in the first six months of 2023. See "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 for a reconciliation of these items.

Previous wording

Our Unum US segment reported adjusted operating income of $385.2 million in the first quarter of 2024 compared to $312.5 million the same period of 2023, due primarily to higher premium income and favorable benefits experience across all product lines, partially offset by higher operating expenses and commissions. The benefit ratio for our Unum US segment was 56.8 percent in the first quarter of 2024, compared to 60.8 percent in first quarter of 2023. Unum US sales decreased 0.9 percent in first quarter 2024 compared to the same period of 2023.

Current wording

Our Unum US segment reported adjusted operating income of $357.5 million and $742.7 million in the second quarter and first six months of 2024, respectively, compared to $343.1 million and $655.6 million in the same periods of 2023, due to favorable benefits experience across most product lines as well as an increase in premium income, partially offset by higher operating expenses and commissions. The benefit ratio for our Unum US segment was 58.2 percent and 57.5 percent in the second quarter and first six months of 2024, respectively, compared to 59.9 percent and 60.4 percent in second quarter and first six months of 2023, respectively. Unum US sales decreased 0.4 percent and 0.7 percent in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023.

Previous wording

Our Unum International segment reported adjusted operating income of $37.4 million in the first quarter of 2024 compared to $38.4 million the same period of 2023. Our Unum UK line of business reported adjusted operating income of £28.2 million in the first quarter of 2024 compared to £31.0 million the same period of 2023 due to lower net investment income and higher operating expenses, partially offset by higher premium income and favorable benefits experience. The benefit ratio for our Unum UK line of business was 68.1 percent in the first quarter of 2024, compared to 68.5 percent in the same period of 2023. Unum International sales, as measured in U.S. dollars, decreased 0.4 percent in the first quarter of 2024 compared to the same period of 2023. Unum UK sales, as measured in local currency, decreased 3.3 percent in the first quarter of 2024 compared to the same period of 2023.

Current wording

Our Unum International segment reported adjusted operating income of $42.5 million and $79.9 million in the second quarter and first six months of 2024, respectively, compared to $43.5 million and $81.9 million in the same periods of 2023. Our Unum UK line of business reported adjusted operating income of £32.5 million and £60.7 million in the second quarter and first six months of 2024, respectively, compared to £34.3 million and £65.3 million in the same periods of 2023, primarily due to lower net investment income, partially offset by higher premium income and favorable benefits experience. The benefit ratio for our Unum UK line of business was 69.5 percent and 68.8 percent in the second quarter and first six months of 2024, respectively, compared to 72.3 percent and 70.5 percent in the same periods of 2023. Unum International sales, as measured in U.S. dollars, increased 6.1 percent and 3.3 percent in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023. Unum UK sales, as measured in local currency, increased 5.7 percent and 1.9 percent in the second quarter and first six months of 2024, respectively, relative to the same periods of 2023.

Previous wording

Our Colonial Life segment reported adjusted operating income of $113.7 million in the first quarter of 2024 compared to $93.9 million the same period of 2023, due primarily to higher premium income and favorable benefits experience, partially offset by higher commissions and amortization of deferred acquisition cost. The benefit ratio for Colonial Life was 48.6 percent in the first quarter of 2024, compared to 53.0 percent in the same period of 2023. Colonial Life sales decreased 3.6 percent in the first quarter of 2024 compared to the same period of 2023.

Current wording

Our Colonial Life segment reported adjusted operating income of $116.9 million and $230.6 million in the second quarter and first six months of 2024, respectively, compared to $115.5 million and $209.4 million in the same periods of 2023, primarily due to higher premium income and favorable benefits experience, partially offset by higher amortization of deferred acquisition costs and higher commissions. The benefit ratio for Colonial Life was 47.8 percent and 48.2 percent in the second quarter and first six months of 2024, respectively, compared to 48.3 percent and 50.7 percent in the same periods of 2023. Colonial Life sales increased 0.7 percent in the second quarter of 2024 and decreased 1.3 percent during the first six months of 2024 compared to the same periods of 2023.

Previous wording

Our Closed Block segment reported income before income tax and net investment gains and losses of $6.7 million in the first quarter of 2024 compared to $39.9 million in the same period of 2023, which include the amortization of the cost of reinsurance and the impact of non-contemporaneous reinsurance related to the Closed Block individual disability reinsurance transaction. Excluding these items, our Closed Block segment reported adjusted operating income of $24.3 million in the first quarter of 2024, compared to $58.2 million in the same period of 2023, due to unfavorable benefit experience and higher operating expenses, partially offset by higher net investment income. The net premium ratio for long-term care increased to 93.8 percent at March 31, 2024 from 85.3 percent at March 31, 2023.

Current wording

Our Closed Block segment reported income before income tax and net investment gains and losses of $34.3 million and $41.0 million in the second quarter and first six months of 2024, respectively, compared to $30.3 million and $70.2 million in the same periods of 2023, all of which include the amortization of the cost of reinsurance and the impact of non-contemporaneous reinsurance related to the Closed Block individual disability reinsurance transaction. Excluding these items, our Closed Block segment reported adjusted operating income of $51.6 million in the second quarter of 2024, compared to $51.2 million in the same period of 2023, due primarily to an increase in net investment income, mostly offset by elevated benefits in our long-term care product line. Our Closed Block segment reported adjusting operating income of $75.9 million in the first six months of 2024, compared to $109.4 million in the same period of 2023, due primarily to higher benefits in the long-term care product line, partially offset by an increase in net investment income. The net premium ratio for long-term care increased to 93.7 percent at June 30, 2024 from 86.1 percent at June 30, 2023.

Previous wording

A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings. Alternatively, a declining interest rate environment could negatively impact our yields on new investments, but could also reduce unrealized losses in our current holdings. As of March 31, 2024, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost. The net unrealized loss on our fixed maturity securities was $2.1 billion at March 31, 2024, compared to $1.6 billion at December 31, 2023, with the increase due primarily to an increase in U.S. Treasury rates. The earned book yield on our investment portfolio was 4.35 percent for the first three months of 2024 compared to a yield of 4.45 percent for full year 2023.

Current wording

A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings. Alternatively, a declining interest rate environment could negatively impact our yields on new investments, but could also reduce unrealized losses in our current holdings. As of June 30, 2024, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost. The net unrealized loss on our fixed maturity securities was $2.6 billion at June 30, 2024, compared to $1.6 billion at December 31, 2023, with the increase due primarily to an increase in U.S. Treasury rates. The earned book yield on our investment portfolio was 4.44 percent for the first six months of 2024 compared to a yield of 4.45 percent for full year 2023.

Previous wording

Additionally, a rising interest rate environment could result in reserve decreases while a declining interest rate environment could result in reserve increases, specific to our liability for future policy benefits, as the reserve discount rate assumptions used in the calculation of our liability are updated at each reporting date using a yield that is reflective of an upper-medium grade fixed income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities. The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the increase in U.S. Treasury rates during thefirst quarter of 2024, resulted in a decrease to the liability for future policy benefits, net of reinsurance, of approximately $1.1 billion.

Current wording

Additionally, a rising interest rate environment could result in reserve decreases while a declining interest rate environment could result in reserve increases, specific to our liability for future policy benefits, as the reserve discount rate assumptions used in the calculation of our liability are updated at each reporting date using a yield that is reflective of an upper-medium grade fixed income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities. The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the increase in U.S. Treasury rates during the first six months of 2024, resulted in a decrease to the liability for future policy benefits, net of reinsurance, of approximately $1.7 billion.

Previous wording

We believe our capital and financial positions are strong. At March 31, 2024, the risk-based capital (RBC) ratio for our traditional U.S. insurance subsidiaries, calculated on a weighted average basis using the NAIC Company Action Level formula, was approximately 440 percent, which is in line with our expectation. We repurchased 2.5 million shares and 1.3 million shares of Unum Group common stock under our share repurchase program during the first quarter of 2024 and 2023, respectively, at a cost of $123.0 million and $53.6 million, respectively, including commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 193.3 million and 199.5 million for the first quarter of 2024 and 2023, respectively. As of March 31, 2024, Unum Group and our intermediate holding companies had available holding company liquidity of $1,406 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset backed securities. See Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.

Current wording

We believe our capital and financial positions are strong. At June 30, 2024, the risk-based capital (RBC) ratio for our traditional U.S. insurance subsidiaries, calculated on a weighted average basis using the NAIC Company Action Level formula, was approximately 470 percent, which is above our long-term expectation. We repurchased 6.0 million shares and 2.4 million shares of Unum Group common stock under our share repurchase program, during the first six months of 2024 and 2023, respectively, at a cost of $302.8 million and $100.6 million, respectively, including commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 190.3 million and 198.1 million for the second quarters of 2024 and 2023, respectively, and 191.9 million and 198.8 million for the first six months of 2024 and 2023, respectively. As of June 30, 2024, Unum Group and our intermediate holding companies had available holding company liquidity of $1,281.0 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds and asset backed securities. See Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.

Previous wording

In August 2022, the Inflation Reduction Act (IRA) was signed into law in the U.S. and includes certain corporate tax provisions effective January 1, 2023. The IRA imposes a new 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income (AFSI) on corporations that have average AFSI over $1.0 billion in any prior three-year period, starting with years 2020 to 2022. Our company is an applicable corporation. We have not recorded any CAMT as of March 31, 2024. We do not expect that any CAMT incurred would impact earnings since it would be offset with a credit toward regular income tax in subsequent years. The IRA also imposes a one percent excise tax on the fair market value of corporate stock repurchases after December 31, 2022. This excise tax is recorded as part of the cost basis of treasury stock and is assessed on the fair market value of stock repurchases, reduced by the fair value of any shares issued during the period. We have recorded $1.1 million and $0.1 million of excise tax in stockholders' equity, as part of the cost basis of treasury stock, as of March 31, 2024 and March 31, 2023, respectively.

Current wording

In August 2022, the Inflation Reduction Act (IRA) was signed into law in the U.S. and includes certain corporate tax provisions effective January 1, 2023. The IRA imposes a new 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income (AFSI) on corporations that have average AFSI over $1.0 billion in any prior three-year period, starting with years 2020 to 2022. Our company is an applicable corporation. We have not recorded any CAMT as of June 30, 2024. We do not expect that any CAMT incurred would impact earnings since it would be offset with a credit toward regular income tax in subsequent years. The IRA also imposes a one percent excise tax on the fair market value of corporate stock repurchases after December 31, 2022. This excise tax is recorded as part of the cost basis of treasury stock and is assessed on the fair market value of stock repurchases, reduced by the fair value of any shares issued during the period. We have recorded $1.7 million and $0.4 million of excise tax in stockholders' equity, as part of the cost basis of treasury stock, for the second quarter of 2024 and 2023, respectively, and $2.8 million and $0.5 million for the first six months of 2024 and 2023, respectively.

Previous wording

We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S generally accepted accounting principles (GAAP). The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, and reserve assumption updates as well as certain other items as specified in the reconciliations below. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.

Current wording

We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP). The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, and reserve assumption updates as specified in the reconciliations below. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.

Previous wording

We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, reserve assumption updates, as well as certain other items as specified in the reconciliations below. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.

Current wording

We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, and reserve assumption updates as specified in the reconciliations below. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.

Previous wording

The accounting estimates deemed to be most critical to our financial position and results of operations are those related to the liability for future policy benefits, valuation of investments, pension and postretirement benefit plans, income taxes, and contingent liabilities. There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2024.

Current wording

The accounting estimates deemed to be most critical to our financial position and results of operations are those related to the liability for future policy benefits, fair value of investments, pension and postretirement benefit plans, income taxes, and contingent liabilities. There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2024.

Previous wording

The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.266 and 1.213 for the three months ended March 31, 2024 and 2023, respectively. If the first quarter 2023 results for our U.K. operations had been translated at the higher exchange rate of 2024, our adjusted operating revenue and adjusted operating income by segment would have both been higher by approximately $8 million and $2 million, respectively, in the first quarter of 2023. However, it is important to distinguish between translating and converting foreign currency. Except for a limited number of transactions, we do not actually convert pounds into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K.

Current wording

The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.265 and 1.257 for the three months ended June 30, 2024 and 2023, and 1.265 and 1.236 for the six months ended June 30, 2024 and 2023, respectively. If the 2023 results for our U.K. operations had been translated at the weighted average exchange rates of 2024, our adjusted operating revenue would have been higher by approximately $2 million and $10 million, respectively, in the second quarter and first six months of 2023 and our adjusted operating income would have been generally consistent and approximately $2 million higher, respectively, for the second quarter and first six months of 2023. However, it is important to distinguish between translating and converting foreign currency. Except for a limited number of transactions, we do not actually convert pounds into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K.

Previous wording

Premium income increased in the first quarter of 2024 relative to the same period of 2023 in each of our principal operating business segments, primarily due to favorable persistency and higher prior period sales. Premium income continues to decline, as expected, in our Closed Block segment.

Current wording

Premium income increased in each of our principal operating segments in the second quarter and first six months of 2024 compared to the same periods of 2023, primarily due to favorable persistency and higher prior period sales. Premium income continues to decline, as expected, in our Closed Block segment.

Previous wording

Net investment income was slightly higher in the first quarter of 2024 compared to the same period of 2023 with an increase in the level of invested assets and higher miscellaneous investment income, primarily related to larger increases in the net asset values (NAV) on our private equity partnerships, mostly offset by lower investment income from inflation index-linked bonds held by Unum UK.

Current wording

Net investment income was higher in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to higher miscellaneous investment income, primarily related to larger increases in the net asset value (NAV) on our private equity partnerships, and an increase in the level of invested assets, partially offset by lower investment income from inflation index-linked bonds held by Unum UK.

Previous wording

We did not recognize any credit losses on fixed maturity securities during the first quarters of 2024 or 2023. Included in net investment gains and losses were changes in the fair value of an embedded derivative in a modified coinsurance arrangement, which resulted in gains of $6.1 million and $0.3 million in the first quarter of 2024 and 2023, respectively. The changes in the embedded derivative are primarily driven by movements in credit spreads in the overall investment market. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information on investment gains and losses.

Current wording

Our investment gains and losses on fixed maturity securities include net losses on sales of $5.4 million and $10.3 million in the second quarter of 2024 and 2023, respectively, and $21.2 million and $10.0 million in the first six months of 2024 and 2023, respectively. Credit and impairment losses on fixed maturity securities were $4.1 million during the second quarter and first six months of 2024. We did not recognize any credit or impairment losses on fixed maturity securities during the second quarter or first six months of 2023. Also included in net investment gains and losses were changes in the fair value of an embedded derivative in a modified coinsurance arrangement, which resulted in investment gains of $0.8 million and $5.2 million in the second quarters of 2024 and 2023, respectively, and $6.9 million and $5.5 million in the first six months of 2024 and 2023, respectively. The changes in the embedded derivative are primarily driven by movements in credit spreads in the overall investment market. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information on investment gains and losses.

Previous wording

Other income is primarily comprised of fee-based service products in the Unum US segment, which include leave management services and administrative services only (ASO) business, and the underlying results and associated net investment income of certain assumed blocks of reinsured business in the Closed Block segment.

Current wording

Other income is primarily comprised of fee-based service products in the Unum US segment, which include leave management services and administrative services only business, and the underlying results and associated net investment income of certain assumed blocks of reinsured business in the Closed Block segment.

Previous wording

Overall benefits experience in thefirst quarter of 2024 was favorable relative to the same period of 2023 with a consolidated benefit ratio, which includes the remeasurement gain or loss, of 68.4 percent and 70.6 percent, respectively. Excluding the impact of non-contemporaneous reinsurance, the consolidated benefit ratios were 68.1 percent and 70.3 percent in the first quarter of 2024 and 2023, respectively. The benefit ratio, which includes the remeasurement gain or loss, for each of our operating business segments is discussed more fully in "Segment Results" as follows.

Current wording

Overall benefits experience was favorable in the second quarter and first six months of 2024 relative to the same periods of 2023. The consolidated benefit ratio, which includes the remeasurement gain or loss, was 68.9 percent and 68.6 percent in the second quarter and first six months of 2024, respectively, compared to 69.9 percent and 70.2 percent for the same prior year periods. Excluding the impact of non-contemporaneous reinsurance, the consolidated benefit ratio was 68.6 percent and 68.4 percent in the second quarter and first six months of 2024, respectively, compared to 69.5 percent and 69.9 percent for the same prior year periods. The underlying benefits experience for each of our operating business segments is discussed more fully in "Segment Results" as follows.

Previous wording

Commissions and the deferral of acquisition costs were higher during the first quarter of 2024 compared to the same period of 2023 primarily driven by higher prior period sales and in-force block growth in our principal operating business segments. The increase in amortization of deferred acquisition costs in the first quarter of 2024 compared to the same period of 2023 is due primarily to growth in the level of the deferred asset in our Unum US supplemental and voluntary product line and in our Colonial Life segment.

Current wording

Commissions and the deferral of acquisition costs were higher during the second quarter and first six months of 2024 compared to the same periods of 2023 driven primarily by higher prior period sales in our principal operating segments. The increase in the amortization of deferred acquisition costs in the second quarter and first six months of 2024 compared to the same periods of 2023 is due primarily to growth in the level of the deferred asset in our Colonial Life segment and in our Unum US supplemental and voluntary product lines.

Previous wording

Other expenses and compensation expense, on a combined basis, increased in the first quarter of 2024 compared to the same period of 2023 due primarily to an increase in employee-related costs, an increase in operational investments in our business, and growth in our fee-based service products.

Current wording

Other expenses and compensation expense, on a combined basis, increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to an increase in employee-related costs, an increase in operational investments in our business, and growth in our fee-based service products.

Previous wording

Premium income was higher in the first quarter of 2024 compared to the same period of 2023 driven by favorable persistency and higher prior period sales. Net investment income was lower in the first quarter of 2024 relative to the same period of 2023 due to a lower level of invested assets, partially offset by an increase in the yield on invested assets. Other income increased in the first quarter of 2024 compared to the same period of 2023 due to growth in our fee-based service products.

Current wording

Premium income was higher in the second quarter and first six months of 2024 compared to the same periods of 2023 driven by favorable persistency and higher prior period sales. Net investment income was lower in the second quarter and first six months of 2024 relative to the same periods of 2023 due to a decrease in the level of invested assets, partially offset by an increase in the yield on invested assets. Other income increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to growth in our fee-based service products.

Previous wording

Commissions and the deferral of acquisition costs were higher in the first quarter of 2024 compared to the same period of 2023 due primarily to higher prior period sales. The amortization of deferred acquisition costs increased in the first quarter of 2024 compared to the same period of 2023 primarily due to growth in the level of the deferred asset. The other expense ratio, which includes other income that is primarily related to fee-based service products, was generally consistent in the first quarter of 2024 compared to the same period of 2023.

Current wording

Commissions and the deferral of acquisition costs were higher in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to higher prior period sales. The amortization of deferred acquisition costs was higher in the second quarter and first six months of 2024 compared to the same periods of 2023 primarily due to growth in the level of the deferred asset. The other expense ratio, which includes other income that is primarily related to fee-based service products, increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to an increase in employee-related costs and growth in our fee-based service products.

Previous wording

Premium income was higher in the first quarter of 2024 compared to the same period of 2023 due to favorable persistency and higher prior period sales. Net investment income was generally consistent in the first quarter of 2024 relative to the same period of 2023.

Current wording

Premium income increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to favorable persistency and higher prior period sales. Net investment income was generally consistent in the second quarter and first six months of 2024 relative to the same periods of 2023.

Previous wording

The benefit ratio in the first quarter of 2024 was favorable compared to the same period of 2023 due to favorable incidence in the group life product line.

Current wording

The benefit ratio was favorable in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to favorable incidence in the group life product line, partially offset by higher average claim size across all product lines.

Previous wording

Commissions and deferral of acquisition costs were higher in the first quarter of 2024 compared to the same period of 2023 due to higher prior period sales. The amortization of deferred acquisition costs in the first quarter of 2024 was decreased compared to the same period of 2023 due to favorable persistency. The other expense ratio was consistent in the first quarter of 2024 compared to the same period of 2023.

Current wording

Commissions and the deferral of acquisition costs were higher in the second quarter and first six months of 2024 compared to the same period of 2023 due to higher prior period sales. The amortization of deferred acquisition costs was higher in the second quarter of 2024 compared to the same period of 2023 due primarily to increased lapses in certain cohorts. The amortization of the deferred acquisition costs was lower in the first six months of 2024 compared to the same period of 2023 due to favorable overall persistency. The other expense ratio was consistent in the second quarter and first six months of 2024 compared to the same periods of 2023.

Previous wording

Premium income was higher in the first quarter of 2024 compared to the same period of 2023 due to continued impacts from the partial recapture of a previously ceded block of business in the individual disability product line as well as higher prior period sales and favorable persistency. Net investment income was higher in the first quarter of 2024 compared to the same period of 2023 primarily due to an increase in the yield on invested assets.

Current wording

Premium income was higher in the second quarter and first six months of 2024 compared to the same periods of 2023, due to continued impacts from the partial recapture of a previously ceded block of business in the individual disability product line as well as favorable persistency and higher prior period sales in the voluntary benefits and dental and vision product lines. Net investment income increased in the second quarter and first six months of 2024 compared to the same periods of 2023 primarily due to an increase in the yield on invested assets.

Previous wording

The benefit ratio for voluntary benefits was favorable in the first quarter of 2024 compared to the same period of 2023 primarily driven by the critical illness product line. The benefit ratio for individual disability was favorable in the first quarter of 2024 compared to the same period of 2023 due primarily to favorable recoveries. The benefit ratio for dental and vision was favorable in the first quarter of 2024 compared to the same period of 2023 due primarily to lower claims incidence and average claim size.

Current wording

The benefit ratio for voluntary benefits was unfavorable in the second quarter and the first six months of 2024 compared to the same periods of 2023 due primarily to less favorable experience in the disability and critical illness and hospital indemnity product lines. The benefit ratio for the individual disability product line was favorable in the second quarter and the first six months of 2024 compared to the same periods of 2023 due primarily to favorable recoveries. The benefit ratio for the dental and vision product line was favorable in the second quarter and the first six months of 2024 compared to the same periods of 2023 due primarily to lower average claim size and claims incidence.

Previous wording

Commissions and deferral of acquisition costs were higher for the first quarter of 2024 relative to the same period of 2023 due primarily to higher prior period sales in the individual disability product line. The amortization of deferred acquisition costs increased in the first quarter of 2024 relative to the same period of 2023 due to growth in the level of the deferred asset. The other expense ratio increased in the first quarter of 2024 compared to the same period of 2023 due primarily to an increase in employee-related costs and an increase in operational investments in our business.

Current wording

Commissions and deferral of acquisition costs were higher in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to higher prior period sales in the voluntary benefits and individual disability product lines. Commissions were also higher for the second quarter and first six months of 2024 compared to the same periods of 2023 due to the continued impacts from the partial recapture of a previously ceded block of business in the individual disability product line. The amortization of deferred acquisition costs was higher in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to growth in the level of the deferred asset. The other expense ratio increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to smaller changes in the allowance for expected credit losses on premium receivable balances and an increase in employee-related costs.

Previous wording

Group sales increased during the first quarter of 2024 compared to the same period of 2023 due to higher sales to new customers in both the large case market, which we define as employee groups with more than 2,000 employees, and the core market, partially offset by lower sales to existing customers in the core market. The sales mix in the group market sector for the first three months of 2024 was approximately 58 percent core market and 42 percent large case market.

Current wording

Group sales decreased during the second quarter of 2024 compared to the same period of 2023 due to lower sales to new customers in the large case market, which we define as employee groups with greater than 2,000 employees, partially offset by higher sales to new customers in the core market. Group sales decreased during the first six months of 2024 compared to the same period of 2023 due to lower sales to new customers in the large case market and existing customers in the core market, partially offset by higher sales to new customers in the core market. The sales mix in the group market sector for the first six months of 2024 was approximately 62 percent core market and 38 percent large case market.

Previous wording

Voluntary benefits sales decreased during the first quarter of 2024 compared to the same period of 2023 due primarily to lower sales to new and existing customers in the large case market, partially offset by higher sales to new customers in the core market. Individual disability sales, which are primarily concentrated in the multi-life market, decreased in the first quarter of 2024 compared to the same period of 2023 due to lower sales to both new and existing customers. Dental and vision sales increased in the first quarter of 2024 compared to the same period of 2023 due to higher sales to new customers.

Current wording

Voluntary benefits sales increased during the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to higher sales to new customers in the large case market and higher sales to new and existing customers in the core market. Individual disability sales, which are primarily concentrated in the multi-life market, decreased in the second quarter and first six months of 2024 compared to the same periods of 2023 primarily due to lower sales to new customers. Dental and vision sales decreased during the second quarter of 2024 compared to the same period of 2023 due primarily to lower sales to new customers, mostly offset by higher sales to existing customers. Dental and vision sales increased during the first six months of 2024 compared to the same period of 2023 due to higher sales to both new and existing customers.

Previous wording

Premium income was higher in the first quarter of 2024 compared to the same period of 2023 due primarily to in-force block growth.

Current wording

Premium income was higher in the second quarter and first six months of 2024 compared to the same periods of 2023 due primarily to in-force block growth.

Previous wording

Net investment income was lower in the first quarter of 2024 relative to the same period of 2023 due to lower investment income from inflation index-linked bonds. Our investments in inflation index-linked bonds support the claim liabilities associated with certain group policies that provide for inflation-linked increases in policy benefits. The change in net investment income attributable to these index-linked bonds is partially offset by a change in policy benefits related to the inflation index-linked group long-term disability and group life policies.

Current wording

Net investment income was lower in the second quarter and first six months of 2024 compared to the same periods of 2023 primarily due to lower investment income from inflation index-linked bonds. Our investments in inflation index-linked bonds support the claim liabilities associated with certain group policies that provide for inflation-linked increases in policy benefits. The change in net investment income attributable to these index-linked bonds is partially offset by a change in policy benefits related to the inflation index-linked group long-term disability and group life policies.

Previous wording

Commissions were higher in the first quarter of 2024 relative to the same period of 2023 due primarily to in-force block growth. The deferral of acquisition costs, the amortization of deferred acquisition costs, and the other expense ratio were generally consistent during the first quarter of 2024 with the same prior year period.

Current wording

Commissions, the deferral of acquisition costs, the amortization of deferred acquisition costs, and the other expense ratio were generally consistent in the second quarter and first six months of 2024 compared to the same periods of 2023.

Previous wording

Group long-term disability sales increased in the first quarter of 2024 compared to the same period of 2023, driven by higher sales to new and existing customers in the large case market, which we define as employee groups with greater than 500 employees, partially offset by lower sales to new and existing customers in the core market.

Current wording

Group long-term disability sales decreased in the second quarter of 2024 compared to the same period of 2023, driven by lower sales to new customers in the core market, which we define as employee groups with less than 500 employees, and lower sales to existing customers in the large case market. Group long-term disability sales were higher in the first six months of 2024 compared to the same period of 2023 driven by higher sales to new and existing customers in the large case market, partially offset by lower sales to new and existing customers in the core market.

Previous wording

Supplemental sales were generally consistent in the first quarter of 2024 compared to the same period of 2023 with higher sales in the dental product line mostly offset by lower sales in the group critical illness product line.

Current wording

Supplemental sales increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to higher sales in our dental product line. Also impacting the supplemental sales comparison for the first six months of 2024 compared to the same period of 2023 is lower sales in our group critical illness line.