Unum Group
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
Contents
Unum US Segment
The Unum US segment is comprised of the group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. The group disability line of business includes long-term and short-term disability, medical stop-loss, and fee-based service products. The supplemental and voluntary line of business includes voluntary benefits, individual disability, and dental and vision products. These products, excluding medical stop-loss which is no longer actively marketed as of the third quarter of 2024, are marketed through our field sales personnel who work in conjunction with independent brokers and consultants.
Unum US Operating Results
Shown below are financial results for the Unum US segment. In the sections following, financial results and key ratios are also presented for the major lines of business within the segment.
| (in millions of dollars, except ratios) | ||||
|---|---|---|---|---|
| Three Months Ended March 31 | ||||
| 2025 · % Change · 2024 | ||||
| Adjusted Operating Revenue | ||||
| Premium Income | $1,780.9 | 4.3% | $1,707.4 | |
| Net Investment Income | 148.9 | (5.2) | 157.0 | |
| Other Income | 71.9 | 18.6 | 60.6 | |
| Total | 2,001.7 | 4.0 | 1,925.0 | |
| Benefits and Expenses | ||||
| Policy Benefits | 1,138.6 | 5.3 | 1,081.7 | |
| Policy Benefits - Remeasurement Gain | (75.4) | (32.9) | (112.4) | |
| Commissions | 205.6 | 12.8 | 182.2 | |
| Deferral of Acquisition Costs | (84.7) | 1.7 | (83.3) | |
| Amortization of Deferred Acquisition Costs | 65.2 | (6.6) | 69.8 | |
| Other Expenses | 423.3 | 5.4 | 401.8 | |
| Total | 1,672.6 | 8.6 | 1,539.8 | |
| Adjusted Operating Income | $329.1 | (14.6) | $385.2 | |
| Operating Ratios (% of Premium Income): | ||||
| Benefit Ratio | 59.7% | 56.8% | ||
| Other Expense Ratio1 | 23.0% | 22.8% | ||
| Adjusted Operating Income Ratio | 18.5% | 22.6% | ||
| 1Ratio of Other Expenses to Premium Income plus Unum US Group Disability Other Income, which is primarily related to fee-based services. | ||||
Unum US Group Disability Operating Results
Shown below are financial results and key performance indicators for Unum US group disability.
| (in millions of dollars, except ratios) | ||||
|---|---|---|---|---|
| Three Months Ended March 31 | ||||
| 2025 · % Change · 2024 | ||||
| Adjusted Operating Revenue | ||||
| Premium Income | ||||
| Group Long-term Disability | $504.5 | (2.4)% | $516.7 | |
| Group Short-term Disability | 278.3 | 5.8 | 263.1 | |
| Total Premium Income | 782.8 | 0.4 | 779.8 | |
| Net Investment Income | 74.0 | (4.9) | 77.8 | |
| Other Income | 56.0 | (4.6) | 58.7 | |
| Total | 912.8 | (0.4) | 916.3 | |
| Benefits and Expenses | ||||
| Policy Benefits | 528.9 | 1.4 | 521.6 | |
| Policy Benefits - Remeasurement Gain | (45.2) | (38.1) | (73.0) | |
| Commissions | 65.0 | 5.2 | 61.8 | |
| Deferral of Acquisition Costs | (16.1) | (2.4) | (16.5) | |
| Amortization of Deferred Acquisition Costs | 10.4 | (27.8) | 14.4 | |
| Other Expenses | 250.6 | 3.0 | 243.2 | |
| Total | 793.6 | 5.6 | 751.5 | |
| Adjusted Operating Income | $119.2 | (27.7) | $164.8 | |
| Operating Ratios (% of Premium Income): | ||||
| Benefit Ratio | 61.8% | 57.5% | ||
| Other Expense Ratio1 | 29.9% | 29.0% | ||
| Adjusted Operating Income Ratio | 15.2% | 21.1% | ||
| Persistency: | ||||
| Group Long-term Disability | 90.7% | 93.1% | ||
| Group Short-term Disability | 87.5% | 91.3% | ||
| 1Ratio of Other Expenses to Premium Income plus Other Income, which is primarily related to fee-based services. | ||||
Premium income was higher in the first quarter of 2025 compared to the same period of 2024 due primarily to prior period sales, partially offset by lower persistency and the decline in medical stop-loss premium. Net investment income was lower in the first quarter of 2025 relative to the same period of 2024 due to a lower level of invested assets and a decrease in the yield on invested assets. Other income, which primarily relates to fee-based service products, was generally consistent in the first quarter of 2025 compared to the same period of 2024.
The benefit ratio was unfavorable in the first quarter of 2025 compared to the same period of 2024 due to higher incidence in our long-term disability and short-term disability product lines.
Commissions were higher in the first quarter of 2025 compared to the same period of 2024 due primarily to higher prior period sales. The deferral of acquisition costs was generally consistent in the first quarter of 2025 compared to the same period of 2024. The amortization of deferred acquisition costs decreased in the first quarter of 2025 compared to the same period of 2024 primarily due to favorable lapse experience in recent issue year cohorts compared to expectations. The other expense ratio, which includes other income that is primarily related to fee-based service products, increased in the first quarter of 2025 compared to the same period of 2024 due primarily to an increase in employee related costs and operational investments in our business.
Unum US Group Life and Accidental Death and Dismemberment Operating Results
Shown below are financial results and key performance indicators for Unum US group life and accidental death and dismemberment.
| (in millions of dollars, except ratios) | ||||
|---|---|---|---|---|
| Three Months Ended March 31 | ||||
| 2025 · % Change · 2024 | ||||
| Adjusted Operating Revenue | ||||
| Premium Income | ||||
| Group Life | $466.2 | 5.3% | $442.6 | |
| Accidental Death & Dismemberment | 48.2 | 5.2 | 45.8 | |
| Total Premium Income | 514.4 | 5.3 | 488.4 | |
| Net Investment Income | 18.2 | (17.3) | 22.0 | |
| Other Income | 0.1 | (90.0) | 1.0 | |
| Total | 532.7 | 4.2 | 511.4 | |
| Benefits and Expenses | ||||
| Policy Benefits | 377.6 | 7.2 | 352.3 | |
| Policy Benefits - Remeasurement Gain | (20.9) | 9.4 | (19.1) | |
| Commissions | 47.0 | 12.7 | 41.7 | |
| Deferral of Acquisition Costs | (11.6) | 10.5 | (10.5) | |
| Amortization of Deferred Acquisition Costs | 6.1 | (11.6) | 6.9 | |
| Other Expenses | 65.3 | 6.5 | 61.3 | |
| Total | 463.5 | 7.1 | 432.6 | |
| Adjusted Operating Income | $69.2 | (12.2) | $78.8 | |
| Operating Ratios (% of Premium Income): | ||||
| Benefit Ratio | 69.3% | 68.2% | ||
| Other Expense Ratio | 12.7% | 12.6% | ||
| Adjusted Operating Income Ratio | 13.5% | 16.1% | ||
| Persistency: | ||||
| Group Life | 89.2% | 91.7% | ||
| Accidental Death & Dismemberment | 87.9% | 91.4% | ||
Premium income was higher in the first quarter of 2025 compared to the same period of 2024 due to higher sales and in-force block growth, partially offset by lower persistency. Net investment income was lower in the first quarter of 2025 relative to the same period of 2024 due to a decrease in the yield on invested assets and a decrease in the level of invested assets.
The benefit ratio in the first quarter of 2025 was unfavorable compared to the same period of 2024 due to higher incidence and higher average claim size in the accidental death and dismemberment product line.
Commissions and deferral of acquisition costs were higher in the first quarter of 2025 compared to the same period of 2024 due to higher sales. The amortization of deferred acquisition costs in the first quarter of 2025 decreased compared to the same period of 2024 due to favorable lapse experience in recent issue year cohorts compared to expectations. The other expense ratio was generally consistent in the first quarter of 2025 compared to the same period of 2024.
Unum US Supplemental and Voluntary Operating Results
Shown below are financial results and key performance indicators for Unum US supplemental and voluntary product lines.
| (in millions of dollars, except ratios) | ||||
|---|---|---|---|---|
| Three Months Ended March 31 | ||||
| 2025 · % Change · 2024 | ||||
| Adjusted Operating Revenue | ||||
| Premium Income | ||||
| Voluntary Benefits | $234.1 | 5.0% | $222.9 | |
| Individual Disability | 168.7 | 18.8 | 142.0 | |
| Dental and Vision | 80.9 | 8.9 | 74.3 | |
| Total Premium Income | 483.7 | 10.1 | 439.2 | |
| Net Investment Income | 56.7 | (0.9) | 57.2 | |
| Other Income | 15.8 | N.M. | 0.9 | |
| Total | 556.2 | 11.8 | 497.3 | |
| Benefits and Expenses | ||||
| Policy Benefits | 232.1 | 11.7 | 207.8 | |
| Policy Benefits - Remeasurement Gain | (9.3) | (54.2) | (20.3) | |
| Commissions | 93.6 | 18.9 | 78.7 | |
| Deferral of Acquisition Costs | (57.0) | 1.2 | (56.3) | |
| Amortization of Deferred Acquisition Costs | 48.7 | 0.4 | 48.5 | |
| Other Expenses | 107.4 | 10.4 | 97.3 | |
| Total | 415.5 | 16.8 | 355.7 | |
| Adjusted Operating Income | $140.7 | (0.6) | $141.6 | |
| Operating Ratios (% of Premium Income): | ||||
| Benefit Ratios: | ||||
| Voluntary Benefits | 44.1% | 33.8% | ||
| Individual Disability | 35.5% | 41.1% | ||
| Dental and Vision | 73.7% | 72.4% | ||
| Other Expense Ratio | 22.2% | 22.2% | ||
| Adjusted Operating Income Ratio | 29.1% | 32.2% | ||
| Persistency: | ||||
| Voluntary Benefits | 76.8% | 75.7% | ||
| Individual Disability | 88.2% | 89.2% | ||
| Dental and Vision | 82.2% | 80.5% | ||
| N.M. = not a meaningful percentage | ||||
Premium income was higher in the first quarter of 2025 compared to the same period of 2024 due to the impacts from the recapture of a previously ceded block of business in the individual disability product line in the first quarter of 2025. Also impacting the comparison is favorable persistency and higher prior period sales in the voluntary benefits and dental and vision product lines. Net investment income was generally consistent in the first quarter of 2025 compared to the same period of 2024. Other income was higher in the first quarter of 2025 compared to 2024 due primarily to a gain on the recapture of a previously ceded block of business in the individual disability product line.
The benefit ratio for voluntary benefits was unfavorable in the first quarter of 2025 compared to the same period of 2024 primarily driven by less favorable benefit experience in the critical illness, accident, and hospital indemnity products. The benefit ratio for individual disability was favorable in the first quarter of 2025 compared to the same period of 2024 due primarily to favorable recoveries. The benefit ratio for dental and vision was unfavorable in the first quarter of 2025 compared to the same period of 2024 due primarily to higher claims incidence.
Commissions were higher for the first quarter of 2025 relative to the same period of 2024 due primarily to the impacts from the recapture of a previously ceded block of business in the individual disability product line in the first quarter of 2025 and higher sales in the voluntary benefits and the individual disability product lines. The deferral of acquisition costs, the amortization of deferred acquisition costs and other expense ratio were generally consistent in the first quarter of 2025 relative to the same period of 2024.
Sales
| (in millions of dollars) | |||
|---|---|---|---|
| Three Months Ended March 31 | |||
| 2025 | % Change | 2024 | |
| Sales by Product | |||
| Group Disability and Group Life and AD&D | |||
| Group Long-term Disability | $43.1 | (21.1)% | $54.6 |
| Group Short-term Disability | 31.9 | (11.1) | 35.9 |
| Group Life and AD&D | 44.4 | 3.7 | 42.8 |
| Subtotal | 119.4 | (10.4) | 133.3 |
| Supplemental and Voluntary | |||
| Voluntary Benefits | 122.9 | 13.9 | 107.9 |
| Individual Disability | 23.7 | 11.8 | 21.2 |
| Dental and Vision | 11.5 | (1.7) | 11.7 |
| Subtotal | 158.1 | 12.3 | 140.8 |
| Total Sales | $277.5 | 1.2 | $274.1 |
| Sales by Market Sector | |||
| Group Disability and Group Life and AD&D | |||
| Core Market (< 2,000 employees) | $70.9 | (8.3)% | $77.3 |
| Large Case Market | 48.5 | (13.4) | 56.0 |
| Subtotal | 119.4 | (10.4) | 133.3 |
| Supplemental and Voluntary | 158.1 | 12.3 | 140.8 |
| Total Sales | $277.5 | 1.2 | $274.1 |
Group sales decreased during the first quarter of 2025 compared to the same period of 2024 due primarily to lower sales to new customers in the large case market, lower sales to existing customers in the core market, which we define as employee groups with fewer than 2,000 employees, as well as the impact of no sales of our medical stop-loss product in the first quarter of 2025, which was no longer actively marketed as of the third quarter of 2024. The sales mix in the group market sector for the first three months of 2025 was approximately 59 percent core market and 41 percent large case market.
Voluntary benefits sales increased during the first quarter of 2025 compared to the same period of 2024 due primarily to higher sales to new customers in both the large case and core markets. Individual disability sales, which are primarily concentrated in the multi-life market, increased in the first quarter of 2025 compared to the same period of 2024 due primarily to higher sales to new customers. Dental and vision sales decreased slightly in the first quarter of 2025 compared to the same period of 2024 due to lower sales to new customers, mostly offset by higher sales to existing customers.
We remain committed to offering consumers a broad set of financial protection benefit products at the worksite. During 2025, we will continue to invest in a unique customer experience defined by simplicity, empathy, and deep industry expertise through the increased utilization of digital capabilities and technology to enhance enrollment, underwriting, the client administration experience, and claims processing. In addition, we will focus on strategically driven sales by enhancing the connectivity, alignment, and support for brokers and technology partners, including integration with human capital management systems. With respect to smaller employers, we will continue to provide a comprehensive set of consumer-focused products, enhance our distribution model, and utilize our digital tools to bring industry leading enrollment capabilities and a fully integrated customer experience. Our differentiated offerings and market leading leave management services provide substantial growth opportunities, particularly with larger employers, and stronger persistency in our core products. We believe our active client management, integrated customer experience across our product lines, and strong risk management, will enable us to continue to grow our market over the long-term.
We expect strong adjusted operating income in 2025 with continued sales and premium growth. We expect the group disability market to remain competitive which may impact our pricing and renewal premium levels. We expect strong group disability claim experience to continue in 2025, driven by operational performance. We also expect group life claim experience to be mostly stable but may experience some quarterly claims volatility. We expect a decline in our supplemental and voluntary line of business adjusted operating income as a result of the reinsurance transaction with Fortitude Re. We expect a slight increase in our operating expense ratio as we continue to invest in our people and capabilities.
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 yields on new investments but could also reduce unrealized losses in our current holdings. Our net investment income may continue to be impacted by volatility in miscellaneous investment income.
As part of our discipline in pricing and reserving, we continuously monitor emerging claim trends and interest rates. We will continue to take appropriate pricing actions on new business and renewals that are reflective of the current environment.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly.
As previously discussed, we anticipate entering into a reinsurance agreement with Fortitude Re to cede a portion of our individual disability business during 2025. For further discussion, see “Executive Summary" contained herein in Item 2 and Note 14 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.
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