Unum Group

Unum Group, a Delaware general business corporation, and its insurance and non-insurance subsidiaries, which collectively with Unum Group we refer to as the Company, operate in the United States, the United Kingdom, Poland, and, to a limited extent, in certain other countries. The principal operating subsidiaries in the United States are Unum Life Insurance Company of America (Unum America), Provident Life and Accident Insurance Company (Provident), The Paul Revere Life Insurance Company, Colonial Life & Accident Insurance Company (Colonial Life & Accident), Unum Insurance Company, Starmount Life Insurance Company, in the United Kingdom, Unum Limited, and in Poland, Unum Zycie TUiR S.A. (Unum Poland). We are a leading provider of financial protection benefits in the United States and the United Kingdom. Our products include disability, life, accident, critical illness, dental and vision, and other related services. We market our products primarily through the workplace.

We have three principal operating segments: Unum US, Unum International, and Colonial Life. Our other operating segments are the Closed Block and Corporate segments. These segments are discussed more fully under "Segment Results" included herein in this Item 2.

The benefits we provide help the working world thrive throughout life's moments and protect people from the financial hardship of illness, injury, or loss of life. As a leading provider of employee benefits, we offer a broad portfolio of products and services through the workplace that provide support when it is needed most.

Specifically, we offer disability, life and voluntary products, on both individual and group bases, as well as provide certain fee-based services. These products and services, which can be sold stand-alone or combined with other coverages, help employers of all sizes attract and retain the talented and capable workforce they need to succeed while protecting the incomes and livelihood of their employees. We believe employer-sponsored benefits are the most effective way to provide workers with access to information and options to protect their financial stability. Working people and their families, particularly those at lower and middle incomes, are perhaps the most vulnerable in today's economy yet are often overlooked by many providers of financial products and services. For many of these workers and families, employer-sponsored benefits are the primary defense against the potentially catastrophic financial impact of death, illness, or injury.

We have established a corporate culture consistent with the social value of our products and services. We see important links between the obligations we have to all of our stakeholders, and we place a strong emphasis on operating with integrity and contributing to positive change in our communities. Accordingly, we are committed not only to meeting the needs of our customers who depend on us, but also to being accountable for our actions through sound and consistent business practices, a strong internal compliance program, a comprehensive risk management strategy, and an engaged employee workforce.

This discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto in Part I, Item 1 contained in this Form 10-Q and with the "Cautionary Statement Regarding Forward-Looking Statements" included below the Table of Contents, as well as the discussion, analysis, and consolidated financial statements and notes thereto in Part I, Items 1 and 1A, and Part II, Items 7, 7A, and 8 of our annual report on Form 10-K for the year ended December 31, 2024.

Operating Performance and Capital Management

For the third quarter of 2025, we reported net income of $39.7 million, or $0.23 per diluted common share, compared to net income of $645.7 million, or $3.46 per diluted common share, in the third quarter of 2024. For the first nine months of 2025, we reported net income of $564.4 million, or $3.23 per diluted common share, compared to net income of $1,430.4 million, or $7.52 per diluted common share in the same period of 2024.

Included in our results for the third quarter of 2025 are:

•A net investment gain of $128.0 million before tax and $101.2 million after tax, or $0.59 per diluted common share;

•Amortization of the cost of reinsurance of $48.6 million before tax and $38.3 million after tax, or $0.22 per diluted common share;

•Amortization of the deferred gain on reinsurance of $4.6 million before tax and $3.6 million after tax, or $0.02 per diluted common share;

•Non-contemporaneous reinsurance of $7.7 million before tax and $6.1 million after tax, or $0.04 per diluted common share; and

•A net reserve increase related to assumption updates of $478.5 million before tax and $377.8 million after tax, or $2.21 per diluted common share.

Included in our results for the first nine months of 2025 are:

•A net investment loss of $96.5 million before tax and $76.1 million after tax, or $0.44 per diluted common share;

•Amortization of the cost of reinsurance of $67.9 million before tax and $53.6 million after tax, or $0.31 per diluted common share;

•Amortization of the deferred gain on reinsurance of $4.6 million before tax and $3.6 million after tax, or $0.02 per diluted common share;

•Non-contemporaneous reinsurance of $19.5 million before tax and $15.4 million after tax, or $0.09 per diluted common share; and

•A net reserve increase related to assumption updates of $478.5 million before tax and $377.8 million after tax, or $2.16 per diluted common share.

Included in our results for the third quarter of 2024 are:

•A net investment loss of $12.9 million before tax and $9.8 million after tax, or $0.05 per diluted common share;

•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;

•Non-contemporaneous reinsurance of $6.0 million before tax and $4.8 million after tax, or $0.03 per diluted common share;

•A net reserve decrease related to assumption updates of $357.4 million before tax and $282.6 million after tax, or $1.51 per diluted common share; and

•A loss resulting from a legal settlement of $15.3 million before tax and $12.1 million after tax, or $0.06 per diluted common share.

Included in our results for the first nine months of 2024 are:

•A net investment loss of $24.5 million before tax and $18.8 million after tax, or $0.10 per diluted common share;

•Amortization of the cost of reinsurance of $31.1 million before tax and $24.6 million after tax, or $0.13 per diluted common share;

•Non-contemporaneous reinsurance of $20.2 million before tax and $16.0 million after tax, or $0.08 per diluted common share;

•A net reserve decrease related to assumption updates of $357.4 million before tax and $282.6 million after tax, or $1.48 per diluted common share; and

•A loss resulting from a legal settlement of $15.3 million before tax and $12.1 million after tax, or $0.06 per diluted common share.

Excluding these items, after-tax adjusted operating income for the third quarter of 2025 was $357.1 million, or $2.09 per diluted common share compared to $398.0 million, or $2.13 per diluted common share, for the same period of 2024. After-tax adjusted operating income was $1,083.7 million, or $6.21 per diluted common share, in the first nine months of 2025, compared to $1,219.3 million, or $6.41 per diluted common share, in the first nine months of 2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction", "Loss on Legal Settlement", and "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 and Note 14 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion and a reconciliation of these items.

Our Unum US segment reported income before income tax and net investment gains and losses of $486.8 million and $1,134.1 million in the third quarter and first nine months of 2025, respectively, compared to $506.9 million and $1,249.6 million in the same periods of 2024, which includes the reserve assumption updates that occurred during the third quarters of 2025 and 2024. Also included in our Unum US segment results for the third quarter and first nine months of 2025, are the amortization of the deferred gain on reinsurance and the impact of non-contemporaneous reinsurance both of which resulted from the Closed Block long-term care and Unum US individual disability reinsurance transaction (Fortitude Re reinsurance transaction). Excluding these items, our Unum US segment reported adjusted operating income of $334.9 million and $982.2 million in the third quarter and first nine months of 2025, respectively, compared to $363.3 million and $1,106.0 million in the same periods of 2024, due to unfavorable benefits experience, partially offset by an increase in premium income. The benefit ratio, excluding reserve assumption updates and the impact of non-contemporaneous reinsurance, for our Unum US segment was 59.4 percent and 60.0 percent in the third quarter and first nine months of 2025, respectively, compared to 58.5 percent and 57.8 percent in the same periods of 2024. Unum US sales increased 16.1 percent and decreased 3.0 percent in the third quarter and first nine months of

2025, respectively, compared to the same periods of 2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction" contained herein for further discussion of the Fortitude Re reinsurance transaction.

Our Unum International segment reported income before income tax and net investment gains and losses of $44.2 million and $124.5 million in the third quarter and first nine months of 2025, respectively, compared to $32.8 million and $112.7 million in the same periods of 2024, which includes the reserve assumption updates during the third quarters of 2025 and 2024. Excluding these items, our Unum International segment reported adjusted operating income of $38.8 million and $119.1 million in the third quarter and first nine months of 2025, respectively, compared to $40.3 million and $120.2 million in the same periods of 2024. Our Unum UK line of business reported adjusted operating income, which excludes the reserve assumption updates, of £26.3 million and £85.2 million in the third quarter and first nine months of 2025, respectively, compared to £29.5 million and £90.2 million in the same periods of 2024, due to unfavorable benefits experience, partially offset by higher premium income and net investment income. The benefit ratio for our Unum UK line of business, excluding the reserve assumption updates, was 73.8 percent and 72.0 percent in the third quarter and first nine months of 2025, respectively, compared to 69.5 percent and 69.0 percent in the same periods of 2024. Unum International sales, as measured in U.S. dollars, increased 30.1 percent and 2.4 percent in the third quarter and first nine months of 2025, respectively, compared to the same periods of 2024. Unum UK sales, as measured in local currency, increased 27.3 percent and decreased 8.2 percent in the third quarter and first nine months of 2025, respectively, compared to the same periods of 2024.

Our Colonial Life segment reported income before income tax and net investment gains and losses of $125.5 million and $358.6 million in the third quarter and first nine months of 2025, respectively, compared to $159.4 million and $390.0 million in the same periods of 2024, which includes the reserve assumption updates during the third quarters of 2025 and 2024. Excluding these items, our Colonial Life segment reported adjusted operating income of $116.6 million and $349.7 million in the third quarter and first nine months of 2025, compared to $113.4 million and $344.0 million in the same periods of 2024, primarily due to higher premium income and net investment income, partially offset by higher operating expenses. Also impacting the comparison of the third quarter of 2025, compared to the same period of 2024, was unfavorable benefit experience. The benefit ratio, excluding the reserve assumption updates, for Colonial Life was 48.2 percent and 48.1 percent in the third quarter and first nine months of 2025, respectively, compared to 47.6 percent and 48.0 percent in the same periods of 2024. Colonial Life sales increased 3.1 percent and 2.8 percent in the third quarter and first nine months of 2025, respectively, compared to the same periods of 2024.

Our Closed Block segment reported a loss before income tax and net investment gains and losses of $682.3 million and $685.1 million in the third quarter and first nine months of 2025, respectively, compared to income before income tax and net investment gains and losses of $193.1 million and $234.1 million in the same periods of 2024, which includes the reserve assumption updates that occurred during the third quarters of 2025 and 2024, the amortization of the cost of reinsurance, and the impact of non-contemporaneous reinsurance. Excluding these items, our Closed Block Segment reported adjusted operating income of $14.1 million and $42.4 million in the third quarter and first nine months of 2025, respectively, compared to $34.2 million and $110.1 million in the same periods of 2024, due primarily to a decrease in net investment income and premium income. Also impacting the comparison for the first nine months of 2025 compared to the same period of 2024 was unfavorable benefits experience. The net premium ratio for long-term care increased to 97.6 percent at September 30, 2025 from 94.5 percent at September 30, 2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction" contained herein for further discussion of the Fortitude Re reinsurance transaction.

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 September 30, 2025, 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 for which an impairment loss was not recorded. The net unrealized loss on our fixed maturity securities was $1.7 billion at September 30, 2025, compared to $2.6 billion at December 31, 2024, with the decrease due primarily to a decrease in U.S. Treasury rates. The earned book yield on our investment portfolio was 4.44 percent for the first nine months of 2025 as well as for the full year ended December 31, 2024.

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 decrease in U.S. Treasury rates during the first nine months of 2025, resulted in an increase to the liability for future policy benefits, net of reinsurance, of approximately $0.7 billion.

We believe our capital and financial positions are strong. At September 30, 2025, 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 455 percent, which is above our long-term expectation. We repurchased 10.3 million shares and 9.7 million shares of Unum Group common stock under our share repurchase program, during the first nine months of 2025 and 2024, respectively, at a cost of $759.2 million and $504.8 million, respectively, including commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 170.6 million and 186.9 million for the third quarters of 2025 and 2024, respectively, and 174.6 million and 190.2 million for the first nine months of 2025 and 2024, respectively. As of September 30, 2025, Unum Group and our intermediate holding companies had available holding company liquidity of $1,982.4 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.

2025 and 2024 Reserve Assumption Updates

During the third quarters of 2025 and 2024, we completed our annual cash flow assumption review and updated certain of our assumptions used to develop the liability for future policy benefits. For more information see "Critical Accounting Estimates" included herein in this Item 2.

Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction

In February 2025, Unum America entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which resulted in the execution of a coinsurance agreement during July 2025 (Fortitude Re Reinsurance transaction). This reinsurance agreement reinsures a portion of our Closed Block long-term care business and a portion of our Unum US individual disability business on a coinsurance basis to Fortitude Re effective January 2025. The reinsurance agreement represents approximately 21 percent of total Closed Block long-term care future policy benefits and approximately 15 percent of Unum US individual disability future policy benefits as of December 31, 2024.

Upon closing the transaction in July 2025, we transferred to Fortitude Re $953.5 million of cash, which included an initial estimated ceding commission of $461.7 million, as well as fixed maturity securities with a fair value totaling $3,230.1 million and accrued investment income of $47.1 million. A final settlement, including the final ceding commission adjustment, is expected prior to the end of 2025. Fortitude Re established and will maintain a collateralized trust account for the benefit of Unum America to secure its obligations under the reinsurance agreement. During the first nine months of 2025, we recognized a net realized investment loss totaling $46.8 million related to the Fortitude Re reinsurance transaction. Although we transferred a significant portion of our fixed maturity securities portfolio during the third quarter of 2025 as a part of this transaction, the overall credit profile of our remaining portfolio did not change.

As a result of this reinsurance agreement, we recognized the following:

•Reinsurance recoverable of $3,620.5 million comprised of ceded reserves of $3,315.2 million related to the Closed Block long-term care product line and $305.3 million related to the Unum US individual disability product line.

•Cost of reinsurance of $846.5 million related to the Closed Block long-term care product line and a deferred gain on reinsurance related to the Unum US individual disability product line of $148.2 million

•Write-off of deferred acquisition costs related to the Unum US individual disability product line of $100.3 million which is included as a component of deferred gain on reinsurance.

In July 2025, immediately prior to entering into the reinsurance agreement with Fortitude Re, Unum America recaptured the aforementioned Closed Block long-term care business from Fairwind Insurance Company (Fairwind), an affiliated captive reinsurer, and assumed the aforementioned Unum US individual disability business from Provident, an affiliate.

See Notes 4 and 14 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" and "Liquidity and Capital Resources" contained herein in this Item 2 for further information.

Global Minimum Tax

The Organization for Economic Co-operation and Development (OECD) has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the United Kingdom, Ireland, and Poland have adopted Pillar Two beginning on or after December 31, 2023. We have not recorded Pillar Two taxes as of September 30, 2025, and we do not expect material impacts in 2025. We will continue to monitor legislative developments and refine our estimates as necessary.

One Big Beautiful Bill Act

In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into U.S. law. We do not expect the OBBBA to have a material impact on our financial position or results of operations in 2025.

Loss on Legal Settlement

During the third quarter of 2024, we incurred a loss of $15.3 million before tax, or $12.1 million after tax, within our Corporate segment for the settlement of an employment-related matter. $4.9 million of the loss is recorded within compensation expense and $10.4 million of the loss is recorded within other expenses in the consolidated statements of income.

Consolidated Company Outlook

We believe our strategy of providing financial protection products at the workplace puts us in a position of strength. We continue to fulfill our corporate purpose of helping the working world thrive throughout life’s moments by providing excellent service to people at their time of need. Our strategy remains centered on growing our core businesses, through investing and transforming our operations and technology to anticipate and respond to the changing needs of our customers, expanding into new adjacent markets through meaningful partnerships and effective deployment of our capital across our portfolio.

In 2024, we experienced increased earnings driven by the underlying strength of our business and expect positive operating trends in our core businesses to continue in 2025. The products and services we provide deliver significant value to employers, employees and their families, and we believe this will help drive premium growth in 2025.

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. We also may continue to experience further volatility in miscellaneous investment income primarily related to changes in partnership net asset values as well as bond calls.

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 and may continue to utilize derivative financial instruments to manage interest rate risk.

Our business is well-diversified by geography within our markets, industry exposures and case size, and we continue to analyze and employ strategies that we believe will help us navigate the current environment. These strategies allow us to maintain financial flexibility to support the needs of our businesses, while also returning capital to our shareholders. We have strong core businesses that have a track record of generating significant free cash flow, and we will continue to invest in our operations and expand into adjacent markets where we can best leverage our expertise and capabilities to capture market growth opportunities as those opportunities emerge. We believe that consistent operating results, combined with the implementation of strategic initiatives and the effective deployment of capital, will allow us to meet our financial objectives.

Further discussion is included in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and in "Reconciliation of Non-GAAP and Other Financial Measures," "Consolidated Operating Results," "Segment Results," "Investments," and "Liquidity and Capital Resources" contained herein in this Item 2.