Unum Group

The Unum International segment is comprised of our operations in both the United Kingdom and Poland. Our Unum UK products include insurance for group long-term disability, group life, and supplemental lines of business, which includes dental, critical illness, and individual disability products. Our Unum Poland products include insurance for individual and group life with accident and health riders. Unum International's products are sold primarily through field sales personnel and independent brokers and consultants.

Shown below are financial results and key performance indicators for the Unum International segment.

Foreign Currency Translation

The functional currencies of Unum UK and Unum Poland are the British pound sterling and Polish zloty, respectively. Premium income, net investment income, claims, and expenses are received or paid in the functional currency, and we hold functional currency-denominated assets to support functional currency-denominated policy liabilities. We translate functional currency-denominated financial statement items into dollars for our consolidated financial reporting. We translate income statement items using an average exchange rate for the reporting period, and we translate balance sheet items using the exchange rate at the end of the period. We report unrealized foreign currency translation gains and losses in accumulated other comprehensive income in our consolidated balance sheets.

Fluctuations in exchange rates impact Unum International's reported financial results and our consolidated financial results. In periods when the functional currency strengthens relative to the preceding period, translation increases current period results relative to the prior period. In periods when the functional currency weakens, translation decreases current period results relative to the prior period.

Unum UK Operating Results

Shown below are financial results and key performance indicators for the Unum UK product lines in functional currency.

Premium income was higher in the third quarter and first nine months of 2025 compared to the same periods of 2024 primarily due to in-force block growth, sales, and favorable persistency in the group life and supplemental product lines.

Net investment income was higher in the third quarter and first nine months of 2025 compared to the same periods of 2024 primarily due to higher 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 generally correlated to a change in policy benefits related to the inflation index-linked group long-term disability and group life policies.

Other income primarily relates to fees earned related to certain administrative services.

The benefit ratio, excluding the impacts of reserve assumption updates, was less favorable in the third quarter and first nine months of 2025 compared to the same periods of 2024 due primarily to unfavorable benefit experience in the group long-term disability product line and higher inflation-linked experience in benefits, partially offset by favorable incidence in the group life product line.

Commissions were higher in the third quarter and first nine months of 2025 compared to the same periods of 2024 primarily due to in-force block growth.

The deferral of acquisition costs and the amortization of deferred acquisition costs were generally consistent in the third quarter and first nine months of 2025 compared to the same periods of 2024. The other expense ratio was higher in the third quarter and first nine months of 2025 compared to the same periods of 2024 due primarily to operational investments in our business.

Sales

The following discussion of sales results relates to our Unum UK product lines based on functional currency.

Unum UK group long-term disability sales increased in the third quarter of 2025 compared to the same period of 2024 due primarily to higher sales to new customers in the large case market, which we define as employee groups with more than 500 employees, and higher sales to new customers in the core market. Unum UK group long-term disability sales decreased in the first nine months of 2025 compared to the same period of 2024 due primarily to lower sales to existing customers in the large case market, partially offset by higher sales to new customers in the large case market.

Unum UK group life sales decreased in the third quarter and first nine months of 2025 compared to the same periods of 2024 due primarily to lower sales to new customers in the large case market. Partially offsetting the comparison for the first nine months of 2025 compared to the same period of 2024 was higher sales to new customers in the core market.

Unum UK supplemental sales decreased in the third quarter and first nine months of 2025 compared to the same periods of 2024 due to lower sales of our dental products.

We are committed to driving growth in the Unum International segment and will build on the capabilities that we believe will generate growth and profitability in our businesses over the long term. In 2025, we will focus on scaling our business and broadening our product portfolio. For our Unum UK line of business, we will continue to focus on delivering a best in class health and wellbeing service to improve retention of our key customers and drive growth across our product offerings. We will also accelerate premium growth by focusing on both the broker experience and customer engagement, while maintaining our disciplined approach to pricing. Within our Unum Poland line of business, we will drive growth by continuing to expand our existing distribution channels. We will also continue to invest in digital capabilities, technology, and product enhancements which we believe will drive sustainable growth over the long term.

In 2025, we expect growth in adjusted operating income with continued sales and premium growth. We continuously monitor key indicators to assess our risks and adjust our business plans accordingly.