Unum Group

2025 Operating Performance and Capital Management

For 2025, we reported net income of $738.5 million, or $4.27 per diluted common share, compared to net income of $1,779.1 million, or $9.46 per diluted common share, in 2024.

Included in our results for 2025 are:

•A net investment loss of $106.6 million before tax and $83.5 million after tax, or $0.49 per diluted common share;

•Amortization of the cost of reinsurance of $116.7 million before tax and $92.2 million after tax, or $0.53 per diluted common share;

•Amortization of the deferred gain on reinsurance of $9.0 million before tax and $7.1 after tax, or $0.04 per diluted common share;

•Non-contemporaneous reinsurance of $29.6 million before tax and $23.3 million after tax, or $0.14 per diluted common share;

•A net reserve increase related to assumption updates of $478.5 million before tax and $377.8 million after tax, or $2.18 per diluted common share;

•A settlement loss on the U.S. pension plan annuity purchase of $103.8 million before tax and $82.0 million after tax, or $0.47 per diluted common share; and

•An accelerated charitable contribution of $20.0 million before tax and $15.8 million after tax, or $0.09 per diluted common share.

Included in our results for 2024 are:

•A net investment loss of $34.6 million before tax and $27.0 million after tax, or $0.14 per diluted common share;

•Amortization of the cost of reinsurance of $41.4 million before tax and $32.7 million after tax, or $0.17 per diluted common share;

•Non-contemporaneous reinsurance of $25.1 million before tax and $19.9 million after tax, or $0.11 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 $1.50 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 2025 was $1,406.0 million, or $8.13 per diluted common share compared to $1,588.2 million, or $8.44 per diluted common share for 2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction", "Settlement Loss on the U.S. Pension Plan Annuity Purchase", "Accelerated Charitable Contribution", "Loss on Legal Settlement" and "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 7 and Notes 3, 11, 14 and 15 contained herein Item 8 for a reconciliation of these items.

Our Unum US segment reported income before income tax and net investment gains and losses of $1,427.6 millionin 2025 compared to $1,582.8 million in 2024, which include the reserve assumption updates that occurred during the third quarters of 2025 and 2024. Also included in our Unum US segment results for 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 lower adjusted operating income of$1,271.9 million in 2025 compared to $1,439.2 million in 2024, primarily due to less favorable benefits experience, partially offset by higher premiums. The benefit ratio, excluding the reserve assumption updates and the impact of non-contemporaneous reinsurance, for our Unum US segment for 2025 was 60.2 percent, compared to 58.2 percent in 2024. Unum US sales decreased 0.6 percent in 2025 compared to 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 $157.7 million in 2025 compared to $150.3 million in 2024, which include the reserve assumption updates during the third quarters of 2025 and 2024. Excluding these items, our Unum International segment reported adjusted operating income of $152.3 million in 2025 compared to $157.8 million in 2024. As measured in local currency, our Unum UK line of business reported lower adjusted operating income, which excludes the reserve assumption updates, of £107.5 million in 2025 compared to £117.8 million in 2024, primarily due to unfavorable benefits experience in the group long-term disability product line, partially offset by higher premium income and higher net investment income. The benefit ratio for our Unum UK line of business, excluding the reserve assumption updates, was 73.5 percent in 2025 compared to 69.8 percent in 2024. Unum International sales, as measured in U.S. dollars, increased 5.5 percent in 2025 compared to 2024. Unum UK sales, as measured in local currency, decreased 3.1 percent in 2025 compared to 2024.

Our Colonial Life segment reported income before income tax and net investment gains and losses of $472.5 million in 2025 compared to $512.7 million in 2024, which include the reserve assumption updates during the third quarters of 2025 and 2024. Excluding these items, our Colonial Life segment reported adjusted operating income of $463.6 million in 2025 compared to $466.7 million in 2024, primarily due to less favorable benefits experience as well as higher operating expenses, partially offset by higher premium income. The benefit ratio, excluding the reserve assumption updates, for Colonial Life was 48.1 percent in 2025 compared to 47.7 percent in 2024. Colonial Life sales increased 5.3 percent in 2025 compared to 2024.

Our Closed Block segment reported a loss before income tax and net investment gains and losses of $722.3 million in 2025 compared to income before income tax and net investment gains and losses of $246.6 million in 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 lower adjusted operating income of $63.5 million in 2025 compared to $137.8 million in 2024, primarily due to lower net investment income driven by a decrease in the level of invested assets. The net premium ratio for long-term care increased to 97.5 percent at December 31, 2025 from 94.6 percent at December 31, 2024.

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 December 31, 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 and $2.6 billion at December 31, 2025 and 2024, respectively, with the decrease due primarily to a decrease in U.S. Treasury rates. The earned book yield on our investment portfolio decreased to 4.35 percent for 2025 compared to a yield of 4.44 percent for 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 2025, resulted in an increase to the liability for future policy benefits, net of reinsurance, of approximately $0.3 billion.

We believe our capital and financial positions are strong. At December 31, 2025, the 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 expectations. We repurchased 13.6 million shares of Unum Group common stock under our share repurchase program, at a cost of $1,011.7 million, which includes commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 172.9 million and 188.1 million for 2025 and 2024, respectively. As of December 31, 2025, Unum Group and our intermediate holding companies had available holding company liquidity of $2,344.1 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset backed securities.

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

In February 2025, Unum Life Insurance Company of America (Unum America) entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which resulted in the execution of a coinsurance agreement (reinsurance agreement) during July 2025. 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 as well as fixed maturity securities with a fair value totaling $3,230.1 million and accrued investment income of $47.1 million. After consideration of the final settlement, the final ceding commission related to this transaction was $442.3 million. Fortitude Re established and will maintain a collateralized trust account for the benefit of Unum America to secure its obligations under the reinsurance agreement.

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

•Net realized investment loss totaling $46.8 million during the year ended 2025.

•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 $848.2 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 $145.9 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 Life and Accident Insurance Company (Provident), an affiliate.

See "Investments" and "Liquidity and Capital Resources" contained herein Item 7, and Notes 3 and 14 in the "Notes to the Consolidated Financial Statements" contained herein Item 8 for further information.

2025, 2024, and 2023 Reserve Assumption Updates

During the third quarters of 2025, 2024, and 2023, 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 7 as well as Note 6 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.

Settlement Loss on the U.S. Pension Plan Annuity Purchase

During the fourth quarter of 2025, we incurred a loss of $103.8 million before tax within our Corporate segment related to a purchase of an annuity contract which transferred a portion of our U.S. qualified defined benefit pension plan obligation to a third-party. The loss is recorded within other expenses in the consolidated statements of income. For more information see Note 11 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.

Accelerated Charitable Contribution

During the fourth quarter of 2025, we incurred an expense related to an accelerated charitable contribution of $20.0 million before tax within our Corporate segment. The expense is recorded within other expenses in the consolidated statements of income. For more information see Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.

Loss on Legal Settlement

During the third quarter of 2024, we incurred a loss of $15.3 million before 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. For more information see Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.

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.

Inflation Reduction Act

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 imposed a 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 and we have recorded a CAMT liability as of December 31, 2025. We do not expect CAMT to impact earnings since it is offset with a minimum tax credit toward regular income tax in subsequent years. The IRA also imposed a one percent excise tax on 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 purchases, reduced by the fair value of any shares issued during the period.

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 material Pillar Two taxes as of December 31, 2025. We will continue to monitor legislative developments.

U.K. Tax Law Change

In June 2021, the Finance Act 2021 was enacted, resulting in a U.K. tax rate increase from 19 percent to 25 percent, effective April 1, 2023.

Consolidated Company Outlook for 2026

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 an excellent experience centered on service, expertise and empathy 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 2025, earnings in our core businesses remained strong, although they declined compared to the prior year. We expect earnings growth in our core operations to resume in 2026. The products and services we provide deliver significant value to employers, employees and their families, and we believe this will help drive strong premium growth in 2026.

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 may also 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 "Reconciliation of Non-GAAP and Other Financial Measures," "Consolidated Operating Results," "Segment Results," "Investments," and "Liquidity and Capital Resources" contained herein in this Item 7 and in the "Notes to Consolidated Financial Statements" contained herein in Item 8.