Unum Group

Second quarter after-tax adjusted operating income per share was $2.16, up 4.9% from the prior year; year-to-date adjusted operating EPS growth was 7.5%. Consolidated adjusted operating ROE was 15.9% in the quarter and 16% year to date. Core earned premium grew 3.6% in the quarter, and would have grown just over 5% year over year excluding runoff and prior transactions; total U.S. group persistency was 91.5%, up nearly 2 points year over year. Unum U.S. adjusted operating income was $329.6 million versus $318.2 million a year ago; U.S. group disability benefit ratio was 65.8% versus a 62% to 64% expectation, U.S. group life and AD&D benefit ratio was 66% versus 69.7% a year ago, and supplemental and voluntary adjusted operating income was $133.3 million. Unum International adjusted operating income was $24.3 million versus $41.6 million a year ago, with a benefit ratio of 78.4% versus 72.4%; U.K. premium grew 5.2% and Poland premium grew 8.8%. Colonial Life adjusted operating income was $131.4 million versus $117.4 million a year ago, with premium income of $477.4 million versus $462.1 million, sales up 6% to $134.1 million, and a benefit ratio of 46.7%. Management reiterated full-year 2026 adjusted operating EPS guidance of $8.60 to $8.90, said core premium growth is expected to land in the 4% to 7% range, expects the U.K. effective tax rate to be about 22% for the rest of 2026, and said capital deployment remains about $1.3 billion this year, with about $750 million returned year to date.

Rick McKenney framed the quarter as evidence that Unum’s diversified employee benefits model is working, with strong demand, solid sales, and generally stable persistency. He emphasized the company’s ability to grow while actively managing closed-block risk, pointing to the additional $3.8 billion LTC reinsurance deal as another step in reducing volatility. His tone was confident and constructive, while acknowledging that PFML and U.K. group income protection are current focus areas that are being addressed with pricing and underwriting actions.

Steve Zabel highlighted the hard numbers behind the quarter: $2.16 of adjusted operating EPS, 15.9% consolidated adjusted operating ROE, 3.6% core premium growth, 91.5% U.S. group persistency, and strong capital metrics including $1.5 billion of holding company liquidity and 480% traditional RBC. He walked through the pressure points in PFML and the U.K., noting double-digit PFML rate actions and a U.K. effective tax rate expectation of about 22% for the rest of 2026. On capital, he said the company returned about $275 million in the quarter, about $750 million year to date, and remains on track for $1.3 billion of shareholder deployment in 2026; he also said the LTC transaction will create roughly $30 million to $40 million per quarter of amortization and non-contemporaneous reinsurance impacts, with total impact initially around $90 million to $100 million per quarter across closed-block transactions.

Analysts focused heavily on PFML, asking how quickly pricing can be raised, how much of the book has multiyear rate guarantees, and whether higher rates would hurt retention. Management said most PFML business is on one-year terms, double-digit pricing actions are already underway, and they believe the product is central to leave-management relationships even if some persistence pressure results. Questions also probed U.S. group life, U.S. LTD pricing adequacy, U.K. earnings remediation, and the pace of group LTC case terminations; management said group life results are sustainable, LTD still targets a 65% benefit ratio over time, U.K. pricing changes will take time to flow through, and group LTC terminations may continue but are hard to predict.