Unum Group Reports Fourth Quarter 2024 Results
-
Net income of
$348.7 million $1.92 $368.9 million $2.03
-
Results for the full year reflect solid growth and sustained margins supported by the favorable operating environment; full year core operations premium growth of 5.0 percent on a constant currency basis and full year after-tax adjusted operating earnings per share growth of 10.2 percent when comparing to 2023.
-
Robust balance sheet and liquidity with holding company liquidity of
$2.0 billion
-
Book value per common share of
$61.38 $75.51
- Positive business trends expected to continue into 2025 with outlook for core operations premium growth of 4 percent to 7 percent and after-tax adjusted operating earnings per share growth of 8 percent to 12 percent.
Included in net income for the fourth quarter of 2024 is the after-tax amortization of the cost of reinsurance of
“We delivered another year of strong performance in 2024, reflecting the continued positioning of our business and focus on our customers. Demand for our solutions remains robust, as reflected in our excellent fourth quarter sales performance,” said Richard P. McKenney, president and chief executive officer. “During the year we executed against our disciplined capital allocation strategy, ending 2024 with robust capital levels, while returning significant capital to our shareholders. Looking ahead to 2025, we are well positioned to execute on our strategy and generate year-over-year premium growth across all segments. Our free cash flow generation allows us to grow our business and continue to return capital to shareholders through dividends and share repurchases.”
RESULTS BY SEGMENT
We measure and analyze our segment performance on the basis of "adjusted operating income" or "adjusted operating loss", which differ from income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains or losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, reserve assumption updates, and certain other items as specified in the reconciliations below. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. Reserve assumption updates may result in increases or decreases to earnings. These performance measures are in accordance with
Unum US Segment
Unum US reported adjusted operating income of
Within the Unum US operating segment, the group disability line of business reported a 3.7 percent decrease in adjusted operating income to
The group life and accidental death and dismemberment line of business reported a 21.6 percent increase in adjusted operating income to
The supplemental and voluntary line of business reported a decrease of 14.8 percent in adjusted operating income to
Unum International
The Unum International segment reported adjusted operating income of
The Unum
Colonial Life Segment
Colonial Life reported a 39.7 percent increase in adjusted operating income to
Closed Block Segment
The Closed Block segment reported adjusted operating income of
Policy benefits including remeasurement loss increased to
Corporate Segment
The Corporate segment reported an adjusted operating loss of
OTHER INFORMATION
Shares Outstanding
The Company’s weighted average number of shares outstanding, assuming dilution, was 181.6 million for the fourth quarter of 2024, compared to 195.5 million for the fourth quarter of 2023. Shares outstanding totaled 178.6 million at December 31, 2024. During the fourth quarter of 2024, the company executed accelerated share repurchase agreements totaling
Capital Management
At December 31, 2024, the weighted average risk-based capital ratio for the Company’s traditional
Book Value
Book value per common share as of December 31, 2024 was
Effective Tax Rate
The effective tax rate on adjusted operating earnings was 21.6 percent in the fourth quarter of 2024, and 21.0 percent for full year 2024.
Outlook
Full-year 2025 outlook of an increase in after-tax adjusted operating income per share of 8 percent to 12 percent when comparing to the full-year 2024 result of
NON-GAAP FINANCIAL MEASURES
We analyze our performance using non-GAAP financial measures which exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We believe the following non-GAAP financial measures are better performance measures and better indicators of the revenue and profitability and underlying trends in our business:
- After-tax adjusted operating income or loss, which excludes investment gains or losses, amortization of the cost of reinsurance, non-contemporaneous reinsurance, reserve assumption updates, as well as certain other items, as applicable;
- Book value per common share, which is calculated excluding AOCI.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. Investment gains or losses and unrealized gains or losses on securities depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business. Book value per common share excluding AOCI provides a more comparable and consistent view of our results, as AOCI tends to fluctuate depending on market conditions and general economic trends.
We exited a substantial portion of our Closed Block individual disability product line through the two phases of the reinsurance transaction that were executed in December 2020 and March 2021. As a result, we exclude the amortization of the cost of reinsurance that we recognized upon the exit of the business related to the policies on claim status as well as the impact of non-contemporaneous reinsurance that resulted from the adoption of ASU 2018-12. We believe that the exclusion of these items provides a better view of our results from our ongoing businesses.
Cash flow assumptions used to calculate our liability for future policy benefits are reviewed at least annually and updated, as needed, with the resulting impact reflected in net income. While the effects of these assumption updates are recorded in the reporting period in which the review is completed, these updates reflect experience emergence and changes to expectations spanning multiple periods. We believe that by excluding the impact of reserve assumption updates we are providing a more comparable and consistent view of our quarterly results.
We may at other times exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace net income or net loss as a measure of our overall profitability.
CONFERENCE CALL INFORMATION
Members of Unum Group senior management will host a conference call on Wednesday, February 5, 2025, at 8:00 a.m. Eastern Time to discuss the results of operations for the fourth quarter of 2024, and outlook for 2025. Topics may include forward-looking information, such as the Company’s outlook on future results, trends in operations, and other material information.
To receive dial in information for the call, please register in advance by using the following URL: https://registrations.events/direct/Q4I330796148. Upon registration you will receive a dial-in number to use to access the event. It is recommended that you register at least 10 minutes before the start of the event. In addition, a live webcast of the call will also be available at www.investors.unum.com in a listen-only mode. It is recommended that webcast viewers access the "Investors" section of the Company's website and opt-in to the webcast approximately 5-10 minutes prior to the start of the call. A replay of the webcast will be available on the Company's website. A replay of the call will also be available through February 12, 2025 by using the registration URL noted above.
In conjunction with today’s earnings announcement, the Company’s Statistical Supplement for the fourth quarter of 2024 and the 2025 Outlook presentation are available on the “Investors” section of the Company’s website.
ABOUT UNUM GROUP
Unum Group (NYSE: UNM), a leading international provider of workplace benefits and services, has been helping workers and their families thrive for more than 175 years. Through its Unum and Colonial Life brands, the company offers disability, life, accident, critical illness, dental, and vision insurance; leave and absence management support; and behavioral health services. In 2024, Unum Group reported revenues of
Visit the Unum Group newsroom (https://www.unumgroup.com/newsroom) for more information, and connect with us on LinkedIn (https://www.linkedin.com/company/unum), Facebook (https://www.facebook.com/unumbenefits/), and Instagram (https://www.instagram.com/unumbenefits/).
SAFE HARBOR STATEMENT
Certain information in this news release constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments and speak only as of the date made. These forward-looking statements, including statements about anticipated growth in after-tax adjusted operating income per share and core operations premium growth, are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. The following factors, in addition to other factors mentioned from time to time, may cause actual results to differ materially from those contemplated by the forward-looking statements: (1) fluctuation in insurance reserve liabilities and claim payments due to changes in claim incidence, recovery rates, mortality and morbidity rates, and policy benefit offsets due to, among other factors, the rate of unemployment and consumer confidence, the emergence of new diseases, epidemics, or pandemics, new trends and developments in medical treatments, the effectiveness of our claims operational processes, and changes in governmental programs; (2) sustained periods of low interest rates; (3) unfavorable economic or business conditions, both domestic and foreign, that may result in decreases in sales, premiums, or persistency, as well as unfavorable claims activity or unfavorable returns on our investment portfolio; (4) the impact of pandemics and other public health issues on our business, financial position, results of operations, liquidity and capital resources, and overall business operations; (5)changes in, or interpretations or enforcement of, laws and regulations; (6) a cybersecurity attack or other security breach resulting in compromised data or the unauthorized acquisition of confidential data; (7) the failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cybersecurity attack, or other event; (8) investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our liabilities; (9) increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors; (10) ineffectiveness of our derivatives hedging programs due to changes in forecasted cash flows, the economic environment, counterparty risk, ratings downgrades, capital market volatility, changes in interest rates, and/or regulation; (11) changes in our financial strength and credit ratings; (12) actual experience in the broad array of our products that deviates from our assumptions used in pricing, underwriting, and reserving; (13) our ability to hire and retain qualified employees; (14) our ability to develop digital capabilities or execute on our technology systems upgrades or replacements; (15) availability of reinsurance in the market and the ability of our reinsurers to meet their obligations to us; (16) ability to generate sufficient internal liquidity and/or obtain external financing; (17) damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, external events, and/or inadequate or failed internal controls and procedures; (18) disruptions to our business or our ability to leverage data caused by the use and reliance on third party vendors, including vendors providing web and cloud-based applications; (19) recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets; (20) effectiveness of our risk management program; (21) contingencies and the level and results of litigation; (22) fluctuation in foreign currency exchange rates; and (23) our ability to meet environment, social, and governance standards and expectations of investors, regulators, customers, and other stakeholders.
For further discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Part 1, Item 1A "Risk Factors" of our annual report on Form 10-K for the year ended December 31, 2023. The forward-looking statements in this news release are being made as of the date of this news release, and we expressly disclaim any obligation to update or revise any forward-looking statement contained herein, even if made available on our website or otherwise.
Unum Group |
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FINANCIAL HIGHLIGHTS |
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(Unaudited) |
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($ in millions, except share data) |
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Three Months Ended December 31 |
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Year Ended December 31 |
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2024 |
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2023 |
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|
2024 |
|
|
|
2023 |
|
Revenue |
|
|
|
|
|
|
|
||||||||
Premium Income |
$ |
2,631.1 |
|
|
$ |
2,551.7 |
|
|
$ |
10,497.4 |
|
|
$ |
10,046.0 |
|
Net Investment Income |
|
543.6 |
|
|
|
530.8 |
|
|
|
2,130.0 |
|
|
|
2,096.7 |
|
Net Investment Loss |
|
(10.1 |
) |
|
|
(6.0 |
) |
|
|
(34.6 |
) |
|
|
(36.0 |
) |
Other Income |
|
72.0 |
|
|
|
68.6 |
|
|
|
294.5 |
|
|
|
279.2 |
|
Total Revenue |
|
3,236.6 |
|
|
|
3,145.1 |
|
|
|
12,887.3 |
|
|
|
12,385.9 |
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Benefits and Expenses |
|
|
|
|
|
|
|
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Policy Benefits Including Remeasurement Loss or Gain |
|
1,861.2 |
|
|
|
1,820.1 |
|
|
|
6,917.9 |
|
|
|
7,257.1 |
|
Commissions |
|
310.8 |
|
|
|
300.4 |
|
|
|
1,258.6 |
|
|
|
1,170.1 |
|
Interest and Debt Expense |
|
52.5 |
|
|
|
49.2 |
|
|
|
201.1 |
|
|
|
194.8 |
|
Deferral of Acquisition Costs |
|
(156.2 |
) |
|
|
(164.7 |
) |
|
|
(651.5 |
) |
|
|
(632.2 |
) |
Amortization of Deferred Acquisition Costs |
|
133.1 |
|
|
|
122.7 |
|
|
|
521.0 |
|
|
|
481.4 |
|
Other Expenses |
|
589.7 |
|
|
|
588.7 |
|
|
|
2,388.9 |
|
|
|
2,274.6 |
|
Total Benefits and Expenses |
|
2,791.1 |
|
|
|
2,716.4 |
|
|
|
10,636.0 |
|
|
|
10,745.8 |
|
|
|
|
|
|
|
|
|
||||||||
Income Before Income Tax |
|
445.5 |
|
|
|
428.7 |
|
|
|
2,251.3 |
|
|
|
1,640.1 |
|
Income Tax Expense |
|
96.8 |
|
|
|
98.1 |
|
|
|
472.2 |
|
|
|
356.3 |
|
|
|
|
|
|
|
|
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Net Income |
$ |
348.7 |
|
|
$ |
330.6 |
|
|
$ |
1,779.1 |
|
|
$ |
1,283.8 |
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|
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PER SHARE INFORMATION |
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Net Income Per Common Share |
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Basic |
$ |
1.93 |
|
|
$ |
1.70 |
|
|
$ |
9.49 |
|
|
$ |
6.53 |
|
Assuming Dilution |
$ |
1.92 |
|
|
$ |
1.69 |
|
|
$ |
9.46 |
|
|
$ |
6.50 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Common Shares - Basic (000s) |
|
180,985.5 |
|
|
|
194,723.8 |
|
|
|
187,497.7 |
|
|
|
196,659.7 |
|
Weighted Average Common Shares - Assuming Dilution (000s) |
|
181,637.7 |
|
|
|
195,476.2 |
|
|
|
188,069.2 |
|
|
|
197,602.0 |
|
Outstanding Shares - (000s) |
|
|
|
|
|
178,589.0 |
|
|
|
193,372.1 |
|
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Reconciliation of Non-GAAP Financial Measures |
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|
Three Months Ended December 31 |
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|
2024 |
|
2023 |
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|
(in millions) |
|
per share * |
|
(in millions) |
|
per share * |
||||||||
Net Income |
$ |
348.7 |
|
|
$ |
1.92 |
|
|
$ |
330.6 |
|
|
$ |
1.69 |
|
Excluding: |
|
|
|
|
|
|
|
||||||||
Net Investment Loss (net of tax benefit of |
|
(8.2 |
) |
|
|
(0.04 |
) |
|
|
(4.6 |
) |
|
|
(0.02 |
) |
Amortization of the Cost of Reinsurance (net of tax benefit of |
|
(8.1 |
) |
|
|
(0.04 |
) |
|
|
(8.7 |
) |
|
|
(0.04 |
) |
Non-Contemporaneous Reinsurance (net of tax benefit of |
|
(3.9 |
) |
|
|
(0.03 |
) |
|
|
(6.6 |
) |
|
|
(0.04 |
) |
After-tax Adjusted Operating Income |
$ |
368.9 |
|
|
$ |
2.03 |
|
|
$ |
350.5 |
|
|
$ |
1.79 |
|
|
Year Ended December 31 |
||||||||||||||
|
2024 |
|
2023 |
||||||||||||
|
(in millions) |
|
per share * |
|
(in millions) |
|
per share * |
||||||||
Net Income |
$ |
1,779.1 |
|
|
$ |
9.46 |
|
|
$ |
1,283.8 |
|
|
$ |
6.50 |
|
Excluding: |
|
|
|
|
|
|
|
||||||||
Net Investment Loss (net of tax benefit of |
|
(27.0 |
) |
|
|
(0.14 |
) |
|
|
(28.2 |
) |
|
|
(0.14 |
) |
Amortization of the Cost of Reinsurance (net of tax benefit of |
|
(32.7 |
) |
|
|
(0.17 |
) |
|
|
(34.8 |
) |
|
|
(0.18 |
) |
Non-Contemporaneous Reinsurance (net of tax benefit of |
|
(19.9 |
) |
|
|
(0.11 |
) |
|
|
(27.5 |
) |
|
|
(0.14 |
) |
Reserve Assumption Updates (net of tax expense (benefit) of |
|
282.6 |
|
|
|
1.50 |
|
|
|
(139.3 |
) |
|
|
(0.70 |
) |
Loss on Legal Settlement (net of tax benefit of |
|
(12.1 |
) |
|
|
(0.06 |
) |
|
|
— |
|
|
|
— |
|
After-tax Adjusted Operating Income |
$ |
1,588.2 |
|
|
$ |
8.44 |
|
|
$ |
1,513.6 |
|
|
$ |
7.66 |
|
|
|
|
|
|
|
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* Assuming Dilution |
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|
|
|
|
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|
December 31 |
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|
2024 |
|
2023 |
||||||||||||
|
(in millions) |
|
per share |
|
(in millions) |
|
per share |
||||||||
Total Stockholders' Equity (Book Value) |
$ |
10,961.1 |
|
|
$ |
61.38 |
|
|
$ |
9,651.4 |
|
|
$ |
49.91 |
|
Excluding: |
|
|
|
|
|
|
|
||||||||
Net Unrealized Loss on Securities |
|
(2,755.2 |
) |
|
|
(15.43 |
) |
|
|
(1,919.1 |
) |
|
|
(9.92 |
) |
Effect of Change in Discount Rate Assumptions on the Liability for Future Policy Benefits |
|
1,185.4 |
|
|
|
6.64 |
|
|
|
(648.4 |
) |
|
|
(3.35 |
) |
Net Loss on Derivatives |
|
(270.7 |
) |
|
|
(1.51 |
) |
|
|
(73.7 |
) |
|
|
(0.39 |
) |
Subtotal |
|
12,801.6 |
|
|
|
71.68 |
|
|
|
12,292.6 |
|
|
|
63.57 |
|
Excluding: |
|
|
|
|
|
|
|
||||||||
Foreign Currency Translation Adjustment |
|
(343.0 |
) |
|
|
(1.93 |
) |
|
|
(321.1 |
) |
|
|
(1.66 |
) |
Subtotal |
|
13,144.6 |
|
|
|
73.61 |
|
|
|
12,613.7 |
|
|
|
65.23 |
|
Excluding: |
|
|
|
|
|
|
|
||||||||
Unrecognized Pension and Postretirement Benefit Costs |
|
(340.2 |
) |
|
|
(1.90 |
) |
|
|
(345.7 |
) |
|
|
(1.79 |
) |
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss |
$ |
13,484.8 |
|
|
$ |
75.51 |
|
|
$ |
12,959.4 |
|
|
$ |
67.02 |
|
|
|
Year Ended |
|||||||||
|
|
December 31,
|
|
December 31, 2023 |
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|
|
Premium
|
|
Premium
|
|
Weighted
|
|
Premium
|
|||
|
|
|
|
|
|||||||
|
|
|
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|
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Unum International |
|
|
|
|
|
|
|
|
|||
Unum |
|
$ |
794.9 |
|
£ |
568.3 |
|
1.279 |
|
$ |
726.9 |
Unum Poland |
|
|
154.6 |
|
zł |
495.5 |
|
0.251 |
|
|
124.4 |
Total |
|
|
949.5 |
|
|
|
|
|
|
851.3 |
|
Unum US |
|
|
6,883.2 |
|
$ |
6,579.2 |
|
|
|
|
6,579.2 |
Colonial Life |
|
|
1,783.9 |
|
$ |
1,726.1 |
|
|
|
|
1,726.1 |
Core Operations |
|
$ |
9,616.6 |
|
|
|
|
|
$ |
9,156.6 |
|
1Premium income shown in millions of pounds for Unum |
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2Exchange rate is calculated using the average foreign currency exchange rates for the most recent period, applied to the comparable prior period. |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20250204847362/en/
MEDIA
Emily Downing
edowning@unum.com
INVESTORS
Matt Royal
investorrelations@unum.com
Source: Unum Group
