Unum Group (NYSE: UNM) lifts Q1 2026 net income to $232M
Filing Impact
Filing Sentiment
Form Type
10-Q
Unum Group reported first-quarter 2026 net income of $232.0 million, up from $189.1 million a year earlier. Total revenue rose to $3,355.2 million from $3,091.6 million, driven mainly by higher premium income and a much smaller net investment loss.
Basic and diluted net income per common share increased to $1.41 from $1.06. Total assets were $62,714.3 million and stockholders’ equity was $10,892.4 million as of March 31, 2026. Operating activities provided $340.8 million of cash, while the company returned capital through $398.8 million of share repurchases and $78.2 million of dividends.
Positive
- None.
Negative
- None.
Insights
Unum delivered higher Q1 earnings, supported by smaller investment losses and active capital return.
Unum Group grew Q1 2026 revenue to $3,355.2 million and net income to $232.0 million, with earnings per share reaching $1.41. The improvement versus 2025 reflects higher premium income and a sharp reduction in net investment loss from $206.8 million to $5.0 million.
Total assets stood at $62,714.3 million and equity at $10,892.4 million, while future policy benefits declined modestly to $37,300.5 million. Net cash from operating activities remained strong at $340.8 million, supporting $398.8 million of share repurchases and $78.2 million of dividends in the quarter.
Investment income declined to $483.4 million from $513.2 million, partly offset by higher premium revenue. Credit metrics in the investment portfolio and mortgage loan allowances changed only slightly, suggesting stable asset quality based on the disclosed figures for March 31, 2026.
Key Figures
Total revenue: $3,355.2 million
Net income: $232.0 million
EPS (basic and diluted): $1.41 per share
+5 more
8 metrics
Total revenue
$3,355.2 million
Three months ended March 31, 2026
Net income
$232.0 million
Three months ended March 31, 2026
EPS (basic and diluted)
$1.41 per share
Three months ended March 31, 2026
Total assets
$62,714.3 million
As of March 31, 2026
Stockholders’ equity
$10,892.4 million
As of March 31, 2026
Net cash from operating activities
$340.8 million
Three months ended March 31, 2026
Share repurchases
$398.8 million
Three months ended March 31, 2026
Dividends paid
$78.2 million
Three months ended March 31, 2026
Key Terms
fair value hierarchy, Level 3, variable interest entities, allowance for credit losses, +1 more
5 terms
fair value hierarchy financial
"We classify financial instruments in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs"
Level 3 financial
"Level 3 - the lowest category of the fair value hierarchy and reflects the judgment of management regarding what market participants would use"
Level 3 describes the lowest-confidence category in the accounting “fair value” hierarchy, covering assets or liabilities whose prices are not observable in the market and must be estimated using judgment and internal models. For investors, Level 3 items matter because they can introduce greater uncertainty and potential valuation swings—like valuing a unique antique versus checking a price tag on a supermarket shelf—so they signal higher model risk and lower liquidity.
variable interest entities financial
"We invest in variable interests issued by variable interest entities. These investments, which are passive in nature, include minority ownership interests"
A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.
allowance for credit losses financial
"The allowance for expected credit losses was $15.3 million and $15.9 million at March 31, 2026 and December 31, 2025, respectively."
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
funding agreement-backed loan program financial
"During February 2026, we established a funding agreement-backed loan (FABL) program, pursuant to which a special purpose unaffiliated Delaware statutory trust"
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended March 31, 2026
For the transition period from to
Commission file number 001-11294
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
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| Not Applicable | |||||
| (Former name, former address and former fiscal year, if changed since last report) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
(Check one):
| x | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
TABLE OF CONTENTS
| Page | |||||||||||
Cautionary Statement Regarding Forward-Looking Statements | 1 | ||||||||||
PART I - FINANCIAL INFORMATION | |||||||||||
Item 1. | Financial Statements (Unaudited): | 3 | |||||||||
Consolidated Balance Sheets at March 31, 2026 and December 31, 2025 | 3 | ||||||||||
Consolidated Statements of Income for the three months ended March 31, 2026 and 2025 | 5 | ||||||||||
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025 | 6 | ||||||||||
Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2026 and 2025 | 7 | ||||||||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 | 8 | ||||||||||
Notes to Consolidated Financial Statements | 9 | ||||||||||
Note 1 - Basis of Presentation | 9 | ||||||||||
Note 2 - Accounting Developments | 9 | ||||||||||
Note 3 - Fair Value of Financial Instruments | 10 | ||||||||||
Note 4 - Investments | 26 | ||||||||||
Note 5 - Derivative Financial Instruments | 41 | ||||||||||
Note 6 - Accumulated Other Comprehensive Loss | 48 | ||||||||||
Note 7 - Liability for Future Policy Benefits | 50 | ||||||||||
Note 8 - Policyholders' Account Balances | 66 | ||||||||||
Note 9 - Deferred Acquisition Costs | 70 | ||||||||||
Note 10 - Segment Information | 71 | ||||||||||
Note 11 - Employee Benefit Plans | 75 | ||||||||||
Note 12 - Stockholders' Equity and Earnings Per Common Share | 76 | ||||||||||
Note 13 - Commitments and Contingent Liabilities | 77 | ||||||||||
Note 14 - Debt and Other | 78 | ||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 80 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 114 | |||||||||
Item 4. | Controls and Procedures | 115 | |||||||||
PART II - OTHER INFORMATION | |||||||||||
Item 1. | Legal Proceedings | 116 | |||||||||
Item 1A. | Risk Factors | 116 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 116 | |||||||||
Item 5. | Other Information | 116 | |||||||||
Item 6. | Exhibits | 117 | |||||||||
Signatures | 118 | ||||||||||
Table of Contents
Cautionary Statement Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the Act) provides a "safe harbor" to encourage companies to provide prospective information, as long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. Certain information contained in this quarterly report on Form 10-Q (including certain statements in the consolidated financial statements and related notes and Management's Discussion and Analysis), or in any other written or oral statements made by us in communications with the financial community or contained in documents filed with the Securities and Exchange Commission (SEC), may be considered forward-looking statements within the meaning of the Act. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments. Forward-looking statements speak only as of the date made. We undertake no obligation to update these statements, even if made available on our website or otherwise. These statements may be made directly in this document or may be made part of this document by reference to other documents filed by us with the SEC, a practice which is known as "incorporation by reference." You can find many of these statements by looking for words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "plans," "assumes," "intends," "projects," "goals,” "objectives," or similar expressions in this document or in documents incorporated herein.
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Cautionary Statement Regarding Forward-Looking Statements - Continued
These forward-looking statements are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. We caution readers that 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:
•Fluctuation in insurance reserve liabilities, claim payments, and pricing 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.
•Sustained periods of low interest rates.
•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.
•Changes in, or interpretations or enforcement of, laws and regulations.
•A cybersecurity attack or other security breach resulting in compromised data or the unauthorized acquisition of confidential data.
•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.
•Increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors.
•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.
•Ineffectiveness of our derivatives hedging programs due to changes in forecasted cash flows, the economic environment, counterparty risk, ratings downgrades, capital market volatility, collateral requirements, changes in interest rates, and/or regulation.
•Our ability to develop digital capabilities or execute on our technology systems upgrades or replacements.
•Our use of artificial intelligence technology, as well as changes in artificial intelligence laws and regulations.
•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.
•Changes in our financial strength and credit ratings.
•The ability of our reinsurers to meet their obligations to us and availability of reinsurance in the market.
•Our ability to hire and retain qualified employees.
•Disruptions to our business or our ability to access data caused by the use and reliance on third-party vendors, including vendors providing web and cloud-based applications.
•Ability to generate sufficient internal liquidity and/or obtain external financing.
•Damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, social issues, third-party vendors, external events, and/or cyber or other information security incidents.
•Recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets.
•Effectiveness of our risk management program.
•Contingencies and the level and results of litigation.
•Fluctuation in foreign currency exchange rates.
•Our ability to meet sustainability 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 of our annual report on Form 10-K for the year ended December 31, 2025.
All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Unum Group and Subsidiaries
| March 31 | December 31 | ||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Assets | |||||||||||
| Investments | |||||||||||
Fixed Maturity Securities - at fair value (amortized cost of $ | $ | $ | |||||||||
Mortgage Loans (net of allowance for credit losses of $ | |||||||||||
| Policy Loans | |||||||||||
| Other Long-term Investments | |||||||||||
| Short-term Investments | |||||||||||
| Total Investments | |||||||||||
| Other Assets | |||||||||||
| Cash and Bank Deposits | |||||||||||
Accounts and Premiums Receivable (net of allowance for credit losses of $ | |||||||||||
Reinsurance Recoverable (net of allowance for credit losses of $ | |||||||||||
| Accrued Investment Income | |||||||||||
| Deferred Acquisition Costs | |||||||||||
| Goodwill | |||||||||||
| Property and Equipment | |||||||||||
| Deferred Income Tax | |||||||||||
| Other Assets | |||||||||||
| Total Assets | $ | $ | |||||||||
See notes to consolidated financial statements.
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CONSOLIDATED BALANCE SHEETS (UNAUDITED) - Continued
Unum Group and Subsidiaries
| March 31 | December 31 | ||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Liabilities | |||||||||||
| Future Policy Benefits | $ | $ | |||||||||
| Policyholders' Account Balances | |||||||||||
| Unearned Premiums | |||||||||||
| Other Policyholders’ Funds | |||||||||||
| Income Tax Payable | |||||||||||
| Deferred Income Tax | |||||||||||
| Long-term Debt | |||||||||||
| Other Liabilities | |||||||||||
| Total Liabilities | |||||||||||
Commitments and Contingent Liabilities - Note 13 | |||||||||||
| Stockholders' Equity | |||||||||||
Common Stock, $ | |||||||||||
Authorized: | |||||||||||
Issued: | |||||||||||
| Additional Paid-in Capital | |||||||||||
| Accumulated Other Comprehensive Loss | ( | ( | |||||||||
| Retained Earnings | |||||||||||
Treasury Stock - at cost: | ( | ( | |||||||||
| Total Stockholders' Equity | |||||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | |||||||||
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Unum Group and Subsidiaries
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars, except share data) | |||||||||||
| Revenue | |||||||||||
| Premium Income | $ | $ | |||||||||
| Net Investment Income | |||||||||||
| Net Investment Loss | ( | ( | |||||||||
| Other Income | |||||||||||
| Total Revenue | |||||||||||
| Benefits and Expenses | |||||||||||
| Policy Benefits | |||||||||||
| Policy Benefits - Remeasurement Loss (Gain) | ( | ||||||||||
| Commissions | |||||||||||
| Interest and Debt Expense | |||||||||||
| Deferral of Acquisition Costs | ( | ( | |||||||||
| Amortization of Deferred Acquisition Costs | |||||||||||
| Compensation Expense | |||||||||||
| Other Expenses | |||||||||||
| Total Benefits and Expenses | |||||||||||
| Income Before Income Tax | |||||||||||
| Income Tax Expense (Benefit) | |||||||||||
| Current | |||||||||||
| Deferred | ( | ||||||||||
| Total Income Tax Expense | |||||||||||
| Net Income | $ | $ | |||||||||
| Net Income Per Common Share | |||||||||||
| Basic | $ | $ | |||||||||
| Assuming Dilution | $ | $ | |||||||||
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Unum Group and Subsidiaries
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Net Income | $ | $ | |||||||||
| Other Comprehensive Income | |||||||||||
Change in Net Unrealized Loss on Securities (net of tax expense (benefit) of $( | ( | ||||||||||
Change in the Effect of Discount Rate Assumptions on the Liability for Future Policy Benefits, Net of Reinsurance (net of tax expense (benefit) of $ | ( | ||||||||||
Change in Net Loss on Derivatives (net of tax expense (benefit) of $( | ( | ||||||||||
Change in Foreign Currency Translation Adjustment (net of tax expense (benefit) of $ | ( | ||||||||||
Change in Unrecognized Pension and Postretirement Benefit Costs (net of tax expense (benefit) of $ | |||||||||||
| Total Other Comprehensive Income | |||||||||||
| Comprehensive Income | $ | $ | |||||||||
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Unum Group and Subsidiaries
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Common Stock | |||||||||||
Balance at Beginning of Year and End of Period | $ | $ | |||||||||
| Additional Paid-in Capital | |||||||||||
| Balance at Beginning of Year | |||||||||||
| Repurchase of Common Stock | |||||||||||
Other Common Stock Activity | ( | ||||||||||
| Balance at End of Period | |||||||||||
| Accumulated Other Comprehensive Loss | |||||||||||
| Balance at Beginning of Year | ( | ( | |||||||||
| Other Comprehensive Income | |||||||||||
| Balance at End of Period | ( | ( | |||||||||
| Retained Earnings | |||||||||||
| Balance at Beginning of Year | |||||||||||
| Net Income | |||||||||||
Dividends to Stockholders (per common share: $ | ( | ( | |||||||||
| Balance at End of Period | |||||||||||
| Treasury Stock | |||||||||||
| Balance at Beginning of Year | ( | ( | |||||||||
| Repurchase of Common Stock | ( | ( | |||||||||
| Balance at End of Period | ( | ( | |||||||||
| Total Stockholders' Equity at End of Period | $ | $ | |||||||||
See notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Unum Group and Subsidiaries
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net Income | $ | $ | |||||||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | |||||||||||
| Change in Receivables | ( | ||||||||||
| Change in Deferred Acquisition Costs | ( | ( | |||||||||
| Change in Insurance Liabilities | ( | ||||||||||
| Change in Income Taxes | |||||||||||
| Change in Other Accrued Liabilities | ( | ( | |||||||||
| Non-cash Components of Net Investment Income | ( | ( | |||||||||
Net Investment Loss | |||||||||||
| Depreciation | |||||||||||
| Amortization of the Cost of Reinsurance | |||||||||||
| Other, Net | ( | ||||||||||
| Net Cash Provided by Operating Activities | |||||||||||
| Cash Flows from Investing Activities | |||||||||||
| Proceeds from Sales of Fixed Maturity Securities | |||||||||||
| Proceeds from Maturities of Fixed Maturity Securities | |||||||||||
| Proceeds from Sales and Maturities of Other Investments | |||||||||||
| Purchases of Fixed Maturity Securities | ( | ( | |||||||||
| Purchases of Other Investments | ( | ( | |||||||||
Net Sales and Maturities (Purchases) of Short-term Investments | ( | ||||||||||
Net Increase (Decrease) in Payables for Collateral on Investments | ( | ||||||||||
| Net Purchases of Property and Equipment | ( | ( | |||||||||
Net Cash Provided (Used) by Investing Activities | ( | ||||||||||
| Cash Flows from Financing Activities | |||||||||||
| Long-term Debt Repayment | ( | ||||||||||
| Issuance of Common Stock | |||||||||||
| Repurchase of Common Stock | ( | ( | |||||||||
| Dividends Paid to Stockholders | ( | ( | |||||||||
| Proceeds from Policyholders' Account Deposits | |||||||||||
| Payments for Policyholders' Account Withdrawals | ( | ( | |||||||||
| Other, Net | ( | ||||||||||
| Net Cash Used by Financing Activities | ( | ( | |||||||||
| Net Increase in Cash and Bank Deposits | |||||||||||
| Cash and Bank Deposits at Beginning of Year | |||||||||||
| Cash and Bank Deposits at End of Period | $ | $ | |||||||||
See notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Unum Group and Subsidiaries
March 31, 2026
Note 1 - Basis of Presentation
In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of full year performance.
Note 2 - Accounting Developments
Accounting Updates Adopted in 2025:
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The amendments in this update required greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. Specifically, the guidance required additional information that met a quantitative threshold in specified categories with respect to the reconciliation of the effective tax rate to the statutory tax rate for federal, state, and foreign income taxes. The specified categories were the following: state and local income taxes, foreign tax effects, effect of cross-border tax laws, enactment of new tax laws, nontaxable or nondeductible items, tax credits, changes in valuation allowances, and changes in unrecognized tax benefits. The quantitative threshold for each category is five percent of the amount computed by multiplying income (or loss) from continuing operations before income taxes by the statutory federal income tax rate. In addition, the amendments required additional information pertaining to income taxes paid, net of refunds, to be disaggregated by federal, state and foreign jurisdictions, and further disaggregated for specific jurisdictions to the extent the related amounts exceeded a quantitative threshold of five percent of total income taxes paid. The amendments also required disclosures of income (or loss) before income tax expense (or benefit) as domestic or foreign for each annual reporting period.
The amendments eliminated the historic requirement to disclose information regarding unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the twelve months following the reporting date, as well as the requirement to disclose the cumulative temporary differences when a deferred tax liability was not recognized due to certain exceptions under ASC 740.
The amendments in this update were applied retrospectively in the annual period ended as of December 31, 2025. The adoption of this update modified our disclosures, but did not have an impact on our financial position or results of operations.
Accounting Updates Outstanding:
ASU 2024-03, Disaggregation of Income Statement Expenses: Income Statement - Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and related amendment
The amendments in this update require the disclosure of disaggregation of certain income statement expense line items. Specifically, the guidance requires the disclosure of additional information related to certain expenses, including employee compensation, depreciation and amortization, and certain other expenses included in each income statement line item. The amendments also require the disclosure of both the total amount of selling expenses and a definition of selling expenses.
We will adopt this update effective for the annual period beginning January 1, 2027, and interim periods beginning January 1, 2028. The adoption of this update is permitted on a prospective basis or a retrospective basis. The adoption of this update will expand our disclosures, but will not have an impact on our financial position or results of operations.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 2 - Accounting Developments - Continued
ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software: Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40)
The amendments in this update modernize the recognition framework for the capitalization of internal-use software and remove all references to software development project stages. The guidance requires software development costs to be capitalized when both of the following criteria are met: (i) management has authorized and committed to funding the project, and (ii) it is probable that the project will be completed and the software will be used to perform its intended function. Additionally, the update aligns disclosure requirements for capitalized software costs with those under ASC 360-10, Property, Plant, and Equipment.
We will adopt this update effective for the interim and annual periods beginning January 1, 2028. The adoption of this update is permitted on a prospective, retrospective, or modified retrospective basis. We are currently evaluating the impact the adoption of this update will have on our financial position, results of operations, and disclosures.
Note 3 - Fair Value of Financial Instruments
Fair Value Measurements for Financial Instruments Carried at Fair Value
We report fixed maturity securities, which are classified as available-for-sale securities, derivative financial instruments, and unrestricted equity securities at fair value in our consolidated balance sheets. We report our investments in private equity partnerships at our share of the partnerships' net asset value (NAV) per share or its equivalent as a practical expedient for fair value.
The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and less judgment utilized in measuring fair value. An active market for a financial instrument is a market in which transactions for an asset or a similar asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and should be used to measure fair value whenever available. Conversely, financial instruments rarely traded or not quoted have less observability and are measured at fair value using valuation techniques that require more judgment. Pricing observability is generally impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, and overall market conditions.
We classify financial instruments in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:
•Level 1 - the highest category of the fair value hierarchy classification wherein inputs are unadjusted and represent quoted prices in active markets for identical assets or liabilities at the measurement date.
•Level 2 - valued using inputs (other than prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.
•Level 3 - the lowest category of the fair value hierarchy and reflects the judgment of management regarding what market participants would use in pricing assets or liabilities at the measurement date. Financial assets and liabilities categorized as Level 3 are generally those that are valued using unobservable inputs to extrapolate an estimated fair value.
Valuation Methodologies of Financial Instruments Measured at Fair Value
Valuation techniques used for assets and liabilities accounted for at fair value are generally categorized into three types. The market approach uses prices and other relevant information from market transactions involving identical or comparable assets
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
or liabilities. The income approach converts future amounts, such as cash flows or earnings, to a single present amount, or a discounted amount. The cost approach is based upon the amount that currently would be required to replace the service capacity of an asset, or the current replacement cost.
We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available that can be obtained without undue cost and effort. In some cases, a single valuation technique will be appropriate (for example, when valuing an asset or liability using quoted prices in an active market for identical assets or liabilities). In other cases, multiple valuation techniques will be appropriate. If we use multiple valuation techniques to measure fair value, we evaluate and weigh the results, as appropriate, considering the reasonableness of the range indicated by those results. A fair value measurement is the point within that range that is most representative of fair value in the circumstances.
The selection of the valuation method(s) to apply considers the definition of an exit price and depends on the nature of the asset or liability being valued. For assets and liabilities accounted for at fair value, we generally use valuation techniques consistent with the market approach, and to a lesser extent, the income approach. We believe the market approach provides more observable data than the income approach, considering the type of investments we hold. Our fair value measurements could differ significantly based on the valuation technique and available inputs. When using a pricing service, we obtain the vendor's pricing documentation to ensure we understand their methodologies. We periodically review and approve the selection of our pricing vendors to ensure we are in agreement with their current methodologies. When markets are less active, brokers may rely more on models with inputs based on the information available only to the broker. Our internal investment management professionals, which include portfolio managers and analysts, monitor securities priced by brokers and evaluate their prices for reasonableness based on benchmarking to available primary and secondary market information. In weighing a broker quote as an input to fair value, we place less reliance on quotes that do not reflect the result of market transactions. We also consider the nature of the quote, particularly whether it is a bid or market quote. If prices in an inactive market do not reflect current prices for the same or similar assets, adjustments may be necessary to arrive at fair value. When relevant market data is unavailable, which may be the case during periods of market uncertainty, the income approach can, in suitable circumstances, provide a more appropriate fair value. During 2026, we have applied valuation approaches and techniques on a consistent basis to similar assets and liabilities and consistent with those approaches and techniques used at year end 2025.
Fixed Maturity and Equity Securities
We use observable and unobservable inputs in measuring the fair value of our fixed maturity and equity securities. For securities categorized as Level 1, fair values equal active Trade Reporting and Compliance Engine (TRACE) pricing or unadjusted market maker prices. For securities categorized as Level 2 or Level 3, inputs that may be used in valuing each class of securities at any given time period are disclosed below. Actual inputs used to determine fair values will vary for each reporting period depending on the availability of inputs which may, at times, be affected by the lack of market liquidity.
| Level 2 | Level 3 | ||||||||||||||||
| Instrument | Observable Inputs | Unobservable Inputs | |||||||||||||||
| United States Government and Government Agencies and Authorities | |||||||||||||||||
| Valuation Method | Principally the market approach | Not applicable | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | ||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||
| Valuation Method | Principally the market approach | Principally the market approach | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Analysis of similar bonds, adjusted for comparability | |||||||||||||||
| Relevant reports issued by analysts and rating agencies | |||||||||||||||||
| Audited financial statements | |||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| Level 2 | Level 3 | ||||||||||||||||
| Instrument | Observable Inputs | Unobservable Inputs | |||||||||||||||
| Foreign Governments | |||||||||||||||||
| Valuation Method | Principally the market approach | Principally the market approach | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Analysis of similar bonds, adjusted for comparability | |||||||||||||||
| Non-binding broker quotes | |||||||||||||||||
| Call provisions | |||||||||||||||||
| Public Utilities | |||||||||||||||||
| Valuation Method | Principally the market and income approaches | Principally the market and income approaches | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Change in benchmark reference | |||||||||||||||
| Non-binding broker quotes | Analysis of similar bonds, adjusted for comparability | ||||||||||||||||
| Benchmark yields | Discount for size - illiquidity | ||||||||||||||||
| Transactional data for new issuances and secondary trades | Volatility of credit | ||||||||||||||||
| Security cash flows and structures | Lack of marketability | ||||||||||||||||
| Recent issuance / supply | |||||||||||||||||
| Audited financial statements | |||||||||||||||||
| Security and issuer level spreads | |||||||||||||||||
| Security creditor ratings/maturity/capital structure/optionality | |||||||||||||||||
| Public covenants | |||||||||||||||||
| Comparative bond analysis | |||||||||||||||||
| Relevant reports issued by analysts and rating agencies | |||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| Level 2 | Level 3 | ||||||||||||||||
| Instrument | Observable Inputs | Unobservable Inputs | |||||||||||||||
Mortgage/Asset-Backed Securities1 | |||||||||||||||||
| Valuation Method | Principally the market and income approaches | Principally the market approach | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Analysis of similar bonds, adjusted for comparability | |||||||||||||||
| Non-binding broker quotes | Prices obtained from external pricing services | ||||||||||||||||
| Security cash flows and structures | |||||||||||||||||
| Underlying collateral | |||||||||||||||||
| Prepayment speeds/loan performance/delinquencies | |||||||||||||||||
| Relevant reports issued by analysts and rating agencies | |||||||||||||||||
| Audited financial statements | |||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||
| Valuation Method | Principally the market and income approaches | Principally the market and income approaches | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Change in benchmark reference | |||||||||||||||
| Non-binding broker quotes | Discount for size - illiquidity | ||||||||||||||||
| Benchmark yields | Volatility of credit | ||||||||||||||||
| Transactional data for new issuances and secondary trades | Lack of marketability | ||||||||||||||||
| Security cash flows and structures | Prices obtained from external pricing services | ||||||||||||||||
| Recent issuance / supply | |||||||||||||||||
| Security and issuer level spreads | |||||||||||||||||
| Security creditor ratings/maturity/capital structure/optionality | |||||||||||||||||
| Public covenants | |||||||||||||||||
| Comparative bond analysis | |||||||||||||||||
| Relevant reports issued by analysts and rating agencies | |||||||||||||||||
| Audited financial statements | |||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| Level 2 | Level 3 | ||||||||||||||||
| Instrument | Observable Inputs | Unobservable Inputs | |||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||
| Valuation Method | Principally the market approach | Principally the market approach | |||||||||||||||
| Valuation Techniques / Inputs | Non-binding broker quotes | Financial statement analysis | |||||||||||||||
| Benchmark yields | |||||||||||||||||
| Comparative bond analysis | |||||||||||||||||
| Call provisions | |||||||||||||||||
| Relevant reports issued by analysts and rating agencies | |||||||||||||||||
| Audited financial statements | |||||||||||||||||
| Perpetual Preferred and Equity Securities | |||||||||||||||||
| Valuation Method | Principally the market approach | Principally the market and income approaches | |||||||||||||||
| Valuation Techniques / Inputs | Prices obtained from external pricing services | Financial statement analysis | |||||||||||||||
| Non-binding broker quotes | |||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types.
The management of our investment portfolio includes establishing pricing policy and reviewing the reasonableness of sources and inputs used in developing pricing. We review all prices that vary between multiple pricing vendors by a threshold that is outside a normal market range for the asset type. In the event we receive a vendor's market price that does not appear reasonable based on our market analysis, we may challenge the price and request further information about the assumptions and methodologies used by the vendor to price the security. We may change the selected price based on a better data source such as an actual trade. We also review all prices that did not change from the prior month to ensure that these prices are within our expectations. The overall valuation process for determining fair values may include adjustments to valuations obtained from our pricing sources when they do not represent a valid exit price. These adjustments may be made when, in our judgment and considering our knowledge of the financial conditions and industry in which the issuer operates, certain features of the financial instrument require that an adjustment be made to the value originally obtained from our pricing sources. These features may include the complexity of the financial instrument, the market in which the financial instrument is traded, counterparty credit risk, credit structure, concentration, or liquidity. Additionally, an adjustment to the price derived from a model typically reflects our judgment of the inputs that other participants in the market for the financial instrument being measured at fair value would consider in pricing that same financial instrument. In the event an asset is sold, we test the validity of the fair value determined by our valuation techniques by comparing the selling price to the fair value determined for the asset in the immediately preceding month end reporting period.
Certain of our investments do not have readily determinable market prices and/or observable inputs or may at times be affected by the lack of market liquidity. For these securities, we use internally prepared valuations, including valuations based on estimates of future profitability, to estimate the fair value. Additionally, we may obtain prices from independent third-party brokers to aid in establishing valuations for certain of these securities. Key assumptions used by us to determine fair value for these securities include risk free interest rates, risk premiums, performance of underlying collateral (if any), and other factors involving significant assumptions which may or may not reflect those of an active market.
The parameters and inputs used to validate a price on a security may be adjusted for assumptions about risk and current market conditions on a quarter to quarter basis, as certain features may be more significant drivers of valuation at the time of pricing.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
Changes to inputs in valuations are not changes to valuation methodologies; rather, the inputs are modified to reflect direct or indirect impacts on asset classes from changes in market conditions.
At March 31, 2026, approximately 23.8 percent of our fixed maturity securities were valued using active trades from TRACE pricing or market maker prices for which there was current market activity in that specific security (comparable to receiving one binding quote). The prices obtained were not adjusted, and the assets were classified as Level 1.
The remaining 76.2 percent of our fixed maturity securities were valued based on non-binding quotes or other observable and unobservable inputs, as discussed below:
•57.5 percent of our fixed maturity securities were valued based on prices from pricing services that generally use observable inputs such as prices for securities or comparable securities in active markets in their valuation techniques. These assets were classified as Level 2.
•17.5 percent of our fixed maturity securities were valued based on one or more non-binding broker quotes, if validated by observable market data. When only one price is available, it is used if observable inputs and analysis confirms that it is appropriate. These assets, for which we were able to validate the price using other observable market data, were classified as Level 2.
•1.2 percent of our fixed maturity securities were valued based on prices of comparable securities, internal models, or pricing services or other non-binding quotes with no other observable market data. These assets were classified as either Level 2 or Level 3, with the categorization dependent on whether there was other observable market data.
Derivatives
Fair values for derivatives other than embedded derivatives in modified coinsurance arrangements are based on market quotes or pricing models and represent the net amount of cash we would have paid or received if the contracts had been settled or closed as of the last day of the period. Credit risk related to the counterparty and the Company is considered in determining the fair values of these derivatives. However, since we have collateralization agreements in place with each counterparty which limits our exposure, any credit risk is immaterial. Therefore, we determined that no adjustments for credit risk were required as of March 31, 2026 or December 31, 2025.
Fair values for our embedded derivative in a modified coinsurance arrangement are estimated using internal pricing models and represent the hypothetical value of the duration mismatch of assets and liabilities, interest rate risk, and third party credit risk embedded in the modified coinsurance arrangement.
We consider transactions in inactive markets to be less representative of fair value. We use all available observable inputs when measuring fair value, but when significant unobservable inputs are used, we classify these assets or liabilities as Level 3.
Private Equity Partnerships
Our private equity partnerships represent funds that are primarily invested in private credit, private equity, and real assets, as described below. Distributions received from the funds arise from income generated by the underlying investments as well as the liquidation of the underlying investments. There is generally not a public market for these investments.
15
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
The following tables present additional information about our private equity partnerships, including commitments for additional investments which may or may not be funded:
| March 31, 2026 | ||||||||||||||||||||||||||
| Investment Category | Fair Value | Redemption Term / Redemption Notice | Unfunded Commitments | |||||||||||||||||||||||
| (in millions of dollars) | (in millions of dollars) | |||||||||||||||||||||||||
| Private Credit | (a) | $ | Not redeemable | $ | ||||||||||||||||||||||
| Quarterly / 90 days notice | ||||||||||||||||||||||||||
| Total Private Credit | ||||||||||||||||||||||||||
| Private Equity | (b) | Not redeemable | ||||||||||||||||||||||||
| Initial 5.5 year lock on each new investment / Quarterly after 5.5 year lock with 90 days notice | ||||||||||||||||||||||||||
| Total Private Equity | ||||||||||||||||||||||||||
| Real Assets | (c) | Not redeemable | ||||||||||||||||||||||||
| Quarterly / 90 days notice | ||||||||||||||||||||||||||
| Total Real Assets | ||||||||||||||||||||||||||
| Total Partnerships | $ | $ | ||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| Investment Category | Fair Value | Redemption Term / Redemption Notice | Unfunded Commitments | |||||||||||||||||
| (in millions of dollars) | (in millions of dollars) | |||||||||||||||||||
| Private Credit | (a) | $ | Not redeemable | $ | ||||||||||||||||
| Quarterly / 90 days notice | ||||||||||||||||||||
| Total Private Credit | ||||||||||||||||||||
| Private Equity | (b) | Not redeemable | ||||||||||||||||||
| Initial 5.5 year lock on each new investment / Quarterly after 5.5 year lock with 90 days notice | ||||||||||||||||||||
| Total Private Equity | ||||||||||||||||||||
| Real Assets | (c) | Not redeemable | ||||||||||||||||||
| Quarterly / 90 days notice | ||||||||||||||||||||
| Total Real Assets | ||||||||||||||||||||
| Total Partnerships | $ | $ | ||||||||||||||||||
16
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
(a)Private Credit - The limited partnerships described in this category employ various investment strategies, generally providing direct lending or other forms of debt financing including first-lien, second-lien, mezzanine, and subordinated loans. The limited partnerships have credit exposure to corporates, physical assets, and/or financial assets within a variety of industries (including manufacturing, healthcare, energy, business services, technology, materials, and retail) in North America and, to a lesser extent, outside of North America. As of March 31, 2026, the estimated remaining life of the investments that do not allow for redemptions is approximately 75 percent in the next 3 years, 7 percent during the period from 3 to 5 years, and 18 percent during the period from 5 to 10 years.
(b)Private Equity - The limited partnerships described in this category employ various strategies generally investing in controlling or minority control equity positions directly in companies and/or assets across various industries (including manufacturing, healthcare, energy, business services, technology, materials, and retail), primarily in private markets within North America and, to a lesser extent, outside of North America. As of March 31, 2026, the estimated remaining life of the investments that do not allow for redemptions is approximately 44 percent in the next 3 years, 19 percent during the period from 3 to 5 years, 36 percent during the period from 5 to 10 years, and 1 percent during the period from 10 to 15 years.
(c)Real Assets - The limited partnerships described in this category employ various strategies, which include investing in the equity and/or debt financing of physical assets, including infrastructure (energy, power, water/wastewater, communications), transportation (including airports, ports, toll roads, aircraft, railcars) and real estate in North America, Europe, South America, and Asia. As of March 31, 2026, the estimated remaining life of the investments that do not allow for redemptions is approximately 54 percent in the next 3 years, 23 percent during the period from 3 to 5 years, and 23 percent during the period from 5 to 10 years.
We record changes in our share of NAV of the partnerships in net investment income. We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. Our partnerships are subject to transfer restrictions which extend over the life of the investment. There are no circumstances in which the transfer restrictions would lapse.
17
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
The following tables present information about financial instruments measured at fair value on a recurring basis by fair value level, based on the observability of the inputs used:
| March 31, 2026 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Fixed Maturity Securities | |||||||||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | |||||||||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | |||||||||||||||||||||||||||||
| Other Long-term Investments | |||||||||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||
| Forwards | — | — | — | ||||||||||||||||||||||||||
Foreign Currency Interest Rate Swaps | — | — | — | ||||||||||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | — | — | — | ||||||||||||||||||||||||||
| Total Derivatives | — | — | |||||||||||||||||||||||||||
| Perpetual Preferred and Equity Securities | |||||||||||||||||||||||||||||
| Private Equity Partnerships | |||||||||||||||||||||||||||||
| Total Other Long-term Investments | |||||||||||||||||||||||||||||
| Total Financial Instrument Assets Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Other Liabilities | |||||||||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||
| Forwards | $ | — | $ | $ | — | $ | — | $ | |||||||||||||||||||||
| Foreign Currency Interest Rate Swaps | — | — | — | ||||||||||||||||||||||||||
| Total Derivatives | — | — | — | ||||||||||||||||||||||||||
| Total Financial Instrument Liabilities Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types.
18
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| December 31, 2025 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Fixed Maturity Securities | |||||||||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | |||||||||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | |||||||||||||||||||||||||||||
| Other Long-term Investments | |||||||||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||
| Forwards | — | — | |||||||||||||||||||||||||||
Foreign Currency Interest Rate Swaps | — | — | — | ||||||||||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | — | — | — | ||||||||||||||||||||||||||
| Total Derivatives | — | — | |||||||||||||||||||||||||||
| Perpetual Preferred and Equity Securities | |||||||||||||||||||||||||||||
| Private Equity Partnerships | |||||||||||||||||||||||||||||
| Total Other Long-term Investments | |||||||||||||||||||||||||||||
| Total Financial Instrument Assets Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Other Liabilities | |||||||||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||
| Forwards | $ | — | $ | $ | — | $ | — | $ | |||||||||||||||||||||
| Foreign Currency Interest Rate Swaps | — | — | — | ||||||||||||||||||||||||||
| Total Derivatives | — | — | — | ||||||||||||||||||||||||||
| Total Financial Instrument Liabilities Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types.
19
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
Changes in assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Beginning of Year | Total Realized and Unrealized Investment Gains (Losses) in | Sales/Maturities | Level 3 Transfers | Fair Value End of Period | Change in Unrealized Gain (Loss) on Securities Held at the End of Period included in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings | OCI | Purchases | Into | Out of | OCI | Earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Public Utilities | $ | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All Other Corporate Bonds | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Perpetual Preferred and Equity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types.
20
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Beginning of Year | Total Realized and Unrealized Investment Gains (Losses) in | Sales/Maturities | Level 3 Transfers | Fair Value End of Period | Change in Unrealized Gain (Loss) on Securities Held at the End of Period included in | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings | OCI | Purchases | Into | Out of | OCI | Earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Public Utilities | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All Other Corporate Bonds | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Perpetual Preferred and Equity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types.
Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses only for the time during which the applicable financial instruments were classified as Level 3. The transfers between levels resulted primarily from a change in observability of three inputs used to determine fair values of the securities transferred: (1) transactional data for new issuance and secondary trades, (2) broker/dealer quotes and pricing, primarily related to changes in the level of activity in the market and whether the market was considered orderly, and (3) comparable bond metrics from which to perform an analysis. For fair value measurements of financial instruments that were transferred either into or out of Level 3, we reflect the transfers using the fair value at the beginning of the period. We believe this allows for greater transparency, as all changes in fair value that arise during the reporting period of the transfer are disclosed as a component of our Level 3 reconciliation.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
The table below provides quantitative information regarding the significant unobservable inputs used in Level 3 fair value measurements derived from internal models. Unobservable inputs for fixed maturity securities are weighted by the fair value of the securities. Certain securities classified as Level 3 are excluded from the table below due to limitations in our ability to obtain the underlying inputs used by external pricing sources.
| March 31, 2026 | |||||||||||||||||||||||
| Fair Value | Valuation Method | Unobservable Input | Range/Weighted Average | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Fixed Maturity Securities | |||||||||||||||||||||||
| All Other Corporate Bonds - Private | $ | Market Approach | Market Convention | (a) | Priced at Par Value | ||||||||||||||||||
| Perpetual Preferred and Equity Securities | Market Approach | Market Convention | (a) | Priced at Cost, Owner's Equity, or Most Recent Round | |||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | Discounted Cash Flows | Projected Liability Cash Flows Weighted Spread of Swap Curve | (b) | Actuarial Assumptions ( | |||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Fair Value | Valuation Method | Unobservable Input | Range/Weighted Average | |||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||
| Fixed Maturity Securities | ||||||||||||||||||||||||||
| All Other Corporate Bonds - Private | $ | Market Approach | Market Convention | (a) | Priced at Par Value | |||||||||||||||||||||
| Perpetual Preferred and Equity Securities | Market Approach | Market Convention | (a) | Priced at Cost, Owner's Equity, or Most Recent Round | ||||||||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | Discounted Cash Flows | Projected Liability Cash Flows Weighted Spread of Swap Curve | (b) | Actuarial Assumptions ( | ||||||||||||||||||||||
(a)Represents a decision to price based on par value, cost, owner's equity, or the price of the most recent capital funding round when limited data is available
Other than market convention, the impact of isolated decreases in unobservable inputs will result in a higher estimated fair value, whereas isolated increases in unobservable inputs will result in a lower estimated fair value. The unobservable input for market convention is not sensitive to input movements. The projected liability cash flows used in the fair value measurement of our Level 3 embedded derivative are based on expected claim payments. If claim payments increase, the projected liability cash flows will increase, resulting in a decrease in the fair value of the embedded derivative. Decreases in projected liability cash flows will result in an increase in the fair value of the embedded derivative.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
Fair Value Measurements for Financial Instruments Not Carried at Fair Value
The methods and assumptions used to estimate fair values of financial instruments not carried at fair value are discussed as follows:
Mortgage Loans: Fair value of newly originated, seasoned performing, or sub-performing but likely to continue cash flowing loans are calculated using a discounted cash flow analysis. Loans’ cash flows are modeled and appropriately discounted by a rate based on current yields and credit spreads. For sub and non-performing loans where there is some probability the loan will not continue to pay, a price based approach would be used to estimate the loan’s value in the open market utilizing current transaction information from similar loans.
Policy Loans: Fair values for policy loans, net of reinsurance ceded, are estimated using discounted cash flow analyses and interest rates currently being offered to policyholders with similar policies. Carrying amounts for ceded policy loans, which equal $3,384.7 million and $3,353.8 million as of March 31, 2026 and December 31, 2025, respectively, approximate fair value and are reported on a gross basis in our consolidated balance sheets. A change in interest rates for ceded policy loans will not impact our financial position because the benefits and risks are fully ceded to reinsuring counterparties.
Miscellaneous Long-term Investments: Our shares of Federal Home Loan Bank (FHLB) common stock are carried at cost, which approximates fair value.
Policyholders' Account Balances: Funding agreements which represent cash advances used for the purpose of investing in either short-term investments, matched fixed maturity securities, or matched commercial mortgage loans. Carrying amounts approximate fair value.
Long-term Debt: Fair values for long-term debt are obtained from independent pricing services or discounted cash flow analyses based on current incremental borrowing rates for similar types of borrowing arrangements.
Other Liabilities: Funding agreements that represent cash advances used for the purpose of investing in either short-term investments, matched fixed maturity securities, or matched commercial mortgage loans. Unfunded equity commitments represent amounts that we have committed to fund investment partnerships. These commitments are legally binding, subject to the partnerships meeting specified conditions. Carrying amounts approximate fair value.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
The following tables present the carrying amounts and estimated fair values of our financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:
| March 31, 2026 | |||||||||||||||||||||||||||||
| Estimated Fair Value | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Mortgage Loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Policy Loans | |||||||||||||||||||||||||||||
| Other Long-term Investments | |||||||||||||||||||||||||||||
| Miscellaneous Long-term Investments | |||||||||||||||||||||||||||||
| Total Financial Instrument Assets Not Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
Policyholders' Account Balances | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Long-term Debt | |||||||||||||||||||||||||||||
| Other Liabilities | |||||||||||||||||||||||||||||
| Total Financial Instrument Liabilities Not Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 3 - Fair Value of Financial Instruments - Continued
| December 31, 2025 | |||||||||||||||||||||||||||||
| Estimated Fair Value | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Mortgage Loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Policy Loans | |||||||||||||||||||||||||||||
| Other Long-term Investments | |||||||||||||||||||||||||||||
| Miscellaneous Long-term Investments | |||||||||||||||||||||||||||||
| Total Financial Instrument Assets Not Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Long-term Debt | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Other Liabilities | |||||||||||||||||||||||||||||
| Total Financial Instrument Liabilities Not Carried at Fair Value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Prior year amounts in the table above were reclassified to conform to current year presentation.
The carrying values of financial instruments such as short-term investments, cash and bank deposits, accounts and premiums receivable, accrued investment income, securities lending agreements, and short-term debt approximate fair value due to the short-term nature of the instruments. As such, these financial instruments are not included in the above chart.
Fair values for insurance contracts other than investment contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in our overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments
Fixed Maturity Securities
At March 31, 2026 and December 31, 2025, all fixed maturity securities were classified as available-for-sale. The amortized cost and fair values of securities by security type are shown as follows:
| March 31, 2026 | |||||||||||||||||||||||||||||
Amortized Cost, Gross of ACL1 | ACL1 | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities2 | |||||||||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
Amortized Cost, Gross of ACL1 | ACL1 | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities2 | |||||||||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
1Allowance for Credit Losses
2Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The following charts indicate the length of time our fixed maturity securities have been in a gross unrealized loss position.
| March 31, 2026 | |||||||||||||||||||||||
| Less Than 12 Months | 12 Months or Greater | ||||||||||||||||||||||
| Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | |||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | |||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||
Redeemable Preferred Stocks2 | |||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Less Than 12 Months | 12 Months or Greater | ||||||||||||||||||||||
| Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | $ | $ | |||||||||||||||||||
| States, Municipalities, and Political Subdivisions | |||||||||||||||||||||||
| Foreign Governments | |||||||||||||||||||||||
| Public Utilities | |||||||||||||||||||||||
Mortgage/Asset-Backed Securities1 | |||||||||||||||||||||||
| All Other Corporate Bonds | |||||||||||||||||||||||
| Redeemable Preferred Stocks | |||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | |||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types
2Includes a de minimis gross unrealized loss for which the length of time has been for less than 12 months
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The following is a distribution of the maturity dates for fixed maturity securities. The maturity dates have not been adjusted for possible calls or prepayments.
| March 31, 2026 | |||||||||||||||||||||||||||||
Amortized Cost, Net of ACL1 | Unrealized Gain Position | Unrealized Loss Position | |||||||||||||||||||||||||||
| Gross Gain | Fair Value | Gross Loss | Fair Value | ||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| 1 year or less | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Over 1 year through 5 years | |||||||||||||||||||||||||||||
| Over 5 years through 10 years | |||||||||||||||||||||||||||||
| Over 10 years | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities2 | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
Amortized Cost, Net of ACL1 | Unrealized Gain Position | Unrealized Loss Position | |||||||||||||||||||||||||||
| Gross Gain | Fair Value | Gross Loss | Fair Value | ||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| 1 year or less | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Over 1 year through 5 years | |||||||||||||||||||||||||||||
| Over 5 years through 10 years | |||||||||||||||||||||||||||||
| Over 10 years | |||||||||||||||||||||||||||||
Mortgage/Asset-Backed Securities2 | |||||||||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
1Allowance for Credit Losses | |||||||||||||||||||||||||||||
2Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types | |||||||||||||||||||||||||||||
The following chart depicts an analysis of our fixed maturity security portfolio between investment-grade and below-investment-grade categories as of March 31, 2026:
| Gross Unrealized Loss | |||||||||||||||||||||||
| Fair Value | Gross Unrealized Gain | Amount | Percent of Total Gross Unrealized Loss | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Investment-Grade | $ | $ | $ | % | |||||||||||||||||||
| Below-Investment-Grade | |||||||||||||||||||||||
| Total Fixed Maturity Securities | $ | $ | $ | % | |||||||||||||||||||
The unrealized losses on investment-grade fixed maturity securities principally relate to changes in interest rates or changes in market or sector credit spreads which occurred subsequent to the acquisition of the securities. Below-investment-grade fixed maturity securities are generally more likely to develop credit concerns than investment-grade securities. At March 31, 2026, the unrealized losses in our below-investment-grade fixed maturity securities were generally due to credit spreads in certain industries or sectors and, to a lesser extent, credit concerns related to specific securities. For each specific security in an unrealized loss position, we believe that there are positive factors which mitigate credit concerns and that the securities for
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
which we have not recorded a credit loss will recover in value. We have the ability and intent to continue to hold these securities to recovery of amortized cost less allowance for credit losses.
As of March 31, 2026, we held 900 individual investment-grade fixed maturity securities and 66 individual below-investment-grade fixed maturity securities that were in an unrealized loss position, of which 753 investment-grade fixed maturity securities and 27 below-investment-grade fixed maturity securities had been in an unrealized loss position continuously for over one year.
In determining when a decline in fair value below amortized cost of a fixed maturity security represents a credit loss, we evaluate the following factors:
•Whether we expect to recover the entire amortized cost basis of the security
•Whether we intend to sell the security or will be required to sell the security before the recovery of its amortized cost basis
•Whether the security is current as to principal and interest payments
•The significance of the decline in value
•Current and future business prospects and trends of earnings
•The valuation of the security's underlying collateral
•Relevant industry conditions and trends relative to their historical cycles
•Market conditions
•Rating agency and governmental actions
•Bid and offering prices and the level of trading activity
•Adverse changes in estimated cash flows for securitized investments
•Changes in fair value subsequent to the balance sheet date
•Any other key measures for the related security
While determining whether a credit loss exists is a judgmental area, we utilize a formal, well-defined, and disciplined process to monitor and evaluate our fixed income investment portfolio, supported by issuer specific research and documentation as of the end of each period. The process results in a thorough evaluation of investments and the recording of credit losses on a timely basis for investments determined to have a credit loss. We calculate the allowance for credit losses of fixed maturity securities based on the present value of our best estimate of cash flows expected to be collected, discounted using the effective interest rate implicit in the security at the date of acquisition. When estimating future cash flows, we analyze the strength of the issuer’s balance sheet, its debt obligations and near-term funding arrangements, cash flow and liquidity, the profitability of its core businesses, the availability of marketable assets which could be sold to increase liquidity, its industry fundamentals and regulatory environment, and its access to capital markets.
The following table presents a rollforward of the allowance for credit losses on available-for-sale fixed maturity securities, which were classified as "all other corporate bonds" during the three months ended March 31, 2026 and March 31, 2025.
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Balance, beginning of period | $ | $ | |||||||||
| Credit losses on securities for which credit losses were not previously recorded | |||||||||||
Change in allowance due to change in intent to sell impaired security | ( | ||||||||||
| Change in allowance on securities with allowance recorded in previous period | |||||||||||
| Balance, end of period | $ | $ | |||||||||
At March 31, 2026, we had commitments of $158.9 million to fund private placement fixed maturity securities, the amount of which may or may not be funded.
29
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
Variable Interest Entities
We invest in variable interests issued by variable interest entities. These investments, which are passive in nature, include minority ownership interests in private equity partnerships and special purpose entities. Our maximum exposure to loss is limited to the carrying value of these investments in private equity partnerships and special purpose entities. For those variable interests that are not consolidated in our financial statements, we are not the primary beneficiary because we have neither the power to direct the activities that are most significant to economic performance nor the responsibility to absorb a majority of the expected losses. The determination of whether we are the primary beneficiary is performed at the time of our initial investment and at the date of each subsequent reporting period.
As of March 31, 2026, the carrying amount of our variable interest entity investments not consolidated in our financial statements, which are primarily private equity partnerships, totaled $1,444.1 million. At December 31, 2025, the carrying amount of our variable interest entity investments not consolidated in our financial statements, which are primarily private equity partnerships, totaled $1,456.3 million. These variable interest entity investments are reported as other long-term investments in our consolidated balance sheets.
Mortgage Loans
Our mortgage loan portfolio is well diversified by both geographic region and property type to reduce risk of concentration. All of our mortgage loans are collateralized by commercial real estate. When issuing a new loan, our general policy is not to exceed a loan-to-value ratio, or the ratio of the loan balance to the estimated fair value of the underlying collateral, of 75 percent. We update the loan-to-value ratios based on internal valuation of the collateral at least every three years for each loan, and properties undergo a general inspection at least every two years. Our general policy for newly issued loans is to have a debt service coverage ratio greater than 1.25 times on a normalized 25 year amortization period. We update our debt service coverage ratios annually.
We carry our mortgage loans at amortized cost less an allowance for expected credit losses. The amortized cost of our mortgage loans was $2,081.6 million and $2,125.4 million at March 31, 2026 and December 31, 2025, respectively. The allowance for expected credit losses was $15.3 million and $15.9 million at March 31, 2026 and December 31, 2025, respectively. Interest income is accrued on the principal amount of the loan based on the loan's contractual interest rate. We report accrued interest income for our mortgage loans as accrued investment income on our consolidated balance sheets, and the amount of the accrued income was $6.6 million and $6.7 million at March 31, 2026 and December 31, 2025, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The carrying amount of mortgage loans by property type and geographic region are presented below.
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||
| Carrying Amount | Percent of Total | Carrying Amount | Percent of Total | |||||||||||||||||||||||||||||
| Property Type | ||||||||||||||||||||||||||||||||
| Apartment | $ | % | $ | % | ||||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||||||||
| Office | ||||||||||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | ||||||||||||||||||||||||||||
| Region | ||||||||||||||||||||||||||||||||
| New England | $ | % | $ | % | ||||||||||||||||||||||||||||
| Mid-Atlantic | ||||||||||||||||||||||||||||||||
| East North Central | ||||||||||||||||||||||||||||||||
| West North Central | ||||||||||||||||||||||||||||||||
| South Atlantic | ||||||||||||||||||||||||||||||||
| East South Central | ||||||||||||||||||||||||||||||||
| West South Central | ||||||||||||||||||||||||||||||||
| Mountain | ||||||||||||||||||||||||||||||||
| Pacific | ||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | ||||||||||||||||||||||||||||
The risk in our mortgage loan portfolio is primarily related to vacancy rates. Events or developments, such as economic conditions that impact the ability of the borrowers to ensure occupancy of the property, may have a negative effect on our mortgage loan portfolio, particularly to the extent that our portfolio is concentrated in an affected region or property type. An increase in vacancies increases the probability of default, which would negatively affect our expected losses in our mortgage loan portfolio.
We evaluate each of our mortgage loans individually for impairment and assign an internal quality rating based on a comprehensive rating system used to evaluate the risk of the loan. The factors we use to derive our internal quality ratings may include the following:
•Loan-to-value ratio based on internal valuation of the property
•Debt service coverage ratio based on current operating income
•Property location, including regional economics, trends, and demographics
•Age, condition, and construction quality of property
•Current and historical occupancy of property
•Lease terms relative to market
•Tenant size and financial strength
•Borrower's financial strength
•Borrower's equity in collateral
•Additional collateral, if any
Although all available and applicable factors are considered in our analysis, loan-to-value and debt service coverage ratios are the most critical factors in determining whether we will initially issue the loan and also in assigning values and determining impairment. We assign an overall rating to each loan using an internal rating scale of AA (highest quality) to B (lowest
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Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
quality). We review and adjust, as needed, our internal quality ratings on an annual basis. This review process is performed more frequently for mortgage loans deemed to have a higher risk of delinquency.
We estimate an allowance for credit losses that we expect to incur over the life of our mortgage loans using a probability of default method. For each loan, we estimate the probability that the loan will default before its maturity (probability of default) and the amount of the loss if the loan defaults (loss given default). These two factors result in an expected loss percentage that is applied to the amortized cost of each loan to determine the expected credit loss. As we are the original underwriter of the mortgage loans, the amortized cost generally equals the principal amount of the loan. We measure losses on defaults of our mortgage loans as the excess amortized cost of the mortgage loan over the fair value of the underlying collateral in the event that we foreclose on the loan or over the expected future cash flows of the loan if we retain the mortgage loan until payoff. We do not purchase mortgage loans with existing credit impairments.
In estimating the probability of default, we consider historical experience, current market conditions, and reasonable and supportable forecasts about the future market conditions. We utilize our historical loan experience in combination with a large third-party industry database for a period of time that aligns with the average life of our loans based on the maturity dates of the loans and prepayment experience. Our model utilizes an industry database of the historical loss experience based on our actual portfolio characteristics such as loan-to-value, debt service coverage, collateral type, geography, and late payment history. In addition, because we actively manage our portfolio, we may extend the term of a loan in certain situations and will accordingly extend the maturity date in the estimate of probability of default. In estimating the loss given default, we primarily consider the type and value of collateral and secondarily the expected liquidation costs and time to recovery.
The primary market factors that we consider in our forecast of future market conditions are gross domestic product, unemployment rates, interest rates, inflation, commercial real estate values, household formation, and retail sales. We also forecast certain loan specific factors such as growth in the fair value and net operating income of collateral by property type. We include our estimate of these factors over a two-year period and for the remainder of the loans’ estimated lives, adjusted for estimated prepayments. Past the two-year forecast period, we revert to the historical assumptions ratably by the end of the fifth year of the loan after which we utilize only historical assumptions.
We utilize various scenarios to estimate our allowance for expected losses ranging from a base case scenario that reflects normal market conditions to a severe case scenario that reflects adverse market conditions. We will adjust our allowance each period to utilize the scenario or weighting of the scenarios that best reflects our view of current market conditions.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The following tables present information about mortgage loans by the applicable internal quality indicators:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying Amount | Percent of Total | Carrying Amount | Percent of Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Internal Mortgage Rating | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| AA | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| A | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| BBB | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| BB | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| B | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Loan-to-Value Ratio1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| <= 65% | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| > 65% <= 75% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| > 75% <= 85% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| > 85% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
1Loan-to-Value Ratio utilizes the most recent internal valuation of the property | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The following tables present the amortized cost of our mortgage loans by year of origination and internal quality indicators at March 31, 2026 and December 31, 2025, respectively.
| March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Prior to 2022 | 2022 | 2023 | 2024 | 2025 | 2026 | Total | |||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||
| Internal Mortgage Rating | |||||||||||||||||||||||||||||||||||||||||
| AA | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| A | |||||||||||||||||||||||||||||||||||||||||
| BBB | |||||||||||||||||||||||||||||||||||||||||
| BB | |||||||||||||||||||||||||||||||||||||||||
| B | |||||||||||||||||||||||||||||||||||||||||
| Total Amortized Cost | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Carrying Amount | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Loan-to-Value Ratio1 | |||||||||||||||||||||||||||||||||||||||||
| <=65% | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| >65<=75% | |||||||||||||||||||||||||||||||||||||||||
| >75%<=85% | |||||||||||||||||||||||||||||||||||||||||
| >85% | |||||||||||||||||||||||||||||||||||||||||
| Total Amortized Cost | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Carrying Amount | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
1Loan-to-Value Ratio utilizes the most recent internal valuation of the property | |||||||||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
Prior to 2021 | 2021 | 2022 | 2023 | 2024 | 2025 | Total | |||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||
| Internal Mortgage Rating | |||||||||||||||||||||||||||||||||||||||||
| AA | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| A | |||||||||||||||||||||||||||||||||||||||||
| BBB | |||||||||||||||||||||||||||||||||||||||||
| BB | |||||||||||||||||||||||||||||||||||||||||
| B | |||||||||||||||||||||||||||||||||||||||||
| Total Amortized Cost | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Carrying Amount | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Loan-to-Value Ratio1 | |||||||||||||||||||||||||||||||||||||||||
| <=65% | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| >65<=75% | |||||||||||||||||||||||||||||||||||||||||
| >75%<=85% | |||||||||||||||||||||||||||||||||||||||||
| >85% | |||||||||||||||||||||||||||||||||||||||||
| Total Amortized Cost | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Carrying Amount | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
1Loan-to-Value Ratio utilizes the most recent internal valuation of the property | |||||||||||||||||||||||||||||||||||||||||
35
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
The following tables present a roll-forward of allowance for expected credit losses by loan-to-value ratio for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| Beginning of Year | Current Period Provisions | Write-Offs | Recoveries | End of Period | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
Loan-to-Value Ratio1 | |||||||||||||||||||||||||||||
| <=65% | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||
| >65<=75% | ( | ||||||||||||||||||||||||||||
| >75%<=85% | ( | ||||||||||||||||||||||||||||
| >85% | |||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||
Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| Beginning of Year | Current Period Provisions | Write-Offs | Recoveries | End of Period | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
Loan-to-Value Ratio1 | |||||||||||||||||||||||||||||
| <=65% | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||
| >65<=75% | |||||||||||||||||||||||||||||
| >75%<=85% | |||||||||||||||||||||||||||||
| >85% | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
1Loan-to-Value Ratio utilizes the most recent internal valuation of the property | |||||||||||||||||||||||||||||
During the three months ended March 31, 2026, no commercial mortgage loans were modified for borrowers experiencing financial difficulties. During the three months ended March 31, 2025, we granted an other-than-insignificant payment delay for a commercial mortgage loan with an amortized cost of $14.2 million, which deferred the principal payment for twenty-four months . This modification represents less than one percent of the commercial mortgage loan portfolio balance. For the three months ended March 31, 2026, all commercial mortgage loans which were previously modified for borrowers experiencing financial difficulties were current.
As of March 31, 2026 and December 31, 2025, we held no no
We had no
At March 31, 2026, we had no commitments to fund certain commercial mortgage loans. Consistent with how we determine the estimate of current expected credit losses for our funded mortgage loans each period, we estimate expected credit losses for loans that have not been funded but we are committed to fund at the end of each period. At March 31, 2026 and December 31, 2025, we had no
Investment Real Estate
Our investment real estate held for the production of income balance was $40.6 million and $41.7 million at March 31, 2026 and December 31, 2025, respectively, and the associated accumulated depreciation was $131.2 million and $130.1 million at March 31, 2026 and December 31, 2025, respectively. We monitor and assess our real estate investments for impairment when facts and circumstances indicate that the real estate may be impaired.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
Our held for sale real estate balance was $41.9
Transfers of Financial Assets
To manage our cash position more efficiently, we may enter into repurchase agreements with unaffiliated financial institutions. We generally use repurchase agreements as a means to finance the purchase of invested assets or for short-term general business purposes until projected cash flows become available from our operations or existing investments. Our repurchase agreements are typically outstanding for less than 30 days. We post collateral through our repurchase agreement transactions whereby the counterparty commits to purchase securities with the agreement to resell them to us at a later, specified date. The fair value of collateral posted is generally 102 percent of the cash received.
Our investment policy also permits us to lend fixed maturity securities to unaffiliated financial institutions in short-term securities lending agreements. These agreements increase our investment income with minimal risk. Our securities lending policy requires that a minimum of 102 percent of the fair value of the securities loaned be maintained as collateral. We may receive cash and/or securities as collateral under these agreements. Cash received as collateral is typically reinvested in short-term investments. If securities are received as collateral, we are not permitted to sell or re-post them.
As of March 31, 2026, the carrying amount of fixed maturity securities loaned to third parties under our securities lending program was $95.7 million, for which we received collateral in the form of cash and securities of $61.7 million and $37.6 million, respectively. As of December 31, 2025, the carrying amount of fixed maturity securities loaned to third parties under our securities lending program was $106.1 million, for which we received collateral in the form of cash and securities of $76.1 million and $34.1 million, respectively. We had no
The remaining contractual maturities of our securities lending agreements disaggregated by class of collateral pledged are as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Overnight and Continuous | |||||||||||
| (in millions of dollars) | |||||||||||
| Borrowings | |||||||||||
| United States Government and Government Agencies and Authorities | $ | $ | |||||||||
| Public Utilities | |||||||||||
Short-Term Investments | |||||||||||
| All Other Corporate Bonds | |||||||||||
| Total Borrowings | |||||||||||
| Gross Amount of Recognized Liability for Securities Lending Transactions | |||||||||||
| Amounts Related to Agreements Not Included in Offsetting Disclosure Contained Herein | $ | $ | |||||||||
Certain of our U.S. insurance subsidiaries are members of regional FHLBs. As members of the FHLBs, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLBs. Each member is required to hold a certain minimum amount of FHLB common stock as a condition of membership and additional amounts based on the amount of the borrowings. Advances received from the FHLB are primarily used for the purchase of short-term investments, matched fixed
37
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
maturity securities, or matched commercial mortgage loans. The carrying value of common stock owned, collateral posted, and advances received are as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (in millions of dollars) | ||||||||||||||
| Carrying Value of FHLB Common Stock | $ | $ | ||||||||||||
| Advances from FHLB | ||||||||||||||
| Carrying Value of Collateral Posted to FHLB | ||||||||||||||
| Fixed Maturity Securities | $ | $ | ||||||||||||
| Commercial Mortgage Loans | ||||||||||||||
| Total Carrying Value of Collateral Posted to FHLB | $ | $ | ||||||||||||
Funding Agreement-Backed Loan Program
During February 2026, we established a funding agreement-backed loan (FABL) program, pursuant to which a special purpose unaffiliated Delaware statutory trust (the FABL trust) may borrow funds under a six-month delayed draw term loan facility (the facility) and deposit the proceeds with Colonial Life & Accident Insurance Company (Colonial Life & Accident), a wholly owned insurance subsidiary, pursuant to funding agreements issued by Colonial Life & Accident to the FABL trust. Colonial Life & Accident does not hold any variable interests in the FABL trust. The deposits received by Colonial Life & Accident under the funding agreements will be used for spread lending purposes. The facility permits borrowings by the FABL trust in two tranches, in an aggregate principal amount of up to $500.0 million, with scheduled maturities on the third and fifth anniversaries, respectively, of the date that is six months after the date of the applicable credit agreement. The funding agreements issued by Colonial Life & Accident will have matching interest, maturity and payment terms to the applicable borrowings by the FABL trust. The funding agreements may be collateralized by eligible securities, including agency securities, corporate bonds, municipal bonds, and U.S. Treasury securities. As of March 31, 2026, we did not have any amounts outstanding under the FABL program.
Offsetting of Financial Instruments
We enter into master netting agreements with each of our derivative's counterparties. These agreements provide for conditional rights of set-off upon the occurrence of an early termination event. An early termination event is considered a default, and it allows the non-defaulting party to offset its contracts in a loss position against any gain positions or payments due to the defaulting party. Under our agreements, default type events are defined as failure to pay or deliver as contractually agreed, misrepresentation, bankruptcy, or merger without assumption. See Note 5 for further discussion of collateral related to our derivative contracts.
We have securities lending agreements with unaffiliated financial institutions that post collateral to us in return for the use of our fixed maturity securities. A right of set-off exists that allows us to keep and apply collateral received in the event of default by the counterparty. Default within a securities lending agreement would typically occur if the counterparty failed to return the securities borrowed from us as contractually agreed. In addition, if we default by not returning collateral received, the counterparty has a right of set-off against our securities or any other amounts due to us.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
Shown below are our financial instruments that either meet the accounting requirements that allow them to be offset in our balance sheets or that are subject to an enforceable master netting arrangement or similar agreement. Our accounting policy is to not offset these financial instruments in our balance sheets. Net amounts disclosed below have been reduced by the amount of collateral pledged to or received from our counterparties.
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Gross Amount | Gross Amount Not | |||||||||||||||||||||||||||||||||||||
| of Recognized | Gross Amount | Net Amount | Offset in Balance Sheet | |||||||||||||||||||||||||||||||||||
| Financial | Offset in | Presented in | Financial | Cash | Net | |||||||||||||||||||||||||||||||||
| Instruments | Balance Sheet | Balance Sheet | Instruments | Collateral | Amount | |||||||||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
| Securities Lending | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
| Financial Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Securities Lending | ( | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Gross Amount | Gross Amount Not | |||||||||||||||||||||||||||||||||||||
| of Recognized | Gross Amount | Net Amount | Offset in Balance Sheet | |||||||||||||||||||||||||||||||||||
| Financial | Offset in | Presented in | Financial | Cash | Net | |||||||||||||||||||||||||||||||||
| Instruments | Balance Sheet | Balance Sheet | Instruments | Collateral | Amount | |||||||||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Securities Lending | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
| Financial Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Derivatives | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Securities Lending | ( | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
39
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
Net Investment Income
Net investment income reported in our consolidated statements of income is presented below.
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Fixed Maturity Securities | $ | $ | |||||||||
| Derivatives | ( | ||||||||||
| Mortgage Loans | |||||||||||
| Policy Loans | |||||||||||
| Other Long-term Investments | |||||||||||
Perpetual Preferred Securities | |||||||||||
Private Equity Partnerships1 | |||||||||||
| Other | |||||||||||
| Short-term Investments | |||||||||||
| Gross Investment Income | |||||||||||
| Less Investment Expenses | |||||||||||
| Less Investment Income on Participation Fund Account Assets | |||||||||||
| Net Investment Income | $ | $ | |||||||||
40
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 4 - Investments - Continued
Investment Gain and Loss
Investment gains and losses are as follows:
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Fixed Maturity Securities | |||||||||||
| Gross Gains on Sales | $ | $ | |||||||||
Gross Losses on Sales1 | ( | ( | |||||||||
Impairment Loss2 | ( | ( | |||||||||
| Credit Losses | ( | ||||||||||
| Mortgage Loans and Other Invested Assets | |||||||||||
Impairment Loss | ( | ||||||||||
| Change in Allowance for Credit Losses | ( | ||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | ( | ( | |||||||||
| All Other Derivatives | ( | ||||||||||
| Foreign Currency Transactions | ( | ||||||||||
| Net Investment Loss | $ | ( | $ | ( | |||||||
1During the three months ended March 31, 2025, we recognized a $23.5 million net loss on sales of fixed maturity securities related to the Closed Block long-term care and Unum US individual disability reinsurance transaction (Fortitude Re reinsurance transaction) and a $19.1 million loss on sales of fixed maturity securities related to the funding of an extraordinary dividend from a wholly owned insurance subsidiary to Unum Group.
2 During the three months ended March 31, 2025, we recognized a $152.4 million impairment loss based on the intent to dispose of fixed maturity securities with a fair value of $1,250.9 million related to the Fortitude Re reinsurance transaction.
Note 5 - Derivative Financial Instruments
Purpose of Derivatives
We are exposed to certain risks relating to our ongoing business operations. The primary risks managed by using derivative instruments are interest rate risk, risk related to matching duration for our assets and liabilities, foreign currency risk, credit risk, and equity risk. Historically, we have utilized current and forward interest rate swaps, current and forward currency swaps, forward benchmark interest rate locks, currency forward contracts, forward contracts on specific fixed income securities, and total return swaps. Transactions hedging interest rate risk are primarily associated with our individual and group long-term care and individual and group disability products. All other product portfolios are periodically reviewed to determine if hedging strategies would be appropriate for risk management purposes. We do not use derivative financial instruments for speculative purposes.
Derivatives designated as cash flow hedges and used to reduce our exposure to interest rate and duration risk are as follows:
•Interest rate swaps were used to hedge interest rate risks and to improve the matching of assets and liabilities. An interest rate swap is an agreement in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and variable rate interest amounts. We used interest rate swaps to hedge the anticipated purchase of fixed maturity securities thereby protecting us from the potential adverse impact of declining interest rates on the associated policy reserves. We also used interest rate swaps to hedge the potential adverse impact of rising interest rates in anticipation of issuing fixed rate long-term debt.
•Forward benchmark interest rate locks are used to minimize interest rate risk associated with the anticipated purchase or associated future coupons of fixed maturity securities or the anticipated issuance of fixed rate long-term debt. A
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
forward benchmark interest rate lock is a derivative contract without an initial investment where we and the counterparty agree to purchase or sell a specific benchmark interest rate fixed maturity bond at a future date at a predetermined price or yield.
Derivatives designated as either cash flow or fair value hedges and used to reduce our exposure to foreign currency risk are as follows:
•Foreign currency interest rate swaps are used to hedge the currency risk of certain foreign currency-denominated fixed maturity securities owned for portfolio diversification. Under these swap agreements, we agree to pay, at specified intervals, fixed rate foreign currency-denominated principal and interest payments in exchange for fixed rate payments in the functional currency of the operating segment.
Derivatives not designated as hedging instruments, which are used to reduce our exposure to foreign currency risk, volatility of the underlying deferred assets in our non-qualified defined contribution plan, and credit risk are as follows:
•Foreign currency interest rate swaps previously designated as hedges were used to hedge the currency risk of certain foreign currency-denominated fixed maturity securities owned for portfolio diversification. These derivatives were effective hedges prior to novation to a new counterparty. In conjunction with the novation, these derivatives were de-designated as hedges. We agree to pay, at specified intervals, fixed rate foreign currency-denominated principal and interest payments in exchange for fixed rate payments in the functional currency of the operating segment. We hold offsetting swaps wherein we agree to pay fixed rate principal and interest payments in the functional currency of the operating segment in exchange for fixed rate foreign currency-denominated payments.
•Foreign currency forward contracts are used to minimize foreign currency risk. A foreign currency forward is a derivative without an initial investment where we and the counterparty agree to exchange a specific amount of currencies, at a specific exchange rate, on a specific date. We use these forward contracts to hedge the currency risk arising from foreign-currency denominated investments.
•Total Return Swaps are used to economically hedge a portion of the liability related to our non-qualified defined contribution plan and hedge the economic risk from credit spread and interest rate duration related to certain cash and cash equivalent amounts. A total return swap is an agreement in which we pay a floating rate of interest to the counterparty and receive the total return on a portfolio of mutual funds and/or exchange traded funds. These swaps are cash settled on the last day of every month and the notional is re-established each month based on plan participant actions or cash settled at maturity.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
Derivative Risks
The basic types of risks associated with derivatives are market risk (that the value of the derivative will be adversely impacted by changes in the market, primarily changes in interest rates, exchange rates, and equity prices) and credit risk (that the counterparty will not perform according to the terms of the contract). The market risk of the derivatives should generally offset the market risk associated with the hedged financial instrument or liability. To help limit the credit exposure of the derivatives, we enter into master netting agreements with our counterparties whereby contracts in a gain position can be offset against contracts in a loss position. We also typically enter into bilateral, cross-collateralization agreements with our counterparties to help limit the credit exposure of the derivatives. These agreements require the counterparty in a loss position to submit acceptable collateral with the other counterparty in the event the net loss position meets or exceeds an agreed upon amount. Credit exposure on derivatives is limited to the value of those contracts in a net gain position, including accrued interest receivable less collateral held. At March 31, 2026, we had $0.1 million credit exposure on derivatives. At December 31, 2025, we had no credit exposure on derivatives. The table below summarizes the nature and amount of collateral received from and posted to our derivative counterparties.
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (in millions of dollars) | ||||||||||||||
| Carrying Value of Collateral Received from Counterparties | ||||||||||||||
| Cash | $ | $ | ||||||||||||
| Fixed Maturity Securities | ||||||||||||||
| $ | $ | |||||||||||||
| Carrying Value of Collateral Posted to Counterparties | ||||||||||||||
| Cash | $ | $ | ||||||||||||
| Fixed Maturity Securities | ||||||||||||||
| $ | $ | |||||||||||||
See Note 4 for further discussion of our master netting agreements.
All of our derivative instruments contain provisions that require us to maintain specified issuer credit ratings and financial strength ratings. Should our ratings fall below these specified levels, we would be in violation of the provisions, and our derivatives counterparties could terminate our contracts and request immediate payment. The aggregate fair value of all derivative instruments with credit risk-related contingent features that were in a liability position was $261.0 million and $269.7 million at March 31, 2026 and December 31, 2025, respectively.
Cash Flow Hedges
As of March 31, 2026 and December 31, 2025, we had $120.0 million and $127.3 million, respectively, notional amount of receive fixed, pay fixed, open current and forward foreign currency interest rate swaps to hedge fixed income foreign currency-denominated securities.
As of March 31, 2026 and December 31, 2025, we had $
As of March 31, 2026, we expect to amortize approximately $1.8 million of net deferred gains on derivative instruments during the next twelve months. This amount will be reclassified from AOCI into earnings and reported on the same income statement line item as the hedged item. The income statement line items that will be affected by this amortization are net investment income and interest and debt expense. Additional amounts that may be reclassified from AOCI into earnings to offset the earnings impact of foreign currency translation of hedged items are not estimable.
As of March 31, 2026, we are hedging the variability of future cash flows associated with forecasted transactions through the year 2053.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
Fair Value Hedges
As of March 31, 2026 and December 31, 2025, we had $822.6 million and $768.6 million, respectively, notional amount of receive fixed, pay fixed, open current and forward foreign currency interest rate swaps to hedge fixed income foreign currency-denominated securities.
The following tables summarize the amortized cost, carrying amount of hedged assets, and the related cumulative basis adjustments related to our fair value hedges:
| March 31, 2026 | |||||||||||||||||
(in millions of dollars) | |||||||||||||||||
Amortized Cost of Hedged Assets | Carrying Amount of Hedged Assets | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | |||||||||||||||
| Fixed maturity securities: | |||||||||||||||||
Receive fixed functional currency interest, pay fixed foreign currency interest | $ | $ | $ | ||||||||||||||
| December 31, 2025 | |||||||||||||||||
(in millions of dollars) | |||||||||||||||||
Amortized Cost of Hedged Assets | Carrying Amount of Hedged Assets | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | |||||||||||||||
| Fixed maturity securities: | |||||||||||||||||
Receive fixed functional currency interest, pay fixed foreign currency interest | $ | $ | $ | ||||||||||||||
For the three months ended March 31, 2026 and March 31, 2025, $4.7 million and $27.2 million, respectively, of the derivative instruments' gain related to cross-currency basis spread and forward points was excluded from the assessment of hedge effectiveness. There were no
Derivatives not Designated as Hedging Instruments
As of March 31, 2026 and December 31, 2025, we held $102.3 million and $115.6 million, respectively, notional amount of receive fixed, pay fixed, foreign currency interest rate swaps. These derivatives are not designated as hedges, and as such, changes in fair value related to these derivatives are reported in earnings as a component of net investment gain or loss.
As of March 31, 2026 and December 31, 2025, we held $47.1 million and $48.9 million, respectively, notional amount of foreign currency forwards to mitigate the foreign currency risk associated with specific securities owned. These derivatives are not designated as hedges, and as such, changes in fair value related to these derivatives are reported in earnings as a component of net investment gain or loss.
As of March 31, 2026 and December 31, 2025, we held $151.4 million and $154.8 million, respectively, notional amount of total return swaps to mitigate the volatility associated with changes in the fair value of the underlying notional assets in our non-qualified defined contribution plan. This derivative is an economic hedge not designated as a hedging instrument, and changes in fair value are reported as a component of other expenses in our income statement.
As of March 31, 2026 and December 31, 2025, we held no total return swap contracts to mitigate the economic risk from credit spreads and interest rate duration related to certain cash and cash equivalent amounts. During the first quarter of 2025, we
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
entered into a total return swap contract with a notional amount of $700.0 million. This derivative was an economic hedge not designated as a hedging instrument, and changes in fair value were reported in realized gains or losses in our income statement. Expenses and dividend payments were reported in earnings as a component of net investment income. The total return swap was unwound and settled for cash in the second quarter of 2025.
We have an embedded derivative in a modified coinsurance arrangement for which we include in our net investment gains and losses a calculation intended to estimate the value of the option of our reinsurance counterparty to cancel the reinsurance contract with us. However, neither party can unilaterally terminate the reinsurance agreement except in extreme circumstances resulting from regulatory supervision, delinquency proceedings, or other direct regulatory action. Cash settlements or collateral related to this embedded derivative are not required at any time during the reinsurance contract or at termination of the reinsurance contract. There are no credit-related counterparty triggers, and any accumulated embedded derivative gain or loss reduces to zero over time as the reinsured business winds down.
Locations and Amounts of Derivative Financial Instruments
The following tables summarize the notional amounts and fair values of derivative financial instruments, as reported in our consolidated balance sheets. Derivative assets are included in other long-term investments, while derivative liabilities are included in other liabilities within our consolidated balance sheets. The notional amounts represent the basis upon which our counterparty pay and receive amounts are calculated.
| March 31, 2026 | |||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||
| Notional Amount | Fair Value | Fair Value | |||||||||||||||
| (in millions of dollars) | |||||||||||||||||
| Designated as Hedging Instruments | |||||||||||||||||
| Cash Flow Hedges | |||||||||||||||||
| Forward Benchmark Interest Rate Locks | $ | $ | $ | ||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Cash Flow Hedges | |||||||||||||||||
| Fair Value Hedges | |||||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||
| Not Designated as Hedging Instruments | |||||||||||||||||
| Foreign Currency Forwards | $ | $ | $ | ||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Return Swaps | |||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | |||||||||||||||||
| Total Not Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||
| Total Derivatives | $ | $ | $ | ||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
| December 31, 2025 | |||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||
| Notional Amount | Fair Value | Fair Value | |||||||||||||||
| (in millions of dollars) | |||||||||||||||||
| Designated as Hedging Instruments | |||||||||||||||||
| Cash Flow Hedges | |||||||||||||||||
| Forward Benchmark Interest Rate Locks | $ | $ | $ | ||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Cash Flow Hedges | |||||||||||||||||
| Fair Value Hedges | |||||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||
| Not Designated as Hedging Instruments | |||||||||||||||||
| Foreign Currency Forwards | $ | $ | $ | ||||||||||||||
| Foreign Currency Interest Rate Swaps | |||||||||||||||||
| Total Return Swaps | |||||||||||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | |||||||||||||||||
| Total Not Designated as Hedging Instruments | $ | $ | $ | ||||||||||||||
| Total Derivatives | $ | $ | $ | ||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
The following tables summarize the location of gains and losses of derivative financial instruments designated as hedging instruments, as reported in our consolidated statements of income.
| Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Net Investment Income | Net Investment Gain (Loss) | Interest and Debt Expense | Net Investment Income | Net Investment Gain (Loss) | Interest and Debt Expense | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Total Income and Expense Presented in the Consolidated Statements of Income of Which Hedged Items are Recorded | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Gain (Loss) on Cash Flow Hedging Relationships | |||||||||||||||||||||||||||||||||||
| Interest Rate Swaps: | |||||||||||||||||||||||||||||||||||
| Hedged items | ( | ||||||||||||||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||
| Foreign Exchange Contracts: | |||||||||||||||||||||||||||||||||||
| Hedged items | ( | ||||||||||||||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments | ( | ||||||||||||||||||||||||||||||||||
| Forward Benchmark Interest Rate Locks: | |||||||||||||||||||||||||||||||||||
| Hedged items | |||||||||||||||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments | ( | ( | |||||||||||||||||||||||||||||||||
| Gain (Loss) on Fair Value Hedging Relationships | |||||||||||||||||||||||||||||||||||
| Foreign Exchange Contracts | |||||||||||||||||||||||||||||||||||
| Hedged items | ( | ||||||||||||||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments | ( | ( | |||||||||||||||||||||||||||||||||
The following table summarizes the location of gains and losses of derivative financial instruments designated as cash flow hedging instruments, as reported in our consolidated statements of comprehensive income (loss).
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in millions of dollars) | ||||||||||||||
| Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | ||||||||||||||
Forward Benchmark Interest Rate Locks | $ | ( | $ | |||||||||||
| Foreign Exchange Contracts | ||||||||||||||
| Total | $ | ( | $ | |||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 5 - Derivative Financial Instruments - Continued
The following table summarizes the location of gains and losses on our derivatives not designated as hedging instruments, as reported in our consolidated statements of income.
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Net Investment Gain (Loss) | |||||||||||
| Foreign Exchange Contracts | $ | $ | ( | ||||||||
| Embedded Derivative in Modified Coinsurance Arrangement | ( | ( | |||||||||
Total Return Swaps | ( | ||||||||||
| Total | $ | ( | $ | ( | |||||||
Net Investment Income | |||||||||||
Total Return Swaps | $ | $ | |||||||||
| Other Expenses | |||||||||||
(Gain) Loss on Total Return Swaps | $ | $ | |||||||||
Note 6 - Accumulated Other Comprehensive Loss
Components of accumulated other comprehensive loss (AOCI), after tax, and related changes are as follows:
Net Unrealized Loss on Securities | Effect of Change in Discount Rate Assumptions on the LFPB1 | Net Loss on Derivatives | Foreign Currency Translation Adjustment | Unrecognized Pension and Postretirement Benefit Costs | Total | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
| Other Comprehensive Income (Loss) Before Reclassifications | ( | ( | ( | ||||||||||||||||||||||||||||||||
Amounts Reclassified from AOCI | ( | ||||||||||||||||||||||||||||||||||
| Net Other Comprehensive Income (Loss) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
| Other Comprehensive Income (Loss) Before Reclassifications | ( | ( | |||||||||||||||||||||||||||||||||
Amounts Reclassified from AOCI | ( | ||||||||||||||||||||||||||||||||||
| Net Other Comprehensive Income (Loss) | ( | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||
1Liability for Future Policy Benefits | |||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 6 - Accumulated Other Comprehensive Loss - Continued
Amounts reclassified from AOCI were recognized in our consolidated statements of income as follows:
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in millions of dollars) | ||||||||||||||
| Net Unrealized Loss on Securities | ||||||||||||||
| Net Investment Loss on Fixed Maturity Securities | ||||||||||||||
| Net Loss on Sales | $ | ( | $ | ( | ||||||||||
| Impairment Loss | ( | ( | ||||||||||||
Change in Allowance for Credit Losses1 | ( | |||||||||||||
| ( | ( | |||||||||||||
| Income Tax Benefit | ( | ( | ||||||||||||
| Total | $ | ( | $ | ( | ||||||||||
| Net Loss on Derivatives | ||||||||||||||
| Net Investment Income | ||||||||||||||
| Gain on Interest Rate Swaps and Forwards | $ | $ | ||||||||||||
| Net Investment Gain | ||||||||||||||
| Gain on Interest Rate Swaps | ||||||||||||||
| Gain (Loss) on Foreign Currency Interest Rate Swaps | ( | |||||||||||||
| Income Tax Expense | ||||||||||||||
| Total | $ | $ | ||||||||||||
| Unrecognized Pension and Postretirement Benefit Costs | ||||||||||||||
| Other Expenses | ||||||||||||||
| Amortization of Net Actuarial Loss | $ | ( | $ | ( | ||||||||||
| Amortization of Prior Service Credit | ||||||||||||||
| ( | ( | |||||||||||||
| Income Tax Benefit | ( | ( | ||||||||||||
| Total | $ | ( | $ | ( | ||||||||||
1Includes change in allowance on securities impaired, sold or otherwise disposed during the period. | ||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits
Liabilities for future policy benefits represent the cost of claims that we estimate we will eventually pay to our policyholders which includes policy liabilities for claims not yet incurred and for claims that have been incurred or are estimated to have been incurred but not yet reported to us. Liabilities for future policy benefits also include the related expenses for our non interest-sensitive life and accident and health products. The liability for future policy benefits is calculated based on the present value of the estimated future policy benefits less the present value of estimated future net premiums collected. Net premiums represent the portion of the gross premium required to provide for all benefits and expenses, excluding acquisition costs or any costs that are required to be charged to expense as incurred. In calculating the liability for future policy benefits, our long-duration contracts are grouped into cohorts by product type and contract issue year.
The calculation of the liability for future policy benefits involves numerous assumptions including assumptions related to discount rate, lapses, mortality, and morbidity. Cash flow assumptions are reviewed and updated, as needed, at least annually. Assumptions may be updated more frequently if necessary based on trending experience and future expectations. On a quarterly basis, cohort level cash flow measures are updated based on the emergence of actual experience.
The initial, also referred to as the original, discount rate assumptions established for each cohort are used to determine interest accretion. After policy issuance or policy renewal, the discount rate assumptions are updated quarterly and used to update the liability at each reporting date to the current discount rate. The weighted average current discount rate was 5.4 percent at March 31, 2026 compared to 5.1 percent at December 31, 2025, with the increase due primarily to an increase in U.S. Treasury rates. The weighted average current discount rate was 5.2 percent at March 31, 2025 compared to 5.3 percent at December 31, 2024 with the decrease due primarily to a decrease in U.S. Treasury rates.
Actual variances from expected experience during the first three months of 2026 were due primarily to higher than expected group long-term care policy terminations and higher than expected incidence in our Closed Block long-term care product line. Also impacting actual variances from expected experience during the first three months of 2026 as well as the first three months of 2025 was lower than expected mortality in the Unum US group life and accidental death and dismemberment product line and higher than expected claim resolutions driven by recoveries in the Unum US group disability product line. For the first three months of 2025, actual variances from expected experience were also impacted by higher than expected mortality experience in the Closed Block individual disability product line.
For the three months ended March 31, 2026 and 2025, there were certain cohorts within the Closed Block segment, related to our long-term care product line, for which net premiums exceeded gross premiums, which resulted in a $49.1 million reduction to income before income tax for the three months ended March 31, 2026 and had an immaterial impact for the three months ended March 31, 2025. There were also certain cohorts within the Colonial Life segment, related to our cancer and critical illness product line, and within the Unum US segment, related to our individual disability product line for which net premiums exceeded gross premiums which had an immaterial impact to income before income tax for the three months ended March 31, 2026 and 2025. There were no other product lines with cohorts for which net premiums exceeded gross premiums for the three months ended March 31, 2026 and 2025.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following table presents balances as well as the changes in the liability for future policy benefits for traditional long duration products.
| Consolidated | |||||||||||||||||||||||||||||||||||
| March 31 | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Present Value of Expected Net Premiums | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | |||||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Net premiums collected | ( | ( | |||||||||||||||||||||||||||||||||
| Foreign currency | ( | ||||||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | |||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | |||||||||||||||||||||||||||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | |||||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
Issuances1 | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Benefit payments | ( | ( | |||||||||||||||||||||||||||||||||
| Foreign currency | ( | ||||||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | |||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | |||||||||||||||||||||||||||||||||
| Net liability for future policy benefits | $ | $ | |||||||||||||||||||||||||||||||||
Other2 | |||||||||||||||||||||||||||||||||||
| Total liability for future policy benefits | |||||||||||||||||||||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | |||||||||||||||||||||||||||||||||
1Issuances include new policy issuances for most product lines. For our Unum US group disability, Unum US group life and AD&D and Closed Block - All Other product lines and certain of our Unum International product lines, this line represents new claim incurrals. | |||||||||||||||||||||||||||||||||||
2Other primarily relates to our Closed Block - All Other product line. | |||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following tables summarize the amount of gross premiums and interest accretion reflected in the statements of income as well as the undiscounted and discounted expected gross premiums and expected future benefit payments and the weighted average interest rates for traditional long duration products presented in the rollforward activity above.
| Consolidated | ||||||||||||||
| March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in millions of dollars) | ||||||||||||||
| Amount recognized in the statement of income: | ||||||||||||||
| Gross premiums or assessments | $ | $ | ||||||||||||
| Interest accretion | $ | $ | ||||||||||||
| Consolidated | |||||||||||
| March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||
| Amount of undiscounted: | |||||||||||
| Expected future benefit payments | $ | $ | |||||||||
| Expected future gross premiums | $ | $ | |||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||
| Expected future gross premiums | $ | $ | |||||||||
| Weighted average interest rate: | |||||||||||
| Interest accretion rate | % | % | |||||||||
| Current discount rate | % | % | |||||||||
| Weighted average duration of the liability | |||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
Unum US Segment
The following tables present the balances and changes in the reserves for future policy benefits for traditional long duration products in the Unum US segment.
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Present Value of Expected Net Premiums | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Net premiums collected | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
Issuances1 | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Benefit payments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net liability for future policy benefits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total liability for future policy benefits | |||||||||||||||||||||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
1Issuances include new policy issuances for most product lines. Issuances for Unum US group disability and Unum US group life and AD&D represents new claim incurrals. | |||||||||||||||||||||||||||||||||||
53
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
| March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Present Value of Expected Net Premiums | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
| Issuances | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Net premiums collected | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||||||||||||||
Issuances1 | |||||||||||||||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||||||||||||||
| Benefit payments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Net liability for future policy benefits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total liability for future policy benefits | |||||||||||||||||||||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
1Issuances include new policy issuances for most product lines. Issuances for Unum US group disability and Unum US group life and AD&D represents new claim incurrals. | |||||||||||||||||||||||||||||||||||
54
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following tables summarize the amount of gross premiums and interest accretion reflected in the statements of income as well as the undiscounted and discounted expected gross premiums and expected future benefit payments and the weighted average interest rates for traditional long duration products in the Unum US segment presented in the rollforward activity above.
| March 31, 2026 | |||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Amount recognized in the statement of income: | |||||||||||||||||||||||||||||
| Gross premiums or assessments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest accretion | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||
| Amount recognized in the statement of income: | |||||||||||||||||||||||||||||
| Gross premiums or assessments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest accretion | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||||||||
| Amount of undiscounted: | |||||||||||||||||||||||||||||
| Expected future benefit payments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Weighted average interest rate: | |||||||||||||||||||||||||||||
| Interest accretion rate | % | % | % | % | % | ||||||||||||||||||||||||
| Current discount rate | % | % | % | % | % | ||||||||||||||||||||||||
| Weighted average duration of the liability | |||||||||||||||||||||||||||||
55
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
| March 31, 2025 | |||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Total Unum US | |||||||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||||||||
| Amount of undiscounted: | |||||||||||||||||||||||||||||
| Expected future benefit payments | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Weighted average interest rate: | |||||||||||||||||||||||||||||
| Interest accretion rate | % | % | % | % | % | ||||||||||||||||||||||||
| Current discount rate | % | % | % | % | % | ||||||||||||||||||||||||
| Weighted average duration of the liability | |||||||||||||||||||||||||||||
56
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
Unum International Segment
The following table presents the balances and changes in the reserves for future policy benefits for traditional long duration products in the Unum International segment.
| March 31 | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||
| Present Value of Expected Net Premiums | ||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | |||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | ||||||||||||||||||||||||||||||||
| Issuances | ||||||||||||||||||||||||||||||||
| Interest accretion | ||||||||||||||||||||||||||||||||
| Net premiums collected | ( | ( | ||||||||||||||||||||||||||||||
| Foreign currency | ( | |||||||||||||||||||||||||||||||
| Ending balance at original discount rate | ||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | ||||||||||||||||||||||||||||||
| Present Value of Expected Future Policy Benefits | ||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | ||||||||||||||||||||||||||||||
| Beginning balance at original discount rate | ||||||||||||||||||||||||||||||||
| Effect of changes in cash flow assumptions | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ||||||||||||||||||||||||||||||
| Adjusted beginning of year balance | ||||||||||||||||||||||||||||||||
Issuances1 | ||||||||||||||||||||||||||||||||
| Interest accretion | ||||||||||||||||||||||||||||||||
| Benefit payments | ( | ( | ||||||||||||||||||||||||||||||
| Foreign currency | ( | |||||||||||||||||||||||||||||||
| Ending balance at original discount rate | ||||||||||||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ||||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | ||||||||||||||||||||||||||||||
| Net liability for future policy benefits | $ | $ | ||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||
| Total liability for future policy benefits | ||||||||||||||||||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | ||||||||||||||||||||||||||||||
1Issuances for Unum International primarily represents new claim incurrals. | ||||||||||||||||||||||||||||||||
57
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following tables summarize the amount of gross premiums and interest accretion reflected in the statements of income as well as the undiscounted and discounted expected gross premiums and expected future benefit payments and the weighted average interest rates for traditional long duration products in the Unum International segment presented in the rollforward activity above.
March 31 | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||
| Amount recognized in the statement of income: | ||||||||||||||||||||||||||||||||
| Gross premiums or assessments | $ | $ | ||||||||||||||||||||||||||||||
| Interest accretion | $ | $ | ||||||||||||||||||||||||||||||
March 31 | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| (in millions of dollars, except weighted average data) | ||||||||||||||||||||||||||||||||
| Amount of undiscounted: | ||||||||||||||||||||||||||||||||
| Expected future benefit payments | $ | $ | ||||||||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | ||||||||||||||||||||||||||||||
| Amount of discounted (at interest accretion rate): | ||||||||||||||||||||||||||||||||
| Expected future gross premiums | $ | $ | ||||||||||||||||||||||||||||||
| Weighted average interest rate: | ||||||||||||||||||||||||||||||||
| Interest accretion rate | % | % | ||||||||||||||||||||||||||||||
| Current discount rate | % | % | ||||||||||||||||||||||||||||||
| Weighted average duration of the liability | ||||||||||||||||||||||||||||||||
58
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
Colonial Life Segment
The following table presents the balances and changes in the reserves for future policy benefits for traditional long duration products in the Colonial Life segment.
| March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Present Value of Expected Net Premiums | |||||||||||
| Balance, beginning of year | $ | $ | |||||||||
| Beginning balance at original discount rate | |||||||||||
| Effect of changes in cash flow assumptions | |||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||
| Adjusted beginning of year balance | |||||||||||
| Issuances | |||||||||||
| Interest accretion | |||||||||||
| Net premiums collected | ( | ( | |||||||||
| Ending balance at original discount rate | |||||||||||
| Effect of change in discount rate assumptions | ( | ( | |||||||||
| Balance, end of period | $ | $ | |||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||
| Balance, beginning of year | $ | $ | |||||||||
| Beginning balance at original discount rate | |||||||||||
| Effect of changes in cash flow assumptions | |||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||
| Adjusted beginning of year balance | |||||||||||
| Issuances | |||||||||||
| Interest accretion | |||||||||||
| Benefit payments | ( | ( | |||||||||
| Ending balance at original discount rate | |||||||||||
| Effect of change in discount rate assumptions | ( | ( | |||||||||
| Balance, end of period | $ | $ | |||||||||
| Net liability for future policy benefits | $ | $ | |||||||||
| Other | |||||||||||
| Total liability for future policy benefits | |||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | |||||||||
59
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following tables summarize the amount of gross premiums and interest accretion reflected in the statements of income as well as the undiscounted and discounted expected gross premiums and expected future benefit payments and the weighted average interest rates for traditional long duration products in the Colonial Life segment presented in the rollforward activity above.
| March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Amount recognized in the statement of income: | |||||||||||
| Gross premiums or assessments | $ | $ | |||||||||
| Interest accretion | $ | $ | |||||||||
| March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||
| Amount of undiscounted: | |||||||||||
| Expected future benefit payments | $ | $ | |||||||||
| Expected future gross premiums | $ | $ | |||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||
| Expected future gross premiums | $ | $ | |||||||||
| Weighted average interest rate: | |||||||||||
| Interest accretion rate | % | % | |||||||||
| Current discount rate | % | % | |||||||||
| Weighted average duration of the liability | |||||||||||
60
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
Closed Block Segment
The following table presents the balances and changes in the reserves for future policy benefits for traditional long duration products in the Closed Block segment.
| March 31, 2026 | |||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||
| (in millions of dollars) | |||||||||||||||||
| Present Value of Expected Net Premiums | |||||||||||||||||
| Balance, beginning of year | $ | $ | $ | ||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||
| Interest accretion | |||||||||||||||||
| Net premiums collected | ( | ( | |||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||
| Effect of change in discount rate assumptions | |||||||||||||||||
| Balance, end of period | $ | $ | $ | ||||||||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||||||||
| Balance, beginning of year | $ | $ | $ | ||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||
Issuances1 | |||||||||||||||||
| Interest accretion | |||||||||||||||||
| Benefit payments | ( | ( | ( | ||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | ( | ||||||||||||||
| Balance, end of period | $ | $ | $ | ||||||||||||||
| Net liability for future policy benefits | $ | $ | $ | ||||||||||||||
Other2 | |||||||||||||||||
| Total liability for future policy benefits | |||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | ||||||||||||||
1Issuances for Closed Block - All Other represents new claim incurrals. | |||||||||||||||||
2Other for Closed Block - All Other primarily includes our closed block group pension products and certain of our ceded closed block individual life products. | |||||||||||||||||
61
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
| March 31, 2025 | |||||||||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Present Value of Expected Net Premiums | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | ||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | |||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||
| Net premiums collected | ( | ( | |||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||
| Effect of change in discount rate assumptions | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | ||||||||||||||||||||
| Present Value of Expected Future Policy Benefits | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | ||||||||||||||||||||
| Beginning balance at original discount rate | |||||||||||||||||||||||
| Effect of changes in cash flow assumptions | |||||||||||||||||||||||
| Effect of actual variances from expected experience | ( | ( | ( | ||||||||||||||||||||
| Adjusted beginning of year balance | |||||||||||||||||||||||
Issuances1 | |||||||||||||||||||||||
| Interest accretion | |||||||||||||||||||||||
| Benefit payments | ( | ( | ( | ||||||||||||||||||||
| Ending balance at original discount rate | |||||||||||||||||||||||
| Effect of change in discount rate assumptions | ( | ( | |||||||||||||||||||||
| Balance, end of period | $ | $ | $ | ||||||||||||||||||||
| Net liability for future policy benefits | $ | $ | $ | ||||||||||||||||||||
Other2 | |||||||||||||||||||||||
| Total liability for future policy benefits | |||||||||||||||||||||||
| Less: Reinsurance recoverable related to future policy benefits | |||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable | $ | $ | $ | ||||||||||||||||||||
1Issuances for Closed Block - All Other represents new claim incurrals. | |||||||||||||||||||||||
2Other for Closed Block - All Other primarily includes our closed block group pension products and certain of our ceded closed block individual life products. | |||||||||||||||||||||||
62
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
The following tables summarize the amount of gross premiums and interest accretion reflected in the statements of income as well as the undiscounted and discounted expected gross premiums and expected future benefit payments and the weighted average interest rates for traditional long duration products in the Closed Block segment presented in the rollforward activity above.
| March 31, 2026 | |||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||
| (in millions of dollars) | |||||||||||||||||
| Amount recognized in the statement of income: | |||||||||||||||||
| Gross premiums or assessments | $ | $ | $ | ||||||||||||||
| Interest accretion | $ | $ | $ | ||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Amount recognized in the statement of income: | |||||||||||||||||||||||
| Gross premiums or assessments | $ | $ | $ | ||||||||||||||||||||
| Interest accretion | $ | $ | $ | ||||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||
| Amount of undiscounted: | |||||||||||||||||||||||
| Expected future benefit payments | $ | $ | $ | ||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | ||||||||||||||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | ||||||||||||||||||||
| Weighted average interest rate: | |||||||||||||||||||||||
| Interest accretion rate | % | % | % | ||||||||||||||||||||
| Current discount rate | % | % | |||||||||||||||||||||
| Weighted average duration of the liability | |||||||||||||||||||||||
63
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
| March 31, 2025 | |||||||||||||||||||||||
| Long-term Care | All Other | Total Closed Block | |||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||
| Amount of undiscounted: | |||||||||||||||||||||||
| Expected future benefit payments | $ | $ | $ | ||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | ||||||||||||||||||||
| Amount of discounted (at interest accretion rate): | |||||||||||||||||||||||
| Expected future gross premiums | $ | $ | $ | ||||||||||||||||||||
| Weighted average interest rate: | |||||||||||||||||||||||
| Interest accretion rate | % | % | % | ||||||||||||||||||||
| Current discount rate | % | % | % | ||||||||||||||||||||
| Weighted average duration of the liability | |||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 7 - Liability for Future Policy Benefits - Continued
Reconciliation
A reconciliation of the liability for future policy benefits reflected in the preceding rollforwards to the related liability balances in the consolidated balance sheets are as follows:
| March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Liability for future policy benefits | |||||||||||
Unum US1 | $ | $ | |||||||||
Unum International1 | |||||||||||
| Colonial Life | |||||||||||
Closed Block1 | |||||||||||
Other products1 | |||||||||||
| Total liability for future policy benefits | $ | $ | |||||||||
1Unum US excludes the dental and vision product line and medical stop-loss products, Unum International excludes certain products in our supplemental product line and Closed Block excludes our participating fund account, which represents policies issued by one of our subsidiaries prior to its conversion from a mutual stock life insurance company. The liabilities associated with these products are included within Other products.
65
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 8 - Policyholders' Account Balances
Policyholders' account balances primarily include universal life, corporate-owned life insurance, and certain funding agreements. Policyholders' account balances reflect policyholder deposits and interest credited less cost of insurance, administration expenses, surrender charges, and withdrawals.
The following table presents the balances and changes in the policyholders' account balances:
| March 31, 2026 | |||||||||||||||||||||||
| Unum US - Voluntary Benefits | Colonial Life | Closed Block - All Other | Total | ||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | |||||||||||||||||||
| Premiums received | |||||||||||||||||||||||
Policy charges1 | ( | ( | ( | ( | |||||||||||||||||||
| Surrenders and withdrawals | ( | ( | ( | ( | |||||||||||||||||||
| Benefit payments | ( | ( | ( | ( | |||||||||||||||||||
| Interest credited | |||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Reserves in excess of account balance | |||||||||||||||||||||||
| Total policyholders' account balances | |||||||||||||||||||||||
| Less: Reinsurance recoverable related to policyholders' account balances | |||||||||||||||||||||||
| Net policyholders' account balances, after reinsurance recoverable | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average crediting rate | |||||||||||||||||||||||
Net amount at risk2 | $ | $ | $ | $ | |||||||||||||||||||
| Cash surrender value | $ | $ | $ | $ | |||||||||||||||||||
1Contracts included in the policyholders' account balances are generally charged a premium and/or monthly assessments on the basis of the account balance. | |||||||||||||||||||||||
2For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. | |||||||||||||||||||||||
A reconciliation of policyholders' account balances reflected in the preceding rollforward to the related liability balances in the consolidated balance sheets is as follows:
| March 31 | |||||
| 2026 | |||||
| (in millions of dollars) | |||||
| Policyholders' account balances | |||||
Unum US | $ | ||||
| Colonial Life | |||||
Closed Block | |||||
Funding agreements | |||||
| Total policyholders' account balances | $ | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 8 - Policyholders' Account Balances - Continued
| March 31, 2025 | |||||||||||||||||||||||
| Unum US - Voluntary Benefits | Colonial Life | Closed Block - All Other | Total | ||||||||||||||||||||
| (in millions of dollars, except weighted average data) | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | |||||||||||||||||||
| Premiums received | |||||||||||||||||||||||
Policy charges1 | ( | ( | ( | ( | |||||||||||||||||||
| Surrenders and withdrawals | ( | ( | ( | ( | |||||||||||||||||||
| Benefit payments | ( | ( | ( | ( | |||||||||||||||||||
| Interest credited | |||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Balance, end of period | |||||||||||||||||||||||
| Reserves in excess of account balance | |||||||||||||||||||||||
| Total policyholders' account balances | |||||||||||||||||||||||
| Less: Reinsurance recoverable related to policyholders' account balances | |||||||||||||||||||||||
| Net policyholders' account balances, after reinsurance recoverable | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average crediting rate | |||||||||||||||||||||||
Net amount at risk2 | $ | $ | $ | $ | |||||||||||||||||||
| Cash surrender value | $ | $ | $ | $ | |||||||||||||||||||
1Contracts included in the policyholders' account balances are generally charged a premium and/or monthly assessments on the basis of the account balance. | |||||||||||||||||||||||
2For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. | |||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 8 - Policyholders' Account Balances - Continued
The balance of the account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points, between rates being credited to policyholders' and the respective guaranteed minimums is as follows.
| March 31, 2026 | ||||||||||||||||||||||||||||||||
| Range of Guaranteed Minimum Crediting Rate | At Guaranteed Minimum | 1 Basis Point - 50 Basis Points Above | 51 Basis Points - 150 Basis Points Above | Greater than 150 Basis Points Above | Total | |||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||
| Unum US - Voluntary Benefits | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Colonial Life | ||||||||||||||||||||||||||||||||
| Closed Block - All Other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 8 - Policyholders' Account Balances - Continued
| March 31, 2025 | ||||||||||||||||||||||||||||||||
| Range of Guaranteed Minimum Crediting Rate | At Guaranteed Minimum | 1 Basis Point - 50 Basis Points Above | 51 Basis Points - 150 Basis Points Above | Greater than 150 Basis Points Above | Total | |||||||||||||||||||||||||||
| (in millions of dollars) | ||||||||||||||||||||||||||||||||
| Unum US - Voluntary Benefits | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Colonial Life | ||||||||||||||||||||||||||||||||
| Closed Block - All Other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 9 - Deferred Acquisition Costs
The following tables display the changes in deferred acquisition costs throughout the period:
| March 31, 2026 | |||||||||||||||||||||||
| Unum US | Unum International | Colonial Life | Total | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | |||||||||||||||||||
| Capitalization | |||||||||||||||||||||||
| Amortization expense | ( | ( | ( | ( | |||||||||||||||||||
| Foreign currency | ( | ( | |||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||
| Unum US | Unum International | Colonial Life | Total | ||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | |||||||||||||||||||
| Capitalization | |||||||||||||||||||||||
| Amortization expense | ( | ( | ( | ( | |||||||||||||||||||
| Foreign currency | |||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Dental and Vision | Total Unum US | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Capitalization | |||||||||||||||||||||||||||||||||||
| Amortization expense | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Group Disability | Group Life and AD&D | Voluntary Benefits | Individual Disability | Dental and Vision | Total Unum US | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Balance, beginning of year | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Capitalization | |||||||||||||||||||||||||||||||||||
| Amortization expense | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance, end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 10 - Segment Information
We have three core operating segments: Unum US, Unum International, and Colonial Life. Our other operating segments are Closed Block and Corporate.
Segment information is shown below. Certain prior year amounts were adjusted to conform to current year presentation. See below for more information regarding this update.
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Premium Income | |||||||||||
| Unum US | |||||||||||
| Group Disability | |||||||||||
| Group Long-term Disability | $ | $ | |||||||||
| Group Short-term Disability | |||||||||||
| Group Life and Accidental Death & Dismemberment | |||||||||||
| Group Life | |||||||||||
| Accidental Death & Dismemberment | |||||||||||
| Supplemental and Voluntary | |||||||||||
| Voluntary Benefits | |||||||||||
| Individual Disability | |||||||||||
| Dental and Vision | |||||||||||
| Unum International | |||||||||||
| Unum UK | |||||||||||
| Group Long-term Disability | |||||||||||
| Group Life | |||||||||||
| Supplemental | |||||||||||
| Unum Poland | |||||||||||
| Colonial Life | |||||||||||
| Accident, Sickness, and Disability | |||||||||||
| Life | |||||||||||
| Cancer and Critical Illness | |||||||||||
| Closed Block | |||||||||||
| Long-term Care | |||||||||||
| All Other | |||||||||||
| Total Premium Income | $ | $ | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 10 - Segment Information - Continued
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Unum US | Unum International | Colonial Life | Closed Block | Corporate | Total | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Premium Income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Net Investment Income | |||||||||||||||||||||||||||||||||||
| Other Income | |||||||||||||||||||||||||||||||||||
Segment Adjusted Operating Revenue | |||||||||||||||||||||||||||||||||||
Policy Benefits | |||||||||||||||||||||||||||||||||||
Policy Benefits - Remeasurement Loss (Gain) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Commissions | |||||||||||||||||||||||||||||||||||
| Interest and Debt Expense | |||||||||||||||||||||||||||||||||||
| Deferral of Acquisition Costs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Amortization of Deferred Acquisition Costs | |||||||||||||||||||||||||||||||||||
Other Segment Items1 | |||||||||||||||||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||||||||||||||
Segment Adjusted Operating Income (Loss) | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
1For each reportable segment, other segment items includes compensation, other personnel expenses, taxes, licenses and fees, depreciation, intangible asset amortization and other expenses. Depreciation and intangible asset amortization during the three months ended March 31, 2026 was $ | |||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 10 - Segment Information - Continued
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Unum US | Unum International | Colonial Life | Closed Block | Corporate | Total | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Premium Income | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Net Investment Income | |||||||||||||||||||||||||||||||||||
| Other Income | |||||||||||||||||||||||||||||||||||
Segment Adjusted Operating Revenue | |||||||||||||||||||||||||||||||||||
Policy Benefits | |||||||||||||||||||||||||||||||||||
Policy Benefits - Remeasurement Loss (Gain) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Commissions | |||||||||||||||||||||||||||||||||||
| Interest and Debt Expense | |||||||||||||||||||||||||||||||||||
| Deferral of Acquisition Costs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Amortization of Deferred Acquisition Costs | |||||||||||||||||||||||||||||||||||
Other Segment Items1 | |||||||||||||||||||||||||||||||||||
Benefits and Expenses | |||||||||||||||||||||||||||||||||||
Segment Adjusted Operating Income (Loss) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
1For each reportable segment, other segment items includes compensation, other personnel expenses, taxes, licenses and fees, depreciation, intangible asset amortization and other expenses. Depreciation and intangible asset amortization during the three months ended March 31, 2025 was $ | |||||||||||||||||||||||||||||||||||
| March 31 | December 31 | ||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Assets | |||||||||||
| Unum US | $ | $ | |||||||||
| Unum International | |||||||||||
| Colonial Life | |||||||||||
| Closed Block | |||||||||||
| Corporate | |||||||||||
| Total Assets | $ | $ | |||||||||
We report goodwill in our Unum US, Unum International, and Colonial Life segments, which are the segments expected to benefit from the originating business combinations. At March 31, 2026 and December 31, 2025 goodwill was $353.0 million and $353.9 million, respectively, with $281.2 44.1 million and $45.0 million, respectively, attributable to Unum International, and $27.7
We measure and analyze our segment performance on the basis of "segment adjusted operating revenue" and "segment adjusted operating income" or "segment adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, reserve assumption updates, and certain other items. The excluded items impacting the periods presented herein are specified in the reconciliations below. We believe segment adjusted operating revenue and segment adjusted operating income or loss are better performance
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 10 - Segment Information - Continued
measures and better indicators of the revenue and profitability and underlying trends in our business. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, impairment losses, and gains or losses on derivatives. Investment gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of investment gains or losses. Although we may experience investment gains or losses which will affect future earnings levels, a long-term focus is necessary to maintain profitability over the life of the business since our underlying business is long-term in nature, and we need to earn the interest rates assumed in calculating our liabilities.
We have completed reinsurance transactions to exit significant portions of our Closed Block businesses and we are no longer accepting new enrollments on existing group long-term care policies. As a result of these actions and the continued run-off of the Closed Block business, we determined that it is no longer necessary to adjust segment adjusted operating revenue or segment adjusted operating income or loss to exclude the amortization of the deferred gain on reinsurance and it is no longer necessary to adjust segment adjusted operating income or loss to exclude the amortization of the cost of reinsurance, the amortization of the deferred gain on reinsurance or the impact of non-contemporaneous reinsurance, because the majority of these items are included in Closed Block segment results. Prior period financial information has been adjusted to conform to this updated presentation.
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.
A reconciliation of total revenue to "segment adjusted operating revenue" and income before income tax to "segment adjusted operating income" is shown below.
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Total Revenue | $ | $ | |||||||||
| Excluding: | |||||||||||
| Net Investment Loss | ( | ( | |||||||||
Segment Adjusted Operating Revenue | $ | $ | |||||||||
| Income Before Income Tax | $ | $ | |||||||||
| Excluding: | |||||||||||
| Net Investment Loss | |||||||||||
| Net Investment Loss Related to the Fortitude Re Reinsurance Transaction | ( | ||||||||||
| Net Investment Loss, Other | ( | ( | |||||||||
| Total Net Investment Loss | ( | ( | |||||||||
| Segment Adjusted Operating Income | $ | $ | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 11 - Employee Benefit Plans
Defined Benefit Pension and Other Postretirement Benefit (OPEB) Plans
We sponsor several defined benefit pension and OPEB plans for our employees, including non-qualified pension plans. The U.S. qualified and non-qualified defined benefit pension plans comprise the majority of our total benefit obligation and benefit cost. We maintain a separate defined benefit plan for eligible employees in our U.K. operation. The U.S. defined benefit pension plans were frozen and closed to new entrants on December 31, 2013, the OPEB plan was frozen and closed to new entrants on December 31, 2012, and the U.K. plan was frozen and closed to new entrants on December 31, 2002.
The following table provides the components of the net periodic benefit cost for the defined benefit pension and OPEB plans.
| Three Months Ended March 31 | |||||||||||||||||||||||||||||||||||
| Pension Benefits | |||||||||||||||||||||||||||||||||||
| U.S. Plans | U.K. Plan | OPEB | |||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||
| Service Cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Interest Cost | |||||||||||||||||||||||||||||||||||
| Expected Return on Plan Assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of: | |||||||||||||||||||||||||||||||||||
Net Actuarial Loss (Gain) | ( | ( | |||||||||||||||||||||||||||||||||
| Prior Service Credit | ( | ( | |||||||||||||||||||||||||||||||||
Total Net Periodic Benefit Cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
The service cost component of net periodic pension and postretirement benefit cost is included as a component of compensation expense in our consolidated statements of income. All other components of net periodic pension and postretirement benefit cost are included in other expenses.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 12 - Stockholders' Equity and Earnings Per Common Share
Earnings Per Common Share
Net income per common share is determined as follows:
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars, except share data) | |||||||||||
| Numerator | |||||||||||
| Net Income | $ | $ | |||||||||
| Denominator (000s) | |||||||||||
| Weighted Average Common Shares - Basic | |||||||||||
| Dilution for Assumed Exercises of Nonvested Stock Awards | |||||||||||
| Weighted Average Common Shares - Assuming Dilution | |||||||||||
| Net Income Per Common Share | |||||||||||
| Basic | $ | $ | |||||||||
| Assuming Dilution | $ | $ | |||||||||
We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding for the period. In computing earnings per share assuming dilution, we include potential common shares that are dilutive (those that reduce earnings per share). We use the treasury stock method to account for the effect of nonvested restricted stock units and nonvested performance share units on the computation of diluted earnings per share. Under this method, the potential common shares from nonvested restricted stock units and nonvested performance share units will each have a dilutive effect, as individually measured, when the average market price of Unum Group common stock during the period exceeds the grant price of the nonvested restricted stock units and nonvested performance share units. The outstanding nonvested restricted stock units and nonvested performance share units have grant prices ranging from $40.29 to $83.04 . Potential common shares not included in the computation of diluted earnings per share because the impact would be antidilutive, approximated 0.3
Common Stock
As part of our capital deployment strategy, we may repurchase shares of Unum Group's common stock, as authorized by our board of directors. The timing and amount of repurchase activity is based on market conditions and other considerations, including the level of available cash, alternative uses for cash, and our stock price.
Our board of directors has authorized the following repurchase programs:
December 2025 Authorization | February 2025 Authorization1 | July 2024 Authorization2 | |||||||||||||||
| (in millions) | |||||||||||||||||
Effective Date | January 1, 2026 | April 1, 2025 | August 1, 2024 | ||||||||||||||
Expiration Date | None | ||||||||||||||||
Authorized Repurchase Amount | $ | $ | $ | ||||||||||||||
Cost of Shares Repurchased Under Repurchase Program | |||||||||||||||||
Unused and Expired | — | 200.0 | 293.2 | ||||||||||||||
Remaining Repurchase Amount at March 31, 2026 | $ | $ | $ | ||||||||||||||
1Concurrent with the announcement of the December 2025 repurchase program, we also announced the termination of the February 2025 program as of December 31, 2025, and any unused amounts under that program expired as of that date.
2Concurrent with the announcement of the February 2025 repurchase program, we also announced the termination of the July 2024 program as of March 31, 2025, and any unused amounts under that program expired as of that date.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 12 - Stockholders' Equity and Earnings Per Common Share - Continued
Common stock repurchases, which are accounted for using the cost method and classified as treasury stock until otherwise retired, were as follows:
1For the three months ended March 31, 2025, includes 0.7 million shares related to the settlement of the November 2024 accelerated share repurchase agreement (ASR) which occurred in February 2025.
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (in millions) | |||||||||||||||||
Shares Repurchased1 | |||||||||||||||||
Cost of Shares Repurchased2 | $ | $ | |||||||||||||||
2Includes $0.1 million and $0.5 million of commissions for the three months ended March 31, 2026 and 2025, respectively. Also includes $3.7 million and $2.1 million of excise taxes for the three months ended March 31, 2026 and 2025, respectively.
As a part of our share repurchase program, we periodically enter into accelerated share repurchase agreements. Under the terms of these agreements, we make a prepayment to a financial counterparty for which we receive an initial delivery of approximately 75 percent of the total Unum Group common stock to be delivered under the agreement. We simultaneously enter into a forward contract indexed to the price of Unum Group common stock, which subjects the transactions to a future price adjustment. Under the terms of the agreements, we are to receive, or be required to pay, a price adjustment based on the volume weighted average price of Unum Group common stock during the term of the agreement, less a discount. Any price adjustment payable to us is settled in shares of Unum Group common stock. Any price adjustment we would be required to pay may be settled in either cash or common stock at our option. In November 2024, we paid $321.0 million to a financial counterparty as a part of an accelerated share repurchase agreement. We received an initial delivery of 3.8 million shares of our common stock. The final price adjustment settlement, along with the delivery of the remaining shares, occurred in February 2025, resulting in the delivery to us of 0.7 million additional shares. As a result of the final settlement occurring subsequent to December 31, 2024, we recorded a decrease of $80.3 million to additional paid-in capital within stockholders' equity on our consolidated balance sheet for the value of the shares held back by the counterparty as of December 31, 2024, which was reclassified to treasury stock in the first quarter of 2025 in connection with the final settlement of the agreement
Preferred Stock
Unum Group has 25.0 million shares of preferred stock authorized with a par value of $0.10 per share. No preferred stock has been issued to date.
Note 13 - Commitments and Contingent Liabilities
Commitments
See Notes 3 and 4 for further discussion on certain of our investment commitments.
Contingent Liabilities
We are a defendant in a number of litigation matters that have arisen in the normal course of business, including the matters discussed below. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning our compliance with applicable insurance and other laws and regulations. Given the complexity and scope of our litigation and regulatory matters, it is not possible to predict the ultimate outcome of all pending investigations or legal proceedings or provide reasonable estimates of potential losses, except if noted in connection with specific matters.
In some of these matters, no specified amount is sought. In others, very large or indeterminate amounts, including punitive and treble damages, are asserted. There is a wide variation of pleading practice permitted in the United States courts with respect to requests for monetary damages, including some courts in which no specified amount is required and others which allow the plaintiff to state only that the amount sought is sufficient to invoke the jurisdiction of that court. Further, some jurisdictions permit plaintiffs to allege damages well in excess of reasonably possible verdicts. Based on our extensive experience and that
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 13 - Commitments and Contingent Liabilities - Continued
of others in the industry with respect to litigating or resolving claims through settlement over an extended period of time, we believe that the monetary damages asserted in a lawsuit or claim bear little relation to the merits of the case, or the likely disposition value. Therefore, the specific monetary relief sought is not stated.
Unless indicated otherwise, reserves have not been established for litigation and contingencies. An estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Claim Handling Matters
We and our insurance subsidiaries, in the ordinary course of our business, are engaged in claim litigation where disputes arise as a result of a denial or termination of benefits. Most typically these lawsuits are filed on behalf of a single claimant or policyholder, and in some of these individual actions punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. For our general claim litigation, we maintain reserves based on experience to satisfy judgments and settlements in the normal course. We expect that the ultimate liability, if any, with respect to general claim litigation, after consideration of the reserves maintained, will not be material to our consolidated financial condition. Nevertheless, given the inherent unpredictability of litigation, it is possible that an adverse outcome in certain claim litigation involving punitive damages could, from time to time, have a material adverse effect on our consolidated results of operations in a period, depending on the results of operations for the particular period.
From time to time class action allegations are pursued where the claimant or policyholder purports to represent a larger number of individuals who are similarly situated. Since each insurance claim is evaluated based on its own merits, there is rarely a single act or series of actions which can properly be addressed by a class action. Nevertheless, we monitor these cases closely and defend ourselves appropriately where these allegations are made.
Note 14 - Debt and Other
Credit Facility
In April 2026, we entered into a senior letter of credit facility pursuant to which a letter of credit may be issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary. The facility provides for drawings up to £50.0 million until its scheduled expiration five years after issuance of the letter of credit and no later than July 2031. The credit facility provides for borrowings at an interest rate based on the sterling overnight index average.
Borrowings under the credit facility are subject to financial covenants, negative covenants, and events of default that are customary. The credit facility includes financial covenants based on our leverage ratio and consolidated net worth as well as covenants that limit subsidiary indebtedness.
Junior Subordinated Debt Securities
Allowance for Expected Credit Losses on Premiums Receivable
At March 31, 2026 and December 31, 2025, the allowance for expected credit losses on premiums receivables was $26.9 million and $26.1 million, respectively, on gross premiums receivable of $727.4 million and $579.5 million, respectively. The increase in gross premiums receivable of $147.9 million during the three months ended March 31, 2026 was driven by sales growth. The increase in the allowance for expected credit losses of $0.8 million during the three months ended March 31, 2026 was driven by an increase in the gross premiums receivable.
At March 31, 2025 and December 31, 2024, the allowance for expected credit losses on premiums receivables was $27.0 million and $26.8 million, respectively, on gross premiums receivable of $631.8 million and $584.1 million, respectively. The allowance for expected credit losses was generally consistent at March 31, 2025 compared to December 31, 2024.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Unum Group and Subsidiaries
March 31, 2026
Note 14 - Debt and Other - Continued
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 represented 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.
As a result of this reinsurance agreement, we recognized the following:
•Net realized investment loss totaling $46.8 million during the year ended December 31, 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, an affiliated captive reinsurer, and assumed the aforementioned Unum US individual disability business from Provident Life and Accident Insurance Company, an affiliate.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
TABLE OF CONTENTS
| Page | |||||
Executive Summary | 81 | ||||
Reconciliation of Non-GAAP and Other Financial Measures | 84 | ||||
Critical Accounting Estimates | 86 | ||||
Accounting Developments | 86 | ||||
Consolidated Operating Results | 87 | ||||
Segment Results | 89 | ||||
Unum US Segment | 89 | ||||
Unum International Segment | 95 | ||||
Colonial Life Segment | 98 | ||||
Closed Block Segment | 100 | ||||
Corporate Segment | 102 | ||||
Investments | 103 | ||||
Liquidity and Capital Resources | 109 | ||||
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Executive Summary
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, 2025.
Certain prior period financial information has been adjusted to conform to current year presentation. See "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 for more information regarding these adjustments.
Operating Performance and Capital Management
For the first quarter of 2026, we reported net income of $232.0 million, or $1.41 per diluted common share, compared to net income of $189.1 million, or $1.06 per diluted common share, in the first quarter of 2025.
Included in our results for the first quarter of 2026 are:
•A net investment loss of $4.0 million after tax, or $0.03 per diluted common share; and,
•Closed Block segment after-tax adjusted operating loss of $116.5 million or $0.70 per diluted common share.
Included in our results for the first quarter of 2025 are:
•A net investment loss of $163.4 million after tax, or $0.91 per diluted common share; and,
•Closed Block segment after-tax adjusted operating income of $3.7 million or $0.02 per diluted common share.
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Excluding these items, after-tax adjusted operating income for the first quarter of 2026 was $352.5 million, or $2.14 per diluted common share compared to $348.8 million, or $1.95 per diluted common share, for the first quarter of 2025. See "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 for further discussion and a reconciliation of these items.
Unum US reported segment adjusted operating income of $337.9 million in the first quarter of 2026 compared to $329.1 million the same period of 2025, due primarily to favorable benefits experience and higher net investment income, partially offset by the gain on the recapture of a previously ceded block of business in the Unum US individual disability product line.in the first quarter of 2025. The benefit ratio for our Unum US segment was 59.5 percent in the first quarter of 2026, compared to 59.7 percent in first quarter of 2025. Unum US sales increased 20.8 percent in the first quarter of 2026 compared to the same period of 2025.
Unum International reported segment adjusted operating income of $30.9 million in the first quarter of 2026 compared to $38.7 million the same period of 2025. Our Unum UK line of business reported adjusted operating income of £20.4 million in the first quarter of 2026 compared to £29.5 million the same period of 2025 due primarily to unfavorable benefits experience. The benefit ratio for our Unum UK line of business was 72.9 percent in the first quarter of 2026, compared to 67.1 percent in the same period of 2025. Unum International sales, as measured in U.S. dollars, increased 14.1 percent in the first quarter of 2026 compared to the same period of 2025. Unum UK sales, as measured in local currency, increased 15.0 percent in the first quarter of 2026 compared to the same period of 2025.
Colonial Life reported segment adjusted operating income of $127.8 million in the first quarter of 2026 compared to $115.7 million the same period of 2025, due primarily to favorable benefits experience and higher net investment income. The benefit ratio for Colonial Life was 46.0 percent in the first quarter of 2026, compared to 47.7 percent in the same period of 2025. Colonial Life sales increased 0.9 percent in the first quarter of 2026 compared to the same period of 2025.
Closed Block reported segment adjusted operating loss of $145.3 million in the first quarter of 2026, compared to $8.0 million of segment adjusted operating income in the same period of 2025. The net premium ratio for long-term care increased to 97.6 percent at March 31, 2026 from 94.7 percent at March 31, 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. As of March 31, 2026, 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 $2.2 billion at March 31, 2026, compared to $1.7 billion at December 31, 2025, with the increase due primarily to an increase in U.S. Treasury rates and credit spreads. The earned book yield on our investment portfolio was 4.29 percent for the first three months of 2026 compared to a yield of 4.35 percent for full year 2025.
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 increase in U.S. Treasury rates during the first quarter of 2026, resulted in a decrease to the liability for future policy benefits, net of reinsurance, of approximately $0.6 billion.
We believe our capital and financial positions are strong. At March 31, 2026, 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 460 percent, which is in line with our expectation. We repurchased 5.4 million shares and 3.3 million shares of Unum Group common stock under our share repurchase program during the first quarter of 2026 and 2025, respectively, at a cost of $402.4 million and $202.6 million, respectively, including commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 164.4 million and 178.9 million for the first quarter of 2026 and 2025, respectively. As of March 31, 2026, Unum Group and our intermediate holding companies had available holding company liquidity of $1,726.1 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.
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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 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 represented 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 has an A rating by A.M. Best Company and has established 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 December 31, 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, an affiliate.
See Notes 4 and 14 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" 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 material Pillar Two taxes as of March 31, 2026. We will continue to monitor legislative developments.
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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 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.
We expect earnings growth in our core operations 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 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.
Reconciliation of Non-GAAP and Other Financial Measures
We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S generally accepted accounting principles (GAAP). The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, Closed Block segment after-tax adjusted operating income or loss, reserve assumption updates and certain other items. The excluded items impacting the periods presented herein are specified in the reconciliations below. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, impairment losses, and gains or losses on derivatives. Investment gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of investment gains or losses. Although we may experience investment gains or losses which will affect future earnings levels, a long-term focus is necessary to maintain profitability over the life of the business since our underlying business is long-term in nature, and we need to earn the interest rates assumed in calculating our liabilities.
We have completed reinsurance transactions to exit significant portions of our Closed Block businesses and we are no longer accepting new enrollments on existing group long-term care policies. As a result of these actions and the continued run-off of the Closed Block business, Closed Block segment earnings are less relevant to our financial results and as such, we exclude the results of the Closed Block segment from after-tax adjusted operating income. As part of this update, we also determined that it is no longer necessary to adjust after-tax adjusted operating income to exclude the amortization of the cost of reinsurance, the
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amortization of the deferred gain on reinsurance, and the impact of non-contemporaneous reinsurance, because the majority of these items are included in Closed Block segment results. Prior period financial information has been adjusted to conform to this updated presentation.
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.
See "Investments" contained herein in Item 2 and Note 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion regarding the net investment loss.
A reconciliation of GAAP financial measures to our non-GAAP financial measures is as follows:
| Three Months Ended March 31 | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (in millions) | per share * | (in millions) | per share * | ||||||||||||||||||||
| Net Income | $ | 232.0 | $ | 1.41 | $ | 189.1 | $ | 1.06 | |||||||||||||||
| Excluding: | |||||||||||||||||||||||
Net Investment Loss | |||||||||||||||||||||||
Net Investment Loss Related to the Fortitude Re Reinsurance Transaction (net of tax benefit of $—; $36.9) | — | — | (139.0) | (0.78) | |||||||||||||||||||
Net Investment Loss, Other (net of tax benefit of $1.0; $6.5) | (4.0) | (0.03) | (24.4) | (0.13) | |||||||||||||||||||
Total Net Investment Loss | (4.0) | (0.03) | (163.4) | (0.91) | |||||||||||||||||||
Closed Block Segment After-Tax Adjusted Operating Income (Loss) (net of tax expense (benefit) of $(28.8); $4.3) | (116.5) | (0.70) | 3.7 | 0.02 | |||||||||||||||||||
| After-tax Adjusted Operating Income | $ | 352.5 | $ | 2.14 | $ | 348.8 | $ | 1.95 | |||||||||||||||
| *Assuming Dilution | |||||||||||||||||||||||
We measure and analyze our segment performance on the basis of "segment adjusted operating revenue" and "segment adjusted operating income" or "segment adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, reserve assumption updates, and certain other items. The excluded items impacting the periods presented herein are specified in the reconciliations below. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.
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A reconciliation of total revenue to "segment adjusted operating revenue" and income before income tax to "segment adjusted operating income" is as follows:
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions of dollars) | |||||||||||
| Total Revenue | $ | 3,355.2 | $ | 3,091.6 | |||||||
| Excluding: | |||||||||||
| Net Investment Loss | (5.0) | (206.8) | |||||||||
| Segment Adjusted Operating Revenue | $ | 3,360.2 | $ | 3,298.4 | |||||||
| Income Before Income Tax | $ | 302.7 | $ | 243.6 | |||||||
| Excluding: | |||||||||||
Net Investment Loss | |||||||||||
| Net Investment Loss Related to the Fortitude Re Reinsurance Transaction | — | (175.9) | |||||||||
| Net Investment Loss, Other | (5.0) | (30.9) | |||||||||
Total Net Investment Loss | (5.0) | (206.8) | |||||||||
| Segment Adjusted Operating Income | $ | 307.7 | $ | 450.4 | |||||||
Critical Accounting Estimates
We prepare our financial statements in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect amounts reported in our financial statements and accompanying notes. Estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed in our financial statements.
The accounting estimates deemed to be most critical to our financial position and results of operations are those related to the liability for future policy benefits, valuation of investments, income taxes, and contingent liabilities. There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2026.
For additional information, refer to our significant accounting policies in Note 1 of the "Notes to Consolidated Financial Statements" in Part II, Item 8, and "Critical Accounting Estimates" in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2025.
Accounting Developments
For information on new accounting standards and the impact, if any, on our financial position or results of operations, see Note 2 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information.
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Consolidated Operating Results
| (in millions of dollars) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Revenue | |||||||||||||||||
| Premium Income | $ | 2,794.0 | 3.4 | % | $ | 2,702.9 | |||||||||||
| Net Investment Income | 483.4 | (5.8) | 513.2 | ||||||||||||||
| Net Investment Loss | (5.0) | (97.6) | (206.8) | ||||||||||||||
| Other Income | 82.8 | 0.6 | 82.3 | ||||||||||||||
| Total Revenue | 3,355.2 | 8.5 | 3,091.6 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 1,955.8 | (0.2) | 1,960.3 | ||||||||||||||
| Policy Benefits - Remeasurement Loss (Gain) | 48.2 | 154.0 | (89.3) | ||||||||||||||
| Commissions | 368.5 | 7.4 | 343.2 | ||||||||||||||
| Interest and Debt Expense | 53.1 | 2.1 | 52.0 | ||||||||||||||
| Deferral of Acquisition Costs | (190.6) | 10.4 | (172.6) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 134.2 | 7.0 | 125.4 | ||||||||||||||
| Compensation Expense | 325.5 | 4.9 | 310.4 | ||||||||||||||
| Other Expenses | 357.8 | 12.3 | 318.6 | ||||||||||||||
| Total Benefits and Expenses | 3,052.5 | 7.2 | 2,848.0 | ||||||||||||||
| Income Before Income Tax | 302.7 | 24.3 | 243.6 | ||||||||||||||
| Income Tax | 70.7 | 29.7 | 54.5 | ||||||||||||||
| Net Income | $ | 232.0 | 22.7 | $ | 189.1 | ||||||||||||
Fluctuations in exchange rates, particularly between the British pound sterling and the U.S. dollar for our U.K. operations, have an effect on our consolidated financial results. In periods when the pound weakens relative to the preceding period, translating pounds into dollars decreases current period results relative to the prior period. In periods when the pound strengthens, translating pounds into dollars increases current period results relative to the prior period.
The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.343 and 1.264 for the three months ended March 31, 2026 and 2025, respectively. If the first quarter 2025 results for our U.K. operations had been translated at the higher exchange rate of 2026, our segment adjusted operating revenue and segment adjusted operating income would have both been higher by approximately $15 million and $2 million, respectively, in the first quarter of 2025. Except for a limited number of transactions, we do not actually convert pounds into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K.
Premium income increased in the first quarter of 2026 relative to the same period of 2025 in each of our principal operating business segments, primarily due to favorable persistency and sales, partially offset by the impact of ceding a portion of the individual disability product line as a part of the Fortitude Re reinsurance transaction, as well as the expected run off in medical stop-loss premium. Premium income continues to decline in our Closed Block segment, as expected, and this was accelerated by the impact of ceding a portion of the Closed Block long-term care product line as a part of the Fortitude Re reinsurance transaction in 2025.
Net investment income was lower in the first quarter of 2026 compared to the same period of 2025 primarily related to a decrease in the level of invested assets supporting the Closed Block long-term care product line as a result of the Fortitude Re reinsurance transaction, partially offset by an increase in the yield on invested assets as well as an increase in miscellaneous investment income, primarily related to larger increases in the NAV on our private equity partnerships.
Our investment gains and losses on fixed maturity securities include net losses on sales of $0.5 million and $44.7 million in the first quarter of 2026 and 2025, respectively. The net losses for the first quarter of 2025 were primarily related to a realized loss
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of $23.5 million on sales of fixed maturity securities relating to the Fortitude Re reinsurance transaction as well as a $19.1 million realized loss on sales of fixed maturity securities relating to funding of a dividend from one of our subsidiaries. Credit and impairment losses on fixed maturity securities were $2.2 million during first quarter of 2026. We recognized $153.4 million of credit and impairment losses on fixed maturity securities during the first quarter of 2025 which was primarily comprised of the $152.4 million impairment loss based on the intent to transfer fixed-maturity securities related to the Fortitude Re reinsurance transaction. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
Other income is primarily comprised of fee-based service products in the Unum US segment, which include leave management services and administrative services only business, and the underlying results and associated net investment income of certain assumed blocks of reinsured business in the Closed Block segment. Also included within other income, in the first quarter of 2026, is the amortization of the deferred gain on reinsurance related to the Unum US individual disability product line as a part of the Fortitude Re reinsurance transaction. Also included within other income, in the first quarter of 2025, is a gain on the recapture of a previously ceded block of business in the Unum US individual disability product line.
Overall benefits experience in the first quarter of 2026 was unfavorable relative to the same period of 2025 with a consolidated benefit ratio, which includes the remeasurement gain (loss), of 71.7 percent and 69.2 percent, respectively. The underlying benefits experience for each of our operating segments is discussed more fully in "Segment Results" as follows.
Commissions and the deferral of acquisition costs were higher during the first quarter of 2026 compared to the same period of 2025 due to sales in our core operating segments. The amortization of deferred acquisition costs was higher in the first quarter of 2026 compared to the same period of 2025 primarily due to growth in the level of the deferred asset in our Colonial Life and Unum US group disability product lines, partially offset by a decrease in the level of the deferred asset in our Unum US individual disability product line as a result of the Fortitude Re reinsurance transaction.
Other expenses and compensation expense, on a combined basis, increased in the first quarter of 2026 compared to the same period of 2025 due primarily to an increase in the amortization of the cost of reinsurance as a result of the Fortitude Re reinsurance transaction, as well as an increase in employee-related costs.
Our effective income tax rate for the first quarter of 2026 was 23.4 percent, compared to 22.4 percent for the same prior year period. Our effective income tax rate differed from the U.S. statutory rate of 21 percent for the first quarter of 2026 primarily due to non-deductible compensation. Our effective income tax rate differed from the U.S. statutory rate of 21 percent for the first quarter of 2025 primarily due to interest on uncertain tax positions.
Consolidated Sales Results
Shown below are sales results for our three principal operating business segments.
| (in millions) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Unum US | $ | 335.1 | 20.8 | % | $ | 277.5 | |||||||||||
| Unum International | $ | 42.1 | 14.1 | % | $ | 36.9 | |||||||||||
| Colonial Life | $ | 106.3 | 0.9 | % | $ | 105.3 | |||||||||||
Sales shown in the preceding chart generally represent the annualized premium income on new sales which we expect to receive and report as premium income during the next 12 months following or beginning in the initial quarter in which the sale is reported, depending on the effective date of the new sale. Sales do not correspond to premium income reported as revenue in accordance with GAAP. This is because new annualized sales premiums reflect current sales performance and what we expect to recognize as premium income over a 12-month period, while premium income reported in our financial statements is reported on an "as earned" basis rather than an annualized basis and also includes renewals and persistency of in-force policies written in prior years as well as current new sales.
Sales, persistency of the existing block of business, employment and salary growth, and the effectiveness of a renewal program are indicators of growth in premium income. Trends in new sales, as well as existing market share, also indicate the potential
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for growth in our respective markets and the level of market acceptance of price levels and new product offerings. Sales results may fluctuate significantly due to case size and timing of sales submissions.
See "Segment Results" as follows for a discussion of sales by segment.
Segment Results
Our reportable segments are comprised of the following: Unum US, Unum International, Colonial Life, Closed Block, and Corporate.
In describing our results, we may at times note certain items and exclude the impact on financial ratios and metrics 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. We also measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses and certain other items. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income. See "Reconciliation of Non-GAAP Financial Measures" contained herein in this Item 2.
Unum US Segment
The Unum US segment is comprised of the group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. The group disability line of business includes long-term disability, short-term disability and our fee-based service products. Long-term disability includes medical stop-loss products, and short-term disability includes paid family and medical leave products. The supplemental and voluntary line of business includes voluntary benefits, individual disability, and dental and vision products. These products, excluding medical stop-loss which is no longer actively marketed as of the third quarter of 2024, are marketed through our field sales personnel who work in conjunction with independent brokers and consultants.
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Unum US Operating Results
Shown below are financial results for the Unum US segment. In the sections following, financial results and key ratios are also presented for the major lines of business within the segment.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | $ | 1,840.5 | 3.3 | % | $ | 1,780.9 | |||||||||||
| Net Investment Income | 158.3 | 6.3 | 148.9 | ||||||||||||||
Other Income | 66.8 | (7.1) | 71.9 | ||||||||||||||
| Total | 2,065.6 | 3.2 | 2,001.7 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 1,127.1 | (1.0) | 1,138.6 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (31.8) | (57.8) | (75.4) | ||||||||||||||
| Commissions | 219.4 | 6.7 | 205.6 | ||||||||||||||
| Deferral of Acquisition Costs | (91.6) | 8.1 | (84.7) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 68.7 | 5.4 | 65.2 | ||||||||||||||
| Other Expenses | 435.9 | 3.0 | 423.3 | ||||||||||||||
| Total | 1,727.7 | 3.3 | 1,672.6 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 337.9 | 2.7 | $ | 329.1 | ||||||||||||
Segment Operating Ratios (% of Premium Income): | |||||||||||||||||
| Benefit Ratio | 59.5 | % | 59.7 | % | |||||||||||||
Other Expense Ratio1 | 22.9 | % | 23.0 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 18.4 | % | 18.5 | % | |||||||||||||
1Ratio of Other Expenses to Premium Income plus Unum US Group Disability Other Income, which is primarily related to fee-based services. | |||||||||||||||||
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Unum US Group Disability Operating Results
Shown below are financial results and key performance indicators for Unum US group disability.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Group Long-term Disability | $ | 498.8 | (1.1) | % | $ | 504.5 | |||||||||||
| Group Short-term Disability | 11.6 | ||||||||||||||||
| Total Premium Income | 809.5 | 3.4 | 782.8 | ||||||||||||||
| Net Investment Income | 76.0 | 2.7 | 74.0 | ||||||||||||||
| Other Income | 60.9 | 8.8 | 56.0 | ||||||||||||||
| Total | 946.4 | 3.7 | 912.8 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 531.6 | 0.5 | 528.9 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (15.9) | (64.8) | (45.2) | ||||||||||||||
| Commissions | 69.8 | 7.4 | 65.0 | ||||||||||||||
| Deferral of Acquisition Costs | (16.3) | 1.2 | (16.1) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 13.9 | 33.7 | 10.4 | ||||||||||||||
| Other Expenses | 256.7 | 2.4 | 250.6 | ||||||||||||||
| Total | 839.8 | 5.8 | 793.6 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 106.6 | (10.6) | $ | 119.2 | ||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
| Benefit Ratio | 63.7 | % | 61.8 | % | |||||||||||||
Other Expense Ratio1 | 29.5 | % | 29.9 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 13.2 | % | 15.2 | % | |||||||||||||
| Persistency: | |||||||||||||||||
| Group Long-term Disability | 92.2 | % | 90.7 | % | |||||||||||||
| Group Short-term Disability | 90.7 | % | 87.5 | % | |||||||||||||
1Ratio of Other Expenses to Premium Income plus Other Income, which is primarily related to fee-based services. | |||||||||||||||||
Premium income was higher in the first quarter of 2026 compared to the same period of 2025 due primarily to favorable persistency and prior period sales, partially offset by the expected run off in medical stop-loss premium. Net investment income was generally consistent in the first quarter of 2026 relative to the same period of 2025. Other income was higher in the first quarter of 2026 compared to the same period of 2025 due to growth in our fee-based service products.
The benefit ratio was less favorable in the first quarter of 2026 compared to the same period of 2025 due to pricing actions as well as higher paid family and medical leave incidence.
Commissions were higher in the first quarter of 2026 compared to the same period of 2025 due primarily to sales. The deferral of acquisition costs was generally consistent in the first quarter of 2026 compared to the same period of 2025. The amortization of deferred acquisition costs increased in the first quarter of 2026 compared to the same period of 2025 primarily due to composition of lapses across cohorts. The other expense ratio, which includes other income that is primarily related to fee-based service products, decreased in the first quarter of 2026 compared to the same period of 2025 due primarily to our focus on expense management and operating efficiencies.
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Unum US Group Life and Accidental Death and Dismemberment Operating Results
Shown below are financial results and key performance indicators for Unum US group life and accidental death and dismemberment.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Group Life | $ | 495.4 | 6.3 | % | $ | 466.2 | |||||||||||
| Accidental Death & Dismemberment | 53.0 | 10.0 | 48.2 | ||||||||||||||
| Total Premium Income | 548.4 | 6.6 | 514.4 | ||||||||||||||
| Net Investment Income | 23.5 | 29.1 | 18.2 | ||||||||||||||
| Other Income | 0.7 | N.M. | 0.1 | ||||||||||||||
| Total | 572.6 | 7.5 | 532.7 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 360.6 | (4.5) | 377.6 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (21.9) | 4.8 | (20.9) | ||||||||||||||
| Commissions | 51.1 | 8.7 | 47.0 | ||||||||||||||
| Deferral of Acquisition Costs | (12.3) | 6.0 | (11.6) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 8.7 | 42.6 | 6.1 | ||||||||||||||
| Other Expenses | 71.3 | 9.2 | 65.3 | ||||||||||||||
| Total | 457.5 | (1.3) | 463.5 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 115.1 | 66.3 | $ | 69.2 | ||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
| Benefit Ratio | 61.8 | % | 69.3 | % | |||||||||||||
| Other Expense Ratio | 13.0 | % | 12.7 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 21.0 | % | 13.5 | % | |||||||||||||
| Persistency: | |||||||||||||||||
| Group Life | 92.6 | % | 89.2 | % | |||||||||||||
| Accidental Death & Dismemberment | 92.2 | % | 87.9 | % | |||||||||||||
Premium income was higher in the first quarter of 2026 compared to the same period of 2025 due to favorable persistency and prior period sales. Net investment income was higher in the first quarter of 2026 relative to the same period of 2025 due to an increase in the allocation of net investment income on corporate owned excess assets as well as an increase in the yield on invested assets.
The benefit ratio in the first quarter of 2026 was favorable compared to the same period of 2025 due to lower claim incidence in the group life and accidental death and dismemberment product lines.
Commissions and deferral of acquisition costs were higher in the first quarter of 2026 compared to the same period of 2025 due to sales. The amortization of deferred acquisition costs in the first quarter of 2026 increased compared to the same period of 2025 due to growth in the level of the deferred asset as well as the composition of lapses across cohorts. The other expense ratio was unfavorable in the first quarter of 2026 compared to the same period of 2025 due to an increase in operational investments in our business.
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Unum US Supplemental and Voluntary Operating Results
Shown below are financial results and key performance indicators for Unum US supplemental and voluntary product lines.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Voluntary Benefits | $ | 253.8 | 8.4 | % | $ | 234.1 | |||||||||||
| Individual Disability | 146.5 | (13.2) | 168.7 | ||||||||||||||
| Dental and Vision | 82.3 | 1.7 | 80.9 | ||||||||||||||
| Total Premium Income | 482.6 | (0.2) | 483.7 | ||||||||||||||
| Net Investment Income | 58.8 | 3.7 | 56.7 | ||||||||||||||
| Other Income | 5.2 | (67.1) | 15.8 | ||||||||||||||
| Total | 546.6 | (1.7) | 556.2 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 234.9 | 1.2 | 232.1 | ||||||||||||||
| Policy Benefits - Remeasurement Loss (Gain) | 6.0 | 164.5 | (9.3) | ||||||||||||||
| Commissions | 98.5 | 5.2 | 93.6 | ||||||||||||||
| Deferral of Acquisition Costs | (63.0) | 10.5 | (57.0) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 46.1 | (5.3) | 48.7 | ||||||||||||||
| Other Expenses | 107.9 | 0.5 | 107.4 | ||||||||||||||
| Total | 430.4 | 3.6 | 415.5 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 116.2 | (17.4) | $ | 140.7 | ||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
Benefit Ratio | 49.9 | % | 46.1 | % | |||||||||||||
| Other Expense Ratio | 22.4 | % | 22.2 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 24.1 | % | 29.1 | % | |||||||||||||
| Persistency: | |||||||||||||||||
| Voluntary Benefits | 75.8 | % | 76.8 | % | |||||||||||||
| Individual Disability | 87.9 | % | 88.2 | % | |||||||||||||
| Dental and Vision | 79.9 | % | 82.2 | % | |||||||||||||
Premium income was slightly lower in the first quarter of 2026 compared to the same period of 2025 due to the impact of ceding a portion of the individual disability product line as a part of the Fortitude Re reinsurance transaction and lower persistency across all product lines, mostly offset by sales in the voluntary benefits and individual disability product lines. Net investment income was generally consistent in the first quarter of 2026 compared to the same period of 2025. Other income was lower in the first quarter of 2026 compared to the same period of 2025 due primarily to a gain on the recapture of a previously ceded block of business in the individual disability product line in the first quarter of 2025. Other income for the first quarter of 2026 includes the amortization of the deferred gain on reinsurance related to the Fortitude Re reinsurance transaction.
The benefit ratio was less favorable in the first quarter of 2026 compared to the same period of 2025 primarily driven by higher average claim size in the individual disability product line and higher claim incidence within the individual disability and voluntary benefits product lines.
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Commissions and the deferral of acquisition costs were higher for the first quarter of 2026 compared to the same periods of 2025 due primarily to sales. The amortization of deferred acquisition costs was lower in the first quarter of 2026 compared to the same period of 2025 due to a decrease in the level of the deferred asset as a result of the Fortitude Re reinsurance transaction. The other expense ratio was generally consistent in the first quarter of 2026 relative to the same period of 2025.
Sales
| (in millions of dollars) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Sales by Market Sector | |||||||||||||||||
| Group Disability and Group Life and AD&D | |||||||||||||||||
| Core Market (< 2,000 employees) | $ | 93.5 | 31.9 | % | $ | 70.9 | |||||||||||
| Large Case Market | 52.3 | 7.8 | 48.5 | ||||||||||||||
| Subtotal | 145.8 | 22.1 | 119.4 | ||||||||||||||
| Supplemental and Voluntary | 189.3 | 19.7 | 158.1 | ||||||||||||||
| Total Sales | $ | 335.1 | 20.8 | $ | 277.5 | ||||||||||||
Group sales increased during the first quarter of 2026 compared to the same period of 2025 due primarily to higher sales to new customers in the core market, which we define as employee groups with less than 2,000 employees, and higher sales to new customers in the large case market. The sales mix in the group disability and group life and accidental death and dismemberment product lines for the first three months of 2026 was approximately 64 percent in the core market and 36 percent in the large case market.
Supplemental and voluntary sales increased during the first quarter of 2026 compared to the same period of 2025 due primarily to higher sales to new customers in the large case market for the voluntary benefits product line.
Segment Outlook
We remain committed to offering consumers a broad set of financial protection benefit products at the worksite. During 2026, we will continue to invest in a unique customer experience defined by simplicity, empathy, and deep industry expertise through the increased utilization of digital capabilities and technology to enhance enrollment, underwriting, the client administration experience, and claims processing. In addition, we will focus on strategically driven sales by enhancing the connectivity, alignment, and support for brokers and technology partners, including integration with human capital management systems. We will continue to provide a comprehensive set of consumer-focused products, enhance our distribution model, and utilize our digital tools to bring industry leading enrollment capabilities and a fully integrated customer experience. We believe our differentiated offerings and market leading leave management services provide substantial growth opportunities and stronger persistency. We believe our active client management, integrated customer experience across our product lines, and strong risk management, will enable us to continue to grow our market over the long-term.
We expect strong segment adjusted operating income in 2026 with premium growth driven by new sales and persistency. We expect the group disability market to remain competitive which may impact our pricing and renewal premium levels. We expect strong group disability claim experience to continue in 2026, driven by operational performance. We also expect group life claim experience to be generally consistent with prior year, but may experience some quarterly claims volatility. We expect growth in our supplemental and voluntary line of business adjusted operating income. We expect to maintain expense discipline with a slight decrease in our other expense ratio.
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 yields on new investments, but could also reduce unrealized losses in our current holdings. Our net investment income may continue to be impacted by volatility in miscellaneous investment income.
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.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly.
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Unum International Segment
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.
Operating Results
Shown below are financial results and key performance indicators for the Unum International segment.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Unum UK | |||||||||||||||||
| Group Long-term Disability | $ | 104.8 | 4.6 | % | $ | 100.2 | |||||||||||
| Group Life | 77.0 | 25.0 | 61.6 | ||||||||||||||
| Supplemental | 50.3 | 20.0 | 41.9 | ||||||||||||||
| Unum Poland | 54.6 | 27.0 | 43.0 | ||||||||||||||
| Total Premium Income | 286.7 | 16.2 | 246.7 | ||||||||||||||
| Net Investment Income | 29.6 | 3.9 | 28.5 | ||||||||||||||
| Other Income | 3.3 | N.M. | 0.1 | ||||||||||||||
| Total | 319.6 | 16.1 | 275.3 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 206.3 | 19.3 | 172.9 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (2.8) | (68.2) | (8.8) | ||||||||||||||
| Commissions | 31.0 | 38.4 | 22.4 | ||||||||||||||
| Deferral of Acquisition Costs | (9.2) | 73.6 | (5.3) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 3.4 | 36.0 | 2.5 | ||||||||||||||
| Other Expenses | 60.0 | 13.4 | 52.9 | ||||||||||||||
| Total | 288.7 | 22.0 | 236.6 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 30.9 | (20.2) | $ | 38.7 | ||||||||||||
| N.M. = not a meaningful percentage | |||||||||||||||||
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.
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Unum UK Operating Results
Shown below are financial results and key performance indicators for the Unum UK product lines in functional currency.
| (in millions of pounds, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Group Long-term Disability | £ | 77.8 | (2.0) | % | £ | 79.4 | |||||||||||
| Group Life | 57.1 | 16.8 | 48.9 | ||||||||||||||
| Supplemental | 37.2 | 12.0 | 33.2 | ||||||||||||||
| Total Premium Income | 172.1 | 6.6 | 161.5 | ||||||||||||||
| Net Investment Income | 19.1 | (5.0) | 20.1 | ||||||||||||||
| Other Income | 2.3 | N.M. | 0.1 | ||||||||||||||
| Total | 193.5 | 6.5 | 181.7 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 127.8 | 10.6 | 115.5 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (2.3) | (67.6) | (7.1) | ||||||||||||||
| Commissions | 14.9 | 47.5 | 10.1 | ||||||||||||||
| Deferral of Acquisition Costs | (3.3) | 175.0 | (1.2) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 1.6 | 23.1 | 1.3 | ||||||||||||||
| Other Expenses | 34.4 | 2.4 | 33.6 | ||||||||||||||
| Total | 173.1 | 13.7 | 152.2 | ||||||||||||||
| Segment Adjusted Operating Income | £ | 20.4 | (30.8) | £ | 29.5 | ||||||||||||
| Weighted Average Pound/Dollar Exchange Rate | 1.343 | 1.264 | |||||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
| Benefit Ratio | 72.9 | % | 67.1 | % | |||||||||||||
| Other Expense Ratio | 20.0 | % | 20.8 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 11.9 | % | 18.3 | % | |||||||||||||
| Persistency: | |||||||||||||||||
| Group Long-term Disability | 90.6 | % | 92.1 | % | |||||||||||||
| Group Life | 87.1 | % | 88.9 | % | |||||||||||||
| Supplemental | 91.4 | % | 89.4 | % | |||||||||||||
| N.M. = not a meaningful percentage | |||||||||||||||||
Premium income was higher in the first quarter of 2026 compared to the same period of 2025 due primarily to sales across all product lines.
Net investment income was lower in the first quarter of 2026 compared to the same period of 2025 due to lower 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 partially offset by 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.
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The benefit ratio was unfavorable in the first quarter of 2026 relative to the same period of 2025 due primarily to higher average claim size and higher claim incidence in the group long-term disability product line.
Commissions and the deferral of acquisition costs were higher in the first quarter of 2026 relative to the same period of 2025 due primarily to new business. The amortization of deferred acquisition costs was higher during the first quarter of 2026 relative to the same period of 2025 due to growth in the level of the deferred asset.
The other expense ratio was lower during the first quarter of 2026 compared to the same period of 2025 primarily due to our focus on expense management and operating efficiencies.
Sales
| (in millions of dollars and pounds) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Unum International Sales by Market Sector | |||||||||||||||||
| Unum UK | |||||||||||||||||
| Group Long-term Disability and Group Life | |||||||||||||||||
| Core Market (< 500 employees) | $ | 10.2 | (8.9) | % | $ | 11.2 | |||||||||||
| Large Case Market | 11.7 | 72.1 | 6.8 | ||||||||||||||
| Subtotal | 21.9 | 21.7 | 18.0 | ||||||||||||||
| Supplemental | 11.2 | 28.7 | 8.7 | ||||||||||||||
| Unum Poland | 9.0 | (11.8) | 10.2 | ||||||||||||||
| Total Sales | $ | 42.1 | 14.1 | $ | 36.9 | ||||||||||||
| Unum UK Sales by Market Sector | |||||||||||||||||
| Group Long-term Disability and Group Life | |||||||||||||||||
| Core Market (< 500 employees) | £ | 7.6 | (14.6) | % | £ | 8.9 | |||||||||||
| Large Case Market | 8.6 | 59.3 | 5.4 | ||||||||||||||
| Subtotal | 16.2 | 13.3 | 14.3 | ||||||||||||||
| Supplemental | 8.3 | 18.6 | 7.0 | ||||||||||||||
| Total Sales | £ | 24.5 | 15.0 | £ | 21.3 | ||||||||||||
The following discussion of sales results relates only to our Unum UK product lines and is based on functional currency.
Group sales increased in the first quarter of 2026 compared to the same period of 2025, driven primarily by 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 existing customers in the core market, partially offset by lower sales to new customers in the core market.
Supplemental sales increased in the first quarter of 2026 compared to the same period of 2025, driven primarily by higher sales of our group critical illness product, partially offset by lower sales of our dental product.
Segment Outlook
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 2026, we will focus on scaling our business across our existing 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 also expect to deliver continued premium growth by focusing on both the broker experience and customer engagement, while maintaining our disciplined approach to pricing. We expect group long-term disability claim experience to be mostly stable, but may experience some quarterly claims volatility. We expect to maintain expense discipline with a decrease in our other expense ratio. Within our Unum Poland line of business, we expect to 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. We continuously monitor key indicators to assess our risks and adjust our business
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plans accordingly.
Colonial Life Segment
The Colonial Life segment includes insurance for accident, sickness, and disability products, which includes dental and vision products, life products, and cancer and critical illness products. These products are marketed to employees, on both a group and an individual basis, at the workplace through an independent contractor agent sales force and brokers.
Operating Results
Shown below are financial results and key performance indicators for the Colonial Life segment.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Accident, Sickness, and Disability | $ | 252.8 | 2.3 | % | $ | 247.1 | |||||||||||
| Life | 128.3 | 7.0 | 119.9 | ||||||||||||||
| Cancer and Critical Illness | 91.6 | 1.4 | 90.3 | ||||||||||||||
| Total Premium Income | 472.7 | 3.4 | 457.3 | ||||||||||||||
| Net Investment Income | 46.8 | 10.9 | 42.2 | ||||||||||||||
| Other Income | 0.7 | 75.0 | 0.4 | ||||||||||||||
| Total | 520.2 | 4.1 | 499.9 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 229.7 | 1.4 | 226.6 | ||||||||||||||
| Policy Benefits - Remeasurement Gain | (12.4) | 45.9 | (8.5) | ||||||||||||||
| Commissions | 102.9 | 5.8 | 97.3 | ||||||||||||||
| Deferral of Acquisition Costs | (89.8) | 8.7 | (82.6) | ||||||||||||||
| Amortization of Deferred Acquisition Costs | 62.1 | 7.6 | 57.7 | ||||||||||||||
| Other Expenses | 99.9 | 6.6 | 93.7 | ||||||||||||||
| Total | 392.4 | 2.1 | 384.2 | ||||||||||||||
| Segment Adjusted Operating Income | $ | 127.8 | 10.5 | $ | 115.7 | ||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
| Benefit Ratio | 46.0 | % | 47.7 | % | |||||||||||||
| Other Expense Ratio | 21.1 | % | 20.5 | % | |||||||||||||
Segment Adjusted Operating Income Ratio | 27.0 | % | 25.3 | % | |||||||||||||
| Persistency: | |||||||||||||||||
| Accident, Sickness, and Disability | 73.8 | % | 73.6 | % | |||||||||||||
| Life | 84.3 | % | 83.8 | % | |||||||||||||
| Cancer and Critical Illness | 81.2 | % | 82.2 | % | |||||||||||||
Premium income increased in the first quarter of 2026 compared to the same period of 2025 due to prior period sales and stable overall persistency. Net investment income was higher in the first quarter of 2026 compared to the same period of 2025 due to an increase in the allocation of net investment income from our corporate owned excess assets and an increase in the level of invested assets.
The benefit ratio in the first quarter of 2026 was favorable relative to the same period of 2025 primarily due to favorable benefits experience in the life and cancer and critical illness product lines.
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Commissions were higher in the first quarter of 2026 relative to the same period of 2025 due to prior period sales. The deferral of acquisition costs was higher in the first quarter of 2026 relative to the same period of 2025 due to the increase in commissions and other sales-related costs. The amortization of deferred acquisition costs in the first quarter of 2026 was higher relative to the same period of 2025 due to growth in the level of the deferred asset. The other expense ratio increased in the first quarter of 2026 relative to the same period of 2025 due primarily to an increase in employee-related costs.
Sales
| (in millions of dollars) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Sales by Market Sector | |||||||||||||||||
Commercial Sector | |||||||||||||||||
| Core Market (< 1,000 employees) | $ | 70.5 | 1.0 | % | $ | 69.8 | |||||||||||
| Large Case Market | 9.8 | 5.4 | 9.3 | ||||||||||||||
| Subtotal | 80.3 | 1.5 | 79.1 | ||||||||||||||
| Public Sector | 26.0 | (0.8) | 26.2 | ||||||||||||||
| Total Sales | $ | 106.3 | 0.9 | $ | 105.3 | ||||||||||||
Commercial sector sales increased during the first quarter of 2026 compared to the same period of 2025 due to higher sales to new customers in the core market, which we define as accounts with less than 1,000 employees, partially offset by lower sales to existing customers in the core market. Public sector sales were generally consistent in the first quarter of 2026 compared to the same period of 2025.
Segment Outlook
We remain committed to providing employees and their families with simple, modern, and personal benefit solutions. By continuing to utilize our extensive distribution system of independent agents, benefit counselors and broker partnerships during 2026, we believe we will deliver business growth. We will also continue to invest in solutions and digital capabilities to expand our reach and effectiveness, which we believe will drive growth and improve productivity while enhancing the customer experience. In 2026, we will continue to bring an enhanced engagement and enrollment platform to market, which we believe will enable deeper connections with employees through the enrollment process and help us maintain stronger relationships throughout the customer lifecycle. We believe our distribution system, customer service capabilities, digital tools, and ability to serve all market sizes position us well for future growth.
In 2026, we expect growth in segment adjusted operating income for the full year with continued premium growth and stable claim experience. We continuously monitor key indicators to assess our risks and adjust our business plans accordingly.
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Closed Block Segment
The Closed Block segment consists of group and individual long-term care and other insurance products no longer actively marketed. We discontinued offering individual long-term care in 2009 and group long-term care in 2012. As of July 2025, we closed the Fortitude Re reinsurance transaction and ceded a portion of the long-term care product line. As of February 2026, we discontinued new enrollments on existing group long-term care policies. Other insurance products include individual disability, group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines.
Operating Results
Shown below are financial results and key performance indicators for the Closed Block segment.
| (in millions of dollars, except ratios) | |||||||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2026 | % Change | 2025 | |||||||||||||||
| Segment Adjusted Operating Revenue | |||||||||||||||||
| Premium Income | |||||||||||||||||
| Long-term Care | $ | 159.4 | (9.5) | % | $ | 176.2 | |||||||||||
| All Other | 34.7 | (17.0) | 41.8 | ||||||||||||||
| Total Premium Income | 194.1 | (11.0) | 218.0 | ||||||||||||||
| Net Investment Income | 229.1 | (15.1) | 269.7 | ||||||||||||||
| Other Income | 11.3 | 14.1 | 9.9 | ||||||||||||||
| Total | 434.5 | (12.7) | 497.6 | ||||||||||||||
| Benefits and Expenses | |||||||||||||||||
| Policy Benefits | 392.7 | (7.0) | 422.2 | ||||||||||||||
| Policy Benefits - Remeasurement Loss | 95.2 | N.M. | 3.4 | ||||||||||||||
| Commissions | 15.2 | (15.1) | 17.9 | ||||||||||||||
| Other Expenses | 76.7 | 66.4 | 46.1 | ||||||||||||||
| Total | 579.8 | 18.4 | 489.6 | ||||||||||||||
| Segment Adjusted Operating Income (Loss) | $ | (145.3) | N.M. | $ | 8.0 | ||||||||||||
Long-term Care Net Premium Ratio1 | 97.6 | % | 94.7 | % | |||||||||||||
| Operating Ratios (% of Premium Income): | |||||||||||||||||
Other Expense Ratio | 39.5 | % | 21.1 | % | |||||||||||||
Segment Adjusted Operating Income (Loss) Ratio | (74.9) | % | 3.7 | % | |||||||||||||
1 Gross of reinsurance | |||||||||||||||||
| N.M. = not a meaningful percentage | |||||||||||||||||
Premium income for the long-term care product line was lower during the first quarter of 2026 relative to the same period in 2025 due primarily to the impact of the Fortitude Re reinsurance transaction. Premium income for our all other product line continues to decline as expected due to policyholder lapses.
Net investment income was lower during the first quarter of 2026 relative to the same period of 2025 primarily due to a decrease in the level of invested assets resulting from the Fortitude Re reinsurance transaction and a decrease in the allocation of net investment income from our corporate owned excess assets, partially offset by an increase in miscellaneous investment income, primarily related to larger increases in the NAV on our private equity partnerships.
Other income primarily includes the underlying results and associated net investment income of certain assumed blocks of business.
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Policy benefits including remeasurement loss were higher during the first quarter of 2026 relative to the same period of 2025 due to group policy terminations and claim incidence in the long-term care product line, partially offset by the impact of the Fortitude Re reinsurance transaction. The net premium ratio for long-term care increased to 97.6 percent at March 31, 2026 from 94.7 percent at March 31, 2025 due to the impacts of the reserve assumption updates in the third quarter of 2025.
The other expense ratio was higher in the first quarter of 2026 due primarily to an increase in the amortization of cost of reinsurance as a result of the Fortitude Re reinsurance transaction.
Segment Outlook
We will continue to execute on our well-defined strategy of implementing long-term care premium rate increases, efficient capital management, improved financial analysis, and operational effectiveness. In regard to capital management, we will continue to explore, and execute where appropriate, structural and reinsurance options to enhance financial flexibility. We continue to file requests with various state insurance departments for premium rate increases on certain of our individual and group long-term care policies which reflect assumptions as of the date of filings. In states for which a rate increase is submitted and approved, we routinely provide customers options for coverage changes or other approaches that might fit their current financial and insurance needs. Despite continued anticipated premium rate increases in our long-term care business, we expect overall premium income and adjusted operating revenue to decline over the long term as these closed blocks of business wind down and with the discontinuation of new enrollments on existing group long-term care policies as of February 2026. We will likely experience volatility in net investment income due to fluctuations of miscellaneous investment income, driven by the allocation towards alternative assets, primarily private equity partnership investments, in the long-term care product line portfolio. We record changes in our share of the NAV of the partnerships in net investment income. We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. As these NAVs are volatile and can fluctuate materially with changes in market economic conditions, there could be significant movements up or down in future periods as conditions change. We continuously monitor key indicators to assess our risks and adjust our business plans, including utilization of derivative financial instruments to manage interest rate risk.
Profitability of our long-tailed products is affected by claims experience related to mortality, morbidity, resolutions, investment returns, premium rate increases, and persistency. The net premium ratio represents the ratio of future expected benefits and related expenses to future expected gross premiums using the original discount rate. Long-term care benefits experience may continue to have quarterly volatility, particularly in the near term as our claim block matures and as we continue the implementation of premium rate increases. Claim resolution rates which reflect the probability that a disability or long-term care claim will close due to recovery or death of the insureds, are very sensitive to operational and external factors and can be volatile. Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the life of the block of business and will vary from actual experience in any one period. It is possible that variability in any of our reserve assumptions, including, but not limited to, mortality, morbidity, resolutions, premium rate increases, benefit change elections, and persistency, could result in a material impact to our reserves.
As a result of the execution of reinsurance transactions related to our Closed Block individual disability and long-term care lines of business, we have ceded a significant portion of this business.
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Corporate Segment
The Corporate segment includes investment income on corporate assets not specifically allocated to a line of business, interest expense on corporate debt, and certain other corporate income and expenses not allocated to a line of business.
Operating Results
| (in millions of dollars) | ||||||||||||||||||||
| Three Months Ended March 31 | ||||||||||||||||||||
| 2026 | % Change | 2025 | ||||||||||||||||||
Segment Adjusted Operating Revenue | ||||||||||||||||||||
| Net Investment Income | $ | 19.6 | (18.0) | % | $ | 23.9 | ||||||||||||||
| Other Income | 0.7 | 100.0 | — | |||||||||||||||||
| Total | 20.3 | (15.1) | 23.9 | |||||||||||||||||
| Interest and Other Expenses | 63.9 | (1.7) | 65.0 | |||||||||||||||||
| Segment Adjusted Operating Loss | $ | (43.6) | 6.1 | $ | (41.1) | |||||||||||||||
Adjusted operating loss increased in the first quarter of 2026 relative to the same period of 2025 due primarily to decreased net investment income, which was driven by a decrease in the yield on invested assets.
Segment Outlook
We expect to continue to generate excess capital on an annual basis through the statutory earnings in our insurance subsidiaries and believe we are well positioned with flexibility to preserve our capital strength while also returning capital to our shareholders. We may experience volatility in net investment income due to changes in the prevailing interest rates, miscellaneous investment income, and the composition and level of invested assets.
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Investments
Overview
Investment activities are an integral part of our business, and profitability is significantly affected by investment results. We segment our invested assets into portfolios that support our various product lines. Generally, our investment strategy for our portfolios is to match the effective asset cash flows and durations with related expected liability cash flows and durations to consistently meet the liability funding requirements of our businesses and to manage interest rate risk. We seek to earn investment income while assuming risk in a prudent and selective manner, subject to the constraints of quality, liquidity, diversification, and regulatory considerations. Our overall investment philosophy is to invest in a portfolio of high quality assets that provide investment returns which inform the assumptions embedded in the pricing of our insurance products. Assets are invested predominantly in fixed maturity securities.
We may redistribute investments among our different lines of business or sell selected securities and reinvest the proceeds, when necessary, to adjust the cash flow and/or duration of the asset portfolios to better match the cash flow and duration of the liability portfolios. Asset and liability portfolio modeling is updated on a quarterly basis and is used as part of the overall interest rate risk management strategy. Cash flows from the in-force asset and liability portfolios are projected at current interest rate levels and at levels reflecting an increase and a decrease in interest rates to obtain a range of projected cash flows under the different interest rate scenarios. These results enable us to assess the impact of projected changes in cash flows and duration resulting from potential changes in interest rates. Testing the asset and liability portfolios under various interest rate scenarios enables us to choose what we believe to be the most appropriate investment strategy, as well as to limit the risk of disadvantageous outcomes. Although we test the asset and liability portfolios under various interest rate scenarios as part of our modeling, the majority of our liabilities related to insurance contracts are not interest rate sensitive, and we therefore have minimal exposure to policy withdrawal risk. Our determination of investment strategy relies on long-term measures such as asset adequacy analysis and the relationship between the portfolio yields supporting our various product lines and the aggregate discount rate assumptions embedded in the reserves. We also utilize quantitative strategic asset analysis to construct our investment strategy, utilizing projected asset class risk and returns to inform an appropriate liability-driven investment approach. Additionally, we also use this analysis in determining hedging strategies and utilizing derivative financial instruments to manage interest rate risk and the risk related to matching duration for our assets and liabilities. We do not use derivative financial instruments for speculative purposes.
Our investment portfolio is well diversified by type of investment and industry sector. We have established an investment strategy that we believe will provide adequate cash flows from operations and allow us to hold our securities through periods where significant decreases in fair value occur. We believe our emphasis on risk management in our investment portfolio has positioned us well and generally reduced the volatility in our results.
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Fixed Maturity Securities
The fair values and associated unrealized gains and losses of our fixed maturity securities portfolio, by industry classification, are as follows:
Fixed Maturity Securities - By Industry Classification
As of March 31, 2026
| (in millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||
| Classification | Fair Value | Net Unrealized Gain (Loss) | Fair Value with Gross Unrealized Loss | Gross Unrealized Loss | Fair Value with Gross Unrealized Gain | Gross Unrealized Gain | ||||||||||||||||||||||||||||||||||||||
| Basic Industry | $ | 2,146.2 | $ | (110.2) | $ | 1,426.2 | $ | (140.8) | $ | 720.0 | $ | 30.6 | ||||||||||||||||||||||||||||||||
| Capital Goods | 2,819.4 | (132.6) | 1,818.0 | (185.3) | 1,001.4 | 52.7 | ||||||||||||||||||||||||||||||||||||||
| Communications | 1,990.3 | (86.4) | 1,053.4 | (156.8) | 936.9 | 70.4 | ||||||||||||||||||||||||||||||||||||||
| Consumer Cyclical | 1,260.5 | (96.3) | 895.1 | (112.7) | 365.4 | 16.4 | ||||||||||||||||||||||||||||||||||||||
| Consumer Non-Cyclical | 5,630.5 | (502.4) | 4,109.1 | (586.9) | 1,521.4 | 84.5 | ||||||||||||||||||||||||||||||||||||||
| Energy | 2,127.7 | 15.1 | 805.2 | (73.2) | 1,322.5 | 88.3 | ||||||||||||||||||||||||||||||||||||||
| Financial Institutions | 3,655.6 | (292.4) | 2,992.2 | (310.3) | 663.4 | 17.9 | ||||||||||||||||||||||||||||||||||||||
Mortgage/Asset-Backed1 | 1,356.9 | (15.0) | 800.5 | (22.7) | 556.4 | 7.7 | ||||||||||||||||||||||||||||||||||||||
| Sovereigns | 844.9 | (144.5) | 425.5 | (159.4) | 419.4 | 14.9 | ||||||||||||||||||||||||||||||||||||||
| Technology | 1,478.4 | (135.3) | 1,242.3 | (143.9) | 236.1 | 8.6 | ||||||||||||||||||||||||||||||||||||||
| Transportation | 1,440.1 | (115.9) | 1,033.5 | (132.8) | 406.6 | 16.9 | ||||||||||||||||||||||||||||||||||||||
| U.S. Government Agencies and Municipalities | 3,544.9 | (417.2) | 2,329.8 | (492.3) | 1,215.1 | 75.1 | ||||||||||||||||||||||||||||||||||||||
| Public Utilities | 5,005.4 | (196.9) | 2,716.6 | (333.7) | 2,288.8 | 136.8 | ||||||||||||||||||||||||||||||||||||||
| Total | $ | 33,300.8 | $ | (2,230.0) | $ | 21,647.4 | $ | (2,850.8) | $ | 11,653.4 | $ | 620.8 | ||||||||||||||||||||||||||||||||
1Includes credit-tranched securities collateralized by loan obligations, auto loans, and other asset types
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The following two tables show the length of time our investment-grade and below-investment-grade fixed maturity securities portfolios had been in a gross unrealized loss position as of March 31, 2026 and at the end of the prior four quarters. The relationships of the current fair value to amortized cost are not necessarily indicative of the fair value to amortized cost relationships for the securities throughout the entire time that the securities have been in an unrealized loss position nor are they necessarily indicative of the relationships after March 31, 2026. During first quarter of 2026, the net unrealized loss on fixed maturity securities increased primarily due to an increase in U.S. Treasury rates and the widening of credit spreads.
Unrealized Loss on Investment-Grade Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||
Length of Time in Unrealized Loss Position | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| March 31 | December 31 | September 30 | June 30 | March 31 | |||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 100% >= 70% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| <= 90 days | $ | 91.5 | $ | 39.3 | $ | 14.3 | $ | 11.1 | $ | 38.1 | |||||||||||||||||||||||||||||||||||||
| > 90 <= 180 days | 52.9 | 12.8 | 3.0 | 37.1 | 111.7 | ||||||||||||||||||||||||||||||||||||||||||
| > 180 <= 270 days | 12.0 | 2.6 | 14.7 | 93.1 | 46.0 | ||||||||||||||||||||||||||||||||||||||||||
| > 270 days <= 1 year | 2.6 | 12.5 | 42.6 | 65.5 | 1.1 | ||||||||||||||||||||||||||||||||||||||||||
| > 1 year <= 2 years | 155.5 | 116.0 | 72.3 | 28.6 | 42.9 | ||||||||||||||||||||||||||||||||||||||||||
| > 2 years <= 3 years | 38.8 | 44.4 | 36.1 | 179.0 | 342.4 | ||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 1,657.6 | 1,539.0 | 1,608.4 | 1,553.8 | 1,467.7 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 2,010.9 | 1,766.6 | 1,791.4 | 1,968.2 | 2,049.9 | ||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 70% >= 40% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| > 90 <= 180 days | — | — | — | — | 3.9 | ||||||||||||||||||||||||||||||||||||||||||
| > 180 <= 270 days | — | 0.4 | — | 4.1 | — | ||||||||||||||||||||||||||||||||||||||||||
| > 270 days <= 1 year | — | — | 4.0 | — | — | ||||||||||||||||||||||||||||||||||||||||||
| > 1 year <= 2 years | 4.2 | 4.9 | 2.0 | 1.0 | — | ||||||||||||||||||||||||||||||||||||||||||
| > 2 years <= 3 years | — | — | 46.8 | 54.1 | 53.7 | ||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 722.1 | 644.4 | 562.3 | 719.2 | 674.8 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 726.3 | 649.7 | 615.1 | 778.4 | 732.4 | ||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 40% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| > 270 days <= 1 year | — | — | — | — | 2.0 | ||||||||||||||||||||||||||||||||||||||||||
| > 1 year <= 2 years | — | — | — | — | 1.9 | ||||||||||||||||||||||||||||||||||||||||||
| > 2 years <= 3 years | — | — | — | — | 36.6 | ||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 46.8 | 41.7 | 57.0 | 51.2 | 10.5 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 46.8 | 41.7 | 57.0 | 51.2 | 51.0 | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 2,784.0 | $ | 2,458.0 | $ | 2,463.5 | $ | 2,797.8 | $ | 2,833.3 | |||||||||||||||||||||||||||||||||||||
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Unrealized Loss on Below-Investment-Grade Fixed Maturity Securities
Length of Time in Unrealized Loss Position
| (in millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| March 31 | December 31 | September 30 | June 30 | March 31 | |||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 100% >= 70% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| <= 90 days | $ | 7.1 | $ | 0.5 | $ | 0.2 | $ | 0.3 | $ | 3.4 | |||||||||||||||||||||||||||||||||||||
| > 90 <= 180 days | 1.2 | 0.3 | — | 0.8 | 3.9 | ||||||||||||||||||||||||||||||||||||||||||
| > 180 <= 270 days | 0.4 | — | 1.5 | 3.8 | 0.4 | ||||||||||||||||||||||||||||||||||||||||||
| > 270 days <= 1 year | — | 1.5 | 2.0 | 0.1 | — | ||||||||||||||||||||||||||||||||||||||||||
| > 1 year <= 2 years | 1.2 | 0.4 | — | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||
| > 2 years <= 3 years | — | — | — | — | 9.4 | ||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 32.4 | 38.0 | 36.8 | 41.9 | 31.3 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 42.3 | 40.7 | 40.5 | 47.0 | 48.5 | ||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 70% >= 40% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| > 1 year <= 2 years | 4.2 | 2.5 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 20.0 | 5.2 | 9.0 | 8.0 | 19.0 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 24.2 | 7.7 | 9.0 | 8.0 | 19.0 | ||||||||||||||||||||||||||||||||||||||||||
| Fair Value < 40% of Amortized Cost | |||||||||||||||||||||||||||||||||||||||||||||||
| > 3 years | 0.3 | 0.3 | 0.3 | 3.8 | 0.3 | ||||||||||||||||||||||||||||||||||||||||||
| Sub-total | 0.3 | 0.3 | 0.3 | 3.8 | 0.3 | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 66.8 | $ | 48.7 | $ | 49.8 | $ | 58.8 | $ | 67.8 | |||||||||||||||||||||||||||||||||||||
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At March 31, 2026, we held 46 investment-grade fixed maturity securities with a gross unrealized loss of $10.0 million or greater as shown in the chart below.
| Gross Unrealized Losses $10 Million or Greater on Investment-Grade Fixed Maturity Securities | |||||||||||||||||||||||
As of March 31, 2026 | |||||||||||||||||||||||
| (in millions of dollars) | |||||||||||||||||||||||
| Classification | Fair Value | Gross Unrealized Loss | Numbers of Issuers | ||||||||||||||||||||
| Basic Industry | $ | 170.1 | $ | (40.2) | 3 | ||||||||||||||||||
| Capital Goods | 134.7 | (37.7) | 3 | ||||||||||||||||||||
| Communications | 416.2 | (85.6) | 6 | ||||||||||||||||||||
| Consumer Cyclical | 280.0 | (57.7) | 4 | ||||||||||||||||||||
| Consumer Non-Cyclical | 569.1 | (89.8) | 7 | ||||||||||||||||||||
| Energy | 123.9 | (23.0) | 2 | ||||||||||||||||||||
| Financial Institutions | 424.8 | (73.8) | 6 | ||||||||||||||||||||
| Sovereigns | 359.0 | (144.9) | 2 | ||||||||||||||||||||
| Technology | 256.7 | (59.9) | 4 | ||||||||||||||||||||
| Transportation | 104.8 | (40.7) | 3 | ||||||||||||||||||||
| U.S. Government Agencies and Municipalities | 26.2 | (10.4) | 1 | ||||||||||||||||||||
| Public Utilities | 398.6 | (84.1) | 5 | ||||||||||||||||||||
| Total | $ | 3,264.1 | $ | (747.8) | 46 | ||||||||||||||||||
At March 31, 2026, we held no below investment-grade fixed maturity securities with a gross unrealized loss greater than $10.0 million.
Unrealized losses on investment-grade fixed maturity securities principally relate to changes in interest rates or changes in market or sector credit spreads which occurred subsequent to the acquisition of the securities. Below-investment-grade fixed maturity securities are generally more likely to develop credit concerns than investment-grade securities. At March 31, 2026, the unrealized losses in our below-investment-grade fixed maturity securities were generally due to higher interest rates, wider credit spreads in certain industries or sectors and, to a lesser extent, credit concerns related to specific securities. For each specific security in an unrealized loss position, we believe that there are positive factors which mitigate credit concerns and that the securities for which we have not recorded a credit loss will recover in value. We have the ability and intent to continue to hold these securities to recovery of amortized cost less allowance for credit losses.
We had no individual net investment losses of $10.0 million or greater from credit losses or sales of fixed maturity securities during the first quarter of 2026 or 2025.
As of March 31, 2026, the amortized cost, net of allowance for credit losses, and fair value of our below-investment-grade fixed maturity securities was $1,305.8 million and $1,254.0 million, respectively, and our below-investment-grade fixed maturity securities as a percentage of our total investment portfolio increased from 2.8 percent at December 31, 2025 to 2.9 percent at March 31, 2026 on a fair value basis. Below-investment-grade securities are inherently riskier than investment-grade securities since the risk of default by the issuer, by definition and as exhibited by bond rating, is higher. Also, the secondary market for certain below-investment-grade issues can be highly illiquid. Additional downgrades may occur, but we do not anticipate any liquidity problems resulting from our investments in below-investment-grade securities, nor do we expect these investments to adversely affect our ability to hold our other investments to maturity.
Fixed Maturity Securities - Foreign Exposure
Our investments in issuers in foreign countries are chosen for specific portfolio management purposes, including asset and liability management and portfolio diversification across geographic lines and sectors to minimize non-market risks. In our approach to investing in fixed maturity securities, specific investments within approved countries and industry sectors are evaluated for their market position and specific strengths and potential weaknesses. For each security, we consider the political,
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legal, and financial environment of the sovereign entity in which an issuer is domiciled and operates. The country of domicile is based on consideration of the issuer's headquarters, in addition to location of the assets and the country in which the majority of sales and earnings are derived. We do not have exposure to foreign currency risk, as the cash flows from these investments are either denominated in currencies or hedged into currencies to match the related liabilities. We continually evaluate our foreign investment risk exposure.
Mortgage Loans
The carrying value of our mortgage loan portfolio was $2,066.3 million and $2,109.5 million at March 31, 2026 and December 31, 2025, respectively. Our investments in mortgage loans are carried at amortized cost less an allowance for expected credit losses which was $15.3 million and $15.9 million at March 31, 2026 and December 31, 2025, respectively. Our mortgage loan portfolio is comprised entirely of commercial mortgage loans. Our mortgage loan portfolio is well diversified geographically and among property types.
Due to conservative underwriting, the incidence of non-performing mortgage loans and foreclosure activity continues to be low. Other than our allowance for expected credit losses, we held no specifically identified impaired mortgage loans at March 31, 2026 and December 31, 2025. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion of our mortgage loan portfolio and the allowance for expected credit losses.
Private Equity Partnerships
The carrying value of our investments in private equity partnerships was $1,444.1 million and $1,456.3 million at March 31, 2026 and December 31, 2025, respectively. These partnerships are passive in nature and represent funds that are primarily invested in private credit, private equity, and real assets. The carrying value of the partnerships is based on our share of the partnership's NAV and changes in the carrying value are recorded as a component of net investment income. We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. We recorded net investment income totaling $23.2 million for the partnerships in the first quarter of 2026 reflecting the market conditions of the fourth quarter of 2025. The majority of our investments in partnerships are not redeemable. Distributions received from the funds arise from income generated by the underlying investments as well as the liquidation of the underlying investments. There is generally not a public market for these investments. We had $834.5 million of commitments for additional investments in the partnerships at March 31, 2026 which may or may not be funded. See Note 3 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion of our private equity partnerships.
Derivative Financial Instruments
We use derivative financial instruments primarily to manage interest rate risk, risk related to matching duration for our assets and liabilities, foreign currency risk, and equity risk. Historically, we have utilized current and forward interest rate swaps, current and forward currency swaps, forward benchmark interest rate locks, currency forward contracts, forward contracts on specific fixed income securities, and total return swaps. As of March 31, 2026, we had $3,769.4 million in notional amount of derivatives outstanding, of which $2,526.0 million is related to management of reinvestment risk in our long-term care product line, $1,092.0 million is related to management of foreign currency risk related to foreign denominated investments, and $151.4 million is economically hedging a portion of the liability related to our non-qualified defined contribution plan. Credit exposure on derivatives is limited to the value of those contracts in a net gain position, including accrued interest receivable less collateral held. Our credit exposure on derivatives was $0.1 million at March 31, 2026. The carrying value of fixed maturity securities and cash collateral received from our counterparties was $9.1 million and $0.5 million, respectively, at March 31, 2026. The carrying value of fixed maturity securities and cash posted as collateral to our counterparties was $235.9 million and $13.3 million at March 31, 2026. We believe that our credit risk is mitigated by our use of multiple counterparties, all of which have an investment-grade credit rating, and by our use of cross-collateralization agreements. See Note 5 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion of our derivatives.
For further information see "Investments" in Part I, Item 1 and "Critical Accounting Estimates" and "Investments" in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2025, and Notes 3, 4, and 5 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.
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Liquidity and Capital Resources
Overview
Our liquidity requirements are met primarily by cash flows provided from operations, principally in our insurance subsidiaries. Premium and investment income, as well as maturities and sales of invested assets, provide the primary sources of cash. Debt and/or securities offerings provide additional sources of liquidity. Cash is applied to the payment of policy benefits, costs of acquiring new business (principally commissions), operating expenses, and taxes, as well as purchases of new investments.
We have established an investment strategy that we believe will provide for adequate cash flows from operations. We attempt to match our asset cash flows and durations with expected liability cash flows and durations to meet the funding requirements of our business. However, deterioration in the credit market may delay our ability to sell our positions in certain of our fixed maturity securities in a timely manner and adversely impact the price we receive for such securities, which may negatively impact our cash flows. Furthermore, if we experience defaults on securities held in the investment portfolios of our insurance subsidiaries, this will negatively impact statutory capital, which could reduce our insurance subsidiaries' capacity to pay dividends to our holding companies. A reduction in dividends to our holding companies could force us to seek external financing to avoid impairing our ability to pay dividends to our stockholders or meet our debt and other payment obligations.
Our policy benefits are primarily in the form of claim payments, and we have minimal exposure to the policy withdrawal risk associated with deposit products such as individual life policies or annuities. A decrease in demand for our insurance products or an increase in the incidence of new claims or the duration of existing claims could negatively impact our cash flows from operations. However, our historical pattern of benefits paid to revenues is generally consistent, even during cycles of economic downturns, which serves to minimize liquidity risk.
The liquidity requirements of the holding company Unum Group include common stock dividends, interest and debt service, and ongoing investments in our businesses. Unum Group's liquidity requirements are met by assets held by Unum Group and our intermediate holding companies, dividends from primarily our insurance subsidiaries, and issuance of common stock, debt, or other capital securities and borrowings from our existing credit facility, as needed. As of March 31, 2026, Unum Group and our intermediate holding companies had available holding company liquidity of $1,726.1 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset-backed securities. No significant restrictions exist on our ability to use or access funds in any of our U.S. or foreign intermediate holding companies. Dividends repatriated from our foreign subsidiaries are eligible for 100 percent exemption from U.S. income tax but may be subject to withholding tax and/or tax on foreign currency gain or loss.
As part of our capital deployment strategy, we may repurchase shares of Unum Group's common stock, as authorized by our board of directors. The timing and amount of repurchase activity is based on market conditions and other considerations, including the level of available cash, alternative uses for cash, and our stock price. During the first three months of 2026, we repurchased 5.4 million shares at a cost of $398.6 million excluding commissions and excise tax.
Our board of directors has authorized the following repurchase program:
December 2025 Authorization | |||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Effective Date | January 1, 2026 | ||||||||||||||||||||||
Expiration Date | None | ||||||||||||||||||||||
Authorized Repurchase Amount | $ | 1,000.0 | |||||||||||||||||||||
Cost of Shares Repurchased Under Repurchase Program | 398.6 | ||||||||||||||||||||||
Unused and Expired | — | ||||||||||||||||||||||
Remaining Repurchase Amount at March 31, 2026 | $ | 601.4 | |||||||||||||||||||||
See Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.
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Cash Available from Subsidiaries
Unum Group and certain of its intermediate holding company subsidiaries depend on payments from subsidiaries to pay dividends to stockholders, to pay debt obligations, and/or to pay expenses. These payments by our insurance and non-insurance subsidiaries may take the form of dividends, operating and investment management fees, and/or interest payments on loans from the parent to a subsidiary.
Restrictions under applicable state insurance laws limit the amount of dividends that can be paid to a parent company from its insurance subsidiaries in any 12-month period without prior approval by regulatory authorities. For life insurance companies domiciled in the U.S., that limitation generally equals, depending on the state of domicile, either ten percent of an insurer's statutory surplus with respect to policyholders as of the preceding year end or the statutory net gain from operations, excluding realized capital gains and losses, of the preceding year. The payment of dividends to a parent company from a life insurance subsidiary is generally further limited to the amount of unassigned funds.
Unum America cedes blocks of long-term care business to Fairwind, which is an affiliated captive reinsurance subsidiary domiciled in the United States. The ability of Fairwind to pay dividends to Unum Group will depend on its satisfaction of applicable regulatory requirements and on the performance of the business reinsured by Fairwind. Unum Group did not make any capital contributions to Fairwind during the first quarter of 2026, nor do we expect to make capital contributions for the remainder of the year.
The ability of Unum Group and certain of its intermediate holding company subsidiaries to continue to receive dividends from their insurance subsidiaries also depends on additional factors such as RBC ratios and capital adequacy and/or solvency requirements, funding growth objectives at an affiliate level, and maintaining appropriate capital adequacy ratios to support desired ratings. The RBC ratios for our U.S. insurance subsidiaries at March 31, 2026 are in line with our expectations and are significantly above the level that would require state regulatory action.
Unum Group and/or certain of its intermediate holding company subsidiaries may also receive dividends from our U.K. subsidiaries, the payment of which may be subject to applicable insurance company regulations and capital guidance in the U.K. Unum Limited is subject to the requirements of U.K. Solvency II, the system of prudential regulation applying in the U.K., which prescribes capital requirements and risk management standards for the U.K. insurance industry. Our U.K. holding company is also subject to the U.K. Solvency II requirements relevant to insurance holding companies, while its subsidiaries (the Unum UK Solvency II Group), which includes Unum Limited, are subject to group and individual supervision under U.K. Solvency II. The Unum UK Solvency II Group has permission from the PRA to use certain adjustments as well as a transitional measure which applies until January 2032. The Unum UK Solvency II Group also has permission to use its own internal model for calculating regulatory capital.
The payment of dividends to the parent company from our subsidiaries also requires the approval of the individual subsidiary's board of directors.
During 2026, we intend to maintain a level of capital in our insurance subsidiaries above the applicable capital adequacy requirements and minimum solvency margins. Approximately $631 million is available, without prior approval by regulatory authorities, during 2026 for the payment of dividends from Unum Group's traditional U.S. insurance subsidiaries, which excludes our captive reinsurer. Unum Group has received $42.8 million of ordinary dividends from its traditional U.S. insurance subsidiaries during the three months ended March 31, 2026.
Approximately £125 million is available to be distributable from Unum Limited during 2026. The actual amount distributable during 2026 will depend on experience, including the impact of market movements, and is subject to local requirements, as well as regulatory and other business considerations.
Insurance regulatory restrictions do not limit the amount of dividends available for distribution from non-insurance subsidiaries except where the non-insurance subsidiaries are held directly or indirectly by an insurance subsidiary and only indirectly by Unum Group, which does not apply to our current entity structure.
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Funding Agreement-Backed Loan Program
During February 2026, we established a funding agreement-backed loan (FABL) program pursuant to which, a special purpose unaffiliated Delaware statutory trust (the FABL trust) may borrow funds under a six-month delayed draw term loan facility (the facility) and deposit the proceeds with Colonial Life & Accident Insurance Company (Colonial Life & Accident), a wholly owned insurance subsidiary, pursuant to funding agreements issued by Colonial Life & Accident to the FABL trust. Colonial Life & Accident does not hold any variable interests in the FABL trust. The deposits received by Colonial Life & Accident under the funding agreements will be used for spread lending purposes. The facility permits borrowings by the FABL trust in two tranches, in an aggregate principal amount of up to $500 million, with scheduled maturities on the third and fifth anniversaries, respectively, of the date that is six months after the date of the applicable credit agreement. The funding agreements issued by Colonial Life & Accident will have matching interest, maturity and payment terms to the applicable borrowings by the FABL trust. The funding agreements may be collateralized by eligible securities, including agency securities, corporate bonds, municipal bonds, and U.S. Treasury securities. As of March 31, 2026, we did not have any amounts outstanding under the FABL program.
Debt, Term Loan Facility, Credit Facilities, and Other Sources of Liquidity
Our long-term debt balance at March 31, 2026 was $3,762.0 million, net of a net discount of $127.9 million and deferred debt issuance costs of $35.9 million, and is comprised of our unsecured senior notes, unsecured medium-term notes, and junior subordinated debt securities.
During the first quarter of 2026, we purchased and retired $7.7 million aggregate principal amount of our 6.25% junior subordinated debt securities issued in 2018 and due in 2058.
In April 2026, we entered into a senior letter of credit facility pursuant to which a letter of credit may be issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary. The facility provides for drawings up to £50.0 million until its scheduled expiration five years after issuance of the letter of credit and no later than July 2031. The credit facility provides for borrowings at an interest rate based on the sterling overnight index average.
We and certain of our traditional U.S. life insurance subsidiaries, Unum America, Provident and Colonial Life & Accident, are parties to a credit agreement providing for a five-year $500.0 million senior unsecured revolving credit facility with a syndicate of lenders. The revolving credit facility is set to expire in April 2030. We may request that the lenders’ aggregate commitments of $500.0 million under the facility be increased by up to an additional $200.0 million. Other of our domestic wholly-owned subsidiaries are permitted to join the credit facility as borrowers, subject to certain conditions. Any obligation of a subsidiary under the credit facility is subject to an unconditional guarantee by Unum Group. At March 31, 2026, there were no borrowed amounts outstanding under the revolving credit facility and letters of credit totaling $1.3 million had been issued.
We have a five-year £75.0 million senior unsecured standby letter of credit facility with a different syndicate of lenders, pursuant to which a syndicated letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in July 2026. We have an additional five-year, £75.0 million senior unsecured standby letter of credit facility pursuant to which a standby letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in December 2028. At March 31, 2026, no amounts have been borrowed under the standby credit facilities or letters of credit issued in favor of Unum Limited.
There are no significant financial covenants associated with any of our debt obligations other than our borrowings under the credit facilities, which are subject to financial covenants, negative covenants, and events of default that are customary. Each credit facility includes financial covenants based on our leverage ratio and consolidated net worth as well as covenants that limit subsidiary indebtedness. We continually monitor our debt covenants to ensure we remain in compliance. We have not observed any current trends that would cause a breach of any debt covenants.
See "Debt, Term Loan Facility, Credit Facilities and Other Sources of Liquidity" and Note 10 of the "Notes to Consolidated Financial Statements" contained in Part II, Items 7 and 8, respectively, of our annual report on Form 10-K for the year ended December 31, 2025 for further discussion.
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Shelf Registration
We maintain a shelf registration with the Securities and Exchange Commission to issue various types of securities, including common stock, preferred stock, debt securities, depository shares, stock purchase contracts, units and warrants. The shelf registration enables us to raise funds from the offering of any securities covered by the shelf registration as well as any combination thereof, subject to market conditions and our capital needs.
Commitments
As of March 31, 2026, we had commitments of $158.9 million to fund certain investments in private placement fixed maturity securities and $834.5 million to fund certain private equity partnerships.
With respect to our commitments and off-balance sheet arrangements, see the discussion under "Cash Requirements" in Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2025. During the first three months of 2026, there were no substantive changes in our commitments, contractual obligations, or other off-balance sheet arrangements other than the changes noted herein.
Transfers of Financial Assets
Our investment policy permits us to lend fixed maturity securities to unaffiliated financial institutions in short-term securities lending agreements, which increases our investment income with minimal risk. We account for all of our securities lending agreements and repurchase agreements as secured borrowings. As of March 31, 2026, we held $61.7 million of cash collateral from securities lending agreements. The average cash collateral balance during the first three months of 2026 was $61.4 million, and the maximum amount outstanding at any month end was $64.1 million. As of March 31, 2026, we held $37.6 million of off-balance sheet securities lending agreements which were collateralized by securities that we were neither permitted to sell nor control. The average balance of these off-balance sheet transactions during the first three months of 2026 was $37.3 million, and the maximum amount outstanding at any month end was $37.7 million.
To manage our cash position more efficiently, we may enter into securities repurchase agreements with unaffiliated financial institutions. We generally use securities repurchase agreements as a means to finance the purchase of invested assets or for short-term general business purposes until projected cash flows become available from our operations or existing investments. We had no securities repurchase agreements outstanding at March 31, 2026, nor did we utilize any securities repurchase agreements during the first three months of 2026. Our use of securities repurchase agreements and securities lending agreements can fluctuate during any given period and will depend on our liquidity position, the availability of long-term investments that meet our purchasing criteria, and our general business needs.
Certain of our U.S. insurance subsidiaries are members of regional FHLBs. As of March 31, 2026, we owned $42.5 million of FHLB common stock and had outstanding advances of $691.9 million from the regional FHLBs which were used for the purpose of investing in either short-term investments, matched fixed maturity securities, or matched commercial mortgage loans. As of March 31, 2026, we have additional borrowing capacity of approximately $706.5 million from the FHLBs.
See Note 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further information.
Consolidated Cash Flows
| (in millions of dollars) | ||||||||||||||
| Three Months Ended March 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net Cash Provided by Operating Activities | $ | 340.8 | $ | 353.6 | ||||||||||
| Net Cash Provided (Used) by Investing Activities | 82.7 | (12.1) | ||||||||||||
| Net Cash Used by Financing Activities | (389.1) | (266.6) | ||||||||||||
| Net Change in Cash and Bank Deposits | $ | 34.4 | $ | 74.9 | ||||||||||
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Operating Cash Flows
Operating cash flows are primarily attributable to the receipt of premium and investment income, offset by payments of claims, commissions, expenses, and income taxes. Premium income growth is dependent not only on new sales, but on policy renewals and growth of existing business, renewal price increases, and persistency. Investment income growth is dependent on the growth in the underlying assets supporting our insurance liabilities and capital and on the earned yield. The level of commissions and operating expenses is attributable to the level of sales and the first year acquisition expenses associated with new business as well as the maintenance of existing business. The level of paid claims is affected partially by the growth and aging of the block of business and also by the general economy, as previously discussed in the operating results by segment.
Investing Cash Flows
Investing cash inflows consist primarily of the proceeds from the sales and maturities of investments. Investing cash outflows consist primarily of payments for purchases of investments. Our investment strategy is to match the cash flows and durations of our assets with the cash flows and durations of our liabilities to meet the funding requirements of our business. When market opportunities arise, we may sell selected securities and reinvest the proceeds to improve the yield and credit quality of our portfolio. We may at times also sell selected securities and reinvest the proceeds to improve the duration matching of our assets and liabilities and/or re-balance our portfolio. As a result, sales before maturity may vary from period to period. The sale and purchase of short-term investments is influenced by proceeds received from FHLB funding advances, issuance of debt, our securities lending program, and by the amount of cash which is at times held in short-term investments to facilitate the availability of cash to fund the purchase of appropriate long-term investments, repay maturing debt, and/or to fund our capital deployment program.
During the first quarter of 2025, fixed maturity securities with a fair value of $151.6 million were sold in preparation for the Fortitude Re reinsurance transaction. Also during the first quarter of 2025, fixed maturity securities with a fair value of $81.8 million were sold related to the funding of an extraordinary dividend from a wholly owned insurance subsidiary to Unum Group.
See Note 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
Financing Cash Flows
Financing cash flows consist primarily of borrowings and repayments of debt, dividends paid to stockholders, repurchases of common stock, and policyholders' account deposits and withdrawals.
During the first quarter of 2026, we purchased and retired $7.7 million aggregate principal amount of our 6.250% junior subordinated debt securities due 2058, for which we paid $7.2 million in cash.
Cash used to repurchase shares of Unum Group's common stock during the first three months of 2026 and 2025 was $398.8 million and $200.5 million, respectively. During the first three months of 2026 and 2025, we paid dividends of $78.2 million and $77.1 million, respectively, to holders of Unum Group's common stock.
Ratings
A.M. Best Company (AM Best), Fitch Ratings (Fitch), Moody's Ratings (Moody's), and S&P Global Ratings (S&P) are among the third parties that assign issuer credit ratings to Unum Group and financial strength ratings to our insurance subsidiaries. Issuer credit ratings reflect an agency's opinion of the overall financial capacity of a company to meet its senior debt obligations. Financial strength ratings are specific to each individual insurance subsidiary and reflect each rating agency's view of the overall financial strength (capital levels, earnings, growth, investments, business mix, operating performance, and market position) of the insuring entity and its ability to meet its obligations to policyholders. Both the issuer credit ratings and financial strength ratings incorporate quantitative and qualitative analyses by rating agencies and are routinely reviewed and updated on an ongoing basis.
We maintain an ongoing dialogue with the four rating agencies that evaluate us in order to inform them of progress we are making regarding our strategic objectives and financial plans as well as other pertinent issues. A significant component of our communications involves our annual review meeting with each of the four agencies. We hold other meetings throughout the year regarding our business, including, but not limited to, quarterly updates.
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Agency ratings are not directed toward the holders of our securities and are not recommendations to buy, sell, or hold our securities. Each rating is subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be regarded as an independent assessment, not conditional on any other rating. Given the dynamic nature of the ratings process, changes by these or other rating agencies may or may not occur in the near-term. We have ongoing dialogue with the rating agencies concerning our insurance risk profile, our financial flexibility, our operating performance, and the quality of our investment portfolios. The rating agencies provide specific criteria and, depending on our performance relative to the criteria, will determine future negative or positive rating agency actions.
We compete based in part on the financial strength ratings provided by rating agencies. A downgrade of our financial strength ratings can be expected to adversely affect us and could potentially, among other things, adversely affect our relationships with distributors of our products and services and retention of our sales force, negatively impact persistency and new sales, particularly large case group sales and individual sales, and generally adversely affect our ability to compete. A downgrade in the issuer credit rating assigned to Unum Group can be expected to adversely affect our cost of capital or our ability to raise additional capital.
The table below reflects the outlook as well as the senior unsecured debt ratings for Unum Group and the financial strength ratings for each of our traditional insurance subsidiaries as of the date of this filing.
| AM Best | Fitch | Moody's | S&P | ||||||||||||||||||||
Outlook | Stable | Stable | Stable | Stable | |||||||||||||||||||
Senior Unsecured Debt Ratings | bbb+ | BBB | Baa2 | BBB | |||||||||||||||||||
| Financial Strength Ratings | |||||||||||||||||||||||
| Provident Life and Accident Insurance Company | A | A | A2 | A | |||||||||||||||||||
| Unum Life Insurance Company of America | A | A | A2 | A | |||||||||||||||||||
| First Unum Life Insurance Company | A | A | A2 | A | |||||||||||||||||||
| Colonial Life & Accident Insurance Company | A | A | A2 | A | |||||||||||||||||||
| The Paul Revere Life Insurance Company | A | A | A2 | A | |||||||||||||||||||
Unum Insurance Company | A | A | A2 | NR | |||||||||||||||||||
Provident Life and Casualty Insurance Company | A | A | NR | NR | |||||||||||||||||||
| Starmount Life Insurance Company | A | NR | NR | NR | |||||||||||||||||||
| Unum Limited | NR | NR | NR | A- | |||||||||||||||||||
NR = not rated
There have been no changes in the rating agencies' outlooks or ratings during 2026 prior to the date of this filing.
See our annual report on Form 10-K for the year ended December 31, 2025 for further information regarding our debt, issuer credit ratings and financial strength ratings and the risks associated with rating changes.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to various market risk exposures including interest rate risk and foreign exchange rate risk. With respect to our exposure to market risk, see the discussion under "Investments" in Item 2 of this Form 10-Q and in Part II, Item 7A of our annual report on Form 10-K for the year ended December 31, 2025. During the first three months of 2026, there was no substantive change to our market risk or the management of this risk.
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ITEM 4. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. We evaluated those controls based on the 2013 Internal Control - Integrated Framework from the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, these officers concluded that our disclosure controls and procedures were effective as of March 31, 2026.
There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended, during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Refer to Part I, Item 1, Note 13 of the "Notes to Consolidated Financial Statements" for information on legal proceedings.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about our share repurchase activity for the first quarter of 2026.
(a) Total Number of Shares Purchased | (b) Average Price Paid per Share (1) | (c) Total Number of Shares Purchased as Part of Publicly Announced Program (2) | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (2) | ||||||||||||||||||||
| January 1 - January 31, 2026 | 1,289,703 | $ | 77.46 | 1,289,703 | $ | 900,102,869 | |||||||||||||||||
| February 1 - February 28, 2026 | 2,214,020 | 72.73 | 2,214,020 | 739,075,036 | |||||||||||||||||||
| March 1 - March 31, 2026 | 1,881,535 | 73.16 | 1,881,535 | 601,430,058 | |||||||||||||||||||
| Total | 5,385,258 | 5,385,258 | |||||||||||||||||||||
(1) Excludes the cost of commissions and excise taxes.
(2) In December 2025, our board of directors authorized the repurchase of up to $1,000.0 million of Unum Group's outstanding common stock beginning on January 1, 2026. The repurchase program authorized in December 2025 has no scheduled termination date.
ITEM 5. OTHER INFORMATION
Securities trading plans
During the three months ended March 31, 2026, no director or officer of the Company adopted terminated
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ITEM 6. EXHIBITS
| Index to Exhibits | ||||||||
| (3.1) | Amended and Restated Bylaws of Unum Group, effective March 4, 2026 (incorporated by reference to Exhibit 3.1 of Unum Group’s Form 8-K filed on March 6, 2026). | |||||||
| (10.1) | Form of Performance Share Unit Agreement with Executive in U.S. | |||||||
| (10.2) | Form of Performance Share Unit Agreement with Executive in U.K. | |||||||
| (10.3) | Form of Cash Incentive Unit Agreement with Executive in U.S. | |||||||
| (10.4) | Form of Cash Incentive Unit Agreement with Executive in U.K. | |||||||
(31.1) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
(31.2) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
(32.1) | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
(32.2) | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
(101) | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
(104) | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Unum Group | ||||||||
| (Registrant) | ||||||||
| Date: April 29, 2026 | By: | /s/ Steven A. Zabel | ||||||
| Steven A. Zabel | ||||||||
| Executive Vice President, Chief Financial Officer | ||||||||
| Date: April 29, 2026 | By: | /s/ Walter L. Rice, Jr. | ||||||
| Walter L. Rice, Jr. | ||||||||
| Senior Vice President, Chief Accounting Officer | ||||||||
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FAQ
How did Unum Group (UNM) perform financially in Q1 2026?
Unum Group reported Q1 2026 net income of $232.0 million, compared with $189.1 million in Q1 2025. Total revenue increased to $3,355.2 million from $3,091.6 million, supported by higher premium income and a substantially smaller net investment loss.
What were Unum Group’s Q1 2026 earnings per share?
Unum Group’s Q1 2026 basic and diluted earnings per common share were $1.41, up from $1.06 a year earlier. The increase reflects higher net income, driven by stronger premium revenue and a much reduced net investment loss versus Q1 2025.
What does Unum Group’s balance sheet look like as of March 31, 2026?
As of March 31, 2026, Unum Group reported $62,714.3 million in total assets and $51,821.9 million in total liabilities. Stockholders’ equity was $10,892.4 million, with future policy benefits of $37,300.5 million and long-term debt of $3,762.0 million.
How much cash did Unum Group generate from operations in Q1 2026?
Unum Group generated $340.8 million of net cash from operating activities in Q1 2026, slightly below the $353.6 million reported in Q1 2025. Operating cash flow benefits from net income plus non-cash items, partially offset by working capital and insurance liability movements.
What capital returns did Unum Group make to shareholders in Q1 2026?
In Q1 2026, Unum Group repurchased $398.8 million of common stock and paid $78.2 million in dividends. The quarterly dividend was $0.46 per share, compared with $0.42 per share in the prior-year quarter, reflecting continued shareholder distributions.
How did Unum Group’s investment results change in Q1 2026?
Net investment income was $483.4 million in Q1 2026, down from $513.2 million in Q1 2025, while net investment loss narrowed sharply to $5.0 million from $206.8 million. Private equity partnerships contributed positively within other long-term investments.
What was Unum Group’s share count as of late April 2026?
Unum Group reported that 159,776,235 shares of its common stock were outstanding as of April 27, 2026. The share count reflects the impact of the company’s ongoing share repurchase activity and any other share-related transactions completed before that date.