UNMA Q1 2026 Earnings Call Summary

After-tax adjusted operating earnings: $353 million, up nearly 10% year-over-year.
Adjusted operating EPS: $2.14, reflecting strong performance.
Core operations premium growth: 5% (adjusted for transactions), with U.S. group business sales up 22%.
Total U.S. group earnings: Over $220 million, with a return on equity (ROE) of 25%.
Colonial Life earnings: Record adjusted operating income of $127.8 million, up from $115.7 million in Q1 2025.
Unum International adjusted operating income: $30.9 million, down from $38.7 million in the prior year.
Combined RBC: 460%, well above the target range, with holding company liquidity at approximately $1.7 billion.

Strong execution in core operations, with disciplined pricing and underwriting contributing to high persistency at 92%.
Continued investment in technology-enabled solutions, enhancing customer engagement and satisfaction.
Successful expansion in supplemental and voluntary products with 20% sales growth.
Ongoing management of the Closed Block, with a focus on reducing risk exposure and improving transparency.
Leadership transition announced with Tim Arnold retiring and Steve Jones appointed as the new President of Colonial Life.

2026 Outlook: Anticipated top-line growth of 4% to 7% and EPS growth of 8% to 12%.
Confidence in continued strong capital generation and deployment, with plans for approximately $1.3 billion in capital redeployment this year.
Expectation to increase dividend rates in the coming months.

International performance: Mixed results, particularly in the U.K. where benefits pressure was noted, impacting earnings.
Long-term care (LTC) exposure: 7% of group LTC cases closed in Q1, reflecting employers’ decisions to cease coverage, leading to elevated GAAP accounting volatility.
Group disability: Higher incidents in short-term disability products, particularly in new paid family medical leave (PFML) states, could pressure future results.
Supplemental and voluntary lines: Adjusted operating earnings decreased from $140.7 million in Q1 2025 to $116.2 million, attributed to unfavorable underlying experience.

Management indicated that the high persistency in group products is linked to investments in technology and strong customer relationships.
Discussions around PFML highlighted it as a growing area, with expectations of continued pressure until the market matures.
The company is actively seeking further risk transfer opportunities to mitigate LTC exposure, with a constructive market environment for potential deals.
Concerns were raised about the sustainability of favorable results in group life, with management noting that pricing adjustments would depend on longer-term performance trends.
The decline in supplemental and voluntary persistency was attributed to member lapses, primarily due to changes in employment rather than product unattractiveness.

This summary encapsulates the key points from Unum's Q1 2026 earnings call, highlighting both successes and challenges faced by the company.

UNMA — Unum Group 6.250% JR NT58