-
Net income of
$645.7 million ($3.46 per diluted common share) for the third quarter of 2024; after-tax adjusted operating income was$398.0 million ($2.13 per diluted common share).
- Growing top-line with core operations premium growth of 4.6 percent on a constant currency basis, and continued strong margins across our businesses.
-
Strong balance sheet with holding company liquidity of
$1.4 billion and weighted average risk-based capital ratio of approximately 470 percent, well in excess of targets; statutory operating earnings of$315.6 million .
-
Book value per common share of
$59.36 grew 20.4 percent over the year-ago quarter; book value per common share excluding accumulated other comprehensive income (AOCI) of$74.15 grew 13.3 percent over the year-ago quarter.
-
Completed our annual GAAP reserve assumption updates; positive trends in long-term care and other product lines drove a before-tax net reserve decrease of
$357.4 million .
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241029887090/en/
Included in net income for the third quarter of 2024 are the after-tax amortization of the cost of reinsurance of
“Our third quarter results demonstrated the broad-based solid performance that we have shown throughout 2024. We continued to execute on our strategy, resulting in growth in premiums and operating income, with particularly strong performance within Group Life,” said
RESULTS BY SEGMENT
We measure and analyze our segment performance on the basis of "adjusted operating income" or "adjusted operating loss", which differ from income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, amortization of cost of reinsurance, the impact of non-contemporaneous reinsurance, reserve assumption updates, and certain other items as specified in the reconciliations below. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. Reserve assumption updates may result in increases or decreases to earnings. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for income before income tax, net income or net loss.
Unum US Segment
Unum US reported adjusted operating income of
Within the Unum US operating segment, the group disability line of business reported a 7.9 percent decrease in adjusted operating income to
The group life and accidental death and dismemberment line of business reported a 80.8 percent increase in adjusted operating income to
The supplemental and voluntary line of business reported a decrease of 17.0 percent in adjusted operating income to
Unum International Segment
The Unum
Colonial Life Segment
Colonial Life reported adjusted operating income of
Closed Block Segment
The Closed Block segment reported adjusted operating income of
Policy benefits including remeasurement loss (gain), excluding the impacts of non-contemporaneous reinsurance and the reserve assumption updates, for the Closed Block segment were generally consistent during the third quarter of 2024 relative to the same period of 2023. The net premium ratio for the long-term care product line increased to 94.5 percent at
Corporate Segment
The Corporate segment reported an adjusted operating loss of
OTHER INFORMATION
Shares Outstanding
The Company’s weighted average number of shares outstanding, assuming dilution, was 186.9 million for the third quarter of 2024, compared to 197.1 million for the third quarter of 2023. Shares outstanding totaled 184.5 million at
Capital Management
At
Book Value
Book value per common share as of
Effective Tax Rate
The effective tax rate on adjusted operating earnings was 20.7 percent in the third quarter of 2024.
Outlook
Full-year 2024 outlook of an increase in after-tax adjusted operating income per share of 10 percent to 15 percent when comparing to full-year 2023.
NON-GAAP 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 GAAP. We believe the following non-GAAP financial measures are better performance measures and better indicators of the revenue and profitability and underlying trends in our business:
- After-tax adjusted operating income or loss, which excludes investment gains or losses, amortization of the cost of reinsurance, non-contemporaneous reinsurance, reserve assumption updates, as well as certain other items, as applicable;
- Book value per common share, which is calculated excluding AOCI.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. Investment gains or losses and unrealized gains or losses on securities depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our Company. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business. Book value per common share excluding AOCI provides a more comparable and consistent view of our results, as AOCI tends to fluctuate depending on market conditions and general economic trends.
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 exited a substantial portion of our Closed Block individual disability product line through the two phases of the reinsurance transaction that were executed in
We may at other times exclude certain other items from our discussion of financial ratios and metrics in order to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur and does not replace net income or net loss as a measure of our overall profitability.
CONFERENCE CALL INFORMATION
Members of
To receive dial in information for the call, please register in advance by using the following URL:
https://registrations.events/direct/Q4I3307929. Upon registration you will receive a dial-in number to use to access the event. It is recommended that you register at least 10 minutes before the start of the event. In addition, a live webcast of the call will also be available at www.investors.unum.com in a listen-only mode. It is recommended that webcast viewers access the “Investors” section of the Company’s website and opt-in to the webcast approximately 5-10 minutes prior to the start of the call. A replay of the webcast will be available on the Company's website. A replay of the call will also be available through
In conjunction with today’s earnings announcement, the Company’s Statistical Supplement for the third quarter of 2024 is available on the “Investors” section of the Company’s website.
ABOUT
Visit the
SAFE HARBOR STATEMENT
Certain information in this news release constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments and speak only as of the date made. These forward-looking statements, including statements about anticipated growth in after-tax adjusted operating income per share, are subject to numerous assumptions, risks, and uncertainties, many of which are beyond our control. The following factors, in addition to other factors mentioned from time to time, may cause actual results to differ materially from those contemplated by the forward-looking statements: (1) fluctuation in insurance reserve liabilities and claim payments due to changes in claim incidence, recovery rates, mortality and morbidity rates, and policy benefit offsets due to, among other factors, the rate of unemployment and consumer confidence, the emergence of new diseases, epidemics, or pandemics, new trends and developments in medical treatments, the effectiveness of our claims operational processes, and changes in governmental programs; (2) sustained periods of low interest rates; (3) unfavorable economic or business conditions, both domestic and foreign, that may result in decreases in sales, premiums, or persistency, as well as unfavorable claims activity or unfavorable returns on our investment portfolio; (4) the impact of pandemics and other public health issues on our business, financial position, results of operations, liquidity and capital resources, and overall business operations; (5) changes in, or interpretations or enforcement of, laws and regulations; (6) a cybersecurity attack or other security breach resulting in compromised data or the unauthorized acquisition of confidential data; (7) the failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cybersecurity attack, or other event; (8) investment results, including, but not limited to, changes in interest rates, defaults, changes in credit spreads, impairments, and the lack of appropriate investments in the market which can be acquired to match our liabilities; (9) increased competition from other insurers and financial services companies due to industry consolidation, new entrants to our markets, or other factors; (10) ineffectiveness of our derivatives hedging programs due to changes in forecasted cash flows, the economic environment, counterparty risk, ratings downgrades, capital market volatility, changes in interest rates, and/or regulation; (11) changes in our financial strength and credit ratings; (12) actual experience in the broad array of our products that deviates from our assumptions used in pricing, underwriting, and reserving; (13) Our ability to hire and retain qualified employees; (14) our ability to develop digital capabilities or execute on our technology systems upgrades or replacements; (15) availability of reinsurance in the market and the ability of our reinsurers to meet their obligations to us; (16) ability to generate sufficient internal liquidity and/or obtain external financing; (17) damage to our reputation due to, among other factors, regulatory investigations, legal proceedings, external events, and/or inadequate or failed internal controls and procedures; (18) disruptions to our business or our ability to leverage data caused by the use and reliance on third-party vendors, including vendors providing web and cloud-based applications; (19) recoverability and/or realization of the carrying value of our intangible assets, long-lived assets, and deferred tax assets; (20) effectiveness of our risk management program; (21) contingencies and the level and results of litigation; (22) fluctuation in foreign currency exchange rates; and (23) our ability to meet environmental, social, and governance standards and expectations of investors, regulators, customers, and other stakeholders.
For further discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Part 1, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended
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FINANCIAL HIGHLIGHTS |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
($ in millions, except share data) |
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Revenue |
|
|
|
|
|
|
|
||||||||
|
Premium Income |
$ |
2,628.8 |
|
|
$ |
2,525.9 |
|
|
$ |
7,866.3 |
|
|
$ |
7,494.3 |
|
|
Net Investment Income |
|
527.8 |
|
|
|
526.0 |
|
|
|
1,586.4 |
|
|
|
1,565.9 |
|
|
Net Investment Loss |
|
(12.9 |
) |
|
|
(31.0 |
) |
|
|
(24.5 |
) |
|
|
(30.0 |
) |
|
Other Income |
|
73.3 |
|
|
|
71.6 |
|
|
|
222.5 |
|
|
|
210.6 |
|
|
Total Revenue |
|
3,217.0 |
|
|
|
3,092.5 |
|
|
|
9,650.7 |
|
|
|
9,240.8 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Benefits and Expenses |
|
|
|
|
|
|
|
||||||||
|
Policy Benefits Including Remeasurement Loss or Gain |
|
1,461.9 |
|
|
|
1,947.0 |
|
|
|
5,056.7 |
|
|
|
5,437.0 |
|
|
Commissions |
|
315.1 |
|
|
|
289.7 |
|
|
|
947.8 |
|
|
|
869.7 |
|
|
Interest and Debt Expense |
|
49.2 |
|
|
|
48.6 |
|
|
|
148.6 |
|
|
|
145.6 |
|
|
Deferral of Acquisition Costs |
|
(163.3 |
) |
|
|
(153.3 |
) |
|
|
(495.3 |
) |
|
|
(467.5 |
) |
|
Amortization of Deferred Acquisition Costs |
|
133.8 |
|
|
|
129.1 |
|
|
|
387.9 |
|
|
|
358.7 |
|
|
Other Expenses |
|
605.7 |
|
|
|
569.7 |
|
|
|
1,799.2 |
|
|
|
1,685.9 |
|
|
Total Benefits and Expenses |
|
2,402.4 |
|
|
|
2,830.8 |
|
|
|
7,844.9 |
|
|
|
8,029.4 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income Before Income Tax |
|
814.6 |
|
|
|
261.7 |
|
|
|
1,805.8 |
|
|
|
1,211.4 |
|
|
Income Tax Expense |
|
168.9 |
|
|
|
59.7 |
|
|
|
375.4 |
|
|
|
258.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income |
$ |
645.7 |
|
|
$ |
202.0 |
|
|
$ |
1,430.4 |
|
|
$ |
953.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
PER SHARE INFORMATION |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income Per Common Share |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
3.46 |
|
|
$ |
1.03 |
|
|
$ |
7.54 |
|
|
$ |
4.83 |
|
|
Assuming Dilution |
$ |
3.46 |
|
|
$ |
1.02 |
|
|
$ |
7.52 |
|
|
$ |
4.81 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted Average Common Shares - Basic (000s) |
|
186,400.7 |
|
|
|
196,083.2 |
|
|
|
189,665.1 |
|
|
|
197,289.5 |
|
|
Weighted Average Common Shares - Assuming Dilution (000s) |
|
186,882.4 |
|
|
|
197,131.8 |
|
|
|
190,209.7 |
|
|
|
198,295.1 |
|
|
Outstanding Shares - (000s) |
|
|
|
|
|
184,501.2 |
|
|
|
195,017.0 |
|
||||
|
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||
|
|
Three Months Ended |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
|
|
(in millions) |
|
per share * |
|
(in millions) |
|
per share * |
||||||||
|
Net Income |
$ |
645.7 |
|
|
$ |
3.46 |
|
|
$ |
202.0 |
|
|
$ |
1.02 |
|
|
Excluding: |
|
|
|
|
|
|
|
||||||||
|
Net Investment Loss (net of tax benefit of |
|
(9.8 |
) |
|
|
(0.05 |
) |
|
|
(24.4 |
) |
|
|
(0.13 |
) |
|
Amortization of the Cost of Reinsurance (net of tax benefit of |
|
(8.2 |
) |
|
|
(0.04 |
) |
|
|
(8.7 |
) |
|
|
(0.04 |
) |
|
Non-Contemporaneous Reinsurance (net of tax benefit of |
|
(4.8 |
) |
|
|
(0.03 |
) |
|
|
(7.3 |
) |
|
|
(0.04 |
) |
|
Reserve Assumption Updates (net of tax expense (benefit) of |
|
282.6 |
|
|
|
1.51 |
|
|
|
(139.3 |
) |
|
|
(0.71 |
) |
|
Loss on Legal Settlement (net of tax benefit |
|
(12.1 |
) |
|
|
(0.06 |
) |
|
|
— |
|
|
|
— |
|
|
After-tax Adjusted Operating Income |
$ |
398.0 |
|
|
$ |
2.13 |
|
|
$ |
381.7 |
|
|
$ |
1.94 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
* Assuming Dilution |
|
|
|
|
|
|
|
||||||||
|
|
|
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
|
|
(in millions) |
|
per share |
|
(in millions) |
|
per share |
||||||||
|
Total Stockholders' Equity (Book Value) |
$ |
10,951.4 |
|
|
$ |
59.36 |
|
|
$ |
9,618.1 |
|
|
$ |
49.32 |
|
|
Excluding: |
|
|
|
|
|
|
|
||||||||
|
Net Unrealized Loss on Securities |
|
(1,491.2 |
) |
|
|
(8.08 |
) |
|
|
(3,948.4 |
) |
|
|
(20.25 |
) |
|
Effect of Change in Discount Rate Assumptions on the Liability for Future Policy Benefits |
|
(527.0 |
) |
|
|
(2.86 |
) |
|
|
1,688.5 |
|
|
|
8.66 |
|
|
Net Loss on Derivatives |
|
(108.9 |
) |
|
|
(0.59 |
) |
|
|
(177.7 |
) |
|
|
(0.91 |
) |
|
Subtotal |
|
13,078.5 |
|
|
|
70.89 |
|
|
|
12,055.7 |
|
|
|
61.82 |
|
|
Excluding: |
|
|
|
|
|
|
|
||||||||
|
Foreign Currency Translation Adjustment |
|
(259.9 |
) |
|
|
(1.40 |
) |
|
|
(382.2 |
) |
|
|
(1.95 |
) |
|
Subtotal |
|
13,338.4 |
|
|
|
72.29 |
|
|
|
12,437.9 |
|
|
|
63.77 |
|
|
Excluding: |
|
|
|
|
|
|
|
||||||||
|
Unrecognized Pension and Postretirement Benefit Costs |
|
(342.7 |
) |
|
|
(1.86 |
) |
|
|
(330.8 |
) |
|
|
(1.70 |
) |
|
Total Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss |
$ |
13,681.1 |
|
|
$ |
74.15 |
|
|
$ |
12,768.7 |
|
|
$ |
65.47 |
|
|
|
|
Three Months Ended |
|||||||||
|
|
|
|
|
|
|||||||
|
|
|
Premium Income |
|
Premium Income
|
|
Weighted Average
|
|
Premium Income
|
|||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||
|
Unum |
|
$ |
206.8 |
|
£ |
142.2 |
|
1.301 |
|
$ |
185.0 |
|
|
|
|
39.8 |
|
zł |
126.9 |
|
0.257 |
|
|
32.6 |
|
Total |
|
|
246.6 |
|
|
|
|
|
|
217.6 |
|
|
Unum US |
|
|
1,723.5 |
|
$ |
1,657.7 |
|
|
|
|
1,657.7 |
|
Colonial Life |
|
|
441.9 |
|
$ |
431.2 |
|
|
|
|
431.2 |
|
Core Operations |
|
$ |
2,412.0 |
|
|
|
|
|
$ |
2,306.5 |
|
|
1Premium income shown in millions of pounds for Unum |
|||||||||||
|
2Exchange rate is calculated using the average foreign currency exchange rates for the most recent period, applied to the comparable prior period. |
|||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029887090/en/
Media Contact:
edowning@unum.com
Investor Relations
investorrelations@unum.com
Source:
