Executive Summary

Solid quarter with sustained core margins and disciplined growth; management guided to continued EPS growth in 2025 alongside strong capital generation and optionality .
Core segment performance was broadly healthy (Group Disability and Group Life), while Supplemental & Voluntary showed transitory pressure that management expects to normalize; Colonial Life delivered strong profitability .
Closed Block LTC remained stable with robust protection against capital needs and active risk management; management reiterated no expected capital contributions and ongoing pursuit of risk transfer .
Capital deployment remains a key narrative with high regulatory capital, ample holding-company liquidity, expected 2025 repurchases and a new $1B authorization, and a subsequent LTC reinsurance announcement supporting de-risking .

What Went Well and What Went Wrong

What Went Well
- Group Life margins remained favorable; management reiterated durability of margins in Group Disability and Life into 2025 .
- Colonial Life had one of its highest quarterly earnings on record; full-year profitability improved on favorable benefits and disciplined expense management .
- Strategic and digital initiatives (HR Connect, Total Leave, Gather) are driving sales momentum and persistency, particularly upmarket and in broker platforms; management emphasized these as competitive moats .
What Went Wrong
- Supplemental & Voluntary (notably voluntary benefits) saw higher benefit ratios from unfavorable experience in hospital indemnity and accident; management sees the Q4 pressure as transitory .
- Unum UK experienced a higher benefit ratio year over year due to unfavorable incidence in GLTD and Group Life, partly offset by favorable recoveries in GLTD .
- Closed Block LTC incidents remained above longer-term expectations and claim terminations mix was unfavorable in Q4 (average size), modestly pressuring the net premium ratio, though trends are expected to normalize into 2025 .

Financial Results

Consolidated results (GAAP and Adjusted)

Metric	Q4 2023	Q3 2024	Q4 2024
Premium Income ($MM)	$2,551.7	$2,628.8	$2,631.1
Net Investment Income ($MM)	$530.8	$527.8	$543.6
Total Revenue ($MM)	$3,145.1	$3,217.0	$3,236.6
Net Income ($MM)	$330.6	$645.7	$348.7
Diluted EPS (GAAP)	$1.69	$3.46	$1.92
After-tax Adjusted Operating Income ($MM)	$350.5	$398.0	$368.9
Adjusted Operating EPS	$1.79	$2.13	$2.03
S&P Global Consensus EPS	N/A (rate limit)	N/A (rate limit)	N/A (rate limit)
S&P Global Consensus Revenue	N/A (rate limit)	N/A (rate limit)	N/A (rate limit)

Notes: S&P Global consensus not retrieved due to API rate limits; estimate comparisons unavailable.

Segment adjusted operating income (Q4)

Segment AOI ($MM)	Q4 2023	Q4 2024
Unum U.S.	$342.1	$333.2
Unum International	$39.4	$37.6
Colonial Life	$87.8	$122.7
Closed Block	$21.3	$27.7
Corporate	$(36.5)	$(50.4)

Selected segment KPIs (Q4 2024 unless noted)

KPI	Value
Unum U.S. Group Disability benefit ratio (Q4)	60.4%
Unum U.S. Group Life benefit ratio (Q4)	66.7%
Supplemental & Voluntary – Voluntary Benefits benefit ratio (Q4)	47.3%
LTC Net Premium Ratio (Dec 31, 2024)	94.6%
Alternative investments yield (Closed Block, Q4 annualized)	9.1%
Risk-Based Capital (weighted avg)	~430%
Holding Co liquidity (Dec 31, 2024)	~$1.987B
Book value per share (Dec 31, 2024)	$61.38
Book value per share ex-AOCI (Dec 31, 2024)	$75.51
Shares outstanding (Dec 31, 2024)	178.6M
Q4 2024 repurchases (cost)	$474.5MM

Prior quarters for trend context

Metric	Q2 2024	Q3 2024
Adjusted Operating EPS	$2.16	$2.13
Premium Income ($MM)	$2,627.2	$2,628.8
Total Revenue ($MM)	$3,233.4	$3,217.0
Key items (disclosure)	Q2: Raised FY24 AOI EPS outlook to 10–15%	Q3: Reserve assumption update reduced reserves; AOI EPS $2.13

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
After-tax Adjusted Operating EPS Growth	FY 2025	—	8%–12%	New
Core Operations Premium Growth	FY 2025	—	4%–7%	New
Unum U.S. Sales Growth	FY 2025	—	5%–10%	New
Unum U.S. Premium Growth	FY 2025	—	3%–6%	New
Unum U.S. Adjusted Operating ROE	FY 2025	—	23%–25%	New
Unum International Sales Growth (cc)	FY 2025	—	8%–12%	New
Unum International Premium Growth (cc)	FY 2025	—	10%–15%	New
Unum International Adjusted Operating ROE	FY 2025	—	16%–18%	New
Colonial Life Sales Growth	FY 2025	—	5%–10%	New
Colonial Life Premium Growth	FY 2025	—	2%–4%	New
Colonial Life Adjusted Operating ROE	FY 2025	—	18%–20%	New
Free Cash Flow Generation	FY 2025	—	$1.3B–$1.6B	New
Share Repurchases	FY 2025	—	$0.5B–$1.0B	New
RBC Ratio (Year-end)	FY 2025 YE	—	425%–450%	New
Holding Co Liquidity (Year-end)	FY 2025 YE	—	>$2.0B	New
Leverage	FY 2025 YE	—	20%–22%	New
Expense Ratio	FY 2025	—	Slight increase vs 2024	New
Longer-term Interest Expense	FY 2025 usage	—	~ $200MM	New
Dividends (cash usage)	FY 2025	—	$300MM–$330MM	New

Note: In addition, the Board authorized a new $1B share repurchase program effective April 1, 2025 (separate from 2025 operating outlook) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3 2024)	Current Period (Q4 2024 call)	Trend
Group Disability and Life margins	Q2: GLife benefit ratio favorable; Q3: GLife benefit ratio improved; Disability ratios sustained	Management expects low-60s disability benefit ratio and continued Group Life performance; durable near to mid-term	Stable/positive
Digital/Platform capabilities (HR Connect, Total Leave, Gather)	Continued investment to support growth	Differentiated leave management and HCM integrations driving sales and persistency across markets	Strengthening
Voluntary Benefits loss ratio	Q2 VB BR 45.1%, Q3 VB BR 45.8%	Q4 VB BR 47.3%; management expects normalization; mid-40s VB BR planning assumption	Mixed/normalizing
Unum UK benefit ratio	Q3 UK BR 69.5% (ex updates)	Q4 UK BR 72.1% on higher incidence; sales and persistency healthy	Slight pressure vs 3Q
Closed Block LTC	Q2 NPR 93.7%; Q3 NPR 94.5%	Q4 NPR 94.6%; $2.6B protection; no expected capital contributions; hedging active	Stable/protected
Capital return	Q2: new $1B authorization; ongoing buybacks	FY25 plan $0.5–$1.0B repurchases; liquidity and RBC above targets; incremental $1B authorization effective Apr 2025	Strong/ongoing

Management Commentary

Strategy and growth: “We grew earnings per share 10%... our core operations delivered over 20% ROE in 2024… In 2025, we expect consolidated sales growth of high-single digits… premium growth 4% to 7%… and 8% to 12% EPS growth.” — CEO Rick McKenney .
Margin durability: “We firmly believe [disability] results are durable for the near to midterm… reiterate our outlook for a benefit ratio in the low 60s… Group Life trends will continue near-term.” — CFO Steve Zabel .
LTC risk and protection: “We no longer anticipate the need for further capital contributions for LTC… $2.6 billion of protection… hedge program remained active with $2.6B notional at ~4.3%.” — CFO Steve Zabel .
Capital deployment: “Free cash flow generation remains robust… we expect to buy back between $500 million and $1 billion of shares in 2025… ending 2025 >400% RBC and >$2B holding company cash.” — Management .

Q&A Highlights

Disability margins sustainability: Management attributes durability to decade-long improvements in recoveries and stable incidence, plus strong operational execution; competitive environment remains but value proposition and connectivity mitigate pricing pressure .
Voluntary Benefits: Q4 pressure viewed as transitory; earnings power expected to normalize (~quarterly AOI around prior levels), with planning assumption for VB benefit ratio in the mid-40s .
LTC dynamics: Elevated incidence expected to abate; Q4 claimant terminations’ average size was below normal; alternative asset yields supportive; protection provides flexibility while pursuing further economic risk transfer .
Capital deployment flexibility: Repurchase pace will be dynamic vs potential M&A; organic growth remains top priority; many lines are not capital-intensive .

Estimates Context

S&P Global consensus estimates for Q4 2024 and prior quarters were unavailable at time of analysis due to API rate limits; therefore, we cannot assess beats/misses versus consensus for revenue or EPS. Upon access restoration, we recommend updating the results-vs-estimates tables with S&P Global consensus for EPS and revenue and revisiting the narrative accordingly.

Key Takeaways for Investors

Margin quality remains a differentiator: sustained low-60s disability benefit ratio and improved Group Life profitability underpin earnings power into 2025 .
Supplemental & Voluntary volatility appears transient; management expects normalization and still views the portfolio as a growth engine .
LTC risk is better insulated by hedging, achieved rate hikes, and $2.6B of protection; Unum remains active on potential risk transfer to further de-risk .
Capital return and flexibility are strong: elevated RBC, large holding-company liquidity, ongoing repurchases in 2025, and a fresh $1B authorization effective April 1, 2025 .
Sales momentum is supported by technology moats (HR Connect, Total Leave, Gather) that deepen employer integration and broker platform connectivity, aiding persistency and pricing stability .
Near-term monitoring: VB loss ratio trend, UK benefit ratios, LTC incidence/terminations, and repurchase cadence vs M&A pipeline will set stock narrative catalysts post-print .

Appendix: Additional Capital and Post-Quarter Updates

Board authorized a $1B share repurchase program effective April 1, 2025 .
Announced LTC and IDI reinsurance with Fortitude Re, reinsuring ~$3.4B of LTC reserves (~19% of block) and ceding 20% of in-force IDI premium; estimated $100MM capital benefit; expected 2025 close pending approvals .

Unum Group (UNM)·Q4 2024 Earnings Summary