UNM - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Unum Group Second Quarter 2020 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Tom White, Investor Relations. Please go ahead, sir.

Tom White

Great. Jonathan. you, Thank and conference everyone, the quarter second Good for welcome Unum. earnings call XXXX morning, to

Our will fact. are not remarks statements of are today current include forward-looking or historical which statements, that

materially Form As actual Exchange forward-looking Information forward-looking XX-K filings differ factors in a concerning filings. Commission with to the the suggested our annual could sections results in results differ statements and statements. cause regarding result, that and appears by located from statement might our and Risk the also ended these results our are and report year Cautionary on for fiscal XXXX, December in factors titled XX, Form-XXQ subsequent Securities

the in and date the obligation to Our measures revise and today's today's statements statistical of Investors presentation no in section at the they comparable found in we in speak undertake our of any or supplement financial you update SEC non-GAAP section. be directly any our as our on only measures statements. are that website forward-looking included can of filings call found made, be also most the GAAP the unum.com. Investors can presentation publicly In website I in reconciliations remind

to plan Net XXXX our operating second building an the a second loss the income of in Unum $XX second quarter afternoon, quarter million. net loss on one diluted of million quarter in of asset an occupy. $XXX.X after-tax reported investment common XXXX. included we to So quarter yesterday gains share, right-of-use to the related XXXX after-tax share office impairment and realized or $X.X XXXX to of realized on $XXX.X income after-tax continue net second of $X.XX million do income not million included compared diluted of $XX.X a per the investment of for leases million per or common net Net $X.XX

realized value gain $XX.X fair and derivative a losses of second resulted realized investment the modified and the in $X.X include in which quarter. quarter after-tax totaled a coinsurance changes from realized credit of in an quarter and of in losses net after-tax gains second Therefore, of million realized sales after-tax the investment arrangement, an XXXX loss year and million reminder, As the embedded loss of an in the ago XXXX. investment net $XXX,XXX

the as per So and our common the Voluntary excluding Tim $X.XX Arnold, of XXXX in Participating in and Mike morning's Financial these now, Benefits quarter. conference share Rick the And $X.XX $XXX.X $XXX.X O'Donnell, McKenney; ago this Unum or to income diluted Simonds; after-tax are who million to Officer, was for second Colonial items, heads Zabel; as Life Unum's comments. Rick common diluted Chief share, Rick? year in Officer, international operating adjusted call business, well per compared Peter turn President businesses. or quarter his call Operating our I'll million the Steve over and and Chief heads who opening CEO,

Rick McKenney

our first second The by Thank brought expectations we and like downturn second everyone. the Despite we in with we quarter. produce pandemic, the solid earnings upheaval us all consistent environments, operating challenges conditions on the generally results and workplace economic and were in unemployment quarter the sharp you joining I'd Tom, resulting experienced quarter. thank you, discussed financial the on for day, today call. COVID-XX good corresponding many the to and the trends

with of However, different the trends. expected, the than was mortality minuses magnitude and pluses particularly

other on impacts well these as greater the business today. as outline We COVID-related throughout our will detail in impacts commentary

dedication hard through several proud I these difficult want I our this of past of am months to get and work I express over into the of discussion time. Before the the teams how results,

our own well customers, their in this uncertainty and as other challenged time has to each feeling exceptional. support are communities been but as efforts teams Our lives, through their

we true purpose life's our helping We have what for moments. And today thrive throughout do. of is people witnessing what amplify are we to remained the need

execution our our plans the changing of and business We adapting to are also world. on focused disciplined

and We largely entire satisfaction work productivity. reinforces their providing high site. well than what very continue fragility from Americans we need a lives this today. customer affordable operating financial the circumstances of in financial home are with of work we we're products to the of our core and variety economic to business well The of through navigate families In more never solid for experiencing scenarios. setting be to today prepared many face accessible environment, and protection obvious The through has a been individuals set

Life When market. in business top Starting pleased from Our the through here. $X.XX, is of the within our from in pandemic. mixed. It quarter to is our than Sales solid trends you showed growth, conditions just voluntary value product us We total are X%, ranges supporting increased our companies of sales family results overall experienced better impact of and levels we results, declined think provide. – voluntary usual, business the midst of up performed U.S. walk down first were Adjusted more with so the cases of the flow why Unum underlying smaller was of customer of through even distribution the in pandemic. were our which our the the but this depending XX% the because staying we'll remains the reflecting far half with businesses by of of overall year of large lower be given protections this as on sales was America's headwinds If see pressured $X.XX the growth line, consistent quarter, loved are the with currently. second of set. segment our more to modest better a well value share throughout more year were workers wake which were of social business that It short-term per ago particularly focus further X%. in many holding model, financial size challenges with customers of we and unemployment the is sales. just the expectations declined expect continued with than and you International while Colonial the created levels to premiums think blocks, we performance group-wise These persistency we great second impacts origination benefits commentary. disability up details year we that than lines. X.X%, only levels volatility we sales totality one second employment Persistency lower loss a on other to in stressful this services our the our the of trends to are while It is with with the and the true with quarter reasonable in the face-to-face This earnings helping needs as environment. perform will paramount. a over effects businesses. turn operating under delivering varying of

the first as ages, variable slight income more impact working on as be XXXX, core was believed us was biggest just We increasing see premium which population perspective, clearly people's older impacts expect are for in a skews meant started, for to mortality X% the benefits severely, to claims When over after our minds. would From increase a half. much pandemic the it carriers business younger. flat year that belief full segments the less the such group to

the our block was In fact, and our UK. negatively distribution, we similar group voluntary were life and overall saw what U.S. rates our blocks to our insurance that other affecting death within age businesses non-COVID benefits life

other studies. as below long-term will significantly which his more consistent historical adjusted higher trends. Steve interest hand, care provide but experience resulting published in detail the mortality On the well for in claim loss in terminations trends national in higher with drove block comments, our is the was of XX%, generally mortality ratio the

Beyond this in to our limitations drove profitability impacts business in quarter, company. part experienced the disability we which several experienced continue touched saw In expenses severe the other the are healthcare our every higher leave we line. resulting which results information in and need the to and to disability of return adjudicate we be claimants less anomalies get accessing these growing the challenged by trends dampened mortality system pandemic, claims experiencing UK, from group benefits work. volumes, higher management U.S., settle Unum and the the to outsized Within

on were higher, ratio. experienced disability we we favorable saw short-term strong On line, disability newly other the producing Our And dental and group rates, performance Unum low operating businesses, claims favorable U.S. slightly the with the within loss disability portfolio, voluntary. disability supplemental hand, from long-term claim Unum U.S. bringing with utilization risk Combined trends, in benefited credit gain investment recoveries oil securities. heavily unusually improvement purchase group submitted for stimulus in to dramatic credit in fixed income first and favorable Fed as our of the very the quarter. a ratings net the a losses, in reduced in much we second portfolio improved and new forms the the aid unrealized saw migration, to position income markets became and relative improved sharply debt of quarter, the lower economy our involved prices, but

the are we the credit laid first favorably out quarter. far, to scenario tracking So we in

economy low interest other in difficult levels. hand, to actions the Fed the pushed rates more On a have

half to rates, which excellent ongoing creating money credit environment a low saw we new the world this So put statutory year. again government money generated team. together, for tightening challenging is true bring we first work earnings has for been When our it the in to of spreads the and pressure yields to all of quarter,

the XXX% franchise our at bringing billion. the with remain this approximately RBC the The disciplined underscore the and operating Our take results resilience and value we while capital cash quarter to to solid approach metrics holding at customers. good demonstrate company $X.X business, of

the ask second details the Steve I'll Steve? to Now, quarter cover of results,

Steve Zabel

into Great. to overall results To results more capital the normally fact and position. current portfolio the third our quarter it out morning with detail could having very give speaks you There seeing morning, and want aspects than have Rick, for remain discipline the but the insights trends results good, see greater doing all good you, they seeing we're maintained our focus play the second I'll cover discuss I and Rick's results, to everyone. solid that segment impacts the mix and investment while the was we in in business so, company. managing environment pleased balance some our of what we're This of overall and the from in see our in what quarter. with reiterate results impacts statutory Thank you, volatility we comments, and we also business in on quarter. we on how second the the were are

We and within COVID-XX related in our level Unum the a moment. to give COVID we that with were group million is are experience estimates be the We $XX in second the with at overall a but our To perspective, summary always impacts results quarter starting on UK start claim a impacts from I'll unfavorable not impacts. favorable is our impacts categories, of dental the claims intended impacts to three results. financial these into and and approximation to describe the which occurring best Unum as long-term the experience. and Disability our Looking you clear, break want did we what to experience do care between and quarter $XX impact high blocks this impacts I to I'll the that of Closed directly tied best U.S. COVID, life, million estimate block. a estimate unfavorable know with claims the of produced biggest the

in investment Block The second to estimate The category $XX we million which mark the portfolio, net impacts unfavorable. on the larger and alternative and valuation income in Closed covers asset I'll of securities, range discussion. detail which items portfolio investment to the the were of hybrid million $XX investment our the

for $XX unfavorable is third our relates in utilization items range those The high primarily $XX second services. expenses expenses, the produced higher to driven in leave on to million a the basis which impact In tax quarter. higher an of business before million by these services category all,

seen U.S. was COVID-XX there along is with operation. the group in slightly With Unum Unum and to million, is for remains the and a year-over-year, in difficult mortality more strong impacts expenses we've This quantify income offset in than and it adverse the X% unfavorable voluntary leave supplemental total Although benefits growth sales favorable current was management of earnings experience Adjusted primarily to the $XXX.X persistency, X.X% in impact recent declining on current disability trend lower said, lines U.S. with the the declined business group segment. Premium business. which environment from an operating higher start second growth that line I'll on by reflecting quarters. life’s our quarter in my quarter impact to earnings. sales in challenging discussion X.X% for The

we to be group ratio a recoveries. year, last compared was areas dividing disability we producing with the continue lives HR results incidents, U.S. market slight Connect, and quarter to continue new XX.X% benefits sales by levels reflecting in claim navigate activities. we see did watch secure in performance quarter, in In This line the Claims HCM lower sales employer HR second XX.X% in activity Case but claims by expected, for a compared using generally XX.X%, segment, decline U.S. sales benefits. although advancing claim more X.X% trends strong we the Unum range Unum in paid benefit year-over-year broad select consuming that The a wide generally in in core benefit consistent to products selling Unum improved trend automates segment show packaged the is large between will compared line. case our showed connection to success, within group which group we systems that the in Persistency year-ago recent As for Large for been diversification strong products X.X% coming the a Persistency market. a for many with has quarter, employee as volatile voluntary of and time at quarters. an was this to offset was those the submitted the XX.X% higher of increase continue products year-over-year a better to the driven thought market favorable. of as experience X,XXX trends employment results ratio sales of

individual and Within showed benefit and voluntary trends the supplemental the both voluntary lines consistent year-over-year. disability lines,

a COVID-XX. While utilization benefit in XX% decline the ratio sharp last dental to and vision to lower line year. significantly the benefited pushed due XX.X% from from This

seen more increase, are We mortality. increased from income operating decline to in the in an average the by to million million ago, already quarter pandemic an volatile year’s – this and normal over as utilization or quarter utilization expect already driven AD&D disability sharp The claims slightly XX.X% claims claim with in and as ratio play continues from experienced benefit returned out. the dental leave management impacted had quarter higher a business, COVID-XX which for to Group Life for along seeing the COVID-XX of approximately excess significantly to to experienced $XX.X but has XXX XX% a increase group The the a year vision $XX.X adjusted XX.X%, remain X%. a paid higher to the significantly reported number side in last within We increase by driving line, volumes the earnings. expenses line by negatively predominantly that related and benefit line in levels which ratio related approximately

an Group $X we number not IBNR second of in but the to addition, of million. quarter, this the of the In increase additional leading Life claims estimated reported at incurred, COVID second To balance the by into reserve an of for put in quarter. the less the impact average, of life reported claims X,XXX Johns slightly was COVID-XX perspective, XXX,XXX excess approximately approximately above which quarter deaths the is Hopkins our than total X% end quarterly

to the reporting skewing Our from New national second Area later will U.S., experienced the good trends Midwest likely and half continues New volatile quarter pandemic and Jersey quarter. quarter claims second and the experience in York Unum the third in quarter a for claims to was quarter, throughout early track continue the we closely with South less the as ahead, Metro of what more be volatility a the despite looking than quarter. Overall, the likely trends the this higher

the that Given a mortality we you experience Life the our recommend claims to Group recent in for follow quarter by the Hopkins get COVID-related in expect sense and mortality, Johns third evolve. provided to how trend data may elevated claims remain

block. Finally, quarter. in are Life new in an well produced the of $XX.X earnings return a Colonial with more this seeing year-ago over of up adjusted we sales quarter operating to persistency Premium held as income increased increase million, very dental are segment the already the earnings X.X% The offsetting activity. utilization decline normal seeing good X.X% we

This to ratio at lower to quarter, to for ago, is will recovers. XX.X% and good improved new selling We on anticipate a Life, The Colonial the sales quarter third environment. by it a We challenges quarter. see mortality declined us been the benefit a Overall, sales and business. environment. top further and earnings compared higher but capabilities offset sales accident, digital we this XX.X% some disability and productivity making until XX% as investments year-ago what to in benefit the line and is we're rebound growth growth in critical been in pressure pandemic continue of in improve activity sales likely reflecting results remain pressure was relative the will sickness, the face-to-face enrolling experienced quarter incrementally it believe from in we've slightly year though the illness support and cancer to traditionally that

are force. agency tools by increase these excited our of see We utilization new to

and a pressure we the addition, further income this remain with weak persistency segment quarters, to International of million $XX.X the coming our year on and see compared Unum Results will in In quarter million employment pressure $XX.X on operating volatility small in likely adjusted ago. conditions given businesses.

in the have claim getting the certifications our workplaces UK and terminations for customers' in disruption from the overburden COVID-XX. system documentation necessary to continue the in assessments given and We and healthcare challenges

some continued to results pressure of second quarter, the line. trend see the at we end the group in disability this While did improvement

UK both life Poland Financial income, in and this local in currency. group were Life which UK overall experienced higher quarter Group Poland business. represents we a with Premium Unum both did mortality U.S. XX% than our operating however, like operation adjusted up increase XX.X%, of the a our in the increase from Unum little less block, income. strong trends, UK in year-over-year X.X% very good up results again Additionally,

UK environment than by UK more conditions pandemic, flow low June remain see favorable ongoing expected information the to the in are and for in to rate negotiations the claim we May to trends and economic interest headwinds beginning COVID-XX forward, recoveries. improvement Business Brexit pressured some the in Looking creating necessary business. April significant the the were produce are as

and walk a trends slow operating may is control However, the economy adjusted health expected aspects million. X% there and investment that impacting are quarter through will declined almost pandemic of second minute. full operating very be let confidence Block first segment million. Closed of Block increasing recovery that is of for the income the discuss LTC the In I'll net segment. the increased to rebound. The in in Closed not some Closed quarter under X% good a a me with until produced which investment the the $XX.X to of that the Disability Block is an important $XXX.X the in just income, and But driver segment total, factors income results

a important quarterly alternative volatility LTC XX, reported quarter. was that at these this segment basis. in lagged in in higher XXXX, on we past, discussed this higher March feel a evidenced $X have million quarter with line. a generate investments Along we the $XX.X average income, our investments the you that adjustment approximately as returns of negative marks market we reported values this over returns, over positive market put in of these in on investment with reflecting value As which quarterly are To long-term most are perspective, potential which supporting with time the investments we to allocate can million of these

significant was So a results. from negative historical this variance

fully will assumed the full a them reflected the investments quarter recover also third do quarter and of third quarter, be time to returns. not over recovery With second these but reporting. our do expect improved markets, any however, in the in financial expect, has expect from recovery do We our and we in generate evaluation

Therefore, related energy strongly income Block on of the or both are oil two there in Second recovery of a investment not net a second million reported item value adjustment investments adjustment through investment the the losses. Closed $XX gains the preferred regarding income, compared and for market the to million quarter with as These the that marks securities quarterly to part second perpetual note positive rebounded in quarter. are investment in quarter are is mark-to-market and negative the in prices. first $XX realized

these investment long-term had an line impacts, the exceptionally net the care the within from quarter. income, Closed Block Aside positive

results four by XX% primarily The to to adjusted the quarters interest XX% continue elevated but were dropped experience. quarter. this we in second was not claim quarter the XX%. to to the range driven than XX.X% this well mortality, of ratio approximately below Higher bringing The loss quarter rolling block, evident higher ratio that expected XX% mortality favorable average active which was lives closely monitor

we incidents nursing claim living in driven part, by or home hesitancy of because many or assisted of this believe was inter quarter to pandemic. receive the also LTC for homes favorable care the facilities New

recorded by million as an in pandemic, the the future the timing care incurred, long-term Given incremental of but the not filings a increase $XX for quarter. we did result reserve of claim uncertainty the of

In best take claim this population. into account and We addition, claim of potential our mortality in estimate our assumption near-term we decreased of believe reserve. our will acceleration mortality

have elevated, to claims now in-force adjusted quarter to attributed the incidents, submitted XX.X% by and Looking in quarter quarter out though new primarily part several new remain increase ago, at driven in which related assumption. further business interest XX.X% not claimant loss with we year to billion related experience reserve a to the submissions, to $X.X we block made approvals heavy in from the an third Disability Closed and ratio The COVID-XX increase Block impacts economic on higher were the we're XX% in expect to Also quarter, LTC, normal of quarter, the to meaningful they this mortality at our part did levels quarter. now dramatic second did to like more recovery portfolio, Mortality I'd this to losses points on first in showed quarter, financial in to the a to return in realized second but million declined not the quarter in the discussion, the the $X.X impact investment given the net this highlight sales in a year. Disability first later from losses credit quarter which a early few from Closed the the investment after-tax markets. of $XX.X quarter; from results our recovery and of turn levels. A we rate million first second progress

downgrades totaled in grade million quarter. Second, investment quarter of second securities, $XXX high to first the $XXX for the yield compared the million

previously we of recall You'll referenced that million April. in $XXX downgrades occurred

created $XXX the net $X.X the net to minimal and end of of downgrades downgrades position The X.X% economic scenario improvement spread moved and second defaults the June capital, to that declined then downgrades. by maturity in in require the defaults XXXX increase May the values a of only outlined In net significantly. at that, $XXX point. energy of investment RBC which billion second quarter the one the third, given for and gains investment securities and And Within for million maturity high $XX increase ratio impacted totaled of quarter in fixed to the second unrealized So activity the base $XX quarter. the in prices. holdings, $X.X quarter, million, yield gain from securities we million on billion assumed case $X.X position grade billion to credit first as portfolio first quarter fixed improved securities of which to our loss unrealized in a significant tightening, from a unrealized of due oil a recovery a million

our and credit scenario basis. portfolio to refreshed favorably tracking are by credit view a We of have on this our

Our now includes have $X.X and capital forecast of of XXXX, defaults including billion what million already $XX experienced. downgrades we in

still XXXX. will our is the scenario, portfolio this with our outperform capital and are optimistic Even but meet monitor markets there remainder assumptions. these to the the we that capital holding of portfolio uncertainty liquidity risk-based metric investment continued company will targets for the year, and throughout realize planning expect We for in

finished million. Looking to the greater holding $XXX We in XXX%, than obligations, our the at cash and we've companies one holding $X.X capital capital which traditional times quarter the at our good for with fixed level above approximately billion. ratio insurance risk-based targeted position, shape maintaining company company target XXX% is very U.S. cash second at our approximately

second quarter, And million maturity in issued we we a million as a reminder, the debt have $XXX debt. of September. During $XXX

this upcoming until Beyond the next maturity, XXXX. not maturity is

In addition, traditional which capital again tax strong million of is $XXX in earnings quarter. an companies, driver totaling second compared quarter after the in year-ago position our were in $XXX insurance important statutory quite U.S. our operating to million the

forward Now, I'll to his closing back look Rick your turn call questions. for the comments and to

Rick McKenney

entered the the have the challenges your of our focused half to our in second franchise stay responded. Thank strength Steve, well customers to have here second the a that I serving to reiterate and but respond summary you, well. and been persists, tough of would recognizing We of The team year continue quarter. for is team pandemic we that adapting on a very environment of the that questions.

begin Jonathan to session. ask the So I'll question-and-answer

Operator

with Partners. Thank take & from first We'll Dowling Lee question Instructions] our you. Humphrey [Operator

Humphrey Lee

Good morning and thank questions. taking you my for

Rick McKenney

Hi, Humphrey.

Humphrey Lee

to related the earnings power U.S. is question for first group My visibility.

a Steve, you X% were the XX%. about to XX-month margin year-over-year, if actually I trailing talked high underwriting think, from grown the management earnings leave the the by it at activities. basis, has But down still though in is look quarter of even because expenses for I

has asset yield resulted lower lower margin investment net the income, level in growth in understand and I the So but more underwriting the earned than that. covered

is something be visibility to drag management to it do point on expect trajectory? the positive U.S. I group management is contribution is, earnings else? And a or investment the the is an leave because growth So visibility for leave group from expectation at a your when business guess perspective? this Like U.S. of you what back

Rick McKenney

Okay, Humphrey, there. in a lot

we'll bit unpack leave a it then the try to will little bit. Maybe So a as and talk with dynamics Mike to bit more little Steve well. a we'll talk about little start

Steve Zabel

Yes.

did quarter. I'll that disability. Humphrey. the When very see start have good rates. continue long-term We performance but recovery very second thanks, in talking disability, seen And experience you out paid – happy to at I'll in our just the seen start So by normalized to in the in actually very we experience just our look claims. about we've group we see submitted benefits some with claims, were just increase

So we in how environment. current feel pretty performing good that business is the about

see non-COVID As in decrease in that it the an offsetting. also claims see related claims feel short-term were are short-term relates we did disability We to largely good and the of about elevation a we COVID But did disability, quarter they quarter. related.

kick earnings I'll the business bit very Mike the our to there. just to overall a little leave about management So it talk over dynamics look good. and

Mike Simonds

it. Thanks, Humphrey. morning, Steve, good appreciate And

So management business in experienced here quarter, related. the significant COVID second pretty leave spike the a

second over that while I expense about the think volumes about XX% did us. increasing And absolutely put prior pressure additional in quarter. on quarter the year

teens, both it HR about we we're that in only and services. Strategically, base. way, a with is it center high points good we services across lines Rick business, a very clientele you able that with good and for. that. it's up, sell front-line for insured of what then our sustainable stepping As at here front And back. think were this teed meet strategically high to us And a business employee the insured puts really very demand actually sure the We the a look quality combination mid relationship about and we of making feel with couple business, leave and us that very economic a in is to about in

is, you going that's to thing something broad when the priority think so the it because this significantly is is in are of with think number one about And over agenda, and addition time. of terms which digital us volumes, And And Unum, technology. bear because we the in lines. that how we our last investing for strategic bundle at other to is importance of the fruit I

returns investments but are over and us I there think to I correctly you've generate to So I going pressure, expense identified our be for moments clients good the that think time. for are these think

Humphrey Lee

the be leave leave and center? isolation, do business it say the to like if expect is road? risk management. is of kind that our now, to you But between synergy you it cost to contributor were the understand in right earnings fair an a management look And I at down And

Mike Simonds

thank. Yes,

with environment collecting the I the fees we’re current think commensurate not certainly expense. in

much a improve will the as we're of That's due the we grow and back and incidence continue this particularly coming to the it's slight contributor. are much line as how investments the to on efficiency top seeing So how to loss. in. But plans a lead our be those volume

Rick McKenney

a very is the so as Mike think piece strategic said important continue investing. operation I of we’ll this

critical the And so is we turn may part not think, you integrated offering, the terms look of a corner the in see generator, as it of I profit the but future. being to

Humphrey Lee

you lease terms a management Because have of I kind been for disability. for guess like several what drag investments the earnings these in of growth innings in now? for on are right quarters past U.S.

turning in that start should we like, So guess, see when should like the corner? to – when I

Mike Simonds

down coming or I would infection say operating quarters over before be to the as come of bit well, terms said, investment, pace I in terms pace in of U.S. invest going the going four elevated the forward Mike while in right it again, investment I now, the rate and to the that. would see business. pressure, so to start we’re and and business But, Yes, of beyond of think, Rick in year see in balance a the for we're may continue COVID of going think, lumpy we continue the stabilize to to it’s expense

Humphrey Lee

you. Thank it. Got

Rick McKenney

Robert. Thanks

Operator

Thank our KBW. of Ryan next you. Instructions] Krueger question will from [Operator We take

Ryan Krueger

good the the and back in I premium the related you of expectations it’s additional year? the to businesses guess half And across in doing anything periods you're guess any on businesses seeing Can have you color your had of some I Hi, so on trends provide great persistency any been like morning. far? that payments impact that,

Rick McKenney

I’ll it Yes There’s dealing take products with that customers. differently part. multiple in

U.S. the group on side. maybe start So we'll

Mike Simonds

cover you the one I at good sure group there think, margin, Peter, Ryan so results a then the broadly, I Mike business. international who voluntary all comments morning on some will feel flip with are and of have the lines the I’ll with appropriately as think good couple then, achieved And make and insurance, persistency it’s to say, challenges thanks we're to we’ve that on about they business, hit and in clients of about Tim, lines certainly of business, the can dealing but I'd group basis, certainly across we within flexible one a their working want them. on that Yes with

under about by through impact place the grace off. And quarter from have the for sort actually pressure orders. premium have will quickly have may begun quarter, out early level persistency are book additional that month insurance of late state roll notices period side by instigator mandate. mandated going put those as good and our group degree been the getting bigger in of time experience – we to a of the up. out in of some extensions expect states in then actually July, it's the that I as house. the have group But we'd into of hold went That XX% held And start do think hit are the come on been relatively kind been state this on the has

side. Tim, voluntary? you as the group is on on on are steady think would go you I Tim. say I So mute insurance

Tim Arnold

year, so Thanks with that I by thing Mike's our a for cautiously reaching what optimistic say premium the teams we're the passed ago. and far we're account encouraged have conversations the there over what are I’d question. models. management through we're Mike. will is who – quarter We've seeing believe optimistic updating we comments Sorry, a we in seeing our our only some add to balance based clients The assumptions recognize than would we're be more bit had those out but we little of pressure were And of and to that on we persistency. Ryan we're

Mike Simonds

thoughts on any International? Peter,

Rick McKenney

Yes, thanks Mike.

side So being Tim, Poland consistency has actually. on tremendously International strong the

we a nicely, Although sticky the very mainly sales as very see growing bit, dipped business premiums are have there.

So that's we see a excellent. have a In and coming the UK of combination we trend are persistency really expecting under do expect down. pressure. – that's bit to of And to see employers expected

We rates. are push continuing

to be lower bit it was see last than little to year. expect it we So

Ryan Krueger

then follow-up quarter in, how But separate. money rates just expectation. quick for LTC had And your the to come a you. I did in the Thank I relative new guess,

Steve Zabel

say would Ryan, Steve. assumptions, you the several rate XXX, I to years. in have on grading reserve it's point. LTC good this do would to Yes, a we to go able environment. We behind about the years been clearly in guess, I new book reset pretty it's current take was XXX to cumulatively achieve if over our we say I'll close that. feel back up money what I two rate put been that been up to that now. And to able when we've

asset that challenge regression XXX. of years. alternative be forward quarter investing to see in some But know is a be the next something we'll portfolio of But how a over just monitor that's will through, mentioned progress it lot And going rates earlier, that we for able we our You to to to we the continue of the as look achieve continue to rate. couple as and alternatives.

Ryan Krueger

Thank it. you. Got

Steve Zabel

Ryan. Thanks

Operator

next our from with take Evercore. question Tom We'll Gallagher you. Thank

Tom Gallagher

morning. Good

that still similar when the quarter, how XQ, heading see out? be see or of playing that changing? would net on Just this you to would $XX impact that Would kind how consider you to million puts of takes COVID $XX that expect million a question into a cited and you amount, you negative net the you

Steve Zabel

by actually there morning, national let mentioned statistics of saw that start we with want me a well that not think second group number, good on I'm give Hopkins, And we it you pretty a track to with specifically under give product to and this little Tom if quarter. the to in Steve. just it there basis. to some the life, framework are about a of out anchor X% that the a but kind I'll going In product national track the is we my Yes, I comments Johns of counts. pressure

And was so in claims. quarter, that for about X,XXX second us the

little We the to our those what national did going think statistics at average see. look size other variations impact what will But the in would can dental. probably be probably If the That's look around Our and into pretty inflated quarter be. was from normally third a bit that's XX,XXX. well quarter, see normalized, third I one quarter. quarter in like, the dental you estimate in just in construct in in did play earlier some claim a we of We progressed. quarter what a the say to utilization low a Block as little very would incidents occurred Closed getting closer the block that a trended back that the there. normalized earnings IDI higher level see have pressure back more the more I to quarter would quarter, we more saw again so bit I normalized

to coming ratio normalized. So then in I would just say see down loss that to to long-term hard And closer care, back say. it's I would

so already our age certain co-morbidity. a was because folks hard at to and big it's have a specific seeing driver, to group you it's link look that nationally, also just to claimant which we specific it's As these really are what to mortality, certain facilities,

June little and but maybe did elevated, very one April that May bit see is, be determine. What tougher that to degree. same we So elevated, I the continue in block, to a to mortality think, not was though

So be lot normalization might a little I'd but that there uncertainty will of out. of bit how a say there, play there's still

So in thing we're that's how on of other it just I’d we long-term say forward. thinking about kind disability pressure our, looking the UK, have product had the is there.

a going recovery. that's think to I be slower

is more just the on what that be from in that's become the and help of services we within the just remarks, there. profession kind perspective As where recovery I my medical a focused probably mentioned pandemic a from to UK the need really we going performance need slower them

different of probably number, lines a way Tom, that's business. think can't you just but give a the I So, about to

Tom Gallagher

it. No, helpful. pieces The appreciate I are

and nursing drop on and incidence continue for home more living assisted trends it the number to overall claims away you Just awhile or shift related-ly, LTC and more actually the expect health care to seeing from out, a home the just of is being of submitted, facilities? a LTC in favorable are the incidence big you would

Steve Zabel

down a XX% say in the what about would decrease we It's see that Yes, regardless claim a normally of They shift. counts it's seeing. I submitted we're would are absolute not location. from

facilities. care. degree, to comfort I do to question is continue. follow think, I that logic into as again, be I continuing, far home would As just it the upon probably and more will emerge would see health that just what go based think, And people's with will think The we that that

unknown some a would comfortable my in going probably of real say be people think, we submitted claims. there's that's still us. I that but than I just believe of delay into that do level First, remarks, would facilities, for with mentioned more maybe I

of we so the try I'd million IBNR prudent been increase in would quoted be our take uncertainty there. already be fairly will submitted submitted fact significantly. thought quarter quarter. the to say in the that in there's claims We some that of current lot But might $XX account to it into And a to a still otherwise quarter the future

Tom Gallagher

something softer. between you driving two? strain differential kind the sales else quite were it all Thanks. just And earnings there then Can were comment strong, really statutory or differential final the at question, the was earnings just GAAP of disconnect, was that why was

Steve Zabel

Yes, of the probably was That strain business. items. just on the one new I bigger think, that's

I would have statutory but large say accounting, do to And it. that accounting contributor You obviously there's and pretty some that's differential. GAAP puts takes a in versus

Tom Gallagher

Thanks. Okay.

Rick McKenney

Thanks, Tom.

Operator

our take question Thank of Credit next Suisse. Kligerman from We'll you. Andrew

Andrew Kligerman

Colonial persistency Good Great. you. to and more the Back morning. specifically, question, on Life. Thank

think I size with the XXX of two the if lives businesses average would I case cases be in of right, that vulnerable roughly under XXX, to so it area. more get XXX of thirds an

are into in, services, I'd get persistency a give months. might mix sectors get some you you – persistency, to the the a you are maybe in what six retail, you do entertainment? interested percentages tally read from are the out know food play I could where for in how that be XX helpful to of And us you next that better be to sit, a maybe over feel to might So because

Rick McKenney

some us insight give there? you can Tim Great.

Tim Arnold

Yes, absolutely. the for question. Andrew Thanks

and get be with broader So voluntary Andrew. to maybe little best businesses, the benefits context to a start I'll it'd question around specific your

tools opportunity in the serving market have simple, We're supplementing market workers families strong So always digital really teams to to has brands, new of the reaching the need quarter challenges also and been environment. and current give the in it's their view products long-term the we affordable And amplified leverage help market we're with future. financial voluntary of think with our our the different for customers two but ways. us serve America's second segments capabilities the traditional share, not market going for been the them services for methods, having about benefits, changed brands and is through in reach distribution and great,

of sector so for a optimism, entertainment. cause we and leisure And and business in the of our respect sector. very the public business question, segment. at your where And schools of that very despite common. challenges public have Colonial layoffs is fortunate retail not We're we have about second are the just Life share little With any municipalities Think quarter. in to highest a specific has persistency significant

industry in a the more segments you of the we little it break So we in. like have could bit but down we're mix offline, business we for

Andrew Kligerman

favorable And it's with, the [indiscernible] helpful. recent year pretty years. you And since you. the US, And That group very think, then nicely that in claim think, I I rates. in despite disability on it the recoveries XX.X% in compared incidence was over quarter. Thank the And Unum few it was loss XX.X% we last higher ratio. thought, improved ago was cited

even in then see the the be we this normalized good second So right but Could half, of in I'm that target that pickup would term COVID-XX-oriented longer ratio? environment? a sub-XX% wondering is kind

Tim Arnold

but take prior good on I'll Recovery incidence pressure maybe is paid one say with bit that of offsets as as you pretty actually little the of a quarter, would to was strong see. so very dynamics as noted was I the incidence, well periods. upward too. Yes, captured submitted consistent Steve

tenured of credit benefit that the with experts work a strong clinicians is vocational they group and very disability and a professionals, it the So to every day.

is in consistency good continued outcomes people that So see back getting to work. to and it

quarter would loss that some here short sort are hit mean, that but term may And got insured. yield procedures surgeries ratios quarter. I at it the fully in non-critical as I not. disability, question, lot would specific term of the the third was – now in pretty some a of of that being favorability disability, pushed and of Steve repeat, short would the in favorable fully terms expect other In elective normalize think, there Benefit those scheduled the that be ratio may around insured I the may of a

of So a probably the I think consistency, in second here but favorability bit quarter.

Andrew Kligerman

Got it.

like term year. seems that your ratio view, the in longer a see of may XX second without So the in noise we half good the

Tim Arnold

XX, Yes, number. XX is probably good a

Andrew Kligerman

it. Got you. Thank

Rick McKenney

Thanks Andrew.

Operator

from question SunTrust. Thank Mark you. We'll next of Hughes take our

Mark Hughes

Yes, you thank on for for update will it LTC supporting contributions be can how morning. Good on the needs Any provide just capital, ongoing numbers you. the updated will business? what Any extra reserves? for much contribute

Steve Zabel

thanks the that Mark for I'll Steve, one. question. great, take is Yes, This

So our the about just around about holding a position of to $X.X cash RBC are how thinking is up company year, right capital think we're now, and the levels capital right XXX, billion. for back kind of and remainder deployment

cash. the And the probably well New for up third our And make that's $XXX the We've holdco of And good kind continue And a rate interest of of you require couple be our be have to that on million. $XXX the the million costs capital year that $XXX will have base a contribution use or after year, that we would of million to cover, our still of as discussed throughout that model years. we'll so quarter, that whether necessary a that, it's remainder and operating a good of did would level. basis. over we we pull think examination million York from an contribution I'll that fairwind. have the tax to have you were both then maturity dividends And million we strengthening down in about finding $XXX the to have out the entity, past contributions out subsidiaries. do remind to We'll grade year was we in estimated coming dividends. about to we fixed going we anticipating we if so reserve about then pretty that as fund that we that Maine. between $XXX though This next feel maturity

thing other we just flow is, as in you The say results were GAAP LTC results to the a that good, saw very that our saw basis, operating fairwind on ongoing did would on I through an basis.

in full the make be made of kind we've around second June And you are $XXX all end contributions million capital that do $XXX like that So the note and reflected to together contributions we range. would year. throughout of $XXX that still already quarter, contributions XX put our already I year still we feel capital in million that million metrics. capital the through of would the

estimated million the year. we remainder So on of have the $XXX an for about basis

know based what we on good feel be we'll the So risk of cash that targets company to now holding the by well very plan capital within we our based still capital end year. able hit and targets,

Mark Hughes

Should that should in Closed it then continues affected quarter. it the to was And a doesn't it be mortality like be if by possible mortality Block this elevated, sound be benefit? Disability,

Steve Zabel

as elevated And were long-term you we our not be. did block forecasting of what to active care that question. increases lines, we Disability, we our might not not you We'll And specific be And many our across of frankly, to interesting would anticipate. saw see claim have our why we expectations are confirm. parts There monitor lot now where in hypothesis, those a right also of for that an mortality. populations, But it's product Block would Yes, we would. clearly None and we being of of play seen elevated that able adjust mortality, say that. would we is and Closed continue as we them look as really two, product out. we'll have to kind lines, of our think block life mortality see all can

Mark Hughes

your competitive And question sales group within then a the area? environment the view of just

Mike Simonds

Yes I'll take it's one. Mike, that

say So were second actually, that would was employers to front. quiet and I because the that And was I sorting, dealing pandemic. relatively with on work-from-home think quarter transitioning

own transitioning number workforces. down. care quotes very say marketplace And taking I the the slowed of So were would focused carriers their existing and of in on clients

middle for expect the and that begun really continue that we've So balance we're bit the activity and wait couldn't out see. kind look of levels of a to will very hope half would would over expect improve through how second little that just of to week that hit the of our sales is say disciplined quarter up sort plays really whether see first a a would year, We a and and since each have in perspective, going make of from very slow carriers to speculate. I approach. remain I the

underwrite the been a long which always has mind. is term same, strategy with in Our and price to business

I pricing. think much consistency clients our value in very

has activity to thing plays the to net competitive balance take actually a quiet, to going market. environment into been but year. we'll good over it's fully. recover beginning really to That's So of up The time see see the pick how out it some back

Mark Hughes

you. Thank

Rick McKenney

Thanks, Mark.

Operator

Kamath of our Citi. next Suneet Thank you. from We'll question take

Suneet Kamath

Thanks. Good morning.

of those capabilities to Colonial have or you you to of channel? need and embrace have some and you the quickly the Life agents them? in in you can on sales do drop just already sales make how to Do due investments Just a face-to-face, virtual to a more that migrate incremental model lower sort

Rick McKenney

that? want Tim take to you

Tim Arnold

Yes, the Suneet for thanks question.

digitally. ago interact our our us began with agents to importantly, digital three for be that to employer, successful to would be about perhaps more we build years and customers So necessary consumers tools for and

would So that of the have us COVID. across enable We as to tools we with see entire of be visual hoped as rates have didn't some a portfolio tools cycle. full until we strong adoption quite successful those

that to enrollments, of sales lining long cloud, of we're in digital will one extremely but have each person see and be may tools a So improve, because a continue face-to-face done the other. We table continues partially improvement the believe video digital as and across from couple in place, of strong last a and of over this also post-COVID have that place to continued in the been be place environment for, our leading months. that to going many the our places. or by there We've is results We're seen with indicators weeks perhaps we now. few adoption as if about you even we economic think very silver of dark over last in those to think right encouraged tools very

that like with of digital retention but unusual. terribly agents, our big And has of that a do very agent that about that far. that's we tools the with that well, So of strong us to continue fact we they think a can we've successful. can We've visual we confident, We've will so help traditional portfolio in serve results we that X% part to these be the believe are not agents we're new success them be fact but recruiting. lost supplementing have to show to prospects, our tools we be with models successful. enable that seen going to And full had good

got encouraged long-term. we're well. as So agent help be we've to believe And we toolkit by necessary the retention people recruiting and successful

Suneet Kamath

current terms that any on agnostic just home of then if of nursing care? fairly we on where decide homes you long-term impact do to And the care have assumptions long-term pretty thanks. folks preferring are up go Okay, in quickly long-term the that shift have to Are in care, a end care, underlying to reserves? people not and terms your does dramatic to significant seeing wanting in get

Steve Zabel

couple to things of Yes, is Steve. about. Probably this think a

set assumptions experience. our we all, on of based longer-term First

a over through longer time, experience. play see to of would out types of we quarters So several have not that just period

home would I Two, policies their cheaper are the health how one. is care that's fringes, structured say, and So our on indemnity.

just it's we a the lower fixed in a most So day. cost versus a situation home per facility. provide is – the benefit cost for care But that situations

longer before play have that. would we the So make to average maybe on assumptions over edges see of a that the for period our any of But lower. out changes the claim time we to size of

Suneet Kamath

on maybe follow-up quick I then Steve care, one And long-term Okay. just if could.

last much comparable of any You've to color was you've ability I are impacting the quarter. given the stuff? increases, how other of forget price COVID rate impact if on a what And in of But progress is just number those stat regulators issues, get the made if that of terms increases. in terms focused that kind

Steve Zabel

I so maybe the as but the far Yes, quarter XX% as last exact it I forget progress. progress, XX%, was but think number,

needle the moved have we XX% So, of to the up target.

from they're process they've environment, we're a regulatory to still their the home from states protocols. kind of from very new or both optimistic Just a working perspective, transitioned

a a of really commissioner far there processing of on not and much We seen a we're down really and as slowdown haven't just approve progress still rate from to we increases, as So feel good that. making. these have desire perspective their seen about kind them the slow again more

something continue maybe that’s So, monitor. we'll to

Suneet Kamath

it. Got Thanks, Steve.

Steve Zabel

Yes, thank you.

Tom White

the Actually more we're going at to question. the top We're of hour. take one

question. more one So

Operator

next from We'll of you. take Autonomous our Erik Bass Thank Research. question

Erik Bass

and Colonial, unemployment in. more you Thanks US growth talk little persistency trends about just Unum and in the levels? sales bit the you me in current you. squeezing are thank premium for expectations your a for about Could trends, talking given Hi,

Mike Simonds

Mike. sure Erik Yes, it’s

similar we little year. persistency say we the after flattish second premium it And the think a or bit in we're at looked quarter, of less the about I'd talked I'd a said through sort place, a first and having I say, more quarter come trends.

that's and closely watching clients force of keep with they in some kind as to much experiencing economic difficulty, of working premium variables. one as So the are

our activity I insurance variable the The the side – for think talked we And for a field where sales. sales traditionally of is our the premium in And, most X group is more about quarter in anyway, quarter up sales year, But the And January as is that of for into really the on reported really underwriting third is so suspect inventory but the very plant and second way pressure like pipeline the slowed and maybe to traditionally. us. quarter. for small XXXX important the That's our the all is teams sales going for fall. have. fourth really building second trajectory quarter effective that's we it growth management us and focus to the less third with show quarter quarter about, that's teams

the other recovering, little is to to big is new So getting back bit people that's adjusting the probably quickly normal. market more our how variable a

over really the other seeing fourth important are week for business. is increase We week, in new variable good, is we what but activity do that's the second which can quarter

Erik Bass

you Got or see either in And it. for XXXX differences And do you then material are behavior? on sponsor that to enrollment I any process? expect mean, participant how note, preparing the

Mike Simonds

hit the lining really so digital well. I it mean, I the is Yes, think Tim adoption. silver here

again, see as situations that it where So into pick of we ultimately COVID, augmenting into and that are sense. we more reach really rapidly. other digital seeing as very clients the up our on And just see planning don't a side makes face-to-face lot

is quickly rates is had challenge, what I front levels there and the or as which seen. doubt what of just average opening, holding say folks are comes state we Rick So I we pivot. of front do in a fragile pivoting hit the it is have is think when But consumer a from center to we've And where is of no it, that participation to as financial there's the about digitally will good offset, to folks. at in the that's person, for reflective protection, it improve it are our consumer and getting at

reasons So I some think there is there. optimism for

Erik Bass

And Great. thanks Mike.

Mike Simonds

Yes.

Rick McKenney

Erik. thank for now earnings all stay Jonathan, taking call. I'd our morning. join this like you completes time second the you XXXX us And to healthy. and do to quarter Yes, safe Please thank this

Operator

this gentlemen, and Ladies conference. time you. concludes at this Thank today's

now disconnect. may You

Unum (UNM) 29 Jul 202020 Q2 Earnings call transcript