UNM - Earnings call transcript Q2 2021

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Operator

Good day, everyone. And welcome to the Unum Group Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, that this event is being recorded. to President conference of like White, to now Vice Senior Investor would turn over the Tom I Relations. Please go ahead, sir.

Tom White

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

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

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

diluted an or update related in forward-looking undertake of in right-of-use share of share of or the $X.XX expense and $X.XX general an million the net the $X.XX operations asset quarter XXXX per to the diluted tax impairment per second diluted statistical loss can revise most non-GAAP in $X.XX supplement UK a the $X.XX XXXX. XXXX in diluted per $XX.X are the of common or comparable on of $XX.X company's office diluted share million no compared Investors gain after-tax for on found the we date million debt to that in the the section filings quarter common second of of increase GAAP or today's the per diluted reinsurance can quarter asset remind are statements. unum.com. a early XXXX net of of our as afternoon, space presentation common a included be on included in to of financial million $XX our quarter statements made, to at share, income investment per of share. no diluted impairment million after-tax the cost Net any of $X.XX of the to common per income million reported per million operating diluted second presentation of tax we common retirement one of and after-tax support SEC $XXX.X $XX.X Yesterday after-tax be after-tax only Net for cost share. $X.XX gain realized our or our or investment publicly portfolio or second And diluted of right-of-use the website I share and common $XXX.X Unum $XX.X reconciliations common speak our per share, per related common section. rate net The Investors included investment of measures $XXX,XXX $X.XX income website leases Our a of you the and in directly obligation they realized longer after-tax loss $X.XX share. using of on today's common or related amortization $XX call net to million found measures or or any the

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

Richard McKenney

income Thank part And by year-over-year in COVID-related in morning, per These showed We adjusted am significant decline with second a operating results. very by performance pleased $X.XX the and this you, in investment after-tax mortality driven XX% results quarter excellent in quarter increase large were everyone. Tom. our to good I our share. improved portfolio.

strong results, our approximately compared Embedded decline outlook are slightly share we raising of XXXX year line in our improve, variant. Given our to in second to in growth the results and ways, COVID underlying with in per impacts, position. further to expectations, adjusted the our operating quarter that a the X% our strengthening that for in after-tax and dependent trends quarter solid mortality is fourth of our third developing expectations Delta full income this X% healthy many We pre-pandemic our margins COVID the mortality declining with we're previous for trajectory trends will improvement the capital profitability X% to out and premium returning to of of progress of on only a but believe good over played coming and levels with X%. outlook quarters decline making of to quarters. In

was our expectations. quarter which notably, to investment upside saw positive alternative with Most This we of portfolio, economy. continued benefiting from growth is also the markets areas strong relative excellent our financial in the some highlighted and returns from

operating cover experience in underlying quarterly this also out, Block we business recovery benefits Closed We trends lines, detail our Disability the long-term record an throughout And from a for these saw comments it We'll with positive sales. our level Block. morning. both care in Closed Colonial income impressive along rounding and favorable had of Life,

our pandemic. we the US. resilient, of generating of as XXXX. financial business our It the Sales saw Life quarter Life showed business a And saw in are quarter, trends model this our the improvement this year, headwinds with offer. line the the with products to income is Unum core growth of our this to most positive expected early with highlights in from into in increase of lines some trends year quite we emerging premium protection addition in positive segments ago indicator Colonial at that we very am a within XX% over our Colonial interest further that the the I strong quarter, slightly of results pleased also support pronounced continue expectations In good indicators consumer expectation basic in agency stages primary

very strong In provide we base solid addition persistency seeing remain of levels of a which with to grow. across sales the we're business, encouraged trends, the majority our to

inflation, quite competitive We back wage of to add to unexpected. core The Finally, the current environment to impacted that sectors natural to employees. and wages looking in the we're a by for talk employers income we but we in was are half the renewed you is they many for the our seeing are premium continue unemployment sharp prepare package economy, competitive higher XXXX. pickup primarily in in about prospective a for seeing their for growth, of is build first to have mix from spike as ensure good the that in And talent, world the often need benefits for there business. recognition have today

us position targets traditional measures XXX%. Turning end. cash are forward. of well, quarter healthy in of to our capital our average and companies It Both and capital insurance as very remained $X.X for for of at going with risk-based weighted US these at substantial our flexibility billion excess provide holding company

for Leverage we capital XX% enabling while our us reducing us. XX% shareholders. year approximately coupon. debt we capital quarter, to redeemed create options creates look value to a further maturity, our and us completed this stack, successfully coupon XX for This and further overall the remains a provides flexibility debt high strong extend issue for - Additionally, as shorter position

both Our organically deployment focused. to benefits market, strategy our to acquisitions. core will in is of first we We through focus business and driven to capability grow franchise growth the and where money position like the our core on continuing segments, putting in are invest our work employee

funds to We how also consistent be be X.X% constantly which have Return remains to hold lessen expect important for we key considering of month. we with a increase the challenge the of capital are best so capital portion these this the evaluating do PDR. we through We to capital. the in funds returning our on LTC deploy shareholders needs, paid how use in us, of from to share the are to an also current these overhang to option legacy of pre-funding our is we this A will by but future, block. look price to excess to to shareholders as or dividends, can dividend question

that stock. portion we be for is explore goal that funding our transaction a Our to any become help the discount And LTC option in this on in future, block, transfer risk an us. utilized should this of in reduce the would

different continue to services Unum peak early unvaccinated year that Results XXXX. and in term our for the and in the the remains Group of improvement and While from areas two looking business losses estimates we disability levels within only pointing a we the forward, to Delta clearly dynamics late mortality are months XXXX now we stubbornly to The high. the COVID-related COVID-XX. half impacted materially have updated that be see watching US quarter Recently are date second third are from by do quarter. short in younger, marginal which of counts our impacting US has second profitability pandemic. returned and the high seen the second COVID-related Life of what claims, declined business mortality is last line experienced recording population is quarter to COVID-related impacted through after variant AD&D by continue What from in to leave as the to relative we for quarters, previous that the persistently be optimistic a

at There for as population closely watch to of the to looking them own getting room employers optimism, in continue our see We role play started have in plans. more the are that we though, and vaccinated. these trends might reflecting they is

funds - capabilities we're look growth have the efficiently business challenges. run to we we've critical more workplace enterprise, As our in new taking that and today's freed up tackle business products taken we're at reinvesting that steps of our some in

offerings. Behavioral we've launched for we the Solutions, Leave During our Total Health our new logged quarter, sales first and and both

social My engage On the taken in digital are and journey. digital our our capabilities enterprise. our we interact across more new Unum Rights and and And among improved Forbes strengthen testing Life's in and will the we're with Best groups time facing Women Human providing Employers inclusion many other to for of during experience, and the the Corporate employees expand Colonial to customers. on Disability portal fund allow clients score perfect and Best place processes a and the Equally to and new named another have our technology Equality accelerate automate be receive help for Inclusion. Best And front, to enrollment to Index Civic Campaign's self-service, Work We've platforms [ph] culture real and to people Points for important work Place enhance the Employers justice and we the efforts steadily and like even steps Employers culture us broaden quarter Best happy also accomplishments the XX, We're the is doing reflect diversity These for Light, ways. we're built. efforts for Graduates. discrimination. scope New to support Unum strong These more of Diversity,

challenges propel We the the how us engagement through forward. proud our it team how half are the and a year of will of past has and us endure helped of going

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

Steven Zabel

good you, Yeah. morning, Rick. And everyone. Thank

detail XXXX, to As the focus how lines I'll are on from company's financial our of results a $XXX.X quarter. the mortality first which this to Group will Life morning, in our business Unum first I start for which US moment. will second relative income significantly the segment, to quarter compared of quarter primarily the operating I These the second second in business million provide analysis due our in with allow I'll recovering more COVID-related $XXX.X us pandemic. to adjusted line, quarter of the show results the reported quarter improvement results improved which in discuss million on

improved and Group declined first line, Disability quarter. to income in We voluntary also the while line operating compared income supplemental the from saw the

Delta will the significant seeing Adjusted estimate reported resulted and believe line quarter first generally the reduction quarter our in in largely income first to the we quarters variant, a benefit US largely US, lower benefit the improvement change estimate Unum Group and approximately claims quarter first Within second the $XX.X from the in quarter. million an the year-over-year nationwide is of of with of was second at which term of quarter. was the between in mortality half net which the XX.X%. lower driver the second declined in Disability quarter excess consistent of compared $XX.X the bond million improvement approximately and Disability ratio We $XX.X income XX,XXX million XX.X%, and will through The X,XXX approximately ratio which Premium in COVID Group Life from increased near The deaths by X.X%. quarter explained consistent compared claims due consistent likely to this for second the are level was in first of year. the COVID on XXX remain level quarter income operating the a primary COVID US benefit in segment, the observed now the Unum loss the a we for from likely the COVID-related operating quarter. to a incurred which from over We first calls. the of two to the in to the the investment that impacts Group basis we of $X.X expectations XXX,XXX ratio to This showed second income is quarter. feel persist sharp AD&D with million in compared second income,

of approximately as size results benefit to average policyholders the average younger, lower quarter more Non-COVID-related by a impact mix to shift on claim we this had XX%, incidents experienced second mortality the as size. higher a quarter little age offset quarter have Our first amounts. increased working was by relative higher point typically who in

current approximately the experienced approximately mortality nationwide in expectation second third looking XX,XXX COVID-related of the to Now ahead compared our XX,XXX quarter. to quarter, for

Assuming modest second would quarter the to a amount, $XX a individuals continued we continues to higher the Group working-age million. average improvement quarter with results in mix younger, Life operating shift third benefit to more approximately estimate over show income

in mortality emerging the increase which half We expectations. COVID for second to the have from watching are closely led variants, impacts estimates

quarter and Now million voluntary saw $XXX.X first the shifting quarter. we million the in supplemental quarter improved lines, compared with $XXX.X to in the operating second of Unum adjusted US an income to

Looking at the three primary lines. business

benefit first and in this Vision to per And improved to was business. the higher very the second group Unum recently the Disability the we First, did basis ratio second a XX.X% experience quarter of quite in voluntary Individual significant quarter XXXX. increase in relative benefit increased, the offsetting well line as quarter income compared in issued the critical the was benefits utilization and the and recorded our quarter second the pre-pandemic with line recovery the then in the pandemic. levels pre-pandemic compared the total lines of to results. of first the in in the utilization US has pleased throughout to finally, of XX.X% the pushing favorable. in quarter to quarter, in the Dental experience, X.X% illness Vision the of declined ratio quarter, from decline level Sales incidence Though The claim a first did Dental compared and both life perform we did cost experience second increased utilization in remain quarter the XX.X% since though decline first benefit the for average in in XX.X% quarter. quarter. to quarter, as strong trends block new line remain of The benefit second a ratio it in on remain second well. performance the continues been as business XX.X% year-over-year in the to the ratio The it procedure, consistent with volatile

X.X% the and markets which core declined For and large total AD&D include and Loss, for case Disability were by sales good while FTD, year-over-year. Stop We Life, Group in activity Group quarter. down this the results saw Group sales lines, LTD, employee benefit Life,

levels. We the first our are seeing lines similar quarter. markets, of the to showed group second trends in relative voluntary a which good the level improvement pre-pandemic is activity quote to supplemental in quarter back and Sales in

compared first year-over-year X.X% declined sales in the total decline XX.X% quarter, this For quarter. to the

Disability with X.X%, that in to consistent X% is Benefit issued increased into the more higher are product down our a lines line quarter take increased in year major effective relative to and sales VB longer have Individual view Unum in in Persistency concentrated and which January our sales recover. cycle for and recently sales of sales X.X% case will good Large year-over-year. this these Dental were longer quarter, XXXX. US sales remained Our sales for Voluntary Vision premium around X quarter first a days. to providing the full and tailwind for XXXX, the growth particular

wage our point. higher favorable in We this trends at from growth natural primarily seen have benefits growth also lines, employee in

Now results operating in £XX.X XXXX. UK quarter XXXX. second million quarter compared driver business, million million generated in second in the the these primary was the the adjusted million quarter segment, of million the of £XX.X to adjusted $XX.X Unum is the second $XX.X and $XX.X for of quarter moving and compared quarter to to Unum second million of our in The International which income first in quarter operating first £XX.X income in the

to We income in did the our the quarter adjusted by with underlying quarter rapid two of Overall, yields second improving in the income quarter benefits particularly year-over-year related both which investment line. benefit and our compared was short growth of from results, for This [ph] International increase higher benefits quarter. term to ratios experience less over inflation our results to second the from ratio year. our showed we the business inflation International Group course in negative factors of slightly linked compared businesses million for quarter. Higher in Unum which inflation our as certain the balance a these to with with to operating the inflation The the as in well triggers this investment on produced The policyholders, in increase net is very expected year in income UK UK the impact to are index pleased Unum first impact inflation these to basis. first a than favorable higher of the sequential this quarter net the an £X improved UK are impacted to reported somewhat benefit in the increase first also Premium in showed the out adjusted XX.X% was for distort from pleased UK, XX.X% timing in a in ago. inflation Life second and portfolio. quarter

on Unum this Looking on block. increases ongoing in-force to the of neutralize from our its significant basis at Unum rate, has rate our the this and growth local currency of benefit a with higher And the year-over-year continuation successful is highest of placement growth, at a generated in growth producing. been strong and now in-force double-digit persistency saw exchange generated growth business of we low level. X% the XX.X%, With Unum growth Poland premium the International UK

experience quarter. the in Next, the the quarterly and critical record the in first first block income we in and compared quarter investment are operating quarter. improved illness $XX.X with the $XX.X the benefit million very level both cancer and Life, relative adjusted overall Colonial to line the accident, pleased the primarily from net The also quarter, second higher mortality. in sickness income XX.X% of improved This Life in in generated the Experience results experience second the to COVID-related improved by ratio improved line disability income. with and by Insurance in XX.X% decline driven million as to quarter first benefits with was

higher a calls. from driven on increased income by which primarily basis, sequential was investment net bond income Additionally,

some with Life basis. We're the activity million we quarter, adjusted year-over-year low favorable moderates. to back as Looking experience out mid increasing we this this a quarter, anticipate excited Colonial operating settle of rebound XX.X% experienced sales to very the income range the in to $XX to third in on

we While this capabilities. of year-over-year result digital the growth, sales quarter quarter, a of and to marks COVID a utilization drive return this year our off strong sales recovery in and depressed enrollment comes as re-emerge, further face-to-face ago

comparisons to on quarters sales a adjusted of year-over-year in than Life likely show trend an until second recovered. X.X% million As XX.X% income benefited $XX almost our quarter the long-term Results the for to in and a compared higher income a million expected, segment, will strong strong $XXX.X for relative due to Closed XXXX, Block Persistency historical for income, detail results as cover to higher quarters investment operating well more income Closed care of sufficiently basis levels the quarter first underlying in at first segment. the which in with both year miscellaneous the benefits couple of a negative Blocks. half very point of both income was declined next in quarter, Colonial just ago. moment, of as have Disability volumes and levels premium for Then continue investment net from this levels encouraging I'll in this the favorable continues

first Closed the of adjusted our the the favorable block within compared the XX.X% ratio XX%. both long-term produced XX% quarter, lower Looking a quite of in expected quarter to to range loss interest Block, XX.X% results second slightly to LTC in

benefit past XXXX four quarter quarters, LTC excluding the reserve the impact ratio the for of fourth update. XX% was assumption Over the

counts than to have in these second expected. which quarter, impact. were LTC We block higher experience claims and claims, seen mortality approximately on that the though quarter in was and slightly in many higher the higher estimate higher the of continue the financial X% second claim see recoveries we incidence mitigates

year, normalize trends our interest remain that assumption range, mortality anticipate the slightly continue ratio Looking long-term will of the likely and forward to incidence we from impacts second loss for to half of to adjusted the COVID. LTC the as favorable

due the second on life in lower experience The in and block, the performed smaller retained, first blocks the certain was claims. loss expectations, For quarter cohort Disability to reflects underlying the reserve Closed retained and the we the to adjusted favorably ratio largely active [ph] other submitted primarily Block, quarter. interest XX.X% our XX.X% claims which

benefit Block strong favorable for segment, We $XX very of income income by estimate higher Closed driven will and $XX miscellaneous the it this performance assuming experience. range quarterly quarter underlying trends operating this million, both more and income for within normal claim time overall, to results. segment investment run for over was the the So a million

the second $XX.X anticipate the So the the results. earnings in trends. to quarter first operating to financial quarter's losses in are my We excludes listed loss up seeing the The million items Corporate commentary will was wrapping low of in to million compared segment on million overall adjusted quarterly very $XX.X segment release. our credit quarter. the the in half year Corporate the mid the in $XX special we we the our in to moderate like portfolio, turn second where to range. investment I'd favorable now This

of to investment-grade First, there quarter. downgrades no were this high yield securities

fact, generated capital which ratings this benefit had small In for portfolio, a us in net overall upgrades the to quarter. we

watch of today addition, list credit internal early coming concerns in now potential lower In is XXXX. pandemic was our the than it into

investment this through had this we high very release generated which read earnings have quarter, income sources. comments my our heard and of you two from is a quarter miscellaneous As level in know you

lower from this quarter, First, income again advantage rates quarterly approximately million our bond spreads. investment miscellaneous averages. we higher level many of and refinance companies investment interest calls had bond take to We of calls tight coupon a income relative to saw historical from this and quarter debt high look as higher $XX today's

quarter-to-quarter. predict from to the been Over volatile this difficult past quarters, and several has extremely

enhance income, rate lost in the environment. a interest replace investment period it today's challenge deals to While calls low these is bond current

well performance quarterly Second, positive quarter. million million expected mentioned mark million as $XX mark of the the of alternative $XX.X in million. on we $XX see in portfolio which are quarter assets, a investment I Both on previously, to positive the in marks our $XX.X strong reported the second totaled the first valuation continue quarters above following to

income, credit, reflected strong investments. This in ending many quarter the premiums. third economic on trends the for quarter's sectors, strong equity, these far, hard miscellaneous were private due our reflect quarterly to this returns strong of period returns, and favorable all financial quarter is The XXXX, to higher and continuation seeing three generated are It lags very call returns from March so the bond investment main estate and markets we a typical the XX, for reporting predict growth. of in of real returns primarily but

our financial to The for to improved holding be financial of company company cash well now insurance $X.X flexibility. the companies position. traditional in great above and our both levels. ratio providing to capital US the targeted significant The quarter, are of approximately our position shape, risk capital Moving second end billion of the XXX%, continues was a based which as

second with were the $XXX you'll quarter. to issuing XX XX-year our senior net issue coupon in included extinguishment the with the associated from debt offering proceeds And million [ph]. issue in XXXX. history. million successfully a a we see quarter, was The the debt year income completed that the the in During redeem redemption used coupon a costs our This of $XXX lowest note X/X X this debt of X.X% a issue would of have matured on

and to transaction coupon duration extend of this the stack enabled debt. us our outstanding on reduced Importantly, the debt overall our

for the past December, quarter, At of the adoption for changes. years. million finalization leverage additional capital of plan for NAIC - indicated capital redemption the XXXX we financial we flexibility. was assumed our that factor the ratio providing outlook our industry With in factor from $XXX a changes in XXXX, our which by second impact important meeting the our approximately of have An several the the XX.X%, is in consideration currently completed issuance recently been and CX the under development the plan past negative this

assumed. as had year million modest XXXX for us we adopting Moody's Analytics, plan million, which expected projected. than expectations our outcome recommendation an common very you our we of capital to a after-tax to are be per XXXX. a to the we than concluded NAIC for to with are X% $X.XX the our from operating impactful share upside position impact adjusted aware, which good per to XXXX. capital the comments not estimate to income of $XXX level for capital XXXX now As A We $XX our by less to likely previously the as relative update rather had end full X% decline diluted my outlook Previously, share. provides for year I'll close previously

a Given trends, relative and now on of our outlook revising we per the decline to strong are for quarter updated share XXXX earnings view to look our X% approximately results second and after-tax X% by adjusted upward XXXX. to operating COVID range

results. COVID continue remain Our is performance the variant to but will and expected underlying Delta to be driver healthy, important of quite an

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

Richard McKenney

you, Thank Great. our for summary second that of quarter. Steve,

the hear of environment. team, believe happy you'll continues. positioned be and been the remain we to As from to conditions, from to be the through continue the we We has improving We're company taking benefit extraordinary performance the questions today's an today. your with are operational of business well what vigilant pleased pandemic very we rest as

operator ask the be me So let to up the - open session.

Operator

with go Thank question will ahead. Please from you. And Krueger Ryan come first [Operator Instructions] today our KBW.

Ryan Krueger

Hi, morning. good

Richard McKenney

Ryan. Hi,

Ryan Krueger

might look sense premium potential little comments over? give you a you deficiency And reserve? pre-fund Could pre-funding main of bit to the about your potentially on expand the time it us frame any

Richard McKenney

Ryan. Sure,

off capital step overall come and start a from reinsurance to have at going also position strong with our how deployment. this a we very Individual Let to year but we've me take and last position of the capital back operations generated and mean, transaction. done, capital the you from that back we both have I you about Disability all and talk first –

generation that very a multiple position. the So And we've that money, business. into thing, as we the start from times, core to said is put first strong put

very we're So happy.

how Very the environment. about happy core morning. more You'll this some about responded business probably in that this has hear

flexibility growth that So capability we want to to acquisitions to what organic over have then money also we've some and where that we put see driven times. similar past do opportunity, to done

then you do our are to expectations. it to the takes excess. our relative with so have excess what And we And forward options

mentioned, state us then today, deficiency And that about bit at talked a so Maine. we You today. is start to looking with little it. on hold exists the premium to see you to the We've repurchase, you the have environment of choppier PDR, out share the reserve, that and option have with that as option we

obligation look is might pre-funding X a we And we in have year we at. of period to sense it obligation have ultimately today, there. think When need you that's will our make so something and to about company one pre-funding, that bigger think to as of that concerns which as funds a market. some time. portion of today's as liabilities this And It an And go an also addressing of and the those as LTC over area that it's about people something at to. think well overhang us the the the look about is

the or to we in So I that are you thought But middle today that. process. process certainly, that's really sizing any can't timing a give the that's today. of thought

Ryan Krueger

Thanks.

follow-up. one Just

In near to addition to that, I repurchase share as confirm are wanted that resume well? planning you term just still to

Richard McKenney

made that not We've commitment, Ryan.

for And conjunction in we that's environment, today. repurchase time with at you the on those doing the that so real the we as look a capital we three an think know, program, been And things. those that's us. at including we of I haven't to And is all But starting one right time. will this today's that excess some be - holding to to of available look in option options up share options

share to committing We but not dividend of of form today. the repurchase to a anything remain certainly repurchase. form, are redeployment not the we in in share from shareholders our and redeploying to committed that as on So capital

Ryan Krueger

Got you. it. Thank

Operator

And our Please Evercore. from Gallagher ahead. with Tom next question will come go

Tom Gallagher

to sense. up sounded until and I think And a everything said the the you've makes just I a about Rick, buyback. little tone on inclined LTC lot recently, buybacks? a follow why guess - positively you more up least morning. pre-funding But questionX. Ryan's The change of curious on Good at just

Richard McKenney

about have I quite we we're more think No, that. what been there look of you and buybacks Yeah. form trying there when have would would than modest. it, don't to anything I be we've we at And one will anything have accomplish, Tom, think as think said contemplated to it.

looking facts, we world I all into to today, us just as mean things change mill. going period of see on put so time the those we And those summer given around are cause through now are and we're as would No thing us. this all we've around in tone but at the the a what's influences. them one gone that,

the out to going the us. want But what very through fourth are options to those on available are based we So that just we're us. we're those decisions around quarter to make be third environment clear there. seeing They to have quarter, in through the

Tom Gallagher

we rates on is Or level with determinant would prudent for being consultation know, Delta also the that path? should variant? macro, considering rating by in is the agencies this what's LTC? then think think you're about really why And you - it the as and you currently Like Do just greater with regulators. pre-funding you. what's driven it of Got be more going more

Richard McKenney

Yeah.

mean, of the one highlight I summer, precipitously factors want rates, are couple at the we've process. are any interest in. our those think changed in down when of We that we're wouldn't out over starting, you make greater you our the through business, overplay But the Delta of sure I what fact books that there variant that to there. in constituents the than that, risk about of the want factors. out look course I is all that So all it this really come have come of all play which of you what at. terms wouldn't through mentioned we other. that But course has all hasn't I thought are to quarters, of seen The those next looking have risk through anything at pretty of look the that the when factor in

Tom Gallagher

guess of is just just being for Is in are Or favorable more not of to could if quarter - the that towards there? sneak you favorability Colonial I end a mentioned because the one you're saw trends Okay. the half maybe? this utilization during assuming back into during XXXX. that quarter assuming of Steve. of you fade claims July or continuation more the And the at normal the you're quarter, I of expected in return course the more conservative that to

Steven Zabel

here. Steve of higher run rate, normal It's an of a more morning. I second expected than low XXs say there. had calls kind and be that a bit anomaly. would of quarter We Good bond would Yeah. is

had I $X our think we over about million expectations.

very that of favorable half expense back also continue We into we levels the year. the had don't think will probably

I probably a about in the of that what more we've is just in low an So is anomaly, any we're long-term XQ our wouldn't I consistent the is which way that expectation, seen kind of say and XXs bit just think regressing. with past.

Tom Gallagher

Thanks. Okay.

Steven Zabel

Thanks, Tom.

Operator

question next will come our Bhullar Jimmy with ahead. And go from JPMorgan. Please

Jimmy Bhullar

Hi, good morning.

back given to terms sort just And of a claim question I - on in but obviously, had reluctant activity submissions. the long-term visit just as your is you're a what are come line, normal? in anything still care that sort mortality people homes seeing are you submissions Or nursing on So first, on seeing of claim views Has of Delta variant? the tailwind and stuff product well? to

Steven Zabel

that take here. it's Jimmy, I'll one. Steve

over the to us seen last take I'll back what quarters. really we've So five

we claimant of high last things XX% in our nursing mortality year, benefits than specifically our were As we I'd expectations. extremely you three know, quarter about say, really higher experience. saw, Number home, in one, second

that slowdown than incidents, in was lower a stayed The where facility. home at or between to reluctant pretty much sites to they second or really facilities whether potentially so saw people claims also saw slowdown transitions we really of care site versa. home moving expected thing were. it's just we people as a vice And mortality claim in in you that older from of any seen then the population, as to we've People were targeted through in pretty [ph] down last where quarters, We pretty be over block about We've continued trends, vaccination towards continue What several about to time, come those is think to that, seen that would moderate. concentrated. elevated will elevated. claimant be would three the clearly elevated XX% about think the second quarter. which When our X%

to little the maybe say second we're XX% would latter year moderate see that the would incidence more say back we'll but affects we're a bit dynamics. we bit little to But a I'd as as quarter, in how pre-pandemic of have those this last probably back And and that between see little within normal. it's into higher back does little up to that historically be continue bit expectations. transitions. incidence to those have expectations. this light we are part up what bit, of to range, new by pretty our point people [ph] to the variant might getting versus that's Delta probably So we So at year. seen different recoveries say the next moving We'll next have what think a From our where of XX% we kind far an block a trend do I'd the of the kind sites then seen perspective, be trending part different that continuing of of we we say incidence, still that but seen And financially, that higher have to wave year. to I latter would I'd open much the claimants,

Jimmy Bhullar

some work. you're any well? recently be to the cases? back just affected and increasing are terms could had that on and Colonial in that Okay. timing what by seems on people back planned that sales face-to-face, companies given recovery constructive you've their having in it the Do work Colonial, back that's sales that pushing seen the picking return comments recently activity just of on pushed at uptick given of how like employees in But as of fairly sort think cases have of to And up an then getting on COVID back been you

Richard McKenney

and the resilience to we talk very Tim it about Jimmy, about franchise. how seeing going that with we're thinking over Yeah, to I'll the of we're turn Arnold that some forward. are pleased dynamics of it

Timothy Arnold

the Appreciate question. Yeah. Thanks, Jimmy.

strong really seeing across segments all levels in geographies. seeing activity product categories. We're and across are industry we So strong results

provide can Delta not successful in we're in period what being is force We levels where agent benefits even the XXXX. distribution education where XX% of finding than virtual to in virtually strong have we retention. in environment of a seeing are XXXX. in this also any have We're have the engagement we currently kind agency really with But more same we're seeing high at our seeing scenario, We and among saw tremendous we substantial is agents states key tremendous to we agents that We're the a time productivity. are seeing that great variant, roll under a and return increase shutdowns there enrollments. and the technology

to we've with face-to-face And the years. also so with tools over incredible continue that built that we able we'll augment the enrollments be digital believe few those and last

Jimmy Bhullar

Okay. Thank you.

Timothy Arnold

Thanks, Jimmy.

Operator

come And with Partners. Humphrey Dowling ahead. go from [ph] will & our next Lee Please question

Unidentified Analyst

to my Life taking is question related AD&D. Group for first you Thank My and questions. Hi.

besides the in kind of You excess excess put $XX,XXX. in depressed average COVID, size debt roughly kind that the XXX million you what historically about earnings claims quarter still of driving quarter. closer million, in ran. your was the of compared claim normalized excess - of the claims the are for And for else quite you million, which That $XX just wondering, what to to with $XX quarter low talked segment. I would would mean earnings is $XX

Steven Zabel

count aged a kind anymore XX,XXX. are our to seeing in more of your about COVID of about did that but restate following calculation as of estimated just of of kind XXX, population are have second last that. rule COVID-related hard experience XXX what I that how nationwide different the thinking the and working year. kind it's This just I'll was say do we 'XX, the I'm I'll and what not take half on math, we're In impact of is younger, - to Steve. thumb Yeah. deaths, of the we assumptions a our Humphrey, a individuals. would starts quarter completely because

probably thumb. rule of It's quarter about So fourth a kind We nationwide level really bit. that around a in of quite of deaths. third the quarter drifted at do X% That's anticipate COVID-related had point. the X.X% we this in XX,XXX up and

around what will And probably and do third run think the through so going both earnings quarter. be, think $XX is that if million math you of be we of for fourth the kind we to distribution

of sort and earnings fluctuations as far in broader historical just of claims, the a can but bit do the fluctuate consistent Now that period that between as levels quarter just pretty see of quarter-to-quarter size to first of quarter, that and quite second and average kind period. was count thing, we

see uncertainty to what what about But resonating this and get earnings is we that's kind and re-baseline just then continue feel we to there Life Group just premium of power with market. through need is. good the the the of really of how of I think pandemic kind business the levels

into get looking we as into come to more year. probably So next

Unidentified Analyst

Okay. Got it.

On uplift the benefit seeing expectation? you're that size growth positive kind some the you side, seeing of as Can well you wage your talked forward coming through. about and of then as

Michael Simonds

Hey, Humphrey. It's Mike.

the coming think can yet is about natural and The and a and bit side wage that tick through come we've growth I through. employment I take that. seeing backs to question that in not client the up of what's on started growth the see equation And right, base. are of you

continue, So the lines. a represent that group particularly to the for continue should us should would expansion of insurance in bit improve, labor upside market economic

Unidentified Analyst

Thank you. Okay.

Richard McKenney

Thanks, Humphrey

Operator

ahead. Please with from our And Benguigui next will question come Barclays. Tracy go

Tracy Benguigui

to excess require Good you accelerate morning. you line time hold not pre-funding, that my and any PDR X Could year you voluntary be confirm if the mean does would capital? understanding,

Richard McKenney

a back at. X the the way something Yeah, next we Tracy, going we're Like would is is over voluntary. looking look we just be said, that, at it This it's obligation years year.

us. be of in to would - be timing, is put the PDR. moving it what and in would form along And still we up We're original that maintaining so that we the voluntary path

Tracy Benguigui

also I you're transaction it's upon if block potential matter? pre-funding I LTC structure, why like that funds would And PDR. contingent And may be withheld wondering or just I'm any macro suggesting guess Great. think that Okay. a

Richard McKenney

Yeah.

So no, we're what not that's saying.

in a saying think realized. to more I is would what get transaction business, long-term care as put funds our we we're ultimately that

how of a care transaction have period done how it that is the It's in and around. nature just the of not we what long-term when it, there'll it's smaller look block, ultimately, now at funding gap So time. it they saying buyer, behind that moves our terms of technical more in a be a

saying is then just there which within nothing it's now upon business would technical, realized that's capital be the LTC sale. So more

Tracy Benguigui

you. Thank Okay.

Operator

from Our Research. Bass Please Erik ahead. go come question with next Autonomous will

Erik Bass

Maybe follow first, what of just changed in blocks? up Hi, the terms you're for thank and anything appetite LTC you. risk to seeing of the has question, terms market guess, in just Tracy's on transfer I

Richard McKenney

Yeah, think to transaction, maybe of I last prospects feel I'll little we like an step perspective, to mean we I a Erik. back year capabilities about the that that that so. about you when do have from talked in think certainly, going back our LTC we've the end, bit,

is counterparty what type part bit we of a changed of indicator We come and the Our just just the willing risk here certainly talked quarter. on. that of differently as has being market it is widening some is which about any now a is we've a perhaps you of down that IDI that that. the good transaction to can little a are, see over last and I'd tell the where actually And of interest dynamics rates transaction take those have to gap. customize headwind the

deal, it about So has dynamics think recently. we've don't other talked of changed thing that's how but really the I a probably math the That's changed. to any that have only

Erik Bass

for feeding outlook in the second And these market? year? it. the of the competitive you of and are your sales how Got you. a bit And about then Thank dynamics US can talk activity levels group kind into half

Michael Simonds

little from good activity couple I encouraged Rick their recovery, the bit market, insurance competitive prior are aggressive. being in I stands levels what's dissimilar and and carrier specific coming out are seen overly we the really group you in as as about think, and because Mike. not both remarks. might take be quarter-over-quarter, that. no the realities terribly we Steve what on to encouraged one are pipeline. The do it's about a in a periods. broad through In of can opportunity question, to about we've Erik, that basis talk It different your geographies a our highlighted a see while

After probably XXXX, underwriting some we're ability the to a are competition I'd going in case ground. up players But the again, capability. guidelines. market, there are toughest. of on That's encouraged where think, and challenging pretty things looking out a differentiate play to our us I make say a, like lost put our for to large are, in good to stick number there pretty that our in and pricing investments think I the that We'll stead. about leave HR Connect is probably opportunistically

go you things the case if small small really almost you down opening we're double-digit literally which go of and are market, If nice overall end us. in into down there, was seeing well market, core, increases down are for it's into up, the linear bodes we quarter. Core the and up And encouraged.

I maybe bit market comment what little forward, Tim, Going and competitive you're the a on think, seeing...

Timothy Arnold

Yeah.

view mid-sized we a large do and we the markets, earlier, in seeing, Similar very quarter. core more the As again, Mike's we're But encouraged second very In to opportunistically the results by very by levels about side. encouraged brands. activity the half on in over by prospects seeing mentioned the the had We're comments, second year. we see bit encouraged well case we're both the across DB opportunity trends tremendous the the the I as quarter. [ph] third early we're of

Richard McKenney

the you international seeing maybe Mark, hit quickly can what you're in market?

Mark Till

some some reduction, up terms distraction recruitment which be we're Yeah. the rates, the but is clients market should hardening us seeing the are is cost terms, economies sales talking in would encouraging. UK very I XX%. say In focus not seeing and penetration. that with quarter-on-quarter, consolidation and I ourselves. competitively to of mean in that certainly the to we're helpful Poland, UK, but where of market Poland generally competitor on say both buoyant is on staff for in similar, And potentially actually, both such dollar

we're think confident. So I pretty feeling

Erik Bass

Perfect. Thank you.

Richard McKenney

Thanks, Erik.

Timothy Arnold

Thanks, Erik.

Operator

of And our with Josh from next question ahead. will go Bank come America. Shanker Please

Josh Shanker

Thank Yeah. you much. very

the the positive looking saw quarter we results unusual. I past to Block mean, we look know for when the on Are versus trends looking in So study in we reserve on frequency this the trying conclude the numbers, wonderful side, persist what some a what's impact? created should figure about before we COVID for headwinds. in-depth pending COVID LTC? to LTC LTC expect trendable and has first, more impact the to what obviously, relative I'm we at the of and analysis out a is And Closed

Steven Zabel

one to first I’ll the Yeah. and so is non-trendable try Its break experience. items. let kind down that a And take there, there start Steve. benefits lot I'll of in a it me little with just bit

perspective, we're so be. quarter. Claimant think I mentioned, much a is from pretty would can to a you perspective an high, incidence about second As from kind still where from in we loss our what mortality the running of were little ratio back expectations

Over I the that is back to focus in $XX XX% net quarters miscellaneous during net is income. our Overall, million will going of the range. to the investment Then The I'd guess be investment specifically asset year, alternative the just next and period. Closed majority that had income of Block. few into that about into next other thing that trend XX% income on we

you pretty won't XX%, be XX% little can variance would in probably so the and more unique much expectation to that consider recur. Our a bit

the volatile marks that as portfolio. said, Now this to on this pretty with tends far as be

over So higher, that we but is have over be little Block. million calls. that maybe our say, And of then Closed bit the half a I been it the maybe be would bond And probably overall, And little half time, would overall. little XX%, expectation kind $XX organization bit the expectation of other a less our were would can in a or bit for XX% than lower. to

be up, this the claims kind business of both in line earnings year miscellaneous as volatile Block be But all as probably that we're the million quarter. to in experience can and Closed of kind investment third net as well know, of and a from all very income. the that from you the you looking perspective, in $XX fourth boil things half to So for back

and perspective anomaly, the in reserve our go end. as behavior that types changes into us of question feel our viewing an into in We're and and kind process But would of in and at there. and how an have our have our by consideration of treating now think more not what's assumptions the seeing experience over normal last your really large, adequacy liability things. Now all unless claims we our do kind that we'll of all we right as add mortality all change we're about just experience about those about good anomaly their reserve, review. permanent we taking see assumption this year in year But anything through we're happened

Josh Shanker

by is And trendable that. portion, just submission, in then on the trying the Individual change way, in like the figure claims to what's is a is lower that of that book? out unusual, related, it the Again, phrasing that Disability over that nature

Steven Zabel

yeah. Yeah,

Atlantic. smaller Closed really that IDI, some we when of them, was we Block blocks claims things majority of but happened Global that pieces did two ceded One for So still transaction our block. our the to with retain we do

still bit claim of been do or claim basically pretty recovery. risk. mortality will risk, termination We with continue have - a it's it's we have some expectations. That's to whether So consistent our that

also the We life reserve the active entirety block. of retained

on And time. over performs of so we it's incidence that there, over if then quarters. volatile. favorable that incidence and really the And about the have Again, actually some active around lives last you the how somewhat can risk couple think claim seen experience pretty be

business $X the half left. over to Again, a more we a block. I Closed I But $X modeling kind just that probably year. smaller for Disability that be when good retain volatile have Block pretty new block So quarter we And quarter what entire a and we than it block, it's about of the saw is because think think the will million a of just we're million the for would clearly, latter purposes, number. what

Josh Shanker

And just to in just transfer bow in understand to Global change it occur [indiscernible] quarter, day? what did transaction? on Atlantic in put When in which did then the a first day the the

Steven Zabel

it. Yeah. Well, phases there were two of

GAAP we was So the purposes, December I'll deal. for closed year. take basically We - last of the quarter halfway you is through back fourth effective closed date when to

quarter think that we is, results. way in pretty in quarter, that results. much reflected have then our about full Phase block fourth been And our first on so the would quarter the second reflected to financial And X have

been have For really that Phase the first X, effective quarter. would at the end of

the closed really of in we the part so X And quarter. Phase latter

have all way first we to So much kind the to quarter X. the forward, was block second summarize it going is, Phase of that. would quarter to And pretty reflected about the think going have is second just quarter we're

Josh Shanker

for all Fantastic. Thank you the answers.

Steven Zabel

you. Thank Yeah.

Richard McKenney

Thank you.

Operator

Mark ahead. our And question from next go Hughes with come Truist. Please will

Mark Hughes

Good Yeah, thank you. morning.

change Do administration earlier. Sorry you recoveries disability in the Group security any line? the approving be that US social Disability behavior Any if I might claims missed the comments have noteworthy? Unum this at on the in around

Michael Simonds

for folks a with period continue solid it, We've through helpful It's work really Mark. question. expectation. clients To proved appreciate our and claimants, expertise favorable into the recoveries a that built I to of asset of and the solid. relative really the that's our and the first us to rock Mike. be Sure, claim good be and the for to deal part book staff, and

of a mentioned and SSDI, part little can bit. question, around you second it The move your only

from move seems some much staff have an in It increases the approved We pretty a for this Also, too a at wouldn't as at bit the I emphasis a aware point of bit have of around. put significant of may it of little SSDI. does backlog. we're though created seen it because working home slowdown. staffing a on

stay We've too we of close that to a to that moving bit little early help partners So externally inventory. It probably inventory that call the got that keep trends. a couple quarter, pressure but was through. on point use we of in a us

Mark Hughes

you. Thank

Michael Simonds

Sure.

Operator

go ahead. our will Barclays. question Tracy And from with next Please Benguigui come

Tracy Benguigui

a make recognizing another just want about that Thank thinking question. here… update I'm more right-sized to taking quarter. for just you've your I pretty sure you outlook correctly, had Is strong second this

Richard McKenney

in middle here out the cut of you Tracy, the question.

question. repeat If the you could please

Tracy Benguigui

update trying guidance little just Sure. the understand Yes. bit I outlook I'm sure make to better. a

rightsizing the in at I math the the your if relative about performance year. to second really Just I'm the with last half trying second of are do is more results getting the what your half? VII. seen to better you wondering first the thinking So just Or looking projected just think quarter, we've given results year? higher to in guidance on

Steven Zabel

Steve. can I one. this Tracy, is take that

our year-over-year. guidance of to original been down EPS X%. we to to December to half we've The our mortality we We've is two But COVID to would we've offsetting down, say in adjusted places. our that last was X% performed have year of expectation the changed most just there I operating book. reground, So our in second that our is with plays about expectation tailwind X% in over year-over-year in then that we is One out came the one is really what would X% consider through down factors. year so have that compare. in kind then of and well that significant the the quarter expectations back to two nationwide for X% how X% increased done that

change significant probably that's most to our the So outlook.

probably quarter So stay that performance we do at loss ratio therefore, year. Disability that guidance in back earnings to due remainder of where backs our is have our second just elevated had volumes, bit that a little it expectation the over is variant. performance of looking there. just of Delta then And And for going is kind gave the does Group in a think the thing STD to little the that right a also We of dampen we bit. the off second other now of bit would kind the lead original And the quarter. volumes the

of it. so how about headlines those are kind the we're on thinking And

Tracy Benguigui

Thank you.

Richard McKenney

Thanks, Tracy.

us team to the go of as thank through through hear take we and time. certainly up that the like year, we'll optimism lot you there's hope you it. we think joining we're this as on a I for in everybody I second of morning. the to I'd look half

soon. and talk we us, our everybody So earnings appreciate will you I that Thank second call, joining you. now operator. completes quarter to

Operator

has the And today's gentlemen, now and attending Thank ladies presentation. for conference you concluded.

disconnect You time. great lines at your And may a have this now day.

Unum (UNM) 4 Aug 212021 Q2 Earnings call transcript