Earnings call transcript Q4 2022

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Operator

Hello, and welcome to today's Unum Group Fourth Quarter 2020 Earnings Results and Conference Call. My name is Bailey, and I'll be the moderator for today's call. [Operator Instructions] I would now like to pass the conference over to our host, Matt Royals, Senior Vice President, Investor Relations. Please go ahead.

Matt Royal

Great. Bailey. you, Thank welcome Unum and fourth XXXX quarter Good to for Group. earnings morning, the

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

from actual may statements. result, by a As differ materially these results results forward-looking suggested

could the factors to results Form statement and December forward-looking section with titled that our and are Risk differ Exchange statements our on Securities cautionary on XX-K and our Information fiscal Commission, in annual Form Factors also filings year cause XXXX, concerning XX, appears the subsequent the located report in reports in quarterly for XX-Q. regarding ended and

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

the of or investment common cost fourth company's investment quarter million per XXXX. reinsurance diluted income income from or $X.X on after-tax of Yesterday fourth and reported quarter $X.XX XXXX $X.XX Net for included diluted common an of million of $XXX common per $X.XX the fourth gain share, amortization $XXX.X afternoon, of million XXXX the portfolio share or net per quarter million – per net share. Unum diluted a million of after-tax common increase of $XXX.X in share the or $XX $X.XX diluted the

loss million share. diluted million fourth portfolio Net investment $X.XX after-tax XXXX a or the reinsurance $X.XX quarter per $XX.X of amortization per company's common of or income net of the common after-tax diluted $X.X the on and investment cost of share in included the of

items, XXXX share, these diluted fourth or quarter. after-tax quarter of million diluted Excluding in increase the share common common or ago per income year an $XXX million the $XXX.X per was from adjusted in operating $X.XX $X.XX

Participating Unum's and Operating Simonds; Rick as heads Steve Mike Voluntary are as Officer, Lines. call CEO, heads Mark business; Life morning's in who President Financial our Chief Chief Benefit Officer, Till, McKenney; and well Zabel; International this our Unum Tim Arnold, conference Colonial who and

turn it I'll opening Rick Now to his for comments.

Rick McKenney

you, Matt. Thank good And everyone. morning,

couldn't of throughout be As and we with trends company more the we our head into performance XXXX, pleased XXXX.

These of employees levels. are operating and Our team protecting helping XX,XXX recovery accelerated purpose the tremendous, our delivering by working have than of been pre-pandemic dedicated on to more highlighted world. record an results

of benefits on by strength focus The needs this longevity in combination serving driven industry-leading workforce. managing is is of our franchise our employers by a of It employees. innovation expertise a driven and along business, singular the with their recognizes and employee a that changing

of million total full $XXX XXXX. quarter The record for were is continuation billion in the a $X.XX a year. earnings on fourth per operating and operating After-tax adjusted the from on year the built progress. of XX%. increase We year the this of share full over an fourth XX% quarter with growth of months first nine annual was earnings good the momentum This a

a Looking is quarter. rate constant a in X% X% to the fourth our year. per nearly expectations of This basis grew premiums of at line, at the top to businesses core trending for our our long-term currency on X%

products sales all in-force was healthy Persistency strong line further the business and aided performance and premium of top growth across our momentum.

constant Unum XX%, currency Unum year, again, basis, driven on the grew by consolidated a International. at of For sales and full US a rate

back to Life's in XXXX rates. We as Colonial sales X% single-digit with are see get growth also encouraged they growth growth to high

our from of at across despite our very core healthy expense core full and Combined lines levels. good claims; pressure benefit XXXX, our in our prudent And remain ratios XX% businesses some the management the ROEs. business, underwriting have environment, for margins was customer-oriented to kept the all of inflationary XX% businesses year finished low up year from earning the XXXX. for Our ROE mid-teen XX%

every have the service we examples services that to employee to employees. recently, rolled growth These benefit our with overall all our of critical with of part out customers a relentless employees benefits Leave, more employers market With help we for the line both Connect, results manage modern of couple They like customers are are on serve broader look continually importance platform which employer A they to and in Total we be beginning is from root employees. the leading and employers attention Total in to important excellent digital how at aspects top utilize connect improved has in management XXXX, line would our taken and market not years, several the have package. positions. of bottom proposition of include and Unum the possible our leads, a as examples without been that also How HR at value in Leave. It building better aspect.

the continue actions, While to running operations our Closed the Block. core risks of which manage are financial execute we well, effectively

earlier changes. build interest have rate of future our we rate we program, pleased are and exposure very to XXXX These been reduce upon. which long-term began the actions which continue For continuation in care, hedging with to

multiple XXXX on provide have increase approvals also XXXX. increase details on Steve stayed recent moment. hedging of and program into approvals regulators rate will premium a on and just achieving on rate even of with have The additional appropriate We approvals. activity premium pace working the and we remains expectations, in throughout approvals both focused received our

drive is Closed a The our our earnings basis which strong also This created many position, resiliency our quarter. rate cash positive operating level helped to capital strong trends business outstanding to model's statutory that business close helped of billion income, $X a Block GAAP year. on of improvement run back reflection and also A pre-pandemic have drive and capabilities. which in continued generation another fourth the management its an to strengthen is prudent core

through U.S. Risk-based quarter, capital in to holding highest is us XXX% our fourth liquidity repurchase. the excess we've continue strength and end Both traditional $X.X balance remain pursue leverage for and of the our capital some gives the our at flexibility levels. strategy to Combined company below of approximately with seen. companies insurance sheet levels billion to share XX%, targeted to increased of of and our of our well shareholders dividends return the tremendous

out a market favorable operating as Coupled benefits strong to with industry-leading purpose-driven, risk of XXXX. advancing summarize, capital into profitable, building we To our come are employee momentum as and head we on environment, prudent leading positions XXXX. business position position our continue in is we management,

of forward meeting look you our end at through the are at to more optimistic why we upcoming We depth investor taking our on business February. and

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

Steve Zabel

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

by performance We are financial headed fundamental and solid our encouraged quarter strength, momentum provides the fourth very into which in strong XXXX.

we mid-XXs, disability fourth XXXX. loss ratio As the into expected, disability the strong in group remaining continued quarter loss trend to continue expect with the group a trends in

all a comes constant from and We consolidated our growth, continues levels pricing growth line lines. advancing of XX.X% aid to Externally, across in which results. renewal product the rising environment support favorable for continues basis Natural currency lines, steady strong our persistency increase also programs. achieved growth while on top employment operating wages, maintain and sales group to

$X.XX after-tax As includes over Rick mentioned, operating adjusted we full This the quarter diluted operating per after-tax in ended with of rate share. adjusted year an of fourth XXXX. million XX.X% the common or year EPS $XXX.X growth income

foreign rate to The dynamics, EPS. $X.XX between of rate XX% and equates was Given approximately effective of fourth our the after-tax expected our difference tax for effective tax the rate tax corporate XX.X% quarter.

For the effective our full was tax rate XX.X%. year,

Earnings Included future $X.X also impact reinsurance of of treaty in million operating providing our return. this attractive recapture, from added periods results action, was to expenses. a illness benefit rate critical will the an in which

XXXX XXX above Regarding ratio or basis expense XX.X% adjusted was operating year full expenses, points operating XXXX. the

recapture, our been estimated range. reinsurance end would the XXXX Excluding of the the to closer have result low

will describe results, our fourth lines results This have on operating XXXX. adjusted analyzing progressing. focus been review I to compared primarily how quarter As of business will to I me the third quarter our allow

as with the our performance and more growth, to on sales comparisons. will XXXX return I business to quarter expect COVID-XX for premium focus I continue given items, line to progression results first year-over-year the of such focusing endemic For results, on year-over-year continued pandemic.

quarter to in earnings the I'll with our to in fourth third begin operating by strong operating segment. another quarter. XXXX $XXX.X million Unum primarily from income line. the $XXX.X very driven review third decreased the $XXX.X income line quarter. income million levels XXXX the disability in the quarter and reported operating US This quarter in disability compared voluntary operating million despite The my was compared strong lower $XXX of with to lines, performance in fourth the of Adjusted supplemental of the group group adjusted of of million

continue quarter. XX.X% recoveries claim and fourth earnings to benefit Favorable the a ratio for drive of

of XX.X% benefit adjusted XX.X% XXXX, year full in the XXXX. our was For to ratio compared

is $XX.X benefit the the operating work Life very continue fourth are this declined incidence levels our supportive stable with block will million group of modestly We ratio how $XX.X from trends, pleased And for compared and income with third performing. expect to last Group mid-XX% AD&D staffing million in environment. quarter. in in the disability adjusted range the Results Unum US for and quarter, XXXX we given XXXX given return quarter to of improved

earnings results claim $XX.X $XXX.X per benefit from in in U.S. the close quarter estimate the the result size as a Unum the of ratio our The increased $XX to fourth end million voluntary pressure the approximately million, impacts XX% third related line XX.X% remaining expectation to for quarter of to COVID of third We average Adjusted compared quarter. quarter. expectation. long-term slightly to with were operating on million the in supplemental were significant that overall and continued higher our mortality decrease adjusted

XX.X% reinsurance the as vision were a in a of well $X $X.X result this reserve driven for treaty by million XX.X% individual line slightly unearned within disability change year mentioned, illness benefit results Results period as ago. quarter the the recapture the premium of ratio same As dental of and the XX.X% million. decreased to third was the above critical estimate in quarter as the to in third and compared

stable with to continuing. now saw in premium group months income was for compared on products quarter was fourth change nine year-over-year the growth, for quarter year. quarter helps and within third Growth performance tailwind an the to the block generally variation a Natural business XX.X% X.X% reserve X% and individual growth the year-over-year in for year business. adjusted unearned to of of fourth at continued disability line of premium X.X% as full premium the increase Unum for strong support for disability Unum first in in group particularly our the solid with a growth we Turning year-over-year by the minor XX.X% only strong with momentum Persistency U.S. XX.X% Sales our experience group in the the in the basis, disability with fourth the in for quarter. drivers, in total group in fourth quarter. estimate the remain trends premium U.S. of

for quarter. XX.X% operating £XX.X The third third compared moving Unum fourth million fourth improved in for income in exceptional third results adjusted million in the segment million UK operating the the lowered quarter on from the quarter income UK Unum million $XX to $XX.X Adjusted increasing compared fourth So quarter in to ratio to to to reported experienced XX% for the quarter. Unum the benefit International quarter. £XX.X the with in

the ratio levels As has happened in in reported the the benefit quarters, experienced quarter. UK inflation few high of distorted the past this

portion a gilts. of an which reminder, inflation-linked are rider, in a UK policies backed the As significant inflation by have our

income The UK closer link we was receive impact, not the adjusted target levels our £XX the per inflation-linked long-term high million benefits removing income to the the inflation. gilts When is earnings are which from operating Unum capped, of quarter. benefits very in periods of but inflationary direct

with show a expecting segment businesses Unum while Unum business slightly Both International on the we're strong generate fourth Premium a dampened our XXXX local and in exchange growth inflationary Unum annual year-over-year generated Unum impact Premiums on movements. of in income Poland XX.X% growth in by rate for grew quarter a a growth local currency. of year-over-year our of muted the XX.X%. basis positive UK XX.X% year-over-year up currency first operation Poland the to For to levels UK. continue up basis. quarter XX.X% Unum basis, continue premium on UK sales increased

the increase Life to benefit third for fourth the driven income by third segment in compared Colonial XX.X% Next, of ratio quarter $XX.X million increased was million The adjusted the to the XX% a operating quarter. to $XX quarter. in in compared

previously premium For pre-pandemic take Colonial it of have to will return couple indicated Life's top to line we growth years levels. a

trended result income X.X% than downward quarter's This slightly premium lower prior with year.

However, X.X% higher Sales XXXX did X.X%. grow higher the and quarter compared prior year to to full quarter in XXXX. the year full by income year premium were the fourth for X.X% compared

in good premium to income made progress We now this full feel XXXX build-back with continue the levels business XXXX. X% very to we've pre-pandemic premium with to higher than for year levels,

favorable our experience the within other Closed to Block to Block transaction million benefits million disability segment the individual cost all adjusted individual by the of compared line. $XX.X income operating related quarter, the of product excluding disability $XX.X In in amortization in Closed driven reinsurance third was reinsurance

also miscellaneous million will which premiums million compared investment investment we income, to speak $XX.X investments earnings more few and lower I the call third in This to $XX.X a includes moments. quarter, bond our alternative of saw quarter. from in portfolio

increase while remains The is level update interest-adjusted care XX.X% expectations mortality the in benefits due take provide XX-month third interest-adjusted ratio in claim below experience, also an to quarter rate program. performance XX-month our for quarter long-term loss long-term loss basis. XX%, premium stable moment For the would like XXXX. the of on ratio ratio long-term I XX% XX% range of compared a rolling with our our a to early an LTC between XX.X% and rolling of on to at to remains and this consistent pandemic-related with care

We justified continue in to make achieving rate regulators good progress with care. our actuarially for increases long-term

pleased significant total $XXX approvals over start tool value. we program state an rate our net progress another increase just single a are value. of present increase roughly approval and making. are is net worth of for received $XXX XXXX, with in the managing block, million million we we This risk totaled very this of the important XXXX And in present In of the since

primarily income my the $XX.X third segment the up corporate corporate commentary operating million shorter assets million compared the and lower wrapping debt duration to quarter, So driven in interest quarter's on results, owned loss was by $XX.X investment financial on adjusted in and the expense. higher

yield, new and Purchases be yield money to continue the risk see above to environment portfolio quarter overall Moving increase portfolio in fourth levels and a now an good investments; we to for at we management. yields made quarter. in experienced continue our in the

our in for program of we ongoing investable are start flows with to addition, hedge we Since of care. program into rate In pleased bringing XXXX, XX% an the the the $XXX to estimated treasury entered expand program and cash long-term progress additional million continued with Unum near-term the America. interest approximately of hedges,

to the expect We hedging expanding over continue program the coming quarters.

risk provide management outlook interest will rate our on details strategy meeting. our We additional at

in to million $XX compared longer-term Miscellaneous our set $XX alternative million for to quarter, income Despite expectations our million third market in moderate to the from million of this expectation decreased to to of below demonstrated resiliency. quarter fourth and investment the Last million diversified we assets, $XX.X credit volatility. of income remained earnings $XX real income volatility, positive, portfolio posting equity our portfolio due its as quarter. $XX.X

performance. will remain looking So income asset directionally market correlated alternative with ahead,

beneficial activity run. income asset in lower of net $XX term with in portfolio we our maintaining investment $XX For in higher-yielding bond the in is yields alternative calls investment the the million. rise reduced while bond estimate income to miscellaneous of securities the quarter the income rates long XXXX, and XXXX, pressure rapid interest to Likewise, traditional first call resulting million short

around take continues wanted highlight the to recession, a moments discussion investment of the strength likelihood few of a our again I portfolio to management. As and

the period, is Our not individual through level and we Stress a if material. investment economic outperforming a of have at and impact modeled well into is issuer long the is move benchmarks the history portfolio mild-to-moderate positioned we recession cycles. of testing a weaker performed

our quarter, X% at as and to Also, cost Further, of investment-grade our in portfolio. million neutral just end $XXX actions from under XXXX decreased the of last experienced under net upgrades we of X% amortized at fixed the XXXX. maturity below mentioned exposure XXXX fourth of in estimate within we greatly to investments rating end over the since net quarter securities

capital expected, levels flexibility. and are As tremendous our offering our excess targets well in of operational needs,

quarter. the holding The weighted of our XXX% approximately and XXX% points was at CX companies strong third average the which the the and at from XX added billion, risk-based mortality remain $X.X company primarily of capital fourth changes, RBC dividends billion traditional to respectively, ratio compared for quarter at U.S. robust factor $X.X attributable The and subsidiaries. were the our insurance increases end end liquidity to of approximately

amount for made Specifically, First dividends straight second year the of in million. we Unum from $XX the

were from quarter and the full million fourth paid business year. Dividends our $XX the totaled Unum UK for $XX million in

metrics capital our income benefited year. after-tax for the quarter operating full billion year. statutory $XXX.X earnings have $X Statutory fourth we million in from was nearly saw this rebound the Our the for and

the Looking of quarter, paid repurchased this at million million in capital fourth our we in $XX.X deployment and stock $XX.X dividends quarter. shares common

dividends the million our million into we which and Fairwind were year. For $XXX Capital million the subsidiary total million our million coming the quarter, is $XXX year, contributions purchased in million, expectations of into for $XX full fourth year the of stock. $XXX the original which below brings to $XXX.X paid the in $XXX to

outlook business on our to plan on our provide the February we XXrd. views across ahead, Looking XXXX meeting during

be and first the improvement results pronouncement. targeted long-duration year's accounting will outlook under new Next the

statements accounting financial has basis only impacts this to and described statutory we've As cash flow economic GAAP business. or in past, the the applies to no

LDTI's impact in I'll discuss about the will two Unum. provide more to detail, we reminders meeting While

income A accumulated of comprehensive adoption, estimated the yield reporting as our adjustment First, as which – date. in have bond other be investment in period reporting filings, previous will based on and single an there portfolio we and rated difference a the of to

Second, earnings earnings relationship to we XXXX based higher prior on and continue on XXXX under recasting LDTI, our and year favorable will see expect a forecasts. based financials, current

the in wanted has year I to had reflect closing, Unum In XXXX. on incredible

in Our laid initial vastly out of after-tax Day adjusted XX% [ph]. Investor the at year's EPS we exceeded XX.X% last growth expectations

narrows our capital help year return items a these reduce for levels, LTC historically XX%. through at to the of risk block. we Our which drive strong that the took total ended range in metrics Execution program, sector-leading of and hedging opportunity outcomes of the shareholder

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

Rick McKenney

Great. Thank the morning. you, time do join Steve, appreciate taking this to and I us everyone

for out for meeting updated month. scheduled that our put more we discussion outlook and business me plans capital the entire dive one Let deeper a our later of exciting advertisement additional look the meeting, outlook for ahead. What will this year for strategy. year like provide our At into

So questions. we to your are to here respond

the to it the I'll and session. turn over team the operator Q&A for

Operator

Thank [Operator line from Burdis Wilma from question of the Instructions] Please you. Raymond comes ahead. go James. The today first

Your line now open. is

Wilma Burdis

morning. Good

question premium due my strong improving increases are there And You LTC got in do more is; to rate increases open to just pipeline? inflation? and more the seem regulators opportunities rate

Steve Zabel

I'll And Steve, back do take Thanks just probably about Wilma. that first rate Great. just programs. It's is increase I'll talk for and step expectations question. our thing the

value of reset net present an program. basis set of at LTC, reserve that we $XXX XXXX behind our for million GAAP we go you back had estimate If for assumptions to when right

mentioned, year against during you including we carry that then that the I $XXX achieved the estimate. the end around If year million achievement that we're of that XX% forward that at through XXXX, XXXX

of that. the XX% that to the carry in added If year another to first of you approval month we that of this received achievement that XX% then forward

are. tell feel So pandemic, really you we've we, where good we we good about throughout the seen I'll responsiveness.

states approving are operationally change of calculations, will interest rate change with dealing about we program, But we view those We in And prescribe [indiscernible] working take in keep were few But that a and use a actually those. to states haven't are. very for good an still was has Many good There there's but have we today. go, it we and time regulators. tone still justified so less the few probably amounts, where a and feel philosophically, really work actuarially for are and where years those how We approve and the seen these through increases. a phased the rate period rest haven't seen really so continue to to with feel we'll good impact quite in very they ways of they those. COVID. a the interest us It for that that the in change – a of rate. you very that about states states

Wilma Burdis

to is inflation Thank then you. block risk? Makes sense. And LTC the exposed

Steve Zabel

to we not. It's rates to XX% money put into is risk. not it But to block of it's Well, itself, that indemnity. when portfolio. comes with we care inflation work new cost Obviously, our

And are daily basis. a contractual so the benefits on

so to really not subject of we're what inflationary And is care periods. actually cost the in

that. It the going of pretty feel about we cost about our good as variables think we just really claims So forward. eliminates

Wilma Burdis

Thank you.

Steve Zabel

Wilma. Thanks

Operator

Thank you.

Our go of today the Bass Research. Erik ahead. Please from question comes Autonomous next from line

is line now Your open.

Erik Bass

time? I the benefits you structural the you by persist mid-XX% ratio range ratio to that was little the the normalize? expect disability some hoping on group about labor factors Or over and Is in remaining you. as more you to what's market future this benefits driven do Thank giving project upward pressure the being in for the expect could talk bit adjusts confidence you pricing a XXXX. Hi.

Rick McKenney

It's Rick. Great. Erik. Thanks

an it overview kick we'll over Mike. and to Just

I our our disability part line. franchise think important group of an and you highlight

today, we into some persisting about those course year. And can as of factors we've over and see so certainly as XXXX we the very good well. saw results the And of talked

line business. maybe of perspective you of broader Mike, And a can that give

Mike Simonds

Thanks. Sure. morning Erik. Good

period we incidence really on today pre-COVID around the maybe a And sustained is basis. saw the where go a have pretty just abate. they quick one continued bit were Just we elevate to down see COVID to where through those environmentally them that claims sensitive

have that's good point, coming achieving really quarters. stabilized we're So something us is recoveries that that point currently outperformed likely then a coming that little recur bit at quarter estimate that's of a like confidence feel straight And going forward on that in third claims gives the us it in. strong, for new those that have the And believe at and our expectations. really we this has levels that to been

range. the the us bit two of kind would segment find business. two, mid-XXs. the come a our client good we that target ourselves next question, things in as think And a we of renewal next a years so. at to moderate of combination do in spot group growth for point that low-XXs level for your disability quarters. three book level And up lands So in several view. be time at experience over of with good those comes kind like through to We the point time, can that's or estimate healthy It's to you would that over little a but in said the expect Erik, We high-XXs the of as a from

capabilities in competition market, think Rick some sort the where So to we good spot story able relative about that outset. of we at are tell be to of we're highlighted our in to a those

Erik Bass

how benefits you have? NII think a the some in more decline capital need hoping of in was and of reserve your could deploy the might that current give you. get for you that rates then the some the event maybe more to sort LTC talk future? scenario, And Great. you about benefits calculations you the the Thank I bit just just tangible capital about confidence of protecting the this stress excess you to a Do company. in i.e., in hedging; And is little this also you level switching

Steve Zabel

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

yields If management. you get money a reduce it this, purpose program the with like down real want risk We hedging we're care. that it's uncertainty around in to pull the specifically long-term to to future, able of the new

very we important. that a tool is So risk management it's think

that think scenarios to you into were about for we types how that of if benefit incorporate through that been down of our placed clear things. because more have Now it the rates did that's and reserving some they of able upfront First to that, have those was Unum, some with pop constructs

was how kind reserve of to we testing about asset benefit So thought there. immediate adequacy that an our

us With it protects deficiency the premium reserve, downside scenarios. from really just

off assumption you treasury experience. of rate new trailing As our know, a three-year money works rate

to what able really our we're the money and off cash around rate hedges block. get take assumption portions those certainty flows those that so And coming more new for of is of

view So that protection. downside I would as

And risk purposes. that idea again, a different benefit give for scenarios, will under better I of management we more little really paths. of quantify different what you part want what that of is do Investor interest rate of this really as Day One the that is things a the the the think to impact doing is. bit But that to fundamentally for market we're really show

Erik Bass

Perfect. target and there a program If more; Thank the hedge to build for squeeze can want to. one just how you. is you I much

next, done see of that years you about you XX% to? cash So the you've think there can level or Is so. I I said think, for that five a building flows

Steve Zabel

something a happy about get locked but February, that We're just we where to today, with say bright expanding a line think Yes. down would We we just about are specific don't that time. target. on over trying little we thinking to planning I can we're how do really set to want that's number. we're not expand. bit later and can I'm talk in more continue to

Erik Bass

you. Got it. Thank

Steve Zabel

Erik. Thanks

Rick McKenney

Erik. Thanks

Operator

comes from of question The Please the go today you. Thank J.P. from line Jimmy Morgan. Bhullar next ahead.

Your line is now open.

Jimmy Bhullar

Hey. Good morning.

disability So market. competition in first a on on just the question

renewals of you little prices what been did in and see you your see Did any good given very going obviously have results And indication own most do your your any so have just your with bit book? of margin? you peers. one-one? a strong So for reflected down Did the prices of that in

Mike Simonds

to was Hey those a I'll X sight take a sort Jimmy, Mike. block line quarter managing And program we the above increases year, it actively or just it's that and through both as renewals. our that where need rates in kind terms have at it successful we little of of you're desired good having about because January one. persistency bit that But placing of last talked expectations. of put we were on a that

that being So in rational market we in pricing outlook with the major the prices aggregate how make sort we on up set. would an of line of sort and see that have we the costs as pretty levels

that to of of our to here sort like sales really outlook looking XXXX to clients new coming feel dramatic in their of We budgeting build We year, pricing terms we we're our on In think established the pipeline the try our the year-to-year. not we I in a – consistency business, new continue momentum stance. good in from pretty position to changes for value at processes make standpoint. a

that So be any so at versus will wholesale. margin we changes the more make

Jimmy Bhullar

Okay. benefit Or deal viewing has still tailwind labor seeing it And lines. And up more realize then a been little it's I big have just product on a been picking that for across There win unemployment not bit. assume the has, or is labor of your of results mix, a a a Obviously, we on into should number market. of layoffs like your market part from big already tailwind or peaked? business the XXXX? – are results you as the are you your but that signs the

Rick McKenney

Jimmy, Rick. Yes. it's

what to terms I have looks about of the step back like. think in think and it forecast you holistically

news of the those and I what If think particular layoffs, in I'd we've you things. seen any don't isolate look the at

of sizes to we of You the hearing broader case. at about employees about with in more that all some the way large are base very the all And the up have that's case what the large employees XX cases. very small from think you're ranges

haven't also the over thoughtful coming today, impact so what very about that be And may but we felt we're horizon.

you as months looks XX talk as and fundamentally months, that labor think are – XX And growth, that take underwriting an in increasing amount well when last our both so wane. may of an you markets business. we last certainly about overall from the the from to; from back the employment, I'll wages But good the recession over what certainly, to premium have benefited over last we like

you'll that the work good grow in our still levels, that persistency, some margins, although of, maintain we to that of that pay and but through premium any on daily about our – cognizant so announcement we attention see nothing see. too very to and feel good of type we opportunities so and we And much good

Jimmy Bhullar

Thank you.

Operator

The you. ISI. next Gallagher line question the go comes from today Please Tom of Thank ahead. from Evercore

Your line is now open.

Tom Gallagher

morning. Good

worse life. that coverage do in is function up? it have per life whatever The average face higher at analysis inflation, of a wage like? natural of you group first claim amount all if that that's insurance of I on would to The coming that meaning inflationary the question you kind actually was say – has gone at block you look coverage Or is your size, in have looks

Steve Zabel

structured, are attribute lot Yes, those how one. We I to average that you higher attribute salaries a indexed normal size. Tom, And to products take it I in can tend Steve. inflation see of necessarily. it to some think I charge salaries wouldn't because are about it's those volatility to benefits would we themselves. just for when the volatility there.

it. getting And for paid so we're

affect shouldn't loss necessarily. really ratio it So our

attribute just up around normal and period volatility, this I the to ratio So loss XX%. was

If Life, we we just loss be probably would XXX that, mid-XXs Group but I something low-XXs, impact is million mentioned we think a that the of the off, take guess, bit that ratio ultimately in probably then, you longer $XX in I to endemic down under will had that, block. that. of more deaths I still think more in life wears in my in hopefully, do it over pandemic remarks the claims take do And realistic. out think time,

wane So performance, will that time. to that over our still is hopefully but attributing

Tom Gallagher

Did to the just And would I to make out. I heard play you in then sure it international, bit XXXX? that you QX? benefit say a back £XX early to you want inflation to expect revert inflation this into is last Or likely to There those way expected comments. I in longer understand you. big to earnings in a related Got was spike

Rick McKenney

international I going who Yes, turn I'm operations. over to Mark? question, runs appreciate that to Mark it Tom. our Till,

Mark Till

you, a it is, performance business. we've think would the strong Yes. The I way in Rick. Thank about underlying firstly, got

because for a the X%; inflation used cap of margin high we creates our October we UK, the we where XXXX. had it inflation-linked at building they In in at UK, in the Secondly, us. inflation XX.X% have peaked benchmark benefits the has course very are through

starts that course the We inflation during XXXX expect rate the downwards. to of decline trend as to

halving the government a in of have inflation We stance UK.

So be millions. therefore, you should in off generating something the of our the should business coming the start to XXXX. this we think long-term position during half low-XX see it – probably with first And during

Tom Gallagher

Got related earlier you Till, you. just that, some XXXX? into favorability persist level to the of part to would of expect And

Mark Till

it as year. Yes. half in a it first now the of In down from a long-term XXXX, towards average. what's starts XX We'll benefit the and get of the probably that bit more early part trend

Tom Gallagher

if in a I only most long-term in. of the NPV I bit guess certainly got just a XXXX, a XXX Got Or backlog? do you very which surprised sneak XXX on more there million But could increase I you. one increases increases? one what's meaningful the then little of XXXX? your care rate you interesting. comments proportion. of success January state, The just million I in And this big Would big thought XXX, on was you little is of Thanks. makes going number, rate were think Was other can for a you give expect for about there? big one then

Steve Zabel

it's Steve. Yes, Tom,

Tom Gallagher

I Sorry, XXXX? of for most meant

Steve Zabel

one. This yes. XXXX, big the is

states their time. in lot requests states have lot phased of approvals that in of that those meaningful, in a of over most annual are We outstanding are but a

what going we're through the XXX But and what are And so with portions that get XXXX. down are That's where is states the to, multiple them. that's to with they a And basis. getting kind we program I years really process, we very we were of are so the approving process. mostly to happy take what on of have the million they through left, it approve it's would just year-to-year that it in say

best so estimate ultimately. our We believe we to no that good and continue reason have progress to make estimate is not a

Tom Gallagher

Okay. Thanks.

Steve Zabel

Thanks Tom.

Rick McKenney

Thanks Tom.

Operator

you. question of Please ahead. the line Hughes Truist. next go Mark today Thank from The comes from

now line Your is open.

Mark Hughes

Thank you morning. good Yes. and

that natural in for quarter? you mentioned the a give times. number fourth few growth specific a Could You

Mike Simonds

question. Good Mike. It's

somewhere for are a in X% split, is placing us. as Sort of to it through. new bit Mark, wage insurance that on a of in by coming the group but terms X% pretty Pretty range you coming number line, ranges for increases good employees product evenly the well as

Rick McKenney

I realize think Mark, that to line. it's that is, group as Mike important, is the mentioned,

like get which don't feel coming the see immediate group have voluntary do we to premiums et of our on just benefit that cetera, all lines, So we through side.

Mark Hughes

Yes, – then exactly. in the Colonial the you about improvement Life? the some And talk through could year. Obviously benefit ratio here

or what the should XXXX normal expect what's – run rate? what's we So the

Steve Zabel

few Yes. hasn't significantly about over XX% just step I that feel XX%, pretty few last and great the been you I very of about our broad-based. our estimates over think, to closer last rate kind expectation. quarters. between over are would And performing back the the I they've what just one quarters. think them but longer over be I'd say business normal But how has Colonial and product consistent three pretty statutory as earnings. But been from now. GAAP has last both lying perspective business us run There as stability that term, earnings more provided of It's it's ratio. years, would stable our benefit in our really extremely that's been well performed. aided well all a profitability well It's and the been running right for XX% would anywhere with and say That's a performed is be.

just I business. feel about really that good So

Mark Hughes

what Colonial earlier then accident a saw [indiscernible] the year. within point, the a product in softer we than little Anything sales that? to this the core visibility, And quarter that down bit

Rick McKenney

Do you have some commentary, Tim?

Tim Arnold

the Mark, and Rick, thanks, Yes, I question. appreciate

opportunity. strong voluntary talent. I'll whether yet pressure are dealing and see the for job They seeing employers. and step factor, to in appreciate with still back wage that all. start We And first unemployment very interest about still products I question we're market me business at the trying Let talking and attract not about is earlier market the a

having In talent employers seeing is peak an turn fact, as still a and issue we're wage pressure benefits. them, for more they good

voluntary the [ph] products portfolio, also being moment, benefit view But and the than at do employees before and as including said work said important are when more employee pretty around education & Ernst of they provide you survey available XX% recent the of XX% very, employers that want the to in important Young who A position being And pretty uniquely across that the they pandemic. employees, segment terms attracting think survey benefits. of customer largest same that offer. at wise benefits millennials were benefits benefits their our about we very education

through tools are of now nearly the technology out down XX% to Life. XX% that they about to people There actually that have XX% have coming pandemic Customer telephone some face-to-face. enable we pandemic, and Thankfully, of the and face-to-face. of our occurred by physically digital, significantly means, and were XXX% so impacted enroll headwinds and other businesses going is and pandemic, represent to digitally, Colonial about number sales base been into small the

deal it with to the we've been able So for most part.

and talk you As out we're let excited the some me natural about side, headwinds. about benefit But growth, was really been pointed have don't the the there get Life Colonial on earlier of pivot recruiting future. why

administration in introduced, number benefits solutions excitement being enrollment including that strong field a that. platform have force our currently technology of seeing and around we're really We modern

We introduced we significant agents tool, and significant see opportunity adoption utilization employer is market marketing products, which a the tools, of paid strong enhancements [indiscernible] A invested it. of begin to the an we in agent group in certain introduced marketplace. We're advantage that we we've ago, segments. think productivity to and years number in

our that But long-term future. year about, really So everything X% we're we given a with talked the little expectations. pleased, the sales excited about below we We're ended just growth bit we your pointed to Mark. Steve out about we're to of Thank where that premium question, ahead hope gets in you. going earlier, as point that I were total in a pandemic.

Rick McKenney

Thanks Mark.

Mark Hughes

you that. for Thank

Operator

Please the question of open. Thank line from Krueger next KBW. comes your The line now from go Ryan ahead, is you.

Ryan Krueger

elevated XXXX level reasonable had more I a think we fourth XXXX, on thanks. do year the you Hi, in do expense expenses. quarter? Good morning. the view more about a full you question as starting think Or point? about ratio the When for

Steve Zabel

I'll Yes. take that bit and it little to over then detail. maybe for It's one Mike Steve. a more kick

back, basis getting what XXX our driven XXX higher full be starting to we with travel going expectation ratio engage the points the we do to back stepping we that things came we XXXX, just set by when and up was with that our customer. than into XXXX. and So That and expense mostly employment anywhere in between saw is different

that. had expected we And so

sustainable, have it's as then year, our so a us rewarding good important we customers. serve able just really workforce those to able being about be because into And to got really we for stable the to employees feel just and

pretty up we range grow to. ended what of as far expense that as saw much on the middle ratio we the in So

so and do where our be through work Mike adoption we're to down be specifically about investing. digital like more tell much bit to a I'd full talk you those in little expectation. we're that that of able But then little pretty of year always at we some would a we to of definitely, expect compensation increases. a I bit we But tools, back going be maybe maybe point, more as that have XXXX productivity, can that, think, peak beyond high that

Mike Simonds

that Yes. just Thanks, again, the we're under what investments would Ryan, seeing results Steve down like says, question. the business we're the we've making. for with and momentum going in And the the built

I team. our think highlighted Steve appropriately

best we we're operation like sales the going feel benefits things industry. of strong And that but we've got our you the to XX% and find, underwriting teams. see talent management across That's most and biased core you're in So sales. in really client the growth

we benefits talked get back people back lifestyle helping and exceptional product You see just our of to recoveries that in organization in and work. is team the to terms our about,

making us. rewarding we is are And fully folks and appropriately important to that staffed sure really so

OEs driving that's item second investment. is the technology the And

that's we're Workforce us on and and that's are saw the mentioned with in way you clients And our growth dental mean now business, total our and for our new We growth. drive quarter. we're UKG HR mean ADP small at for to Workday replatformed fourth excited going outset that so platforms. what Colonial in and it's our the business Life mentioned winning just very and helping sales Connect platform, and capability about on engagement encouraged the Tim here, enrollment we what to Rick leads, going very the

the and thing dual success investments with say, is technology those we as benefit. I'd And that's Ryan, have think probably last a they about in those market, in you have as

on levels the But is helping side. client more efficient high differentiate ways satisfaction. first doing It's of The growth these us importantly, are and drive of business.

volumes And rate, long-term and take of growth to we in growing that we X% more see next coming start year, are top and slower a expect would OE rate more acceleration into be that's both and because as hold that and said, at so and of our back like expenses to X% line. the ratio coming transactional our will have down that for Steve the second these we through digitally half that self-serve,

Ryan Krueger

still expect thanks. supplemental $XXX you on do voluntary, range $XXX going And to million earnings forward? the and more just million in quarterly then Great, that

Steve Zabel

I around probably that's in say that earnings. I it's if the been out had would we the take have Ryan. are marker, a the quarter items two would think, decent you nonrecurring, $XXX onetime million that Yes,

benefits but of bit probably with And in are [indiscernible] so probably probably embedded a range is planning little unfavorable there that results estimate. a there, that still is specifically that's in decent somewhere

Ryan Krueger

lot. Thanks Got a it.

Rick McKenney

Ryan. Thanks,

Operator

is ahead, go you. now The next Goldman from question of your Alex Scott comes Thank Please today open. from the Sachs. line line

Unidentified Analyst

This priorities could your deployment was update a you basis. is on capital for on go-forward provide Marley guys Alex. an wondering if [ph] I

Rick McKenney

Yes. morning. Good talking you Thanks, Marley. to this

the a little recovery post-pandemic. and saw start I we about bit with the saw generation that capital we just talk Let's capital.

$X to see earnings comes I statutory think in. as that it's billion tremendous the

You before. flow company our haven't and ratios saw the at way holding heights, current RBC we this capital that levels our the all at seen through like are the

it business still around how in there about continue opportunities. work, franchise. And we're so conversation to we're put that our I is making to think That's where We're to when where growth first. we you to go investments money good that put behind all, going first think of going the the back great think to it's going

some can that with we Sometimes, acquisitions. enhance

who the accelerate to are And there so that capabilities are us out help path. businesses think of that that can growth-oriented, about types

And so to our And there. the where trajectory we put put money that's want we to growth want back today. capital

Now several a clip pretty watching responsive same grow. dividends at it steady last the We've to over the our increased we're our shareholders years. time, at certainly

will that. then to We And to continue buybacks. expect do

the million think run rate. I annual we $XX on $XXX had a plus $XX million, million quarter in

those shareholders. are response ways to of So two

behind the also I'd want in and then talk have, to us. about the that get And premium that the funded we deficiency We PDR reserve. background,

capital And think forward. an as I that's use look important of our we so

things do a got to and position. of more we good So in the month. see we'll great lot capital that this fronts, at about end in all that feel flexibility all how really we'll balance, those attack We've we our here talk about on and XXXX, those

Unidentified Analyst

That like growth. sounds It one go into U.S. the in what you of guys little bit then if looks good. a guys driving And had follow-up. some I I sales strong just and have is pretty was wondering you that. could

Mike Simonds

the it's Yes, thanks Mike. question, for

pretty it's a And capabilities. so for we the broad-based And talked little us. bit about

Unum really leave the solutions. We for administrative are large the the and a and brand need strong for markets, definitely seeing both mid employer in

exceeded for we those So year again, we in this had first goals year our as big goals. rollout leave set pretty national significantly our them and a total platform, phase,

coming a and referenced mid you earlier. coming a long-term amount we with growth, short-term leave packaged really those strong combination large that amount on and instance, a good only I insured of in the good And through disability as offer when in products, platforms on a reminder, basis, for see is that cases the

market, the In provide employers. smaller the an small the bundle look we end administratively easy to of for

the the that has really off. in employer that dental to a of strength really particularly So small is platform benefit, started our and take important market Unum administrative which offering,

And as dental, lines with so pulling us well. that's other success as in have we

And then group individual a in strength buy-up long-term is to disability. the disability business self-involved the category, our in often that good continued

and would the for really premier that often So the strong, franchise in individual again, profitable very as buy-up disability we business. have disability that's I opportunities leave argue, a steady very and industry, bringing

a bit taking little like under both we're lines Unum Life and underlying our talked voluntary seeing pipeline. as brands, Colonial but really in you the Tim it's strength distribution as forward, think strong longer, look the about of I

top X% of of about over as a then bodes we XXXX the X% years. think, and sort so sales again back And again, that range to line well couple next into growth getting

Unidentified Analyst

That's great. you. Thank

Rick McKenney

Thank you, Marley.

Operator

next is Please go Thank question Ward your line now today ahead, comes you. Mike open. Citi. The from from of line the

Mike Ward

just Thank you, Good guys. Rick. Maybe morning. quick a clarification,

into to $XXX rate million So run no for XXXX? buybacks the change

Rick McKenney

Yes, upcoming we'll talk about that meeting. at our

on I $XXX think about we at we've were for looking last XX backwards more pace talking so, over the months least the million or that. done

I We'll going have of So, weeks. at here about different we talk into good XXXX few in outlook a types flexibility about our that. feel meeting

Mike Ward

rating Awesome, expand curious if in wondering then neutral the guys you just commentary thanks. net maybe the commentary around for investment about And could credit. on portfolio. I'm activity the

Steve Zabel

this is can take I Yes, Steve. one. Mike, that

us. think material estimate feel we pretty see net around to our we around think of that GDP haven't really our we the But through of manage neutral a just bit, good And about but impairments recessionary fact stepping We don't work single of that flexibility recessionary we Just run kind we and for the have, have about the pressures lot credit a clearly, testing, back scenario most portfolio, capital digits, specifically, for little is any the do we and low lot talked moderate planning we within good scenarios. look a we do of really forward sensitivity about in we scenario as and portfolio. a a down positions planning. that

say And I'd redeploy very we It's other have to That pandemic. pandemic. opportunity that in the remarks, over high-yield thing just our under a that a during performed great move we my the throughout X%. classes, that in the of bit a investment reduced the other to under class. took was we The made. just money, I we've lot asset had obviously, gone is into And X% portfolio specifically alternative quite from our but that's well pandemic,

really going about proved and feel managed a we're credit I recessionary we forward, our in shifts to investment strategy though, portfolio we We're actual just asset do need through how significant think, portfolio. We've, this impacts of on think, good. our well is shop. a make different mitigate strategy think and can we what We lot This and experience really not do. our to that going

those very show benchmarks we go of scenarios. types through good against So you as

Mike Ward

Awesome. Thanks guys.

Steve Zabel

Mike. Thanks

Rick McKenney

Mike. you, Thank

Operator

you. Thank

question today Suneet now final open. your comes the of Jefferies. ahead, Please go line Our from line Kamath is from

Suneet Kamath

Great. here. Thanks for sticking in me

So talk the claims. just to disability wanted about

industry's experience, up periods of I think does weakness, it into little like tend a to pick the As back bit. disability we when economic claims to seem head

So thinking about And that's something just you that guys on curious of you particularly are ratio? given you or benefit XXXX, if kind A? your with, move who through kind as the guidance then kind how agree of that we B, of

Mike Simonds

is I where Hey good a see I question, Really opportunity disability. you linkage guess Thanks. Suneet, when do Mike. think about [ph]. start this you is And would

a varies impact have bit of a some lag, usually any is the you I'd recession it's do six-quarter recession. the to between The four- on time employment on turn with lead disability. say macroeconomic first in it so little average, thing But to and

I So think, that is lag, important.

impact gets is second The built. that where

but And the muted three to the in last still. at has see a industry brightest security you Unum bit bit our tends recessions sort muted, there. disability. a at be social least line of it look is You when that experience, can the And done private

that terribly it's not terribly, but So not inconsequential, significant. it's

for short-term certainly XXXX, disability integrated a And to do it with of say, us, level of and respect a given little I to have with of we bit you be high think with sight frequency. LTV tends sort look at line of that

trends of those of some through sort incidence see early. can You come

kind next, strong of quarters, play four were to coming be and really go again, you strong recoveries to Yes, we've six be. some As of that this pressure where I think recession it. emerges? most those come sensitive through back could could there through, out diagnosis with really the even a to environmentally quite just recent I there that offset some

pretty little scenarios, mid-XXs is pretty it think But it So experience there. in reasonable uncertain. that XXXX, you recessions, the again, on a last different in I we've what bit like think like three resilient ends more Where a got economically. again, through It's looks we based feel franchise our a as the XXXX, estimate. about

Suneet Kamath

follow-up. Got just then it. maybe one And quick

that new risen? pricing? by you now And how kind As action of interest lowering you were rates that rates think have guys it. on claims rate to declined, you do taking vis-a-vis Have about discount that increase started that

Steve Zabel

what say basis, we new year past did be to we are into of on was, interesting increase percent when go it, would that is over rates locked-in rates market rates see. what's the did kind I Yes. increase but up. those get LDTI we the I it accounting when really the going you based forgot discount the But more

a going it's bit be little more to prescribed. so And

our with will to be there that but and we And bit that earn really how how we is create GAAP pricing dynamic discount it's a going how think place. with of forward takes difference rates. want what sure accounting on think of so a going change about I'm to to about kind different portfolio, going not we philosophically the

Suneet Kamath

Got it.

thanks. Okay,

Rick McKenney

Thanks, Suneet.

Steve Zabel

Suneet. Thanks,

Operator

are waiting There time. you. Thank questions additional this at no

to remarks. So the Rick for go to ahead. closing back I'd Please pass like any McKenney conference over

Rick McKenney

forward Great. Bailey. over our for Thanks, several and to at Day very had XXXX, the we I very and Thank we today. Investor through hearing of it. forward about from the of Appreciate around some out then. look look you year upcoming to look joining next carry good that meeting. the you, Unum happy taking into We're everybody, details us over as course you years we some XXXX. the results momentum

very that much. call. today's you ends Thank And

Operator

your call. for participation. all conference today's concludes This you Thank

You may lines. now your disconnect

Unum (UNM) 1 Feb 232022 Q4 Earnings call transcript