Unum Group's Q2 2025 Earnings Call: Unpacking Contradictions in Disability Claims, LTC Reserves, and Underwriting Performance

Disability claims and persistency, long-term care experience and reserve adjustments, group disability underwriting performance, long-term care reserve funding and capital structure, group disability benefit ratios and pricing strategy are the key contradictions discussed in Unum Group's latest 2025Q2 earnings call.



Premium Growth and Persistency:
- Unum Group reported strong premium growth of near 5% in the second quarter, driven by a continuation of persistency improvements and natural growth within the in-force block.
- The premium growth was supported by disciplined pricing and risk management, contributing to the company's financial stability and long-term earnings growth.

Group Disability and Life Insurance Margins:
- The group disability benefit ratio was 62%, which was higher than expected, but still robust with returns exceeding 25%.
- The increase was driven by a decrease in recoveries compared to the previous year, although recoveries remained stable on a historical basis.

Long-Term Care Challenges and Transactions:
- Unum experienced unfavorable LTC benefits experience, particularly in capped cohorts, impacting earnings volatility and net premium ratio.
- The company advanced its strategic work by completing an external reinsurance transaction, aiming to reduce exposure, improve risk profile, and enhance focus on core businesses.

Capital Deployment and Share Repurchase:
- Unum returned $6.5 billion to shareholders through dividends and repurchases in the first half of 2025, with a plan to finish the year towards the upper end of the $500 million to $1 billion range.
- The capital deployment includes immaterial acquisitions and a significant increase in the annual common stock dividend.