Unum's Q1 2025 Earnings Call: Navigating Contradictions in Disability Claims, Sales Growth, and Long-Term Care Risks

Disability claims performance, sales growth and productivity, long-term care risks and transactions, alternative asset returns, and economic sensitivity of disability claims are the key contradictions discussed in Unum's latest 2025Q1 earnings call.



Financial Performance and Growth:
- Unum's core operations achieved an ROE of over 20% in Q1 2025, with premium growth exceeding 4% and statutory earnings of $350 million.
- The growth was driven by strong sales from the previous year and favorable economic conditions such as higher interest rates.

Disability Claims and Incident Rates:
- The first quarter saw elevated disability claim incidents, particularly in long-term disability, with some improvement as the quarter progressed.
- While the higher incidence rates impacted short-term results, the company expects claim levels to normalize, leading to improved financial performance in the following quarters.

Investment in Technology and Digital Capabilities:
- Unum is focusing on embedding digital interactions and technology to enhance customer experiences, particularly in leave administration, to maintain and increase persistency rates.
- These investments are aimed at providing comprehensive employment solutions, attracting and retaining talent, and leveraging technology for efficiency and growth.

Long-Term Care Transactions and Capital Management:
- Unum announced two long-term care transactions that will remove 20% of the risk from their block at favorable economic terms, contributing to significant capital release.
- This strategic move is part of an effort to reduce exposure and release capital, enhancing the company's financial flexibility and optionality.