Unum Lifted Adjusted EPS as Insurance Income Weakened
Revenue edged up 0.3% to $3.370 billion as lower investment income offset premium growth.
Unum Group (UNM), the workplace-benefits insurer, increased second-quarter adjusted earnings to $2.16 a share as share repurchases outweighed a decline in operating income.
The quarter extended a slowdown in core premium growth and brought weaker results from Unum International and the Closed Block. Unum changed its non-GAAP presentation to exclude the entire Closed Block from after-tax adjusted operating income and recast prior periods on the same basis.
Net income fell 23.5% from a year earlier to $256.9 million, and diluted earnings declined to $1.61 a share from $1.92. After-tax adjusted operating income decreased 3.9% to $346.0 million, though adjusted earnings per share rose 4.9% as the diluted share count fell to 160.0 million from 174.4 million.
Premium income increased 2.5% to $2.818 billion, while net investment income fell 14.7% to $478.4 million. Core-operations premium growth on a constant-currency basis slowed to 3.6% from 3.9% in the first quarter, returning close to the 3.7% pace recorded for 2025.
Unum US adjusted operating income rose 3.6% to $329.6 million as premiums and sales increased, although sales growth slowed to 7.4% from 20.8% in the first quarter. Group disability income fell 17.4% as higher short-term-disability incidence pushed its benefit ratio to 65.8%. Group life and accidental death and dismemberment income increased 32.8%, helped by lower claim incidence.
Colonial Life adjusted operating income rose 11.9% to $131.4 million as premiums, sales and investment income increased and its benefit ratio improved. Unum International moved in the opposite direction: income fell 41.6% and sales declined 19.4%, with a higher benefit ratio weighing on Unum UK despite premium growth.
Unum reiterated its 2026 adjusted operating earnings outlook of $8.60 to $8.90 a share, representing growth of 8% to 12% from redefined 2025 adjusted earnings.
The company repurchased about $200 million of shares during the quarter, down from about $400 million in the first quarter. It also agreed to reinsure another $3.8 billion of long-term-care statutory reserves, bringing reserves transferred through two recent transactions to more than $7 billion; the deal remains on track to close in the second half of 2026.