Unum Swings to Loss After Fortitude Re Impairments

The Tip Desk · November 3, 2026 · 4 min read

After-tax adjusted operating income was $349.0 million, or $2.20 a share, as core premium growth on a constant-currency basis accelerated to 4.7 percent.

Unum Group (UNM) reported a net loss of $419.7 million, or $2.65 a share, for the third quarter of 2026, reversing the second-quarter net income of $256.9 million, or $1.61 a share.

The swing included a before-tax net investment loss of $853.0 million on the investment portfolio, primarily impairment losses tied to the intent to transfer assets supporting the 2026 Fortitude Re long-term care reinsurance transaction, and a Closed Block segment before-tax adjusted operating loss of $135.6 million, with a tax benefit of $207.9 million on those items. A net tax-only benefit of $12.0 million reflected the release of an $188.2 million unrecognized tax benefit liability, mostly offset by a $176.2 million deferred tax asset valuation allowance.

Excluding those items, after-tax adjusted operating income was $349.0 million, or $2.20 a share. Beginning with the third quarter, Unum revised the measure, after discussions with the SEC, to include annual reserve assumption updates and refinements. That notable item added an after-tax net reserve decrease of $53.2 million, or $0.33 a share, in the core operating segments.

Core premium growth on a constant-currency basis accelerated to 4.7 percent from 3.6 percent in the second quarter. Adjusted operating return on equity was 21.3 percent. President and chief executive officer Richard P. McKenney said underlying earnings fell short of expectations, with strong voluntary benefits offset by elevated claim submissions in group disability.

Unum US segment adjusted operating income fell 35.2 percent year over year to $315.3 million. Premium income rose 5.2 percent to $1,846.6 million; sales decreased 8.5 percent to $163.9 million.

Group disability segment adjusted operating income dropped 60.4 percent to $94.8 million. The benefit ratio was 67.1 percent, versus 47.8 percent a year earlier, which the company attributed to less favorable reserve assumption updates and refinements, higher incidence, prior-period pricing, and higher average claim size in long-term disability. Premium income for the line rose 4.0 percent to $816.6 million.

Group life and accidental death and dismemberment segment adjusted operating income declined 14.3 percent to $78.2 million, with premium income up 6.6 percent to $551.4 million and a benefit ratio of 68.8 percent. Supplemental and voluntary segment adjusted operating income decreased 9.0 percent to $142.3 million, with premium income up 5.7 percent to $478.6 million and a benefit ratio of 45.4 percent.

Unum International segment adjusted operating income collapsed 99.5 percent to $0.2 million from $44.2 million. Unum UK moved to a local-currency operating loss of £1.4 million from income of £27.0 million, with the UK benefit ratio at 91.0 percent versus 73.4 percent and sales down 45.9 percent to £15.9 million.

Colonial Life segment adjusted operating income rose 35.0 percent to $169.4 million, with premium income up 3.0 percent to $470.0 million, sales up 6.4 percent to $132.6 million, and the benefit ratio down to 38.0 percent from 46.3 percent.

The Closed Block segment adjusted operating loss narrowed to $135.6 million from $682.3 million a year earlier on less unfavorable reserve assumption updates. The net premium ratio was 98.1 percent at September 30, 2026, versus 97.8 percent at June 30, 2026. The company said Fairwind statutory reserves and excess capital above best-estimate reserves are estimated at approximately $2 billion following the anticipated Fortitude Re closing.

During the quarter Unum repurchased 2.1 million shares for $202.0 million and paid $80.1 million of common stock dividends, bringing year-to-date capital return to $1,038.5 million. Holding-company liquidity was $1,383.4 million and the weighted average risk-based capital ratio for the company’s traditional U.S. insurance companies was approximately 485 percent.

Incorporating the annual assumption review and refinements, results through the first three quarters, and fourth-quarter expectations for the core segments, the company now expects full-year 2026 after-tax adjusted operating income of $8.30 to $8.50 a share, including approximately $0.33 from the notable item.