With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Companies that foster an environment that supports professional growth are more likely to thrive and successfully adopt digital innovation. Here are the 100 best places to work in Europe—and how they stay that way.

2025 Best Workplaces Europe_Unum-J12A9564

<p>Unum Group ranks 30 on this year’s Fortune 100 Best Companies to Work For – Europe list.</p>

Fortune 100 Best Companies To Work For – Europe

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-230-Unum Group

As a top insurance company in the U.S. and U.K., the provider has several well-known brands under its umbrella, namely Colonial Life, The Paul Revere Life Insurance Company, and Provident Life.

This year's Fortune 500 marks the 66th running of the list.

The underwriter of disability and life insurance policies protects 36 million people globally and is headquartered in Chattanooga, Tenn.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Unum Group is an insurance company providing employee benefits to more than 38 million beneficiaries. Unum's offerings include, but are not limited to, disability insurance, life insurance, accident and critical illness insurance, dental insurance, vision insurance, and pet insurance. Users can plan time off and perform other HR functions through the online Unum platform. The company’s subsidiaries include Unum US, Unum International, Colonial Life, and its Closed Block segment.

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Q4 2024

Unum Group (UNM): Company Profile, Stock Price, News, Rankings

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Unum Group

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Hello, and welcome to Unum Group Fourth Quarter twenty twenty four Results and twenty twenty five Outlook Conference Call. Please note that this call is being recorded. After the speakers' prepared remarks, there will be a question and answer session. Thank you. I'd now like to hand the call over to Matt Royal, Senior Vice President, Head of Investor Relations and Treasury.

Thank you and good morning. Welcome to Unum Group's fourth quarter twenty twenty four earnings call. Today, we will be discussing full year 2024 results along with highlights from the fourth quarter. We will also use the time to discuss our outlook for 2025. Please note today's call may include forward looking statements and actual results may differ.

We are not obligated to update any of these statements. And as always, you can refer to our earnings release and our filings with the SEC for a description of the factors that could cause actual results to differ from expected results. Yesterday afternoon, Unum released our earnings, including the financial supplement and presentation materials for today's call. Copies of those materials can be found on the Investors section of our website. Finally, references made today to core operation sales and premium, including Unum International, are presented on a constant currency basis.

Participating in this morning's conference call are Unum's President and CEO, Rick McKinney and Chief Financial Officer, Steve Zabel. Following remarks from Rick and Steve, additional members of management will participate in Q and A, including Mark Till, who heads our Unum International business Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines and Chris Pine for Group Benefits. Thank you again for your time this morning. And with that, let me turn the call over to our CEO, Rick McKinney.

Thank you, Matt, and good morning, everyone. It's a pleasure to be here with you all today. We appreciate the opportunity to share not only the strong results we delivered throughout 2024, but also on the excitement as we look to the future. Our leadership position is hard earned and embedded in our DNA is a desire to find new ways to develop and grow in the employee benefit space. In fact, we are motivated by the privilege we have to serve 47,000,000 customers and are well positioned to serve many more.

Our focus on taking care of our customers at time of need, supporting our employees to provide excellent service and engaging in our communities has the profound effect of building a durable franchise that delivers significant value for our shareholders. Steadfast commitment to the working world are core to who we are and brings delivery and creativity to those who we are connected with. These connections are strong and built to last. The capabilities we are bringing to the market such as HR Connect, Total Leave, Gather and Help at Hand are connection points with employers and employees to bring greater customer satisfaction and ease with the benefits experience. When considering the expertise and empathy our team adds to every interaction in every touchpoint and connection, these advancements have been instrumental in attracting customers and maintaining our competitive advantage.

These advantages are not only as good as the ability to deliver them year in and year out, it takes consistency and a disciplined approach to run a leading business in our market. Our commitment remains unwavering and has continued to deliver top line growth, earnings growth and high returns on equity. Overall in 2024, we grew earnings per share 10%, which is above our initial expectations of 79% growth going into the year. We saw most of our product lines meeting or exceeding our expectations throughout the year and our core operations delivered over 20% ROE in 2024. From a capital standpoint, we've again executed our plans in line with how we describe them coming into the year and with good overall results exceeding expectations on value delivered to our shareholders.

Twenty twenty four was the first year in many years that LTC did not consume any capital. The actions we took in 2023 to fund this block and our expectation of not needing to put more capital here are playing out. Further, we raised our dividend by 15% and repurchased approximately $1,000,000,000 of shares throughout 2024, including just over $700,000,000 of repurchases when excluding one time additional repurchases following the PCAPP Trust transaction. With these actions, we still ended the year with stronger than expected financial metrics, including holding company cash of $2,000,000,000 and an RBC ratio of 430%. This is in addition to the significant capital buffer within the closed block, which Steve will talk about more in a minute.

Looking forward, we expect our key metrics to enhance further and provide even greater strategic optionality as our core businesses will continue to deliver between $1,300,000,000 and $1,600,000,000 of free cash flow in 2025. As we transition to think about 2025, we continue to witness both a market backdrop and an economic environment that are highly supportive of our business. A competitive labor market, wage inflation and sustained interest rates provide us with ample opportunities to grow and thrive. Our action plan is to continue building on our solid foundation and maintain our leading foothold with digital capabilities. We're dedicated to continually upgrading our core operations while maintaining our disciplined approach and innovating in ways that resonate with our customers and the market.

When we look across the company, we are hitting the ground running in 2025 and our teams are looking to build on some very strong growth rates with consolidated sales growth of high single digits coupled with good persistency, premium growth is expected to deliver in the 4% to 7% range. With continued disciplined underwriting, we expect to maintain good margins that will flow through to earnings and after we've used some of our capital generation to purchase shares, we will deliver 8% to 12% earnings per share growth on top of the 10% adjusted EPS growth we delivered in 2024. All of this is predicated on our customer centric approach remaining at the heart of our strategy. We're constantly adapting our services to meet changing

market needs and ensuring we remain the preferred choice for our clients. When we

met last February, we results. For For Unum in The U. S, we are leveraging our go to market expertise to connect benefit solutions to HR platforms effectively, while also ensuring our leave management is best in class. Leave management has been a challenge for the industry and with our history, knowledge and focus, we can continue to give a differentiated experience to our customers. In addition, we saw strong momentum in the trend of customers preferring the full suite of products.

Our efforts are geared towards seamless enrollment, billing and administration via solutions like myUnum and establishing robust connections with select third party platforms. In Colonial Life, the focus is on continuing to build and support our independent sales force with enhanced tools and solutions. Our proprietary industry leading agent assist technology, which enables automated lead generation, CRM and workflow will help boost agent productivity of our independent agents so they can continue to focus on building their agencies. Another key tool is our in our arsenal is Gather, which modernizes enrollment and benefits administration and streamlines the client experience. Finally, enabling Colonial Life agents to offer Unum employed Unum employer paid products ensures that they have the solution for every employer and broker with market leading group products.

For Unum UK, our approach has been to redefine the broker experience, setting a market leading standard that is distinctively Unum and enhancing our relationship management model. We are dedicated to providing value added services that drive customer engagement and loyalty such as through Help at Hand, which offers integrated value added services and by delivering comprehensive management information that yields actionable insights. Moreover, we're expanding our product set to encompass a broader spectrum of risk and well-being solutions. In 2024, we launched a claims portal for large customers, the first of its kind delivered by a disability insurer in The UK. All of these efforts across the company will drive growth in the number of employees we serve and in turn will generate the growth of premiums and earnings.

It is a simple purpose driven strategy that has resonated through different cycles. We have a proven track record of achieving our growth aspirations. If you look at the last ten years, first you can note our compound annual growth rate of 4% for core premiums, which is especially remarkable when looking when talking taking into account the pandemic. The second is to look at growth and book value per share. We have seen 9% compound growth driven by a similar EPS growth.

There is a strong story that encapsulates how we have driven value over the long term. We also remain disciplined stewards of our capital in building franchise value. The consistency of our capital priorities remains intact. First, we ensure strategic investments directly support our businesses. We have a clear growth strategy continuing to build out our offerings and capitalize on our well positioned and profitable products.

Second, we continue to look externally to identify and pursue selective M and A that supports our internal initiatives in line with this strategy. And third, we will continue to return capital to shareholders via regular dividend increases and share repurchases as we have demonstrated through our actions in increasing both commensurate with our plans. Summing it up, our strong capital generation, $500,000,000 to $1,000,000,000 of share repurchases and no LTC contributions will leave us in a position of greater than 400% RBC and holding company cash greater than $2,000,000,000 at the end of twenty twenty five. Our continued commitment to innovation, prudent capital allocation and shareholder returns remain steadfast. With our customer first mindset, agile operations and comprehensive financial strategies, we continue to shape our future.

2025 is going to be an exciting year for Unum. I'd like to now hand it over to Steve to provide further insights into how we wrapped up the year and provide outlook details for 2025. Steve?

Great. Thanks, Rick, and good morning to everyone. As Rick mentioned, we were extremely pleased with the strong finish to the year across the board. The fourth quarter capped another year of solid growth as evidenced by our results. For the full year, sales were up 6.1% in Unum International, down 1.4% in Colonial Life and up 6.5% in Unum U.

S, where we saw record absolute sales and growth of nearly 20% in the fourth quarter, which is our largest sales quarter of the year. Premium for our core operations increased 3.6% in the quarter compared to a year ago and finished up 5% for the full year. This is within the expectation laid out last February and consistent with our long term expectation of 4% to 7% annual premium growth. Margins across the business continue to be robust. Unum U.

S. Results saw continued sustainability in both disability and life results highlighted by a disability benefit ratio of fifty nine percent for the full year and sixty point four percent in the fourth quarter. Meanwhile, group life and AD and D finished with a benefit ratio of 66.3% for the year and 66.7% for the quarter. Looking ahead, we expect performance for both of these lines to continue and are maintaining our outlook for both benefit ratios. Specifically for disability, we firmly believe that the results we are seeing are durable for the near to midterm as we continue to see support for these levels in our operations and in the market and, therefore, reiterate our outlook for a benefit ratio in the low 60s.

For group life and AD and D, we think current trends will continue for the near term and, therefore, believe the benefit ratio outlook will be around 70% with potential period to period favorability as we have recently experienced. We also saw strong margin performance beyond Unum U. S. Colonial Life delivered one of its highest quarters of earnings on record and International continues to produce earnings in line with its earnings outlook, which we did raise earlier this year to the mid to upper £20,000,000 range per quarter. Both franchises are well positioned to continue these strong operating trends as we enter 2025.

All of these factors enabled us to end the year with after tax adjusted operating income of $1,600,000,000 and after tax adjusted operating earnings per share of $8.44 which represents growth of 10.2 over full year 2023. The strong earnings power for GAAP was also apparent in our statutory results with full year after tax operating earnings of over $1,300,000,000 which was within our outlook of $1,200,000,000 and $1,400,000,000 Earlier, Rick mentioned our capital priorities and detailed our aspirations to grow the business while also returning capital to shareholders. Our consistent and powerful cash flow generation model provides us with significant capital flexibility, which was further enhanced in 2024 without the need to fund LTC. As a result, we returned $1,300,000,000 to shareholders in the form of share repurchases and dividends. This was an increase of 2.5 times from our deployment of just over $500,000,000 in 2023.

Our top capital priority is to reinvest organically into the business. The strength of our persistency and new account sales metrics are a testament to the value of our offering in the market and the success we are seeing with the key strategic initiatives that Rick discussed. Investing in these capabilities to grow our core business and increase efficiency is a key priority. As a result, the full year 2024 adjusted operating expense ratio of 21.7% was consistent with 2023. In 2025, we expect the expense ratio to increase slightly as we balance continued investment to maintain our differentiation in markets with realizing further productivity gains.

So then focusing in on the fourth quarter, results represented a continuation of some of the strong trends we've seen throughout the year, mainly around margin sustainability and group disability in life. We did see some pressure in our supplemental and voluntary lines that I will discuss in a moment. However, we don't expect that to persist in 2025. All in all, this produced after tax adjusted operating earnings per share of $2.03 for the quarter and $8.44 for the full year, representing 10.2% growth over 2023. Notably, this growth level follows multiple years of double digit EPS growth.

So then, I'll now briefly review our 2024 results by segment, provide updates on the closed block and then shift to our 2025 outlook. In Unum US, full year adjusted operating income of $1,400,000,000 increased 6.2% over 2023. As mentioned earlier, these results were bolstered by sustained group disability margins, but also group life performance with the group life and AD and D product line experiencing full year adjusted operating earnings growth of 62.8%. While this quarter saw pressure from our supplemental and voluntary lines, specifically voluntary benefits, we view these impacts as transitory and believe results in 2025 should return to more normal levels, specifically quarterly earnings around $121,000,000 compared to the $104,000,000 in the fourth quarter. Then from a growth perspective, Unum U.

S. Earned premium grew 4.6% to $6,900,000,000 due to natural growth, higher sales and solid persistency, which is near our 5.7% expectation. Moving to Unum International, the segment continued to show strong trends in its underlying earnings power and top line growth. Adjusted operating income of $157,800,000 for full year 2024 was relatively flat compared to the prior year, but didn't have the benefit of high levels of UK inflation seen in 2023. As such, the underlying earnings power of the business grew in 2024 and when adjusting for the impact of inflation, UK earnings grew approximately 15 over 2023.

Fourth quarter UK results of £27,600,000 were in line with our outlook for adjusted operating earnings levels in the mid to upper £20,000,000 range. As we enter 2025, we expect to grow off of this range and believe the upper £20,000,000 range remains an appropriate outlook. We are pleased with the growth levels in The UK, highlighted by full year premium growth of 9.4% and sales growth of 6.6%. While The UK business is the major driver of this segment, Poland saw another year of significant growth, increasing premiums 24.2% while sales grew 4.2%. Then turning to Colonial, while sales were down for the full year, premium did grow steadily at 3.3%.

Despite slower levels of growth, margins remained outstanding and fourth quarter adjusted operating earnings were some of Colonial's best ever at $122,700,000 Full year results of $466,700,000 were up 16.6% over 2023 and equated to a return on equity of 19.7% compared to 18.1% in the prior year. So, before covering the closed block results, the corporate segment, which consists predominantly of corporate debt related expenses, produced a loss of $50,400,000 in the quarter and we expect this level of loss to continue into 2025. Switching gears to the closed block of business and focusing on this quarter, adjusted operating earnings were $27,700,000 This brings full year earnings to $137,800,000 which is in line with our outlook of $130,000,000 to $160,000,000 The LTC net premium ratio, which is indicative of a lifetime benefit ratio expectation, increased slightly to 94.6% from 94.5% in the third quarter of twenty twenty four. Further, LTC incidents remained above long term expected levels and was generally consistent with our experience in the third quarter. We continue to believe the elevated incidence rates has been a function of inventory levels normalizing in the environment following the pandemic and we may continue to see some of this volatility going forward.

Lastly, for the closed block, our alternative investment portfolio, which largely backs LTC, produced income of $30,500,000 in the quarter or a yield of 9.1% on an annualized basis. Since inception of this portfolio, our diversified alternative portfolio has produced returns which are in line with our long term expectation of 8% to 10%. And moving on from quarterly results, I'll now take a look take a few moments to address the overall position of our LTC block. 2024 saw a handful of positive trends, including the higher for longer rate environment as well as our success regarding our premium rate increase program. Both of these factors drove pronounced impacts to our block that I'll describe.

First, through the end of twenty twenty four, we have achieved over 50% of our current premium rate increase program expectation. We are pleased with both the pace and the receptiveness from regulators for these requests. A key element of this success has been offering policyholders flexibility. We regularly present choices for coverage adjustments and other methods that we may better suit their present financial and insurance needs. Second, a higher rate environment has had major benefits to LTC over the last few years and this was no different in 2024.

Our hedge program remained active and with $2,600,000,000 of outstanding notional at year end with average hedge rates of 4.3% exceeding our best estimate ultimate assumption for the thirty year treasury of 4.25%. In addition, as we discussed earlier in the year, we took the opportunity to extend the horizon of investable cash flows hedged from five years up to ten years in some cases. Overall, we are very pleased with the impacts of our hedge program and the prudent risk management it provides. As Rick mentioned in his opening, we no longer anticipate the need for further capital contributions for LTC. Our 2024 capital deployment demonstrated this, allowing us to concentrate further on expanding our core operations and returning value to our shareholders.

Our confidence is reinforced by the $2,600,000,000 of protection which consists of the difference between our best estimate reserves and our recorded statutory reserves, plus excess capital at Fairwind. With the sustained levels of interest rates, we were able to release a large portion of our premium deficiency reserve in Fairwind. Due to tax impacts on reserve releases into Fairwind excess capital, the level of protection decreased as expected from $2,800,000,000 reported last year to $2,600,000,000 this year. On an economic basis, we are in a similar position of strength to last year as this capital will stay in Fairwind. We've provided update sensitivities to show the relative size that changes in assumptions have against our protection level.

I'd like to take a pause here and describe a little bit the sensitivities that we show in the materials that are on the screen. And as I'm looking at the table on the right side of the page, what we've done is looked at the major assumptions that we have within our best estimate assumption set for our economic reserve for this line of business. And what we have done for both the premium rate increase as well as the morbidity and mortality improvement is just give an indication of what the impact of removing the benefit of those assumptions from our best estimate assumptions would impact our best estimate reserve. For policy lapses and mortalities, claim incidents and claim resolutions, we've really taken the approach to take a one standard deviation variance to our best estimate assumption forever and show the impact of what that would have on our best estimate reserve. And then the last sensitivity that we gave was to take the new money rate for the thirty year Treasury and take that down to 3.25% for an ultimate rate and the impact that that would have on our best estimate.

We obviously do not think that these will all occur together but wanted to give the market some indication of the sensitivities for these various key assumptions within our best estimate reserve and be able to relate that back to the level of protection that we do believe we have between our recorded regulatory reserves and our best estimate reserve. So, this further validates our view that we will no longer need to contribute capital to the block. Considering all of this, we are pleased with the position of our block and we will continue to pursue all of our options, both internally and externally to best actively manage it. Internally, we will focus on continued risk management actions such as implementing hedging strategies and advancing our premium rate increase program. Externally, we will continue to seek opportunities for economic risk transfer.

These actions remain a top priority as we move into 2025. For your reference, we have updated the LTC key metrics and block demographics and they can be found in the appendix of today's presentation. So, stepping back, 2024 was an incredible year for the company and as we turn to 2025, we see many of the same tailwinds and opportunities to win. So, with all that considered, it's time to talk about our outlook for this year. I'll start with our view of business growth and earnings power and then discuss how that plays into capital generation.

The key theme of our 2025 outlook is consistency with the strong results that we saw in 2024. The major trends that drove those 2024 results are expected to continue and in 2025, specifically our group disability and life product margins. The durability of these trends drive high levels of earnings power and lead to robust free cash flow generation and capital optionality. These sustained margins paired with top line growth and a thoughtful share repurchase strategy drive expected earnings per share growth of 8% to 12% in 2025. I will now turn to our expectations for top line growth and returns of our core businesses.

Following our core operations sales growth of 4.3% in 2024, we expect sales to build momentum in 2025, including continued success in Unum U. S. And international with Colonial resurging to the 5% to 10% growth range. There are different stories across lines of premium growth, but importantly, we believe core operations growth will continue to produce results in line with our long term expectation of 4% to 7%. It's also noteworthy that our international segment continues to produce very strong growth results while maintaining its solid level of margin seen post pandemic.

Returns on equity across the board are robust and sector leading, driven by the sustained product margins I referenced earlier. I'll now pivot from GAAP metrics to our capital expectations in 2025. Our capital generation model continues to grow after a fantastic 2024 with our sources of expected capital totaling $1,500,000,000 to $1,800,000,000 This compares to our outlook last year of $1,400,000,000 to $1,600,000,000 As a reminder, our cash generation is driven by earnings in our US insurance subsidiaries, which will convert to dividends to our holding company, dividends from our UK operations and other fees charged to our operating companies, specifically asset management fees. This is all fueled by our strong earnings across our businesses. We do not expect major changes in our capital usage in 2025.

Specifically, we will continue to service our debt at leverage consistent to current levels, steadily increase our dividend and return capital through a sizable share repurchase program. For 2025, we expect to buyback between $500,000,000 and $1,000,000,000 of shares as we assess our capital deployment priorities throughout the year. For context, in 2024, we repurchased approximately $700,000,000 of shares after removing those shares repurchased in conjunction with our PCAPs transaction in the fourth quarter. So, now turning to page 12 in the presentation, I will finish with our expectation for capital levels at the end of twenty twenty five. We expect capital levels to continue to be strong and well above our targets which are calibrated to maintain our current ratings.

This includes risk based capital and our traditional subsidiaries to be between 425450%, holding company liquidity to be greater than $2,000,000,000 and ample leverage capacity between 2122%. As we always do, we will ensure a prudent approach to capital management and do not plan for sudden changes to our capital structure. That considered, over time, we do plan to manage these metrics back down closer to targets. However, in the near term, this position grants us immense capital flexibility and allows us many options to further advance our business strategy and return more capital to shareholders. So, to wrap up our prepared remarks, we are extremely pleased with how the company performed in 2024 and excited for the opportunities for our businesses in 2025.

We will continue to deliver on our promises to more and more customers, create a desired workplace for our employees and deliver industry leading margins for our shareholders. I will now turn it over to Rick for his closing comments before going to your questions.

Great. Thank you, Steve. As you can see with 2024 in the books, 2025 is shaping up to be another great year for Unum and with continued momentum in our core business and our capital generation. Plenty of topics to cover this morning, so with that, we will move to your questions.

We are now opening the floor for question and answer session. Your first question comes from Tom Gallagher from EVR. Your line is now open.

Thanks guys. So, Steve, one question I had. My first one is just on group disability. You said you expect it to remain favorable over the midterm. If you were to kind of isolate and say why is that, because I think there's a broader concern it's going to revert to the mean, get back into the 70s.

What is it about the underlying that's really driving it sounds like there's been a structural change here. Is it really clean recovery? Is it incidents? Is it a combination of things? And why won't why don't you assume that price competition will erode the margin if it's if it's as favorable?

Or do you think your maybe your margin is better than many peers, so that's not a threat? Any color on that? Thanks.

Good morning, Tom. And I'll cover really just from a claims performance perspective what we've been seeing and why that gives us confidence kind of in the near to mid term. And then maybe Chris can talk a little bit more about the competitive market. We've gone through kind of the fourth quarter selling season. And so, we have kind of an updated read on pricing and the competition out there and I'll let him cover that.

So, just to zoom out a little bit, group disability for the year had an actual benefit ratio that was right around fifty nine percent. And so, although in the fourth quarter it ticked up a little bit to 60.4%, it is well within any kind of range of volatility that you might see quarter to quarter. So, we continue to feel very comfortable about giving an outlook going into 2025 that would be in that low 60% benefit ratio range. And then what I would say is just kind of the dynamics of the experience we're seeing. Incidence bounces around a little bit quarter to quarter, but I'd say, generally speaking, incidence is pretty much at levels that we would expect longer term and pretty consistent with what maybe we would have experienced pre pandemic.

So, I would say we feel really good about that and that's been relatively stable. From a recovery perspective, that's really where we've seen the improvement. And that's been kind of a decade long improvement that we've seen there. It was clouded a little bit by some of the volatility during the pandemic. But as we came out of that in the 'twenty two, 'twenty three, 'twenty four kind of period, we really saw continued improvement.

And that gets down to just our team, them working with our customers, with employers, with physicians to figure out ways to get people back to work at a higher rate. We've been able to apply data to better understand outcomes and to implement accommodations for those people to get to better outcomes. And we're all aligned. People want to get back to work. We want them to get back to work.

And we've been very successful with our people, with our technology to be able to do that at a higher rate. And for those reasons, we do think that performance is sustainable going forward because we've embedded that just into our claims management process. And so then, with that, I'll turn it over to Chris to just talk a little bit about the competitive environment and pricing and what that looks like going forward.

Yes. Thanks, Steve. And Tom, thanks for the question. Absolutely remains a competitive environment. We expect to operate in that type of a world.

But building on what Steve was saying around, you've got an excellent operational performance. You do have a favorable kind of attractive retained reality that employers are dealing with. They want a quality benefits package. They want it to work really well for their employees and them as a customer. And when you kind of combined high quality coverage with connectivity into the human capital management platforms or other kind of technologies that are important to them, when you're solving challenges that are as important as leave and that's the reason maybe a customer came to you or they're considering staying.

These are modestly different conversations than in the past or where price was more central to the conversation. Price is a part of the equation, though there's no question. We want to charge a fair price. We want it to be stable over time. Customers appreciate that.

And we just have a nice history of delivering both the value and price combination as it relates to our investments.

That's helpful guys. Thanks. And just my follow-up just on Long Term Care. The peer of yours on Manulife announced another risk transfer deal in late twenty twenty four on a younger vintage block. How do you feel about the market right now?

Do you is it getting better for risk transfer? Is the bid spread still too wide? What do you think the prospects are for you?

Sure, sure. Let me touch on that and be fairly consistent with how we've talked about in the past. One thing that did change in the quarter, we did see another transaction.

So as we talked about the first transaction we saw just over a year ago, we think that's good. We think that actually shows that the market is coming together and where you can actually have the right attributes of a LTC company, meaning somebody that will be willing to take on that risk. Remember that the new development there is we're also bringing in other parties that are taking on some of the asset risk, which can enhance the overall proposition. So I think that those are both good transactions to see. But as we talk about it, these transactions are hard and we have to make sure that we're able to find the right partner to take on specific attributes of our block.

The team has done a really good job of parsing the block, so we can really structure the block and something that we'd want to transfer from a risk perspective to see what the buyer is looking for and structure around that. So all those are, I think, are very positive dynamics that are happening out there. But these are difficult transactions. And so we don't want to talk about anything of a particular time frame, but we will be active in the market. We will talk to a number of players out there and the deal has got to make sense for us as well for the longer term for our shareholders.

But this is something we do think strategically is very important for our company to be off of the LTC risk. It's very unlike everything that we do. This is a legacy block of business. And so we want to make sure that we're focusing on the core, which you've seen the results are very strong. And so we want to do both of those things, continue to run a great core business and then work to transfer the risk of LTC to another party.

Your next question comes from Elyse Greenspan from Wells Fargo. Your line is now open.

Hi, thanks. Good morning. My first question is just on the capital side, right? I mean, you guys, your HoldCo cash is going to grow during the year as is your RBC is going to expand. And yet, you guys seem to be it seems a little bit conservative, right, with the buyback.

I know there is a big range there. But are you guys just leaving some buffer depending upon what happens with on the M and A side? And if that is the case, can you just talk about some stuff that you guys might be considering with potential transactions for M and A?

Sure, Elyse. This is Rick. Let me take you through. And first, I guess, this conversation with what Steve is taking you through is the very, very strong capital generation. So you have to start with that.

The businesses are generating a tremendous amount of capital. I think importantly too, as we talked about 2023, that was where we actually made a different move on long term care to have that fully funded. So, when you have that strong generation, you don't have those needs across long term care, you've got a lot of choices to make. And we've been very consistent to say, first and foremost, priority, grow the core business. We've got a great franchise.

You've heard about that today. How can we enhance that? How can we grow that? That's true organically. Also true from an M and A perspective.

And so you asked about the types of things we look at M and A. Really, it's about how do we continue to use those transactions to grow the premium line, think about that as capabilities, think about that as potentially distribution and then certainly our international businesses are places we'd like to continue to look to grow as well. So that's the acquisition front and that use. But then you get to the things we're going to do from a shareholder perspective. Increasing our dividend rate is something we've done consistently over a longer period of time.

We'll continue to look at that. And then from a share repurchase perspective, when you get through all of that, we've said we're going to be dynamic. So it is a wide range, dollars 500,000,000,000 to 1,000,000,000. A lot will transpire over the course of this year, and we want to actually be responsive to whatever that environment brings forward to us. Last year was a good example of where we were more dynamic.

We exceeded the amount that we had going into the year with our kind of underlying $700,000,000 and then a PCAP transaction which

up close to $1,000,000,000 So, this is going to

be very active from a capital deployment perspective. I think in 2024, we showed that we will be dynamic, and we expect 2025 will shape up similarly.

Thanks. And then on the voluntary side, right, the results were a little weaker in the Q4, but it sounds like you guys don't expect that to continue given the earnings guide for 2025? Can you just kind of provide a little bit more color on what went on there both in the Q4 and just the outlook for this

is Steve. I'll take that one. Yes, we, as we kind of look back over multiple quarters, we've seen this line of business have some volatility in it. A lot of that volatility was focused, I'd say, on the actual voluntary benefits product line within supplemental and voluntary. And it's really been different things as we look quarter to quarter, different products that are in there that we've seen some unfavorable volatility.

If you go all the way back to the first part of last year, the earnings power of that block was above kind of what our expectations would have been at $120,000,000 per quarter. So, it bounces around a little bit, but nothing that we see in there we feel like is systemic and would continue going forward. And so, right now, when we think about the earnings power of that business, the 120 per quarter seems like a pretty reasonable level that we can expect going into 2025 and we'll just have to see how that plays out as we get into 2025. I will say that all the lines that are within, supplementary and voluntary, they continue to be good growth engines for us as an organization. We really like those businesses.

They're very much meeting the market and I would say are growing at a faster pace than what our group benefits businesses are. And so we really like those businesses.

Your next question comes from Wes Carmichael from Autonomous Research. Your line is now open.

Hey, thank you. Good morning. I wanted to ask again on pricing trends for Unum US for twenty twenty five renewals. Can you maybe just give us a little bit of color, particularly in group disability and group life? And if you could maybe just touch on how long that renewal pricing is being locked in just at a high level?

Yes. Thanks, Wes. It's Chris. So, a good topic to talk about just in general how the block performed. If you step back and you look at really what was incredible persistency in 2024, we talked about that a little bit around our capabilities making a real difference, but also just strong performance over time, stable pricing, etcetera, etcetera.

There was some element of kind of projects, bid projects that have been put off for a while. We saw more of those in 2024 where cases came to market that hadn't come out. For us, that's a little bit of a double edged sword because obviously in the sales side, we really enjoyed a strong oneone. So as some of those projects were coming out, we won some. On the flip side, some of our cases also went to market just for overdue market checks or more than like.

Where we can tie things to investments and longer term strategies, we feel really good about it being a driver of persistency.

earlier question from Tom, it's a competitive market and we are looking to continue to get a fair price and stable over time and feel very good that we can do that. We are really thrilled with the sales in fourth quarter. We think that that's a nice combination of a really coordinated strategy across the company that shows up well for our customers and

we think that's something we can build on.

Got it. Thanks, Chris. And maybe on long term care in terms of premium rate increases, I think you're about 50% through your current program. I'm curious, it seems like that's going pretty quickly.

So, how does that pace compare to what you originally thought and what's embedded in reserves? And I guess separately is given your need of no more capital in the business, your level of protection, do you expect this to be you're largely done with rate increases or do you continue to expect those to go on over time if they're actuarially justified?

Right. Yeah. And you're right. We're very happy with the progress that we've seen so far since last fall. And, yeah, reiterate the progress that we've made, we're a little over 50% through the current best estimate assumption that is incorporated into our reserve right now.

I will say between then and now, we have had some very large state approvals. We were expecting those, but those did come through in the fourth quarter and have been reflected in our statistics there. And as such, I wouldn't expect the pace going forward over the next few years to be at that level. We tend to get these approvals and get them implemented over kind of a three to five year period when we launch a program. And I think that still feels like a reasonable timeline.

With that said, we are very happy that we're able to get some pretty large ones over the finish line and very happy with the progress that we have made. Your question just about not launching kind of future programs, that's always really just dependent on what we see emerge from the product. And also, we're continually looking at opportunities to maximize that program. So, I would never say never on that because we're consistently challenging where we might be able to go back to states and get fair returns on this product line.

Unum Group (UNM) Q4 2024 Earnings Call Transcript

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