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Unum (UNM) Down 1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Unum (UNM). Shares have lost about 1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Unum due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Unum Group Q1 Earnings, Revenues Top Estimates, View Up

Unum Group’ first-quarter 2023 operating net income of $1.87 per share beat the Zacks Consensus Estimate by 13.3% and our estimate of $1.64. The bottom line increased 37.5% year over year.

The quarterly results reflected continued strong operating performance, core business premium trends that are nearing long-term growth expectations, improved core operations sales, stable persistency, premium growth and continued favorable benefits experience.

Operational Update

Total operating revenues of Unum Group were $3 billion, up 1.3% year over year, as higher premium income and other income were offset by lower net investment income. The top line beat the Zacks Consensus Estimate by 0.8%, Our estimate was $3.1 billion.

Premium increased 2.4% from the prior-year quarter to $2.5 billion and was in line with our estimate.

Total benefits and expenses decreased 5.1% year over year to $2.6 billion, largely attributable to lower benefits and changes in reserves for future benefits.

Quarterly Segment Update

Unum U.S.: Premium income was $1.6 billion, up 4.3% year over year. The figure was in line with our estimate.

Adjusted operating income surged 85.7% year over year to $312.5 million, attributable to higher income in the group disability line, group life and accidental death and dismemberment line as well as supplemental and voluntary line of business.

Unum International: Premium income of $188.6 million increased 0.5% year over year.  This compares unfavorably with our estimate of $198.5 million. Adjusted operating income was $38.4 million, up 48.3% year over year.

The Unum U.K. line of business premium income was £133.9 million, up 9.1% from the year-ago quarter due to in-force block growth and higher sales. Adjusted operating income, in local currency, of £31 million was up 66.7% from a year ago.

The benefit ratio was 68.5, which improved 1270 basis points (bps) due to favorable claim resolutions driven by higher mortality in the group long-term disability product line, higher discount rates on new claims, and lower inflation-linked experience in benefits, partially offset by higher mortality in the group life product line. Sales increased 37.8%.

Persistency increased in group long-term disability but decreased in group life business and supplemental line of business.

Colonial Life: Premium income decreased 0.3% from the prior-year figure to $429.5 million due to lower persistency, partially offset by higher prior period sales. The figure compared unfavorably with our estimate of $436.8 million.

Sales increased 2.7% from the year-ago figure to $106.8 million. Adjusted operating income increased 8.7% from the prior-year period to $93.9 million.

Persistency was 77.3%, which improved 140 bps year over year.

The benefit ratio improved 20 bps year over year to 53, primarily driven by favorable mortality experience in the life product line as a result of the easing of the impact of COVID-19 on the insured population, partially offset by unfavorable benefits experience in the cancer and critical illness product lines.

Closed Block: Adjusted operating income was $58.2 million, which decreased 26% year over year.

Corporate: The segment incurred an operating loss of $33.5 million, narrower than a loss of $40.4 million in the year-earlier quarter.

Capital Management

As of Mar 31, 2023, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 425%.

Unum Group exited 2022 with liquidity worth $1.3 billion.

Book value per share grew 37.3% year over year to $46.85 as of Mar 31, 2023.

Unum Group bought back 1.3 shares for $53.6 million.


UNM expects adjusted operating income per share to increase 20% to 25%, up from the prior guidance of an 8-12% increase.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 8.35% due to these changes.

VGM Scores

Currently, Unum has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Unum has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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