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What's in Store for Unum Group (UNM) This Earnings Season?

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Unum Group (UNM - Free Report) is slated to report first-quarter 2021 results on May 5, after market close. The company delivered a negative earnings surprise of 3.36% in the last reported quarter.

Factors to Note

The Unum U.S. segment is likely to have been affected by lower natural growth in the in-force block. Disruption in group sales due to discounts and other incentives carriers are likely to have dented the sales of dental and vision business. Lower sales and persistency are likely to have hurt the group life and accidental death and dismemberment business. The Zacks Consensus Estimate for first-quarter premium income at the Unum U.S. segment is pegged at $1.5 billion, suggesting a decline of 1.4% from the prior-year reported figure.

Colonial Life is also likely to have been impacted by lower sales, unfavorable experience in the life and disability product lines, due to COVID-19. The downside was likely to be offset by a higher level of persistency, premium growth, higher net investment income and lower operating expenses. The Zacks Consensus Estimate for first-quarter premium income at the Colonial Life segment is pegged at $426 million, indicating a decline of 2.1% from the prior-year level.

The company expects an increase of 30% mortality in the first quarter of 2021.

The national mortality rate will likely affect the results of Group Life in the to-be-reported quarter.

Per the reinsurance agreement, additional Closed Block individual disability business, is expected to have been reinsured in the first quarter of 2021, subject to regulatory approval.

Lower miscellaneous investment income, decline in yield on invested assets and a decrease in the level of invested assets are likely to have weighed on net investment income. The Zacks Consensus Estimate for the same is pegged at $540 million, indicating a 7.7% decline from the prior-year quarter.

Expenses are likely to have increased due to higher benefits and change in reserves for future benefits and other expenses.

The Zacks Consensus Estimate for earnings per share is pegged at $1.01, indicating a decline of 25.19% from the year-ago reported figure.

Quantitative Model Prediction

Our proven model does not conclusively predict an earnings beat for Unum Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: It has an Earnings ESP of -0.64%. This is because the Most Accurate Estimate of $1.00 is pegged lower than the Zacks Consensus Estimate of $1.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 

Unum Group Price and EPS Surprise

Zacks Rank: Unum Group currently carries a Zacks Rank #3.

Stocks to Consider

Some stocks from the insurance space that have the perfect mix of elements to surpass earnings estimates in the upcoming quarterly releases are as follows:

Aflac (AFL - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amerisafe, Inc. (AMSF - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank of 3, at present.

Cigna Corporation (CI - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #3.

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