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Unum Group (UNM) Q2 Earnings, Revenues Top, Guidance Up
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Unum Group’s (UNM - Free Report) second-quarter 2021 operating net income of $1.39 per share beat the Zacks Consensus Estimate by 23%. The bottom line increased 13% year over year, attributable to soft performance across Unum International and Colonial Life segments.
Second-quarter results benefited from improving trend in mortality, strong returns in alternative invested asset portfolio and economic recovery.
Total operating revenues of Unum Group were nearly $3 billion, up 0.2% year over year driven by higher premiums. The top line beat the Zacks Consensus Estimate by 1.7%.
Premium increased 0.2% from the prior-year quarter to $2.4 billion. Investment income declined nearly 1% year over year to $$563.5 million.
Total benefits and expenses increased 1.7% year over year to $2.7 billion, largely attributable to cost related to early retirement of debt and rise in other expense.
Quarterly Segment Update
Unum U.S.: Premium income was $1.5 billion, almost flat year over year.
Adjusted operating income was down 22.7% year over year to $179.3 million, attributable to lower income in the group disability line of business and group life and supplemental and voluntary line of business as well as decline in accidental death and dismemberment line of business.
Unum International: Premium income of $183.5 million increased 16.8% year over year. Adjusted operating income was $24.8 million, up 64.2% year over year.
Unum U.K. line of business’ premium income was £115.1 million, up 3% from the year-ago quarter, attributable to growth in the in-force block, resulting from the impact of rate increases in the group long-term disability product line and higher overall persistency. Adjusted operating income, in local currency, of £16.8 million was up 66.3% from a year ago.
Benefit ratio was 82.5, flat year over year as improved experience in the group long-term disability product line and lower claims incidence in the group life product line was offset by higher inflation-linked experience in benefits.
Persistency increased in group long-term disability and group life business but declined in supplemental line of business.
Colonial Life: Premium income declined 4.3% from the prior-year figure to $419.7 million on account of lower sales. Sales increased 53.7% from the year-ago figure to $111.1 million. Adjusted operating income increased 5.4% from the prior-year period to $95.8 million. Persistency was 78.3%, which improved 80 bps year over year.
Benefit ratio deteriorated 100 bps year over year to 51.7 due to unfavorable experience in the accident, sickness, and disability product line, partially offset by improved experience in the life product line.
Closed Block: Premium income decreased 0.5% year over year attributable to due to policy terminations mostly offset by rate increases on certain in-force business in the long-term care line of business. Adjusted operating income was $111.2 million, which increased more than threefold year over year.
Corporate: The segment incurred an operating loss of $48.5 million, narrower than the loss of $58.1 million in the year-earlier quarter.
Capital Management
As of Jun 30, 2021, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 375.
Unum Group exited the quarter with cash and marketable securities worth $1.7 billion.
Book value per share improved 3.2% year over year to $53.57 as of Jun 30, 2021.
2021 Guidance
Unum Group expects 1-3% decline in operating income per share, an improvement from 5-6% decline expected earlier.
Second-quarter earnings of AMERISAFE (AMSF - Free Report) and Aflac (AFL - Free Report) beat the Zacks Consensus Estimate while that of Employers Holdings (EIG - Free Report) missed the same.
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Unum Group (UNM) Q2 Earnings, Revenues Top, Guidance Up
Unum Group’s (UNM - Free Report) second-quarter 2021 operating net income of $1.39 per share beat the Zacks Consensus Estimate by 23%. The bottom line increased 13% year over year, attributable to soft performance across Unum International and Colonial Life segments.
Second-quarter results benefited from improving trend in mortality, strong returns in alternative invested asset portfolio and economic recovery.
Unum Group Price, Consensus and EPS Surprise
Unum Group price-consensus-eps-surprise-chart | Unum Group Quote
Operational Update
Total operating revenues of Unum Group were nearly $3 billion, up 0.2% year over year driven by higher premiums. The top line beat the Zacks Consensus Estimate by 1.7%.
Premium increased 0.2% from the prior-year quarter to $2.4 billion. Investment income declined nearly 1% year over year to $$563.5 million.
Total benefits and expenses increased 1.7% year over year to $2.7 billion, largely attributable to cost related to early retirement of debt and rise in other expense.
Quarterly Segment Update
Unum U.S.: Premium income was $1.5 billion, almost flat year over year.
Adjusted operating income was down 22.7% year over year to $179.3 million, attributable to lower income in the group disability line of business and group life and supplemental and voluntary line of business as well as decline in accidental death and dismemberment line of business.
Unum International: Premium income of $183.5 million increased 16.8% year over year. Adjusted operating income was $24.8 million, up 64.2% year over year.
Unum U.K. line of business’ premium income was £115.1 million, up 3% from the year-ago quarter, attributable to growth in the in-force block, resulting from the impact of rate increases in the group long-term disability product line and higher overall persistency. Adjusted operating income, in local currency, of £16.8 million was up 66.3% from a year ago.
Benefit ratio was 82.5, flat year over year as improved experience in the group long-term disability product line and lower claims incidence in the group life product line was offset by higher inflation-linked experience in benefits.
Persistency increased in group long-term disability and group life business but declined in supplemental line of business.
Colonial Life: Premium income declined 4.3% from the prior-year figure to $419.7 million on account of lower sales. Sales increased 53.7% from the year-ago figure to $111.1 million. Adjusted operating income increased 5.4% from the prior-year period to $95.8 million. Persistency was 78.3%, which improved 80 bps year over year.
Benefit ratio deteriorated 100 bps year over year to 51.7 due to unfavorable experience in the accident, sickness, and disability product line, partially offset by improved experience in the life product line.
Closed Block: Premium income decreased 0.5% year over year attributable to due to policy terminations mostly offset by rate increases on certain in-force business in the long-term care line of business. Adjusted operating income was $111.2 million, which increased more than threefold year over year.
Corporate: The segment incurred an operating loss of $48.5 million, narrower than the loss of $58.1 million in the year-earlier quarter.
Capital Management
As of Jun 30, 2021, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 375.
Unum Group exited the quarter with cash and marketable securities worth $1.7 billion.
Book value per share improved 3.2% year over year to $53.57 as of Jun 30, 2021.
2021 Guidance
Unum Group expects 1-3% decline in operating income per share, an improvement from 5-6% decline expected earlier.
Zacks Rank
Unum Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Second-quarter earnings of AMERISAFE (AMSF - Free Report) and Aflac (AFL - Free Report) beat the Zacks Consensus Estimate while that of Employers Holdings (EIG - Free Report) missed the same.