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Unum Group (UNM) Q3 Earnings Miss, Revenues Beat Estimates
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Unum Group’s (UNM - Free Report) third-quarter 2021 operating net income of $1.03 per share missed the Zacks Consensus Estimate by 11.2%. The bottom line decreased 14.9% year over year.
Third-quarter results were affected by higher COVID-related mortality, partially offset by growth in sales and premium, and continued strong returns in the alternative invested asset portfolio.
Total operating revenues of Unum Group were nearly $3 billion, down 0.7% year over year owing to lower net investment income. The top line however beat the Zacks Consensus Estimate by 0.2%.
Premium increased 1.5% from the prior-year quarter to $2.4 billion. Investment income declined 10.3% year over year to $550.2 million.
Total benefits and expenses decreased 5.1% year over year to $2.6 billion, largely attributable to lower benefit, interest and debt expense.
Quarterly Segment Update
Unum U.S.: Premium income was $1.5 billion, up 1.2% year over year.
Adjusted operating income was down 53% year over year to $88.5 million, attributable to lower income in the group disability line of business and loss in group life and supplemental and voluntary lines of business.
Unum International: Premium income of $181.6 million increased 9.8% year over year. Adjusted operating income was $27.4 million, up 28% year over year.
The Unum U.K. line of business’ premium income was £115.4 million, up 2.9% from the year-ago quarter, driven by 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 £18.4 million was up 21.1% from a year ago.
The benefit ratio was 79.2, down 210 basis points year over year attributable to higher inflation-linked experience in benefits and a higher average claim size in the group life product lines.
Persistency increased in group long-term disability and group life business but declined in the supplemental line of business.
Colonial Life: Premium income increased 0.2% from the prior-year figure to $420.8 million, driven by higher overall persistency and higher year-to-date sales. Sales increased 28.6% from the year-ago figure to $112.3 million. Adjusted operating income decreased 13.1% from the prior-year period to $80.1 million.
The benefit ratio deteriorated 370 bps year over year to 55.9, primarily due to an unfavorable experience in the life product line resulting from the impacts of COVID-19.
Closed Block: Premium income of $250.5 million was flat year over year as rate increases on certain in-force businesses in the long-term care line of business were mostly offset by policy terminations and maturities. Adjusted operating income was $109.8 million, which increased 55.1% year over year.
Corporate: The segment incurred an operating loss of $45.4 million, narrower than the loss of $54.1 million in the year-earlier quarter.
Capital Management
As of Sep 30, 2021, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 380.
Unum Group exited the quarter with cash and marketable securities worth $1.6 billion.
Book value per share increased 1.7% year over year to $54.39 as of Sep 30, 2021.
On Oct 25, 2021, the board of directors authorized a repurchase program of $250 million worth of shares through Dec 31, 2022. The company intends to execute an accelerated stock repurchase agreement to repurchase $50 million worth of shares in the fourth quarter of 2021.
Zacks Rank
Unum Group currently carries a Zacks Rank #4 (Sell).
Third-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) Q3 Earnings Miss, Revenues Beat Estimates
Unum Group’s (UNM - Free Report) third-quarter 2021 operating net income of $1.03 per share missed the Zacks Consensus Estimate by 11.2%. The bottom line decreased 14.9% year over year.
Third-quarter results were affected by higher COVID-related mortality, partially offset by growth in sales and premium, and continued strong returns in the alternative invested asset portfolio.
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, down 0.7% year over year owing to lower net investment income. The top line however beat the Zacks Consensus Estimate by 0.2%.
Premium increased 1.5% from the prior-year quarter to $2.4 billion. Investment income declined 10.3% year over year to $550.2 million.
Total benefits and expenses decreased 5.1% year over year to $2.6 billion, largely attributable to lower benefit, interest and debt expense.
Quarterly Segment Update
Unum U.S.: Premium income was $1.5 billion, up 1.2% year over year.
Adjusted operating income was down 53% year over year to $88.5 million, attributable to lower income in the group disability line of business and loss in group life and supplemental and voluntary lines of business.
Unum International: Premium income of $181.6 million increased 9.8% year over year. Adjusted operating income was $27.4 million, up 28% year over year.
The Unum U.K. line of business’ premium income was £115.4 million, up 2.9% from the year-ago quarter, driven by 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 £18.4 million was up 21.1% from a year ago.
The benefit ratio was 79.2, down 210 basis points year over year attributable to higher inflation-linked experience in benefits and a higher average claim size in the group life product lines.
Persistency increased in group long-term disability and group life business but declined in the supplemental line of business.
Colonial Life: Premium income increased 0.2% from the prior-year figure to $420.8 million, driven by higher overall persistency and higher year-to-date sales. Sales increased 28.6% from the year-ago figure to $112.3 million. Adjusted operating income decreased 13.1% from the prior-year period to $80.1 million.
The benefit ratio deteriorated 370 bps year over year to 55.9, primarily due to an unfavorable experience in the life product line resulting from the impacts of COVID-19.
Closed Block: Premium income of $250.5 million was flat year over year as rate increases on certain in-force businesses in the long-term care line of business were mostly offset by policy terminations and maturities. Adjusted operating income was $109.8 million, which increased 55.1% year over year.
Corporate: The segment incurred an operating loss of $45.4 million, narrower than the loss of $54.1 million in the year-earlier quarter.
Capital Management
As of Sep 30, 2021, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 380.
Unum Group exited the quarter with cash and marketable securities worth $1.6 billion.
Book value per share increased 1.7% year over year to $54.39 as of Sep 30, 2021.
On Oct 25, 2021, the board of directors authorized a repurchase program of $250 million worth of shares through Dec 31, 2022. The company intends to execute an accelerated stock repurchase agreement to repurchase $50 million worth of shares in the fourth quarter of 2021.
Zacks Rank
Unum Group currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Third-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.