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Unum Group (UNM) Q1 Earnings, Revenues Top Estimates, View Up
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Unum Group’s (UNM - Free Report) 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.
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.
Guidance
UNM expects adjusted operating income per share to increase 20% to 25%, up from the prior guidance of an 8-12% increase.
AMERISAFE, Inc. (AMSF - Free Report) reported first-quarter 2023 adjusted earnings of 83 cents per share, which outpaced the Zacks Consensus Estimate by 25.8% and our estimate of 56 cents per share. The bottom line improved 1.2% year over year. Operating revenues improved 4.1% year over year to $76.8 million. The top line beat the consensus mark by 3.2% and was higher than our estimate of $71.4 million.
Net premiums earned by AMERISAFE amounted to $69.2 million, which increased 2.4% year over year in the first quarter. The net combined ratio of 82.2% deteriorated 210 basis points (bps) year over year. The figure was lower than the consensus mark of 89% and our estimate of 89.8%.
Aflac Incorporated (AFL - Free Report) reported first-quarter 2023 adjusted earnings per share of $1.55, which beat the Zacks Consensus Estimate by 12.3% and our estimate by 17.4%. The bottom line increased 7.6% year over year. AFL’s revenues dropped 7.2% year over year to $4,800 million in the quarter under review. The top line beat the consensus mark by 4.4% and our estimate by 6%.
Aflac estimates improved sales in its Japan business for 2023, buoyed by improving pandemic conditions, product launches and updates. Management also remains optimistic about strong sales results within its U.S. business. Improving productivity and contributions from platforms like network dental and vision and group life, and disability are expected to continue supporting the results.
Voya Financial (VOYA - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.69 per share, which missed the Zacks Consensus Estimate by 1.7%. The bottom line increased 15% year over year. Adjusted operating revenues amounted to $261 billion, which decreased 4.4% year over year. The top line missed the Zacks Consensus Estimate by 9.4%.
Net investment income declined 13.9% year over year to $545 million. Meanwhile, fee income of $464 million increased 7.2% year over year. Premiums totaled $685 million, up 12.7% from the year-ago quarter. As of Mar 31, 2023, VOYA’s assets under management, assets under administration and advisement totaled $771.2 million.
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Unum Group (UNM) Q1 Earnings, Revenues Top Estimates, View Up
Unum Group’s (UNM - Free Report) 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.
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 $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.
Guidance
UNM expects adjusted operating income per share to increase 20% to 25%, up from the prior guidance of an 8-12% increase.
Zacks Rank
Unum Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
AMERISAFE, Inc. (AMSF - Free Report) reported first-quarter 2023 adjusted earnings of 83 cents per share, which outpaced the Zacks Consensus Estimate by 25.8% and our estimate of 56 cents per share. The bottom line improved 1.2% year over year. Operating revenues improved 4.1% year over year to $76.8 million. The top line beat the consensus mark by 3.2% and was higher than our estimate of $71.4 million.
Net premiums earned by AMERISAFE amounted to $69.2 million, which increased 2.4% year over year in the first quarter. The net combined ratio of 82.2% deteriorated 210 basis points (bps) year over year. The figure was lower than the consensus mark of 89% and our estimate of 89.8%.
Aflac Incorporated (AFL - Free Report) reported first-quarter 2023 adjusted earnings per share of $1.55, which beat the Zacks Consensus Estimate by 12.3% and our estimate by 17.4%. The bottom line increased 7.6% year over year. AFL’s revenues dropped 7.2% year over year to $4,800 million in the quarter under review. The top line beat the consensus mark by 4.4% and our estimate by 6%.
Aflac estimates improved sales in its Japan business for 2023, buoyed by improving pandemic conditions, product launches and updates. Management also remains optimistic about strong sales results within its U.S. business. Improving productivity and contributions from platforms like network dental and vision and group life, and disability are expected to continue supporting the results.
Voya Financial (VOYA - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.69 per share, which missed the Zacks Consensus Estimate by 1.7%. The bottom line increased 15% year over year. Adjusted operating revenues amounted to $261 billion, which decreased 4.4% year over year. The top line missed the Zacks Consensus Estimate by 9.4%.
Net investment income declined 13.9% year over year to $545 million. Meanwhile, fee income of $464 million increased 7.2% year over year. Premiums totaled $685 million, up 12.7% from the year-ago quarter. As of Mar 31, 2023, VOYA’s assets under management, assets under administration and advisement totaled $771.2 million.