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Unum Group (UNM) Q2 Earnings, Revenues Top, Premiums Rise Y/Y
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Unum Group’s (UNM - Free Report) second-quarter 2023 operating net income of $2.06 per share beat the Zacks Consensus Estimate by 10.2%. The bottom line increased 7.9% year over year.
The quarterly results reflect 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 as well as positive underlying trends, particularly in disability products.
Total operating revenues of Unum Group were $3.1 billion, up 2% 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 1.4%.
Premium increased 3.9% from the prior-year quarter to $2.5 billion. Our estimate was $2.6 billion. The Zacks Consensus Estimate was pegged at $2.5 billion.
Total benefits and expenses increased 0.5% year over year to $2.6 billion, largely attributable to higher commissions, interest and debt expense, amortization of deferred acquisition costs and other expenses. Our estimate for the same was also $2.6 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.6 billion, up 4.5% year over year. The figure was in line with our estimate.
Adjusted operating income rose 17.5% year over year to $343.1 million, attributable to higher income in the group disability line and supplemental and voluntary line of business. The Zacks Consensus Estimate was pegged at $310 million.
Unum International: Premium income of $207.9 million increased 15.9% year over year. This compares unfavorably with our estimate of $186.6 million. Adjusted operating income was $43.5 million, up 54.8% year over year. The Zacks Consensus Estimate was pegged at $33 million.
The Unum U.K. line of business premium income was £143.1 million, up 14.5% from the year-ago quarter due to in-force block growth and higher sales. Adjusted operating income, in local currency, of £34.3 million was up 59.5% from a year ago.
The benefit ratio was 72.3, which improved 1560 basis points (bps), due to favorable claim resolutions, primarily driven by higher mortality and higher discount rates on new claims in the group long-term disability product line, and lower inflation-linked experience in benefits. Sales increased 64.3%.
Persistency increased in group long-term disability but decreased in group life business and supplemental line of business.
Colonial Life: Premium income increased 0.7% from the prior-year figure to $429.5 million, driven by higher sales in prior periods, partially offset by lower persistency. The figure compared unfavorably with our estimate of $435.7 million.
Sales increased 3.2% from the year-ago figure to $122 million. Adjusted operating income increased 19.6% from the prior-year period to $115.5 million. The Zacks Consensus Estimate was pegged at $104 million.
Persistency was 77.5% in the first half of 2023, which contracted 110 bps year over year.
The benefit ratio improved 550 bps year over year to 53, primarily driven by lower claim costs in the accident, sickness and disability and cancer and critical illness product lines.
Closed Block: Adjusted operating income was $51.2 million, which decreased 41.1% year over year.
Corporate: The segment incurred an operating loss of $34.9 million versus $36.9 million earned in the year-ago quarter.
Capital Management
As of Jun 30, 2023, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 450%.
Unum Group exited 2022 with liquidity worth $1.1 billion.
Book value per share grew 21% year over year to $47.06 as of Jun 30, 2023.
Unum Group bought back 1.1 shares for $47 million.
2023 Guidance
UNM expects adjusted operating income per share to increase 20% to 25%.
AMERISAFE, Inc. (AMSF - Free Report) reported second-quarter 2023 adjusted earnings per share of 73 cents, which outpaced the Zacks Consensus Estimate by 5.8%. The bottom line improved 7.4% year over year. Operating revenues deteriorated 4.4% year over year to $73.5 million. The top line missed the consensus mark by 2.4%.
Net premiums earned amounted to $65.6 million, which decreased 6.7% year over year in the second quarter. Pre-tax underwriting profit of $9.5 million improved 1.5% year over year. The net combined ratio of 85.4% improved 130 bps year over year. The figure was better than our estimate of 85.5%.
Aflac Incorporated (AFL - Free Report) reported second-quarter 2023 adjusted earnings per share of $1.58, which beat the Zacks Consensus Estimate by 11.3%. The bottom line increased 7.5% year over year. Aflac’s revenues dropped 2.7% year over year to $5,172 million in the quarter under review. The top line, however, beat the consensus mark by 14.5%.
Adjusted net investment income fell 3% year over year to $892 million. Aflac estimates improved sales in its Japan business for 2023, buoyed by product launches, product updates and Japan Post performance.
Management also remains optimistic about strong sales results within its U.S. business. Improving productivity, 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 second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. As of Jun 30, 2023, VOYA’s assets under management, assets under administration and advisement totaled $789 million.
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Unum Group (UNM) Q2 Earnings, Revenues Top, Premiums Rise Y/Y
Unum Group’s (UNM - Free Report) second-quarter 2023 operating net income of $2.06 per share beat the Zacks Consensus Estimate by 10.2%. The bottom line increased 7.9% year over year.
The quarterly results reflect 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 as well as positive underlying trends, particularly in disability products.
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 $3.1 billion, up 2% 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 1.4%.
Premium increased 3.9% from the prior-year quarter to $2.5 billion. Our estimate was $2.6 billion. The Zacks Consensus Estimate was pegged at $2.5 billion.
Total benefits and expenses increased 0.5% year over year to $2.6 billion, largely attributable to higher commissions, interest and debt expense, amortization of deferred acquisition costs and other expenses. Our estimate for the same was also $2.6 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.6 billion, up 4.5% year over year. The figure was in line with our estimate.
Adjusted operating income rose 17.5% year over year to $343.1 million, attributable to higher income in the group disability line and supplemental and voluntary line of business. The Zacks Consensus Estimate was pegged at $310 million.
Unum International: Premium income of $207.9 million increased 15.9% year over year. This compares unfavorably with our estimate of $186.6 million. Adjusted operating income was $43.5 million, up 54.8% year over year. The Zacks Consensus Estimate was pegged at $33 million.
The Unum U.K. line of business premium income was £143.1 million, up 14.5% from the year-ago quarter due to in-force block growth and higher sales. Adjusted operating income, in local currency, of £34.3 million was up 59.5% from a year ago.
The benefit ratio was 72.3, which improved 1560 basis points (bps), due to favorable claim resolutions, primarily driven by higher mortality and higher discount rates on new claims in the group long-term disability product line, and lower inflation-linked experience in benefits. Sales increased 64.3%.
Persistency increased in group long-term disability but decreased in group life business and supplemental line of business.
Colonial Life: Premium income increased 0.7% from the prior-year figure to $429.5 million, driven by higher sales in prior periods, partially offset by lower persistency. The figure compared unfavorably with our estimate of $435.7 million.
Sales increased 3.2% from the year-ago figure to $122 million. Adjusted operating income increased 19.6% from the prior-year period to $115.5 million. The Zacks Consensus Estimate was pegged at $104 million.
Persistency was 77.5% in the first half of 2023, which contracted 110 bps year over year.
The benefit ratio improved 550 bps year over year to 53, primarily driven by lower claim costs in the accident, sickness and disability and cancer and critical illness product lines.
Closed Block: Adjusted operating income was $51.2 million, which decreased 41.1% year over year.
Corporate: The segment incurred an operating loss of $34.9 million versus $36.9 million earned in the year-ago quarter.
Capital Management
As of Jun 30, 2023, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 450%.
Unum Group exited 2022 with liquidity worth $1.1 billion.
Book value per share grew 21% year over year to $47.06 as of Jun 30, 2023.
Unum Group bought back 1.1 shares for $47 million.
2023 Guidance
UNM expects adjusted operating income per share to increase 20% to 25%.
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
AMERISAFE, Inc. (AMSF - Free Report) reported second-quarter 2023 adjusted earnings per share of 73 cents, which outpaced the Zacks Consensus Estimate by 5.8%. The bottom line improved 7.4% year over year. Operating revenues deteriorated 4.4% year over year to $73.5 million. The top line missed the consensus mark by 2.4%.
Net premiums earned amounted to $65.6 million, which decreased 6.7% year over year in the second quarter. Pre-tax underwriting profit of $9.5 million improved 1.5% year over year. The net combined ratio of 85.4% improved 130 bps year over year. The figure was better than our estimate of 85.5%.
Aflac Incorporated (AFL - Free Report) reported second-quarter 2023 adjusted earnings per share of $1.58, which beat the Zacks Consensus Estimate by 11.3%. The bottom line increased 7.5% year over year. Aflac’s revenues dropped 2.7% year over year to $5,172 million in the quarter under review. The top line, however, beat the consensus mark by 14.5%.
Adjusted net investment income fell 3% year over year to $892 million. Aflac estimates improved sales in its Japan business for 2023, buoyed by product launches, product updates and Japan Post performance.
Management also remains optimistic about strong sales results within its U.S. business. Improving productivity, 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 second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. As of Jun 30, 2023, VOYA’s assets under management, assets under administration and advisement totaled $789 million.