Back to top

Image: Bigstock

Unum's (UNM) Q4 Earnings Surpass Estimates, Increase Y/Y

Read MoreHide Full Article

Unum Group’s UNM fourth-quarter 2019 operating net income of $1.41 per share beat the Zacks Consensus Estimate by 2.2%. Moreover, the figure improved 8.5% year over year on the back of higher revenues.

Operational Update

Total operating revenues of Unum Group were nearly $3 billion, up 3.5% year over year on higher premium income, net investment income and net realized investment gain. The top line also beat the Zacks Consensus Estimate by 0.5%.

Total benefits and expenses rose 3.3% year over year to $2.7 billion due to higher benefits, amortization of deferred acquisition costs and other expenses.

Unum Group Price, Consensus and EPS Surprise

Unum Group Price, Consensus and EPS Surprise

Unum Group price-consensus-eps-surprise-chart | Unum Group Quote

Quarterly Segment Update

Unum U.S.: Premium income was $1.5 billion, up 5.1% year over year. Adjusted operating income was up 5.8% year over year to $263.1 million.

Unum International: Premium income grew 8.7% year over year to $165.6 million. Adjusted operating income was $23.9 million, down 21.4% year over year.

Unum UK line of business reported adjusted operating income of £17.4 million in local currency, down 21.6%. Premium income was £113.9 million, up 8.6%, driven by higher overall persistency, sales growth and the impact of premium rate increases on the group long-term disability product line.

Benefit ratio of 77.3% was down 270 basis points (bps) due to an unfavorable claims experience in both the group long-term disability and group life product lines.  However, the same was offset by lower inflation-linked increases in benefits.

Colonial Life: Premium income inched up 3.6% year over year to $424.9 million, driven by growth in the prior-year period sales. Sales increased 2.6% to $209.7 million. Adjusted operating income rose 2.7% to $87.7 million.
Benefit ratio contracted 10 bps year over year to 51.5%.

Closed Block: Premium income decreased 4.5% year over year, primarily due to policy terminations and maturities. Adjusted operating income was $46.1 million, up 32.5% year over year.

Corporate: The segment incurred an operating loss of $50.5 million, wider than the operating loss of $48.2 million in the year-earlier quarter.

Capital Management

As of Dec 31, 2019, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 365%.

Unum Group exited the quarter with cash and marketable securities worth $863 million.

Book value per share was up 22.2% year over year to $49.10 as of Dec 31, 2019.

The company bought back 3.3 million shares for $100.1 million in the fourth quarter.

2019 Update

Operating income for the year came in at $5.44 per share, up 4.6% year over year. Revenues for the year totaled $11.99 billion, up 3.5% year over year.

2020 Guidance

Unum Group affirmed after-tax operating income growth per share between 4% and 7%.

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

Among other players from the insurance industry having already reported fourth-quarter earnings, the bottom-line results of Brown & Brown, Inc. (BRO - Free Report) and RLI Corp. RLI beat estimates while that of Principal Financial PFG met the mark.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Brown & Brown, Inc. (BRO) - free report >>