Q4 2023 Unum Group Earnings Call

Participants

Christopher Wallace Pyne; EVP of Group Benefits; Unum Group

J. Matthew Royal; SVP of IR & Treasury; Unum Group

Richard Paul McKenney; President, CEO & Director; Unum Group

Steven Andrew Zabel; Executive VP & CFO; Unum Group

Timothy Gerald Arnold; Executive VP of Voluntary Benefits & President of Colonial Life; Unum Group

Unidentified Company Representative

Jamminder Singh Bhullar; Senior Analyst; JPMorgan Chase & Co, Research Division

Joshua David Shanker; MD; BofA Securities, Research Division

Mark Douglas Hughes; MD; Truist Securities, Inc., Research Division

Michael Augustus Ward; Research Analyst; Citigroup Inc., Research Division

Ryan Joel Krueger; MD of Equity Research; Keefe, Bruyette, & Woods, Inc., Research Division

Suneet Laxman L. Kamath; Equity Analyst; Jefferies LLC, Research Division

Taylor Alexander Scott; Equity Analyst; Goldman Sachs Group, Inc., Research Division

Thomas George Gallagher; Senior MD; Evercore ISI Institutional Equities, Research Division

Unidentified Analyst

Wilma Carter Jackson Burdis; Research Analyst; Raymond James & Associates, Inc., Research Division

Presentation

Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Unum Group Fourth Quarter 2023 Earnings Results and 2024 Outlook Conference Call. (Operator Instructions)
Matt Royal, Senior Vice President of Investor Relations, you may begin your conference.

J. Matthew Royal

Wonderful. Thank you, Rob, and good morning to everyone. Welcome to Unum Group's Fourth Quarter 2023 Earnings Call.
Today, we will be discussing full year 2023 results, along with highlights from the fourth quarter. We will also use the time to discuss our outlook for 2024.
Please note that today's call may include forward-looking statements. Actual results, which are subject to risks and uncertainties may differ materially, and we are not obligated to update any of these statements. Please refer to our earnings release and our periodic filings with the SEC for a description of factors that could cause actual results to differ from expected results.
Also, today's presentation may include non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measures can be found in our earnings release and the Investor Relations section of our website.
Also, please note, references to Unum International sales and premium are presented in local currency and core operation sales and premium results are presented on a constant currency basis.
Further, discussion of adjusted operating 2023 EPS growth of 23% or $7.66 compares to 2022 historically reported EPS of $6.21.
Yesterday afternoon, Unum released our earnings press release, financial supplement and webcast presentation. All of those materials may also be found on the Investors section of our website.
Participating in this morning's call are Unum's President and CEO, Rick McKenney; and Chief Financial Officer, Steve Zabel. Following the remarks from Rick and Steve, additional members of management will participate in Q&A, including Mark Till, who heads our Unum International business; Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines and Chris Pyne for Group Benefits.
Now I'll turn the call over to Rick.

Richard Paul McKenney

Great. Thank you, Matt, and good morning, everyone. It's a pleasure to be here with you all today, sharing the journey of Unum throughout 2023 and where we're headed in 2024. This is the first time we've shared our outlook in conjunction with our year-end results, and I think it works well, given the consistency of our actions and performance across the company.
As we reflect on our progress and look ahead, I am proud to affirm our unwavering commitment to our purpose of helping the working world thrive throughout life's moments. Steadfast focus and commitment to this purpose is delivering value to customers, employees, communities and, of course, to shareholders.
2023 was a year of exceptional results across the board, with a highlight being our decades-long leadership in disability insurance shining through, and core business growth momentum building stronger with significant strides in accelerating our industry-leading digital capabilities. The capabilities we are bringing to market, such as HR Connect, Total Leave, Gather and Help@Hand are becoming connection points with employers and employees, to bring greater customer satisfaction to the benefits experience. These advancements have been influential in attracting and retaining customers, setting us apart in a competitive landscape, and ultimately driving strong top line results, including sales of over 13% for the full year of 2023 and premium growth of over 5%.
This top line growth has returned steadily throughout the year and has us on the trajectory that we look for in our business model.
As the top line has returned in 2023, our discipline with how we run the business has not wavered. Our pricing and underwriting has remained consistent to continue to deliver growth and high returns on equity.
Overall, we grew EPS 23%, with most of our product lines delivering on our expectations throughout the year. I mentioned the highlight of group disability returns, but I would extend that to most of our products and continue to -- that continue to generate mid- to high-teen returns.
An area that understandably received attention in the third quarter was our Closed Block. We have seen volatility in the performance of that block. And today, Steve will provide some ways to look at its overall health and performance outside of just its loss ratio.
From a capital standpoint, we've executed our plans exactly how we describe them coming into the year, and with good results. So we exceeded expectations on value delivered to our shareholders. We raised our dividend by 10% and increased the pace of our share repurchases throughout 2023 and announced a plan to double the amount we repurchased in 2024 with our $500 million authorization.
Most notably, we described a desire to fully fund the premium deserve -- premium efficiency reserve and contribute the capital needed to support our long-term care block.
Steve will discuss further, but let me emphasize -- given our current assumptions and capital buffers, we have stated that we believe long-term care will not need additional capital for 5 years. But in reality, our belief is that will be true for much longer.
Across the company, the reason that we have been able to achieve such capital results goes back to the fact that our businesses steadily generate strong cash flow. And with a year of good results, we ended the year with financial metrics that were stronger than expected, including holding company cash of $1.7 billion and RBC of 415%.
Looking forward, we now expect to generate free cash flow between $1.2 billion and $1.4 billion per year.
As we transition to think about 2024, the momentum from the past several years continues. We're witnessing both a market backdrop and economic environment that are highly supportive of our business, providing us with ample opportunities to grow and thrive.
Our focus is to continue building on our solid foundation. We're dedicated to enhancing our core operations, maintaining our disciplined approach and continuing to innovate in ways that resonate with our customers and the market.
When we look across the company, we are hitting the ground running, and our teams are looking to build on some very strong growth rates with consolidated sales growth of high single digits and combined with good persistency, yielding premium growth in the 5% to 7% range.
Consistent margins and the purchasing of shares will deliver growth of 7% and 9% on top of the 23% adjusted EPS growth we delivered in 2023.
Our customer-centric approach remains at the heart of our strategy. We're constantly adapting our services to meet changing market needs, ensuring we remain the preferred choice for our clients. When we met last February, we outlined our strategy and plans to build on our market-leading position. We can report that we are advancing along all fronts, and we are seeing the results.
For Unum in the U.S., we are leveraging our go-to-market expertise to connect benefit solutions to HR platforms effectively, while also ensuring our leave management is a differentiator. With over 1,500 customers and counting, we've reached a notable sales milestones with our HR Connect capability, which deeply integrates with leading human capital management platforms and we now cover over 1 million employees through Unum's Total Leave offering.
In addition, we saw strong momentum in the trend of customers bundling products. Our efforts are geared towards seamless enrollment, billing and administration via My Unum and establishing robust connections with select third-party platforms.
These efforts to leverage technology to improve the customer experience are paying off. And in 2023, we saw record levels of employer satisfaction for customers on the My Unum platform.
In Colonial Life, the focus is on continuing to build and support our independent sales force with enhanced tools and solutions, such as our proprietary industry-leading Agent Assist technology, which enables automated lead generations, CRM and workflow, boosting agent productivity.
Another key development in our arsenal is Gather, which modernizes enrollment and benefits administration and streamlines the client experience. The offering has been building, is evidenced by the annual premium associated with it, increasing from $10 million to $50 million over the course of 2023. And finally, enabling Colonial Life agents to offer Unum employer-paid products ensures they have the solution for any employer or broker.
For Unum UK, our approach has been to redefine the broker experience, setting a market-leading standard that is distinctively Unum and enhancing our relationship management model.
We are dedicated to providing value-added services that drive customer engagement and loyalty, such as through Help@Hand, which offers integrated value-added services and by delivering comprehensive management information that yields actionable insights.
Moreover, we're expanding our product set to encompass a broader spectrum of risk and well-being solutions, ensuring we meet the diverse needs of our clients.
And finally, in Unum Poland, we're forging ahead with a robust strategy tailored to the local market. We're scaling our direct to SME sales team and fortifying partnerships with local brokers, thereby extending our distribution network and geographical reach. All these efforts will drive growth in the number of employers and customers we serve and in turn, will be -- will generate the growth of premiums and earnings we have articulated.
Looking forward, we will also remain disciplined stewards of our capital and franchise value, and the consistency of our capital priorities remains intact. First, we ensure investments directly supporting our business. We have a clear growth strategy continued to build out our offerings and capitalize on our well-positioned and profitable products.
Second, we will look externally to identify and pursue selective M&A that supports our internal initiatives and that are in line with this strategy.
And third, we will continue to return capital to shareholders via regular dividend increases and share repurchases, as we have demonstrated through our actions and increasing both commensurate with our plans.
Summing it up, our strong capital generation, $500 million of share repurchases and no LTC contributions will leave us in a position of greater than 400% RBC and holding company cash greater than $2 billion.
For 2024, our commitment to innovation, prudent capital allocation and shareholder returns remain steadfast. As a result, we are on track to surpass the objectives we established a year ago, and our fortified position in the market is a testament to the hard work and dedication of our teams across the globe.
The strides we've made in our digital footprint, customer engagement and capital management are the very engines of our growth.
In closing, we entered 2024 with confidence in our position and ready to build off of our achievements of 2023. With our customer-first mindset, agile operations and comprehensive financial strategies, we are not just anticipating the future, we are actively shaping it.
2024 is going to be an exciting year for Unum.
I'd like to now hand it over to Steve to provide further insights into our financial strategy and outlook as well as provide insight into the Closed Block. Thanks for your attention once again today. And Steve, I'll turn it over to you.

Steven Andrew Zabel

Great. Thanks, Rick, and good morning to everyone. As Rick mentioned, we were extremely pleased with the strong finish to the year across the board. This caps 2 years of continued momentum building in our core operating segments. This is evident in both our sales and operating results.
For the full year, sales were up 15.1% in Unum U.S., 26.7% in Unum International and 6.2% in Colonial Life, where we saw accelerating growth each quarter, including 11.5% growth in the fourth quarter compared to the same period a year ago.
Premium for our core operations increased 6.1% in the quarter compared to a year ago and finished up 5.2% for the full year, exceeding the expectation laid out last February and more consistent with our long-term expectation.
Disability results were favorable across the company as well, highlighted by a group disability benefit ratio of 59.1% for the full year and 59.5% in the quarter. We do expect benefit ratios in the low 60s to continue in the near to midterm, as we continue to see support for these levels in both our operations and in the market. These same trends are also supporting strong performance in our individual disability and U.K. Group Income Protection product lines.
We ended the year with after-tax adjusted operating income at $1.5 billion and after-tax adjusted operating EPS of $7.66, which represents growth of 23.3% over historically reported full year 2022.
The fourth quarter's results of reported after-tax adjusted operating EPS of $1.79 was impacted by 2 items that I would like to mention. First, the effective tax rate in the fourth quarter was elevated at 22.8%. We expect the long-term rate to be between 21.1% and 22% -- or 21.5% to 22% and vary some from period to period due to foreign tax dynamics.
The variance in the fourth quarter lowered EPS by approximately $0.03.
Further, Colonial Life Benefits were higher by $21.7 million or $0.09 of EPS pressure, due to a onetime reserve model refinement. When adjusting for these 2 items, which represents a better view of underlying earnings power, adjusted operating EPS in the quarter would have been $0.12 higher.
The strong earnings power for GAAP was also apparent in our statutory results, with full year after-tax operating earnings of over $1.3 billion, well ahead of our outlook last year of roughly $1 billion.
These results drove significant upside to our original expectation of capital generation and as a result, our capital position.
Top line results were also notable this year, with both sales and premium for our core operations outperforming the top end of their outlook ranges at 13.4% and 5.2% respectively.
Fourth quarter's results also show that momentum isn't slowing, which we believe will set us up nicely for continued growth in 2024. These strong growth metrics are a testament to the value of our offering in the market and the success we are seeing with our key strategic initiatives that Rick discussed.
Investing in these capabilities to grow our core business is a key capital priority. And as a result, the full year 2023 adjusted operating expense ratio increased to 21.7%, slightly above our expectations coming into the year. We continue to expect the expense ratio to taper off over time, as the impact of our investments take further hold.
For full year 2024, we expect our adjusted operating expense ratio to be slightly lower than 2023.
Now let me briefly review our 2023 results by segment. For Unum US, adjusted operating income increased 39.4% to $1.36 -- to $1.36 billion in 2023 compared to $972.6 million in 2022. As mentioned earlier, these results were bolstered by disability performance, with group disability experiencing full year adjusted operating earnings growth of 56.1% in our individual disability line of business, driving overall supplemental and voluntary growth of 11.7% for the year.
Further, group disability ended the year with an ROE of [30.88%].
The group life and AD&D lines experienced adjusted operating earnings growth of 94.8%, as the impacts from the pandemic waned. The fourth quarter's results of $68 million were the highest since the beginning of the pandemic and were driven by favorable labor experience, lower incidents in AD&D, with continued lower mortality results.
From a growth perspective, Unum US earned premium grew 5.2% to $6.6 billion due to natural growth, higher sales and solid persistency. This result was in line with our expected premium growth rate of 4% to 6%.
Now moving to Unum International. The segment continued to show strong trends in its underlying earnings power, with adjusted operating income of $158.1 million for the year, up 18% compared to the prior year.
Fourth quarter U.K. results were in line with our outlook for adjusted operating earnings levels in the mid-20 million pound range, excluding the impacts of inflation.
Inflation has moderated since last year's highs, and we expect this will continue as the environment normalizes, but still benefited the U.K. this quarter by approximately GBP 5 million.
We are extremely pleased with the growth levels in the U.K., highlighted by full year sales growth of 18.6% and premium growth of 11.6%, well ahead of our original expectations of 2% to 5% and 2% to 4%, respectively.
While the U.K. business is a major driver of this segment, Poland saw significant levels of growth, increasing sales, 76% and premium 24.2% for the year.
Now turning to Colonial. The segment saw growth return after a couple of years of challenged results, due to the impacts of the pandemic on our sales process and agent productivity. Sales growth of 6.2% and premium growth of 1.4% for the full year, does drive optimism for the further growth in 2024 and our ultimate target to return to the high single-digit level of growth that this segment historically achieved.
From an adjusted earnings perspective, full year results of $400.1 million were lower than $412.9 million a year ago, largely due to a number of unique items throughout the year, including the reserve model refinement in 4Q. That said, full year ROE was impressive at 18.1%, and we expect a high level of earnings power from this line as we enter 2024.
Switching gears to the Closed Block of business and focusing on this quarter, adjusted operating earnings of $21.3 million were below our expected run rate of $30 million to $40 million and last quarter's results of $34.2 million, as both long-term care and the remainder of our closed disability block saw sequential declines.
The net premium ratio, which is indicative of the lifetime benefit ratio expectation, increased slightly to 93.5%, from 93.4% in the third quarter of 2023.
Under LDTI, the combination of earnings results and movements in the net premium ratio provides a more comprehensive view of long-term care claims performance compared to the previously reported interest-adjusted loss ratio, which we observed could distort underlying claims experience trends and focus solely on experience in that quarter.
Overall, underlying claims experience for the block was largely in line with third quarter. Incidents remained above long-term expected levels, but has improved from the higher levels seen earlier in 2023.
We continue to believe that the elevated incidence rates in 2023 were a function of inventory levels normalizing in the environment following the pandemic. We expect to see a continuation of claims catch-up in 2024, albeit at a dissipating rate.
Lastly, for the Closed Block, our alternative investment portfolio, which largely backs LTC, produced income of $21.5 million in the quarter. Since inception, our diversified alternative portfolio has produced returns in line with our long-term expectation of 8% to 10%.
Rounding up the segments, the Corporate segment produced a loss of $36.5 million in the quarter, and we expect this level of loss to continue at slightly higher levels in 2024.
So then stepping back, 2023 was an incredible year for the company, and as we turn to 2024, we see many of the same tailwinds and opportunities to win.
So with all that considered, it's time to talk about our outlook for this year, and I'll start with our view of business growth and earnings power, discuss how that plays in the capital generation. And then I'll end with a little bit of a discussion on how we're executing on our strategy for long-term care.
So just to orient everyone on the slides and make sure that we're following along, we're on Page 7. And I want to kick off this discussion. I really reflect back to a year ago at our last outlook meeting and in summary, we have delivered what we described last February when we were in New York City and are poised to deliver even stronger performance in 2024.
We led off that discussion with a key message, and that message was that we have the ability and capacity to chart our course in 2023. And I believe that is even more true as we go into 2024.
So 4 key messages for the outlook discussion. Number one is top line growth. It is very strong, and it's fueled by momentum and the digital capabilities that Rick mentioned.
Number two, the earning growth rates really stabilizing back to our long-term expected range after 2 years of very high levels of growth, coming out of the pandemic and specifically some highlights that I'd like to note. First, group disability is back to prepandemic incidence rates, with historically favorable levels of recovery.
The second thing to note is group life is back to pre-pandemic levels of earnings. Third, we have a full recovery of our U.K. business model, with double-digit growth rates. And lastly, momentum continuing to build in Colonial Life and the franchise that we have there.
The third message for the outlook is we're at an inflection point in free cash flow. And that's due to no contributions needed for long-term care in 2024, which will allow us to return more capital to shareholders while maintaining significant capital buffers.
And I would end with the key message of our capital generation is really at full strength, with all capital metrics well in excess of targets.
So then I'll move on to Page 8, and I just want to briefly hit on some highlights for top line expectations. We have healthy core businesses, which will deliver strong levels of growth in 2024. But I want to reflect a little bit that we just came off a really good growth story in 2023. And in Unum US, sales grew 15%, with premium growing over 5%. In International, sales grew close to 30%, premium growing over 14% and in Colonial, sales growing at 6.2%, with premium close to 1.5% growth.
And then I would say to top this all off, we have maintained industry-leading margins. Our secret sauce is really to grow in a disciplined way that is sustainable and leads ultimately to earnings growth and capital generation for future growth and deployment to our shareholders.
Moving on to Page 9, talk a little bit more about earnings growth. So the top of the house view here is with most of our 2024 metrics, they are in or relatively in line with our long-term expectations.
Long-term expectations for sales increased as we see the benefits of our investments in technology. We have strong projected earnings growth, despite record levels of earnings power in 2023. It really shows the strength of the franchise. But what I'm most optimistic about is our premium growth story, as we believe the growth rates of our core businesses can surpass the growth we saw in 2023, which was still a year of recovery in some ways.
Then transitioning to Page 10, talk a little bit about our sources and uses of capital. And I'll orient you on the left side of the page around capital generation and really start with statutory earnings.
Similar to the GAAP earnings that we just discussed, U.S. statutory earnings are also projected to be robust. And -- but the one thing, just to remind the audience of, is that these earnings will be available for dividends up to the holding company in the following year or 2025. But 2023 statutory earnings of over $1.3 billion are available to us this year in 2024.
I move next to international dividends. Given the recent performance in the U.K., they are now able to contribute their fair share of earnings through dividends to the holding company.
Next, our service agreements. Those are mainly through investment management agreements, and they continue to be a strong source of free cash flow to the holding company. And so our capital generation capacity remains strong and in line with our 2023 actuals, but well above last year's outlook.
So considering our interest expense expectation of $200 million, our free cash flow generation is a healthy $1.2 billion to $1.4 billion, as we move past the period of capital contributions being needed for LTC.
So then we arrive at capital deployment back to our shareholders, and that is also increasing significantly, with an expected increase in the dividend of 10% to 15%, which we will discuss with our Board later this spring and announce in the coming months. And doubling the amount of dollars spent on share repurchase, consistent with the authorization we received at the end of last year. I would note that these repurchases in 2024 may not be straight line throughout the year, if we do see opportunities in the market to maximize this authorization throughout the year.
And then our use of excess capital generated will follow our capital priorities, grow core businesses, either through organic investment or inorganically, shareholder dividends and then share repurchase.
So then moving on to Slide 11, talk a little bit about capital targets. I'm not going to spend too much time here, as you will see consistency in our targets and our company performance.
2023 saw capital levels well in excess of our targets and 2024 projections to be similar, providing us substantial financial flexibility. I will add that these levels of flexibility are supportive of our goal of maintaining a single A financial rating. We continue to make progress on that front in 2023 with our upgrade by Fitch towards the end of last year.
Okay. Let's move on to a few topics regarding long-term care, and I will move to Page 13. So to recap our strategy, we have a focused strategy for managing the Closed Block, which we have progressed and continued to progress, and is focused on 3 things: creating value, reducing the footprint and increasing predictability of outcomes.
In line with this strategy, we executed on a number of items, we teed up as priorities with you in early 2023, and we continue to use a number of actions as we enter 2024. We have continued to mitigate interest rate risk and have done so at the current favorable interest rate environment. By repositioning cash flows and hedging, we've been able to reduce interest rate sensitivity to date by 25%, and how we measure that is with a basic DV01 measurement, which is really the dollar duration impact to surplus. So think about the sensitivity of our surplus to 100 basis point movement in prevailing interest rates.
We continue to pursue justified rate increases. Last year, we achieved over $450 million in GPV of increases and are nearing $4.5 billion of rate increased value since we started our program.
And then we are using our strong capital position to create capital capacity and flexibility, providing the ability to navigate adverse events and creating confidence in our go-forward free cash flows.
As committed last year, we fully recognized the premium deficiency reserve at year-end. This was an important step in protecting our future cash flows, and we will talk more on this in a moment.
And finally, we remain active and we'll continue to look for risk transfer solutions.
So then moving on to Page 14. I want to spend a little bit of time talking about our interest rate risk management and I really want to cover 3 topics here. One, discuss where we've been and accomplished over the last year; two, what the benefit of those actions were; and three, how that has helped to mitigate any capital requirements in a downside interest rate scenario.
So first of all, I'll talk about hedging and repositioning and how that's allowed us to better match duration and fruit quality and reduce interest sensitivity. So we kicked off our more recent hedging program at the beginning of last year. Since then, we have entered into 2.6 billion of notional treasury forwards, and those do have an average treasury yield of 4%. And as you know, we look out and take a 7-year horizon, and it's really to try to derisk the yields at which we can invest those cash flows as we look to the near to medium term.
Secondly, in the third quarter of last year, we executed on a $700 million repositioning program within the LTC portfolio. And the objective of that was really to look at shorter duration assets and derisk the new money rate that we'll be able to invest those on and extend the duration to longer-duration assets. We took the opportunity to do that at a nice place in the interest rate environment. We improved portfolio quality, we increased yield, and we did extend duration with no capital impact.
And so the results of that is we were able -- as I mentioned, we were able to improve our duration matching measures by 25%, but we also reduced the PDR in Unum America, the sensitivity to interest rate movements by 30%. And that's really demonstrated then in the chart on the right side of the page.
And so let me explain the table on the right quickly. It's really the same concept that we used in our Investor Day materials last year, but I just want to orient you on it. At year-end, the premium deficiency reserve that was recorded was at $1.6 billion. And then the sensitivities that we're showing here are for the 30-year treasury yield and the impact that those would have over time with our new money rate assumption that then is incorporated into our liability discount rate.
And so as an example, at a 4% assumption, the $1.6 billion of PDR would be reduced by $1.1 billion, assuming that the 4% assumption worked its way all the way into our 3-year trailing average that we use for that construct.
So the dynamic, it really provides flexibility and appropriately manage our LTC commitments. And so I think it's key 2 concepts here. One, we do have time to adapt as those rates work into our assumption. But I think the other thing that's very important, and we have a note on the page, is that our interest rate management actions have significantly dampened any downside risk of interest rate movements on the PDR or balance, and I'll call out the 2% assumption here and highlight the fact that, that sensitivity has been reduced by $450 million because of the actions that we have taken over the last couple of years around both hedging and our repositioning of the portfolio.
All right. Then I'll move on to Page 15. And I want to give a little bit more information about both how we think about reserve sufficiency, but also some sensitivities. And so the orientation for this page is we talk about $2.8 billion of protection. What that really represents is our view of our current level of statutory reserves in excess of our view of the best estimate of that liability, for the liability that's within Unum America and reinsured to Fairwind. Plus the excess capital that we have within the Fairwind entity in excess of those targets that we set.
Then when you go to the table, those are really sensitivities independent of that protection, where we look at the assumptions built into our best estimate, and we look at the dollar amount impact to our best estimate, given the sensitivities. And so specifically, I would say these are liability assumption sensitivities. We addressed interest rate sensitivities on the previous page.
So let me walk you through a little bit the sensitivities themselves. So on the premium rate increase, the $1 billion really represents the full amount of value we have currently in our best estimate assumption. And so the sensitivity is to completely remove that.
I would say from my perspective, we have had a great track record over the years to be able to deliver on achieving our premium rate targets. In fact, we've always -- we've already made very good progress in the achievement of that $1 billion, just since we've launched the program back in the fall.
Secondly, morbidity and mortality improvement. The assumption within the best estimate reserve is $700 million. And so this sensitivity would be to fully remove that. We do believe, and we've seen over time, improvement in both morbidity and mortality in our experience. So we do believe that, that assumption is backed up by the data and the experience that we've seen, but we've gone ahead just for purposes of the presentation to fully remove that, to give an indication of the size of that assumption.
And then we have 3 more assumptions, which are policy lapse and mortality or claiming incidents and our claim resolutions. We've given sensitivities here down 7.5% for the whole of lapses and mortalities, an increase in claim incidents of 3% and a decrease in claim resolutions, mostly due to mortality of 2%. And the way to think about that is those roughly approximate one standard deviation difference over the entire life of the business for these sensitivities, and you can see the resulting impact to our best estimate.
The one thing to also remember, though, when it comes to those last 3 assumptions, it's critical to remember that we still do have the ability to increase our rate increase actions, as a form to mitigate those adverse developments and the impact of those additional rate increases are not reflected in these individual liability sensitivities.
So then 2 other items to note on this page. First of all, excess capital, as it emerges, which we do think will emerge in Fairwind over time. It can be used to meet LTC needs across all the entities. And the point there is, we do have the ability, over time, to make decisions about how to use that excess capital that, over time, we believe will build in Fairwind.
And then the second item to note is given our current position along with the PDR balance dynamics described above, would be expected to meet the capital needs of the book, as it does progress to peak reserves in the next 10 years. So just to reiterate, under our current assumptions and in the current interest rate environment, the actions we have taken, create confidence that future cash flows of the enterprise will be insulated from LTC needs.
And then I'll finish off on Page 16. So to close this out, let's discuss some key indicators of long-term health of the business. And we look at 4 metrics. First, the net NPR or Net Premium Ratio. With the shift to LDTI, we believe that MPR provides a long-term outlook for block claim experience, and we will look at the movement in that metric over time. We gave that movement in our comments this quarter, and we'll continue to do that over time.
Secondly, Closed Block earnings. While we expect quarterly volatility, we would expect an annualized run rate in the $130 million to $160 million range, in an environment where experience may vary quarter-to-quarter, assuming alternative asset yields are near longer-term ranges.
The third metric would be rate increased progress, and this is a key element of our strategy, and we monitor progress against our best estimate assumptions.
Recall that we increased the scope of the program with our latest assumption review, and so we'll give information over time, how we're progressing as a percentage against that best estimate assumption within the reserve liability.
And then lastly, the 30-year treasury rate. And in particular, we will look for the 3-year average to remain above the 2.84% rate, which represents the current 3-year average. That rate underlines our new money assumption that feeds into our liability discount rate for the premium deficiency reserve. Rates above this would signal a positive impact on the overall discount rate and related balance of the premium deficiency reserve as represented on Page 14 of the stack.
So to wrap up, we have very exciting top and bottom line expectations for 2024. We think our financial flexibility has never been stronger, and we look forward to the year ahead.
Thank you again for attending today's call, and I look forward to your questions. And now I'll turn the call back over to Rick to close.

Richard Paul McKenney

Great. Thank you, Steve. As you can see and based on Steve's and my comments, 2024 is shaping up to be a great year for Unum. The teams are very focused on what we want to achieve this year, and continued momentum in our core business and the inflection point we're seeing with capital, now that our LTC block is funded, as Steve articulated, really puts us in a very good spot.
So there's plenty of topics to discuss today. So with that, I will -- the team is here to field questions and I'll turn it back to you, Rob.

Question and Answer Session

Operator

(Operator Instructions) Your first question comes from the line of [Joel Hurwitz] from (inaudible)and Partners.

Unidentified Analyst

First on the core businesses, if I compare the '24 earnings outlook relative to what you guys guided a year ago, I estimate that core business earnings expectations are over $150 million better than what would have been implied a year ago. I guess do you see this level of core business earnings as a sustainable longer term? Or would you expect to have to give back some of the favorable risk results over time?

Steven Andrew Zabel

Yes, this is Steve. I can take that question. And I'll just maybe get into the math a little bit how we're thinking about expectations going into '24.
I think the key to think about with our core businesses, we do believe that we're going to be able to maintain the margins in our group disability business through the next year. And specifically, we believe that the benefit ratio for group disability will remain in that low 60% level.
I would also note that we do anticipate an increase in Colonial Life earnings. I did mention we had several onetime items that did dampen the earnings of Colonial Life in 2023. And we think in 2024, that earnings will come through on a more kind of core basis.
And then maybe we can hit a little bit on just the commercial environment and competitive environment and just the level of pricing in the group benefits line.

Christopher Wallace Pyne

Yes. Thanks, Steve. Thanks for the question, Joel. This is Chris. We're really excited about where we stand, and I'd like to start with capabilities. When we're talking to new customers, we're really there to help solve problems. We see many more prospects in the market, who are looking to solve big problems that we address through. Some of the things Rick mentioned with Total Leave and HR Connect and My Unum. That changes the game versus a more traditional price check type environment.
So from a new business perspective, we are writing strong levels of business. We expect that to continue, and we're hitting price point. That's a great day.
From a renewal perspective, business is favorable. And we look at it very much on a case-by-case basis. We are -- our history of strong risk discipline from an underwriting perspective serves us really well.
Again, these customers value what we bring. We're able to show up in these discussions, we have an opportunity to talk about long-term price stability, whether it be modest rate increase, rate pass or rate reduction and our persistency results through the close of '23 were quite strong as we go into '24.

Unidentified Company Representative

I think, Joel, you hit it. There was a step-up in 2023 from an earnings perspective, but you can see from our outlook in 2024, we're looking to grow off it. So 7% to 9% on top of a very strong year. All those indicators that we talked about and as Chris articulated, in particular to our group disability, but even with our Colonial Life business are all intact, and that leads us to our good outlook coming off of an incredibly strong year.

Unidentified Analyst

Okay. Helpful. And then in terms of long-term care, I guess, what gives you guys confidence that the experience you've been seeing is more of a catch-up versus a longer-term shift in trends?
And then in terms of the outlook, what's embedded in 2024 guidance for Closed Block earnings?

Steven Andrew Zabel

Yes. This is Steve. I can take that one. So related to incidents, I just kind of take people back a little bit on long-term care and where we've been.
At the beginning of 2023, we saw very elevated incidents through the first 6 months. We saw that start to abate a little bit in the third quarter, albeit at still elevated levels.
Going into the fourth quarter, I would say those incidence levels were pretty consistent with what we saw in the third quarter.
But what we also saw during the pandemic were fairly low levels of incidents. And we could just see, when we're looking at just kind of our inventory trend lines that we were a bit below the trend lines that we would ultimately expect. And so as we approach back to those, that gives us some confidence that this was just kind of pent-up demand.
The other thing that we've seen a lot of over the last 6 months, I would say, and maybe even a little bit before that, was the higher level of resubmission of claims, and those would be claims that had previously been submitted, but either denied or closed or recovered for other reasons. And we've seen the level of those come back in, which might indicate claims that originally had been pulled back, but now have been submitted.
And so obviously, we have to continue to monitor this. We do believe that the level of incidence for a while in '24 will probably continue at an elevated level, but we would look to monitor that then as we get into the back half of the year. And I would say within our outlook, we still do have a level of elevated incidents built into that outlook.

Operator

(Operator Instructions) Your next question comes from the line of Alex Scott from Goldman Sachs.

Taylor Alexander Scott

First question I had is just on the excess capital position. At the holdco, it got a lot stronger with a big dividend that seems in 4Q and you're projecting it to get better in 2024. So just thought maybe you could give us at high level, what are the priorities there? You've outlined share repurchases, and we know where comp dividends are, it looks like you're at $0.5 billion after that, the sort of not earmarked. So what are the priorities for using that?

Richard Paul McKenney

Sure. Thanks, Alex. Just to take you back, everyone back, we mentioned a couple of times, but the capital generation this year was very, very strong. We see it continuing as we go forward. And we ended the year in a very good capital position as we've been building that throughout 2023. So first of all, I'll start there.
Second is last year, a priority was putting more money behind long-term care and funding that level of funding up the PDR, and so that was accomplished. And I think that leaves us in a good spot as we've talked about, no more money going towards long-term care.
And so then we think about the deployment opportunities we have in 2024, I'd start out first with putting it right back in our core businesses, investing in the digital capabilities we talked about. From an organic perspective, that's contemplated in our earnings as we talk about as we fund internal initiatives. And we'd like to look at M&A to how do we continue to accelerate that growth rate. Capabilities, things that surround our business, whether it's distribution, product, internal capabilities, we'll continue to look at.
And when you do all of those different things, we then look at our -- how we'll deploy it back to our shareholders. Steve mentioned the dividend expectation even ticked up a little bit, that 10% to 15% range this year. And share repurchase, which is double where it was a year ago at 500 million.
Doing all of that, we still have building capital levels, and we'll have to contemplate that over time, what we want to do with that.
These are different trend lines that we're on from a generation as well as from a deployment perspective. And so we'll be thoughtful in 2024 about how we do that. I think Steve articulated on one of his slides and mentioned, we're going to be dynamic with share repurchase. So it's not something we're putting out there today. But clearly, as you said, we're in a much higher level of capital that we've seen over time. And we have lots of potential uses for it. Nothing particular that we have today we build, but we'd love to use some of that capital to deploy to grow our business faster, and then if we don't see that opportunity, to turn it back to our shareholders.

Taylor Alexander Scott

Got it. Very helpful. And then I wanted to go back to some of the comments you're making on being fully funded on LTC. I guess when I look at the one slide that's got the bullet on reserves peaking in 10 years, and there's -- I know you talked in the past about the natural sort of higher required capital is that reserve level builds. If we think through where interest rates are right now and sort of the billion and change of PDR balance coming down, is that enough to be fully funded just for like some finite period of time? Or when you were looking at that reserve build and then getting over the peak of it, is it really that your base case is that you're actually projecting at this point that you never have to fund it ever again? I mean I just want to understand what you mean by being fully funded and if that's changed at all?

Steven Andrew Zabel

Yes. This is Steve. So I would separate. When we say fully funded and those statements, that's specific to -- in 2023, we fully recognize the PDR and we downstream capital, okay?
If I look forward, though, and we look at current interest rates and we look at our current best estimate assumptions there, we do believe that, that will be kind of self-contained funding for all the required capital that would be needed for the build of those reserves over the next 10 years. And then once you get beyond that, those reserves will start to release, which will start to release some of the required capital behind that as well.
So right now, with our current projections, we do take a longer-term view that we're not going to need to contribute capital to fund long-term care.

Operator

Your next question comes from the line of Suneet Kamath from Jefferies.

Suneet Laxman L. Kamath

Just starting with long-term care, Rick, you had mentioned this, I think, in your opening comments about pursuing risk transfer. Obviously, the environment is dynamic. We saw a transaction late last year. Other companies have talked about bid-ask coming in. So can you just give us a sense maybe where you are in that process, what the conversations are like? Has there been a change, given some of the actions that you took last year as well as the rate environment?

Richard Paul McKenney

Sure. Thanks, Suneet. Just a couple of comments. One, you mentioned the transaction that happened last year. It was good to see. It was a positive development. I think after many years, where we've been talking about it, but you haven't seen anything in the market. So I just articulate a positive development.
If you look at the transaction that was done, it's very consistent with how we've been talking about it, in terms of parsing out certain risks within our block, taking on different things, finding the right counterparty. All of those are things that we've been talking about what a transaction might look like.
For us, our message is very consistent around that. So we have the ability to work with counterparties, to do that, to parse out different things, the bid-ask spread that we look at. And when that closes, we'll be looking at a transaction. We're not there in terms of what we've seen out there, but we're going to stay very active in the markets. And I think that we'll look forward to more buyers meeting sellers, but I don't think there's a change in our tone overall from a market perspective, but we're very happy to see that positive development happen in the market.
So hopefully, that answer -- I think our messaging will be very consistent. The only thing that's different is something has happened in the market, and that's a good thing.

Suneet Laxman L. Kamath

Got it. That makes sense. And then I guess, as we think about your capital plans for 2024 and in particular, that slide that looked at where you expect to be at year-end '24, I think all measures are higher than where you ended 2023. And so I guess the question is, is there a thought there around maybe holding back on some of the capital deployment in anticipation of some sort of transaction with respect to LTC? Is that part of the capital philosophy at the company?

Richard Paul McKenney

It's really not. When we think of a potential transaction out there, we think we -- before this year, we had plenty of capital to do it. Steve had on his slide, we have a lot of debt capacity as well. So I really would take that out of it.
We're not earmarking any of those excess funds we're talking about for any particular use. We'd love to see it in terms of the good M&A transaction. If something could happen in LTC, that would be good as well, but we're not holding back any funds waiting for a transaction to happen. We've got the flexibility, the capacity to do something, even as we stood at -- even as we stand today or as we project out over the course of the year.

Operator

Your next question comes from the line of Jimmy Bhullar from JPMorgan.

Jamminder Singh Bhullar

First had a question on competition in the disability market. If you look at margins, for you guys for most of your peers, they've been very strong. So just wondering why you haven't seen competition pick up or -- because I would have normally thought that with margins being as strong as they are, you would have seen prices come down a lot on 1/1 renewals, and it doesn't seem like they've moved down as much.

Unidentified Company Representative

Chris?

Christopher Wallace Pyne

Yes. Thanks for the question, Jimmy. Competition is always out there. That's for sure. But I would take you back to some of the things that we do, both from a capabilities perspective and from a claims management perspective.
So again, our customers are buying a broader experience from us. I'll give you an example from My Unum. Smaller customers who are looking for a completely integrated set of products that work really well from an administration standpoint and an enrollment standpoint. We've got the right contracts and cover so they get really high-quality insurance. And of course, that ultimately ends up in a wonderful claim experience.
Going upmarket. HR Connect is a great example, where somebody is buying our products because of deep integration with leading HCM platforms like ADP's Workforce Now, Workday and UKG.
And then again, if somebody buys the Total Leave package from us, they're looking for us to solve a very significant challenge with claims administration and compliance on leave management.
With that comes a great insurance products. We've got a phenomenal claim team behind those products that do a wonderful job to make sure we pay exactly what we should pay and do it with great care and compassion. We do a great job of getting people back to work, and incidence has been favorable in the current environment, which we expect to continue.
So you put that whole thing together, and we, again, I go back to where I started the conversation around strong disciplined underwriting. We've got a very kind of logical way to kind of describe fair price in that environment, and it's generating strong returns. And again, this has been for a period of time, and we expect it to continue.

Jamminder Singh Bhullar

Okay. And then just following up on -- you've made a few comments on M&A. And in the past, you've done a few smaller type deals. What is it that you're looking for ideally in terms of M&A? And would you be interested in sort of larger deals as well? Or should we assume a consistent approach to what you've done in the past?

Richard Paul McKenney

I think the assumption would be a consistent approach. I think we're looking at not necessarily to go far afield, but to build our positions that we have. We have opportunities to do that. There are some areas we'd like to continue to build out across the franchise, across the world on that front.
But when you think about other bigger transactions that do basically what we're doing today, we're going to be very, very selective, because we think we have the opportunity to grow it organically.
So hope that gives you a sense. We were very happy with the transaction we've done. Although it's been a couple of years since we've done one, but we're going to be out there in the market continuing to look at what makes sense for us and most importantly, what's on strategy.

Operator

Your next question comes from the line of Tom Gallagher from Evercore ISI.

Thomas George Gallagher

Just a few on long-term care. First is the elevated claim frequency versus your expectation? I'm solving for around 3% to 4% elevated. Does that sound about right to you? Or would you adjust that figure?

Steven Andrew Zabel

Yes. I probably don't want to specifically attribute the impact of claims incidents to the loss ratio.
I think what I'd take you back to is just the net premium ratio and really thinking about if our actual performance is equal to the expectations built into our reserve, we should have a loss ratio of around 95%. And clearly, claims incidence has been elevated over the last several quarters, and so you've seen that NPR creep up just a little bit. And historically, you've seen higher-than-expected loss ratios. But that's probably the best way to think about it, Tom. In my comments, I did say we expect that elevation to continue some into 2024 and then dissipate over time.

Thomas George Gallagher

But just directionally, I just want to make sure we're not talking about elevated incidents of double digits that with what you're seeing on the claims front, it's less than that. Is that -- even not looking for a specific number, just want to know directionally, are we talking about a big change in incidence or not?

Steven Andrew Zabel

Yes. Again, going into next year, we don't anticipate it getting worse than what we've seen in the back half of the year. And the loss ratio that we reported during those periods of time were around [105%, 107%]. So I wouldn't see it going beyond that. But we just have to see how it plays out in the future.

Thomas George Gallagher

Got you. And then second question, just the higher level of resubmission of claims that you were highlighting. Can you talk about, maybe unpack that a little bit? What's happening exactly? Were there lower acceptance rates before? How does that process work? And this sounds like there's a little bit of an inventory on the resubmission of claims, but if you can expand on that?

Steven Andrew Zabel

Yes. I mean resubmission is going to happen in a lot of ways. We start to track the claim pretty early on in the submission process. And so a lot of things going to happen. People can withdraw the claim. We can close the claim before it starts to pay. It may go to pay status, but it recovers very quickly. And that happens for a variety of reasons. Some of it around us accepting the claim and approving the claim. Some of it may be policyholder driven, that they've changed their mind around the claims submission and come off a claim.
What I would just say, though, is we have seen a higher level of that than we've historically seen and it's something that we track, but it does create a little bit of pressure in kind of our expected incidence counts over time.

Thomas George Gallagher

Got you. And then just one final one on risk transfer. I guess, one prominent feature of the MFC deal was their willingness to package some other risks along with LTC. And again this is just my opinion, but I believe that expanded the number of reinsurers willing to get involved. Is that -- would you guys -- I think the way you've talked about it in the past was LTC-only deal, not really packaging other risks. But if it allowed you to get something done, do you have the ability? And would you consider packaging other risks along with LTC?

Richard Paul McKenney

Yes. Tom, the way I'd answer that is we've talked about how buyers can meet sellers in the process. And as we look at it, we talk to counterparties and -- we've talked about it within the LTC block of how we would parse risks, think about asset management, aspects of that, think about liabilities. But certainly, we would be open to other things that buyers would be looking for around the franchise. So I wouldn't take that off the table, and we would have that opportunity.

Operator

Your next question comes from the line of Ryan Krueger from KBW.

Ryan Joel Krueger

First, just a quick follow-up. Is your expectation still that in 2024, you will earn within the $130 million to $160 million range in the Closed Block, or maybe towards the lower end? Or -- can you give any more color on kind of what you assumed for the earnings, given the higher incidents that you expect near term?

Steven Andrew Zabel

Yes. It's in that range. And the 2 variables would be claims incidents and really the alternative asset portfolio. We have assumed that we get back to kind of longer-term yields on that portfolio. And as you know, that tends to be volatile quarter-to-quarter.

Ryan Joel Krueger

Got it. And if I could ask, I guess, one more on risk transfer. You do have the first Unum New York entity, which has, I think, a lot of older age long-term care in it and pretty conservative reserves due to the requirements in New York. Is selling the entire legal entity another option beyond -- separate from reinsurance? Or are there other liabilities in that entity, that would prevent that from occurring?

Richard Paul McKenney

Yes. I appreciate the question, Ryan. I'm not sure I want to get into too much detail. I think I'd just go back to my earlier comments, which is we look at the entirety of our long-term care exposure and think about how we can parse those different risks in different ways. I wouldn't want to get into a legal entity or even duration-specific things until we get closer to getting something done.

Ryan Joel Krueger

Okay. And then if I could maybe just sneak one last one. You talked broadly about the good environment for renewals. But could you give us any more color on just the pricing dynamic in Unum U.S., where prices -- like when you look at prices as a whole, were they relatively flat? Or did you bring them down some for disability, if can you give us any more sense of what happened there?

Christopher Wallace Pyne

Yes. Thanks, Ryan. It's Chris. We're constantly looking at different ways to kind of make sure we can grow in the most logical and profitable way possible. So it's really -- consider it just our active underwriting and pricing approach. We're very thoughtful. We have tremendous data. We use it all the time to be as sharp as we possibly can. We recognize trends are early, and that goes into, what I would consider business as usual, in terms of thinking about price at the case level, thinking about price in different segments where we see opportunity.
So it is a competitive world. We have growth expectations that we're really excited about. We're certain we can deliver, and we'll continue to kind of take that active approach to the process.

Operator

Your next question comes from the line of Wilma Burdis from Raymond James.

Wilma Carter Jackson Burdis

You guys touched on it, but I would like to confirm if 1.4 billion to 1.6 billion of annual capital generation is a good run rate beyond '24? Is there some risk to that level if disability results normalize?

Steven Andrew Zabel

Yes. Steve. I can take that. I think that's a good planning assumption. Obviously, over time, we like the franchise to continue to grow at some grade that would be reflected. But I think that's a good run rate. And that would anticipate for 2024, the group disability loss ratio to stay in the low 60s. Our planning assumptions for capital generation and for our GAAP earnings expectations would be consistent.

Wilma Carter Jackson Burdis

Okay. And then you have provided a new data point that LTC reserves are peaking in 10 years. That's sooner than I expected, especially on the group side. And it's a very good data point because it implies that we're a lot closer to knowing how reserves will develop than I initially anticipated. Could you talk about, is this an average across the block? And if so, is there a different peak reserving time line for the individual versus group blocks?

Steven Andrew Zabel

Yes. So it would be an aggregate view of the total reserve. And just due to the age of the blocks, you would logically think that the individual will peak sooner than the group. I would say though the magnitude of the reserves that we carry on those 2 are a bit different, just because of the relative size of the relative richness of benefits for our group business versus our individual business. So there's a lot of weighted averaging going on. But in aggregate, that's when it's going to peak.

Operator

Your next question comes from the line of Josh Shanker from Bank of America.

Joshua David Shanker

Sorry, one last transaction question. Apologies -- but you mentioned that in a number of years and things lined up properly, the interest rate situation is changing. Do you think there were unique circumstances on the ground that allowed a transaction to come together? Or are you currently seeing appetite that people are discussing wanting to do transactions as the matter of finding the right one for you?

Richard Paul McKenney

Yes. So I wouldn't want to speculate. I don't know what was going on, particularly on the ground with that transaction. I can look at it just as you can from a far and say that it's a positive development for the industry and for people that are looking to do something on that front. And I would just say we have had very consistent dialogue, very consistent outreach expectations parsing. So I don't think our world has necessarily changed as a result of that. But I think it's good for the world to see that these transactions can happen, and we'll continue to pursue such a transaction.

Operator

Your next question comes from the line of Mark Hughes from Truist.

Mark Douglas Hughes

Just one quick one. Anything nonrecurring in the recoveries? Recoveries have been very strong. We've heard from other companies that social security administration has been kind of stingy in their payouts. I know that's only a part of your recovery story. But is that something that should be sustainable?

Steven Andrew Zabel

Yes. I can answer that, Mark. So I would say that if you go back really several years, we have seen a continued improvement in the performance of recoveries within our group disability block. And so what we're seeing in the more recent history is just a continuation of that. And so I would not view the performance in the fourth quarter as being in any way unique or nonsustainable. And that's why we feel pretty comfortable giving guidance going into next year, that we'll be able to maintain those levels of benefit ratios, that not only to the market dynamics that Chris spoke to around pricing, but also just around our operational excellence and being able to maintain that level of performance.

Mark Douglas Hughes

And I'll maybe throw in one more, the Colonial sales are pretty strong this quarter, up 12%. You talked about high single digits. Was there an unusual boost or easy comp this quarter?

Timothy Gerald Arnold

Yes. Thank you for the question. This is Tim. I would say that comps were not that easy, although they weren't extremely challenging either. But we feel good about where we landed the quarter end. Frankly, the year, we think the market is growing in the 4% to 6% range, and we came out at the top end of that range.
We really like our strategy. We think we have the tools and technology to help our agents, brokers and clients achieve their goals. We grew our sales leadership team by 8% last year. And on the third quarter call, I mentioned that we are strengthening our offering in the large case commercial market. And while we still have a little bit of work to do there, we're really pleased that we saw a fourth quarter growth rate in the 500-plus life market of 36%. So really just focused on consistency of execution and broad-based adoption of those differentiating tools and technology that we have in our portfolio.
As we look forward, a couple of the leading indicators we watch are new recruits and sales productivity from those new agents in the 2023 in total. Recruiting was up 23% and new agent sales were up 18%.
Since all of you been sneaking in one last question. I'll answer a question you didn't ask. But we saw really strong growth on the Unum [BB] side of 10.2% last year. We're excited about the opportunities we have to cross-sell into the group block and to take advantage of those technology solutions that Chris mentioned earlier and grow that book as well.

Mark Douglas Hughes

Appreciate it.

Operator

Your next question comes from the line of Mike Ward from Citi.

Michael Augustus Ward

Just quickly, I was wondering if you had any kind of similar commentary on the benefit ratio guidance quantification type range for AD&D or supplemental and voluntary like you gave for group disability?

Steven Andrew Zabel

Yes, this is Steve. I can cover that. Maybe I'll go across all the businesses. We've talked about group disability quite a bit. I might just touch on Group Life. Group Life had a very good quarter in the fourth quarter, which we do not believe is sustainable. So I think a good planning assumption there would be more in that 73% to 75% range.
And then for really all of our other alliance, including the ones that you mentioned, I would just go back to the guidance that we gave last year, and where those businesses have historically performed. I think that's probably a pretty good indicator of our view of how they're going to perform going forward.

Michael Augustus Ward

Okay. And then maybe for capital return for '24. It sounds like there is some excess there or capital left over. Just curious, like, let's say, you don't come across any acquisition opportunities or bolt-ons, what have you? Should we think about potential upside to that? Or should we think of that as like a realistic like straight-line guidance for the year?

Unidentified Company Representative

Yes. I think, Mike, the way I'd look at it is kind of how Steve saw, it will be dynamic. So we don't just set a plan and set it and forget it. We actually will be back at it all the time. So building up that excess throughout the course of the year, we're going to be making decisions constantly about what we want to do with that. And as we get closer to those decisions, we'll certainly give the market some heads up around that.

Operator

Your next question comes from the line of Tom Gallagher from Evercore ISI.

Thomas George Gallagher

Just a question on sales. Long-term disability sales were down 12%. Group Life and AD&D were up 61%. Can you comment on the mix? Should we take that to mean more price competition in long-term disability and less in group life? Is that why there was a shift or something else happening there?

Christopher Wallace Pyne

Yes. Thanks for the question, Tom, it's Chris. Actually, it's a good call. We saw some great opportunity in group life package with -- a lot of it was packaged with current customers. So always nice to add life insurance in that environment.
We actually did have more strength in the disability sales line than it would appear. Full year sales were up 14% and in the quarter for pure disability, pure LTD up high single digit, 8% or so.
What you don't see at the surface is we did have soft stop-loss sales in the quarter, and that had an impact on the overall disability sales line as we report them together. But in general, any given quarter, it can be a little bit volatile, but we did see very good sales growth in group LTD and group STD for both the quarter and the full year. Extra good in group life this quarter and the mix will move around over time.

Thomas George Gallagher

And so that -- and sorry, that the stop loss, is that medical stop loss? Or is that disability stop loss? What type of product is that?

Christopher Wallace Pyne

Medical stop loss.

Richard Paul McKenney

Yes, Tom, this is a line that we launched several years ago. Just to clear, this is the line we launched several years ago opportunistically, and so you'll see that be a little bit more volatile, but I think it's a good call out within the results. LTD was actually quite strong from a sales perspective.

Operator

There are no further questions at this time. Mr. Rick McKenney, I turn the call back over to you for some final closing remarks.

Richard Paul McKenney

Great. Thank you, Rob. I appreciate everybody sticking with us for a little bit more time today as we put together both the results of 2023 and our outlook for 2024. We'll be out there working at different conferences, talking to different investors. We look forward to meeting up with you here in the next several months. And I appreciate you spending the time on today's call.
With that, we'll end the call, Rob. Thank you.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.