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Unum Group (UNM) Q1 Earnings Beat Estimates, Increase Y/Y

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Unum Group’s UNM first-quarter 2022 operating net income of $1.36 per share beat the Zacks Consensus Estimate by 67.9%. The bottom line increased about 30.8% year over year, attributable to solid performance across Unum U.S., Unum International and Colonial Life segments.

Unum Group Price, Consensus and EPS Surprise

Unum Group Price, Consensus and EPS Surprise
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 $2.9 billion, up 0.3% year over year due to higher premium Income and other income. The top line missed the Zacks Consensus Estimate by 0.8%.

Premium increased 1% from the prior-year quarter to $2.4 billion.

Total benefits and expenses decreased 7% year over year to $2.7 billion, largely attributable to lower benefits and change in reserves for future benefits and amortization of deferred acquisition costs.

Quarterly Segment Update

Unum U.S.: Premium income was $1.5 billion, up 1.3% year over year.
Adjusted operating income was up 48.3% year over year to $171.6 million, attributable to higher income in the supplemental and voluntary line of business.

Unum International: Premium income of $187.8 million increased 7.7% year over year. Adjusted operating income was $27.2 million, up 3% year over year.

The Unum U.K. line of business’ premium income was £122.7 million, up 11% from the year-ago quarter, attributable to growth in the in-force blocks, resulting from the impact of rate increases in the group long-term disability product line, higher overall persistency, and higher sales. Adjusted operating income, in local currency, of £19.2 million was up 3.2% from a year ago.

Benefit ratio was 80.7, which improved 540 basis points (bps) due to higher inflation-linked experience in benefits, and timing of notifications and claims resolutions in the group long-term disability product line, resulting from the ongoing effects of disruptions to health services that were caused by COVID-19.

Persistency increased in group long-term disability, group life business and supplemental line of business.

Colonial Life: Premium income increased 1% from the prior-year figure to $430.7 million on account of higher sales and higher level of persistency. Sales increased 15.3% from the year-ago figure to $104 million. Adjusted operating income increased 22.9% from the prior-year period to $90.1 million.

Persistency was 78.7%, which improved 30 bps year over year.

The benefit ratio improved 610 bps year over year to 49.3 due to favorable claims experience across all products, partially resulting from lower mortality in the life product line due to lessening impacts of COVID-19 on the insured population.

Closed Block: Premium income decreased 4.7 % year over year to $239.9 million due to policy terminations and maturities, partially offset by rate increases in the long-term care product line. Adjusted operating income was $94.1 million, which decreased 2.9% year over year.

Corporate: The segment incurred an operating loss of $40.4 million, wider than a loss of $38.9 million in the year-earlier quarter, primarily due to increased employee-related costs and interest and debt expenses.

Capital Management

As of Mar 31, 2022, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 400%.

Unum Group exited the quarter with liquidity worth $1.3 billion.

Book value per share of the company improved 1.6% year over year to $52.62 as of Mar 31, 2022.

Guidance

Unum Group expects positive operating trends in core business in 2022, with solid premium growth and improving claim experience as impacts from COVID-19 lessen.

Unum Group projects an increase in after-tax adjusted operating income per share of 15% to 20% relative to 2021, compared with its guidance of an increase of 4% to 7%. The improved expectation reflects the insurer's strong first-quarter performance and an improved guidance for the remainder of 2022.

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

Voya Financial, Inc. VOYA reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.

Total revenues amounted to $1.5 billion against ($2 billion) in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year.
Premiums totaled $613 million versus ($5 billion) in the year-ago quarter. Total expenses were $1.4 billion versus a benefit of $3 million in the year-ago quarter.

Lincoln National Corporation LNC reported first-quarter 2022 adjusted earnings of $1.66 per share, which missed the Zacks Consensus Estimate of $1.97. Also, the bottom line declined from the prior-year figure of $1.82 per share.

Adjusted operating revenues decreased to $4,718 million for the first quarter from $4,762 million a year ago. Also, it missed the consensus mark of $4,768 million.

Aon plc AON reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.

Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.


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