UNM 10-K & 10-Q changes, risk factors and insider trading
Unum Group (also UNMA) · NYSE · Accident & Health Insurance · CIK 5513 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “General Risk Factors”
Removed heading “Operational Risks”
Largest changes
“We and our third-party providers have experienced and likely will continue to experience information security incidents from time to time. Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect. …”see in full comparison
“We and our third-party providers have experienced and likely will continue to experience information security incidents. Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect. …”see in full comparison
“If economic conditions worsen as a result of a pandemic or other public health issue, that may adversely affect the financial condition of current or potential customers, which may result in lower sales or other negative impacts to customer purchasing patterns. If we experience unfavorable developments related to our revenues, benefits, or expenses, we may correspondingly experience adverse impacts to our overall future profitability and growth, which may alter the timing and magnitude of our plans for overall business growth. …”see in full comparison
“Our business is exposed to risks from major public health issues, such as pandemics or disease outbreaks. In the event of a pandemic, disease outbreak, or other public health issue, our revenues, benefits, or expenses may be negatively impacted, which also may have an adverse effect on our profitability or growth plans. Such an event may also disrupt customer behavior and lead to a reduction in sales and decreased premium collection. …”see in full comparison
“Although we have access to significant amounts of liquidity, which include a credit facility, Federal Home Loan Bank (FHLB) arrangements, and the ability to liquidate certain investments, it may be insufficient or even inaccessible if we are not in compliance with required covenants under our borrowing arrangements or if the associated lenders are unable to provide funds. In addition, if investment markets become illiquid or severely impaired, we may be unable to liquidate our investments in a timely and advantageous manner.”see in full comparison
“We maintain access to liquidity through a credit facility, arrangements with the Federal Home Loan Bank (FHLB), and the ability to liquidate certain investments. These sources may be limited or inaccessible during market stress or covenant noncompliance.”see in full comparison
Full comparison: every changed paragraph (40)
Insurance RisksRisk Factors
Within the group disability market, pricing and renewal actions can be taken in response to higher claim rates and higher administrative expenses. However, these actions take time to implement, and there is a risk that the market will not sustain increased prices. In addition, changes in economic and external conditions may not manifest themselves in claims experience for an extended period of time. The pricing actions available in the individual disability market differ among product classes. Our noncancelable individual noncancelable disability policies, in which the policy is guaranteed to be renewable through the life of the policy at a fixed premium, do not permit us to adjust premiums on our in-force business. Guaranteed renewable contracts that are not noncancelable can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as in the group disability market.
Long-term care insurance, which we discontinued offering in 2012, but is guaranteed renewable, can be influenced by a number of demographic, medical, economic, governmental, competitive, and other factors, as well as the relative lack of historical data as compared to our other products, all of which can affect pricing activities and the establishment of our liability for future policy benefits. Long-term care insurance can be repriced to reflect adverse experience, but the repricing is subject to regulatory approval by our states of domicile and may also be subject to approval by jurisdictions in which our policyholders reside. The rate approval process can affect the length of time in which the repricing can be implemented, if at all, and the rate increases ultimately approved may be unfavorable relative to assumptions initially used to establish our liability for future policy benefits, which could result in unfavorable impacts to our financial position and results of operations. We monitor our own experience and industry studies concerning morbidity, mortality, and policyholder terminations to understand emerging trends. Changes in actual experience relative to our expectations may adversely affect our profitability and the liability for future policy benefits. To the extent mortality improves for the general population, and life expectancies increase, the period for which a claimant receives long-term care benefits may lengthen and the associated impact of advanced aging of policyholders may cause an increase in claims incidence. Medical advances may continue to have an impact on claim incidence and duration, both favorable and unfavorable. Due to the long duration of the product, the timing and/or amount of our investment cash flows are difficult to match to those of our maturing liabilities.
Voluntary Benefits Products
Voluntary benefits products sold in the workplace may be affected by the characteristics of the employees insured, the level of employee participation and the amount of insurance the employees elect, our risk selection process, and our ability to retain employer groups with favorable risk characteristics. A portion of our voluntary life insurance products include interest sensitive forms of insurance which contain a guaranteed minimum interest crediting rate. It is possible that our investment returns could be lower than the guaranteed crediting rate. While a significant portion of our non-lifeaccident and health contracts are optionally renewable, some are guaranteed renewable and can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as for group disability and group life products.
Long-term care insurance, which we discontinued offering in 2012, but is guaranteed renewable, can be influenced by a number of demographic, medical, economic, governmental, competitive, and other factors, as well as the relative lack of historical data, all of which can affect pricing activities and the establishment of our liability for future policy benefits. Long-term care insurance can be repriced to reflect adverse experience, but the repricing is subject to regulatory approval by our states of domicile and may also be subject to approval by jurisdictions in which our policyholders reside. The rate approval process can affect the length of time in which the repricing can be implemented, if at all, and the rate increases ultimately approved may be unfavorable relative to assumptions initially used to establish our liability for future policy benefits, which could result in unfavorable impacts to our financial position and results of operations. We monitor our own experience and industry studies concerning morbidity, mortality, and policyholder terminations to understand emerging trends. Changes in actual experience relative to our expectations may adversely affect our profitability and the liability for future policy benefits. To the extent mortality improves for the general population, and life expectancies increase, the period for which a claimant receives long-term care benefits may lengthen and the associated impact of advanced aging of policyholders may cause an increase in claim incidence. Medical advances may continue to have an impact on claim incidence and duration, both favorable and unfavorable. Due to the long duration of the product, the timing and/or amount of our investment cash flows are difficult to match to those of our maturing liabilities.
Goodwill is not amortized, but on an annual basis, or more frequently if necessary, we review the carrying amount of goodwill for indications of impairment, considering in that review the financial performance and other relevant factors. In accordance with accounting guidance, we test for impairment at either the operatingreporting segmentunit levellevel. or one level below. In addition, certainCertain events including, but not limited to, a significant adverse change in legal factors or the business environment, an adverse action by a regulator or rating agency, or unanticipated competition wouldmay cause us to review goodwill for impairment more frequently than annually.
Long-lived assets, including assets such as real estate, right-of-use assets, and information technologyinternal-use software, also may require impairment testing to determine whether changes in circumstances indicate that we may be unable to recover the carrying amount.
Market and Credit RisksRisk Factors
Unfavorable economic or market conditions may result in lower sales, lower premium growth and persistency, higher claimsclaim incidence, unfavorable mortality, longer claims duration, and higher expenses which may adversely affect our results of operations or financial condition.
We are affected by conditions in the capital markets and the general economy, primarily in the United States, the United Kingdom, Poland, and to a lesser extent, the broader global financial markets. Negative developments in the capital markets and/or the general economy could adversely affect our business, including our investment portfolio, financial condition and results of operations.
Factors such as unemployment levels, consumer confidence levels, consumer spending, business investment, government spending, the volatility and strength of the capital markets, inflation, pandemics, and the threat of terrorism all affect the business and economic environment and, ultimately, the amount and profitability of our businesses. In particular, high levels of inflation could result in higher expenses and negatively affect the discretionary spending of our customers, which could result in lower sales. More generally, given the nature of our products, in an economic environment characterized by higher unemployment, lower personal income, reduced consumer spending, and lower corporate earnings and investment, product sales and persistency may be adversely affected. Our premium growth may also be negatively impacted by lower premium growth from existing customers due to lower salary growth and lower growth in the number of employees covered under an existing policy. In addition, during such periods we may experience higher claimsclaim incidence, longer claims duration, and/or an increase in policy lapses, any of which could have a material adverse effect on our results of operations or financial condition.
In addition to interest rate risk as previously discussed,risk, we are exposed to other risks related to our investment portfolio which may adversely affect our results of operations, financial condition, or liquidity.
Reinsurance may not be available or affordable, or reinsurersReinsurers may be unwilling or unable to meet their obligations under our reinsurance contracts, or reinsurance may not be available or affordable, which may adversely affect our results of operations or financial condition.
As part of our overall risk management and capital management strategies, we purchase reinsurance for certain risks underwritten by our various businesses. We also utilize reinsurance to exit certain lines of business. Market conditions beyond our control determine the availability and cost of reinsurance. Any decrease in the amount of reinsurance will increase our risk of loss and may impact the level of capital requirements for our insurance subsidiaries, and any increase in the cost of reinsurance will, absent a decrease in the amount of reinsurance, impact our financial condition and reduce our results of operations. Accordingly, we may be forced to incur additional expenses for reinsurance or may be unable to obtain sufficient reinsurance on acceptable terms, which may adversely affect our ability to write future business, result in the assumption of more risk with respect to the policies we issue, and increase our capital requirements. The collectability of our reinsurance recoverable is primarily a function of the solvency of the individual reinsurers. We cannot provide assurance that our reinsurers will pay the reinsurance recoverables owed to us or that they will pay these recoverables on a timely basis. The insolvency of a reinsurer or the inability or unwillingness of a reinsurer to comply with the terms of a reinsurance contract may have an adverse effect on our results of operations or financial condition.
The functional currency of our U.K. and Polish operations is the British pound sterling and the Polish zloty, respectively. Fluctuations in exchange rates impact our reported financial results, which may be unfavorably affected when the functional currency weakens. However, it is important to distinguish between translating and converting foreign currency. Exceptexcept for a limited number of transactions, we do not actually convert our functional currency into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K or Poland.
Public Health RisksRisk Factors
Our business is exposed to risks from major public health issues, such as pandemics or disease outbreaks. In the event of a pandemic, disease outbreak, or other public health issue, our revenues, benefits, or expenses may be negatively impacted, which also may have an adverse effect on our profitability or growth plans. Such an event may also disrupt customer behavior and lead to a reduction in sales and decreased premium collection. Further, such an event may result in the impairment of certain assets, including premiums receivable, goodwill, VOBA and other intangibles, property and equipment, right-of-use assets, and deferred tax assets.
Public health issues, such as pandemics or disease outbreaks, may also impair borrowers’ ability to meet obligations on debt securities or mortgage loans we hold, which may also result in lower net investment income and increased credit losses. Commercial real estate valuations may also decline, affecting expected loss estimates. Market volatility or dislocations may also hinder our ability to respond prudently and may impact financial reporting assumptions.
We maintain access to liquidity through a credit facility, arrangements with the Federal Home Loan Bank (FHLB), and the ability to liquidate certain investments. These sources may be limited or inaccessible during market stress or covenant noncompliance.
If economic conditions worsen as a result of a pandemic or other public health issue, that may adversely affect the financial condition of current or potential customers, which may result in lower sales or other negative impacts to customer purchasing patterns. If we experience unfavorable developments related to our revenues, benefits, or expenses, we may correspondingly experience adverse impacts to our overall future profitability and growth, which may alter the timing and magnitude of our plans for overall business growth. In addition, these unfavorable developments may result in the impairment or write-off of certain assets such as premiums receivable, goodwill, property and equipment, VOBA, and right-of-use assets, or the establishment of a valuation allowance regarding the realization of our deferred tax assets.
If economic conditions worsen as a result of a pandemic or other public health issue, that may also result in the inability for companies to make interest and principal payments on their debt securities or mortgage loans that we hold for investment purposes. Accordingly, although we maintain a disciplined approach regarding our overall investment strategy, we may still incur significant losses that can result in a decline in net investment income and/or material increases in credit losses on our investment portfolio. With respect to commercial real estate, there could be potential impacts to estimates of expected losses resulting from lower underlying values, reflecting current market conditions at that time.
Although we have access to significant amounts of liquidity, which include a credit facility, Federal Home Loan Bank (FHLB) arrangements, and the ability to liquidate certain investments, it may be insufficient or even inaccessible if we are not in compliance with required covenants under our borrowing arrangements or if the associated lenders are unable to provide funds. In addition, if investment markets become illiquid or severely impaired, we may be unable to liquidate our investments in a timely and advantageous manner.
From an operational perspective, our employees, sales associates, brokers, and distribution partners, as well as the workforces of our vendors, service providers, and counterparties, may be adversely affected by a pandemic or other public health issue, including government-mandated shutdowns, requests or orders for employees to work remotely, and other social distancing measures. These measures could result in an adverse impact on our ability to conduct our business, including our ability to sell our policies and our ability to adjudicate and pay claims in a timely manner. Additionally, oura remote or hybrid work environment may expose us to various additional risks such as elevated cybersecurity vulnerability resulting from the wide-scale remote usage of our company networks and related risks to the effectiveness of our internal controls over financial reporting.
There is no guarantee that processes we have developed in order to adapt to theprevious COVID-19public pandemichealth issues or pandemics would succeed in allowing us to adapt to any future pandemic or other public health issue, which may have materially different characteristics than theprevious COVID-19pandemics pandemic.or public health issues.
See "Executive Summary", "Segment Operating Results", and "Liquidity and Capital Resources" included herein in Part 2, Item 7 under "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional discussion.
GeneralOperational RisksRisk Factors
We store confidential information about our business and our policyholders, employees, agents, and others on our information technology systems, including proprietary and personally identifiable information. As part of our normal business operations, we use this information and engage third-party providers, including outsourcing, cloud computing, and other business partners, that store, access, process, and transmit such information on our behalf. We also process payments to claimants under our insurance policies, including by physical and electronic means, which could subject us or our customers to attacks from threat actors, including attempted theft of credentials from our customers or other social engineering attacks directed at our customers. We devote significant resources and employ security measures to help protect our information technology systems and confidential information, and we have programs in place to detect, contain, and respond to information security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we and our third-party providers may be unable to anticipate these techniques or implement adequate preventative measures. In addition, hardware, software, or applications we develop or procure from third parties or through open source solutions may contain defects in design or manufacture or other problems that could unexpectedly compromise our information security. Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, or other cyber attacks, computer viruses, malicious codes, and similar means of unauthorized and destructive tampering, as well as through human error or failure by our employees to follow corporate policy. Specifically, we have seen an increase in the number and sophistication of social engineering attacks that seek access to our systems through emails sent to our employees. We have taken action to provide additional training to increase awareness of the potential for these attacks among our workforce.
We and our third-party providers have experienced and likely will continue to experience information security incidents. Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect. A successful penetration or circumvention of the security of our information technology systems, or those of third parties with whom we do business, including a ransomware attack that locks or freezes systems until the payment of a ransom, could cause serious negative consequences for us, including significant disruption of our operations, unauthorized disclosure or loss of confidential information, harm to our brand or reputation, loss of customers and revenues, violations of privacy and other laws, and exposure to litigation, monetary damages, regulatory enforcement proceedings, fines, and potentially criminal proceedings and penalties. If we are unaware of the incident for some time after it occurs, our exposure could increase. In addition, the costs to address or remediate systems disruptions or security threats or vulnerabilities, whether before or after an incident, could be significant. As we continue to build our digital capabilities and focus on enhancing the customer experience, the amount of information that we retain and share with third parties, as well as our reliance on them, is likely to grow, increasing the cost to prevent data security breaches and the cost and potential consequences of such breaches. An information technology systems failure could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to potential disciplinary action by regulators. Further, successful cyber attacks at other large financial institutions or other market participants, whether or not we are affected, could lead to a general loss of customer and investor confidence in financial institutions that could negatively affect us.
The talent and contributions of our employees are essential to achieving our business objectives. While certain specialized roles may experience tighter labor-market conditions, the overall environment has moderated, and we continue to maintain a strong ability to attract, hire, and retain qualified talent. Although challenges in filling key roles may occur from time to time, we view these as manageable operational considerations. Through proactive workforce planning and investment in employee development, we work to minimize potential impacts on execution and ensure continuity in the capabilities needed to support our strategy. However, any prolonged stress on our ability to retain or recruit employees may result in increased labor costs or could affect our ability to conduct and manage our business.
General Risk Factors
It is possible that there will be heightened oversight of insurers by regulatory authorities in the jurisdictions in which our insurance subsidiaries are domiciled and operate. We cannot predict specific proposals that might be adopted, or what impact, if any, such proposals or, if enacted, such laws, could have on our business, results of operations, or financial condition. For instance, the NAIC or state regulators may adopt further revisions to statutory reserving standards or the RBC formula, the PRA may revise its capital adequacy requirements and minimum solvency margins, the IAIS may adopt capital requirements to which we could be subject, or rating agencies may incorporate higher capital thresholds into their quantitative analyses, thus requiring additional capital contributions by us to our insurance subsidiaries. Increased financial services regulation, which could include activities undertaken by the NAIC and regulatory authorities in the U.K., Poland, and the EU may impose greater quantitative requirements, supervisory review, and disclosure requirements and may impact the business strategies, capital requirements, and profitability of our insurance subsidiaries. The U.K. government has been reviewing the regulatory U.K. Solvency II framework including transferring the requirements into the PRA Rulebook, which contains rules made and enforced by the PRA, and other policy materials. While this process led to favorable impacts on the solvency position of our U.K. business in earlier reporting periods, the completion of the review at December 31, 2024 did not have any further material impacts on the U.K. business solvency position. The U.K.'s Financial Ombudsman Service, which was established to help settle disputes between consumers and businesses providing financial services, and the FCA, which has rule-making, investigative, and enforcement powers to protect consumers, may hamper our ability to do business, which could have a material adverse effect on our U.K. operations.
We use an affiliated captive reinsurer for the limited purpose of reinsuring risks attributable to specified policies issued or reinsured by one of our insurance subsidiaries in order to effectively manage risks in connection with certain blocks of our business as well as to enhance our capital efficiency. If we were required to discontinue use of the captive reinsurer or to alter the structure of the captive reinsurance arrangement, our ability to maintain current RBC ratios and/or our capital deployment activities could be adversely affected.impacted.
We maintain our credit facilityfacility, and our arrangements with the FHLB as a potential sourcesources of liquidity. Our right to borrow funds under thisthe credit facility is subject to financial covenants, negative covenants, and events of default. Our ability to borrow under thisthe credit facility is also subject to the ability of the lenders to provide funds. Our failure to comply with the covenants in the credit facility or the failure of lenders to fund their lending commitments would restrict our ability to access the facility when needed, with a resulting adverse effect on our results of operations, financial condition, or liquidity. While our funding agreements with the FHLB are currently used for the purpose of investing in either short-term investments, matched fixed maturity securities, or matched commercial mortgage loans, we maintain the option to utilize these agreements for liquidity purposes.
There are many events which may harm our reputation, including, but not limited to, those discussed in this Item 1A regarding regulatory investigations, legal proceedings, social issues, third-party vendors, external events, and cyber or other information security incidents.
We are, and in the future may be, defendants in a number of litigation matters, and the outcome of this litigation is uncertain. Some of these proceedings havemay beenbe brought on behalf of various alleged classes of complainants. Plaintiffs in class action and other lawsuits against us may seek very large and/or indeterminate amounts, including punitive and treble damages. An estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An adverse outcome in one or more of these actions may, depending on the nature, scope, and amount of the ruling, materially and adversely affect our results of operations or financial condition, encourage other litigation, and limit our ability to write new business, particularly if the adverse outcomes negatively impact certain of our ratings.
Operational Risks
We store confidential information about our business and our policyholders, employees, agents, and others on our information technology systems, including proprietary and personally identifiable information. As part of our normal business operations, we use this information and engage third-party providers, including outsourcing, cloud computing, and other business partners, that store, access, process, and transmit such information on our behalf. We devote significant resources and employ security measures to help protect our information technology systems and confidential information, and we have programs in place to detect, contain, and respond to information security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we and our third-party providers may be unable to anticipate these techniques or implement adequate preventative measures. In addition, hardware, software, or applications we develop or procure from third parties or through open source solutions may contain defects in design or manufacture or other problems that could unexpectedly compromise our information security. Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through human error, misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, or other cyber attacks, computer viruses, malicious codes, and similar means of unauthorized and destructive tampering. Specifically, we have seen an increase in the number and sophistication of phishing attacks that seek access to our systems through emails sent to our employees. We have taken action to provide additional training to increase awareness of the potential for these attacks among our workforce.
We and our third-party providers have experienced and likely will continue to experience information security incidents from time to time. Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect. A successful penetration or circumvention of the security of our information technology systems, or those of third parties with whom we do business, including a ransomware attack that locks or freezes systems until the payment of a ransom, could cause serious negative consequences for us, including significant disruption of our operations, unauthorized disclosure or loss of confidential information, harm to our brand or reputation, loss of customers and revenues, violations of privacy and other laws, and exposure to litigation, monetary damages, regulatory enforcement proceedings, fines, and potentially criminal proceedings and penalties. If we are unaware of the incident for some time after it occurs, our exposure could increase. In addition, the costs to address or remediate systems disruptions or security threats or vulnerabilities, whether before or after an incident, could be significant. As we continue to build our digital capabilities and focus on enhancing the customer experience, the amount of information that we retain and share with third parties, as well as our reliance on them, is likely to grow, increasing the cost to prevent data security breaches and the cost and potential consequences of such breaches. An information technology systems failure could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to potential disciplinary action by regulators. Further, successful cyber attacks at other large financial institutions or other market participants, whether or not we are affected, could lead to a general loss of customer and investor confidence in financial institutions that could negatively affect us.
The talent and contributions of our employees are critical to meeting our business needs. Our future success depends on our ability to hire and retain qualified personnel. In recent periods we have experienced increased competition for qualified talent and higher turnover compared to our historical experience, as many employees seek higher wages, new careers, or choose to exit the workforce entirely. The greater opportunities for fully remote or hybrid working arrangements have contributed to this trend, as many employees are no longer limited to employers located in their local area. We have taken steps to address this challenge, including updating compensation structures, allowing for more hybrid or remote working arrangements, and taking advantage of opportunities to recruit highly skilled employees from other employers. However, any prolonged stress on our ability to retain or recruit employees may result in increased labor costs and could adversely affect our ability to conduct and manage our business.
Management's Discussion & Analysis (MD&A)
New heading “Accelerated Charitable Contribution”
New heading “One Big Beautiful Bill Act”
New heading “2025 Significant Cash Flow Assumption Updates:”
New heading “Reinsurance Transactions”
Removed heading “Loss on Legal Settlement”
Removed heading “2022 Significant Cash Flow Assumption Updates:”
Removed heading “Pension and Postretirement Benefit Plans”
Removed heading “Individual Disability Reinsurance Transaction”
Largest changes
During the twelve months ended December 31,see in full comparison2024,2025, we made contributions of$79.5 million and £5.2$85.4 million to our U.S.and U.K.defined contributionplans, respectively,plan and expect to make contributions of approximately $89 millionandduring£62026. During the twelve months ended December 31, 2025, we made contributions of $10.3 millionduringto2025.our U.S. non-qualified defined benefit pension plan and expect to make contributions of approximately $10 million to fund benefit payments in 2026. We had no regulatory contribution requirements for our U.S.and U.K.qualified defined benefit pension plans and made no voluntary contributions during the twelve months ended December 31,2024.2025. Wedo notexpect tohavemakeregulatoryapproximatelycontribution$15requirementsmillion in contributions for our U.S.and U.K.qualified defined benefit pensionplansplan in2025,2026butas a result of regulatory requirements and we reserve the right to make additional voluntary contributions during2025.2026. We have met all minimum pension funding requirements set forth by the Employee Retirement Income Security Act.We have estimated our future funding requirements under the Pension Protection Act of 2006 and under applicable U.K. law and do not believe that any future funding requirements will cause a material adverse effect on our liquidity.
We have a five-year £see in full comparison7575.0 million senior unsecured standby letter of credit facility with a different syndicate of lenders, pursuant to which a syndicated letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £7575.0 million until its scheduled expiration in July 2026. We have an additional five-year, £7575.0 million senior unsecured standby letter of credit facility pursuant to which a standby letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in December 2028.InAtconnectionDecemberwith31,and2025,asnosecurityamountsforhave been borrowed under theseniorstandbylettercredit facilities or letters of creditfacility,issuedweingranted to the issuerfavor oftheUnumstandby letter of credit the right to exercise, if an event of default occurred and was continuing, the issuance right under the facility agreement with the P-Caps Trust, up to a maximum of $200.0 million. In October 2024, prior to our exercise of the issuance right under the facility agreement, the assigned issuance right was forfeited in its entirety.Limited.
We use derivative financial instruments primarily to manage interest rate risk, risk related to matching duration for our assets and liabilities, foreign currency risk, and equity risk. Historically, we have utilized current and forward interest rate swaps, current and forward currency swaps, forward benchmark interest rate locks, currency forward contracts, forward contracts on specific fixed income securities,see in full comparisoncredit default swaps,and total return swaps. As of December 31,2024,2025, we had$3,751.4$3,818.2 million in notional amount of derivatives outstanding, of which$2,570.0$2,603.0 million is related to management of reinvestment risk in our long-term care product line,$1,052.5$1,060.4 million is related to management of foreign currency risk related to foreign denominated investments and$128.9$154.8 million is economically hedging a portion of the liability related to our non-qualified defined contribution plan. Credit exposure on derivatives is limited to the value of those contracts in a net gain position, including accrued interest receivable less collateral held.OurWe had no credit exposure on derivativeswas $0.5 millionat December 31,2024.2025. The carrying value of fixed maturity securities and cash collateral received from our counterparties was$8.4$4.2 million and$3.6$1.6 million, respectively, at December 31,2024.2025. The carrying value of fixed maturity securitiesandposted as collateral to our counterparties was $244.3 million at December 31, 2025. There was no cash posted as collateral to our counterpartieswas $196.7 million and $4.0 million, respectively,at December 31,2024.2025. We believe that our credit risk is mitigated by our use of multiple counterparties, all of which have an investment-grade credit rating, and by our use of cross-collateralization agreements.See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion of our derivatives.
“Our investment gains and losses on fixed maturity securities include net losses on sales of $38.2 million, $48.7 million and $26.5 million in 2024, 2023, and 2022, respectively. Credit and impairment losses on fixed maturity securities were $5.5 million, $2.2 million, and $4.6 million in 2024, 2023, and 2022, respectively. Credit and impairment losses on mortgage loans were $12.9 million, $0.9 million, and $1.0 million in 2024, 2023, and 2022, respectively. …”see in full comparison
Full comparison: every changed paragraph (230)
Included in our results for 2025 are:
•A net investment loss of $106.6 million before tax and $83.5 million after tax, or $0.49 per diluted common share;
•Amortization of the cost of reinsurance of $116.7 million before tax and $92.2 million after tax, or $0.53 per diluted common share;
•Amortization of the deferred gain on reinsurance of $9.0 million before tax and $7.1 after tax, or $0.04 per diluted common share;
•Non-contemporaneous reinsurance of $29.6 million before tax and $23.3 million after tax, or $0.14 per diluted common share;
•A net reserve increase related to assumption updates of $478.5 million before tax and $377.8 million after tax, or $2.18 per diluted common share;
•A settlement loss on the U.S. pension plan annuity purchase of $103.8 million before tax and $82.0 million after tax, or $0.47 per diluted common share; and
•An accelerated charitable contribution of $20.0 million before tax and $15.8 million after tax, or $0.09 per diluted common share.
•Non-contemporaneous reinsurance of $25.1 million before tax and $19.9 million after taxtax, or $0.11 per diluted common share;
Included in our results for 2023 are:
•A net investment loss of $36.0 million before tax and $28.2 million after tax, or $0.14 per diluted common share;
•Amortization of the cost of reinsurance of $44.1 million before tax and $34.8 million after tax, or $0.18 per diluted common share;
•Non-contemporaneous reinsurance of $34.8 million before tax and $27.5 million after tax or $0.14 per diluted common share; and
•A net reserve increase related to assumption updates of $177.2 million before tax and $139.3 million after tax, or $0.70 per diluted common share.
Excluding these items, after-tax adjusted operating income for 20242025 was $1,406.0 million, or $8.13 per diluted common share compared to $1,588.2 million, or $8.44 per diluted common share compared to $1,513.6 million, or $7.66 per diluted common share for 2023.2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction", "Settlement Loss on the U.S. Pension Plan Annuity Purchase", "Accelerated Charitable Contribution", "Loss on Legal Settlement" and "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 7 and Notes 3, 11, 14 and 15 contained herein Item 8 for a reconciliation of these items.
Our Unum US segment reported income before income tax and net investment gains and losses of $1,427.6 million in 2025 compared to $1,582.8 million in 2024 compared to $1,484.3 million in 2023,2024, which include the reserve assumption updates that occurred during the third quarters of 20242025 and 2023.2024. Also included in our Unum US segment results for 2025, are the amortization of the deferred gain on reinsurance and the impact of non-contemporaneous reinsurance both of which resulted from the Closed Block long-term care and Unum US individual disability reinsurance transaction (Fortitude Re reinsurance transaction). Excluding these items, our Unum US segment reported lower adjusted operating income of $1,271.9 million in 2025 compared to $1,439.2 million in 2024 compared to $1,355.5 million in 2023,2024, primarily due to higher premium income as well asless favorable benefits experience, primarily in our group life product line, partially offset by higher commissions.premiums. The benefit ratio, excluding the reserve assumption updates,updates and the impact of non-contemporaneous reinsurance, for our Unum US segment for 20242025 was 58.260.2 percent, compared to 59.858.2 percent in 2023.2024. Unum US sales increaseddecreased 6.50.6 percent in 20242025 compared to 2023.2024. See "Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction" contained herein for further discussion of the Fortitude Re reinsurance transaction.
Our Unum International segment reported income before income tax and net investment gains and losses of $157.7 million in 2025 compared to $150.3 million in 2024 compared to $140.2 million in 2023,2024, which include the reserve assumption updates during the third quarters of 20242025 and 2023.2024. Excluding these items, our Unum International segment reported adjusted operating income of $152.3 million in 2025 compared to $157.8 million in 2024 compared to $158.1 million in 2023.2024. As measured in local currency, our Unum UK line of business reported lower adjusted operating income, which excludes the reserve assumption updates, of £107.5 million in 2025 compared to £117.8 million in 2024 compared to £124.6 million in 2023,2024, primarily due to lower net investment income as well as unfavorable benefits experience in the group life and group long-term disability product lines,line, partially offset by higher premium income and higher net investment income. The benefit ratio for our Unum UK line of business, excluding the reserve assumption updates, was 73.5 percent in 2025 compared to 69.8 percent in 2024 compared to 69.0 percent in 2023.2024. Unum International sales, as measured in U.S. dollars, increased 9.45.5 percent in 20242025 compared to 2023.2024. Unum UK sales, as measured in local currency, increaseddecreased 6.63.1 percent in 20242025 compared to 2023.2024.
Our Colonial Life segment reported income before income tax and net investment gains and losses of $472.5 million in 2025 compared to $512.7 million in 2024 compared to $480.8 million in 2023,2024, which include the reserve assumption updates during the third quarters of 20242025 and 2023.2024. Excluding these items, our Colonial Life segment reported adjusted operating income of $463.6 million in 2025 compared to $466.7 million in 2024 compared to $400.1 million in 2023,2024, primarily due to less favorable benefits experience andas well as higher premiumoperating income,expenses, partially offset by higher commissionspremium and amortization of deferred acquisition costs.income. The benefit ratio, excluding the reserve assumption updates, for Colonial Life was 48.1 percent in 2025 compared to 47.7 percent in 2024 compared to 50.9 percent in 2023.2024. Colonial Life sales decreasedincreased 1.45.3 percent in 20242025 compared to 2023.2024.
Our Closed Block segment reported a loss before income tax and net investment gains and losses of $722.3 million in 2025 compared to income before income tax and net investment gains and losses of $246.6 million in 20242024, comparedwhich toincludes athe lossreserve beforeassumption incomeupdates taxthat occurred during the third quarters of 2025 and net investment gains and losses of $282.8 million in 2023, which include2024, the amortization of the cost of reinsurancereinsurance, and the impact of non-contemporaneous reinsurance related to the Closed Block individual disability reinsurance transaction, as well as the reserve assumption updates.reinsurance. Excluding these items, our Closed Block segment reported lower adjusted operating income of $63.5 million in 2025 compared to $137.8 million in 2024 compared to $164.9 million in 2023,2024, primarily due to unfavorable benefits experience in our long-term care and all other product lines, partially offset by favorablelower net investment income.income driven by a decrease in the level of invested assets. The net premium ratio for long-term care increased to 97.5 percent at December 31, 2025 from 94.6 percent at December 31, 2024 from 93.5 percent at December 31, 2023.2024.
A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings. Alternatively, a declining interest rate environment could negatively impact our yields on new investments, but could also reduce unrealized losses in our current holdings. As of December 31, 2024,2025, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost.cost for which an impairment loss was not recorded. The net unrealized loss on our fixed maturity securities was $2.6$1.7 billion and $1.6$2.6 billion at December 31, 20242025 and 2023,2024, respectively, with the increasedecrease due primarily to ana increasedecrease in U.S. Treasury Rates.rates. The earned book yield on our investment portfolio decreased to 4.35 percent for 20242025 wascompared 4.44 percent, which was generally consistent withto a yield of 4.454.44 percent for 2023.2024.
Additionally, a rising interest rate environment could result in reserve decreases while a declining interest rate environment could result in reserve increases, specific to our liability for future policy benefits, as the reserve discount rate assumptions used in the calculation of our liability are updated at each reporting date using a yield that is reflective of an upper-medium grade fixed income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities. The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the increasedecrease in U.S Treasury rates during 2024,2025, resulted in aan decreaseincrease to the liability for future policy benefits, net of reinsurance, of approximately $2.3$0.3 billion.
We believe our capital and financial positions are strong. At December 31, 2024,2025, the RBC ratio for our traditional U.S. insurance subsidiaries, calculated on a weighted average basis using the NAIC Company Action Level formula, was approximately 430440 percent, which is abovein line with our long-term expectations. We repurchased 15.713.6 million shares of Unum Group common stock under our share repurchase program, at a cost of $979.3$1,011.7 million, which includes commissions,commissions and excise tax, and $80.3 million related to shares which settled in February 2025 in connection with the November 2024 accelerated share repurchase agreement during 2024.tax. Our weighted average common shares outstanding, assuming dilution, equaled 188.1172.9 million and 197.6188.1 million for 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, Unum Group and our intermediate holding companies had available holding company liquidity of $1,987.0$2,344.1 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset backed securities.
On February 26, 2025, Unum America entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which, subject to receipt of regulatory approvals and the satisfaction or waiver of other customary closing conditions, is expected to result in the execution of a coinsurance agreement (anticipated reinsurance agreement) during 2025.
In February 2025, Unum Life Insurance Company of America (Unum America) entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which resulted in the execution of a coinsurance agreement (reinsurance agreement) during July 2025. This anticipated reinsurance agreement is to reinsurereinsures a portion of our Closed Block long-term care insurance business and a portion of our Unum US individual disability business on a coinsurance basis to Fortitude Re.Re effective January 2025. The anticipated reinsurance agreement represents approximately 21 percent of total Closed Block long-term care future policy benefits and approximately 15 percent of Unum US individual disability future policy benefits as of December 31, 2024. The transaction is expected to result in approximately $430 million pre-tax ceding commission paid to Fortitude Re. Fortitude Re will establish and maintain a collateralized trust account for the benefit of Unum America to secure its obligations under the anticipated reinsurance agreement.
Upon closing the transaction in July 2025, we transferred to Fortitude Re $953.5 million of cash as well as fixed maturity securities with a fair value totaling $3,230.1 million and accrued investment income of $47.1 million. After consideration of the final settlement, the final ceding commission related to this transaction was $442.3 million. Fortitude Re established and will maintain a collateralized trust account for the benefit of Unum America to secure its obligations under the reinsurance agreement.
As a result of this reinsurance agreement, we recognized the following:
•Net realized investment loss totaling $46.8 million during the year ended 2025.
•Reinsurance recoverable of $3,620.5 million comprised of ceded reserves of $3,315.2 million related to the Closed Block long-term care product line and $305.3 million related to the Unum US individual disability product line.
•Cost of reinsurance of $848.2 million related to the Closed Block long-term care product line and a deferred gain on reinsurance related to the Unum US individual disability product line of $145.9 million.
•Write-off of deferred acquisition costs related to the Unum US individual disability product line of $100.3 million which is included as a component of deferred gain on reinsurance.
ImmediatelyIn July 2025, immediately prior to entering into the anticipated reinsurance agreement with Fortitude Re, Unum America will recapturerecaptured the aforementioned Closed Block long-term care business from Fairwind ReinsuranceInsurance Company (Fairwind), an affiliated captive reinsurer, and assumeassumed the aforementioned Unum US individual disability business from Provident Life and Accident Insurance Company,Company (Provident), an affiliate.
See "Investments" and "Liquidity and Capital Resources" contained herein Item 7, and Notes 3 and 14 in the "Notes to the Consolidated Financial Statements" contained herein Item 8 for further information.
Loss on Legal Settlement
During the thirdfourth quarter of 2024,2025, we incurred a loss of $15.3$103.8 million before tax, or $12.1 million after tax,tax within our Corporate segment forrelated theto settlementa purchase of an employment-relatedannuity matter.contract $4.9which milliontransferred a portion of theour lossU.S. isqualified recordeddefined withinbenefit compensationpension expenseplan andobligation $10.4to milliona ofthird-party. theThe loss is recorded within other expenses in the consolidated statements of income. For more information see Note 11 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
Accelerated Charitable Contribution
During the fourth quarter of 2025, we incurred an expense related to an accelerated charitable contribution of $20.0 million before tax within our Corporate segment. The expense is recorded within other expenses in the consolidated statements of income. For more information see Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
During the third quarter of 2024, we incurred a loss of $15.3 million before tax within our Corporate segment for the settlement of an employment-related matter. $4.9 million of the loss is recorded within compensation expense and $10.4 million of the loss is recorded within other expenses in the consolidated statements of income. For more information see Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
One Big Beautiful Bill Act
In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into U.S. law. We do not expect the OBBBA to have a material impact on our financial position or results of operations.
In August 2022, the Inflation Reduction Act (IRA) was signed into law in the U.S. and includes certain corporate tax provisions effective January 1, 2023. The IRA imposed a new 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income (AFSI) on corporations that have average AFSI over $1.0 billion in any prior three-year period, starting with years 2020 to 2022. Our company is an applicable corporation.corporation Weand we have not recorded anya CAMT liability as of December 31, 2024.2025. We do not expect that any CAMT incurred wouldto impact earnings since it would beis offset with a minimum tax credit toward regular income tax in subsequent years. The IRA also imposed a one percent excise tax on fair market value of corporate stock repurchases after December 31, 2022. This excise tax is recorded as part of the cost basis of treasury stock and is assessed on the fair market value of stock purchases, reduced by the fair value of any shares issued during the period. We have recorded $8.3 million of excise tax in stockholders' equity, as part of the cost basis of treasury stock in 2024.
The Organization for Economic Co-operation and Development (OECD) has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the United Kingdom, Ireland, and Poland have adopted Pillar Two beginning on or after December 31, 2023. We have not recorded material Pillar Two taxes as of December 31, 2025. We will continue to monitor legislative developments.
The Organization for Economic Co-operation and Development (OECD) has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the United Kingdom, Ireland, and Poland have adopted Pillar Two beginning on or after December 31, 2023. We have not recorded material Pillar Two taxes as of December 31, 2024, and we do not expect material impacts in 2025. We will continue to monitor legislative developments.
We believe our strategy of providing financial protection products at the workplace puts us in a position of strength. We continue to fulfill our corporate purpose of helping the working world thrive throughout life’s moments by providing an excellent serviceexperience centered on service, expertise and empathy to people at their time of need. Our strategy remains centered on growing our core businessesbusinesses, through investing and transforming our operations and technology to anticipate and respond to the changing needs of our customers, expanding into new adjacent markets through meaningful partnerships,partnerships and effective deployment of our capital across our portfolio.
In 2024, we experienced increased2025, earnings driven by the underlying strength of our business and expect positive operating trends in our core businesses remained strong, although they declined compared to continuethe prior year. We expect earnings growth in 2025.our core operations to resume in 2026. The products and services we provide deliver significant value to employers, employees and their families, and we believe this will help drive sales andstrong premium growth in 2025.2026.
A rising interest rate environment could positively impact our yields on new investmentsinvestments, but could also increase unrealized losses in our current holdings. Alternatively, a declining interest rate environment could negatively impact our yields on new investmentsinvestments, but could also reduce unrealized losses in our current holdings. We may also may continue to experience further volatility in miscellaneous investment income primarily related to changes in partnership net asset values as well as bond calls.
We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S generally accepted accounting principles (GAAP). The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, thecertain amortizationimpacts offrom thereinsurance cost of reinsurance, the impact of non-contemporaneous reinsurance, andtransactions, reserve assumption updates as well asand certain other items as specified in the reconciliations below. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, impairment losses, and gains or losses on derivatives. Investment gains or losses depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments. Our investment focus is on investment income to support our insurance liabilities as opposed to the generation of investment gains or losses. Although we may experience investment gains or losses which will affect future earnings levels, a long-term focus is necessary to maintain profitability over the life of the business since our underlying business is long-term in nature, and we need to earn the interest rates assumed in calculating our liabilities.
WeAt exitedtimes, awe substantialutilize portionreinsurance transactions to manage risk related to certain portions of our business including the exit of portions of our Closed Block individual disability product line through the two phases of the reinsurance transaction that were executed in December 2020 and March 2021.businesses. As a result, we exclude the amortization of the cost of reinsurance that we recognized uponand the exitamortization of the businessdeferred relatedgain toon reinsurance that are recognized after the policiesclosing onof claimthese statustransactions. asWe wellalso asexclude the impact of non-contemporaneous reinsurance thatfor resultedthese fromtransactions. While the adoptiontotal equity impact of ASUnon-contemporaneous 2018-12.reinsurance is neutral, the difference in original discount rates utilized for direct and ceded reserves results in a disproportionate earnings impact. We believe that the exclusion of these items provides a better view of our results from our ongoing businesses.
Cash flow assumptions used to calculate our liability for future policy benefits are reviewed at least annually and updated, as needed, with the resulting impact reflected in net income. While the effects of these assumption updates are recorded in the reporting period in which the review is completed, these updates reflect experience emergence and changes to expectations spanning multiple periods. We believe that by excluding the impact of reserve assumption updates we are providing a more comparable and consistent view of our quarterly results.
See "Executive SummarySummary," "Investments," and "Critical Accounting Estimates" contained herein in Item 7 and Notes 3, 6, 11, 14, and 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion regarding the items specified in the reconciliationsreconciliation below.
We measure and analyze our segment performance on the basis of "adjusted operating revenue" and "adjusted operating income" or "adjusted operating loss,loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses, thecertain amortizationimpacts offrom thereinsurance cost of reinsurance, the impact of non-contemporaneous reinsurance, andtransactions, reserve assumption updates, as well asand certain other items as specified in the reconciliations below. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income.
The accounting estimates deemed to be most critical to our financial position and results of operations are those related to the liability for future policy benefits, valuation of investments, pension and postretirement benefit plans, income taxes, and contingent liabilities. For additional information, refer to our significant accounting policies in Note 1 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
1.The discount rate, which is used in calculating the liability for future policy benefits, is the interest rate that we use to discount future cash flows including premium and claim payments to determine the present value. A higher discount rate produces a lower reserve. If the discount rate is higher than our future investment returns, our invested assets will not earn enough investment income to support our future claim payments. The original discount rates are initially set at the transition date of accounting standard updated (ASU) 2018-12, which was January 1, 2021, for policies originally issued before the transition date, or at the policy issuance date, for policies issued on or after the transition date. For policies issued on or after the transition date, the original discount rate assumptions reflect an upper-medium grade (low-credit risk) fixed-income instrument yield based on the currency in which the liabilities are assumed and matched to the duration of the insurance liabilities. For all cohorts, the liability is then remeasured at each reporting period using the current discount rate reflective of an upper-medium grade fixed-income instrument. We primarily utilize a forward curve which is derived from the underlying spot curve using interpolation to develop an ultimate forward rate.
Our cash flow assumption reviews during the years ended December 31, 2025, 2024, 2023, and 20222023 resulted in the following impacts to income beforenet income tax as a result of updating certain assumptions related to the liability for future policy benefits:
2025 Significant Cash Flow Assumption Updates:
The cash flow assumption updates in our Closed Block segment were primarily driven by the long-term care product line. The impact to income before income tax for this product line was $643.1 million. However, there were also updates to the assumptions for the portion of the long-term care product line which was included in the block ceded as a part of the Fortitude Re reinsurance transaction. We increased our liability for future policy benefits by $82.0 million as a result of the assumption updates related to the ceded block with a corresponding increase in our consolidated balance sheet as a reinsurance recoverable. The total cash flow assumption updates in the long-term care product line increased our liability for future policy benefits due primarily to the removal of the morbidity and mortality improvement assumptions. Also contributing were higher expectations for claim incidence assumptions, and the removal of future assumptions related to new enrollments on existing group cases, partially offset by an increase to expected future premium rate approvals and higher expectations for claim terminations.
The cash flow assumption updates in our Unum US group long-term disability product line reduced our liability for future policy benefits by $105.8 million, due primarily to claim resolution assumptions driven by favorable claim recovery trends as well as higher mortality expectations.
The cash flow assumption updates in our Unum US individual disability product line reduced our liability for future policy benefits by $27.7 million, due primarily to favorable claim incidence and recovery trends.
The cash flow assumption updates in our Closed Block segment were primarily driven by the long-term care product line which reduced our liability for future policy benefits by $174.1 million, due primarily to an increase to expected premium rate increase approvals within our existing premium rate increase program, partially offset by lower than expected persistency on group policies.
The cash flow assumption updates in our Unum US group long-term disability product line reduced our liability for future policy benefits by $121.0 million, due primarily to sustainedclaim improvementresolution inassumptions driven by favorable claim recovery trends.
What changed in the latest 10-Q
Risk Factors
There have been no material changes from the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “2025 Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction”
New heading “Strategic Actions”
New heading “Unrealized Loss on Investment-Grade Fixed Maturity Securities”
New heading “Length of Time in Unrealized Loss Position”
Largest changes
“As part of the anticipated reinsurance transaction with Fortitude Re, which is expected to close prior to the end of 2026, we plan to transfer, upon closing the transaction, fixed maturity securities and cash with a fair value of $5,659.0 million, which is subject to adjustment prior to closing for changes in interest rates and certain interim cash flows related to the reinsured business. We expect the 2026 anticipated reinsurance transaction will be funded using a combination of excess capital from Fairwind, holding company liquidity, and additional external financing.”see in full comparison
“2025 Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction”see in full comparison
Commercial sector sales increasedsee in full comparisonduringin the second quarter and firstquartersix months of 2026 compared to the sameperiodperiods of 2025 due primarily to higher sales to new and existing customers in the large case market, which we define as accounts with more than 1,000 employees, as well as in the core market. Public sector sales increased in the second quarter and first six months of 2026 compared to the same periods of 2025 due to higher sales tonew customers in the core market, which we define as accounts with less than 1,000 employees, partially offset by lower sales toexistingcustomers in the core market. Public sector sales were generally consistent in the first quarter of 2026 compared to the same period of 2025.customers.
Our investment gains and losses on fixed maturity securities include net losses on sales ofsee in full comparison$0.5$7.5 million and$44.7$13.5 million in the second quarter of 2026 and 2025, respectively, and $8.0 million and $58.2 million in the firstquartersix months of 2026 and 2025, respectively. The net losses for the firstquartersix months of 2025 were primarily related to a realized loss of $23.5 million on sales of fixed maturity securities relating to the 2025 Fortitude Re reinsurance transaction as well as a $19.1 million realized loss on sales of fixed maturity securities relating to funding of a dividend from one of our subsidiaries. Credit and impairment losses on fixed maturity securities were$2.2$3.0 million and $5.2 million during the second quarter and firstquartersix months of 2026.We recognized $153.4 million of creditCredit and impairment losses on fixed maturity securities were $19.1 million and $172.5 million during the second quarter and first six months of 2025, respectively. Credit and impairment losses on fixed maturity securities for the firstquartersix months of 2025which wasis primarily comprised of the$152.4$160.9 million impairment loss based on the intent to transfer fixed-maturity securitiesrelatedrelating to the 2025 Fortitude Re reinsurance transaction. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
Full comparison: every changed paragraph (129)
For the firstsecond quarter of 2026, we reported net income of $232.0$256.9 million, or $1.41$1.61 per diluted common share, compared to net income of $189.1$335.6 million, or $1.06$1.92 per diluted common share, in the firstsecond quarter of 2025. For the first six months of 2026, we reported net income of $488.9 million, or $3.01 per diluted common share, compared to net income of $524.7 million, or $2.97 per diluted common share in the same period of 2025.
Included in our results for the firstsecond quarter of 2026 are:
•A net investment loss of $4.0$5.2 million afterbefore tax, or $0.03 per diluted common sharetax; and,
•Closed Block segment after-taxbefore-tax adjusted operating loss of $116.5$75.4 million; or $0.70 per diluted common share.and,
•A strategic actions impact of $30.7 million before tax.
The tax benefit on the items above was $22.2 million.
Included in our results for the first quartersix months of 20252026 are:
•A net investment loss of $163.4$10.2 million afterbefore tax, or $0.91 per diluted common sharetax; and,
•Closed Block segment after-taxbefore-tax adjusted operating incomeloss of $3.7$220.7 million; or $0.02 per diluted common share.and,
•A strategic actions impact of $30.7 million before tax.
The tax benefit on the items above was $52.0 million.
Included in our results for the second quarter of 2025 are the following reconciling items:
•A net investment loss of $17.7 million before tax; and,
•Closed Block segment before-tax adjusted operating loss of $10.8 million.
The tax benefit on the items above was $3.9 million.
Included in our results for the first six months of 2025 are:
•A net investment loss of $224.5 million before tax; and,
•Closed Block segment before-tax adjusted operating loss of $2.8 million.
The tax benefit on the items above was $43.0 million.
Excluding these items, after-tax adjusted operating income for the firstsecond quarter of 2026 was $352.5$346.0 million, or $2.14$2.16 per diluted common share compared to $348.8$360.2 million, or $1.95$2.06 per diluted common share, for the same period of 2025. After-tax adjusted operating income was $698.5 million, or $4.31 per diluted common share, in the first quartersix months of 2026, compared to $709.0 million, or $4.01 per diluted common share, in the first six months of 2025. See "Reconciliation of Non-GAAP and Other Financial Measures" contained herein in this Item 2 for further discussion and a reconciliation of these items.
Unum US reported segment adjusted operating income of $337.9 million in the first quarter of 2026 compared to $329.1 million the same period of 2025, due primarily to favorable benefits experience and higher net investment income, partially offset by the gain on the recapture of a previously ceded block of business in the Unum US individual disability product line.in the first quarter of 2025. The benefit ratio for our Unum US segment was 59.5 percent in the first quarter of 2026, compared to 59.7 percent in first quarter of 2025. Unum US sales increased 20.8 percent in the first quarter of 2026 compared to the same period of 2025.
Unum International reported segment adjusted operating income of $30.9 million in the first quarter of 2026 compared to $38.7 million the same period of 2025. Our Unum UK line of business reported adjusted operating income of £20.4 million in the first quarter of 2026 compared to £29.5 million the same period of 2025 due primarily to unfavorable benefits experience. The benefit ratio for our Unum UK line of business was 72.9 percent in the first quarter of 2026, compared to 67.1 percent in the same period of 2025. Unum International sales, as measured in U.S. dollars, increased 14.1 percent in the first quarter of 2026 compared to the same period of 2025. Unum UK sales, as measured in local currency, increased 15.0 percent in the first quarter of 2026 compared to the same period of 2025.
ColonialUnum LifeUS reported segment adjusted operating income of $127.8$329.6 million and $667.5 million in the firstsecond quarter and first six months of 20262026, respectively, compared to $115.7$318.2 million and $647.3 million in the same periods of 2025, due primarily to higher premium income. Also impacting the comparison of the first six months of 2026, compared to the same period of 2025, due primarily to favorable benefits experience andwas higher net investment income. The benefit ratio for Colonialour LifeUnum US segment was 46.061.1 percent and 60.3 percent in the second quarter and first quartersix months of 2026, respectively, compared to 47.760.7 percent and 60.2 percent in the same periodperiods of 2025. ColonialUnum LifeUS sales increased 0.97.4 percent and 14.3 percent in the firstsecond quarter and first six months of 20262026, respectively, compared to the same periodperiods of 2025.
Unum International reported segment adjusted operating income of $24.3 million and $55.2 million in the second quarter and first six months of 2026, respectively, compared to $41.6 million and $80.3 million in the same periods of 2025. Our Unum UK line of business reported segment adjusted operating income of £15.3 million and £35.7 million in the second quarter and first six months of 2026, respectively, compared to £29.4 million and £58.9 million in the same periods of 2025, primarily due to benefits experience. The benefit ratio for our Unum UK line of business was 82.2 percent and 77.6 percent in the second quarter and first six months of 2026, respectively, compared to 75.0 percent and 71.1 percent in the same periods of 2025. Unum International sales, as measured in U.S. dollars, decreased 19.4 percent and 7.3 percent in the second quarter and first six months of 2026, respectively, compared to the same periods of 2025. Unum UK sales, as measured in local currency, decreased 14.9 percent and 4.2 percent in the second quarter and first six months of 2026, respectively, compared to the same periods of 2025.
Colonial Life reported segment adjusted operating income of $131.4 million and $259.2 million in the second quarter and first six months of 2026, respectively, compared to $117.4 million and $233.1 million in the same periods of 2025, primarily due to benefits experience, higher net investment income and higher premium income. The benefit ratio for Colonial Life was 46.7 percent and 46.3 percent in the second quarter and first six months of 2026, respectively, compared to 48.3 percent and 48.0 percent in the same periods of 2025. Colonial Life sales increased 6.0 percent and 3.7 percent in the second quarter and first six months of 2026, respectively, compared to the same periods of 2025.
Closed Block reported segment adjusted operating loss of $145.3$75.4 million and $220.7 million in the second quarter and first quartersix months of 2026, respectively, compared to $8.0$10.8 million ofand segment$2.8 adjusted operating incomemillion in the same periodperiods of 2025. The net premium ratio for long-term care increased to 97.697.8 percent at MarchJune 31,30, 2026 from 94.794.9 percent at MarchJune 31,30, 2025.
A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings. Alternatively, a declining interest rate environment could negatively impact our yields on new investments, but could also reduce unrealized losses in our current holdings. As of MarchJune 31,30, 2026, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost for which an impairment loss was not recorded. The net unrealized loss on our fixed maturity securities was $2.2$2.1 billion at MarchJune 31,30, 2026, compared to $1.7 billion at December 31, 2025, with the increase due primarily to an increase in U.S. Treasury rates and credit spreads.rates. The earned book yield on our investment portfolio was 4.294.23 percent for the first threesix months of 2026 compared to a yield of 4.35 percent for the full year ended December 31, 2025.
Additionally, a rising interest rate environment could result in reserve decreases while a declining interest rate environment could result in reserve increases, specific to our liability for future policy benefits, as the reserve discount rate assumptions used in the calculation of our liability are updated at each reporting date using a yield that is reflective of an upper-medium grade fixed income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities. The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the increase in U.S. Treasury rates during the first quartersix months of 2026, resulted in a decrease to the liability for future policy benefits, net of reinsurance, of approximately $0.6$0.3 billion.
We believe our capital and financial positions are strong. At MarchJune 31,30, 2026, the risk-based capital (RBC) ratio for our traditional U.S. insurance subsidiaries, calculated on a weighted average basis using the NAIC Company Action Level formula, was approximately 460480 percent, which is in line withabove our long-term expectation. We repurchased 5.47.9 million shares and 3.37.1 million shares of Unum Group common stock under our share repurchase programprogram, during the first quartersix months of 2026 and 2025, respectively, at a cost of $402.4$604.5 million and $202.6$505.9 million, respectively, including commissions and excise tax. Our weighted average common shares outstanding, assuming dilution, equaled 164.4160.0 million and 178.9174.4 million for the second quarters of 2026 and 2025, respectively, and 162.2 million and 176.6 million for the first quartersix months of 2026 and 2025, respectively. As of MarchJune 31,30, 2026, Unum Group and our intermediate holding companies had available holding company liquidity of $1,726.1$1,536.5 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds,bonds and asset backed securities. See Note 12 of the "Notes to Consolidated Financial Statements" contained herein in Item 1.
Anticipated 2026 Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction
In July 2026, Unum America entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which, subject to receipt of regulatory approvals and the satisfaction or waiver of other customary closing conditions, is expected to result in the execution of a coinsurance agreement during 2026.
This anticipated reinsurance agreement reinsures a portion of our Closed Block individual long-term care policies on a coinsurance basis to Fortitude Re effective April 2026. The reinsurance agreement represents approximately 28 percent of total Closed Block long-term care future policy benefits. As part of the anticipated reinsurance transaction with Fortitude Re, we plan to transfer, upon closing the transaction, fixed maturity securities and cash with a fair value of $5,659.0 million, which is subject to adjustment prior to closing for changes in interest rates and certain interim cash flows related to the reinsured business. Fortitude Re intends to retrocede biometric risk on the reinsured block to a highly rated global reinsurer (the Retrocessionaire).
Additionally, at the closing of the transaction, Provident will enter into an agreement with the Retrocessionaire whereby Provident will provide an experience volatility cover for the difference between actual and expected claim experience, subject to a maximum payment of $125.0 million (in net present value terms). Payment obligations will be settled every five years and will be secured by a trust account to be funded at all times with the remaining possible payment by Provident. Provident will provide the experience volatility cover in exchange for a payment from the Retrocessionaire of $5.0 million upon closing the anticipated reinsurance transaction. The experience volatility cover will be accounted for under the deposit method.
During July 2026, we also entered into $1,082.0 million notional amount of Treasury forwards and $549.8 million notional amount of total return swaps to hedge interest rate and duration risk associated with assets that will be transferred upon closing of the anticipated 2026 Closed Block long-term care reinsurance transaction.
Immediately prior to entering into the anticipated reinsurance agreement with Fortitude Re, Unum America will recapture the Closed Block individual long-term care business from Fairwind Insurance Company (Fairwind), an affiliated captive reinsurer.
See Note 14 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
2025 Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction
In February 2025, Unum Life Insurance Company of America (Unum America) entered into a master transaction agreement with Fortitude Re which resulted in the execution of a coinsurance agreement (reinsurance agreement) during July 2025. This reinsurance agreement reinsures a portion of our Closed Block long-term care business and a portion of our Unum US individual disability business on a coinsurance basis to Fortitude Re effective January 2025. The reinsurance agreement represented approximately 21 percent of total Closed Block long-term care future policy benefits and approximately 15 percent of Unum US individual disability future policy benefits as of December 31, 2024.
Upon closing the transaction in July 2025, we transferred to Fortitude Re $953.5 million of cash as well as fixed maturity securities with a fair value totaling $3,230.1 million and accrued investment income of $47.1 million. After consideration of the final settlement, the final ceding commission related to this transaction was $442.3 million. Fortitude Re has an A rating by A.M. Best Company and has established a collateralized trust account for the benefit of Unum America to secure its obligations under the reinsurance agreement.
In July 2025, immediately prior to entering into the reinsurance agreement with Fortitude Re, Unum America recaptured the aforementioned Closed Block long-term care business from Fairwind Insurance Company (Fairwind), an affiliated captive reinsurer,Fairwind, and assumed the aforementioned Unum US individual disability business from Provident, an affiliate.Provident.
See Notes 4 and 14 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
Strategic Actions
In connection with our transition to an updated operating model, during the second quarter of 2026, we recognized expenses of $30.7 million. This included $18.0 million in real estate-related costs, including $16.3 million of depreciation expense associated with investment real estate which is reflected within net investment income in the consolidated statements of income. In addition, we incurred employee-related costs of $12.7 million, with $11.2 million reflected within compensation expense in the consolidated statements of income and we expect payments to occur through 2027. These costs were included within our Corporate segment.
The Organization for Economic Co-operation and Development (OECD) has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the United Kingdom, Ireland, and Poland have adopted Pillar Two beginning on or after December 31, 2023. We have not recorded material Pillar Two taxes as of MarchJune 31,30, 2026. We will continue to monitor legislative developments.
As previously discussed, we anticipate entering into a reinsurance agreement with Fortitude Re to cede an additional portion of our long-term care business during 2026.
We analyze our performance using non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.SU.S. generally accepted accounting principles (GAAP). The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, Closed Block segment after-tax adjusted operating income or loss, reserve assumption updates and certain other items. The excluded items impacting the periods presented herein are specified in the reconciliations below. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.
See "Investments" contained herein in Item 2 and NoteNotes 4 and 10 of the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion regarding the netitems investmentspecified loss.in the reconciliation below.
The accounting estimates deemed to be most critical to our financial position and results of operations are those related to the liability for future policy benefits, valuationfair value of investments, income taxes, and contingent liabilities. There have been no significant changes in our critical accounting estimates during the threesix months ended MarchJune 31,30, 2026.
The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.3431.340 and 1.2641.333 for the three months ended MarchJune 31,30, 2026 and 2025, and 1.342 and 1.299 for the six months ended June 30, 2026 and 2025, respectively. If the first quarter 2025 results for our U.K. operations had been translated at the higherweighted average exchange raterates of 2026, our segment adjusted operating revenue would have been higher by approximately $1 million and segment$16 million, respectively, in the second quarter and first six months of 2025. Our adjusted operating income for the second quarter of 2025 would have been generally consistent and our adjusted operating income would have both been higher by approximately $15$3 million and $2 million, respectively, infor the first quartersix months of 2025. Except for a limited number of transactions, we do not actually convert pounds into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K.
Premium income increased in the first quarter of 2026 relative to the same period of 2025 in each of our principal operating businesssegments segments,in the second quarter and first six months of 2026 compared to the same periods of 2025, primarily due to favorable persistency and sales, partially offset by the impact of ceding a portion of the Unum US individual disability product line as a part of the 2025 Fortitude Re reinsurance transaction,transaction as well as the expected run off in medical stop-loss premium. Premium income continues to decline in our Closed Block segment, as expected, and this was accelerated by the impact of ceding a portion of the Closed Block long-term care product line as a part of the 2025 Fortitude Re reinsurance transaction in 2025.transaction.
Net investment income was lower in the second quarter and first quartersix months of 2026 compared to the same periodperiods of 2025 due primarily related to a decrease in the level of invested assets supporting the Closed Block long-term care product line as a result of the 2025 Fortitude Re reinsurance transaction, partiallydepreciation offsetexpense associated with real estate previously held for sale reclassified to real estate held for the production of income, and lower income from inflation index-linked bonds held by anUnum increase in the yield on invested assets as well as an increase in miscellaneous investment income, primarily related to larger increases in the NAV on our private equity partnerships.UK.
Our investment gains and losses on fixed maturity securities include net losses on sales of $0.5$7.5 million and $44.7$13.5 million in the second quarter of 2026 and 2025, respectively, and $8.0 million and $58.2 million in the first quartersix months of 2026 and 2025, respectively. The net losses for the first quartersix months of 2025 were primarily related to a realized loss of $23.5 million on sales of fixed maturity securities relating to the 2025 Fortitude Re reinsurance transaction as well as a $19.1 million realized loss on sales of fixed maturity securities relating to funding of a dividend from one of our subsidiaries. Credit and impairment losses on fixed maturity securities were $2.2$3.0 million and $5.2 million during the second quarter and first quartersix months of 2026. We recognized $153.4 million of creditCredit and impairment losses on fixed maturity securities were $19.1 million and $172.5 million during the second quarter and first six months of 2025, respectively. Credit and impairment losses on fixed maturity securities for the first quartersix months of 2025 which wasis primarily comprised of the $152.4$160.9 million impairment loss based on the intent to transfer fixed-maturity securities relatedrelating to the 2025 Fortitude Re reinsurance transaction. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 and "Investments" contained herein in this Item 2 for further information.
Other income is primarily comprised of fee-based service products in the Unum US segment, which include leave management services and administrative services only business,business and the underlying results and associated net investment income of certain assumed blocks of reinsured business in the Closed Block segment. Also included within other income,income in the Unum US individual disability product line, in the second quarter and first quartersix months of 2026, is the amortization of the deferred gain on reinsurance related to the Unum US individual disability product line as a part of the 2025 Fortitude Re reinsurance transaction.transaction Also included within other income,and, in the first quartersix months of 2025, is a gain on the recapture of a previously ceded block of business in the Unum US individual disability product line.business.
Overall benefits experience was favorable in the firstsecond quarter of 2026 was unfavorable relative to the same period of 20252025. with aThe consolidated benefit ratio, which includes the remeasurement gain (loss),or ofloss, 71.7was 71.0 percent and 69.271.9 percent,percent in the second quarter of 2026 and 2025, respectively. Overall benefits experience was unfavorable in the first six months of 2026 relative to the same period of 2025. The consolidated benefit ratio, which includes the remeasurement gain or loss, was 71.4 percent and 70.6 percent in the first six months of 2026 and 2025, respectively. The underlying benefits experience for each of our operating segments is discussed more fully in "Segment Results" as follows.
Commissions and the deferral of acquisition costs were higher during the second quarter and first quartersix months of 2026 compared to the same periodperiods of 2025 due to sales in our coreprincipal operating segments. The amortization of deferred acquisition costs was higher in the second quarter and first quartersix months of 2026 compared to the same periodperiods of 2025 primarily due to growth in the level of the deferred asset in our Colonial Life and Unum US group disability product lines,segment, partially offset by a decrease in the level of the deferred asset in our Unum US individual disability product line as a result of the 2025 Fortitude Re reinsurance transaction.
Other expenses and compensation expense, on a combined basis, increased in the second quarter and first quartersix months of 2026 compared to the same periodperiods of 2025 due primarily to an increase in the amortization of the cost of reinsurance as a result of the 2025 Fortitude Re reinsurance transaction, as well as an increase in employee-related costs.
Our effective income tax raterates for the second quarter and first quartersix months of 2026 waswere 23.422.0 percent,percent and 22.7 percent of income before income tax, respectively, compared to 22.419.5 percent and 20.6 percent for the same prior year period.periods. Our effective income tax rate differed from the U.S. statutory rate of 21 percent for the second quarter and first quartersix months of 2026 primarily due to non-deductibleinterest compensation.on uncertain tax positions and Net Controlled Foreign Corporation Tested Income. Our effective income tax rate differed from the U.S. statutory rate of 21 percent for the firstsecond quarter of 2025 primarily due to interesttax onexempt uncertainincome. Our effective income tax positions.rate was generally consistent with the U.S. statutory rate of 21 percent in effect for the first six months of 2025.
Sales shown in the preceding chart generally represent the annualized premium income on new sales which we expect to receive and report as premium income during the next 12 months following or beginning in the initial quarter in which the sale is reported, depending on the effective date of the new sale. Sales do not correspond to premium income reported as revenue in accordance with GAAP. This is because new annualized sales premiums reflect current sales performance and what we expect to recognize as premium income over a 12-month12 month period, while premium income reported in our financial statements is reported on an "as earned" basis rather than an annualized basis and also includes renewals and persistency of in-force policies written in prior years as well as current new sales.
In describing our results, we may at times note certain items and exclude the impact on financial ratios and metrics to enhance the understanding and comparability of our operational performance and the underlying fundamentals, but this exclusion is not an indication that similar items may not recur. We also measure and analyze our segment performance on the basis of "segment adjusted operating revenue" and "segment adjusted operating income" or "segment adjusted operating loss", which differ from total revenue and income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains and losses and certain other items. These performance measures are in accordance with GAAP guidance for segment reporting, but they should not be viewed as a substitute for total revenue, income before income tax, or net income. See "Reconciliation of Non-GAAP Financial Measures" contained herein in this Item 2.
Premium income was higherincreased in the second quarter and first quartersix months of 2026 compared to the same periodperiods of 2025 due primarily to favorable persistencysales and priorhigher period sales,persistency, partially offset by the expected run off in medical stop-loss premium. Net investment income was generally consistent in the second quarter and the first quartersix months of 2026 relative to the same periodperiods of 2025. Other income was higher in the first quarter of 2026 compared to the same period of 2025 due to growth in our fee-based service products.
UNM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 4 filings (4 insiders, 3 trade dates, 22,488 shares, about $2.0M). Net open-market shares: -22,488 (purchases minus sales); net value about -$2.0M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-10 | Rice Walter Lynn Jr |
Open-market sale | 2,188 | $94.32 | $206.4K |
| 2026-09-10 | Rice Walter Lynn Jr |
Gift | 239 | — | — |
| 2026-09-10 | Keaney Timothy F |
Open-market sale | 4,300 | $94.02 | $404.3K |
| 2026-09-09 | Iglesias Lisa G |
Open-market sale | 4,000 | $94.44 | $377.8K |
| 2026-07-31 | Walker Andrew D |
Shares withheld for tax | 1,819 | $86.11 | $156.6K |
| 2026-05-26 | O Hanley Ronald P |
Grant/award | 1,777 | — | — |
| 2026-05-26 | O Hanley Ronald P |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Matus Kristi Ann |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Lefebvre Mojgan M |
Grant/award | 2,191 | — | — |
| 2026-05-26 | King Gale V. |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Keaney Timothy F |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Kabat Kevin T |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Kabat Kevin T |
Grant/award | 1,333 | — | — |
| 2026-05-26 | Egan Cynthia |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Echevarria Joseph |
Grant/award | 1,540 | — | — |
| 2026-05-26 | Echevarria Joseph |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Devore Susan D. |
Grant/award | 2,191 | — | — |
| 2026-05-26 | Cross Susan Lee |
Grant/award | 2,191 | — | — |
| 2026-05-01 | Anderson Shelia Danette |
Shares withheld for tax | 1,817 | $80.84 | $146.9K |
| 2026-04-30 | Ahmed Elizabeth Claire |
Open-market sale | 12,000 | $80.14 | $961.7K |
Well-known investors holding UNM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 2,988,552 | $266.2M | 0.09% | Added 57% |
| Two Sigma Investments | 2026-06-30 | 1,759,799 | $157.3M | 0.12% | Added 15% |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,383,673 | $123.7M | 0.08% | Reduced 18% |
| D. E. Shaw & Co. | 2026-06-30 | 1,158,462 | $103.6M | 0.06% | Added 11% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 863,930 | $77.2M | 0.12% | Reduced 25% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 339,678 | $30.4M | 0.02% | Added 34% |
| Bridgewater Associates | 2026-06-30 | 226,541 | $20.3M | 0.08% | Reduced 8% |
| Renaissance Technologies | 2026-06-30 | 181,400 | $16.2M | 0.02% | Added 88% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 29,176 | $2.6M | 0.01% | New position |
| Gardner Russo & Quinn (Tom Russo) | 2026-06-30 | 3,485 | $311.6K | 0.0% | Reduced 8% |