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CHATTANOOGA - Unum Group (NYSE:UNM) saw its shares drop 3.6% after reporting second-quarter earnings that fell short of analyst expectations, despite posting better-than-expected revenue and maintaining a positive outlook for the full year.
The insurance provider reported adjusted operating earnings of $2.07 per share for the second quarter of 2025, missing the analyst consensus of $2.22 by $0.15. Revenue came in at $3.36 billion, slightly above the $3.33 billion analysts had expected, representing a 4.6% increase on a constant currency basis compared to the same period last year.
"During the quarter we made meaningful progress against our strategic priorities, despite earnings results that did not meet our expectations," said Richard P. McKenney, president and chief executive officer. "Core fundamentals remain solid and we continued to deliver strong premium growth in our capital-efficient, high-return businesses."
The company’s Unum US segment, its largest business unit, reported an 11% decrease in adjusted operating income to $318.2 million, with weakness in both the group disability and group life product lines. The benefit ratio for group disability increased to 62.2% from 59.1% a year earlier, while the group life benefit ratio rose to 69.7% from 65.4%.
Unum’s Closed Block segment, which includes its long-term care insurance business, saw adjusted operating income plummet to $3.9 million from $51.6 million in the prior-year period, primarily due to lower claimant mortality and higher average new claim size.
Despite the earnings miss, Unum maintained a strong capital position with a weighted average risk-based capital ratio of approximately 485% and holding company liquidity of $2.0 billion. The company repurchased $300 million of shares during the quarter, bringing year-to-date repurchases to $500 million.
Unum revised its full-year 2025 outlook for after-tax adjusted operating income per share to approximately $8.50, compared to $8.44 in 2024. Book value per common share grew 18.2% YoY to $65.76, while book value excluding accumulated other comprehensive income increased 9.7% to $77.62.
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