Unum Group on Tuesday reported net income of $335.6 million ($1.92 per diluted common share) for the second quarter of 2025, compared to net income of $389.5 million ($2.05 per diluted common share) for the second quarter of 2024.
Included in net income for the second quarter of 2025 are the after-tax amortization of the cost of reinsurance of $7.7 million ($0.05 per diluted common share), the after-tax impact of non-contemporaneous reinsurance of $3.9 million ($0.02 per diluted common share), and a net after-tax investment loss on the company’s investment portfolio of $13.9 million ($0.08 per diluted common share). Included in net income for the second quarter of 2024 are the after-tax amortization of the cost of reinsurance of $8.2 million ($0.04 per diluted common share), the after-tax impact of non-contemporaneous reinsurance of $5.5 million ($0.03 per diluted common share), and a net after-tax investment loss on the Company’s investment portfolio of $8.2 million ($0.04 per diluted common share). Excluding the items above, after-tax adjusted operating income was $361.1 million ($2.07 per diluted common share) in the second quarter of 2025, compared to $411.4 million ($2.16 per diluted common share) in the second quarter of 2024.
“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. We continue to execute on our risk management and capital deployment priorities, returning substantial capital to shareholders through dividends and share repurchases while closing our long-term care reinsurance transaction. Looking ahead, we remain confident in our resilient business model and strong capital position to focus on executing our growth strategy.”
Unum gave this analysis of the quarter:
RESULTS BY SEGMENT
We measure and analyze our segment performance on the basis of "adjusted operating income" or "adjusted operating loss", which differ from income before income tax as presented in our consolidated statements of income due to the exclusion of investment gains or losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, and reserve assumption updates. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, impairment losses, and gains or losses on derivatives. Reserve assumption updates may result in increases or decreases to earnings. These performance measures are in accordance with U.S. generally accepted accounting principles (GAAP) guidance for segment reporting, but they should not be viewed as a substitute for income before income tax, net income, or net loss.
Unum US Segment
Unum US reported adjusted operating income of $318.2 million in the second quarter of 2025, a decrease of 11.0 percent from $357.5 million in the second quarter of 2024. Premium income increased 3.9 percent to $1,798.6 million in the second quarter of 2025, compared to $1,730.9 million in the second quarter of 2024. Net investment income decreased 1.9 percent to $155.1 million in the second quarter of 2025, compared to the $158.1 million in the second quarter of 2024.
Within the Unum US operating segment, the group disability line of business reported an 18.5 percent decrease in adjusted operating income to $124.8 million in the second quarter of 2025, compared to $153.2 million in the second quarter of 2024. Premium income for the group disability line of business was $797.1 million in the second quarter of 2025, which was generally consistent compared to $797.8 million in the second quarter of 2024, driven primarily by the expected decline in medical stop-loss premium and lower persistency, mostly offset by prior period sales. Net investment income decreased 4.9 percent to $74.5 million in the second quarter of 2025, compared to $78.3 million in the second quarter of 2024, due to a lower level of invested assets. The benefit ratio for the second quarter of 2025 was 62.2 percent, compared to 59.1 percent in the second quarter of 2024, due to lower recoveries in our long-term disability product line and higher average claims size in our short-term disability product line. Group long-term disability sales were $45.1 million in the second quarter of 2025, a decrease of 30.4 percent from $64.8 million in the second quarter of 2024. Group short-term disability sales were $39.3 million in the second quarter of 2025, a decrease of 7.1 percent from $42.3 million in the second quarter of 2024. Persistency in the group long-term disability product line was 90.6 percent for the first half of 2025, compared to 93.1 percent for the first half of 2024. Persistency in the group short-term disability product line was 88.2 percent for the first half of 2025, compared to 91.8 percent for the first half of 2024.
The group life and accidental death and dismemberment line of business reported a 21.2 percent decrease in adjusted operating income to $70.2 million in the second quarter of 2025 compared to $89.1 million in the second quarter of 2024. Premium income for this line of business increased 5.1 percent to $519.2 million in the second quarter of 2025, compared to the $493.9 million in the second quarter of 2024 due to prior period sales and in-force block growth, partially offset by lower persistency. Net investment income decreased 6.2 percent to $21.1 million in the second quarter of 2025, compared to $22.5 million in the second quarter of 2024 due to a lower level of invested assets as well as a decrease in the yield on invested assets. The benefit ratio in the second quarter of 2025 was 69.7 percent, compared to 65.4 percent in the second quarter of 2024, due to higher average claim size in our group life product line and less favorable waiver of premium benefits experience. The unfavorability is partially offset by lower incidence in our group life product line and lower incidence and lower average claims size in our accidental death and dismemberment product line. Group life and accidental death and dismemberment sales were $77.2 million in the second quarter of 2025, a decrease of 5.7 percent from $81.9 million in the second quarter of 2024. Persistency in the group life product line was 89.7 percent for the first half of 2025, compared to 92.1 percent for the first half of 2024. Persistency in the accidental death and dismemberment product line was 88.3 percent for the first half of 2025, compared to 91.6 percent for the first half of 2024.
The supplemental and voluntary line of business reported an increase of 6.9 percent in adjusted operating income to $123.2 million in the second quarter of 2025, compared to $115.2 million in the second quarter of 2024. Premium income for the supplemental and voluntary line of business increased 9.8 percent to $482.3 million in the second quarter of 2025, compared to $439.2 million in the second quarter of 2024, due to the continued impacts from the recapture of a previously ceded block of business in the individual disability product line in the first quarter of 2025, favorable persistency in the voluntary benefits and dental and vision product lines, and higher prior period sales in the voluntary benefits and individual disability product lines. Net investment income increased 3.8 percent to $59.5 million in the second quarter of 2025, compared to $57.3 million in the second quarter of 2024 primarily due to an increase in the yield on invested assets and an increase in the level of invested assets. The benefit ratio for the voluntary benefits product line was 44.3 percent in the second quarter of 2025, compared to 45.1 percent in the second quarter of 2024, due to favorable benefit experience in the critical illness and hospital indemnity products, partially offset by unfavorable benefit experience in the life and accident products. The benefit ratio for the individual disability product line was 40.3 percent, for the second quarter of 2025, compared to 39.0 percent in the second quarter of 2024, due primarily to lower recoveries. The benefit ratio for the dental and vision product line was 77.7 percent for the second quarter of 2025, compared to 75.3 percent in the second quarter of 2024, due primarily to higher claims incidence. Relative to the second quarter of 2024, sales in the voluntary benefits product line decreased 21.8 percent in the second quarter of 2025 to $62.2 million. Sales in the individual disability product line decreased 8.2 percent to $23.4 million in the second quarter of 2025. Sales in the dental and vision product line decreased 20.8 percent in the second quarter of 2025 to $15.2 million. Persistency in the voluntary benefits product line was 76.4 percent for the first half of 2025, compared to 76.3 percent for the first half of 2024. Persistency in the individual disability product line was 88.0 percent for the first half of 2025, compared to 89.0 percent for the first half of 2024. Persistency in the dental and vision product line was 82.4 percent for the first half of 2025, compared to 81.1 percent for the first half of 2024.
Unum International Segment
The Unum International segment reported adjusted operating income of $41.6 million in the second quarter of 2025, a decrease of 2.1 percent from $42.5 million in the second quarter of 2024. Premium income increased 18.5 percent to $271.1 million in the second quarter of 2025, compared to $228.8 million in the second quarter of 2024. Net investment income increased 21.6 percent to $46.2 million in the second quarter of 2025, compared to $38.0 million in the second quarter of 2024. Sales increased 1.1 percent to $65.0 million in the second quarter of 2025, compared to $64.3 million in the second quarter of 2024.
The Unum UK line of business reported adjusted operating income, in local currency, of £29.4 million in the second quarter of 2025, a decrease of 9.5 percent from £32.5 million in the second quarter of 2024. Premium income was £166.9 million in the second quarter of 2025, an increase of 9.9 percent from £151.8 million in the second quarter of 2024, due primarily to in-force block growth in the group life and supplemental product lines. Net investment income was £31.9 million in the second quarter of 2025, an increase of 14.3 percent from £27.9 million in the second quarter of 2024, primarily due to higher income from inflation index-linked bonds. The benefit ratio was 75.0 percent in the second quarter of 2025, compared to 69.5 percent in the second quarter of 2024, due primarily to higher inflation-linked experience in benefits and higher incidence in the group long-term disability product line, partially offset by favorable incidence in the group life product line. Sales decreased 13.5 percent to £38.3 million in the second quarter of 2025, compared to £44.3 million in the second quarter of 2024. Persistency in the group long-term disability product line was 92.3 percent for the first half of 2025, compared to 92.7 percent for the first half of 2024. Persistency in the group life product line was 89.9 percent for the first half of 2025, compared to 88.2 percent for the first half of 2024. Persistency in the supplemental product line was 93.0 percent for the first half of 2025, compared to 89.4 percent for the first half of 2024.
Colonial Life Segment
Colonial Life reported adjusted operating income of $117.4 million in the second quarter of 2025, a 0.4 percent increase compared to $116.9 million in the second quarter of 2024. Premium income increased 3.6 percent to $462.1 million in the second quarter of 2025, compared to $446.2 million in the second quarter of 2024, due to prior period sales and favorable overall persistency. Net investment income increased 5.2 percent to $42.6 million in the second quarter of 2025, compared to $40.5 million in the second quarter of 2024, due to an increase in the level of invested assets and an increase in the yield on invested assets. The benefit ratio was 48.3 percent in the second quarter of 2025, compared to 47.8 percent in the second quarter of 2024, primarily due to unfavorable benefit experience in the accident, sickness, and disability product line. Sales increased 2.9 percent to $126.5 million in the second quarter of 2025, compared to $122.9 million in the second quarter of 2024. Persistency in the Colonial Life segment was 78.5 percent for the first half of 2025, compared to 78.2 percent for the first half of 2024.
Closed Block Segment
The Closed Block segment reported adjusted operating income of $3.9 million in the second quarter of 2025, which excludes the amortization of the cost of reinsurance of $9.7 million and the impact of non-contemporaneous reinsurance of $5.0 million related to the Closed Block individual disability reinsurance transaction, compared to $51.6 million in the second quarter of 2024, which excludes the amortization of the cost of reinsurance of $10.3 million and the impact of non-contemporaneous reinsurance of $7.0 million related to the Closed Block individual disability reinsurance transaction. Premium income for this segment is largely driven by our long-term care product line, and in the second quarter of 2025, premium income for long-term care was generally consistent with the same period of 2024. Net investment income decreased 3.3 percent to $284.5 million in the second quarter of 2025, compared to $294.2 million in the second quarter of 2024, driven primarily by lower miscellaneous investment income, primarily related to smaller increases in the NAV on our private equity partnerships, and a decrease in the level of invested assets, partially offset by an increase in yield on invested assets.
Policy benefits including remeasurement loss, excluding the impacts of non-contemporaneous reinsurance, for the Closed Block segment were higher during the second quarter of 2025 relative to the same period of 2024 driven primarily by lower claimant mortality, higher average new claim size, and an increase in benefits expense resulting from the higher net premium ratio and the impact of capped cohorts in the long-term care product line. The net premium ratio for long-term care at June 30, 2025 of 94.9 percent was generally consistent with the net premium ratio of 94.7 percent as of March 31, 2025.
Corporate Segment
The Corporate segment reported an adjusted operating loss of $31.7 million in the second quarter of 2025, compared to an adjusted operating loss of $45.3 million in the second quarter of 2024, due primarily to an increase in net investment income, driven by an increase in miscellaneous investment income and an increase in the level of invested assets.
OTHER INFORMATION
Shares Outstanding
The Company’s weighted average number of shares outstanding, assuming dilution, was 174.4 million for the second quarter of 2025, compared to 190.3 million for the second quarter of 2024. Shares outstanding totaled 172.1 million at June 30, 2025. During the second quarter of 2025, the Company repurchased 3.8 million shares at a total cost of $303.3 million.
Capital Management
At June 30, 2025, the weighted average risk-based capital ratio for the Company’s traditional U.S. insurance companies was approximately 485 percent, and the holding companies had available holding company liquidity of $1,955.7 million.
Book Value
Book value per common share as of June 30, 2025 was $65.76, compared to $55.63 at June 30, 2024. Book value per common share excluding AOCI as of June 30, 2025 was $77.62, compared to $70.76 at June 30, 2024.
Effective Tax Rate
The effective tax rate on adjusted operating earnings was 19.6 percent in the second quarter of 2025, compared to 21.4 percent in the second quarter of 2024. The decrease in the rate was driven primarily by more favorable tax credits in 2025.
Outlook