Q4 2023 Unum Group Earnings Call

January 31, 2024

Rob: Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Unum Group fourth quarter 2023 earnings results and 2024 Outlook conference call. All lines have been placed on mute to prevent any background noise.

Good morning, My name is Rob and I'll be your conference operator today at this time I would like to welcome everyone to the Unum Group fourth quarter 2023 earnings results and 2024 outlook conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Rob: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, press Star, followed by the number one on your telephone keypad.

If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one.

Rob: If you would like to withdraw your question, again, press the star one. Thank you. Matt Royal, Senior Vice President of Investor Relations. You may begin your conversation.

Matt Royal Senior Vice President of Investor Relations you May begin your conference.

Matt Royal: Wonderful Thank you, Rob and good morning, everyone wells.

Matt Royal: Welcome to Unum Group's fourth quarter 2023 earnings call. Today, we will be discussing full year 2023 results along with highlights from the fourth quarter. We will also use the time to discuss our outlook for 2024. Please note that today's call may include forward-looking statements. Actual results, which are subject to risk and uncertainties, may differ materially, and we are not obligated to update any of these statements.

Matt Royal: Welcome to the Unum group fourth quarter 2023 earnings call.

Matt Royal: Today, we will be discussing full year 2020 results along with highlights from the fourth quarter.

Matt Royal: We will also use the time to discuss our outlook for 2024. Please.

Speaker Change: Please note that today's call may include forward looking statements.

Speaker Change: Actual results, which are subject to risks and uncertainties may differ materially and we are not obligated to update any of these statements.

Matt Royal: Please refer to our earnings release and our periodic filings with the SEC for a description of factors that could cause actual results to differ from expected results. Also, today's presentation may include non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP measures can be found in our earnings release and the investor relations section of our website. Also, please note references to Unum International sales and premium are presented in local currency, and core operation sales and premium results are presented on a constant currency basis. Further discussion of adjusted operating 2023 EPS growth of 23%, or $7.66, compares to 2022 historically reported EPS of $6.21. Yesterday afternoon, Unum released our earnings press release, financial supplement, and webcast presentation. All of those materials may also be found on the investor section of our website.

Speaker Change: Please refer to our earnings release, and our periodic filings with the SEC for a description of factors that could cause actual results to differ from expected results.

Speaker Change: Also today's presentation may include non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measures can be found in our earnings release.

Speaker Change: And the Investor Relations section of our website also please note references to Unum International sales in premium are presented as the local currency and core operation sales and premium results are presented on a constant currency basis.

Speaker Change: Further discussion of adjusted operating 2023, EPS growth of 23% or $7.66 compares to 2022, historically reported EPS of $6 in 'twenty one sets.

Speaker Change: Yesterday afternoon, Unum released our earnings press release financial supplement and webcast presentation. All of those materials may also be found on the investors section of our website.

Matt Royal: Participating in this morning's call are Unum's President and CEO Rick McKinney and Chief Financial Officer Steve Zabel. Following the remarks from Rick and Steve, additional members of management will participate in Q&A, including Mark Till, who heads our Unum International Business, Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines, and Chris Pyne for Group Benefits. Now I'll turn the call over to Rick.

Speaker Change: Participating in this mornings call are union, President and CEO, Rick Mckenney, and Chief Financial Officer, Steve Zabel.

Richard McKenney: Following their remarks from Rick and Steve additional members of management will participate in Q&A, including Mark Hill, who heads our Unum International business, Tim Arnold, who heads our colonial life and voluntary benefits lines and Chris Pine for group benefits.

Richard McKenney: Now I'll turn the call over to Rick.

Richard McKenney: Great. Thank you, Matt. And good morning, everyone.

Richard McKenney: Great. Thank you, Matt and good morning, everyone.

Richard McKenney: It's a pleasure to be here with you all today, sharing the journey of Unum throughout 2023 and where we're headed in 2024. This is the first time we've shared our outlook in conjunction with our year-end results, and I think it works well given the consistency of our actions and performance across the company. As we reflect on our progress and look ahead, I am proud to affirm our unwavering commitment to our purpose of helping the working world thrive throughout life's moments. Steadfast focus and commitment to this purpose is delivering value to customers, employees, communities, and, of course, to shareholders. 2023 was a year of exceptional results across the board, with a highlight being our decades-long leadership in disability insurance shining through, and core business growth momentum building stronger with significant strides in accelerating our industry-leading digital capabilities. The capabilities we are bringing to market, such as HR Connect, Total Leave, Gather, and Help at Hand, are becoming connection points with employers and employees to bring greater customer satisfaction to the benefits experience.

Richard McKenney: Pleasure to be here with you all today sharing the journey of Unum throughout 2023, and where we're headed in 2024.

This is the first time, we've shared our outlook in conjunction with our year end results and I think it works well given the consistency of our actions and performance across the company.

Rob: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, or if you would like to withdraw your question, press the star 1.

Richard McKenney: As we reflect on our progress and look ahead I am proud to affirm our unwavering commitment to our purpose of helping the working world thrive throughout life's moments.

Richard McKenney: Steadfast focus and commitment to this purpose this is delivering value to customers employees communities and of course to shareholders.

Rob: Thank you. Matt Royal, Senior Vice President of Investor Relations. You may begin your conversation now. wonderful Thank you, Rob. And good morning to everyone.

Richard McKenney: 2023, it was a year of exceptional results across the board with the highlight being our decades long leadership and disability insurance shining through and core business growth momentum building stronger with significant strides in accelerating our industry leading digital capabilities.

Matt Royal: Welcome to Unim Group's fourth quarter 2023 earnings call. Today, we will be discussing full year 2023 results along with highlights from the fourth quarter. We will also use the time to discuss our outlook for 2024. Please note that today's call may include forward-looking statements. Actual results, which are subject to risk and uncertainties, may differ materially, and we are not obligated to update any of these statements.

Richard McKenney: The capabilities, we are bringing to market such as HR connect total leave gather and help at hand are becoming connection points with employers and employees to bring greater customer satisfaction to the benefits experience.

Matt Royal: Please refer to our earnings release and our periodic filings with the SEC for a description of factors that could cause actual results to differ from expected results. Also, today's presentation may include non-GAAP financial measures, and a reconciliation to the most directly comparable GAAP measures can be found in our earnings release and the investor relations section of our website. Also, please note references to Unum International sales and premium are presented in local currency, and core operation sales and premium results are presented on a constant currency basis. Further, discussion of adjusted operating 2023 EPS growth of 23%, or $7.66, compares to 2022 historically reported EPS of $6.21. Yesterday afternoon, Unum released our earnings press release, financial supplement, and webcast presentation. All of those materials may also be found on the investor section of our website.

Richard McKenney: These advancements have been influential in attracting and retaining customers, setting us apart in a competitive landscape, and ultimately driving strong top-line results, including sales of over 13% for the full year of 2023 and premium growth of over 5%. This top-line growth has returned steadily throughout the year and has us on the trajectory that we look for in our business model. As the top line has returned in 2023, our discipline with how we run the business has not wavered. Our pricing and underwriting have remained consistent to continue to deliver growth and high returns on equity.

Richard McKenney: These advanced since ive been influential in attracting and retaining customers setting us apart in a competitive landscape and ultimately driving strong top line results, including sales of over 13% for the full year of 2023 and premium growth of over 5%.

Richard McKenney: This top line growth has returned steadily throughout the year and has us on a trajectory that we look for in our business model.

Richard McKenney: As the topline has returned in 2023, our disciplined with how we run the business has not wavered our.

Richard McKenney: Our pricing and underwriting has remained consistent to continue to deliver growth and high returns on equity.

Richard McKenney: Overall, we grew EPS 23%, with most of our product lines delivering on our expectations throughout the year. I mentioned the highlight of group disability returns, but I would extend that to most of our products that continue to generate mid to high teen returns. An area that understandably received attention in the third quarter was our closed block.

Richard McKenney: Overall, we grew EPS, 23% with most of our product lines delivering on our expectations throughout the year.

Richard McKenney: I mentioned the highlight of group disability returns, but I would extend that to most of our products and continuing to that continue to generate mid to high teen returns.

Richard McKenney: An area that understandably received attention during the third quarter was our closed block we have seen volatility in the performance of that block in today's Steve will provide some ways to look at its overall health and performance outside of just its loss ratio.

Richard McKenney: We have seen volatility in the performance of that block, and today Steve will provide some ways to look at its overall health and performance outside of just its loss ratio. From a capital standpoint, we've executed our plans exactly as we described them coming into the year and with good results. We exceeded expectations on value delivered to our shareholders. We raised our dividend by 10% and increased the pace of our share repurchases throughout 2023 and announced a plan to double the amount we repurchased in 2024 with our $500 million authorization. Most notably, we describe the desire to fully fund the Premium Deficiency Reserve and contribute the capital needed to support our long-term care block. Steve will discuss this further, but let me emphasize, given our current assumptions and capital buffers, we have stated that we believe long-term care will not need additional capital for five years. But in reality, our belief is that it will be true for much longer.

Matt Royal: Participating in this morning's call are Unum's President and CEO Rick McKinney and Chief Financial Officer Steve Zabel. Following the remarks from Rick and Steve, additional members of management will participate in Q&A, including Mark Hill, who heads our Unum International Business, Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines, and Chris Pine for Group Benefits. Now I'll turn the call over to Rick.

From a capital standpoint, we've executed our plans exactly how we describe them coming into the year and with good results.

Steven A. Zabel: So we exceeded expectations on value delivered to our shareholders, we raised our dividend by 10% and increase the pace of our share repurchases throughout 2023 and announced the plan to double the amount we repurchased in 2024 with our $500 million authorization.

Richard McKenney: Great. Thank you, Matt. And good morning, everyone.

Richard McKenney: It's a pleasure to be here with you all today, sharing the journey of UNUM throughout 2023 and where we're headed in 2024. This is the first time we've shared our outlook in conjunction with our year-end results, and I think it works well given the consistency of our actions and performance across the company. As we reflect on our progress and look ahead, I am proud to affirm our unwavering commitment to our purpose of helping the working world thrive throughout life's moments. Steadfast focus and commitment to this purpose is delivering value to customers, employees, communities, and, of course, to shareholders. 2023 was a year of exceptional results across the board, with a highlight being our decades-long leadership in disability insurance shining through and core business growth momentum building stronger with significant strides in accelerating our industry-leading digital capabilities. The capabilities we are bringing to market, such as HR Connect, Total Leave, Gather, and Help at Hand, are becoming connection points with employers and employees to bring greater customer satisfaction to the benefits experience.

Steven A. Zabel: Most notably we described the desire to fully fund the premium deserved premium deficiency reserve and contribute the capital needed to support our long term care block Steve.

Steve will discuss further but let me emphasize given our current assumptions and capital buffers. We have stated that we believe long term care will not need additional capital for five years.

Steven A. Zabel: But in reality, our belief is that will be true for much longer.

Richard McKenney: Across the company, the reason that we have been able to achieve such capital results goes back to the fact that our businesses steadily generate strong cash flow. And with a year of good results, we ended the year with financial metrics that were stronger than expected, including holding company cash of $1.7 billion and RBC of 415%. Looking forward, we now expect to generate free cash flow between $1.2 and $1.4 billion per year.

Steven A. Zabel: Across the company. The reason that we have been able to achieve such capital results goes back to the fact that our businesses steadily generated strong cash flow and with a year of good results. We ended the year with financial metrics that were stronger than expected, including holding company cash of $1 $7 billion in RBC of 415%.

Looking forward, we now expect to generate free cash flow between one two and $1 4 billion per year.

Richard McKenney: As we transition to think about 2024, the momentum from the past several years continues. We're witnessing both a market backdrop and an economic environment that are highly supportive of our business, providing us with ample opportunities to grow and thrive. Our focus is to continue building on our solid foundation.

Steven A. Zabel: As we transitioned to think about 2024 the momentum from the past several years continues.

Steven A. Zabel: We are witnessing both a market backdrop and economic environment that are highly supportive of our business, providing us with ample opportunities to grow and thrive.

Our focus is to continue building on our solid foundation, we are dedicated to enhancing our core operations, maintaining our disciplined approach and continuing to innovate in ways that resonate with our customers and the market.

Richard McKenney: We're dedicated to enhancing our core operations, maintaining our disciplined approach, and continuing to innovate in ways that resonate with our customers and the market. When we look across the company, we are hitting the ground running, and our teams are looking to build on some very strong growth rates with consolidated sales growth of high single digits, combined with good persistency, yielding premium growth in the 5 to 7% range. Consistent margins and the purchase of shares will deliver growth of 79% on top of the 23% adjusted EPS growth we delivered in 2023. Our customer-centric approach remains at the heart of our strategy.

Steven A. Zabel: When we looked across the company, we are hitting the ground running and our teams are looking to build on some very strong growth rates with consolidated sales growth of high single digits and combined with good persistency, yielding premium growth in the 5% to 7% range.

Steven A. Zabel: Consistent margin margins in the purchasing of shares will deliver growth of 7% to 9% on top of the 23% adjusted EPS growth we delivered in 2023.

Steven A. Zabel: Our customer centric approach remains at the heart of our strategy.

Richard McKenney: We're constantly adapting our services to meet changing market needs, ensuring we remain the preferred choice for our clients. When we met last February, we outlined our strategy and plans to build on our market-leading position. We can report that we are advancing along all fronts, and we are seeing results. For Unum in the U.S., we are leveraging our go-to-market expertise to connect benefit solutions to HR platforms effectively, while also ensuring our leave management is a differentiator. With over 1500 customers and counting, we've reached notable sales milestones with our HR Connect capability, which deeply integrates with leading human capital management platforms. And we now cover over 1 million employees through Unum's total leave offer. In addition, we saw strong momentum in the trend of customers bundling products. Our efforts are geared towards seamless enrollment, billing, and administration via MyUnum and establishing robust connections with select third-party platforms.

Steven A. Zabel: We're constantly adapting our services to meet changing market needs, ensuring we remain the preferred choice for our clients.

Steven A. Zabel: When we met last February we outlined our strategy and plans to build on our market leading position.

Steven A. Zabel: We can report that we are advancing along all fronts and we are seeing the results.

Richard McKenney: We have seen volatility in the performance of that block, and today Steve will provide some ways to look at its overall health and performance outside of just its loss ratio. From a capital standpoint, we've executed our plans exactly as we described them coming into the year and with good results. We exceeded expectations on value delivered to our shareholders. We raised our dividend by 10% and increased the pace of our share repurchases throughout 2023 and announced a plan to double the amount we repurchased in 2024 with our $500 million authorization. Most notably, we describe the desire to fully fund the premium deficiency reserve and contribute the capital needed to support our long-term care block. Steve will discuss this further, but let me emphasize, given our current assumptions and capital buffers, we have stated that we believe long-term care will not need additional capital for five years. But in reality, our belief is that it will be true for much longer.

Steven A. Zabel: For Unum and the U S. We are leveraging our go to market expertise to connect benefit solutions to HR platforms effectively while also ensuring our leave management is a differentiator.

Steven A. Zabel: With over 500 customers and counting we reached a notable sales milestones with our HR connect capability, which deeply integrates with leading human capital management platforms, and we now cover over 1 million employees through units totaled <unk> offering.

Steven A. Zabel: In addition, we saw strong momentum in the trend of customers bundling products. Our efforts are geared towards seamless enrollment billing and administration via my Union and establishing robust connections with select third party platforms.

Richard McKenney: These efforts to leverage technology to improve the customer experience are paying off, and in 2023, we saw record levels of employer satisfaction for customers on the MyUnum platform. In Colonial Life, the focus is on continuing to build and support our independent sales force with enhanced tools and solutions, such as our proprietary industry-leading agent assist technology, which enables automated lead generation, CRM, and workflow, boosting agent productivity.

Steven A. Zabel: These efforts to leverage technology to improve the customer experience are paying off and in 2023, we saw record levels of employer satisfaction for our customers on the <unk> platform.

Steven A. Zabel: And colonial life. The focus is on continuing to build and support our independent sales force with enhanced tools and solutions such as our proprietary industry, leading agent assist technology, which enables automated lead generations, CRM and workflow boosting agent productivity.

Richard McKenney: Another key development in our arsenal is Gather, which modernizes enrollment and benefits administration and streamlines the client experience. The offering has been growing, as evidenced by the annual premium associated with it increasing from $10 million to $50 million over the course of 2023. And finally, enabling Colonial Life agents to offer Unum employer-paid products ensures they have the solution for any employer or broker.

Steven A. Zabel: Another key development area are snow's gather.

Steven A. Zabel: Which modernisers enrolment in benefits administration and streamlines the client experience.

<unk> has been building as evidenced by the annual premium associated with it increasing from 10 million to $50 million over the course of 2023.

Steven A. Zabel: And finally, enabling colonial life agents to offer a union of employer paid products ensures they have the solution for any employer or broker.

Richard McKenney: For Unum UK, our approach has been to redefine the broker experience, setting a market-leading standard that is distinctively Unum, and Enhancing Our Relationship Management Model. We are dedicated to providing value-added services that drive customer engagement and loyalty, such as through help at hand, which offers integrated value-added services, and by delivering comprehensive management information that yields actionable insight. Moreover, we're expanding our product set to encompass a broader spectrum of risk and well-being solutions, ensuring we meet the diverse needs of our clients.

Steven A. Zabel: For Unum U K, our approach has been to redefine the broker experience setting a market leading standard that is distinctively unit.

Steven A. Zabel: And enhancing our relationship management model.

Steven A. Zabel: We are dedicated to providing value added services that drive customer engagement and loyalty such as through help at hand, which offers integrated value added services and by delivering comprehensive management information that yields actionable insights.

Steven A. Zabel: Moreover, we are expanding our product set to encompass a broader spectrum of risk and well being solutions, ensuring we meet the diverse needs of our clients.

Richard McKenney: And finally, in Unum, Poland, we're forging ahead with a robust strategy tailored to the local market. We're scalating our direct sales team to SME customers and fortifying partnerships with local brokers, thereby extending our distribution network and geographical reach. All these efforts will drive growth in the number of employers and customers we serve and, in turn, will generate the growth of premiums and earnings we have articulated. Looking forward, we will also remain disciplined stewards of our capital and franchise value, and the consistency of our capital priorities remains intact. First, we ensure investments directly supporting our business. We have a clear growth strategy, continue to build out our offerings, and capitalize on our well-positioned and profitable product. Second, we will look externally to identify and pursue selective M&A that supports our internal initiatives and is in line with this strategy.

Steven A. Zabel: And finally in Unum, Poland. We're forging ahead with a robust strategy tailored to the local market. We're scaling our direct to SME sales team and fortifying partnerships with local brokers, thereby extending our distribution network and geographical reach.

Richard McKenney: We're constantly adapting our services to meet changing market needs, ensuring we remain the preferred choice for our clients. When we met last February, we outlined our strategy and plans to build on our market-leading position. We can report that we are advancing along all fronts, and we are seeing results. For Unum in the U.S., we are leveraging our go-to-market expertise to connect benefits solutions to HR platforms effectively, while also ensuring our leave management is a differentiator. With over 1500 customers and counting, we've reached notable sales milestones with our HR Connect capability, which deeply integrates with leading human capital management platforms. And we now cover over 1 million employees through Unum's total leave offer. In addition, we saw strong momentum in the trend of customers bundling products. Our efforts are geared towards seamless enrollment, billing, and administration via MyUnum and establishing robust connections with select third-party platforms.

Steven A. Zabel: All these efforts will drive growth in the number of employers and customers, we serve and in turn will be will generate the growth of premiums and earnings we have articulated.

Steven A. Zabel: Looking forward, we will also remain disciplined stewards of our capital and franchise value.

Steven A. Zabel: And the consistency of our capital priorities remains intact.

Steven A. Zabel: First we ensure investments directly supporting our business, we have a clear growth strategy continued to build out our offerings and capitalized on our well positioned and profitable products.

Steven A. Zabel: Second we will look externally to identify and pursue selective M&A that supports our internal initiatives and that are in line with this strategy.

Richard McKenney: And third, we will continue to return capital to shareholders via regular dividend increases and share repurchases, as we have demonstrated through our actions in increasing both commensurate with our plan. Summing it up, our strong capital generation, $500 million of share repurchases, and no LTC contributions will leave us in a position of greater than 400% RBC and holding company cash greater than $2 billion. For 2024, our commitment to innovation, prudent capital allocation, and shareholder returns will remain steadfast. As a result, we are on track to surpass the objectives we established a year ago, and our fortified position in the market is a testament to the hard work and dedication of our teams across the globe. The strides we've made in our digital footprint, customer engagement, and capital management are the very engines of our growth. In closing, we enter 2024 with confidence in our position and ready to build off of our achievements in 2023. With our customer-first mindset, agile operations, and comprehensive financial strategies, we are not just anticipating the future; we are actively shaping it. 2024 is going to be an exciting year for you.

Steven A. Zabel: And third we will continue to return capital to shareholders via a regular dividend increases and share repurchases as we have demonstrated through our actions and increasing both commensurate with our plants.

Steven A. Zabel: Summing it up our strong capital generation $500 million of share repurchases and know LTC contributions will leave us in a position of greater than 400% RBC and holding company cash greater than $2 billion.

Richard McKenney: These efforts to leverage technology to improve the customer experience are paying off, and in 2023, we saw record levels of employer satisfaction for customers on the MyUnion platform. In Colonial Life, the focus is on continuing to build and support our independent sales force with enhanced tools and solutions, such as our proprietary industry-leading agent assist technology, which enables automated lead generation, CRM, and workflow, boosting agent productivity.

Steven A. Zabel: For 2024, our commitment to innovation prudent capital allocation and shareholder returns remains steadfast.

Steven A. Zabel: As a result, we are on track to surpass the objectives, we established a year ago and our fortified position in the market is a testament to the hard work and dedication of our teams across the globe.

Richard McKenney: Another key development in our arsenal is Gather, which modernizes enrollment and benefits administration and streamlines the client experience. The offering has been growing, as evidenced by the annual premium associated with it, increasing from $10 million to $50 million over the course of 2023. And finally, enabling Colonial Life agents to offer a union of employer-paid products ensures they have the solution for any employer or broker. For Unim UK, our approach has been to redefine the broker experience, setting a market-leading standard that is distinctively Unim, and Enhancing Our Relationship Management Model.

Steven A. Zabel: The strides we've made in our digital footprint customer engagement and capital management are the very engines of our growth.

Steven A. Zabel: In closing, we enter 2024 with confidence in our position and ready to build off of our achievements of 2023.

Steven A. Zabel: With our customer first mindset agile operations and comprehensive financial strategies, we are not just anticipating the future we are actively shaping it.

2024 is going to be an exciting year for union.

Steven A. Zabel: I'd like to now hand it over to Steve to provide further insights into our financial strategy and outlook, as well as provide insight into the closed block. Thanks for your attention once again today, and Steve, I'll turn it over to you. Great. Thanks, Rick, and good morning to everyone.

Steven A. Zabel: I'd like to now hand, it over to Steve to provide further insights into our financial strategy and outlook as well as provide insight into the closed block. Thanks for your attention once again today and Steve I'll turn it over to you great. Thanks, Rick and good morning to everyone. As Rick mentioned, we were extremely pleased with the strong finish to the year across the board. This caps two years of continued <unk>.

Richard McKenney: We are dedicated to providing value-added services that drive customer engagement and loyalty, such as through help at hand, which offers integrated value-added services, and by delivering comprehensive management information that yields actionable insight. Moreover, we're expanding our product set to encompass a broader spectrum of risk and well-being solutions, ensuring we meet the diverse needs of our clients. And finally, in Unum, Poland, we're forging ahead with a robust strategy tailored to the local market. We're scalating our direct sales team to SME customers and fortifying partnerships with local brokers, thereby extending our distribution network and geographical reach. All these efforts will drive growth in the number of employers and customers we serve and, in turn, will generate the growth of premiums and earnings we have articulated.

Steven A. Zabel: As Rick mentioned, we were extremely pleased with the strong finish to the year across the board. This caps two years of continued momentum building in our core operating segment. This is evident in both our sales and operating results. For the full year, sales were up 15.1% in Unum US, 26.7% in Unum International, and 6.2% in Colonial Life, where we saw accelerating growth each quarter, including 11.5% growth in the fourth quarter compared to the same period a year ago. Premium for our core operations increased 6.1% in the quarter compared to a year ago and finished up 5.2% for the full year, exceeding the expectation laid out last February and more consistent with our long-term expectations. Disability results were favorable across the company as well, highlighted by a group disability benefit ratio of 59.1% for the full year and 59.5% in the quarter.

Steven A. Zabel: <unk> building in our core operating segments. This was evident in both our sales and operating results for.

Steven A. Zabel: For the full year sales were up 15, 1% in Unum U S 26, 7% in Unum International and six 2% in colonial life, where we saw accelerating growth each quarter, including 11, 5% growth in the fourth quarter compared to the same period a year ago.

Steven A. Zabel: Premium for our core operations increased six 1% in the quarter compared to a year ago and finished up five 2% for the full year exceeding the expectations laid out last February and more consistent with our long term expectation.

Richard McKenney: Looking forward, we will also remain disciplined stewards of our capital and franchise value, and the consistency of our capital priorities remains intact. First, we ensure investments directly supporting our business. We have a clear growth strategy, continue to build out our offerings, and capitalize on our well-positioned and profitable products. Second, we will look externally to identify and pursue selective M&A that supports our internal initiatives and is in line with this strategy.

Steven A. Zabel: Disability results were favorable across the company as well highlighted by our group disability benefit ratio of 59, 1% for the full year and 59, 5% in the quarter.

Steven A. Zabel: We do expect benefit ratios in the low 60s to continue in the near to mid-term as we continue to see support for these levels in both our operations and in the market. These same trends are also supporting strong performance in our individual disability and UK group income protection product lines. We ended the year with after-tax adjusted operating income at $1.5 billion and after-tax adjusted operating EPS of $7.66, which represents growth of 23.3% over the historically reported full year 2022. The fourth quarter's results of reported after-tax adjusted operating EPS of $1.79 were impacted by two items that I would like to mention. First, the effective tax rate in the fourth quarter was elevated at 22.8 percent. We expect the long-term rate to be between 21.1 and 22 percent or 21.5 to 22 percent and vary some from period to period due to foreign tax dynamics. The variance in the fourth quarter lowered EPS by approximately 3 cents.

Steven A. Zabel: We do expect benefit ratios in the low sixty's to continue in the near to midterm as we continue to see support for these levels in both our operations and in the market.

Steven A. Zabel: Same trends are also supporting strong performance in our individual disability.

Richard McKenney: And third, we will continue to return capital to shareholders via regular dividend increases and share repurchases, as we have demonstrated through our actions in increasing both commensurate with our plan. Summing it up, our strong capital generation, $500 million of share repurchases, and no LTC contributions will leave us in a position of greater than 400% RBC and holding company cash greater than $2 billion. For 2024, our commitment to innovation, prudent capital allocation, and shareholder returns remains steadfast. As a result, we are on track to surpass the objectives we established a year ago, and our fortified position in the market is a testament to the hard work and dedication of our teams across the globe. The strides we've made in our digital footprint, customer engagement, and capital management are the very engines of our growth. In closing, we enter 2024 with confidence in our position and ready to build off of our achievements in 2023. With our customer-first mindset, agile operations, and comprehensive financial strategies, we are not just anticipating the future; we are actively shaping it. 2024 is going to be an exciting year for you.

Steven A. Zabel: And UK group income protection product lines.

Steven A. Zabel: We ended the year with after tax adjusted operating income at $1 5 billion.

Steven A. Zabel: And after tax adjusted operating EPS of $7 66.

Steven A. Zabel: Which represents growth of 23, 3% over historically reported full year 2022.

Steven A. Zabel: The fourth quarter's results of reported after tax adjusted operating EPS of $1 79 was impacted by two items that I would like to mention.

Steven A. Zabel: First the effective tax rate in the fourth quarter was elevated at 22, 8%. We expect the long term rate to be between 21, 1% in 'twenty to 'twenty, one 5% to 22% and very some from period to period due to foreign tax dynamics.

Steven A. Zabel: The variance in the fourth quarter lowered EPS by approximately <unk> <unk>.

Steven A. Zabel: Further, Colonial Life benefits were higher by $21.7 million, or nine cents of EPS pressure, due to a one-time reserve model refinement. When adjusting for these two items, which represents a better view of underlying earnings power, adjusted operating EPS in the quarter would have been 12 cents higher. The strong earnings power for GAAP was also apparent in our statutory results, with full year after-tax operating earnings of over $1.3 billion, well ahead of our outlook last year of roughly $1 billion. These results drove significant upside to our original expectation of capital generation and, as a result, our capital position. Top line results were also notable this year, with both sales and premium for core operations outperforming the top end of their outlook ranges, at 13.4% and 5.2% respectively.

Steven A. Zabel: Further colonial life benefits were higher by $21 7 million or <unk> <unk> of EPS pressure due to a onetime reserve model refinement when adjusting for these two items, which represents a better view of underlying earnings power adjusted operating EPS in the quarter would have been 12 points higher.

Steven A. Zabel: The strong earnings power for GAAP was also apparent in our statutory results with full year after tax operating earnings of over $1 3 billion.

Steven A. Zabel: Well ahead of our outlook last year of roughly $1 billion.

Steven A. Zabel: As Rick mentioned, we were extremely pleased with the strong finish to the year across the board. This caps two years of continued momentum building in our core operating segment. This is evident in both our sales and operating results. For the full year, sales were up 15.1% in UNUM US, 26.7% in UNUM International, and 6.2% in Colonial Life, where we saw accelerating growth each quarter, including 11.5% growth in the fourth quarter compared to the same period a year ago. Premium for our core operations increased 6.1% in the quarter compared to a year ago and finished up 5.2% for the full year, exceeding the expectation laid out last February and more consistent with our long-term expectations. Disability results were favorable across the company as well, highlighted by a group disability benefit ratio of 59.1% for the full year and 59.5% in the quarter.

Steven A. Zabel: These results drove significant upside to our original expectation of capital generation and as a result, our capital position.

Steven A. Zabel: Top line results were also notable this year with both sales and premium for our core operations outperforming the top end of their outlook ranges at 13, 4% and five 2% respectively.

Steven A. Zabel: Fourth quarter's results also show that momentum isn't slowing, which we believe will set us up nicely for continued growth in 2024. The strong growth metrics are a testament to the value of our offering in the market and the success we are seeing with our key strategic initiatives that Rick discussed. Investing in these capabilities to grow our core business is a key capital priority, and as a result, the full-year 2023 adjusted operating expense ratio increased to 21.7%, slightly above our expectations coming into the year.

Steven A. Zabel: Fourth quarter's results also show that momentum isn't slowing which we believe will set us up nicely for continued growth in 2024.

Steven A. Zabel: The strong growth metrics are testament to the value of our offering in the market and the success, we're seeing with our key strategic strategic initiatives that Rick discussed invest.

Steven A. Zabel: Investing in these capabilities to grow our core business is a key capital priority and as a result, the full year 2023, adjusted operating expense ratio increased to 21, 7% slightly above our expectations coming into the year.

Steven A. Zabel: We continue to expect the expense ratio to taper off over time as the impact of our investments takes further hold. For full year 2024, we expect our adjusted operating expense ratio to be slightly lower than in 2023. Now, let me briefly review our 2023 results. For Unum US, Adjusted Operating Income increased 39.4% to $1.36 billion in 2023, compared to $972.6 million in 2022. As mentioned earlier, these results were bolstered by disability performance, with group disability experiencing full year adjusted operating earnings growth of 56.1%, and our individual disability line of business driving overall supplemental and voluntary growth of 11.7% for the year. Further, group disability ended the year with an ROE of 30.8%.

Steven A. Zabel: We continue to expect the expense ratio to taper off over time as the impact of our investments take further hold.

Steven A. Zabel: We do expect benefit ratios in the low 60s to continue in the near to mid-term as we continue to see support for these levels in both our operations and in the market. These same trends are also supporting strong performance in our individual disability and UK group income protection product lines. We ended the year with after-tax adjusted operating income at $1.5 billion and after-tax adjusted operating EPS of $7.66, which represents growth of 23.3% over the historically reported full year 2022. The fourth quarter's results of reported after-tax adjusted operating EPS of $1.79 were impacted by two items that I would like to mention. First, the effective tax rate in the fourth quarter was elevated at 22.8 percent. We expect the long-term rate to be between 21.5 to 22 percent and vary some from period to period due to foreign tax dynamics. The variance in the fourth quarter lowered EPS by approximately 3 cents.

Steven A. Zabel: For full year 2024, we expect our adjusted operating expense ratio to be slightly lower than 2023.

Steven A. Zabel: Now let me briefly review our 2023 results by segment for Unum US adjusted operating income increased 39, 4% to $1 36.

Steven A. Zabel: $213 6 billion.

Steven A. Zabel: In 2023 compared to $972 $6 million in 2022.

As mentioned earlier. These results were bolstered by disability performance with group disability experiencing full year adjusted operating earnings growth of 56, 1% and our individual disability line of business driving overall supplemental and voluntary growth of 11, 7% for the year.

Steven A. Zabel: Further group disability ended the year with an ROE of 38, 8% the.

Steven A. Zabel: The Group Life and AD&D lines experienced adjusted operating earnings growth of 94.8% as the impacts of the pandemic waned. The fourth quarter's results of $68 million were the highest since the beginning of the pandemic and were driven by favorable labor experience, lower incidence in AD&D, and continued lower mortality results. From a growth perspective, Unum US earned premium grew 5.2% to $6.6 billion due to natural growth, higher sales, and solid. This result was in line with our expected premium growth rate of four to six percent. Now moving to Unum International, the segment continued to show strong trends in its underlying earnings power, with adjusted operating income of $158.1 million for the year, up 18% compared to the prior year. Fourth quarter UK results were in line with our outlook for adjusted operating earnings levels in the mid 20 million pounds range, excluding the impacts of inflation. However, inflation has moderated since last year's highs.

Steven A. Zabel: The group life and <unk> lines experienced adjusted operating earnings growth of 94, 8% as the impacts from the pandemic waned. The fourth quarter's results of $68 million were the highest since the beginning of the pandemic and were driven by favorable when labor experience lower incidence in <unk> with continued low.

Steven A. Zabel: Further, colonial life benefits were higher by $21.7 million, or $0.09 of EPS pressure, due to a one-time reserve model refinement. When adjusting for these two items, which represents a better view of underlying earnings power, adjusted operating EPS in the quarter would have been $0.12 higher. The strong earnings power for GAAP was also apparent in our statutory results, with full year after-tax operating earnings of over $1.3 billion, well ahead of our outlook last year of roughly $1 billion. These results drove significant upside to our original expectation of capital generation and, as a result, our capital position. Top line results were also notable this year, with both sales and premium for core operations outperforming the top end of their outlook ranges, at 13.4% and 5.2% respectively.

Steven A. Zabel: Our mortality results.

Steven A. Zabel: From a growth perspective Unum U S earned premium grew five 2% to six 6 billion due to natural growth higher sales and solid persistency. This result was in line with our expected premium growth rate of 4% to 6%.

Steven A. Zabel: Now moving to Unum International segment continued to show strong trends in its underlying earnings power with adjusted operating income of $158 $1 million for the year up 18% compared to the prior year.

Steven A. Zabel: <unk> fourth quarter U K results were in line with our outlook for adjusted operating earnings levels in the mid 20 million pounds range, excluding the impact from inflation.

Steven A. Zabel: Inflation has moderated since last year's highs and we expect this will continue as the environment normalizes, but still benefited the U K this quarter by approximately 5 million pounds.

Steven A. Zabel: And we expect this will continue as the environment normalizes, but it still benefited the UK this quarter by approximately 5 million pounds. We are extremely pleased with the growth levels in the UK, highlighted by full-year sales growth of 18.6% and premium growth of 11.6%, well ahead of our original expectations of 2-5% and 2-4%, respectively. While the UK business is a major driver of this segment, Poland saw significant levels of growth, increasing sales 76% and premium by 24.2% for the year.

Steven A. Zabel: Fourth quarter's results also show that momentum isn't slowing, which we believe will set us up nicely for continued growth in 2024. These strong growth metrics are a testament to the value of our offering in the market and the success we are seeing with our key strategic initiatives that Rick discussed. Investing in these capabilities to grow our core business is a key capital priority, and as a result, the full-year 2023 adjusted operating expense ratio increased to 21.7%, slightly above our expectations coming into the year.

Steven A. Zabel: We are extremely pleased with the growth levels in the U K highlighted by full year sales growth of 18, 6% and premium growth of 11, 6% well ahead of our original expectations of 2% to 5% and 2% to 4% respectively.

Steven A. Zabel: While the U K business is a major driver of this segment, Poland saw significant levels of growth, increasing sales, 76% and premium 24, 2% for the year.

Steven A. Zabel: Now turning to Colonial, the segment saw growth return after a couple of years of challenged results due to the impacts of the pandemic on our sales process and agent productivity. Sales growth of 6.2% and premium growth of 1.4% for the full year do drive optimism for further growth in 2024 and our ultimate target to return to the high single-digit level of growth that this segment historically achieved. From an adjusted operating earnings perspective, full-year results of $400.1 million were lower than $412.9 million a year ago, largely due to a number of unique items throughout the year, including the reserve model refinement in 4Q.

Steven A. Zabel: We continue to expect the expense ratio to taper off over time as the impact of our investments takes further hold. For full year 2024, we expect our adjusted operating expense ratio to be slightly lower than in 2023. Now, let me briefly review our 2023 results by second. For UNM-US, adjusted operating income increased 39.4% to $1.36 billion in 2023 compared to $972.6 million in 2022. As mentioned earlier, these results were bolstered by disability performance, with group disability experiencing full-year adjusted operating earnings growth of 56.1%, and our individual disability line of business driving overall supplemental and voluntary growth of 11.7% for the year. Additionally, group disability ended the year with an ROE of 30.88%.

Now turning to colonial the segment saw growth return after a couple of years of challenged results due to the impacts of the pandemic on our sales process and agent productivity.

Sales growth of six 2% and premium growth of one 4% for the full year does drive optimism for the further growth in 2024, and our ultimate target to return to the high single digit level of growth that this segment historically achieved.

Steven A. Zabel: From an adjusted operating earnings perspective, full year results of $401 million were lower than $412 $9 million a year ago, largely due to a number of unique items throughout the year, including the reserve model refinement in <unk>.

Steven A. Zabel: That said, full-year ROE was impressive at 18.1%, and we expect a high level of earnings power from this line as we enter 2024. Switching gears to the closed block of business and focusing on this quarter, adjusted operating earnings of $21.3 million were below our expected run rate of $30 to $40 million and last quarter's results of $34.2 million, as both long-term care and the remainder of our closed disability block saw sequential declines. The net premium ratio, which is indicative of the lifetime benefit ratio expectation, increased slightly to 93.5% from 93.4% in the third quarter of 2023. Under LDTI, the combination of earnings results and movements in the net premium ratio provides a more comprehensive view of long-term care claims performance compared to the previously reported interest-adjusted loss ratio, which we observed could distort underlying claims experience trends and focus solely on experience in that quarter.

Steven A. Zabel: That said full year ROE was impressive at 18, 1% and we expect a high level of earnings power from this line as we enter 2024.

Steven A. Zabel: Switching gears to the closed block of business and focusing on this quarter adjusted operating earnings of $21 $3 million were below our expected run rate of $30 million to $40 million and last quarter's results of $34 2 million as both long term care in the remainder of our closed disability block saw sequential declines.

Steven A. Zabel: The group life in AD&D lines experienced adjusted operating earnings growth of 94.8% as the impacts of the pandemic waned. The fourth quarter's results of $68 million were the highest since the beginning of the pandemic and were driven by favorable labor experience, lower incidence in AD&D, and continued lower mortality results. From a growth perspective, U-M-U-S earned premium grew 5.2% to $6.6 billion due to natural growth, higher sales, and solid. This result was in line with our expected premium growth rate of 4-6%. Now moving to Unum International, the segment continued to show strong trends in its underlying earnings power, with adjusted operating income of $158.1 million for the year, up 18% compared to the prior year. Fourth quarter UK results were in line with our outlook for adjusted operating earnings levels in the mid £20 million range, excluding the impacts of inflation.

Steven A. Zabel: <unk>.

Steven A. Zabel: The net premium ratio, which is indicative of the lifetime benefit ratio expectation increased slightly to 93, 5% from 93, 4% in the third quarter of 2023.

Steven A. Zabel: Under <unk> the combination of earnings results and movements and the net premium ratio provides a more comprehensive view of long term care claims performance compared to the previously reported interest adjusted loss ratio, which we observed could distort underlying claims experienced trends and focused solely on experienced in that quarter.

Steven A. Zabel: Overall, underlying claims experience for the block was largely in line with the third quarter. However, incidents remained above long-term expected levels but had improved from the higher levels seen earlier in 2023. We continue to believe that the elevated incidence rates in 2023 were a function of inventory levels normalizing in the environment following the pandemic. We expect to see a continuation of claims catch up in 2024, albeit at a dissipating rate. Lastly, for the closed block, our alternative investment portfolio, which largely backs LTC, produced income of $21.5 million in the quarter. Since inception, our diversified alternative portfolio has produced returns in line with our long-term expectation of 8 to 10 percent. Rounding out the segments, the corporate segment produced a loss of $36.5 million in the quarter, and we expect this level of loss to continue at slightly higher levels in 2024.

Steven A. Zabel: Overall underlying claims experience for the block was largely in line with third quarter incidents remained above long term expected levels, but has improved from the higher levels seen earlier in 2023, we continue to believe that the elevated incidence rates in 2023 were a function of inventory levels normalize in the.

Steven A. Zabel: Inflation has moderated since last year's highs, and we expect this will continue as the environment normalizes, but inflation still benefited the UK this quarter by approximately five million pounds. We are extremely pleased with the growth levels in the UK, highlighted by full-year sales growth of 18.6% and premium growth of 11.6%, well ahead of our original expectations of 2-5% and 2-4%, respectively. While the UK business is a major driver of this segment, Poland saw significant levels of growth, increasing sales 76% and premium by 24.2% for the year.

Steven A. Zabel: Following the pandemic.

Steven A. Zabel: We expect to see a continuation of claim catch up in 2024, albeit at a dissipating right.

Steven A. Zabel: Lastly for the close block, our alternative investment portfolio, which largely backs LTC produced income of $21 $5 million in the quarter.

Steven A. Zabel: Since inception, our diversified alternative portfolio has produced returns in line with our long term expectation of 8% to 10%.

Rounding out the segments. The corporate segment produced a loss of $36 $5 million in the quarter and we expect this level of loss to continue at slightly higher levels in 2024.

Steven A. Zabel: So, stepping back, 2023 was an incredible year for the company, and as we turn to 2024, we see many of the same tailwinds and opportunities to win. So with all that considered, it's time to talk about our outlook for this year. And I'll start with our view of business growth and earnings power and discuss how that plays in capital generation. And then I'll end with a little bit of a discussion on how we're executing on our strategy so far. So, just to orient everyone on the slides and make sure that we're following along, we're on page seven, and I want to kick off this discussion. I really reflect back to a year ago at our last Outlook meeting.

Speaker Change: So then stepping back 2023 was an incredible year for the company and as we turn to 2024, we see many of the same tailwind and opportunities to win.

So with all that considered it's time to talk about our outlook for this year and I'll start with a review of business growth and earnings power discuss how that plays into capital generation and then I'll end with a little bit of a discussion on how we are executing on our strategy for long term care.

Speaker Change: Okay.

Speaker Change: So just to Orient everyone on the slides and make sure that were falling along we're on page seven I want to kick off this discussion I really reflect back to a year ago at our last outlook meeting and in summary, we have delivered what we described last February when we were in New York City and are poised to deliver even stronger performance in 2024.

Speaker Change: We lead off that discussion with the key message and that message was that we have the ability and capacity to chart. Our course in 2023 and I believe that is even more true as we go into 2024. So four key messages for the outlook discussion number one is top line growth. It is very strong and it's fueled by momentum in the digital.

Steven A. Zabel: And it's fueled by momentum and the digital capabilities that Rick mentioned. Number two, the Urdin growth rates are really stabilizing back to our long-term expected range after two years of very high levels of growth coming out of the pandemic, and specifically, some highlights that I'd like to note. First, group disability is back to pre-pandemic incidence rates with historically favorable levels of recovery.

Speaker Change: Capabilities that Rick mentioned.

Speaker Change: Number two the earnings growth rates really stabilizing back to our long term expected range. After two years of very high levels of growth coming out of the pandemic and specifically some highlights that I'd like to note first group disability is back to pre pandemic incidence rates with historically favorable levels.

Speaker Change: <unk> of recovery.

Steven A. Zabel: The second thing to note is group life is back to pre-pandemic levels. Third, we have a full recovery of our UK business model with double-digit growth rates. And lastly, momentum is continuing to build in colonial life and the franchise that we have there. The third message for The Outlook is that we're at an inflection point in free cash flow, and that's due to no contributions needed for long-term care in 2024, which will allow us to return more capital to shareholders while maintaining significant capital buffers. And I would end with the key message that our capital generation is really at full strength, with all capital metrics well in excess of target. So then I'll move on to page 8.

Speaker Change: The second thing to note is group life is back to pre pandemic levels of earnings.

Third we have a full recovery of our U K business model with double digit growth rates.

Speaker Change: And lastly momentum continuing to build in colonial life and the franchise that we have there.

Steven A. Zabel: Incidents remained above long-term expected levels but improved from the higher levels seen earlier in 2023. We continue to believe that the elevated incidence rates in 2023 were a function of inventory levels normalizing in the environment following the pandemic. We expect to see a continuation of claims catch-up in 2024, albeit at a dissipating rate. Lastly, for the closed block, our alternative investment portfolio, which largely backs LTC, produced income of $21.5 million in the quarter. Since inception, our diversified alternative portfolio has produced returns in line with our long-term expectation of 8 to 10 percent. Rounding out the segments, the corporate segment produced a loss of $36.5 million in the quarter, and we expect this level of loss to continue at slightly higher levels in 2024.

Speaker Change: The third message for the outlook is we are at an inflection point in free cash flow and Thats due to no contributions needed for long term care in 2024, which will allow us to return more capital to shareholders, while maintaining significant capital buffers and I would end with a key message of our capital generation is really at full.

Speaker Change: <unk> strength with all capital metrics well in it.

Speaker Change: Of targets.

Speaker Change: So then I'll move on to page eight and I just want to briefly hit on some highlights for topline expectations, we have healthy core businesses, which will deliver strong levels of growth in 2024, but I want to reflect a little bit that we just came off of really good growth story in 2023, and a unit Unum U S sales grew 15% with premium.

Steven A. Zabel: And I just want to briefly hit on some highlights for top line expectations. We have healthy core businesses that will deliver strong levels of growth in 2024. But I want to reflect a little bit that we just came off a really good growth story in 2023. In Unum US, sales grew 15% with premium growing over 5%. In international, sales grew close to 30%, with premium growing over 14%.

Speaker Change: Growing over 5% and international sales grew close to 30% premium growing over 14% and in colonial sales growing at six 2% with premium close to one 5% growth.

Steven A. Zabel: So, stepping back, 2023 was an incredible year for the company, and as we turn to 2024, we see many of the same tailwinds and opportunities to win. So with all that considered, it's time to talk about our outlook for this year. And I'll start with our view of business growth and earnings power and discuss how that plays in capital generation. And then I'll end with a little bit of a discussion on how we're executing on our strategy for the long term. So, just to orient everyone on the slides and make sure that we're following along, we're on page seven, and I want to kick off this discussion. I really reflect back to a year ago at our last Outlook meeting.

Steven A. Zabel: And in colonial, sales growing at 6.2%, with premiums close to 1.5% growth. And then, I would say, to top this all off, we have maintained an industry-leading margin. Our secret sauce is really to grow in a disciplined way that is sustainable and leads ultimately to earnings growth and capital generation for future growth and distribution to our shareholders. Moving on to page 9, I will talk a little bit more about earnings growth. So the top of the house view here is that with most of our 2024 metrics, they are in or relatively in line with our long-term expectations. Long-term expectations for sales have increased as we see the benefits of our investments in technology. We have strong projected earnings growth despite record levels of earnings power in 2023. It really shows the strength of the franchise.

Speaker Change: And then I would say the top us all off we have maintained industry, leading margins. Our secret sauce is really to grow in a disciplined way that is sustainable and leads ultimately to earnings growth and capital generation for future growth and deployment to our shareholders.

Speaker Change: Moving on to page nine talk a little bit more about earnings growth. So the top of the house view here is with most of our 2024 metrics they are in or relatively in line with our long term expectations.

Steven A. Zabel: And in summary, we have delivered what we described last February when we were in New York City and are poised to deliver even stronger performance in 2024. We led off that discussion with a key message, and that message was that we have the ability and capacity to chart our course in 2023. And I believe that is even more true as we go into 2024. So, four key messages for this Outlook discussion. Number one is top line growth. It is very strong, and it's fueled by momentum and the digital capabilities that Rick mentioned. Number two, the Urdine growth rates are really stabilizing back to our long-term expected range after two years of very high levels of growth coming out of the pandemic, and specifically, some highlights that I'd like to note. First, group disability is back to pre-pandemic incidence rates with historically favorable levels of recovery.

Speaker Change: Long term expectations for sales increased as we see the benefits of our investments in technology.

Speaker Change: We have strong projected earnings growth despite record levels of earnings power in 2023, it really shows the strength of the franchise, but what I'm. Most optimistic about is our premium growth story as we believe the growth rates of our core businesses can surpass the growth. We saw in 2023, which was still a year of recut.

Steven A. Zabel: But what I'm most optimistic about is our premium growth story, as we believe the growth rates of our core businesses can surpass the growth we saw in 2023, which was still a year of recovery in some ways. Then, transitioning to page 10, I will talk a little bit about our sources and uses of capital. And I'll orient you on the left side of the page around capital generation and really start with statutory earnings. Similar to the GAAP earnings that we just discussed, U.S. statutory earnings are also projected to be robust. And the one thing I just want to remind the audience is that these earnings will be available for dividends up to the holding company in the following year or 2025. But 2023 statutory earnings of over $1.3 billion are available to us this year in 2024. I'd move next to international dividends.

Speaker Change: <unk> in some ways.

Speaker Change: Then transitioning to page 10 talk a little bit about our sources and uses of capital and Orient you on the left side of the page around capital generation and really start with statutory earnings.

Similar to the GAAP earnings that we just discussed U S. Statutory earnings are also projected to be robust and but the one thing just to remind the audience up is that these earnings will be available for dividends up to the holding company in the following year or 2025, but 2023 statutory earnings of over one three.

Speaker Change: $3 billion are available to us this year in 2024.

Speaker Change: And moving next to international dividends given the recent performance in the U K. They are now able to contribute their fair share of earnings through dividends to the holding company.

Steven A. Zabel: Given their recent performance in the UK, they are now able to contribute their fair share of earnings through dividends to the whole income. Next are service agreements. These are mainly through investment management agreements, and they continue to be a strong source of free cash flow to the whole income. And so our capital generation capacity remains strong and in line with our 2023 actuals, but well above last year's forecast. So considering our interest expense expectation of $200 million, our free cash flow generation is a healthy $1.2 to $1.4 billion as we move past the period of capital contributions being needed for LTI.

Speaker Change: Next our service agreements those are mainly through investment management agreements and they continue to be a strong source of free cash flow to the holding company.

Speaker Change: And so our capital generation capacity remains strong and in line with our 2023, actuals, but well above last year's outlook.

Steven A. Zabel: And I just want to briefly hit on some highlights for top line expectations. We have healthy core businesses which will deliver strong levels of growth in 2024. But I want to reflect a little bit that we just came off a really good growth story in 2023. In UnimUS, sales grew 15%, with premium growing over 5%.

Speaker Change: So considering our interest expense expectation of $200 million, our free cash flow generation is a healthy one two to $1 4 billion as we move past the period of capital contributions being needed for LTC.

Steven A. Zabel: So then we arrive at capital deployment back to our shareholders, and that is also increasing significantly with an expected increase in the dividend of 10 to 15 percent, which we will discuss with our board later this spring and announce in the coming months, and doubling the amount of dollars spent on share repurchase consistent with the authorization we received at the end of last year. I would note that these repurchases in 2024 may not be straight-lined throughout the year if we do see opportunities in the market to maximize this authorization throughout the year. And then our use of excess capital generated will follow our capital priority. Grow core businesses, either through organic investment or inorganic, shareholder dividends, and then share repurchase.

Speaker Change: So then we arrive at capital deployment back to our shareholders and that is also increasing significantly with an expected increase in the dividend of 10% to 15%, which we will discuss with our board later, this spring and announced in the coming months.

Steven A. Zabel: In international, sales grew close to 30%, with premium growing over 14%. And in colonial, sales grew at 6.2%, with premium growing close to 1.5%. And then I would say to top this all off, we have maintained industry-leading margins. Our secret sauce is really to grow in a disciplined way that is sustainable and leads ultimately to earnings growth and capital generation for future growth and deployment to our shareholders. Moving on to page 9, I want to talk a little bit more about earnings growth. So the top of the house view here is that with most of our 2024 metrics, they are in or relatively in line with our long-term expectations. Long-term expectations for sales have increased as we see the benefits of our investments in technology. We have strong projected earnings growth despite record levels of earnings power in 2023. It really shows the strength of the franchise.

Speaker Change: And doubling the amount of dollars spent on share repurchase consistent with the authorization and we received at the end of last year.

Speaker Change: I would note that these repurchases in 2024 may not be straight line throughout the year, if we do see opportunities in the market to maximize this authorization throughout the year.

Speaker Change: And then our use of excess capital generated will follow our capital priorities grow core businesses, either through organic investment or inorganically shareholder dividends and then share repurchase.

Steven A. Zabel: So then moving on to slide 11, I'm going to spend a little bit of time talking about capital targets. I'm not going to spend too much time here as you will see consistency in our targets and our company performance. 2023 saw capital levels well in excess of our targets, and 2024 projections were similar, providing us with substantial financial flexibility. I would add that these levels of flexibility are supportive of our goal of maintaining a single A financial strength rating. We continue to make progress on that front in 2023 with our upgrade by pitch towards the end of last year. Okay, let's move on to a few topics regarding long-term care, and I will move to page 13.

Speaker Change: So then moving on to slide 11, and talk a little bit about capital targets I'm not going to spend too much time here as youll see consistency in our targets and our company performance two.

Speaker Change: 2023 capital levels, well in excess of our targets and 2024 projections to be similar providing us substantial financial flexibility.

Steven A. Zabel: But what I'm most optimistic about is our premium growth story, as we believe the growth rates of our core businesses can surpass the growth we saw in 2023, which was still a year of recovery in some ways. And transitioning to page 10, I will talk a little bit about our sources and uses of capital. And I'll orient you on the left side of the page around capital generation and really start with statutory earnings. Similar to the GAAP earnings that we just discussed, U.S. statutory earnings are also projected to be robust. And the one thing I just want to remind the audience is that these earnings will be available for dividends up to the holding company in the following year, or 2025. But 2023 statutory earnings of over $1.3 billion are available to us this year in 2024. I'd move next to international dividends.

Speaker Change: I will add that these levels of flexibility are supportive of our goal of maintaining our single a financial strength rating. We continue to make progress on that front in 2023 with our upgrade by Fitch towards the end of last year.

Speaker Change: Okay, let's move on to a few topics regarding long term care and I will move to page 13.

Steven A. Zabel: So to recap our strategy, we have a focused strategy for managing the closed block, which we have progressed and continue to progress, and it's focused on three things: Creating Value, Reducing the Footprint, and Increasing Predictability of Outcomes. In line with this strategy, we executed on a number of items we teed up as priorities with you in early 2023, and we continue to use a number of actions as we enter 2024. We have continued to mitigate interest rate risk and have done so in the current favorable interest rate environment. By repositioning cash flows and hedging, we've been able to reduce interest rate sensitivity to date by 25%. And how we measure that is with a basic DV01 measurement, which is really the dollar duration impact on surplus.

Speaker Change: So to recap our strategy, we have a focused strategy for managing the closed block, which we have progressed and continued to progress and is focused on three things.

Creating value, reducing the footprint and increasing predictability of outcomes.

Speaker Change: In line with this strategy, we executed on a number of items, we teed up as priorities with you in early 2023, and we continue to use a number of actions as we enter 2024.

Speaker Change: We have continued to mitigate interest rate risk and have done so at the current favorable interest rate environment.

Steven A. Zabel: Given their recent performance in the UK, they are now able to contribute their fair share of earnings through dividends to the whole income. Next are service agreements. These are mainly through investment management agreements, and they continue to be a strong source of free cash flow to the whole income. And so our capital generation capacity remains strong and in line with our 2023 targets, but well above last year's output. So considering our interest expense expectation of $200 million, our free cash flow generation is a healthy $1.2 to $1.4 billion as we move past the period of capital contributions being needed for LT.

Speaker Change: By repositioning cash flows and hedging we've been able to reduce interest rate sensitivity to date by 25% and how we measure that is with a basic DBO one measurement, which is really the dollar duration impact to surplus so think about the sensitivity of our surplus to a 100 basis point.

Steven A. Zabel: So think about the sensitivity of our surplus to a 100 basis point movement in prevailing interest rates. We continue to pursue justified rate increases. Last year, we achieved over 450 million in GPV of increases and are nearing four point five billion dollars of rate increased value since we started our program. And then we are using our strong capital position to create capital capacity and flexibility, providing the ability to navigate adverse events and creating confidence in our go-forward-free cash flows. As committed last year, we fully recognized the premium deficiency reserve at year-end.

Speaker Change: And prevailing interest rates.

Speaker Change: We continue to pursue justified rate increases last year, we achieved over $450 million in <unk> of increases and are nearing $4 5 billion of rate increase value since we started our program.

Speaker Change: And then we are using our strong capital position to create capital capacity and flexibility, providing the ability to navigate adverse events and creating confidence and our go forward free cash flows as committed last year, we fully recognized the premium deficiency reserve at year end. This was an important step in protecting our future cash flows and we will talk.

Steven A. Zabel: So then we arrive at capital deployment back to our shareholders, and that is also increasing significantly with an expected increase in the dividend of 10 to 15%, which we will discuss with our board later this spring and announce in the coming months, and doubling the amount of dollars spent on share repurchase consistent with the authorization we received at the end of last year. I would note that these repurchases in 2024 may not be straight-lined throughout the year if we do see opportunities in the market to maximize this authorization throughout the year. And then our use of excess capital generated will follow our capital priority, grow core businesses, either through organic investment or inorganic, shareholder dividends, and then share repurchase. So then moving on to slide 11, I will talk a little bit about capital targets.

Steven A. Zabel: This was an important step in protecting our future cash flows, and we will talk more about this in a moment. And finally, we remain active and will continue to look for risk transfer solutions. So then moving on to page 14, I want to spend a little bit of time talking about our interest rate risk management and really want to cover three topics here. One, discuss where we've been and what we've accomplished over the last year. Two, what the benefits of those actions were.

Speaker Change: More on this in a moment and finally, we remain active and we'll continue to look for risk transfer solutions.

Speaker Change: So then moving on to page 14, I will spend a little bit of time talking about our interest rate risk management and really want to cover three topics here, one discuss where we've been and accomplished over the last year to what the benefit of those actions were and three how that has helped to mitigate any capital requirements.

Steven A. Zabel: And three, how that has helped to mitigate any capital requirements in a downside interest rate scenario. So first of all, I'll talk about hedging and repositioning and how that's allowed us to better match duration, improve quality, and reduce interest sensitivity. So we kicked off our more recent hedging program at the beginning of last year. Since then, we have entered into $2.6 billion of notional treasury forwards, and those do have an average treasury yield of 4%.

Speaker Change: In a downside interest rate scenario.

Speaker Change: So first of all I'll talk about hedging in repositioning and how thats allowed us to better match duration improved quality and reduced interest sensitivity. So we kicked off our.

Steven A. Zabel: I'm not going to spend too much time here as you will see consistency in our targets and our company performance. 2023 saw capital levels well in excess of our targets, and 2024 projections to be similar, providing us with substantial financial flexibility. I will add that these levels of flexibility are supportive of our goal of maintaining a single A financial strength rating. We continue to make progress on that front in 2023 with our upgrade by pitch towards the end of last year. Okay, let's move on to a few topics regarding long-term care, and I will move to page 13. So to recap, we have a focused strategy for managing the closed block, which we have progressed and continue to progress, and it's focused on three things: creating value, reducing the footprint, and increasing predictability.

Speaker Change: Our more recent hedging program at the beginning of last year. Since then we have entered into $2 6 billion of notional treasury forwards and those do have an average treasury yield of 4% and as you know, we look out and take a seven year horizon, and it's really to try to derisk the yields at which we can invest.

Steven A. Zabel: And as you know, we look out and take a seven-year horizon, and it's really to try to de-risk the yields at which we can invest those cash flows as we look to the near to medium term. Secondly, in the third quarter of last year, we executed on a $700 million repositioning program within the LTC portfolio. And the objective of that was really to look at shorter duration assets and de-risk the new money rate that we'd be able to invest those in and extend the duration to longer duration assets. We took the opportunity to do that at a good price in the interest rate environment. We improved portfolio quality, we increased yield, and we did extend duration with no capital impact.

Speaker Change: Those cash flows as we look to the near to medium term.

Speaker Change: Secondly, in the third quarter of last year, we executed on our $700 million repositioning program within the LTC portfolio and the objective of that was really to look at shorter duration assets and derisked, the new money rate that wed be able to invest those on and extend the duration to longer.

Speaker Change: Duration assets, we took the opportunity to do that at a nice place in the interest rate environment, we improved portfolio quality, we increased yield and we did extend duration with no capital impact and so the results of that is we were able as I mentioned, we were able to improve our duration matching measures by 25% but.

Steven A. Zabel: In line with this strategy, we executed on a number of items we teed up as priorities with you in early 2023, and we continue to use a number of actions as we enter 2024. We have continued to mitigate interest rate risk and have done so in the current favorable interest rate environment. By repositioning cash flows and hedging, we've been able to reduce interest rate sensitivity to date by 25%. And how we measure that is with a basic DV01 measurement, which is really the dollar duration impact on surplus.

Steven A. Zabel: And so the results of that are we were able, as I mentioned, we were able to improve our duration matching measures by 25%, but we also reduced the PDR in Unum America, the sensitivity to interest rate movements by 30%. And that's really demonstrated in the chart on the right side of the page. And so let me explain the table on the right quickly. It's really the same concept that we used in our Investor Day materials last year, but I just want to give you an orientation to it. At year end, the premium deficiency reserve that was recorded was $1.6 billion.

Speaker Change: We also reduced the PDR in Unum America, the sensitivity to interest rate move and that's by 30% and Thats really demonstrated then in the chart on the right side of the page and so let me explain the table on the right quickly. It's really the same concept that we used in our investor day material grills last year, but I just want to oriented.

Steven A. Zabel: So think about the sensitivity of our surplus to a 100 basis point movement in prevailing interest rates. We continue to pursue justified rate increases. Last year we achieved over $450 million in GPV of increases and are nearing $4.5 billion of rate increase value since we started our program. And then we are using our strong capital position to create capital capacity and flexibility, providing the ability to navigate adverse events and creating confidence in our go-forward free cash flows. As committed last year, we fully recognized the premium deficiency reserve at year-end.

Speaker Change: You want it at year end the premium deficiency reserve that was recorded was at $1 6 billion and then the sensitivities that we're showing here are for the 30 year Treasury yield.

Steven A. Zabel: And then the sensitivities that we're showing here are for the 30-year treasury yield and the impact that it would have over time with our new money rate assumption that is then incorporated into our liability discount rate. And so, as an example, at a 4% assumption, the $1.6 billion of PDR would be reduced by $1.1 billion, assuming that the 4% assumption worked its way all the way into our three-year trailing average that we used for that construct. So, the dynamic really provides flexibility and appropriately manages our LTC commitments. And so, I think it's key to discuss two concepts here. One, we do have time to adapt as those rates work into our assumptions. But I think the other thing that's very important, and we have a note on the page, is that our interest rate management actions have significantly dampened any downside risk of interest rate movements on the PDR or balance. And I'll call out the 2% assumption here and highlight the fact that that sensitivity has been reduced by $450 million because of the actions that we have taken over the last couple of years around both hedging and our repositioning in the portfolio. All right, then I'll move on to page 15.

Speaker Change: And the impact that those would have over time with our new money rate assumption that then is incorporated into our liability discount rate and so as an example at a 4% assumption. The one 6 billion a PDR would be reduced by $1 1 billion.

Steven A. Zabel: This was an important step in protecting our future cash flows, and we will talk more about this in a moment. And finally, we remain active and will continue to look for risk transfer solutions. So then moving on to page 14, I wanna spend a little bit of time talking about our interest rate risk management and really wanna cover three topics here. One, discuss where we've been and what we've accomplished over the last year. Two, what the benefits of those actions were.

Speaker Change: <unk> that the 4% assumption worked its way all the way into our three year trailing average that we use for that construct.

Speaker Change: So.

Speaker Change: The dynamic it really provides flexibility and appropriately appropriately manage our LTC commitments and so I think it's key to concepts here. One we do have time to adapt as those rates work into our assumption, but I think the other thing thats very important and we have a note on the page is that our interest rate management actions.

Speaker Change: Have significantly dampened any downside risk of interest rate movements on the PDR balance not call out the 2% assumption here and and highlight the fact that that sensitivity has been reduced by $450 million because of the actions that we have taken over the last couple of years around both hedging.

And our repositioning of the portfolio.

Speaker Change: Alright, and then I'll move on to page 15, and we wanted to give.

Steven A. Zabel: And we wanted to give a little bit more information about both how we think about reserve sufficiency and some sensitivities. And so the orientation for this page is that we are talking about $2.8 billion of protection. What that really represents is our view of our current level of statutory reserves in excess of our view of the best estimate of that liability for the liability that's within Unum America and reinsured to Fairwind, plus the excess capital that we have within the Fairwind entity in excess of those targets that we set. Then when you go to the table, those are really sensitivities independent of that protection, where we look at the assumptions built into our best estimate, and And so specifically, I would say these are liability assumption sensitivities; we addressed interest rate sensitivities on the previous page. So let me walk you through a little bit of the sensitivities themselves.

Speaker Change: When you give a little bit more information about both how we think about reserve sufficiency, but also some sensitivities and so the orientation for this pages, we talk about $2 8 billion of protection what that really represents is our view of our current level of statutory reserves in excess of.

Speaker Change: Our view of the best estimate of that liability for the liability that's win within Unum America and reinsured to fair wind.

Speaker Change: Plus the excess capital that we have within the fair when entity in excess of those targets that we set.

Speaker Change: Then when you go to the table those are really sensitivities independent of that protection, where we look at the assumptions built into our best estimate.

Steven A. Zabel: And so the results of that are we were able, as I mentioned, we were able to improve our duration matching measures by 25%, but we also reduced the PDR in Unim America, the sensitivity to interest rate movements by 30%. And that's really demonstrated in the chart on the right side of the page. And so let me explain the table on the right quickly. It's really the same concept that we used in our investor day materials last year, but I just want to give you an orientation to it. At year end, the premium deficiency reserve that was recorded was $1.6 billion.

And we look at the dollar amount impact to our best estimate given given the sensitivities.

Speaker Change: So specifically I would say these are liability assumptions sensitivities, we addressed interest rate sensitivities on the previous page.

So let me walk you through a little bit the sensitivities themselves.

Steven A. Zabel: So on the premium rate increase, the $1 billion really represents the full amount of value we have currently in our best estimate assumption. And so the sensitivity is to completely remove that. I would say from my perspective, we have had a great track record over the years of being able to deliver on achieving our premium rate targets. In fact, we've already made very good progress in the achievement of that $1 billion just since we launched the program back in the fall. Secondly, morbidity and mortality improvement. The assumption within the best estimate reserve is $700 million.

Speaker Change: So on the premium rate increase.

Speaker Change: The $1 billion really represents the full amount of value. We have currently in our best estimate assumption and so the sensitivity is to completely remove that I would say from my perspective, we have had a great track record over the years to be able to deliver on achieving our premium rate targets. In fact, we've always we've already made very.

Steven A. Zabel: And then the sensitivities that we're showing here are for the 30-year treasury yield and the impact that it would have over time with our new money rate assumption that is then incorporated into our liability discount rate. And so, as an example, at a 4% assumption, the $1.6 billion of PDR would be reduced by 1.1 billion, assuming that the 4% assumption worked its way all the way into our three-year trailing average that we use for that construct. So the dynamic really provides flexibility and appropriately manages our LTC commitments. And so I think it's key to introduce two concepts here. One, we do have time to adapt as those rates work into our assumptions. But I think the other thing that's very important, and we have a note on the page, is that our interest rate management actions have significantly dampened any downside risk of interest rate movements on the PDR or balance. So I'll call out the 2% assumption here and highlight the fact that that sensitivity has been reduced by $450 million because of the actions that we have taken over the last couple of years around both hedging and our repositioning of the portfolio. All right, then I'll move on to page 15.

Speaker Change: Good progress in the achievement of that $1 billion, just since we've launched the program back in the fall.

Secondly, morbidity and mortality improvement assumption within the best estimate reserve is $700 million and so the sensitivity would be to fully remove that we do believe and we've seen over time improvement in both morbidity and mortality in our experienced so we do believe that that.

Steven A. Zabel: And so this sensitivity would be to fully remove that. We do believe, and we've seen over time, improvement in both morbidity and mortality in our experience. So we do believe that that assumption is backed up by the data and the experience that we've seen. But we've gone ahead, just for the purposes of the presentation, to fully remove that, to give an indication of the size of that assumption. And then we have three more assumptions, which are policy lapses in mortality, or claimant incidence, and our claim resolutions. We've given sensitivities here down 7.5% for the level of lapses in mortalities, an increase in claim incidents of 3%, and a decrease in claim resolutions, mostly due to mortality, of 2%.

Speaker Change: Assumption is backed up by the data and the experience that we've seen but we've gone ahead just for purposes of the presentation to fully remove that to give an indication of the size of that assumption and then we have three more assumptions, which are policy lapses mortality or claim incidents and our claim resolutions we've given sensitivities here.

Speaker Change: You're down seven.

Seven 5% for the whole of lapses and mortality and increase in claim incidents of 3% and a decrease in claim resolutions, mostly due to mortality of 2% and the way to think about that is that those those roughly approximate a one standard deviation difference over over the entire life of.

Steven A. Zabel: And the way to think about that is that those roughly approximate a one standard deviation difference over the entire life of the business for these sensitivities. And you can see the resultant impacts according to our best estimate. The one thing to also remember, though, when it comes to those last three assumptions, it's critical to remember that we still do have the ability to increase our rate increase actions as a form to mitigate those adverse developments, and the impact of those additional rate increases is not reflected in these individual liability sensitivities. So then, two other items to note on this page. First of all, excess capital, as it emerges, which we do think will emerge in Fairwind over time, can be used to meet LTC needs across all legal entities.

Steven A. Zabel: And we wanted to give a little bit more information about both how we think about reserve sufficiency and some sensitivities. And so the orientation for this page is that we are talking about $2.8 billion of protection. What that really represents is our view of our current level of statutory reserves in excess of our view of the best estimate of that liability for the liability that's within Unim America and reinsured to Fairwind, plus the excess capital that we have within the Fairwind entity in excess of those targets that we set. Then when you go to the table, those are really sensitivities independent of that protection where we look at the assumptions built into our best estimate, and we And so specifically, I would say these are liability assumption sensitivities. We addressed interest rate sensitivities on the previous page. So let me walk you through a little bit of the sensitivities themselves.

Speaker Change: The business for the sensitivities and you can see the resultant impacts to our best estimate.

The one thing to also remember, though when it comes to those last three assumptions. It's critical to remember that we still do have the ability to <unk>.

Speaker Change: Increase our rate increase actions as a form to mitigate those adverse developments and the impact of those additional rate increases are not reflected in these individual liability sensitivities.

Speaker Change: Then two other items to note on this page first of all excess capital as it emerges, which we do think we will emerge in fair wind overtime. It can be used to meet LTC needs across all legal entities and the point. There is we do have the ability over time to make decisions about how to use that excess capital that over time, we believe.

Steven A. Zabel: And the point there is we do have the ability over time to make decisions about how to use that excess capital that, over time, we believe will build up in Fairwind. And then the second item to note is that, given our current position, along with the PDR balance dynamics described above, would be expected to meet the capital needs of the book as it does progress to peak reserves in the next 10 years. So just to reiterate, under our current assumptions and in the current interest rate environment, the actions we have taken create confidence that future cash flows of the enterprise will be insulated from LTE. And then I'll finish off on page 16.

Speaker Change: We will build in fair wind.

Speaker Change: And then the second item of note is given our current position along with the PDR balanced dynamics described above would be expected to meet the capital needs of the book as it does progressed peak reserves in the next 10 years.

Speaker Change: So just to reiterate under our current assumptions and in the current interest rate.

Steven A. Zabel: So on the premium rate increase, the $1 billion really represents the full amount of value we have currently in our best estimate assumption. And so the sensitivity is to completely remove that. I would say, from my perspective, we have had a great track record over the years to be able to deliver on achieving our premium rate targets. In fact, we've always we've already made very good progress in the achievement of that $1 billion just since we lost launched the program back in the fall. Secondly, morbidity and mortality improvement, the assumption within the best estimate reserve is $700 million, and so the sensitivity would be to fully remove that.

Speaker Change: Environment. The actions, we have taken create confidence that future cash flows of the enterprise will be insulated from LTC needs.

Speaker Change: And then I'll finish up on page 16, so its close this out let's discuss some key indicators of long term health of the business and we look at four metrics first the net PR or net premium ratio with the shift to <unk>. We believe that MPR provides a long term outlook for block claim experience.

Steven A. Zabel: So to close this out, let's discuss some key indicators of the long-term health of the business. And we look at four metrics. First, the net NPR or net premium ratio.

Steven A. Zabel: With the shift to LBTI, we believe that NPR provides a long-term outlook for block claim experience, and we will look at the movement in that metric over time. We gave that movement in our comments this quarter, and we'll continue to do that over time. Secondly, closed BOC earnings. While we expect quarterly volatility, we would expect an annualized run rate in the $130 to $160 million range in an environment where experience may vary quarter to quarter, assuming alternative asset yields are near the longer term range. The third metric would be rate-increased progress, and this is a key element of our strategy, and we monitor progress against our best estimate assumptions. Recall that we increased the scope of the program with our latest assumption review. And so we'll give you information over time how we're progressing as a percentage against that best estimate assumption within the reserve liability. And then lastly, the 30-year Treasury rate.

Speaker Change: <unk> and we will look at the movement in that metric over time, we gave that movement in our comments this quarter and we will continue to do that over time.

Speaker Change: Secondly closed block earnings while we expect quarterly volatility, we would expect an annualized run rate in the $130 million to $160 million range in an environment, where experience may vary quarter to quarter, assuming alternative asset yields are near at longer term ranges.

Steven A. Zabel: We do believe, and we've seen over time, improvement in both morbidity and mortality in our experience, so we do believe that that assumption is backed up by the data and the experience that we've seen, but we've gone ahead, just for purposes of the presentation, to fully remove that to give an indication of the size of that assumption. And then we have three more assumptions, which are policy lapses in mortality or claimant incidence and our claim resolutions. We've given sensitivities here down 7.5% for the level of lapses in mortalities, an increase in claim incidence of 3%, and a decrease in claim resolutions, mostly due to mortality, of 2%.

Speaker Change: The third metric would be rate increased progress and this is a key element of our strategy and we monitor progress against our best estimate assumptions recall that we increased the scope of the program with our latest assumption review and so we will give information over time, how we're progressing as a percentage against that best estimate assumption.

Speaker Change: And within the reserve liability.

Speaker Change: And then lastly, the 30 year treasury rate and in particular, we will look for the three year average to remain above the $2 eight 4% rate, which represents the current three year average.

Steven A. Zabel: And in particular, we will look for the three-year average to remain above the 2.84% rate, which represents the current three-year average. That rate underlines our new money assumption that feeds into our liability discount rate for the premium deficiency. Rates above this would signal a positive impact on the overall discount rate and related balance of the Premium Deficiency Reserve as re-represented on page 14 of this. So, to wrap up, we have very exciting top and bottom line expectations for 2024. We think our financial flexibility has never been stronger, and we look forward to the year ahead. Thank you again for attending today's call. And I look forward to your questions. And now, I'll turn the call back over to Rick to close.

Steven A. Zabel: And the way to think about that is that those roughly approximate a one standard deviation difference over the entire life of the business for these sensitivities, and you can see the resultant impacts to our best estimate. The one thing to also remember, though, when it comes to those last three assumptions, it's critical to remember that we still do have the ability to increase our rate increase actions as a form to mitigate those adverse developments, and the impact of those additional rate increases is not reflected in these individual liability sensitivities. So there are two other items to note on this page.

Speaker Change: That rate underlines, our new money assumption that feeds into our liability discount rate for the premium deficiency reserve.

Speaker Change: Rates above this would signal a positive impact on the overall discount rate and related balance of the premium deficiency reserve and the three.

Rented on page 14 of the stack.

Speaker Change: So to wrap up we have very exciting top and bottom line expectations for 2024, we think our financial flexibility has never been stronger and we look forward to the year ahead.

Steven A. Zabel: First of all, excess capital, as it emerges, which we do think will emerge in Fairwind over time, can be used to meet LTC needs across all legal entities. And the point there is that we do have the ability, over time, to make decisions about how to use that excess capital, which we believe will build in Fairwind. And then the second item to note is that, given our current position, along with the PDR balance dynamics described above, would be expected to meet the capital needs of the book as it does progress to peak reserves in the next 10 years. So just to reiterate, under our current assumptions and in the current interest rate environment, the actions we have taken create confidence that future cash flows of the enterprise will be insulated from LTE. And then I'll finish it off on page 16.

Speaker Change: Thank you again for attending today's call and I look forward to your questions and now I'll turn the call back over to Rick to close alright. Thank you Steve as you can see and based on <unk> and my comments 'twenty 'twenty four is shaping up to be a great year for unum. The teams are very focused on what we want to achieve this year and continued momentum in our core business and the inflection point.

Richard McKenney: Great. Thank you, Steve. As you can see, and based on Steve's and my comments, 2024 is shaping up to be a great year for Unum. The teams are very focused on what we want to achieve this year, and continued momentum in our core business and the inflection point we're seeing with capital now that our LTC block is funded, as Steve articulated, really puts us in a very good spot. So there's plenty of topics to discuss today. So with that, my team is here to field questions, and I'll turn it back to you, Rob. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad.

Richard McKenney: We're seeing with capital now that our LTC block is funded as Steve articulated.

Richard McKenney: It really puts us in a very good spot. So there's plenty of topics to discuss today. So with that I will team is here to field questions and I'll turn it back to Europe.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad your.

Rob: Your first question comes from the line of Joel Hurwitz from Dattling & Partners. Your line is open. Hey, good morning.

Speaker Change: First question comes from the line of Joel <unk> from <unk>.

Joel: <unk> partners your line is open.

Joel: Hey, good morning.

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

Joel: First on the core businesses, if I compare the 24 earnings outlook relative to what you guys guided a year ago I estimate that core business earnings expectations are are over $150 million better than what would have been implied a year ago. I guess do you see this level of core business earnings sustainable longer term or would you expect to.

Steven A. Zabel: So to close this out, let's discuss some key indicators of the long-term health of the business. And we look at four metrics. First, the net NPR or net premium ratio.

Joel: I have to give back some of that with favorable risk results over time.

Steven A. Zabel: I can take that question, and I'll just maybe get into math a little bit, how we're thinking about expectations going into 24. I think the key thing to think about with our core businesses is that we do believe that we're going to be able to maintain the margins in our group disability business through the next year. And specifically, we believe that the benefit ratio for group disability will remain at that low 60% level.

Joel: Yes. This is Steve I can take that question and I'll, just maybe get into the math a little bit how we're thinking about expectations going into 'twenty four I think the key to think about with our core businesses. We do believe that we're going to be able to maintain the margins in our group disability business.

Steven A. Zabel: Through the next year and specifically, we believe that the benefit ratio for group disability will remain in that low 60% level. I would also note that we do anticipate an increase in colonial life earnings I did mentioned, we had several onetime items that did dampen the earnings of colonial life in 2023 and we.

Steven A. Zabel: The third metric would be rate-increased progress, and this is a key element of our strategy, and we monitor progress against our best estimate assumptions. Recall that we increased the scope of the program with our latest Assumption Review, and so we'll give information over time how we're progressing as a percentage against that Best Estimate Assumption within the reserve liability. And then lastly, the 30-year Treasury rate.

Steven A. Zabel: I would also note that we do anticipate an increase in colonial life earnings. I mentioned we had, you know, several one-time items that did dampen the earnings of colonial life in 2023. And we think in 2024, that earnings will come through on a more kind of core basis. And then maybe we can hit a little bit on just the commercial environment and the competitive environment and just the level of pricing in the group benefits line. Yeah, thanks, Steve. Thanks for the question, Joel. This is Chris.

Steven A. Zabel: In 2024 that earnings will come through on a more kind of core basis.

Steven A. Zabel: And then maybe we can hit a little bit on just the commercial environment and competitive environment and just the level of pricing in the group benefits line, yes. Thanks, Nick Thanks for the question Joel This is Chris.

Steven A. Zabel: And in particular, we will look for the three-year average to remain above the 2.84% rate, which represents the current three-year average. That rate underlines our new money assumption that feeds into our liability discount rate for the premium deficiency rate. Rates above this would signal a positive impact on the overall discount rate and related balance of the Premium Deficiency Reserve as re-represented on page 14 of this document. So to wrap up, we have very exciting top and bottom line expectations for 2024. We think our financial flexibility has never been stronger, and we look forward to the year ahead. Thank you again for attending today's call. And I look forward to your questions. Now, I'll turn the call back over to Rick to close.

Christopher Wallace Pyne: You know, we're really excited about where we stand, and I'd like to start with capabilities. When we're talking to new customers, you know, we're really there to help solve problems. We see, you know, many more prospects in the market who are looking to solve big problems that we address through, you know, some of the things Rick mentioned with Total Leave and HR Connect and MyUnum. That changes the game versus, you know, a more traditional price check type environment.

Chris Pine: We're really excited about where we stand I would like to start with capabilities.

We're talking to new customers.

Chris Pine: They are to help solve problems.

Chris Pine: We see many more prospects in the market, who are looking to solve big problems that we address through some of the things that Rick mentioned with total leave an HR connect in my Unum.

Chris Pine: That changes the game versus a more traditional price check type environment. So from a new business perspective, we are writing strong levels of business, we expect that to continue and we're hitting price points that that's a great day.

Christopher Wallace Pyne: So, from a new business perspective, we are writing strong levels of business. We expect that to continue, and we're hitting price point. That's a great day.

Richard McKenney: From a renewal perspective, you know, business is favorable, and we look at it very much on a case by case basis. We are—our history of strong risk discipline from an underwriting perspective serves us really well. Again, these customers value what we bring. We're able to show up in these discussions with an opportunity to talk about long-term price stability, whether it be, you know, a modest rate increase, rate pass, or rate reduction. And our persistency results through the close of 23 were quite strong as we went on to 24.

Chris Pine: From a renewal perspective.

Chris Pine: Business is favorable and we look at it very much on a case by case basis. We are our history of strong risk discipline from an underwriting perspective serves us really well.

Richard McKenney: Great. Thank you, Steve. Uh, as you can see, and based on Steve's and my comments, 2024 is shaping up to be a great year for Unum. The teams are very focused on what we want to achieve this year, and continued momentum in our core business, and the inflection point we're seeing with capital now that our LTC block is funded, as Steve articulated, really puts us in a very good spot. So there's plenty of topics to, uh, discuss today. So with that, my team is here to field questions, and I'll turn it back to you, Rob. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. Your first question comes from the line of Joel Hurwitz from Dental England Partners. Your line is open. Hey, good morning.

Chris Pine: Again these customers value, what we bring we're able to show up in these discussions with an opportunity to talk about long term price stability, whether it would be.

Chris Pine: Modest rate increase right pass or rate reduction in our <unk>.

Chris Pine: Persistency results through the close of 23 were quite strong as we go into 'twenty four.

Joel Hurwitz: Yeah, I think Joel, you hit it, it was a step up in 2023 from an earnings perspective, but you can see from our outlook in 2024, we're looking to grow off it. So seven to 9% on top of a very strong year, you know, all those indicators that we talked about, and as Chris articulated, in particular our group disability, but even with our colonial life business, are all intact. And that leads us to our good outlook coming off of an incredibly strong year. Okay, helpful.

Chris Pine: I think Joel you hit it.

Chris Pine: Step up in 2023 from an earnings perspective, but you can see from our outlook in 2024, we're looking to grow off it so 7% to 9% on top of very very strong year all of those indicators that we talked about and as Chris articulated in particular, two of our group disability, but even with our colonial life business are all intact and that leads us to our our good outlook coming off.

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

Chris Pine: With an incredibly strong year.

Speaker Change: Okay helpful. And then in terms of long term care I guess, what gives you guys confidence that.

Steven A. Zabel: And then in terms of long-term care, I guess what gives you guys confidence that the experience you've been seeing is more of a catch-up versus a longer-term shift in trends? And then, in terms of the outlook, what's embedded in 2024 guidance for closed block earnings? Yeah, just to see if I can take that one.

Speaker Change: The experience you've been seeing is more of a catch up versus.

Speaker Change: Versus a longer term shift in trends.

Speaker Change: Then in terms of the outlook, what's embedded in 2024 guidance for closed block earnings.

Speaker Change: Yes. This is Steve I can take that one so related to incidents I just kind of take people back a little bit on long term care and where we've been at the beginning of 2023, we saw very elevated in some incidents through the first six months, we saw that start to abate a little bit in the third quarter, albeit at still elevated lead.

Steven A. Zabel: So related to incidents, I just kind of take people back a little bit on long-term care and where we've been. At the beginning of 2023, we saw very elevated incidents through the first six months. We saw that start to abate a little bit in the third quarter, albeit at still elevated levels. Going into the fourth quarter, I would say those incidence levels were pretty consistent with what we saw in the third quarter. But what we also saw during the pandemic were fairly low levels of incidents.

Speaker Change: <unk>.

Steven A. Zabel: Going into the fourth quarter I would say those incentive levels were pretty consistent with what we saw in the third quarter, but what we also saw during the pandemic were fairly low levels of incidents and we could just see when we're looking at just kind of our inventory trend lines that were a bit below the trend lines that we would ultimately expect and so as we.

Steven A. Zabel: And we could just see when we were looking at, you know, just kind of our inventory trend lines that we were a bit below the trend lines that we would ultimately expect. And so as we approach back to those, that gives us some confidence that this was just kind of pent-up demand. The other thing that we've seen a lot of over the last six months, I would say, and maybe even a little bit before that, was a higher level of resubmission of claims. And those would be claims that had previously been submitted but were either denied or closed or recovered for other reasons.

Steven A. Zabel: <unk> approach back to those that gives us some confidence that this was just kind of pent up demand. The other thing that we've seen a lot of over the last six months I would say and maybe even a little bit before that with a higher level of resubmission of claims and those would be claims that had previously been submitted but either denied or closed.

Chris: You know, we're really excited about where we stand, and I'd like to start with capabilities. When we're talking to new customers, you know, we're really there to help solve problems. We see, you know, many more prospects in the market who are looking to solve big problems that we address through, you know, some of the things Rick mentioned with Total Leave and HR Connect and MyUNM. That changes the game versus, you know, a more traditional price check type environment.

Steven A. Zabel: Or recovered for other reasons and we've seen the level of those come back in which might indicate claims that originally had been pulled back but now have been submitted and so where obviously we have to continue to monitor. This we do believe that the level of incidents for a while and 24 will probably continue at an elevated level.

Steven A. Zabel: And we've seen the level of those come back in, which might indicate claims that originally had been pulled back but have now been submitted. And so, obviously, we have to continue to monitor this. We do believe that the level of incidents for a while in 2024 will probably continue at an elevated level, but we would look to monitor that then as we get into the back half of the year. And I would say within our outlook, we still do have a level of elevated incidents built into that outlook. Okay, thank you. Thanks, y'all.

Chris: So, from a new business perspective, we are writing strong levels of business. We expect that to continue, and we're hitting price point. That's a great day.

Steven A. Zabel: But we would look to monitor that then as we get into the.

Steven A. Zabel: The back half of the year and I would say within our outlook, we still do have a level of elevated incidents.

Chris: From a renewal perspective, you know, business is favorable, and we look at it very much on a case by case basis. Our history of strong risk discipline from an underwriting perspective serves us really well. Again, these customers value what we bring. We're able to show up in these discussions with an opportunity to talk about long-term price stability, whether it be, you know, a modest rate increase, rate pass, or rate reduction. And our persistency results through the close of 23 were quite strong as we went on to 24.

Steven A. Zabel: <unk> built into that outlook.

Speaker Change: Okay. Thank you.

Speaker Change: Sure. Thanks, Sean.

Speaker Change: Okay.

Steven A. Zabel: As a reminder, please limit yourself to one question and one follow-up. Your next question comes from the line of Alex Scott from Goldman Sachs. Your line is open. Hi, good morning.

As a reminder, please limit yourself to one question and one follow up. Your next question comes from the line of Alex Scott from Goldman Sachs. Your line is open.

Alexander Scott: The first question I had was just on the excess capital position. You know, at the Holdco, it got a lot stronger with a big dividend in 4Q, and you're projecting it to get better in 2024. So, I just thought maybe you could give us, you know, at a high level, what are the priorities there? You've outlined share repurchases, and we know where comp dividends are. It looks like around half a billion after that, the sort of naughtier mark.

Alex Scott: Hi, Good morning first question I had is just on the excess capital position.

Alex Scott: Holdco pick out a lot stronger with the big dividend it seems in four Q and you're projecting it to get better in 2024 or so.

Steven A. Zabel: Yeah, I think Joel, you hit it with a step up in 2023 from an earnings perspective, but you can see from our outlook in 2024, we're looking to grow off it. So seven to 9% on top of a very strong year, you know, all those indicators that we talked about. And as Chris articulated, in particular our group disability business, but even our colonial life business, are all intact. And that leads us to our good outlook coming off of an incredibly strong year. Okay, helpful.

Alex Scott: Just maybe you could give us high level what are the priorities there you've outlined share repurchases and we know were comp dividends are.

It looks like Youre around half a billion after that.

Richard McKenney: So, you know, what are the priorities for using that? Sure. Thanks, Alex.

Alex Scott: Not earmarked so what are the priorities for using that.

Speaker Change: Sure. Thanks, Alex just to take you back everyone back we mentioned a couple of times, but the capital generation. This year was very very strong we see it continuing as we go forward and we ended the year in a very good capital position as we've been building that throughout 2023. So first of all start their second is last year.

Richard McKenney: Just to take you back, everyone. We mentioned a couple of times, but the capital generation this year was very, very strong. We see it continuing as we go forward. And we ended the year in a very good capital position as we've been building that throughout 2023. So, first of all, start there.

Richard McKenney: Second, you know, last year, a priority was putting more money behind long-term care and funding that level of funding up the PDR. And so that was accomplished, and I think that leaves us in a good spot, as we've talked about, with no more money going towards long-term care. And so, when we think about the deployment opportunities we have in 2024, I'd start out first by putting it right back into our core businesses, investing in the digital capabilities we talked about. From an organic perspective, that's contemplated in our earnings as we talk about that, as we fund internal initiatives. And we'd like to look at M&A to help accelerate that growth rate, capabilities, things that surround our business, whether it's distribution, product, internal capabilities. We'll continue to look at.

Speaker Change: There are a priority was putting more money behind long term care and funding that level of funding of the PDR and so that was accomplished and I think that leaves us in a good spot as we've talked about no more money going towards long term care and so then when you think about the deployment opportunities. We have in 2024 I'd start out first with.

Speaker Change: Putting it back in our core businesses investing in the digital capabilities, we've talked about from an organic perspective, that's contemplated in our earnings as we've talked about that as we fund the internal initiatives and we'd like to look at M&A to help how do we continue to accelerate that growth rate capabilities things that surround our business, whether it's distribution.

Steven A. Zabel: So related to incidence, I just kind of take people back a little bit on long-term care and where we've been. At the beginning of 2023, we saw very elevated incidence through the first six months. We saw that start to abate a little bit in the third quarter, albeit at still elevated levels. Going into the fourth quarter, I would say those incidence levels were pretty consistent with what we saw in the third quarter. But what we also saw during the pandemic were fairly low levels of incidence.

Speaker Change: <unk> product internal capabilities, we will continue to look at and when you do all of those different things. We then look at our.

Richard McKenney: And when you do all of those different things, we then look at how we'll deploy it back to our shareholders. Steve mentioned a dividend expectation that even ticked up a little bit, a 10 to 15% range this year, and share repurchase, which is double where it was a year ago at 500 million. Keep doing all of that; we still have building capital levels, and we'll have to contemplate that over time, what we want to do with that. These are different trend lines that we're on from a generational as well as from a deployment perspective.

Speaker Change: We will deploy it back to our shareholders, Steve mentioned, a dividend expectation, even ticked up a little bit to that 10% to 15% range. This year and share repurchase which is double where it was a year ago at $500 million.

Speaker Change: Doing all of that we still have building capital levels, and we will have to contemplate that over time, what we want to do with that.

Speaker Change: These are different trend lines that we're on from a generation as well as from a deployment perspective, and so we'll be thoughtful in 2024 about how we do that I think Steve articulated on one of his slides and mentioned, we're going to be dynamic with share repurchase. So it's not something we're putting out there today, but clearly as you said we're in a much more.

Richard McKenney: And so we'll be thoughtful in 2024 about how we do that. I think Steve articulated that on one of his slides and mentioned, you know, we're going to be dynamic with share repurchase. So it's not something we're putting out there today.

Alexander Scott: But clearly, as you said, we're at a much, much higher level of capital that we've seen over time, and we have lots of potential uses for it, but nothing particular that we have today.

Speaker Change: Higher level of capital that we've seen over time, and we have lots of lots of potential uses for nothing particular that we have today it will build but wed love to use some of that capital to deploy to grow our business faster.

Steven A. Zabel: It will build, but we'd love to use some of that capital to grow our business faster, and then if we don't see that opportunity, turn it back to our shareholders. Got it. Very helpful.

Steven A. Zabel: And we've seen the level of those come back in, which might indicate claims that originally had been pulled back but have now been submitted. And so, obviously, we have to continue to monitor this. We do believe that the level of incidence for a while in 2024 will probably continue at an elevated level, but we would look to monitor that then as we get into the back half of the year. And I would say within our outlook, we still do have a level of elevated incidence built into that outlook. Okay, thank you. Thanks, y'all.

Speaker Change: And then if we don't see that opportunity to turn it back to our shareholders.

Speaker Change: Got it very helpful. And then I wanted to go back to some of the comments you are making on being fully funded on the LTC I guess when I look at the one side Thats got the board on reserves, peaking in 10 years.

Alexander Scott: And then I wanted to go back to some of the comments you're making on being fully funded on LTC. I guess when I look at the one side that's got the bullet on reserves peaking in 10 years, and I know you talked in the past about the natural sort of higher required capital as that reserve level builds. If we think through where interest rates are right now and sort of the billion and change of PDR balance coming down, is that enough to be fully funded just for some finite period of time?

Speaker Change: You talked in the past with the natural sort of.

Speaker Change: Higher required capital is that reserve level builds if we think through where interest rates are right now and sort of the $1 billion and change.

Speaker Change: <unk> PDR balance coming down.

Speaker Change: Is that enough to be fully funded.

Speaker Change: Like some finite period of time or when you are looking at that reserve build and then getting over the peak of it is it really that your base case is that youre actually projecting at this point that you'll never have to fund it ever again.

Steven A. Zabel: Or when you were looking at that reserve build and then getting over the peak of it, is it really your base case that you're actually projecting at this point that you'll never have to fund it ever again? I mean, I just want to understand what you mean by being fully funded and if that's changed at all. Yeah, this is Steve.

Alex Scott: The first question I had was just on the excess capital position. You know, at the holdco, it got a lot stronger with a big dividend in 4Q, and you're projecting it to get better in 2024. So, I just thought maybe you could give us, you know, at a high level, what are the priorities there? You've outlined share repurchases, and we know where comp dividends are. It looks like around half a billion after that, the sort of naughtier mark.

Speaker Change: Want to understand what you mean by being fully funded and if that's changed at all.

Yes. This is Steve so I would separate when we say fully funded in those statements.

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

Steven A. Zabel: Specific to in 2023, we fully recognize the PDR and we downstream capital. Okay. If I look forward, though and we look at current interest rates and we look at our current best estimate assumptions.

Steven A. Zabel: We do believe that that will be kind of self contained funding for all of the required capital that would be needed for the build of those reserves over the next 10 years and then once you get beyond that those reserves will start to release, which we'll start to release some of the required capital behind that as well so right now with our car.

Richard McKenney: So, you know, what are the priorities for using that? Sure, thanks, Alex. Just to take you back, everyone. We mentioned a couple of times, but the capital generation this year was very, very strong. We see it continuing as we go forward. And we ended the year in a very good capital position as we've been building that throughout 2023. So, first of all, start there.

Steven A. Zabel: Projections, we do take a longer term view that we're not going to need to contribute capital to fund long term care.

Alexander Scott: Thanks. Your next question comes from a line of Suneet Kamath from Jefferies. Your line is open. Thanks, good morning.

Speaker Change: Got it thanks.

Speaker Change: Your next question comes from the line of Sidney <unk> from Jefferies. Your line is open.

Sidney: Thanks, Good morning, starting with long term care. Rick you had mentioned this I think in your opening comments about pursuing risk transfer obviously the environment is dynamic we saw transaction late last year. Other companies have talked about bid ask coming in so can you just give us a sense, maybe where you are in that process what the conversations are like.

Suneet Laxman L. Kamath: Starting with long term care, Rick, you mentioned this, I think, in your opening comments about, you know, pursuing risk transfer, obviously, the environment, the dynamic, we saw a transaction late last year, other companies have talked about bid-ask coming in. So can you just give us a sense maybe where you are in that process? What the conversations are like?

Richard McKenney: Has there been a change, given some of the actions that you took last year, as well as the rate environment? Sure. Thanks, Suneet.

Has there been a change given some of the actions that you took last year as well as the rate environment.

Richard McKenney: From an organic perspective, that's contemplated in our earnings as we talk about that, as we fund internal initiatives. And we'd like to look at M&A to help accelerate that growth rate, capabilities, things that surround our business, whether it's distribution, product, internal capabilities. We'll continue to look at. And when you do all of those different things, we then look at how we'll deploy it back to our shareholders. Steve mentioned a dividend expectation that even ticked up a little bit, a 10 to 15% range this year, and share repurchase, which is double where it was a year ago at 500 million. Keep doing all of that; we still have building capital levels, and we'll have to contemplate that over time, what we want to do with that. These are different trend lines that we're on from a generational as well as from a deployment perspective.

Richard McKenney: Sure. Thanks, So just a couple of comments one you mentioned the transaction that happened last year. It was good to see it as a positive development I think after many years, we've been talking about it but you haven't seen anything in the market I just articulated a positive development.

Richard McKenney: Just a couple of comments. One, you mentioned the transaction that happened last year. It was good to see.

Richard McKenney: It was a positive development, I think, after many years where we've been talking about it, but you hadn't seen anything in the market. So I'd just articulate a positive development. If you look at the transaction that was done, it's very consistent with how we've been talking about it in terms of, you know, parsing out certain risks within our block, taking on different things, finding the right counterparty. All those are things that we've been talking about what a transaction might look like. You know, for us, our message is very consistent around that.

Richard McKenney: You look at the transaction that was done is very consistent with how we've been talking about it in terms of parsing out certain risks within our block taking on different things finding the right counterparty all of those are things that we've been talking about what a transaction might look like.

Richard McKenney: Our message is very consistent around that so we have the ability to work with counterparties to do that to parse out different things the bid ask spread that we look at.

Richard McKenney: So we have the ability to work with counterparties to do that, to parse out different things. The bid-ask spread that we look at, you know, when that closes, we'll be looking at a transaction. We're not there in terms of what we've seen out there, but we're going to stay very active in the markets. And I think that, you know, we'll look forward to more buyers meeting sellers, but I don't think there's a change in our tone overall from a market perspective, but we're very happy to see that positive development happen in the market. So hopefully, that answers your question. You know, I think our messaging will be very consistent. The only thing that's different is something has happened in the market, and that's a good thing. I got it.

Richard McKenney: That closes we'll we'll be looking at a transaction we're not there in terms of what we've seen out there, but we're going to stay very active in the markets.

Richard McKenney: And I think that we will look forward to more buyers meeting sellers, but I don't think theres a change in our tone.

Richard McKenney: Overall from a market perspective, but we're very happy to see that positive development happens in the market. So hopefully that answered it I think our messaging will be very consistent the only thing. That's different is something has happened in the market and that's that's a good thing.

Richard McKenney: But clearly, as you said, we're at a much, much higher level of capital that we've seen over time, and we have lots of potential uses for it, but nothing particular that we have today.

Suneet Laxman L. Kamath: That makes sense. And then, I guess, as we think about your capital plans for 2024, and in particular, that slide that looked at where you expect to be at year end 24, I think all measures are higher than where you ended 2023. And so I guess the question is, is there a thought there around maybe holding back on some of the capital deployment in anticipation of some sort of transaction with respect to LTC? Is that part of the capital philosophy? And it's really not.

Speaker Change: Got it that makes sense and then I guess as we think about your capital plans for 2024 and in particular that slide that looked at where you expect to be at year end 'twenty. Four I think all measures are higher than where you ended 2023, and so I guess.

Alex Scott: It will build, but we'd love to use some of that capital to deploy to grow our business faster, and then if we don't see that opportunity, turn it back to our shareholders.

Speaker Change: Question is is there a thought there around maybe holding back on some of the capital deployment in anticipation of some sort of transaction with respect to LTC is that part of the capital philosophy at the company.

Steven A. Zabel: Very helpful. And then I wanted to go back to some of the comments you made on being fully funded on LTC. I guess when I look at the one side that's got the bullet on reserves peaking in 10 years, and I know you talked in the past about the natural sort of higher required capital as that reserve level builds. If we think through where interest rates are right now and sort of the billion and change of PDR balance coming down, is that enough to be fully funded just for some finite period of time?

Speaker Change: It's really not when we think of a potential transaction out there. We think we before this year, we had plenty of capital to do it Steve had on slides as we have a lot of debt capacity as well. So so I really would take that out of it we're not earmarking any of those excess funds. We're talking about for any particular use we'd love to see it in terms of the good M&A.

Richard McKenney: When we think of a potential transaction out there, we think before this year, we had plenty of capital to do it. Steve said on his slide that we have a lot of debt capacity as well. So I really would take that out of it. We're not earmarking any of those excess funds we're talking about for any particular use.

Suneet Laxman L. Kamath: We'd love to see it in terms of a good M&A transaction. If something could happen in LTC, that would be good as well, but we're not holding back any funds waiting for a transaction to happen. We've got the flexibility, the capacity to do something even as we stand today or as we project out over the course of the year. Okay, thanks. The next question comes from the line of Jimmy Bhullar from J.P. Morgan. Your line is open. Hey, good morning.

<unk>, if something could happen in LTC that will be good as well, but we're not holding back any funds waiting for a transaction to happen, we've got the flexibility and the capacity to do something even as we stood at ball, even as we stand today or as we project out over the course of the year.

Steven A. Zabel: Or when you were looking at that reserve build and then getting over the peak of it, is it really your base case that you're actually projecting at this point that you'll never have to fund it ever again? I just want to understand what you mean by being fully funded and if that's changed at all. Yeah, this is Steve.

Speaker Change: Got it okay. Thanks.

Speaker Change: Your next question comes from the line of Jimmy <unk> from Jpmorgan. Your line is open.

Jimmy: Hey, good morning. So first question on competition in the disability market. If you look at margin for you guys for most of your peers. They have been very strong. So I'm just wondering why you haven't seen competition pick up or.

Jamminder Singh Bhullar: So first set of questions on competition in the disability market. If you look at the margin for you guys, for most of your peers, they've been very strong. So just wondering why you haven't seen competition pick up or because I would normally normally think that with margin being as strong as they are, you would have seen prices come down a lot on one on renewals and it doesn't seem like they've moved down as much as, Chris, yeah, thanks for the question, Jimmy. You know, competition is always out there. That's for sure.

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

Jimmy: Because I would've normally normally thought that with margins being as strong as they are you would've seen prices come down a lot on 100 renewals and it doesn't seem like they've moved down as much.

Chris Pine: Chris Yes.

Chris Pine: Thanks for the question Jimmy.

Chris Pine: Competition is always out there that's for sure, but I would take you back to.

Christopher Wallace Pyne: But I would take you back to some of the things that we do, both from a capabilities perspective and from a claims management perspective. So, again, our customers are buying a broader experience from us. I'll give you an example from my Unum experience, smaller customers who are looking for a completely integrated set of products that work really well from an administration standpoint and enrollment standpoint.

Chris Pine: Some of the things that we do both from a capabilities perspective and from a claims management perspective.

Chris Pine: So again, our customers are buying a broader experience from us I will give you. An example from my Unum.

Chris Pine: Our customers who are looking for a completely integrated set of products that work really well from an administration standpoint, and an enrollment standpoint, we've got the right contracts and cover so they get really high quality insurance and of course that ultimately ends up and wonderful claim experience going up market.

Christopher Wallace Pyne: We've got the right contracts and cover, so they get really high-quality insurance. And, of course, that ultimately ends up in a wonderful claim experience. Going upmarket, HR Connect is a great example where somebody is buying our products because of deep integration with, you know, leading HCM platforms like ADP's Workforce Now, Workday, and UKG.

Suneet Kamath: Thanks. Your next question comes from a line of Suneet Kamath from Jeffreys. Your line is open. Thanks. Good morning.

Richard McKenney: Starting with long-term care, Rick, you mentioned this, I think, in your opening comments about, you know, pursuing risk transfer. Obviously, the environment is dynamic; we saw a transaction late last year, other companies have talked about bid-ask coming in. So can you just give us a sense maybe where you are in that process? What the conversations are like?

Chris Pine: HR can act as a Great example, where somebody is buying our products because of deep integration with leading HCM platforms like Adt's workforce now workday in UK G. And then again if somebody buys the total leave package from us Theyre looking for us to solve a very a significant challenge with claims administration.

Christopher Wallace Pyne: And then again, if somebody buys the total leave package from us, you know, they're looking for us to solve a very significant challenge with claims administration and compliance on lead management. And with that comes great insurance products. We've got a phenomenal claim team behind those products that do a wonderful job to make sure we pay exactly what we should pay and do it with great care and compassion. We do a great job of getting people back to work, and incidents have been favorable in the current environment, which we expect to continue. So you put that whole thing together.

Chris Pine: And compliance management.

Richard McKenney: Has there been a change, given some of the actions that you took last year, as well as the rate environment? Sure. Thanks, Suneet.

Chris Pine: The management with that comes up.

Chris Pine: Great insurance products.

Chris Pine: Got a phenomenal claim team are behind those products that do a wonderful job to make sure we pay exactly what we should pay.

Richard McKenney: Just a couple of comments. One, you mentioned the transaction that happened last year. It was good to see.

Chris Pine: Do it with great care and compassion, we do a great job getting people back to work.

And incidence has been favorable in the current environment, which we expect to continue so you put that whole thing together and we.

Christopher Wallace Pyne: And we, again, I go back to where I started the conversation around strong discipline underwriting. We've got a very logical way to kind of describe fair price in that environment, and it's generating strong returns. And again, this has been for a period of time, and we expect it to continue.

Chris Pine: We again I'd go back to where I started the conversation around strong disciplined underwriting we've got a very logical way to kind of describe fair price in that environment and it is generating strong returns and again. This has been for a period of time and we expect to continue.

Jamminder Singh Bhullar: Okay, and then just following up on you've made a few comments on M&A. And in the past, you've done a few smaller type deals. What is it that you're looking for ideally in terms of M&A? And would you be interested in sort of larger deals as well?

Speaker Change: Okay and then just following up on the you've made a few comments on M&A.

Speaker Change: And in the past you've done a few smaller type deals what is it that you are looking for ideally in terms of M&A and would you.

Speaker Change: Be interested in sort of larger deals as well or should we assume a consistent approach with what you've done in the past.

Richard McKenney: Or should we assume a consistent approach to what you've done in? I think the assumption would be a consistent approach. I think we're looking not necessarily to go far afield but to build our positions that we have. We have opportunities to do that. There are some areas we'd like to continue to build out across the franchise and across the world in that regard. But when you think about other bigger transactions that do basically what we're doing today, we're going to be very, very selective because we think we have the opportunity to grow it organically. So hopefully that gives you a sense.

Speaker Change: I think the assumption would be a consistent approach I think we're looking at not necessarily to go far afield, but to build our positions and we have we have opportunities to do that there is some some areas we'd like to continue to build out across the franchise across the world on that front, but when you think about other bigger transactions that do.

Speaker Change: Basically what we're doing today, we are going to be very very selective and we're going to because we think we have the opportunity to grow it organically. So hopefully that gives you a sense that we were really happy with the transaction, we've done and although it's been a couple of years since we since we've done one, but we're going to be out there in the markets continuing to look at what makes sense for us and most importantly, what's on strategy.

Richard McKenney: We're very happy with the transaction we've done, although it's been a couple of years since we've done one. But we're going to be out there in the markets continuing to look at what makes sense for us, and most importantly, what's on strategy. Your next question comes from a line from Tom Gallagher from Evercore ISI. Morning, just just a few on long term care. First is the elevated claim frequency versus your expectation. I'm solving for around three to 4% higher. Does that sound about right to you? Or would you adjust that figure?

Suneet Kamath: That makes sense. And then, I guess, as we think about your capital plans for 2024, and in particular, that slide that looked at where you expect to be at year end 24, I think all measures are higher than where you ended 2023. And so I guess the question is, is there a thought there around maybe holding back on some of the capital deployment in anticipation of some sort of transaction with respect to LTC? Is that part of the capital philosophy? And it's really not.

Speaker Change: Okay. Thanks.

Speaker Change: Your next question comes from the line of Tom Gallagher from Evercore ISI. Your line is open.

Thomas Gallagher: Good morning, just just a few on long term care.

Thomas Gallagher: First is the elevated claim frequency versus your expectation I'm solving for around 3% to 4% elevated does that sound about right to you or would you adjust that figure.

Steven A. Zabel: Yeah, I probably don't want to specifically attribute the impact of claims incidence to the loss ratio. I think what I should take you back to is just the net premium ratio and really think about if our actual performance is equal to the expectations built into our reserve, we should have a loss ratio of around 95%. And clearly, claims incidence has been elevated over the last several quarters. And so, you know, you've seen NPR creep up just a little bit. And historically, you've seen higher than expected loss ratios. But that's probably the best way to think about it, Tom.

Thomas Gallagher: Yeah.

Thomas Gallagher: Probably don't want to specifically attribute the impact of claims incidence to the loss ratio I think what I'd take you back to is just the net premium ratio and really thinking about if our actual performance.

Richard McKenney: We'd love to see it in terms of a good M&A transaction. If something could happen in LTC, that would be good as well, but we're not holding back any funds waiting for a transaction to happen. We've got the flexibility, the capacity to do something even as we stand today or as we project out over the course of the year. Okay, thanks. The next question comes from the line of Jimmy Bhullar from J.P. Morgan. Your line is open. Hey, good morning.

Thomas Gallagher: Is equal to the expectations built into our reserve, we should have a loss ratio of around 95% and clearly claims incidence has been elevated over the last several quarters and so you've seen that MPR creep up just a little bit and historically, you've seen higher than expected loss ratios, but.

Speaker Change: That's probably the best way to think about it Tom.

Jimmy S. Bhullar: So first set of questions on competition in the disability market. If you look at the margin for you guys, for most of your peers, they've been very strong. So just wondering why you haven't seen competition pick up or because I would normally normally think that with margin being as strong as they are, you would have seen prices come down a lot on one on renewals, and it doesn't seem like they've moved down as much as, Yeah, thanks for the question, Jimmy. You know, competition is always out there. That's for sure.

Steven A. Zabel: And in my comments, I did say, you know, we expect that elevation to continue some into 2024 and then, you know, dissipate over time. Thanks, Steve. But just directionally, I just want to make sure we're not talking about elevated incidents of double digits that, with what you're seeing on the claims front, it's, less than that. You know, even, not looking for a specific number, just want to know directionally whether we are talking about a big, big change in incidence or not.

Speaker Change: My comments I did say, we expect that elevation to continue some into 2024, and then dissipate overtime.

Thomas Gallagher: Alright, Thanks, Steve, but just Directionally I just want to make sure we're not talking about elevated ensign into double digits that with what youre seeing on the claims front. It it's less than that is that.

Thomas Gallagher: Even.

Speaker Change: Not looking for a specific number just wanted to know Directionally are we talking about a big big change in incentives or not.

Chris: But I would take you back to some of the things that we do, both from a capabilities perspective and from, you know, a claims management perspective. So, again, our customers are buying a broader experience from us. I'll give you an example from my Unum.

Steven A. Zabel: Yeah, again, going into next year, we don't anticipate it getting worse than what we've seen in the back half of the year. And the loss ratio that we reported during those periods of time was around, you know, 105, 107. So I wouldn't see it going beyond that. But you know, we just have to see how it plays out in the future. Gotcha. And the second question, just the higher level of resubmission of claims that you were highlighting. Can you talk about maybe unpacking that a little bit? What's happening exactly? Were there lower acceptance rates before? How does that process work?

Steven A. Zabel: Yes, again going into next year, we don't anticipate it getting worse than what we've seen in the back half of the year and the loss ratio that we reported during those periods of time or around $105. Seven so I wouldn't see it going beyond that but we just have to see how it plays out into the future.

Chris: Smaller customers who are looking for a completely integrated set of products that work really well from an administration standpoint and an enrollment standpoint. We've got the right contracts and cover, so they get really high-quality insurance. And of course, that ultimately ends up in, you know, a wonderful claim experience. Going upmarket, HR Connect is a great example where somebody is buying our products because of deep integration with, you know, leading HCM platforms like ADP's WorkforceNow, Workday, and UKG.

Got you and then second question just the higher level of Resubmission of claims that you were highlighting.

Speaker Change: Can you talk about maybe unpack that a little bit.

Speaker Change: What's happening exactly where theyre lower acceptance rates before.

Speaker Change: How does that process work and it sounds like Theres, a little bit of an inventory on the resubmission of claims but.

Steven A. Zabel: And that sounds like there's a little bit of an inventory on the resubmission of claims. But if you expand on that, Yeah, I mean, resubmissions can happen in a lot of ways. We start to track the claim pretty early on in the submission process. And so a lot of things can happen, people can withdraw the claim, we can close the claim before it starts to pay, it may go into pay status, but it recovers very quickly. And that happens for a variety of reasons.

Chris: And then again, if somebody buys the Total Leave package from us, you know, they're looking for us to solve a very significant challenge with claims administration and compliance on lead management. And with that comes great insurance products. We've got a phenomenal claim team behind those products that do a wonderful job to make sure we pay exactly what we should pay and do it with great care and compassion. We do a great job of getting people back to work, and incidence has been favorable in the current environment, which we expect to continue. So you put that whole thing together, and again, I go back to where I started the conversation around strong discipline underwriting. We've got a very logical way to kind of describe fair price in that environment, and it's generating strong returns. And again, this has been for a period of time, and we expect it to continue.

Speaker Change: If you if.

Speaker Change: You can expand on that.

Speaker Change: Yes, I mean, resubmission is going to happen in a lot of ways. We start to track the claim pretty early on in the submission process and so a lot of things can happen and people can withdraw the claim we can close the claim before it starts to pay it may go to pay status, but it recovers very quickly and that happens for a variety of reasons some of it.

Steven A. Zabel: So some of it around us accepting the claim and approving the claim; some of it may be policyholder-driven, that they changed their mind about the claim submission and come off the claim. What I would just say, though, is we have seen a higher level of that than we've historically seen, and it's something that we track, but it does create a little bit of pressure on our expected incidence counts over time. Gotcha. And then just one final one on risk transfer. I guess one prominent feature of the MFC deal was their willingness to package some other risks, along with LTC. And, you know, this, again, this is just my opinion, but I believe that Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change: Around accepting the claim and approving the claim some of it may be policyholder, driven that they've changed their mind around the claim submission and come off a claim.

Speaker Change: What I would just say, though is we have seen a higher level of that than we've historically seen and something that we track, but it does it does create a little bit of pressure in kind of our expected incidents counts overtime.

Speaker Change: Got you and then just one final one on risk transfer.

Speaker Change: I guess, one prominent feature of the MFC deal was their willingness to package. Some other risks along with LTC.

Jimmy S. Bhullar: Okay, and then just following up on you've made a few comments on M&A. And in the past, you've done a few smaller type deals. What is it that you're looking for ideally in terms of M&A? And would you be interested in sort of larger deals as well?

Speaker Change: And again this is just my opinion, but I believe that.

Speaker Change: Expanded the number of reinsurers willing to get involved.

Speaker Change: Would you guys I think the way you've talked about it in the past was LPC only deal not really packaging other risks but.

Steven A. Zabel: Yeah, Tom, the way I'd answer that is we've talked about how buyers can meet sellers in the process. And as we look at it, you know, we've talked to counterparties. And we've talked about it within the LTC block of how we would parse risk, think about asset management aspects of that, think about liabilities, but certainly, we would be open to other things that buyers would be looking for around the franchise. So I wouldn't take that off the table.

If it allows you to get something done do you have the ability and would you consider packaging other risks along with LTC.

Speaker Change: Yes, John the way I would answer that is we've talked about how buyers can meet sellers in the process and as we look at it we've talked to Counterparties and we've talked about it within the LTC block of how we would parse risks think about asset management aspects of that think about liabilities, but certainly we would be open to other things that buyers would be.

Speaker Change: Looking for around the franchise, so I don't I wouldnt take that off the table and we would have that opportunity.

Steven A. Zabel: And we would have that opportunity. Great. Thanks, Rick. Your next question comes from a line from Ryan Krueger from KBW. Your line is open. Hey, thanks. Good morning.

John: Great. Thanks, Rick.

John: Your next question comes from the line of Ryan Krueger from <unk>. Your line is open.

Ryan Krueger: Hey, Thanks, Good morning, first just a quick follow up.

Ryan Joel Krueger: First, just a quick follow-up. Is your expectation still that in 2024, you will earn within the 130 to 160 million range in the closed box, maybe towards the lower end? Or can you give any more color on kind of what you assumed for the earnings given the higher incidence that you expect near term? Yeah, it's in that range.

Ryan Krueger: Is your expectation.

Ryan Krueger: In 2024, you will earn within the $1 $30 million to $160 million range in the closed block maybe towards the lower end or can you give any more color on kind of what you assumed for the earnings given the higher incidence.

Ryan Krueger: Do you expect near term.

Ryan Krueger: Yes, it's in that range and then by two variables would be would be claims incidents and really the alternative asset portfolio.

Steven A. Zabel: And the two variables would be claims incidents and really the alternative asset portfolio. You know, we've assumed that we get back to kind of longer-term yields on that portfolio. And as you know, that tends to be volatile quarters for the, Got it. And if I could ask, I guess one more on risk transfer, and you do have the first Unum New York entity, which has, I think, a lot of older age, long-term care in it and pretty conservative reserves due to the requirements in New York. Is selling the entire legal entity another option beyond, you know, separate from reinsurance? Are there other liabilities in that entity that would prevent that from happening?

Ryan Krueger: We've assumed that we get back to kind of longer term yields on that portfolio and as you know that tends to be volatile quarter to quarter.

Speaker Change: Got it.

Speaker Change: And then if I could ask one more on risk transfer.

Speaker Change: You do have the FERC PJM, New York entity.

Speaker Change: We tend to think a lot of older age long term care.

Speaker Change: And pretty conservative reserves due to the requirement in New York is.

Speaker Change: Is selling the entire legal entity another option beyond separate from reinsurance or are there other liabilities in that entity that would prevent that from occurring.

Steven A. Zabel: And in my comments, I did say, you know, we expect that elevation to continue some into 2024 and then, you know, dissipate over time. Thanks, Steve. But just directionally, I just want to make sure we're not talking about elevated incidents of double digits like what you're seeing on the claims front. Less than that, is that... you know, even, not looking for a specific number, just want to know directionally whether we are talking about a big, big change in incidence or not.

Ryan Joel Krueger: Yeah, I appreciate the question, Ryan. I'm not sure I'd want to get into too many details. I think I'd go back to my earlier comments, which is that we look at the entirety of our long-term care exposure and think about, you know, how we can parse those different risks in different ways. I wouldn't want to get into legal entity or, or even duration-specific things until we get closer to getting something done. Okay, and then if I could maybe sneak one last one, you talked broadly about the good environment for renewals, but could you give us any more color on just the pricing dynamic in Unum US? You know, where prices, like when you look at prices as a whole, were they relatively flat? Or did you bring them down some for disability?

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

Speaker Change: Something done.

Speaker Change: Okay, and then if I could maybe sneak one last one you talked broadly about.

Speaker Change: Good environment for renewals, but could you give us any more color on just the pricing dynamic in Unum U S.

Prices when you look at prices as a whole.

Speaker Change: Were they relatively flat could you bring them down some for disability that can give us any more sense of what happened there.

Ryan Joel Krueger: Or can you give us any more sense of what happened there? Yeah, thanks, Ryan. It's Chris. You know, we're constantly looking at different ways to kind of make sure we can grow in the most logical and profitable way possible. So, you know, it's really just our active underwriting and pricing approach. We're very thoughtful. We have tremendous data. We use it all the time to be as sharp as we possibly can.

Steven A. Zabel: Gotcha. And the second question, just the higher level of resubmission of claims that you were highlighting. Can you maybe unpack that a little bit? What's happening exactly? Were there lower acceptance rates before? How does that process work?

Speaker Change: Yes.

Speaker Change: Yes, Thanks, Ryan it's Chris.

Chris Pine: We're constantly looking at different ways to kind of make sure we can grow the most.

The logical and profitable way possible so.

Steven A. Zabel: And this sounds like there's a little bit of an inventory on the resubmission of claims, but if you could expand on that, yeah, resubmissions can happen in a lot of ways. We start to track the claim pretty early on in the submission process, and so a lot of things can happen. For example, people can withdraw the claim. We can close the claim before it starts to pay. It may go into payment status, but it recovers very quickly, and that happens for a variety of reasons.

It's really consider it just our active underwriting and pricing approach, we're very thoughtful we have a tremendous data.

Chris Pine: Use it all the time to be as sharp as we possibly can we recognize trends early and that goes into.

Christopher Wallace Pyne: We recognize trends early. And that goes into, you know, what I would consider business as usual in terms of, you know, thinking about price at the case level, thinking about price, you know, in different segments where we see opportunity. So it is a competitive world.

Chris Pine: What I would consider business as usual in terms of thinking about price.

Chris Pine: At the case level thinking about price in different segments, where we see opportunity. So.

Steven A. Zabel: Some of it is around us accepting the claim and approving the claim. Some of it may be policyholder-driven, that they changed their mind about the claim submission and come off the claim. What I would just say, though, is we have seen a higher level of that than we've historically seen, and it's something that we track, but it does create a little bit of pressure on our expected incidence counts over time. Gotcha. And then just one final one on risk transfer. I guess one prominent feature of the MFC deal was their willingness to package some other risks, along with LTC.

It is a competitive world we have growth expectations that we're really excited about where certainly we can deliver and we will continue to kind of think that active.

Wilma Carter Jackson Burdis: We have growth expectations that we're really excited about. We're certain we can deliver, and we'll continue to kind of take that active approach to the process. Great, thank you. Your next question comes from the line of Wilma Burdis from Raymond James. Your line is open. Morning, Wilma. Wilma, your line is open. Hey, hey, good morning.

Chris Pine: Roche of process.

Speaker Change: Great. Thank you.

Speaker Change: Your next question comes from the line of Loma Burgess from Raymond James Your line is open.

Okay.

Loma Burgess: Good morning.

Thomas Gallagher: And, you know, this is again just my opinion, but I believe that, expanding the number of reinsurers willing to get involved, is that would you guys, I think the way you've talked about it in the past was an LTC only deal, not really packaging other risks, but if it allowed you to get something done, do you have the ability and would you consider packaging other risks along with LTC? Yeah, Tom, the way I'd answer that is we've talked about how buyers can meet sellers in the process. And as we look at it, you know, we've talked to counterparties, and we've talked about it within the LTC block of how we would parse risk, think about asset management aspects of that, think about liabilities, but certainly, we would be open to other things that buyers would be looking for around the franchise. So I don't I wouldn't take that off the table.

Loma Burgess: Well, Mike Your line is open.

Loma Burgess: Hey, Good morning, you guys touched on it that I would like to confirm that one four to $1 $6 billion in annual capital generation is a good run rate beyond 'twenty four.

Steven A. Zabel: You guys touched on it, but I would like to confirm if 1.4 to 1.6 billion of annual capital generation is a good run rate beyond 24, is there some risk to that level if disability results normalize? Yeah, Steve, I can take that. I think that's a good planning assumption. You know, obviously, over time, we'd like the franchise to continue to grow at some rate, and that would be reflected. But I think I think that's a good run rate, and that would be good for 2024.

Loma Burgess: Is there some risk to that level of disability results normalized.

Mike: Yes, Steve I can take that I think that's a good planning assumption, obviously overtime wed like the franchise to continue to grow at some some great that.

Speaker Change: That would be reflected but I think I think that's a good run rate and that would anticipate for 2024.

Steven A. Zabel: The group disability loss ratio sustained in the low 60s, our planning assumptions for capital generation and for our gap, earnings expectations would be consistent. Thank you. And then you have provided a new data point that LTC reserves are peaking in 10 years, which is sooner than I expected, especially on the group side.

Speaker Change: The group disability loss ratio and to stay in the low Sixty's, our planning assumptions for capital generation and for our GAAP earnings expectations would be consistent.

Speaker Change: Okay. Thank you and then you have provided a new data point that LTC reserves are peaking in 10 years.

Richard McKenney: And we would have that opportunity. Great. Thanks, Rick. Your next question comes from a line from Ryan Krueger from KBW. Your line is open. Hey, thanks. Good morning.

Speaker Change: Sooner than I expected, especially on the group side.

Steven A. Zabel: And it's a very good data point because it implies that we're a lot closer to knowing how reserves will develop than I initially anticipated. Could you talk about is this an average across blocks? And if so, is there a different peak reserving timeline for the individual versus group block?

Ryan Krueger: First, just a quick follow-up. Is your expectation still that in 2024, you will earn within the 130 to 160 million range in the closed box, maybe towards the lower end? Or can you give any more color on kind of what you assumed for the earnings given the higher incidence that you expect near term? Yeah, it's in that range.

Speaker Change: It's a very good data point, because it implies that we're a lot closer to knowing how reserves will develop.

Speaker Change: Initially anticipated.

Speaker Change: Could you talk about is this an average across the block.

Speaker Change: And if so is there a different.

Speaker Change: At peak or is there any timeline for the individual versus group blocks.

Steven A. Zabel: Yeah, so it would be an aggregate view of the total reserve. And just due to the age of the blocks, you would logically think that the individual will peak sooner than the group. I would say though, the magnitude of the reserves that we carry on those two is a bit different just because of the relative size of or the relative richness of benefits for our group business versus our individual business. So, you know, there's a lot of weighted averaging going on, but in aggregate, that's when it's going to peak. Thank you. Thanks, Wilma.

Speaker Change: Yes, so it would be an aggregate view of the total reserve just due to the age of the boxes you would logically think.

Steven A. Zabel: And the two variables would be claims incidents and really the alternative asset portfolio. You know, we've assumed that we get back to kind of longer-term yields on that portfolio. And as you know, that tends to be volatile quarters for the, Got it. And if I could ask, I guess, one more question on risk transfer. You do have the first unit, New York Entity, which has, I think, a lot of older age and long-term care in it and pretty conservative reserves due to the requirements in New York. Is selling the entire legal entity another option beyond separate from reinsurance?

Speaker Change: <unk> that the individual will peak sooner.

Speaker Change: In the group.

Speaker Change: I would say, though the magnitude of the reserves that we carry on those two are a bit different just because of the relative size of or the relative rich and some benefits for our group business versus our individual business. So there's a lot of weighted averaging going on but in aggregate that's when it's going to be.

Ryan Krueger: Are there other liabilities in that entity that would prevent that from occurring? Yeah, I appreciate the question, Ryan. I'm not sure I want to get into too many details. I think I'd go back to my earlier comments, which is that we look at the entirety of our long-term care exposure and think about, you know, how we can parse those different risks in different ways. I wouldn't want to get into legal entity or, or even duration-specific things until we get closer to getting something done. Okay, and then, if I could maybe just sneak one last one, you talked broadly about the good environment for renewals, but could you give us any more color on just the pricing dynamics in Unum US? You know, where prices, like when you look at prices as a whole, were they relatively flat? Or did you bring them down some for disability?

Speaker Change: Thank you.

Speaker Change: Thanks, Ron.

Joshua David Shanker: Your next question comes from Josh Shanker from Bank of America. Your line is open. Yeah, hi there. Sorry, one last transaction question. Apologies.

Speaker Change: Our next question comes from the line of Josh Shanker from Bank of America. Your line is open.

Josh Shanker: Yes, hi, there sorry, one last transaction question apologies.

Richard McKenney: But you know, you mentioned that it's been a number of years, and things lined up properly. The interest rate situation is changing. Do you think there were unique circumstances on the ground that allowed a transaction to come together? Or are you currently seeing an appetite that people are discussing wanting to do transactions, just the matter of finding the right one? Yeah, so I wouldn't want to speculate.

Josh Shanker: You mentioned that it's been a number of years and things lined up properly.

Josh Shanker: The interest rates distributions changing or do you think there were unique circumstances on the ground.

Josh Shanker: That allowed a transaction to come together or are you currently seeing.

Josh Shanker: Appetite that people are discussing wanting to do transactions in a matter of finding the right one for you.

Speaker Change: Yeah, So I wouldn't want to speculate I don't know what was going on particularly on the ground with that transaction I can look at this as you can from afar and say.

Richard McKenney: I don't know what was going on, particularly on the ground with that transaction. But I can look at it just as you can from afar and say that it's a positive development for the industry and for people that are looking to do something on that front. And I would just say we have had very consistent dialogue, very consistent outreach expectations, and parsing. So I don't think our world has necessarily changed as a result of that.

Speaker Change: It's a positive development for the for the industry and for people that are looking to do something on that front.

Speaker Change: And I would just say we have had very consistent dialogue very consistent.

Ryan Krueger: Or can you give us any more sense of what happened there? Yeah, thanks, Ryan. It's Chris.

Speaker Change: Outreach expectations parsing, so I don't think our world doesn't necessarily change as a result of that but.

Chris: You know, we're constantly looking at different ways to kind of make sure we can grow in the most logical and profitable way possible. So, you know, it's really just our active underwriting and pricing approach. We're very thoughtful. We have tremendous data. We use it all the time to be as sharp as we possibly can.

Joshua David Shanker: But I think it's good for the world to see that these transactions can happen, and we'll continue to pursue such a transaction. Those are my other questions. Thank you very much.

Speaker Change: But I think it's good for the world to see that these transactions can happen and we will continue to pursue.

Speaker Change: Such a transaction.

Okay. My other questions were asked thank you very much.

Mark Douglas Hughes: Thanks, Josh. Your next question comes from the line of Mark Hughes from Truist. Your line is open. Yeah, thank you. Just one quick one.

Speaker Change: Thanks, Josh.

Speaker Change: Your next question comes from the line of Mark Hughes from Truest. Your line is open.

Chris: We recognize trends are early, and that goes into what I would consider business as usual in terms of thinking about price at the case level, and thinking about price in different segments where we see opportunity. So it is a competitive world. We have growth expectations that we're really excited about. We're certain we can deliver, and we'll continue to take that active approach to the process. Great, thank you. Your next question comes from the line of Wilma Burtis from Raymond James. Your line is open. Morning, Wilcox. Wilma, your line is open. Hey, good morning.

Yes. Thank you just one quick one anything nonrecurring in the recoveries recoveries have been very strong we've heard from other companies.

Steven A. Zabel: Anything unusual in the recoveries? The recoveries have been very strong. We've heard from other companies that the Social Security Administration has been kind of stingy in their payouts. I know that's only a part of your recovery, Story.

Mark Hughes: Social Security administration has been kind of stingy in their payout that's only a part of your recovery.

Steven A. Zabel: But is that something that should be sustainable? Yeah, I can I can answer that, Mark. So I would say that if you go back, really several years, we've seen a continued improvement in the performance of recoveries within our group disability block. And so what we're seeing in the more recent history is just a continuation of that.

Mark Hughes: Story.

Mark Hughes: But.

Mark Hughes: Is that something that should be sustainable.

Speaker Change: Yeah, I can I can answer that mark So I would say that if you go back really.

Speaker Change: Several years, we've seen a continued improvement in the performance of recoveries within our group disability block and so what we're seeing in the more recent.

Speaker Change: History is just a continuation of that and so I would not view the performance in the fourth quarter as being in any way unique or non sustainable and thats why we feel pretty comfortable giving guidance going into next year that we'll be able to maintain those levels of benefit ratios that not only to the market dynamics there.

Steven A. Zabel: And so I would not view the performance in the fourth quarter as being in any way unique or non-sustainable. And that's why we feel pretty comfortable giving guidance going into next year, that we'll be able to maintain those levels of benefit ratios, not only due to the market dynamics that Chris spoke to around pricing, but also just around our operational excellence and being able to maintain that level of performance. And I'll maybe throw in another one.

Wilma Burtis: You guys touched on it, but I would like to confirm that $1.4 to $1.6 billion of annual capital generation is a good run rate beyond 24. Is there some risk to that level if disability results normalize? Yeah, Steve, I can take that. I think that's a good planning assumption. You know, obviously, over time, we'd like the franchise to continue to grow at some rate, that would be reflected. But I think I think that's a good run rate.

Speaker Change: Chris spoke to around pricing, but also just around our operational excellence and being able to maintain that level of performance.

Speaker Change: Maybe throw in one more of the colonial sales were pretty strong this quarter up 12% you talked about high single digits.

Steven A. Zabel: The colonial sales are pretty strong this quarter, up 12%. We talked about high single digits. Was there an unusual boost or easy comp this quarter? Yeah, thank you for the question. This is Tim. I would say the comms were not that easy, although they weren't extremely challenging either.

Steven A. Zabel: And that would anticipate for 2024, the group disability loss ratio staying in the low 60s, our planning assumptions for capital generation and for our gap, earnings expectations would be consistent. Thank you. And then you have provided a new data point that LTC reserves are peaking in 10 years, which is sooner than I expected, especially on the group side.

Speaker Change: An unusual boost or easy comp this quarter.

Speaker Change: Yes. Thank you for the question. This is Tim I would say that comps are not that easy, although they werent extremely challenging either but we feel good about where we landed this quarter and frankly the year and we think the market is growing in the.

Timothy Gerald Arnold: But, you know, we feel good about where we landed in the quarter and, frankly, the year. We think the market is growing in the four to 6% range, and we came out at the top end of that range. We really like our strategy. We think we have the tools and technology to help our agents, brokers, and clients achieve their goals. We grew our sales leadership team by 8% last year. And you know, on the third quarter call, I mentioned that we are strengthening our offering in the large case commercial market. And while we still have a little bit of work to do there, we're really pleased that we saw a fourth quarter growth rate in the 500 plus life market of 36%.

Timothy G. Arnold: 46% range and we came out at the top end.

Timothy G. Arnold: Of that range, we really like our strategy. We think we have the tools and technology to help our agents brokers and clients achieve their goals. We grew our sales leadership team by 8% last year and on the on the third quarter call I mentioned that.

Wilma Burtis: And it's a very good data point because it implies that we're a lot closer to knowing how reserves will develop than I initially anticipated. Could you talk about is this an average across blocks? And if so, is there a different peak reserving timeline for the individual versus group block?

Timothy G. Arnold: We are strengthening our offering in the large case commercial market and while we still have a little bit of work to do there. We're really pleased that we saw fourth quarter growth rate in the 500 plus life market of 36%.

Timothy Gerald Arnold: So we're really just focused on consistency of execution and broad-based adoption of those differentiating tools and technology that we have in our portfolio. As we look forward, you know, a couple of the leading indicators we watch are new recruits and sales productivity from those new agents. In total, recruiting was up 23%, and new agent sales were up 18%.

Timothy G. Arnold: So we're really just focused on consistency of execution and broad based adoption of those differentiating tools and technology that we have in our portfolio as we look forward a couple of the leading indicators, we watch her new recruits and sales productivity from those new agents in the 2023 and total recruiting was up 20.

Timothy G. Arnold: 3% new agent sales were up.

Timothy Gerald Arnold: And since all of you have been sneaking in, one last question, I'll answer a question you didn't ask. But we saw really strong growth on the Unum VB side of 10.2% last year. We're excited about the opportunities we have to cross sell into the group block and to take advantage of those technology solutions that Chris mentioned earlier and grow that book as well. Thanks. Your next question comes from a line from Mike Ward from Citi. Your line is open.

Speaker Change: 18% and since all of you have been sneaking in one last question I'll answer a question you didn't ask but we saw really strong growth on the <unk> side of 10, 2% last year. We're excited about the opportunities we have to cross sell into the group block and to take advantage of those technology solutions that Chris mentioned earlier and grow that book as well.

Josh Shanker: But you know, you mentioned that it's been a number of years, and things lined up properly. The interest rate situation is changing. Do you think there were unique circumstances on the ground that allowed a transaction to come together? Or are you currently seeing an appetite that people are discussing wanting to do transactions, the matter of finding the right one? Yeah, so I wouldn't want to speculate.

Speaker Change: I appreciate it thank you.

Speaker Change: Your next question comes from the line of Mike <unk> from Citi. Your line is open.

Michael Augustus Ward: Thanks guys, good morning. Just quickly, I was wondering if you had any kind of similar commentary on the benefit ratio guidance quantification type range for AD&D or, you know, supplemental and voluntary, like you gave for group disability? Yeah, this is Steve.

Mike: Thanks, guys good morning.

Mike: Just quickly I was wondering if you had any kind of similar commentary on the benefit ratio guidance quantification type range for.

Mike: For <unk> or supplemental and voluntary.

Speaker Change: You gave her group facility.

Richard McKenney: I don't know what was going on, particularly on the ground with that transaction. But I can look at it just as you can from afar and say that it's a positive development for the industry and for people that are looking to do something on that front. And I would just say we have had very consistent dialogue, very consistent outreach, expectations, and parsing. So I don't think our world has necessarily changed as a result of that.

Speaker Change: Yes. This is Steve I can cover that and maybe.

Steven A. Zabel: I can cover that. And maybe, you know, I'll go across all the businesses. We've talked about group disability quite a bit, so I might just touch on group life. Group life had a very good quarter in the fourth quarter, which we do not believe is sustainable. So I think a good planning assumption there would be more in that 73 to 75% range. And then for really all of our other lines, including the ones that you mentioned, I would just go back to the guidance that we gave last year and where those businesses have historically performed. I think that's probably a pretty good indicator of our view of how they're going to perform going forward. Okay, thanks, Steve. And then maybe for capital return for 24. It, you know, it sounds like there is some excess there. Or, you know, capital leftover. Just curious, like, let's say you don't come across any acquisition opportunities or bolt-ons. What have you?

Steven A. Zabel: So across all the businesses, we've talked about group disability quite a bit I might just touch on group life Group life had a very good quarter in the fourth quarter, which we do not believe is sustainable. So I think a good planning assumption there would be more in that 73% to 75% range and then for really all of our other lines.

Steven A. Zabel: Including the ones that you mentioned I would just go back to the guidance that we gave last year and where those businesses have historically performed I think thats, probably a pretty good indicator of our view of how theyre going to perform going forward.

Josh Shanker: But I think it's good for the world to see that these transactions can happen, and we'll continue to pursue such a transaction. Those are my other questions. Thank you very much.

Mark Hughes: Thanks, Josh. Your next question comes from the line of Mark Hughes from Truist. Your line is open. Yeah, thank you. Just one quick one.

Speaker Change: Okay. Thank Steve and then maybe for for capital return for 2004.

Speaker Change: It sounds like there is some excess there.

Speaker Change: Our capital leftover.

Speaker Change: Just curious like let's say you don't come across any.

Steven A. Zabel: I know that's only a part of your recovery story, but is that something that should be sustainable? Yeah, I can I can answer that, Mark. So I would say that if you go back, really several years, we've seen a continued improvement in the performance of recoveries within our group disability block. And so what we're seeing in the more recent history is just a continuation of that.

Speaker Change: Acquisition opportunities or bolt ons, what have you.

Michael Augustus Ward: Should we think about potential upside to that? Or should we think of that as like a realistic, like straight line guidance for the year? Yeah, I think, Mike. The way I'd look at it is kind of, as Steve said, it'll be dynamic. So we don't just set a plan and set it and forget it.

Speaker Change: Should we think about potential upside to that or should we think of that as like a realistic like straight line guidance for the year.

Speaker Change: Thanks, Mike.

Steven A. Zabel: And so I would not view the performance in the fourth quarter as being in any way unique or non-sustainable. And that's why we feel pretty comfortable giving guidance going into next year that we'll be able to maintain those levels of benefit ratios, not only because of the market dynamics that Chris spoke to around pricing but also just around our operational excellence and being able to maintain that level of performance. And I'll maybe throw in another one.

Speaker Change: I would look at is kind of out Steve So it'll be dynamic. So we don't just set a plan and set it and forget it we actually will be back at all times, So building up that excess throughout the course of the year, we're going to be making decisions constantly about what we want to do with that and as we get closer to those decisions we will certainly.

Richard McKenney: We actually will be back at all times. So, building up that excess throughout the course of the year, we're going to be making decisions constantly about what we want to do with that. And as we get closer to those decisions, we'll certainly give the market some heads up around that. Director, Your next question comes from the line of Tom Gallagher from Evercore ISI. Your line is open.

<unk> give the market some heads up around them.

Mark Hughes: The colonial sales are pretty strong this quarter, up 12%. We talked about high single digits. Was there an unusual boost or easy comp this quarter? Yeah, thank you for the question. This is Tim. I would say that comms were not that easy, although they weren't extremely challenging either.

Speaker Change: Thanks, Eric.

Speaker Change: Your next question comes from the line of Tom Gallagher from Evercore ISI. Your line is open.

Thomas George Gallagher: Hey, thanks for the follow up. Just a question on what sales were. Long-term disability sales were down 12 percent, group life, and AD&D were up 61%. Can you comment on the mix?

Hey, Thanks for the follow up just a question on sales long term disability sales were down 12 group life and <unk> were up 61%.

Timothy G. Arnold: But, you know, we feel good about where we landed in the quarter and, frankly, the year. We think the market is growing in the four to 6% range, and we came out at the top end of that range. We really like our strategy. We think we have the tools and technology to help our agents, brokers, and clients achieve their goals. We grew our sales leadership team by 8% last year. And you know, on the third quarter call, I mentioned that we are strengthening our offering in the large case commercial market. And while we still have a little bit of work to do there, we're really pleased that we saw a fourth quarter growth rate in the 500 plus life market of 36%. So we're really just focused on consistency of execution and broad-based adoption of those differentiating tools and technology that we have in our portfolio. As we look forward, a couple of the leading indicators we watch are new recruits and sales productivity from those new agents in 2023, in total. Recruiting was up 23%, and new agent sales were up 18%.

Thomas Gallagher: Can you can you comment on the mix I.

Christopher Wallace Pyne: Should we take that to mean more price competition and long-term disability and less in group life? Is that why there was a shift or something else happening there? Yeah, thanks for the question Thomas, Chris. Actually, it's a good call.

Thomas Gallagher: Should we take that to mean more price competition in long term disability and lessen group life is that is that why there was.

Thomas Gallagher: The shift there was something else happening there.

Speaker Change: Yes, thanks for the question toughest Chris.

Speaker Change: Actually it's a good call we saw some great opportunity in group life packaged with a lot of us packaged with current customers always nice to add a life insurance in that environment.

Christopher Wallace Pyne: We saw some great opportunities in group life packaged with, a lot of it was packaged with current customers. So it's always nice to add life insurance in that environment. We actually did have more strength in the disability sales line than it would appear. Full year sales were up 14% and in the quarter for pure disability, pure LTD was up high single digits, 8% or so. What you don't see on the surface is that we did have soft stop loss sales in the quarter, and that had an impact on the overall group disability sales line as we reported them together. But, you know, in general, any given quarter, it can be a little bit volatile, but we did see very good sales growth in group LTD and group STD for both the quarter and the full year. Well, you know, extra good in group life this quarter, and the mix will move around over time. And so, and I'm sorry that the stop loss is that medical stop loss, or is it disability stop loss? What type of product is that?

Speaker Change: We actually did have more strength in the disability sales line than it would appear our full year sales were up 14% and in the quarter for pure disability pure LTE up high single digit.

Speaker Change: 8% or so what you don't see at the surface is we did have soft stop loss sales in the quarter and that had an impact on the overall group disability sales line.

We report them together, but in general.

Speaker Change: Any given quarter it can be a little bit volatile, but we did see very good sales growth and group LTV and <unk> for both the quarter and the full year.

Timothy G. Arnold: And since all of you have been sneaking in, one last question, I'll answer a question you didn't ask, but we saw really strong growth on the UNMB side of 10.2% last year. We're excited about the opportunities we have to cross sell into the group block and to take advantage of those technology solutions that Chris mentioned earlier and grow that book as well. Appreciate it. Your next question comes from a line called Mike Ward from Citi. Your line is open. Thanks guys, good morning. Just quickly, I was wondering if you had any kind of similar commentary on the benefit ratio guidance quantification type range for AD&D or, you know, supplemental and voluntary, like you gave for group disability? Yeah, this is Steve.

Extra good in group life this quarter in the Mexico move around over time.

Speaker Change: And so that I'm, sorry that the stop loss.

Speaker Change: Medical stop loss or is that disability stop loss what type of product is that.

Christopher Wallace Pyne: Medical Stop Loss. Yeah, Tom, the line that we launched several years ago, just to just declare this is the line we launched several years ago opportunistically. And so you'll see that be a little bit more volatile, but I think it's a good call out within the results. LTD was actually quite strong from a sales perspective.

Speaker Change: Medical stop loss.

Speaker Change: Yes, Todd your line that we launched several years ago, just to just to clarify. This is the one we launched several years ago Opportunistically and so you'll see that be a little bit more volatile, but I think it's a good callout, but then the results LCD was actually quite strong Brazil's perspective.

Richard McKenney: Gotcha. Thanks, guys... If there are no further questions at this time, Mr. Rick McKenney, I turn the call back over to you for some final closing remarks. Okay.

Todd: Got you thanks, guys.

Speaker Change: Thanks, Tom.

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

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

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

Michael Simonds: I can cover that. And maybe, you know, I'll go across all the businesses. We've talked about group disability quite a bit, so I might just touch on group life. Group life had a very good quarter in the fourth quarter, which we do not believe is sustainable. So I think a good planning assumption there would be more in that 73% to 75% range. And then for really all of our other lines, including the ones that you mentioned, I would just go back to the guidance that we gave last year and where those businesses have historically performed. I think that's probably a pretty good indicator of our view of how they're going to perform going forward. Okay, thanks, Steve. And then maybe for capital return for 24, it, you know, it sounds like there is some excess there. Or, you know, capital leftover. Just curious, like, let's say, you don't come across any acquisition opportunities or bolt-ons. What have you?

Speaker Change: And the call Rob Thank you.

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

Speaker Change: Okay.

Speaker Change:

Speaker Change: Yeah.

Speaker Change: Okay.

Steven A. Zabel: Should we think about potential upside to that? Or should we think of that as like a realistic, like straight line guidance for the year? Yeah, I think, Mike. The way I'd look at it is kind of, as Steve said, it'll be dynamic. So we don't just set a plan and set it and forget it.

Michael Simonds: We actually will be back at all times. So, building up that excess throughout the course of the year, we're going to be making decisions constantly about what we want to do with that. And as we get closer to those decisions, we'll certainly give the market some heads up around that. Thank you. Your next question comes from the line of Tom Gallagher from Evercore ISI. Your line is open.

Steven A. Zabel: Hey, thanks for the follow up. Just a question on sales; long term disability sales were down 12 percent group life, and AD&D were up 61%. Can you comment on the mix?

Thomas Gallagher: Should we take that to mean more price competition and long-term disability and less in group life? Is that why there was a shift or something else happening there? Yeah, thanks for the question Thomas, Chris. Actually, it's a good call.

Chris: We saw some great opportunities in group life packaged with, a lot of it was packaged with current customers, so it's always nice to add life insurance in that environment. We actually did have more strength in the disability sales line than it would appear. Full year sales were up 14% and in the quarter for pure disability, pure LTD, were up high single digits, 8% or so.

Chris: What you don't see on the surface is that we did have soft stop-loss sales in the quarter, and that had an impact on the overall group disability sales line as we report them together. But in general, any given quarter, it can be a little bit volatile, but we did see very good sales growth in group LTD and group STD for both the quarter and the full year. Well, extra good in group life this quarter and the next, and we'll move around over time. And so that, I'm sorry, that stop loss, is that medical stop loss, or is that disability stop loss? What type of product is that?

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

Thomas Gallagher: Gotcha. Thanks, guys. Thank you, Tom. If there are no further questions at this time, Mr. Rick McKenney, I turn the call back over to you for some final closing remarks. Okay.

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

Q4 2023 Unum Group Earnings Call

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