Q1 2026 Unum Group Earnings Call

April 29, 2026

Speaker #2: Hello everyone. Thank you for joining us and welcome to Unum First Quarter 2026 earnings. After today's prepared remarks, we will host a question and answer session.

Operator 2: Hello, everyone. Thank you for joining us, welcome to Unum First Quarter 2026 Earnings. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Matt Royal, Investor Relations. Matt, please go ahead.

Operator: Hello, everyone. Thank you for joining us, welcome to Unum Q1 2026 Earnings. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Matt Royal, Investor Relations. Matt, please go ahead.

Speaker #2: If you would like to ask a Mr. Matt,

Speaker #2: question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Matt Royal, Investor Relations.

Matt Royal: Thank you. Thank you, and good morning to everyone. Welcome to Unum Group's Q1 2026 Earnings Call. Please note, today's call may include forward-looking statements. Actual results may differ materially, and we are not obligated to update any of these statements. 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. Yesterday afternoon, Unum released our earnings results and financial supplement for Q1 2026. Materials are also available on the Investors section of our website. Please note references made today to core operations sales and premium, including Unum International, are presented on a constant currency basis for improved comparability period to period. Participating in this morning's conference call are Unum's President and CEO, Richard McKenney, and Chief Financial Officer, Steven Zabel.

Speaker #3: Thank you. Thank you and good morning to everyone. Welcome to Unum Group's First Quarter 2026 earnings call. Please note today's call may include forward-looking statements and actual results may differ materially, and we are not obligated to update any of these statements.

Speaker #3: 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 #3: Yesterday afternoon, Unum released our earnings results and financial supplement for the first quarter of 2026. Materials are also available on the Investors section of our website.

Speaker #3: Also, please note references made today to core operations, sales, and premium, including Unum International, are presented on a constant currency basis for improved comparability.

Speaker #3: Participating in this morning's conference call are Unum's President and CEO, Rick McKinney, and Chief Financial Officer, Steve Zabel. Following remarks from Rick and Steve, additional members of management will join and participate in Q&A.

Matt Royal: Following remarks from Rick and Steve, additional members of management will join and participate in Q&A, including Timothy Arnold, who heads our Colonial Life and Voluntary Benefits lines, Christopher Pyne for Group Benefits, and Mark Till, who heads our Unum International business. Now let me turn the call over to our President and CEO, Richard McKenney.

Speaker #3: Including Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines, Chris Pine for Group Benefits, and Mark Till, who heads our Unum International Business.

Speaker #3: Now let me turn the call over to our President and CEO, Rick McKinney.

Speaker #4: Great. Thank you, Matt. Good morning, and thank you for joining us. We are very pleased with a solid and encouraging start to 2026. It is one that reflects strong execution across the business for both the top and bottom line, greater capital deployment, and continued progress in management of our closed block.

Richard McKenney: Great. Thank you, Matt. Good morning, and thank you for joining us. We are very pleased with a solid and encouraging start to 2026. It is one that reflects strong execution across the business for both the top and bottom line, greater capital deployment, and continued progress in management of our closed block. Core operations performed well with earned premium growth of over 5% adjusting for the transactions. After-tax adjusted operating earnings of $353 million and after-tax adjusted operating EPS of $2.14 is up nearly 10% from a year ago. Leading the way, our US Group business had a standout quarter with sales up 22% and persistency strong at 92%. Combined, this drove premiums up approximately 5% specific to our group lines.

Speaker #4: Core operations performed well with earned premium growth of over 5%, adjusting for the transactions. After-tax adjusted operating earnings of $353 million and after-tax adjusted operating EPS of $2.14, is up nearly 10% from a year ago.

Speaker #4: Leading the way, our U.S. Group business had a standout quarter with sales up 22% and persistency strong at 92%. Combined, this drove premiums up approximately 5%, specific to our group lines.

Speaker #4: The top line also translated to the bottom line as we saw a record earnings in Group Life. Bringing total U.S. Group earnings to over $220 million and with a very high ROE.

Richard McKenney: The top line also translated to the bottom line as we saw record earnings in Group Life, bringing total US Group earnings to over $220 million and with a very high ROE. Within the Group portfolio this quarter, it was clearly the Group Life business which outperformed. Not to be overshadowed, our Group Disability business showed consistent strength with high returns and good long-term disability fundamentals. As we pay careful attention to pricing and risk selection at the employer level for new and existing customers, our team continues to do an excellent job helping people get back to work and fulfill our purpose. These results reinforce what has long been true for us. We have built our business on disciplined pricing and underwriting, strong customer relationship management, which is key to high persistency, and continued focused investments in capabilities that differentiate Unum in the markets.

Speaker #4: Within the group portfolio, this quarter it was clearly the Group Life business which outperformed. But not to be overshadowed, our group disability business showed consistent strength with high returns and good long-term disability fundamentals.

Speaker #4: As we pay careful attention to pricing and risk selection at the employer level for new and existing customers, our team continues to do an excellent job helping people get back to work and fulfill our purpose.

Speaker #4: These results reinforce what has long been true for us. We have built our business on disciplined pricing and underwriting, strong customer relationship management—which is key to high persistency—and continued, focused investments in capabilities that differentiate Unum in the market.

Richard McKenney: We have built our business on disciplined pricing and underwriting, strong customer relationship management, which is key to high persistency, and continued focused investments in capabilities that differentiate Unum in the markets. It is particularly important where technology and human support come together at moments that matter most. It is also another quarter in which we delivered on the consistency and execution that our customers and shareholders expect from us. To achieve this, we have been deliberately investing in technology-enabled solutions that help us win, retain, and grow business by making it easier for employers and their employees to engage with their benefits.

Speaker #4: It is particularly important where technology and human support come together at moments that matter most. It is also another quarter in which we delivered on the consistency and execution that our customers and shareholders expect from us.

Richard McKenney: It is particularly important where technology and human support come together at moments that matter most. It is also another quarter in which we delivered on the consistency and execution that our customers and shareholders expect from us. To achieve this, we have been deliberately investing in technology-enabled solutions that help us win, retain, and grow business by making it easier for employers and their employees to engage with their benefits. This is evident in this quarter's results with the success we're having in providing solutions and services that resonate with our customers. In recent years, employers have placed increasing importance on managing employees' leaves. The expansion of state-paid family and medical leave programs has provided another avenue to leverage our leave management leadership position and reach more people.

Speaker #4: To achieve this, we have been deliberately investing in technology-enabled solutions that help us win, retain, and grow business by making it easier for employers and their employees to engage with their benefits.

Speaker #4: This is evident in this quarter's results, with the success we're having in providing solutions and services that resonate with our customers. In recent years, employers have placed increasing importance on managing employees' leaves.

Richard McKenney: This is evident in this quarter's results with the success we're having in providing solutions and services that resonate with our customers. In recent years, employers have placed increasing importance on managing employees' leaves. The expansion of state-paid family and medical leave programs has provided another avenue to leverage our leave management leadership position and reach more people.

Speaker #4: The expansion of state-paid family and medical leave programs has provided another avenue to leverage our leave management leadership position and reach more people. Our digital-first total leave platform, combined with our traditional insurance products and technologies such as HR Connect, delivers a best-in-class experience to our clients which in turn contributes to the high levels of satisfaction and persistency exemplified this quarter.

Richard McKenney: Our digital-first Total Leave platform, combined with our traditional insurance products and technologies such as HR Connect, delivers a best-in-class experience to our clients, which in turn contributes to the high levels of satisfaction and persistency exemplified this quarter. Extending from our leading group businesses is a very successful and broad-reaching supplemental and voluntary product business. These lines of business saw a 20% sales growth in the quarter. We see employers looking at the broader benefits package more often as these products leverage the same digital tools, and employers know they can depend on Unum across their benefit needs. Taking our Unum US business in totality, we delivered strong before-tax earnings of $338 million and an ROE of 25% in the quarter. At Colonial Life, momentum continues to build.

Speaker #4: Extending from our leading group businesses is a very successful and broad-reaching supplemental and voluntary product business. These lines of business saw 20% sales growth in the quarter.

Speaker #4: We see employers looking at the broader benefits package more often as these products leverage the same digital tools and employers know they can depend on Unum across their benefit needs.

Speaker #4: Taking our Unum U.S. business in totality, we delivered strong before-tax earnings of $338 million and an ROE of 25% in the quarter. At Colonial Life, momentum continues to build.

Speaker #4: The business delivered a record earnings quarter, supported by premium growth in line with expectations, attractive returns, and continued benefit from disciplined execution and strong relationships in the worksite market.

Richard McKenney: The business delivered a record earnings quarter supported by premium growth in line with expectations, attractive returns, and continued benefit from disciplined execution and strong relationships in the worksite market. Colonial Life is an important component of our reach and able to get to employers of different sizes that are looking for high-quality solutions to help take care of their employees. Looking internationally, after significant growth on top and bottom line over the last several years, Unum International produced mixed results this quarter. Strong performance in Poland, where growth continues at an exceptional pace, was offset by benefits pressure in the UK. Our market position and know-how gives us confidence that we can actively address macro market dynamics, and we are excited about the long-term value growth and contribution of our international businesses. Overall, core operations are in excellent shape heading into the rest of the year.

Speaker #4: Colonial Life is an important component of our reach and able to get to employers of different sizes that are looking for high-quality solutions to help take care of their employees.

Speaker #4: Looking internationally, after significant growth on the top and bottom line over the last several years, Unum International produced mixed results this quarter. Strong performance in Poland, where growth continues at an exceptional pace, was offset by benefits pressure in the UK.

Speaker #4: Our market position and know-how give us confidence that we can actively address macro market dynamics, and we are excited about the long-term value growth and contribution of our international businesses.

Speaker #4: Overall, core operations are in excellent shape heading into the rest of the year. As we refine how we present and focus our earnings on an ongoing basis, we'll also continue to provide transparency into our close block.

Richard McKenney: Overall, core operations are in excellent shape heading into the rest of the year. As we refine how we present and focus our earnings on an ongoing basis, we'll also continue to provide transparency into our closed block. This remains an area of active and deliberate management. Importantly, results this quarter reflect tangible progress in reducing both the size and the risk profile of the block. As we announced late last year, we discontinued new employee coverage on existing group cases. The response was well-received by clients, particularly among employers who had not recently evaluated the cost and value to their employees of this legacy offering within their broader employee benefits package.

Richard McKenney: As we refine how we present and focus our earnings on an ongoing basis, we'll also continue to provide transparency into our closed block. This remains an area of active and deliberate management. Importantly, results this quarter reflect tangible progress in reducing both the size and the risk profile of the block. As we announced late last year, we discontinued new employee coverage on existing group cases. The response was well-received by clients, particularly among employers who had not recently evaluated the cost and value to their employees of this legacy offering within their broader employee benefits package. Because this product was last marketed in 2012 and provides benefits well beyond an employee's working years, our engagement Q1 led some employers to voluntarily cease their coverage. As a result, 7% of all Group LTC cases closed during Q1, meaningfully reducing our exposure.

Speaker #4: This remains an area of active and deliberate management. Importantly, results this quarter reflect tangible progress in reducing both the size and the risk profile of the block.

Speaker #4: As we announced late last year, we discontinued new employee coverage on existing group cases. The response was well received by clients. Particularly among employers who had not recently evaluated the cost and value to their employees of this legacy offering within their broader employee benefits package.

Speaker #4: Because this product was last marketed in 2012 and provides benefits well beyond an employee's working years, our engagement this quarter led some employers to voluntary cease their coverage.

Richard McKenney: Because this product was last marketed in 2012 and provides benefits well beyond an employee's working years, our engagement Q1 led some employers to voluntarily cease their coverage. As a result, 7% of all Group LTC cases closed during Q1, meaningfully reducing our exposure. Importantly, this reduction in footprint was achieved with clarity and transparency for our clients. As our customers' evaluation continues, we expect additional case closures going forward. Beyond that, our Fairwind protection remains at a robust $2.2 billion. The external reinsurance transaction we completed last year continues to perform well, and the elimination of new employee tail risk is fully in place. We continue to evaluate a broad set of options to further mitigate LTC exposure, including risk transfer, and we are encouraged by our progress and the opportunities ahead.

Speaker #4: As a result, 7% of all group LTC cases closed during the first quarter. Meaningfully reducing our exposure. Importantly, this reduction in footprint was achieved with clarity and transparency for our clients.

Richard McKenney: Importantly, this reduction in footprint was achieved with clarity and transparency for our clients. As our customers' evaluation continues, we expect additional case closures going forward. Beyond that, our Fairwind protection remains at a robust $2.2 billion. The external reinsurance transaction we completed last year continues to perform well, and the elimination of new employee tail risk is fully in place. We continue to evaluate a broad set of options to further mitigate LTC exposure, including risk transfer, and we are encouraged by our progress and the opportunities ahead. The actions we are taking are methodical, deliberate, and effective. Each step improves the risk profile and allows us to keep our focus where it belongs, growing and strengthening our core business. Turning to the balance sheet, our portfolio continues to perform well in the current environment and remains solidly investment-grade.

Speaker #4: As our customers evaluation continues, we expect additional case closures going forward. Beyond that, our fair wind protection remains at a robust 2.2 billion dollars.

Speaker #4: The external reinsurance transaction we completed last year continues to perform well. And the elimination of new employee tail risk is fully in place. We continue to evaluate a broad set of options to further mitigate LTC exposure, including risk transfer.

Speaker #4: And we are encouraged by our progress and the opportunities ahead. The actions we are taking are methodical, deliberate, and effective. Each step improves the risk profile and allows us to keep our focus where it belongs.

Richard McKenney: The actions we are taking are methodical, deliberate, and effective. Each step improves the risk profile and allows us to keep our focus where it belongs, growing and strengthening our core business. Turning to the balance sheet, our portfolio continues to perform well in the current environment and remains solidly investment-grade.

Speaker #4: Growing and strengthening our core business. Turning to the balance sheet, our portfolio continues to perform well in the current environment and remains solidly investment grade.

Speaker #4: Our team has done a good job over the last several years increasing our overall credit quality at a time when you weren't getting appropriately paid for the inherent credit risk.

Richard McKenney: Our team has done a good job over the last several years increasing our overall credit quality at a time when you weren't getting appropriately paid for the inherent credit risk. Additionally, our capital position remains very strong, with RBC at 460%, which is over 100 points above our target range, and holding company liquidity is strong at approximately $1.7 billion. With solid capital generation, we remain committed to our capital deployment framework, investing in our business for growth, both organically and inorganically, returning capital to our shareholders through dividends and share repurchases. Our outlook calls for the redeployment of roughly $1.3 billion, which is roughly what we generate in a year.

Speaker #4: Additionally, our capital position remains very strong with RBC at $460%, which is over 100 points above our target range and holding company liquidity is strong at approximately 1.7 billion dollars.

Speaker #4: With solid capital generation, we remain committed to our capital deployment framework—investing in our business for growth, both organically and inorganically, and then returning capital to our shareholders through dividends and share repurchases.

Speaker #4: Our outlook calls for the redeployment of roughly $1.3 billion, which is roughly what we generate in a year. During the first quarter, we repurchased approximately $400 million of shares, taking advantage of attractive prices to accelerate a portion of our planned repurchase.

Richard McKenney: During the Q1, we repurchased approximately $400 million of shares, taking advantage of attractive prices to accelerate a portion of our planned repurchase. This reduced our public float by approximately 3% in Q1. After paying out $8 million in dividends in the Q1, we will also look to increase our dividend rate in the coming months heading into our annual meeting. Our delivery of investing in growth and deployment plans are intact. Looking ahead, we remain confident in our 2026 outlook, which consists of delivering 4% to 7% top-line growth, 8% to 12% EPS growth, attractive returns on equity in our core operations, and continued strong capital generation and deployment. The environment remains supportive. Our sales pipelines are building as we move through the year.

Speaker #4: This reduced our public float by approximately 3% in one quarter. After paying out $78 million in dividends in the first quarter, we will also look to increase our dividend rate in the coming month heading into our annual meeting.

Speaker #4: Our delivery of investing in growth and deployment plans are intact. Looking ahead, we remain confident in our 2026 outlook, which consists of delivering 4 to 7% top line growth, 8 to 12% EPS growth, attractive returns on equity in our core operations, and continued strong capital generation and deployment.

Speaker #4: The environment remains supportive. Our sales pipelines are building as we move through the year. Digital connections with our customers continue to deepen and our teams remain intensely focused on execution.

Richard McKenney: Digital connections with our customers continue to deepen, and our teams remain intensely focused on execution. Most importantly, our purpose of helping the working world thrive throughout life's moments continues to guide our teams, our growth, and our culture over the long term. This year, we were pleased to be named one of the world's most ethical companies for the sixth straight year. This all comes together to generate the results of today and the long-term value creation we are building for customers, employers, and shareholders. I'm happy now to turn the call over to Steve to walk through the numbers in more detail. Steve.

Speaker #4: Most importantly, our purpose of helping the working world thrive throughout life's moments continues to guide our teams. Our growth and our culture over the long term.

Speaker #4: This year, we were pleased to be named one of the world's most ethical companies for the sixth straight year. This all comes together to generate the results of today and the long-term value creation we are building for customers, employers, and shareholders.

Speaker #4: I'm happy now to turn the call over to Steve to walk through the numbers in more detail. Steve.

Steven Zabel: Great. Thank you, Rick, and good morning, everyone. The Q1 of 2026 was a strong start to the year with many of the expectations we laid out at our outlook meeting emerging across our businesses, resulting in after-tax adjusted operating income per share of $2.14. Notably, Group Life and AD&D, along with Colonial Life, had record levels of earnings, and Group Disability met our expectations. Alongside the strong margins we saw, top-line trends were ahead of our expectations with sales growth of 14.4%, group persistency increasing 2.7% year over year to 92%, and core premium growth of 3.9%. While premium growth is slightly below our 4% to 7% full-year expectation, we had expected this to accelerate and build throughout the year.

Speaker #5: Great. Thank you, Rick, and good morning, everyone. The first quarter of 2026 was a strong start to the year, with many of the expectations we laid out at our Outlook meeting emerging across our businesses.

Speaker #5: Resulting in after-tax adjusted operating income per share of $2.14. Notably, Group Life and AD&D, along with Colonial Life, had record levels of earnings. And Group Disability met our expectations.

Speaker #5: Alongside the strong margins, we saw top line trends were ahead of our expectations with sales growth of 14.4%, group persistency increasing 2.7% year over year, to 92%, and core premium growth of 3.9%.

Speaker #5: While premium growth is slightly below our 4 to 7% full year expectation, we had expected this to accelerate and build throughout the year. Adjusting for the runoff of the stop loss business and the transactions executed last year, core premium growth would have been just over 5%.

Steven Zabel: Adjusting for the runoff of the stop-loss business and the transactions executed last year, core premium growth would have been just over 5%. Before moving on to our segment results, I will remind you that this is the Q1 reporting under our new definition of after-tax adjusted operating earnings, which excludes the closed block. While the closed block's earnings are no longer represented in our headline adjusted after-tax operating income, I will spend some time later in the call to talk about key trends in that business. Diving into our quarterly operating results across the segments, the Unum US segment produced adjusted operating income of $337.9 million in Q1 2026 compared to $329.1 million in Q1 2025.

Speaker #5: Before moving on to our segment results, I will remind you that this is the first quarter reporting under our new definition of after-tax adjusted operating earnings, which excludes the closed block.

Speaker #5: While the closed block's earnings are no longer represented in our headline adjusted after-tax operating income, I will spend some time later in the call to talk about key trends in that business.

Speaker #5: Diving into our quarterly operating results across the segments, the Unum US segment produced adjusted operating income of $337.9 million in the first quarter of 2026, compared to $329.1 million in the first quarter of 2025.

Speaker #5: Group Disability adjusted operating earnings of $106.6 million in the first quarter of 2026 reflect a benefit ratio of 63.7%, compared to 61.8% in the year-ago period, and an improvement from 64.2% in the fourth quarter of last year.

Steven Zabel: Group Disability adjusted operating earnings of $106.6 million in Q1 2026 reflect a benefit ratio of 63.7% compared to 61.8% in the year ago period and an improvement from 64.2% in Q4 of last year. Overall, long-term disability results are consistent with the assumptions embedded in the models that underpinned our guidance last quarter and reflect continued progress as the line continues to normalize. With that said, the quarter did include higher incidents in the short-term disability product line compared to the same period a year ago. Specifically, paid family and medical leave experience was somewhat elevated in newer PFML states and modestly pressured in existing jurisdictions, reflecting continued investment in the attractive leave opportunity discussed earlier.

Speaker #5: Overall, long-term disability results are consistent with the assumptions embedded in the models that underpinned our guidance last quarter, and reflect continued progress as the line continues to normalize.

Speaker #5: With that said, the quarter did include higher incidents in the short-term disability product line compared to the same period a year ago. Specifically, paid family and medical leave experience was somewhat elevated in newer PFML states and modestly pressured in existing jurisdictions, reflecting continued investment in the attractive leave opportunity discussed earlier.

Speaker #5: As PFML remains a maturing market, our standard one-year rate guarantees provide flexibility to respond quickly. Excluding PFML, group disability experience was solid and within expectations, supported by stable incidents, strong recoveries, and a rational pricing environment.

Steven Zabel: As PFML remains a maturing market, our standard 1-year rate guarantees provide flexibility to respond quickly. Excluding PFML, Group Disability experience was solid and within expectations, supported by stable incidents, strong recoveries, and a rational pricing environment. Re-results for Unum US Group Life and AD&D include adjusted operating income of $115.1 million for Q1 2026, compared to $69.2 million in the same period a year ago. The benefit ratio decreased to 61.8% compared to 69.3% in Q1 2025, driven by lower incidence. This result was extremely favorable compared to our outlook of 70%, and we've now seen multiple years of better-than-expected results, averaging in the mid to high 60s. We believe that this moderate level of outperformance could continue to persist.

Speaker #5: Results for Unim US Group Life and AD&D include adjusted operating income of $115.1 million for the first quarter of 2026, compared to 69.2 million in the same period a year ago.

Speaker #5: The benefit ratio decreased to 61.8% compared to 69.3% in the first quarter of 2025, driven by lower incidents. This result was extremely favorable compared to our outlook of 70%, and we've now seen multiple years of better-than-expected results averaging in the mid to high 60s.

Speaker #5: We believe that this moderate level of outperformance could continue to persist. Adjusted operating earnings for the Unum US Supplemental and Voluntary lines were $116.2 million in the first quarter, a decrease from $140.7 million in the first quarter of 2025.

Steven Zabel: Adjusted operating earnings for the Unum US supplemental and voluntary lines were $116.2 million in Q1, a decrease from $140.7 million in Q1 of 2025. The decline in earnings was driven in part by last year's Long-Term Care transaction, which ceded a portion of our IDI business, but also by unfavorable underlying experience in that line. Turning to premium and sales, our top-line trends remain healthy. Unum US premium grew 3.3% with support from high levels of persistency. Excluding the impact from the runoff of the stop-loss business and our transaction last year, Unum US premium grew just over 5% year over year. Our pipeline for future growth remains strong.

Speaker #5: The decline in earnings was driven in part by last year's long-term care transaction which seeded a portion of our IDI business. But also by unfavorable underlying experience in that line.

Speaker #5: Turning to premium and sales, our top line trends remain healthy. Unim US Premium grew 3.3% with support from high levels of persistency. Excluding the impact from the runoff of the stop loss business and our transaction last year, Unim US Premium grew just over 5% year over year.

Speaker #5: Our pipeline for future growth remains strong. Unim US quarterly sales were $335.1 million compared to $277.5 million in the first quarter of 2025. Total Group persistency of 92% increased sequentially from the fourth quarter and from the same period last year, reflecting the enduring relationships we are able to create with our customers.

Steven Zabel: Unum US quarterly sales were $335.1 million compared to $277.5 million in Q1 2025. Total group persistency of 92% increased sequentially from the Q4 and from the same period last year, reflecting the enduring relationships we are able to create with our customers. Moving to Unum International, adjusted operating income for the Q1 was $30.9 million compared to $38.7 million in Q1 2025 and below our outlook for earnings in the low $40 million range. The International segment's benefit ratio was 71% compared to 66.5% in the year-ago period, driven by unfavorable experience in the UK business.

Speaker #5: Moving to Unim International, adjusted operating income for the first quarter was $30.9 million, compared to $38.7 million in the first quarter of 2025. And below our Outlook for earnings in the low $40 million range.

Speaker #5: The international segment's benefit ratio was 71%, compared to 66.5% in the year-ago period, driven by unfavorable experience in the UK business. Adjusted operating income for the Unum UK business was $20.4 million in the first quarter, compared to $29.5 million in the first quarter of 2025.

Steven Zabel: Adjusted operating income for the Unum UK business was GBP 20.4 million in Q1 compared to GBP 29.5 million in Q1 of 2025. The results reflect underlying claims performance, including a benefit ratio of 72.9% compared to 76.1% a year ago. The change in benefit ratio was primarily due to larger average claim size in our group long-term disability business in 2026. International premiums continue to show growth, increasing 8.1% and are supported by healthy persistency levels and sales growth of 5.5%. Premium growth was broad-based, with UK premium growing 6.5% and Poland premium growing 15.2%.

Speaker #5: The results reflect underlying claims performance, including a benefit ratio of 72.9% compared to 76.1% a year ago. The change in benefit ratio was primarily due to larger average claim size in our group long-term care disability business in 2026.

Speaker #5: International premiums continue to show growth. Increasing 8.1% and our supported by healthy persistency levels and sales growth of 5.5%. Premium growth was broad-based with UK premium growing 6.5% and Poland premium growing 15.2%.

Speaker #5: Next, adjusted operating income for the Colonial Life segment of $127.8 million in the first quarter was a record, an increase from $115.7 million in the first quarter of 2025, driven by strong benefits experience and underlying premium growth.

Steven Zabel: Next, adjusted operating income for the Colonial Life segment of $127.8 million in Q1 was a record, and increased from $115.7 million in Q1 2025, driven by strong benefits experience and underlying premium growth. The benefit ratio of 46% compared to 47.7% in the year-ago period and was better than our expectation of the range of 48% to 50%. Premium income of $472.7 million compared to $457.3 million in Q1 2025 and was driven by strong sales in the prior year and stable persistency. Sales in Q1 of $106.3 million were up slightly from the prior year.

Speaker #5: The benefit ratio of 46% compared to 47.7% in the year ago period and was better than our expectation of the range of 48 to 50 percent.

Speaker #5: Premium income of $472.7 million, compared to $457.3 million in the first quarter of 2025, was driven by strong sales in the prior year and stable persistency.

Speaker #5: Sales in the first quarter of $106.3 million were up slightly from the prior year. Colonial Life produced strong returns, including ROE of 19.2%. I will now provide an update on the Closed Block, focusing less on the earnings results and more on key business trends and balance sheet health.

Steven Zabel: Colonial Life produced strong returns, including ROE of 19.2%. I will now provide an update on the closed block, focusing less on the earnings results and more on key business trends and balance sheet health. Long-term care's results this quarter were largely influenced by employers' decisions to cease coverage following the discontinuation of new employee enrollments on existing GLTC cases that we announced in Q3 of last year, and that was effective in February of 2026. As a result of these decisions, we saw elevated GAAP accounting volatility from these closed cases, which is acutely seen in the headline segment earnings result. Despite the margin in these closed cases, which reduced current period GAAP earnings, we are very pleased to reduce the associated exposure and tail risk in the block.

Speaker #5: Long-term care's results this quarter were largely influenced by employers' decisions to cease coverage following the discontinuation of new employee enrollments on existing GLTC cases, that we announced in the third quarter of last year and that was effective in February of 2026.

Speaker #5: As a result of these decisions, we saw elevated gap accounting volatility from these closed cases which is acutely seen in the headline segment earnings result.

Speaker #5: Despite the margin in these closed cases which reduced current period gap earnings, we are very pleased to reduce the associated exposure and tail risk in the block.

Speaker #5: In addition, first quarter results included amortization of reinsurance costs related to the LTC reinsurance transaction that closed in July of 2025, which did not impact the year ago period.

Steven Zabel: In addition, Q1 results included amortization of reinsurance costs related to the LTC reinsurance transaction that closed in July of 2025, which did not impact the year-ago period. Outside of these impacts, underlying experience trends remain in line with expectations. Combined with the underlying benefits experience, the NPR increased 10 basis points to 97.6% on a sequential basis. Other key considerations for monitoring the block's health include our Fairwind protection remaining stable at approximately $2.2 billion and continued success with our premium rate increase program, with our achievement rate sitting at approximately 15% for our current program. Lastly for the closed block, our alternative investment portfolio, which mainly supports LTC, had an annualized yield of 6.7% in the quarter below our long-term expectation of 8% to 10%.

Speaker #5: Outside of these impacts, underlying experience trends remain in line with expectations. Combined with the underlying benefits experience, the NPR increased 10 basis points to 97.6% on a sequential basis.

Speaker #5: Other key considerations for monitoring the block's health include our Fairwin protection remaining stable at approximately $2.2 billion, and continued success with our premium rate increase program, with our achievement rate sitting at approximately 15% for our current program.

Speaker #5: Then lastly, for the closed block, our alternative investment portfolio which mainly supports LTC had an annualized yield of 6.7% in the quarter below our long-term expectation of 8 to 10 percent.

Speaker #5: We typically see seasonality in first quarter marks due to the timing of receiving year-end statements and therefore remain confident in the construction and resiliency of this portfolio.

Steven Zabel: We typically see seasonality in first quarter marks due to the timing of receiving year-end statements, and therefore remain confident in the construction and resiliency of this portfolio. I'll end by covering our capital position. In Q1, capital metrics across the board remained robust. Holding company liquidity stood at $1.7 billion and traditional RBC at 460%, both above our long-term targets and consistent with our expectations. These levels keep us on track to achieve our full-year outlook of 400% to 425% RBC and $2 billion to $2.5 billion of holding company liquidity. Our robust capital position is supported by statutory after-tax operating income of $314 million in Q1, positioning us for our full-year expectation of $1.4 billion to $1.6 billion of total capital generation.

Speaker #5: I'll end by covering our capital position. In the quarter, capital metrics across the board remain robust. Holding company liquidity stood at $1.7 billion, and traditional RBC at 460%, both above our long-term targets and consistent with our expectations.

Speaker #5: These levels keep us on track to achieve our full-year outlook of 400 to 425 percent RBC and $2 to $2.5 billion of holding company liquidity.

Speaker #5: Our robust capital position is supported by statutory after-tax operating income of $314 million in the first quarter, positioning us for our full-year expectation of $1.4 to $1.6 billion of total capital generation.

Speaker #5: This cash generation model, paired with our strong position, enables our durable approach to deploying capital to our shareholders. In the quarter, we took the opportunity to execute a dynamic approach to share repurchase, buying back around $400 million of stock.

Steven Zabel: This cash generation model paired with our strong position enables our durable approach to deploying capital to our shareholders. In the quarter, we took the opportunity to execute a dynamic approach to share repurchase, buying back around $400 million of stock. While we are constantly evaluating our capital deployment plans, we view these actions as a pull forward of our plan and remain on track to repurchase $1 billion of stock this year, representing all of the free cash flow we plan to generate. Our thoughtful share repurchase paired with our common stock dividend of $78.4 million put Q1 deployment just under a half a billion dollars, underscoring our ongoing focus of executing prudent capital management. All in all, it is a solid start to the year for the company.

Speaker #5: While we are constantly evaluating our capital deployment plans, we view these actions as a pull forward of our plan and remain on track to repurchase $1 billion of stock this year representing all of the free cash flow we plan to generate.

Speaker #5: Our thoughtful share repurchase paired with our common stock dividend of 78.4 million put first quarter deployment just under a half a billion dollars underscoring our ongoing focus of executing prudent capital management.

Speaker #5: So all in all, it is a solid start to the year for the company. The encouraging top-line trends and strong margins across many of our products illustrate the high-quality nature of our business.

Steven Zabel: The encouraging top-line trends and strong margins across many of our products illustrate the high-quality nature of our business. This, paired with our continued active management of closed block and opportunistic acceleration of share repurchases, provides us with healthy optimism for the remainder of the year and positions us well to execute against our goals. I will now turn it over to Rick for his closing comments before going to your questions.

Speaker #5: This, paired with our continued active management of the closed block and opportunistic acceleration of share repurchases, provides us with healthy optimism for the remainder of the year.

Speaker #5: And positions us well to execute against our goals. I will now turn it over to Rick for his closing comments before going to your questions.

Speaker #1: Thank you, Steve. And overall, you heard from both Steve and I that we delivered a strong first quarter, and it reinforces both our near-term momentum and our confidence in the company's long-term positioning as we move through the year.

Richard McKenney: Thank you, Steve. Overall, you heard from both Steve and I that we delivered a strong Q1. It reinforces both our near-term momentum and our confidence in the company's long-term positioning as we move through the year. Before we move to Q&A, I want to recognize an important leadership transition for our company. After more than 4 decades at Unum, Timothy Arnold has decided to retire in July. Tim has been a highly respected leader with a significant impact on our Voluntary Benefits businesses, particularly at Colonial Life, where he has been the president for the past 11 years. Tim is one of the few people who has lived in each of our 4 major locations and has impacted the people and the communities he has served. We are grateful for his many contributions and the legacy he leaves behind.

Speaker #1: Before we move to Q&A, I want to recognize an important leadership transition for our company. After more than four decades at Unum, Tim Arnold has decided to retire in July.

Speaker #1: Tim has been a highly respected leader with a significant impact on our voluntary benefits businesses, particularly at Colonial Life, where he has been the president for the past 11 years.

Speaker #1: Tim is one of the few people who has lived in each of our four major locations as and has impacted the people and the communities he has served.

Speaker #1: We are grateful for his many contributions and the legacy he leaves behind. We're also very pleased with the planned leadership transition including the appointment of Steve Jones.

Richard McKenney: We're also very pleased with the planned leadership transition, including the appointment of Steve Jones, currently Colonial Life's Head of Market and Field Development, as the next President of Colonial Life. This reflects the depth of our management team and our focus on continuity and long-term growth. We will look forward to Steve joining us on this call in the future. With that, operator, we'd be happy to take questions we have out there.

Speaker #1: Currently, Colonial Life's head of market and field development as the next president of Colonial Life. This reflects the depth of our management team and our focus on continuity and long-term growth.

Speaker #1: We will look forward to Steve joining us on this call in the future. So with that, operator, we'd be happy to take questions we have out there.

Speaker #2: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand.

Operator 2: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile a Q&A roster. Your first question from the line of Alex Scott with Barclays. Your line is open. Please go ahead.

Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile a Q&A roster. Your first question from the line of Alex Scott with Barclays. Your line is open. Please go ahead.

Speaker #2: Do we draw your question? Press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #2: If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Alex Cott with Barclays.

Speaker #2: Your line is open. Please go ahead.

Speaker #3: Hey, thanks, and good morning. The first one I have is on paid family medical leave. I wanted to see if you could provide a little more color on what you're seeing in that product line.

Alex Scott: Hey, thanks, and good morning. 1 I had is on the Paid Family Medical Leave. wanted to see if you could provide a little more color on, you know, what you're seeing in that product line as you're moving into new states and, you know, just to help us understand if we should expect to continue to see some pressure there, you know, until we hit another renewal cycle or, you know, what you saw in Q1 is a little more, you know, one-off in nature.

Speaker #3: As you're moving into new states and just help us understand if we should expect a continued to see some pressure there until we hit another renewal cycle or what you saw in first quarter is a little more one-off in nature.

Speaker #1: Yeah. Thanks, Alex, for the question. It's Rick. I just wanted to say that this is an important part of the overall mix. And so, when we think about it, we think about it as being consolidated in our group disability results, which, as you can see, is very high returning business.

Richard McKenney: Yeah. Thanks, Alex, for the question. It's Rick. I just wanted to say that this is an important part of the overall mix. When we think about it, you know, we think about it's been consolidated in our Group Disability results, which, as you can see, very high returning business. This is a new developing area. It's one we've been talking about for a long time, but certainly we can give you some more details behind that, which is just an extension, as I mentioned, of our leave business. Maybe, Chris, will you give some more context in terms of the dynamics in the paid family medical leave currently?

Speaker #1: And so this is a new developing area. It's one we've been talking about for a long time, but certainly we can give it some more details behind that, which is just an extension as I mentioned of our leave business.

Speaker #1: But maybe, Chris, we can give some more context in terms of the dynamics in the paid family medical leave currently.

Speaker #4: Sure. Thanks, Rick. And thanks, Alex. Ultimately, this is an exciting time in our business. If you think about PFML and the states that have come on over time and most recently Minnesota and Delaware were added one-one and then Maine will come up in the first quarter of this year.

Christopher Pyne: Sure. Thanks, Rick, and thanks, Alex. You know, ultimately, this is an exciting time in our business. If you think about PFML and the states that have come on over time and, you know, most recently Minnesota and Delaware were, you know, added one and one, and then Maine will come up in Q1 this year. You know, this is an expansion of a business we're in, giving more employers, the requirement to be covered for short-term disability on the employee side, but also adding coverage for family events where people need to be away from work.

Speaker #4: This is an expansion of a business we're in giving more employers the requirement to be covered for short-term disability on the employee side, but also adding coverage for family events where people need to be away from work.

Speaker #4: So it really fits the work and the investments we've made in the leave business, where you bundle products and services to make sure that we can be that partner to employers as they manage their workforce for both regulated events and also just what they want to provide in terms of flexibility for their employee population.

Christopher Pyne: it really fits, you know, the work and the investments we've made in the lead business, where you bundle products and services to make sure that we can be, you know, that partner to employers as they manage their workforce for both, you know, regulated events and also, you know, just what they want to provide in terms of flexibility for their employee population. you know, when states come on, we deal with it like any other, you know, new line of business coming on, you know, in a state. you can see some pressure from pent-up demand that happens at times. we manage it. you know, the good thing about PFML is it is, you know, high frequency type coverage like short-term disability. it gets credible quickly.

Speaker #4: When states come on, we deal with it like any other new line of business coming on in a state. And you can see some pressure from pent-up demand that happens at times.

Speaker #4: We manage it. The good thing about PFML is it is high-frequency type coverage like short-term disability. It gets credible quickly. You can see how the experience emerges.

Christopher Pyne: You can see how the experience emerges andShort in terms of rate guarantees. Normally a 1-year rate guarantee gives us the opportunity to reprice, and we've been doing that at current, and we'll continue to do that. It also can give you a little bit of lift in sales. Normally, that's been small enough to just be absorbed into our business 'cause it's one state at a time, and you know, obviously our disability business is quite large. When you have two or more or it's a larger state, it can show up a little bit and that does provide a little bit of tailwind in sales. I would bring you back to, you know, this is the business we're in, this is the business that employers need our help with. It's an exciting time.

Speaker #4: And it is short in terms of rate guarantees. So normally, a one-year rate guarantee gives us the opportunity to reprice. And we've been doing that at current, and we'll continue to do that.

Speaker #4: It also can give you a little bit of lift in sales. Normally, that's been small enough to just be absorbed into our business, because it's one state at a time, and obviously, our disability business is quite large.

Speaker #4: When you have two or more or it's a larger state, it can show up a little bit. And that does provide a little bit of tailwind in sales.

Speaker #4: But I would bring you back to this is the business we're in. This is the business that employers need our help with. So it's an exciting time.

Christopher Pyne: When new states come on, that is part of it. As prior states mature in terms of how the experience plays out, that's given us, you know, more information, and we'll continue to adjust price and manage that business very well, which is part of our heritage.

Speaker #4: When new states come on, that is part of it as prior states mature in terms of how the experience plays out, that's given us more information.

Speaker #4: And we'll continue to adjust price and manage that business very well, which is part of our heritage.

Alex Scott: That's all. Thank you. Second one I had is on Long-Term Care. Could you talk about the in-force management actions that you're taking and just the 7%, can you tell me about, you know, what portion of the policies had that renewal that occurred this quarter? You know, how much are you expecting to renew that you're working on some of these actions with through the rest of the year? How do we think about that 7% potentially growing to, you know, a larger percentage of the total Group LTC?

Speaker #3: That's all helpful. Thank you. Second one I had is on long-term care. Could you talk about those Enforce Management Actions that you're taking and just the 7%?

Speaker #3: Can you tell me about what portion of the policies had that renewal that occurred this quarter? And how much are you expecting to renew that you're working on some of these actions with through the rest of the year?

Speaker #3: So how do we think about that 7% potentially growing to a larger percentage of the total Group LTC?

Speaker #1: Yeah, thanks, Alex. Let me just provide a little bit more context around our LTC actions. We've been taking them now for several years.

Richard McKenney: Yeah. Thanks, Alex Scott. Let me just provide a little bit more context around our LTC actions, and we've been taking them now for several years. As we've said, it's been methodical, addressing different parts of our book of business. That includes rate increases, which we've been doing now for a long period of time. Also includes the capital actions we've taken behind Fairwind over the last several years, and then most recently last year on the risk transfer that we did as part of that. Then in the Q3, we took some actions around new lives on group cases, and I think that that has some impacts that we've started to see coming out there. Steve Zabel, maybe you can take us through some of the details without what we saw specific to this quarter.

Speaker #1: As we said, it's been methodical addressing different parts of our book of business. That includes rate increases, which we've been doing now for a long period of time.

Speaker #1: Also includes the capital actions we've taken behind Fairwind over the last several years. And then most recently last year on the risk transfer that we did as part of that.

Speaker #1: And then in the third quarter, we took some actions around new lives on group cases. And I think that has some impacts that we've started to see coming out there.

Speaker #1: And Steve, maybe you can take us through some of the details that Alex is what we saw specific to this quarter.

Speaker #4: Yeah. Yeah. So I would go back to last year when we notified our employer base that we were going to be no longer accepting new lives on existing cases.

Steven Zabel: Yeah. I would go back to last year when we notified our employer base that we were gonna be no longer accepting new lives on existing cases. What that did is it really started a lot of conversations with our employer groups just about the value of the program, the future of the program. You get into the discussions about kind of what we're looking for going forward around our rate increase program. It's just a point in time where they evaluate their entire employee benefits package and how the LTC plans might fit into that. As a result of some of those discussions, we did have much higher levels of employer level terminations of those cases.

Speaker #4: And what that did is it really started a lot of conversations with our employer groups just about the value of the program, the future of the program.

Speaker #4: You get into the discussions about kind of what we're looking for going forward around our rate increase program. And it's just a point in time where they evaluate their entire employee benefits package and how the LTC plans might fit into that.

Speaker #4: And so as a result of some of those discussions, we did have much higher levels of employer-level terminations of those cases. We did quote that about 7% of our cases did terminate in the first quarter.

Steven Zabel: We did quote that about 7% of our cases did terminate in Q1. That equates to approximately 30,000 actual lives on a net basis that would have ceased coverage during that period of time. You know, as we think about just ongoing communications with our customers, that's part of the conversation. We will continue to have those going forward. I would say as we look forward, Q1 is probably the most acute that we'd feel the impact, but we could see, you know, future terminations on some cases as those conversations continue. I would just pull it back up, though. I know there's a lot of GAAP accounting noise on this one, but at the end of the day, we're having good conversations with our clients.

Speaker #4: That equates to approximately 30,000 actual lives on a net basis that would have ceased coverage during that period of time. And so as we think about just ongoing communications with our customers, that's part of the conversation.

Speaker #4: We will continue to have those going forward. I would say, as we look forward, the first quarter is probably the most acute that we feel the impact.

Speaker #4: But we could see future terminations on some cases as those conversations continue. I would just pull it back up, though. I know there's a lot of gap accounting noise on this one.

Steven Zabel: I know there's a lot of GAAP accounting noise on this one, but at the end of the day, we're having good conversations with our clients. As a result, we've reduced risk exposure, tail risk on that book of business, and we just view it as another part of us thinking about how to manage this business going forward.

Speaker #4: But at the end of the day, we're having good conversations with our clients. As a result, we've reduced risk exposure, tail risk on that book of business.

Steven Zabel: As a result, we've reduced risk exposure, tail risk on that book of business, and we just view it as another part of us thinking about how to manage this business going forward.

Speaker #4: And we just view it as another part of us thinking about how to manage this business going forward.

Speaker #3: Your next question from the line of Tom Gallagher. With Evercore ISI. Your line is open. Please go ahead.

Operator 2: Your next question from the line of Thomas Gallagher with Evercore ISI. Your line is open. Please go ahead.

Operator: Your next question from the line of Thomas Gallagher with Evercore ISI. Your line is open. Please go ahead.

Speaker #5: Good morning. First question is just on how to think about guidance over the balance of the year. I heard your comment on group life and AD&D, how you think that's probably going to trend somewhat favorable relative to initial assumption.

Thomas Gallagher: Good morning. First question is just on how to think about guidance over the balance of the year. I heard your comment on Group Life and AD&D, how you think that's probably gonna trend somewhat favorable relative to initial assumption. I don't know. Can you just dimension have you changed anything for the other businesses? It does seem like international is running somewhat adverse, I guess Group Disability, the loss ratio sounds like it might be more toward the high end of the range, if I'm reading you correctly on this PFML issue, assuming that persists for a bit. Can you just talk about, you know, how you're thinking about the different businesses over the balance of the year? Thanks.

Tom Gallagher: Good morning. First question is just on how to think about guidance over the balance of the year. I heard your comment on Group Life and AD&D, how you think that's probably gonna trend somewhat favorable relative to initial assumption. I don't know. Can you just dimension have you changed anything for the other businesses? It does seem like international is running somewhat adverse, I guess Group Disability, the loss ratio sounds like it might be more toward the high end of the range, if I'm reading you correctly on this PFML issue, assuming that persists for a bit. Can you just talk about, you know, how you're thinking about the different businesses over the balance of the year? Thanks.

Speaker #5: I don't know. Can you just dimension have you changed anything for the other businesses? It does seem like international is running somewhat adverse. And I guess group disability the loss ratio sounds like it might be more toward the high end of the range if I'm reading you correctly on this PFML.

Speaker #5: Issue assuming that persists for a bit. But can you just talk about how you’re thinking about the different businesses over the balance of the year?

Speaker #5: Thanks.

Speaker #4: Yeah. This is Steve. I mean, I would zoom up and just say we feel very comfortable in the guidance range that we've given. Based on what we've seen in the first quarter, the drivers of some of the margins in the first quarter and how we look to the back half of the year.

Steven Zabel: Yeah. This is Steve. I mean, I would zoom up and just say we feel very comfortable in the guidance range that we've given. You know, based on what we've seen in Q1, the drivers of some of the margins in Q1 and how we look to H2. I would start with we feel great about growth within our core businesses, and that's a real driver then of bottom line. Everything we're seeing commercially would very much support the top-line growth that will drive the earnings that we have in that outlook. We did have some variances against kind of original expectations in Q1. You mentioned Group Life. That was a great result for us.

Speaker #4: I'd start with we feel great about growth within our core businesses. And that's a real driver then of bottom line. So everything we're seeing commercially would very much support the top line growth that will drive the earnings that we have in that outlook.

Speaker #4: We did have some variances against kind of original expectations in the first quarter. You mentioned group life. That was a great result for us.

Steven Zabel: We, we do think that there's a possibility that'll continue to be somewhat favorable to the 70%. As you know, Group Life can be very volatile, so we'll just have to see how the year plays out. International benefit ratio was a little bit higher. There was kind of some one-off things around just the average size of new disability claims. We don't believe that will persist. That, that'll be a watch area for us, though, and, you know, we'll monitor that as the year goes on. Colonial had a great quarter. Really everything from a benefit ratio perspective was very positive. We have a lot of different products within that, and there's usually a little bit of offsetting of performance, but this quarter everything was very positive.

Speaker #4: We do think that there's a possibility that'll continue to be somewhat favorable to the 70%. But as you know, group life can be very volatile.

Speaker #4: So we just have to see how the year plays out. International benefit ratio was a little bit higher. There was kind of some one-off things around just the average size of new disability claims.

Speaker #4: We don't believe that will persist. That'll be watch area for us, though. And we'll monitor that as the year goes on. Colonial had a great quarter.

Speaker #4: Really, everything from a benefit ratio perspective was very positive. We have a lot of different products within that. And there's usually a little bit of offsetting of performance.

Speaker #4: But this quarter, everything was very positive. And then there's some other lines where we had some variations, including group disability. But they were all within our range.

Steven Zabel: Then there's some other lines where we had some variations, including Group Disability. They were all within our range. I'm going into kind of planning for that ultimate outlook. It's the time. At this point, we're Q1 in, I'd say we still, you know, feel very good about the broad outlook range that we gave at the beginning of the year.

Speaker #4: Going into kind of planning for that ultimate outlook. So Tom, at this point, we're one quarter in. And so I would say we still feel very good about the broad outlook range that we gave at the beginning of the year.

Speaker #5: Gotcha. Thanks for that color, Steve. My follow-up is also on long-term care. Can you give a little bit of color for how big the group LTC reserves are relative to the total of, we'll call it, $14 billion or so?

Thomas Gallagher: Gotcha. Thanks for that color, Steve. My follow-up also long-term care. Can you give a little bit of color for how big are the?

Tom Gallagher: Gotcha. Thanks for that color, Steve. My follow-up also long-term care. Can you give a little bit of color for how big are the?

Steven Zabel: Oh

Thomas Gallagher: How big are the group LTC reserves relative to the total of, we'll call it $14 billion or so? When you had a 17% reduction from non-renewals, can you provide a little more transparency, what did that do to reserve levels versus the capital that make up the $2.2 billion of excess over best estimates in Fairwind? Thanks.

Steven Zabel: Oh

Tom Gallagher: How big are the group LTC reserves relative to the total of, we'll call it $14 billion or so? When you had a 17% reduction from non-renewals, can you provide a little more transparency, what did that do to reserve levels versus the capital that make up the $2.2 billion of excess over best estimates in Fairwind? Thanks.

Speaker #5: And did you when you had a 17% reduction from non-renewals, can you provide a little more transparency? What did that do to reserve levels versus the capital that make up the 2.2 billion of excess over best estimates in Fairwind?

Speaker #5: Thanks.

Speaker #4: Yeah. Tom, so it wasn't 17%. We had a 7% reduction. In cases in the first quarter due to employers ceasing the coverage in their plans.

Steven Zabel: Yeah. Tom, it wasn't 17%. We had a 7% reduction in cases in Q1 due to employers ceasing the coverage in their plans. What I would tell you is kind of from a statutory reserving perspective, we did really release reserves in Q1 of the year and felt, you know, very good about that. I kind of zoom back a little bit and just think about the protections that we have in Fairwind generally. Mechanically, what happens is we release those statutory reserves, and those in essence flow into excess capital and Fairwind. When you think about our definition of protections in Fairwind, it's a combination of the margins that we have in the reserves and the excess capital. It was pretty much neutral.

Speaker #4: What I would tell you is kind of from a statutory reserving perspective, we did really release reserves. In the first quarter of the year and felt very good about that.

Speaker #4: I kind of zoom back a little bit and just think about the protections that we have in Fairwind generally. And mechanically, what happens is we release those statutory reserves.

Speaker #4: And those, in essence, flow into excess capital in Fairwind. And when you think about our definition of protections in Fairwind, it's a combination of the margins that we have in the reserves and the excess capital.

Speaker #4: It was pretty much neutral. And so the way I think about it is we still have 2.2 billion of protections in Fairwind on a block that's smaller.

Steven Zabel: The way I think about it is we still have $2.2 billion of protections in Fairwind on a block that's smaller. At net on net, feel like we have more relative protection in Fairwind for the remaining block there. We haven't really disclosed the split between GAAP and individual or group and individual statutory reserves. That's, you know, something we consider going forward. There is a lot of demographic information about the split between individual and group in our annual investor packet that we send out as part of that call.

Speaker #4: And so net on net, feel like we have more relative protection in Fairwind for the remaining block there. We haven't really disclosed the split between gap and individual or, sorry, group and individual statutory reserves.

Speaker #4: And so that's something we consider going forward. There is a lot of demographic information about the split. Between individual and group in our annual investor packet that we send out as part of that call.

Speaker #3: Your next question from the line of Suneet Kamath, with Jefferies. Your line is open. Please go ahead.

Operator 2: Your next question from the line of Suneet Kamath with Jefferies. Your line is open. Please go ahead.

Operator: Your next question from the line of Suneet Kamath with Jefferies. Your line is open. Please go ahead.

Speaker #6: Great, thanks. Just wanted to start out by congratulating Tim Arnold on his retirement. But I did want to ask him a question, just on the voluntary business. We're starting to see some reports of states telling insurance companies to lower premiums on certain products.

Suneet Kamath: Great. Thanks. Just wanted to start out, congratulating Timothy Arnold on his retirement, but I did wanna ask him a question. Just on the voluntary business, you know, we're starting to see some reports of states telling insurance companies to lower premiums on certain products. Just wondering if you're seeing any of that in terms of your business.

Speaker #6: Just wondering if you're seeing any of that in terms of your business?

Speaker #5: Yesterday, this is Tim. Thank you so much for the congratulations on the retirement. I appreciate that. There have been states throughout the last 10, 15 years who've had loss ratio requirements that differ.

Timothy Arnold: Yes, Suneet, this is Tim. Thank you so much for the congratulations on the retirement. I appreciate that. You know, there have been states throughout the last 10, 15 years who've had loss ratio requirements that differ. It's not something new that we're working through, but we are seeing a couple of additional instances where states are inquiring about loss ratios and just trying to make sure that the products are performing as they were originally priced.

Speaker #5: And so, it's not something new that we're working through. But we are seeing a couple of additional instances where states are inquiring about loss ratios and just trying to make sure that the products are performing as they were originally priced.

Speaker #6: Got it. Okay. And then I guess turning to UNMUS, I mean, the 20% sales growth was pretty strong. I think most of it's from the core market.

Suneet Kamath: Got it. Okay. I guess, turning to Unum US, I mean, the 20% sales growth was pretty strong. I think most of it's from the core market. Can you just kind of unpack that a little bit? How much of that is, you know, sales to existing customers versus new customers? You know, any comment on kind of the natural growth that you typically talk about on these calls? Thanks.

Speaker #6: But can you just kind of unpack that a little bit? How much of that is sales to existing customers versus new customers? And any comment on kind of the natural growth that you typically talk about on these calls?

Speaker #6: Thanks.

Speaker #5: Yeah. Suneet, actually, we'll let Chris get into that. But I think it would be helpful to actually talk about sales around the horn because I think we had a really good sales quarter.

Steven Zabel: Yeah, Suneet, actually, we'll let Chris get into that. I think it would be helpful to actually talk about sales around the horn because I think we had a really good sales quarter in the US, but I think that that was other places as well. Chris, you want to start us off? Maybe we'll ask Mark and Tim to talk a little bit about sales as well.

Speaker #5: And in the US, but I think that was other places as well. So, Chris, you want to start us off? And maybe we'll ask Mark and Tim to talk a little bit about sales as well.

Speaker #7: Great. Thanks, Suneet. Yeah. Strong sales in the quarter, 20% growth. And we're thrilled as we look at that sales growth that we can continue to tie back to where we've made investments and capabilities.

Christopher Pyne: Great. Thanks, Suneet. Yes, strong sales in the quarter, 20% growth. You know, we're thrilled as we look at that sales growth that we can continue to tie back to where we've made investments and capabilities. No surprise, HR Connect and, you know, connecting to the platforms of choice, hugely popular with our new sales and also growing existing sales when that type of connection's in place. TotalLeave is a huge driver of decisions that people make, and they buy a bundle when they do that for both TotalLeave and HR Connect type platforms.

Speaker #7: No surprise, HR Connect and connecting to the platforms of choice are hugely popular with our new sales. And also growing existing sales when that type of connection is in place.

Speaker #7: Total leave is a huge driver of decisions that people make. And they buy a bundle when they do that for both total leave and HR Connect.

Speaker #7: Type platforms. I want to also reinforce that we've got a very strong marketing alignment in terms of going out and finding the right types of prospects.

Christopher Pyne: I want to also reinforce that, you know, we've got a very strong marketing alignment in terms of going out and finding the right types of prospects, so that we know where to spend time and energy and, you know, our brokers and consultants are focused on the right things when it comes to making a difference for their client base. That's an exciting partnership, and it's nice to see that alignment all the way through the sales funnel. You referenced that, you know, new sales for small and mid customers are really strong. That was, there was a little bit of tailwind with PFML in that space. Even when you strip that out, new sales for small and mid customers are really strong.

Speaker #7: So that we know where to spend time and energy and our brokers and consultants are focused on the right things. When it comes to making a difference for their client base, that's an exciting partnership.

Speaker #7: And it's nice to see that alignment all the way through the sales funnel. You referenced that new sales for small and mid customers really strong.

Speaker #7: That was there was a little bit of tailwind with PFML. And that's based. But even when you strip that out, new sales for small and mid customers are really strong.

Speaker #7: Nice to see that growth year over year. First quarter is a little bit more volatile. It's a small quarter for us in terms of our national client group.

Christopher Pyne: Nice to see that growth year over year. Q1 is a little bit more volatile. It's a small quarter for us in terms of our national client group. You know, again, we did see some tailwind from PFML in the large space with Maine coming on 1 May, which we credit in the, you know, which we see in the quarter. You know, overall, the fundamentals of where we're winning tied to capabilities, winning on new and growing our business have been really positive. Great start to the year. Thanks for asking.

Speaker #7: And again, we did see some tailwind from PFML in the large space with Maine coming on 5-1, which we credit in the we see in the quarter.

Speaker #7: But overall, the fundamentals of where we're winning tied to capabilities winning on new and growing our business have been really positive. Great start to the year.

Speaker #7: So thanks for asking. Tim, you want to follow up?

Steven Zabel: Tim, you want to follow up?

Speaker #5: Yes, sure. I'll start with the UNMVV side of the house. Extremely strong sales in the first quarter, up 24% year over year. New sales were at a record level.

Timothy Arnold: Yes, sure. I'll start with the Unum VB side of the house. Extremely strong sales in Q1, up 24% year over year. New sales were at a record level. In the VB business on the Unum side, Q1 is the biggest quarter of the year, so it's particularly comforting to see the business get off to a +24% start, that bodes well for the remainder of the year. On the Colonial Life side, sales were a little sluggish in the quarter. However, I would just bring it back to Q4 where sales growth was almost 10%. I think we had a little bit of a soft pipeline coming into 2026, but I would tell you the fundamentals and the leading indicators remain very strong. Recruiting is very strong.

Speaker #5: And the VB business on the UNM side, the first quarter is the biggest quarter of the year. So it's particularly comforting to see the business get off to a plus 24% start that bodes well for the remainder of the year.

Speaker #5: On the cloning life side, sales were a little sluggish in the quarter. However, I would just bring you back to the fourth quarter where sales growth is almost 10%.

Speaker #5: I think we had a little bit of a soft pipeline coming into 2026. But I would tell you the fundamentals and the leading indicators remain very strong.

Speaker #5: Recruiting is very strong. We like the number of sales managers we have in the organization and the performance that they are demonstrating. We saw a strong sales in the quarter from new clients and also from large case clients.

Timothy Arnold: We like the number of sales managers we have in the organization and the performance that they are demonstrating. We saw strong sales in the quarter from new clients and also from large case clients. We had a little bit of weakness in the existing client sales base, and Ashley Motter and the team, the sales team were working hard to get that back on track, and we believe that the remainder of the year there's reason to be optimistic. If you look at the gap between where we finished the Q1 at Colonial Life and where we thought we would be, it's about 1% of total annual sales, so we certainly think that that is recoverable.

Speaker #5: Had a little bit of weakness in the existing client sales base. And Ashley Miner and the sales team were working hard to get that back on track.

Speaker #5: And we believe that, for the remainder of the year, there's reason to be optimistic. If you look at the gap between where we finished the first quarter at Colonial Life and where we thought we would be, it's about 1% of total annual sales.

Speaker #5: So we certainly think that that is recoverable. And then if I may, Suneet, since you started the question with my retirement, I'd be remiss not to say I'm extremely excited about Steve Jones.

Timothy Arnold: If I may, Suneet, since you started the question with my retirement, I'd be remiss not to say I'm extremely excited about Steve Jones. I've had the opportunity to work with him now for 2 and a half years since he joined Colonial Life as the head of sales and marketing support, field to market development. He is an incredibly strong leader. He's led 2 other P&Ls in his career. I think this transition is going to be extremely smooth. He's very much aligned to all the things that we've been doing. He's got some ideas of his own that I think are pretty exciting. So, really, really happy to have Steve in the role moving forward.

Speaker #5: In fact, the opportunity to work with him now for two and a half years, since he joined Colonial Life as the head of sales and marketing support.

Speaker #5: Field and market development. He is an incredibly strong leader. He's led two other P&Ls in his career. And I think this transition is going to be extremely smooth.

Speaker #5: He's very much aligned to all the things that we've been doing. And he's got some ideas of his own that I think are pretty exciting.

Speaker #5: And so really, really happy to have Steve in the role moving forward.

Speaker #7: Great. Good. Thanks, Tim and Mark. Let's talk a little bit about international.

Richard McKenney: Great. Good. Thanks, Tim. Mark, let's talk a little bit about International.

Speaker #8: Yeah. Thanks, Rick. If you look at international as a whole in dollars, sales were up 14%. As we know, the UK is the predominant part of that.

Mark Till: Yeah. Thanks, Rick. If you look at International as a whole in $, sales were up 14%. As we know, the UK is the predominant part of that. If I perhaps touch on local currency sales in the UK, they were up 15% on the quarter. I always think sales are a function of the proposition that you have and the way in which the brokers in the UK market view you. We've been investing hard in broker service, digital propositions. It was last week that actually an independent survey by NNG on brokers rated us the number one for Net Promoter Score, and we led the market in pretty much every major capability, whether that's relationship management, claims management, absence management, rehab, product, and value-added service.

Speaker #8: So if I perhaps touch on local currency sales in the UK, they were up 15% on the quarter. I always think sales are a function of the proposition that you have and the way in which the brokers in the UK market view you.

Speaker #8: We’ve been investing hard in broker service digital propositions. It was last week that, actually, an independent survey by NMG on brokers rated us the number one for net promoter score.

Speaker #8: And we led the market in pretty much every major capability whether that's relationship management, claims management, absence management, rehab, product value added service. Those are the things that contribute those are the things that contribute to the growth in the business.

Mark Till: Those are the things that contribute to the growth in the business. We also got some data last week that said that in 2025, we were the number 1 writer of new business in the UK market. I think we've got some confidence that we have the support of the brokers and the propositions to be able to drive the growth sales in the business over time.

Speaker #8: We also got some data last week that said that in 2025, we were the number one writer of new business in the UK market.

Speaker #8: So I think we got some confidence that we have the support of the brokers and the propositions to be able to drive the growth and sales in the business over time.

Speaker #7: Good. Thanks, Mark. There you have, Suneet. I mean, I think it is a broad-based story. And so I didn't want to focus on just the USP sales looked very good across the enterprise in the quarter.

Richard McKenney: Good. Thanks, Mark. There you have, Suneet. I mean, I think it is a broad-based story. I don't want to focus on just the USP. Sales looked very good across the enterprise in the quarter. Thanks for the question.

Speaker #7: Thanks for the question.

Speaker #8: Your next question, from the line of Jack Madden with BMO. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Jack Matten with BMO.

Operator: Your next question from the line of Jack Matten with BMO.

Speaker #9: Hey. Good morning. Just one follow-up on the group LTC actions. I guess what you said that UNM is incentivizing its group customers in any way to terminate their cases?

Jack Matten: Hey, good morning. Just one follow-up on the Group LTC actions. I guess would you say that Unum is incentivizing its group customers in any way to terminate their cases or do you plan to offer any incentives there? Is it really just these terminations are an outcome from kind of more normal course conversations around things like rate increases?

Speaker #9: Or do you plan to offer any incentives there? Or is it really just these terminations are an outcome from kind of more normal course conversations around things like rate increases?

Speaker #5: Yeah. This is Steve. Absolutely no incentive. This is a unilateral decision that a group HR director makes. When they're looking at their entire benefit package for their employees and just evaluating the value of the different pieces of that package and so we're obviously here to have that conversation with them.

Steven Zabel: Yeah, this is Steve. Absolutely no incentive. This is a unilateral decision that a group HR director makes when they're looking at their entire benefit package for their employees and just evaluating the value of the different pieces of that package. We're obviously here to have that conversation with them and discuss their options with their plan. There's absolutely no incentive coming from us. From our perspective, you know, the key is for us to continue to serve those customers that remain in force, and that's what our team's focused on. We're also there to help, you know, give a little bit of education and, you know, help an administrator through their decision.

Speaker #5: And discuss their options with their plan. But there's absolutely no incentive coming from us. And from our perspective, the key is for us to continue to serve those customers that remain in force.

Speaker #5: And that's what our team's focused on. But we're also there to help give a little bit of education and help an administrator through their decision.

Speaker #9: Got it. That makes sense. And then my follow-ups on the international business. And I think some of the pressure you talked about in UK group LTD, can you just unpack that a little bit more?

Jack Matten: Got it. That makes sense. My follow-ups on the international business, and I think some of the pressure you talked about in UK group LTD, can you just unpack that a little bit more? Was that more a frequency or severity issue? Do you view any of the trends there as something that could persist for a period of time, or do you view it more as just a kind of a one-off this quarter?

Speaker #9: Was that more of a frequency or severity issue? And do you view any of the trends there as something that could persist for a period of time?

Speaker #9: Or do you view it more as just a kind of a one-off this quarter?

Steven Zabel: Yeah, this is Steve. I can cover that one. You know, it definitely was, for the quarter, an average size for the long-term disability business over there. Really, the size of new claims is a function of just those individual claims that come in based on diagnosis, based on occupancy, based on, you know, based on the industry. We have a lot of data to say those types of claims when they come in, this is the reserve that we need to set up. You get into some of these quarters where just the mix of those claims drive a higher expected size of claims than what you would have expected. Really nothing to do with the incidence counts specifically there.

Speaker #5: Yeah. This is Steve. I can cover that one. It definitely was for the quarter an average size for the long-term disability business over there.

Speaker #5: And really, the size of new claims is a function of just those individual claims that come in based on diagnosis, based on occupancy, based on the industry.

Speaker #5: And so we have a lot of data to say those types of claims when they come in, this is the reserve that we need to set up.

Speaker #5: And so you get into some of these quarters where just the mix of those claims drive a higher expected size of claims than what you would have expected.

Speaker #5: So really nothing to do with the incidents counts. Specifically there. I will say we've seen that in the US business as well over time.

Steven Zabel: I will say we've seen that in the US business as well over time. They tend to just be kind of anomalies that you see in a quarter. Right now we would view it as just some Q1 volatility. Obviously we're gonna need to look at that as the year plays out and see, you know, how that impacts our view of the outlook for the business.

Speaker #5: And they tend to just be kind of anomalies that you see in a quarter. And so right now, we would view it as just some first-quarter volatility.

Speaker #5: But obviously, we're going to need to look at that as the year plays out. And see how that impacts our view of the outlook for the business.

Speaker #8: Your next question. From the line of Joel Hurwitz. With Dowling. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Joel Hurwitz with Dowling. Your line is now open. Please go ahead.

Operator: Your next question from the line of Joel Hurwitz with Dowling. Your line is now open. Please go ahead.

Speaker #9: Hey. Good morning. First, Rick, in your prepared remarks, you mentioned that you were I think encouraged by opportunities and progress that's been made on further risk transfer.

Joel Hurwitz: Hey, good morning. First, Rick, in your prepared remarks, you mentioned that you were, I think, encouraged by opportunities and progress that's been made on further risk transfer. Can you just elaborate what you're seeing in the market and I guess any optimism in getting another deal done this year?

Speaker #9: Can you just elaborate what you're seeing in the market? And I guess any optimism in getting another deal done this year?

Speaker #5: Yeah. Thanks, Joel. And as I talk about that, I look back to the transaction last year. It's been just over a year since we announced the transaction closed at mid-year last year.

Steven Zabel: Yeah. Thanks, Joel. As I talk about that, you know, I look back to the transaction last year. It's been just over a year since we announced the transaction closed at mid-year last year. Very happy with how that performed, how that went through close, and we think it's just a good overall impact to the risk transfer. We've talked a little bit about what's happening on the group side today. We are looking across the book with different counterparties to think about what are other ways that we can use reinsurance and risk transfer to help mitigate that. Coming off of a successful 2025, we also at that time said we're deal ready. We're ready to go for the next tranche. It's just about finding the right counterparty.

Richard McKenney: Yeah. Thanks, Joel. As I talk about that, you know, I look back to the transaction last year. It's been just over a year since we announced the transaction closed at mid-year last year. Very happy with how that performed, how that went through close, and we think it's just a good overall impact to the risk transfer. We've talked a little bit about what's happening on the group side today. We are looking across the book with different counterparties to think about what are other ways that we can use reinsurance and risk transfer to help mitigate that. Coming off of a successful 2025, we also at that time said we're deal ready. We're ready to go for the next tranche. It's just about finding the right counterparty.

Speaker #5: Very happy with how that performed, how that went through close. And we think it's just a good overall impact to the risk transfer. We've talked a little bit about what's happening on the group side today.

Speaker #5: But we are looking across the book with different counterparties to think about what are other ways that we can use reinsurance and risk transfer to help mitigate that.

Speaker #5: So coming off of a successful 2025, we also at that time said we're deal ready. We're ready to go for the next tranche. It's just about finding the right counterparty.

Speaker #5: So we have the preparation and the teams are ready to do that. We have a strong desire to remove this risk, which we have been very consistent on.

Steven Zabel: We have the preparation and the teams are ready to do that. We have a strong desire to remove this risk, which we have been very consistent on, and that's in multiple forms, in terms of taking the risk across the enterprise. On the risk transfer side, the market is constructive. I think we've used that term constructive before. There are a number of players out there that might take on this type of risk. Lots of interest that's out there, but getting interest to be actionable takes some time because it does take a good qualified counterparty who's willing to do the work. There are a number of people out there willing to take the biometric risk.

Richard McKenney: We have the preparation and the teams are ready to do that. We have a strong desire to remove this risk, which we have been very consistent on, and that's in multiple forms, in terms of taking the risk across the enterprise. On the risk transfer side, the market is constructive. I think we've used that term constructive before. There are a number of players out there that might take on this type of risk. Lots of interest that's out there, but getting interest to be actionable takes some time because it does take a good qualified counterparty who's willing to do the work. There are a number of people out there willing to take the biometric risk.

Speaker #5: And that's in multiple forms. In terms of taking the risk across the enterprise. And on the risk transfer side of the market is constructive.

Speaker #5: I think we've used that term constructive before. There are a number of players out there that might take on this type of risk. Lots of interest that's out there.

Speaker #5: But getting interest to be actionable takes some time because it does take a good qualified counterparty who's willing to do the work. But there are a number of people out there willing to take the biometric risk.

Speaker #5: And I think part of the development we saw a couple of years ago is the ability of companies to parse the risk between the biometrics and the asset management side, which is such an important piece as well.

Steven Zabel: I think part of the development we saw a couple of years ago is the ability of companies to parse the risk between the biometrics and the asset management side, which is such an important piece as well. There are a number of players out there thinking about the biometric side. There are many players out there thinking about the asset side of it. How do you bring it all together? I'd put it with the same category. It's constructive, the team is active. Does not necessarily mean any deal will come to fruition. This is still complicated, hard work, and we're going to do the right thing in terms of shareholders as well when we take off that risk. We're working hard at it.

Richard McKenney: I think part of the development we saw a couple of years ago is the ability of companies to parse the risk between the biometrics and the asset management side, which is such an important piece as well. There are a number of players out there thinking about the biometric side. There are many players out there thinking about the asset side of it. How do you bring it all together? I'd put it with the same category. It's constructive, the team is active. Does not necessarily mean any deal will come to fruition.

Speaker #5: And there are a number of players out there thinking about the biometric side. There are many players out there thinking about the asset side of it.

Speaker #5: And then how do you bring it all together? So I'd put it with the same category. It's constructive. We're the team is active. Does not necessarily mean any deal will come to fruition.

Speaker #5: This is still complicated, hard work. And we're going to do the right thing in terms of shareholders as well when we take off that risk.

Richard McKenney: This is still complicated, hard work, and we're going to do the right thing in terms of shareholders as well when we take off that risk. We're working hard at it. I think that, you know, we'll continue to have this to be a priority in the company to remove the risk of LTC from the balance sheet.

Speaker #5: But we're working hard at it. And I think that we'll continue to have this be a priority in the company to remove the risk of LTC from the balance sheet.

Steven Zabel: I think that, you know, we'll continue to have this to be a priority in the company to remove the risk of LTC from the balance sheet.

Speaker #9: Great. Thanks. And then just shifting to group life, just I guess can you unpack the experience? Was it all essentially frequency? And then just given I think it's been a little over two years now of continued strong results in group life.

Joel Hurwitz: Great. Thanks. Then just shifting to group life, just, I guess, can you unpack the experience? Was it all essentially frequency? Then just given, I think it's been a little over 2 years now of continued strong results in group life, when does that get reflected back in pricing or is the benefit ratio in the sixties for this line sort of the new normal now?

Speaker #9: When does that get reflected back in pricing? Or is the benefit ratio in the 60s for this line sort of the new normal now?

Speaker #5: Yeah. So in the quarter, it was definitely just incidents. These tend to be lower face amount type policies in group life. So normally when you see kind of fluctuations in overall benefit ratios, it's just going to be driven by the number of claims that we receive in a period.

Steven Zabel: Yeah. In Q1, it was definitely just incidents. These tend to be lower face amount type policies in Group Life. Normally when you see kind of fluctuations in overall benefit ratios, it's just going to be driven by the number of claims that we receive in a period. That's definitely what we saw in Q1, very low number of claims submitted. When I kind of zoom back a little bit, you know, if you go back and you look at the average benefit ratio in this line going back many quarters, it's been kind of in that high 60% range. This quarter was really an anomaly and doesn't necessarily, you know, change our view of the block significantly.

Speaker #5: And that's definitely what we saw in the first quarter. Very, very low number of claims submitted. When I kind of zoom back a little bit, if you go back and you look at the average benefit ratio in this line going back many quarters, it's been kind of in that high 60% range.

Speaker #5: So this quarter was really an anomaly and doesn't necessarily change our view of the block significantly. I did make a comment that, looking forward, it may be in that high 60% range benefit ratio.

Steven Zabel: I did make a comment that, you know, if we looking forward, it may be in that high 60% range benefit ratio. I would say from a market and a pricing perspective, we'll take it into account, but it is just one quarter of very good performance, and we'd have to see that play out for longer really before it impact pricing in a big way. Like all of our products, we look at this in a bundled way as we're working with our cases. We'll look at the overall economics of a case and, over time it, you know, it could factor in, but right now I think it's too early.

Speaker #5: But I would say from a market and a pricing perspective, we'll take it into account. But it is just one quarter of very, very good performance.

Speaker #5: And we'd have to see that play out for longer, really before it impacts pricing in a big way. And like all of our products, we look at this in a bundled way.

Speaker #5: As we're working with our cases, and so we'll look at the overall economics of a case and over time it could factor in. But right now, I think it's too early.

Speaker #5: Yeah. I think that's an important point, Joel. When you think about it, it is that bundling factor. We've been talking about that a lot on the group disability and the great results we've seen there.

Richard McKenney: Yeah. I think that's an important point, Joel. When you think about it is that bundling factor. We've been talking about that a lot on the Group Disability and the great results we've seen there. It's more than just the standalone product line, what it's doing. It's more about the relationship, our risk selection, all those different things that come in. As we've talked about leave management and the wrapper around that's all important. It's good to look at. We're very happy with the results, but it's really hard to predict in terms of where that's going to go or how the market will factor some of that in.

Speaker #5: It's more than just the standalone product line. What it's doing, it's more about the relationship, our risk selection, all those different things that come in.

Speaker #5: And as we've talked about, leave management and the wrapper around that—that's all important. So it's good to look at it. We're very happy with the results.

Speaker #5: But it's really hard to predict in terms of where that's going to go or how the market will factor some of that in.

Joel Hurwitz: Hmm.

Speaker #8: Your next question, from the line of Wes Carmichael with Wells Fargo. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Wesley Carmichael with Wells Fargo. Your line is now open. Please go ahead.

Operator: Your next question from the line of Wesley Carmichael with Wells Fargo. Your line is now open. Please go ahead.

Speaker #10: Hey, thank you. Good morning. I wanted to come back to group LTC for a second on the terminations and the 7%. Just looking at the statutory annual filings, I think the group LTC reserves are around $7.5 billion.

Wesley Carmichael: Hey, thank you. Good morning. I wanted to come back to Group LTC for a second on the terminations in the 7%. Just looking at the statutory annual filings, I think the Group LTC reserves around $7.5 billion at the end of 2025. Curious, Steven, does that imply that the reserve releases are in the neighborhood of, call it $500, 525 million? Or is there any help you can give us on the impact on the statutory front?

Wes Carmichael: Hey, thank you. Good morning. I wanted to come back to Group LTC for a second on the terminations in the 7%. Just looking at the statutory annual filings, I think the Group LTC reserves around $7.5 billion at the end of 2025. Curious, Steven, does that imply that the reserve releases are in the neighborhood of, call it $500, 525 million? Or is there any help you can give us on the impact on the statutory front?

Speaker #10: At the end of 2025. So just curious, Steve, does that imply that the reserve releases are in the neighborhood of call it 500, 525 million dollars?

Speaker #10: Or is there any help you can give us on the impact on the statutory front?

Speaker #5: Yeah. What I'll tell you on that one, you can't just kind of use averages. To think about what a statutory reserve release might look like just because the policies are in different ages.

Steven Zabel: Yeah. What I'll tell you on that one, you can't just kind of use averages to think about what a statutory reserve release might look like just because the policies are in, you know, in different ages. There's different benefit coverages, so it's kind of hard just to do that. What I'll tell you is on a net basis, the statutory reserve release, it was less than $100 million. It was, you know, it was significant, it wasn't something that would change a capital plan or change the way we think about, you know, protections on the balance sheet. We're very happy. For us, the main thing is we're very happy reducing the risk exposure, not a big capital impact, I would say, in the quarter.

Speaker #5: There's different benefit coverages. And so it's kind of hard just to do that. What I'll tell you is on a net basis, the statutory reserve release it was less than 100 million dollars.

Speaker #5: It was significant, but it wasn't something that would change a capital plan or change the way we think about protections on the balance sheet.

Steven Zabel: It was, you know, it was significant, it wasn't something that would change a capital plan or change the way we think about, you know, protections on the balance sheet. We're very happy. For us, the main thing is we're very happy reducing the risk exposure, not a big capital impact, I would say, in the quarter. As you said, the reserves on these are going to be positive for statutory purposes, so there will always be a reserve release.

Speaker #5: We're very happy for us. The main thing is we're very happy reducing the risk exposure. But not a big capital impact, I would say, in the quarter.

Speaker #5: But as you said, the reserves on these are going to be positive for statutory purposes. So there will always be a reserve release.

Steven Zabel: As you said, the reserves on these are going to be positive for statutory purposes, so there will always be a reserve release.

Speaker #10: Yep. That's helpful. And I totally acknowledge the reduction in risk along sorry, was it something else?

Wesley Carmichael: Yep, that's helpful. I totally acknowledge the reduction in risk. Sorry, was it something else?

Wes Carmichael: Yep, that's helpful. I totally acknowledge the reduction in risk. Sorry, was it something else?

Speaker #5: Nope.

Steven Zabel: Nope.

Speaker #10: Okay. Just second question, I guess moving to Unum US. Just on expenses and I think I asked about this last quarter, and you guys have hinted that maybe there is some potential operating leverage coming.

Wesley Carmichael: Okay. Just second question, I guess, moving to Unum US, just on expenses, and, you know, I think I asked about this last quarter, and you guys had hinted that maybe there is some potential operating leverage coming. Any thought on how you can improve the expense ratio going forward in Unum US?

Wes Carmichael: Okay. Just second question, I guess, moving to Unum US, just on expenses, and, you know, I think I asked about this last quarter, and you guys had hinted that maybe there is some potential operating leverage coming. Any thought on how you can improve the expense ratio going forward in Unum US?

Speaker #10: But any thought on how you can improve the expense ratio going forward in Unum US?

Speaker #5: Yeah. I mean, we kind of think about it in the aggregate and kind of take it to the top of the house of the consolidated operating expense.

Steven Zabel: Yeah, I mean, we kind of think about it in the aggregate and kind of take it to the top of the house of the consolidated operating expense. I, you know, I think the comments that we made is our expectation for 2026 is gonna be, you know, that's gonna be relatively flat with maybe some improvement as we work our way through the year. We are driving productivity within the organization, which we think is important, but we're also investing back into what we're trying to do commercially. I think if, you know, if you want to look for this period in 2026, I think it'll be a pretty neutral story, all things being considered.

Speaker #5: I think the comments that we made is our expectation for 2026 is going to be that's going to be relatively flat with maybe some improvement as we work our way through the year.

Speaker #5: We are driving productivity within the organization, which we think is important. But we're also investing back into what we're trying to do commercially. And so I think if you want to look for the this period in 2026, I think it'll be a pretty neutral story all things being considered.

Speaker #8: Your next question from the line of Ryan Krueger with KBW. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Ryan Krueger with KBW.

Operator: Your next question from the line of Ryan Krueger with KBW.

Speaker #10: Hey. Thanks. Good morning. I had a question on the traditional group persistency improvement of about 3.0 per year. Can you talk about the, I guess, the dynamics that you think led to that, both from a market perspective and maybe anything Unum specific?

Ryan Krueger: Hey, thanks. Morning. I had a question on the traditional group persistency, improvement of about 3 points year over year. Can you just talk about the, I guess, the dynamics that you think led to that, both from a market perspective and maybe anything Unum specific?

Speaker #5: Yeah. Thanks, Ryan. It's Chris. Persistency is really strong. We're thrilled with the beat we had with persistency. And we do think it reflects very directly the investments we've made in capabilities.

Christopher Pyne: Yeah. Thanks, Ryan. It's Chris. Persistency is really strong. We're thrilled with the beat we had with persistency, and we do think it reflects very directly the investments we've made in capabilities. You know, we've got historical evidence that continues where there's a spread in persistency in terms of higher persistency where you've got either HR Connect technology investments and/or Total Leave, and we expect, you know, that trend to continue.

Speaker #5: We've got historical evidence that continues where there's a spread in persistency. In terms of higher persistency where you've got either HR Connect technology investments and/or total leave.

Speaker #5: And we expect that trend to continue coupled that with the fact that we talk about consistent and transparent discussions around price and when things are going really well, we'll make sure we set the price on a go forward basis.

Christopher Pyne: Couple that you know, with the fact that we talk about consistent and transparent discussions around price and, you know, when things are going really well, we'll make sure we set the price on a go-forward basis in a way that reflects, you know, good value to us and fair value to the consumer. Employers appreciate that. It shows up in terms of persistency, and we can keep customers with a, you know, modest rate reduction going forward at very high margins. That's a good day. When you tie that to, you know, full bundle, lots of different products, lots of services that we provide, including, you know, fairly significant and, from a volume perspective, intense things like managing leave.

Speaker #5: In a way that reflects good value to us and fair value to the consumer. Employers appreciate that. It shows up in terms of persistency.

Speaker #5: And we can keep customers with a modest rate reduction going forward at very high margins. That's a good day. And when you tie that to full bundle lots of different products, lots of services that we provide, including fairly significant and from a volume perspective intense things like managing leave, customers' value are what we do for them.

Christopher Pyne: That's a good day. When you tie that to, you know, full bundle, lots of different products, lots of services that we provide, including, you know, fairly significant and, from a volume perspective, intense things like managing leave. Customers value our what we do for them and we feel the persistency, you know, while not always gonna hit the high that we had this quarter, it is gonna be a real kind of key to growth in the future.

Christopher Pyne: customers value our what we do for them and we feel the persistency, you know, while not always gonna hit the high that we had this quarter, it is gonna be a real kind of key to growth in the future.

Speaker #5: And we feel the persistency while not always going to hit the high that we had this quarter, it is going to be a real kind of key to growth in the future.

Speaker #10: Great. Thank you.

Ryan Krueger: Great. Thank you.

Operator 2: Your next question from the line of Mark Hughes from Truist. Your line is now open. Please go ahead.

Operator: Your next question from the line of Mark Hughes from Truist. Your line is now open. Please go ahead.

Speaker #8: Your next question from the line of Mark Hughes from Truth. Your line is now open. Please go ahead.

Speaker #11: Yeah. Thank you. Flip side of that, I think supplemental and voluntary persistency perhaps down a little bit. I think still within normal range. Any strategies to see similar improvement like you've seen in those core group disability life and AD&D?

Mark Hughes: Thank you. Flip side of that, I think, supplemental and voluntary persistency perhaps down a little bit, I think still within normal range. Any strategies to see similar improvement like you've seen in those core Group Disability, Life, and AD&D?

Speaker #5: Yeah. You want to take that? Go ahead. Go ahead, Chris.

Christopher Pyne: Yeah.

Timothy Arnold: Hey, you want to take that? Go ahead, Chris.

Richard McKenney: Hey, you want to take that? Go ahead, Chris.

Timothy Arnold: Yeah. Go ahead, Tim. Talk about the voluntary business. I would start with the wrapper, though.

Christopher Pyne: Yeah. Go ahead, Tim. Talk about the voluntary business. I would start with the wrapper, though.

Speaker #11: Yeah. Go ahead, Dan. Talk about the voluntary business. I would start with the wrapper, though, because those things that Chris talked about are important overall in terms of the digital connections we have, etc.

Richard McKenney: Yeah.

Richard McKenney: Because those things that Chris talked about are important overall in terms of the digital connections we have, et cetera. You know, our voluntary business does have a little bit lower persistency at the employee level. Tim, maybe you can talk a little bit about that.

Speaker #11: But our voluntary business does have a little bit lower persistency at the employee level. And Tim, maybe you can talk a little bit about that.

Timothy Arnold: Yeah, Rick, that's right on. That's exactly where we experienced the pressure in the quarter. As we, as we continue to attach the Voluntary Benefits business on the Unum side to our leave program and to our platform partnerships with through HR Connect and Broker Connect and things of that nature, we're seeing improving persistency on the employer choice side. We had what I would describe as volatility in Q1 on what we call member lapses, so policyholders who are either changing employers or, for whatever reason, dropping their coverage. The overwhelming majority of those are changing employers. We're taking a deeper look at that just to make sure that we are fully understanding it, and then we'll put together any actions that are necessary to bring that back.

Speaker #5: Yeah. Yeah, right. That's right on. That's exactly where we experience the pressure in the quarter. So as we continue to attach the voluntary benefits business on the Unum side to our leave program and to our platform partnerships through HR Connect and Broker Connect and things of that nature, we're seeing improving persistency on the employer choice side.

Speaker #5: We had what I would describe as volatility in the first quarter. On what we call member lapses. So policyholders who are either changing employers or for whatever reason dropping their coverage, the overwhelming majority of those are changing employers.

Timothy Arnold: The overwhelming majority of those are changing employers. We're taking a deeper look at that just to make sure that we are fully understanding it, and then we'll put together any actions that are necessary to bring that back. We think a big part of it was just some volatility in the quarter.

Speaker #5: And so we're taking a deeper look at that just to make sure that we are fully understanding it. And then we'll put together any actions that are necessary to bring that back.

Speaker #5: But we think a big part of it was just some volatility in the quarter. Yeah. And I might just underscore Tim's point—it's a really good one.

Timothy Arnold: We think a big part of it was just some volatility in the quarter.

Richard McKenney: Yeah. I might just underscore Tim's point. It, it's a, it's a really good one. Those conversations when you're in talking holistically about the human capital management platform and leave and the full portfolio, you know, we have the chance to talk about, you know, how to make sure that ongoing enrollments remain strong and we get persistency lift over time. Glad Tim led in with that.

Speaker #5: Those conversations when you're in talking holistically about the human capital management platform and leave and the full portfolio, we have the chance to talk about how to make sure that ongoing enrollments remain strong.

Speaker #5: And we get persistency lift over time. So glad Tim led them with that.

Speaker #11: Appreciate that. Thank you. And then the corporate outlook for the balance of the year, what do you expect in terms of the corporate loss?

Mark Hughes: Appreciate that. Thank you. Then the corporate outlook for the balance of the year, what do you expect in terms of the corporate loss?

Speaker #5: Yeah. This is Steve. I would say mid-40s loss is probably about where I peg it. It was a little bit light. The losses, I think, a little bit light this quarter.

Steven Zabel: Yeah. This is Steve. I would say mid-40s loss is probably about where I peg it. You know, it was a little bit light. The losses were, I think, a little bit light this Q. That would be probably where I would estimate it being going forward for the year.

Speaker #5: But that would be, probably, where I would estimate it being, going forward for the year.

Speaker #8: Your next question from the line of Pablo Singson with JPM. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Pablo Zuniga with JPM.

Operator: Your next question from the line of Pablo Zuniga with JPM.

Speaker #12: Hi, thank you. One more question on Unum International, where you'd referenced macrodynamics in the UK. Was that related to inflation potentially picking up again?

Pablo Zuniga: Hi. Thank you. One more question on Unum International, where you referenced macro dynamics in the UK. Was that related to inflation potentially picking up again, you know, economic outlook or something to do with underlying risk experience that you had already commented on? Thanks.

Pablo Singzon: Hi. Thank you. One more question on Unum International, where you referenced macro dynamics in the UK. Was that related to inflation potentially picking up again, you know, economic outlook or something to do with underlying risk experience that you had already commented on? Thanks.

Speaker #12: Economic outlook or something to do with underlying risk experience that you had already commented on? Thanks.

Speaker #5: Mark, I don't know if you picked up the question, but it was talking about just the macro environment and if that's causing some of the benefits.

Richard McKenney: Mark, I don't know if you picked up the question, but it was talking about just the macro environment and if that's causing some of the benefits. He specifically highlighted inflation. It's a little hard to hear.

Speaker #5: And he specifically highlighted inflation. So it's a little hard to hear. So yeah.

Mark Till: Yeah, yeah. I mean, I think it's fair to say that the macroeconomic environment in the UK is not as strong as it has been for the last couple of years. We have some slightly higher inflation. The Bank of England has yet to respond with higher interest rates, and actually sent some very calming messages saying that it wasn't going to do that. There has been a little bit of a slowdown in, we saw in 2025 in existing employers adding lives to schemes, but actually that picked up in Q1 2026. At the moment, I would say I think there's a mood is a little bit lower, but not lots of sign that the economic activity is much lower.

Speaker #12: I mean, I think it's fair to say that the macroeconomic environment in the UK is not as strong as it has been for the last couple of years.

Speaker #12: We have some slightly higher inflation. The Bank of England has yet to respond with higher interest rates and actually has sent some very calming messages saying that it wasn't going to do that.

Speaker #12: But there has been a little bit of a slowdown in we saw in 2025 in existing employers adding lives to schemes. But actually, that picked up in quarter one '26.

Speaker #12: So at the moment, I would say I think there's a mood is a little bit lower, but not lots of sign that the economic activity is much lower.

Speaker #5: Yeah. The other thing that I'd add, Pablo, because I think you maybe have a specific question about, was the benefit ratio somehow influenced by some of our policies that are inflation-linked.

Steven Zabel: Yeah. The other thing that I'd add, Pablo, 'cause I think you maybe have a specific question about was the benefit ratio somehow influenced by some of our policies that are inflation-linked. I would say that that's not a significant contributor this quarter. It's more just around the average size of some of the claims submissions.

Speaker #5: And I would say that's not a significant contributor. This quarter, it's more just around the average size of some of the claim submissions.

Pablo Zuniga: Yep. Thank you for that. Second question, US Supplemental. I, IDI was below the quarterly run rate you had provided before. I think it was 120 to 130, and the loss ratio was the high end of your range. Can you give us an updated outlook? Thank you.

Pablo Singzon: Yep. Thank you for that. Second question, US Supplemental. I, IDI was below the quarterly run rate you had provided before. I think it was 120 to 130, and the loss ratio was the high end of your range. Can you give us an updated outlook? Thank you.

Speaker #12: Yep. Thank you for that. And then second question, US supplemental. Once it was below the quarterly run rate you had provided before, I think it was 120 to 130.

Speaker #12: And the loss ratio was the high enough your range. Can you give us an updated autoclear? Thank you.

Speaker #5: Yeah. There's not really anything in there specific that I would say would be recurring. We still feel really good about kind of the quarterly outlook that we give for supplemental and voluntary.

Steven Zabel: You know, there's not really anything in there specific that I would say would be recurring. We still feel really good about kind of the quarterly outlook that we give for supplemental and voluntary. IDI claims were a little bit high for the quarter. We saw a little bit of volatility in voluntary benefits, but nothing that we're looking to really continue as we proceed through the remainder of the year. Not really changing our viewpoint on ongoing earnings there.

Speaker #5: IDI claims were a little bit high for the quarter. We saw a little bit of volatility in voluntary benefits. But nothing that we're looking to really continue as we proceed through the remainder of the year.

Speaker #5: So not really changing our viewpoint on ongoing earnings there.

Speaker #8: Your next question from the line of Tracy Bengogo. With Wolf Research. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Tracy Benguigui with Wolfe Research. Your line is now open. Please go ahead.

Operator: Your next question from the line of Tracy Benguigui with Wolfe Research. Your line is now open. Please go ahead.

Speaker #13: Thank you. Good morning. Most of my questions were asked just one for me. I appreciate you clarifying that $100 million of reserves for the group LTC case exits was not material enough to move the needle on capital.

Tracy Benguigui: Thank you. Good morning. Most of my questions were asked, so just one for me. I appreciate you clarifying that $100 million in reserves for the Group LTC case exits was not material enough to move the needle on capital. Just taking a step back, can you share what you need to see to reallocate some of your $2.2 billion of LTC protection into excess capital?

Speaker #13: So just taking a step back, can you share what you need to see to reallocate some of your $2.2 billion of LTC protection into excess capital?

Speaker #5: Yeah. It's Steve. We feel really good about leaving the protections down in Fairwind right now. We don't really have any other needs for that capital necessarily.

Steven Zabel: Yeah. It's Steve. We feel really good about leaving the protections down in Fairwind right now. You know, we don't really have any other needs for that capital necessarily. We would have the ability to dividend some of that up to the holding company. As everybody knows, we have plenty of excess capital at the holding company to have flexibility to do what we need to do. Right now, we think the most prudent thing is to leave that protection down in Fairwind. That also possibly, you know, could support a transaction in the future. We just think it's good use of capital right now, Tracy.

Speaker #5: We would have the ability to dividend some of that up to the holding company. But as everybody knows, we have plenty of excess capital at the holding company to have flexibility to do what we need to do.

Speaker #5: So right now, we think the most prudent thing is to leave that protection down in Fairwind. That also possibly could support a transaction in the future.

Speaker #5: So we just think it's good use of capital right now, Tracy.

Speaker #13: Thank you.

Tracy Benguigui: Thank you.

Speaker #5: Thanks.

Steven Zabel: Thanks.

Speaker #8: Your next question from the line of Mike Ward with UBS. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Michael Ward with UBS.

Operator: Your next question from the line of Michael Ward with UBS.

Speaker #14: Thanks for squeezing me in, guys. Just wanted to go back to the paid family medical. I'm just wondering if you're able to kind of help us size the actual underwriting business that you've gotten from the state.

Michael Ward: Thanks for squeezing me in, guys. Just wanted to go back to the paid family medical. I'm just wondering if you're able to kind of like help us size the actual underwriting business that you've gotten from the state leave management programs? Just 'cause it, you've spoken about this for a couple of years, but I kind of understood it was like a fee for service kind of model.

Mike Ward: Thanks for squeezing me in, guys. Just wanted to go back to the paid family medical. I'm just wondering if you're able to kind of like help us size the actual underwriting business that you've gotten from the state leave management programs? Just 'cause it, you've spoken about this for a couple of years, but I kind of understood it was like a fee for service kind of model.

Speaker #14: Leave management programs just because it you've spoken about this for a couple of years, but kind of understood it was like a fee-for-service kind of model.

Speaker #5: Yeah. Mike, Chris, thanks for the question. And when you talk about leave, there is an element that is fee-for-service, and that's somebody can have us outsource their corporate leaves and FMLA which is the federal leave job protection component.

Christopher Pyne: Yeah. Mike, it's Chris. Thanks for the question. When you talk about leave, there is an element that is fee for service, and that's, you know, somebody can have us outsource their corporate leaves and, you know, FMLA, which is the federal leave job protection component. Where the PFML that generally gets most of the discussion, and there are different flavors, is when a state has a mandatory plan, and they provide for a private option. We very much like to play in those spaces, and we have an offering that will be compliant with the state requirements, and we can incorporate that into the broader short-term disability and long-term disability play.

Speaker #5: But where the PFML that generally gets most of the discussion—and there are different flavors—is when a state has a mandatory plan and they provide for a private option.

Speaker #5: We very much like to play in those spaces and we have an offering that will be compliant with the state requirements. And we can incorporate that into the broader short-term disability and long-term disability play.

Speaker #5: It ties in with leave management in total, helping employers keep track of what their different employee populations are eligible for because inside of one employer, obviously, you have multiple states frequently and different rules apply to different people.

Christopher Pyne: It ties in with leave management in total, helping employers keep track of what their different employee populations are eligible for. Because inside of one employer, obviously you have multiple states frequently and different rules apply to different people. Really it's the insured component of not just a leave associated, a paid leave associated with a medical claim the employee has, but also an event that a family member may have, where they need to take time away, and they also get insurance cover for that. When you know, maybe to just size it, you know, it's still less than 10% of our overall disability book. Normally when one state comes on at a time, it doesn't have that much impact.

Speaker #5: But really, it's the insured component of not just the leave—associated paid leave—associated with a medical claim the employee has, but also an event that a family member may have, where they need to take time away.

Speaker #5: And they also get insurance cover for that. When you maybe just size it, it's still less than 10% of our overall disability book.

Speaker #5: And normally, once they come on at a time, it doesn't have that much impact. I think this quarter, as we referenced, we had two larger states that Minnesota being a little larger and Delaware that showed up a little bit in the loss ratio.

Christopher Pyne: You know, I think this quarter, as we referenced, we, you know, we had two larger states that, excuse me, Minnesota being a little larger and Delaware, that showed up a little bit in the loss ratio. Also new sales coming on can have an effect in a smaller quarter like Q1, for when Maine comes on. You know, in general, that's the element of PFML that we're talking about outside of the fee for service leave management business that you historically know.

Speaker #5: And also new sales coming on can have an effect in a smaller quarter like the first quarter. For when Maine comes on. But in general, that's the element of PFML that we're talking about outside of the fee-for-service leave management business that you historically knew.

Speaker #14: Okay. Thanks. And then is it like are you seeing is it parental leave or is it more so that sort of family member that is ill that needs care?

Michael Ward: Okay, thanks. Are you seeing is it parental leave or is it more so that sort of family member that is ill that needs care? Is there anything that prevents that from becoming a long-term claim if it's a family member?

Mike Ward: Okay, thanks. Are you seeing is it parental leave or is it more so that sort of family member that is ill that needs care? Is there anything that prevents that from becoming a long-term claim if it's a family member?

Speaker #14: And is there anything that prevents that from becoming a long-term claim if it's a family member?

Christopher Pyne: Great question. Think about, so your short-term disability long has forever been. Maternity's been the most prominent claim in short-term disability. That now gets extended for the birth mother and also the paternity leave associated with it. A mother can go longer than historically, just the, you know, the element of giving birth and the time after birth. There, you know, frequently there are a set number of weeks that they're eligible to stay out. Then there is a paternity factor, which has become, you know, a very meaningful bonding element of family medical leave that is real. There's also a cap on that. Same with family members.

Speaker #5: Great question. So, think about—so your short-term disability, long has forever been—maternity has been the most prominent claim in short-term disability. That now gets extended for the birth mother and also the paternity leave associated with it.

Speaker #5: So a mother can go longer than historically. Just the element of giving birth and the time after birth. There are frequently there are a set number of weeks that they're eligible to stay out.

Speaker #5: And then there is a paternity factor which has become very meaningful bonding element of family medical leave that is real. But there's also a cap on that.

Speaker #5: Same with family members. So if you have a sick parent or a sick child or some reason you're taking time away from work, all of these things are capped.

Christopher Pyne: If you have a sick parent or a sick child or some reason you're taking time away from work, all of these things are capped. They're eligible to be used, but they very much have a tail. That's part of what we do for employers is we actually keep track of how long somebody has been away from work, what they're eligible for, how long they can be paid. Part of our job is to tell them when they've exhausted that cover.

Speaker #5: So they're eligible to be used, but they very much have a tail. That's part of what we do for employers is we actually keep track of how long somebody has been away from work, what their eligible for, how long they can be paid.

Speaker #5: And then our part of our job is to tell them when they've exhausted that cover.

Speaker #14: And I think, Mike, the important thing is all of that can be priced for. And so that's how you respond to changes that might emerge in that book.

Steven Zabel: I think, Michael, the important thing is all of that can be priced for.

Christopher Pyne: That's right.

Steven Zabel: That's how you respond to changes that might emerge in that book. It's very short tail, and the pricing cycle is very short as well.

Speaker #14: It's very short tail and the pricing cycle is very short as well.

Speaker #8: Your next question from the line of Wilma Burtis with Raymond James. Your line is now open. Please go ahead.

Operator 2: Your next question from the line of Wilma Burdis with Raymond James. Your line is now open. Please go ahead.

Operator: Your next question from the line of Wilma Burdis with Raymond James. Your line is now open. Please go ahead.

Speaker #15: Hey, good morning. The lapses in group LTC, can you just go into a little bit more detail? Was it one large account that left or was it a lot of small accounts?

Wilma Burdis: Hey, good morning. The lapses in Group LTC, can you just go into a little bit more detail? Was it one large account that left, or was it a lot of small accounts? Maybe just kind of give us some visibility there. We're trying to evaluate just, you know, is the product just not as attractive as it once was? I know you mentioned that it is still attractive, but maybe just give us a little bit of color there. Or was it just kind of one big account? Just to help us think about how we should think about it going forward. Thanks.

Speaker #15: Maybe just kind of give us some visibility there. We're trying to evaluate just is the product just not as attractive as it once was?

Speaker #15: I know you mentioned that it is still attractive, but maybe just give us a little bit of color there. Or was it just kind of one big account and just help us think about how we should think about it going forward?

Speaker #15: Thanks.

Speaker #5: Yeah, Steve. I think kind of a good articulation of it is we did have 7% of cases terminate. So it was definitely broad-based. It wasn't that there were a couple of major accounts in there that terminated their plan.

Steven Zabel: Yeah, Steve, I think kind of a good articulation of it is we did have 7% of cases terminate, so it was definitely broad-based. It wasn't that there were, you know, a couple major accounts in there that terminated their plan. It was more broad-based. It's just based on, you know, kind of the value that an HR director views with their budget of how they spend their money 'cause many of these tend to be funded by the employer. That's just a decision that they're making as they think about the broader benefit package.

Speaker #5: It was more just based on kind of the value that an HR director views with their budget of how they spend their money because many of these tend to be funded by the employer.

Speaker #5: And so that's just a decision that they're making as they think about the broader benefit package.

Speaker #15: Thank you. And then we haven't seen as many of your peers lean into buybacks to the extent that Unum did this quarter. Can you just talk about how you guys view that kind of tactical buybacks going forward?

Wilma Burdis: Thank you. We haven't seen as many of your peers lean into buybacks to the extent that Unum did this quarter. Can you just talk about how you guys view that kind of tactical buybacks going forward? Thanks.

Speaker #15: Thanks.

Speaker #16: Yeah. When we think about it, I appreciate that, Wilma. It's very consistent with the things that we've talked about. Overall, in terms of taking our overall generation and then with a similar amount of deployment, a billion dollars over the course of the year was our plan, is our plan currently.

Richard McKenney: Yeah. When we think about it, I appreciate that, Wilma. You know, it's very consistent with the things that we've talked about overall in terms of taking our overall generation and then with a similar amount of deployment, $1 billion over the course of the year was our plan, is our plan currently. We just saw the opportunity to actually buy more. We sit on excess capital, so it was not challenging to make that decision. We were opportunistic in the market. I think one of the things we've said, we wanna be dynamic in that share repurchase. We showed that in Q1.

Speaker #16: And we just saw the opportunity to actually buy more. We sit in excess capital, so it was not challenging to make that decision. And we were opportunistic in the market.

Speaker #16: But I think one of the things we said, we want to be dynamic in that sherry purchase. We showed that in the first quarter.

Speaker #16: We're not changing the longer-term outlook on that, but we want to make sure we're taking advantage of different things that we see in the market.

Christopher Pyne: We're not changing the longer term, outlook on that, but we wanna make sure we're taking advantage of different things that we see in the market, and we did that in Q1. Very happy to retire 3% of our shares in the quarter, and we'll see what future quarters look like as well.

Richard McKenney: We're not changing the longer term, outlook on that, but we wanna make sure we're taking advantage of different things that we see in the market, and we did that in Q1. Very happy to retire 3% of our shares in the quarter, and we'll see what future quarters look like as well.

Speaker #16: And we did that in the first quarter. So very happy to retire 3% of our shares in the quarter and we'll see what future quarters look like as well.

Speaker #8: We have reached the end of the Q&A session. I will now turn the call back over to Rick McKinney for closing remarks.

Operator 2: We have reached the end of the Q&A session. I will now turn the call back over to Rick McKenney for closing remarks.

Operator: We have reached the end of the Q&A session. I will now turn the call back over to Rick McKenney for closing remarks.

Speaker #5: Great. Thank you for joining us today. We do appreciate the engagement. So we will be out there upcoming opportunities to connect. We would note that our annual meeting will be held on May the 21st.

Richard McKenney: Great. Thank you for joining us today. We do appreciate the engagement. We will be out there, upcoming opportunities to connect. We would note that our annual meeting will be held on 21 May. You can all dial in for that as well or send questions. Thanks for your time. Please do send Timothy Arnold a note. I'm sure he would appreciate it. Congratulations to him. That concludes today's call. Thanks, everyone.

Speaker #5: You can all dial in for that as well or send questions. Thanks for your time. Please do send Tim Arnold a note. I'm sure he would appreciate it.

Speaker #5: And congratulations to him. And that concludes today's call. Thanks, everyone.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Q1 2026 Unum Group Earnings Call

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