Yahoo Finance Unum Group (UNM) Q4 Earnings and Revenues Lag, Rise Y/Y
Unum Group’s UNM fourth-quarter 2022 operating net income of $1.43 per share missed the Zacks Consensus Estimate by 2.1% but came in line with our estimate. The bottom line increased 60.7% year over year.
The quarterly results reflected continued strong operating performance, core business premium trends nearing long-term growth expectations, improved core operations sales, stable persistency, premium growth and continued favorable benefits experience.
Unum Group Price, Consensus and EPS Surprise
Unum Group price-consensus-eps-surprise-chart | Unum Group Quote
Operational Update
Total operating revenues of Unum Group were $3 billion, up 0.3% year over year, as higher premium income and other income were offset by lower net investment income. The top line missed the Zacks Consensus Estimate by 0.04% and was almost in line with our estimate.
Premium increased 1.5% from the prior-year quarter to $2.4 billion and was in line with our estimate.
Total benefits and expenses decreased 5.1% year over year to $2.6 billion, largely attributable to lower benefits and changes in reserves for future benefits.
Quarterly Segment Update
Unum U.S.: Premium income was $1.6 billion, up 3.4% year over year. The figure was almost in line with our estimate.
Adjusted operating income surged 181% year over year to $228.7 million, attributable to higher income in the group disability line as well as group life and accidental death and dismemberment line.
Unum International: Premium income of $178.3 million increased 0.5% year over year. This compares unfavorably with our estimate of $178.7 million. Adjusted operating income was $45 million, up 66.1% year over year.
The Unum U.K. line of business premium income was £132.1 million, up 15.4% from the year-ago quarter due to favorable sales and in-force block growth. Adjusted operating income, in local currency, of £37.7 million was up 101.6% from a year ago.
The benefit ratio was 76, which improved 540 basis points (bps) due to favorable experience in the group long-term disability product line driven by favorable recoveries. Sales increased 1.4%.
Persistency increased in group long-term disability, group life business and supplemental line of business.
Colonial Life: Premium income decreased 0.7% from the prior-year figure to $420.4 million on account of lower overall persistency, partially offset by higher prior period sales. The figure compared unfavorably with our estimate of $428.2 million.
Sales increased 2.3% from the year-ago figure to $170 million. Adjusted operating income increased 16.3% from the prior-year period to $93 million.
Persistency was 78%, which improved 130 bps year over year.
The benefit ratio improved 750 bps year over year to 45, driven by favorable claim experience across all product lines.
Closed Block: Premium income decreased 5.6% year over year to $230.9 million due to policy terminations, partially offset by rate increases. This compares unfavorably with our estimate of $237.3 million.
Adjusted operating income was $40.4 million, which decreased 47.3% year over year.
Corporate: The segment incurred an operating loss of $37.5 million, narrower than a loss of $45.1 million in the year-earlier quarter.
Full-Year Highlights
Operating net income of $6.21 per share missed the Zacks Consensus Estimate of $6.24 but was in line with our estimate. The bottom line increased 42.8% year over year.
Total operating revenues of Unum Group were $12 billion, up 0.6% year over year. The top line missed the Zacks Consensus Estimate by 0.08% and was almost in line with our estimate.
Premium increased 1.5% from the prior-year quarter to $9.6 billion and was in line with our estimate.
Capital Management
As of Dec 31, 2022, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 420%.
Unum Group exited 2022 with liquidity worth $1.6 billion.
Book value per share was down 17.5% year over year to $46.51 as of Dec 31, 2022.
Unum Group bought back 1.6 shares for $62.6 million, taking the 2022 tally to 5.7 shares bought for $200.1 million.
Zacks Rank
Unum Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies, Inc. TRV reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s PGR fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
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