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Unum Group (UNM)
NYSE:UNM

Unum Group (UNM) AI Stock Analysis

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Unum Group

(NYSE:UNM)

76Outperform
Unum Group's strong financial performance, marked by revenue growth and profitability, forms the backbone of its solid stock score. Its attractive valuation further enhances its investment appeal. Technical indicators suggest neutral momentum, though caution is advised due to nearing overbought levels. The earnings call highlighted robust capital strength and strategic growth, despite challenges in disability claims and persistency.
Positive Factors
Earnings Guidance
Management provided 2025 EPS growth guidance of 8-12% on expected premium growth for the company’s core operations of 4-7%.
Reinsurance Deals
The company conducted an internal reinsurance transaction by reinsuring 100% of LTC reserves out of their New York subsidiary to their Tennessee subsidiary, resulting in additional policyholder protection, lower capital volatility, and supporting a $630mn dividend to the holding company.
Share Repurchase
High levels of excess capital and significant cash flow generation support potential upside to long-term share repurchases.
Negative Factors
Earnings Miss
UNM shares traded down owing to the earnings miss and weaker disability results in the quarter.
EPS Forecast
Lower premium income reduces EPS forecasts, with EPS falling 2.3% in 2025 while FY26E-27 virtually unchanged.
Premium Growth Outlook
UNM lowered its 2025 EPS growth outlook to 6-10% and lowered its core premium growth expectation to 3-6%.

Unum Group (UNM) vs. S&P 500 (SPY)

Unum Group Business Overview & Revenue Model

Company DescriptionUnum Group, together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, and Poland. It operates through Unum US, Unum International, Colonial Life, and Closed Block segments. The company offers group long-term and short-term disability, group life, and accidental death and dismemberment products; supplemental and voluntary products, such as individual disability, voluntary benefits, and dental and vision products; and accident, sickness, disability, life, and cancer and critical illness products. It also provides group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other products. The company sells its products primarily to employers for the benefit of employees. Unum Group sells its products through field sales personnel, independent brokers, consultants, and independent contractor agency sales force. The company was founded in 1848 and is based in Chattanooga, Tennessee.
How the Company Makes MoneyUnum Group generates revenue primarily through the sale of insurance products and the collection of insurance premiums. The company's key revenue streams include individual disability insurance, group disability insurance, life insurance, and supplemental health products. Unum also earns money through investment income from managing and investing policyholder premiums. Significant partnerships with employers and brokers help expand their distribution network, facilitating access to a larger customer base and enhancing premium collections. Additionally, Unum's financial performance is influenced by its underwriting practices, claims management, and risk assessment strategies, which ensure profitability by balancing premium income with potential payouts.

Unum Group Financial Statement Overview

Summary
Unum Group's financial health reflects strong revenue growth and improved profitability, supported by a robust cash flow position. The company's leverage situation is favorable, though asset management requires attention. Overall, Unum exhibits a solid financial foundation with promising operational efficiency.
Income Statement
76
Positive
Unum Group has demonstrated consistent revenue growth, with a notable increase from $12.39 billion in 2023 to $12.89 billion in 2024. The net profit margin improved significantly, reflecting strong operational efficiency. However, the absence of EBIT and EBITDA figures for 2024 limits a complete profitability assessment.
Balance Sheet
70
Positive
The company's debt-to-equity ratio improved, indicating a favorable leverage position with a decrease in total debt relative to equity. The equity ratio remains strong, ensuring stability. Nonetheless, a substantial drop in total assets from 2023 to 2024 raises some concerns about asset management.
Cash Flow
82
Very Positive
The cash flow position is robust, with a significant increase in free cash flow from $1.07 billion in 2023 to $1.39 billion in 2024. This growth underscores strong operational cash generation capabilities. The operating cash flow to net income ratio remains healthy, indicating efficient conversion of earnings into cash.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
12.79B12.39B11.99B12.01B13.16B
Gross Profit
12.79B11.93B11.52B11.80B13.16B
EBIT
2.54B1.93B1.82B820.10M739.80M
EBITDA
2.45B1.94B2.05B1.57B1.27B
Net Income Common Stockholders
1.78B1.28B1.41B981.00M793.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.40B146.00M1.51B1.46B1.67B
Total Assets
15.65B63.26B61.43B70.12B70.63B
Total Debt
3.74B3.43B3.43B3.44B3.35B
Net Debt
3.58B3.28B3.31B3.37B3.15B
Total Liabilities
51.00B53.60B52.24B3.90B3.76B
Stockholders Equity
10.96B9.65B9.20B11.42B10.87B
Cash FlowFree Cash Flow
1.39B1.07B1.32B1.28B478.40M
Operating Cash Flow
1.51B1.20B1.42B1.39B597.50M
Investing Cash Flow
-344.40M-725.90M-955.90M-1.34B-267.70M
Financing Cash Flow
-1.15B-450.10M-418.60M-168.90M-216.90M

Unum Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price80.47
Price Trends
50DMA
78.43
Positive
100DMA
76.20
Positive
200DMA
68.54
Positive
Market Momentum
MACD
0.76
Negative
RSI
57.20
Neutral
STOCH
87.13
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNM, the sentiment is Positive. The current price of 80.47 is above the 20-day moving average (MA) of 77.89, above the 50-day MA of 78.43, and above the 200-day MA of 68.54, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 57.20 is Neutral, neither overbought nor oversold. The STOCH value of 87.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UNM.

Unum Group Risk Analysis

Unum Group disclosed 30 risk factors in its most recent earnings report. Unum Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Unum Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
PRPRI
77
Outperform
$8.72B19.3123.87%1.34%10.18%-9.75%
UNUNM
76
Outperform
$13.86B9.2814.68%2.09%1.69%25.54%
GLGL
74
Outperform
$10.02B9.8920.47%0.81%5.41%16.60%
FGFG
71
Outperform
$4.80B7.5012.72%2.85%-1.72%95.91%
LNLNC
68
Neutral
$5.63B1.7916.91%5.40%8.31%-2.30%
64
Neutral
$12.60B9.737.92%16985.68%12.21%-5.55%
CNCNO
59
Neutral
$3.83B13.3512.47%1.69%-0.43%-16.22%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UNM
Unum Group
80.47
28.89
56.01%
CNO
CNO Financial
37.79
10.17
36.82%
LNC
Lincoln National
33.35
5.47
19.62%
PRI
Primerica
268.71
47.79
21.63%
GL
Globe Life
121.94
37.60
44.58%
FG
F&G Annuities & Life Inc
30.17
-7.73
-20.40%

Unum Group Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 1.55%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a well-balanced performance with strong capital positioning, significant achievements in long-term care risk reduction, and robust sales in key segments. However, increased disability claims and lower persistency in some areas posed challenges. Despite these, the company remains confident in meeting its full-year growth outlook.
Q1-2025 Updates
Positive Updates
Strong Capital Position
Unum ended the quarter with record levels of holding company liquidity at $2.2 billion and an RBC position of 460%, providing high levels of optionality for capital deployment.
Long-Term Care Reinsurance Transactions
Successfully announced two long-term care transactions removing 20% of the risk of the block at favorable economic terms, releasing significant capital.
Positive Premium Growth
Core operations achieved a premium growth rate of over 4%, with sales in the Unum U.S. segment slightly increasing by approximately 1% year-over-year.
Voluntary Benefits Sales Surge
Strong voluntary benefits sales growth reported, contributing to achieving sales goals for 2025, with significant increases across all segments.
Robust International Performance
Premium income for Unum International increased by 7% year-over-year, including 18% growth in Unum Poland.
Negative Updates
Increased Disability Claims
Earnings per share were impacted by a higher level of disability claims, particularly in the group disability line, with an increased benefit ratio.
Decline in International Segment Sales
The international segment saw a large decline, particularly affected by a lack of large case sales.
Lower Persistency in Some Product Lines
Persistency in some product lines was lower than last year's high, impacting overall sales.
Alternative Asset Portfolio Challenges
Lower returns in the alternative asset portfolio backing the long-term care block affected headline results.
Company Guidance
During Unum Group's Q1 2025 earnings call, the company reaffirmed its full-year growth outlook of 6% to 10%, citing strong performance across its core operations. Key metrics highlighted include a return on equity (ROE) of over 20%, over 4% premium growth, and $350 million in underlying statutory earnings. Additionally, the company reported an elevated group disability benefit ratio of 61.8% due to higher disability claims, but remains confident in achieving an annual benefit ratio expectation in the low 60s. The first quarter earnings per share (EPS) was $2.04, slightly below expectations due to these claims. Unum also noted robust capital metrics, with record holding company liquidity at $2.2 billion and a risk-based capital (RBC) ratio of 460%. The company executed $200 million in share repurchases during the quarter and plans to increase this in the second quarter. Despite some variability in international sales, Unum U.S. and Colonial Life segments showed growth, with voluntary benefits sales particularly strong. The company continues to focus on digital interactions to strengthen client relationships and anticipates further sales growth, aided by a healthy sales pipeline and strategic investments in technology.

Unum Group Corporate Events

M&A TransactionsBusiness Operations and Strategy
Unum Group Enters Agreement with Fortitude Reinsurance
Neutral
Feb 27, 2025

On February 26, 2025, Unum Life Insurance Company of America, a subsidiary of Unum Group, entered into a Master Transaction Agreement with Fortitude Reinsurance Company Ltd. to reinsure a portion of its closed block individual long-term care business and individual disability business. This transaction, effective January 1, 2025, involves ceding $3.4 billion of long-term care reserves and $120 million of in-force premium to Fortitude Re, with an expected capital benefit of $100 million for Unum. The move is part of Unum’s strategy to reduce exposure to legacy long-term care business and focus on higher-returning core businesses, while continuing to provide service and administration for the reinsured business. The transaction is anticipated to close in 2025, subject to regulatory approvals and customary conditions.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.