Unum Group Files Q2 2024 10-Q

TL;DR

Unum Group's Q2 10-Q is in: financials updated, market position solid.

AI Summary

Unum Group filed its 10-Q for the period ending June 30, 2024. The company, a leader in accident and health insurance, reported its financial performance and operational updates. Key financial data and business segments were detailed in the filing, providing insight into the company's standing in the insurance market.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for Unum Group, crucial for understanding the company's health and future prospects in the insurance sector.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures for Unum Group.

Key Players & Entities

• Unum Group (company) — Filer of the 10-Q
• 20240630 (date) — End of the reporting period
• 0000005513 (company) — Central Index Key for Unum Group
• DE (state) — State of incorporation
• 1 FOUNTAIN SQUARE, CHATTANOOGA, TN 37402 (address) — Business and mailing address

FAQ

Key Financial Figures

• $0.10 — ange on which registered Common stock, $0.10 par value UNM New York Stock Exchange

Filing Documents

• unm-20240630.htm (10-Q) — 5545KB
• unm06302024ex31.htm (EX-3.1) — 24KB
• unm06302024ex311.htm (EX-31.1) — 8KB
• unm06302024ex312.htm (EX-31.2) — 8KB
• unm06302024ex321.htm (EX-32.1) — 5KB
• unm06302024ex322.htm (EX-32.2) — 5KB
• image.jpg (GRAPHIC) — 8KB
• 0000005513-24-000142.txt ( ) — 25799KB
• unm-20240630.xsd (EX-101.SCH) — 86KB
• unm-20240630_cal.xml (EX-101.CAL) — 94KB
• unm-20240630_def.xml (EX-101.DEF) — 607KB
• unm-20240630_lab.xml (EX-101.LAB) — 1136KB
• unm-20240630_pre.xml (EX-101.PRE) — 835KB
• unm-20240630_htm.xml (XML) — 6987KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited): 3 Consolidated Balance Sheets at June 30, 2024 and December 31, 2023 3 Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 5 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 6 Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2024 and 2023 7 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Note 1 - Basis of Presentation 9 Note 2 - Accounting Developments 9 Note 3 - Fair Value of Financial Instruments 11 Note 4 - Investments 29 Note 5 - Derivative Financial Instruments 44 Note 6 - Accumulated Other Comprehensive Loss 53 Note 7 - Liability for Future Policy Benefits 55 Note 8 - Policyholders' Account Balances 71 Note 9 - Deferred Acquisition Costs 74 Note 10 - Segment Information 76 Note 11 - Employee Benefit Plans 80 Note 12 - Stockholders' Equity and Earnings Per Common Share 81 N ote 13 - Commitments and Contingent Liabilities 83 N ote 14 - Debt and Other 84 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 85 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 125 Item 4.

Controls and Procedures

Controls and Procedures 125

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 126 Item 1A.

Risk Factors

Risk Factors 126 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 126 Item 5. Other Information 126 Item 6. Exhibits 127

Signatures

Signatures 128 Table of Contents Cautionary Statement Regarding Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 (the Act) provides a "safe harbor" to encourage companies to provide prospective information, as long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. Certain information contained in this quarterly report on Form 10-Q (including certain statements in the consolidated financial statements and related notes and Management's Discussion and Analysis), or in any other written or oral statements made by us in communications with the financial community or contained in documents filed with the Securities and Exchange Commission (SEC), may be considered forward-looking statements within the meaning of the Act. Forward-looking statements are those not based on historical information, but rather relate to our outlook, future operations, strategies, financial results, or other developments. Forward-looking statements speak only as of the date made. We undertake no obligation to update these statements, even if made available on our website or otherwise. These statements may be made directly in this document or may be made part of this document by reference to other documents filed by us with the SEC, a practice which is known as "incorporation by reference." You can find many of these statements by looking for words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "plans," "assumes," "intends," "projects," "goals," "objectives," or similar expressions in this document or in documents incorporated herein. 1 Table of Contents Cautionary Statement Regarding Forward-Looking Statements - Continued These forward-looking statements are subject to numerous assumptions, risks, and uncertaint

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (UNAUDITED) Unum Group and Subsidiaries June 30 December 31 2024 2023 (in millions of dollars) Assets Investments Fixed Maturity Securities - at fair value (amortized cost of $ 38,554.3 ; $ 38,410.6 ; allowance for credit losses of $ 5.1 ; $ 2.2 ) $ 35,952.8 $ 36,833.9 Mortgage Loans (net of allowance for credit losses of $ 12.1 ; $ 10.2 ) 2,261.1 2,318.2 Policy Loans 3,535.2 3,620.2 Other Long-term Investments 1,646.3 1,579.4 Short-term Investments 1,793.5 1,610.7 Total Investments 45,188.9 45,962.4 Other Assets Cash and Bank Deposits 132.7 146.0 Accounts and Premiums Receivable (net of allowance for credit losses of $ 26.8 ; $ 29.5 ) 1,578.5 1,543.7 Reinsurance Recoverable (net of allowance for credit losses of $ 1.7 ; $ 1.7 ) 8,658.9 9,108.4 Accrued Investment Income 713.9 633.9 Deferred Acquisition Costs 2,791.5 2,714.5 Goodwill 349.6 349.9 Property and Equipment 483.4 485.3 Deferred Income Tax 516.0 649.4 Other Assets 1,631.0 1,661.7 Total Assets $ 62,044.4 $ 63,255.2 See notes to consolidated financial statements. 3 T able of Conten ts CONSOLIDATED BALANCE SHEETS (UNAUDITED) - Continued Unum Group and Subsidiaries June 30 December 31 2024 2023 (in millions of dollars) Liabilities and Stockholders' Equity Liabilities Future Policy Benefits $ 37,899.4 $ 40,009.4 Policyholders' Account Balances 5,660.3 5,667.7 Unearned Premiums 502.8 380.2 Other Policyholders' Funds 1,567.2 1,615.7 Income Tax Payable 156.4 190.0 Deferred Income Tax 27.2 27.0 Long-term Debt 3,470.3 3,430.4 Other Liabilities 2,296.2 2,283.4 Total Liabilities 51,579.8 53,603.8 Commitments and Contingent Liabilities - Note 13 Stockholders' Equity Common Stock, $ 0.10 par Authorized: 725,000,000 shares Issued: 195,319,864 and 194,588,625 shares 19.5 19.4 Additional Paid-in Capital 1,558.8 1,547.8 Accumulated Other Comprehensive Loss ( 2,846.2 ) ( 3,308.0 ) Retained Ear

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Unum Group and Subsidiaries June 30, 2024 Note 1 - Basis of Presentation The accompanying consolidated financial statements of Unum Group and its subsidiaries (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2023. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of full year performance. Note 2 - Accounting Developments Accounting Standards Updates (ASUs) Adopted in 2023: ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures The amendments in this update eliminated the troubled debt restructuring recognition and measurement guidance and instead required that an entity evaluate whether the modification represents a new loan or the continuation of an existing loan. The amendments also enhanced the disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. In addition, the amendments in this update required that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases. The amendments in this update were applied prospectively in the period of adoption as of January 1, 2023. The adoption of this update modified our disclosures but did not have an impact on our financial position or results of operations. ASU 2018-12, Financial Se

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Unum Group and Subsidiaries June 30, 2024 Note 2 - Accounting Developments - Continued Accounting Updates Outstanding: ASU 2020-04 , Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and related amendments The amendments in this update provide optional guidance, for a limited period of time, to ease the potential burden in accounting for and recognizing the effects of reference rate reform on financial reporting. The guidance allows for various practical expedients and exceptions when applying GAAP to contracts, hedging relationships, and other transactions affected either by discontinued rates as a direct result of reference rate reform or a market-wide change in interest rates used for discounting, margining or contract price alignment, if certain criteria are met. Specifically, the guidance provides certain practical expedients for contract modifications, fair value hedges, and cash flow hedges, and also provides certain exceptions related to changes in the critical terms of a hedging relationship. The guidance also allows for a one-time election to sell or transfer debt securities that were both classified as held-to-maturity prior to January 1, 2020 and reference a rate affected by the reform. The adoption of this update is permitted as of the beginning of the interim period that includes March 12, 2020 (the issuance date of the update), or any date thereafter, through December 31, 2024, at which point the guidance will sunset. We have elected practical expedients for contracts impacted by reference rate reform which did not result in a material impact on our financial position or results of operations. We will continue to monitor our contracts and hedging relationships throughout the adoption period. ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures The amendments in this update

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Unum Group and Subsidiaries June 30, 2024 Note 2 - Accounting Developments - Continued requirement to disclose the cumulative temporary differences when a deferred tax liability is not recognized due to certain exceptions under ASC 740. We will adopt this update effective for the annual period beginning January 1, 2025. The adoption of this update is permitted on a prospective basis or a retrospective basis. The adoption of this update will not have an impact on our financial position or results of operations, but will expand our disclosures effective for the annual period beginning January 1, 2025. Note 3 - Fair Value of Financial Instruments Fair Value Measurements for Financial Instruments Carried at Fair Value We report fixed maturity securities, which are classified as available-for-sale securities, derivative financial instruments, and unrestricted equity securities at fair value in our consolidated balance sheets. We report our investments in private equity partnerships at our share of the partnerships' net asset value per share or its equivalent (NAV) as a practical expedient for fair value. The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted

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