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1. Company Snapshot

1.a. Company Description

Unum 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.

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1.b. Last Insights on UNM

Unum Group's recent performance was driven by growing premium income, solid segment performance, and steady investment income growth. The company's Q3 results reflected higher premium income, strong performance at Colonial Life, and favorable persistency in the Unum U.K. Despite escalating expenses, Unum's pricing power and focus on workplace benefits drive robust profits. The company's capital allocation strategy, including share buybacks and dividend payments, supports long-term value. Management guides for 8-12% EPS growth, and recent reinsurance deals reduce future risk.

1.c. Company Highlights

2. Disciplined Operations and Strategic Progress Drive Growth

The company's financial performance in 2025 was characterized by adjusted EPS of $8.13, which was below expectations due to higher-than-expected benefits experience. Revenue growth was 3.7% for the full year, with core operations premium increasing by 2.9% in the fourth quarter compared to the previous year. The company's return on equity (ROE) for core operations was 20%, reflecting durable earnings power supported by disciplined underwriting and a focused product mix.

Publication Date: Feb -15

📋 Highlights
  • Adjusted EPS Decline:: 2025 adjusted EPS fell to $8.13, below expectations, driven by higher-than-anticipated benefits costs.
  • Core ROE Strength:: Core operations delivered a 20% return on equity, supported by disciplined underwriting and product mix.
  • Capital Returns:: $1.3 billion returned to shareholders in 2025 via share repurchases and dividends.
  • 2026 Growth Outlook:: Projects 4–7% top-line growth and 8–12% EPS growth, driven by core operations and margin discipline.
  • Closed Block Transition:: Excludes Closed Block earnings from adjusted operating metrics starting Q1 2026 for clearer core performance focus.

Segment Performance

The group disability and group life businesses in the US maintained strong pricing discipline and risk selection, with attractive and industry-leading returns. Colonial Life continued to strengthen its independent distribution model, improving agent productivity through better digital tools and workflow. International delivered double-digit premium growth, driven by a sharper broker experience in the UK and continued progress in Poland. As Christopher Wallace Pyne noted, "the world has changed since COVID, and the way we can execute has fundamentally changed," positioning the company well for growth.

Outlook and Guidance

The company expects top-line growth in the range of 4% to 7% in 2026, driven by new sales and persistency. Adjusted EPS growth is expected to be 8% to 12%, driven by high ROE businesses. The company's capital generation is expected to be robust, with free cash flow expected to be between $1.4 billion and $1.6 billion in 2026. The price-to-book ratio of 1.1 and dividend yield of 2.51% indicate a relatively attractive valuation.

Valuation and Return Metrics

The company's return on equity (ROE) is 6.65%, and the return on invested capital (ROIC) is 1.13%. The net debt to EBITDA ratio is 2.96, indicating a manageable level of debt. Analysts' estimates for revenue growth next year are 4.4%, which is within the company's guided range.

Earnings Surprise

The actual EPS of $1.92 was lower than the estimated $2.11, indicating a negative earnings surprise. This was likely due to higher-than-expected benefits experience, which impacted the company's adjusted EPS.

3. NewsRoom

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First Trust Advisors LP Has $446.06 Million Position in Unum Group $UNM

Mar -07

Source: defenseworld.net

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Envestnet Asset Management Inc. Has $1.06 Million Holdings in Unum Group $UNM

Mar -04

Source: defenseworld.net

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Fox Run Management L.L.C. Invests $1.40 Million in Unum Group $UNM

Feb -25

Source: defenseworld.net

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Skandinaviska Enskilda Banken AB publ Sells 18,828 Shares of Unum Group $UNM

Feb -23

Source: defenseworld.net

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Cynthia Egan Sells 9,000 Shares of Unum Group (NYSE:UNM) Stock

Feb -22

Source: defenseworld.net

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Unum Group Could Soar If These 3 Things Go Right

Feb -18

Source:

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Unum Group Reaffirms 2026 Growth Targets, 100% Capital Return, Shifts Closed Block “Below the Line”

Feb -10

Source: defenseworld.net

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Unum Group (UNM) Presents at UBS Financial Services Conference 2026 Transcript

Feb -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.31%)

6. Segments

Unum US

Expected Growth: 4.5%

Unum US, a subsidiary of Unum Group, achieves 4.5% growth driven by increasing demand for employee benefits, expansion of voluntary benefits offerings, and strategic partnerships. Additionally, a strong brand reputation, effective underwriting, and efficient claims processing contribute to the segment's growth.

Closed Block

Expected Growth: 3.5%

Unum Group's Closed Block segment growth of 3.5% is driven by disciplined risk management, favorable mortality experience, and effective asset liability management. Additionally, the company's focus on expense management and strategic capital allocation have contributed to the segment's growth. Furthermore, the Closed Block's stable cash flows and low volatility have enabled Unum Group to invest in growth initiatives, driving the segment's expansion.

Colonial Life

Expected Growth: 4.2%

Colonial Life's 4.2% growth is driven by increasing demand for voluntary benefits, expansion into new markets, and strategic partnerships. Additionally, Unum Group's strong brand reputation, diversified product portfolio, and effective distribution channels contribute to the segment's growth. Furthermore, the rising need for employee benefits and a growing middle class also support Colonial Life's growth momentum.

Unum International

Expected Growth: 4.8%

Unum International's 4.8% growth is driven by increasing demand for employee benefits in the UK and Ireland, expansion into new markets, and strategic partnerships. Additionally, the segment benefits from Unum Group's strong brand reputation, diversified product offerings, and effective risk management practices, enabling it to capitalize on growth opportunities in the international insurance market.

Corporate Segment

Expected Growth: 3.8%

Unum Group's Corporate Segment growth of 3.8% is driven by increased sales of employee benefits, expansion into new markets, and strategic partnerships. Additionally, the segment has benefited from favorable pricing trends, improved underwriting margins, and effective cost management. These factors have contributed to the segment's strong performance and positioned it for continued growth.

Reconciling Items

Expected Growth: 4.1%

Unum Group's 4.1% growth driven by increasing demand for employee benefits, expansion in the voluntary benefits market, and strategic acquisitions. Additionally, favorable underwriting results, improved risk management, and effective cost management contribute to the growth. Furthermore, the company's focus on digital transformation and enhanced customer experience also support its growth momentum.

7. Detailed Products

Group Life Insurance

Provides financial protection to employees' families in the event of their death, with a lump-sum payment to help cover funeral expenses, outstanding debts, and ongoing living expenses.

Group Disability Insurance

Provides income replacement to employees who become too sick or injured to work, helping them to maintain their standard of living.

Group Voluntary Benefits

Offers employees a range of voluntary benefits, including accident, critical illness, and hospital indemnity insurance, which can be paid for through payroll deductions.

Supplemental Health Insurance

Provides additional financial protection to employees who are experiencing a serious illness or injury, helping to cover out-of-pocket medical expenses.

Long-Term Care Insurance

Helps employees prepare for the potential need for long-term care, such as assisted living or home health care, due to age, disability, or illness.

Retirement Plans

Offers a range of retirement plan options, including 401(k), 403(b), and pension plans, to help employees save for retirement.

8. Unum Group's Porter Forces

Forces Ranking

Threat Of Substitutes

Unum Group operates in the insurance industry, which has a moderate threat of substitutes. While there are alternative insurance providers, Unum Group's products and services are differentiated, reducing the threat of substitutes.

Bargaining Power Of Customers

Unum Group's customers have limited bargaining power due to the company's strong brand reputation and diversified product offerings, making it difficult for customers to negotiate prices or terms.

Bargaining Power Of Suppliers

Unum Group has a diversified supply chain, and its suppliers have limited bargaining power due to the company's large scale and negotiating power.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory requirements and capital requirements, making it difficult for new entrants to enter the market and compete with Unum Group.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Unum Group faces intense rivalry from competitors, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.33%
Debt Cost 7.25%
Equity Weight 73.67%
Equity Cost 8.18%
WACC 7.94%
Leverage 35.74%

11. Quality Control: Unum Group passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Jackson Financial

A-Score: 6.6/10

Value: 8.2

Growth: 4.3

Quality: 7.8

Yield: 8.0

Momentum: 5.0

Volatility: 6.0

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CNO Financial Group

A-Score: 6.0/10

Value: 6.6

Growth: 6.4

Quality: 4.4

Yield: 4.0

Momentum: 6.0

Volatility: 8.3

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Primerica

A-Score: 5.9/10

Value: 5.4

Growth: 7.2

Quality: 6.8

Yield: 3.0

Momentum: 4.0

Volatility: 9.0

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Unum

A-Score: 5.8/10

Value: 5.7

Growth: 5.6

Quality: 5.1

Yield: 5.0

Momentum: 6.0

Volatility: 7.7

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F&G Annuities & Life

A-Score: 5.7/10

Value: 8.8

Growth: 8.6

Quality: 5.9

Yield: 5.0

Momentum: 0.5

Volatility: 5.7

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American Equity

A-Score: 5.4/10

Value: 9.5

Growth: 7.3

Quality: 6.2

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

72.52$

Current Price

72.52$

Potential

-0.00%

Expected Cash-Flows