UNM Q2 Earnings and Revenues Beat Estimates on Solid Premium Growth

UNM’s Operational Update

Total operating revenues of Unum Group were $3.4 billion, down 0.1% year over year. The top line surpassed the Zacks Consensus Estimate by 14.3%.

Premium increased 2.5% from the prior-year quarter to $2.8 billion, which was higher than our estimate of $2.5 billion. The Zacks Consensus Estimate was pegged at $2.6 billion.

Net investment income declined 14.7% year over year to $478.4 million, primarily due to lower returns from alternative investments.

Total benefits and expenses increased 3.3% year over year to $3 billion, largely attributable to higher policy benefits, commissions and other expenses. The figurewas higher than our estimate of $2.5 billion.

UNM’s Quarterly Segment Update

Unum U.S.: Premium income was $1.86 billion, up 3.3% year over year.

Adjusted operating income decreased 22.8% year over year to $261 million, primarily due to less favorable disability experience and higher benefit costs. It excluded the amortization of the deferred gain on reinsurance of $4.4 million and the impact of non-contemporaneous reinsurance of $0.7 million. Our estimate was $314 million.

The group disability line of business reported a 17.4% decrease in adjusted operating income while the group life and accidental death and dismemberment line of business reported a 32.8% increase. The supplemental and voluntary line of business reported an increase of 8.2%.

Unum International: Premium income of $289.3 million increased 6.7% year over year.  

Adjusted operating income was $24.3 million, down 41.6% year over year. Our estimate was $51.7 million.

The Unum U.K. line of business premium income totaled £175.5 million, up 5.2% from the year-ago quarter, primarily due to in-force block growth, sales and favorable persistency. Adjusted operating income, in local currency, was £15.3 million, down 48% year over year.

The benefit ratio, excluding the reserve assumption updates, was 82.2%, which deteriorated 720 basis points (bps), primarily due to higher average claim size and increased claim incidence in the group long-term disability business.

Sales decreased 14.9% to £32.6 million.

Persistency decreased in the supplemental product line, the group long-term disability and the group life product line.

Colonial Life: Premium income increased 3.3% from the prior-year figure to $477.4 million, driven by stable overall persistency and prior period sales.   

Sales increased 0.9% from the year-ago figure to $106.3 million.

Adjusted operating income increased 11.9% from the prior-year period to $131.4 million. Our estimate was $113.4 million.

Persistency was 78.2% for the first half of 2026, improved 30 bps year over year. The benefit ratio, excluding the reserve assumption updates, improved 300 bps year over year to 46.7%.

Closed Block: Premium income decreased 10.8% to $192.9 million. The segment reported an adjusted operating loss of $61.2 million, compared with a loss of $10.8 million in the year-ago quarter. The decrease was primarily due to lower net investment income and the amortization of the cost of reinsurance. Our estimate for loss was $55 million.

Corporate: The segment incurred an adjusted operating loss of $44.5 million, wider than the year-ago quarter’s loss of $31.7 million, primarily due to decreased net investment income. Our estimate for loss was $45.1 million.

UNM’s Capital Management

As of June 30, 2026, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 480%.

Unum Group exited the second quarter with holding company liquidity worth $1.5 billion.

Book value per share grew 3.8% year over year to $68.28 as of June 30, 2026.

UNM repurchased approximately $200 million of common shares and paid $73.5 million in common stock dividends during the second quarter.

UNM’s 2026 Guidance

UNM expects that after-tax adjusted operating income per share will increase to 22.2% from 21.2% in the year-ago period.

Management expects 2026 EPS of $8.60-$8.90, implying 8-12% growth.

UNM’s Zacks Rank

UNM currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%.

Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.

Chubb Limited CB reported second-quarter 2026 core operating earnings of $7.26 per share, which beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. Stronger P&C underwriting, record investment income, and higher life insurance income supported results.

Net premiums earned increased 5.8% to $13.89 billion. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%, reflecting a lower share of premiums consumed by claims and expenses. Our estimate was $1.15 billion.

Principal Financial Group, Inc.’s PFG second-quarter 2026 operating earnings of $2.50 per share beat the Zacks Consensus Estimate by 7.3%. The bottom line increased 16% year over year. Revenues rose 6.4% year over year to $3.99 billion, which missed the consensus mark of $4.09 billion by 2.4%.

Total expenses increased 7.6% year over year to $3.41 billion. Benefits, claims and settlement expenses rose 8.3% to $1.99 billion, while operating expenses increased 8.1% to $1.40 billion. Non-GAAP operating earnings climbed 12% to $547 million. Excluding significant variances, operating earnings advanced 13% to $528.7 million, reflecting growth across the operating segments. Net income attributable to PFG declined 1% to $403.4 million.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research