Unum Group Q3 Earnings Miss on Higher Expenses, Revenues Rise Y/Y

Unum Group’s UNM third-quarter 2025 operating net income of $2.09 per share missed the Zacks Consensus Estimate by 2.7%. The bottom line decreased 1.8% year over year.

The quarterly results reflected higher premium income, solid performance at Colonial Life, in-force block growth, and favorable persistency in the Unum U.K., offset by escalating expenses.

Operational Update         

Total operating revenues of Unum Group were $3.4 billion, up 5% year over year, driven by higher premium income and other income. The top line beat the Zacks Consensus Estimate by 2.5%.

Premium increased 2.2% from the prior-year quarter to $2.7 billion, which matched our estimate as well as the Zacks Consensus Estimate.

Total benefits and expenses increased 38.3% year over year to $3.3 billion, largely attributable to higher policy benefits, including remeasurement loss or gain, commissions, interest, and debt expense, and other expenses. Our estimate for the same was $2.8 billion.

Quarterly Segment Update

Unum U.S.: Premium income was $1.7 billion, up 1.9% year over year. 

Adjusted operating income declined 7.8% year over year to $334.9 million. It excludes the amortization of the deferred gain on reinsurance of $4.6 million, the impact of non-contemporaneous reinsurance of $0.4 million, as well as the net reserve decrease related to the assumption updates of $147.7 million. The Zacks Consensus Estimate was pegged at $337 million. Our estimate was $401.1 million.

Unum International: Premium income of $281.1 million increased 14% year over year.  Adjusted operating income was $38.8 million, down 3.7% year over year. The Zacks Consensus Estimate was pegged at $40.7 million. Our estimate was $34.1 million.

The Unum U.K. line of business premium income was £171 million, up 7.6% from the year-ago quarter due primarily to in-force block growth, sales, and favorable persistency in the group life and supplemental product lines. Adjusted operating income, in local currency, of £26.3 million was down 10.8% year over year.

The benefit ratio, excluding the reserve assumption updates, was 73.8%, which deteriorated 430 basis points (bps), due primarily to unfavorable benefit experience in the group long-term disability product line and higher inflation-linked experience in benefits. It was partially offset by favorable incidence in the group life product line. Sales increased 27.3% to £29.4 million.

For the first nine months of 2025, persistency remained flat year over year in the group long-term disability, while it increased in the supplemental product line and group life product line of business.

Colonial Life: Premium income increased 3.3% from the prior-year figure to $456.5 million, driven by favorable overall persistency and prior period sales.  

Sales decreased 3.1% from the year-ago figure to $124.6 million. Adjusted operating income increased 2.8% from the prior-year period to $116.6 million. Our estimate was $157.8 million, while the Zacks Consensus Estimate was pegged at $127 million.

Persistency was 78.7% in the first nine months of 2025, which expanded 70 bps year over year.

The benefit ratio, excluding the reserve assumption updates, deteriorated 60 bps year over year to 48.2%.

Closed Block: Adjusted operating income was $14.1 million, which declined 58.7% year over year. The adjusted operating income excludes the amortization of the cost of reinsurance of $48.6 million and the impact of non-contemporaneous reinsurance of $7.3 million, as well as the net reserve increase related to the assumption updates of $640.5 million. Our estimate was $65.1 million, while the Zacks Consensus Estimate was pegged at $25 million.

Corporate: The segment incurred an adjusted operating loss of $47.7 million, narrower than the year-ago quarter’s loss of $49.4 million, which excludes the loss on legal settlement of $15.3 million. The lower loss was due primarily to increased net investment income. It was due to an increase in the level of invested assets and a rise in the yield on invested assets. Our estimate for loss was $45.8 million, while the Zacks Consensus Estimate was pegged at a loss of $38.8 million.

Capital Management

As of Sept. 30, 2025, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 455%.

Unum Group exited the third quarter with holding company liquidity worth $2 billion. Book value per share grew 8.7% year over year to $64.56 as of Sept. 30, 2025. UNM bought back 3.2 shares for $253.3 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 Some Other Insurers

CNA Financial Corporation CNA reported third-quarter 2025 core earnings of $1.50 per share, which beat the Zacks Consensus Estimate by 20%. The bottom line increased 39% year over year. Total operating revenues of CNA Financial were $3.4 billion, up 6.3% year over year. The top line missed the Zacks Consensus Estimate by 0.05%.

Net written premiums of Property & Casualty Operations increased 3.2% year over year to $2.4 billion, driven by P&C renewal premium change of more than 4% with a written rate of more than 3% and exposure change of more than 1%. Net investment income rose 2% year over year to $638 million. The Zacks Consensus Estimate and our estimate for net investment were both pegged at $690.5 million.

First American Financial Corporation FAF reported third-quarter 2025 operating income per share of $1.70, which beat the Zacks Consensus Estimate by 19.7%. The bottom line increased 26.8% year over year. Operating revenues of $1.9 billion increased 40.7% year over year. The top line also beat the Zacks Consensus Estimate by 6.8%.

Investment income was $163.8 million in the third quarter, up 11.7% year over year. Our estimate was $146.6 million. Expenses rose 11.7% to $1.7 billion. Our estimate was $1.6 billion.

Chubb Limited CB reported third-quarter 2025 core operating income of $7.49 per share, which beat the Zacks Consensus Estimate by 26%. The bottom line increased 30.9% year over year. Net premiums written improved 7.5% year over year to $14.8 billion in the quarter. Our estimate was $14.4 billion while the Zacks Consensus Estimate was pegged at $14.5 billion. 

Pre-tax net investment income was $1.65 billion, up 9.3% year over year. Our estimate and the Zacks Consensus Estimate were both pegged at $1.8 billion. Revenues of $16.1 billion beat the consensus estimate by 1.6% and improved 7.4% year over year. Property and casualty (P&C) underwriting income was $2.2 billion, up 55% year over year. The Zacks Consensus Estimate was pegged at $1.4 billion. 

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