Unum Group

Good morning. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to the Unum Group 3Q2 for Earnings. Call lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the call over to Matt Royal, Senior Vice President, Head of Investor Relations and Treasury. Matt, please go ahead.

Great. Thank you, Mark, and good morning to everyone. Welcome to Unim Group's third quarter 2024 earnings call. As Mark said, today we'll begin with prepared remarks, followed by Q&A session. Also, today's call may include forward-looking statements, and actual results may differ materially, and we are not obligated to update any of these statements. Please refer to our earnings release and our periodic filings with the SEC for a description of factors that could cause actual results to differ from expected results. Yesterday afternoon, Unum released our third quarter earnings press release and financial supplement. Those materials may be found on the investor section of our website along with a presentation of the most directly comparable gap measures and reconciliations of any non-gap financial measures included in today's presentation. As a reminder, references made today to core operations sales and premium are presented on a constant currency basis. Participating in this morning's conference call are Unum's President and CEO Rick McKinney, Chief Financial Officer Steve Zabel, Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines, Chris Pine for Group Benefits, and Mark Till, CEO of Unum International. Now let me turn it over to Rick McKinney for his comments.

Good morning, everyone, and thank you for joining us. We're excited to discuss our third quarter results and trends as we look to the fourth quarter and begin to look towards 2025. For 2024, growth has been top of mind as we entered the year and through three quarters. We are on a solid path to achieve our EPS growth expectations of 10 to 15% for the full year, which is higher than our original outlook. Results continue to reflect strong broad-based performance and cash flow generation. Adjusted EPS was $2.13 per share and statutory earnings surpassed $300 million for the quarter, bringing us to over $1 billion of statutory earnings for the year. You'll note that additionally our reported EPS was significantly higher as our assumption updates led to an overall reduction in reserves and contributed to growth in book value per share XOCI of over 10% so far this year. Our top line remained healthy with a 4.6% increase in core operations premium growth, and this is a little bit lower this quarter, but year to date we are up 5.5%. Persistency remains high, but sales were down over prior year. Third quarter is our smallest sales quarter at about 10% of the full year, and we saw some difficult comparisons to last year, so it does not have us overly concerned. The important thing is that we are optimistic for the fourth quarter, which is our largest sales quarter. We expect the U.S. to build momentum and be within our full year outlook. Further, we expect sales in the U.K. will continue to sustain the growth trajectory achieved so far this year, while colonial life will likely be flat for the year. It takes a full team effort in a busy fourth quarter, and we are most appreciative of the resilience of our team. They've done an excellent job navigating the changes in the environment and our market over the last several years. Our focus solely on employee benefits gives an advantage in concentrating our efforts. Specifically, the investments we've made into our processes have helped solidify the improvements we're delivering for our clients and allowing our highly productive sales teams a differentiated story to tell. This spans from our leading enrollment technologies to ensuring a smooth experience for employees on leave to helping employees get back to a more productive and fulfilling Work life sooner. While we have an unwavering customer focus, the macro picture continues to support our resilient business model. The strong employment atmosphere, higher interest rates, and a benign credit environment are all positives. Looking across the franchise, results in Unum US were highlighted by very strong results in the group insurance business. Group disability experienced another strong quarter where recoveries drove low benefit levels. This line has been a multi-year strong performer, and we see this continuing in the near term. Our group life insurance business has been a very strong performer in 2024 with benefit ratios under 70%. We expect similar experience trends to persist across both lines as we head into the fourth quarter. Colonial Life continues to be a valuable franchise with margins continuing to be excellent with an ROE of nearly 20%. Premiums grew 2.5% in the third quarter with strong persistency and sales close to flat. We would like to see the top line grow faster, and we remain focused on our key strategic initiatives within Colonial Life to do just that. The Gather platform, which transforms benefits, enrollments, and administration, continues to gain momentum with over 75% of new sales implementing Gather year-to-date. This is translated to premiums sold on the platform of up to close to 100% year over year. Our international business had another quarter operating at full strength, with robust premium growth of over 10%, and UK underlying earnings consistent to last quarter at around 30 million pounds. We continue to see excellent momentum as well in our growing Poland business. And in the UK, we continue to redefine the broker experience, setting a market-leading standard that is distinctly Unum and enhancing our relationship management model. Our business in the UK doesn't always get as much attention given its relative size, but we are very pleased with how our team is executing. Across the enterprise, our discipline in pricing and customer engagement combined with consistent execution translates to solid product returns as we continue to see attractive margins across our lines. Consolidated return on equity was a very healthy 12.5%, and our before-tax operating earnings and return on equity at our core operations were well above the top end of our most recent outlook ranges. In total, after-tax adjusted operating earnings of $398 million increased 4.3% from the same time last year. The positive results are true for both GAAP and STAT, and this cash flow generation flows into the strength of the balance sheet. We have been active in bolstering our balance sheet over the last couple of years across the board. It is true of our investment portfolio, where we've increased its credit quality profile and are well positioned for future market cycles. We have also increased reserves and capital behind our long-term care business, where we don't expect to need more capital. With respect to long-term care, we continue to actively pursue risk transfer. Long-term care insurance is very different from everything else we do and can at times overshadow the strength of our franchise. Whereas long-term care is for customers very late in life, The core of our strategy and purpose is taking care of people in their working years. It is why removing this over time and at the right price is very much a strategic objective. Pulling the capital picture together with statutory earnings over $300 million, our holding company liquidity ended at $1.4 billion, and our RBC was approximately 470%, both at levels well north of our targets. With the balance sheet actions taken last year, the substantial free cash flow generation of our core business has been building our capital position of strength and adding to our deployment flexibility. Our capital deployment priorities remain intact, investing in our business organically and inorganically, and then returning capital to shareholders through dividends and share repurchase. When we look at our overall balance sheet strength, we also continually examine our capital structure. As a result, we have decided to dissolve our precapitalized trust facility following the end of the third quarter. This was a tranche of contingent capital we no longer deem necessary given our multiple sources of capital. We've decided to use the proceeds for a one-time additional share repurchase in the fourth quarter, and when combined with our normal pace of purchases, we'll bring the total amount of share repurchase to approximately $1 billion for 2024. up from $250 million in 2023 and above our $500 million outlook coming into the year. When factoring in this expanded repurchase, we will have reduced our float by over 10% since restarting our share repurchase program in the fourth quarter of 2021. Overall, we are pleased by the many positive trends across our operations and the supportive macro environment. Third quarter marked another period of strength for the company and served as an important milestone for the year. We remain forward-looking, ensuring we are well positioned to execute on our strategy to deliver on our outlook of 10% to 15% EPS growth, which sets up continued progress into 2025. Once again, we appreciate you joining us this morning, and let me turn it over to Steve for more details and perspectives. Steve? Great.