Unum posts quarterly earnings in line with its prior outlook

Unum Group on Thursday posted fourth quarter adjusted operating income in line with the insurer’s prior outlook despite elevated December coronavirus-related mortality levels.

Operating income came in at $235.3 million in the quarter, or $1.15 per diluted common share. That’s compared to $290.7 million, or $1.41 per diluted common share, in the fourth quarter of 2019, the Chattanooga-based company reported.

Analysts at Yahoo Finance had expected Unum on average to earn $1.19 in the quarter.

Richard P. McKenney, Unum’s president and chief executive officer, said after the close of the markets that Unum’s execution in 2020 “delivered solid financial performance as we adapted to new ways of doing business to best serve our customers in extraordinary times.”

“While we expect elevated mortality rates from COVID-19 and a challenging employment picture to persist in the near term, as a leader in employee benefits we are well-positioned to return to sales and earnings growth in the second half of the year as vaccines take hold and the economy is expected to return to more normalized levels,” he said in a statement.

Unum’s stock on Thursday closed at $24.69 per share, up 63 cents, or 2.62% on the New York Stock Exchange.

For all of 2020, Unum’s aftertax adjusted operating income was $1.005 billion, or $4.93 per share compared to $1.14 billion, or $5.44 per share in 2019, the company reported.

In the fourth quarter of 2020, net income was $135.4 million, or 66 cents per diluted common share for the fourth quarter of 2020 compared to $296.2 million, or $1.44 per diluted common share for the same quarter in 2019.

Included in net income for the fourth quarter of 2020 is the net after-tax gain from a Closed Block individual disability reinsurance transaction of $32 million and an after-tax reserve increase of $119.7 million in the long-term care product line of Unum’s Closed Block segment.

Also included is an after-tax reserve increase of $13.8 million related to its group pension block that is within the all other product line of its Closed Block segment as well as a net after-tax realized investment gain on the company’s investment portfolio, excluding the net realized investment gain associated with the Closed Block individual disability reinsurance transaction of $1.6 million, the company reported.

The company’s Unum US segment in the latest quarter posted adjusted operating income of $143.5 million, a decrease of 45.5% from $263.1 million in the fourth quarter of 2019.

The Unum International segment reported adjusted operating income of $20.7 million in the fourth quarter of 2020, a drop of 13.4% from $23.9 million in the fourth quarter of 2019.