Unum posts higher 1Q earnings on better coronavirus trend

Chattanooga-based benefits provider Unum Group on Thursday posted higher first-quarter operating income reflecting an improving trend in coronavirus-related mortality.

After-tax adjusted operating income was $277.3 million, or $1.36 per diluted common share, in the first quarter of 2022 compared to $212 million, or $1.04 per diluted common share, a year ago, the insurer reported.

Richard P. McKenney, Unum’s president and chief executive officer, said in a statement after the close of the markets that the quarter was “an outstanding start” to the year with strong performance across the business and lessening effects of the pandemic impacting customers.

“The current business environment is favorable for our company, with higher interest rates and a strong labor market resulting in an improved earnings outlook,” he said.

The company that employs nearly 3,000 people in Chattanooga posted a full-year 2022 outlook in which after-tax adjusted operating income per share is now expected to grow 15% to 20% relative to fullyear 2021. That compared to the previous outlook of an increase of 4% to 7%.

Unum’s first-quarter performance beat the analyst consensus estimate it would earn 79 cents per share, according to Yahoo Finance.

But Unum reported net income of $253.5 million, or $1.25 per diluted common share, for the first quarter was down from $277.3 million, or $1.36 per diluted common share.

Included in net income for the quarter are aftertax amortization of the cost of reinsurance of $13.2 million and a net after-tax investment loss on the company’s investment portfolio of $10.6 million, according to Unum.

Still, Unum’s U.S. segment reported adjusted operating income of $171.6 million in the first quarter of 2022, up 48.3% from $115.7 million in the year-ago quarter. Premium income increased 1.3%, the company reported.

The Unum International segment showed adjusted operating income of $27.2 million in the quarter, an increase of 3% from $26.4 million a year ago. Premium income grew 7.7%.

The Colonial Life segment reported a 22.9% increase in adjusted operating income to $90.1 million in the first quarter, compared to $73.3 million a year ago. Premium income rose slightly to $430.7 million in the first quarter of 2022.

Unum’s stock closed Thursday at $31.91 per share, down 45 cents, or 1.39% on the New York Stock Exchange.