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Unum Group Q3 Earnings Top Estimates, Revenues & Premium Rise Y/Y
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Unum Group’s (UNM - Free Report) third-quarter 2024 operating net income of $2.13 per share beat the Zacks Consensus Estimate by 1.9%. The bottom line increased 9.8% year over year.
The quarterly results reflected continued strong operating performance, favorable benefit experience, premium growth, increased sales in the Unum U.K. and lower expenses, offset by a soft performance in the Corporate segment.
Total operating revenues of Unum Group were $3.2 billion, up 3.4% year over year, driven by higher premium income, other income and improved net investment income.
Premium increased 4% from the prior-year quarter to $2.6 billion, which matched our estimate as well as the Zacks Consensus Estimate.
Total benefits and expenses decreased 15.1% year over year to $2.4 billion, largely attributable to lower policy benefits, including remeasurement loss or gain. Our estimate for the same was $2.7 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.7 billion, up 4% year over year. Adjusted operating income rose 1.5% year over year to $363.3 million. The Zacks Consensus Estimate was pegged at $358 million. Our estimate was $424.8 million.
Unum International: Premium income of $246.6 million increased 17.1% year over year. Adjusted operating income was $40.3 million, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $39.9 million. Our estimate was $31.5 million.
The Unum U.K. line of business premium income was £158.9 million, up 11.7% from the year-ago quarter due to in-force block growth. Adjusted operating income, in local currency, of £29.5 million was up 3.9% year over year.
The benefit ratio, excluding the reserve assumption updates, was 69.5%, which deteriorated 210 basis points (bps) due to higher incidence in the group long-term disability and group life product lines. It was partially offset by favorable incidence in the supplemental product line and favorable recoveries in the group long-term disability product line. Sales increased 26.9%.
For the first nine months of 2024, persistency decreased in the group long-term disability and supplemental product line but increased in the group life product line of business.
Colonial Life: Premium income increased 2.5% from the prior-year figure to $441.9 million, driven by higher prior period sales and generally stable persistency.
Sales decreased 0.3% from the year-ago figure to $120.9 million. Adjusted operating income increased 10.2% from the prior-year period to $113.4 million. Our estimate was $148.9 million, while the Zacks Consensus Estimate was pegged at $119 million.
Persistency was 78% in the first nine months of 2024, which expanded 10 bps year over year.
The benefit ratio, excluding the reserve assumption updates, improved 150 bps year over year to 47.6%, primarily due to favorable benefit experience in cancer and critical illness and life product lines.
Closed Block: Adjusted operating income was $34.2 million, which remained unchanged year over year. The adjusted operating income excludes the amortization of the cost of reinsurance of $10.4 million and the impact of non-contemporaneous reinsurance of $6 million related to the Closed Block individual disability reinsurance transaction as well as the net reserve decrease related to the assumption updates of $175.3 million. Our estimate for loss was $34.1 million, while the Zacks Consensus Estimate was pegged at a loss of $37.8 million.
Corporate: The segment incurred an adjusted operating loss of $49.4 million, which excludes the loss on legal settlement of $15.3 million, wider than the year-ago quarter’s loss of $41.5 million. The loss was due to a decrease in net investment income, owing to increased allocations to lines of business. Our estimate for loss was $45.3 million, while the Zacks Consensus Estimate was pegged at a loss of $45.1 million.
Capital Management
As of Sept. 30, 2024, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 470%.
Unum Group exited the third quarter with holding company liquidity worth $1.4 billion.
Book value per share grew 20.4% year over year to $59.36 as of Sept. 30, 2024.
RLI Corp. (RLI - Free Report) reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.
Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.
Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2024 net operating earnings of $4.20 per share, which outpaced the Zacks Consensus Estimate by 13.5%. The bottom line increased 26.9% year over year. Operating revenues jumped 33.1% year over year to $418 million. The growth can primarily be attributed to a rise in premiums, fee income, higher net investment income and other income. Revenues beat the consensus estimate by 4.2%.
Gross written premiums of $448.6 million rose 18.8% year over year. Our estimate was $475.1 million. Net written premiums climbed 18.9% year over year to $349.9 million in the quarter. Our estimate was pegged at $370.2 million. Net investment income increased 46.4% year over year to $39.6 million in the quarter and beat our estimate of $38.6 million. The Zacks Consensus Estimate was pegged at $37.7 million.
Selective Insurance Group, Inc. (SIGI - Free Report) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter. Total revenues of $1.2 billion increased 13.9% from the year-ago quarter’s figure. However, the top line missed the Zacks Consensus Estimate by 0.4%.
On a year-over-year basis, net premiums written increased 9% to $1.15 billion. The figure was higher than our estimate of $1.2 billion. Net investment income earned, before-tax, increased 17% year over year to $117.8 million. The figure was higher than our estimate of $117.3 million. The Zacks Consensus Estimate was pegged at $114 million. After-tax net underwriting income was $4.1 million, which plunged 83% year over year. Pre-tax catastrophe losses more than doubled year over year to $148.8 million. Non-catastrophe property loss and loss expenses of $146.7 million decreased 15.1% year over year.
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Unum Group Q3 Earnings Top Estimates, Revenues & Premium Rise Y/Y
Unum Group’s (UNM - Free Report) third-quarter 2024 operating net income of $2.13 per share beat the Zacks Consensus Estimate by 1.9%. The bottom line increased 9.8% year over year.
The quarterly results reflected continued strong operating performance, favorable benefit experience, premium growth, increased sales in the Unum U.K. and lower expenses, offset by a soft performance in the Corporate segment.
Unum Group Price, Consensus and EPS Surprise
Unum Group price-consensus-eps-surprise-chart | Unum Group Quote
Operational Update
Total operating revenues of Unum Group were $3.2 billion, up 3.4% year over year, driven by higher premium income, other income and improved net investment income.
Premium increased 4% from the prior-year quarter to $2.6 billion, which matched our estimate as well as the Zacks Consensus Estimate.
Total benefits and expenses decreased 15.1% year over year to $2.4 billion, largely attributable to lower policy benefits, including remeasurement loss or gain. Our estimate for the same was $2.7 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.7 billion, up 4% year over year.
Adjusted operating income rose 1.5% year over year to $363.3 million. The Zacks Consensus Estimate was pegged at $358 million. Our estimate was $424.8 million.
Unum International: Premium income of $246.6 million increased 17.1% year over year. Adjusted operating income was $40.3 million, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $39.9 million. Our estimate was $31.5 million.
The Unum U.K. line of business premium income was £158.9 million, up 11.7% from the year-ago quarter due to in-force block growth. Adjusted operating income, in local currency, of £29.5 million was up 3.9% year over year.
The benefit ratio, excluding the reserve assumption updates, was 69.5%, which deteriorated 210 basis points (bps) due to higher incidence in the group long-term disability and group life product lines. It was partially offset by favorable incidence in the supplemental product line and favorable recoveries in the group long-term disability product line. Sales increased 26.9%.
For the first nine months of 2024, persistency decreased in the group long-term disability and supplemental product line but increased in the group life product line of business.
Colonial Life: Premium income increased 2.5% from the prior-year figure to $441.9 million, driven by higher prior period sales and generally stable persistency.
Sales decreased 0.3% from the year-ago figure to $120.9 million. Adjusted operating income increased 10.2% from the prior-year period to $113.4 million. Our estimate was $148.9 million, while the Zacks Consensus Estimate was pegged at $119 million.
Persistency was 78% in the first nine months of 2024, which expanded 10 bps year over year.
The benefit ratio, excluding the reserve assumption updates, improved 150 bps year over year to 47.6%, primarily due to favorable benefit experience in cancer and critical illness and life product lines.
Closed Block: Adjusted operating income was $34.2 million, which remained unchanged year over year. The adjusted operating income excludes the amortization of the cost of reinsurance of $10.4 million and the impact of non-contemporaneous reinsurance of $6 million related to the Closed Block individual disability reinsurance transaction as well as the net reserve decrease related to the assumption updates of $175.3 million. Our estimate for loss was $34.1 million, while the Zacks Consensus Estimate was pegged at a loss of $37.8 million.
Corporate: The segment incurred an adjusted operating loss of $49.4 million, which excludes the loss on legal settlement of $15.3 million, wider than the year-ago quarter’s loss of $41.5 million. The loss was due to a decrease in net investment income, owing to increased allocations to lines of business. Our estimate for loss was $45.3 million, while the Zacks Consensus Estimate was pegged at a loss of $45.1 million.
Capital Management
As of Sept. 30, 2024, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 470%.
Unum Group exited the third quarter with holding company liquidity worth $1.4 billion.
Book value per share grew 20.4% year over year to $59.36 as of Sept. 30, 2024.
UNM bought back 3.7 shares for $202 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
RLI Corp. (RLI - Free Report) reported third-quarter 2024 operating earnings of $1.31 per share, beating the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues for the reported quarter were $426 million, up 1.4% year over year. The top line beat the Zacks Consensus Estimate of $420 million.
Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Our estimate was $572.3 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 bps year over year to 89.6. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 103.1.
Kinsale Capital Group (KNSL - Free Report) delivered third-quarter 2024 net operating earnings of $4.20 per share, which outpaced the Zacks Consensus Estimate by 13.5%. The bottom line increased 26.9% year over year. Operating revenues jumped 33.1% year over year to $418 million. The growth can primarily be attributed to a rise in premiums, fee income, higher net investment income and other income. Revenues beat the consensus estimate by 4.2%.
Gross written premiums of $448.6 million rose 18.8% year over year. Our estimate was $475.1 million. Net written premiums climbed 18.9% year over year to $349.9 million in the quarter. Our estimate was pegged at $370.2 million. Net investment income increased 46.4% year over year to $39.6 million in the quarter and beat our estimate of $38.6 million. The Zacks Consensus Estimate was pegged at $37.7 million.
Selective Insurance Group, Inc. (SIGI - Free Report) reported third-quarter 2024 operating income of $1.40 per share, which missed the Zacks Consensus Estimate by 17.1%. The bottom line decreased 7% from the year-ago quarter. Total revenues of $1.2 billion increased 13.9% from the year-ago quarter’s figure. However, the top line missed the Zacks Consensus Estimate by 0.4%.
On a year-over-year basis, net premiums written increased 9% to $1.15 billion. The figure was higher than our estimate of $1.2 billion. Net investment income earned, before-tax, increased 17% year over year to $117.8 million.
The figure was higher than our estimate of $117.3 million. The Zacks Consensus Estimate was pegged at $114 million. After-tax net underwriting income was $4.1 million, which plunged 83% year over year. Pre-tax catastrophe losses more than doubled year over year to $148.8 million. Non-catastrophe property loss and loss expenses of $146.7 million decreased 15.1% year over year.