It has been about a month since the last earnings report for Unum (UNM Quick QuoteUNM - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Unum due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Unum Group Q4 Earnings and Revenues Miss Estimates, Premium Rises Y/Y

Unum Group’s fourth-quarter 2024 operating net income of $2.03 per share missed the Zacks Consensus Estimate by 4.7%. The bottom line increased 13.4% year over year.

The quarterly results reflected continued strong operating performance, favorable benefit experience, premium growth, increased sales in Unum U.K., offset by a soft performance in the Corporate segment and higher expenses.

Operational Update      

Total operating revenues of Unum Group were $3.2 billion, up 2.5% year over year, driven by higher premium income, other income and improved net investment income. The top line missed the consensus estimate by 1.5%
Premium increased 3.1% from the prior-year quarter to $2.6 billion, which matched the Zacks Consensus Estimate. 

Net investment Income of $543.6 million increased 2.4%. The Zacks Consensus Estimate was $540 million.

Total benefits and expenses increased 2.7% year over year to $2.8 billion, largely attributable to lower policy benefits, including remeasurement loss or gain.

Quarterly Segment Update

Unum U.S.: Premium income was $1.7 billion, up 3% year over year.  Adjusted operating income decreased 2.6% year over year to $333.2 million, attributable to lower adjusted operating income across all three business lines. The Zacks Consensus Estimate was pegged at $346 million. 

Unum International: Premium income of $246.6 million increased 17.1% year over year.  Adjusted operating income was $37.6 million, up 4.6% year over year. The Zacks Consensus Estimate was pegged at $42 million. 

The Unum U.K. line of business premium income was £156.9 million, up 5.2% from the year-ago quarter due to in-force block growth. Adjusted operating income, in local currency, of £27.6 million was up 10.7% year over year.

The benefit ratio, excluding the reserve assumption updates, was 72.1%, which deteriorated 420 basis points (bps) due to unfavorable claim incidence in the group long-term disability and group life product lines, partially offset by favorable claim incidence in the supplemental product line and favorable recoveries in the group long-term disability product line. Sales increased 5%.

For 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 3.2% from the prior-year figure to $448.9 million, driven by higher prior period sales and generally stable persistency.

Sales decreased 2.2% from the year-ago figure to $185.4 million. Adjusted operating income increased 39.7% from the prior-year period to $122.7 million. The Zacks Consensus Estimate was pegged at $106 million.

Persistency was 78.3% in 2024, flat year over year.

The benefit ratio, excluding the reserve assumption updates, improved 640 bps year over year to 46.8%, primarily due to favorable benefit experience in cancer and critical illness and life product lines.

Closed Block: Adjusted operating income was $27.7 million, up 30% year over year.  The Zacks Consensus Estimate was $37.5 million.

Corporate: The segment incurred an adjusted operating loss of $50.4 million, wider than the year-ago quarter’s loss of $36.5 million. The loss widened due to lower net investment income, attributable to increased allocations to lines of business. The Zacks Consensus Estimate was pegged at a loss of $49 million.

Full-Year Highlights

Adjusted operating income of $8.44 per share increased 10.1% from 2023. 
Premium increased 4.5% to $10.5 billion.

Capital Management

As of Dec. 31, 2024, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 430%. Unum Group exited 2024 with holding company liquidity worth $2 billion.

Book value per share grew 23% year over year to $61.38 as of Dec. 31, 2024. UNM executed accelerated share repurchase agreements totaling $471 million in the fourth quarter.

Guidance

UNM expects after-tax adjusted operating income per share to grow 8-12% in 2025. Core operations premium growth is expected between 4% and 7%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Unum has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Unum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.