2Q26: EPS Inline on Weaker Group Disability and International Offset by Group Life and AD&D

Research evidence excerpt

2Q26: EPS Inline on Weaker Group Disability and International Offset by Group Life and AD&D

Barclays | Unum Group

family and medical leave product suite continues to ramp. The benefit ratio increased year over

year to 65.8% which was worse than our estimate of 63.8%. The increase year over year was

driven by aforementioned weaker showing in short term disability as well as concessionary

pricing actions. This marks another miss in the Group Disability segment following several

quarters of unfavorable benefits experience, although the weakness this quarter appears to be

largely attributable to PFML, which should have a more transitory impact.

Group Life and AD&D: Group Life and AD&D delivered pretax operating earnings of $93mn,

beating our $79mn estimate and Street's $86mn estimate. The outperformance was largely

driven by strong underwriting results as the benefit ratio came in at a favorable 66.0%, better

than our 69.3%, due to lower claim incidence in both group life and AD&D, partially offset by

higher average claim size in the AD&D product line. This was partially offset by slightly higher

expenses that were 12.57% as a percentage of premiums vs our expected 12.10%.

Supplemental & Voluntary: Supplemental and Voluntary posted pretax operating earnings of

$133mn which beat our $123mn estimate and Street's $124mn estimate. The result stemmed

from a more favorable benefit ratio of 47.4% vs our 48.5% estimate. The stronger underwriting

performance was driven by lower incidence in the individual disability product which was

partially offset by higher incidence in the voluntary benefits line.

International: International posted pretax operating earnings of $24mn, coming in below our

$38mn estimate and Street's $36mn estimate.