2Q results cap a strong first half of year

Second quarter financial results for Unum US capped a strong first half of the year. Operating income rose slightly to $218.8 million, an increase of 2.2 percent over the second quarter of last year. Sales increased 40 percent, a sharp jump from last year when market activity was much slower, in large part due to the implementation of health care reform.

The notably consistent performance of Unum US has been driven by commitment to client relationships, strong customer service and a collective focus on business goals. The results have enabled investments in products, service, technology, and communication that deliver what benefits partners, clients and consumers need in today’s changing marketplace.

In the second quarter, we launched new support for our large customers in managing the requirements of the Americans with Disabilities Act.

We’ve been making significant investments in the technology, communications and methodologies that support benefits enrollment. This fall we will be implementing some enhancements that will further simplify the decision-making process for employees and reinforce their buying decisions.

Results for Unum Group

Unum Group reported after-tax operating income for the quarter was $234.8 million, or 91¢ per share, compared to $218.5 million, or 82¢ per share, in the second quarter of 2013. Net income was $242.5 million, or 94¢ per share, compared to $218.6 million, or 82¢ a share, a year ago.

“It was another very good quarter for us, rounding out a strong first half of the year,” said President and CEO Tom Watjen. “We are well-positioned to capitalize on the opportunities ahead to profitably grow our business by continuing to focus on the things that have contributed to our past success – solid plans, disciplined execution of these plans, and our employees doing their part to support our customers and business.”

In addition to Unum US results above, here are business segment highlights from the quarter:

Unum UK continued to deliver solid year-over-year margin improvement and earnings growth, with an 8.3 percent increase in operating income (in local currency). While sales were down about 11 percent, persistency is trending higher relative to the first quarter of this year and premium income rose.
Colonial Life also delivered strong results, with operating income increasing 5.9 percent to $75.3 million. These solid results were driven by stable risk results and solid premium growth. Sales increased again this past quarter, with a 7.7 percent increase over last year’s results.
The overall results of our Closed Block, which consists of individual disability and long-term care products which Unum no longer sell but still service, were strong this quarter. Long-term care continues to be a difficult business to manage, especially in this low interest rate environment.
The company’s investment portfolio remains in excellent shape, but it, too, is challenged by today’s low interest rates.
Finally, the company’s capital position is strong, giving Unum significant financial flexibility. The company bought back another $100 million of its stock during the quarter.

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