Unum Group UNM continues to benefit from disciplined pricing, high persistency and demand for employer-sponsored benefits. Premiums, the primary component of UNM’s top line, continue to benefit from its healthy in-force block growth and higher sales. In 2026, Unum Group anticipates total premium growth of 4-7%, driven by persistency, new sales, employment and salary growth, and the effectiveness of a renewal program. UNM expects adjusted operating income per share to be between $8.60 and $8.90, indicating growth of about 8-12%.
Unum Group continues to strengthen its core businesses through continued investments in technology and operational transformation, enhancing digital capabilities, customer engagement and broker experience. These initiatives, combined with disciplined sales execution, strong persistency in group lines, large-case sales momentum, favorable disability claims experience and growth in voluntary benefits at Unum U.S., are expected to support robust premium growth and earnings expansion in 2026.
Operating income in the Colonial Life Segment has risen over the last few years, supported by solid sales growth, strong claims experience, higher investment income, stable persistency and high ROE. If UNM can maintain these trends, Colonial Life can remain a key contributor to earnings growth and help offset pressure from weaker International results and the Closed Block. Management’s focus on disciplined execution and agent productivity supports continued premium growth.
Unum Group enjoys a solid capital position and substantial statutory earnings and capital, leading to financial flexibility. The company has consistently enhanced shareholders’ value through dividend hikes and share buybacks, and expects to repurchase $1 billion of shares in 2026. It has an impressive dividend track record, having increased dividends 19 times in the last 17 years and offering a yield better than the industry average, making it an attractive pick for yield-seeking investors.
Risks for UNM
Unum Group has been witnessing a rise in total benefits and expenses over the past few years as paid family and medical leave claims are rising, inducing margin contraction. Management expects these effects to persist in the second half, although pricing and underwriting actions are underway.
Net investment income is declining year over year, weighing on Unum International, Corporate and Closed Block. The long-term care alternative portfolio yielded 6.1%, below management’s long-term expectation of 8–10%.
Performance in the Closed Block and Corporate segments has also been disappointing over the past few quarters.
Other Industry Players
Other industry players include NMI Holdings Inc. NMIH, Palomar Holdings, Inc. PLMR and Arch Capital Group Ltd. ACGL.
NMI Holdings’ earnings surpassed estimates in three of the last four quarters and matched in one, the average surprise being 3.82%.
NMI Holdings is well-poised for growth on new primary insurance written, direct primary insurance in force, and a better risk-based capital ratio. Its mortgage insurance portfolio is expected to create a strong foundation for future earnings. The mortgage insurer should continue to gain from a strong mortgage origination market and increased private mortgage insurance penetration rates.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average surprise being 13.04%.
Palomar is poised to gain from the increased volume of policies written across the lines of business, strong retention rates, strategic expansion of products’ geographic and distribution footprint, and new partnerships. PLMR should benefit from its solid product portfolio as well as geographic expansion and rate increases. Net investment income is expected to grow on the back of a higher average balance of investments. PLMR increased the adjusted net income guidance from $262-$ 278 million to $270-$280 million.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 12.75%.
Arch Capital boasts a strong product portfolio and has a solid track record of premium growth. Premiums should benefit from new business opportunities, rate increases, growth in existing accounts and growth in Australian single-premium mortgage insurance. A solid capital position shields it from market volatility.
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Unum Group (UNM): Free Stock Analysis Report
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Palomar Holdings, Inc. (PLMR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).