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What changed in Unum Group's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Unum Group's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+548 added−592 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-27)

Top changes in Unum Group's 2025 10-K

548 paragraphs added · 592 removed · 460 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

95 edited+13 added−19 removed134 unchanged
Biggest changeThe New York State Department of Financial Services' cybersecurity regulation contains provisions similar to the Cybersecurity Model Law, in addition to more prescriptive cybersecurity obligations. States are also adopting laws and regulations that govern the collection, processing, storage, and destruction of personal information outside the context of providing insurance products.
Biggest changeStates are also adopting laws and regulations that govern the collection, processing, storage, and destruction of personal information outside the context of providing insurance products. Several states have enacted comprehensive consumer privacy laws, and other states are considering passing similar laws, which typically allow consumers the right to access, correct, delete, and opt-out of certain uses of their data.
All states where our traditional U.S. insurance subsidiaries are domiciled require insurers to conduct, at least annually, an own risk and solvency assessment (ORSA), which is a group-level perspective on the risks of current and future business plans and the sufficiency of capital to support those risks. We file an ORSA summary report annually with the applicable insurance regulators.
All states where our traditional U.S. insurance subsidiaries are domiciled require insurers to conduct, at least annually, an own risk and solvency assessment (ORSA), which is a group-level perspective on the risks of current and future business plans and the sufficiency of capital to support those risks. We file an ORSA summary report annually with the applicable U.S. insurance regulators.
We offer robust operational training programs, targeted skill development programs, career development resources, tools and workshops, dedicated learning time and on-demand skill building resources. We also offer tuition reimbursement benefits, in role leadership development programs, and multi-year rotational programs.
We offer robust operational training programs, targeted skill development programs, career development resources, tools and workshops, and on-demand skill building resources. We also offer dedicated learning time, tuition reimbursement benefits, in role leadership development programs, and multi-year rotational programs.
Legislation enacted thus far as a result of Pillar Two is not expected to materially impact the Company. Federal, foreign, and state tax laws and regulations are subject to change, and any such change could materially impact our federal, foreign, or state taxes and affect profitability as well as capital levels in our insurance subsidiaries.
Legislation enacted thus far as a result of Pillar Two has not and, is not expected to, materially impact the Company. Federal, foreign, and state tax laws and regulations are subject to change, and any such change could materially impact our federal, foreign, or state taxes and affect profitability as well as capital levels in our insurance subsidiaries.
Inclusive Workplace Our purpose of helping the working world thrive throughout life's moments starts with our workforce. The unique perspectives, experiences, and backgrounds of our employees empower us to better serve our customers, communities, and one another. Unum is committed to a culture of inclusivity and belonging for all our employees across our enterprise.
Inclusive Workplace Our purpose of helping the working world thrive throughout life's moments starts with our workforce. The unique skills, perspectives, experiences, and backgrounds of our employees empower us to better serve our customers, communities, and one another. Unum is committed to a culture of inclusivity and belonging for all our employees across our enterprise.
Premiums for our dental and vision products are guaranteed renewable with rates that vary by age and region. Profitability is affected by the level of employee participation, persistency, investment returns, claims experience, and the level of administrative expenses. Life Life products are primarily comprised of universal life, whole life, and term life policies.
Premiums for our dental and vision products are guaranteed renewable with rates that may vary by age and region. Profitability is affected by the level of employee participation, persistency, investment returns, claims experience, and the level of administrative expenses. Life Life products are primarily comprised of universal life, whole life, and term life policies.
The Organization for Economic Co-operation and Development has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the U.K., Poland, and Ireland, have adopted Pillar Two for tax years beginning in 2024.
The Organization for Economic Co-operation and Development has established model rules to ensure a minimum level of tax of 15 percent (Pillar Two) for multinational companies. Several jurisdictions, including the U.K., Poland, and Ireland, adopted Pillar Two for tax years beginning in 2024.
Learning and Development We are committed to supporting the growth and development of our workforce, ensuring employees are engaged and skilled to support not only Unum’s growth but also their own. Employees have access to a portfolio of skills and career development offerings to support their growth.
Learning and Development We are committed to supporting the growth and development of our workforce, ensuring employees are engaged and skilled to support not only Unum’s growth but also their own. Employees have access to a portfolio of career development offerings to support their growth.
The General Data Protection Regulation of the EU and the U.K. General Data Protection Regulation (collectively referred to as "the GDPR") establish the legal framework for our EU and U.K. entities that collect and process information from individuals who reside in the EU and U.K., respectively.
General Data Protection Regulation (collectively referred to as "the GDPR") establish the legal framework for our EU and U.K. entities that collect and process information from individuals who reside in the EU and U.K., respectively.
Regulatory focus on the risks, opportunities, and impacts posed by climate change is increasing, with some regulators now requiring that the Company integrate consideration of these items into our disclosure, governance and risk management frameworks, which may subject us to increased costs. Other regulators have attempted to limit the types of factors that can be incorporated into investment decisions.
Regulatory focus on the risks, opportunities, and impacts posed by climate change is increasing, with some regulators now requiring that the Company integrate consideration of these items into our disclosure, governance and risk management frameworks, which may subject us to increased costs. Other regulators have sought to limit the types of factors that can be incorporated into investment decisions.
(Unum Poland). We are a leading provider of financial protection benefits in the United States and the United Kingdom. Our products include disability, life, accident, critical illness, dental and vision, and other related services. We market our products primarily through the workplace. We have three principal operating segments: Unum US, Unum International, and Colonial Life.
(Unum Poland). We are a leading provider of financial protection benefits in the United States and the United Kingdom. Our products include disability, life, accident, critical illness, dental and vision, and other related services. We market our products primarily through the workplace. We have three core operating segments: Unum US, Unum International, and Colonial Life.
Our executive officers, who are also executive officers of certain of our principal subsidiaries, were appointed by Unum Group's board of directors to serve until their successors are chosen and qualified or until their earlier resignation or removal. Name Age Position Richard P. McKenney 56 President and Chief Executive Officer and a Director Steven A.
Our executive officers, who are also executive officers of certain of our principal subsidiaries, were appointed by Unum Group's board of directors to serve until their successors are chosen and qualified or until their earlier resignation or removal. Name Age Position Richard P. McKenney 57 President and Chief Executive Officer and a Director Steven A.
This approach supports our focus on customers and commitment to building a workplace where everyone feels welcome, valued and supported. Our international locations each continue to follow their established strategies based on their local environment. Compensation and Benefits We provide compensation and benefits programs which support our employees’ health, wealth, and life.
This approach supports our focus on customers and commitment to building a workplace where everyone feels welcome. Our international locations each continue to follow their established strategies based on their local environment. Compensation and Benefits We provide compensation and benefits programs which support our employees’ health, wealth, and life.
Assets are invested predominately in fixed maturity securities. We may redistribute investments among our different lines of business or sell selected securities and reinvest the proceeds, when necessary, to adjust the cash flow and/or duration of the asset portfolios to better match the cash flow and duration of the liability portfolios.
Assets are invested predominantly in fixed maturity securities. We may redistribute investments among our different lines of business or sell selected securities and reinvest the proceeds, when necessary, to adjust the cash flow and/or duration of the asset portfolios to better match the cash flow and duration of the liability portfolios.
We also use this analysis in determining hedging strategies and utilizing derivative financial instruments to manage interest rate risk and the risk related to matching duration for our assets and liabilities. We do not use derivative financial instruments for speculative purposes.
Additionally, we use this analysis in determining hedging strategies and utilizing derivative financial instruments to manage interest rate risk and the risk related to matching duration for our assets and liabilities. We do not use derivative financial instruments for speculative purposes.
However, underwriting requirements are often waived for cases that meet certain criteria, including participation levels. Individual voluntary benefits products other than life insurance are offered on a guaranteed renewable basis which allows us to 5 Table of Contents reprice in-force policies, subject to regulatory approval.
However, underwriting requirements are often waived for cases that meet certain criteria, including participation levels. Individual voluntary benefits products other than life insurance are offered on a guaranteed renewable basis which allows us to 5 T able of Contents reprice in-force policies, subject to regulatory approval.
The percentage of consolidated premium income generated by each reportable segment for the year ended December 31, 2024 is as follows: Unum US 65.6 % Unum International 9.0 Colonial Life 17.0 Closed Block 8.4 Total 100.0 % Financial information is provided in "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein in Item 7 and Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
The percentage of consolidated premium income generated by each reportable segment for the year ended December 31, 2025 is as follows: Unum US 65.4 % Unum International 10.0 Colonial Life 17.0 Closed Block 7.6 Total 100.0 % Financial information is provided in "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein in Item 7 and Note 15 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
We discontinued offering universal life policies in 2019. Premiums are generally based on assumptions for mortality, persistency, administrative expenses, investment income, and profit. We develop our assumptions based on our own experience and published industry tables. Premiums for the individual 8 Table of Contents whole life and term life products are guaranteed for the life of the contract.
We discontinued offering universal life policies in 2019. 8 T able of Contents Premiums are generally based on assumptions for mortality, persistency, administrative expenses, investment income, and profit. We develop our assumptions based on our own experience and published industry tables. Premiums for the individual whole life and term life products are guaranteed for the life of the contract.
Our Polish insurance subsidiary, Unum Zycie TUiR, is subject to regulation by the Komisja Nadzoru Finansowego (KNF) of the Financial Supervision Authority (FSA) in Poland. The KNF oversees the financial health and stability of financial services 14 Table of Contents firms and is responsible for the prudential regulation and day-to-day supervision of insurance companies and other financial institutions.
Our Polish insurance subsidiary, Unum Zycie TUiR, is subject to regulation by the Komisja Nadzoru Finansowego (KNF) of the Financial Supervision Authority (FSA) in Poland. The KNF oversees the financial health and stability of financial services firms and is responsible for the prudential regulation and day-to-day supervision of insurance companies and other financial institutions.
In general, the maximum amount of life insurance risk retained by our U.S. insurance subsidiaries under group or individual life or group or individual accidental death and dismemberment policies during 2024 was $1 million per covered life per policy. The retention amount remains at $1 million for 2025.
In general, the maximum amount of life insurance risk retained by our U.S. insurance subsidiaries under group or individual life or group or individual accidental death and dismemberment policies during 2025 was $1.0 million per covered life per policy. The retention amount remains at $1.0 million for 2026.
The new agreement allows us to more effectively manage capital in conformity with statutory accounting principles but does not meet insurance risk transfer in accordance with applicable GAAP and therefore will not be accounted for as reinsurance in our consolidated GAAP financial statements.
This agreement allows us to more effectively manage capital in conformity with statutory accounting principles but does not meet insurance risk transfer in accordance with applicable GAAP and therefore will not be accounted for as reinsurance in our consolidated GAAP financial statements.
For example, numerous states have adopted the NAIC’s Model Bulletin regarding the Use of Artificial Intelligence Systems by Insurers, other states have issued their own regulations governing insurance company use of AI, and the European Union's Artificial Intelligence Act has come into effect.
For example, over twenty states have adopted the NAIC’s Model Bulletin regarding the Use of Artificial Intelligence Systems by Insurers, other states have issued their own regulations governing insurance company use of AI, and the European Union's Artificial Intelligence Act has come into effect.
We have the following coverage for 2025, after a $150 million deductible: Layer Coverage Layer (in millions) Percent Coverage Coverage (in millions) First $ 100.0 50.0 % $ 50.0 Second 100.0 55.0 55.0 Third 150.0 55.0 82.5 Fourth 300.0 55.0 165.0 Total Catastrophic Coverage $ 352.5 10 Table of Contents In addition to the global catastrophic reinsurance coverage noted above, Unum Limited has additional catastrophic coverage via an arms-length, intercompany reinsurance agreement with Unum America, under similar terms as the global catastrophic treaties.
We have the following coverage for 2026, after a $150 million deductible: Layer Coverage Layer (in millions) Percent Coverage Coverage (in millions) First $ 100.0 50.0 % $ 50.0 Second 100.0 55.0 55.0 Third 150.0 55.0 82.5 Fourth 300.0 55.0 165.0 Total Catastrophic Coverage $ 352.5 10 T able of Contents In addition to the global catastrophic reinsurance coverage noted above, Unum Limited has additional catastrophic coverage via an arms-length, intercompany reinsurance agreement with Unum America, under similar terms as the global catastrophic treaties.
As of December 31, 2024, total assets equaled approximately 5 percent of consolidated assets and total liabilities equaled approximately 5 percent of consolidated liabilities for our Unum International segment. Fluctuations in the U.S. dollar relative to the local currencies of our Unum International segment will impact our reported operating results.
As of December 31, 2025, total assets equaled approximately 6 percent of consolidated assets and total liabilities equaled approximately 5 percent of consolidated liabilities for our Unum International segment. Fluctuations in the U.S. dollar relative to the local currencies of our Unum International segment will impact our reported operating results.
Benefits are typically effective after 0 to 30 days for accidents and after 7 to 30 days for sickness. 4 Table of Contents Our fee-based services include leave management and administrative services only (ASO) business.
Benefits are typically effective after 0 to 30 days for accidents and after 7 to 30 days for sickness. 4 T able of Contents Our fee-based services include leave management and administrative services only (ASO) business.
Pyne 55 Executive Vice President, Group Benefits Mark P. Till 57 Executive Vice President and CEO, Unum International Mr. McKenney became President in April 2015 and Chief Executive Officer in May 2015, having served as Executive Vice President and Chief Financial Officer from August 2009 until April 2015. Before joining the Company in July 2009, Mr.
Pyne 56 Executive Vice President, Group Benefits Mark P. Till 58 Executive Vice President and CEO, Unum International Mr. McKenney became President in April 2015 and Chief Executive Officer in May 2015, having served as Executive Vice President and Chief Financial Officer from August 2009 until April 2015. Before joining the Company in July 2009, Mr.
Also included in our long-term disability product line is our medical stop-loss product, which is no longer actively marketed as of the third quarter of 2024. As our medical stop-loss contracts were renewable on an annual basis, no medical stop-loss policies will remain in-force as of the third quarter of 2025.
Also included in our long-term disability product line is our medical stop-loss product, which was no longer actively marketed as of the third quarter of 2024. As our medical stop-loss contracts were renewable on an annual basis, no medical stop-loss policies were in-force as of the fourth quarter of 2025.
We believe employer-sponsored benefits are the most effective way to provide workers with access to information and options to protect their financial stability. Working people and their families, particularly those at lower and middle incomes, are perhaps the most vulnerable in today's economy yet are often overlooked by many providers of financial products and services.
We believe employer-sponsored benefits are the most effective way to provide workers with access to information and options to protect their financial stability. Working people and their families, particularly those at lower and middle incomes, are perhaps the most vulnerable to economic volatility yet are often overlooked by many providers of financial products and services.
The DOL enforces a comprehensive federal statute that regulates claims paying fiduciary responsibilities and reporting and disclosure requirements for most employee benefit plans. Our U.K. insurance subsidiary, Unum Limited, is subject to dual regulation by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
The DOL enforces a comprehensive federal statute that regulates claims paying fiduciary responsibilities and reporting and disclosure requirements for most employee benefit plans. 14 T able of Contents Our U.K. insurance subsidiary, Unum Limited, is subject to dual regulation by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
Profitability is affected by premium rate increases, persistency, investment returns, mortality and other claims experience, and the level of administrative expenses. Other Other insurance products not actively marketed include individual disability, group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines.
Profitability is affected by premium rate increases, persistency, investment returns, mortality and other claims experience, and the level of administrative expenses. 9 T able of Contents All Other All other insurance products not actively marketed include individual disability, group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines.
The percentage of Colonial Life segment premium income generated by each product line during 2024 is as follows: Accident, Sickness, and Disability 54.3 % Life 25.7 Cancer and Critical Illness 20.0 Total 100.0 % Accident, Sickness, and Disability The accident, sickness, and disability product line consists of short-term disability policies, accident-only policies providing benefits for injuries on a specified loss basis, and our dental and vision policies.
The percentage of Colonial Life segment premium income generated by each product line during 2025 is as follows: Accident, Sickness, and Disability 54.0 % Life 26.3 Cancer and Critical Illness 19.7 Total 100.0 % Accident, Sickness, and Disability The accident, sickness, and disability product line consists of short-term disability policies, accident-only policies providing benefits for injuries on a specified loss basis, and our dental and vision policies.
Long-term, we believe that consistent operating results, combined with the implementation of strategic initiatives and the effective deployment of capital, will allow us to meet our financial objectives. 3 Table of Contents Reportable Segments Our reportable segments are comprised of the following: Unum US, Unum International, Colonial Life, Closed Block, and Corporate.
We believe that consistent operating results, combined with the implementation of strategic initiatives and the effective deployment of capital, will allow us to meet our financial objectives. 3 T able of Contents Reportable Segments Our reportable segments are comprised of the following: Unum US, Unum International, Colonial Life, Closed Block, and Corporate.
Cash flows from the in-force asset and liability portfolios are projected at current interest rate levels and at levels reflecting an increase and a decrease in interest rates to obtain a range of projected cash flows under the different interest rate scenarios.
Cash flows from the in-force asset and liability portfolios are projected at current 12 T able of Contents interest rate levels and at levels reflecting an increase and a decrease in interest rates to obtain a range of projected cash flows under the different interest rate scenarios.
With respect to disclosure requirements, California adopted climate-related financial risk and emissions-related reporting requirements in 2023 which applies to the Company. Additionally, the EU Corporate Sustainability Reporting Directive (CSRD) requires in-scope companies to report on financial risks due to sustainability-related issues as well as companies’ impacts on society and the environment.
With respect to disclosure requirements, California adopted climate-related reporting requirements in 2023 which may apply to the Company. Additionally, the EU Corporate Sustainability Reporting Directive (CSRD) requires in-scope companies to report on financial risks due to sustainability-related issues as well as companies’ impacts on society and the environment.
Our programming, training and hiring practices help us reach candidates with a wide array of personal and professional experiences and talents. Among our 11,063 employees, 65 percent identify as female, and 20 percent, excluding Poland, identify as members of an ethnic or racially diverse group.
Our programming, training and hiring practices help us reach candidates with a wide array of personal and professional experiences and talents. Among our 10,910 employees, 65 percent identify as female, and 20 percent, excluding Poland and Ireland, identify as members of an ethnic or racially diverse group.
For Unum Limited, in both 2024 and 2025, we have reinsured 100 percent of benefits in excess of £2 million for both group dependents and lump sum benefits.
For Unum Limited, in 2025 and 2026, we have reinsured 100 percent of benefits in excess of £2.0 million for both group dependents and lump sum benefits.
Information Security and Privacy Regulation A growing number of federal, state, and foreign laws and regulations require companies, including insurance companies, to adopt measures designed to protect the security and privacy of personal information collected during the course of operations. These laws and regulations vary across jurisdictions.
Information Security and Privacy Regulation A growing number of federal, state, and foreign laws and regulations require companies, including insurance companies, to adopt measures designed to protect the security and privacy of personal information collected during the course of operations. These laws and regulations vary across jurisdictions and additional laws and regulations are expected to be enacted.
We are committed to our employees’ growth and development and embrace the diversity of ideas for improvement. 19 Table of Contents Available Information Our internet website address is www.unum.com .
We are committed to our employees’ growth and development and embrace the diversity of ideas for continuous improvement. Available Information Our internet website address is www.unum.com .
For Unum Limited, during 2025, we have reinsurance agreements which provide 15 percent quota share coverage for group lump sum benefits up to £500 thousand per covered life as well as 80 percent coverage per covered life for benefits above £500 thousand up to £2 million.
For Unum Limited, during 2026, we have reinsurance agreements which provide 10 percent quota share coverage for group lump sum benefits up to £500 thousand per covered life as well as 80 percent coverage per covered life for group lump sum benefits above £500 thousand up to £2.0 million.
We exited a substantial portion of our Closed Block individual disability product line through two phases of a reinsurance transaction with Commonwealth Annuity and Life Insurance Company (Commonwealth) in December 2020 and March 2021.
We exited a substantial portion of our Closed Block individual disability product line through two phases of a coinsurance and modified coinsurance reinsurance transaction with Commonwealth Annuity and Life Insurance Company (Commonwealth) that were executed in December 2020 and March 2021.
Individual long-term care was previously marketed on a single-life customer basis. Long-term care insurance pays a benefit upon the loss of two or more activities of daily living and the insured's requirement of standby assistance or cognitive impairment. Payment is generally made on an indemnity basis, regardless of expenses incurred, up to a lifetime maximum.
Long-term care insurance pays a benefit upon the loss of two or more activities of daily living and the insured's requirement of standby assistance or cognitive impairment. Payment is generally made on an indemnity basis, regardless of expenses incurred, up to a lifetime maximum.
He previously served as Senior Vice President, Growth Operations and Distribution from June 2018 to January 2020 and as Senior Vice President, Sales and Client Management from June 2011 to June 2018. 20 Table of Contents Mr.
He previously served as Senior Vice President, Growth Operations and Distribution from June 2018 to January 2020 and as Senior Vice President, Sales and Client Management from June 2011 to June 2018. Mr.
We seek to earn investment income while assuming risk in a prudent and selective manner, subject to the constraints of quality, liquidity, diversification, and regulatory considerations. Our overall investment philosophy is to invest in a portfolio of high quality assets that provide investment returns consistent with that assumed in the pricing of our insurance products.
We seek to earn investment income while assuming risk in a prudent and selective manner, subject to the constraints of quality, liquidity, diversification, and regulatory considerations. Our overall investment philosophy is to invest in a portfolio of high quality assets that provide investment returns which inform the assumptions embedded in the pricing of our insurance products.
Additionally, the NAIC’s Innovation, Cybersecurity and Technology (H) Committee has established a Third-Party Data and Models (H) Task Force responsible for developing and proposing a framework for the regulatory oversight of third-party data and predictive models. These laws and regulations generally focus on companies developing a risk management framework for privacy and data protection and protection against unfair discrimination.
Additionally, the NAIC’s Innovation, Cybersecurity and Technology (H) Committee has a Third-Party Data and Models (H) Working Group that is responsible for developing and proposing a framework for the regulatory oversight of third-party data and predictive models. These laws and regulations generally focus on companies developing a risk management framework for privacy and data protection and protection against unfair discrimination.
Generally, these laws require insurers to give policyholders notice about the insurer’s privacy practices, place restrictions on how the insurer can use and disclose personal information, require the insurer to enact certain cybersecurity measures to protect the data, and obligate insurers to notify individuals and regulators in certain cases when personal data is compromised.
These laws require insurers to provide notice to policyholders regarding the insurer’s privacy practices, place restrictions on how the insurer can use and disclose personal information, require the insurer to enact certain cybersecurity measures to protect policyholder data, and obligate insurers to notify policyholders and regulators in certain cases when personal data is compromised.
The percentage of Unum US segment premium income generated by each product line during 2024 is as follows: Group Disability 46.1 % Group Life and Accidental Death & Dismemberment 28.6 Voluntary Benefits 12.8 Individual Disability 8.2 Dental and Vision 4.3 Total 100.0 % Group Long-term and Short-term Disability We sell group long-term and short-term disability products to employers for the benefit of employees.
The percentage of Unum US segment premium income generated by each product line during 2025 is as follows: Group Disability 44.4 % Group Life and Accidental Death & Dismemberment 29.2 Voluntary Benefits 13.1 Individual Disability 8.7 Dental and Vision 4.6 Total 100.0 % Group Long-term and Short-term Disability We sell group long-term and short-term disability products to employers for the benefit of employees.
Unum Limited has the following additional coverage for 2025, after a £77.5 million deductible: Layer Coverage Layer (in millions) Percent Coverage Coverage (in millions) First £ 38.8 25.0 % £ 9.7 Second 77.6 50.0 38.8 Total Catastrophic Coverage £ 48.5 Unum Poland had additional global catastrophic reinsurance coverage of up to zł 100 million per event, or up to zł 200 million for the year, with a maximum retention limit of zł 2 million in 2024 and 2025.
Unum Limited has the following additional coverage for 2026, after a £75.6 million deductible: Layer Coverage Layer (in millions) Percent Coverage Coverage (in millions) First £ 37.8 25.0 % £ 9.4 Second 75.6 50.0 37.8 Total Catastrophic Coverage £ 47.2 Unum Poland had additional global catastrophic reinsurance coverage of up to zł 100.0 million per event, or up to zł 200.0 million for the year, with a maximum retention limit of zł 2.0 million in 2025 and with a maximum retention limit of zł 2.5 million in 2026.
We undertake reinsurance transactions for both risk management and capital management. If the assuming reinsurer in a reinsurance agreement is unable to meet its obligations, we remain contingently liable. In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreement, reinsurance recoverable balances could become uncollectible.
If the assuming reinsurer in a reinsurance agreement is unable to meet its obligations, we remain contingently liable. In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreement, reinsurance recoverable balances could become uncollectible.
Effective January 1, 2025, we ceded 30 percent of the risk for most of our recently issued Unum US individual disability policies. This agreement is on a coinsurance with funds withheld basis with a provision for experience refunds.
In 2025, we ceded 30 percent of the risk for most of our recently issued Unum US individual disability policies. This agreement is on a coinsurance with funds withheld basis with a 11 T able of Contents provision for experience refunds.
O ur lead state regulator, the Maine Bureau of Insurance (MBOI), adopted the NAIC GCC standards and we submit our GCC report to the MBOI annually. These standards have not had an impact on our capital management. We are also monitoring the International Association of Insurance Supervisors' (IAIS) development of new capital requirements applicable to Internationally Active Insurance Groups (IAIGs).
O ur lead state regulator, the Maine Bureau of Insurance (MBOI), adopted the NAIC GCC standards and we submit our GCC report to the MBOI annually. These standards have not had an impact on our capital management. The International Association of Insurance Supervisors' (IAIS) has developed the International Capital Standard (ICS) for Internationally Active Insurance Groups (IAIGs).
(Aegon UK) from July 2020 to January 2021, and as Managing Director, Digital Solutions from May 2018 to July 2020.
(Aegon UK) from July 2020 to January 2021, and as Managing Director, Digital Solutions from May 2018 to July 2020. 20 T able of Contents
Products are issued primarily by Colonial Life & Accident Insurance Company and marketed to employees, on both a group and an individual basis, at the workplace through an independent contractor agent sales force and brokers.
Colonial Life Segment Our Colonial Life segment includes the accident, sickness, and disability product line, life product line, and cancer and critical illness product line. Products are issued primarily by Colonial Life & Accident Insurance Company and marketed to employees, on both a group and an individual basis, at the workplace through an independent contractor agent sales force and brokers.
The market strategy for the segment is to offer benefits to employers and employees through the workplace, with a focus on the expansion of the number of employers and employees covered in our Unum UK business, and the growth of the existing Unum Poland business through the incorporation of our benefits and distribution expertise. 6 Table of Contents The percentage of Unum International segment premium income generated by each product line during 2024 is as follows: Unum UK Group Long-term Disability 44.0 % Group Life 22.3 Supplemental 17.4 Unum Poland 16.3 Total 100.0 % Unum UK Group Long-term Disability Group long-term disability products are sold to employers for the benefit of employees.
The market strategy for the segment is to offer benefits to employers and employees through the workplace, with a focus on the expansion of the number of employers and employees covered in our Unum UK business, and the continued growth of the Unum Poland business. 6 T able of Contents The percentage of Unum International segment premium income generated by each product line during 2025 is as follows: Unum UK Group Long-term Disability 39.5 % Group Life 25.6 Supplemental 17.0 Unum Poland 17.9 Total 100.0 % Unum UK Group Long-term Disability Group long-term disability products are sold to employers for the benefit of employees.
We have global catastrophic reinsurance coverage which covers all Unum Group insurance companies and includes four layers of coverage to limit our exposure under life, accidental death and dismemberment, long-term care, and disability policies in regard to a catastrophic event. Each layer provides coverage for catastrophic events, including most acts of war and any type of terrorism.
We have global catastrophic reinsurance coverage which covers all Unum Group insurance companies and includes four layers of coverage to limit our exposure under life, accidental death and dismemberment, long-term care, and disability policies in regard to a catastrophic event.
We strive to be a welcoming community for all people to be their authentic selves. Our programming and vibrant employee networks that are open to the entire workforce remain focused on helping us live up to our purpose and corporate values. Our ongoing success is dependent on our capacity to attract, nurture, and retain top-tier talent.
We strive to be a welcoming community where everyone feels valued and supported. Our programming and vibrant employee networks that are open to the entire workforce remain focused on helping us live up to the Company's purpose and values. Our ongoing success is dependent on our capacity to attract, nurture, and retain top-tier talent.
We make available, free of charge, on or through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material with the Securities and Exchange Commission.
We make available, free of charge, on or through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material with the Securities and Exchange Commission. 19 T able of Contents Information about our Executive Officers Our executive officers and persons chosen to become executive officers as of the date hereof are listed below.
Our Company is an applicable corporation, but we do not have a CAMT liability as of December 31, 2024 or December 31, 2023. We do not expect that any CAMT incurred in the future would impact earnings since it would be offset with a credit toward regular income tax in subsequent years.
Our Company is an applicable corporation and we recorded a CAMT liability as of December 31, 2025. There was no CAMT liability as of December 31, 2024. We do not expect that any CAMT incurred would impact earnings since it would be offset with a minimum tax credit toward regular income tax in subsequent years.
For Unum Limited life insurance risk, during 2024 we had reinsurance agreements which provided 20 percent quota share coverage up to £500 thousand per covered life for group lump sum benefits, as well as 100 percent coverage per covered life above that amount.
For Unum Limited life insurance risk, during 2025, we had reinsurance agreements which provided 15 percent quota share coverage for group lump sum benefits up to £500 thousand per covered life as well as 80 percent coverage per covered life for group lump sum benefits above £500 thousand up to £2.0 million.
Geographic Areas Adjusted operating revenue, which excludes net investment gains and losses, for our Unum International segment was approximately 8 percent of our consolidated adjusted operating revenue in 2024, approximately 8 percent in 2023, and approximately 7 percent in 2022.
Geographic Areas Adjusted operating revenue, which excludes net investment gains and losses and the amortization of the deferred gain on reinsurance, for our Unum International segment was approximately 9 percent of our consolidated adjusted operating revenue in 2025 and approximately 8 percent in both 2024 and 2023.
We expect further regulatory activity in this area, including potential regulations governing individual rights with respect to the usage of AI. We continuously monitor federal, state, and foreign legislative and regulatory developments to understand their potential impact on our profitability, capital, and resources. For further discussion of regulation, refer to "Risk Factors" contained herein in Item 1A.
We continuously monitor federal, state, and foreign legislative and regulatory developments to understand their potential impact on our profitability, capital, and resources. For further discussion of regulation, refer to "Risk Factors" contained herein in Item 1A.
On a consolidated reporting basis for Unum Group, financial statement impacts of our reinsurance arrangements with affiliates are eliminated in accordance with GAAP. 11 Table of Contents For further discussion of our reinsurance activities, refer to "Risk Factors" contained herein in Item 1A; "Executive Summary," "Consolidated Operating Results," "Segment Results," and "Liquidity and Capital Resources - Cash Available from Subsidiaries" contained herein in Item 7, and Notes 1, 14, and 18 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
For further discussion of our reinsurance activities, refer to "Risk Factors" contained herein in Item 1A; "Executive Summary," "Consolidated Operating Results," "Segment Results," and "Liquidity and Capital Resources - Cash Available from Subsidiaries" contained herein in Item 7, and Notes 1, 14, and 18 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
Some may also have greater financial resources with which to compete. 13 Table of Contents In the United Kingdom and Poland, where we sell both individual and group products, we compete with a mix of large internationally recognized providers and strong local carriers.
In the United Kingdom and Poland, where we sell both individual and group products, we compete with a mix of large internationally recognized providers and strong local carriers.
Prior to that, he served as Executive Vice President, President and Chief Executive Officer, Colonial Life from January 2015, and before that, as Executive Vice President, President, Colonial Life from July 2014. Ms. Iglesias was named Executive Vice President, General Counsel upon joining the Company in January 2015.
Arnold was named Executive Vice President, Voluntary Benefits and President, Colonial Life in February 2020. Prior to that, he served as Executive Vice President, President and Chief Executive Officer, Colonial Life from January 2015, and before that, as Executive Vice President, President, Colonial Life from July 2014. Ms.
Reinsurance In the normal course of business, we assume reinsurance from and cede reinsurance to other insurance companies. In a reinsurance transaction, a reinsurer agrees to indemnify another insurer for part or all of its liability under a policy or policies it has issued for an agreed upon premium or fee.
In a reinsurance transaction, a reinsurer agrees to indemnify another insurer for part or all of its liability under a policy or policies it has issued for an agreed upon premium or fee. We undertake reinsurance transactions for both risk management and capital management.
Solvency II requirements relevant to insurance holding companies, while its subsidiaries (the Unum UK Solvency II Group), which includes Unum Limited, are subject to group and individual supervision under U.K. Solvency II.
Solvency II, the system of prudential regulation applying in the U.K., which prescribes capital requirements and risk management standards. Our U.K. holding company is subject to the U.K. Solvency II requirements relevant to insurance holding companies, while its subsidiaries (the Unum UK Solvency II Group), which includes Unum Limited, are subject to group and individual supervision under U.K. Solvency II.
Other Laws and Regulations We are subject to the U.S. federal laws and regulations generally applicable to public companies, including the rules and regulations of the Securities and Exchange Commission (SEC) and the New York Stock Exchange relating to public reporting and disclosure, accounting and financial reporting, corporate governance, and securities trading. 17 Table of Contents The USA PATRIOT Act of 2001 (Patriot Act) contains anti-money laundering and financial transparency laws and mandates the implementation of various regulations applicable to broker-dealers and other financial services companies, including insurance companies.
Other Laws and Regulations We are subject to the U.S. federal laws and regulations generally applicable to public companies, including the rules and regulations of the Securities and Exchange Commission (SEC) and the New York Stock Exchange relating to public reporting and disclosure, accounting and financial reporting, corporate governance, and securities trading.
U.S. and international insurance regulators continue to focus on insurers’ use of artificial intelligence (AI), automated decision-making technologies, and external consumer data.
We expect regulatory activity in this area, including the potential for conflicting regulations, to continue. U.S. and international insurance regulators continue to focus on insurers’ use of artificial intelligence (AI), automated decision-making technologies, and external consumer data.
Premiums for group dental products are generally based on expected claims of a pool of similar risks plus provisions for administrative expenses and profit, with minor pricing variation based on the number of covered employees in the group. Profitability of our supplemental products is affected by persistency, investment returns, claims experience, and the level of administrative expenses.
Premiums are based on expected claims of a pool of similar risks plus provisions for administrative expenses, investment income, and profit. Profitability of our Unum Poland products is affected by persistency, investment returns, mortality and other claims experience, and the level of administrative expenses.
She served as Executive Vice President, Chief Human Resources Officer, at AmTrust Financial Services, Inc., a multinational insurance holding company, from May 2015 to October 2018. Mr. Arnold was named Executive Vice President, Voluntary Benefits and President, Colonial Life in February 2020.
She served as Executive Vice President, Chief Human Resources Officer, at AmTrust Financial Services, Inc., a multinational insurance holding company, from May 2015 to October 2018. Ms. Anderson was named Executive Vice President, Chief Information and Digital Officer upon joining the Company in April 2025.
Our principal competitors for our products include the largest employee benefit insurance companies as well as regional companies offering specialty products. Some of these companies have more competitive pricing or have higher claims-paying ratings.
Our principal competitors for our products include the largest employee benefit insurance companies as well as regional companies offering specialty products. Some of these companies have more competitive pricing. Some may also have greater financial resources with which to compete.
Zabel 56 Executive Vice President, Chief Financial Officer Elizabeth C. Ahmed 50 Executive Vice President, People and Communications Timothy G. Arnold 62 Executive Vice President, Voluntary Benefits and President, Colonial Life Lisa G. Iglesias 59 Executive Vice President, General Counsel Martha D. Leiper 62 Executive Vice President, Chief Investment Officer Christopher W.
Zabel 57 Executive Vice President, Chief Financial Officer Elizabeth C. Ahmed 51 Executive Vice President, People and Communications Shelia D. Anderson 61 Executive Vice President, Chief Information and Digital Officer Timothy G. Arnold 63 Executive Vice President, Voluntary Benefits and President, Colonial Life Lisa G. Iglesias 60 Executive Vice President, General Counsel Christopher W.
Testing the asset and liability portfolios under various interest rate 12 Table of Contents scenarios enables us to choose what we believe to be the most appropriate investment strategy, as well as to limit the risk of disadvantageous outcomes.
These results enable us to assess the impact of projected changes in cash flows and duration resulting from potential changes in interest rates. Testing the asset and liability portfolios under various interest rate scenarios enables us to choose what we believe to be the most appropriate investment strategy, as well as to limit the risk of disadvantageous outcomes.
Also in December 2020, Provident Life and Casualty Insurance Company (PLC), a wholly-owned domestic insurance subsidiary of Unum Group, entered into, and subsequently amended in March 2021, an agreement with Commonwealth whereby PLC will provide a 12-year volatility cover to Commonwealth for the active life cohort (ALR cohort) ceded as a part of the reinsurance transaction described above.
In addition, we also entered into an agreement with Commonwealth whereby we will provide a 12-year volatility cover to Commonwealth for the active life cohort (ALR cohort) ceded as a part of the reinsurance transaction described above.
Closed Block segment premium income for 2024 was comprised of approximately 79 percent group and individual long-term care and 21 percent other insurance products. Group and Individual Long-term Care We discontinued offering individual long-term care in 2009 and group long-term care in 2012. Group long-term care was previously offered to employers for the benefit of employees.
Closed Block segment premium income for 2025 was comprised of approximately 81 percent group and individual long-term care and 19 percent other insurance products. Group and Individual Long-term Care We discontinued offering individual long-term care in 2009 and group long-term care in 2012. As of July 2025, we closed the Fortitude Reinsurance Company Ltd.
The Unum UK Solvency II Group received approval from the PRA to use its own internal model for calculating regulatory capital and also received approval for certain associated regulatory permissions including transitional relief which applies until January 2032. For a number of years, the U.K. government has been reviewing the regulatory U.K.
The Unum UK Solvency II Group has permission from the PRA to use certain adjustments as well as a transitional measure which applies until January 2032. The Unum UK Solvency II Group also has permission to use its own internal model for calculating regulatory capital.
She served as Senior Vice President, General Counsel and Secretary of WellCare Health Plans, Inc., a managed care company, from February 2012 to December 2014. Ms. Leiper was appointed Executive Vice President, Chief Investment Officer in October 2019.
Iglesias was named Executive Vice President, General Counsel upon joining the Company in January 2015. She served as Senior Vice President, General Counsel and Secretary of WellCare Health Plans, Inc., a managed care company, from February 2012 to December 2014. Mr. Pyne was named Executive Vice President, Group Benefits in February 2020.
Group critical illness products provide a lump-sum benefit on the occurrence of a covered critical illness event. Group dental products generally provide fixed benefits based on specified treatments or a portion of the cost of the treatment.
Group critical illness products provide a lump-sum benefit on the occurrence of a covered critical illness event.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Ratings" contained herein in Item 7 for our current outlook, issuer credit, and financial strength ratings. See also further discussion in "Risk Factors" contained herein in Item 1A. Competition There is significant competition among insurance companies for the types of products we sell.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Ratings" contained herein in Item 7 for our current outlook, issuer credit, and financial strength ratings.
Beginning in 2022, supplemental products are no longer actively marketed to individual customers. 7 Table of Contents Premiums for group critical illness products are generally based on expected claims of a pool of similar risks plus provisions for administrative expenses, investment income, and profit. Underwriting and rate guarantees are similar to those utilized for Unum UK group long-term disability products.
Underwriting and rate guarantees are similar to those utilized for Unum UK group long-term disability products. Premiums for group dental products are generally based on expected claims of a pool of similar risks plus provisions for administrative expenses and profit, with minor pricing variation based on the number of covered employees in the group.
The Patriot Act seeks to promote cooperation among financial institutions, regulators, and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Anti-money laundering laws outside of the United States contain some similar provisions.
The USA PATRIOT Act of 2001 (Patriot Act) contains anti-money laundering and financial transparency laws and mandates the implementation of various regulations applicable to broker-dealers and other financial services companies, including insurance companies. The Patriot Act seeks to promote cooperation among financial institutions, regulators, and law enforcement entities in identifying parties that may be involved in terrorism or money laundering.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere is no guarantee that processes we have developed in order to adapt to the COVID-19 pandemic would succeed in allowing us to adapt to any future pandemic or other public health issue, which may have materially different characteristics than the COVID-19 pandemic. 26 Table of Contents To the extent pandemics or other public health issues adversely affect our business, financial position, results of operations, liquidity and capital resources, and overall business operations, it may also have the effect of heightening many of the other risks disclosed herein in this Item 1A "Risk Factors".
Biggest changeThere is no guarantee that processes we have developed in order to adapt to previous public health issues or pandemics would succeed in allowing us to adapt to any future pandemic or other public health issue, which may have materially different characteristics than previous pandemics or public health issues.
Our individual noncancelable disability policies, in which the policy is guaranteed to be renewable through the life of the policy at a fixed premium, do not permit us to adjust premiums on our in-force business.
Our noncancelable individual disability policies, in which the policy is guaranteed to be renewable through the life of the policy at a fixed premium, do not permit us to adjust premiums on our in-force business.
Reinsurance may not be available or affordable, or reinsurers may be unwilling or unable to meet their obligations under our reinsurance contracts, which may adversely affect our results of operations or financial condition. As part of our overall risk management and capital management strategies, we purchase reinsurance for certain risks underwritten by our various businesses.
Reinsurers may be unwilling or unable to meet their obligations under our reinsurance contracts, or reinsurance may not be available or affordable, which may adversely affect our results of operations or financial condition. As part of our overall risk management and capital management strategies, we purchase reinsurance for certain risks underwritten by our various businesses.
To the extent mortality improves for the general population, and life expectancies increase, the period for which a claimant receives long-term care benefits may lengthen and the associated impact of advanced aging of policyholders may cause an increase in claims incidence. Medical advances may continue to have an impact on claim incidence and duration, both favorable and unfavorable.
To the extent mortality improves for the general population, and life expectancies increase, the period for which a claimant receives long-term care benefits may lengthen and the associated impact of advanced aging of policyholders may cause an increase in claim incidence. Medical advances may continue to have an impact on claim incidence and duration, both favorable and unfavorable.
We are affected by conditions in the capital markets and the general economy, primarily in the United States, the United Kingdom, Poland, and to a lesser extent, the broader global financial markets. Negative developments in the capital markets and/or the general economy could adversely affect our business, including our investment portfolio, and results of operations.
We are affected by conditions in the capital markets and the general economy, primarily in the United States, the United Kingdom, Poland, and to a lesser extent, the broader global financial markets. Negative developments in the capital markets and/or the general economy could adversely affect our business, including our investment portfolio, financial condition and results of operations.
In addition, during such periods we may experience higher claims incidence, longer claims duration, and/or an increase in policy lapses, any of which could have a material adverse effect on our results of operations or financial condition.
In addition, during such periods we may experience higher claim incidence, longer claims duration, and/or an increase in policy lapses, any of which could have a material adverse effect on our results of operations or financial condition.
Voluntary Products Voluntary products sold in the workplace may be affected by the characteristics of the employees insured, the level of employee participation and the amount of insurance the employees elect, our risk selection process, and our ability to retain employer groups with favorable risk characteristics.
Voluntary Benefits Products Voluntary benefits products sold in the workplace may be affected by the characteristics of the employees insured, the level of employee participation and the amount of insurance the employees elect, our risk selection process, and our ability to retain employer groups with favorable risk characteristics.
See "Cautionary Statement Regarding Forward-Looking Statements" contained herein on page 1. Insurance Risks We provide a broad array of disability, long-term care, group life, and voluntary insurance products that are affected by many factors, and changes in any of those factors may adversely affect our results of operations, financial condition, or liquidity.
See "Cautionary Statement Regarding Forward-Looking Statements" contained herein on page 1. Insurance Risk Factors We provide a broad array of disability, long-term care, group life, and voluntary insurance products that are affected by many factors, and changes in any of those factors may adversely affect our results of operations, financial condition, or liquidity.
Regulatory examinations or investigations could result in, among other things, an increase to reserving requirements, changes in our claims handling or other business practices, changes in procedures for the identification and payment to the states of benefits and other property that is not claimed by the owners, changes in the use and oversight of reinsurance, changes in governance and other oversight procedures, assessments by tax authorities or other governing agencies, fines, and other administrative action, which could injure our reputation, adversely affect our issuer credit ratings and financial strength ratings, place us at a competitive disadvantage in marketing or administering our products, impair our ability to sell or retain insurance policies, and/or have a material adverse effect on our results of operations or financial condition.
Regulatory examinations or investigations could result in, among other things, an increase to reserving requirements, changes in our claims handling or other business practices, changes in procedures for the identification and payment to the states of benefits and other property that is not claimed by the owners, changes in the use and oversight of reinsurance, changes in 29 T able of Contents governance and other oversight procedures, assessments by tax authorities or other governing agencies, fines, and other administrative action, which could injure our reputation, adversely affect our issuer credit ratings and financial strength ratings, place us at a competitive disadvantage in marketing or administering our products, impair our ability to sell or retain insurance policies, and/or have a material adverse effect on our results of operations or financial condition.
Litigation and contingencies are common in our businesses and may result in financial losses and/or harm to our reputation. We are, and in the future may be, defendants in a number of litigation matters, and the outcome of this litigation is uncertain. Some of these proceedings have been brought on behalf of various alleged classes of complainants.
Litigation and contingencies are common in our businesses and may result in financial losses and/or harm to our reputation. We are, and in the future may be, defendants in a number of litigation matters, and the outcome of this litigation is uncertain. Some of these proceedings may be brought on behalf of various alleged classes of complainants.
Additionally, our hybrid work environment may expose us to various additional risks such as elevated cybersecurity vulnerability resulting from the wide-scale remote usage of our company networks and related risks to the effectiveness of our internal controls over financial reporting.
Additionally, a remote or hybrid work environment may expose us to various additional risks such as elevated cybersecurity vulnerability resulting from the wide-scale remote usage of our company networks and related risks to the effectiveness of our internal controls over financial reporting.
Long-term Care Insurance Long-term care insurance, which we discontinued offering in 2012, but is guaranteed renewable, can be influenced by a number of demographic, medical, economic, governmental, competitive, and other factors, as well as the relative lack of historical data as compared to our other products, all of which can affect pricing activities and the establishment of our liability for future policy benefits.
Long-term Care Insurance Long-term care insurance, which we discontinued offering in 2012, but is guaranteed renewable, can be influenced by a number of demographic, medical, economic, governmental, competitive, and other factors, as well as the relative lack of historical data, all of which can affect pricing activities and the establishment of our liability for future policy benefits.
Typically those lawsuits are filed on behalf of a single claimant or policyholder, and in some 30 Table of Contents of these individual actions punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. For our general claim litigation, we maintain reserves based on experience to satisfy judgments and settlements in the normal course.
Typically those lawsuits are filed on behalf of a single claimant or policyholder, and in some of these individual actions punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. For our general claim litigation, we maintain reserves based on experience to satisfy judgments and settlements in the normal course.
However, these actions take time to implement, and there is a risk that the market will not sustain increased prices. In addition, changes in economic and external conditions may not manifest themselves in claims experience 21 Table of Contents for an extended period of time. The pricing actions available in the individual disability market differ among product classes.
However, these actions take time to implement, and there is a risk that the market will not sustain increased prices. In addition, changes in economic and external conditions may not manifest themselves in claims experience for an extended period of time. The pricing actions available in the individual disability market differ among product classes.
If our internal sources of liquidity prove to be insufficient, we may be unable to successfully obtain additional financing and capital on favorable terms, or at all, which may adversely affect us. 29 Table of Contents If our financial results are unfavorable, we may need to increase our capital in order to maintain our credit ratings or satisfy regulatory requirements.
If our internal sources of liquidity prove to be insufficient, we may be unable to successfully obtain additional financing and capital on favorable terms, or at all, which may adversely affect us. If our financial results are unfavorable, we may need to increase our capital in order to maintain our credit ratings or satisfy regulatory requirements.
These actions could result in substantial fines or restrictions on our business activities and could have a material adverse effect on our business or results of operations. Determination by regulatory authorities that we have engaged in improper conduct may also adversely affect our defense of various lawsuits. 28 Table of Contents Competition may adversely affect our market share or profitability.
These actions could result in substantial fines or restrictions on our business activities and could have a material adverse effect on our business or results of operations. Determination by regulatory authorities that we have engaged in improper conduct may also adversely affect our defense of various lawsuits. Competition may adversely affect our market share or profitability.
Any decrease in the amount of reinsurance will increase our risk of loss and may impact the level of capital requirements for our insurance subsidiaries, and any increase in the cost of reinsurance will, absent a decrease in the amount of reinsurance, reduce our results of operations.
Any decrease in the amount of reinsurance will increase our risk of loss and may impact the level of capital requirements for our insurance subsidiaries, and any increase in the cost of reinsurance will, absent a decrease in the amount of reinsurance, impact our financial condition and reduce our results of operations.
Regulatory changes such as those discussed herein in this Item 1A may impose higher capital or reserve requirements on our insurance subsidiaries, increase collateral requirements for certain of our derivatives transactions, and/or implement other requirements which could unfavorably affect our liquidity. Without sufficient liquidity, our ability to maintain and grow our operations would be limited.
Regulatory changes such as those discussed herein in this Item 1A may impose higher capital or reserve requirements on our insurance subsidiaries, increase collateral requirements for certain of our derivatives transactions, and/or implement other requirements which could unfavorably affect our liquidity. Without sufficient liquidity, our ability to maintain and grow our 31 T able of Contents operations would be limited.
Market and Credit Risks Sustained periods of low interest rates in the long-term investment market may adversely affect our reported net investment income and the discount rates used in pricing our insurance products and projecting our pension obligations, which may adversely affect our results of operations or financial condition.
Market and Credit Risk Factors Sustained periods of low interest rates in the long-term investment market may adversely affect our reported net investment income and the discount rates used in pricing our insurance products and projecting our pension obligations, which may adversely affect our results of operations or financial condition.
The insolvency of a reinsurer or the inability or 25 Table of Contents unwillingness of a reinsurer to comply with the terms of a reinsurance contract may have an adverse effect on our results of operations or financial condition. Currency translation could materially impact our reported operating results.
The insolvency of a reinsurer or the inability or unwillingness of a reinsurer to comply with the terms of a reinsurance contract may have an adverse effect on our results of operations or financial condition. 25 T able of Contents Currency translation could materially impact our reported operating results.
While a significant portion of our non-life contracts are optionally renewable, some are guaranteed renewable and can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as for group disability and group life products.
While a significant portion of our accident and health contracts are optionally renewable, some are guaranteed renewable and can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as for group disability and group life products.
In addition to interest rate risk as previously discussed, we are exposed to other risks related to our investment portfolio which may adversely affect our results of operations, financial condition, or liquidity. Default Risk Our investment portfolio consists primarily of fixed maturity securities.
In addition to interest rate risk, we are exposed to other risks related to our investment portfolio which may adversely affect our results of operations, financial condition, or liquidity. Default Risk Our investment portfolio consists primarily of fixed maturity securities.
Public Health Risks Pandemics and other public health issues can negatively impact certain aspects of our business and, depending on severity and duration, could have a material adverse effect on our financial position, results of operations, liquidity and capital resources, and overall business operations.
Public Health Risk Factors Pandemics and other public health issues can negatively impact certain aspects of our business and, depending on severity and duration, could have a material adverse effect on our financial position, results of operations, liquidity and capital resources, and overall business operations.
Plaintiffs in class action and other lawsuits against us may seek very large and/or indeterminate amounts, including punitive and treble damages. An estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
Plaintiffs in class action and other lawsuits against us may seek very large and/or indeterminate amounts, including punitive and treble damages. An 32 T able of Contents estimated loss is accrued when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
See "Regulation" contained herein in Item 1,"Critical Accounting Estimates" included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein in Item 7, "Quantitative and Qualitative Disclosures About Market Risk" contained herein in Item 7A, and Note 16 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion. 33 Table of Contents ITEM 1B.
See "Regulation" contained herein in Item 1,"Critical Accounting Estimates" included in "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein in Item 7, "Quantitative and Qualitative Disclosures About Market Risk" contained herein in Item 7A, and Note 16 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion.
If we were required to discontinue use of the captive reinsurer or to alter the structure of the captive reinsurance arrangement, our ability to maintain current RBC ratios and/or our capital deployment activities could be adversely affected.
If we were required to discontinue use of the captive reinsurer or to alter the structure of the captive reinsurance arrangement, our ability to maintain current RBC ratios and/or our capital deployment activities could be impacted.
Increased financial services regulation, which could include activities undertaken by the NAIC and regulatory authorities in the U.K., Poland, and the EU may impose greater quantitative requirements, supervisory review, and disclosure requirements and may impact the business strategies, capital requirements, and profitability of our insurance subsidiaries. The U.K. government has been reviewing the regulatory U.K.
Increased financial services regulation, which could include activities undertaken by the NAIC and regulatory authorities in the U.K., Poland, and the EU may impose greater quantitative requirements, supervisory review, and disclosure requirements and may impact the business strategies, capital requirements, and profitability of our insurance subsidiaries.
Many regulatory and governmental bodies have the authority to review our products and business practices and those of our agents and employees. These regulatory or governmental bodies may bring regulatory or other legal actions against us if, in their view, our practices are improper.
Many regulatory and governmental bodies have the authority to review our products and business practices and those of our agents and employees. These regulatory or 30 T able of Contents governmental bodies may bring regulatory or other legal actions against us if, in their view, our practices are improper.
Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through human error, misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, or other cyber attacks, computer viruses, malicious codes, and similar means of unauthorized and destructive tampering.
Unauthorized parties, whether within or outside our company, may disrupt or gain access to our systems, or those of third parties with whom we do business, through misfeasance, fraud, trickery, or other forms of deceit, including break-ins, use of stolen credentials, social engineering, phishing, or other cyber attacks, computer viruses, malicious codes, and similar means of unauthorized and destructive tampering, as well as through human error or failure by our employees to follow corporate policy.
Changes in laws and regulations that affect our industry or findings from examinations and investigations may affect the cost or demand for our products, increase capital and reserving requirements for our insurance subsidiaries, and adversely affect our profitability, liquidity, or growth. Our insurance subsidiaries are subject to extensive supervision and regulation in the United States and abroad.
General Risk Factors We and our insurance subsidiaries are subject to extensive supervision and regulation. Changes in laws and regulations that affect our industry or findings from examinations and investigations may affect the cost or demand for our products, increase capital and reserving requirements for our insurance subsidiaries, and adversely affect our profitability, liquidity, or growth.
Similarly, our access to capital may be impaired if regulatory authorities or rating agencies take negative actions against us. Raising capital in unfavorable market conditions could increase our interest expense or negatively impact our shareholders through increased dilution of their common stock in Unum Group. We maintain our credit facility as a potential source of liquidity.
Similarly, our access to capital may be impaired if regulatory authorities or rating agencies take negative actions against us. Raising capital in unfavorable market conditions could increase our interest expense or negatively impact our shareholders through increased dilution of their common stock in Unum Group.
At the same time, our failure to adopt AI technology quickly enough could put us at a competitive disadvantage. 32 Table of Contents We may be unable to hire and retain qualified employees which may adversely affect our business, results of operations, or financial condition. The talent and contributions of our employees are critical to meeting our business needs.
At the same time, our failure to adopt AI technology quickly enough could put us at a competitive disadvantage. We may be unable to hire and retain qualified employees which may adversely affect our business, results of operations, or financial condition. The talent and contributions of our employees are essential to achieving our business objectives.
VOBA is amortized based primarily upon expected future premium income of the related insurance policies. Recoverability testing for VOBA is performed on an annual basis. Insurance contracts are grouped on a basis consistent with our manner of acquiring, servicing, and measuring profitability of the contracts.
VOBA is amortized based primarily upon expected future premium income of the related insurance policies. Recoverability testing for VOBA is performed on an annual basis. Insurance contracts are grouped on a basis consistent with our manner of acquiring, servicing, and measuring profitability of the contracts. If recoverability testing indicates that VOBA is not recoverable, the deficiency is charged to expense.
Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect.
We and our third-party providers have experienced and likely will continue to experience information security incidents. Although known incidents have not had a material effect on our business or financial condition, there is no assurance that our security systems and measures will be able to prevent, mitigate, or remediate future incidents that could have such an effect.
In addition, being in the business of insurance, we are paid to accept certain risks. Those who conduct business on our behalf, including executive officers and members of management, sales managers, investment professionals, and to some extent, independent agents and brokers, do so in part by making decisions that involve exposing us to risk.
Those who conduct business on our behalf, including executive officers and members of management, sales managers, investment professionals, and to some extent, independent agents and brokers, do so in part by making decisions that involve exposing us to risk.
Such changes could have a material effect on our reported results of operations and financial condition and may impact the perception of our business by external stakeholders including the rating agencies that assign the issuer credit rating on Unum Group.
Future accounting standards we adopt will change current accounting and disclosure requirements applicable to our financial statements. Such changes could have a material effect on our reported results of operations and financial condition and may impact the perception of our business by external stakeholders including the rating agencies that assign the issuer credit rating on Unum Group.
Increases or decreases in long-term interest rates as well as equity market volatility will impact the fair value of our plan assets and may 23 Table of Contents result in a decrease in the funded status of our pension plans and/or increased pension costs, which may adversely affect our results of operations, financial condition, or liquidity.
Increases or decreases in long-term interest rates as well as equity market volatility will impact the fair value of our plan assets and may result in a decrease in the funded status of our pension plans and/or increased pension costs, which may adversely affect our results of operations, financial condition, or liquidity. 23 T able of Contents Unfavorable economic or market conditions may result in lower sales, lower premium growth and persistency, higher claim incidence, unfavorable mortality, longer claims duration, and higher expenses which may adversely affect our results of operations or financial condition.
The U.K.'s Financial Ombudsman Service, which was established to help settle disputes between consumers and businesses providing financial services, and the FCA, which has rule-making, investigative, and enforcement powers to protect consumers, may hamper our ability to do business, which could have a material adverse effect on our U.K. operations. 27 Table of Contents Our financial statements are subject to the application of generally accepted accounting principles, in the United States, the United Kingdom, and Poland, which are periodically revised and/or expanded.
The U.K.'s Financial Ombudsman Service, which was established to help settle disputes between consumers and businesses providing financial services, and the FCA, which has rule-making, investigative, and enforcement powers to protect consumers, may hamper our ability to do business, which could have a material adverse effect on our U.K. operations.
Except for a limited number of transactions, we do not actually convert our functional currency into dollars. As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K or Poland.
As a result, we view foreign currency translation as a financial reporting item and not a reflection of operations or profitability in the U.K or Poland.
Our right to borrow funds under this facility is subject to financial covenants, negative covenants, and events of default. Our ability to borrow under this facility is also subject to the ability of the lenders to provide funds.
We maintain our credit facility, and our arrangements with the FHLB as potential sources of liquidity. Our right to borrow funds under the credit facility is subject to financial covenants, negative covenants, and events of default. Our ability to borrow under the credit facility is also subject to the ability of the lenders to provide funds.
Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported in our 24 Table of Contents financial statements, and the period to period changes in value could vary significantly. Decreases in value may have a material adverse effect on our results of operations or financial condition.
Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported in our financial statements, and the period to period changes in value could vary significantly.
The use and reliance on third-party vendors, including vendors providing web and cloud-based applications, may disrupt our business, and impact our ability to access data. We utilize third-party vendors to provide certain business support services. The reliance on these third-party vendors exposes us to the risk that we cannot control the information systems, facilities, or networks of such third-party vendors.
We utilize third-party vendors to provide certain business support services. The reliance on these third-party vendors exposes us to the risk that we cannot control the information systems, facilities, or networks of such third-party vendors.
Events that damage our reputation may adversely affect our business, results of operations, or financial condition. There are many events which may harm our reputation, including, but not limited to, those discussed in this Item 1A regarding regulatory investigations, legal proceedings, social issues, and cyber or other information security incidents.
There are many events which may harm our reputation, including, but not limited to, those discussed in this Item 1A regarding regulatory investigations, legal proceedings, social issues, third-party vendors, external events, and cyber or other information security incidents. In addition, being in the business of insurance, we are paid to accept certain risks.
Specifically, we have seen an increase in the number and sophistication of phishing attacks that seek access to our systems through emails sent to our employees.
Specifically, we have seen an increase in the number and sophistication of social engineering attacks that seek access to our systems through emails sent to our employees. We have taken action to provide additional training to increase awareness of the potential for these attacks among our workforce.
Accordingly, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies within these countries, which may also be influenced by the International Accounting Standards Board. Future accounting standards we adopt will change current accounting and disclosure requirements applicable to our financial statements.
Our financial statements are subject to the application of generally accepted accounting principles, in the United States, the United Kingdom, and Poland, which are periodically revised and/or expanded. Accordingly, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies within these countries, which may also be influenced by the International Accounting Standards Board.
If recoverability testing indicates that VOBA is not recoverable, the deficiency is charged to expense. 22 Table of Contents Goodwill is not amortized, but on an annual basis, or more frequently if necessary, we review the carrying amount of goodwill for indications of impairment, considering in that review the financial performance and other relevant factors.
Goodwill is not amortized, but on an annual basis, or more frequently if necessary, we review the carrying amount of goodwill for indications of impairment, considering in that review the financial performance and other relevant factors. In accordance with accounting guidance, we test for impairment at the reporting unit level.
The functional currency of our U.K. and Polish operations is the British pound sterling and the Polish zloty, respectively. Fluctuations in exchange rates impact our reported financial results, which may be unfavorably affected when the functional currency weakens. However, it is important to distinguish between translating and converting foreign currency.
The functional currency of our U.K. and Polish operations is the British pound sterling and the Polish zloty, respectively. Fluctuations in exchange rates impact our reported financial results, which may be unfavorably affected when the functional currency weakens. However, except for a limited number of transactions, we do not actually convert our functional currency into dollars.
Operational Risks A cyber attack or other security breach could disrupt our operations, result in compromised data, the unauthorized disclosure or loss of confidential data, damage our reputation or relationships, and expose us to significant financial and legal liability, which may adversely affect our business, results of operations, or financial condition.
To the extent pandemics or other public health issues adversely affect our business, financial position, results of operations, liquidity and capital resources, and overall business operations, it may also have the effect of heightening many of the other risks disclosed herein in this Item 1A "Risk Factors". 26 T able of Contents Operational Risk Factors A cyber attack or other security breach could disrupt our operations, result in compromised data, the unauthorized disclosure or loss of confidential data, damage our reputation or relationships, and expose us to significant financial and legal liability, which may adversely affect our business, results of operations, or financial condition.
Any event reducing the value of our securities may have a material adverse effect on our business, results of operations, or financial condition.
Additional credit losses may need to be taken in the future, and historical trends may not be indicative of future credit losses. Any event reducing the value of our securities may have a material adverse effect on our business, results of operations, or financial condition.
Such a failure could harm our reputation, subject us to regulatory sanctions, legal claims, and increased expenses, and lead to a loss of customers and revenues. Our use of artificial intelligence technology, as well as changes in artificial intelligence laws and regulations, could lead to regulatory noncompliance, operational risk, and competitive challenges.
Such a failure could harm our reputation, subject us to regulatory sanctions, legal claims, and increased expenses, and lead to a loss of customers and revenues.
However, any prolonged stress on our ability to retain or recruit employees may result in increased labor costs and could adversely affect our ability to conduct and manage our business.
However, any prolonged stress on our ability to retain or recruit employees may result in increased labor costs or could affect our ability to conduct and manage our business. The use and reliance on third-party vendors, including vendors providing web and cloud-based applications, may disrupt our business, and impact our ability to access data.
If based on available information, it is more likely than not that the deferred income tax asset will not be realized, a valuation allowance is established. Charges such as accelerated amortization, impairment losses, or the establishment of valuation allowances could have a material adverse effect on our results of operations or financial condition.
Charges such as accelerated amortization, impairment losses, or the establishment of valuation allowances could have a material adverse effect on our results of operations or financial condition.
Due to the long duration of the product, the timing and/or amount of our investment cash flows are difficult to match to those of our maturing liabilities.
Due to the long duration of the product, the timing and/or amount of our investment cash flows are difficult to match to those of our maturing liabilities. We have assets which may not be fully recoverable or realizable, which could adversely affect our results of operations or financial condition.
Although we have insurance against some cyber risks and attacks, we may be subject to litigation and financial losses that exceed our policy limits, are subject to deductibles or are not covered under any of our current insurance policies.
Although we have insurance against some cyber risks and attacks, we may be subject to litigation and financial losses that exceed our policy limits, are subject to deductibles or are not covered under any of our current insurance policies. 27 T able of Contents The failure of our business recovery and incident management processes to resume our business operations in the event of a natural catastrophe, cyber attack, or other event could adversely affect our profitability, results of operations, or financial condition.
Factors in our determination include the performance of the business, including the ability to generate future taxable income and the fair value of our investment portfolio. Significant declines in the fair value of our investments could result in the recognition of a valuation allowance on our deferred tax asset.
We assess our deferred tax assets to determine if they are realizable. Factors in our determination include the performance of the business, including the ability to generate future taxable income and the fair value of our investment portfolio.
Group Life Insurance Group life insurance may be affected by the characteristics of the employees insured, the amount of insurance employees may elect voluntarily, our risk selection process, our ability to retain employer groups with favorable risk characteristics, the geographical concentration of employees, and mortality rates.
Guaranteed renewable contracts that are not noncancelable can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as in the group disability market. 21 T able of Contents Group Life Insurance Group life insurance may be affected by the characteristics of the employees insured, the amount of insurance employees may elect voluntarily, our risk selection process, our ability to retain employer groups with favorable risk characteristics, the geographical concentration of employees, and mortality rates.
The primary purpose of insurance regulation is to protect policyholders, not stockholders.
Our insurance subsidiaries are subject to extensive supervision and regulation in the United States and abroad. The primary purpose of insurance regulation is to protect policyholders, not stockholders.
In addition, certain events including, but not limited to, a significant adverse change in legal factors or the business environment, an adverse action by a regulator or rating agency, or unanticipated competition would cause us to review goodwill for impairment more frequently than annually.
Certain events including, but not limited to, a significant adverse change in legal factors or the business environment, an adverse action by a regulator or rating agency, or unanticipated competition may cause us to review goodwill for impairment more frequently than annually. 22 T able of Contents Long-lived assets, including assets such as real estate, right-of-use assets, and internal-use software, also may require impairment testing to determine whether changes in circumstances indicate that we may be unable to recover the carrying amount.
We evaluate our investment portfolio for credit losses. There can be no assurance that we have accurately assessed the level of credit losses taken. Additional credit losses may need to be taken in the future, and historical trends may not be indicative of future credit losses.
Decreases in value may have a material adverse effect on our results of operations or financial condition. 24 T able of Contents We evaluate our investment portfolio for credit losses. There can be no assurance that we have accurately assessed the level of credit losses taken.
In addition, these unfavorable developments may result in the impairment or write-off of certain assets such as premiums receivable, goodwill, property and equipment, VOBA, and right-of-use assets, or the establishment of a valuation allowance regarding the realization of our deferred tax assets.
Such an event may also disrupt customer behavior and lead to a reduction in sales and decreased premium collection. Further, such an event may result in the impairment of certain assets, including premiums receivable, goodwill, VOBA and other intangibles, property and equipment, right-of-use assets, and deferred tax assets.
Although we have access to significant amounts of liquidity, which include a credit facility, Federal Home Loan Bank (FHLB) arrangements, and the ability to liquidate certain investments, it may be insufficient or even inaccessible if we are not in compliance with required covenants under our borrowing arrangements or if the associated lenders are unable to provide funds.
Market volatility or dislocations may also hinder our ability to respond prudently and may impact financial reporting assumptions. We maintain access to liquidity through a credit facility, arrangements with the Federal Home Loan Bank (FHLB), and the ability to liquidate certain investments. These sources may be limited or inaccessible during market stress or covenant noncompliance.
Removed
Guaranteed renewable contracts that are not noncancelable can be repriced to reflect adverse experience, but rate changes cannot be implemented as quickly as in the group disability market.
Added
Significant declines in the fair value of our investments could result in the recognition of a valuation allowance on our deferred tax asset. If based on available information, it is more likely than not that the deferred income tax asset will not be realized, a valuation allowance is established.
Removed
We have assets which may not be fully recoverable or realizable, which could adversely affect our results of operations or financial condition.
Added
Our business is exposed to risks from major public health issues, such as pandemics or disease outbreaks. In the event of a pandemic, disease outbreak, or other public health issue, our revenues, benefits, or expenses may be negatively impacted, which also may have an adverse effect on our profitability or growth plans.
Removed
In accordance with accounting guidance, we test for impairment at either the operating segment level or one level below.
Added
Public health issues, such as pandemics or disease outbreaks, may also impair borrowers’ ability to meet obligations on debt securities or mortgage loans we hold, which may also result in lower net investment income and increased credit losses. Commercial real estate valuations may also decline, affecting expected loss estimates.
Removed
Long-lived assets, including assets such as real estate, right-of-use assets, and information technology software, also may require impairment testing to determine whether changes in circumstances indicate that we may be unable to recover the carrying amount. We assess our deferred tax assets to determine if they are realizable.
Added
We also process payments to claimants under our insurance policies, including by physical and electronic means, which could subject us or our customers to attacks from threat actors, including attempted theft of credentials from our customers or other social engineering attacks directed at our customers.
Removed
Unfavorable economic or market conditions may result in lower sales, lower premium growth and persistency, higher claims incidence, unfavorable mortality, longer claims duration, and higher expenses which may adversely affect our results of operations or financial condition.
Added
Our use of artificial intelligence technology, as well as changes in artificial intelligence laws and regulations, could lead to regulatory noncompliance, operational risk, and competitive challenges.
Removed
If economic conditions worsen as a result of a pandemic or other public health issue, that may adversely affect the financial condition of current or potential customers, which may result in lower sales or other negative impacts to customer purchasing patterns.
Added
While certain specialized roles may experience tighter labor-market conditions, the overall environment has moderated, and we continue to maintain a strong ability to attract, hire, and retain qualified talent. Although challenges in filling key roles may occur from time to time, we view these as manageable operational considerations.
Removed
If we experience unfavorable developments related to our revenues, benefits, or expenses, we may correspondingly experience adverse impacts to our overall future profitability and growth, which may alter the timing and magnitude of our plans for overall business growth.
Added
Through proactive workforce planning and investment in employee development, we work to minimize potential impacts on execution and ensure continuity in the capabilities needed to support 28 T able of Contents our strategy.
Removed
If economic conditions worsen as a result of a pandemic or other public health issue, that may also result in the inability for companies to make interest and principal payments on their debt securities or mortgage loans that we hold for investment purposes.
Added
While our funding agreements with the FHLB are currently used for the purpose of investing in either short-term investments, matched fixed maturity securities, or matched commercial mortgage loans, we maintain the option to utilize these agreements for liquidity purposes. Events that damage our reputation may adversely affect our business, results of operations, or financial condition.
Removed
Accordingly, although we maintain a disciplined approach regarding our overall investment strategy, we may still incur significant losses that can result in a decline in net investment income and/or material increases in credit losses on our investment portfolio.
Removed
With respect to commercial real estate, there could be potential impacts to estimates of expected losses resulting from lower underlying values, reflecting current market conditions at that time.
Removed
In addition, if investment markets become illiquid or severely impaired, we may be unable to liquidate our investments in a timely and advantageous manner.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+1 added−2 removed11 unchanged
Biggest changeOur internal audit organization also provides independent assurance of the cybersecurity program through related audit engagements to complement external assessments and reviews. Additional third parties are engaged, as needed, to perform risk assessments, penetration testing, and other services related to cybersecurity.
Biggest changeAdditionally, we engage an external firm to conduct an annual System and Organization Controls 2 Type 2 examination of certain cybersecurity controls. Our internal audit organization also provides independent assurance of the cybersecurity program through related audit engagements to complement external assessments and reviews.
ITEM 1C. CYBERSECURITY We take our responsibility for the privacy and security of the information our customers share with us seriously. Through our cybersecurity program, we constantly watch for threats to our systems and make real-time adjustments to our defenses to protect customer data and minimize service disruptions.
ITEM 1C. CYBERSECURITY We take our responsibility for the privacy and security of the information our customers share with us seriously. Through our cybersecurity program, we continuously watch for threats to our systems and make real-time adjustments to our defenses to protect customer data and minimize service disruptions.
The cybersecurity risk assessment follows the guidelines published by the National Institute of Standards and Technology, which are aimed at identifying and determining the potential impact of threats and vulnerabilities and assessing the controls in place to mitigate those threats and vulnerabilities.
The cybersecurity risk assessment is informed by the guidelines published by the National Institute of Standards and Technology, which are aimed at identifying and determining the potential impact of threats and vulnerabilities and assessing the controls in place to mitigate those threats and vulnerabilities.
Our cybersecurity program involves collaboration with partners, including financial industry groups, to understand and incorporate best practices and engage in cybersecurity threat intelligence sharing. Our security operations team includes internal threat hunters, such as cybersecurity engineers and analysts, who are working directly with third parties to monitor the threat landscape.
Our cybersecurity program involves collaboration with partners, including financial industry groups, to understand and incorporate best practices and engage in cybersecurity threat intelligence sharing. Our security operations team includes cyber threat intelligence, threat hunting, and cybersecurity engineers and analysts, who are working directly with third parties to monitor the threat landscape.
He holds a bachelor’s degree in computer science and several professional qualifications, including Certified Information Systems Security Professional and 34 Table of Contents Information Systems Security Management Professional.
He holds a bachelor’s degree in computer science and several professional qualifications, including Certified Information Systems Security Professional and Information Systems Security Management Professional.
Cybersecurity risks associated with third-party service providers are managed in accordance with our Third-Party Risk Management (TPRM) program. Components of this program include cybersecurity due diligence and review of contractual terms with third parties that access our network or sensitive information.
Additional third parties are engaged, as needed, to perform risk assessments, penetration testing, and other services related to cybersecurity. Cybersecurity risks associated with third-party service providers are managed in accordance with our Third-Party Risk Management (TPRM) program. Components of this program include cybersecurity due diligence and review of contractual terms with third parties that access our network or sensitive information.
We utilize an internal global incident management team, comprised of executive and senior management-level personnel, that is responsible for oversight of our business resiliency and cybersecurity incident response programs.
We utilize an internal global incident management team, comprised of executive and senior management-level personnel, that is responsible for oversight of our business resiliency and cybersecurity incident response programs. Our cybersecurity incident response team works closely with the business continuity, disaster recovery, and crisis management functions to plan, prepare, and practice response to simulated cybersecurity incident scenarios for response readiness.
We also conduct one or more annual cybersecurity incident response tabletop exercises with senior management and third-party experts to test our incident response plan and enhance our readiness for a potential cybersecurity incident. Additionally, we engage an external firm to conduct an annual System and Organization Controls 2 Type 2 examination of certain cybersecurity controls.
We also conduct one or more annual cybersecurity incident response tabletop exercises with senior management and third-party experts to test our incident response plan and enhance our readiness for a potential cybersecurity incident. Additionally, we carry cybersecurity insurance to help reduce financial risk posed by cybersecurity incidents.
The ISC is responsible for ensuring that the cybersecurity strategy and program align with our overall risk strategy. Our TPRM program is overseen by the Corporate Operational Risk Committee (CORC), a cross-functional management team whose membership includes leaders from our third-party risk management, corporate services, compliance, sourcing, information technology, and business resiliency teams.
The ISC is responsible for ensuring that the cybersecurity strategy and program align with our overall risk strategy. Our TPRM program is governed by the TPRM Steering Committee, a cross-functional leadership team with representation from sourcing, compliance, legal, information security, and enterprise risk.
The CORC and the ISC both report risks to our Executive Risk Management Committee (ERMC), which is comprised of senior management from our corporate functions and business segments and is responsible for overseeing our enterprise-wide risk management program.
Both the TPRM Steering Committee and the ISC escalate relevant risks to our Executive Risk Management Committee (ERMC), which is comprised of senior leaders from our corporate functions and business segments. The ERMC oversees our 34 T able of Contents enterprise-wide risk management framework and ensures strategic alignment across the organization.
We rely on third-party cybersecurity software tools and services to enhance many of our cybersecurity functions, such as incident logging, network monitoring, security operations, and data loss prevention, among others. Additionally, we carry cybersecurity insurance to help reduce financial risk posed by cybersecurity incidents.
We rely on third-party cybersecurity software tools and services to enhance cybersecurity functions such as incident logging, network monitoring, detecting and blocking malicious attacks, as well as to govern identity and access management, and for security operations and data loss prevention.
Alerts from monitoring are analyzed by our security teams for preemptive engagement to avoid or minimize the impact of potential cyber threats. Additional cybersecurity tools are used to detect and block malicious attacks, as well as to govern identity and access management, in each case to avoid or minimize risks of unauthorized access to systems and data.
Alerts from monitoring are analyzed by our security teams for 33 T able of Contents preemptive engagement to avoid or minimize the impact of potential cyber threats.
Removed
Within our information security organization, our cybersecurity incident response team works closely with the business resiliency team across business continuity, disaster recovery, and crisis management functions to plan, prepare, and practice response to simulated cybersecurity incident scenarios for response readiness.
Added
The committee provides guidance and oversight for the TPRM policy and program framework to manage risks associated with third-party vendors. The TPRM Steering Committee also ensures that the TPRM program and strategy remain aligned with our broader business objectives.
Removed
The CORC is responsible for ensuring risks to our non-insurance operational functions, including those related to third-party vendors, are identified and managed within our risk appetite, and that our TPRM program and strategy align with our overall business objectives.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we owned office space comprised of five campuses located in Chattanooga, Tennessee; Portland, Maine; Columbia, South Carolina; Baton Rouge, Louisiana; and Dorking in the United Kingdom. In addition, as of December 31, 2024, we leased office space in various locations throughout the United States, the United Kingdom, Ireland, and Poland.
Biggest changeITEM 2. PROPERTIES As of December 31, 2025, we owned office space comprised of five campuses located in Chattanooga, Tennessee; Portland, Maine; Columbia, South Carolina; Baton Rouge, Louisiana; and Dorking in the United Kingdom. In addition, as of December 31, 2025, we leased office space in various locations throughout the United States, the United Kingdom, Ireland, and Poland.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable 35 Table of Contents PART II
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable 35 T able of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−4 removed3 unchanged
Biggest changeConcurrent with the announcement of the February 2025 repurchase program, we also announced the termination of the July 2024 program as of March 31, 2025, and any unused amounts under that program will expire as of that date. The repurchase program authorized in February 2025 has no scheduled termination date.
Biggest changeConcurrent with the announcement of the December 2025 repurchase program, we also announced the termination of the February 2025 program as of December 31, 2025, and any unused amounts under that program expired as of that date. For information relating to compensation plans under which Unum Group's equity securities are authorized for issuance, see Item 12 contained herein.
Quarterly dividends declared and paid per share of common stock are as follows: 2024 4th Quarter $ 0.420 3rd Quarter 0.420 2nd Quarter 0.365 1st Quarter 0.365 2023 4th Quarter $ 0.365 3rd Quarter 0.365 2nd Quarter 0.330 1st Quarter 0.330 Our board of directors has the authority to declare cash dividends on shares of our common stock.
Quarterly dividends declared and paid per share of common stock are as follows: 2025 4th Quarter $ 0.460 3rd Quarter 0.460 2nd Quarter 0.420 1st Quarter 0.420 2024 4th Quarter $ 0.420 3rd Quarter 0.420 2nd Quarter 0.365 1st Quarter 0.365 Our board of directors has the authority to declare cash dividends on shares of our common stock.
(2) In July 2024, our board of directors authorized the repurchase of up to $1,000.0 million of Unum Group's outstanding common stock beginning on August 1, 2024. In February 2025, our board of directors authorized the repurchase of up to $1,000.0 million of Unum Group's outstanding common stock beginning on April 1, 2025.
(2) In February 2025, our board of directors authorized the repurchase of up to $1,000.0 million of Unum Group's outstanding common stock beginning on April 1, 2025. In December 2025, our board of directors authorized the repurchase of up to $1,000.0 million of Unum Group's outstanding common stock beginning January 1, 2026.
As of February 25, 2025, there were 7,052 registered holders of common stock. The following table provides information about our share repurchase activity for the fourth quarter of 2024.
As of February 13, 2026, there were 6,638 registered holders of common stock. The following table provides information about our share repurchase activity for the fourth quarter of 2025.
For information relating to compensation plans under which Unum Group's equity securities are authorized for issuance, see Item 12 contained herein. For information relating to our accelerated share repurchases and share repurchase programs, see Note 12 contained herein Item 8. 37 Table of Contents ITEM 6. [RESERVED]
For information relating to our accelerated share repurchases and share repurchase programs, see Note 12 contained herein Item 8. 36 T able of Contents ITEM 6. [RESERVED]
(a) Total Number of Shares Purchased (3) (4) (b) Average Price Paid per Share (1) (3) (4) (c) Total Number of Shares Purchased as Part of Publicly Announced Program (2) (3) (4) (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (2) (3) (4) October 1 - October 31, 2024 1,910,665 $ 68.11 1,910,665 $ 814,160,418 November 1 - November 30, 2024 3,751,168 72.55 3,751,168 493,160,418 December 1 - December 31, 2024 291,742 68.11 291,742 493,160,418 Total 5,953,575 5,953,575 (1) Excludes the cost of commissions and excise taxes.
(a) Total Number of Shares Purchased (b) Average Price Paid per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Program (2) (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (2) October 1 - October 31, 2025 1,642,555 $ 76.10 1,642,555 $ 325,013,770 November 1 - November 30, 2025 706,619 76.27 706,619 271,121,837 December 1 - December 31, 2025 954,705 74.48 954,705 — Total 3,303,879 3,303,879 (1) Excludes the cost of commissions and excise taxes.
Removed
(3) In October 2024, we entered into an accelerated share repurchase agreement. As part of this transaction, we paid $150.0 million to a financial counterparty and received an initial delivery of 1,910,665 shares of our common stock, which represented 36 Table of Contents approximately 75 percent of the total delivery under the agreement.
Removed
The final price adjustment settlement, along with the delivery of the remaining shares, occurred in December 2024, resulting in the delivery of 291,742 additional shares. In total, we repurchased 2,202,407 shares pursuant to the October 2024 accelerated share repurchase agreement. (4) In November 2024, we entered into another accelerated share repurchase agreement.
Removed
As part of this transaction, we paid $321.0 million to a financial counterparty and received an initial delivery of 3,751,168 shares of our common stock, which represented approximately 75 percent of the total delivery under the agreement.
Removed
The final price adjustment settlement, along with the delivery of the remaining shares, occurred in February 2025, resulting in the delivery to us of 673,119 additional shares. In total, we repurchased 4,424,287 shares pursuant to the November 2024 accelerated share repurchase agreement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

254 edited+61 added−84 removed189 unchanged
Biggest changeUnrealized Loss on Investment-Grade Fixed Maturity Securities Length of Time in Unrealized Loss Position (in millions of dollars) 2024 2023 December 31 September 30 June 30 March 31 December 31 Fair Value = 70% of Amortized Cost $ 188.9 $ 11.8 $ 31.4 $ 48.0 $ 8.3 > 90 56.6 1.2 74.6 8.3 3.5 > 180 1.1 5.1 28.6 4.5 16.4 > 270 days 13.2 3.3 6.4 22.3 18.9 > 1 year 58.8 24.9 286.2 518.7 1,536.4 > 2 years 1,553.6 1,708.4 2,019.4 1,721.0 675.6 > 3 years 497.6 202.0 60.8 63.7 22.4 Sub-total 2,369.8 1,956.7 2,507.4 2,386.5 2,281.5 Fair Value = 40% of Amortized Cost — — 0.1 — — > 1 year — 28.4 33.3 34.1 99.5 > 2 years 326.1 232.8 597.2 439.5 232.3 > 3 years 498.4 62.3 61.8 56.9 22.0 Sub-total 824.5 323.5 692.4 530.5 353.8 Fair Value > 180 2.0 — — — — > 270 days 2.0 — — — — > 1 year — — — 23.3 22.3 > 2 years 34.9 28.6 27.2 2.8 2.7 > 3 years 3.0 — — — — Sub-total 41.9 28.6 27.2 26.1 25.0 Total $ 3,236.2 $ 2,308.8 $ 3,227.0 $ 2,943.1 $ 2,660.3 82 Table of Contents Unrealized Loss on Below-Investment-Grade Fixed Maturity Securities Length of Time in Unrealized Loss Position (in millions of dollars) 2024 2023 December 31 September 30 June 30 March 31 December 31 Fair Value = 70% of Amortized Cost $ 4.8 $ 0.3 $ 0.4 $ 0.2 $ 0.3 > 90 1.2 — 0.7 0.8 — > 180 — — 0.9 — 0.2 > 270 days 0.1 — — 0.2 0.1 > 1 year 0.1 — 0.9 7.2 51.6 > 2 years 38.2 38.6 51.7 45.6 7.3 > 3 years 13.4 11.7 — 0.1 0.1 Sub-total 57.8 50.6 54.6 54.1 59.6 Fair Value = 40% of Amortized Cost > 1 year — — — 13.9 26.4 > 2 years 16.4 14.7 25.6 13.5 — > 3 years 3.3 — 12.3 12.5 12.9 Sub-total 19.7 14.7 37.9 39.9 39.3 Fair Value > 1 year — — 0.1 0.1 4.5 > 3 years 0.3 0.3 0.2 0.2 0.2 Sub-total 0.3 0.3 0.3 0.3 4.7 Total $ 77.8 $ 65.6 $ 92.8 $ 94.3 $ 103.6 At December 31, 2024, we held 59 investment-grade fixed maturity securities with a gross unrealized loss of $10.0 million or greater as shown in the chart below. 83 Table of Contents Gross Unrealized Losses $10 Million or Greater on Investment-Grade Fixed Maturity Securities As of December 31, 2024 (in millions of dollars) Classification Fair Value Gross Unrealized Loss Number of Issuers Basic Industry $ 220.8 $ (51.9) 4 Capital Goods 138.6 (39.0) 3 Communications 469.9 (105.2) 7 Consumer Cyclical 280.8 (60.8) 4 Consumer Non-Cyclical 764.9 (132.1) 10 Energy 242.0 (36.4) 3 Financial Institutions 762.7 (101.3) 8 Sovereigns 375.1 (134.8) 2 Technology 351.2 (59.7) 5 Transportation 196.1 (52.1) 4 U.S.
Biggest changeUnrealized Loss on Investment-Grade Fixed Maturity Securities Length of Time in Unrealized Loss Position (in millions of dollars) 2025 2024 December 31 September 30 June 30 March 31 December 31 Fair Value = 70% of Amortized Cost $ 39.3 $ 14.3 $ 11.1 $ 38.1 $ 188.9 > 90 12.8 3.0 37.1 111.7 56.6 > 180 2.6 14.7 93.1 46.0 1.1 > 270 days 12.5 42.6 65.5 1.1 13.2 > 1 year 116.0 72.3 28.6 42.9 58.8 > 2 years 44.4 36.1 179.0 342.4 1,553.6 > 3 years 1,539.0 1,608.4 1,553.8 1,467.7 497.6 Sub-total 1,766.6 1,791.4 1,968.2 2,049.9 2,369.8 Fair Value = 40% of Amortized Cost > 90 — — — 3.9 — > 180 0.4 — 4.1 — — > 270 days — 4.0 — — — > 1 year 4.9 2.0 1.0 — — > 2 years — 46.8 54.1 53.7 326.1 > 3 years 644.4 562.3 719.2 674.8 498.4 Sub-total 649.7 615.1 778.4 732.4 824.5 Fair Value > 180 — — — — 2.0 > 270 days — — — 2.0 2.0 > 1 year — — — 1.9 — > 2 years — — — 36.6 34.9 > 3 years 41.7 57.0 51.2 10.5 3.0 Sub-total 41.7 57.0 51.2 51.0 41.9 Total $ 2,458.0 $ 2,463.5 $ 2,797.8 $ 2,833.3 $ 3,236.2 82 Table of Contents Unrealized Loss on Below-Investment-Grade Fixed Maturity Securities Length of Time in Unrealized Loss Position (in millions of dollars) 2025 2024 December 31 September 30 June 30 March 31 December 31 Fair Value = 70% of Amortized Cost $ 0.5 $ 0.2 $ 0.3 $ 3.4 $ 4.8 > 90 0.3 — 0.8 3.9 1.2 > 180 — 1.5 3.8 0.4 — > 270 days 1.5 2.0 0.1 — 0.1 > 1 year 0.4 — 0.1 0.1 0.1 > 2 years — — — 9.4 38.2 > 3 years 38.0 36.8 41.9 31.3 13.4 Sub-total 40.7 40.5 47.0 48.5 57.8 Fair Value = 40% of Amortized Cost > 1 year 2.5 — — — — > 2 years — — — — 16.4 > 3 years 5.2 9.0 8.0 19.0 3.3 Sub-total 7.7 9.0 8.0 19.0 19.7 Fair Value > 3 years 0.3 0.3 3.8 0.3 0.3 Sub-total 0.3 0.3 3.8 0.3 0.3 Total $ 48.7 $ 49.8 $ 58.8 $ 67.8 $ 77.8 83 Table of Contents At December 31, 2025, we held 31 investment-grade fixed maturity securities with a gross unrealized loss of $10.0 million or greater as shown in the chart below.
The impact of internal and external events, such as changes in claims operational procedures, economic trends such as the rate of unemployment and the level of consumer confidence, the emergence of new diseases, new trends and developments in medical treatments, and legal trends and legislative 46 Table of Contents changes, including changes to social security and other government-based welfare benefits programs which provide policy benefit offsets, among other factors, will influence claim incidence rates, claim resolution rates, and claim costs.
The impact of internal and external events, such as changes in claims operational procedures, economic trends such as the rate of unemployment and the level of consumer 46 Table of Contents confidence, the emergence of new diseases, new trends and developments in medical treatments, and legal trends and legislative changes, including changes to social security and other government-based welfare benefits programs which provide policy benefit offsets, among other factors, will influence claim incidence rates, claim resolution rates, and claim costs.
Net investment income was higher in 2024 compared to 2023 due primarily an increase in the yield on invested assets as well as an increase in the level of invested assets. The benefit ratio, excluding the impacts of the reserve assumption updates, was favorable relative to 2023 due primarily to favorable benefit experience in all product lines.
Net investment income was higher in 2024 compared to 2023 due primarily to an increase in the yield on invested assets as well as an increase in the level of invested assets. The benefit ratio, excluding the impacts of the reserve assumption updates, was favorable relative to 2023 due primarily to favorable benefit experience in all product lines.
The payment of dividends to a parent company from a life insurance subsidiary is generally further limited to the amount of unassigned funds. Unum America cedes blocks of long-term care business to Fairwind Insurance Company (Fairwind), which is an affiliated captive reinsurance subsidiary domiciled in the United States.
The payment of dividends to a parent company from a life insurance subsidiary is generally further limited to the amount of unassigned funds. Unum America cedes blocks of long-term care business to Fairwind, which is an affiliated captive reinsurance subsidiary domiciled in the United States.
We have a five-year £75 million senior unsecured standby letter of credit facility with a different syndicate of lenders, pursuant to which a syndicated letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75 million until its scheduled expiration in July 2026.
We have a five-year £75.0 million senior unsecured standby letter of credit facility with a different syndicate of lenders, pursuant to which a syndicated letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in July 2026.
We have established an investment strategy that we believe will provide for adequate cash flows from operations and allow us to hold our securities through periods where significant decreases in fair value occur. We believe our emphasis on risk management in our investment portfolio has positioned us well and generally reduced the volatility in our results.
We have established an investment strategy that we believe will provide adequate cash flows from operations and allow us to hold our securities through periods where significant decreases in fair value occur. We believe our emphasis on risk management in our investment portfolio has positioned us well and generally reduced the volatility in our results.
The benefit ratio, excluding the impacts of the reserve assumption updates, was generally consistent compared to 2023 with favorable medical stop-loss benefits experience and favorable recoveries in the long-term disability product line, mostly offset by higher incidence in our long-term and short-term disability product lines.
The benefit ratio, excluding the impacts of the reserve assumption updates, was generally consistent compared to 2023 with favorable medical stop-loss benefits experience and favorable recoveries in the group long-term disability product line, mostly offset by higher incidence in our group long-term and group short-term disability product lines.
Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, and gains or losses on derivatives. We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business.
We believe after-tax adjusted operating income is a better performance measure and better indicator of the profitability and underlying trends in our business. Investment gains or losses primarily include realized investment gains or losses, expected investment credit losses, impairment losses, and gains or losses on derivatives.
Segment Outlook We remain committed to offering consumers a broad set of financial protection benefit products at the worksite. During 2025, we will continue to invest in a unique customer experience defined by simplicity, empathy, and deep industry expertise through the increased utilization of digital capabilities and technology to enhance enrollment, underwriting, the client administration experience, and claims processing.
Segment Outlook We remain committed to offering consumers a broad set of financial protection benefit products at the worksite. During 2026, we will continue to invest in a unique customer experience defined by simplicity, empathy, and deep industry expertise through the increased utilization of digital capabilities and technology to enhance enrollment, underwriting, the client administration experience, and claims processing.
We generally use securities repurchase agreements as a means to finance the purchase of invested assets or for short-term general business purposes until projected cash flows become available from our operations or existing investments. We ha d no securities re purchase agreements outstanding at December 31, 2024 , nor did we utilize any securities repurchase agreements during 2024.
We generally use securities repurchase agreements as a means to finance the purchase of invested assets or for short-term general business purposes until projected cash flows become available from our operations or existing investments. We ha d no securities re purchase agreements outstanding at December 31, 2025 , nor did we utilize any securities repurchase agreements during 2025.
See "Reconciliation of Non-GAAP Financial Measures" contained herein in this Item 7. 58 Table of Contents Unum US Segment The Unum US segment is comprised of the group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. The group disability line of business includes long-term and short-term disability, medical stop-loss, and fee-based service products.
See "Reconciliation of Non-GAAP Financial Measures" contained herein in this Item 7. 56 Table of Contents Unum US Segment The Unum US segment is comprised of the group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. The group disability line of business includes long-term and short-term disability, medical stop-loss, and fee-based service products.
The supplemental and voluntary line of business includes voluntary benefits, individual disability, and dental and vision products. These products, excluding medical stop-loss which is no longer actively marketed as of the third quarter of 2024, are marketed through our field sales personnel who work in conjunction with independent brokers and consultants.
The supplemental and voluntary line of business includes voluntary benefits, individual disability, and dental and vision products. These products, excluding medical stop-loss which was no longer actively marketed as of the third quarter of 2024, are marketed through our field sales personnel who work in conjunction with independent brokers and consultants.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly. 76 Table of Contents Closed Block Segment The Closed Block segment consists of group and individual long-term care and other insurance products no longer actively marketed. We discontinued offering individual long-term care in 2009 and group long-term care in 2012.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly. 74 Table of Contents Closed Block Segment The Closed Block segment consists of group and individual long-term care and other insurance products no longer actively marketed. We discontinued offering individual long-term care in 2009 and group long-term care in 2012.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly. 73 Table of Contents Colonial Life Segment The Colonial Life segment includes insurance for accident, sickness, and disability products, which includes dental and vision products, life products, and cancer and critical illness products.
We continuously monitor key indicators to assess our risks and adjust our business plans accordingly. 71 Table of Contents Colonial Life Segment The Colonial Life segment includes insurance for accident, sickness, and disability products, which includes dental and vision products, life products, and cancer and critical illness products.
Of the assumptions impacting the estimated change in the liability for future policy benefits, the largest contributor is the claim costs, for which we assumed a change of approximately 10 percent. We also consider variability in our assumptions related to the long-term care liability for future policy benefits.
Of the assumptions impacting the estimated change in the liability for future policy benefits, the largest contributor is the claim costs, for which we assumed a change of approximately 5 percent. We also consider variability in our assumptions related to the long-term care liability for future policy benefits.
In periods when the functional currency weakens, translation decreases current period results relative to the prior period. 69 Table of Contents Unum UK Operating Results Shown below are financial results and key performance indicators for the Unum UK product lines in functional currency.
In periods when the functional currency weakens, translation decreases current period results relative to the prior period. 67 Table of Contents Unum UK Operating Results Shown below are financial results and key performance indicators for the Unum UK product lines in functional currency.
We report unrealized foreign currency translation gains and losses in accumulated other comprehensive income (loss) in our consolidated balance sheets. 68 Table of Contents Fluctuations in exchange rates impact Unum International's reported financial results and our consolidated financial results.
We report unrealized foreign currency translation gains and losses in accumulated other comprehensive income (loss) in our consolidated balance sheets. 66 Table of Contents Fluctuations in exchange rates impact Unum International's reported financial results and our consolidated financial results.
The relationships of the current fair value to amortized cost are not necessarily indicative of the fair value to amortized cost relationships for the securities throughout the entire time that the securities have been in an unrealized loss position nor are they necessarily indicative of the relationships after December 31, 2024.
The relationships of the current fair value to amortized cost are not necessarily indicative of the fair value to amortized cost relationships for the securities throughout the entire time that the securities have been in an unrealized loss position nor are they necessarily indicative of the relationships after December 31, 2025.
We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. As these NAVs are volatile and can fluctuate materially with changes in market economic conditions, there may possibly be significant movements up or down in future periods as conditions change.
We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. As these NAVs are volatile and can fluctuate materially with changes in market economic conditions, there could be significant movements up or down in future periods as conditions change.
The second step is to measure a position that satisfies the recognition threshold at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate 54 Table of Contents settlement.
The second step is to measure a position that satisfies the recognition threshold at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate 52 Table of Contents settlement.
The sale and purchase of short-term investments is influenced by proceeds received from FHLB funding advances, issuance of debt, our securities lending program, and by the amount of cash which is at times held in short-term investments to facilitate the availability of cash to fund the purchase of appropriate long-term investments, repay maturing debt, and/or to fund our capital deployment program.
The sale and 91 Table of Contents purchase of short-term investments is influenced by proceeds received from FHLB funding advances, issuance of debt, our securities lending program, and by the amount of cash which is at times held in short-term investments to facilitate the availability of cash to fund the purchase of appropriate long-term investments, repay maturing debt, and/or to fund our capital deployment program.
Each rating is subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be regarded as an independent assessment, not conditional on any other rating. Given the dynamic nature of the ratings process, changes by these or other rating agencies may or may not occur in the near-term.
Each rating is subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be regarded as an independent assessment, not conditional on any other rating. Given the dynamic nature of the ratings 92 Table of Contents process, changes by these or other rating agencies may or may not occur in the near-term.
The RBC ratios for our U.S. insurance subsidiaries at December 31, 2024 are in line with our expectations and are significantly above the level that would require state regulatory action.
The RBC ratios for our U.S. insurance subsidiaries at December 31, 2025 are in line with our expectations and are significantly above the level that would require state regulatory action.
The actual amount distributable during 2025 will depend on experience, including the impact of market movements, and is subject to local requirements, as well as regulatory and other business considerations.
The actual amount distributable during 2026 will depend on experience, including the impact of market movements, and is subject to local requirements, as well as regulatory and other business considerations.
Our claim resolution rate assumption used in determining the liability for future policy benefits is our expectation of the resolution rate we will experience over the life of the block of business and will vary from actual experience in any one period, 48 Table of Contents both favorably and unfavorably.
Our claim resolution rate assumption used in determining the liability for future policy benefits is our expectation of the resolution rate we will experience over the life of the block of business and will vary from actual experience in any one period, both favorably and unfavorably.
We have an additional five-year, £75 million senior standby letter of credit facility pursuant to which a standby letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration 89 Table of Contents in December 2028.
We have an additional five-year, £75.0 million senior unsecured standby letter of credit facility pursuant to which a standby letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in December 2028.
The ability of Fairwind to pay dividends to Unum Group will depend on its satisfaction of applicable regulatory requirements and on the performance of the business reinsured by Fairwind. Fairwind did not pay dividends in 2024. Unum Group did not make any contributions to Fairwind in 2024 and we do not expect to make any contributions to Fairwind during 2025.
The ability of Fairwind to pay dividends to Unum Group will depend on its satisfaction of applicable regulatory requirements and on the performance of the business reinsured by Fairwind. Fairwind did not pay dividends in 2025. Unum Group did not make contributions to Fairwind in 2025 and we do not expect to make contributions to Fairwind during 2026.
Historically, we have utilized current and forward interest rate swaps, current and forward currency swaps, forward benchmark interest rate locks, currency forward contracts, forward contracts on specific fixed income securities, credit default swaps, and total return swaps.
Historically, we have utilized current and forward interest rate swaps, current and forward currency swaps, forward benchmark interest rate locks, currency forward contracts, forward contracts on specific fixed income securities, and total return swaps.
The net premium ratio for long-term care increased to 94.6 percent at December 31, 2024 from 93.5 percent at December 31, 2023. A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings.
The net premium ratio for long-term care increased to 97.5 percent at December 31, 2025 from 94.6 percent at December 31, 2024. A rising interest rate environment could positively impact our yields on new investments, but could also increase unrealized losses in our current holdings.
The original discount rates are initially set at the transition date of ASU 2018-12, which was January 1, 2021, for policies originally issued before the transition date, or at the policy issuance date, for policies issued on or after the transition date.
The original discount rates are initially set at the transition date of accounting standard updated (ASU) 2018-12, which was January 1, 2021, for policies originally issued before the transition date, or at the policy issuance date, for policies issued on or after the transition date.
The cash flow assumption updates in our Closed Block segment were primarily driven by the long-term care product line which reduced our liability for future policy benefits by $174.1 million, due primarily to an increase to expected premium rate increase approvals within our existing premium rate increase program, partially offset by lower expected persistency on group policies. 2023 Significant Cash Flow Assumption Updates: The cash flow assumption updates in our Unum US group long-term disability product line reduced our liability for future policy benefits by $121.0 million, due primarily to sustained improvement in claim recovery trends.
The cash flow assumption updates in our Closed Block segment were primarily driven by the long-term care product line which reduced our liability for future policy benefits by $174.1 million, due primarily to an increase to expected premium rate increase approvals within our existing premium rate increase program, partially offset by lower than expected persistency on group policies. 2023 Significant Cash Flow Assumption Updates: The cash flow assumption updates in our Unum US group long-term disability product line reduced our liability for future policy benefits by $121.0 million, due primarily to claim resolution assumptions driven by favorable claim recovery trends.
We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. We recorded net investment income totaling $103.1 million, $78.1 million, and $110.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. The majority of our investments in partnerships are not redeemable.
We receive financial information related to our investments in partnerships and generally record investment income on a one-quarter lag in accordance with our accounting policy. We recorded net investment income totaling $91.2 million, $103.1 million, and $78.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. The majority of our investments in partnerships are not redeemable.
In our estimation, scenarios based on certain variations in each of our assumptions for our Unum US group long-term disability product line could produce a change of approximately $100 million which represents 2.1 percent of our Unum US group disability liability for future policy benefits balance.
In our estimation, scenarios based on certain variations in each of our assumptions for our Unum US group long-term disability product line could produce a change of approximately $80 million which represents 1.7 percent of our Unum US group disability liability for future policy benefits balance.
We had no regulatory contribution requirements for our U.S. and U.K. qualified defined benefit pension plans and made no voluntary contributions during the twelve months ended December 31, 2024.
We had no regulatory contribution requirements for our U.S. qualified defined benefit pension plans and made no voluntary contributions during the twelve months ended December 31, 2025.
Other insurance products include individual disability, group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines. Operating Results Shown below are financial results and key performance indicators for the Closed Block segment.
Other insurance products include individual disability, group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous product lines. 75 Table of Contents Operating Results Shown below are financial results and key performance indicators for the Closed Block segment.
The IRA imposed a new 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income (AFSI) on corporations that have average AFSI over $1.0 billion in any prior three-year period, starting with years 2020 to 2022. Our company is an applicable corporation. We have not recorded any CAMT as of December 31, 2024.
The IRA imposed a 15 percent corporate alternative minimum tax (CAMT) on adjusted financial statement income (AFSI) on corporations that have average AFSI over $1.0 billion in any prior three-year period, starting with years 2020 to 2022. Our company is an applicable corporation and we have recorded a CAMT liability as of December 31, 2025.
In our estimation, scenarios based on certain possible variations in each of our assumptions for our Colonial Life segment could produce a change of approximately $60 million which represents 3.2 percent of our Colonial Life liability for future policy benefits balance.
In our estimation, scenarios based on certain possible variations in each of our assumptions for our Colonial Life segment could produce a change of approximately $50 million which represents 2.5 percent of our Colonial Life liability for future policy benefits balance.
Cash Requirements As previously discussed, cash is applied primarily to the payment of policy benefits, costs of acquiring new business (principally commissions), operating expenses, and taxes, as well as purchases of investments. We have established an investment strategy that we believe will provide for adequate cash flows from operations to meet cash payment requirements.
Cash is applied to the payment of policy benefits, costs of acquiring new business (principally commissions), operating expenses, and taxes, as well as purchases of new investments. We have established an investment strategy that we believe will provide for adequate cash flows from operations.
If the 2023 and 2022 results for our U.K. operations had been translated at the 2024 weighted average exchange rate, our adjusted operating revenue would have been approximately $23 million higher and $28 million higher in 2023 and 2022, respectively.
If the 2024 and 2023 results for our U.K. operations had been translated at the 2025 weighted average exchange rate, our adjusted operating revenue would have been approximately $28 million higher and $50 million higher in 2024 and 2023, respectively.
Commissions and the deferral of acquisition costs were higher compared to 2023 due primarily to higher sales. The amortization of deferred acquisition costs was generally consistent compared to 2023. The other expense ratio was consistent compared to 2023.
Commissions and the deferral of acquisition costs were higher compared to 2024 due primarily to sales. The amortization of deferred acquisition costs was generally consistent compared to 2024. The other expense ratio was also generally consistent compared to 2024.
See Note 9 in the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion. 57 Table of Contents Consolidated Sales Results Shown below are sales results for our three principal operating segments.
See Note 9 in the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion. 55 Table of Contents Consolidated Sales Results Shown below are sales results for our three core operating segments.
In addition, at December 31, 2024, we had $34.8 million o f off-balance sheet securities lending agreements which were collateralized by securities that we were neither permitted to sell nor control.
In addition, at December 31, 2025, we had $34.1 million o f off-balance sheet securities lending agreements which were collateralized by securities that we were neither permitted to sell nor control.
We may experience volatility in net investment income due to changes in the prevailing interest rates as well as both the composition and level of invested assets. 80 Table of Contents Investments Overview Our investment portfolio is well diversified by type of investment and industry sector.
We may experience volatility in net investment income due to changes in the prevailing interest rates, miscellaneous investment income, and the composition and level of invested assets. 79 Table of Contents Investments Overview Our investment portfolio is well diversified by type of investment and industry sector.
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Group long-term disability sales decreased compared to 2023 driven by lower sales to new and existing customers in the core market, which we define as employee groups with fewer than 500 employees, partially offset by an increase in sales to new and existing customers in the large case market.
Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 Group long-term disability sales decreased compared to 2024 primarily driven by lower sales to existing customers in the large case market, which we define as employee groups with more than 500 employees, partially offset by an increase in sales to new customers in the core and large case markets.
In February 2025, First Unum Life Insurance Company (First Unum) entered into a reinsurance agreement with Provident Life and Accident Insurance Company to cede, on a coinsurance with funds withheld basis, 100 percent of the long-term care business of First Unum, effective January 1, 2025.
In February 2025, First Unum Life Insurance Company (First Unum), a wholly owned insurance subsidiary, entered into a reinsurance agreement with Provident, a wholly owned insurance subsidiary, to cede, on a coinsurance with funds withheld basis, 100 percent of the long-term care business of First Unum effective January 1, 2025.
The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the increase in U.S Treasury rates during 2024, resulted in a decrease to the liability for future policy benefits, net of reinsurance, of approximately $2.3 billion. We believe our capital and financial positions are strong.
The change in discount rate assumptions on the liability for future policy benefits, net of reinsurance, due primarily to the decrease in U.S Treasury rates during 2025, resulted in an increase to the liability for future policy benefits, net of reinsurance, of approximately $0.3 billion. We believe our capital and financial positions are strong.
We increased our liability for future policy benefits by $196.0 million as a result of the assumption updates related to the ceded advanced age claimant block with a corresponding increase in our consolidated balance sheet as a reinsurance recoverable.
We increased our liability for future policy benefits by $82.0 million as a result of the assumption updates related to the ceded block with a corresponding increase in our consolidated balance sheet as a reinsurance recoverable.
Segment Outlook We are committed to driving growth in the Unum International segment and will build on the capabilities that we believe will generate growth and profitability in our businesses over the long term. In 2025, we will focus on scaling our business and broadening our product portfolio.
Segment Outlook We are committed to driving growth in the Unum International segment and will build on the capabilities that we believe will generate growth and profitability in our businesses over the long term. In 2026, we will focus on scaling our business across our existing product portfolio.
See Note 11 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion. Income Taxes We provide for federal, state, and foreign income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities.
See Notes 1 and 3 of the "Notes to Consolidated Financial Statements" contained herein in Item 8. Income Taxes We provide for federal, state, and foreign income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities.
The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, the amortization of the cost of reinsurance, the impact of non-contemporaneous reinsurance, and reserve assumption updates as well as certain other items as specified in the reconciliations below.
The non-GAAP financial measure of "after-tax adjusted operating income" differs from net income as presented in our consolidated operating results and income statements prepared in accordance with GAAP due to the exclusion of investment gains or losses, certain impacts from reinsurance transactions, reserve assumption updates and certain other items as specified in the reconciliations below.
In addition, $768.5 million is committed in additional capital contributions to certain private equity partnerships which are due upon satisfaction of contractual notice from the partnership.
In addition, $756.7 million is committed in additional capital contributions to certain private equity partnerships which are due upon satisfaction of contractual notice from the partnership.
(in millions) Year Ended December 31 2024 % Change 2023 % Change 2022 Unum US $ 1,367.0 6.5 % $ 1,283.8 15.1 % $ 1,115.3 Unum International $ 186.9 9.4 % $ 170.9 27.8 % $ 133.7 Colonial Life $ 532.2 (1.4) % $ 539.6 6.2 % $ 508.1 Sales shown in the preceding chart generally represent the annualized premium income on new sales which we expect to receive and report as premium income during the next 12 months following or beginning in the initial quarter in which the sale is reported, depending on the effective date of the new sale.
(in millions) Year Ended December 31 2025 % Change 2024 % Change 2023 Unum US $ 1,358.9 (0.6) % $ 1,367.0 6.5 % $ 1,283.8 Unum International $ 197.2 5.5 % $ 186.9 9.4 % $ 170.9 Colonial Life $ 560.3 5.3 % $ 532.2 (1.4) % $ 539.6 Sales shown in the preceding chart generally represent the annualized premium income on new sales which we expect to receive and report as premium income during the next 12 months following or beginning in the initial quarter in which the sale is reported, depending on the effective date of the new sale.
As of December 31, 2024, Unum Group and our intermediate holding companies had available holding company liquidity of $1,987.0 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset backed securities.
As of December 31, 2025, Unum Group and our intermediate holding companies had available holding company liquidity of $2,344.1 million that was held primarily in bank deposits, commercial paper, money market funds, corporate bonds, municipal bonds, and asset backed securities.
Liability for future policy benefits ceded to reinsurers was $7.0 billion and $7.8 billion at December 31, 2024 and 2023, respectively, and are reported as a reinsurance recoverable in our consolidated balance sheets.
Liability for future policy benefits ceded to reinsurers was $10.3 billion and $7.0 billion at December 31, 2025 and 2024, respectively, and are reported as a reinsurance recoverable in our consolidated balance sheets.
Our Unum US segment reported income before income tax and net investment gains and losses of $1,582.8 million in 2024 compared to $1,484.3 million in 2023, which include the reserve assumption updates that occurred during the third quarters of 2024 and 2023.
Our Unum US segment reported income before income tax and net investment gains and losses of $1,427.6 million in 2025 compared to $1,582.8 million in 2024, which include the reserve assumption updates that occurred during the third quarters of 2025 and 2024.
The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.278, 1.243, and 1.221 for 2024, 2023, and 2022, respectively.
The weighted average pound/dollar exchange rate for our Unum UK line of business was 1.318, 1.278, and 1.243 for 2025, 2024, and 2023, respectively.
We expect strong adjusted operating income in 2025 with continued sales and premium growth. We expect the group disability market to remain competitive which may impact our pricing and renewal premium levels. We expect favorable group disability claim experience to continue in 2025, driven by strong operational performance.
We expect strong adjusted operating income in 2026 with premium growth driven by new sales and persistency. We expect the group disability market to remain competitive which may impact our pricing and renewal premium levels. We expect strong group disability claim experience to continue in 2026, driven by operational performance.
For further discussion, see "Reinsurance" contained herein in Item 1 and Note 14 of the "Notes to Consolidated Financial Statements" contained herein in Item 8. Segment Outlook We will continue to execute on our well-defined strategy of implementing long-term care premium rate increases, efficient capital management, improved financial analysis, and operational effectiveness.
For further discussion, see "Executive Summary" contained herein in Item 7 and Note 14 of the "Notes to Consolidated Financial Statements" contained herein in Item 8. 77 Table of Contents Segment Outlook We will continue to execute on our well-defined strategy of implementing long-term care premium rate increases, efficient capital management, improved financial analysis, and operational effectiveness.
Investing cash outflows consist primarily of payments for purchases of investments. Our investment strategy is to match the cash flows and durations of our assets with the cash flows and durations of our liabilities to meet the funding requirements of our business.
Investing Cash Flows Investing cash inflows consist primarily of the proceeds from the sales and maturities of investments. Investing cash outflows consist primarily of payments for purchases of investments. Our investment strategy is to match the cash flows and durations of our assets with the cash flows and durations of our liabilities to meet the funding requirements of our business.
As of December 31, 2024, approximately 11.7 percent of our fixed maturity securities were categorized as Level 1, 87.9 percent as Level 2, and 0.4 percent as Level 3. Level 1 is the highest category of the three-level fair value hierarchy classification wherein inputs are unadjusted and represent quoted prices in active markets for identical assets or liabilities.
As of December 31, 2025, approximately 12.0 percent of our fixed maturity securities were categorized as Level 1, 87.5 percent as Level 2, and 0.5 percent as Level 3. Level 1 is the highest category of the three-level fair value hierarchy classification wherein inputs are unadjusted and represent quoted prices in active markets for identical assets or liabilities.
Our differentiated offerings and market leading leave management services provide substantial growth opportunities, particularly with larger employers, and stronger persistency in our core products. We believe our active client management, integrated customer experience across our product lines, and strong risk management, will enable us to continue to grow our market over the long-term.
We believe our differentiated offerings and market leading leave management services provide substantial growth opportunities and stronger persistency. We believe our active client management, integrated customer experience across our product lines, and strong risk management, will enable us to continue to grow our market over the long-term.
Mortgage Loans The carrying value of our mortgage loan po rtfolio was $2,224.5 million and $2,318.2 million at December 31, 2024 and 2023, respectively. Our investments in mortgage loans are carried at amortized cost less an allowance for expected credit losses which was $16.1 million and $10.2 million at December 31, 2024 and 2023, respectively.
Mortgage Loans The carrying value of our mortgage loan po rtfolio was $2,109.5 million and $2,224.5 million at December 31, 2025 and 2024, respectively. Our investments in mortgage loans are carried at amortized cost less an allowance for expected credit losses which was $15.9 million and $16.1 million at December 31, 2025 and 2024, respectively.
As measured in local currency, o ur Unum UK line of business reported adjusted operating income, which excludes the reserve assumption updates, of £117.8 million in 2024 compared to £124.6 million in 2023, primarily due to lower net investment income as well as unfavorable benefits experience in the group life and group long-term disability product lines, partially offset by higher premium income.
As measured in local currency, o ur Unum UK line of business reported lower adjusted operating income, which excludes the reserve assumption updates, of £107.5 million in 2025 compared to £117.8 million in 2024, primarily due to unfavorable benefits experience in the group long-term disability product line, partially offset by higher premium income and higher net investment income.
For more information see "Critical Accounting Estimates" included herein in this Item 7 as well as Note 6 of the "Notes to Consolidated Financial Statements" contained herein in Item 8.
For more information see "Critical Accounting Estimates" included herein in this Item 7 as well as Note 6 of the "Notes to Consolidated Financial Statements" contained herein in Item 8. Settlement Loss on the U.S.
Liability for future policy benefits equaled $36.8 billion and $40.0 billion at December 31, 2024 and 2023, or approximately 72.2 percent and 74.6 percent of our total liabilities, respectively.
Liability for future policy benefits equaled $38.0 billion and $36.8 billion at December 31, 2025 and 2024, or approximately 72.6 percent and 72.2 percent of our total liabilities, respectively.
As of December 31, 2024, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost.
As of December 31, 2025, we do not hold any securities with a decline in fair value below amortized cost which we intend to sell nor any securities for which it is more likely than not that we will be required to sell before recovery in amortized cost for which an impairment loss was not recorded.
Our Unum International segment reported income before income tax and net investment gains and losses of $150.3 million in 2024 compared to $140.2 million in 2023, which include the reserve assumption updates during the third quarters of 2024 and 2023 .
Our Unum International segment reported income before income tax and net investment gains and losses of $157.7 million in 2025 compared to $150.3 million in 2024, which include the reserve assumption updates during the third quarters of 2025 and 2024 .
Our Colonial Life segment reported income before income tax and net investment gains and losses of $512.7 million in 2024 compared to $480.8 million in 2023, which include the reserve assumption updates during the third quarters of 2024 and 2023.
Our Colonial Life segment reported income before income tax and net investment gains and losses of $472.5 million in 2025 compared to $512.7 million in 2024, which include the reserve assumption updates during the third quarters of 2025 and 2024.
This sensitivity analysis is completed at least annually and was last completed as of December 31, 2024 for our product lines with a higher level of estimation uncertainty and utilizes the liability for future policy benefits valued at the original discount rate.
This sensitivity analysis is completed at least annually for our product lines with a higher level of estimation uncertainty and utilizes the liability for future policy benefits valued at the original discount rate.
We reported year-over-year increases in other expenses and compensation expenses, on a combined basis, in 2024 compared to 2023 due primarily to a loss from a legal settlement, an increase in operational investments in our business, and growth in our fee-based service products.
Other expenses and compensation expenses, on a combined basis, increased in 2024 compared to 2023 due primarily to a loss from a legal settlement, an increase in operational investments in our business, and growth in our fee-based service products.
Below-investment-grade fixed maturity securities are generally more likely to develop credit concerns than investment-grade securities. At December 31, 2024, the unrealized losses in our below-investment-grade fixed maturity securities were generally due to higher interest rates, wider credit spreads in certain industries or sectors and, to a lesser extent, credit concerns related to specific securities.
At December 31, 2025, the unrealized losses in our below-investment-grade fixed maturity securities were generally due to higher interest rates, wider credit spreads in certain industries or sectors and, to a lesser extent, credit concerns related to specific securities.
We believe that our credit risk is mitigated by our use of multiple counterparties, all of which have an investment-grade credit rating, and by our use of cross-collateralization agreements. See Note 4 in the "Notes to Consolidated Financial Statements" contained herein in Item 1 for further discussion of our derivatives.
We believe that our credit risk is mitigated by our use of multiple counterparties, all of which have an investment-grade credit rating, and by our use of cross-collateralization agreements. See Notes 1, 2, 3, and 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion of our investments and derivative financial instruments.
We do not expect that any CAMT incurred would impact earnings since it would be offset with a credit toward regular income tax in subsequent years. The IRA also imposed a one percent excise tax on fair market value of corporate stock repurchases after December 31, 2022.
We do not expect CAMT to impact earnings since it is offset with a minimum tax credit toward regular income tax in subsequent years. The IRA also imposed a one percent excise tax on fair market value of corporate stock repurchases after December 31, 2022.
The average balance of these off-balance sheet transactions during the year ended December 31, 2024 w as $29.7 million, an d the maximum amount outstanding at any month end w as $38.6 million. To manage our cash position more efficiently, we may enter into securities repurchase agreements with unaffiliated financial institutions.
The average balance of these off-balance sheet transactions during the year ended December 31, 2025 w as $30.2 million, an d the maximum amount outstanding at any month end w as $41.2 million. To manage our cash position more efficiently, we may enter into securities repurchase agreements with unaffiliated financial institutions.
Commissions and the deferral of acquisition costs were higher compared to 2022 due to higher prior period sales. The amortization of deferred acquisition costs was higher compared to 2022 primarily due to growth in the level of the deferred asset and the impact of the policyholder lapses.
Commissions and the deferral of acquisition costs were higher compared to 2023 due to higher prior period sales. The amortization of deferred acquisition costs was higher compared to 2023 primarily due to growth in the level of the deferred asset.
Commercial sector sales decreased compared to 2023 driven by lower sales to new and existing customers in the core market, which we define as accounts with fewer than 1,000 employees, partially offset by higher sales to new and existing customers in the large case market. Public sector sales increased compared to 2023 due to higher sales to new customers.
Commercial sector sales increased compared to 2024 driven by higher sales to new and existing customers in the core market, which we define as accounts with fewer than 1,000 employees, and in the large case market. Public sector sales also increased compared to 2024 due to higher sales to new and existing customers.
Consolidated Company Outlook for 2025 We believe our strategy of providing financial protection products at the workplace puts us in a position of strength. We continue to fulfill our corporate purpose of helping the working world thrive throughout life’s moments by providing excellent service to people at their time of need.
Consolidated Company Outlook for 2026 We believe our strategy of providing financial protection products at the workplace puts us in a position of strength. We continue to fulfill our corporate purpose of helping the working world thrive throughout life’s moments by providing an excellent experience centered on service, expertise and empathy to people at their time of need.
The amortization of deferred acquisition costs was higher compared to 2023 due primarily to the increased lapses in certain older voluntary benefits products and growth in the level of the deferred asset in all product lines. The other expense ratio was generally consistent compared to 2023.
The amortization of deferred acquisition costs was higher compared to 2023 due to the increased lapses in certain older voluntary benefits products and growth in the level of the deferred asset in all product lines.
Within our Unum Poland line of business, we will drive growth by continuing to expand our existing distribution channels. We will also continue to invest in digital capabilities, technology, and product enhancements which we believe will drive sustainable growth over the long term. In 2025, we expect growth in adjusted operating income with continued sales and premium growth.
Within our Unum Poland line of business, we expect to drive growth by continuing to expand our existing distribution channels. We will also continue to invest in digital capabilities, technology, and product enhancements, which we believe will drive sustainable growth over the long term.
As of December 31, 2024, the amortized cost, net of allowance for credit losses, and fair value of our below-investment-grade fixed maturity securities was $1,498.8 million and $1,436.0 million, respectively, and our below-investment-grade fixed maturity securities as a percentage of our total investment portfolio decreased from 3.3 percent at December 31, 2023 to 3.1 percent at December 31, 2024 on a fair value basis.
As of December 31, 2025, the amortized cost, net of allowance for credit losses, and fair value of our below-investment-grade fixed maturity securities was $1,229.2 million and $1,208.6 million, respectively, and our below-investment-grade fixed maturity securities as a percentage of our total investment portfolio decreased from 3.1 percent at December 31, 2024 to 2.8 percent at December 31, 2025 on a fair value basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe hypothetical potential changes in fair value of our insurance liabilities and financial instruments at December 31, 2024 and 2023 are shown as follows: 96 Table of Contents December 31, 2024 (in millions of dollars) Notional Amount of Derivatives Fair Value (FV) 2 Hypothetical FV + 100 BP 2 Change in FV 2 Assets Fixed Maturity Securities 1 $ 35,629.9 $ 32,889.9 $ (2,740.0) Mortgage Loans 1,975.4 1,877.0 (98.4) Policy Loans, Net of Reinsurance Ceded 359.3 334.7 (24.6) Reinsurance Recoverable 2 8,296.4 7,520.0 (776.4) Liabilities Liability for Future Policy Benefits 2 $ (36,806.4) $ (32,947.1) $ 3,859.3 Debt (3,564.3) (3,244.5) 319.8 Derivatives 1 Forward Benchmark Interest Rate Locks 2,570.0 (219.8) (463.9) (244.1) December 31, 2023 (in millions of dollars) Notional Amount of Derivatives Fair Value 2 Hypothetical FV + 100 BP 2 Change in FV 2 Assets Fixed Maturity Securities 1 $ 36,833.9 $ 33,842.1 $ (2,991.8) Mortgage Loans 2,070.7 1,957.7 (113.0) Policy Loans, Net of Reinsurance Ceded 373.8 347.8 (26.0) Reinsurance Recoverable 2 9,108.4 8,179.2 (929.2) Liabilities Liability for Future Policy Benefits 2 $ (40,009.4) $ (35,456.1) $ 4,553.3 Debt (3,227.9) (2,978.4) 249.5 Derivatives 1 Forward Benchmark Interest Rate Locks 1,905.0 (33.3) (245.2) (211.9) 1 These financial instruments are carried at fair value in our consolidated balance sheets.
Biggest changeThe selection of a 100 basis point immediate parallel change in interest rates should not be construed as our prediction of future market events, but only as an illustration of the potential effect of such an event. 95 Table of Contents The hypothetical potential changes in fair value of our insurance liabilities and financial instruments at December 31, 2025 and 2024 are shown as follows: December 31, 2025 (in millions of dollars) Notional Amount of Derivatives Fair Value (FV) 2 Hypothetical FV + 100 BP 2 Change in FV 2 Assets Fixed Maturity Securities 1 $ 33,056.6 $ 30,475.4 $ (2,581.2) Mortgage Loans 1,965.1 1,871.3 (93.8) Policy Loans, Net of Reinsurance Ceded 385.7 359.4 (26.3) Reinsurance Recoverable 2 10,318.5 9,222.4 (1,096.1) Liabilities Future Policy Benefits 2 $ (38,017.0) $ (34,164.4) $ 3,852.6 Debt (3,641.4) (3,313.7) 327.7 Derivatives 1 Forward Benchmark Interest Rate Locks $ 2,603.0 $ (220.6) $ (474.5) $ (253.9) December 31, 2024 (in millions of dollars) Notional Amount of Derivatives Fair Value 2 Hypothetical FV + 100 BP 2 Change in FV 2 Assets Fixed Maturity Securities 1 $ 35,629.9 $ 32,889.9 $ (2,740.0) Mortgage Loans 1,975.4 1,877.0 (98.4) Policy Loans, Net of Reinsurance Ceded 359.3 334.7 (24.6) Reinsurance Recoverable 2 8,296.4 7,520.0 (776.4) Liabilities Future Policy Benefits 2 $ (36,806.4) $ (32,947.1) $ 3,859.3 Debt (3,564.3) (3,244.5) 319.8 Derivatives 1 Forward Benchmark Interest Rate Locks $ 2,570.0 $ (219.8) $ (463.9) $ (244.1) 1 These financial instruments are carried at fair value in our consolidated balance sheets.
Although changes in the fair value of our forward benchmark interest rate locks due to changes in interest rates may impact amounts reported in our consolidated balance sheets and ultimately the amounts we owe or will receive at the termination or maturity of the derivative, our usage of these derivatives allows us to reduce uncertainty in the reinvestment of future cash flows associated with certain of our product lines.
Although changes in the fair value of our forward benchmark interest rate locks due to changes in interest rates may impact amounts reported in our consolidated balance sheets and ultimately the amounts we owe or will receive at the termination or maturity of each derivative, our usage of these derivatives allows us to reduce uncertainty in the reinvestment of future cash flows associated with certain of our product lines.
Both are key components of our risk appetite framework and play an important role in monitoring, assessing, managing, and mitigating our primary risk exposures, which we evaluate over multiple time horizons. Our ability to manage our baseline risks and run stress and scenario analysis relies on numerous capital and financial models.
Both are key components of our risk appetite framework and play an important role in monitoring, assessing, managing, and mitigating our primary risk exposures, which we evaluate over multiple time horizons. The ability to manage our baseline risks and run stress and scenario analysis relies on numerous capital and financial models.
See "Risk Factors" contained herein in Item 1A, "Investments" contained herein in Item 7, and Notes 2, 3, and 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion of the qualitative aspects of market risk, including derivative financial instrument activity. 94 Table of Contents Interest Rate Risk Our exposure to interest rate changes results from our holdings of financial instruments such as fixed rate investments, forward benchmark interest rate locks, and interest sensitive liabilities.
See "Risk Factors" contained herein in Item 1A, "Investments" contained herein in Item 7, and Notes 2, 3, and 4 of the "Notes to Consolidated Financial Statements" contained herein in Item 8 for further discussion of the qualitative aspects of market risk, including derivative financial instrument activity. 93 Table of Contents Interest Rate Risk Our exposure to interest rate changes results from our holdings of financial instruments such as fixed rate investments, forward benchmark interest rate locks, and interest sensitive liabilities.
If we modify or replace existing debt instruments at current market rates, we may incur a gain or loss on the transaction. We believe our debt-related risk to changes in interest rates is relatively minimal. 95 Table of Contents We measure our insurance liabilities and financial instruments' market risk related to changes in interest rates using a sensitivity analysis.
If we modify or replace existing debt instruments at current market rates, we may incur a gain or loss on the transaction. We believe our debt-related risk to changes in interest rates is relatively minimal. 94 Table of Contents We measure our insurance liabilities and financial instruments' market risk related to changes in interest rates using a sensitivity analysis.
Assuming interest rates and credit spreads remain constant at the January 2025 market levels throughout the remainder of 2025 and 2026, our net investment income would increase by an immaterial amount in both 2025 and 2026 as a result of the investment of cash flows at levels above our current portfolio rate.
Assuming interest rates and credit spreads remain constant at the January 2026 market levels throughout the remainder of 2026 and 2027, our net investment income would increase by an immaterial amount in both 2026 and 2027 as a result of the investment of cash flows at levels above our current portfolio rate.
As such, the value of certain of our insurance liabilities may be adversely affected by changes in the single-A interest rate environment which could impact the valuation of our liability for future policy benefits and related reinsurance recoverable.
As such, the value of certain of our insurance liabilities may be adversely affected by changes in the single-A interest rate environment which could impact the valuation of our future policy benefits and related reinsurance recoverable.
This analysis estimates potential changes in fair values as of December 31, 2024 and 2023 based on a hypothetical immediate increase of 100 basis points in interest rates from year end levels.
This analysis estimates potential changes in fair values as of December 31, 2025 and 2024 based on a hypothetical immediate increase of 100 basis points in interest rates from year end levels.
These models aid us in making significant business decisions including strategic planning, capital management, risk limit determinations, reinsurance purchases, hedging activities, asset allocation, pricing, and corporate development.
These models aid us in making significant business decisions including strategic planning, capital management, risk limit determination, reinsurance purchases, hedging activities, asset allocation, pricing, and corporate development.
To provide controls on development and use of our key models, we maintain a model risk framework for all financial models. 100 Table of Contents
To provide controls on development and use of our key models, we maintain a model risk framework for all financial models. 99 Table of Contents
The corresponding offsetting change is reported in other comprehensive income or loss, net of income tax. 2 We are required to update the discount rate assumptions related to our liability for future policy benefits at each reporting date using a yield that is reflective of an upper-medium grade fixed-income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities.
The corresponding offsetting change is reported in other comprehensive income or loss, net of income tax. 2 We are required to update the discount rate assumptions related to our future policy benefits and related reinsurance recoverable at each reporting date using a yield that is reflective of an upper-medium grade fixed-income instrument, which is generally equivalent to a single-A interest rate matched to the duration of certain of our insurance liabilities.
Because we actively manage our investments and liabilities, actual changes could differ from those estimated above. 97 Table of Contents Our overall investment philosophy is to invest in a portfolio of high quality assets that provide investment returns consistent with those assumed in the pricing of our insurance products. Assets are invested predominately in fixed maturity securities.
Because we actively manage our investments and liabilities, actual changes could differ from those estimated above. Our overall investment philosophy is to invest in a portfolio of high quality assets that provide investment returns consistent with those assumed in the pricing of our insurance products. Assets are invested predominantly in fixed maturity securities.
These hypothetical prices were compared to the actual prices for the period to compute the overall change in market value. The changes in the fair values shown in the chart above for all other items were determined using discounted cash flow analyses.
These hypothetical prices were compared to the actual prices for the period to compute the overall change in market value. The changes in the fair values shown in the chart above for all other items were 96 Table of Contents determined using discounted cash flow analyses.
Assuming the pound to dollar year-end exchange rate decreased 10 percent from the December 31, 2024 and 2023 levels, accumulated other comprehensive income or loss as reported in U.S. dollars would have been lower by approximately $120 million in each year.
Assuming the pound to dollar year-end exchange rate decreased 10 percent from the December 31, 2025 and 2024 levels, accumulated other comprehensive income or loss, as reported in U.S. dollars, would have been lower by approximately $117 million and $120 million, respectively.
We aim to constantly improve the capital modeling techniques and methodologies we use to determine a level of capital that is commensurate with our risk profile and to ensure compliance with evolving regulatory and rating agency requirements.
We aim to constantly improve our capital modeling techniques and methodologies that are used to determine a level of capital that is commensurate with our risk profile and to ensure compliance with evolving regulatory and rating agency requirements.
With the goal of maximizing shareholder value, the primary objectives 98 Table of Contents of our ERM framework are to support Unum Group in meeting its operational and financial objectives, maintaining liquidity, optimizing capital, protecting franchise value, and operational resilience.
With the goal of maximizing shareholder value, the primary objectives 97 Table of Contents of our ERM framework are to support Unum Group in meeting its operational and financial objectives, which include maintaining liquidity, optimizing capital, and protecting franchise value.
Assuming the pound to dollar average exchange rate decreased 10 percent from the actual average exchange rates for 2024 and 2023, net income, as reported in U.S. dollars, would have decreased approximately $10 million in each year.
Assuming the pound to dollar average exchange rate decreased 10 percent from the actual average exchange rates for 2025 and 2024, net income, as reported in U.S. dollars, would have decreased approximately $9 million and $10 million, respectively.
We estimate that we will have approximately $2.2 billion of investable cash flows in 2025.
We estimate that we will have approximately $2.7 billion of investable cash flows in 2026.
Fixed rate investments include fixed maturity securities, mortgage loans, policy loans, and short-term investments. Fixed maturity securities include U.S. and foreign government bonds, securities issued by government agencies, public utility bonds, corporate bonds, mortgage-backed securities, and redeemable preferred stock, all of which are subject to risk resulting from interest rate fluctuations.
Fixed maturity securities include, but may not be limited to, U.S. and foreign government bonds, securities issued by government agencies, municipal bonds, public utility bonds, corporate bonds, mortgage-backed and asset-backed securities, and redeemable preferred stock, certain of which are subject to risk resulting from interest rate fluctuations.
The ERM framework utilizes a combination of qualitative and quantitative measures to inform our assessment at the enterprise level. To support risk assessments, both the first and second line utilize stress testing and scenario analysis for risk management and to shape our business, financial, and strategic planning activities.
To support assessments of risks, both the first and second line utilize stress testing and scenario analysis for risk management and to shape our business, financial, and strategic planning activities.
The risk appetite statement defines our approach to risk taking and guides decision making as to the amount and types of risks we assume in fulfilling our purpose and advancing our strategy. We regularly use assessment techniques that are suitable for the specific nature of the risk being assessed.
Risk Appetite Our risk appetite reflects acceptable boundaries for the risks we are willing to assume and the acceptable boundaries for uncertainty in achieving our strategic objectives. The risk appetite statement defines our approach to risk taking and guides decision making as to the amount and types of risks we assume in fulfilling our purpose and advancing our strategy.
We face a wide range of risks, and our continued success depends on our ability to identify and appropriately manage our risk exposures. For additional information on certain risks that may adversely affect our business, operating results, or financial condition see "Cautionary Statement Regarding Forward-Looking Statements" contained herein on page 1 and "Risk Factors" contained herein in Item 1A.
For additional information on certain risks that may adversely affect our business, operating results, or financial condition see "Cautionary Statement Regarding Forward-Looking Statements" contained herein on page 1 and "Risk Factors" contained herein in Item 1A. Risk Reporting Regular internal and external risk reporting is an integral part of our ERM framework.
Risk Reporting Regular internal and external risk reporting is an integral part of our ERM framework. Internally, ERM reports are a standard part of our quarterly senior management and board meetings. The reports summarize our existing and emerging risk exposures, as well as report against the tolerances and limits defined by our risk appetite policy.
Internally, ERM reports are a standard part of our quarterly senior management and board meetings. The reports summarize our existing and emerging risk exposures, as well as report against the tolerances and limits defined by our risk appetite statement. Externally, we are subject to a number of regulatory and rating agency risk examinations, and risk reports are often included.
This report provides strong evidence of the strengths of our ERM framework, measurement approaches, key assumptions utilized in assessing our risks, and prospective solvency assessments under both normal and stressed conditions. See "Regulation" contained herein in Item 1 for additional information regarding the ORSA.
Annually, we file our Own Risk and Solvency Assessment (ORSA) summary report with the applicable insurance regulators for our U.S. insurance subsidiaries. This report provides strong evidence of the strengths of our ERM framework, measurement approaches, key assumptions utilized in assessing our risks, and prospective solvency assessments under both normal and stressed conditions.
Risk Management and Modeling The ERM framework takes a decentralized approach to risk management that relies on the three lines of defense described above. The second line plays an important role in providing reliable, current, timely, and actionable information about the uncertainties that might affect the achievement of our objectives.
The second line plays an important role in providing reliable, current, timely, and actionable information about the uncertainties that might affect the achievement of our objectives. The ERM framework aggregates a combination of qualitative and quantitative measures to inform our assessment at the enterprise level.
Knowing the potential risks we face allows us to monitor and manage their potential effects including adjusting our strategies as appropriate and holding capital levels which provide financial flexibility. Business process owners, supported by the ERM program, have primary responsibility for identifying and prioritizing risks within their respective areas.
Additionally, we identify emerging risks and analyze how material future risks might affect us. Knowing the potential risks we face allows us to monitor and manage their potential effects including adjusting our strategies as appropriate and holding capital levels which provide financial flexibility.
See "Critical Accounting Estimates" contained herein in Item 7 for further information concerning our pension and post-retirement benefit plans. Foreign Currency Risk The functional currency of our U.K. operations is the British pound sterling. The functional currency of our operations in Poland is the Polish zloty.
Foreign Currency Risk The functional currency of our U.K. operations is the British pound sterling. The functional currency of our operations in Poland is the Polish zloty.
For risks falling outside of our risk tolerance and limits, the respective governing body assesses the appropriate risk response, including implementation of remediation plans or corrective actions. Collectively, management is responsible for monitoring its adherence to the risk appetite statement throughout its operations and in accordance with the ERM framework.
Key measures of our risk profile are monitored against risk tolerances and limits on a quarterly basis and are communicated to their respective governing body. For risks falling outside of our risk tolerance and limits, the respective governing body assesses the appropriate risk response, including implementation of remediation plans or corrective actions.
Where appropriate, specific quantitative boundaries are used to establish and measure against risk appetite articulated in the statement. 99 Table of Contents Key measures of our risk profile are monitored against risk tolerances and limits on a quarterly basis and are communicated to their respective governing body.
Business segments align with the risk appetite through process, policies, and operating 98 Table of Contents procedures and through monitoring of operational metrics. Where appropriate, specific quantitative boundaries are used to establish and measure against risk appetite articulated in the statement.
Risk Identification and Prioritization Risk identification and prioritization is an ongoing process, whereby we identify and assess our risk positions and exposures, including notable risk events. Additionally, we identify emerging risks and analyze how material future risks might affect us.
Collectively, management is responsible for monitoring its adherence to the risk appetite statement throughout its operations and in accordance with the ERM framework. Risk Identification and Prioritization Risk identification and prioritization is an ongoing process, whereby we identify and assess our risk positions and exposures, including notable risk events.
Removed
The selection of a 100 basis point immediate parallel change in interest rates should not be construed as our prediction of future market events, but only as an illustration of the potential effect of such an event.
Added
Fixed rate investments include fixed maturity securities, mortgage loans, policy loans, and short-term investments.
Removed
Risk Appetite Our risk appetite, as set forth in a risk appetite statement, reflects acceptable boundaries for the risks we are willing to assume and the acceptable boundaries for uncertainty in achieving our strategic objectives.
Added
The assessment is at the enterprise level and often qualitative and principles based. We regularly use assessment techniques that are suitable for the specific nature of the risk being assessed.
Removed
The discussion is at the enterprise level and often qualitative and principles based. Quantitative specifications are made where possible, generally regarding aggregate capital metrics. Business segments align with the risk appetite through process, policies, and operating procedures and through monitoring of operational metrics.
Added
Risk tolerances are defined to give the lines of business a measure of the level of uncertainty we are comfortable with as well as trade-offs we are willing or unwilling to accept in meeting these objectives. Quantitative specifications are made where possible, generally regarding aggregate capital metrics.
Removed
Externally, we are subject to a number of regulatory and rating agency risk examinations, and risk reports are often included. Annually, we file our Own Risk and Solvency Assessment (ORSA) summary report with the applicable insurance regulators for our U.S. insurance subsidiaries.
Added
Business process owners, supported by the ERM program, have primary responsibility for identifying and prioritizing risks within their respective areas. We face a wide range of risks, and our continued success depends on our ability to identify and appropriately manage our risk exposures.
Added
See "Regulation" contained herein in Item 1 for additional information regarding the ORSA. Risk Management and Modeling The ERM framework takes a decentralized approach to risk management that relies on the three lines of defense described above.

Other UNMA 10-K year-over-year comparisons