Steve Zabel: Yes, Tom, I think there are two questions in there, but I’ll count it as one. Yes, from a GAAP perspective, I think you’re thinking about it right. We look at all of our assumption set on an annual basis that’s required under LDTI, and we will do that in the third quarter like we normally do. We look at a pretty long experience set when we set those assumptions and think more long-term about them. So, we’ll take into account the recent elevated claims experience that we’ve seen, but we will also take into account all the experience that we’ve seen over the last year. And we did do a pretty comprehensive review last year, but we’ll go through that process in the third quarter on a GAAP basis. And then on the statutory side, I would just refer back to some of the discussion that we had as part of our outlook meeting where we do feel like we have quite a bit of margin or a buffer for adverse deviation in our assumption set on a best estimate basis, we talked about the $2.8 billion of protection, which is really the difference between our recorded statutory reserves and kind of our economic view of best estimate along with the excess capital that we have behind the LTC line.
So, we continue to feel pretty good that we got the right buffers there for any deviation in our actual experience or even any deviation in our best estimate. I’d just refer you back to some of the sensitivities that we gave as part of that presentation back in January.
Tom Gallagher: Got you. And then just for a follow-up. The large case group lapse for long-term care that you had in the quarter that impacted the benefit ratio. Did you lose the group life and disability along with that? Or did the employer just discontinue the LTC coverage?
Steve Zabel: Yes. And just one clarification. It impacted our net premium ratio then that was a large group LTC case that terminated, you’d have margin in it. We released that margin basically, and it was buffered into the benefit ratio itself. We did not lose the other coverages. That was specific to the LTC coverage.
Tom Gallagher: Is there — just out of curiosity, I mean, to me, that probably is more positive than negative if you have at the group level, employers lapsing LTC coverage, all things considered. Is that kind of — is that — was that just voluntary? Or is there an effort to do that at Unum?
Steve Zabel: Yes, I mean I wouldn’t comment on whether it’s voluntary or not. We’re always talking to our groups about providing value to them through our various products and services. What I would say is it’s a reduction of risk in the LTC book, which I think is always a positive thing.
Tom Gallagher: Okay. Thanks.
Steve Zabel: Thanks Tom.
Operator: Your next question comes from Joel Hurwitz with Dowling & Partners. Please go ahead.
Joel Hurwitz: Hey good morning. I wanted to follow-up on Ryan’s earlier question on persistency. Chris, I heard your commentary on capability is a major driver now with retaining business or getting new business. I guess can you just talk about the persistency of your business with some of those capabilities like HR Connector, the total lead product?
Rick McKenney: Yes. Thanks for the question, Joel. No question capabilities, again, it changes the conversation in the prospect stage of engaging with an employer. It also changes the relationship over time. So, it talking to customers about what we need for appropriate price up or down. But when done in context of lead management or the HR Connect, ecosystem that we’re participating in, you can just tell there’s a lean to drive toward long-term partnerships. So, persistency does increase when you’re tied to a capability like HR Connect, that’s a very a mature offering at this point. We’ve been partnering with Workday for over five years in terms of customers who choose that platform. and other platforms like Workforce Now, multiple years in.
So, we are seeing that favorable retention. And again, we get excited about the discussion that focuses on what other products can we add to that bundle as well as long-term price stability. So, I think the theme of your question is spot on without getting into too much detail on specific numbers.
Steve Zabel: I would just add that, Joe, I think it’s Chris is getting. It’s multifaceted. So, that relationship on all those pieces, pricing, connections, the relationship management, all those things come into play. We’re really happy with where the presidency was, like we said, it’s the highest levels that we’ve seen, but it does come back to that ongoing relationship management.
Joel Hurwitz: Okay, makes sense. And then switching over to Colonial Life. Can you talk about what you’re seeing from a recruit and productivity standpoint? And maybe provide some more color on the GATHER technology and what gives you the confidence that you can achieve that 5% to 10% sales growth target this year?
Timothy Arnold: Yes. Thanks Joel. This is Tim Arnold. I appreciate the question. So, Rick mentioned this, I’d like to just reiterate that overall premium growth in the quarter was 4.1% versus 1.4% last year. So, we’re pleased with that. You mentioned GATHER, just for those who may not be aware of what it is, it’s a benefits administration and human capital management platform that we can make available in the small end of the market, especially at no cost to an employer. And we’ve seen independent third-party data that suggests that about 90% of employers with fewer than 100 employees do not have a benefits enabled technology platform. So, our technology-enabled benefits administration platform. So, we’re excited about our proprietary offering there.
We saw very strong growth in adoption rates of GATHER in the first quarter, continuing the great growth that we saw in 2023. Another capability that we have that’s resonating in the marketplace currently is our cross-brand solutions. So, we’re partnering with our peers at Unum U.S. and Colonial Life agents have access to those group employer paid products now. In the quarter, we saw premium from those products grow at 44%, and we saw a 43% increase in the agents at Colonial Life who are selling Unum Group products. So, where we saw the softness in the quarter was on reenrollments of our existing clients. And we think that that’s something that’s — that can be addressed and will enable us to get back into the sort of the lower end of that range that we gave at Investor Day.
Joel Hurwitz: Okay. Thank you.
Operator: Your next question comes from the line of Jimmy Bhullar with JPMorgan. Please go ahead.
Jimmy Bhullar: Hey, good morning. So, first, just a question on long-term care along the lines of what’s been asked previously as well. But you mentioned elevated incidents, and you had assumed that, but are your reserves right now predicated on an improvement in incidents? Or is the variability and incidence not enough to cause the charge even if it stays around recent levels?
