Unum Group (NYSE:UNM) Q4 2022 Earnings Call Transcript

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Ryan Krueger: Great, thanks. And then just on the supplemental and voluntary, do you still expect quarterly earnings more in that $110 million to $115 million range going forward?

Steve Zabel: Yes, that’s probably a decent marker, Ryan. I would say if you take out the two onetime items that we had in the quarter that are nonrecurring, I think, it’s around $105 million would have been the earnings. And so there is still a little bit of unfavorable benefits results that are embedded in there, specifically with probably but that’s probably somewhere in that range is probably a decent planning estimate.

Ryan Krueger: Got it. Thanks a lot.

Rick McKenney: Thanks, Ryan.

Operator: Thank you. The next question today comes from the line of Alex Scott from Goldman Sachs. Please go ahead, your line is now open.

Unidentified Analyst: This is Marley for Alex. I was wondering if you guys could provide an update on your capital deployment priorities on a go-forward basis.

Rick McKenney: Yes. Thanks, Marley. Good talking to you this morning. Let’s talk a little bit about capital. I just start with the capital generation that we saw and the recovery we saw post-pandemic. I think it’s tremendous to see the $1 billion statutory earnings as that comes in. You saw that flow all the way through our RBC ratios and our capital at the holding company are at current heights, we haven’t seen the levels like this before. And so I think when you think about how we’re going to put that money to work, first of all, great conversation around the investments that we’re making in the franchise. We’re going to continue to put it back behind our business where we think there is still good growth opportunities. That’s where it’s going to go first.

Sometimes, we can enhance that with some acquisitions. And so think about capabilities that are growth-oriented, who are the types of businesses out there that can help us to accelerate that path. And so we want to put money back there. And that’s the growth trajectory where we want to put our capital today. Now at the same time, we’re certainly responsive to our shareholders watching our dividends grow. We’ve increased it at a pretty steady clip over the last several years. We will expect to continue to do that. And then buybacks. I think we had $60 million, $60 million plus in the quarter on a $200 million annual run rate. So those are two ways of response to shareholders. And then in the background, I’d also talk about the PDR that we have, the premium deficiency reserve.

We want to get that funded and behind us. And so I think that’s an important use of our capital as we look forward. So all those things in balance, we feel really good about our capital position. We’ve got great flexibility to attack on all those fronts, and we’ll see how we do that in 2023, and we’ll talk about that a lot more here at the end of this month.

Unidentified Analyst: That sounds good. And then I have one follow-up. It looks like you guys had some pretty strong sales in the U.S. and growth. I was wondering if you guys could just go into a little bit of what is driving that.

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