Unum (UNM) Investor Update summary

Transaction overview

• Entered agreement to cede $3.4 billion of long-term care (LTC) reserves and a portion of Multi-Life individual disability premium, effective January 1, 2025, with closing expected in 2025 pending regulatory approval.

• Transaction covers 19% of LTC block (over 30% of individual LTC reserves) and 20% of in-force multi-life individual disability insurance premium, including policies with attained ages over 80.

• Internal reinsurance executed, transferring 100% of LTC reserves from New York entity to a Tennessee affiliate, enhancing policyholder protection and supporting a $630 million dividend to the holding company.

• Transaction with Fortitude Re provides full risk transfer through 100% coinsurance, additional asset protections, and retrocession to a highly rated global reinsurer.

• Combined actions reduce LTC exposure by $4 billion in reserves and increase capital efficiency and stability.

Financial and strategic impacts

• The LTC transaction has a $200 million capital impact, including $480 million in capital benefits from tax, capital release, and future rate increases.

• For the Multi-Life individual disability portion, 20% of in-force premium is ceded, resulting in a $40 million annual earnings reduction for 2025, declining as the block runs off.

• Revised adjusted EPS growth outlook is now 6%-10% for 2025, with core premium growth expected at 3%-6%.

• $2.6 billion of protection above best estimate reserves is maintained, with reduced risk sensitivities across key liability assumptions.

• Most sensitivities to key assumptions decrease by 9-21%, improving predictability of outcomes.

Transaction structure and terms

• 19% of LTC exposure (30% of ILTC block) and 20% quota share of multi-life IDI are included in a single 100% coinsurance treaty, effective January 1, 2025.

• Trust will hold assets exceeding ceded reserves, managed by Fortitude under investment guidelines.

• Value of anticipated LTC premium rate increases will be paid over time as achieved; all administration remains with Unum.

• Released capital from internal reinsurance reflects regulatory differences between New York and Tennessee, resulting in efficient capital management.

• Closing is subject to regulatory approvals, expected later in 2025.