Unum Group Enters $3.8B LTC Insurance Agreement with Fortitude Re
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Unum Group announced that its Unum Life Insurance Company of America subsidiary has entered into an agreement to cede to Fortitude Reinsurance Company , on a coinsurance basis, certain individual long-term care insurance policies representing $3.8B of statutory reserves in Fairwind Insurance Company, a wholly owned subsidiary of Unum. At closing, Unum America will recapture the reinsured individual LTC block from Fairwind and cede the block to Fortitude Re. Fortitude Re will retrocede biometric risk on the reinsured block to a highly rated global reinsurer. Unum will retain administration of the reinsured business, including claims handling and premium rate increase program management. The reinsured block consists of approximately 50,000 individual LTC policies with $3.8B of statutory reserves and approximately $4.5B of best estimate reserves. Following the transaction, Unum's remaining LTC statutory reserves are expected to be approximately $11B, with approximately 70% of remaining reserves backing group LTC policies, which generally have more basic benefit structures than individual LTC policies. The transaction represents the next step in Unum's execution of its closed block strategy and follows the company's previously announced LTC reinsurance transaction in 2025. Together, the two external transactions will have decreased the company's closed block footprint through reinsurance of more than $7B of LTC statutory reserves. The transaction is expected to be funded through a combination of Fairwind excess capital, holding company liquidity and financing related to future tax benefits. Following the closing of the transaction, Unum expects to maintain a robust capital position, with year-end 2026 holding company liquidity of $1.5B to $2B, leverage of approximately 25%, and RBC of 400% to 425%. The transaction's impact on operating earnings is expected to be limited to foregone investment income and incremental interest expense associated with transaction financing. The transaction is expected to close during 2026, subject to receipt of required regulatory approvals and satisfaction or waiver of other customary closing conditions.
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Analyst Views on UNM
Wall Street analysts forecast UNM stock price to rise
9 Analyst Rating
6 Buy
3 Hold
0 Sell
Moderate Buy
Current: 89.510
Low
85.00
Averages
94.00
High
115.00
Current: 89.510
Low
85.00
Averages
94.00
High
115.00
About UNM
Unum Group is a provider of financial protection benefits in the United States and the United Kingdom. The Company offers disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum International, and Colonial Life. The Unum US segment comprises group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. It includes long-term and short-term disability, medical stop-loss, and fee-based service products. The Unum International segment includes insurance for group long-term disability, group life, and supplemental lines of business which include dental, individual disability, and critical illness products. The Colonial Life segment includes the accident, sickness, and disability product line, life product line, and cancer and critical illness product line. Its products are marketed to employees, on both a group and an individual basis.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Unum Group Reinsures $3.8 Billion in Long-Term Care Reserves
- Reinsurance Transaction Size: Unum Group has entered into an agreement with Fortitude Reinsurance Company to reinsure $3.8 billion in long-term care reserves, covering 26% of total reserves and 52% of individual reserves, marking a significant step in reducing the risk profile of its long-term care business.
- Impact on Reserves: Combined with the previously announced 2025 reinsurance transaction, Unum's total long-term care statutory reserves are expected to decrease by approximately 40%, with remaining reserves projected to be around $11 billion, further optimizing the company's capital structure and risk management.
- Strategic Execution Focus: CEO Richard P. McKenney stated that this transaction is a crucial part of the company's Closed Block strategy aimed at reducing reliance on legacy long-term care business while maintaining focus on its employee benefits franchise, enhancing long-term shareholder value.
- Capital Management Outlook: The transaction is expected to be funded through Fairwind's excess capital and financing related to future tax benefits, with Unum anticipating holding company liquidity of $1.5 billion to $2.0 billion by year-end 2026, ensuring robust capital management moving forward.
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Unum Group Enters Agreement to Cede $3.8B LTC Policies to Fortitude Re
- Reinsurance Transaction Size: Unum Group's subsidiary, Unum Life Insurance Company, has entered into an agreement to cede $3.8 billion of long-term care (LTC) insurance policies to Fortitude Reinsurance, covering approximately 50,000 individual policies, with the transaction expected to close in 2026, indicating a proactive approach to optimizing the balance sheet.
- Retention of Management Rights: Despite the reinsurance, Unum will retain management of the reinsured business, including claims handling and rate adjustments, which not only ensures continuity of customer service but may also reduce future operational risks through effective management.
- Capital Adequacy Expectations: Following the transaction, Unum's remaining LTC statutory reserves are expected to be around $11 billion, with approximately 70% of the remaining reserves backing group LTC policies, reflecting the company's confidence in maintaining a robust capital position, with projected liquidity of $1.5 billion to $2 billion by year-end 2026.
- Strategic Restructuring Impact: This transaction complements the previously announced LTC reinsurance deal in 2025, collectively reducing over $7 billion in LTC statutory reserves through reinsurance, showcasing Unum's strategic decision-making in addressing market challenges and optimizing its business structure.
See More
Fortitude Re Signs $3.8 Billion Reinsurance Deal with Unum
- Reinsurance Transaction Size: Fortitude Re's $3.8 billion reinsurance deal with Unum Life Insurance Company involves a long-term care insurance block from Fairwind Insurance Company, showcasing the company's robust strength and trust in the reinsurance market.
- Regulatory Approval and Conditions: The transaction requires regulatory approvals and satisfaction of customary closing conditions, indicating Fortitude Re's rigorous approach to compliance and risk management, which further solidifies its market position.
- Risk Management Strategy: Following the transaction, FRL will retrocede 100% of the long-term care insurance risks to a highly rated global reinsurance partner, thereby retaining only the underlying spread-based risks associated with this block, optimizing risk-adjusted investment returns.
- Client-Centric Solutions: Fortitude Re emphasizes its client-centric approach by providing highly customized solutions to meet client needs, further strengthening its partnership with Unum and demonstrating its competitive advantage in the industry.
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Costco and Unum Group Options Trading Activity Surges
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- High Put Option Activity: Notably, the $770 strike put option expiring on June 12, 2026, has seen 1,357 contracts traded, representing about 135,700 shares, reflecting investor expectations of potential declines, which could impact stock price volatility.
- Unum Group Options Volume: Similarly, Unum Group (UNM) options trading has been active, with 13,215 contracts traded, representing approximately 1.3 million shares, exceeding its average daily trading volume of 1.1 million shares by 121.9%, showcasing market interest in its potential performance.
- High Call Option Activity: Particularly, the $105 strike call option expiring on December 18, 2026, has recorded 12,851 contracts traded, representing around 1.3 million shares, indicating investor confidence in Unum Group's future price increases, which may drive its stock price higher.
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- Committee Appointments: Matus was appointed to the audit committee and the risk and finance committee, leveraging her extensive experience in financial services and healthcare to strengthen the company's risk management and financial transparency.
- Extensive Leadership Experience: With over 30 years of leadership and board experience, including senior roles at USAA, Aetna, and athenahealth, Matus is positioned to provide strategic guidance for Unum's long-term value creation.
- Company Background and Performance: Unum Group, a leading international provider of workplace benefits and services, reported revenues of $13.1 billion and paid $8.3 billion in benefits in 2025, demonstrating strong market position and ethical reputation.
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- Strategic Importance: With over 20 years of leadership experience in the insurance industry, including roles as president of Cigna Supplemental Benefits and COO at Aetna, Jones is expected to enhance Colonial Life's business performance and long-term strategy, further solidifying the company's market position.
- Customer Focus: Jones has emphasized his commitment to continuing to serve employers, brokers, and employees who rely on their products, indicating the company's ongoing dedication to a customer-centric strategy.
- Financial Performance: In 2025, Colonial Life paid over $730 million in benefits, supporting 95,000 businesses and 4 million workers, highlighting its significance and impact in the market.
See More
Unum Group Reinsures $3.8 Billion in Long-Term Care Reserves
- Reinsurance Transaction Size: Unum Group has entered into an agreement with Fortitude Reinsurance Company to reinsure $3.8 billion in long-term care reserves, covering 26% of total reserves and 52% of individual reserves, marking a significant step in reducing the risk profile of its long-term care business.
- Impact on Reserves: Combined with the previously announced 2025 reinsurance transaction, Unum's total long-term care statutory reserves are expected to decrease by approximately 40%, with remaining reserves projected to be around $11 billion, further optimizing the company's capital structure and risk management.
- Strategic Execution Focus: CEO Richard P. McKenney stated that this transaction is a crucial part of the company's Closed Block strategy aimed at reducing reliance on legacy long-term care business while maintaining focus on its employee benefits franchise, enhancing long-term shareholder value.
- Capital Management Outlook: The transaction is expected to be funded through Fairwind's excess capital and financing related to future tax benefits, with Unum anticipating holding company liquidity of $1.5 billion to $2.0 billion by year-end 2026, ensuring robust capital management moving forward.
See More
Unum Group Enters Agreement to Cede $3.8B LTC Policies to Fortitude Re
- Reinsurance Transaction Size: Unum Group's subsidiary, Unum Life Insurance Company, has entered into an agreement to cede $3.8 billion of long-term care (LTC) insurance policies to Fortitude Reinsurance, covering approximately 50,000 individual policies, with the transaction expected to close in 2026, indicating a proactive approach to optimizing the balance sheet.
- Retention of Management Rights: Despite the reinsurance, Unum will retain management of the reinsured business, including claims handling and rate adjustments, which not only ensures continuity of customer service but may also reduce future operational risks through effective management.
- Capital Adequacy Expectations: Following the transaction, Unum's remaining LTC statutory reserves are expected to be around $11 billion, with approximately 70% of the remaining reserves backing group LTC policies, reflecting the company's confidence in maintaining a robust capital position, with projected liquidity of $1.5 billion to $2 billion by year-end 2026.
- Strategic Restructuring Impact: This transaction complements the previously announced LTC reinsurance deal in 2025, collectively reducing over $7 billion in LTC statutory reserves through reinsurance, showcasing Unum's strategic decision-making in addressing market challenges and optimizing its business structure.
See More
Fortitude Re Signs $3.8 Billion Reinsurance Deal with Unum
- Reinsurance Transaction Size: Fortitude Re's $3.8 billion reinsurance deal with Unum Life Insurance Company involves a long-term care insurance block from Fairwind Insurance Company, showcasing the company's robust strength and trust in the reinsurance market.
- Regulatory Approval and Conditions: The transaction requires regulatory approvals and satisfaction of customary closing conditions, indicating Fortitude Re's rigorous approach to compliance and risk management, which further solidifies its market position.
- Risk Management Strategy: Following the transaction, FRL will retrocede 100% of the long-term care insurance risks to a highly rated global reinsurance partner, thereby retaining only the underlying spread-based risks associated with this block, optimizing risk-adjusted investment returns.
- Client-Centric Solutions: Fortitude Re emphasizes its client-centric approach by providing highly customized solutions to meet client needs, further strengthening its partnership with Unum and demonstrating its competitive advantage in the industry.
See More
Costco and Unum Group Options Trading Activity Surges
- Costco Options Volume: As of now, Costco (COST) options volume has reached 31,539 contracts, equivalent to approximately 3.2 million shares, which is 125.1% of its average daily trading volume of 2.5 million shares over the past month, indicating strong market interest in its future performance.
- High Put Option Activity: Notably, the $770 strike put option expiring on June 12, 2026, has seen 1,357 contracts traded, representing about 135,700 shares, reflecting investor expectations of potential declines, which could impact stock price volatility.
- Unum Group Options Volume: Similarly, Unum Group (UNM) options trading has been active, with 13,215 contracts traded, representing approximately 1.3 million shares, exceeding its average daily trading volume of 1.1 million shares by 121.9%, showcasing market interest in its potential performance.
- High Call Option Activity: Particularly, the $105 strike call option expiring on December 18, 2026, has recorded 12,851 contracts traded, representing around 1.3 million shares, indicating investor confidence in Unum Group's future price increases, which may drive its stock price higher.
See More
Unum Group Elects Kristi Matus to Board of Directors
- New Board Member: Unum Group elected Kristi Matus to its board during the 2026 annual shareholder meeting, enhancing board diversity and expertise to improve governance and strategic decision-making capabilities.
- Committee Appointments: Matus was appointed to the audit committee and the risk and finance committee, leveraging her extensive experience in financial services and healthcare to strengthen the company's risk management and financial transparency.
- Extensive Leadership Experience: With over 30 years of leadership and board experience, including senior roles at USAA, Aetna, and athenahealth, Matus is positioned to provide strategic guidance for Unum's long-term value creation.
- Company Background and Performance: Unum Group, a leading international provider of workplace benefits and services, reported revenues of $13.1 billion and paid $8.3 billion in benefits in 2025, demonstrating strong market position and ethical reputation.
See More
Unum Group Appoints New President for Colonial Life
- Leadership Transition: Unum Group has announced that Steve Jones will succeed Tim Arnold as president of Colonial Life effective June 8, marking a significant leadership change after Arnold's 41-year tenure with the company, which includes 11 years as president.
- Strategic Importance: With over 20 years of leadership experience in the insurance industry, including roles as president of Cigna Supplemental Benefits and COO at Aetna, Jones is expected to enhance Colonial Life's business performance and long-term strategy, further solidifying the company's market position.
- Customer Focus: Jones has emphasized his commitment to continuing to serve employers, brokers, and employees who rely on their products, indicating the company's ongoing dedication to a customer-centric strategy.
- Financial Performance: In 2025, Colonial Life paid over $730 million in benefits, supporting 95,000 businesses and 4 million workers, highlighting its significance and impact in the market.
See More
