Unum Group Enters $3.8B LTC Insurance Agreement with Fortitude Re
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.
