Unum Group (UNM) M&A announcement summary

Deal rationale and strategic fit

• Agreement to cede $3.8 billion of long-term care (LTC) statutory reserves, reducing exposure by 40% since last year and advancing the closed block strategy.

• Combined with prior actions, over $7 billion of LTC reserves have been reinsured, materially reducing the closed block footprint.

• Enables focus on core employee benefits franchise and disciplined capital management.

• Risk profile improves as the remaining block shifts to predominantly group LTC, with reduced sensitivities and strong protection retained.

• Selective and opportunistic approach continues for further closed block management.

Financial terms and conditions

• $3.8 billion of LTC statutory reserves reinsured, representing 26% of total and 52% of individual LTC reserves as of March 31, 2026.

• Transaction effective April 1, 2026, with closing expected in 2026, subject to regulatory approvals and customary conditions.

• Cost is $650 million of holding company excess capital, with pricing at approximately 12% of best estimate reserves.

• Economic benefits include capital release of $130 million and tax benefits of $490 million, offsetting a significant portion of gross cost.

• Funded using Fairwind excess capital, holding company liquidity, and temporary financing tied to future tax benefits.

Synergies and expected cost savings

• Upfront payment for future rate increases embedded in the ceding commission, viewed as favorable.

• Pricing remains disciplined and consistent across transactions, with economic benefits varying by risk profile and structure.

• Rate increases of over $5 billion have been achieved to date, supporting ongoing block management.

• Significantly reduces the size and risk profile of the closed LTC block, allowing for more efficient capital deployment.

• No change to planned $1.3 billion return to shareholders through dividends and buybacks.