Chattanooga-based insurer Unum Group on Wednesday reported higher first quarter after-tax operating income on solid levels of premium growth with earnings topping analysts' estimates.
After-tax operating income, minus adjustments, was $226.8 million, or 95 cents per diluted common share, compared to $224.8 million, or 89 cents per diluted share a year ago, the company reported after the close of the markets.
The average estimate by analysts was that Unum would come in at 91 cents per share in the first quarter.
"Our first quarter results were a strong start to 2016," said Unum Chief Executive Richard P. McKenney in a statement. "I am very pleased with the operating performance of our core business segments, which again showed solid levels of premium growth and stable benefits experience."
Unum shares closed Wednesday at $34.15 per share, up 32 cents, or 0.93 percent on the New York Stock Exchange.
During the first quarter, Unum repurchased about 3.7 million shares at a cost of some $100 million, the disability insurer said.
The company's expectation for after-tax operating income growth per share for full-year 2016 continues to be within a range of 3 percent to 6 percent, Unum said.
The Unum U.S. segment reported operating income of $215.9 million in the first quarter, an increase of 0.7 percent from $214.3 million in the year-ago period. Premium income for the segment increased 5.8 percent.
Net investment income for the segment was $207.4 million in the first quarter of 2016 and $215 million a year ago.
Unum U.K. reported operating income of $33.6 million in the quarter, an increase of 3.1 percent from $32.6 million in the 2015 quarter.
Premium income increased by 0.2 percent to $139.3 million in the first quarter compared to $139 million a year ago
Colonial Life posted a 0.3 percent decline in operating income to $77.4 million in the first quarter, compared to $77.6 million a year ago.
Premium income for the first quarter increased 5.7 percent to $351.2 million, compared to $332.2 million in the first quarter of 2015, driven by sales growth in recent quarters partially offset by a decline in persistency.
McKenney said Unum's financial flexibility continues to help create value for shareholders as it actively repurchased shares while investing in future growth with the planned acquisition of Starmount Life Insurance Co.
Earlier this month, the company agreed to buy the Louisiana-based dental and vision benefits business for $127 million, plus net assets. Unum is acquiring H&J Capital LLC, the parent of Starmount Life and Always- Care Benefits of Baton Rouge, La.
"This platform will broaden our employee benefits offerings as we expand in the dental and vision markets," McKenney said.