Shares of Unum Group rose Thursday by more than 2.5%, or 89 cents per share, in trading on the New York Stock Exchange after the Chattanooga-based insurance giant announced it was boosting its dividend amid what CEO Rick McKenney said was an improving business environment.
Unum said it will raise its quarterly dividend payment by 10% to 33 cents per share, payable starting with third quarter dividend payments. The increase boosts the forward yield of the dividend to 3.7% and the annual dividend payout to $1.32.
“Our disciplined execution in 2021 delivered ongoing profitability in a difficult environment that allowed us to aggressively invest in growing our business and return greater value to shareholders,” McKenney said during the company’s annual meeting on Thursday. “We saw that performance accelerate in the first quarter, as strong sales results and continued premium growth provide a good foundation for a successful 2022.”
Although higher interest rates raise the cost of doing business for many capital-intensive businesses and borrowers, the tightening policy of the Federal Reserve and higher interest rate environment helps Unum achieve more investment earnings on its insurance reserves.
Last year, McKenney said Unum paid $8.2 billion in benefits across a broad range of financial protection products.