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.
"Our corporate purpose of helping the working world thrive throughout life's moments has never been more relevant, and our team of more than 10,000 employees in the U.S. and Europe are committed every day to making a difference in the lives of those who count on us," he said in a statement at the company annual meeting.
Based on preliminary voting results, Unum shareholders elected 12 directors for terms expiring in 2023: Theodore Bunting, Jr., Susan Cross, Susan DeVore, Joseph Echevarria, Cynthia Egan, Kevin Kabat, Timothy Keaney, Gale King, Gloria Larson, Rick McKenney, Ronald O'Hanley and Francis Shammo. Shareholders also endorsed the executive compensation plan at Unum and approved the Unum Group 2022 Stock Incentive Plan.
- Compiled by Dave Flessner