Unum Group (UNM) Earnings Call Transcript & Summary

All right. We're going to jump into it here. So first off, thank you. I've got Rick McKenney, CEO of Unum Group; and Steve Zabel, CFO of Unum and I wanted to jump right into it. Maybe if we could start with a more broad question around what your key priorities are as you look out over the next year or two.

Yes. Thanks, Alex. Thanks for having us. Thanks everybody who's joining us here today in the room and on the webcast. We've had a good day talking to different folks at the Barclays Conference. So we appreciate being here -- when we think about Unum, I think our priorities have been pretty consistent and will remain consistent, and that is one of growth. When we think about what we want to do as a company and as we talk to our employees into the market, it is about protecting more people. And so we're very happy to protect almost 50 million people across the U.S., the U.K. and Poland, and -- we're looking forward to continuing to see that number grow. And so to get to that growth that has many sub chapters, but certainly being out there with individual employers, having good digital connectivity to what they do and then being there for all of their employees at time of need is what we're trying to do. So we can dig into more of that, but it really is about that growth trajectory and what we think we've been able to do to capitalize on the things that we've built over the last several years and how we will continue to build those and build that connectivity in the coming years.

Yes. Great. So maybe let's dig into it a little bit more on Unum U.S., in particular. And I think a lot of people are looking at this last quarter. I think the sales numbers came in a little softer than expected, albeit in a quarter that's a lot less important for you all than as we move towards end of the year and 1/1 renewals and so forth. We thought maybe we could spend a little time there. What are you seeing in the environment? Maybe what caused 2Q? And how do you see sort of the pipeline going into the back.

Yes. When you think about the second quarter, but I'd take you back to really the first half of the year. We feel very good about what we're bringing to market and our relative competitiveness that we have. If you look to the first half of the year, we actually saw a decent amount of requests coming to the market. But what we also saw is that people didn't end up moving cases. And so there's a couple of things that we might attribute that to. We don't really know, you'd have to ask each individual customer, but I think that there's also been a lot of -- they've been dealing with a lot of changes from health care, et cetera. And if you think about -- the employee benefits piece of their spend, it's a much smaller piece. And so they may have been happier stay put. From our perspective, that's still good. I think we think about premium growth. So we're not just thinking about the new sales. We're also thinking about the retention of current customers. That has been good. And so as we look out over the course of the year, our 4.5% kind of premium growth we saw in the second quarter, we'd like to continue to see that extrapolate out. As we think about premium growth and we look out over a period of time, that mid-single-digit level of premium growth really works well with our business model and we'd like to do that. So you're right, second quarter is not a big sales quarter. The bigger sales quarters are coming, particularly the fourth quarter. And our relative positioning and competitiveness is something we're still focused on. Sales may be a little bit different than we thought coming into the year, but it really is about that persistency and the overall premium levels that we're very happy about.

And maybe going along the same lines, I wanted to see if you could talk about the competitive environment a bit. And I think your returns have generally been very good in group benefits as we come out of the pandemic. And so naturally, the skeptical insurance investors say, well, is it going to become competitive? You're going to have to give this back on price, et cetera. So are you seeing any of that? How price less elastic is it versus capabilities?

Yes. And maybe I'll just take a second and step back and then have Steve fill in the details that we've seen behind it. But we have been a leader in the group disability market, really since its invent going back many, many decades. And so we actually think that we have a very strong position and have seen strong margins in this business for a long period of time. And given the size and scale that we have, we think that gives us real advantages. And so as we look at today's market, maybe Steve can dig into some of the details that we're seeing and how we feel competitively.

Yes. Again, it's a lot of different factors that really play into an employer is thinking about their benefit structure. It's going to be priced, yes, that will be a contributor, but it's also going to be just the experience for their employees. And that's not just being able to be protected financially, but also just the experience that they have going through the process and just the ease of being able to do that. And we do feel like given our current offering of both products and services, that's going to be something that we can still be at the top of the industry and kind of win when we're out there in market. I think the other thing that's really important is -- it's not just specific to individual products themselves. Most employers when we go in and sell coverages, it's going to be long-term disability, but then also short-term disability, maybe some life, maybe some dental leave management. And there's just a real focus on that entire experience across the suite of products continuing to be something that's a great experience. So right now, we really think we've got some of the capabilities that can win in market. We'll continue to be competitive in the market. We like the market right now and who we compete against. We think it's very rational. We think it continues to be that way. And in that sort of environment, we like our chances. We like our chances to win.

So maybe keying in specifically on disability, that's a product line that has frankly been incredibly favorable in recent years. And I think for the first time, there's been a little bit of upward momentum back in the benefit ratio. And so there's been a lot of focus on that. So very good levels. I guess we're all just trying to understand what are the near-term trends looking like, but then also maybe moving away from the short-term piece of it and just thinking about the next 3 to 5 years, what does that trajectory look like? Does it go back to sort of like what is a "normal" earnings stream look like there.

Yes. And maybe I'll give you a little bit of history for those of you that aren't as familiar with kind of the history of our group disability line. If you go back pre-pandemic, it's a line that had a benefit ratio that was -- it was pretty consistently in the low 70% range, say, 72% to 74%, and that played out over time. And it was a very profitable book of business. Our returns were in the mid-teens. You progressed through COVID, and we had quite a few anomalies there. First of all, our incidents was very elevated during the very acute part of COVID. There are a lot of behavioral health claims and things like that in there. And our benefit ratio actually approached 80% for a period of time. But what was underpinning that was the rate at which we got people back to work or our recovery rate, which is a really strong indicator of financial performance and also great customer experience, getting them back to work. That continued to improve. And we really saw that all through kind of the 3 or 4 years of COVID and then the aftermath of that. And what you saw with our incidents get back to more historical norms -- and so you were really able to see the benefit come through to our benefit ratio, where it continued to decrease until we got more closer to the 60% range -- last year, we had a couple of quarters where it was actually sub-60% in the high 50s. And our expectation coming into the year, but that was probably not sustainable. We said guidance as we were coming into the year around earnings that benefit ratio is probably going to be more in the low 60s. What we experienced in the first 2 quarters was a benefit ratio that was in the 62% range, which we're very happy with. It's still a very good performing business. But it's something that obviously has drawn a lot of scrutiny as far as, okay, your benefit ratios last year were sub-60%, now they're up around 62%. Where are these going to go? And how we describe it is both from an incidence perspective as well as a recovery perspective, we think it's very sustainable. The performance we've had. We have a really strong benefits administration team. They're very good at working with both employees, employers and physicians, to make sure that we get people back to work and productive as fast as we can. The question then comes -- and so the guidance we've given for the remainder of the year is something in that 62% benefit ratio range which converts to a business that returns -- as returns over 20%. So really strong business. Beyond that, then you start to think about pricing and what's going to happen in the competitive environment? And can we maintain those margins. I'd say right now, what we're seeing in market, we would say, yes, there should be some sustainability to that. But the guidance we've given is really just through the end of the year and what we can see so far in pricing levels. So we'll just have to see how that plays out over the longer term.

And actually, Steve mentioned it, but I'd also give a shout out to our team on our benefits team that may be listening into this, they do a fantastic job and have for a long period of time. They do so with a high degree of empathy. So as we talk about the numbers here, they are making sure that people are being treated incredibly well, employers and their employees to get people back to work. .

That's an important point. All right. So I wanted to move on to the group life business. We've seen, I think, the working age population actually begin to experience some favorable mortality coming out of the pandemic -- what are you seeing in your book? Is that something that could stay around for a little while?

Yes. I'd say the short answer to the question is we haven't really seen, I'd say, that favorability versus what our expectations are. That's a book of business, prepandemic. [ Pet ] benefit ratio is probably, again, in the low 70s in that range, obviously, during COVID extremely elevated. But it's pretty much settled down to the 70% level. We've seen that for the last year or so. That was our expectation coming into this year. And really, our first 2 quarters were really right at that level. So we continue to monitor it, but we think this is probably about the right level of mortality to think about in this book going forward, at least for what we're seeing in our block of business.

Got it. Another area I've been interested in is just some of the capabilities you all have with paid family medical leave and how that has interacted with some of the new regulations that have come out of certain states is a company that I think is a little ahead on some of those investments. How has that been progressing? How is the regulatory environment around some of those changes at the state level evolved.

Yes. So it actually has been a very dynamic space on the leave management side. And so you're right, state-by-state has gone through in different ways. And so maybe half states have implemented some sort of requirement around leave. And -- the important thing for us is investing in the digital capabilities to make sure that we're there to serve those customers. And it matters a lot to the employers out there to do this well. And what's happened is a state-by-state has come on, it's introduced a tremendous amount of complexity in that market. And people want to be out there, they want to take care of their employees. They want to be compliant in that process. But the reality is that every state is a little bit different. With the proliferation of leaves out there, we can be a source of bringing digital capabilities to help them administer that on behalf of their customers. And where that is for us is we actually bring that together as part of the overall package, which will include that lead management, but it will also include the insurance and other employee benefits, and we think that does well for us. The regulatory environment you talked about, actually, this is something that's encouraged from a state perspective. So this is the place where it's happening. And so regulation on that front, I think, is one that really helps us in terms of bringing our capabilities to the forefront. And so we look forward to continuing to serve that market. There are others out there in our space that are also doing. It is part of the basis of competition today. And so having a bit of a lead there and also continually investing, I think, it continues to be really important.

Yes. Okay. Next one I had is on just medical inflation broadly. I think it's been an important topic in certain pockets. Even within benefits, things like stop-loss, Dental, I think you're seeing some inflation in the loss trends and we hear a lot coming out of the health insurers. And so I wanted to see if you could unpack for us what are the parts of your business where you do feel some of that versus I think a lot of the core benefits products are not so linked things even in utilization and the cost of the care.

Yes. I just kind of go through the portfolio of businesses. And I would say that the summary is, it doesn't really impact our business all that much. The types of products we have. But clearly, we have a lot of profitability coming out of our group disability business. That's pretty much indexed to salary. So it's not necessarily sensitive to what health care costs are doing. It's really a salary replacement or an income replacement versus actually paying for health care needs. So really not an impact there. You go across to our voluntary benefit businesses. Those actually help employees because some of those products actually help fill the financial gap that is left by high deductible health plans. And more and more employers are going to those types of plans to really manage their own cost. Well, what that does is it transfers the burden of that to the employee. We have products around kind of hospital accident, those types of things that will help fill that gap. So we actually think it helps demonstrate the value of those products. And then obviously, one of our legacy blocks right now is long-term care. And there's really no impact on that block due to health care inflation. Those types of services are more geared towards home care facility care. But the vast majority of our block, almost the entire block has more contractual benefits versus reimbursement for the actual cost of providing that care. So really, the policyholder themselves, the claimant themselves, they take on the risk of health care inflation. We just really guarantee that they're going to get their contractual benefit to help defer that cost for them. So I would say we obviously track it. But right now, we're not really seeing that bleed its way in the economics of the products that we offer.

You mentioned stop loss, and that was a product line that we were in. And we did exit that a year ago, so we're in the process of running that off, but that would have run on historically, but we decided to exit that. I guess it's been about a year now.

Yes. Yes. Okay. Next, I want to move on to technology. I think we covered it a little bit. It's a place where I think you've been had some others invest in the platform. And I just wanted to come back to that and some of the things you talked about, even going back to that Investor Day, you did, can you give us an update on HR Connect and some of these things you've done to better integrate with the cloud-based systems in particular.

Certainly, I think it has been something we've invested in for a number of years now. I think we started probably 7 or 8 years ago. Working with HR technology and making a much cleaner experience for the employer as we work through that process. If you think about it, the world where the data would be transferred between insurer and the employer, if you can make that more seamless with the combination of those technologies, it's a lot better experience. It moves faster in more real time and just helps everyone in the process. So that's an area we talk about that as HR Connect, connecting directly into those systems and having that be real time. We continue to do that and improve those technologies over time. So I think that's -- that's been one that has really helped us with that connectivity. And then embedded within our other technologies. So Total Leave is our leave management capability, simple, intuitive, people to be able to manage their own leaves and making sure that we also bring the empathetic in the back end of that. So the human in the loop certainly helps on that front, but we've been investing in that technology over the over the last several years. I think those are probably the largest areas. And then internally in the company, certainly bringing a lot of technology, including AI tools to help us be able to administer claims faster, to have the data at the fingertips of our customer service representatives to make sure that we're better and faster in serving our customers' needs.

Very helpful. Next on Colonial. It's one of the areas of the business that was a little slower to return to growth coming out of the pandemic. Can you talk about what the experience has been there, some of the things you're doing to have it begin to turn the corner?

Yes. Great. Yes. No, we love that business. It's been a high-margin business for us for a long time. I'd say historically, it's a business that has grown more in the higher single digits. And we do think that, that's a good aspiration for us to have going forward. During the pandemic, it was hit a little bit harder, and it was really hit on several fronts. One was just being able to go into workplaces. This is more on the lower end of the market. So think small business owners going in and talking to their employees, but then also enrolling their employees and the coverages that we offer -- so that's an area that was disrupted. We've adopted quite a bit of digital technology to have consultations and also enroll people virtually. And then obviously, a lot of the workforce is getting back into the office. So we're able to continue to do that. So that was kind of the primary impact coming out of COVID. But what we also saw in some of the years right after that, where we just had a lot of challenges in the workplace, there was kind of the fight for talent and the great rotation of talent within just the broad workspaces. What we saw was recruiting, although we were able to recruit people into the distribution system that we have. It's a 1099 distribution construct. We're able to recruit people in, but we weren't able to get them productive as quickly. And so we did have some challenges there for a couple of years where they just weren't coming online and being productive as quickly as we had experienced previous to that. We've really seen us turn a corner on that. So if you go back, our sales were relatively flat over the last year or so. We started to see some momentum build there. And although it's in the lower single digits, we do feel like the momentum is building, and we're able to get people in, get them productive, get them out talking to small businesses and being able to enroll employees out there. We have a new sales leader, She's been on the job for just about a year now. And one of the key things is when you bring an agent in, you need to get them productive quickly, which means you need to train them, you need to provide them kind of the playbook for how you go out and build the business, because that's what these 1099 agents are. They're building a business, but they need a road map to do that. And I think we're kind of getting back to the foundation of this distribution of getting them to kind of run the playbook in the right way, measure their progress and being able to build their business and be productive as quickly as possible. And we're starting to see it come through in the sales results, say we're still on a journey there. We're still not where we would like to be from a growth perspective. But I get back to you, this is still a business that has 20% returns, the cash generator for the organization. It does continue to grow, albeit at maybe a pace that's a little bit slower than it was historically, one that we do think can start to grow in the future at a greater pace.

Next, moving to long-term care insurance. I think 2Q, we saw the net premium ratio go up a bit, little incidence, claim size, claimant mortality, et cetera. What is your view on those underlying drivers? And just maybe if you could help us think through which of those pieces should we expect to kind of come back down and normalize more to where you guys have placed the NPR guidance.

Yes. So yes, in the second quarter, it was a challenging underwriting result for long-term care. And -- what we've seen over the last couple of years are just the counts of new claimants has been elevated. It's been elevated over what our long-term expectation has been, and that did continue in the second quarter. But there were a couple of things that were different than what we would have expected and that we've seen in the recent past. One was when those new claims come on, the severity or just the size of the claims, we're about 5% greater than what our expectation would have been and what we've seen in our historical results. And that's just going to be a -- it's a calculated reserve based on the claimant situation, the diagnosis, the type of benefit coverages, all those things -- and so if you look at kind of the weighted average of that severity, it was greater than what we would have expected. At the same time, the rate at which we had claims terminate, and most terminated claims are due to mortality, those reserves were about 5% less than what we would have expected. And again, it's the situation of those claims themselves that terminated in those claimants that really are going to drive that. Those last 2 pieces around severity. We don't think we'll continue. We think that was just kind of a onetime volatility that we saw in the second quarter. So when we gave our outlook for the full year, we did not incorporate any kind of additional claims pressure due to those 2 instances. What we did incorporate in is that we would continue to have some elevated claim incidents -- we think that will continue probably through the remainder of the year. And so it's something that we'll continue to monitor and just see how that plays out.

There was also mentioned in the last earnings call that you're still working through your actuarial review process. I'm trying to understand just from the outside, can you help us think through the potential for a long-term care charge at all? I mean is there any update that can help us with as we get closer to the quarter.

Right. Let me maybe just talk about the process a little bit. We're in the -- right in the middle of it right now. We'll conclude at the end of the third quarter. We look at our best estimate assumptions first. And so that's ongoing. And then we use those as a basis to think about our GAAP reserve levels under LDTI, our GAAP reserves should be set at our best estimate for that for that liability. And so we'll conclude that work as we're releasing third quarter earnings. We will also give a view towards how our statutory work or a regulatory reserve adequacy work is looking -- that's not actually reflected in the financial statements until the fourth quarter, but it's definitely something that we'll have line of sight on because that's the big question, obviously, that we get right now from the investment community is okay, if you have to do something with your best estimate assumptions to make some adjustments there, what are the ramifications for capital? And right now, how we articulate that to the market is we have the combination of margins in our stat reserve over best estimate combined with excess capital in our Fairwind captive. We have about $2.6 billion of kind of excess margin there that would manage any change in how we think about our best estimate. But we need to go through. We need to do the work here in the third quarter. We will reflect any changes to our GAAP reserve assumptions in the third quarter, but it's something that's kind of ongoing. So I can't really give any more certainty or specificity around the results of that, but that will be the process that we follow, and we'll get those results to the market as part of the third quarter earnings.

Got it. Okay. Next one I had is just on the -- or sorry, the Fairwind edit, you kind of gave some of the capital update there and just where that stands. There was, I think, $200 million that was released as part of the Fortitude transaction -- and I think at the time you guys announced that there was some consideration for maybe there's some ways you could use that certainly have plenty of flexibility at the holdco currently. But -- how are you thinking about that additional capital that was added right now? .

Yes. Right now, we feel really good about leaving that in Fairwind. We've left it in there to date. As you mentioned, we have an unbelievable amount of capital flexibility at the holding company right now. And we're a holding company cash levels of around $2 billion. We've given guidance that by the end of the year, that's going to be between $2 billion and $2.5 billion. We have RBC that's around the [ 4.85% ] range. So a lot of excess capital there. We will be moving some of that excess capital down at the operating companies up to the holding company here in the latter part of the year through just dividends that will go through the system. And so the geography there will change a little bit. But right now, we feel good about having a strong balance sheet down in Fairwind and combine that with the financial flexibility that we have at the holding company. So that would be our current view of it now.

All right. Last one on long-term care. So you completed 1 reinsurance transaction. Can you just tell us about the appetite you still see in the market from some of the reinsurers for additional transactions?

We're very happy about the transaction that we did, working, as you mentioned, with Fortitude Re and having a transaction to remove some of the risk of our long-term care balance sheet. We are actually looking to do the entirety. It's going to take time. And I think we've said that, and so we're going to continue to work through that. But that transaction in and of itself, which we just closed here at the end of the second quarter, beginning of the third quarter. We were very happy about how that structure looked, what the ramifications of that across the Board are. And we're looking to the next one. I think we said that even at the time that we signed. We're in a continual process. We've been in a continuing process for several years working with counterparties, so that they can understand the type of book that we have, what the underlying assumptions are for that and have buyers and sellers meet. So it's one of those things we're very happy to see this transaction. It comes on the back of a couple of other transactions that happened in the external market. Some of the things that changed as part of that, we're bringing together an asset manager that was backed by private equity and somebody who's reinsuring the morbidity risk to that as well. All of that coming together, we think provides more opportunity as we think about structuring our book of business in other ways. And so -- there's actually more players out there that are interested in this space. We saw a little bit more interest coming after our transaction, but these are really hard deals to do, and so we're going to have to spend the time at it. But it is our stated goal that we will continue to work to remove more of this risk from our balance sheet through a structure similar to the one that we did at the end of the second quarter.

Great. Next, if we can come back to the excess capital as much as you talk about long-term care and Fairwind and all of this. I mean, the RBC ratio to your point, very strong. holdco cash strong, probably gets stronger as you move some capital up, gives you an awful lot of flexibility. You've talked a bit about the buyback, I think being towards the higher end. But can you maybe just remind us your priorities more broadly? What are some of the ways that you could look to deploy the excess?

Yes. I appreciate that. As Steve mentioned, we do have a very significant amount of excess capital at our holding company and embedded in our insurance structures. So we're constantly evaluating what are we going to do with that capital that we're generating. We're fortunate that we're in a capital generative business, across all of our product lines. And so we start first and foremost about thinking, well, how do we grow? Back to my priorities that we're doing, we're trying to grow the business as fast as we can. And so we want to invest in the core growth of our operations. The reality is that's on a steady state in terms of the capital we put into our business to drive that growth. And so it's not going to consume a tremendous amount of capital. So then we think to inorganic means how we're going to actually grow from an M&A perspective. We've also said historically, we're looking at capability-driven acquisitions, things that will allow us to grow more -- interact with our customers faster -- those are the kind of things that we'd be looking to acquire and use those dollars from an M&A perspective. We actually announced 2 small transactions as part of our second quarter call as well. Those are the kind of things we do. And -- of course, we'd like to grow from a traditional M&A, I'd call it, in the U.K. and Poland. Because we think those are really good operations we have today that we just like to see bigger. So from an M&A perspective, that's how we think about that. And then it's returning capital to shareholders. So first, we're continuing to increase our dividend. We've seen our dividend double if you went back a number of years. And so that's good. Every year, we've been increasing at a very regular pace. Good use of capital, good way to return capital to shareholders. And as you mentioned, Alex, then you get to share repurchase. And so if you look at our last several years, we've seen the amount of share repurchase that we've done increasing -- we've gone from $250 million to $500 million. Last year, $750 million with an additional $250 million based on a structure that we had done. And in this year, we actually started with a range of $500 million to $1 billion and said in the last quarter call that we will actually be closer to the top end of that range. And so we think that's been a really good progression in terms of returning capital to shareholders. If you take the share repurchase plus the dividends that we pay, we're starting to get closer to that capital generation and be an equilibrium state there. And then we have to continue to look at what we're going to do longer term around redeploying capital. But in a good spot, happy with where we are, increasing the pace of how we're returning capital to shareholder for 2025, and then we'll have to -- as we get to 2026 and beyond, we'll have to look further into that.

Great. Next, I wanted to ask about the asset side of the balance sheet. And maybe if you could just refresh us on where are new money yields right now relative to the roll off. Is that still a healthy tailwind for the business? And are there any allocations that you're sort of leaning in or out of that are notable?

Yes. I would say our strategy, by and large, has been consistent over the last decade. We're a credit shop. We spend a lot of time researching both investment grade and high-yield corporate credit, private placement, debt issuances, we have mortgage loan portfolio. And then we have an alternative asset portfolio. I'd say some of the shifts that have occurred over the last several years. One is our high-yield portfolio used to be over 8% of our allocation. During COVID, we were called out a lot of those bonds when rates got so low during that period of time. From a relative value perspective, we took those proceeds and invested more in our alternative asset portfolio. We view that portfolio as a really nice tool to think about the tail liability of our long-term care business. You think about the duration of that business. We have cash needs that go beyond a traditional 30-year type of investment window. So it's really hard to do traditional asset liability matching for everything beyond that. So we use our alternative asset portfolio, which is about $1.5 billion right now to be able to provide the types of returns that we want for that risk. That's been a portfolio that's yielded for us about 9% on an annualized basis since we really started to grow that. And I think that's a really nice tool going forward. But beyond that, we feel pretty good about the strategy that we've employed. We always start with the liability profile of our business. And our goal isn't just total return. It's to really match the portfolio to properly interest rate manage what we have there. When it comes to new money, a lot of our new money is going to be put to work around long-term care. And so when you talk about kind of new money yields versus the portfolio rate. We have a lot of that rate locked in around long-term care right now with our hedging program. We're up to about $2.5 billion notional or $2.6 billion notional in that program, feel really good about the protection that it gives us. But it does lock in rates for that part of the portfolio. I would say right now, we're pretty close as far as thinking about kind of new money yields where we're putting it to work and where the portfolio is right now. So I don't view it as a massive headwind or a tailwind going forward. For us, we think more -- think about it more of just have we kind of eliminated as much interest rate risk as we possibly can, either through a good ALM strategy or combined with a strong hedging which we've really built up a lot in the last several years.

Got it. And I think you answered this question as part of that. But if we were to think about sensitivity to the Fed reducing rates at the far end of the curve, how would you characterize earnings sensitivity to.

Yes. I'd say it's pretty minimal, really. The Fed rate is very much a short-term rate. We invest most of our new money, specifically around long-term care and more 20- and 30-year paper. And so we think about forward yield curves and just the steepness of the curve and what that means -- but at the end of the day, we're really trying to protect ourselves specifically in the next 10 years from interest rate risk with the hedging program that we've employed. So yes, it could create some variation. The reality is we don't put a lot of money to work a single year. Our portfolio is pretty long. And so it kind of trends maybe over a longer period of time.

Got it. So I'm bouncing around here a little bit. But I wanted to go back to supplemental and voluntary products. That was a category that -- or I think it still is probably a category that had sort of more and more penetration into the market. And I think there's generally been more industry growth there. Where are we with sort of the life cycle of that. And like where it's ultimately going to land in terms of getting penetration into the market. Is that something that you're still seeing good growth opportunities? .

Yes. And I think Steve mentioned it too, even due to some of the dynamics that are happening in the health care space, there's more opportunity to grow this. The needs are growing from an overall population perspective. And this is a good way to serve those needs with simple products that actually fulfill some risk that an employee perceives in their life and do so in reasonable way. It's true that more people have come into this market. The barriers to entry are a little bit lower than we'd see in most of our product lines. But ultimately, you have to be a good scale player to bring that to an individual company. And so we think there's going to be good growth in the market. There has been, but this is a market where the needs are continuing to grow and we're able to bring the product set out there, both through the traditional channels of our Unum base, which is working through brokers, but then also with Colonial Life. And so we think we're able to cover different populations of all different sizes to bring these needs to them. So it's a good product. It's a well-understood product at the employee level. They evaluate greatly in terms of making sure it's filling some of those needs. And so we look forward to this being an overall part of our portfolio that we have today.

Great I think that is -- that's all I had time. You guys rip through those. So thank you for being here. And -- thank you to the audience as well.

Thanks, everyone. .

Great. Thanks for having us.