Insurer Unum jumps after $3.4 billion reinsurance deal with Fortitude Re

Unum

27/02/2025 19:41

** Shares of insurer Unum Group UNM.N jump 6% to $81.95

** UNM announces $3.4 billion reinsurance deal with Fortitude Re, as the firm looks to reduce its exposure to the long-term care (LTC) business

** LTC insurance is considered a high-risk business, as it involves coverage for people with chronic or disabling condition needing constant care

** Transaction, expected to close in 2025, could drive in $100 million capital benefit to UNM

** Transaction would shift UNM's focus towards company's more capital efficient, higher-returning core businesses - CEO Richard McKenney

** While the deal is negative for earnings due to lost income from the individual disability business, it should be more than offset by an uptick in the firm's valuation - J.P.Morgan analyst Jimmy Bhullar

** As of last close, UNM stock up 5.8% YTD

 (Reporting by Arasu Kannagi Basil in Bengaluru)

 ((ArasuKannagi.Basil@thomsonreuters.com;))