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Unum Group Affirms 2016 Outlook, Offers Guidance for 2017

Unum GroupUNM recently affirmed its expectation for 2016 and provided the outlook for 2017. The accident and health insurer estimates operating income per share to grow slightly above the upper end of the 3-6% range in 2016. The company anticipates 2017 operating income per share to grow between 3% and 6%.

The Zacks Consensus Estimate is currently pegged at $3.89 for 2016 and $4.09 for 2017, translating to a year-over-year growth of 6.73% and 5.16%, respectively. These are in line with the company's guidance.

Unum Group is the leading disability income writer and voluntary business writer in the U.S. Despite the turmoil in the U.S. economy, the insurer reported favorable operating results across the majority of its insurance units since 2011. Over the past few years, the company's conservative pricing and reservation practices have contributed to its overall profitability. President and Chief Executive Officer Rick McKenney said, "We enter 2017 from a position of strength, with leading market positions, and our focus continues to be on disciplined execution and enhancing our risk management capabilities. Our capital generation model remains strong and we will maintain a balanced approach when deploying resources, by investing to fuel growth in our core businesses, and returning capital to shareholders."

Two of the largest operating segments of Unum Group - Unum U.S. and Colonial Life - have been consistently reporting operating income growth over the past few years. Both these segment continue to benefit from higher premiums and favorable risk results. Management estimates Unum U.S. sales growth in 2016 to be between 2% and 4% and sustained persistency and sales improvement in existing client relationships to support the increase. At Colonial Life, management intends to shift to a mix of businesses with higher growth and stable margins.

Shares of Unum Group have gained 30.8% year to date, outperforming the Zacks categorized Accident & Health industry that gained 19.6%. Banking on solid persistency levels in core business lines, sturdy volume of sales, and solid benefits experience, the company is likely to deliver strong performances in the quarters ahead, in turn, driving the stock higher.

Unum Group's operational strength has resulted in its 2016 estimates moving north by more than 1% over the last 60 days and 2017 estimates moving north by nearly 0.5% over the same time frame. The insurer carries a Zacks Rank #2 (Buy).

Stocks to Consider

Some better-ranked stocks from the insurance industry include Alleghany Corporation Y , NMI Holdings, Inc. NMIH and Employers Holdings, Inc. EIG .

Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Employers Holdings, which provides workers' compensation insurance to small businesses in low to medium hazard industries in the U.S., surpassed estimates in three of the last four quarters with an average positive surprise of 27.32%. The company carries Zacks Rank #2 (Buy).

NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%. The company carries Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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