UNUM GROUP – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Summary

Unum Group, a Delaware general business corporation, and its insurance and
non-insurance subsidiaries, which collectively with Unum Group we refer to as
the Company, operate in the United States, the United Kingdom, Poland, and, to a
limited extent, in certain other countries. The principal operating subsidiaries
in the United States are Unum Life Insurance Company of America (Unum America),
Provident Life and Accident Insurance Company (Provident), The Paul Revere Life
Insurance Company, Colonial Life & Accident Insurance Company, Starmount Life
Insurance Company, in the United Kingdom, Unum Limited, and in Poland, Unum
Zycie TUiR S.A. (Unum Poland). We are a leading provider of financial protection
benefits in the United States and the United Kingdom. Our products include
disability, life, accident, critical illness, dental and vision, and other
related services. We market our products primarily through the workplace.

We have three principal operating business segments: Unum US, Unum
International, and Colonial Life. Our other segments are the Closed Block and
Corporate segments. These segments are discussed more fully under "Segment
Results" included herein in this Item 2.

The benefits we provide help the working world thrive throughout life's moments
and protect people from the financial hardship of illness, injury, or loss of
life. As a leading provider of employee benefits, we offer a broad portfolio of
products and services through the workplace that provide support when it is
needed most.

Specifically, we offer group, individual, voluntary, and dental and vision
products as well as provide certain fee-based services. These products and
services, which can be sold stand-alone or combined with other coverages, help
employers of all sizes attract and retain the talented and capable workforce
they need to succeed while protecting the incomes and livelihood of their
employees. We believe employer-sponsored benefits are the most effective way to
provide workers with access to information and options to protect their
financial stability. Working people and their families, particularly those at
lower and middle incomes, are perhaps the most vulnerable in today's economy yet
are often overlooked by many providers of financial products and services. For
many of these people, employer-sponsored benefits are the primary defense
against the potentially catastrophic fallout of death, illness, or injury.

We have established a corporate culture consistent with the social values our
products provide. Because we see important links between the obligations we have
to all of our stakeholders, we place a strong emphasis on operating with
integrity and contributing to positive change in our communities. Accordingly,
we are committed not only to meeting the needs of our customers who depend on
us, but also to being accountable for our actions through sound and consistent
business practices, a strong internal compliance program, a comprehensive risk
management strategy, and an engaged employee workforce.

This discussion and analysis should be read in conjunction with the consolidated
financial statements and notes thereto in Part I, Item 1 and Item 3 contained in
this Form 10-Q and with the "Cautionary Statement Regarding Forward-Looking
Statements" included below the Table of Contents, as well as the discussion,
analysis, and consolidated financial statements and notes thereto in Part I,
Items 1 and 1A, and Part II, Items 7, 7A, and 8 of our annual report on Form
10-K for the year ended December 31, 2022.

Prior period financial information has been adjusted to reflect our modified
retrospective adoption, effective January 1, 2023, of the Accounting Standards
Update (ASU) 2018-12, related to targeted improvements to the accounting for
long-duration contracts. See "Accounting Developments" included herein in this
Item 2 as well as Note 2 of the "Notes to Consolidated Financial Statements"
contained herein in Item 1.

Operating Performance and Capital Management

For the first quarter of 2023, we reported net income of $358.3 million, or
$1.80 per diluted common share, compared to net income of $240.4 million, or
$1.18 per diluted common share, in the first quarter of 2022.

Included in our results for the first quarter of 2023 are:

•A net investment gain of $0.1 million before tax and $0.1 million after tax,
with a de minimis impact on earnings per diluted common share;

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•Amortization of the cost of reinsurance of $11.0 million before tax and $8.7
million after tax, or $0.04 per diluted common share; and,
•Non-contemporaneous reinsurance of $7.3 million before tax and $5.7 million
after tax, or $0.03 per diluted common share.

Included in our results for the first quarter of 2022 are:

•A net investment loss of $13.8 million before tax and $10.6 million after tax,
or $0.05 per diluted common share;
•Amortization of the cost of reinsurance of $13.4 million before tax and $10.6
million after tax, or $0.05 per diluted common share; and,
•Non-contemporaneous reinsurance of $12.4 million before tax and $9.8 million
after tax, or $0.05 per diluted common share.

Excluding these items, after-tax adjusted operating income for the first quarter
of 2023 was $372.6 million, or $1.87 per diluted common share compared to $271.4
million, or $1.33 per diluted common share, for the first quarter of 2022. See
"Reconciliation of Non-GAAP and Other Financial Measures" contained herein in
this Item 2 for further discussion and a reconciliation of these items.

Our Unum US segment reported an increase in adjusted operating income of 85.7
percent in the first quarter of 2023 compared to the same period of 2022, due
primarily to favorable benefits experience across most product lines, partially
offset by higher operating expenses and lower net investment income. The benefit
ratio for our Unum US segment was 60.8 percent in the first quarter of 2023,
compared to 72.5 percent in first quarter of 2022. Unum US sales increased 22.5
percent in first quarter 2023 compared to the same period of 2022.

Our Unum International segment reported an increase in adjusted operating
income, as measured in U.S. dollars, of 48.3 percent in the first quarter of
2023 compared to the same period of 2022. As measured in local currency, our
Unum UK line of business reported an increase in adjusted operating income of
66.7 percent in the first quarter of 2023 compared to the same period of 2022
due to higher premium income and favorable benefits experience, partially offset
by higher operating expenses and lower net investment income. The benefit ratio
for our Unum UK line of business was 68.5 percent in the first quarter of 2023,
compared to 81.2 percent in the same period of 2022. Unum International sales,
as measured in U.S. dollars, increased 33.9 percent in the first quarter of 2023
compared to the same period of 2022. Unum UK sales, as measured in local
currency, increased 37.8 percent in the first quarter of 2023 compared to the
same period of 2022.

Our Colonial Life segment reported a decrease in adjusted operating income of
8.7 percent in the first quarter of 2023 compared to the same period of 2022,
due primarily to higher operating expenses, partially offset by slightly
favorable benefits experience. The benefit ratio for Colonial Life was 53.0
percent in the first quarter of 2023, compared to 53.2 percent in the same
period of 2022. Colonial Life sales increased 2.7 percent in the first quarter
of 2023 compared to the same period of 2022.

Our Closed Block segment reported income before income tax and net investment
gains and losses of $39.9 million in the first quarter of 2023 compared to
income before income tax and net investment gains and losses of $52.8 million in
the same period of 2022, both of which includes the amortization of the cost of
reinsurance and the impact of non-contemporaneous reinsurance related to the
Closed Block individual disability reinsurance transaction. Excluding these
items, our Closed Block segment reported adjusted operating income of $58.2
million in the first quarter of 2023, compared to $78.6 million in the same
period of 2022. The long-term care interest adjusted loss ratio was less
favorable during the first quarter of 2023 relative to the same period of 2022
but is within our long-term range of expectations.

A rising interest rate environment could continue to positively impact our
yields on new investments but could also continue to create unrealized losses in
our current holdings. Our net investment income has been pressured as the
majority of our investments were made at a decreasing level of interest rates
indicative of the prevailing trend over the last decades. As of March 31, 2023,
we do not hold any securities with a decline in fair value below amortized cost
which we intend to sell and it is not more likely than not that we will be
required to sell before recovery in amortized cost. The net unrealized loss on
our fixed maturity securities was $1.9 billion at March 31, 2023, compared to
$3.0 billion at December 31, 2022, with the decrease due primarily to a decrease
in U.S. Treasury rates. The earned book yield on our investment portfolio was
4.35 percent for the first three months of 2023 compared to a yield of 4.57
percent for full year 2022.

Additionally, a rising interest rate environment could result in reserve
decreases specific to our liability for future policy benefits, as the reserve
discount rate assumptions used in the calculation of our liability are updated
at each reporting date using
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a yield that is reflective of an upper-medium grade fixed income instrument,
which is generally equivalent to a single-A interest rate matched to the
duration of certain of our insurance liabilities. The change in discount rate
assumptions on the liability for future policy benefits, net of reinsurance, due
primarily to the decrease in U.S. Treasury rates during the first quarter of
2023, resulted in an increase to the liability for future policy benefits, net
of reinsurance, of approximately $0.7 billion.

We believe our capital and financial positions are strong. At March 31, 2023,
the risk-based capital (RBC) ratio for our traditional U.S. insurance
subsidiaries, calculated on a weighted average basis using the NAIC Company
Action Level formula, was approximately 425 percent. We repurchased 1.3 million
shares of Unum Group common stock under our share repurchase program during each
of the first quarters of 2023 and 2022. Our weighted average common shares
outstanding, assuming dilution, equaled 199.5 million and 203.5 million for the
first quarter of 2023 and 2022, respectively. As of March 31, 2023, Unum Group
and our intermediate holding companies had available holding company liquidity
of $1,343 million that was held primarily in bank deposits, commercial paper,
money market funds, corporate bonds, municipal bonds, and asset backed
securities. See Note 11 of the "Notes to Consolidated Financial Statements"
contained herein in Item 1.

Inflation Reduction Act

In August 2022, the Inflation Reduction Act (IRA) was signed into law in the
U.S. and includes certain corporate tax provisions effective January 1, 2023.
The IRA imposes a new 15 percent corporate alternative minimum tax (CAMT) on
adjusted financial statement income (AFSI) on corporations that have average
AFSI over $1.0 billion in any prior three-year period, starting with years 2020
to 2022. We anticipate that our company will be an applicable corporation. We
have not recorded any CAMT as of March 31, 2023. We do not expect that any CAMT
incurred would impact earnings since it would be offset with a credit toward
regular income tax in subsequent years. The IRA also imposes a one percent
excise tax on the fair market value of corporate stock repurchases after
December 31, 2022. This excise tax is recorded as part of the cost basis of
treasury stock and is assessed on the fair value of stock repurchases, reduced
by the fair value of any shares issued during the period. We have recorded
$0.1 million of excise tax in stockholders' equity, as part of the cost basis of
treasury stock, as of March 31, 2023.

U.K. Tax Law Change

In June 2021, the Finance Act 2021 was enacted, resulting in a U.K. tax rate
increase from 19 percent to 25 percent, effective April 1, 2023.

Coronavirus Disease 2019 (COVID-19)

COVID-19 has caused disruption to the global economy and has unfavorably
impacted our company as well as the overall insurance industry. During 2022 and
in the first quarter of 2023, we experienced lower mortality in our life
products lines, resulting primarily from lessening impacts of COVID-19 on our
insured population when compared to pandemic levels. Due to the volatile and
unprecedented nature of these events, we still cannot fully estimate the
ultimate impact of the COVID-19 pandemic. We continue to closely monitor
pandemic trends that have and may continue to have adverse impacts on our
business.

Consolidated Company Outlook

We believe our strategy of providing financial protection products at the
workplace puts us in a position of strength. We continue to fulfill our
corporate purpose of helping the working world thrive throughout life's moments
by providing excellent service to people at their time of need. Our strategy
remains centered on growing our core businesses, through investing and
transforming our operations and technology to anticipate and respond to the
changing needs of our customers, expanding into new adjacent markets through
meaningful partnerships and effective deployment of our capital across our
portfolio.

As the pandemic impacts have lessened, we have experienced recovery in our
earnings driven by the underlying strength of our business and expect positive
operating trends in our core businesses to continue in 2023, including improved
claim experience. The products and services we provide delivered significant
value to employers, employees and their families, throughout the COVID-19
pandemic and we believe this will help drive sales and premium growth in 2023.

The current interest rate environment could continue to positively impact our
yields on new investments, but could also continue to create unrealized losses
in our current holdings. We also may continue to experience further volatility
in miscellaneous investment income primarily related to changes in partnership
net asset values as well as bond calls.

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As part of our discipline in pricing and reserving, we continuously monitor
emerging claim trends and interest rates. We will continue to take appropriate
pricing actions on new business and renewals that are reflective of the current
environment and may continue to utilize derivative financial instruments to
manage interest rate risk.

Our business is well-diversified by geography within our markets, industry
exposures and case size, and we continue to analyze and employ strategies that
we believe will help us navigate the current environment. These strategies allow
us to maintain financial flexibility to support the needs of our businesses,
while also returning capital to our shareholders. We have strong core businesses
that have a track record of generating significant free cash flow, and we will
continue to invest in our operations and expand into adjacent markets where we
can best leverage our expertise and capabilities to capture market growth
opportunities as those opportunities emerge. We believe that consistent
operating results, combined with the implementation of strategic initiatives and
the effective deployment of capital, will allow us to meet our financial
objectives.

Further discussion is included in "Reconciliation of Non-GAAP and Other
Financial Measures," "Accounting Developments", "Consolidated Operating
Results," "Segment Results," "Investments," and "Liquidity and Capital
Resources" contained herein in this Item 1 and in the "Notes to Consolidated
Financial Statements" contained herein in Item 2.

Reconciliation of Non-GAAP and Other Financial Measures

We analyze our performance using non-GAAP financial measures. A non-GAAP
financial measure is a numerical measure of a company's performance, financial
position, or cash flows that excludes or includes amounts that are not normally
excluded or included in the most directly comparable measure calculated and
presented in accordance with U.S generally accepted accounting principles
(GAAP). The non-GAAP financial measure of "after-tax adjusted operating income"
differs from net income as presented in our consolidated operating results and
income statements prepared in accordance with GAAP due to the exclusion of
investment gains or losses, the amortization of the cost of reinsurance, and the
impact of non-contemporaneous reinsurance as specified in the reconciliations
below. Investment gains or losses primarily include realized investment gains or
losses, expected investment credit losses, and gains or losses on derivatives.
We believe after-tax adjusted operating income is a better performance measure
and better indicator of the profitability and underlying trends in our business.

Investment gains or losses depend on market conditions and do not necessarily
relate to decisions regarding the underlying business of our segments. Our
investment focus is on investment income to support our insurance liabilities as
opposed to the generation of investment gains or losses. Although we may
experience investment gains or losses which will affect future earnings
levels, a long-term focus is necessary to maintain profitability over the life
of the business since our underlying business is long-term in nature, and we
need to earn the interest rates assumed in calculating our liabilities.

We have exited a substantial portion of our Closed Block individual disability
product line through the two phases of the reinsurance transaction that were
executed in December 2020 and March 2021. As a result, we exclude the
amortization of the cost of reinsurance that we recognized upon the exit of the
business related to the policies on claim status as well as the impact of
non-contemporaneous reinsurance that resulted from the adoption of ASU 2018-12.
Due to the execution of the second phase of the reinsurance transaction
occurring after January 1, 2021, the transition date of ASU 2018-12, in
accordance with the provisions of the ASU related to non-contemporaneous
reinsurance, we were required to establish the ceded reserves using an
upper-medium grade fixed-income instrument as of the reinsurance transaction
date in March 2021 which resulted in higher ceded reserves compared to that
which was reported historically. However, the direct reserves for the block
reinsured in the second phase were calculated using the original discount rate
utilized as of the transition date. Both the direct and ceded reserves are then
remeasured at each reporting period using a current discount rate reflective of
an upper-medium grade fixed-income instrument, with the changes recognized in
OCI. While the total equity impact is neutral, the different original discount
rates utilized for direct and ceded reserves result in disproportionate earnings
impacts. The impact of non-contemporaneous reinsurance will fluctuate depending
on the magnitude of reserve changes during the period. We believe that the
exclusion of these items provides a better view of our results from our ongoing
businesses.

We may at other times exclude certain other items from our discussion of
financial ratios and metrics in order to enhance the understanding and
comparability of our operational performance and the underlying fundamentals,
but this exclusion is not an indication that similar items may not recur and
does not replace net income or net loss as a measure of our overall
profitability.
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A reconciliation of GAAP financial measures to our non-GAAP financial measures
is as follows:

                                                                                  Three Months Ended March 31
                                                                      2023                                          2022
                                                       (in millions)           per share *           (in millions)           per share *
Net Income                                           $        358.3          $       1.80          $        240.4          $       1.18
Excluding:

Net Investment Gain (Loss) (net of tax benefit of
$-; $3.2)                                                       0.1                     -                   (10.6)                (0.05)

Amortization of the Cost of Reinsurance (net of tax
benefit of $2.3; $2.8)

                                         (8.7)                (0.04)                  (10.6)                (0.05)

Non-Contemporaneous Reinsurance (net of tax benefit
of $1.6; $2.6)

                                                 (5.7)                (0.03)                   (9.8)                (0.05)

After-tax Adjusted Operating Income                  $        372.6          $       1.87          $        271.4          $       1.33

*Assuming Dilution



We measure and analyze our segment performance on the basis of "adjusted
operating revenue" and "adjusted operating income" or "adjusted operating loss",
which differ from total revenue and income before income tax as presented in our
consolidated statements of income due to the exclusion of investment gains and
losses, the amortization of the cost of reinsurance, and the impact of
non-contemporaneous reinsurance as specified in the reconciliations below. These
performance measures are in accordance with GAAP guidance for segment reporting,
but they should not be viewed as a substitute for total revenue, income before
income tax, or net income.

A reconciliation of total revenue to "adjusted operating revenue" and income
before income tax to "adjusted operating income" is as follows:

                                                Three Months Ended March 31
                                                    2023                  2022
                                                  (in millions of dollars)
Total Revenue                             $      3,036.1               $ 2,980.6
Excluding:
Net Investment Gain (Loss)                           0.1                   (13.8)
Adjusted Operating Revenue                $      3,036.0               $ 2,994.4

Income Before Income Tax                  $        451.3               $   295.7
Excluding:

Net Investment Gain (Loss)                           0.1                   (13.8)

Amortization of the Cost of Reinsurance            (11.0)                  

(13.4)

Non-Contemporaneous Reinsurance                     (7.3)                  (12.4)

Adjusted Operating Income                 $        469.5               $   335.3



Critical Accounting Estimates

We prepare our financial statements in accordance with GAAP. The preparation of
financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect amounts reported in our financial statements and
accompanying notes. Estimates and assumptions could change in the future as more
information becomes known, which could impact the amounts reported and disclosed
in our financial statements.

The accounting estimates deemed to be most critical to our financial position
and results of operations are those related to the liability for future policy
benefits, deferred acquisition costs, valuation of investments, pension and
postretirement benefit plans, income taxes, and contingent liabilities. The
critical accounting estimates for which there were significant changes during
the three months ended March 31, 2023 due to the adoption of ASU 2018-12, are
included below. For additional information on the accounting estimates for which
there was not a significant change during the three months ended March 31, 2023,
refer to the discussion under "Critical Accounting Estimates" in Part II, Item 7
of our annual report on Form 10-K for the year ended December 31, 2022.
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Liability for Future Policy Benefits

Liabilities for future policy benefits represent the cost of claims that we
estimate we will eventually pay to our policyholders and the related expenses
for our non interest-sensitive products. Liability for future policy benefits
includes policy liabilities for claims not yet incurred and for claims that have
been incurred or are estimated to have been incurred but not yet reported to us.
Liability for future policy benefits equaled $39.4 billion and $38.6 billion at
March 31, 2023 and December 31, 2022, respectively, or approximately 74.0
percent and 73.6 percent of our total liabilities, respectively. Liability for
future policy benefits ceded to reinsurers was $8.1 billion at both March 31,
2023 and December 31, 2022, respectively, and are reported as a reinsurance
recoverable in our consolidated balance sheets.

Liabilities for future policy benefits are initially established in the same
period in which we issue a policy, and equal the difference between projected
future policy benefits and projected future premiums, allowing a margin for
expenses and profit. The liabilities for future policy benefits build up and
release over time, based on the emergence of cash flows, including premiums
received and claims paid, and updated expectations for future cash flows.

Liabilities for future policy benefits are updated at each reporting date to
reflect changes in the liability based on policy development over time, emerging
experience, and any assumption updates required to maintain the best estimate
basis for expected future cash flows as required by GAAP. These future policy
benefit liabilities are based on actual known facts regarding the liability,
such as the benefits available under the applicable policy, the covered benefit
period, the age, and, as appropriate, the occupation and cause of disability of
the claimant, as well as assumptions derived from our actual historical
experience and expected future changes in experience for factors such as the
claim duration, claim administration expenses, discount rate, policy benefit
offsets, including those for social security and other government-based welfare
benefits. The liability for future policy benefits also includes the liabilities
for incurred claims.

Future policy benefit liabilities primarily relate to our traditional
long-duration products which include our group, individual disability and
certain of our voluntary benefits products in our Unum US segment; group,
individual disability and life products in our Unum International segment;
certain of our voluntary benefits products in our Colonial Life segment; and
long-term care and certain of our other products in our Closed Block segment.

In calculating the liability for future policy benefits, our long-duration
contracts are grouped into cohorts by product type and contract issue year.
Liabilities for future policy benefits for claims not yet incurred are generally
determined using the net premium model as prescribed by GAAP. At each reporting
period, the liability for future policy benefits is remeasured at the current
discount rate with the change recorded in other comprehensive income.

The calculation of the liability for future policy benefits involves numerous
assumptions including discount rate, lapses, mortality, and morbidity. Certain
product lines may utilize additional assumptions in calculating the liability
for future policy benefits in addition to those listed above. For long-term
care, premium rate increases are also a key assumption and for group long-term
disability, benefit offsets are also a key assumption. For voluntary benefits
products, claim costs are a key assumption. Claim costs capture the combined
effect of the incidence rate, the expected level of benefit to be paid, and the
claim resolution rate. Cash flow assumptions are reviewed and updated, as
needed, at least annually. Assumptions may be updated more frequently if
necessary based on trending experience.

On a quarterly basis, cohort level cash flow measures are updated based on the
emergence of actual experience. The updated cash flows, based on experience
emergence and any assumption updates, are used to determine the updated net
premiums, the portion of the gross premium required to provide for all benefits
and expenses, excluding acquisition costs or any costs that are required to be
charged to expense as incurred. The updated net premium ratio is used to
calculate the updated liability for future policy benefit as of the beginning of
year, at the original discount rate. To the extent the present value of future
benefits and expenses exceeds the present value of future gross premiums, an
immediate charge is recognized in net income, such that net premiums are set
equal to gross premiums. Future policy benefit liabilities are floored at zero
at the cohort level in situations where the liabilities for future policy
benefits are less than zero. The change in the liability for future policy
benefits, at the original discount rate, as of the beginning of the year,
resulting from cash flow changes is reflected as the change in benefits -
remeasurement gain or loss in the consolidated statements of income. The impact
of issuances, interest accretion, premiums collected, benefit payments and
lapses are reflected as the change in benefits in the consolidated statements of
income.

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Key Assumptions

The calculation of the liability for future policy benefits involves numerous
assumptions, but the primary assumptions used to calculate the liability are (1)
the discount rate, (2) the claim resolution rate, (3) the claim incidence rate,
and (4) policyholder mortality and lapses:

1.The discount rate, which is used in calculating the liability for future
policy benefits, is the interest rate that we use to discount future cash flows
including premium and claim payments to determine the present value. A higher
discount rate produces a lower reserve. If the discount rate is higher than our
future investment returns, our invested assets will not earn enough investment
income to support our future claim payments. The original discount rates are
initially set at the transition date of ASU 2018-12, which was January 1, 2021,
for policies originally issued on or before the transition date, or at the
policy issuance date, for policies issued after the transition date. For
policies issued after the transition date, the original discount rate
assumptions reflect an upper-medium grade (low-credit risk) fixed-income
instrument yield based on the currency in which the liabilities are assumed. For
all cohorts, the liability is then remeasured at the each reporting period using
the current discount rate reflective of an upper-medium grade fixed-income
instrument. We primarily utilize a forward curve which is derived from the
underlying spot curve using interpolation to develop an ultimate forward rate.

2.The claim resolution rate is the probability that a disability or long-term
care claim will close due to recovery or death of the insured. It is important
because it is used to estimate how long benefits will be paid for a claim.
Estimated resolution rates that are set too high will result in liabilities that
are lower than they need to be to pay the claim benefits over time. Claim
resolution assumptions involve many factors, including the cause of disability,
the policyholder's age, the type of contractual benefits provided, and the time
since initial disability. We primarily use our own claim experience to develop
our claim resolution assumptions. These assumptions are established for the
probability of death and the probability of recovery from disability. Our
studies incorporate actual claim resolution experience over a number of years
and consider any observed trends over the study period. We also consider any
expected future changes in claim resolution experience.

3.The incidence rate is the rate at which new claims are submitted to us. The
incidence rate is affected by many factors, including the age of the insured,
the insured's occupation or industry, the benefit plan design, and certain
external factors such as consumer confidence and levels of unemployment. We
establish our incidence assumption using a historical review of actual incidence
results along with an outlook of future incidence expectations.

4.Policyholder lapse and mortality assumptions reflect the probability that
insureds' coverage is discontinued due to lapsation or death of the insured. For
our life insurance products, mortality assumptions also reflect the probability
that a benefit payment occurs. These rates are affected by many factors,
including the age of the insured, the insured's occupation or industry, the
benefit plan design, and the length of time from policy or certificate issue to
valuation date. We establish our mortality and lapse assumptions using a
historical review of actual results along with an outlook of future
expectations.

Establishing liability for future policy benefit assumptions is complex and
involves many factors. Liabilities for future policy benefits, particularly for
policies offering insurance coverage for long-term disabilities and long-term
care, are dependent on numerous assumptions other than just those presented in
the preceding discussion. The impact of internal and external events, such as
changes in claims operational procedures, economic trends such as the rate of
unemployment and the level of consumer confidence, the emergence of new
diseases, new trends and developments in medical treatments, and legal trends
and legislative changes, including changes to social security and other
government-based welfare benefits programs which provide policy benefit offsets,
among other factors, will influence claim incidence rates, claim resolution
rates, and claim costs. In addition, for policies offering coverage for
disability or long-term care at advanced ages, the level and pattern of
mortality rates at advanced ages will impact overall benefit costs. Reserve
assumptions differ by product line and by policy type within a product line.
Additionally, in any period and over time, our actual experience may have a
positive or negative variance from our long-term assumptions, either singularly
or collectively, and these variances may offset each other. We review our
assumptions at least annually with a long-term view of our expected experience
over the life of a block of business rather than test just one or a few
assumptions independently that may be aberrant over a short period of time.
Based on this review, we update our assumptions to reflect our current best
estimates. Therefore, while it is possible to evaluate the sensitivity of
overall results in our liability for future policy benefits based upon a change
in each individual assumption, the actual impacts of changes to a variety of
underlying assumptions must be considered in the aggregate by product line in
order to judge the overall potential implications to the liability for future
policy benefits. The following section presents an overview of our trend
analysis for key assumptions and the results of variability in our assumptions,
in aggregate, for the
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liabilities for future policy benefits which we believe are reasonably possible
to have a material impact on our future financial results if actual claims yield
a materially different amount than what we currently expect and have reserved
for, either favorable or unfavorable.

Cash Flow Assumption Review

Our cash flow assumption reviews during the years ended December 31, 2022 and
2021 resulted in the following net favorable impacts to income before income tax
as a result of updating certain assumptions:
                                                                             December 31
                                                                     2022                    2021
                                                                       (in millions of dollars)
Cash Flow Assumption Update Impacts to Income Before
Income Tax

Unum US
Group Disability                                               $        121.0          $       215.0
Group Life and Accidental Death and Dismemberment                        34.0                      -
Individual Disability                                                   (18.6)                   4.0
Voluntary Benefits                                                       17.0                   12.2
Total Unum US                                                           153.4                  231.2

Unum International                                                       24.5                    4.6

Colonial Life                                                            55.3                   23.5

Closed Block
Long-term Care                                                            2.9                  (24.4)
Closed Block - All Other                                                (11.0)                     -
Total Closed Block                                                       (8.1)                 (24.4)

Total                                                          $        225.1          $       234.9

There were no significant changes in our cash flow assumptions during the three
months ended March 31, 2023.

2022 Significant Cash Flow Assumption Updates:

The cash flow assumption updates in our US group long-term disability product
line and our waiver of premium benefits for our Unum US group life product line
reduced our liability for future policy benefits by $121.0 million and $34.0
million before tax with a corresponding increase to policy benefits -
remeasurement gain, respectively, due primarily to sustained improvement in
claim recovery trends since our last assumption update, partially offset by
lower social security benefit offsets for our group long-term disability product
line.

The cash flow assumption updates in our Colonial Life segment reduced our
liability for future policy benefits by $55.3 million with a corresponding
increase to policy benefits - remeasurement gain, due primarily to improvement
in certain of our claim cost assumptions since our most recent assumption
update.

2021 Significant Cash Flow Assumption Updates:

The cash flow assumption updates in our US group long-term disability product
line and our waiver of premium benefits for our Unum US group life product line
reduced our liability for future policy benefits by $215.0 million before tax
with a corresponding increase to policy benefits - remeasurement gain, due
primarily to sustained improvement in claim recovery trends since our last
assumption update.

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Trends in Key Assumptions

Generally, we do not expect our mortality and morbidity claim incidence trends
or our persistency trends to change significantly in the short-term, and to the
extent that these trends do change, we expect those changes to be gradual over a
longer period of time. We have historically experienced an increase in our group
long-term disability morbidity claim incidence trends during and following a
recessionary period and believe claim incidence trends may continue to somewhat
follow general economic conditions and demographics of the general workforce.

Regarding the 2020 COVID-19 pandemic and the related impact on the social and
economic environment, we experienced elevated mortality and disability claims
incidence rates during 2020 and 2021. Our view on our long-term mortality and
morbidity expectations has not been impacted by this limited experience.

Generally, we do not expect our persistency trends to change significantly in
the short-term, and to the extent that these trends do change, we expect those
changes to be gradual over a longer period of time.

Although both short-term and long-term interest rates increased in 2022 and into
2023, the long-term discount rates underlying the majority of our liabilities
are reflective of rates based on the issue year of the cohort or rates
underlying the liabilities at transition to the updated accounting basis as
prescribed by ASU 2018-12. The discount rate assumption for new cohorts, after
the transition date, is based on the interest rate of an upper-medium grade
fixed-income instrument for that cohort period.

Our claim resolution rate assumption used in determining the liability for
future policy benefits is our expectation of the resolution rate we will
experience over the life of the block of business and will vary from actual
experience in any one period, both favorably and unfavorably. Claim resolution
rates are very sensitive to operational and environmental changes and have a
greater chance of significant variability in a shorter period of time than our
other reserve assumptions. These rates are reviewed on a quarterly basis for the
death and recovery components separately. While claim resolution rates in our
Unum US group long-term disability product line have shown some variability over
the last several years, they have exhibited an increasing trend.

Sensitivity Analysis

We monitor our key assumptions and test the sensitivity of our liability for
future policy benefits under a range of scenarios. This sensitivity analysis was
completed as of December 31, 2022 for our product lines with a higher level of
estimation uncertainty and utilizes the liability for future policy benefits
valued at the original discount rate. See "Quantitative and Qualitative
Disclosures about Market Risk" contained herein in Item 3 for information
regarding the sensitivity of the current discount rate used to remeasure the
liability for future policy benefits at each reporting date.

In our estimation, scenarios based on certain variations in each of our
assumptions for our Unum US group long-term disability product line could
produce a change of approximately $100 million which represents 1.8 percent of
our Unum US group disability liability for future policy benefits balance. Of
the assumptions impacting the estimated change in the liability for future
policy benefits, the largest contributor is the claim resolution rate for which
we assumed a change of approximately 10 percent.

In our estimation, scenarios based on certain variations in each of our
assumptions for our Unum US voluntary benefits product line could produce a
change of approximately $15 million which represents 1.3 percent of our Unum US
voluntary benefits liability for future policy benefits balance. Of the
assumptions impacting the estimated change in the liability for future policy
benefits, the largest contributor is the claim costs for which we assumed a
change of approximately 10 percent.

In our estimation, scenarios based on certain possible variations in each of our
assumptions for our Colonial Life segment could produce a change of
approximately $60 million which represents 3.2 percent of our Colonial Life
liability for future policy benefits balance. Of the assumptions impacting the
estimated change in the liability for future policy benefits, the largest
contributor is the claim costs, for which we assumed a change of approximately
10 percent.

We also consider variability in our assumptions related to the long-term care
liability for future policy benefits. In our estimation, scenarios based on
certain variations in each of our assumptions could produce potential results as
illustrated in the chart below. The liability for future policy benefits for
long-term care is based upon a number of key assumptions, and each assumption
has various factors which may impact the long-term outcome. Key assumptions with
respect to active policy lapses and mortality, claims incidence and resolutions,
and future premium rate increases must incorporate extended views of
expectations for many years into the future. The liability for future policy
benefits is highly sensitive to these estimates. Key
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assumptions and related impacts are also heavily interrelated in both their
outcome and in their effects on the liability for future policy benefits. For
example, changes in the view of morbidity and mortality might be mitigated by
either potential future premium rate increases and/or morbidity improvements due
to general improvement in health and/or medical breakthroughs. There is a
potentially wide range of outcomes for each assumption and in totality. As a
result, and given the size of the long-term care liability for future policy
benefits in relation to the total liability for future policy benefits, our
sensitivity analysis for long-term care reflects the potential impact to the
present value of gross liability cash flows for future policy benefits for
updates to our key assumptions for long-term care is as follows. The impact of
changes to these assumptions would partially be reflected in the period in which
the assumptions are updated and partially across future periods.

                                                                                            PV Gross LFPB Cash Flows1
  Long-Term Care Cash Flow Assumptions                   Sensitivity                                   Unfavorable                 Favorable
                                                                                                             (in millions of dollars)
Active Policy Lapses and Mortality                                      7.5  %                    $              440          $            420
Claim Incidence                                                         3.0  %                                   390                       400
Claim Resolutions                                                       2.0  %                                   300                       290
Morbidity/Mortality Improvement2                             No Improvement/2x                                   980                     

1,390

Future Unapproved Premium Rate Increases                               10.0  %                                    80                        80

1Present value of cash flows specific to the LFPB at original discount rate, except using
gross premiums instead of net premiums.
2Unfavorable scenario reflects no future improvement. Favorable scenario reflects improvement
rates twice as high as baseline.



The impact to current period liability for future benefits would be smaller in
magnitude than the present value of gross liability for future policy benefits
cash flows due to the updating of the net premium ratio. The current period
liability for future policy benefits impact may be asymmetrical (i.e. larger for
the unfavorable scenario) for some sensitivities if the assumption update causes
the net premium ratio to be capped at 100 percent for any given cohort.

We believe that these sensitivities provide a reasonable estimate of the
possible changes in liability for future policy benefit balances for those
product lines where we believe it is possible that variability in the
assumptions, in the aggregate, could result in a material impact on our
liability for future policy benefit levels, but we record our liability for
future policy benefits based on our long-term best estimate for our cohorts and
these assumptions are reviewed and updated annually to reflect the current best
estimates. Product lines that have long-term claim payout periods have a greater
potential for significant variability in claim costs, either positive or
negative. We closely monitor emerging experience and use these results to inform
our view of long-term assumptions.

Deferred Acquisition Costs (DAC)

DAC represents the deferred incremental direct costs associated with the
successful acquisition of new or renewal insurance contracts. Such costs include
commissions, other agency compensation, certain selection and policy issue
expenses, and certain field expenses. Acquisition costs that do not vary with
the production of new business, such as commissions on group products which are
generally level throughout the life of the policy, are excluded from the
deferral. The DAC balance equaled $2,602.4 million and $2,560.0 million at
March 31, 2023 and December 31, 2022 respectively, or approximately 4.2 percent
of our total assets at each period.

Generally, we do not expect our key assumptions for DAC to change significantly
in the short-term, and to the extent that these trends do change, we expect
those changes to be gradual over a longer period of time.

Certain of the policy issue expenses include employee costs resulting from time
spent on acquisition activities that result in the sale or renewal of policies,
including selling and underwriting. The estimates of time spent on the
successful acquisition of new or renewal business are reviewed and updated, as
needed, at least annually. There were no significant changes in these
assumptions during the years ended December 31, 2022 or 2021 or the three months
ended March 31, 2023.

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The lapse and mortality assumptions used to amortize DAC for our traditional
long-duration products are consistent with the assumptions used to estimate the
liability for future policy benefits. The underlying assumptions used to
determine DAC amortization are updated concurrently with any related assumption
changes for the liability for future policy benefits and changes in estimates
are recognized prospectively over the remaining expected term of the related
contracts. Amortization expense is adjusted based on actual versus expected
experience through an adjustment to the prospective rate of amortization.

During the years ended December 31, 2022 and 2021, we updated our policyholder
lapse and mortality assumptions used to develop the future amortization for DAC
for the Unum US individual disability and voluntary benefits product lines as
well as for the Colonial Life segment, consistent with the related assumption
updates for the corresponding liabilities for future policy benefits. There were
no significant changes in these assumptions during the three months ended March
31, 2023.

See Note 8 of the "Notes to Consolidated Financial Statements" contained herein
in Item 1 for further discussion of our DAC accounting policy and DAC
rollforward.

Accounting Developments

In 2018, the Financial Accounting Standards Board issued ASU 2018-12, "Targeted
Improvements to the Accounting for Long-Duration Contracts". This update
significantly amended the accounting and disclosure requirements for
long-duration insurance contracts. The update is effective for periods beginning
January 1, 2023. We adopted this guidance effective January 1, 2023 using the
modified retrospective approach with changes applied as of January 1, 2021, also
referred to as the transition date. We adjusted all prior period operating
results, balance sheets, and related metrics throughout this document.

See Note 2 of the "Notes to Consolidated Financial Statements" contained herein
in Item 1 for further information.

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