Other

9 Months Ended

Sep. 30, 2024

Debt and Other Disclosures [Abstract]

Debt

Debt

In June 2024, we issued $400.0 million of 6.000% senior notes due 2054. The notes are callable at or above par and rank equally in the right of payment with all of our other unsecured and unsubordinated debt. A portion of the net proceeds of the offering were used to repay the $350.0 million aggregate principal amount of outstanding indebtedness under our senior unsecured delayed draw term loan facility, which was terminated upon repayment.

P-Caps Trust

During November 2021, we entered into a 20-year facility agreement with a Delaware statutory trust (the P-Caps Trust), in connection with the sale by the P-Caps Trust of $400.0 million of pre-capitalized trust securities (P-Caps) in a Rule 144A private placement. The P-Caps Trust invested the proceeds from the sale of the P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities (the Trust Assets). The facility agreement gave us the right to issue and require the P-Caps Trust to purchase, on one or more occasions, up to $400.0 million of our 4.046% senior notes due 2041 (the 2041 Senior Notes) in exchange for the Trust Assets. Under the facility agreement, we agreed to pay a semi-annual facility fee to the P-Caps Trust at a rate of 2.225% per year on the unexercised portion of the maximum amount of 2041 senior notes that we could issue and sell to the P-Caps Trust and to reimburse the P-Caps Trust for its expenses.

In October 2024, we exercised our issuance right in full under the facility agreement and issued $400.0 million of the 2041 Senior Notes to the P-Caps Trust in exchange for the Trust Assets, thereby triggering our recognition of the 2041 Senior Notes on our consolidated balance sheets. The Trust Assets had a fair value of $273.5 million when the 2041 Senior Notes were issued. We directed the trustee of the P-Caps Trust to dissolve the P-Caps Trust and to deliver the 2041 Senior Notes to the beneficial holders of the P-Caps pro rata in respect of each P-Cap. The 2041 Senior Notes are callable at or above par and rank

equally in the right of payment with all of our other unsecured and unsubordinated debt. The net proceeds from the issuance of the 2041 Senior Notes and subsequent sale of the Trust Assets are expected to be used for future share repurchases.

We have an additional five-year, £75 million senior standby letter of credit facility pursuant to which a standby letter of credit was issued in favor of Unum Limited (as beneficiary), our U.K. insurance subsidiary, and is available for drawings up to £75.0 million until its scheduled expiration in December 2028. In connection with and as security for the senior standby letter of credit facility, we granted to the issuer of the standby letter of credit the right to exercise, if an event of default occurred and was continuing, the issuance right under the facility agreement with the P-Caps Trust, up to a maximum of $200.0 million. In October 2024, prior to our exercise of the issuance right under the facility agreement, the assigned issuance right was forfeited in its entirety.

For further information see "Liquidity and Capital Resources - Debt, Term Loan Facility, Credit Facilities and Other Sources of Liquidity" in Part I, Item 2.

Allowance for Expected Credit Losses on Premiums Receivable

Allowance for Expected Credit Losses on Premiums Receivable

At September 30, 2024, June 30, 2024, and December 31, 2023, the allowance for expected credit losses on premiums receivable was $27.1 million, $26.8 million, and $29.5 million, respectively, on gross premiums receivable of $630.4 million, $659.8 million, and $612.4 million, respectively. The allowance for expected credit losses was generally consistent at September 30, 2024 compared to June 30, 2024. The decrease of $2.4 million during the nine months ended September 30, 2024 was driven primarily by improvements in the age of gross premiums receivable.

At September 30, 2023, June 30, 2023, and December 31, 2022, the allowance for expected credit losses on premiums receivable was $29.7 million, $28.7 million, and $32.5 million, respectively, on gross premiums receivable of $626.6 million $660.3 million, and $557.6 million, respectively. The increase in the allowance of $1.0 million during the three months ended September 30, 2023, was driven primarily by the increase in gross premiums receivable. The decrease of $2.8 million during the nine months ended September 30, 2023, was driven primarily by improvements in the age of gross premiums receivable.

Loss on Legal Settlement

Loss on Legal Settlement

During the third quarter of 2024, we incurred a loss of $15.3 million within our Corporate segment for the settlement of an employment-related matter. $4.9 million of the loss is recorded within compensation expense and $10.4 million of the loss is recorded within other expenses within the consolidated statements of income.