Reinsurance

12 Months Ended

Dec. 31, 2025

Reinsurance activity related to our premium income, policy benefits, and policy benefits remeasurement gain are as follows:


	Year Ended December 31
	2025		2024		2023
	(in millions of dollars)
Direct Premium Income	$	11,064.0	$	10,732.1	$	10,286.8
Reinsurance Assumed	54.5		69.8		80.4
Reinsurance Ceded	(287.5)		(304.5)		(321.2)
Net Premium Income	$	10,831.0	$	10,497.4	$	10,046.0

Direct Policy Benefits	$	8,343.9	$	8,027.9	$	8,001.8
Reinsurance Assumed	154.6		152.5		138.7
Reinsurance Ceded	(872.3)		(700.2)		(828.6)
Net Policy Benefits	$	7,626.2	$	7,480.2	$	7,311.9

Direct Policy Benefits - Remeasurement Loss (Gain)	$	530.0	$	(546.8)	$	(49.2)
Reinsurance Assumed	(5.4)		2.2		(0.1)
Reinsurance Ceded	(85.5)		(17.7)		(5.5)
Net Policy Benefits - Remeasurement Loss (Gain)	$	439.1	$	(562.3)	$	(54.8)

Closed Block Long-Term Care and Unum US Individual Disability Reinsurance Transaction

In February 2025, Unum America entered into a master transaction agreement with Fortitude Reinsurance Company Ltd. (Fortitude Re) which resulted in the execution of a coinsurance agreement (reinsurance agreement) during July 2025. This reinsurance agreement reinsures a portion of our Closed Block long-term care business and a portion of our Unum US individual disability business on a coinsurance basis to Fortitude Re effective January 2025. The reinsurance agreement represents approximately 21 percent of total Closed Block long-term care future policy benefits and approximately 15 percent of Unum US individual disability future policy benefits as of December 31, 2024.

Upon closing the transaction in July 2025, we transferred to Fortitude Re $953.5 million of cash as well as fixed maturity securities with a fair value totaling $3,230.1 million and accrued investment income of $47.1 million. After consideration of the final settlement, the final ceding commission related to this transaction was $442.3 million.

As a result of this reinsurance agreement, we recognized the following:

•Net realized investment loss totaling $46.8 million during the year ended 2025.

•Reinsurance recoverable of $3,620.5 million comprised of ceded reserves of $3,315.2 million related to the Closed Block long-term care product line and $305.3 million related to the Unum US individual disability product line.

•Cost of reinsurance of $848.2 million related to the Closed Block long-term care product line and a deferred gain on reinsurance related to the Unum US individual disability product line of $145.9 million.

•Write-off of deferred acquisition costs related to the Unum US individual disability product line of $100.3 million which is included as a component of deferred gain on reinsurance.

The cost of reinsurance and the deferred gain on reinsurance will be amortized into earnings over a period of 11 years and 20 years, respectively, consistent with expected future premiums. During 2025, subsequent to the execution of the agreement, we recognized amortization of the cost of reinsurance of $78.0 million related to the Closed Block long-term care product line and amortization of the deferred gain on reinsurance of $9.0 million related to the Unum US individual disability product line.

In July 2025, immediately prior to entering into the reinsurance agreement with Fortitude Re, Unum America recaptured the aforementioned Closed Block long-term care business from Fairwind Insurance Company, an affiliated captive reinsurer, and assumed the aforementioned Unum US individual disability business from Provident, an affiliate.

Closed Block Individual Disability Reinsurance Transaction

We exited a substantial portion of our Closed Block individual disability product line through two phases of a coinsurance and modified coinsurance reinsurance transaction with Commonwealth Annuity and Life Insurance Company (Commonwealth) that were executed in December 2020 and March 2021. In addition, we also entered into an agreement with Commonwealth whereby we will provide a 12-year volatility cover to Commonwealth for the active life cohort (ALR cohort) ceded as a part of the reinsurance transaction described above. At the end of the 12-year coverage period, Commonwealth will retain the risk for the remaining incidence and claims risk on the ALR cohort of the ceded business. Due to the nature of the volatility cover, the ALR cohort is accounted for under the deposit method on a GAAP basis. Reserves ceded to Commonwealth were $4,561.3 million and $4,698.4 million at December 31, 2025 and 2024, respectively. The deposit asset as of December 31, 2025 and 2024 was $270.5 million and $282.3 million, respectively. We recognized amortization of the cost of reinsurance related to this transaction of $38.7 million, $41.4 million, and $44.1 million in 2025, 2024, and 2023, respectively.