Unum Group cedes $3.8B in LTC reserves to Fortitude Re

Unum Group (NYSE: UNM) announced that its Unum Life Insurance Company of America subsidiary has entered into an agreement to cede approximately $3.8 billion of long-term care (LTC) statutory reserves to Fortitude Reinsurance Company Ltd. ("Fortitude Re") on a coinsurance basis.

The reinsured block covers approximately 50,000 individual LTC policies held in Fairwind Insurance Company, a wholly owned Unum subsidiary, and represents 26% of Unum's total LTC statutory reserves and 52% of its individual LTC reserves, each as of March 31, 2026. The block carries approximately $4.5 billion of best estimate reserves.

At closing, Unum America will recapture the individual LTC block from Fairwind and cede it to Fortitude Re, which will retrocede biometric risk to a separate global reinsurer. Unum will retain administration of the reinsured business, including claims handling and premium rate increase program management.

Combined with a prior LTC reinsurance transaction announced in 2025, the two deals will have reduced Unum's total LTC statutory reserves by approximately 40%, covering more than $7 billion in reserves. Following this transaction, Unum's remaining LTC statutory reserves are expected to be approximately $11.0 billion, with roughly 70% backing group LTC policies.

The transaction is expected to be funded through Fairwind excess capital, holding company liquidity, and financing tied to future tax benefits. Unum projects year-end 2026 holding company liquidity of $1.5 billion to $2.0 billion, leverage of approximately 25%, and a risk-based capital ratio of 400% to 425%.

"This marks another important step in advancing our Closed Block strategy to further reduce our exposure to our legacy long-term care business," said Richard P. McKenney, president and chief executive officer.

The transaction is expected to close during 2026, pending regulatory approvals and other customary closing conditions. Debevoise & Plimpton LLP served as legal counsel to Unum. The information in this article is based on a press release issued by Unum Group.

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