Barclays Virtual Global Financial Services Conference

Sep 13, 2021

Hello, I'm Tracy Benguigui, insurance analyst at Barclays, and I'm pleased to host our fireside session with Unum with Rick McKenney, President and CEO. We have a lot to go through. Before I turn it over to Rick for some opening remarks, I just want to remind folks some housekeeping items. You will see on your screen that you could submit questions. You could also always email it to me. The survey button, that basically just means a polling question. With that, I will turn it over to Rick with some opening remarks. Great. Thank you, Tracy, and welcome to all of you that have joined today. We appreciate your interest in Unum Group and what we have going on across this country, as well as in the U.K. and in Poland. I think when you look at our company, if you're less familiar with it's an employee benefits company. We are helping workforces deal with the changing dynamics that we see around us today, as well as think about protection going forward. Our offerings through the workplace range from protection products such as life insurance, disability insurance, dental and vision, and voluntary benefits, which are some more simple products that we have out there. So we're glad to be with you today. We feel like our company, despite what we've seen through the pandemic, has weathered the storm very well, and we look forward to a bettering economy as well as a bettering environment where we continue to protect people like the 40 million people that we are protecting today. Excellent. Maybe just to jump in, you've updated your full year guidance, and I'm wondering if you could provide a perspective on your updated expectations of how COVID-19 or the Delta variant, how that may impact your mortality or morbidity losses as you play out that book through the back half of this year. Yeah, Tracy, happy to do that. I think when you look at what we saw through the middle of the year, this was the year where we expected our earnings would be down. As a result of that, coming through what we saw at the beginning of the year, which were higher mortality claims, death claims crossed. This is our purpose. This is what we do. We are there to help people at time of need to protect their families. We certainly saw that in the beginning half of this year at an elevated level. As we got into the middle of the year, we were feeling good about in terms of how things were settling down across our books of business across the U.S. and even the U.K. We saw our earnings going still down slightly, but certainly improving. As we looked at the back half of the year, certainly we've got to go through the third quarter and items we have out there. We're starting to see mortality increase pretty rapidly across our business, across the country, really. When you think about it, as we get into the back half of the year, we are going to see elevated levels of short-term disability, elevated levels of mortality in our book of business, and we'll have to readdress that as we get into the third quarter. Just to give you a reference around that, as we came into the year, we were seeing about 1% of all claims that happened across the U.S. would be within our book of business. We also updated that to say, given the changing dynamics of mortality, as you've had older populations with vaccinations, we've seen that as a percentage come down. Younger populations, unfortunately, with many still unvaccinated, becoming a larger percentage. Those are more in our books of business. We've seen our number of people we've covered raising to the 1.3% and even higher than that. So we're going to have to see how that all plays out through the third quarter and into the fourth quarter. But certainly, it's a more challenging environment across the U.S. due to the Delta variant than we would have seen as part of our second quarter reporting. Excellent. Very good take on the demographics. Do you consider COVID-19 to be more of an endemic? If so, does that change the way you approach pricing, risk selection, and reserving? When you think about what we have experienced across our book of business, both from starting from a short-term disability and leave management, all the way up through what we see from a mortality perspective, we factored some elements of that into our pricing, more around industries that we are protecting and things like that. But what we do expect over time for these mortality levels that we have seen to settle back down, and I think importantly in our business, we are able to reprice. So even if things remain a little bit elevated for a longer period of time, we are still repricing our books of business, and it is something we will be able to work through. Like I said, we have paid out a significant number of death claims. It is our purpose to be there to protect people at time of need. We will certainly do that, and how we reflect that through our pricing will evolve over time in terms of what we see. Okay, great. Now I would like to shift gears and talk a little bit about long-term care, just high level. What inning do you think the industry is in to understand long-term care liabilities? Yeah, appreciate that, Tracy. I would say an inning analogy probably isn't the right one when you think around long-term care, given the state of the industry, really when the industry started, kind of in the 90s into the early 2000s, and when the industry really slowed down, and that would be kind of in the end of the 2010 timeframe into 2015. We actually stopped writing our book of business starting in 2009 through 2011. So when you think about the industry, now it is in a mode of building data, and data is actually going to be critical. We have seen data develop across the industry, not just in our own book, to understand what the dynamics of these liabilities will look like through different periods of times. So even though an analogy around innings aren't right, I think the data continues to build. Even in our own book of business, if you look out over the next five years, the amount of data we have, particularly in older lives and what incidence looks like, what mortality looks like in older ages, will double. If you go out a decade, it is going to quadruple. We will start to see more and more data, and the more data we have, the better we are able to explain that book of business. As we have said many times, this is a book of business that we would like to go through risk transfer to transfer it to somebody else because it is not core to what we do today. The more data we get is really the most important thing so that we can transfer this risk ultimately to a third party. I am definitely going to touch on risk transfer a little bit later in the session. Data is really important, but I also point out that not all LTC is created equal. What are the distinguishing factors of your group LTC versus individual? Yeah, it is a good question because it is a little bit unique in the industry. Our individual block of business, individual long-term care block of business, looks similar to many others out there in terms of the time period it was written, the type of benefit features that it had to it. I would say that looks quite similar to what you see elsewhere. Our group long-term care business, similar to our business today, are those that were actually originated at the workplace, and a couple of different attributes to that book of business as a result. One, a large percentage of that was actually paid for by the employer. You did not have the individual choice of the individual buying that business. It actually was a provided benefit by the employer, which I think is an important distinguishing feature. The second is usually, given that fact, is that these actually, the risk around this block of business is very different in terms of what the features look like, and that can be in terms of the length of the benefit period that people have, and also just the overall risk selection. The dynamics are a little bit different in that block of business. Once again, it is in a similar type of running mode to what we see out there today. It is a little bit younger, relative to what we see in our individual block. But like I said, the risk characteristics are of a much lesser level than what you would see across the industry in individual long-term care blocks. Can I interpret by what you just said that it's a shorter benefit period for group? Yes. The group is a shorter benefit period, so when people actually go on claim. So once again, this is younger still. So the average age of this block of business is somewhere in the mid-50s. So there's still a long time before people will be on claim, but when they get there- Yeah actually the benefit periods, whereas in individual blocks of business, you might see lifetime benefits, in this, a more common characteristic would be like a 3-year benefit period. Got it. Basically, we just said about the age of the block, recognizing Unum's claimants are too young to be in the disability stage for quite some time. How much are you leaning in on morbidity improvements? I guess I realize that's one of your reserving assumptions. And I have a follow-up. Yeah. It is one of our reserving assumptions on morbidity improvement. We have actually seen morbidity improvement in our block of business. We do reflect some of this as we look forward. I think that that's one of the assumptions that we have across many. The younger nature of that block has other dynamics that we're looking at in terms of how it will build over time. As I said earlier, getting the data around what older ages looks like is going to be critical to how we assess what the reserve profile of that business should look like today. Got it. This may be a little bit early, but how are you thinking about Biogen's Alzheimer's drug at this stage? Is it net positive or negative? Yeah, I'd say it's still too early. This is one of the drugs we've seen out there. We've seen previous ones as well. When you think about long-term care, and any kind of medications out there to prevent, delay onset, and ultimately how you operate, it really depends on what things look like as people are on claim. As they're in that benefit period, they're unable to look at their activity of daily living, or where they're actually showing that disability from their overall. It's really about what that period of time looks like, and when do you get to that period of time. There's a lot of dynamics that happen in there because you can delay onset, and then you could ultimately shrink the amount of benefit period that somebody might be on. It's not just about the drug. We think it's good. We think actually drugs will continue to come to the market. Obviously, the study of the brain has a lot to do with that. A large majority, not a large majority, but certainly a good percentage of our claims are cognitive in nature. As we're able to map the brain and look at drugs that may delay onset to a long-term care claim, we think all those dynamics will ultimately be good for our policyholders and good for this book of business. Yeah. I get what you're saying about delaying the onset. I guess there would be a bear case that it could also extend life expectancy some more time in a nursing home. Is that a real risk? That's why I say the dynamics about what happens in that benefit period are what's critical because you could delay onset by somebody in still a very good state of living and actually shrink that benefit period. So it's really not just about either one of those. It's about how they interact together. Got it. Okay. So now, back to, I guess, everyone's favorite topic about LTC risk transfer solutions. I'm just wondering what types of solutions are possible. What factors need to be considered by the participating parties? Yeah. Certainly, Tracy. Let me step back a little bit and talk about, one, this book of business, risk transfer, we think is important. It is not core to our business today, and that's been true for a period of time. I think one of the things that's happened in the more recent times is we were able to go through risk transfer on an individual disability block. So we did that at the end of last year. This is a block that we've been managing for a long period of time, and the dynamics came together where we were able to do that. So a couple things that happened as a result of that. One, is we gained a lot of knowledge about what it looks like to actually go through risk transfer of a longer-term liability that we have out there. Two, we got to know a lot of the parties that are in that business today and what might be the options around what that looks like. The third thing is we also looked about how you can actually tranche some of the risks in these longer-term blocks of business and have that ability to take pieces that may be more appealing to a counterparty and be able to take those apart so that we will be able to do it. Those things I think were quite instructive as we look at the market today. It is difficult today. You don't see a lot of long-term care risk transfer transactions out there. But certainly, we have the tools to do so. As we look to a better environment to do that, risk transfer is certainly top of the list when we look at long-term care. I guess over time, has that bid-ask spread changed at all? What does it currently look like? Yeah. I would tell you there's two aspects. When you say spread, I'm assuming that you mean the spread between buyers and sellers. As I said, in the individual disability, that spread came to a point where we think we did a very good transaction last year and able to free up some capital. When it comes to long-term care, there's really two aspects to that spread. One is how each looks at the liabilities, and that could come in multiple ways. One is some of the dynamics we just talked about. What are things going to look like for older age, liabilities, and those of that nature? The other is interest rates. Interest rates have gotten more challenging as we've looked at the last couple of years as they came down very rapidly, which has widened the spread a little bit. Those are probably the two biggest aspects that we look at. One, the nature of liabilities. Second is what interest rates look like. That's what's creating some of that spread that we see today. Okay. Could you clarify some of your earlier statements about prepaying your premium deficiency reserve will be utilized for any risk transfer transaction that Unum explores? I mean, are you basically saying that doing that makes a deal more possible? Yeah, I would say that actually, and just to step back a little bit, those that are less familiar with it. Our premium deficiency reserve is we came to an agreement with the state of Maine last year to increase the pace at which we're putting reserves behind our long-term care block. We see those reserves as incremental to what our best estimate is today. When you think about a transaction around that, the more that we put into those premium deficiency reserves, the tighter the gap is with someone we're going to do a transaction with. Now, the reality is it doesn't make a transaction easier to do. The buyer's going to have their view of what it looks like. But certainly financially, will look better in terms of what the result of that transaction will come to fruition. Think about it as those funds we're putting behind a PDR are raising the investment that we have behind that line of business. As a buyer comes in and evaluates it, that gap will actually have narrowed as a result of those investments. Got it. You didn't make that parallel with the closed disability block deal. I'm wondering, what is your relationship like with Global Atlantic? Do you think familiarity with your reinsurer may lead to future deal-making? All I'd say is with Global Atlantic, we're very happy with the transaction that we did. We still have an ongoing relationship. We're still administering the claims on behalf of them. I think they would look at the transaction and say it's very good as well. All I would say is our individual disability block, working with Global Atlantic, worked out well for both parties, and I think it's more instructive to say, how can we work with other reinsurers out there as opposed to that particular one, even though we're quite happy with the work we've done with them. Yeah, no way to preclude other reinsurance partners. Given the unfortunate mortality toll COVID took on the elderly population, we've actually done some work and noticed that your LTC covered lives, if I combine individual and group, dropped by 2% in 2020 compared to 2019. I guess going into the exercise, I thought it would be a steeper drop. Does this highlight the less mature age of your in-force? I think it highlights a couple of things. One is what we saw from a mortality perspective were people that were on claim. Unfortunately, through the course of last year and into the beginning of this year, we saw an elevated claim level in our long-term care block, older ages. This is prior to the vaccine. Certainly, the vaccines coming into that book of business has really reduced the amount of mortality that we see in the older age population in long-term care, which I think is very positive. But I take that to the other side of the equation, which is really the vast majority of our policies are in active status, meaning they are actually continuing to pay premiums in. Then at some point in time, a percentage of them will be on claim. That population has not changed that much. We have not seen a lot of mortality within that block of business within the active population. Once again, our individual business is roughly 75 average attained age, our group business about 55. We did not see the higher level of mortalities in that block of business through this period of time. Got it. I am curious how your conversations with regulators been going on LTC premium rate increases in light of what we just spoken about, the longevity benefit of COVID-19, which may end up looking like an endemic rather than pandemic. Yeah. I think our regulators, when you think about long-term care price increases and how we have justified price increases in working with our regulators, they look at this period of time similarly to what we do and what I just answered in that previous question, which is this is a period of time we are looking at very long-term assumptions as we go through those price increases. I do not think it factors in on that front. I think in the pandemic, it has been challenging in places, but I think it has all worked its way through just in terms of the nature of work and working with our regulators. And actually, in fact, just recently, we received a fairly large rate increase from the state of New York, and that is one that we have been working on for a period of time. And so it is still happening. We have talked about price increases as justified within our book of business. That has been happening. We continue to work with our regulators on that front where it is justified, and I think on our behalf and likely on behalf of the industry, that process seems to be going reasonably well. Okay, great. Maybe just turning to capital management. I guess hearing management tone, it felt like Unum was leaning on pursuing buybacks, and now it sounds like there are several other capital priorities. And we already talked about PDR a little, but can you provide some visibility on what guideposts you are looking at to bump up buybacks higher up on your list? Yeah. I think it's good to step back and look at capital deployment across all our different options that we have in front of us. I'd start by saying we're in a very good capital position. The IDI transaction that we talked about recently freed up about $600 million of capital, actually brought our leverage down. We ended the year in a very strong capital position. We projected out we'll be in a very strong capital position again this year. When you think about deployment, first and foremost, as we always said, we want to grow the business. That can come organically where we just continue to write business like we have in the past. Invest money in capabilities that we have out there to more further digitize and connect with our customers. That's all happening. Then there's inorganic, where we think about acquisitions. These are probably not mega deals where we're looking at buying large blocks of business. This is more capability driven as well. We first think about those. Then we also think about how do we return capital to shareholders. One of them is from a dividend perspective, so we've maintained our dividend and in fact, increased it back in the May timeframe. Then also a look at share repurchase. That hasn't gone away. Share repurchase is still something we continue to look at, because we think it's a good way to return capital to shareholders. When we got into the second quarter, we talked about another option out there, similar to what we do across our capital markets aspects. When we think about debt and refinancing debt and taking advantage of lower rates and extending out the maturity levels, another thing that we have to continue to work on is that PDR, because we do have the agreement with the state of Maine that we'll fund $2.1 billion in incremental reserves over the next seven years. We think about, is there an opportunity or is there the right moment where we should actually pre-fund some of those reserves? There's a couple of benefits that we see with that. One of those is what Tracy just talked about, is as we put money towards those reserves and any transaction we do, that closes the gap in terms of what we record at that point in time. Also, we know that long-term care, just as we've talked about on this call, is certainly an overhang on our stock, and we want to do what we can do to address that as best we can. Sometimes thinking about a premium deficiency reserve and putting capital there, which we've already agreed to, might be a way to continue to help address that. So it's not a replacement of any of those capital deployment options I talked about, but it's additional, and we wanted to make sure in the second quarter people are also thinking about that in the calculus about how do we think about that? How do we manage it? Although we haven't made any decisions and haven't talked about anything specifically, those are all the options that we have on the table with deploying this really strong capital position that the team has worked really hard to build and able to get through the pandemic, and we feel like we're in a really good spot. Are you basically saying it's not mutually exclusive? It is not mutually exclusive. Okay, great. Is there some sense, just given you updated your guidance, that you kind of want to get through this hump with how COVID-19 is going to be shaping up before thinking about how you finalize some of these priorities? It's a really good point because we are at an acute moment in the pandemic. Although we went through the first phase very well, our capital position withstood very well through the first phases of the pandemic, even through the middle of this year. We are in a moment where a lot's happening. Do I think it will be a capital event? Absolutely not. We will actually work our way through the period of time. Unfortunately, we will be paying out more in death claims, given what we see out there today. We have to take a pause and weigh that into all of our decision-making. I think that being at this moment in time and how we think about capital deployment, certainly what we're seeing in the markets around us always come into the calculus of the decisions we make on a daily basis. Yeah. Without putting too much attention on mortality, I mean, interest rates are also on everyone's minds. As you enter your assumption reviews, how do you feel about your actuarial assumptions? I guess including, yeah, go ahead. No, I was going to say, like I said, we are headed into that process, so I wouldn't want to preclude any of that. When you think about our assumptions, we actually re-struck interest rates assumptions last year in terms of a glide path we saw, particularly to long-term care. We actually put out a 3.25% 10-year Treasury grading up over seven years. We're kind of on that path when you saw it relative to what we saw last year. When you go through all the liability assumptions, the team will do a good job to go through all those. It's a little bit early in the process to talk about anything there, but I don't think there's anything in particular that I'd highlight at this time. Got it. I guess the other side of interest rates being in this lower for longer, even though there's talk about tapering and some rate hikes, how do you position, I guess the illiquid portion of your liabilities with your LTC block and having opportunities to reach for yield in less liquid assets? Yeah, I don't think that's a new. If you think about a long-term care block, there is no surrender value in these policies. The liabilities are completely illiquid. When you think about that, how do you match up similar assets? We've done some of that. Over time, we've always liked private placements as part of our ongoing book of business. We've even talked recently about a smaller allocation, I should say a larger, but still small allocation behind alternative investments, which can take advantage of some of the illiquid nature that we see behind long-term care. It's a reality that we've been taking advantage, I think, for some time, and it's not a reach for yield. I think it's just the nature of that block is these liabilities will be illiquid, so we can put assets on the books that match up to those liabilities and think about how we manage that over the longer term. Got it. It doesn't sound like a change in strategy. No change. Okay, great. Let's get to a couple of your other businesses. Really curious to hear about opportunities. You kind of touched on earnings calls, some new products and digital distribution. Maybe you could just unpack for us a little bit the launch of your new Total Leave and Behavioral Health solutions. Yeah, I'd love to do that. I think when you think about our business, as I said at the beginning, we're at the workplace. We're helping employers and their employees. I think Total Leave has been one. Our launching of Total Leave, think about it as a very digitally enabled solution that will help employees navigate what leave can look like. As you would note in the markets, leave is becoming more and more a benefit that employers and their employees certainly want to take advantage of. Our ability to help employers and their employees navigate that digitally is critical. We're very excited about our Total Leave offering that we're bringing forward to help employers do just that. You mentioned Unum Behavioral Health, also another acute need that we have. The pandemic has really shined a light on. What we see out there from needing to manage behavioral health, our solutions out there are proactive, digitally enabled, and we want to try and help employers with their employees to ultimately deal with what's important to them as well, which is making sure that people are coming to work their full selves and able to continue to be productive as employees. We're excited about both of those offerings coming out over the course of this year. We'll see that be a bigger piece. Leave is something we've been doing for a very long time, so this is more about the enablement of that. Behavioral health is something that we think that we can add value in. We'll seem to be doing more of that as we look to the rest of this year and into next year. Yeah. You've also made other digital investments. Wondering how that's paying off, platforms like MyUnum and Colonial Life's more user-friendly portal. Well, I think the digital investments, it would be unique to us. The good news is, as we've said for a couple of years, everything we've been saving for an efficiency front has been going into our digital footprint. You mentioned a couple of them, MyUnum and our Colonial Life portal that we have out there just to make that digital enablement more and more standard operating across the board. I think we've got the right platforms. Now we need to make sure that our processes and actually our enrollment in these platforms are up to what they can be. I think those have been the right investments over the last several years, and we'll continue to take savings that we get on one side of the business and put that straight back into our digital footprint to enable new products like Total Leave and Unum Behavioral Health, but also behind the scenes, making it easier for customers to interact with us on a digital basis. Yeah, got it. How are you leaning in to simplified underwriting? I guess one pain point industry is just how long it takes to get through a policy process. Is simplified underwriting shortening the time it takes? Yeah. When you think about our business, just the core nature of our business going through group products, it is simplified underwriting. As we protect those benefits across the board, it is very quick as to how it gets to the consumer. On the voluntary benefits front, on the individual voluntary benefits at the employer, there may be some enrollment required or some underwriting, but usually it is of a very rapid nature as well. So we think that is one of the benefits that we provide, being at the employer, is that underwriting becomes less important because you are able to spread your risk over a larger population. But we can get better, we can get faster, and so some of our simplified products we are bringing forward to customers will help fulfill that as well. Yeah. I guess another added benefit is just getting into the middle market population, which is just so hard to do. Maybe just looking at Unum US, how should mortality and morbidity for short-term disability or long-term disability trend for the rest of the year? Is there a lag effect that could impact results? Yeah. It is a good question. I think it is what I laid out earlier, which is that we see, looking into the back half of the year, even in our life insurance business, we look to see growing earnings or actually we were going to be profitable. That is going to be tougher now given what we see out there going on from a mortality perspective. Same is true on short-term disability. That comes at you faster. So as you see some of the infection rates go up, which you have seen that curve on Delta go up, that will pretty quickly turn into a short-term disability claim. We do not see that transitioning so much into a long-term disability claims. That has been true throughout the pandemic, that short-term disability claims are about the nature of people being unable to work because of infection rates. But we haven't seen as much of that turn into a long-term disability claim. As I mentioned, the mortality piece, unfortunately, some of those infections are turning into more hospitalizations today. As the path has shown, many of those will turn into a mortality event as well. So we are looking to the back half of the year, hoping that we start to see these curves turn as we saw in the U.K. But it is certainly something that will have to be factored in as we look into the rest of the third quarter and into fourth quarter. How do you expect dental and vision underwriting to play out for the rest of the year? Dental and vision has been a little bit of a different story. If you go all the way back to when the pandemic first hit and dental offices were closed, we saw actually a pretty big change in terms of what that looked like. We saw that actually come back over the course of the year. In that period of time, you had a lot of carriers that were looking at how do they work with the dentist to deal with some of the change that we saw there. But as we got into the end of the year, even into the first year, utilization, people getting back to the dentist was pretty high. We saw that throughout the summer, and we expect to see that. Dental offices, I think, are equipped to deal with some of the variants that we've seen just in terms of their operating practices and procedures. We just haven't seen much change on that front, and we probably don't expect to do so through the rest of this year. Got it. Touched a little bit earlier on voluntary. I have a two-part question. The first one is, as the economy's reopening, are you seeing a different demand characteristics for Colonial Life versus Unum US? Yeah. First of all, when you think about our product set and what's going on in the world around us, the need to protect individuals, their families across all these dimensions, I think, has gone up. The awareness, the need of our products is clear. That's true on the Unum US side. It's true on the Colonial Life side. What we saw on the Unum US side, because a lot of these were actually in conjunction with a lot of our group written cases. We saw them go down. We started to see them come back, but there's two pieces that happen. One is the employer offers voluntary benefits. The second is people need to enroll in those voluntary benefits. There's been a little bit of a slower lag relative to our group products. Colonial Life is one, because we're out there talking to individuals, could be smaller businesses, on a face-to-face basis. They've done a great job over the course of the last year in what was probably the most acutely hit area of the market, which is that smaller business, going out with their employees, offering these benefits, and having them enroll. We've seen them come back strongly. We're very happy with what our Colonial Life team has been able to do. The agents that we have out there are able to both get in front of people, as well as more digitally enable the enrollment and selling of those products as well. We feel very good about our Colonial Life. Even as we look into difficult times with the Delta variant, we're very happy about the changes that have happened across our voluntary benefits platform to grow our sales. Got it. The second part of my question is, can you speak to the maturation and competition under Unum US side? Is the competition becoming irrational? Yeah. It's a question that we often get. I would tell you, competition on the Unum US side is fierce. But that's what you would expect in a business that is a very good business to be writing. Our competitors out there who are good competitors, I think the competition for business is fierce. You mentioned the word irrational. I don't think it's irrational. Irrational says people come in, there's a pack of where people are, and then somebody's way out of that range. We don't see that. But there's certainly competition out there because this is good business. The need is out there. People need these type of benefits. We expect, and we've lived in, and we know how to operate in a very competitive environment. Got it. I just want to remind folks, you have the ability to submit questions, and I could be taking your question. I'll go back to my list until those questions pop up. What is your total addressable market for leave management solutions, and what investments are you making? It's a good question. Leave management, think about it. This is at the employer level. Employers, for the most part, are at minimum administering an FMLA, and that's been true for a long period of time. That actually was something that employers might be able to do themselves. It was less complicated. But the world of leaves are changing very rapidly, and so those leaves come in the form of FMLA type leave, but then you also have new maternity, paternity, caregiver leaves all coming into the mix. You've also got a complex web of different state laws that are out there around this. People are looking more and more to who can help them with this. That's where we come in, to make sure that we're able to deliver them a good solution to help them manage the leaves of their employees. You mentioned the addressable market. We think about it across all of our covered base that we have today. That's not where it is today, but there's certainly that opportunity to grow into making sure we're doing a good job of leave management like we're doing for our customers today across the spectrums. Got it. How is the ramp-up of medical stop loss going, and can you size the opportunity for this product line? Yeah. It's a product line we like a lot. Part of that is because we're with the employer, we know how to help them manage their risk. Stop loss is another avenue to do that. We've been in the business now for a few years. We made the concerted choice to actually move slowly into this market. What you want to do is make sure that you have the right knowledge, expertise, and processes to be able to deliver in this market. So we feel like we're there today, but we think it's a good opportunity to continue to help employers to manage their overall medical exposure they have today and bring to it some of the great relationships that we have out there, our knowledge around underwriting and areas that can be helpful to our customers. It's a reasonably big business today, and we just want to get what we think is a reasonable share of that, given that we're at all these employers and operating our core business as well. Got it. Employee paid versus employer paid benefits has been a growing trend. Do you see this continuing, and how does this change the way Unum communicates and markets products? Yeah. That's been true for a long period of time. If you went back probably 15 to 20 years ago, you had a predominance of these benefits came through paid for by the employer. That flipped, really about 10 years ago, to being much more employee paid as well. When I say that, it's a split on the group benefits. When you think about life insurance or disability insurance, that mixed funding that happens there. And then voluntary benefits are almost uniquely paid for by the employee. You've got to have great communications and education to those individuals. You've got to have a seamless experience, so you can take them all the way from, they know they have the need to they actually execute on purchasing the need. And those are some of the areas I have. We're always investing in those digital education tools, working through our distribution partners, working with the employers to help get to where the ultimate consumer, the employee, can help cover the needs they have for themselves and for their family. Okay. I know this is ongoing as well, but you've also sought to increase the number of products that are offered on employer platforms. What has Unum done to work towards this goal? Yeah. Actually, if you went back several years, the biggest addition we made, going back about four to five years ago, was to add dental to the platform. So dental and vision were things that we didn't have. I think we were obviously well-known. We've had a leading position in disability for decades, so we're very well-known at doing a good job on that. We added to that the life insurance. Now with the dental and vision that you have, as well as the voluntary benefits, which we also have been writing at employers for a very long period of time. And now we bring services around that. We talked about Total Leave, we talked about Unum Behavioral Health. Those are the kind of things we have to just round out everything that we do with the employer today to help serve their employees. If you think about your whiteboard, is there more white space or you are happy in all your offerings? Yes. We are very happy with all our offerings. There is not a lot of white space, but what I would say is, when you think about being at the employer today, there is really three buckets. One is on the savings side. When you think about defined contribution 401(k), we are not playing in that space. When you think about the medical side, we do not play in major medical, although we might help a little bit on the medical stop loss. Then everything else that you get from your employer is certainly something that we would look at to provide to employees. When we have that relationship with the employer, we think we are a good avenue to help provide different benefits, different products, or different services to their employees. Got it. Then I guess when we are talking about capital management, you were talking about inorganic growth, and you have done some bolt-on acquisitions in Unum International. What other type of assets are you interested in? Yes. I think those are instructive to the types of things we like. Even I just mentioned dental, bringing that into the portfolio. That was done through acquisition, going back several years ago. When you think about some services that we have out there, we brought in a leave management company, a couple of years ago called LeaveLogic, which helped on the services side. It can range from product to services. Then internationally, we added a business in Poland. A business we like very much. They operate across the board. They do both group and individual product. We certainly like what they do on the group side, but that was a tremendous addition to the portfolio that we see. Internationally, we can continue to add, although I'd tell you probably our focus is much more on the services that we can do here on a domestic basis, which we've continued to add into the portfolio. Got it. Since you mentioned Poland, what's the ramp-up look like in Poland? What is your distribution strategy as you expand this business, and are you introducing any new products at this point? It's a good question. Poland for us is a smaller company. Like I said, it's a good acquisition. We like the market. We like its growth trajectory we've seen. It's hundreds that actually make an impact. We'll continue to add product, which they do over there, as well as distribution. Like I say, a very strong individual distribution agent market that we have in Poland today. We're supplementing that with a good group insurance space and watching both of those grow at a big rate. Our goal there is to continue to watch that grow and as it becomes a bigger piece of the overall international pie. Got it. It looks like we're almost running out of time. I didn't know if you had any type of bold predictions going into 2022. Well, I'll tell you, the prediction game is tough these days relative to what we've seen out there from the pandemic. I think my prediction on behalf of our company is that we've seen the challenges and volatility in the markets today. We certainly want to be there. We think the workplace or the workforce, no matter where they're working, is still where we want to see protection. We see growth, and we see that in our markets overall, and we look forward to a much better economy, as well as environment as we go into 2022. Great. With that, I'd like to thank you so much for our discussion and our chat now concludes. Thank you, Tracy. Thanks, everyone. Okay, bye.