Hello, everyone, and welcome to the Unum Group Third Quarter 2022 Earning Results Conference Call. My name is Alex. I'll be coordinating the call today. [Operator Instructions]. I will now hand over to your host, Matt Royal, Senior Vice President of Investor Relations. Matt, please go ahead.

Thank you, Alex. Good morning, and welcome, everyone. I'm excited to be hosting my first call, where we will be discussing the third quarter 2022 earnings for Unum Group. Our remarks today will include forward-looking statements, which are statements that are not of current or historical fact. As a result, actual results may differ materially from results suggested by these forward-looking statements. Information concerning factors that could cause results to differ appears in our filings with the Securities and Exchange Commission, and are also located in the sections titled Cautionary Statement regarding Forward-Looking Statements and Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2021, and our subsequent quarterly reports on Form 10-Q. Our SEC filings can be found in the Investors section of our website at www.unum.com. I remind you that the statements in today's call speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements. A presentation of the most directly comparable GAAP measures and reconciliations of any non-GAAP financial measures included in today's presentation can be found in our statistical supplement on our website in the Investors section. Yesterday afternoon, Unum reported third quarter 2022 net income of $410.7 million or $2.04 per diluted common share, an increase of $328.6 million or $1.60 per diluted common share in the third quarter of 2021. Net income for the third quarter of 2022 included the after-tax amortization of the cost of reinsurance of $12.1 million or $0.06 per diluted common share, a net after-tax investment loss on the company's investment portfolio of $3.4 million or $0.02 per diluted common share and the reserve decrease related to reserve assumption updates of $122.5 million or $0.61 per diluted common share. Net income in the third quarter of 2021 included the after-tax impairment loss on internal-use software of $9.6 million or $0.05 per diluted common share, the after-tax amortization of the cost of reinsurance of $15.5 million or $0.08 per diluted common share. The net after-tax reserve decrease related to reserve assumption updates of $143.3 million or $0.70 per diluted common share and an after-tax net realized investment loss on the company's investment portfolio of $100,000, a de minimis impact on earnings per diluted common share. Excluding these items, after-tax adjusted operating income in the third quarter of 2022 was $303.7 million or $1.51 per diluted common share, an increase from $210.5 million or $1.03 per diluted common share in the year ago quarter. Also participating in this morning's conference call are Unum's President and CEO, Rick McKenney; Chief Financial Officer, Steve Zabel; Chief Operating Officer, Mike Simonds; as well as Mark Till, who heads our Unum International business; and Tim Arnold, who heads our Colonial Life and Voluntary Benefits lines. Now I'll turn to Rick for his opening comments.

Thank you, Matt, and good morning, everyone. We're happy to be with you today to share the results of the third quarter as well as our positioning in the current environment. Our performance in the third quarter continued to build on the momentum of the first half of the year, with growth in operating earnings per share of 47% on a year-over-year basis. Starting with the top line. Premiums in our core businesses grew at a rate just shy of 4% on a constant currency basis. Additionally, we continue to see very strong benefits experience, particularly in U.S. group disability and Colonial Life. The growing top line, solid margins and a better interest rate environment layer on top of already strong capital levels. This provides us the ability to invest in our growth and positions us to navigate the multiple macro scenarios that may emerge. As we look to close out 2022, there are many things that give me confidence in our franchise and future growth prospects. When I reflect on our company's leadership in the employee benefit space, it is not a commentary on recent sales or even market share, though both are strong. It is more a statement that we are consistent in our purpose of serving employers and their employees. We have a deep understanding of the realities and dynamics of the workplace, whether it's managing leaves, comforting people through tragedy or continued focus and progress returning someone to work, our teams and processes deliver for our customers. This requires ongoing investments in our people, capabilities and operations, something we continue to build on over the past several years. With COVID shifting to a more endemic phase, we are poised to benefit from the advancements we've made to connect and serve our customers in new, leading digital-first…

Great. Thank you, Rick, and good morning to everybody. As Rick made clear, we are very pleased with both the operating results and strategic actions advanced in the third quarter. As you may recall, the most severe impacts from the pandemic recorded in the second quarter and these impacts continue to a more endemic state during the third quarter. Coupled with an increasingly favorable interest rate environment, the third quarter performance provides a strong position as we continue through the back half of the year. As I cover the results, I will primarily focus on an analysis of our third quarter results compared to the second quarter of 2022, allowing me to describe how our business lines have been progressing. For items such as premium and sales growth, I will tend to focus more on year-over-year comparisons. I will also describe our adjusted operating income results, excluding the impacts from our GAAP reserve assumption updates, which typically occurred during the third quarter. As we outlined in the press release, the reserve decrease related to our annual reserve assumption update totaled $155 million before tax or $122.5 million after tax, and was comprised of releases in both Unum US group long-term disability and group life. The biggest component of the actuarial reserve review was a release of $121 million before tax in the Unum US group long term disability line. Claim reserves should represent our best estimate of the future liability. And since the last GAAP reserve review, high levels of performance and continued investment in our operations give us confidence these trends are sustainable. As such, these reserves have been adjusted to better reflect the expected cost of claims. This reserve update will have little impact on our forward expectations for earnings or the expected benefit ratios. Although the impact…

Great. Thanks, Steve. Good summary of the quarter's results. I would say results were excellent. We are very pleased with our ability to execute on our strategy and capitalized for both the short term and longer term on an operating environment that is very favorable to us. We do believe that we are very well positioned to take on any environment they may present itself with a strong balance sheet and resilient earnings power, and we remain very encouraged for the future. I'll now hand the call over to Alex to begin our Q&A session. Alex?

[Operator Instructions]. Our first question for today comes from Erik Bass of Autonomous Research.

Can you provide some more color on the drivers of the disability margin improvement and why you think at least a portion of this is sustainable? And also, do you view a high 60% benefits ratio is the right expectation heading into 2023?

Erik, let me turn it over to Mike to talk about some of the drivers and then maybe Steve will have some comments on where we see this going.

I appreciate it. Yes, you highlighted another good quarter in terms of experience for the group disability line. And I would say, while there's a couple of things under the covers there, the primary drivers is the recovery experience. And we've spent time on it, it's pretty broad-based. So we look across industries. We've looked across different durations of claims and we are seeing favorability pretty broadly against our expectation. And I think it is fair to conclude that we've got a conducive environment out there for helping people to return to work at productive lifestyle. And I would say internally, we're well positioned in that, we are fully staffed, which is a really good place to be. We've got a really experienced and capable management team and our benefits organization that have implemented some process changes, focusing on different diagnoses and durations, all with the intent of delivering on that purpose of supporting people and supporting our employer clients in terms of driving productivity. So favorability continued probably a bit more so than what we had expected here in the third quarter. We would anticipate it will moderate a bit over time but probably not at the pace we would have thought otherwise. I don't know, Steve, if you have anything.

No, I think that's right. I mentioned in my comments that we're looking for something in the mid- to high 60% loss ratio in the fourth quarter. As we look ahead to '23, I probably won't comment on that right now. We're going through our process around LDTI and kind of recast what loss ratio is going to look like going forward. So a lot more for you as we talk about the '23 outlook.

And then on the hedging, it sounds like the actions you took in the third quarter as sort of a step in a larger process and something that you continue -- plan to continue legging into. Can you just help us think about the benefits in terms of future NII as well as kind of locking in the discount rate for reserves?

Yes, yes. So let me just kind of recap what we did because I know we gave you a little bit more information even in my script than what we would have had in the release. If you go back in the second quarter, we executed in first Unum, which was pretty straightforward, $164 million of notional pretty straightforward from how that flowed through to asset adequacy testing. It really derisks some of the downside scenarios that you have within that testing. And we were very focused on the first 5 years of investable cash for that block. And we've given a little bit of guidance that we're looking at about 50% of that. As we roll forward, we lagged in some transactions in Unum America. In the third quarter, we executed on $500 million in notional same type of instrument. And then in the fourth quarter, we actually took another step and put another $100 million. It's a little bit more complicated when we get into Unum America. And let me just talk a little bit basics about what we're hedging. We're hedging investable cash flows, and think of that as the cash flows that come out of our liabilities, the premiums, the claims, expenses that we have to pay and then combine that with the cash flow needs of our investment portfolio and really how that portfolio turns over. So we're very focused on the first 5 years. It's important to us that we get hedge accounting on this. And so we want to really make sure there's certainty of what those cash flows are. So that's where we're focused. I wouldn't view these being put on for any kind of future income enhancement these are risk management trades. We want to make sure that we're well protected for a downside risk in the interest rate environment. So I don't think you're going to see incremental investment income in the future on this. I do think, too, when you get into Unum America, it's a more diversified portfolio. So that makes it a little bit more complicated about which types of investment trades in the future we want to hedge. We have alternative assets in there, commercial mortgage loans, private placement, those would be harder to hedge because you need to be able to enter into a bond trade in the future to really look at the maturity of those trades. So far, we've hedged about 20%, I think, 15% to 20% of our expected cash flows in Unum America over the next 5 years. And we feel like this is a great start to leg into a program that we think is very important to manage downside risk in the future for this block.

Our next question comes from Ryan Krueger of KBW.

First, I just want to follow up on the last question. I guess, can you give us any thoughts on where you see the 15% to 20% headed? Do you think you'd go all the way up to the 50% of 5-year cash flows that you did in First Unum or given the portfolio differences, would you likely stay a little bit below that?

Yes. Ryan, we're not going to really give any guidance kind of where we're going to take the program. We feel very good about the steps that we've taken. We do think that there's more room to advance the program here in the future, but we'll update the market as we leg into further transactions on that, but I don't really want to set any kind of, I guess, expectation out there for how this may grow to.

Got it. And then on the PDR, just I had a more mechanical question. So you talked about the rolling 3-year impact of how it comes into your results. So I guess my question is, if interest rates end up staying high in your PDR requirement as ends up being lower, is the way it would work that you'd have to put in -- you have to put in the contributions now. But then if rates remain high and the rolling 3-year calculation improves, that you would then release those reserves back out of the entity.

Yes. Ryan, and I wouldn't think about it as releasing reserves. We have an overall premium deficiency reserve that we need to record. The state of Maine has given us the ability to do that over time. And so we're building towards that reserve in the current rate environment, it allows us to potentially do that at a faster pace as far as how we recognize that. I do think it's fair to say that if rates remain where they are today, and we gave you some scenarios last February, it would give us the ability to recognize that full premium deficiency reserve at a faster pace.

Our next question comes from Alex Scott of Goldman Sachs.

First one I had for you is just on a follow-up on the dynamic with the PDR. I mean, I think that just based on the sensitivity you gave in the past with that probably having declined to less than $1 billion. Will that actually obviously become a tailwind and actually release capital and give you access to more than maybe the normal $1 billion of statutory capital as we look out to 2024. And if that's at all right, I think you guys are getting closer to the point where you can start thinking about the larger amount of capital you all have to deploy every year. So I'd just be interested in the mechanics there and how you -- I guess, more importantly, how you think about deploying capital as we sort of exit this period where you have a bigger drag?

Yes, Alex, it's Rick. Let me just take you a step back to the dynamics because you talked about some of the dynamics specific to the PDR. I think it's instructive to also talk about what is the overall capital generation deployment look like across the enterprise because that's only one element, and I'll get to that as part of the overall. I think when you think about the generation we've had, as you said, the $1 billion of statutory earnings that we have or at least the run rate that we have around statutory earnings is very positive in terms of generating capital for the company. So if you think about that, plus the -- where we sit today from an overall RBC, where we sit from a liquidity perspective. Steve mentioned some of the dynamics that will be coming here in the fourth quarter. We sit in a very good position. A couple of places where we're going to put that to work. First and foremost, growth and think about core growth. We're talking about the growth of the enterprise. That is first and foremost. I think about inorganic means, we'll add capabilities where we see fit. Nothing that you would -- unexpected. This is about building out our overall platform we have, similar to things you would have seen us do in the past. And then you get into the dividends that we continue to pay, a nice healthy dividend growth rate. and then the deployment of capital that we get out. So think about the PDR in that construct. Steve mentioned the dynamics of one element, which is the interest rate element of how the PDR develops. I'd also reiterate that, as we told you earlier in the year, we've been funding it faster. We've been recognizing it faster in a balanced way relative to the $200 million of share repurchase we've been buying. So we feel very good about how we're balancing the needs of many stakeholders and bringing back capital to our shareholders through both dividends and through share repurchase. And as we look out to the next couple of years, dynamics, you said around the PDR, the sensitivities we put out, all still very real, but we're going to have to see how that plays out. So I wouldn't want to get too far ahead of that, and we'll lay out some of that in the '23 process, but this is something for the future, we'll continue to look at, once again, very happy about where we sit, where we're going and the ability to deploy capital in a very reasonable way.

Follow-up question on Unum US, could you talk a bit about the competitive environment, how things look sort of headed into the end of the year? In terms of competition and pricing and so forth and how that translates into your view of revenue growth heading into next year?

Alex, it's Mike. I'll take that one. And maybe we'll take a minute because we do have some good dynamics going across our markets. So maybe I'll tee up the Unum brand for group insurance here in the U.S., but going to ask Tim and Mark to comment on those markets as well. And as you highlighted, we've built some good momentum here as we're heading into a really important closeout to the year and the January 1 effective date. And encouraging buildup across all of our core operations and see sales up and 14% on a constant currency basis. The core market group insurance sales here in the U.S. are particularly encouraging up approximately 30% in the quarter. It's a relatively small quarter given seasonality, but it bodes well for us as we look into, again, that important fourth quarter. differentiators like we've been talking about the investments that we've been making in digital and things like our HR Connect solutions, our new Total Leave platform, those are really helping us drive strong sales results, particularly in our middle markets. And again, that's really encouraging. Our Individual Disability executive benefit doing supplemental disability to our clients near record sales quarter here again in the third quarter and a lot of momentum built. And I think it ties to what Rick was talking about. This is a market that's increasingly cognizant of the exposure and the need for our products around financial protection. So we operate in very competitive markets. We have good competitors out there. But again, I think some of the investments that we've made and some of the environmental conditions are encouraging here in the U.S. And I think true also for voluntary, Tim.

Yes. Thanks, Mike, and Alex. Thanks for the question. Since you asked a question about Unum, I'll start there on the Unum brand for VB. We are pleased with the momentum that we see building in the Unum VB brand, and we're also pleased with what we're seeing in the pipeline for the rest of the year and for 2023 as well. On the Colonial Life brand, we're really pleased with the progress and momentum that we've seen since the pandemic. Remember that this lot of business does not benefit from natural growth that we see in some of our other lines. But through the investments we've made in digital capabilities and investments in our distribution system and team. We feel really good about prospects long term for the business. In the third quarter of '23, large case sales were a bit lumpy and they can be. And we've said previously that we view that market somewhat opportunistically. And so we saw a little bit of an impact there on large case, but we're really encouraged by what we're seeing in our target markets, especially our public sector marketplace. I'll hand it over to Mark for a point of view on the international business.

Thanks, Tim. If I take the U.K. first, the market has been growing nicely off the back of COVID. There's certainly been a kicker there. You see us maintaining our market-leading position in long-term disability and in group critical illness and we're starting to pick our game up in the group life market where we've been a little bit less well penetrated. And I think the drivers of that are the way in which we're differentiating our experience to the brokers who are the gatekeepers to the customers and the value-added services we've been able to add into the product for the benefit of the employee and the employer. So I think we're feeling pretty good about the growth we can drive here in the U.K. I think over in Poland, we've seen steady growth in our individual block of business, but really some exceptional growth in our group business, particularly the strength of the product that we've got there, but also we're adding an additional distribution there. So I think you're seeing that come through in the sales growth in the overall international business, which I think this quarter in dollar terms is 62%, but in local currency is 82% growth. So that's everything from me.

Our next question comes from Tom Gallagher of Evercore.

First one is just the GAAP favorable reserving release for 3Q for the waiver claims recoveries. Is that also going to be reflected in statutory next quarter? Or is that a GAAP-only phenomenon?

This is Steve. I can take that one. Just a little bit background about how we go through our reserving process and our assumption setting process. We look at assumptions over time based on the experience that we see. If you go back to last year, we felt like the experience we were seeing in recoveries was at such a level that we wanted to go ahead and reflect that in our GAAP reserves. The GAAP reserves and stat reserves are on a little bit different construct just because you need to look at the levels of margin that you accumulate on those two bases. And so last year, we felt like it was time to change the assumption set on GAAP. We did that. We've continued to have very favorable recovery experience. So we went ahead and adjusted that again on the GAAP side, but felt comfortable with the margins that we had on the statutory side. I will say with the latest updates to expectations, we are likely to determine an update as appropriate for the statutory basis in 2023, and I won't expect anything to happen this year, but that is something that we'll look at next year and determine whether we need to reflect that experience and how we think about our assumption set for statutory.

Got you. And Steve, for in terms of ring fencing what that might mean for statutory next year, would that be similar only to the change in the GAAP reserves this year? Or might it also include something cumulative on the earnings side, so you might have to add a few pieces there to think about what the statutory impact might be?

Yes. I wouldn't predict what the amount would be. We need to go through. We need to do the work. We do hold higher levels of margin on the statutory side. So we'll do the work next year. I would anticipate it will not be as much as the releases that we took on the GAAP side, but we'll inform the market as we go through that process.

Okay. And then just a question on long-term care risk transfer generally. Can you just give an update for -- rates have obviously ripped higher here. The one new negative in the market is some elevated claim costs, which are not really exposed to it because of your indemnity feature. But with interest rates continuing to move higher here, curious if it's opening up greater possibility sort of advancing talks for you on potential risk transfer. Maybe talk about, are we getting closer? Is it still pretty far out? And is it still more likely to just be sort of smaller blocks of your LTC that is likely to be transacted, anything you're able to share kind of holistically what's where we're at?

Yes, Tom, it's Rick. I'll just share at the macro level around what we're seeing. As you said, with the rising interest rate environment, certainly for our -- as we look at our own block of business, it helps in terms of when we look at the longer-term nature, the cash flow reporting to -- all the things that Steve talked about. When you think about risk transfer in the markets, I would say it's fairly unchanged in terms of how others look at it. The work that needs to be done is usually across liability assumptions. It's not just the interest rate piece. So there's interest out there, but I wouldn't say there's really much change in the market. And as you said, our view hasn't changed. So when we think about how we want to do a transaction and think about multiple ways to do that, including pieces of our block of business, all those things unchanged. And I would just reaffirm what you said around the expense world and our indemnity nature of our block that really doesn't come into play when you think about our ability to do risk transfer. So not much has changed, certainly a higher interest rate environment better, but it's something we're still actively work on.

Our next question comes from Suneet Kamath from Jefferies.

I wanted to go back to the assumption review, particularly related to long-term care. Just curious what your experience around morbidity improvement has been of late? And if there were any other sort of identifiable trends kind of post-COVID that you can talk about with respect to long-term care?

This is Steve. I can take this one. I would say there's nothing of note that came out of our review. We obviously look at our margin in aggregate as we look at the experience that we've seen over the last year and we folded that into our experience set. So I would say our views haven't changed. I would note that like many others, as we looked at some of the experience we had through COVID, you have to kind of deemphasize some of that experience if you think about what our long-term expectations are. And so some of the claim of mortality, maybe some of the transition activity, we discount that pretty much when we're thinking about longer-term expectations unless any of that would continue over the longer term. So I would say there's really nothing to note. We're very happy about the process that we've gone through. And like I said in my opening remarks, from a GAAP perspective, we're done with our reserve adequacy work. Obviously, we'll go through our year-end statutory work, but don't view anything there of any significance either.

Okay. Got it. And then, I guess, for the core business, I mean, it's great to hear all this talk about natural growth, but at the same time, we continue to hear the word recession mentioned every single day. So I guess the question is, are you hearing anything from your corporate clients around headcount or potential layoffs? It does seem like everybody is talking about it. But when we look at your underlying trends, it doesn't seem to be showing up at least not yet.

Let me start off and then I'll hand it over to Mike for some details. But when you think about the recessionary impact, certainly, we hear what you hear and the discussions around it, you have to step back and think about the impacts of the business overall. One, you mentioned about the natural growth we've seen certainly been a good lift. And so you might see a little bit of slowing growth. But given all the great things that the team just talked about, we still see good growth, and that's really just protecting more people. So that's one piece of it. Got to think about the investment portfolio. Steve went through some of the details on that. I feel very good in their analysis. We stressed the portfolio through recessionary analysis. And then I think it comes back to questions around the core business and what happens in a recessionary environment on a couple of fronts. And Mike, maybe you can give some perspectives on that.

Yes. Sure. So Suneet, I think good observation. I would also say that what we see in natural growth is probably lagged by a couple 2, 3 a month. So it wouldn't be a great forward-looking indicator. But in terms of conversation, it seem to feel pretty good about the diversification of the client base. When we think about potential changes macroeconomically, the fact that we've had a lot of success in industries like health care, a lot of success, certainly in some of the more cyclical but in some of the more steady as well. So I think that diversification has played well in prior cycles, and I expect it would going forward from a top line point of view. And then always a watch area for us will be disability risk through a recessionary environment. Starting with SSDI, you do typically see long-term disability incidents tick up a bit in the industry on the private side does as well. We tend to be a bit more muted, I think, looking at the last 2 cycles, something in maybe 2 to 3 points on the loss ratio side from elevated incidents and then typically recovery, it was actually drift up to offset that to a degree. So it's a watch area for us. We're obviously in a good spot when we think about group disability risk right now. So we start from a position of strength. And the last thing I'd mention when you think about risk, claim risk is that typically, you have 4-plus quarters before recessionary impacts start to work their way into the book of business. So it gives you some time to take action.

Our next question comes from Tracy Benguigui from Barclays.

Rick, I'm glad you alluded to a more favorable PDR ultimate balance outcome than what you see per Slide 23 in your February outlook deck. I mean, interest rates are now well north. So that sensitivity table that cuts off at 2.5%. So I have a 2-part question. First, can you quantify what would the 2026 PDR ultimate balance look like? Assuming a more normal shape of the yield curve. And if we see today's rates remain constant over 3 years? And then in contrast, can you quantify how the PR balance looks today on a trailing 3-year basis and considering the current inverted shape of the yield curve?

Yes. A couple of things, Tracy to mention is that sensitivity we put out back in February really was not yield curve focused, it was kind of ultimate rate. And so take those numbers there, which were the 10-year treasury at 30 -- or 50 basis points to that, and that gives you the 30-year benchmark, and 30 years is really where it matters where a lot of our hedges are. We're thinking out on the longer end of the curve. The sensitivities you talk about, they are above the sensitivities we put out, at least in that page. They do reasonably well when you think about the moves that we've seen since then. But as we've talked about multiple times, looking at 2026 isn't really where we're looking. We're thinking about how this progresses over the next several years. And we talked about where things are looking at the end of this year and how they will run into next year. Steve, I don't know if you have anything to that?

Yes. I just kind of go back to how the premium deficiency reserve calculation looks. And although we feel great about where rates are today, it is going to take a few years for those rates to wind their way into the discount rate calculation. So I wouldn't expect a big drop in our PDR calculation at the end of this year, just to set expectations. We're very happy about what rates have done in the near term behind us here. But as we get through year end, it's going to take a few years for that to work its way into the calculation.

Yes. I totally got it. The 50 basis point spread, just a little bit more normal shape of the curve. That's right, I mentioned that. very basic question. So 80% of your LTC risk resides in Unum America and I get the relationship between Fairwind and the captive reinsurer and Unum America succeeded. But how does it work? Hedging Unum America cash flow does that help the PR calculation at all resulting in less contributions? Or is this just for risk management purposes?

Yes, Tracy, this is Steve. First and foremost, risk management. We just think it's a good way to manage an LTC block when you have interest rates at this level to go ahead and try to lock some of those in the near term. I would say just mechanically, how that would work is right now, our new money rate assumption is this trailing 3-year average. So for those investable cash flows that we have hedged, we've kind of locked in what that new money yield assumption is currently. And so it kind of accelerates, I guess, reflecting the current interest rate environment. but we view it as downside protection so that if rates in the future do come down, we know we can achieve a certain yield on our future investable cash flows.

Our final question for today comes from Jimmy Bhullar from JPMorgan.

So most of my questions were answered. But just on disability margins. The results are obviously pretty strong, and I think they're significantly stronger than even you would have assumed earlier this year. So can you talk about what drivers of the momentum in the business you feel are related to the economy or to inflation or other things that might be somewhat temporary in nature versus anything that you've done on your end that might be helping your results beyond the environment?

Jimmy, it's Mike. And I would agree, favorable risk results in group disability, more favorable than we would have anticipated. And like I mentioned, we have definitely spent time really digging in, looking at various segments of that strength, comparing them to history and to our expectations. And like I mentioned earlier, it is quite broad-based across sector and across duration of claim. And I do think that it is reasonable to conclude that the environment is a conducive one for our people working with claimants to help them get back to a productive work back in the workplace. Teasing out how much is internal versus how much is environment is a really tricky thing as I'm sure that you can appreciate. We feel really good about the team that we have in our benefits organization. We feel really good about the team. And it is really a team that we have between our field organization, our underwriting groups and our pricing actuaries that have just been very, very good over time at taking current experience and factoring that into our renewal and new business pricing process. So I know that's probably not as specific as an answer as you would like. But as Steve said, it does at this point with a few quarters here, a positive experience suggests to us that it's likely to continue to a degree and sort of the moderation back towards long-term loss ratio expectations is probably going to take some amount of time.

And then I think other companies have had fairly good margins in disability as well. Yours have been even better. But are you seeing any signs of companies sort of giving up some of that in pricing as you looked at renewal season? Have you seen any indications of disability prices being a little softer because of it?

Yes. Good question, Jimmy. And you're right to ask in sort of how this might translate into market pricing. And we are really actually pleased with how our January 1 renewals led in the larger employer market, we were placing those in the summertime. We're continuing to work that all the way through down into the small end of the market now. And we're tracking well relative to our expectations. So that, I think, for us is job 1 and just making sure that we're keeping our clients and making adjustments as you always will, with your book of business based on risk outcomes. So that feels pretty good. We talked about the sales momentum across group insurance and I feel very good, particularly in that core market which for us is a really important one and how that's playing through. And I guess I would take a step back when it comes to our approach to pricing, and again, you would have heard us talk about this, we do take a very long-term lens. That's what I think our clients really appreciate is some consistency in approach and not reacting quarter-to-quarter. So while we do have generally favorable risk experience, certainly, interest rates as well are a bit of a tailwind for us. We're going to look at that over time, often in combination with other products besides group disability, pulling in life insurance, pulling in voluntary benefits and really take a long-term lens to overall client relationship. So hopefully, that's helpful.

We have no further questions. I will hand back to Rick McKenney for any further remarks.

Great. Thanks, Alex, and I want to thank everybody for taking the time to join us this morning. That does complete our call for the third quarter. We do look forward to seeing many of you in the upcoming weeks and months at investor conferences, and so I appreciate you spending the time with us this morning. Talk to you all soon. Goodbye.

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