Good morning, and welcome to the Unum Group fourth quarter 2020 earnings conference call. Today's call is being recorded. At this time, I would like to turn the conference over to Tom White, Senior Vice President, Investor Relations. Please go ahead, sir. Great. Thank you, Tracy. Good morning, everyone, and welcome to the fourth quarter 2020 earnings conference call for Unum. Our remarks today will include forward-looking statements, which are statements that are not of current or historical fact. Actual results might 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, 2019, and our subsequent Form 10-Q filings. Our SEC filings can be found in the Investors section on our website at unum.com. I'll also remind you that 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. Excuse me. 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 fourth quarter 2020 net income of $135.4 million, or $0.66 per diluted common share, compared to $296.2 million or $1.44 per diluted common share in the fourth quarter of 2019. Net income for the fourth quarter of 2020 included the following items: A net after-tax gain from the closed block individual disability reinsurance transaction of $32 million, an increase to the reserves backing the closed block Long-Term Care product line of $119.7 million after tax, an increase to reserves backing the group pension block, which is a part of the other product line within the closed block of $13.8 million after tax, a net after-tax realized investment gain on our investment portfolio, excluding the net realized investment gain associated with the closed block individual disability reinsurance transaction of $1.6 million. Net income in the fourth quarter of 2019 included a net after-tax realized investment gain of $7.2 million after-tax debt extinguishment cost of $1.7 million. Excluding these items, after-tax adjusted operating income in the fourth quarter of 2020 was $235.3 million, or $1.15 per diluted common share, compared to $290.7 million or $1.41 per diluted common share in the year-ago quarter. Participating in this morning's conference call are Unum's President and CEO, Rick McKenney, Chief Financial Officer, Steve Zabel, and Chief Operating Officer, Mike Simonds, as well as Peter O'Donnell, who heads our Unum International business, and Tim Arnold, who heads our Colonial Life and Voluntary Benefits businesses. Now I'll turn the call over to Rick for his opening comments. Thank you, Tom, and good morning, everyone. We certainly appreciate you all joining us today. Today, we will take you through our financial and operating results for the fourth quarter, which finalized many of the items we shared with you on our investor day, in our investor meeting in December. This will be inclusive of our closed individual disability reinsurance transaction, which we are very happy about. Let me start by saying we closed out a very tumultuous year in a very strong position as we continue to navigate the challenges of the pandemic. Our leadership team is here, as usual, to address your questions, but I'd also like to recognize the entire Unum team, who have shown great resilience through the year in ensuring that our customers are well cared for and that we continue to build a dynamic employee benefits franchise. Let me start my comments this morning by providing some high-level views of the markets and macro factors that have been significantly impacting our business, not only in the fourth quarter, but through the entire pandemic in 2020. Many of these factors, including COVID-related mortality, saw a resurgence in the fourth quarter that has carried over into the early weeks of 2021. These factors will help frame up our financial results during our discussion today, as well as our views for 2021. First of all, the impacts from COVID-19 and related economic challenges in 2020 have been very transparent in our financial results. Those impacts were amplified in our fourth quarter results by this resurgence that I mentioned with related deaths and infections, specifically in December. As we'll discuss in greater detail, COVID-related deaths in the U.S. for the full year totaled 345,000, with 138,000 occurring in the fourth quarter. Further, over half of these fourth quarter deaths occurred in December alone, making it the deadliest month that we saw in the pandemic in 2020. Since we met with you at our investor meeting in mid-December, death counts have increased significantly. Sadly, that trend has continued into January, and it will no doubt impact our first quarter results even more than what we've seen in previous quarters. To detail that, high mortality in our life insurance business lines, high claim rates in short-term disability, and high expenses from leave volumes with partial offsets from high claim terminations caused by mortality in the closed long-term care block. As we look forward, we are very optimistic that this will turn. Recently, we have seen infection rates declining, coupled with the rollout of vaccines. The CDC reports that approximately 80% of the COVID-related deaths have been over the age of 65, and this population will be vaccinated in the coming months. This same group also represented about 50% of our group life deaths by count, many of whom are retirees who maintain some level of their coverage. As the vaccine makes its way through these ages, we should thankfully see meaningful decreases in overall mortality. This, in turn, is expected to drive a strong rebound in our results, likely in the second half of 2021, and cause us to expect to get back to our historic levels of growth and profitability in 2022. There will be some volatility in our results as we progress through this rollout period, but we remain highly confident in a full recovery as we get the pandemic behind us. The pandemic and related impacts on the economy have also had significant impacts on our top-line premium income. Our premiums in our core businesses for several years have seen growth in the 5% range. This year, it only grew by 0.6%, and in the fourth quarter, it was down by 1.4%. This outcome was consistent with the revised outlook we provided when the pandemic first hit, that premium income would be flat to up slightly for the full year, with declining year-over-year comparisons throughout 2020. To give perspective on the drivers of premium headwinds, there are three macro factors to highlight. First, the immediate shift to a work-from-home environment in March, resulting from the onset of the pandemic, had significant impacts on new sales. Full-year sales for our core business segments all declined in 2020, Unum US by 10%, Colonial Life by 27%, and Unum International by 9.5%. Most impacted were the voluntary benefit lines, which have a heavier emphasis on face-to-face sales and enrollments which require active selection. Looking forward, this has created an acceleration of the trends we were seeing with an increased adoption of digital sales and enrollment tools that we have invested in over the past few years, especially for our Colonial Life agents, where we saw a 240% increase in the number of agents utilizing these digital tools. Looking at the group market, we're encouraged by the momentum, which was initially impacted by the dramatic economic shock of the pandemic, but is recovering to a more normal pace of activity as people have slowly returned to work. Also helping our premium is how persistency has held up well in the face of the pandemic across most of our business lines. The benefits and services we provide are highly valued by employers and their came through in the retention of benefit plans, despite the financial stress many employers are facing. I believe it also reflects the investments we have made in our customer service and the dedication of our employees to serve these customers in this time. Finally, natural growth had a significant impact on the slowdown in premium growth in 2020. The shock to employment levels in the spring, rising from 3.5% to a peak of 14.7%, virtually wiped out all the benefit we usually see from growth in employee count and wages for existing customers. We expect to see the benefits of natural growth re-emerge as the pandemic slows and employment levels improve throughout 2021, with a more complete recovery in 2022. The next broad factor to highlight is the interest rate environment, which continues to be a headwind for all insurance and financial services companies. Over the course of 2020, the yield on the 10-year Treasury fell from its peak of 1.92% at the beginning of the year to a low of 50 basis points in March, and ended the year at 92 basis points. These levels, coupled with historically tight credit spreads, continue to create challenges for achieving attractive new money yields for our investment portfolio. Our strategy to gradually build out our alternative investment portfolio has benefited us with a well-diversified portfolio that focuses on consistent, predictable cash flows. We have also taken the necessary steps to lower our interest rate assumptions as part of our annual reserve adequacy assumption updates. In the tragedy of the pandemic, we see the economic effects on Unum as a once-in-a-lifetime event. Unlike what you might see in a P&C cat event, this impact has been spread out over the course of a year. It will impact our growth and profitability for a period of time, but we will come back strong. We would also note that through this period, our capital remained in excellent shape as we ended the year in a strong financial position with healthy capital levels above our targets and holding company cash almost four times our target. This speaks to the financial resiliency of our franchise. Just as importantly, the pandemic will be looked at as an event which we have successfully met our purpose, which is helping people through life's challenging moments and reinforce the social value of the benefits we provide to working people and their families. We have paid out over $150 million in COVID claims, mostly in small face amounts and provided by a company as a benefit. I continue to be very proud of the work of our employees to provide excellent service to our customers while we have navigated through this disruptive year. In our most recent surveys, we have seen strong improvements in both overall Unum employee engagement and claimant satisfaction scores over 2019. I'm also very pleased that despite the disruptions presented in 2020, our teams were able to complete an important transaction, which was the sale through reinsurance of our closed block of individual disability business. Once fully executed, it will have the benefit of freeing up approximately $650 million of capital, primarily to holding company cash, part of which we will see in our fourth quarter numbers. The transaction is a culmination of many years of effectively managing this book of business and helps us move our capital to more effective uses. While the numerous disruptions of 2020 have masked the progress we are making in growing many of our more capital-efficient businesses, such as Voluntary Benefits, dental and vision, and medical stop-loss, we are well-positioned strategically and competitively in these product lines, and I'm very optimistic about their long-term growth potential. To wrap up the year, we will look back on 2020 as the year of COVID. It changed so much of our world. It changed a lot in how we operate our business. It only reinforced our purpose as a company. We saw high mortality rates, short-term claims volatility, and the unprecedented disruption to the economy and the workplace. These are times when we step up and deliver on our promises, and we did, as our highly engaged and dedicated employees provided excellent service to our customers when they most needed it. In a year of unprecedented challenges from the economy, interest rates, credit markets, and the health crisis, the strength of our capital metrics improved at year-end 2020 compared to a year ago. With holding company cash increasing $650 million to $1.5 billion, risk-based capital holding steady at 365%, and leverage declining almost three points to 26%, the measures of strength and stability of the company, combined with the know-how of our team, give us great confidence as we work through what we all hope are the last stages of the pandemic to a more stable environment ahead. To cover the details of fourth quarter results, Steve? Great. Thanks, Rick, and good morning, everyone. In discussing Unum's fourth quarter financial results this morning, my remarks will focus on the analysis of our fourth quarter results relative to the third quarter, rather than the traditional year-over-year comparison. This will allow us to show how the company's business lines are progressing through the pandemic and resulting economic challenges and outline for you the impacts it has had on our results. Before I do so, I want to level set our reported adjusted operating income of $1.15 per share for the fourth quarter against the outlook we provided at our December 17 outlook meeting, which did call for adjusted operating earnings per share within a range of $1.14 to $1.24. Looking back on those assumptions we provided in December, actual fourth quarter results for premium growth, sales, persistency, year-end capital metrics, and investment income impacts were consistent with the expectations we discussed. In addition, the capital benefits from the closed block individual disability reinsurance transaction, which were realized in phase one, were slightly better, and the reserve increase for LTC as well as the capital contributions we made to back this block were consistent. The one area that did diverge significantly from our expectations was late quarter mortality. For setting expectations for benefits experienced, our outlook was based on an assumption of fourth quarter mortality from COVID-19 of 92,000 deaths nationwide. Actual mortality turned out to be substantially higher at approximately 138,000 excess deaths, with December accounting for over 50% of those deaths. More specifically, 25% of the quarter's excess deaths occurred in the last two weeks of the year, with the average daily death count approaching 2,600, pushing our reported income towards the lower end of our expected range. The year-end surge that occurred negatively impacted our before-tax operating income by approximately $22 million relative to the midpoint of our expectation, primarily in Unum US Group Life, with minor impacts to short-term disability, Voluntary Benefits, and Colonial Life's life insurance business. This was offset in part by approximately $10 million favorable before-tax operating income in long-term care from higher claimant mortality. This $12 million net impact late in the quarter impacted our operating income by $0.05 per share. As Tom outlined in his opening, after-tax adjusted operating income in the fourth quarter was $235.3 million, or $1.15 per common share. By comparison, in the third quarter this year, after-tax operating income was $245.9 million, or $1.21 per common share. We saw about an $11 million decline in sequential quarterly earnings. As I'll outline in my comments in more detail, the primary drivers of that quarter-to-quarter change were higher mortality impacts in US Group Life and Colonial Life, higher short-term disability claims and leave volumes in group disability, and lower levels of miscellaneous investment income from bond call premiums. We did experience some favorable offsets from long-term care claims experience and positive marks on the alternative investment portfolio. Before I begin my discussion of operating results this quarter, let me summarize for you the economic and business conditions that existed in the quarter and outline the impacts that it had on our results. First, as I mentioned, COVID-19 continues to have a significant impact on the external environment, driving a high level of mortality plus a continued high level of infections. These counts showed a significant resurgence in the fourth quarter as excess deaths in the U.S. from COVID totaled an estimated 138,000 compared to 80,000 in the third quarter. The impacts to our business are higher mortality across our life insurance business lines and increased short-term disability claims, which increased by 3% relative to the third quarter. Second, employment conditions remain challenging. Fortunately, the unemployment rate has gradually improved to 6.7% for December compared to 7.8% for September and the peak level in April of 14.8%. However, today's rate is higher than the 3.5% level the U.S. economy was experiencing heading into the pandemic a year ago. High unemployment rates negatively impacted premium growth in our core business lines as it negated the benefit we usually experience from natural growth in the in-force blocks. We are seeing signs in our results that the impact is leveling out, supporting our view that premium growth in 2021 for our core segments is expected to show a slight increase with group line increases offsetting small declines in the voluntary businesses. With the resurgence of infections and mortality in the fourth quarter, the reopening of the economy, with some people returning to more normal activity in their day, generate some inconsistencies [in forward]. COVID-related STD claims increased with the resurgence of infections, pressuring overall STD benefits experience. Leave requests continued to run significantly above year-ago levels and on a quarter-to-quarter basis, driving continued expense pressure in the group disability line. Providing a small offset was dental utilization in the fourth quarter, which was somewhat lower than the experience of the third quarter. The net impact to our fourth quarter results from these trends was negative related to what we experienced in the third quarter. Finally, financial market conditions were generally favorable in the quarter. This is most impactful to Unum in the credit markets, where corporate bond spreads continued to tighten while U.S. Treasury rates did increase. This combination continues to create a challenge for achieving attractive new money yields on investment opportunities, but it is favorable for overall credit quality and our outlook going forward for potential credit impacts. We've seen a dramatic reduction in downgrades and impairments since the first quarter of 2020, as well as a significant decline in our watch list for potential credit concerns. The marks on our alternative asset investment portfolio showed a strong improvement in the fourth quarter, and we estimate the portfolio has recovered roughly half of the valuation decline experienced in the second quarter. Against this high-level backdrop, I'll now focus on our business lines, beginning with Unum US Group Disability. Adjusted operating income for the fourth quarter was $64.7 million, compared to $73 million in the third quarter. There were three primary factors that impacted these results. First, we experienced pressure on STD claims from the resurgence in COVID infection rates, with the volume of COVID-related standalone STD claims increasing 45% by count from the third quarter to the fourth quarter. Second, pressure on expenses from leave request volumes remains high and continued to impact results, with those volumes running approximately 6% higher relative to the third quarter. Third, pressure on net investment income impacted operating income as miscellaneous investment income was $10 million lower due to lower levels of bond call premiums. Miscellaneous investment income from bond calls was unusually high in the third quarter at $12 million and slightly below average in the fourth quarter at $2 million. These trends were partly offset by continued favorable results in the long-term disability block, with generally stable new claims incidents and continued strong claim recoveries. We continue to be very pleased with the consistency of the results in LTD throughout this volatile environment, as demonstrated by the group disability benefit ratio of 72.5% this quarter, the lowest in recent history, compared to 74.1% in the prior quarter. Adjusted operating income for Unum US Group Life and AD&D remained depressed with a loss of $21.9 million in the fourth quarter compared to income of $13.9 million for the third quarter, with the change driven primarily by unfavorable claims experience. The pandemic clearly impacted results, though our analysis continues to show a consistent pattern between our mortality trends and the national COVID mortality statistics. That is, we continue to see approximately 1% of the excess mortality by count in our Group Life results. Specifically, in the fourth quarter, we had approximately 1,300 excess claims by count or slightly under 1% of the 138,000 reported deaths nationwide. In the third quarter, reported slightly more than 900 excess life claims benchmarked against a base of approximately 80,000 COVID-related deaths nationwide. A higher claim count of approximately 350 and an average claim size of $50,000 in the fourth quarter accounts for part of the decline in operating earnings. Looking ahead to the first quarter, the national mortality rate in January has exceeded the experience of December and will likely further pressure results in Group Life in the first quarter. We believe this 1% mortality relationship to national trends will continue in the early part of 2021 and suggest that you use that as a basis for your projections and estimates in future quarters. Over time, this relationship could change and potentially exceed 1% on what we expect to be a declining overall mortality count as vaccinations roll out to different sectors of the population, initially to the elderly, teachers, medical personnel, and first responders, but we will update you as these trends evolve. The Unum US Supplemental and Voluntary lines experienced generally consistent results in the fourth quarter with adjusted operating income of $100.7 million compared to $101.3 million in the third quarter. While consistent in total, there were some differing trends for each of the primary product lines. The Voluntary Benefits results were softer in the fourth quarter, driven by worse experience in the individual life and short-term disability higher COVID-related claims. The IDI line had favorable results with the benefit ratio declining to 42% in the fourth quarter from 48.6% in the third quarter, driven primarily by favorable incidents and mortality trends in the block. Finally, results in the dental and vision business improved in the fourth quarter, with the benefit ratio declining to 65.4% from 76.8%, primarily driven by lower utilization. Sales for Unum US declined 7% in the fourth quarter compared to the year-ago quarter. Sequentially, though, we see sales momentum building, with improvement in the year-over-year decline from 18.5% in the third quarter to 7% in the fourth quarter, reflecting the still difficult yet improving commercial environment. Total sales for Group lines, meaning LTD/STD and Group Life combined, decreased 4.3% as the fourth quarter experienced the impact of a higher than normal level of large case sales recorded in the third quarter. Although new sales were down in total, we continue to be encouraged by the success from our Unum HR Connect platform, which provides a differentiated experience on leading HCM platforms. Sales on this platform increased 6% in the fourth quarter over the year-ago quarter and increased 17% for the full year. On the persistency front, all group products saw an uptick from the third quarter. As discussed throughout 2020 and on our outlook call, the Supplemental lines show more pressure than the Group lines. Voluntary Benefit sales declined 24.2% compared to the year-ago quarter, but did improve their sequential year-over-year decline, which was 35.8% in the third quarter. Dental and vision sales declined 9.4% as we continue to see disruption in group sales stemming from discounts and other incentives carriers are providing in response to the unusually favored claim trends the industry experienced in the second quarter. This dynamic is evident in our persistence results as well, which improved to 85% versus 82.6% in the year-ago quarter. Similar to VB, we also see momentum building in the sequential year-over-year sales decline improved in dental and vision from down 33.1% in Q3 to down 9.4% in Q4. stop-loss sales continued to grow from a small base, up over 140% for the fourth quarter and full year, providing a good long-term growth opportunity for us in a very capital-efficient product line. Moving to Unum International segment, adjusted operating income for the fourth quarter remained generally consistent at $20.7 million compared to $21.4 million in the third quarter. Income for Unum UK was £15.4 million this quarter, compared to £15.2 million in the prior quarter. Overall benefits experience was slightly favorable quarter-to-quarter, premium income was slightly lower due to persistency and an increase in reinsurance ceded. Unum Poland saw more pressure on its results in the fourth quarter relative to prior quarters due to impacts from COVID, which began to emerge late in the year. we are encouraged by the improved income in the second half of 2020 in the international operations, we are cautious with our near-term outlook as both the U.K. and Poland deal with COVID impacts and related economic shutdowns. Colonial Life had a more challenging fourth quarter with adjusted operating income of $71.2 million, compared to $92.2 million in the third quarter. These results were primarily impacted by a higher benefit ratio of 56.6% compared to 52.2% in the third quarter, which was primarily driven by higher COVID-related life insurance and disability claims, as well as weaker results in the cancer and critical illness products. In previous quarters, the negative impacts on our life block from COVID claims had been partially offset by favorable results in our other two product lines. in the fourth quarter, those favorable offsets were negated by a pickup in utilization of many of our health and wellness and accident products, where performance had been favorable. Premium income for the fourth quarter was in line with the third quarter. As we indicated in our prior meetings, it will take a return to more normal sales growth before we see growth reemerge in premium income. I'd also point out that fourth quarter net investment income was lower than third quarter, reflecting the unusually large $8.1 million of miscellaneous investment income we did record in the third quarter. Sales for Colonial Life declined 26.5% in the fourth quarter relative to a year ago. This represents some improvement related to year-over-year trends we saw in the second and third quarters, which were down 43% and 27.6% respectively. the sales environment remains challenging, we are encouraged by the adoption of the digital sales tools we have developed. While our traditional agent-assisted sales remain pressured, we saw a 30% increase in telephonic enrollment and a 25% increase in our digital self-service platforms. In addition, agent recruiting remains strong with a 10% increase year-over-year. In the Closed Block segment, adjusted operating earnings increased to $104.2 million in the fourth quarter, which did exclude the significant items that I'll cover in just a moment. This compares with $70.8 million in the third quarter, largely driven by the impact of higher claimant mortality on the LTC Block and positive marks on the alternative investment portfolio following the significant decline that we saw in value as of the end of the second quarter. The positive mark on the alts was $29.4 million in the fourth quarter, compared to $11.3 million in the third quarter, and a loss of $31.3 million in the second quarter, which did reflect the negative market conditions at the end of the first quarter. We estimate that we have recovered about half of the valuation hit we saw in the second quarter, focused mostly on the equity-based and credit segment of the portfolio, and we anticipate additional recovery in future quarters. For the long-term care block, the interest-adjusted loss ratio was 60.2% in the fourth quarter, excluding the impact of the reserve assumption update, which I will cover separately in a moment. The results of both quarters remain well below our expected long-term range of 85%-90%. The underlying results this quarter continued to be highly favorable [relative] Driven by higher mortality on the claimant block. Claimant mortality by count was approximately 15% higher than expected in the fourth quarter. As a reminder, claimant mortality was approximately 15% higher than expected in the third quarter and 30% higher in the second quarter. For the closed disability block, the interest-adjusted loss ratio was 79.5% in the fourth quarter, excluding the impacts from the reinsurance transaction, compared to 86.6% in the third quarter. Fourth quarter experience was more consistent with our expectations. As the reinsurance transaction closed in mid-December, our results reflect the performance of this block for the majority of the fourth quarter. Wrapping up my commentary on the quarter's financial results, the adjusted operating loss in the corporate segment was $42.7 million in the fourth quarter. This is favorable to the run rate of losses of $45 million-$50 million per quarter that we did outline for you back in our December meeting, primarily due to lower expenses in this quarter. I would like to cover the significant items recorded in the quarter, beginning with the closed block individual disability reinsurance transaction that we announced at our December outlook meeting. While the accounting treatment for the transaction is complex, the primary economic impact is the ultimate release of approximately $650 million of capital backing this block, primarily as holding company cash. This occurs with the closing of the first phase of the transaction we are reporting today with our fourth quarter results and the completion of phase 2, which we are making very good progress on here in the first quarter, and we will discuss on our first quarter earnings call. The impact to fourth quarter GAAP earnings from the transaction was a net after-tax gain of $32 million. You can see the components broken out in the digest in the earnings release. From a balance sheet perspective, the active life cohort of the block is being accounted for under deposit accounting rules, and the disabled life cohort is being accounted for as reinsurance. As a result of accounting under different accounting models, we are separating the transaction components, which results in recognizing a prepaid cost of reinsurance on the DLR component and a deposit asset on the ALR cohort. The prepaid cost of reinsurance of $815.7 million, which largely reflects the negative ceding commission and difference between GAAP and statutory reserves held on the block, will be amortized over the life of the block, with the amortization reported as a non-GAAP measure and excluded from our adjusted operating earnings. The deposit asset related to the ALR cover is initially $88.2 million and will be adjusted going forward to reflect the net cash flows related to the performance and accretion of interest. As I mentioned, there is a lot of complexity in the accounting of the transaction, but the economic impact driving the rationale for the transaction is the release of capital back in the block, primarily to holding company cash and the financial flexibility it provides us. As we also discussed back in our December meeting, we completed an update of our GAAP reserve adequacy for the LTC block and did record a reserve increase of $119.7 million on an after-tax basis, which was really at the midpoint of our expected range. The assumptions we implemented with this review were generally consistent with what we described previously. As we mentioned, we lowered the interest rate assumption for the 10-year Treasury yield to an ultimate rate of 3.25% and extended the mean reversion period to seven years. This change added approximately $500 million to reserves, but we also had favorable offsets with the success of our rate increase approval program, lower expense expectations, and movements in our group LTC inventories. Cash contributions for the LTC block ended 2020 consistent with the expectations we provided at our outlook meeting. The amounts contributed for full year 2020 were $411 million for Fairwind and $55 million for First Unum. The Fairwind contribution includes funding $181 million after tax for the LTC premium deficiency reserve in conjunction with the Maine Bureau of Insurance Examination. These are all reflected in the capital metrics I'll outline in the capital discussion. Also in the fourth quarter, as part of our GAAP reserve adequacy review, we did record a reserve increase of $13.8 million after tax in the group pension block, which is included in the other product line within closed block segment. This closed block has reserves of approximately $700 million and runs off at a rate of approximately $40 million annually. The reserve increase was really driven by lowering the interest rate assumption for this block to be more consistent with that of the LTC block. I'd like to now turn to our investment portfolio with a few points to highlight. First, we reported a large after-tax realized investment gain of over $1 billion in the quarter. This is largely related to the reinsurance transaction, as the assets being transferred to the reinsurer were marked to market before being transferred as part of phase 1 of the transaction. These assets had large unrealized gains, which were realized, and the assets were transferred to the reinsurer at market. Second, related to the reinsurance transaction, we were able asset, which had to the closed disability block, but were not transferred to the reinsurer as part of the transaction. This quarter, we allocated $360 million of these securities with a 7.4% yield and BBB rating to the LTC investment portfolio. These above-market yields add strength to the balance sheet and represent additional economics to the transaction. Third, the overall quality of the portfolio remains in very good shape. During the fourth quarter, we saw only $85 million of investment-grade bonds downgraded to below-investment grade, and $52 million of which will be upgraded back to investment-grade status when the acquisition of that company is completed this year. Our watch list of potentially troubled investments has declined to very low levels, as we have taken advantage of the rebound in the credit market to trade out of these positions. The final point I'll make is that we saw a strong recovery in the valuation mark on our alternative investment assets of $29.4 million this quarter. Given the current portfolio size, we would expect quarterly positive marks on the portfolio of between $8 million and $10 million. We estimate we have recovered about half of the valuation loss from the market decline in early 2020 and continue to expect a full recovery over time. I'd also note that it was an unusually low quarter for traditional miscellaneous investment income from bond calls, following an unusually high amount in the third quarter. You will see that impact in many of our core business lines. Looking to our capital position, we finished the year in very good shape with a risk-based capital ratio for our traditional U.S. insurance companies at approximately 365% and holding company cash at $1.5 billion, which are both comfortably above our targeted levels. The cash balance includes the capital release from phase one of the reinsurance transaction of approximately $400 million, and we'll have an additional benefit as phase two of the transaction is completed in the first quarter. In total, once the reinsurance transaction is fully executed in the first quarter, we anticipate releasing over $650 million of capital, primarily to the holding company. In addition, our leverage ratio has declined to 26.2%. I'll close my comments with an update to our expectations regarding our outlook for 2021. At our outlook meeting back in December, we indicated that we expected 2021 after-tax adjusted operating income to be relatively flat with our expected income for 2020. We also outlined a pattern for expected income of the first half 2021 mirroring the second half of 2020, with the second half of 2021 beginning to rebound to more historic levels of growth and profitability. Based on the higher than estimated COVID-related mortality we experienced in the fourth quarter of 2020 and our revised assumption of a 30% increase in mortality counts in the first quarter of 2021, we now expect a modest decline of 5%-6% for full year 2021 adjusted operating income per share. We anticipate COVID having a more negative impact on our first quarter results, with mortality in January being the worst month of the pandemic. However, we continue to expect second half 2021 income to be in line with our previous outlook, producing a stronger recovery as the impacts of the pandemic subside. As for our outlook for capital metrics, we anticipate year-end 2021 levels of holding company cash and risk-based capital to be very in line with our year-end 2020 metrics of 365% RBC and $1.5 billion of holding company liquidity, which will provide a strong, stable capital base as we work through the remaining impacts from the pandemic. With that, I'll turn the call back to Rick for his closing comments and look forward to your questions. Great. Thank you, Steve, for that summary of a very busy fourth quarter. I'll summarize by saying that we continue to be pleased with the operational performance of the company through what continues to be an extraordinary environment. We do believe we're well positioned to benefit from improving business conditions as vaccines take hold and we move past the December and January surge in mortality and new COVID infections. In the meantime, we'll continue to focus on the crisp execution and manage through the challenges we see today. One thing before we go to your questions, I'd like to take a moment to recognize Peter O'Donnell, who will be retiring from Unum soon. After a decade-long career with the company, this will be his last quarterly earnings call. I just want to recognize Peter. Peter has been a great part of our executive team, and we will certainly miss his leadership and expertise. I would say we have an excellent leader coming in Mark Till, which you may have seen in the press release, stepping into Peter's shoes. We do look forward to introducing Mark to you in future meetings such as this. The team's here ready to respond to your questions. I will ask the operator to begin the Q&A session. Thank you, sir. If you would like to ask a question, please signal by pressing *1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please ask one question and one follow-up question. We will now take our first question from Ryan Krueger from KBW. Please go ahead. Hi. Good morning, everyone. I just had a question on utilization of critical illness and related products. I guess, are you expecting that to remain somewhat elevated as we go through the beginning part of 2021, like you saw in the fourth quarter? Mike, you want to answer that? Yeah, sure. Thanks, Ryan. Good morning. A little bit of elevation, and I think we would expect to see that persist here in the first quarter. If you kind of broaden out, I think you said critical illness and other related. If you think about the supplemental health products, Accident, group hospital indemnity. With everything shutting down and people not knowing how to access services in the springtime, we saw those things fall off. I think, fortunately, people have found a way, even with social distancing, to access those services. We're getting back to more normal and in a couple spots, slightly elevated. I don't see it as a long-term, persistent point of pressure for us. Ryan, Steve, I just add, that was incorporated into kind of the directional outlook that we gave of the 5%-6% EPS decline. I think we've incorporated a little bit more pressure going into the first quarter there. Got it. Just one quick follow-up on the 5%-6% decline. I guess, when you think about that relative to the prior expectation of flat, is that effectively all driven by higher COVID-related impacts in the first half of 2021? Yeah, Ryan, it's Steve. I mean, there's some puts and takes in there, but generally speaking, yes. If you go back and you think about how we were thinking about 2021 going into Investor Day, we were coming off of an October with about 24,000 national COVID deaths. November was about 37,000 deaths. That was setting our expectations for December and then going into the first quarter. What we ended up seeing was close to 78,000 deaths in December. I think the final count for January was 97,000 nationally. As we've mentioned, we get about 1% of that by count in our group life business. Obviously, there's also some impact to some of our other voluntary benefit businesses. Yeah, that's the main story. All of our other expectations remain relatively consistent. What I would say, too, is that we believe once we pass through the wave of mortality, which hopefully will subside very quickly here, we believe the second half of 2021, we'll be right back on track with our recovery. Then it's just a matter of growing the top line, and we'll have a great franchise back going into 2022. Got it. Thank you. Thanks, Ryan. We will now take our next question from Thomas Gallagher from Evercore. Good morning. Just a question on group disability. The underwriting results still look pretty favorable here. Most peers we've seen this quarter are seeing a pretty meaningful level of deterioration in the quarter. I guess I've also heard about some are extrapolating the pickup in short-term disability claims are going to convert to LTD claims when the elimination period ends. Just kind of rolling all that together, are you expecting that you're going to start to see some of this? Is that embedded in the guide, or are you still assuming I think you mentioned just a little bit higher is the expectation, but are you seeing any of those trends emerge? Is that factored in? Go ahead, Mike. Thanks, Tom. Yeah, thanks, Tom. Good morning. It's Mike. A couple things I'd say on group disc. The first is, if you think about long-term disability, a little bit of volatility on the submit incidents, but paid incidents, really solid and consistent. Recoveries, again, quite consistent to favorable. Then I'd say average size was a little bit of positive volatility for us, not major, but certainly contributed to good results in the fourth quarter. Offsets from SSDI in line kind of piece of the call. I think the offset a little bit for overall group disability was short-term disability, and Steve talked a little bit about that. We saw COVID, and you can really quite clearly see it, COVID-related incidents driving an increase in fully insured STD. The two netted to 72%-73% group disability loss ratio. I think for the year, we finished around 73%. I think that's in line with what we've come to expect as we look out over 2021, something in that 73%-74% range from a loss ratio point of view. Got you. Can I actually hit real quickly? Yeah, Tom, just sorry. You asked a good question, too, about the flow-through rate from short-term disability. Yeah, we have been watching that real closely and at this point in line with what we would expect. If you think about the typical COVID diagnosis, you're certainly going to trigger a short-term disability. To get all the way through to the EP into LTD, we're just not seeing that be a significant driver for us. Okay, got you. The statutory loss for the quarter, the $145 million, can you just remind me what drove that in? I realize that the very favorable closed block performance, I think they're in captive, so they're not included in the result you show in your supplement. Is that largely what's driving it or something else? Do you expect that to continue into 1Q? Yeah, Tom, it's Steve. Good morning. Really the driver of that loss in the fourth quarter was some of the accounting around the reinsurance transaction. We recaptured that block from our Northwind captive, when we ceded it out of our kind of traditional insurance companies, the negative cede generate a loss from a statutory perspective because of the negative c. If you kind of look at that earnings pattern, ex the transaction for the full year, we feel pretty good about where our statutory earnings were given the group life pressure probably came out between the $800 million and $900 million of annual earnings. What I'd tell you, though, is that was more than offset, or it was at least offset in our Fairwind structure. As you can imagine, all the favorable LTC claimant mortality was really realized and recognized in the Fairwind captive. We had very good favorable statutory results there. That was kind of a wash. We feel good about the statutory cash generation coming out of the year. I would say going into 2021, we'll still see a little bit of pressure around our statutory earnings given the elevated life claims that we expect to see. Still feel really good about the cash generation engine that we have in those traditional operating companies. Okay, thanks. Thank you, Tom. Thanks, Tom. We will now take our next question from Mark Hughes from Truist Securities. Please go ahead. Thank you. Good morning. You had talked about Morning, Mark making some adjustments to the leave management agreements to dampen some of these expenses. Am I remembering that properly? When might that kick in and have an impact on the financials? Sure, Mark. Good morning. It's Michael. I'll take that one. I just would start by saying, recall that when we talk about the services components of group disability, it's leave management for sure. It's also our self-insured, fee-based STD business, critically important to us. Our clients care deeply about it. Think about the changes that have come at the national, state, municipal level when it comes to leaves, everything that employers are doing with parental leaves, elder care leaves being added to their benefit portfolio. Clients need help with it. We only sell it in conjunction with insured lines and look at pricing at a customer level and feel good about our ability to continue to do that. That being said, I think Rick highlighted this a bit, but when you looked across the self-insured STD and leave, we saw volumes up 57% in the fourth quarter. The costs and expenses were up about half that. We are seeing the benefit of some technology and process change and some productivity coming through. To your specific question, as I look out, I think we're going to deal with another elevated first quarter here in all likelihood, given the pandemic. That expense ratio in the group disability segment I would expect to be down pretty consistently as volumes come down. I'd say even more impactfully as we get technology and process change helping us gain some efficiency, then two, the pricing changes, which I'd say we're making good headway both in terms of some aggregate increase in fees that we're charging, then two, and to your question, embedding some collars in the pricing arrangement such that the price and revenue will fluctuate with big swings in volumes in the future. I think it'll, again, be a gradual sort of progress in the disability expense ratio coming down, but I do expect that to continue in a pretty steady fashion post 1Q over the next four, five, six quarters. Just a quick follow-up. When you looked at group life, how are you approaching pricing on that product? Obviously, you've got the COVID is unusual, but maybe could recur in the future. How are you approaching pricing? Yeah, Mike, I'll take that one, too. It is a finite defined event. What we didn't do was make significant adjustments to, say, our manual rates that go into our pricing. It will flow through in the experience. Typically, when you're looking at a mid or large-sized group life insurance client, you're going to look at, say, three years of experience, and that will flow into renewal and pricing decisions as we look out into the future. I would also say, Rick made this comment in his opening, we have been there for clients through this period. They understand and have felt firsthand the impact of this pandemic. I think we've come through it really well in terms of delivering on our promises, it is always a competitive and tough market. I think our clients understand that there will probably be some upward movement, and I expect our persistency is going to hang through that process. Thank you. Thanks, Mark. We will now take our next question from Erik Bass from Autonomous Research. Hi. Thank you. Steve, I was just hoping you could go back to the topic of the holding company free cash flow for 2021. I was wondering, what do you anticipate for subsidiary dividends? And then can you just remind us how much you're budgeting for LTC contributions or other cash needs? Yeah, great. Thanks, Erik. Yeah, just reiterating our expectation at the end of 2021 is to maintain both holding company cash levels at $1.5 billion, as well as retaining our RBC percentage at the 365 range. When we think at around 2021, generally speaking, the statutory earnings from 2020 will influence what comes through dividends from the operating companies in 2021. I think that they're still going to be very strong, maybe a little bit lower than what we've seen in past years. What I'd also say is we anticipate our contributions to Fairwind to also be a bit lower because of our expectation of claimant mortality there. It's probably a bit of a wash, all things being said. What I would say, though, just to kind of give you a number, is when you think about cash contributions to support LTC, we anticipate those to be kind of in the same range that we saw in 2020, which was right around $450 million. They're going to shift a little bit in that we expect our New York company to have lower contributions, and Fairwind might just be a tick-up. All things being equal, it's going to be pretty consistent with what we saw in 2020. Got it. Thank you. I was just hoping you could talk a little bit more about the sales outlook for Unum US, where it sounds like you're getting optimistic on kind of seeing a return of activity there. Relatedly, what impact do you expect to see on persistency as sales activity picks up? Great. Mike, do you want to start us off? Yeah, sure. Absolutely. continued challenging environment, but finding a way. The variances to prior year continued to close in the fourth quarter. If you think about Unum US, to your question, down about 20% year-over-year in Q3. We narrowed that down to about 7% here in Q4. It was encouraged to see core sales to employers under 2,000 employees are actually up in the quarter. Large case was down, but as we talk about and have for many years, it's going to be selective, and we'll see some volatility in large case sales. The value proposition's coming through. If you are an employer that has gone to a cloud-based HCM platform like Workday or ADP, we're winning a disproportionate amount of that business. Come back, as we look at the pipeline, in line with the expectations to may be slightly favorable. The momentum, I think, is starting to build. I'll actually ask if Tim's got some comments on the voluntary front, and I'm sure Peter can hit international quickly because there's slightly different dynamics between group and voluntary. Just to close out the Unum US side, I do expect sales to build as we go through the year. Persistency has been ticking up through 2020, and our expectations are for another strong year from a persistency point of view. The third piece of that puzzle is the natural growth. Again, as the economy begins to recover at the turn here, we would like to see and expect to see some level of both job and wage growth that would come through for premium for us, such that we're just beginning to show a little bit of earned premium growth as we look at the balance of 2021. Tim, maybe you could talk a little bit about the voluntary markets. Sure. Yeah. Thanks, Mike. I'll pick up on some of the themes that you shared. First, from a momentum perspective, we're pleased with the momentum we're seeing. Obviously, Q2 of 2020 was the most challenged quarter, we've seen incremental momentum each quarter since. In our fourth quarter results on the Colonial Life side, we were up against a very difficult comp. We had extremely large jumbo case that was included in our 2019 fourth quarter results. If you exclude the impact of that particular case, our sales growth rate was more like -19%. We like the momentum we're seeing. We're encouraged by what we saw in January. As both Rick and Steve pointed out, adoption of our digital tools is going extremely well. We're seeing great adoption by our agents and also our clients and policyholders of our digital portfolio. As Steve pointed out, on the Colonial Life brand, saw nice recruiting in 2020, up 10%. The total number of 1099 sales managers in the Colonial Life organization grew by about 15% last year. Mike commented on persistency on the group side, persistency held up extremely well on the VB lines overall. On the Colonial Life brand, persistency actually was better in 2020 than in 2019, and we think a big part of that is people recognizing the value of these products. As the vaccine really comes online here later this quarter and into the second quarter, we're encouraged about markets opening back up and having the opportunity to really put our sales force back out in the field. On the Unum side, we're extremely encouraged with our engagement with brokers and how strong that's been throughout the pandemic. As others have suggested, it's going to take a little longer on the VB side to recover from the pandemic, but we're encouraged. Shall I pick it up from there on the international side? Yeah, please. Just a little bit of context on the U.K., first of all. You'll have noticed that sales in the fourth quarter were particularly challenged. Where we are at the moment is in a very significant lockdown. We are locked down in our houses. However, I would say to you, the sun is shining, the snowdrops are outside, and the vaccination rate has just gone through 10 million people. 90% of over 75 people have got the vaccination. We're hopeful that we're going to get opened up soon. I do think the government is a bit conservative. We've had a few false starts on opening, so it's difficult to call when. Similar to the U.S., I'd expect momentum to start gathering from March, April, and then it takes about a couple of months to come through. I do think Q4 was the low point, so I expect sales comparatives to improve quarter-over-quarter. We're off to a reasonable start in January. Sales will be slightly lower overall for the year, but momentum will gather through the second half of the year. That's the full sales outlook. I just want to make one note. We're going to keep going. I know we're up on the hour, and so to be respectful of others that might be out there, but we're going to keep going answering questions. If you want to stay in queue, we'd be happy to keep going. Thanks for that question, Erik. We will now take our next question from Brian Meredith from UBS. Thanks, guys. Good morning. This is Mike on for Brian. I was just curious, in long-term care, if there's sort of an acceleration of mortality occurring, I know that should be theoretically reducing your policy count. I know this is a closed block that'll be rolling off over time, but is it logical to assume that when COVID kind of settles down, the operating income that you report from long-term care will sort of flip around and become unfavorable just because of the pull forward of that mortality? Yeah, great. Thanks, Mike. This is Steve. I'll make a couple comments on that. First of all, I want to distinguish between what we're seeing in our active life block and what we're seeing in our claimant block. We have not really seen mortality on the active life block, and that's where the are, if you think about it that way. So the in-force block has stayed fairly stable, with what we've seen historically. When it comes to the claimant block, we have thought a little bit about are we just seeing an acceleration of some claimant mortality that we would see in future periods? We have made pretty significant provisions within how we think about our disabled life assumption set. Specifically, we have decreased some of our near-term mortality assumptions to take that into account. We've set an expectation within our reserving construct that that will happen to some degree. We'll have to see how that plays out, and we'll look at that over the coming quarters as this thing unwinds. We would not expect, though, for this thing to flip and have higher than expected loss ratios on that business. As you know, it's a very volatile block and we'll just have to see how much of it really was pull-forward against the expectations that we set in our assumption set. Great. Thanks. That's super helpful. Just quickly on Unum US. I know G&A seemed a little bit elevated. Is that all that kind of lead volume that you were talking about? Is there any other pieces that are driving that higher? Do you think that might remain elevated as we enter 2021? Should that be an indicator, if it is lead volume, that sales are kind of going to jump later in the year? Yes, Mike, I can take it. The primary driver is both those self-insured short-term disability and leave expenses. I'd say there are a couple of other kind of timing-related things in the fourth quarter that have it a bit elevated. As we sort of look out, I wouldn't read into it a sustained trend of upward OE ratio. I think we would expect that that would come back in line, particularly once we get past 1Q and the volumes in short-term disability and leave come down as the vaccination hits. We are frankly seeing that as sort of first, as you see the national statistics around infections come down. We've seen that now for about five sustained weeks with a short lag of a week or two, our short-term and leave volumes start to mitigate. Again, we're on a sustained path there as you would expect, mortality should follow. A good continued OE discipline, probably need to get past 1Q. Thanks, guys. Thank you, Mike. Thank you. We will now take our last question from Humphrey Lee from Dowling & Partners. Good morning, and thank you for taking my questions. Just to follow up on the whole leave management expenses. I understand that you continue to reinvest in the businesses, that part of the equation from the elevated expenses may continue. Is there any way to help us to think about the elevated expenses between volume versus continued reinvestments? Yes, Mike. I do think you've got an outsized impact to expenses if you look at particularly, Humphrey, that group disability segment driven by COVID, very acute in 4Q, just like we've been talking about. Expect that to continue in 1Q. Boy, things are lining up the way we are expecting at this point, that as we get through that first quarter, get to the turn of the year, we would expect things to normalize quite a bit. Just to be clear, that's going to be the big driver of those expenses. The midterm to long term trend, though, we are feeling very good about the productivity that's coming with the technology investments that we have been making. We do believe that we will see some pretty substantial margin improvement in that self-insured STD leave business as we both improve productivity, bring down unit costs, and then make the pricing adjustments that we talked about earlier. That's a good combination for us. I do think what you could expect to see, again, is that operating expense ratios within the group disability segment remain elevated here in 1Q, just a gradual improvement as both cost improvement and pricing takes hold over the coming quarters. Got it. Going back to group life mortality. Clearly, COVID has been a big impact, some of the other carriers have seen non-COVID related mortality as well. I was just wondering if you have seen any impact from differences between the COVID related versus non-COVID related impacts to your mortality book? Yeah, Humphrey, it's Steve. Good morning. See just normal volatility in our non-COVID mortality. Maybe average claim size just a little higher in the fourth quarter, but it bounces back and forth. We are not seeing anything that we would consider a trend in that non-COVID kind of block of mortality. We'll continue to look at it, monitor it over time. It's something we think about, but I would say that it's not a meaningful driver of earnings in the fourth quarter or has it been in previous quarters other than just normal volatility that we would have in the block anyway. All right. Thank you. Thanks, Humphrey. Great. Thank you, Humphrey. I think that is all the questions. I do want to thank everybody for taking the time to join us, sticking on a little bit over the hour as well. Operator, this does complete our fourth quarter 2020 earnings call. I look forward to connecting with many of you at upcoming investor events. I would ask that you all stay well. With that, we'll end the call. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.