Steven A. Zabel
Executive Vice President and Chief Financial Officer at Unum Group
Great. Thank you, Rick, and good morning, everyone.
As Rick described, the first quarter was a very good quarter for the company as we benefited from strong operating performance in many parts of our business, including group disability where trends are supporting our full year after-tax adjusted operating EPS outlook increase. Sales were strong on a constant currency basis, with consolidated sales growth of 18.9% across our core operations, highlighted by 22.5% growth in Unum U.S. and 47% for Unum International.
Core operations premium growth of 3.9% in the first quarter on a constant currency basis was higher than anticipated at this point in the year. Despite some variation across lines, persistency showed nice stability and improvement in areas where our technology has the opportunity to drive an excellent customer experience, such as our growing leave business.
Let's review our quarterly operating results across the segments, beginning with Unum US. Adjusted operating income in the Unum US segment increased to $312.5 million in the first quarter of 2023, compared to $168.3 million in the first quarter of 2022. Results across all product lines improved year-over-year with our group products seeing the biggest improvement driven by claim trends in group disability and the shift from a pandemic to an endemic COVID environment for Group Life and AD&D.
The group disability line reported another robust quarter with adjusted operating income of $145.7 million compared to $62.8 million in the first quarter of 2022 with the increase driven by improved incidents, strong recoveries and a higher discount rate on new claims. These drivers contributed to a benefit ratio of 60% for the first quarter. We are very pleased with how this block is performing and have now experienced four consecutive quarters of benefit results below our historical expected range.
A key contributor to serving our clients is helping them get back to work and this recent experience continues to demonstrate that we are in an extremely supportive return to work environment. Given this, we now expect the group disability benefit ratio to sustain in the low 60s for the remainder of 2023. Results for Unum U.S. Group Life and AD&D rebounded from the first quarter of last year. with adjusted operating income of $40.1 million for the first quarter of 2023 compared to a loss of $10.6 million in the same period a year ago. The benefit ratio decreased to 75%, compared to 87.9% in the first quarter of 2022 as COVID-related mortality decreased significantly to endemic levels.
Adjusted operating earnings for the Unum US supplemental and voluntary lines in the first quarter were $126.7 million, an increase from $116.1 million in the first quarter of 2022. The increase is driven by strong underlying benefits experienced in both the individual disability and the voluntary benefits lines. Turning to premium trends and drivers, natural growth, a tailwind for our group products continued to contribute to strong year-over-year premium growth and supported the growth of 4.3% in Unum US. Sales trends for Unum US were also solid, with sales increasing 22.5% year-over-year in the first quarter. Total group persistency of 89.1% for the first quarter remained generally stable, with mixed results within our supplemental and voluntary lines.
Moving to Unum International. The segment experienced exceptional overall earnings results with adjusted operating income for the first quarter, increasing to $38.4 million from $25.9 million in the first quarter of 2022. Adjusted operating income for the Unum U.K. business improved in the first quarter to GBP31 million compared to GBP18.6 million in the first quarter of 2022. The reported benefit ratio for Unum UK decreased to 68.5% in the first quarter compared to 81.2% in the same period a year ago. You may recall a portion of our policies in the U.K. have an inflation rider, which are backed by inflation-link gilts.
The inflation-linked benefits are capped, but the income we receive from the linked yields is not, which benefits earnings levels in periods of very high inflation. When removing direct inflationary impacts, Unum UK adjusted operating income was in the GBP mid-20 million range, reflecting strong underlying performance.
On a dollar basis, premium income for our Unum International business segment increased slightly on a year-over-year basis, but was dampened by exchange rate movements. Premiums continue to show strong growth on a local currency basis. Unum U.K. generated premium growth of 9.1% on a year-over-year basis in the first quarter, while our Poland operation grew 19%. Both businesses continued to generate positive levels of year-over-year sales growth with Unum UK up 37.8% and Unum Poland sales up nearly doubled in local currency.
Next, adjusted operating income for the Colonial Life segment was $93.9 million in the first quarter compared to $102.9 million in the first quarter of 2022, with the decrease driven by higher total expenses. The benefit ratio of 53% compares to 53.2% in the year ago period and though improved, was higher than our expectations due to volatility in the cancer and critical illness block which was partially offset by improving life experience.
Premium income of $429.5 million finished slightly below prior year, primarily driven by lower persistency partially offset by higher prior period sales. Premium income was higher than our expectations and is on the full year growth trajectory that we laid out in February. Sales in the first quarter of $106.8 million increased 2.7% from prior year, primarily driven by robust agent recruiting and productive small case sales partially offset by a decrease in new account sales across other size segments. In the Closed Block segment, adjusted operating income, excluding adjustments related to the Closed Block individual disability reinsurance transaction, was $58.2 million compared to $78.6 million in the first quarter of 2022.
The decline was primarily due to a year-over-year decrease in the segment's miscellaneous net investment income of $21 million. For benefits experience, the LTC interest-adjusted loss ratio was 86.6% compared to 82.2% and in the year ago period, driven by higher claims incidence. The interest adjusted loss ratio on a rolling 12-month basis was 84.7%. So then wrapping up my commentary on the quarter's financial results, the adjusted operating loss in the corporate segment was $33.5 million compared to $40.4 million -- a $40.4 million loss in the first quarter of 2022, primarily driven by higher investment income on shorter-duration corporate-owned assets. A dynamic that should continue while short-term rates remain elevated.
So then moving now to investments. We continue to see a good environment for new money yields and risk management. Purchases made in the quarter were again at levels above our earned portfolio yield, which was 4.35% in the first quarter. In addition, we are pleased with the ongoing progress with our interest rate hedge program for LTC. Since inception of the program last year, we've entered into $1.6 billion of treasury forwards, which include $772 million this year.
Miscellaneous investment income decreased in the first quarter to $15.8 million compared to $41 million a year ago as both traditional bond call premiums and alternative investment income declined. Income from our alternative invested assets was $14.3 million, below our longer-term expectation of $20 million to $25 million, but was in line with our guidance from last quarter.
Looking ahead, alternative asset income will remain directionally correlated with market conditions. As has been the case for the last several quarters, traditional bond call activity remained low in the first quarter and we do expect this to persist following the run-up in interest rates experienced in 2022. So as we discussed at our outlook meeting, our investment team thoughtfully constructs. Our investment portfolio to manage through cycles and we have a long track record of outperforming downgrade and default benchmarks. Our management of commercial real estate investments is no different. Following a rigorous origination process, we have established a multitiered approach to monitoring loan performance and valuations.
Our commercial real estate exposure is also substantially underweight compared to industry averages. Commercial mortgage loans of $2.4 billion account for approximately 5.5% of our overall invested assets with an average LTV of approximately 60% while CMBS exposure is limited to a single $2 million investment in the U.K., which carries a AA rating. Within the CML portfolio, office exposure represents 18% of our portfolio with LTVs also approximately 60%.
Refinancing risk within office is also very low. We have two office loans maturing before the end of 2024 with a total book value of approximately $30 million. Our low level of overall real estate exposure, which is heavily weighted to CM1 allows us to thoughtfully seek attractive opportunities that might emerge during times of dislocation. All my commentary this morning was an update on our capital position. As expected, our capital levels are well in excess of our targets and operational needs, offering tremendous flexibility. The weighted average risk-based capital ratio for our traditional U.S. insurance companies strengthened further to approximately 425% and holding company liquidity remains robust at $1.3 billion. Both of these metrics are expected to fluctuate throughout the year, with both ending the year around our expected levels of 400% RBC and $1.5 billion of holding company liquidity.
Capital metrics did benefit from the strong start to the year for our statutory results. Statutory after-tax income was $276.2 million for the first quarter putting us on pace for generating over $1 billion for the year, which translates to strong free cash flow generation at the holding company. Our strong cash generation model drives our ability to return capital to shareholders. And in the first quarter, we paid $69.2 million in common stock dividends and repurchased 1.3 million shares at a total cost of $53.6 million.
As Rick mentioned, our plans for 2023 include increase in the pace of share repurchases as well as the level of our common stock dividend. Other capital plans such as fully recognizing the premium deficiency reserve by year-end also remain on track.
And as a reminder, we will contribute capital into our Fairwind subsidiary over the course of the year and began this process with capital contributions of $200 million into the Fairwind subsidiary in the first quarter. Full recognition of the premium deficiency reserve this year will result in significant excess margin over our current best estimate and support our plans of not contributing capital into Fairwind as we discussed at our outlook meeting. So we could not be more pleased with our strong capital position and flexibility as the fundamental trends across our businesses.
The expected group disability performance for the remainder of the year significantly strengthens our earnings power and supports our updated outlook. And so to reiterate, we now expect an increase in after-tax adjusted operating income per share of 20% to 25% over 2022 on a historically reported basis or an increase of 10% to 15% on a consistent basis under LDTI.
So now I'll turn the call back to Rick for his closing comments, and I look forward to your questions.
