Unum, an insurer best known for its group disability insurance units, says it's continuing to add agents and territories to the distribution force at its Colonial Life worksite marketing unit.
Recent sales growth at Colonial Life has been "a result of getting a lot more feet on the street," Rick McKenney, the company's president, said Friday, during a conference call with securities analysts that was streamed live on the web.
Tim Arnold, the Colonial Life's chief executive officer, said the unit opened three new territory offices in the first half of the year, bringing the total number of territory offices to 45.
(Related: Unum Happy With New Colonial Life Reps)
Colonial Life hopes to increase the number of territory offices to the "upper 50s" in the next few years, Arnold said.
Unum executives talked about the Colonial Life unit and other operations while going over second-quarter earnings.
The Chattanooga, Tennessee-based company is reporting $245 million in net income for the quarter on $2.8 billion in revenue, up from $237 million in net income on $2.8 billion in revenue.
Spending on commissions increased to $261 million, from $255 million.
The U.S. group disability unit is reporting $92 million in operating income on $596 million in premium revenue for the latest quarter, compared with $74 million in operating income on $589 million in premium revenue for the year-earlier quarter.
Group long-term disability insurance sales fell 1.7%, to $47 million, and group short-term disability insurance sales increased 10%, to $27 million.
Colonial Life sales increased 7.5%, to $117 million, with life insurance sales showing the strongest growth. Life sales increased 15%, to $25 million.
Unum recent acquired Starmount, a dental and vision plan provider, and that added $41 million in premium revenue to total revenue, the company said.
"The dental and vision lines are exceeding our expectations," Mike Simonds, chief executive officer of the Unum U.S. division, said during the conference call.
Unum also began taking orders for employer medical stop-loss insurance, with the first stop-loss arrangements taking effect Jan. 1.
Medical stop-loss insurance protects employers that run their own self-insured health plans against catastrophic claims.
Simonds said he doubts the unit will have much effect on Unum results in the next two years.
But Unum believes it has the people and underwriting experience to do well in that market, and "importantly, it gets us insight into what employers are planning to do with their overall employee benefits program earlier in the cycle," Simonds said.
Steve Zabel, head of Unum's closed block unit, which oversees a large block of long-term care insurance, talked about the outcome of rate increases.
When Unum imposes a big long-term care insurance premium increase, it offers the policyholders a "landing spot," or opportunity to hold down premiums by accepting a lower level of coverage. More than 50% of the affected policyholders are taking up the landing spot offers, Zabel said.
The take-up level "clearly varies by the level of increase that was actually approved," Zabel said. "Where the increases are higher, the adoption rate is going to be a bit higher."
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