NU Online News Service, March 12, 2003, 9:53 p.m. EST – Holders of UnumProvident Corp. stock got a little good news Wednesday.
The Chattanooga, Tenn., disability insurer’s share price ended the day up 9.21%, at $6.52, after plummeting Monday and Tuesday.
Investors reacted to a critical rating agency report earlier this week by pushing the price of the company’s stock down more than 50%. The report, from Moody’s Investors Service, New York, questions the effects of low-rated securities on the capital positions of UnumProvident and other insurers.
Earlier this month, UnumProvident disclosed that it was responding to a letter from the U.S. Securities and Exchange Commission about the way it reports problems with speculative-grade securities.
UnumProvident has also acknowledged that it ended 2002 with less consolidated regulatory capital than it had at the end of 2001.
But the company has about as much consolidated regulatory capital as it had at the end of 1999 and 2000, and it says its statutory capital and surplus level has increased 6.6% since mid-2002, to $3.6 billion.
UnumProvident has $1.8 billion in net unrealized gains in its investment portfolio, and it has sold $300 million of its speculative-grade securities, or 10% of its speculative-grade portfolio, since Jan. 1, the company says.