NU Online News Service, Nov. 5, 2003, 5:34 p.m. EST – UnumProvident Corp., Chattanooga, Tenn., says improvements in its bond portfolio helped it hold third-quarter net income reasonably steady despite increases in claims costs for some products and continuing weakness in interest rates.
The company’s net realized investment loss fell to $16 million, from $42 million for the third quarter of 2002, and the net amount of bond losses that have not yet been realized fell to $534 million at the end of the quarter, from $1.1 billion at the end of 2002.
The amount of net unrealized bond gains rose to $2.9 billion, from $1.9 billion, while the percentage of the bond portfolio invested in junk bonds fell to 7.7%, from 10%.
Thanks, in part, to the decline in investment losses, UnumProvident is reporting $109 million in net income for the latest quarter on $2.7 billion in revenue, compared with $113 million in net income on $2.5 billion in revenue for the third quarter of 2002.
New sales of group long term disability insurance fell to $64 million, from $66 million; of group short term disability insurance, to $26 million, from $29 million; and of individual disability insurance, to $37 million, from $42 million.
Strong persistency helped UnumProvident increase premium revenue for all three product categories despite the drops in new sales, increases in benefits payments, decreases in the claim recovery rates and a decrease in the yield on the assets backing the policies.
The picture was brighter at the Colonial Life & Accident Insurance Company worksite marketing subsidiary, where profits, revenue and new sales were all up.