A Chattanooga, Tenn., insurer turned its performance around in the fourth quarter of 2004 despite a drop in new product sales.[@@]

The insurer, UnumProvident Corp., is reporting $135 million in net income for the latest quarter on $2.7 bilion in revenue, compared with a net loss of $347 million on $2.5 billion in revenue for the fourth quarter of 2003.

The latest net income figure includes a charge of $117 million for a multistate market conduct settlement. Net annualized sales fell 18% for individual disability, to $27 million; 32% for group long-term disability, to $104 million; and 52% for group short-term disability, to $29 million. But sales in the brokerage voluntary life line rose to $17 million, from $14 million.

“The decline in sales activity is primarily due to the company’s disciplined pricing strategy and the competitive market environment,” the company says in a statement accompanying its earnings release.

The effort to demand higher prices may have helped UnumProvident’s increase the average profitability of the business that it won and retained: The overall ratio of benefit costs to premium revenue fell to 98.2%, from 149.4%.

The benefit ratio for the latest quarter includes $80 million in additions to reserves resulting from the multistate market conduct settlement, and results for the fourth quarter of 2003 included a $440 million addition to reserves.