An executive at Unum Group Corp. says the company is glad it has tried to take a disciplined approach to selling group disability insurance in the past few years.

Unum, Chattanooga, Tenn. (NYSE:UNM), suffered through a number of difficult years after it went through a wave of mergers and acquisitions in the mid-1990s.

Since then, the company has emphasized that it would rather lose group disability insurance sales then set prices too low.

The company’s strategy came up recently during the company’s second-quarter earnings call.

Several competitors have reported seeing a noticeable increase in group disability claims costs in recent months; others have reported flat profit margins or wider profit margins.

At Unum US, the company’s U.S. operating division, the incidence of new claims was up slightly, but an increase in claim recoveries helped reduce the benefits ratio to 84.4% of premiums in the latest quarter, from 84.6% in the second quarter of 2010.

Kevin McCarthy, president of the U.S. division, said during the earnings call that overall market prices for group long-term disability (LTD) insurance have been flat but some competitors have been setting LTD prices especially low.

Overall industry profit margins have been shrinking, McCarthy said.

“Our margins have been increasing,” McCarthy said. “I think that our discipline has worked out really, really well for us.”

Some of the competitors might increase their prices once they see what is happening to their margins, McCarthy said.

- Allison Bell

Other disability insurance coverage from National Underwriter Life & Health: