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February 09, 2012 at 09:44 AM
At publicly traded companies with disability insurance operations, the hot topic during fourth-quarter earnings calls seems to be the future of group disability insurance claims incidence.
Executives at StanCorp Financial Group Inc. (NYSE:SFG), Portland, Ore., kicked the earnings call season off in January by suggesting that, although claims continued to be elevated, they showed some signs of bottoming out.
The job market ought to get better, and that ought to make disability claims look better, StanCorp executives reasoned.
The general rule of thumb in the disability insurance market is that employers that are hiring do a better job of keeping workers on the job and returning ailing workers to their jobs than employers that are downsizing.
In 2008 and 2009, many disability insurance experts said they were surprised to see how stable disability claims were. Some wondered whether workers with serious health problems were staying on the job because they were too nervous or too broke to file disability claims.
Employment remained weak, and many carriers began seeing claims mount around 2010.
Since StanCorp held its call, the Labor Department has reported signs that employment is starting to recover.
StanCorp’s competitors have been giving mixed assessments of the disability claims situation during their earnings calls.
Executives at Unum Group Corp., Chattanooga, Tenn. (NYSE:UNM), held U.S. group disability operating income steady at $77 million. The ratio of benefits paid to premium revenue increased to 84.7%, from 84.2%.
Unum says the increase in the benefit ratio was due mainly to low interest rates and a decrease in the discount rate the company uses to value claims.
