Unum Group Corp. (NYSE:UNM) scraped up more net income during the third quarter in spite of the ongoing drop in interest rates.
The insurer — which has large life and voluntary benefits operations but is an especially strong player in the disability insurance market — is reporting $230 million in net income for the latest quarter on $2.6 billion in revenue, up from $202 million in net income on $2.5 billion in revenue for the third quarter of 2011.
The Unum US group disability unit is reporting $75 million in operating income on $513 million in premium income, up from $73 million in operating income on $509 million in premium income for the comparable quarter in 2011.
Even though the average interest rate Unum must use to set reserve levels for disability claims, and disability insurance prices, fell 0.5 percentage points, net investment income fell just 6.5 percent, to $143 million.
Group long-term disability (LTD) sales increased 7.3 percent, to $24 million, and group short-term disability (STD) sales increased 14 percent, to $14 million.
Group life sales fell 2.8 percent, to $24 million.
Sales of voluntary benefits — products paid for partly or entirely by the employees, rather than the employers — increased 2.6 percent, to $44 million.
Sales of all traditional, employer-paid products to employers with 2,000 or more covered people fell 0.8 percent, to $12 million. Sales of employer-paid products to smaller employers increased 4.6 percent, to $52 million.
Unum is now calling the market of employers with 2,000 or fewer covered people its core market.
Some disability insurers have found that the Great Recession hurt benefits ratios, by leading to higher disability claim rates, a reduced likelihood that claimants would return to work, or both.