Unum Group Corp. (NYSE:UNM) is still facing pressure from a weak labor market and low interest rates.
The low rates continue to pound the company’s long-term disability (LTD) insurance business and its closed block of long-term care insurance business, leading the company to pass rate increases onto consumers.
Thomas Watjen, Unum’s president, said the company is also facing a new challenge: the federal Patient Protection and Affordable Care Act of 2010 (PPACA).
“Many brokers and agents, and employers, are focused on implementing health care reform, and delaying the implementation of new benefit programs,” Watjen said today during a call Unum held to discuss its first-quarter earnings. “This headwind may be with us for much of 2013.”
Unum, a major disability insurance and voluntary benefits supplier, is reporting $213 million in net income for the latest quarter on $2.6 billion in revenue, compared with $214 million in net income on $2.6 billion in revenue for the first quarter of 2012.
The U.S. group disability business is reporting $78 million in operating income on $524 million in premium revenue, up from $75 million in operating income on $513 million in premium revenue.
But group LTD sales fell 13 percent, to $31 million, in part because the company has coped with low interest earnings on investments by increasing coverage prices.
Group short-term disability (STD) sales increased 18 percent, to $16 million.