Executives at a major player in the U.S. group disability insurance market said they see signs conditions are improving.
The executives, at StanCorp Financial Group Inc. (NYSE:SFG), talked about disability market conditions at a teleconference they held to discuss their second-quarter earnings.
Weak employment has hurt demand for group disability insurance and other benefits products in recent years, and low interest rates have hurt insurers’ ability to generate the investment income needed to help cover the cost of offering products that pay benefits over a long period, or may pay benefits on events that could happen many years in the future.
StanCorp, the parent of Standard Insurance, responded to those trends and an increase in claims by increasing premiums. J. Greg Ness, the company’s president, said the company is about three-quarters of the way through the “repricing action.”
The employers that use StanCorp products was 0.2 percent smaller in the second quarter than in the second quarter of 2012 — but group customer employment was 1.5 percent lower in the second quarter of 2012 than in the second quarter of 2011, Ness said.
“We’re cautiously optimistic that organic growth will return as we head into 2014,” Ness said.
Floyd Chadee, the StanCorp CFO, said the rates that apply to the company’s new investments and the discount rates used to come up with reserves for new long-term disability (LTD) insurance claims were still falling in the second quarter.