U.S. disability insurance claims are looking better at Unum Group Inc., but low interest rates continue to hurt investment returns.
Executives at Unum (NYSE:UNM) gave that assessment in a look at fourth-quarter earnings.
The company — which has major disability insurance operations in the United Kingdom, and major voluntary benefits and group life businesses in the United States as well as a large U.S. group disability business — is reporting $221 million in net income for the quarter on $2.6 billion in revenue, compared with $234 million in net income on $2.7 billion in revenue for the fourth quarter of 2012.
Low interest rates hurt long-term disability (LTD) insurance operations and other businesses with long-term obligations more than they hurt short-term disability (STD) operations, which are less dependent on investment income.
Unum’s U.S. group disability business let STD sales increase 18 percent in the fourth quarter, to $55 million. It let LTD sales fall 3.6 percent, to $84 million.
But the Unum unit’s supplemental and voluntary individual disability sales increased 28 percent, to $16 million.
Sales to “core market” employers with fewer than 2,000 covered lives rose 9.4 percent, to $154 million. Sales to bigger employers fell 2.6 percent, to $85 million.
Total U.S. group disability premium revenue fell to $511 million, from $514 million. Net investment income dropped to $134 million, from $145 million.
Commissions held steady at about $39 million.