John Nadel, a securities analyst at Sterne Agee, says operating results at Unum Group Corp. (NYSE:UNM) look a little better than he expected.
Unum announced Tuesday that it took a $698 million charge for the fourth quarter of 2014 in connection with an increase in long-term care insurance (LTCI) reserves. The company blamed the move on lingering low interest rates and the discovery that holders of LTCI policies are living longer than LTCI issuers had expected.
Unum included news about the LTCI reserve increase in its earnings release for the fourth quarter of 2014. The company reported $323 million in operating income for the quarter on $2.6 billion in revenue. Mainly because of the charge, the company posted a $279 million net loss.
Unum executives said late last year that the company was likely to report an increase in LTCI reserves in the range of $600 million to $800 million, Nadel writes in a comment.