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Portfolio > Economy & Markets > Fixed Income

StanCorp sees stronger group disability sales

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StanCorp Financial Group Inc. (NYSE:SFG), the parent of The Standard, says the economy is starting to look better.

The company, a major seller of individual and group disability insurance, and a substantial player in the group life and annuity markets, is reporting $57 million in net income for the first quarter on $710 million in revenue, up from $48 million in net income on $695 million for the first quarter of 2014.

At the benefits unit, long-term disability (LTD) premium revenue increased $195 million, from $189 million, and short-term disability (STD) premium revenue increased to $60 million, from $54 million.

Annualized new sales jumped to $30 million, from $16 million, for LTD products, and to $18 million, from $8.5 million, for STD products.

Benefits unit spending on commissions and bonuses rose 13 percent, to $38 million.

The ratio of benefits to premium revenue fell to 77.4 percent, from 80.8 percent.

The individual disability unit is reporting $23 million in income before taxes on $64 million in premium revenue, administrative fees and investment income, up from $18 million in pretax income on $62 million in revenue.

Annualized new sales increased to $5.7 million, from $4.5 million, and commission and bonus expense rose to $13 million, from $11 million.

Greg Ness, the company’s president, said the employment picture is starting to brighten.

“Employment levels among our existing customers have increased slightly again this quarter,” Ness said. 

See also: U.S. group disability market returns to work

But Floyd Chadee, the chief financial officer, said that persistent low interest rates continue to be a challenge. “Unfortunately,” he said, “new money investment rates on bonds and commercial mortgage loans are below our current investment portfolio yields. This puts pressure on net investment income.”


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