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Life Health > Life Insurance

Disability insurers see solid sales

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Two big U.S. disability insurers are seeing decent market conditions.

StanCorp Financial Group (NYSE:SFG), the parent of the Standard, is in the process of being acquired by Meiji Yasuda Life Insurance Company of Japan and no longer holds quarterly earnings calls with securities analysts.

But the company as a whole reported $55 million in net income for the third quarter on $718 million in revenue, compared with $70 million in net income on $688 million in revenue.

StanCorp’s individual disability insurance unit is reporting $17 million in income before income taxes on $65 million in revenue, up from 16 million in income on $63 million in revenue for the third quarter of 2014.

Annualized new sales increased to $7.7 million, from $7.3 million, and spending on commissions and bonuses held steady at about $13 million.

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The company’s new money investment rate crept up to 4.49 percent, from 4.41 percent.

StanCorp does not break out group disability results from results for other group benefits products, but it said that benefits sales and retention have been strong, and that the number of requests for proposals from prospective clients has increased.

Unum Group Corp. (NYSE:SFG) is reporting $204 million in net income for the third quarter on $2.7 billion in revenue, compared with $219 million on $2.6 billion in revenue for the year-earlier quarter.

Sales of short-term disability insurance at the Unum U.S. unit fell 2.6 percent, to $15 million, but U.S. sales of long-term disability (LTD) increased 23 percent, to $34 million. Group benefits sales of all kinds to employers with 2,000 or more lives increased 33 percent, to $22 million. Benefits sales to smaller employers rose just 1.3 percent, to $61 million.

Total Unum U.S. group disability commission payments increased to $42 million, from $40 million.

Individual disability sales increased 47 percent, to $21 million.

Operating revenue increased to $153 million, from $138 million, for STD; to $414 million, from $388 million, for LTD; and to $120 million, from $117 million, for individual disability.

At the Colonial Life unit, premium revenue from accident, sickness and disability products increased to $197 million, from $191 million. Sales of those products increased 6.8 percent, to $60 million.

Mike Simonds, the president of Unum U.S., said the pricing environment for benefits products looks “pretty rational.”

Both Tim Arnold, the head of the Colonial Life unit, and Simonds said sales of products that help fill in the gaps in major medical coverage have been strong.

“As employees are given more choice, it’s pretty clear that they tend to buy down the health care,” Simonds said. “They will elect for higher deductibles to lower the premiums, and that creates gaps that need to be filled. It’s an opportunity for us.”

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