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October 27, 2016 at 11:19 AM
Unum Group, a big seller of health-related products other than major medical insurance, is still paying insurance agents and brokers to sell its products.
The Chattanooga, Tennessee-based insurer spent a total of $257 million, or 12 percent of its $2.8 billion in third-quarter revenue, on sales commissions.
Companywide commission spending was 4.3 percent higher in the latest quarter than in the third quarter of 2015.
Unum is one of the biggest players in the U.S. group disability insurance market. It’s also a major seller of voluntary insurance products — group products with premiums paid at least partly by the employees — and of individual insurance products sold at the work site.
Commission spending at the Unum U.S. and Colonial Life voluntary and worksite businesses jumped 7.8 percent, to $148 million. The agents and brokers selling those products got to keep more than 20 percent of the products’ premium revenue.
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Commission payments to sellers of traditional U.S. group disability coverage rose 4.2 percent, to $44 million.
Unum disclosed the agent and broker compensation figures in its latest earnings supplement.
The company reported $236 million in net income for the third quarter on $2.8 billion in revenue, up from $204 million in net income on $2.7 billion in revenue for the third quarter of 2015.
During a conference call with securities analysts, Jack McGarry, the chief financial officer, said a low ratio of claims to revenue has helped the cushion the company from the effects of very low rates on the kinds of bonds insurers typically put in their portfolios.
“Low new-money yields put pressure on the portfolio yield,” McGarry said.
Executives also talked about Unum’s closed block of long-term care insurance business.
