Executives from Unum Group spent much of their company’s latest earnings release conference call reassuring securities analysts about the health of the company’s large closed block of long-term care insurance (LTCI) business.
The Chattanooga, Tennessee-based company is reporting $267 million in net income for the fourth quarter of 2017 on $2.8 billion in revenue, compared with $248 million in net income for the fourth quarter of 2016.
The company is best known in the United States for its Unum US group disability insurance operations and its Colonial Life worksite marketing unit. It continues to manage large blocks of in-force LTCI, and of individual disability insurance policies, at a closed-block unit.
General Electric Company recently announced that it will have to add $15 billion to the LTCI reserves at its reinsurance business, to adjust for problems with past assumptions about what policy lapses and claims might look like.
Richard McKenney, Unum’s president, told analysts that Unum has had 10 actuaries working full-time on its LTCI block since 2012, and has actively and aggressively managed that block of business.
“We feel we’re in a very different place than GE is,” McKenney said.
At Unum US, overall sales jumped 29%, and commission payments rose 5.8%, to $149 million.
A new New York state law that requires employers there to offer paid family leave pushed group short-term disability insurance sales up 58%.
At the Colonial Life unit, sales rose 10%, to $200 million. Commission payments increased 9.2%, to $88 million.
Colonial Life sales of cancer insurance and critical illness insurance policies were especially strong. For those products, sales revenue climbed 24%, to $39 million.
For all U.S. operations, commission payments increased 5.9%, to $258 million.