Unum earns high marks for customer satisfaction

Unum’s commitment to customer service helped the company achieve strong results in overall claims handling for short term and long term disability claims, according to new industry research. Results reveal that approximately 88 percent of short term disability customers and 91 percent of long term disability customers surveyed are “very satisfied” or “satisfied” with the overall handling of their Unum claim.

Every two years, Unum participates in research conducted by Gen Re, a leader in reinsurance, consulting and research. The research measures satisfaction levels for the short term disability and long term disability claim experiences. We use the results to refine and enhance our Benefits Center procedures and services.

“We’ve promised to provide exceptional customer service to those who turn to us for financial support when they’re hurt or sick,” said Diane Garofalo, senior vice president of the Benefits Center. “These results are verification that our claims employees are dedicated to that commitment, which is great news for our customers.”

Customers gave Unum significantly higher ratings than the industry average for 20 out of 26 measures for its long term disability claims process, including:

• Overall handling of long term disability claim
• Timeliness of claim decision
• Timeliness of receiving first payment
• Ease of our claims process and the Unum’s prompt and professional handling of the claim

For short term disability, Unum was in line with the industry average in key performance categories, including:

• Clear explanation of the process
• Ease of telephonic filing
• Courteous and respectful contact when customers call Unum

Diane also touted the findings of a recent independent study on Unum’s performance in managing the individual disability claim experience. The results reveal some of the highest satisfaction scores in the history of this research program, which was first conducted in 2005.

“While there’s always room for improvement, these are great results,” Diane said. “Our organization should be extremely proud of the way our benefit employees represent our brand.”

For 35 consecutive years, Unum has been the leader in the group disability market in the United States. In 2011, Unum received more than 367,000 new disability claims and paid $5.4 billion in financial protection benefits.

Why Is Critical Illness Insurance So Darn Hot?

A lackadaisical economy. Ever-rising healthcare costs. Health care reform … maybe.

These and other factors are contributing to a sense of financial unease for businesses. Higher-deductible health plans can help employers control costs, but they leave employees at increased financial risk.

Most Americans don’t have much in savings to help cushion their wallets from the impact of a major health issue. And nearly two-thirds of U.S. bankruptcies are the result of medical expenses, according to the American Association for Critical Illness Insurance (AACII), Westlake Village, Calif.

Combining voluntary benefits with high-deductible health plans is an effective way for employers to provide employees more coverage. Brokers and employers recognize that critical illness coverage, in particular, is the perfect complement to high deductible health plans, higher co-pays and Health Savings Accounts (HSAs).

The market for critical illness insurance is showing consistent, significant growth. In 2010 Eastbridge Consulting reported that sales of critical illness have doubled since 2007. And as a leading provider of critical illness insurance, Unum has experienced 20% growth each of the past four years. AACII estimates that about 1 million Americans are covered by a critical illness policy.

Sales and claims information from my company, Unum, can help shed light on the product’s growth and how consumers are using critical illness insurance.

Understanding the need and the coverage

Even with medical coverage, out-of-pocket costs for serious health conditions can be high. In a study by Duke University Medical Center and Dana-Farber Cancer Institute of cancer patients, 30% of respondents said their expenses were a "significant burden" and 11% described them as a "catastrophic problem." These are the kinds of concerns critical illness coverage is designed to mitigate.

In the past five years, Unum has approved more than 6,000 critical illness claims and paid about $70 million in critical illness benefits.

Cancer is the top condition cited, affecting 55% of Unum’s critical illness claims. Heart-related claims are second, involving 28% of claims. Yet, the leading condition differs by gender. Women are more likely to file cancer claims, while men are more likely to file heart-related claims.

Many critical illness policies have a wellness benefit that helps pay for covered health screenings such as a colonoscopy, Pap smear or mammogram. In the past 12 months, Unum has seen an increase of 5% to 10% in use of the wellness benefit. This benefit is an excellent way to encourage employees to take proactive steps toward prevention and early detection. The benefit pays a set payout per calendar year per insured individual if a covered health screening is performed.

Critical Illness Payouts

Critical illness insurance offers a lump sum payment at the diagnosis of a covered illness which can be used for any purpose. Policies typically pay 100% of the benefit amount for heart attack, stroke, major organ failure, permanent paralysis due to accident and end-stage kidney failure and cancer. Some of the newer critical illness plans also can pay abenefit for such conditions as coma as the result of a brain injury, blindness, benign brain tumor, and occupational HIV.  Dependent coverage is typically available. And critical illness policies pay in addition to any existing health, disability or life insurance coverage.
The market seems to have shifted more to group-based critical illness products over the last five years.  Advantages of group critical illness coverage are that it allows for more flexible funding options and it simplifies benefit education and implementation for employers with employees in multiple states.

Group plans may include portability features similar to typical individual plans, so that even if the employer drops the plan, employees can continue their coverage.

Keeping employees engaged

Unum research shows that employees value critical illness and other voluntary coverages. More specifically, it shows an 18-point improvement in employee satisfaction with their benefits package when working for employers that offer voluntary plans compared to employers offering no voluntary benefits – even when employees pay for them. And, according to a 2012 Unum survey on employee education and enrollment, when it comes to comparing employee satisfaction with the employer, there is a nine-point advantage for employers offering voluntary benefits. Studies have also shown that workplace satisfaction is a key driver of employee engagement.

Critical illness insurance is a product designed to meet the needs of employees facing significant out-of-pocket costs due to a serious illness. Further, it blends well with health care plans to provide employees with a more complete benefit package while not adding to employers’ benefit costs.

Critical Illness Insurance: What to look for

A number of insurance providers offer critical illness plans with an array of features and benefits. Here are some ideas to keep in mind when you're helping consumers compare plans:

• Select policies that are HSA compatible, which best complements high-deductible health plans.
• Some plans pay on a simplified lump sum basis rather than a more complex expense reimbursement arrangement. This saves consumers from having to collect and maintain receipts for medically-related expenses.
• Seek providers that offer automated guarantee issue enrollment for spouses, which helps to simplify the overall enrollment experience for families.
• To better match health care coverage, look for policies that cover dependent children to age 26.
• To help encourage employees to become smart health care consumers, make sure critical illness plans include a wellness benefit for health screenings.
• Look for a carrier that offers a broad portfolio of coverages that work seamlessly together and offer portability at the same rate if an employer terminates the plan with no replacement coverage offered.

New VB packages simplify sales and enrollment

Sometimes, it’s simplicity that sells. Particularly for the voluntary benefits market, the easier we make the sale, enrollment and administration of our products, the better.

This is especially important for brokers who are new to voluntary, see the importance of the coverage in a comprehensive financial protection package, but may have the perception that voluntary benefits are complicated.

Recognizing an opportunity to overcome these perceptions, Unum has launched a new, simplified sales and enrollment approach for some of our most popular voluntary products. This new approach provides the broker with everything needed to position, sell and enroll interest sensitive whole life, individual short term disability, individual accident and group critical illness.

Unum’s broker-enrolled solutions provides two offerings called Unum Essential VB for cases of 25-250 lives and Unum Essential VB Plus for those of more than 250 lives, these new packages include:

• Marketing material to support the broker in the sale of the voluntary benefits offering
• Employee education to aid in employees’ benefits decisions
• Pre-filled paper election form or online enrollment options that reduce errors and time
• Self-enroll capability offers a next step to customer-preferred group meetings
• No broker signature required saves the broker time
• Personalized enrollment kit provides all the communication tools and forms=

This approach enables brokers and employers to offer voluntary benefits in much the same way as traditional group benefits by utilizing group meetings and a personalized, prefilled enrollment form that lets employees self-enroll.

The launch of Unum’s broker-enrolled solutions follows closely on the heels of the introduction of the new voluntary group accident product and enhanced group critical illness coverage. All reinforce Unum’s leadership in the voluntary benefits market and commitment to providing innovative solutions to our customers.

Watjen touts Unum’s recent performance on CNBC

The two major challenges facing the insurance industry right now are a continued high unemployment rate coupled with low interest rates, CEO Tom Watjen said on CNBC this morning.

“We’re (Unum) doing pretty well despite that,” Watjen said on CNBC’s “Squawk Box,” adding that the company adjusted to the down market by restructuring its investment portfolio, raising capital and focusing on markets thought to be more sustainable.

“I think that put us in a good position when the economic crisis hit,” he added.

While low interest rates do impact Unum, the way the company is structured helps lessen the impact the low rates could have.

“The products we sell have a very long duration so we buy basically fixed income securities. Sixty percent of our portfolio is corporate investment grade bonds. Since we have a very staggered maturity schedule, we can plan pretty well how we forecast interest rates into our pricing,” Watjen explained. “We’ve had to bring those rates down, but we can bring them down in a very thoughtful, mindful way over a period of time as opposed to having to deal with any one particular week or quarter.”

High unemployment rates also affect Unum’s business, since part of the way we grow is through existing customers growing their businesses by adding employees and increasing their wage and benefits package, he said.

During the interview, Watjen also discussed his recent testimony in front of a Senate committee last month and how the public and private sector need to work together to expand disability coverage to ease the burden on government public assistance programs.

A recent study commissioned by Unum and conducted by Charles River Associates found that private, employer-sponsored disability insurance saves taxpayers up to $4.5 billion per year and helps keep as many as 575,000 families from using public assistance, such as food stamps.

“Sixty percent of individuals live paycheck to paycheck today and that doesn’t put you in a really good position if you have an issue that causes you to be out of work and unable to earn income,” Watjen said.

Watjen testifies before Senate committee last week

CEO Tom Watjen spoke at a Senate committee meeting last week, stressing the importance of income protection benefits and the need for the private disability insurance industry and the government to work together to expand coverage.

The hearing, entitled “Stay-at-work and return-to-work: Lessons from the private sector,” focused on how the private sector supports employees through disability insurance, employment modifications, and workplace accommodations, among other services. Click here to view a taped broadcast of the hearing.

“The ability to earn a living is the most important asset people have, and protecting that asset benefits individuals, families, businesses and taxpayers,” Watjen told the committee at a hearing March 22.

“Our experience is that the lack of awareness of the risk of disability and the affordable ways to insure against the risk are the biggest impediments to more Americans being protected,” he added. “That is why this hearing is so important.”

A worker is three times more likely to become disabled than to die before retirement, yet is much more likely to have life insurance than income protection insurance. About 70 percent of private sector employees lack long term disability coverage, Watjen said.

Disability benefits can provide the support and resources needed when an employee is sidelined by injury or illness, he said, adding that the benefits extend to taxpayers and the government as well, by relieving the burden on public assistance programs.

Last year, Unum commissioned a study by Charles River Associates to assess the value of employee benefits with a specific focus on disability protection provided in the workplace. The study found that private, employer-sponsored disability insurance saves taxpayers up to $4.5 billion dollars per year and helps as many as 575,000 families avoid impoverishment and the need to rely on public assistance programs.

In fact, the Charles River report suggests that poverty among working adults who become disabled during their careers could be virtually eliminated if all workers had some form of standard employer-sponsored disability insurance.

For that reason, the private income protection insurance industry and the government should work together on the shared objective of making financial protection more accessible and affordable to workers, Watjen told committee members.

“Government can play an important role by helping to raise awareness with consumers, employers, and others about the risks and consequences of disability.”