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.
Thursday, April 5, 2012
Monday, April 2, 2012
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.”
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.”
Thursday, March 22, 2012
Unum's new simplified voluntary benefits enrollment strategy for sales partners
Unum's new simplified voluntary benefits enrollment strategy for sales partners: It's time to offer your clients important voluntary benefits and a streamlined enrollment approach that will help you serve your customers and build your business. Working with Unum, you now have a way to crack the code in the voluntary benefits market!
http://my.brainshark.com/Unums-new-simplified-voluntary-benefits-enrollment-strategy-for-sales-partners-709444925
http://my.brainshark.com/Unums-new-simplified-voluntary-benefits-enrollment-strategy-for-sales-partners-709444925
Tuesday, March 20, 2012
A.M. Best affirms Unum’s rating standings
A.M. Best has affirmed Unum’s financial strength rating and stable ratings outlook, basing its decision on the company’s strong capitalization, good profitability and favorable operating trends in the face of a weakened economic environment.
“Unum’s core business lines are generating strong earnings and cash flows, with returns exceeding industry medians,” A.M. Best said in a press release. “Moreover, A.M. Best believes capital is being deployed in an efficient and prudent manner,” while maintaining sound risk-adjusted capital ratios. A.M. Best also referenced the company’s persistency, “reflecting the group’s ability to retain quality business.”
The ratings agency also commended Unum for its financial flexibility and for the modest exposure the company’s investment portfolio has to structured securities and real estate-related investments.
“Unum’s core business lines are generating strong earnings and cash flows, with returns exceeding industry medians,” A.M. Best said in a press release. “Moreover, A.M. Best believes capital is being deployed in an efficient and prudent manner,” while maintaining sound risk-adjusted capital ratios. A.M. Best also referenced the company’s persistency, “reflecting the group’s ability to retain quality business.”
The ratings agency also commended Unum for its financial flexibility and for the modest exposure the company’s investment portfolio has to structured securities and real estate-related investments.
Monday, March 12, 2012
Workers now place more value on benefits
Adding voluntary plans can increase employee satisfaction...
Independent research shows that employees’ perception of the value of their benefits continues to be at a high level. The majority of employees say benefits are important to job satisfaction. Our research, too, shows employees continue to value life, accident, and critical illness insurance, short and long term disability coverage since first surveyed for our 2008 report. And, benefit package satisfaction rates of those not offered voluntary benefits continued to be lower than for those that did. That’s valuable to employers, since this 100% employee-paid coverage allows a company to offer more benefits and add perceived value to a plan without impacting the bottom line.
In today’s budget-conscious times, voluntary benefits are becoming “must-haves” in a competitive benefits package. And they offer a variety of choices in coverage that appeal to today’s diverse and versatile workforce.
Voluntary coverage provides an important safety net to employees who are vulnerable to rising health care costs. Accident and critical illness insurance can help offset the financial impact of expensive out-of-pocket costs not covered by health insurance. And Unum research shows that employees place a high value on these benefits when they
are effectively communicated, even though they pay the premium.
The message is clear: employees are placing more value on benefits in general — even when they have to pay for them. And today’s group and voluntary benefits make it easy to add coverages at little or no cost to the company. This strategy can result in higher workplace satisfaction, reduced turnover and increased productivity.
Please contact me to learn more. I can also provide you with a copy of Unum's recent industry study - Beyond the Usual Benefits: 2012 - The power of employee education to influence workplace satisfaction.
Friday, March 9, 2012
Strategies for expanding your reach in voluntary benefits
Voluntary benefits have been a growing trend for almost 15 years. Recent surveys show employee-paid benefits are on the minds of brokers, employers and the workforce alike. According to a 2011 study by LIMRA, 30% of U.S. employers are considering adding a voluntary benefit to replace employer-paid and contributory benefits within the next two years - affecting between 19 million and 45 million employees. These numbers aren't surprising. Even with slight improvement in the U.S. unemployment rate, employers have responded to the poor economy and rising health care costs by making the tough decision to shift the costs of certain benefits to their employees.
As a producer, this challenging climate provides you with a tremendous opportunity to guide the transition from employer-funded benefits to a more consumer-centric approach. The benefits managers you partner with will see the value in reducing their benefits costs. Their employees will appreciate the ease of worksite enrollment for products that provide fundamental lifestyle protection.
Helping an employer transition from employer-paid to voluntary benefits requires an approach that's consultative and product savvy, which finds ways to ease the administrative burden on the employer and educate the person ultimately making the purchase - the employee.
Consider these questions
Since you'll be meeting the needs of various employer and employee audiences, it goes without saying that a one-size-fits-all voluntary strategy isn't recommended. Instead, it involves a careful assessment of your book of business to determine where you will have the best opportunities:
* How many of your accounts are considering reducing benefits packages?
* Are your clients' benefit plans competitive with the industry? To make their benefits package more robust, are they open to offering voluntary benefits?
* Has your client evaluated their entire benefits package holistically? A well-rounded benefit program should include the basics, such as life, disability and medical gap coverage that complement any employer-funded coverage.
Once you've targeted the right types of employers, the next step is careful planning with their benefits teams to ensure successful implementation and communication strategies. From there, a successful voluntary benefits program is ultimately defined by strong employee participation in the benefits being offered.
On an industry level, we tend to measure baseline success when at least 35% of employees in a given enrollment cycle chose to sign up for benefits. Drivers of successful participation include:
* Targeted education campaigns- Your carrier should work with you to determine which segments of the employee population are the best targets for voluntary benefits. This analysis can be backed by a marketing campaign that includes dynamic educational tools accessible via email or intranet and supporting testimonials that affirm the buying decision.
* Communications- Discuss with your employer enrollment communications that give you access to employees via techniques such as group meetings, benefit fairs, and lunch and learns. This is especially important with employers that are geographically diverse or employ a range of shifts in multiple job bands.
* Simple and flexible enrollment- Be sure to explore whether paper or online enrollment best meets the employees' needs. Keep in mind specific groups, such as those who work remotely.
Market trends all point to voluntary benefits as a strong choice for brokers who are interested in growing their book of business.
This is an article recently published by employee benefit adviser.
As a producer, this challenging climate provides you with a tremendous opportunity to guide the transition from employer-funded benefits to a more consumer-centric approach. The benefits managers you partner with will see the value in reducing their benefits costs. Their employees will appreciate the ease of worksite enrollment for products that provide fundamental lifestyle protection.
Helping an employer transition from employer-paid to voluntary benefits requires an approach that's consultative and product savvy, which finds ways to ease the administrative burden on the employer and educate the person ultimately making the purchase - the employee.
Consider these questions
Since you'll be meeting the needs of various employer and employee audiences, it goes without saying that a one-size-fits-all voluntary strategy isn't recommended. Instead, it involves a careful assessment of your book of business to determine where you will have the best opportunities:
* How many of your accounts are considering reducing benefits packages?
* Are your clients' benefit plans competitive with the industry? To make their benefits package more robust, are they open to offering voluntary benefits?
* Has your client evaluated their entire benefits package holistically? A well-rounded benefit program should include the basics, such as life, disability and medical gap coverage that complement any employer-funded coverage.
Once you've targeted the right types of employers, the next step is careful planning with their benefits teams to ensure successful implementation and communication strategies. From there, a successful voluntary benefits program is ultimately defined by strong employee participation in the benefits being offered.
On an industry level, we tend to measure baseline success when at least 35% of employees in a given enrollment cycle chose to sign up for benefits. Drivers of successful participation include:
* Targeted education campaigns- Your carrier should work with you to determine which segments of the employee population are the best targets for voluntary benefits. This analysis can be backed by a marketing campaign that includes dynamic educational tools accessible via email or intranet and supporting testimonials that affirm the buying decision.
* Communications- Discuss with your employer enrollment communications that give you access to employees via techniques such as group meetings, benefit fairs, and lunch and learns. This is especially important with employers that are geographically diverse or employ a range of shifts in multiple job bands.
* Simple and flexible enrollment- Be sure to explore whether paper or online enrollment best meets the employees' needs. Keep in mind specific groups, such as those who work remotely.
Market trends all point to voluntary benefits as a strong choice for brokers who are interested in growing their book of business.
This is an article recently published by employee benefit adviser.
Monday, February 27, 2012
Put critical illness coverage at the heart of your financial protection
Did you know that heart-related conditions account for almost 30 percent of
Unum’s critical illness claims???
CHATTANOOGA, Tenn. (Feb. 17, 2012) - Treatment of cardiovascular diseases accounts for about one of every 6 dollars spent on health care in the United States, according to the Centers for Disease Control. American Heart Month in February is a perfect time to prepare ahead with financial protection against a critical illness, such as a heart attack, stroke or bypass surgery.
“Recovering from a critical illness, such as a heart attack or stroke, can carry some pretty expensive medical expenses, but non-medical expenses can also quickly add up,” said Mary Ann Beliveau, assistant vice president, Product and Market Development at Unum. “Benefits from critical illness insurance can provide financial support so an individual can concentrate on getting better instead of paying the bills.”
Critical illness insurance pays a lump sum benefit directly to insured people diagnosed with a covered illness. Individuals can use the benefit any way they see fit, for medical or non-medical expenses such as paying bills, groceries and even child care.
Without adequate protection, people who suffer a heart attack or stroke might have to use their savings or rely on family, friends or credit to cover their expenses. According to the American Association for Critical Illness Insurance nearly two-thirds of U.S. bankruptcies are the result of medical expenses. Even more troubling, 78 percent of those filing for bankruptcy had health insurance when they were first diagnosed.
Unum, a leading provider of critical illness insurance, says heart-related incidences account for almost 30 percent of its critical illness claims. Heart conditions are second to cancer, which accounts for more than half of the company’s critical illness claims.
About Unum
Unum (www.unum.com) is one of the leading providers of employee benefits products and services in the United States and the United Kingdom. Through its subsidiaries, Unum Group paid approximately $6 billion in total benefits to customers in 2010.
Subscribe to:
Posts (Atom)