Strong third quarter gives Unum nice lift into final stretch

Unum US delivered strong results for the third quarter, with positive sales momentum (up 9 percent thus far this year) and strong persistency across our major product lines. Operating income increased more than 3 percent to $216.3 million, one of our highest levels ever.

“We are in a very strong position and should be proud of the results we delivered this quarter,” said Mike Simonds, senior vice president and chief operating officer. “Our unwavering discipline and focus have helped us deliver these good short term results and make progress on our longer term priorities.”
Among the highlights:

• Unum US sales ended the third quarter at nearly 98 percent of plan and 4 percent over the third quarter of last year.
• Group disability sales were at 103 percent of plan, core group at 104 percent of plan and IDI business continued a very strong year at 111 percent of plan. VB sales were up 2 percent, but short of plan.
• Group premium persistency of 90.5 percent remains well above the annual plan of 87.9 percent.
• As in the second quarter, expenses were favorable, but remain a critical area of focus as we continually look for efficiencies and opportunities to improve.
• Service metrics across customer touch points continued to be strong and remain above target.
• The August implementation of the second wave of the Growth Operations strategy went well. More than 40,000 clients are now doing business with us under this new sales and client management model.

The final months of the year are busy ones. Nearly 40 percent of our sales are expected in the fourth quarter and the environment remains intensely competitive, said Chris Pyne, senior vice president and head of Unum US Sales and Client Management.

“We have good momentum as we head into the home stretch,” Chris said. “We have a good mix of new sales and new business on old cases (NBOC) in pipeline and this positions us well for a strong finish.”
The entire industry continues to struggle against strong economic headwinds, including the impact of historically low interest rates. Unum is analyzing these economic factors carefully and taking the necessary steps to mitigate the impact to our business.

“The interest rate environment is certainly impacting us, from returns we see on investments to pricing plans we’re developing for the future,” Mike said. “But we should be proud of our results and our outlook. We are clearly energized and in a good position to carry this momentum through the end of the year.”

S&P upgrades Unum's FSR to A from A-

Standard & Poor’s Rating Services (S&P) upgraded Unum’s financial strength ratings to A from A- based on our strong capital foundation and operating performance.

In its announcement, S&P noted that two primary factors were behind the decision to raise our rating: company performance that has exceeded our peers’ for several years, and improved business diversification through increasing supplemental and voluntary product sales. The agency also noted that despite a weak economy, they expect Unum to continue producing consistent operating results and diversifying its business profile over the next couple of years.

This is the second time in two months that our financial strength ratings have been raised, with Moody’s issuing an upgrade in August. With today’s action, all four rating agencies have now upgraded us since early 2010. This is good news in the current economic environment and contrasts with the generally negative outlook ratings agencies have on our industry as a whole. 

 This positive news is another indication of our financial strength to our customers, distribution partners and the financial community

September is a perfect time to broaden your business

September is Life Insurance Awareness Month and a perfect time to broaden your business.  Tell your clients about Unum’s life insurance, which provides flexible benefits to employees, plus excellent education and enrollment solutions.

It’s never been a better time to help your clients assess the financial protection needs of their employees. When many families have little or no savings to help with the high costs of final expenses or pay for a period of long term care, life insurance can be more valuable than ever.

With Unum’s life insurance, first-time buyers can get an affordable amount of coverage with the option to purchase more at later enrollments — with no health questions. The streamlined enrollment process makes it easy for employees to sign up. Plus, Unum provides effective employee education at no extra cost — something that your clients will appreciate.

Build business, while also building life insurance awareness for your clients. Remind your clients about Unum’s life coverage and other important voluntary benefits — and revenues will follow.

Industry review finds steady rise in LTD claims

In its seventh annual Long Term Disability Claims Review, the Council for Disability Awareness reports that more than 662,000 people received about $9.3 billion in long term disability insurance payments from CDA member companies during 2011.

The number of long term disability claims has increased industrywide each of the past four years. This year’s results represent a 2 percent increase in payments and a 1 percent increase in the number of people receiving those payments over 2012, according to the study.

Seventeen CDA member companies representing more than 75 percent of the commercial disability insurance market contributed disability claim data for this year’s survey. Though long term disability claims were up overall, claims incidence results were mixed at individual companies across the industry. Incidence refers to the number of claims per 1,000 insured lives per year. The report found:

• 43 percent of participating companies reported increased claim incidence from 2010 to 2011
• 38 percent reported incidence as flat from 2010 
• 19 percent reported lowered incidence
• In 2010, 56 percent of participating companies reported increased claim incidence

“Similar to the majority of respondents to the survey, we have seen a slight increase in the incidence of long term disability claims at Unum over the past few years,” said Kevin Huber, assistant vice president of Benefit Metrics and Analysis. “This has been driven to some degree by aging of our insured block and the economic environment.”

According to the CDA report, most, but not all, companies participating in the survey cite the economic environment as a factor in increased claims incidence. Participating companies reported insured lives declined by 0.5 percent from 2010 to 2011, reflecting the third straight year that the number of wage earners insured for long term disability has declined. The number of employees insured in employer sponsored plans has declined each year since 2008.

Since 2005, the CDA has conducted the annual review of long term disability claims among the U.S. working population. The review summarizes long term disability insurance claims data gathered from the annual CDA member Long Term Disability Claims Survey.

Unum is a founding member of the CDA, a non-profit group governed by 18 leading disability insurance companies. David Leopold, senior vice president and chief marketing officer for Unum US, is a member of the council’s board of directors.

Based in Portland, Maine, the CDA is dedicated to raising awareness of the challenges of disability and providing education about disability insurance protection.

Read the full claims report here.

A better benefits prescription for hospital clients

Unum continues to refine its focus on the hospital segment in the group, voluntary and individual disability markets. Its Health Care Practice team, led by Tiffany Breau-Metivier, director of market development, is helping to create best practices that support new sales, service and persistency.

It’s easy to see why we are focused on the health care market. Unum provides group benefits to more than 1,500 hospitals, representing more than one million health care employees. In the National Client Group (NCG), healthcare makes up the largest customer segment with one in five customers coming from the health care industry. Additionally, Unum provides voluntary benefits to more than 700 hospitals customers, making it Unum’s largest VB segment.

As we focus on this market, our goal is clear: deliver innovative solutions that help hospitals address their cost and patient care challenges, while making it easier for them to do business with Unum. From training Unum employees on the challenges that hospitals face, to streamlining the services we offer, we are developing solutions to meet the unique needs of these health care customers.

“Hospitals want to work with carriers that have experience working with clients in the health care field,” Tiffany explained. “To ensure that we are meeting their needs, we are investing in training and knowledge management tools for our disability specialists and claims teams. These tools will help them gain a deeper knowledge of this industry and its unique requirements.”

Hospitals are “staffing sensitive” operations, and, due to employee demographics and work demands, they usually experience higher levels of employee absence. Couple this with the need to provide around-the-clock patient care, and it’s no surprise hospitals want to work with a carrier that can provide fast, effective claims management and support.

For our health care clients, Unum is now offering 24/7 intake and employer notification when a claim is filed. Regardless of the time of the day, within three to five minutes of receiving a claim request, an email is sent to the appropriate contact at the hospital notifying them of the claim and the employee’s absence.

“The goal of this offering is to help the hospital find a replacement as soon as possible by alerting them to the claim as quickly as we can,” Tiffany said.  Additionally, Unum is now involving a nurse case manager in all complex clinician claims. The nurse case manager will interact directly with the clinician claimant and work alongside the disability benefits specialist to help answer claimant questions and provide an additional layer of customer support.

“This added clinical support is a natural extension of our value proposition,” said Tiffany. “Hospitals aren’t just looking for vendors they’re looking for partners. And claimants that are clinically-trained are more comfortable talking to others who are well-versed in their diagnosis. It’s about providing a customer experience that demonstrates we understand not just the industry, but those who work in the industry.”
Many hospitals these days are interested in transitioning away from traditional sick bank models that allow employees to accrue up to 26 weeks in sick time to use for short-term leave.

“These models can be cumbersome to administer and costly for the employer,” said Tiffany. “They can create gaps for less-tenured employees and because they are not always administered consistently, they can also raise compliance issues for the hospital.”

The Health Care Practice Team is working on a consultative service that will help hospitals better understand the trends that influence their current and potential costs. Through this tailored and customized approach, Unum can provide a roadmap to help control these costs that are unique to a hospital’s workforce and culture.

The Team is also looking at ways to measure the impact of programs that help reduce lost time, such as return-to-work programs, health and productivity reporting and sick-bank program alternatives.
“We partner with our hospital customers in such unique ways to help them minimize costs and limit absences while still improving patient care,” said Tiffany. “So it’s important for us to be able to measure the value of the solutions we can provide.”

There are more things to come from this team. They continue to look at developing additional programs to address cost, quality and patient satisfaction for hospitals, with a focus on the aging workforce and nurse engagement and productivity. They are also looking for way to help support physicians, such as new plan design offerings and integrated support services.

Year after year, 3 + 3 still the key to benefits education

Unum’s annual study of American workers finds that enough time and the right tools are still the key ingredients to an effective benefits education.

“This is the fourth year we’ve conducted this study, and our research has consistently found that the key to an effective benefits education campaign is a three-plus-three communication strategy,” said Kelly McClusky, director of marketing communications at Unum. “Allowing employees at least three weeks to review information, and providing that information in at least three formats, adds up to a better benefits education and enrollment experience.”

A positive assessment of benefits education is strongly related to overall workplace satisfaction. The research shows that four in five (82%) employees who rated their benefits education highly also rated their employer as an excellent/very good place to work.

“When employers give their employees enough time and resources to learn about benefits, the payoff can be positive for both the employer and the employee,” McClusky said. “We consistently see that when employees experience an effective approach to benefits education, they also have higher levels of engagement, morale and loyalty.”

The study of more than 1,100 employed adults by Harris Interactive was completed following the 2011 benefits enrollment period.

To better meet the various learning styles among employees, the results indicate offering education materials in at least three formats is a critical part of the benefits education process.
According to the study, 90 percent of employees who were asked to review their benefits within the past year used the information made available to them. Printed materials, employer emails, personalized statements and employer intranets were among the most likely to be utilized:

• 66 percent of employees used printed materials or brochures to learn more about their benefits when given the opportunity.
• 59 percent of employees who had access to personal statements utilized them to get information about their benefits.
• 58 percent of employees accessed information on their employer’s Intranet or from email communications from their employers when it was offered.

Unfortunately, the study also reveals that employee access to benefits resources has remained significantly lower than 2008 levels.

Equally important as offering employees the right amount of resources is giving them three weeks or more to review their benefits choices and information before making a decision.

Those who had three or more weeks to review benefits materials prior to the close of enrollment were significantly more likely to rate their benefits and their benefits education as excellent or very good, compared to those with less than three weeks to enroll.

The research shows that 96 percent of employees who had three-plus weeks to review their benefits education materials said it was enough time—but only 48 percent of respondents were given that much time.

An effective benefits education strategy can enhance employees’ appreciation of their benefits, the research shows. Eighty-one percent of employees with an excellent/very good benefits education rated their employee benefits package as excellent or very good. Conversely, only 27 percent of employees who rated their benefits education as fair/poor said their employee benefits package was excellent or very good.

Understanding voluntary benefits needs - Unum's CMO David Leopold explains

There is a nice value equation for employers to offer voluntary benefits, says David Leopold, SVP and chief marketing officer at Unum. Watch as he shares a few key data points and which type of employee is actually buying voluntary products:

http://ebn.benefitnews.com/video/voluntary2726126-1.html