Thomas R. Watjen

Unum Group shares rose more than 4 percent Thursday on the heels of higher earnings and its chief executive saying he’s encouraged by growth in a key business line.

Analyst Eric Berg of Lehman Brothers said Unum’s first-quarter results are markedly better than other life insurers he follows.

“There was little to quibble with,” he said in a research note.

The insurer’s stock climbed $1.03 per share to close at $24.24.

Unum CEO Thomas R. Watjen told analysts that while sales trends were mixed among the businesses of the Chattanooga-based insurer, he is heartened by growth in its Unum US business.

“We’ve had a strong start to 2008,” he said about quarterly earnings reported after the close of the market Wednesday.

Unum, which employs almost 3,000 people in Chattanooga, reported operating earnings of $207.8 million, or 59 cents per share, topping the consensus estimate of analysts of 57 cents.

That was a 19 percent gain.

Mr. Watjen said the company is rolling out new initiatives countrywide, including its Simply Unum effort which combines its group and voluntary products on one platform.

Unum’s Colonial Life subsidiary has begun to raise its profile in an updated branding effort along with introducing new life and health insurance products, he said.

Mr. Berg said sales growth, which had been absent from the Unum turnaround story, finally turned solidly positive in many product categories.

He said production was clearly ramping up in the quarter in the Unum US business, the insurer's largest. Mr. Berg said the segment is responsible for 52 percent of consolidated earnings and sales jumped 28.8 percent year over year.

He said notable exceptions in growth were in group short-term disability insurance sales in the United States and sales in the United Kingdom. Also, earned premiums slid again in the quarter in two of Unum's biggest businesses, namely, group disability and group life. But even that blemish may go away soon, Mr. Berg said.

Unum is purging underperforming, larger cases from its life and disability business and replacing those customers with smaller ones the insurer says are more profitable, he said.