The market value of Chattanooga’s biggest company plunged by nearly $1.8 billion Wednesday over investor concerns about the cost of supporting products the company is phasing out.
Shares of Unum Group fell by nearly 17 percent to the lowest level since the fall of 2016 as investors remained concerned over losses in the company’s long term care policies written in the past and whether the company will have to raise its reserve charges to cover expenses from such plans as the cost of coverage for those participants still insured by Unum continues to increase.
Among the 2,800 stocks listed on the New York Stock Exchange, Unum suffered the fourth biggest decline in value of any company during trading Wednesday after the company’s quarterly earnings were released.
Unum’s common stock price fell by $8.12 per share, or 16.95 percent, to $39.78 per share, despite reporting higher first quarter earnings Tuesday night.
The Chattanooga-based disability insurer, which had record profits in 2017, said its net income in the first three months of 2018 rose by 23 percent from a year ago to $273.5 million, or $1.23 per share. The after-tax adjusted results were a penny per share below Wall Street expectations. But the biggest concern among analysts who follow the company was about potential losses from Unum’s long-term care policies, which the company quit selling six years ago but remain as part of its closed book of business.