Unum Group on Tuesday reported a 13 percent jump in operating income to $228.6 million, or 69 cents per share, for the second quarter, beating Wall Street expectations by a penny and exceeding 2009 second quarter results of $215.8 million, or 65 cents per share.
The increase was led by Unum’s group disability line, according to Tom Watjen, president and chief executive of Chattanooga-based Unum.
He said the insurer is operating from “a position of strength, both operationally and financially, which is a very nice place to be in times like these.”
Profit, however, fell to $209.7 million in the second quarter, or 63 cents per share, from $267.2 million or 80 cents per share for the second quarter of 2009, according to the company’s earnings statement.
“Our focus going forward will continue to be on executing our disciplined business plan and maintaining our financial flexibility,” Watjen said.
“Our operating performance was generally good, our investment performance was strong and our capital position remains solid,” he said.
The company realized net after-tax investment losses of $18.9 million, or 6 cents per share, compared to gains of $51.4 million in 2009’s second quarter, or around 15 cents per share.
The investment losses stemmed primarily from “changes in the fair value of an embedded derivative in a modified coinsurance contract,” the company said in a statement.
John Nadel, managing director for Sterne Agee, said Unum’s results reflected the company record of generating stable returns in a tumultuous economy.
“This is a quarter that we’ve come to expect: good disciplined underwriting results, fairly predictable earnings, good capital levels, good investment level portfolio performance, but in a very tough macro environment,” Nadel said. “They’re seeing some sales growth in a couple of lines of business like their Colonial operation and involuntary benefits, but overall, with unemployment levels remaining steady and high, that puts pressure on group insurance companies, and Unum is not immune to that.”
Unum’s stock closed Tuesday at $22.72 a share, down 51 cents from Monday’s closing price.