Unum expanding into dental, vision insurance in 2017

The Unum headquarters building is located in downtown Chattanooga. The company expects to significantly grow its dental and vision insurance business.

I think we've got one here that will be successful in the short term and really successful long term.

Chattanooga-based Unum Group's expansion in the U.S. dental and vision insurance business will launch on Jan. 1 as the company aims at rapidly ratcheting up revenues in the sector.

"You feel the buzz," Unum U.S. President Mike Simonds said. "Everyone is working hard to get Unum-branded products in the market."

Unum vision will roll out nationally next month. Unum dental will go live in the Southeast and Midwest in January and then throughout the nation a year later.

Unum, a market leader in workplace employee benefits such as disability insurance, sees the potential of vision and dental premiums hitting about $500 million in five years.

"I think we've got one here that will be successful in the short term and really successful long term," Simonds said.

Earlier this year, Unum purchased a leading provider and administrator of dental and vision insurance, H&J Capital LLC, the parent of Starmount Life Insurance Co. and AlwaysCare Benefits for $127 million.

Starmount CEO Erich Sternberg said the Baton Rouge, La., company emerged from a family-owned department store business. While the family sold the stores in the early 1990s, it developed the insurance company into a $180 million a year venture with 230 employees.

Sternberg said while Starmount set a goal of becoming a $1 billion-a- year business, it didn't have the skill sets and capacity to get there and the deal with Unum was struck.

"From a comfort and culture perspective, we clicked immediately," he said. "It's keeping the customer top of mind."

Deborah Sternberg, Erich's sister and Starmount's president, said plans are to make sure the launch is seamless and will blend the vision and dental offerings with Unum's other employee benefit products.

"Unum's core and voluntary benefits are well known," she said. "Clients are looking for one stop with their benefits needs. We capture those supplemental benefits in an all-inclusive solution."

Simonds said Unum had an established partnership with another dental provider and good success in growing revenue in the segment.

Ultimately, he said, Unum wanted to bring that capacity inside the group so clients could benefit from all of the company's products.

Starmount had a strong reputation of "doing things the right way and taking care of customers. The cultural fit was strong," Simonds said. "What the acquisition of Starmount was about was people and know-how."

Erich Sternberg said Starmount will be a "center of excellence" in dental and vision for Unum and its Colonial Life subsidiary.

"We provide the product, know-how and experience to drive the business," he said.

The potential market is a big one, Sternberg said.

"It's a huge opportunity," he said. "We're just scratching the surface."

Unum, which reported overall 2015 revenues of $10.7 billion and provided $6.8 billion in benefits, sees opportunity as the U.S. economy grows, Simonds said.

"That's good news for dental, vision and Unum," he said. "We're leveraged toward job and wage growth."

The deal with Starmount was the second for Unum in the dental and vision segment over the past year or so. Last year, the company acquired National Dental Plan, which provides insurance through the workplace in the United Kingdom, for about $49.5 million.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.