The weak economy and rising unemployment are putting pressure on premiums, Unum Group said Tuesday, but the Chattanooga insurer's performance during the third quarter still met analysts' expectations.

Revenue from premiums during the third quarter was $2.5 billion, down from the $2.6 billion generated for the same period last year.

Unum reported operating income of $211.6 million or 64 cents per share compared to $216.9 or 64 cents per share reported during the third quarter last year.

The company maintained its 2009 guidance of between $2.50 and $2.60 a share.

Tom Watjen, Unum's president and chief executive officer, said he is pleased with the company's performance while pitted against increased competition and a weak economy.

"I am pleased with our results for the third quarter, as well as our continued strong position in our markets, in what remains a challenging economic environment," he said.

Despite the recession, Unum continues to invest in its Chattanooga campus, including a $20 million project to build a 1,450-car parking deck they hope will meet the LEED certification environmental standards set forth by the U.S. Green Building Council.

Shellie Stoddard, an analyst with Standard & Poor's, said Unum has avoided risky investments and has not seen recession-related increases in disability claims.

"Unum seems to be in a very stable position," she said.

She said the insurer has had a slight uptick in claims, but it doesn't appear to be meaningful.

"We are not prepared to say it is no longer a concern, just like we are not prepared to say the economy is in a recovery," Ms. Stoddard said.

According to Unum's financial report, operating income for the Unum UK segment fell more than 35 percent from $92.5 million in the third quarter of 2008 to $58.7 million in the recent quarter.

Officials attribute the drop to lower premiums and a unfavorable exchange rate between the British pound and the dollar, yet income from its other segments, Unum U.S. and Colonial Life, both rose.

The Unum U.S. segment grew 15 percent during the three months ending Sept. 30 to $197.1 million, and the Colonial Life segment increased 6 percent to $70.4 million.

"While we expect the environment will remain challenging, we are well positioned to profitably grow our business as general business conditions improve and, in the meantime, continue to generate solid results and maintain a strong balance sheet and capital position," Mr. Watjen said.

On Tuesday, Unum's stock closed at $20.19 a share, a less than 1 percent decrease from Monday's close.

Next Article

Market Insight

Previous Article

Filmmakers capture VW's move here