CHATTANOOGA, Tenn. (AP) — Employee benefits and disability insurance provider Unum Group on Tuesday said its third-quarter profit fell 7 percent, mainly because of investment losses.
For the three months ended Sept. 30, the company said net income slipped to $205.6 million, or 69 cents per share, from $220.8 million, or 68 cents per share, in the same quarter last year.
There were nearly 8 percent fewer shares in the 2011 quarter, which had the effect of increasing earnings per share.
Unum, a disability insurance provider, employs roughly 10,000 people worldwide and just over 3,000 in Maine. It was formed from the 1998 merger of Portland-based Unum Corp. and Tennessee-based Provident Corp.
Unum recorded $23.9 million in net realized investment losses during the quarter, or 5 cents per share, compared with a $1.1 million investment gain last year. Excluding that loss, the company said its adjusted earnings came to 74 cents per share.
Revenue rose just under 2 percent to $2.55 billion from $2.53 billion last year.
Analysts, on average, expected profit of 75 cents per share, on revenue of $2.57 billion.
The investment losses for the recent quarter included an after-tax loss of $21.8 million resulting from changes in the fair value of an embedded derivative in a modified coinsurance contract.
In Unum’s U.S. segment, operating income rose 7 percent to $219.5 million.
Its group disability business saw operating income fall because of declining premiums and an increase in the number of paid-out disability claims. The company said price competition and the weak employment situation contributed to the declines. Premiums in its group life and accidental death and dismemberment business rose, while claims fell slightly.
Earnings in its supplemental and voluntary business line improved because of the introduction of voluntary benefits and individual disability lines, which helped make up for lower income from long-term-care coverage. Sales rose across all three business lines.
In Unum’s U.K. segment, operating income slumped 26 percent to $34.9 million. Higher disability claims payouts were not offset by increased premium income. Sales of new policies fell sharply.
Unum’s Colonial Life segment saw operating income slip 6 percent to $70.3 million. Increased premiums and higher investment income in the segment could not offset increased claims.
For the full year, Unum continues to expect adjusted per-share earnings to increase between 6 and 12 percent.
Wall Street is expecting full-year earnings of $2.96 per share, compared with earnings of $2.71 last year.