Unum Group's headquarters overlook downtown Chattanooga.Despite lower yields in the current low-interest rate environment, Unum Group boosted its per-share net income in the third quarter by 11.5 percent over a year ago.
The Chattanooga-based disability insurer said Wednesday that it earned $221.1 million, or 87 cents per share, in the third quarter. In the same period a year ago, Unum earned $205.7 million, or 78 cents per share.
Unum CEO Tom Watjen said the results "reflect a continuation of a number of the positive trends that began to emerge last year, including strong sales momentum, accelerating premium growth, and favorable risk results across much of the company." But the results were still 3 cents per share below what most analysts had forecast for the quarter.
Unum, which released the results after the market closed Wednesday, said operating earnings were down slightly for Unum U.S. operations "due largely to pressure on our investment income." But U.S. sales were up 13 percent in the quarter.
"We have continued to generate strong operating results, despite what remains an increasingly challenging interest rate environment," Watjen said. "I am confident that the positive operating trends we have seen in the business are sustainable and that we can continue to deliver solid operating margins and returns in our ongoing businesses."
Operating earnings for Unum's British operations rose slightly to $33.5 million, but were flat in local currency. The company tends to experience some adverse seasonality in the U.K. in the third quarter, and this year was no exception.
Colonial Life generated another strong quarter, with a 13 percent gain in sales.
Unum said its investment portfolio "remains in excellent shape" and the company repurchased another $100 million of stock during the quarter, which brings its total for the year to $300 million and to $2.8 billion for the last seven years.
"While I expect low interest rates to be with us for a while, I know that we will continue to take the steps needed to respond to these conditions, as we've done in the past," Watjen said.