Unum CEO says Chattanooga insurer is adapting amid coronavirus crisis

Jul. 29--Unum CEO Richard McKenney said Wednesday the insurer is adapting to a changing world amid the coronavirus crisis, adding that it's prepared for "a wide variety of economic scenarios."

"Our team is feeling challenged and uncertainty in their own lives but their efforts to support our customers, communities as well as each other through this time has been exceptional," said McKenney concerning second quarter performance to financial analysts during a conference call.

The Chattanooga-based company that employs nearly 3,000 people in the city on Tuesday posted after-tax adjusted operating income of $250.1 million in the quarter, or $1.23 per diluted common share. That's compared to $286.9 million, or $1.36 per diluted common share, a year ago.

While earnings were down, the company that sells disability, life, dental and other insurance products at the workplace beat the Zacks consensus estimate that it would earn $1.19 in the quarter.

McKenney said the fragility of Americans' financial lives has never been more apparent as in recent weeks.

"We have remained true to our purpose of helping people thrive throughout life's moments," he said. "And what we are witnessing today has amplified the need for what we do."

In the quarter, the company said it saw high mortality in group life, voluntary life, and long-term care segments in the pandemic environment.

Steve Zabel, Unum's chief financial officer, said the company experienced unfavorable coronavirus impacts on claims, expenses and investment income in the quarter.

He said Unum's dental business in the quarter saw unusually low utilization rates as people stayed home, but the company expects that to get back to a more normal level.

McKenney said that persistency, or the business that an insurer is able to retain, held up in the quarter, though he expects those levels will be pressured in the second half of the year.

Also, low government interest rates put into place earlier this year to bolster the economy made it more difficult for the company put its sizable investment portfolio to work for Unum.

Still, McKenney said the company operated "very well" in the quarter even though employees are largely working from home during the pandemic.

"In a very tough environment, the team and the strength of the franchise have responded," he said.

Unum's stock closed Wednesday at $18.19 per share, up 36 cents, or 2.02% on the New York Stock Exchange.

Also, the company said Tuesday that it's suspending financial guidance for the remainder of 2020 due to the uncertain economic environment caused by the COVID-19 pandemic.

Contact Mike Pare at [email protected]. Follow him on Twitter @MikePareTFP.

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