Unum expects natural market growth over 2%

Executives at a major benefits provider see employment growth stabilizing but providing a strong, steady sales boost over the near-term.

Rick McKenney, the chief executive officer of Unum, and Steve Zabel, the chief financial officer, talked about the underlying tone of the market during a conference call the company held to go over earnings for the third quarter.

The company reported $646 million in net income for the quarter on $3.2 billion in revenue, up from $202 million in net income on $3.1 billion in revenue for the third quarter of 2023.

A few months ago, executives at many companies were worried that the U.S. economy would soon enter a mild recession.

Now, strong employment is combining with a benign credit environment to support Unum’s performance, McKenny said during the call.

Zabel noted that U.S. market growth increased to 5% toward the end of the COVID-19 pandemic.

“So, it was creating a bit of tailwind,” Zabel said. “A lot of that was during periods of wage inflation, but also we were seeing very strong employment.”

Now, Zabel said, growth has normalized to about 2% to 3% per year.

The kinds of market growth trends Unum is seeing may buoy marketers of everything from health plans to 401(k) plans, in addition to the kinds of disability insurance plans, absence management services and other products Unum and its Colonial Life business are best known for selling.

Related: Employee leave management continues to be a struggle for many employers

Tim Arnold, the president of the Colonial Life, acknowledged that sales to existing clients at the Colonial Life unit were down 3%.

“I believe it’s largely an execution issue,” Arnold said. “We recently named a new senior vice president of sales. We’re excited about the impact that she and her team will have going forward.”