StanCorp Financial Group Inc
) reported third-quarter 2013 operating net earnings of $1.45 per
share, which exceeded the Zacks Consensus Estimate of $1.04 by
39%. Results were 38% ahead of $1.05 earned in the prior-year
The improvement came on the back of increased favorable claims
experience in the group insurance business and higher earnings in
the company's Asset Management segment.
Including after-tax net capital losses of 13 cents a share, net
earnings of StanCorp were $1.32 per share in the third quarter,
up 31% year over year.
StanCorp's total revenue in the third quarter of 2013 was $702.0
million, down 1.6% year over year from $713.7 million. The
decline came from waning premiums (down 0.8% year over year) as
well as lower net investment income (down 2.5% year over year).
Results were also below the Zacks Consensus Estimate of $711
Total benefits and expenses of StanCorp stood at $620.2 million
in the reported quarter, down 4.9% year over year. A decline in
benefits to policy holders (down 6.5%), operating expense (down
0.4%), and interest expense (down 27.1%) from the prior-year
quarter aided the results.
business reported pre-tax income of $78.3 million for the third
quarter of 2013, up 25% year over year. The surge was driven by
increased favorable claims experience in the group insurance
business. However, lower group insurance premiums and a lower
discount rate used for new long-term disability claim reserves
limited the upside.
Premiums for the segment in the third quarter were $523 million,
down 0.9% from $527.5 million in the year-ago quarter. Group
insurance premiums declined 1.7% year over year to $474.7
million. The results were affected by higher experience rated
refunds (ERR) and lower group insurance sales. However,
individual disability insurance premiums increased 8.8% year over
year to $48.3 million during the reported quarter.
Sales from the group insurance business increased 44.9% year over
year to $29.7 million in the reported quarter due to pricing
Group Insurance benefit ratio was 75.1% compared with 79.7% in
the year-ago quarter. Individual disability benefit ratio was
72.9% in the quarter against 75.7% in the prior-year period.
business reported pre-tax income of $21.9 million, up 25.1% year
over year from $17.5 million. The improvement came on higher
administrative fee revenues and spread margin stemming from
increase in assets under administration and lower benefits to
Assets under administration were $23.8 billion as of Sep 30,
2013, up 9.9% from $21.7 billion as of Sep 30, 2012. It largely
reflected higher equity values for retirement plan assets under
During the quarter, StanCorp Mortgage Investors originated $414.1
million of commercial mortgage loans, higher than $347.3 million
in the comparable year-ago quarter.
segment registered a pre-tax loss of $9.7 million in
third-quarter 2013 compared with $16 million in the third quarter
As of Sep 30, 2013, StanCorp's investment portfolio comprised
approximately 54.8% fixed maturity securities, 43% commercial
mortgage loans, and 2.2% real estate and other invested assets.
The overall weighted-average credit rating of the fixed maturity
securities portfolio assigned by Standard and Poor's was "A-".
As of Sep 30, 2013, cash and cash equivalents for StanCorp were
$345.4 million, significantly up from $160.7 million as of Dec
31, 2012. Long-term debt of StanCorp was $551.4 million as of Sep
30, 2013, flat with 2012-end level.
Book value per share of StanCorp as on Sep 30, 2013 was $48.12,
down 2% from $49.08 at Sep 30, 2012.
Share Repurchase Update
In third-quarter 2013, StanCorp purchased 0.82 million shares for
$44.1 million and is left with 1.5 million shares under its
authorization, scheduled to expire on Dec 31, 2014.
StanCorp currently carries a Zacks Rank #1 (Strong Buy). Among
other life insurers,
) with will report its results on Oct 23, after the market
Protective Life Corporation
Lincoln National Corporation
) will report their results on Oct 30. All these stocks carry a
Zacks Rank #2 (Buy).
LINCOLN NATL-IN (LNC): Free Stock Analysis
PROTECTIVE LIFE (PL): Free Stock Analysis
STANCORP FNL CP (SFG): Free Stock Analysis
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