StanCorp Slumps as Profit Falls on Disability Claims, Missing Estimates
StanCorp Financial Group Inc. (SFG), the Portland, Oregon-based disability insurer, fell the most since 2008 as profit plunged, missing analysts’ estimates.
The insurer dropped $5.72, or 14 percent, to $35.50 at 4:03 p.m. in New York Stock Exchange composite trading. The company had slipped 21 percent this year.
Second-quarter net income dropped 54 percent to $18.8 million, or 42 cents a share, from $41.1 million, or 87 cents, as the cost of benefits increased, the company said in a statement late yesterday. Operating earnings, which exclude some investment results, were 61 cents a share, missing the average $1.03 estimate of 11 analysts surveyed by Bloomberg.
“Higher-than-expected claims incidence in the company’s group long-term disability insurance business” are weighing on results, Standard & Poor’s said today as it lowered the counterparty credit rating to BBB+ from A- for the firm.
The insurer has raised prices to “address the higher claims in the current economic environment,” StanCorp Chief Executive Officer Greg Ness said in the statement.
To contact the reporter on this story: Brooke Sutherland in New York at Bsutherland5@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.