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StanCorp says higher claims will hurt profit
(Reuters) - StanCorp Financial Group (SFG.N) said its second-quarter profit was hurt by higher claims in its disability insurance business, and expects full-year earnings to miss its previous forecast.
StanCorp said it expects full-year profit to be below its previously estimated range of $3.60 to $3.90 per share, excluding capital gains and losses.
Analysts on an average were expecting full-year earnings of $3.57, excluding items, according to Thomson Reuters I/B/E/S.
The company said it would report a second-quarter profit of 51 cents per share, excluding capital gains and losses, lower than the 59 cents per share it earned a year earlier.
Analysts are expecting a profit of 86 cents per share in the quarter.
The company said it estimates benefit ratio for group insurance products to be 88.5 percent in the second quarter, higher than its expected annual range of 80 percent to 82 percent.
A higher benefit ratio means the company is paying out a larger chunk of its premiums in costs and claims.
StanCorp's benefit ratio has been rising over the past year. The company said in January that it would begin to increase prices in its long-term disability insurance business to bring its annual benefit ratio in the range of 74 to 78 percent.
Shares of the Portland, Oregon-based company were down 7 percent at $34.38 in trading after the bell. They closed at $37.09 on Monday on the New York Stock Exchange.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Roshni Menon)
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