Profile: StanCorp Financial Group Inc (SFG.N)
20 Dec 2013
StanCorp Financial Group, Inc. (StanCorp), incorporated on September 23, 1998, is a holding company. StanCorp conducts business through wholly owned operating subsidiaries throughout the United States. Through the Company's subsidiaries, the Company has the authority to underwrite insurance products in all 50 states, as well as the District of Columbia and the United States territories of Guam and the Virgin Islands. The Company operates in two segments: Insurance Services and Asset Management. The Company’s insurance businesses offer group and individual disability insurance, group life and accidental death and dismemberment (AD&D) insurance, group dental and group vision insurance, and absence management services. The Company’s asset management businesses offer full-service 401(k) plans, 403(b) plans, 457 plans, defined benefit plans, money purchase pension plans, profit sharing plans and non-qualified deferred compensation products and services. Its asset management businesses also offer investment advisory and management services, financial planning services, origination and servicing of fixed-rate commercial mortgage loans, individual fixed-rate annuity products, group annuity contracts and retirement plan trust products, and manage certain real estate properties.
The Company’s wholly owned operating subsidiaries include Standard Insurance Company (Standard), The Standard Life Insurance Company of New York, Standard Retirement Services, Inc. (Standard Retirement Services), StanCorp Equities, Inc. (StanCorp Equities), StanCorp Mortgage Investors, LLC (StanCorp Mortgage Investors), StanCorp Investment Advisers, Inc. (StanCorp Investment Advisers), StanCorp Real Estate, LLC (StanCorp Real Estate) and Standard Management, Inc. (Standard Management). Standard underwrites group and individual disability insurance and annuity products, group life and accidental death and dismemberment (AD&D) insurance, and provides group dental and group vision insurance, absence management services and retirement plan products. The Standard Life Insurance Company of New York is licensed to provide group long term and short term disability insurance, group life and AD&D insurance, group dental insurance and individual disability insurance in New York.
Standard Retirement Services administers and services the Company's retirement plans group annuity contracts and trust products. Retirement plan products are offered in all 50 states through Standard or Standard Retirement Services. StanCorp Equities is a limited broker-dealer and member of the Financial Industry Regulatory Authority. As a wholesaler, StanCorp Equities activities are limited to soliciting and supporting third-party broker-dealers and investment advisers that offer or advise their retirement plan clients on using an unregistered group annuity contract or a mutual fund trust platform. StanCorp Mortgage Investors originates and services fixed-rate commercial mortgage loans for the investment portfolios of the Company's insurance subsidiaries.
StanCorp Mortgage Investors also generates additional fee income from the origination and servicing of commercial mortgage loans participated to institutional investors. StanCorp Investment Advisers is an Securities and Exchange Commission (SEC)-registered investment adviser providing performance analysis, fund selection support, model portfolios and other investment advisory, financial planning and investment management services to its retirement plans clients, individual investors and subsidiaries of StanCorp. StanCorp Real Estate is a property management company that owns and manages the Company's Hillsboro, Oregon home office properties and other properties held for investment and held for sale. Standard Management manages certain real estate properties held for sale from time-to-time in conjunction with the Company's real estate business.
Insurance Services Segment
The Insurance Services segment offers group life and AD&D insurance, group and individual disability insurance, group dental and group vision insurance, and absence management services to individuals and employer groups ranging in size from two lives to more than 164,000 lives. The Company had approximately 35,000 group insurance policies in force, covering approximately 6.5 million employees as of December 31, 2012. The Company's group insurance products are sold by sales representatives through independent employee benefit brokers and consultants. Group life and AD&D insurance contributed 40.8% of premiums for the segment during the year ended December 31, 2012. Group life insurance products provide coverage to insured employees for a specified period and have no cash value (amount of cash available to an insured employee on the surrender of, or withdrawal from, the life insurance policy). Coverage is offered to insured employees and their dependents.
AD&D insurance is usually provided in conjunction with group life insurance, and is payable after the accidental death or dismemberment of the insured in an amount based on the face amount of the policy or dismemberment schedule. Group long term disability insurance contributed 37.5% of premiums for the segment in 2012. Group long term disability insurance provides partial replacement of earnings to insured employees who become disabled for extended periods of time. The Company's basic long term disability product covers disabilities that occur during the policy period at both work and elsewhere. In order to receive long term disability benefits, an employee must be continuously disabled beyond a specified waiting period, which generally ranges from 30 to 180 days. Generally, group long term disability policies offer rate guarantees for periods from one to three years.
Group short term disability insurance contributed 9.8% of premiums for the segment in 2012. The Company's basic short term disability products generally cover only disabilities occurring outside of work. Short term disability insurance generally requires a short waiting period, ranging from one to 30 days, before an insured employee may receive benefits, with maximum benefit periods generally not exceeding 180 days. Individual disability insurance contributed 8.2% of premiums for the segment in 2012. The products include non-cancelable disability coverage that provides insurance at a guaranteed fixed premium rate for the life of the contract, and guaranteed renewable coverage where premium rates are guaranteed for limited periods and are subject to change thereafter.
The Company also offers a product with features that provide coverage in the event of partial disability or loss of income while caring for a family member with a serious health condition as well as medical and legal specialty protection. This segment also sells business overhead expense coverage that reimburses covered operating expenses when the insured is disabled and business equity buy-out coverage that provides payment for the purchase, by other owners or partners, of the insured's ownership interest in a business in the event of total disability. The Company's individual disability insurance products are sold nationally by brokers through master general agents, primarily to physicians, lawyers, executives, other professionals and small business owners.
The Company's other insurance premiums include group dental and group vision insurance and contributed 3.7% of premiums for the segment in 2012. Group dental products provide coverage to insured employees and their dependents for preventive, basic and major dental expenses, and also include an option to purchase orthodontia benefits. The Company offers three dental plans including a traditional plan, a reduced cost plan and a cost containment plans that are differentiated by levels of service and cost. Standard has a strategic marketing alliance with Ameritas Life Insurance Corp. (Ameritas), which offers Standard's policyholders flexible dental coverage options and access to Ameritas' nationwide preferred provider organization panel of dentists. The Company's group vision products provide coverage to insured employees and their dependents for essential eye care services including exams, frames, a variety of lens options and contact lenses. The Company also offers absence management services that allow employers to outsource administrative services and compliance support for short term disability, family medical leave, leave of absence, paid time off, and other employer-specific leave programs.
Asset Management Segment
The Asset Management segment offers full-service 401(k) plans, 403(b) plans, 457 plans, defined benefit plans, money purchase pension plans, profit sharing plans and non-qualified deferred compensation products and services through an affiliated broker-dealer. This segment also offers investment advisory and management services, financial planning services, origination and servicing of fixed-rate commercial mortgage loans, individual fixed-rate annuity products, group annuity contracts and retirement plan trust products. Retirement plans contributed 45.7% of revenues for the segment in 2012. Recordkeeping services for 401(k), defined benefit plans and governmental 457 plans are provided through a non-registered group annuity contract with third-party brand name mutual funds through a separate account and a stable value investment option managed by Standard. These plan services are also provided through an open architecture (NAV) platform offering mutual funds and a stable value investment option managed by Standard.
Representative fund companies are: Davis Funds, Dodge & Cox, Federated Investors Funds, Harbor Funds, Oppenheimer Funds, T. Rowe Price and Vanguard Funds. StanCorp Investment Advisers provides fund performance analysis and selection support to 87% of the Company's group annuity plan sponsors. All group annuity contracts are distributed through StanCorp Equities. Services for 403(b) and non-qualified deferred compensation plans are available on the NAV platform. The Company's retirement plans products and services are sold primarily through registered investment advisors, brokers, employee benefit consultants, investment advisors and other distributors served by the Company's sales representatives throughout the United States.
The primary sources of revenue for the retirement plans business include plan administration fees, asset-based fees and investment income on general account assets under administration, a portion of which is credited to policyholders. Individual annuities contributed 43.4% of revenues for the segment in 2012. The individual annuity products sold by this segment are primarily fixed-rate and indexed deferred annuities. This segment also sells immediate annuities. Fixed-rate annuities are distributed through national marketing organizations, brokers and financial institutions and compensation is primarily based on a percentage of premiums and deposits related to the business sold.
The Company's other financial services business includes the Company's investment advisory, real estate management and commercial mortgage loan origination businesses. These businesses contributed 10.9% of revenues for the segment in 2012. The Company's investment advisory business, StanCorp Investment Advisers, is an SEC -registered investment adviser providing performance analysis, fund selection support, model portfolios and other investment management and financial planning services. StanCorp Mortgage Investors, underwrites, originates and services fixed-rate commercial mortgage loans. It also generates additional fee income from the origination and servicing of commercial mortgage loans participated to institutional investors. The target market for commercial mortgage loans is small retail, industrial and office properties located throughout the continental United States.
StanCorp Financial Group Inc
1100 SW 6TH AVE P12B
PORTLAND OR 97204