Group DI Executives Stress Need To Grow Profits

McCarthy conceded that, in the late 1990s, his company was one of the companies that set prices too low, gambling on predictions that investment earnings would rise and claims would stabilize.

Now, McCarthy said, "I think were much more realistic about not making bets."

UnumProvident will accept a 25% drop in sales, if necessary, to get employers to pay more realistic rates, McCarthy said.

Other executives at the conference argued that although insurers have to set realistic rates and hold down costs, they also have to come up with better products and better marketing campaigns.

"What about bringing value?" asked Michael Shunney, vice president of group insurance at Sun Life Financial Inc., Toronto. "What about closing the awareness gap?"

"If you have to choose, choose profits over growth," said Richard Mucci, senior vice president in the group benefits division at Hartford Life, a unit of Hartford Financial Services Group Inc., Hartford. "But the real winners will grow and be profitable."

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.