There is every indication Unum Group is currently engaging in projects to pull claims from the Extended Duration Unit (EDU in Portland) and Special Handling Unit (SHU in Chattanooga) for the purpose of “risk managing” claims after long periods of benefit payments.
Unum’s claim managers always have some kind of project or another going to prove to higher-ups they can “roll in” expected profit targets. EDU and SHU are sometimes one of those projects. Insureds who have been receiving benefits since 1997 are now finding themselves faced with aggressive requests for medical information, doc-to-doc calls, IMEs and surveillance.
In addition, nearly every claim presented to DCS is now being paid under Reservation of Rights. This includes initial applications as well as claims paid for quite some time. You may recall Unum changed its ROR policy and now informs insureds it can ask for all benefit money back if the company arbitrarily decide it should not have paid benefits at all.
DCS has also been made aware Unum is also conducting surveillance and other “expensive” risk management activities on LTD claims with only a $500 a month benefit. Use of G4S out sourcing for field representative visits as well as surveillance may indicate Unum is operating in the red on certain claims with the expectation of gaining over all.
In the past, expensive risk activities such as surveillance were determined to be “cost-effective” only for claims with monthly benefits in excess of $1,500-$2,000/month. It appears Unum may be throwing good money at low reserve claims and may have exhausted their “biggest bang for the buck” product lines such as wealthy LTD and DI claims.
All of these actions are possible indications Unum needs to either maintain, or increase its profitability. Remember June is the end of the second quarter and Unum will be looking to achieve its financial profit goals at that time.
It is surprising though for Unum to actually begin pulling out claims in the EDU and SHU for risk management. The company doesn’t generally assign their brightest claims handlers to the EDU which means claims removed must be reassigned to other claim specialists “on the floor.”
Unum always seems to go through profitability feast or famine. Unfortunately, neither are good or reassuring for Unum’s insureds and claimants.