StanCorp Financial — J.P. Morgan 2013 Insurance Conference
20 slides from StanCorp Financial's conference presentation, Mar 21, 2013
Slide 1: J.P. Morgan 2013 Insurance Conference
Floyd Chadee, Senior VP and CFO J.P. Morgan 2013 Insurance Conference March 21, 2013 Exhibit 99.1
Slide 2: Forward-Looking Statements
This presentation should be read in conjunction with StanCorp’s most recent earnings release and Annual Report on Form 10-K. Information in this presentation includes certain statements related to projected growth and future events. These statements are “forward- looking” statements as that term is
Slide 3: A Consistent and Conservative Story
• Same conservative company for more than 100 years • Experts in the businesses in which we compete • Profitable, long-term businesses • Avoided high-risk businesses such as variable annuities and long term care • Conservative and transparent reserving practices • Never had a material reserve streng
Slide 4: Who We Are
Group Insurance $129.8 53% IDI $50.0 21% Who We Are 2012 Pre-Tax Income* ($ in millions) Asset Management $64.0 26% Insurance Services $179.8 74% * Excludes income before income taxes in our Other category.
Slide 5: We Offer / We Do Not Offer
We Offer: We Do Not Offer: Products Description Profitability drivers Ability to re-price policies over a 1-3 year period Profitability not spread-based No embedded equity derivatives/riders StanCorp principally operates in the group insurance market which has attractive attributes in a volatile mac
Slide 6: High-Quality Investment Portfolio
High-Quality Investment Portfolio (As of 12/31/2012) * Source: SNL Financial • Consistent, conservative investment strategy • No material preferred or common equities, or structured investments • Similar amount of debt holdings compared to peers • Underwrite, originate and service our own commercial
Slide 7: Disciplined Interest Rate Management
Disciplined Interest Rate Management 12-Month Interest Margins
Slide 8: Goodwill and Other Intangible Assets
20.6% 24.8% 34.4% 45.4% 67.2% 69.4% 84.2% 87.9% Low Goodwill and Other Intangible Assets (% of Shareholders’ Equity* at 12/31/12) *Excludes accumulated other comprehensive income (loss) ** Peer group includes AIZ, HIG, LNC, MET, PFG, PRU, UNM SFG Peer A** Peer B** Peer C** Peer D** Peer E** Peer F**
Slide 9: Guidance
• We expect a low single digit decline in group insurance premiums given a lack of organic growth and pricing actions to address elevated claims incidence and the continued low interest rate environment. • We expect that our group insurance annual benefit ratio will be in the range of 81% to 84% (in
Slide 10: 2013 EPS Guidance
Net income per diluted share, excluding after-tax net capital gains and losses, to be in the range of $3.40 to $3.80. 2013 EPS Guidance Earnings per Share Growth For illustrative purposes, factors are not shown to scale *Excluding after- tax net capital gains and losses
Slide 11: Drivers of 2013 Premiums
We expect a low single digit decline in group insurance premiums given a lack of organic growth and pricing actions to address elevated claims incidence and the continued low interest rate environment. 2013 Group Insurance Premiums Salary Employment Aging Sales Pricing Actions Terminations 2013 Prem
Slide 12: LTD Pricing Roadmap for Incidence
LTD Pricing Roadmap for Incidence 5% 5% 23% 4% 9% 4% 23% 4% 7% 2% 10% 4% 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 % of LTD business for renewal 33% of LTD block 73% of LTD block
Slide 13: 2013 Benefit Ratio
The benefit ratio can fluctuate widely and should be viewed on an annual basis We expect that our group insurance annual benefit ratio will be in the range of 81% to 84% (incorporates a discount rate 50 to 75 basis points lower for 2013). 2013 Benefit Ratio Group Insurance Benefit Ratio Volatility
Slide 14: 2013 Effective Income Tax Rate
We expect that our effective income tax rate will be in the range of 22% to 23%. 2013 Effective Income Tax Rate Benefits of Tax-Advantaged Investments * Based on tax-advantaged investments held as of 12/31/2012. $0 $5 $10 $15 $20 Impact of Tax-Advantaged Investments on Net Income Over Next Five Year
Slide 15: Strong Capital Levels
• Generated capital in excess of our RBC target of 300% • Solid capital structure • Available capital was approximately $360 million at 12/31/12 Standard Insurance Company* Rating Outlook S&P A+ (5th of 20 ratings) Negative Moody’s A2 (6th of 21 ratings) Negative A.M. Best A (3rd of 13 ratings) Stab
Slide 16: Persistent Shareholder Returns
• Shareholder dividends • Dividend per common share increased 4.5% over 2011 • 13 consecutive years of annual dividend per common share increases • Share repurchases • Repurchases consider consistency of capital generation and our view of equity market valuation Persistent Shareholder Returns Annual
Slide 17: Consistent Long-Term Growth
More than a decade of disciplined earnings and book value growth Driven by consistent operations and a solid investment portfolio Consistent Long-Term Growth Book Value per Share* * Excludes accumulated other comprehensive income (loss)
Slide 18: Key Takeaways
We are confident in our underwriting and pricing methodologies and are committed to obtaining and retaining long-term profitable business Key Takeaways
Slide 19: StanCorp Financial Group
LN StanCorp Financial Group™
Slide 20: StanCorp Financial Group
StanCorp Financial Group” ‘The Standard is the marketing name for StanCorp Financial Group, Inc. and its subsidiaries. Insurance products are offered by Standard Insurance Company of Portland, Ore. in all states except New York, where insurance products are offered by The Standard Life Insurance Com
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