StanCorp Financial — Investor Presentation (June 2009)
20 slides from StanCorp Financial's investor presentation, Jun 17, 2009
Slide 1: Floyd Chadee, Senior Vice President and Chief Financial Officer
Floyd Chadee Senior Vice President and Chief Financial Officer June 17, 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation should be read in conjunction with StanCorp’s most recent earnings release and 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
Slide 3: ©2009 StanCorp Financial Group, Inc. Page 3
©2009 StanCorp Financial Group, Inc. Page 3
Slide 4: Key Messages
Key Messages • Our conservative financial strength is the foundation on which we run a profitable business • Our focus on the businesses and investments that fit within our expertise pay off in periods of economic growth and decline • The preparations we have made in the past and the actions we are
Slide 5: Operating Segments
Operating Segments Pre-tax Income* ($ millions) 2008 Insurance Services $366.4 91% Asset Management $34.9 9% * Excludes net capital gains & losses and pre-tax loss in Other. ©2009 StanCorp Financial Group, Inc. Page 5
Slide 6: Conservative Financial Strength
Conservative Financial Strength Foundation of Profitable Business TARGET RANGE 300% • Continue to generate capital in excess of our RBC target of 300% • RBC target is based on Company Action Level • RBC level is not impacted by equity markets • Capital levels sufficient to meet Standard Insurance Co
Slide 7: Focus on the Business: Operating Overview
Focus on the Business Operating Overview We have operated well in a challenging macro environment: • Solid operational results • Pricing and underwriting discipline are rewarded with continued profitable business and ROE within our target range • Continued growth in book value and capital position •
Slide 8: Focus on the Business: Experts In Areas In Which We Compete
Focus on the Business Experts In Areas In Which We Compete Insurance Services: • Premiums are well diversified for economic pressures • Strong persistency in stable and growing markets and greater turnover in areas with lower job growth • Have avoided distractions that others in the industry are fac
Slide 9: Favorable Benefit Ratio In Periods of Economic Growth and Decline
Favorable Benefit Ratio In Periods of Economic Growth and Decline GROUP BENEFIT RATIO & GROUP BENEFIT RATIO & CONSUMER CONFIDENCE * UNEMPLOYMENT ** * Source: The Conference Board ** Source: U.S. Bureau of Labor Statistics. ©2009 StanCorp Financial Group, Inc. Page 9
Slide 10: Long Term Disability Benefit Ratio Is In-line With Group Benefit Ratio
Long Term Disability Benefit Ratio Is In-line With Group Benefit Ratio BENEFIT RATIO • Favorable claims activity and product pricing • Very favorable 2008 benefit ratio driven by LTD • 1996 through 2000 show the results of investments in the claims operation ©2009 StanCorp Financial Group, Inc. Page
Slide 11: Focus On Our Investments: Superior Risk-Related Return
Focus On Our Investments Superior Risk-Related Return Invested Assets (12/31/08) • No preferred or common equities, or structured investments • Very minor ratings migration in bond portfolio • Generating higher yields than short-term investments Source: SNL Financial ©2009 StanCorp Financial Group,
Slide 12: Steady Growth In Commercial Mortgage Loans
Focus On Our Investments Steady Growth In Commercial Mortgage Loans COMMERCIAL MORTGAGE LOANS • Niche of small, fixed-rate commercial UNDER MANAGEMENT ($ millions) mortgage loans History of Excellent Performance • Average loan size retained $6,610 $6,666 approximately $766K • Weighted average LTV is
Slide 13: Steady Maturities In Our CML Portfolio
Focus on Our Investments Steady Maturities In Our CML Portfolio Balance at Maturity % of 3/31/09 • Represents the amortized Maturity Year (in millions) CML Balance balance of maturing loans in 2009 $ 39.3 0.9% the year that they mature as 2010 $ 51.1 1.2% a percentage of the 2011 $ 99.4 2.4% commerc
Slide 14: We Are Positioned For Growth
We Are Positioned For Growth 2009 and Beyond • Pursue a strategy of growth today for an economy that improves tomorrow • Through one-time expenses, we will achieve a lower long-term run rate • Maintain pricing flexibility / target profitable business • Unprecedented level of investment in new produc
Slide 15: We Continue to be an Industry Leader in Providing Long-term Shareholder Value
We Continue to be an Industry Leader in Providing Long-term Shareholder Value STEADILY RISING EPS AND DIVIDEND Principal methods of providing (per share) $5.00 shareholder value: $1 $5 1) Earnings per share $1 $4.35 $5 Solid record of long-term $1 $3.74 $3.70 $4 earnings growth $1 $3.32 $0.75 $4 $0.
Slide 16: Conclusion
Conclusion • Our conservative financial strength is the foundation on which we run a profitable business • Our focus on the businesses and investments that fit within our expertise pay off in periods of economic growth and decline • The preparations we have made in the past and the actions we are ta
Slide 17: ©2009 StanCorp Financial Group, Inc.
©2009 StanCorp Financial Group, Inc.
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures ($ millions – except share data) 1999 2000 2001 2002 2003 Reconciliation of Non-GAAP financial measures: Net income $ 79.9 $ 94.7 $ 106.0 $ 111.0 $ 156.3 After-tax one-time costs - - - - - After-tax net capital gains (losses) 0.3 (1.2) - (12.6) 6.0 Net income excluding af
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures ($ millions – except share data) 2004 2005 2006 2007 2008 Q1 2009 Reconciliation of Non-GAAP financial measures: Net income $ 199.4 $ 211.1 $ 203.8 $ 227.5 $ 162.9 $ 32.7 After-tax one-time costs - - - - - (5.4) After-tax net capital gains (losses) 7.4 1.4 1.2 (0.4) (83.4
Slide 20: Contact
Contact Jeff Hallin Assistant Vice President Investor Relations StanCorp Financial Group, Inc. Phone: (971) 321-6127 Fax: (971) 321-5037 jhallin@standard.com ©2009 StanCorp Financial Group, Inc. Page 20
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