The loss ratio of 76.7% in third quarter 2013 compared with 79.3% in third quarter 2012, a 2.6 point improvement. The group disability loss ratio, which includes both short-term and long-term disability, improved by 3.6 points to 87.9% from 91.5% in third quarter 2012, reflecting improved pricing and favorable long-term disability recoveries and incidence trends.
In third quarter 2013, fully insured premiums in Group Benefits were $817 million, a 12% decrease compared with $926 million in third quarter 2012. The reduction in premiums was primarily due to new business and renewal pricing discipline, the non-renewal of the largest account in this segment due to pricing and other considerations, and management actions on the Association block of business.
MUTUAL FUNDSThird Quarter 2013 Highlights:
- Mutual Funds gross sales rose 35% versus third quarter 2012
- Core earnings were $18 million, down 5% compared with $19 million in third quarter 2012
- Total Mutual Funds assets under management totaled $66.8 billion at Sept. 30, 2013, up 9% since Sept. 30, 2012
|($ in millions)||Three Months Ended|
|Sept. 30 2013||Sept. 30 2012||Change|
|Total Mutual Funds sales||$3,787||$2,798||35%|
|Total Mutual Funds net flows||$(645)||$(782)||(18%)|
|Total Mutual Funds assets under management||$66,759||$61,282||9%|
|Average Mutual Funds assets under management||$65,183||$60,313||8%|
|Annuity assets under management||$25,638||$26,839||(4%)|
|Total assets under management||$92,397||$88,121||5%|
|Average assets under management||$90,953||$87,176||4%|
Third quarter 2013 net income and core earnings for Mutual Funds were comparable to third quarter 2012 due to higher revenue from the change in average assets under management, offset by increased expenses. The change in operating expenses was driven by higher variable distribution-related expenses combined with increased marketing and advertising expenses.