How do interest rates affect insurance industry pricing?

At Unum, we've tried to make insurance easy to understand. Take a second and learn how insurance works and how low interest rates affect the entire industry.

Three primary things insurance companies do with premium dollars

Pool money to pay claims.

Pay normal business expenses like taxes, fees, overhead, etc.

Invest the money and generate income from the interest gained on the premium dollars.

This keeps the price low for our customers!

The Post Recession Market

After the recession of 2007, interest rates dropped substantially. And since 2009, they have been consistently low.

For a period of time, there was an expectation that interest rates would increase and return to historical averages - so our prices were unchanged. But now, we project that the interest rate environment is going to continue to stay low for the foreseeable future.

So, as the ability to generate interest income goes down, insurance companies across the nation face pressure to raise their premium prices.

The Unum Difference

Strong Financial Responsibility

Our disciplined investment and pricing strategies have continued to pay off, which means our pricing adjustments can stay low - even despite the current interest rate environment.

Transparency in Communication

Interest rates impact insurance prices across the nation. We strive for transparency in the way we communicate and price our benefits.

The Partner You Can Trust

We appreciate your trust in our company and look forward to providing another year of great service to you and your employees.