Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Jukka Lipponen - Keefe, Bruyette & Woods
Jukka Lipponen - Keefe, Bruyette & Woods
With respect to your guidance statement about the capital needs not needing capital for the foreseeable future, is that last part of it just in there just in case this economy gets even a lot worse then what we’re seeing now?
Floyd Chadee
I think we’ve been saying that for quite a while, that we are confident of the conservatism of our investment base and you haven’t seen the kinds of pressure on our realized or unrealized losses that you’ve seen with our peer group so I think that statement is entirely in line with us. For example if we look back a quarter because you can only see these results in retrospect here and we look at combined realized and unrealized losses for StanCorp for the third quarter it was about, a percentage of investments, about 2.4%.
If we look at our peer group you can see that ranging anywhere from 7%, 15%, 16% so that statement about us not anticipating a need for capital really speaks to the conservatism of our investment and our confidence in that conservatism.
Jukka Lipponen - Keefe, Bruyette & Woods
Can you give us more color on exactly the nature of the investments in your operating platform that you’re going to be making and why should we treat them as one time as opposed to normal investment in the business.
Floyd Chadee
We talked to you last year about investments that we’ve been making in our businesses, in our operations so we’ve talked to you about the systems that we’ve been developing on the asset management side, that was implemented in the fourth quarter here. And also on the insurance services side we’ve also been investing in our business there.
We’ve had long-term plans for improving our efficiency and we’ll continue to do so. The one-time cost that we’ve talked about as anticipated for 2009 would reflect some very specific things related to for example severance, lease payments, closing out leases, facilities closures, some relocation costs, so very much a one-time cost related to those activities.
I think we’ve already started down that path of improving operational efficiencies.
Greg Ness
Let me give you an example maybe this will put it in perspective, as you know we have field offices, sales offices all the way across the country. Late last year we made a change in the way those field offices operate. Formally they each had underwriting staff in each office that underwrote a certain subset of the kinds of cases that we look at. What we did was made a decision to bring those field underwriting positions into the home office and so thus we don’t do field underwriting in our field offices anymore, all underwriting is done out of our corporate office here.
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