We are reiterating our Neutral recommendation on the shares of
). While we expect long term out performance from the company,
results in the near term will continue to be affected by micro as
well as macro economic headwinds faced by its various business
The company's Assurant Solutions segment has been performing well
over the past several quarters. Though results in U.K. have been
disappointing for some quarters, the company has taken several
steps to improve in the international arena.
Over the longer time horizon, the international business is
anticipated to continue growing steadily, while the domestic
business should rebound as the economy improves and consumer
electronics spending recovers, leading to overall revenue growth.
Though Assurant Health had been underperforming for the past
several quarters, its profitability has shown some improvement.
In response to the challenging marketplace, the company entered
into a network agreement with AETNA signature Administrators and
a marketing agreement with American Family. In addition, it
focused on the distribution of individual healthy policies to its
Assurant's Specialty property business is expected to see a
decline in placement rates which are likely to worsen the impact
of price reductions, thereby resulting in a plunge in revenues
over the next two years.
The Employee Benefits segment has been pressured by persistent
economic challenges in the small group sector leading to higher
lapse rates and lower premium growth on in-force policies. Since
there have been few new employee additions and a modest wage
growth, premium income from the segment will remain under
pressure in the near term.
In the absence of a substantial organic growth, Assurant has
maintained its bottom-line earnings via an active capital
Assurant is conservatively placed with respect to its investment
portfolio, which will cushion earnings if the macro conditions
Based in New York's financial district, Assurant competes with
Principal Financial Group Inc.
The Chubb Corp.
) among others. The company's stock currently retains a Zacks #3
Rank, which translates into a short-term Hold rating.
ASSURANT INC (AIZ): Free Stock Analysis
CHUBB CORP (CB): Free Stock Analysis Report
LOEWS CORP (L): Free Stock Analysis Report
PRINCIPAL FINL (PFG): Free Stock Analysis
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