) reported first quarter 2013 operating earnings of $1.35 per
share, which lagged the Zacks Consensus Estimate of $1.58 per
share. Earnings were however, significantly down 23% year over
Besides, results for the quarter were affected by a settlement
with the New York Department of Financial Services which amounted
to $14 million. Earnings also suffered due to $10.0 million from
catastrophe losses at Assurant Specialty Property.
Net income was $1.46 per share down 19% year over
Total revenue for the reported quarter increased modestly by
approximately 3.7% year over year to $2.15 billion, led by higher
premiums, net realized gains on investment, and fees and other
Net earned premiums improved 5.3% year over year to $2.0
billion. Net investment decreased to $166.0 million from $172.3
million in the year-ago quarter.
Premium earned at Assurant
was up 10% year over year to $768.6 million, led by improvements
in international as well as domestic businesses. Operating
income, however, decreased 20% to $34.9 million.
Premiums earned at Assurant
increased 9% year over year to $556.0 million due to positive
developments in loan portfolios and multi-family housing
products. Net operating income, however, dwindled 17% year over
year to $94.2 million.
Net premiums earned at Assurant Health fell 7.0% year over
year to $385.3 million attributable to decline in individual
major medical policies as well as lower small group insured
lives. Net operating loss of $5.3 million declined sharply by146%
year over year.
Net premiums earned by Assurant
segment declined 3% year over year to $257.6 million. This was as
a result of the loss of two major clients in the disability line
of business, partly mitigated by premium growth in voluntary and
supplemental products. Net operating income decreased 33% year
over year to $6.1 million.
The financial position of Assurant remains strong with $4.4
billion of equity capital as of Mar 31, 2013, which remained
unchanged on a sequential basis. The company leverage ratio
increased to 27.4% as of Mar 31, 2013 compared with 18.4% as of
Dec 31, 2012.
Book value per share excluding accumulated and other
comprehensive income, increased 2.0% to $54.90 from $53.87 at Dec
Assurant repurchased 6 million shares during the quarter for a
total of $26.6 million.
For 2013, management expects its Specialty line of business to
benefit from growth in multi-housing loans and higher volume in
lender-placed loan portfolios. Its Solutions line will see higher
top-line growth from increases in domestic as well as
international businesses. The Health line of business is expected
to see depressed earnings from the ongoing implementation of
health care reform as well as a decline in investment income from
real estate joint venture partnerships. The Employee Benefits
business top line growth is expected to remain unchanged relative
to 2012. However, a low interest rate will result in overall
earnings decline of the segment.
Other players in the same industry
Prudential Financial Inc.
), all carrying a Zacks Rank #2 (Buy) are expected to release
first quarter earnings shortly.
ASSURANT INC (AIZ): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
METLIFE INC (MET): Free Stock Analysis Report
PRUDENTIAL FINL (PRU): Free Stock Analysis
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