Bear of the Day: Assurant Inc (AIZ) - Bear of the Day

A generic image of a pen, a calculator and sheets
Credit: Shutterstock photo

Assurant Inc. ( AIZ ) had pre-announced that their Health segment was experiencing adverse conditions during Q1, and that management was looking into strategic alternatives for both their Health and Employee Benefits divisions. But during Q1, the company experienced weakness in three out of four of their key divisions, and saw mixed underwriting results. The combination of these factors has made Assurant the Zacks Bear of the Day.

This Zacks Ranked #5 (Strong Sell) company is a premier provider of specialized insurance products and related services in North America and selected other international markets. Assurant has four key businesses, Assurant Employee Benefits, Assurant Health, Assurant Solutions, and Assurant Specialty Property. The company distributes its insurance products and services through various distribution channels.

In their most recent quarter, the Health segment recorded a loss of $84 million due to a revision in estimated recoveries associated with 2014 policies under the Affordable Health Care Act. Further, the Employee Benefits segment saw earnings drop 27%, and Specialty Property earnings fell 23%. Also, the Solutions division lost a mobile tablet program, which is expected to negatively impact premiums by almost $100 million annually starting in Q2 15.

Estimates Graph

The graph below shows AIZ's historic price levels against the EPS consensus. As you can see the estimates are significantly declining for 2015 and 2016.

Declining Estimates

Over the past 30 days, earnings estimates have declined for Q2 15, Q3 15, FY 15, and FY 16; Q2 15 dropped from $1.37 to $1.21, Q3 15 fell from $1.29 to $1.12, FY 15 tumbled from $4.65 to $4.24, and FY 16 declined from $6.48 to $6.33.

Bottom Line

While the negative Health segment operating loss was anticipated, the less than expected performance of the Employee Benefits, Solutions, and Specialty Property segments was disconcerting. While there was some positives, the difficult first quarter will still make the remainder of 2015 challenging for management.

If you are inclined to invest in the Insurance-Multi line segment, you would be best served by looking into Ageas-Adr ( AGESY ), Assured Guarnty ( AGO ), or Old Rep Intl ( ORI ). All three carry a Zacks Rank #1 (Strong Buy).

Note : Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

OLD REP INTL (ORI): Free Stock Analysis Report

ASSURANT INC (AIZ): Free Stock Analysis Report

ASSURED GUARNTY (AGO): Free Stock Analysis Report

AGEAS-ADR (AGESY): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More