Updated Report on Assurant Inc. - Analyst Blog

On May 20, 2014, we issued an updated research report on Assurant Inc. AIZ. The company reported first-quarter 2014 operating income of $1.68 per share, handily beating the Zacks Consensus Estimate of $1.56. Earnings per share were also up 24% on a year-over-year basis. Strong performance at Assurant Solutions and Assurant Employee Benefits along with a lower share count owing to share repurchases boosted the quarter's results.

Assurant boasts a solid franchise, strong management team and diversified product and geographic profile. We are also upbeat about Assurant's Solutions division which has been performing well over the past many quarters. With international as well as domestic business improving, we expect top-line growth.

Management expects premium in its Specialty Property segment to remain unchanged from 2013. While premium growth is expected to result from the recent acquisition of StreetLinks, it will be partly offset by a decline in premium from the company's lender-placed insurance business. The bottom line could be affected by a higher expense ratio as well as a higher loss ratio.

The Health line of Assurant's business is likely to witness top-line growth on increased sales of new major medical policies. The bottom line would, however, be restricted by a high effective tax rate and higher sales commissions.

Likewise, the Employee Benefits business' top-line growth is expected to increase on the back of growth in voluntary products. Nonetheless, earnings are likely to be affected by continued expense management and higher expenditure on generation of higher voluntary sales.

Assurant follows a disciplined capital management strategy and has always managed to keep up shareholders' confidence by actively deploying capital though dividend payments and share buybacks. Last week, the company announced an 8% increase in its quarterly dividend.

This Zacks Rank #3 (Hold) property and casualty insurer has been witnessing an increase in earnings estimates ever since its first-quarter earnings results. For 2014, the Zacks Consensus Estimate has gone up 2.11% to $6.26 as 5 of 7 estimates moved north.
    
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