DOW JONES NEWSWIRES
Assurant Inc.'s (AIZ) fourth-quarter net income rose 51% as the
company recorded a much smaller tax provision and held the line on
realized investment losses.
"Although we can't avoid the chill of the economic 'global
cooling,' Assurant's capital position remains stable and our
balance sheet remains solid, setting us apart, despite the
unprecedented challenges in the economy," President and Chief
Executive Robert B. Pollock said Wednesday.
In after-hours trading, shares of Assurant were up 2.3% at
$26.75, even as the results missed Wall Street's estimate.
The company, which insures a range of things from credit cards
to trailer parks, posted net income of $182.4 million, or $1.55 a
share, compared with $120.8 million, or $1.01 a share, a year
earlier. The latest quarter included a tax provision of $9.02
million, compared with $76.1 million a year earlier.
The latest results include $33.7 million in net realized
investment losses, including write-downs, compared with $33.6
million a year earlier. Operating earnings rose to $1.31 a share
from $1.29 a share.
Revenue rose 1.7% to $2.22 billion.
A Thomson Reuters analyst poll projected operating earnings of
$1.54 a share on $2.32 billion in revenue.
Net earned premiums rose 2% to $2 billion, while net investment
income fell 7.5% to $183 million.
Profits in the specialty-property business rose 19%, largely as
a result of growth in creditor-placed homeowners insurance and
favorable combined ratios.
Assurant is among the few companies actually benefiting from
rising mortgage defaults and slipping home prices, because its
specialty-property unit collects premiums from banks for insurance
on homes whose owners have fallen behind on their coverage. Still,
Assurant isn't immune from the woes roiling the insurance industry,
with exposures to the troubled stock markets and hurricane-related
losses.
The Assurant Solutions unit posted a 63% decrease in net
operating profit, hurt by special charges, and a decline in
investment income. The quarter included a benefit from the
acquisition of General Electric Co.'s (GE) warranty-management
group.
In December, Standard & Poor's Ratings Services affirmed the
ratings of Assurant and most of its units, citing their operating
performance, financial flexibility and competitive position.
However, the ratings agency did cut two units a notch, reflecting
higher dividend activity and realized investment losses.
Despite the troubles rippling through the economy, Assurant has
been moving to expand its offerings. In September, it agreed to buy
from General Electric Co. (GE) the warranty-management business
they had been co-managing, for $140 million.
The company's shares have more than doubled since late November,
but they are still down more than 60% from the 52-week high in
July.
-By Jay Miller, Dow Jones Newswires; 201-938-2331;
jay.miller@dowjones.com