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Assurant and its Units Receive Rating Action from A.M. Best

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Assurant Inc. (AIZ - Free Report) was recently affirmed the Long-Term Issuer Credit Ratings (ICR) of “bbb+”and the Long- and Short-Term Issue Credit by A.M. Best. However, the rating giant has retained the Financial Strength Rating (FSR) of A (Excellent) and Long-Term ICR of “a+” of the U.S. property/casualty (P&C) subsidiaries of Assurant and FSR of A- (Excellent) and the Long-Term ICRs of “a-” for the core life/health subsidiaries of Assurant. The outlook is stable.

The rating affirmations of the P&C subsidiaries account for the insurer’s sturdy operating performance, solid risk-adjusted capitalization and strong presence in specialty markets. However, exposure to catastrophic activities and dependence on third-party reinsurance are headwinds. Though price cuts and lower placement rates remained a drag on underwriting revenues from the insurance operations, the rating agency remains optimistic about the underwriting results. The credit rating agency expects the expansion of non-insurance service products to mitigate the impact of the aforesaid negatives.

Subsequently, the rating reiteration of core life/health subsidiaries too was supported by their sustained favorable operational performance, solid capitalization and well-established presence in the specific target markets.

Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor confidence on the stock as well as maintaining credit worthiness in the market. Therefore, rating downgrades adversely affect the business as well as increase the costs of future debt issuances. We believe that strong ratings will help Assurant retain investor confidence and help it write more businesses going forward.

Shares of Assurant outperformed the Zacks categorized Multiline Insurance industry year to date. Shares of the insurer gained 7.76% compared with the industry’s increase of 3.31%. The insurer carries a Zacks Rank #3 (Hold).



Stocks to Consider

Some better-ranked multiline insurers are MGIC Investment Corp. (MTG - Free Report) , James River Group Holdings, Ltd. (JRVR - Free Report) and Old Republic International Corporation (ORI - Free Report) .

Shares of MGIC Investment, the largest private mortgage insurer in the U.S., have outperformed the industry year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.   

Shares of James River, which provides specialty insurance and reinsurance services in the United States, have outperformed the industry year to date. The stock carries a Zacks Rank #2 (Buy).

Shares of Old Republic International, a provider of underwriting and related services business primarily in the United States and Canada, has outperformed the industry year to date. The stock carries a Zacks Rank #2.

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