Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

After witnessing benign catastrophe loss during the first nine months of 2012, property and casualty insurer Assurant Inc. (AIZ - Analyst Report) is set to incur pre-tax cat losses in the range of $200–$220 million in the fourth quarter of 2012. The entire loss is attributed to Hurricane Sandy, which battered the Northeast Coast in October this year.

These cat losses will affect Assurant’s largest business – the Specialty Property segment – which accounts for 60% of the company’s operating earnings. The segment incurred $17.9 million in cat losses in the third quarter of 2012.

Assurant’s margins appear to be more volatile than previously expected due to its increased exposure to coastal and catastrophe-prone regions. For this, the company maintains an active catastrophe reinsurance program. In June 2012, the company renewed its comprehensive three-layer reinsurance agreement.

Assurant’s CAT reinsurance agreements are part of the company’s catastrophe management strategy, which aims to provide the shareholders an acceptable return on the risks assumed in its property business and reduce variability of earnings while protecting its customers.

Assurant’s fourth quarter 2012 earnings, scheduled to release on February 6, 2013 after the market closes, will be modestly affected by cat losses. According to the Zacks Consensus Estimate, the company’s fourth-quarter earnings per share (EPS) would be 65 cents, down 60.72% from the year-ago period.

Other insurers that are expected to suffer losses from Hurricane Sandy include The Travelers Companies Inc. (TRV - Analyst Report), having significant homeowners and commercial property exposures throughout the East Coast. Furthermore, The Allstate Corp. (ALL - Analyst Report), the second-largest homeowners’ insurance underwriter, has a substantial exposure to Sandy. W.R. Berkely Corp. (WRB - Analyst Report), XL Group plc (XL - Analyst Report) and The Chubb Corp. (CB - Analyst Report) are some of the carriers that witnessed losses to a comparatively lesser extent.

Assurant retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are also maintaining our long-term Neutral recommendation on the company’s shares.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LAKE SHORE G LSG 0.77 +6.05%
QUESTCOR PHA QCOR 80.07 +2.47%
VIPSHOP HOLD VIPS 156.35 +1.82%
ENLINK MIDST ENLC 36.29 +1.60%
BNC BANCORP BNCN 17.33 +1.58%