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Assurant (AIZ), Telefonica Partner for Trade-in Program

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Assurant, Inc. (AIZ - Free Report) recently expanded its partnership with the Telefonica Group. The partnership was intended to provide a trade-in program that will include on-device app and web browser-based diagnostics, trade-in services, and device pricing analytics to online channels and third-party dealers.

Through its Global Lifestyle segment, Assurant provides mobile device solutions, and extended service products as well as related services for consumer electronics and appliances, which is referred to as Connected Living.

This recent deal is expected to boost the trade-in platform of Assurant, which in turn will support its Connected Living business. Assurant is a global provider of lifestyle and housing solutions. Higher mobile trade-in volumes are likely to support the top line of the Connected Living business.

With this deal, Assurant will also be able to fortify its geographical presence in Spain, UK, Germany and Brazil.

This recent partnership is expected to expand the range of products and services that Assurant offers and thus boost this multi-line insurer’s capability to offer an enhanced customer experience, innovate and promote sustainable practices.

As far as Telefonica is concerned, the deal is likely to provide it with access to advanced, market-leading trade-in technology. Also, it will get the benefit of improved, innovative solutions to deliver a better customer experience in each of the markets.

Assurant, a global provider of risk management solutions in the housing and lifestyle markets, has adopted several growth strategies to boost the Global Lifestyle segment. AIZ partners with leading brands to develop innovative products and services, plus deliver an enhanced customer experience.

Assurant made strategic acquisitions in Connected Living and Global Automotive businesses. It acquired HYLA, Inc., a provider of smartphone software and trade-in and upgrade services, in December 2020 to consolidate its position as a leader in trade-in and upgrade programs.

These strategic initiatives are expected to enhance Assurant’s businesses, strengthen its product capabilities and boost customer experience. The acquisitions have added scale and technology capabilities to global trade-in and upgraded business, and boosted its mobile device trading and repair and logistics capabilities in the Asia Pacific.

Also, these buyouts have improved Assurant’s connected-home strategy in Japan and enhanced the use of mobile devices, electronics and home appliances.

Price Performance

Shares of this currently Zacks Rank #3 (Hold) multi-line insurer have outperformed the industry in a year’s time. The stock has gained 12.5% outperforming the industry’s increase of 0.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Growth Initiatives in the Same Space

Given the insurance industry’s adequate capital level, players like Brown and Brown Inc. (BRO - Free Report) , Arthur J. Gallagher & Co. (AJG - Free Report) and HCI Group Inc. (HCI - Free Report) are pursuing strategic mergers and acquisitions.

Brown & Brown’s subsidiary Brown & Brown Lone Star Insurance Services has purchased HARCO to boost its presence in Texas. Brown & Brown and its subsidiaries continuously make strategic acquisitions to expand globally, add capabilities and boost operations. Also, these strategic buyouts help Brown & Brown increase commissions and fees, which, in turn, drive revenues.

Arthur J. Gallagher & Co. acquired Risk Transfer Insurance Agency, LLC. Arthur J. Gallagher boasts an impressive inorganic story. AJG’s merger and acquisition pipeline is quite strong with about $400 million revenues associated with nearly 50 term sheets either agreed upon or being prepared. The insurance broker estimates more than $2.5 billion for mergers and acquisitions consisting of $1 billion in cash, about $650 million of net cash generation in the second half of 2021, and $600 million to $700 million of borrowing capacity.

HCI Group has agreed to acquire United Insurance Holdings’ personal lines insurance business in the states of Georgia, North Carolina, and South Carolina to expand into new geographies. Well-performing Homeowners Choice and TypTap coupled with conservative reserving practice should continue to support HCI’s growth story.

Shares of Brown and Brown, Arthur J. Gallagher and HCI Group have gained 42.8%, 37.4% and 48.1%, respectively, in a year’s time. 

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