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Assurant (AIZ) Q4 Earnings Beat, Revenues Miss Estimates

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Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2021 net operating income of $2.47 per share, which beat the Zacks Consensus Estimate by 7.4%. The bottom line increased 35.7% from the year-ago quarter.

The company’s results benefited from improved top-line growth, lower reportable catastrophes coupled with continued growth in Global Automotive and Connected Living, which forms part of the Global Lifestyle segment. The upside was partly offset by elevated costs.

Total revenues were up 2.2% year over year to $2.5 billion due to higher net earned premiums (3.5%), fees and other income (47.9%) and net investment income (8%). The top line missed the Zacks Consensus Estimate by 0.07%.      
Total benefits, loss and expenses increased 6.8% to $2.4 billion due to higher selling, underwriting, general and administrative expenses and interest expense.

Assurant, Inc. Price, Consensus and EPS Surprise

Assurant, Inc. Price, Consensus and EPS Surprise

Assurant, Inc. price-consensus-eps-surprise-chart | Assurant, Inc. Quote

Full-Year Highlights

For 2021, Assurant delivered a net operating income of $9.36 per share, which beat the Zacks Consensus Estimate by 2.1%. The bottom line improved 21% year over year.

Total revenues of $10.05 billion missed the consensus mark by 0.09% but grew 4.7% year over year.

Segmental Performance

Revenue at Global Housing increased 2% year over year to $505.8 million, primarily due to growth in lender-placed and Multifamily Housing. This was partially offset by a decline in specialty products from client runoff.

The segment reported a net operating income of $80.3 million, which increased 31% year over year, primarily due to lower reportable catastrophes.

Revenues at Global Lifestyle increased 9% year over year to $1.9 billion due to continued growth in Global Automotive from strong prior period sales and further expansion in Connected Living, including strong fee income growth in mobile from higher trade-in volumes, as well as domestic subscriber growth. It was partially offset by runoff mobile programs.

Net operating income of $107.8 million increased 23% year over year, primarily due to growth in Global Automotive and mobile within Connected Living. The increase in Global Automotive was mainly from underlying growth from prior period sales across all distribution channels and favorable loss experience in select ancillary products. Mobile growth was driven by strong trade-in volumes, including HYLA Mobile, and improved performance in Europe and the Asia Pacific. The upside was partially offset by in-store mobile service and repair capability investments.

Net operating loss at Corporate & Other was $23.9 million, narrower than the year-ago quarter’s $26.6 million, primarily due to an increase in investment income from higher asset balances.

Financial Update

The company exited the fourth quarter with total assets of $33.9 billion, down 24% year over year. Debt was $2.2 billion, which decreased 2.2% year over year.

Stockholders’ equity of $5.5 billion at the end of the quarter decreased 7.7% year over year.

2022 Guidance

In 2022, the company expects 8% to 10% growth in adjusted EBITDA, excluding reportable catastrophes, driven by expansion across Global Lifestyle and Global Housing.

Zacks Rank & Peer Releases

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players that have reported fourth-quarter results so far, AXIS Capital Holdings Limited (AXS - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and W. R. Berkley Corporation (WRB - Free Report) beat the Zacks Consensus Estimate for earnings.

AXIS Capital reported adjusted fourth-quarter 2021 earnings of $2.13 per share, which beat the Zacks Consensus Estimate by 58% and rebounded from the year-ago loss of 20 cents. AXS’s total operating revenues of $1.4 billion outpaced the Zacks Consensus Estimate by 11.2% and rose 15% year over year.

Gross premiums written increased 16% year over year to $1.6 billion. The combined ratio of AXIS Capital improved 1650 bps year over year to 93.1.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from a year-ago loss of $1.59 per share. Total revenues of RNR dipped 0.1% year over year to $1.39 billion in the fourth quarter.

Gross premiums written rose 40.4% year over year to $1.3 billion. RenaissanceRe’s combined ratio improved 3530 basis points (bps) year over year to 79.4.

W.R. Berkley reported fourth-quarter 2021 operating income of $1.53 per share, which beat the Zacks Consensus Estimate by 26.5% and surged 66.3% year over year. The operating revenues of WRB were $2.6 billion, which beat the consensus mark by 9.2% and improved 19.4% year over year.

W.R. Berkley’s net premiums written were $2.3 billion, up 26.6% year over year. The consolidated combined ratio was 88.2, improving 270 bps year over year.