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Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2022 net operating income of $3.23 per share, which beat the Zacks Consensus Estimate by 24.7%. The bottom line increased 15% from the year-ago quarter.
The quarterly results reflected higher average insured values, premium rates and lender-placed policies in force, growth in Connected Living and in North American mobile subscribers' income. However, the upside was partly offset by elevated costs.
Total revenues were up 3.7% year over year to $2.7 billion driven by higher net earned premiums and net investment income. The top line beat the Zacks Consensus Estimate by 1.2%.
Net earned premiums of $2.3 billion climbed 4% year over year. The figure was higher than our estimate of $2.2 billion. Net investment income increased 29.2% year over year to $102.3 million. The figure was higher than our estimate of $90.6 million.
Total benefits, loss and expenses increased 5.8% to $2.6 billion driven by higher policyholder benefits, underwriting, selling, general and administrative expenses, goodwill impairment and interest expense. The figure was higher than our estimate of $2.4 billion.
For 2022, Assurant delivered a net operating income of $11.13 per share, which beat the Zacks Consensus Estimate by 5.7%. The bottom line improved 9% year over year.
Total revenues of $10.4 billion beat the consensus mark by 0.8% and grew 3.1% year over year.
Segmental Performance
Revenues at Global Housing increased 11.1% year over year to $567.6 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $551.1 million.
Adjusted EBITDA increased 11% year over year to $135.3 million because of higher average insured values, premium rates and lender-placed policies in force. It was partially offset by a $17.8 million increase in reportable catastrophes from winter storms and Hurricane Nicole.
Revenues at Global Lifestyle increased 1.9% year over year to $2.1 billion because of higher net earned premiums and net investment income. The figure was higher than our estimate of $2 billion.
Adjusted EBITDA increased 6% year over year to $166.1 million. The increase was driven by Connected Living and higher net investment income. It was partially offset by weaker performance in Asia Pacific and Europe, including the unfavorable impact of foreign exchange, as well as an increase in claims costs within Global Automotive. Connected Living benefited from reduced mobile service and repair expenses compared with the prior year period and a modest increase in North American mobile subscribers.
Adjusted EBITDA loss at Corporate & Other was $27.2 million, wider than the year-ago quarter’s adjusted EBITDA loss of $25.5 million due to lower investment income.
Financial Update
The company exited the fourth quarter with total assets of $33.1 billion, down 2.3% year over year. Debt was $2.1 billion, which decreased 3.3% year over year.
Stockholders’ equity of $4.2 billion at the end of the quarter decreased 22.6% year over year.
Share Repurchase and Dividend Update
In the fourth quarter of 2022, Assurant repurchased shares for $13 million. From Jan 1 through Feb 3, 2023, Assurant did not repurchase any shares. It now has $274 million remaining under the current repurchase authorization. Assurant’s total dividends amounted to $38 million in the fourth quarter of 2022.
2023 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by low single-digits, with results improving as the year progresses, led by improved performance in Global Housing and more modest growth in Global Lifestyle.
Global Housing Adjusted EBITDA, excluding reportable catastrophes, is expected to grow from revised 2022 results of $417.4 million. Higher 2023 catastrophe reinsurance program costs as well as continued elevated non-catastrophe loss experience across all lines of business, particularly in the first half of 2023, are expected to impact the segment.
Global Lifestyle Adjusted EBITDA is expected to grow modestly from revised 2022 results of $809.4 million. Lower contributions from international, including the impact of continued foreign exchange headwinds, are expected to pressure results particularly in the first half of 2023. Corporate and Other Adjusted EBITDA loss is expected to be approximately $105 million as the company continues to drive expense leverage.
Assurant expects adjusted earnings, excluding reportable catastrophes, per diluted share growth rate to be lower than Adjusted EBITDA, excluding reportable catastrophes growth. This is due to higher depreciation expense of approximately $114 million and a higher effective tax rate of approximately 22% to 24%, following a $9 million benefit in 2022.
Interest expense is estimated to be approximately $110 million, in line with 2022.
MGIC Investment Corporation (MTG - Free Report) reported fourth-quarter 2022 operating net income per share of 64 cents, which beat the Zacks Consensus Estimate by 8.5% and our estimate of 59 cents. The reported figure increased 4.9% year over year. Insurance in force increased 7.6% from the prior-year quarter to $295.3 billion. The figure was higher than our estimate of $294.9 billion. The insurer witnessed a 20.7% decrease in primary delinquency to 26,387 loans.
MGIC Investment recorded total operating revenues of $291 million, which decreased 0.6% year over year on lower premiums earned. The top line missed the consensus mark by 12.9% and our estimate of $334.1 million. Net premiums written decreased 2.8% year over year to $231.4 million. The figure was lower than our estimate of $260.1 million. Net investment income increased 18.5% year over year to $46.4 million. The figure was higher than our estimate of $44.3 million. Persistency — the percentage of insurance remaining in force from one year prior — was 79.8% as of Dec 31, 2022, up from 62.6% in the year-ago quarter. It compares favorably with our estimate of 66.3%.
Cigna Corporation (CI - Free Report) reported fourth-quarter 2022 adjusted earnings of $4.96 per share, which outpaced the Zacks Consensus Estimate by 2.5% and our estimate of $4.84 per share. The bottom line advanced 4% year over year. Adjusted revenues inched up 0.1% year over year to $45,743 million, owing to better pharmacy revenues coupled with higher fees and other revenues. The top line beat the consensus mark by a whisker and exceeded our estimate of $44,354.2 million.
Cigna’s medical customer base came in at 18 million, which grew 5.4% year over year as of Dec 31, 2022. The growth came on the back of a well-performing U.S. Commercial business. The reported figure matched both the consensus mark and our estimate. Total benefits and expenses declined 0.3% year over year to $44,026 million in the quarter under review. The adjusted selling, general and administrative expense ratio of 7.6% deteriorated 20 basis points (bps) year over year.
MetLife, Inc. (MET - Free Report) reported fourth-quarter 2022 adjusted operating earnings of $1.55 per share, which missed the Zacks Consensus Estimate of $1.74 and our estimate of $1.77. The bottom line declined 29% year over year. Adjusted operating revenues of MetLife amounted to $15,836 million, which decreased 21.6% year over year. The top line missed the consensus mark of $16,996 million and our estimate of $16,303.1 million. Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT), were $11,375 million, down 1% year over year.
Total expenses of $14,589 million decreased from $18,783 million a year ago due to lower policyholder benefits and claims. The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, increased 30 bps year over year to 20.7%. Net income increased 12% year over year to $1,314 million because of net derivative and investment gains. Adjusted return on equity, excluding AOCI other than FCTA, deteriorated 400 bps year over year to 11.3%.
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Assurant (AIZ) Q4 Earnings & Revenues Beat, Premiums Rise Y/Y
Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2022 net operating income of $3.23 per share, which beat the Zacks Consensus Estimate by 24.7%. The bottom line increased 15% from the year-ago quarter.
The quarterly results reflected higher average insured values, premium rates and lender-placed policies in force, growth in Connected Living and in North American mobile subscribers' income. However, the upside was partly offset by elevated costs.
Total revenues were up 3.7% year over year to $2.7 billion driven by higher net earned premiums and net investment income. The top line beat the Zacks Consensus Estimate by 1.2%.
Net earned premiums of $2.3 billion climbed 4% year over year. The figure was higher than our estimate of $2.2 billion. Net investment income increased 29.2% year over year to $102.3 million. The figure was higher than our estimate of $90.6 million.
Total benefits, loss and expenses increased 5.8% to $2.6 billion driven by higher policyholder benefits, underwriting, selling, general and administrative expenses, goodwill impairment and interest expense. The figure was higher than our estimate of $2.4 billion.
Assurant, Inc. Price, Consensus and EPS Surprise
Assurant, Inc. price-consensus-eps-surprise-chart | Assurant, Inc. Quote
Full-Year Highlights
For 2022, Assurant delivered a net operating income of $11.13 per share, which beat the Zacks Consensus Estimate by 5.7%. The bottom line improved 9% year over year.
Total revenues of $10.4 billion beat the consensus mark by 0.8% and grew 3.1% year over year.
Segmental Performance
Revenues at Global Housing increased 11.1% year over year to $567.6 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $551.1 million.
Adjusted EBITDA increased 11% year over year to $135.3 million because of higher average insured values, premium rates and lender-placed policies in force. It was partially offset by a $17.8 million increase in reportable catastrophes from winter storms and Hurricane Nicole.
Revenues at Global Lifestyle increased 1.9% year over year to $2.1 billion because of higher net earned premiums and net investment income. The figure was higher than our estimate of $2 billion.
Adjusted EBITDA increased 6% year over year to $166.1 million. The increase was driven by Connected Living and higher net investment income. It was partially offset by weaker performance in Asia Pacific and Europe, including the unfavorable impact of foreign exchange, as well as an increase in claims costs within Global Automotive. Connected Living benefited from reduced mobile service and repair expenses compared with the prior year period and a modest increase in North American mobile subscribers.
Adjusted EBITDA loss at Corporate & Other was $27.2 million, wider than the year-ago quarter’s adjusted EBITDA loss of $25.5 million due to lower investment income.
Financial Update
The company exited the fourth quarter with total assets of $33.1 billion, down 2.3% year over year. Debt was $2.1 billion, which decreased 3.3% year over year.
Stockholders’ equity of $4.2 billion at the end of the quarter decreased 22.6% year over year.
Share Repurchase and Dividend Update
In the fourth quarter of 2022, Assurant repurchased shares for $13 million. From Jan 1 through Feb 3, 2023, Assurant did not repurchase any shares. It now has $274 million remaining under the current repurchase authorization.
Assurant’s total dividends amounted to $38 million in the fourth quarter of 2022.
2023 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by low single-digits, with results improving as the year progresses, led by improved performance in Global Housing and more modest growth in Global Lifestyle.
Global Housing Adjusted EBITDA, excluding reportable catastrophes, is expected to grow from revised 2022 results of $417.4 million. Higher 2023 catastrophe reinsurance program costs as well as continued elevated non-catastrophe loss experience across all lines of business, particularly in the first half of 2023, are expected to impact the segment.
Global Lifestyle Adjusted EBITDA is expected to grow modestly from revised 2022 results of $809.4 million. Lower contributions from international, including the impact of continued foreign exchange headwinds, are expected to pressure results particularly in the first half of 2023. Corporate and Other Adjusted EBITDA loss is expected to be approximately $105 million as the company continues to drive expense leverage.
Assurant expects adjusted earnings, excluding reportable catastrophes, per diluted share growth rate to be lower than Adjusted EBITDA, excluding reportable catastrophes growth. This is due to higher depreciation expense of approximately $114 million and a higher effective tax rate of approximately 22% to 24%, following a $9 million benefit in 2022.
Interest expense is estimated to be approximately $110 million, in line with 2022.
Zacks Rank & Peer Releases
The company currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment Corporation (MTG - Free Report) reported fourth-quarter 2022 operating net income per share of 64 cents, which beat the Zacks Consensus Estimate by 8.5% and our estimate of 59 cents. The reported figure increased 4.9% year over year. Insurance in force increased 7.6% from the prior-year quarter to $295.3 billion. The figure was higher than our estimate of $294.9 billion. The insurer witnessed a 20.7% decrease in primary delinquency to 26,387 loans.
MGIC Investment recorded total operating revenues of $291 million, which decreased 0.6% year over year on lower premiums earned. The top line missed the consensus mark by 12.9% and our estimate of $334.1 million. Net premiums written decreased 2.8% year over year to $231.4 million. The figure was lower than our estimate of $260.1 million. Net investment income increased 18.5% year over year to $46.4 million. The figure was higher than our estimate of $44.3 million. Persistency — the percentage of insurance remaining in force from one year prior — was 79.8% as of Dec 31, 2022, up from 62.6% in the year-ago quarter. It compares favorably with our estimate of 66.3%.
Cigna Corporation (CI - Free Report) reported fourth-quarter 2022 adjusted earnings of $4.96 per share, which outpaced the Zacks Consensus Estimate by 2.5% and our estimate of $4.84 per share. The bottom line advanced 4% year over year. Adjusted revenues inched up 0.1% year over year to $45,743 million, owing to better pharmacy revenues coupled with higher fees and other revenues. The top line beat the consensus mark by a whisker and exceeded our estimate of $44,354.2 million.
Cigna’s medical customer base came in at 18 million, which grew 5.4% year over year as of Dec 31, 2022. The growth came on the back of a well-performing U.S. Commercial business. The reported figure matched both the consensus mark and our estimate. Total benefits and expenses declined 0.3% year over year to $44,026 million in the quarter under review. The adjusted selling, general and administrative expense ratio of 7.6% deteriorated 20 basis points (bps) year over year.
MetLife, Inc. (MET - Free Report) reported fourth-quarter 2022 adjusted operating earnings of $1.55 per share, which missed the Zacks Consensus Estimate of $1.74 and our estimate of $1.77. The bottom line declined 29% year over year. Adjusted operating revenues of MetLife amounted to $15,836 million, which decreased 21.6% year over year. The top line missed the consensus mark of $16,996 million and our estimate of $16,303.1 million. Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT), were $11,375 million, down 1% year over year.
Total expenses of $14,589 million decreased from $18,783 million a year ago due to lower policyholder benefits and claims. The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, increased 30 bps year over year to 20.7%. Net income increased 12% year over year to $1,314 million because of net derivative and investment gains. Adjusted return on equity, excluding AOCI other than FCTA, deteriorated 400 bps year over year to 11.3%.