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Assurant (AIZ) Q4 Earnings Top on Solid Global Housing Results
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Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2023 net operating income of $4.58 per share, which beat the Zacks Consensus Estimate by 23.4%. The bottom line surged 41.8% year over year.
The results reflected solid performance at Global Housing.
Total revenues increased 12.4% year over year to $3 billion due to higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 7.9%.
Adjusted EBITDA, excluding reportable catastrophes, increased 29% to $382.4 million.
Total benefits, loss and expenses increased 7.8% to $2.8 billion, mainly on account of an increase in underwriting, selling, general and administrative expenses and interest expense. The figure was higher than our estimate of $2.4 billion.
Net earned premiums, fees and other income at Global Housing increased 7% to $545.8 million. Homeowners top-line growth was driven by higher average premiums and growth in policies in-force within lender-placed. The figure missed the Zacks Consensus Estimate of $553 million and was lower than our estimate of $552.6 million.
Adjusted EBITDA was $186.1 million, up 56% year over year. Excluding reportable catastrophes, adjusted EBITDA increased 48% year over year to $208 million, primarily attributable to lower non-catastrophe loss experience. Results also benefited from continued top-line growth within Homeowners and higher net investment income. The figure was higher than our estimate of $183 million.
Net earned premiums, fees and other income at Global Lifestyle increased 13% to $2.3 billion, driven by growth across Global Automotive and Connected Living. The figure beat the Zacks Consensus Estimate of $2.1 billion and was higher than our estimate of $2 billion.
Adjusted EBITDA of $204.6 million increased 12% year over year, driven by growth in Connected Living as a result of stronger mobile device protection results across carrier and cable operator clients in North America, as well as higher investment income. Global Automotive was flat, as elevated claims costs were largely offset by higher investment income.
Adjusted EBITDA loss at Corporate & Other was $29.9 million, wider than the year-ago quarter’s adjusted EBITDA loss of $27.2 million. The wider loss was due to higher employee-related expenses, which were partially offset by higher net investment income.
Full-Year Highlights
Adjusted earnings increased 39% to $15.49 per share in 2023.
Net earned premiums, fees and other income from the Global Lifestyle and Global Housing segments totaled $10,7 billion, up 8%, driven by an increase in Global Lifestyle, mainly from prior period sales in Global Automotive and growth in Global Housing from Homeowners.
Adjusted EBITDA, excluding reportable catastrophes, increased 21% to $1.4 billion.
Financial Position
Liquidity was $606 million as of Dec 31, 2023, which was $381 million higher than the company’s current targeted minimum level of $225 million. Total assets increased 1.6% to $33.6 billion as of Dec 31, 2023 from 2022 end.
Debt of $2.1 billion decreased 2%.
Total shareholders’ equity came in at $4.8 billion, up 14% year over year.
Share Repurchase and Dividend Update
In 2023, Assurant repurchased approximately 1.3 million shares for $200 million. From Jan 1 through Feb 2, the company repurchased approximately 0.06 million shares for $20 million. It now has $664 million remaining under the current repurchase authorization. Assurant’s total dividends amounted to $152 million in 2023.
2024 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by mid-single digits, driven by both Global Lifestyle and Global Housing, at similar growth rates.
Adjusted EPS, excluding catastrophes, is expected to grow modestly below adjusted EBITDA, excluding catastrophes growth, primarily reflecting an increase in depreciation expense from strategic technology investments.
Corporate and Other adjusted EBITDA loss is expected to be approximately $105 million as the company continues to drive expense leverage.
The effective tax rate is expected to be in the range of 20% to 22%.
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. PGR’s premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Progressive’s combined ratio improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
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Assurant (AIZ) Q4 Earnings Top on Solid Global Housing Results
Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2023 net operating income of $4.58 per share, which beat the Zacks Consensus Estimate by 23.4%. The bottom line surged 41.8% year over year.
The results reflected solid performance at Global Housing.
Total revenues increased 12.4% year over year to $3 billion due to higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 7.9%.
Adjusted EBITDA, excluding reportable catastrophes, increased 29% to $382.4 million.
Total benefits, loss and expenses increased 7.8% to $2.8 billion, mainly on account of an increase in underwriting, selling, general and administrative expenses 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
Segmental Performance
Net earned premiums, fees and other income at Global Housing increased 7% to $545.8 million. Homeowners top-line growth was driven by higher average premiums and growth in policies in-force within lender-placed. The figure missed the Zacks Consensus Estimate of $553 million and was lower than our estimate of $552.6 million.
Adjusted EBITDA was $186.1 million, up 56% year over year. Excluding reportable catastrophes, adjusted EBITDA increased 48% year over year to $208 million, primarily attributable to lower non-catastrophe loss experience. Results also benefited from continued top-line growth within Homeowners and higher net investment income. The figure was higher than our estimate of $183 million.
Net earned premiums, fees and other income at Global Lifestyle increased 13% to $2.3 billion, driven by growth across Global Automotive and Connected Living. The figure beat the Zacks Consensus Estimate of $2.1 billion and was higher than our estimate of $2 billion.
Adjusted EBITDA of $204.6 million increased 12% year over year, driven by growth in Connected Living as a result of stronger mobile device protection results across carrier and cable operator clients in North America, as well as higher investment income. Global Automotive was flat, as elevated claims costs were largely offset by higher investment income.
Adjusted EBITDA loss at Corporate & Other was $29.9 million, wider than the year-ago quarter’s adjusted EBITDA loss of $27.2 million. The wider loss was due to higher employee-related expenses, which were partially offset by higher net investment income.
Full-Year Highlights
Adjusted earnings increased 39% to $15.49 per share in 2023.
Net earned premiums, fees and other income from the Global Lifestyle and Global Housing segments totaled $10,7 billion, up 8%, driven by an increase in Global Lifestyle, mainly from prior period sales in Global Automotive and growth in Global Housing from Homeowners.
Adjusted EBITDA, excluding reportable catastrophes, increased 21% to $1.4 billion.
Financial Position
Liquidity was $606 million as of Dec 31, 2023, which was $381 million higher than the company’s current targeted minimum level of $225 million. Total assets increased 1.6% to $33.6 billion as of Dec 31, 2023 from 2022 end.
Debt of $2.1 billion decreased 2%.
Total shareholders’ equity came in at $4.8 billion, up 14% year over year.
Share Repurchase and Dividend Update
In 2023, Assurant repurchased approximately 1.3 million shares for $200 million. From Jan 1 through Feb 2, the company repurchased approximately 0.06 million shares for $20 million. It now has $664 million remaining under the current repurchase authorization. Assurant’s total dividends amounted to $152 million in 2023.
2024 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by mid-single digits, driven by both Global Lifestyle and Global Housing, at similar growth rates.
Adjusted EPS, excluding catastrophes, is expected to grow modestly below adjusted EBITDA, excluding catastrophes growth, primarily reflecting an increase in depreciation expense from strategic technology investments.
Corporate and Other adjusted EBITDA loss is expected to be approximately $105 million as the company continues to drive expense leverage.
The effective tax rate is expected to be in the range of 20% to 22%.
Zacks Rank
Assurant currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. TRV witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year. Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. PGR’s premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Progressive’s combined ratio improved 520 bps from the prior-year quarter’s level to 88.7.
W.R. Berkley Corporation’s (WRB - Free Report) fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.