Assurant 2Q Earnings Rise 2% On Big Gain

   DOW JONES NEWSWIRES 
 

Assurant Inc.'s (AIZ) second-quarter earnings rose 2% as the insurance company benefited from a big gain from a legal settlement that masked weakness at its health and specialty property units.

"We are taking decisive actions throughout Assurant to improve performance, reduce expenses, enhance revenues and best position the company for the long term," said Robert B. Pollock, president and chief executive. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."

Assurant is one of the few companies that benefited from rising mortgage defaults because its specialty-property unit collects premiums from banks on homes whose owners have fallen behind on coverage, but it suffered with the rest of the industry from the last year's challenges from the economy and severe weather. However, the company's capital position has remained strong, as indicated by its dividend increase earlier this year.

The company, which insures a range of items from credit cards to trailer parks, reported earnings of $193.3 million, or $1.63 a share, compared with $190 million, or $1.59 a share, a year earlier. The latest results included an $85 million gain from a legal settlement.

Operating earnings, which exclude net realized investment gains and losses, fell to 84 cents a share from $1.55. The latest figure included a $6.4 million restructuring charge.

Revenue rose 1.1% to $2.27 billion.

Analysts expected per-share operating earnings of $1.21 and revenue of $2.16 billion, according to a poll by Thomson Reuters.

Net premiums earned fell 6%, with declines hitting all the company's businesses. Net investment income fell 13%.

Profit in the largest segment, specialty property, fell 30% as the business suffered from servicer consolidation, fewer policies and higher catastrophe-reinsurance costs, while the health unit swung to a loss on rising claims.

Assurant's shares were up 0.2% at $24.95 in after-hours trading. The stock price has doubled since late November but is still down more than 60% from a year ago.

-By Jay Miller, Dow Jones Newswires; 212-416-2355; [e-mail]