Assurant 4Q Net Up 51% As Realized Investment Losses Steady

   DOW JONES NEWSWIRES 
 

Assurant Inc.'s (AIZ) fourth-quarter net income rose 51% as the company recorded a much smaller tax provision and held the line on realized investment losses.

"Although we can't avoid the chill of the economic 'global cooling,' Assurant's capital position remains stable and our balance sheet remains solid, setting us apart, despite the unprecedented challenges in the economy," President and Chief Executive Robert B. Pollock said Wednesday.

In after-hours trading, shares of Assurant were up 2.3% at $26.75, even as the results missed Wall Street's estimate.

The company, which insures a range of things from credit cards to trailer parks, posted net income of $182.4 million, or $1.55 a share, compared with $120.8 million, or $1.01 a share, a year earlier. The latest quarter included a tax provision of $9.02 million, compared with $76.1 million a year earlier.

The latest results include $33.7 million in net realized investment losses, including write-downs, compared with $33.6 million a year earlier. Operating earnings rose to $1.31 a share from $1.29 a share.

Revenue rose 1.7% to $2.22 billion.

A Thomson Reuters analyst poll projected operating earnings of $1.54 a share on $2.32 billion in revenue.

Net earned premiums rose 2% to $2 billion, while net investment income fell 7.5% to $183 million.

Profits in the specialty-property business rose 19%, largely as a result of growth in creditor-placed homeowners insurance and favorable combined ratios.

Assurant is among the few companies actually benefiting from rising mortgage defaults and slipping home prices, because its specialty-property unit collects premiums from banks for insurance on homes whose owners have fallen behind on their coverage. Still, Assurant isn't immune from the woes roiling the insurance industry, with exposures to the troubled stock markets and hurricane-related losses.

The Assurant Solutions unit posted a 63% decrease in net operating profit, hurt by special charges, and a decline in investment income. The quarter included a benefit from the acquisition of General Electric Co.'s (GE) warranty-management group.

In December, Standard & Poor's Ratings Services affirmed the ratings of Assurant and most of its units, citing their operating performance, financial flexibility and competitive position. However, the ratings agency did cut two units a notch, reflecting higher dividend activity and realized investment losses.

Despite the troubles rippling through the economy, Assurant has been moving to expand its offerings. In September, it agreed to buy from General Electric Co. (GE) the warranty-management business they had been co-managing, for $140 million.

The company's shares have more than doubled since late November, but they are still down more than 60% from the 52-week high in July.

-By Jay Miller, Dow Jones Newswires; 201-938-2331; [e-mail]