DOW JONES NEWSWIRES 
 

Assurant Inc.'s (AIZ) first-quarter net income dropped 57% on lower revenue and higher investment losses.

The results fell short of Wall Street's expectations.

"Our quarterly results reflect how the economy is challenging consumers, employers and the financial markets," said Chief Executive Robert B. Pollock.

He noted claims were up because of the poor economy, citing as an example heavy use of medical services by people fearing they might lose their jobs and medical coverage. However, Pollock added Assurant is finding new business opportunities in the U.S. and abroad.

Assurant has suffered, along with other insurers, from stock market declines and hurricane-related losses, even though it is among the few companies benefiting from rising mortgage defaults and slipping home prices. Its specialty-property unit collects premiums from banks for insurance on homes whose owners have fallen behind on their coverage.

The company, which insures a range of items from credit cards to trailer parks, reported net income of $80.6 million, or 68 cents a share, down from $186.8 million, or $1.56 a share, a year earlier.

The latest results included $36.2 million in net realized investment losses and $21 million in tax expense caused by a change in deferred tax assets. The prior-year quarter included net realized investment losses of $28 million. Operating earnings, which exclude net realized investment gains and losses, fell to $1.17 a share from $1.80.

Revenue slid 4.1% to $2.09 billion.

Analysts' estimates were for per-share operating earnings of $1.43 and revenue of $2.25 billion, according to a poll by Thomson Reuters.

Net premiums earned fell 3.4%, and net investment income declined 9.8%.

Profit in the largest segment, specialty property, fell 16% because of higher catastrophe reinsurance costs and claims related to normal winter weather, compared with the mild winter a year earlier. Earnings were lower in all other segments.

Assurant's shares closed Wednesday at $28.03, up 2.5%, and were inactive after hours. The stock price has been cut in half in the past seven months.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com