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Assurant, Inc. (AIZ - Free Report) reported second-quarter 2024 net operating income of $4.08 per share, which beat the Zacks Consensus Estimate by nearly 14%. The bottom line rose 4.9% year over year. Quarterly results benefited from higher net earned premiums, fees and other income and net investment income, and solid performance in the Global Lifestyle segment. These were partially offset by higher expenses and weakness in the Corporate & Other segment.
Total revenues increased 7% year over year to $2.9 billion, driven by higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 2.5%.
Net earned premiums, fees and other income increased 6% year over year to $2.8 billion, driven by growth across both segments. Our estimate was $2.7 billion.
Net investment income was up 10.4% year over year to $124.7 million, driven by higher yields and assets in fixed maturity securities, short-term investments and cash and cash equivalents. Our estimate was $127.9 million. The Zacks Consensus Estimate was pegged at $127 million.
Total benefits, loss and expenses increased 6.5% to $2.7 billion, mainly due to higher policyholders benefit and underwriting and selling, general and administrative expenses. Our estimate was $2.5 billion.
Adjusted EBITDA, excluding reportable catastrophes, increased 10% to $369.1 million. Our estimate was $359.5 million.
Revenues at Global Housing increased 18.1% year over year to $663.5 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $572.6 million. The Zacks Consensus Estimate was $594 million.
Net earned premiums, fees and other income increased 18% year over year driven by Homeowners’ top-line growth, including growth in policies in force and higher average premiums within lender-placed.
Adjusted EBITDA, excluding catastrophes, surged 23% year over year to $206.4 million on continued top-line growth within Homeowners, including higher policies in force from new lender-placed programs and portfolios. The figure was higher than our estimate of $174 million. The Zacks Consensus Estimate was $179 million.
Revenues at Global Lifestyle rose 3.6% year over year to $2.3 billion, matching the Zacks Consensus Estimate and our estimate. The increase was primarily driven by higher net earned premiums, fees and other income.
Adjusted EBITDA, excluding catastrophes, of $189.9 million decreased 4% year over year, attributable to lower Global Automotive results from ongoing elevated claims costs and elevated losses within select ancillary products. The figure was lower than our estimate of $212.9 million. The Zacks Consensus Estimate was pegged at $205 million.
Adjusted EBITDA loss at Corporate & Other was $27.25 million, narrower than the year-ago quarter’s adjusted EBITDA loss of $28.5 million. The narrower loss was attributable to higher net investment income from higher asset levels and yields.
Financial Position
Liquidity was $735 million as of Jun 30, 2024, which was $397 million higher than the company’s current targeted minimum level of $225 million.
Total assets increased 0.4% to $33.7 billion as of Jun 30, 2024, from the end of 2023. Total shareholders’ equity came in at $5 billion, up 4.1% year over year.
Debt-to-total capital ratio of 29.4 improved 80 bps from the 2023 end level.
Share Repurchase and Dividend Update
In the second quarter, Assurant returned $80 million to shareholders, comprising $40 million in buybacks and $40 million in dividends.
Through Aug 2, the insurer bought back another $20 million worth of shares and now has $575 million remaining under the current repurchase authorization.
2024 Guidance Raised
Assurant expects adjusted EBITDA to increase in high single digits led by strong growth in Global Housing and modest growth in Global Lifestyle. It expected the same to increase by mid-single digits earlier.
Global Housing adjusted EBITDA, excluding reportable catastrophes, is expected to increase, mainly driven by top-line growth in Homeowners, benefits from expense leverage and lower catastrophe reinsurance premiums.
Global Lifestyle adjusted EBITDA is expected to increase modestly. The company continues to expect organic growth and improved profitability in Connected Living programs.
Corporate and Other adjusted EBITDA loss is expected to approximate $110 million.
The company now expects a lower effective tax rate of approximately 19% to 21%. It continues to expect depreciation expense of approximately $130 million, interest expense of approximately $107 million and amortization of purchased intangible assets of approximately $70 million.
Adjusted earnings per share are expected to grow in low double digits, excluding reportable catastrophes. It earlier expected adjusted earnings per share, excluding reportable catastrophes, growth rate to approximate the growth rate in adjusted EBITDA, excluding reportable catastrophes.
The insurer expects share repurchases to be toward the high end of its $200-$300 million range, reflecting a strong capital position and comprehensive catastrophe reinsurance program.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. Pretax income of $912 million increased 35.7% year over year in the second quarter.
Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year. Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
Net premiums earned were $237.7 million, up 11.4% year over year. MI New Insurance Written decreased 18% year over year to $13.9 billion. Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.
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Assurant (AIZ) Q2 Earnings & Revenues Beat, View Raised
Assurant, Inc. (AIZ - Free Report) reported second-quarter 2024 net operating income of $4.08 per share, which beat the Zacks Consensus Estimate by nearly 14%. The bottom line rose 4.9% year over year. Quarterly results benefited from higher net earned premiums, fees and other income and net investment income, and solid performance in the Global Lifestyle segment. These were partially offset by higher expenses and weakness in the Corporate & Other segment.
Total revenues increased 7% year over year to $2.9 billion, driven by higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 2.5%.
Net earned premiums, fees and other income increased 6% year over year to $2.8 billion, driven by growth across both segments. Our estimate was $2.7 billion.
Net investment income was up 10.4% year over year to $124.7 million, driven by higher yields and assets in fixed maturity securities, short-term investments and cash and cash equivalents. Our estimate was $127.9 million. The Zacks Consensus Estimate was pegged at $127 million.
Total benefits, loss and expenses increased 6.5% to $2.7 billion, mainly due to higher policyholders benefit and underwriting and selling, general and administrative expenses. Our estimate was $2.5 billion.
Adjusted EBITDA, excluding reportable catastrophes, increased 10% to $369.1 million. Our estimate was $359.5 million.
Assurant, Inc. Price, Consensus and EPS Surprise
Assurant, Inc. price-consensus-eps-surprise-chart | Assurant, Inc. Quote
Segmental Performance
Revenues at Global Housing increased 18.1% year over year to $663.5 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $572.6 million. The Zacks Consensus Estimate was $594 million.
Net earned premiums, fees and other income increased 18% year over year driven by Homeowners’ top-line growth, including growth in policies in force and higher average premiums within lender-placed.
Adjusted EBITDA, excluding catastrophes, surged 23% year over year to $206.4 million on continued top-line growth within Homeowners, including higher policies in force from new lender-placed programs and portfolios. The figure was higher than our estimate of $174 million. The Zacks Consensus Estimate was $179 million.
Revenues at Global Lifestyle rose 3.6% year over year to $2.3 billion, matching the Zacks Consensus Estimate and our estimate. The increase was primarily driven by higher net earned premiums, fees and other income.
Adjusted EBITDA, excluding catastrophes, of $189.9 million decreased 4% year over year, attributable to lower Global Automotive results from ongoing elevated claims costs and elevated losses within select ancillary products. The figure was lower than our estimate of $212.9 million. The Zacks Consensus Estimate was pegged at $205 million.
Adjusted EBITDA loss at Corporate & Other was $27.25 million, narrower than the year-ago quarter’s adjusted EBITDA loss of $28.5 million. The narrower loss was attributable to higher net investment income from higher asset levels and yields.
Financial Position
Liquidity was $735 million as of Jun 30, 2024, which was $397 million higher than the company’s current targeted minimum level of $225 million.
Total assets increased 0.4% to $33.7 billion as of Jun 30, 2024, from the end of 2023. Total shareholders’ equity came in at $5 billion, up 4.1% year over year.
Debt-to-total capital ratio of 29.4 improved 80 bps from the 2023 end level.
Share Repurchase and Dividend Update
In the second quarter, Assurant returned $80 million to shareholders, comprising $40 million in buybacks and $40 million in dividends.
Through Aug 2, the insurer bought back another $20 million worth of shares and now has $575 million remaining under the current repurchase authorization.
2024 Guidance Raised
Assurant expects adjusted EBITDA to increase in high single digits led by strong growth in Global Housing and modest growth in Global Lifestyle. It expected the same to increase by mid-single digits earlier.
Global Housing adjusted EBITDA, excluding reportable catastrophes, is expected to increase, mainly driven by top-line growth in Homeowners, benefits from expense leverage and lower catastrophe reinsurance premiums.
Global Lifestyle adjusted EBITDA is expected to increase modestly. The company continues to expect organic growth and improved profitability in Connected Living programs.
Corporate and Other adjusted EBITDA loss is expected to approximate $110 million.
The company now expects a lower effective tax rate of approximately 19% to 21%. It continues to expect depreciation expense of approximately $130 million, interest expense of approximately $107 million and amortization of purchased intangible assets of approximately $70 million.
Adjusted earnings per share are expected to grow in low double digits, excluding reportable catastrophes. It earlier expected adjusted earnings per share, excluding reportable catastrophes, growth rate to approximate the growth rate in adjusted EBITDA, excluding reportable catastrophes.
The insurer expects share repurchases to be toward the high end of its $200-$300 million range, reflecting a strong capital position and comprehensive catastrophe reinsurance program.
Zacks Rank
Assurant currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. Pretax income of $912 million increased 35.7% year over year in the second quarter.
Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year. Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
Net premiums earned were $237.7 million, up 11.4% year over year. MI New Insurance Written decreased 18% year over year to $13.9 billion. Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.