Assurant Solutions, a division of Assurant Inc. (AIZ), announced the extension of its service agreement with Service Corporation International (SCI). Based in Houston, Service Corporation operates more than 1,800 funeral homes and cemeteries in the U.S. and Canada, providing deathcare services to the insured.
Assurant Solutions will continue to provide its members with preneed life insurance, which allows them to prepay for a funeral in a single payment or in multiple payments over a fixed number of years. The insurance policy proceeds are used to address funeral costs at death. These products are only sold in the U.S. and Canada and are generally structured as whole life insurance policies in the U.S. and annuity products in Canada. These services will be arranged by Service Corporation for the next 10 years, as per the agreement.
Assurant Solutions provides insurance and annuity products administered by Union Security Insurance Company, IA American Life Insurance Company and American Memorial Life Insurance Company with new business underwritten by American Memorial Life Insurance.
Apart from providing preneed insurance, the company’s Solutions unit provides domestic and international extended service contracts and warranties, including mobile device protection and international credit insurance.
In the last reported quarter, the unit’s results came in better than anticipated, driven by strong results in mobile and expense savings from prior restructuring actions. The company is focusing on growth areas like mobile and vehicle service contracts.
In Jul 2013, Assurant expanded the scope of its contract with T-Mobile from administering its Monthly4G handset warranty plan to include the company’s JUMP! upgrade program. In Oct 2013 the unit acquired Lifestyle Services Group, a mobile phone insurance provider. Moreover, the addition of original equipment manufacturer, Whirlpool will also generate domestic sales. All these efforts clearly point to revenue growth at the unit going forward.
Investors interested in multiline insuarnce industry can take a look at Old Republic International Corporation (ORI) and AmTrust Financial Services, Inc. (AFSI). Both these stocks hold a Zacks Rank #1 (Strong Buy).