What's in Store for Assurant (AIZ) This Earnings Season?
Assurant, Inc. AIZ is slated to report third-quarter 2023 earnings on Oct 31, after the closing bell. AIZ delivered an earnings surprise in each of the last four quarters, the average beat being 24.39%.
Factors to Note
Revenues are likely to have benefited from improved net earned premiums and higher net investment income. The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.6 billion, suggesting growth of 3.7% from the year-ago quarter’s levels.
Net earned premiums are expected to have benefited from higher lender-placed policies in force in Homeowners business, average insured values and premium rates. Continued organic growth from prior-period U.S. sales in the Global Automotive business across all distribution channels and an improvement in extended service contracts and mobile subscribers in North America are likely to have added to the upside.
The Zacks Consensus Estimate for third-quarter net earned premiums, fees and other income is pegged at $2.3 billion, down 8.5% from the year-ago reported number. We expect net earned premiums to increase 2.8% to $2.2 billion in the to-be-reported quarter. We expect fees and other income to decrease 8% to $271.1 million in the to-be-reported quarter.
Net investment income is likely to have benefited from income from higher yields on fixed-maturity securities, short-term investments and cash equivalents. The upside is likely to be partially offset by a decrease in income from other investments due to lower real estate joint venture sales. The Zacks Consensus Estimate for third-quarter net investment income is pegged at $111 million, up 32.1% from the year-ago reported number. We expect net investment income to increase 21.1% to $101.2 million in the to-be-reported quarter.
Global Housing is likely to have benefited from significant growth in Homeowners from higher lender-placed net earned premiums and lower non-catastrophe loss experience, driven by Homeowners from an increase in lender-placed policies in-force, average insured values and premium rates.
The Global Lifestyle segment is expected to have been affected by ongoing elevated claims costs in Global Automotive, as well as weaker Connected Living results in Asia Pacific and Europe, including the impact of foreign exchange. The decline in Global Lifestyle was partially offset by higher net investment income across Global Lifestyle, modest growth in extended service contracts and mobile device protection results in North America.
Global Automotive is likely to have been affected by ongoing higher claims costs and elevated loss experience due to inflation. Strong prior-period U.S. sales and growth in domestic mobile subscribers are likely to have offset the declines.
Total benefits, losses and expenses might have escalated because of higher policyholder benefits, underwriting, selling, general and administrative expenses. We expect total expenses to decrease 3.2% to $2.4 billion.
Continued share buybacks are likely to have aided the bottom line in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.48 per share, which suggests an increase of 145.5% from the prior-year reported figure.
What Our Quantitative Model Unveils
Our proven model does not predict an earnings beat for Assurant this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case as you can see below.
Earnings ESP: Assurant has an Earnings ESP of -0.75%. This is because the Most Accurate Estimate of $2.46 is pegged lower than the Zacks Consensus Estimate of $2.48. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote
Zacks Rank: Assurant has a Zacks Rank #3 at present.
Stocks to Consider
Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Enact Holdings, Inc. ACT has an Earnings ESP of +2.33% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at 86 cents, indicating a year-over-year decline of 26.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACT’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. AIG has an Earnings ESP of +4.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.55, indicating a year-over-year increase of 134.8%.
AIG’s earnings beat estimates in each of the last four quarters.
Brighthouse Financial, Inc. BHF has an Earnings ESP of +0.89% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4, indicating a year-over-year increase of 10,100%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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American International Group, Inc. (AIG) : Free Stock Analysis Report
Assurant, Inc. (AIZ) : Free Stock Analysis Report
Enact Holdings, Inc. (ACT) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
