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Assurant (AIZ) to Report Q4 Earnings: What's in the Offing?

Assurant, Inc. AIZ is slated to report fourth-quarter 2022 earnings on Feb 7, after the closing bell. AIZ delivered an earnings surprise in three of the last four quarters while missing in one, the average being 7.85%.

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. Price and EPS Surprise
Assurant, Inc. Price and EPS Surprise

Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote

Factors to Note

Revenues are likely to have benefited from improved net earned premiums, higher fees and other income and net investment income. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.6 billion, suggesting growth of 2.4% from the year-ago quarter’s levels. We expect revenues of $2.5 billion in the to-be-reported quarter.

Net earned premiums are expected to have benefited from continued Global Automotive premium growth from strong prior period sales, device protection growth in North America, growth in Specialty and Other products and Lender-placed Insurance. Domestic mobile subscriber growth within cable operator distribution channel is likely to have added to the upside.

The consensus mark for net earned premiums and other considerations stands at $2.2 billion, which indicates an improvement of 2.7% from the prior-year reported figure. The same for fees and other income is pegged at $313 million. We expect net earned premiums of $2.2 billion in the to-be-reported quarter. We expect fees and other income of $310.4 million in the to-be-reported quarter.

Net investment income has benefited from higher fixed maturity asset levels and higher yields and higher real estate related income. The Zacks Consensus Estimate for fourth-quarter net investment income is pegged at $87 million, up 10.1% from the year-ago reported number.

The Global Lifestyle segment is expected to have benefited from continued organic growth from strong prior period U.S. sales in Global Automotive business across all distribution channels and domestic mobile subscriber growth within cable operator distribution channel. The increase is likely to be partially offset by a decrease from the run-off of certain global mobile programs and unfavorable impacts of foreign exchange. The Zacks Consensus Estimate for fourth-quarter total revenues of this segment is pegged at $2 billion (in line with our estimate), up 3% from the year-ago reported number.

Global Automotive is likely to have benefited from mobile device protection contributions in North America, higher net investment income, after client profit sharing, higher yields and the sale of real estate joint venture partnerships and favorable loss experience in select ancillary products and expansion across distribution channels.

Total benefits, losses and expenses might have escalated because of higher policyholder benefits and selling, underwriting, general and administrative expenses.

Continued share buybacks are likely to have aided the bottom line in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter earnings stands at $2.59 per share, which suggests an improvement of 4.86% from the prior-year reported figure. AIZ expects EPS to be $1.32 in the to-be-reported quarter. Earnings for the fourth quarter are expected to grow year-over-year mainly driven by growth in Connected Living.

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 -0.85%. This is because the Most Accurate Estimate of $2.57 is pegged lower than the Zacks Consensus Estimate of $2.59. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Assurant has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Some insurance stocks also with the right combination of elements to come up with an earnings beat this time around are:

American International Group, Inc. AIG has an Earnings ESP of +5.73% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.19 per share, indicating a decrease of 24.7% from the year-ago reported figure.

AIG’s earnings beat estimates in three of the last four reported quarters while missing in one.

CNO Financial Group, Inc. CNO has an Earnings ESP of +6.31% and a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at a loss of 56 cents per share, indicating a decrease of 35.6% from the year-ago reported figure.

CNO’s earnings beat estimates in three of the last four reported quarters while missing in one.

MetLife, Inc. MET has an Earnings ESP of +0.43% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at $1.94, indicating a decrease of 6.7% from the year-ago reported figure.

MET’s earnings beat estimates in three of the last four reported quarters while missing in one.

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

CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report

MetLife, Inc. (MET) : Free Stock Analysis Report

Assurant, Inc. (AIZ) : Free Stock Analysis Report

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