Here's What to Expect From Assurant in Q2 Earnings

Assurant, Inc. AIZ is slated to report second-quarter 2024 earnings on Aug 6, after the closing bell. AIZ delivered an earnings surprise in each of the last four quarters, the average beat being 42.47%.

Factors to Note

The continued strength of the Global Housing segment, as well as growth in Global Lifestyle, is likely to have aided the second-quarter performance of Assurant.

Revenues are likely to have benefited from improved net earned premiums and higher net investment income. The Zacks Consensus Estimate for second-quarter revenues is pegged at $2.87 billion, suggesting growth of 4.4% from the year-ago quarter's level.

Net earned premiums are expected to have benefited from higher premiums in the Global Housing and Global Lifestyle segments.

The Zacks Consensus Estimate for second-quarter net earned premiums, fees and other income is pegged at $2.4 billion. We expect net earned premiums to increase 0.8% to $2.4 billion in the to-be-reported quarter. We expect fees and other income to increase 26.3% to $373.5 million in the second quarter.

Net investment income is likely to have gained from higher yields and assets in fixed maturity securities, cash and cash equivalents and short-term investments. The Zacks Consensus Estimate for second-quarter net investment income is pegged at $127.2 million, suggesting an improvement of 12.7% from the year-ago reported number. We expect net investment income to increase 13.3% to $127.9 million.

Global Housing is expected to have been driven by Homeowners from higher lender-placed average insured values and policies in force, as well as higher premium rates primarily to address increased claims severity and lower catastrophe reinsurance premiums.

Continued net earned premiums growth within Homeowners, ongoing expense leverage from scale and operating efficiencies are likely to have added to the upside. The Zacks Consensus Estimate for the segment's second-quarter revenues is pegged at $593.9 million. We expect the segment's revenues to increase 1.9% to $572.6 million.

Global Lifestyle is expected to have benefited from growth in Connected Living from stronger mobile device protection results across carrier and cable operator clients in North America and contributions from newly launched mobile trade-in programs. Investments in new partnerships and acquisitions are expected to have added to the growth.

The uptick is likely to have been partially offset by ongoing elevated claims costs in Global Automotive as well as the unfavorable impact of foreign exchange. The Zacks Consensus Estimate for the segment's second-quarter revenues is pegged at $2.2 billion. We expect the segment's revenues to increase 4.4% to $2.3 billion.

Total benefits, losses and expenses might have escalated because of higher underwriting and selling, general and administrative expenses. We expect total expenses to increase 0.7% to $2.5 billion.

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

The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.67 per share, suggesting a decline of 5.6% from the prior-year quarter's reported figure.

What Our Quantitative Model Unveils

Our proven model does not predict an earnings beat for Assurant this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.

Earnings ESP: Assurant has an Earnings ESP of -2.40%. This is because the Most Accurate Estimate of $3.58 is pegged lower than the Zacks Consensus Estimate of $3.67.

Stocks to Consider

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

Oscar Health, Inc. OSCR has an Earnings ESP of +3.23% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at 16 cents, indicating a year-over-year increase of 328.5%.

OSCR's earnings beat estimates in each of the last four quarters.

Brighthouse Financial, Inc. BHF has an Earnings ESP of +1.15% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $4.36, indicating a year-over-year increase of 5.5%.

BHF's earnings beat estimates in three of the last four reported quarters and missed in one.

MidCap Financial Investment Corporation MFIC has an Earnings ESP of +3.69% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at 43 cents, indicating a year-over-year decrease of 2.2%.

MFIC's earnings beat estimates in three of the last four reported quarters and missed in one.

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