Assurant First-Quarter Net Down 28%, Hurt by Settlement Costs

       By Kristin Jones 

    Assurant Inc.'s (AIZ) first-quarter profit fell 28% as the insurer was hurt by a settlement related to accusations of overpriced insurance, and other costs.

    Assurant, which is the largest seller of "force-placed" home insurance in the U.S., agreed last month to pay a $14 million penalty and provide restitution to some New York homeowners under an agreement with state regulators to settle allegations of overpriced insurance and excessive profits. The policies are "forced" on borrowers who drop their required, standard homeowners coverage, which protects banks' collateral.

    The company, which provides health, employee and property insurance as well as coverage for products like credit cards--has benefited for most of 2012 from fewer catastrophe-related losses--a winning streak interrupted by Hurricane Sandy.

    In the latest quarter, catastrophe losses of $10 million from the company's specialty property business, and a $10.2 million tax liability related to U.S. health-care reform also contributed to lower operating earnings.

    Overall, Assurant reported a profit of $117.8 million, or $1.46 a share, down from $163.3 million, or $1.81 a share, a year earlier.

    Revenue increased 3.7% to $2.15 billion.

    Analysts polled by Thomson Reuters were expecting a per-share profit of $1.59 on revenue of $2.11 billion.

    Operating earnings, which exclude investment gains and losses, fell to $1.35 from $1.76 a year earlier. Net earned premiums, fees and other income were 5.3% higher at $5.3 billion.

    Shares closed Wednesday at $47.69 and were unchanged in after-hours trading. The stock is up 37% since the start of the year.

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