Assurant (AIZ) Stock Forecast & Price Target

Assurant Inc. has demonstrated robust growth in its Global Lifestyle segment, with Connected Living revenue increasing by approximately 14% and EBITDA rising by around 21%. The property management company's renters' business has also achieved double-digit growth for 12 consecutive quarters, bolstered by the acquisition of over 250,000 policies from a competitor, contributing to significant annualized premiums. Additionally, the company's home business exhibits greater underwriting leverage, enhancing its premium-to-equity ratios and boosting return-on-equity and return-on-tangible equity, further supporting a favorable outlook for future earnings potential.

Assurant Inc. faces notable challenges, as its EBITDA margins have declined from the mid-20s range to the high teens over the last decade, indicating ongoing margin pressure. Additionally, the revenue from the Global Auto segment is expected to contract further, impacted by a decline in the company’s trade-in business and y/y declines amounting to approximately 3% in 2023 and 2% in 2024, emphasizing a concerning revenue trajectory. Furthermore, the history of an average combined ratio of 89% in the home insurance segment raises alarms about potential profitability erosion due to elevated catastrophe risks, particularly as market conditions worsen.