- Assurant loss at health unit was at least $215 million
- Loss driven by higher-than-expected claims on medical policies
Assurant Inc. fell the most among large U.S. insurers in New York trading after saying that its health insurance unit posted a third-quarter pretax loss of at least $215 million.
Assurant declined 3 percent to $79.72 at 12:41 p.m., the biggest drop in the 21-company Standard and Poor’s 500 Insurance Index. The health loss was driven by higher-than-expected claims on individual medical policies and could be as high as $230 million, the New York-based company said in a filing after markets closed Tuesday.
Chief Executive Officer Alan Colberg is winding down the health unit to focus on segments such as mobile-phone coverage and home insurance. He announced a deal in September to sell an employee-benefits operation to Canada’s Sun Life Financial Inc. for more than $900 million.
Assurant “can’t get out of the health business fast enough,” John Nadel, an analyst at Piper Jaffray Cos., said in a note Tuesday. “While the charges have no impact on our operating earnings estimates, we note they will negatively impact book value as well as the outlook for share repurchases.”
Colberg has also been reshaping the insurer’s management, appointing Chief Financial Officer Christopher Pagano to lead risk management. The company said it was seeking a CFO and a chief technology officer.
Assurant is scheduled to report final third-quarter results on Oct. 27.