Assurant Inc. AIZ has announced $1.3 billion 2018 property catastrophe reinsurance program, intended to curb its risk and financial exposure, fortifying financial capabilities. The reinsurance coverage comprises $985 million for the U.S. catastrophe loss and $315 billion for the International segment.

The company announced that its reinsurance premiums are projected at $121 million. This is about $5 million lower than the reinsurance premium of $126 million registered in 2017. The reduction in premiums stemmed from the company’s lowered exposure to lender-placed insurance.

Per the program, the U.S. per-occurrence catastrophe coverage encompasses Assurant retaining $120 million coverage and the reinsuring, $985 million coverage. The multi-year reinsurance contract should cover a portion of the $985 million layer in excess of $240 million. In its Florida Hurricane Catastrophe Fund, Assurant will cover $88 million loss while reinsure 90% of $283 million loss.

Per the program, International per-occurrence catastrophe coverage has increased from the previous year with expansion of Assurant’s business in the select property markets. The International per-occurrence catastrophe coverage for Latin America is $183.5 million and for Caribbean, is $162.5 million. The company will have $4.5 million coverage for loss in Latin America and $17.5 million for the Caribbean.

With this new reinsurance program, the Zacks Rank #2 (Buy) multi-line insurer can now better serve its 2.9 million homeowners and renters policyholders.

Assurant is directing its capabilities to the targeted markets and enhancing its operating efficiency as well. The company envisions earnings growth and margin expansion at the Lifestyle segment through a combination of profitable growth and operating efficiencies, worldwide. Thus, reinsuring its insurance coverage seems a prudent move in the present scenario. This move can possibly enhance the company’s profitability and financial flexibility.

Shares of Assurant have outperformed the industry year to date. The stock has gained 3% versus the industry’s decline of 4.6%. We expect such growth drivers to drive the shares higher going forward.

Other Stocks to Consider

Investors interested in the multi-line industry can also look for some other top-ranked stocks like Kemper Corporation KMPR, Loews Corporation. L and Cigna Corp CI.

Kemper provides property and casualty, and life and health insurance to individuals and businesses in the United States. The company delivered an average four-quarter positive surprise of 121.61%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Loews provides commercial property and casualty insurance in the United States, Canada, the United Kingdom, Continental Europe and Singapore. The company pulled off an average four-quarter earnings surprise of 557.35%. The stock has a Zacks Rank of 1.

Cigna provides health care and related benefits, majority of which, are offered through workplace. The company came up with positive surprises in three of the last four quarters with an average beat of 15.74%. The stock carries a Zacks Rank of 2.

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