US specialty insurance group Assurant has recorded a Q2 net income of $139.5 million, representing a $77.3 million year-over-year increase.
The increase was primarily down to growth within Global Lifestyle, including contributions from the recently-acquired The Warranty Group (TWG), as well as higher net realised gains on investments and lower net acquisition-related charges for TWG.
Net operating income for the Global Lifestyle segment increased due to strong organic mobile expansion in Connected Living and $22 million of additional contributions from TWG, compared to second quarter 2018.
In total, TWG generated $31.5 million of net operating income in the quarter, which reflects $2.9 million primarily related to intangible amortisation and approximately $11 million of realised operating synergies.
This compares to $9.4 million of TWG net operating income earned for the month of June in 2018, following the acquisition’s close.
Meanwhile, net operating income for the group increased to $147.7 million compared to the $121.9 million posted in Q2 2018.
This jump was primarily driven by mobile organic growth and contributions from TWG in Global Lifestyle but was partially offset by higher financing costs related to the TWG acquisition and a higher Corporate and other net operating loss.
Excluding reportable catastrophes, net operating income totalled $144.6 million, compared to $120.9 million in Q2 2018.
“We were pleased with our second quarter results as they were above our expectations, mainly from Global Lifestyle’s strong mobile growth as new client partnerships and program expansions continued to gain traction,” said Assurant President and Chief Executive Officer Alan Colberg.
“Importantly, we have also now reached $60 million in run-rate expense synergies from our TWG acquisition, two quarters ahead of schedule.”
“We believe we’re well-positioned to achieve our financial objectives for 2019, despite higher claims in Global Housing, while continuing to drive overall long-term outperformance,” Colberg added.
The performance of Assurant’s Global Housing segment dropped in Q2 2019, primarily due to increased claims severity and frequency for small commercial products and as previously anticipated, higher catastrophe reinsurance costs.
This was partially offset by growth in multifamily housing and the absence of losses from the mortgage solutions business in the prior year period.