Assurant – book value valuation

Regarding AIZ book value per share.  I looked around and found out that most insurance company are valuated based on book value per share.  Insurance business usually make no to little money on premiums but net incomes are correlated to invested value interest income (interest on book value).  If you get a return based on the book value, it is interesting to value your investment on that basis.

Here is Assurant book value per share progression per quarter since 2011.

AIZ-BV

Current book value is 53.70 excluding AOCI giving us a P/B of 0.64.

The book value is progressing, thanks to massive (10%) share repurchase program on going, between 14% (2011) and 18% (2012 YTD).  Let’s assume a 10% growth in BV and we get this valuation.

I think I’m falling in love with AIZ.

Disclosure : Author is long AIZ.

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