As you are probably aware of we at Funeral Director Daily have built up our own index of public stocks which reflect six companies with, at least a part of their business entity in the Death Care profession.  Our hope is that by watching this index, and how the companies operate, we can learn something of value to bring to each of us in the industry.

Yesterday I noticed an interesting item about Assurant, one of those six stocks, mentioned in an article in chaffeybreeze.com.  The article was by a writer who was comparing Assurant with another company in the insurance business, National General Holdings Corporation, as to which might make the better investment at this time.  I will not go into the investment opinion, however, as is many times the case, you can learn something about the company just by reading the article.

Assurant, a worldwide conglomerate, touches the death care industry with its Global PreNeed business segment — a unit which serves the United States and Canada providing pre-need funeral insurance and annuities.  Among the insurance companies in the PreNeed unit owned by Assurant are Union Security Insurance Company of Atlanta and American Memorial Life Insurance Company of Rapid City, South Dakota.  While we don’t know the premium volumes of those companies the article tells us that Assurant, in total, collected gross revenues $6.94 billion and had an EBITDA  of about $943 million.

The article also told us in what other industries Assurant competes.  They are the Global Housing unit which offers insurance, valuation services and risk management services in that industry and the Global Lifestyle unit which provides insurance for such things as mobile devices,  electronics, appliances and credit services.  As you can see, they are really into the financial and/or insurance industry.  As an entire company their field of operations includes North America, Latin America, Europe, and Asia.

Finally, the article states that over 92% of the shares of stock are held by institutional investors — meaning mutual funds and the like.  Numbers like that are pretty typical of very large companies.

Funeral Director Daily take:  As usual, when you have been around funeral service as long as I have memories come through on just about every company.  While pre-need has grown to become a big part of the revenue stream of funeral homes, it was not always that way.  In 1980 in Minnesota, which was when I started working full-time, pre-need insurance was a prohibited product in Minnesota.  Any money set aside had to be put in FDIC insured accounts via savings accounts or Certificates of Deposits at local banks – neither placement earned a commission for the funeral home.  It took some time to convince the consumer protection people in Minnesota that insurance would be another possible vehicle to hold this funding.

When I see that Assurant now owns the American Memorial Life Insurance Company of Rapid City, South Dakota, it brings back these memories because it was their forerunner, Purple Cross Insurance, that helped pave the way for insurance in Minnesota.  At one time, I was even an agent for Purple Cross.

Knowing as much as you can about your pre-need provider is a good idea.  Not only do you want to know what the insurance face value amount over cash premium is, the growth rate of the policy, and the commission rate paid to the funeral home, I suggest it is very good to know of the parent company of your pre-need provider also.  While most insurance proceeds are protected by state pools and the like, having a provider who is in trouble, either financially or otherwise, would not be good publicity for a funeral home. I would suggest you  learn all you can about any company that you are out there promoting — to not do so could be a nightmare of public relations some day.[wpforms id=”436″ title=”true” description=”true”]