Assurant considers sale of its KC-based employee benefits unit

Assurant is exploring the sale of its employee benefits and health insurance businesses as part of a strategy to narrow its focus and generate higher returns.

Assurant’s employee benefits operation is based in Kansas City at 2323 Grand Blvd. The unit said recently it had about 1,600 employees, including more than 800 at its headquarters.

Divestitures would leave the insurer with units that sell coverage for housing and personal items, such as mobile phones and jewelry, according to a statement from the New York- based company. Assurant said it plans to exit the health insurance market in 2016, even if it fails to sell the business.

“The health and employee benefits business segments possess differentiated capabilities in their respective markets, but we do not believe they can meet our return targets at the pace we require,” Assurant chief executive officer Alan B. Colberg said in the statement. “We believe they would be strong assets for new owners that are focused more exclusively on health care and employee benefits.”

Proceeds from a divestiture could be used to expand its remaining businesses or be returned to shareholders, according to the statement. The company has hired Barclays to explore a possible sale.

Assurant also said its net operating income in the first quarter was probably $40 million to $50 million. Full results will be released May 5.

This story was originally published April 28, 2015 at 5:37 PM with the headline "Assurant considers sale of its KC-based employee benefits unit."