Specialty insurer Assurant, Inc. says it will purchase U.K.mobile phone insurance insurer Lifestyle Services Group for $160million, a move Moody's Investors Service says should helpdiversify Assurant's sources of net operating income over time.

Assurant CEO Robert B. Pollock says in a statement, "Ouracquisition of Lifestyle Services Group strengthens and expands ourglobal mobile presence, which is an important strategicpriority."

Moody's analyst Jasper Cooper notes in the ratings agency's"Weekly Credit Outlook" that the purchase price is equal to 8.5times LSG's earnings before interest, taxes, depreciation andamortization (EBITDA). Moody's adds that Assurant plans to pay forthe acquisition with cash at the holding company, "which appears tobe manageable given that the holding company as of June 30 hadsignificant liquidity totaling $890 million in cash and liquidsecurities, excluding $476 million set aside for a February 2014debt maturity."

Regarding the impact on Assurant's business mix, Moody's pointsout that most of Assurant's net operating income in recent yearshas come from its Specialty Property segment, "which consistsmainly of lender-placed homeowners and mobile home insurance."

Lender-placed, or force-placed, homeowners policies havecome under regulatory scrutiny in New York and other states,leading to settlements with insurers, Assurant included, thatinclude refunds to policyholders and reforms in how the coverage issold.

This week, JP. Morgan Chase and lawyers for homeowners who paidfor force-placed insurance settled a lawsuit in Miami requiring Assurant to make paymentsto homeowners equal to 12.5 percent of the insurance premium eachaffected homeowner was charged. The deal could be worth as much as$300 million and could include up to 1.3 million homeownersnationwide.

Moody's says it expects the LSG acquisition to "help the companydiversify its sources of net operating income over time."

LSG will become a part of Assurant Solutions, which accountedfor 38 percent of Assurant's 2012 net-earned premiums, but only 23percent of its net operating income, according to Moody's.

Moody's also says, "About 31 percent of Assurant Solutions'revenue is from international markets, and on a pro forma basis,the LSG acquisition will boost the international share to about 37percent."