Assurant (AIZ) 10-Q 2004 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from      to

Commission file number: 001-31978

Assurant, Inc.

(Exact name of registrant as specified in its charter)

Delaware	39-1126612
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)

One Chase Manhattan Plaza, 41st Floor
New York, New York 10005
(212) 859-7000
(Address, including zip code, and telephone number, including
area code, of Registrant’s Principal Executive Offices)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes [  ] No [X]

     The number of shares of the registrant’s Common Stock outstanding at October 29, 2004 was 139,959,506.

ASSURANT, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

TABLE OF CONTENTS

Item	Page
Number	Number
PART I
FINANCIAL INFORMATION
1. Financial Statements		2
Unaudited interim consolidated balance sheets of Assurant, Inc. at September 30, 2004 and December 31, 2003		2
Unaudited interim consolidated statement of operations of Assurant, Inc. for the three and nine months ended September 30, 2004 and 2003		4
Unaudited interim consolidated statement of changes in stockholders’ equity of Assurant, Inc. for the nine months ended September 30, 2004		5
Unaudited interim consolidated statement of cash flows of Assurant, Inc. for the nine months ended September 30, 2004 and 2003		6
Notes to the unaudited consolidated financial statements of Assurant, Inc		7
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
3. Quantitative and Qualitative Disclosures About Market Risk		42
4. Controls and Procedures		42
PART II OTHER INFORMATION
1. Legal Proceedings		42
2. Unregistered Sale of Equity Securities and Use of Proceeds		43
5. Other Information		43
6. Exhibits		44
Signatures		46
AMENDMENT NO. 1 TO THE AMENDED AND RESTATED 2004 EMPLOYEE STOCK PURCHASE PLAN
AMENDMENT NO. 1 TO THE EXECUTIVE PENSION AND 401K PLAN
AMENDMENT NO. 2 TO THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
CERTIFICATION
CERTIFICATION
CERTIFICATION
CERTIFICATION

Assurant, Inc. and Subsidiaries

Consolidated Balance Sheets
At September 30, 2004 (unaudited) and December 31, 2003

	September 30,		December 31,
	2004		2003
	(in thousands except number of shares)
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost — $8,567,856 in 2004 and $8,229,861 in 2003)	$	9,045,812	$	8,728,838
Equity securities available for sale, at fair value (cost — $540,062 in 2004 and $436,823 in 2003)		548,203		456,440
Commercial mortgage loans on real estate at amortized cost		1,039,914		932,791
Policy loans		66,025		68,185
Short-term investments		225,851		275,878
Other investments		508,398		461,473
Total investments		11,434,203		10,923,605
Cash and cash equivalents		692,373		958,197
Premiums and accounts receivable, net		482,560		468,766
Reinsurance recoverables		4,263,042		4,445,265
Accrued investment income		138,869		135,267
Tax receivable		—		26,499
Deferred acquisition costs		1,562,094		1,405,169
Property and equipment, at cost less accumulated depreciation		270,922		283,762
Deferred income taxes, net		31,385		60,321
Goodwill		831,346		828,523
Value of business acquired		175,872		191,929
Other assets		214,869		195,958
Assets held in separate accounts		3,540,759		3,805,058
Total assets	$	23,638,294	$	23,728,319

See the accompanying notes to the consolidated financial statements

2

Assurant, Inc. and Subsidiaries
Consolidated Balance Sheets
At September 30, 2004 (unaudited) and December 31, 2003

	September 30,			December 31,
	2004			2003
	(in thousands except number of shares)
Liabilities
Future policy benefits and expenses	$	6,328,838		$	6,235,140
Unearned premiums		3,221,977			3,133,847
Claims and benefits payable		3,641,270			3,512,809
Commissions payable		309,654			371,074
Reinsurance balances payable		121,705			110,063
Funds held under reinsurance		195,916			200,384
Deferred gain on disposal of businesses		344,054			387,353
Accounts payable and other liabilities		1,308,728			1,370,104
Tax payable		74,589			—
Debt		971,593			1,750,000
Mandatorily redeemable preferred securities of subsidiary trusts		—			196,224
Mandatorily redeemable preferred stock		24,160			24,160
Liabilities related to separate accounts		3,540,759			3,805,058
Total liabilities		20,083,243			21,096,216
Commitments and contingencies (note 9)		—			—
Stockholders’ equity
Common stock, par value $.01 per share, 800,000,000 shares authorized, 142,268,106 and 109,222,276 shares issued, 140,821,350 and 109,222,276 shares outstanding at September 30, 2004 and December 31, 2003, respectively		1,423			1,092
Additional paid-in capital		2,790,440			2,063,763
Retained earnings		493,266			248,721
Unamortized restricted stock compensation; 59,430 shares		(708	)		—
Accumulated other comprehensive income		306,665			318,527
Treasury stock, at cost; 1,387,326 shares		(36,035	)		—
Total stockholders’ equity		3,555,051			2,632,103
Total liabilities and stockholders’ equity	$	23,638,294		$	23,728,319

See the accompanying notes to the consolidated financial statements

3

Assurant, Inc. and Subsidiaries

Consolidated Statement of Operations
Three and Nine Months Ended September 30, 2004 and 2003 (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2004		2003		2004		2003
	(in thousands except number of shares and per share amounts)
Revenues
Net earned premiums and other considerations	$	1,603,548	$	1,546,474	$	4,844,259	$	4,533,503
Net investment income		160,034		150,723		471,486		456,608
Net realized gain on investments		2,501		7,334		22,447		14,808
Amortization of deferred gain on disposal of businesses		14,539		17,522		43,298		52,235
Fees and other income		51,238		53,524		154,511		172,764
Total revenues		1,831,860		1,775,577		5,536,001		5,229,918
Benefits, losses and expenses
Policyholder benefits		976,934		879,321		2,888,948		2,656,325
Amortization of deferred acquisition costs and value of business acquired		220,092		232,842		668,260		684,821
Underwriting, general and administrative expenses		510,473		488,350		1,530,235		1,407,169
Interest expense		15,107		—		41,104		—
Loss on disposal of business		—		—		9,232		—
Distributions on mandatorily redeemable preferred securities of subsidiary trusts		—		29,288		2,163		87,854
Total benefits, losses and expenses		1,722,606		1,629,801		5,139,942		4,836,169
Income before income taxes		109,254		145,776		396,059		393,749
Income taxes		34,410		46,378		131,627		130,464
Net income	$	74,844	$	99,398	$	264,432	$	263,285
Net income per share:
Basic	$	0.53	$	0.91	$	1.92	$	2.41
Diluted	$	0.53	$	0.91	$	1.92	$	2.41
Dividends per share	$	0.07	$	0.19	$	0.14	$	1.66
Share Data:
Weighted average shares outstanding used in basic per share calculations		141,694,172		109,222,276		137,818,397		109,222,276
Plus: Dilutive securities		92,981		—		67,265		—
Weighted average shares used in diluted per share calculations		141,787,153		109,222,276		137,885,662		109,222,276

See the accompanying notes to the consolidated financial statements

4

Assurant, Inc. and Subsidiaries

Consolidated Statement of Changes in Stockholders’ Equity
From December 31, 2003 through September 30, 2004 (unaudited)

											Accumulated
			Additional					Unamortized			Other									Shares of
	Common		Paid-in		Retained			Restricted Stock			Comprehensive			Treasury						Common Stock
	Stock		Capital		Earnings			Compensation			Income (Loss)			Stock			Total			Issued
	(in thousands except number of shares)
Balance, December 31, 2003	$	1,092	$	2,063,763	$	248,721		$	—		$	318,527		$	—		$	2,632,103			109,222,276
Issuance of Common stock		330		725,161		—			—			—			—			725,491			32,976,854
Issuance of Restricted Shares		1		1,516		—			(1,517	)		—			—			—			68,976
Dividends		—		—		(19,887	)		—			—			—			(19,887	)		—
Acquistion of Treasury Shares		—		—		—			—			—			(36,035	)		(36,035	)		—
Amortization of restricted stock compensation		—		—		—			809			—			—			809			—
Comprehensive income (loss):
Net income		—		—		264,432			—			—			—			264,432			—
Net change in unrealized gains on securities		—		—		—			—			(18,258	)		—			(18,258	)		—
Foreign currency translation		—		—		—			—			6,396			—			6,396			—
Total comprehensive income																		252,570
Balance, September 30, 2004	$	1,423	$	2,790,440	$	493,266		$	(708	)	$	306,665		$	(36,035	)	$	3,555,051			142,268,106

See the accompanying notes to the consolidated financial statements

5

Assurant, Inc. and Subsidiaries

Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2004 and 2003 (unaudited)

	Nine Months Ended
	September 30,
	2004			2003
	(in thousands)
Net cash provided by operating activities	$	607,459		$	631,603
Investing activities
Sales of:
Fixed maturities available for sale		1,119,074			974,627
Equity securities available for sale		77,277			105,021
Property and equipment		873			17,326
Maturities, prepayments, and scheduled redemption of:
Fixed maturities available for sale		767,028			976,153
Purchases of:
Fixed maturities available for sale		(2,206,937	)		(2,545,974	)
Equity securities available for sale		(180,638	)		(264,793	)
Property and equipment		(35,611	)		(82,798	)
Change in commercial mortgage loans on real estate		(106,458	)		(64,423	)
Change in short term investments		47,455			368,114
Change in other invested assets		(55,951	)		887
Change in policy loans		2,186			330
Net cash received related to sale of business		3,536			—
Net cash (used in) investing activities		(568,166	)		(515,530	)
Financing activities
Repayment of preferred securities of subsidiary trusts		(196,224	)		—
Redemption of mandatorily redeemable preferred stock		—			(500	)
Issuance of debt		971,538			—
Issuance of common stock		725,491			—
Repayment of debt		(1,750,000	)		—
Purchase of treasury stock		(36,035	)		—
Dividends paid		(19,887	)		(181,187	)
Other		—			(715	)
Net cash (used in) financing activities		(305,117	)		(182,402	)
Change in cash and cash equivalents		(265,824	)		(66,329	)
Cash and cash equivalents at beginning of period		958,197			610,694
Cash and cash equivalents at end of period	$	692,373		$	544,365

See the accompanying notes to the consolidated financial statements

6

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

1. Nature of Operations

     Assurant, Inc., (formerly Fortis, Inc.) (the “Company”) is a holding company provider of specialized insurance products and related services in North America and selected other markets. At January 1, 2004, Fortis, Inc. was incorporated in Nevada and was indirectly wholly owned by Fortis N.V. of the Netherlands and Fortis SA/NV of Belgium (collectively, “Fortis”) through their affiliates, including their wholly owned subsidiary, Fortis Insurance N.V.

     On February 5, 2004, Fortis sold approximately 65% of its ownership interest in Assurant, Inc. via an Initial Public Offering (the “IPO”). In connection with the IPO, Fortis, Inc. was merged into Assurant, Inc., a Delaware corporation, which was formed solely for the purpose of the redomestication of Fortis, Inc. After the merger, Assurant, Inc. became the successor to the business, operations and obligations of Fortis, Inc. Assurant, Inc. is traded on the New York Stock Exchange under the symbol AIZ.

     The following events occurred in connection with the merger: each share of the existing Class A Common Stock of Fortis, Inc. was exchanged for 10.75882039 shares of Common Stock of Assurant, Inc.; the automatic conversion of the shares of Class B Common Stock and Class C Common Stock into an aggregate of 25,841,418 shares of Common Stock of Assurant, Inc.; each share of the existing Series B Preferred Stock of Fortis, Inc. was exchanged for one share of Series B Preferred Stock of Assurant, Inc.; each share of the existing Series C Preferred Stock of Fortis, Inc. was exchanged for one share of Series C Preferred Stock of Assurant, Inc.

     The following events occurred in connection with the Company’s IPO: (1) redeemed the outstanding $196,224 of mandatorily redeemable preferred securities of subsidiary trusts in January 2004, (2) issued 68,976 restricted shares of Common Stock of Assurant, Inc. to certain officers of the Company, and (3) issued 32,976,854 shares of Common Stock of Assurant, Inc. to Fortis Insurance N.V. simultaneously with the closing of the IPO in exchange for a $725,500 capital contribution based on the public offering price of the Company’s common stock. The Company used the proceeds of the capital contribution to repay the $650,000 of outstanding indebtedness under the $650,000 senior bridge credit facility and $75,500 of outstanding indebtedness under the $1,100,000 senior bridge credit facility. The Company repaid a portion of the $1,100,000 senior bridge credit facility with $49,500 in cash. On February 18, 2004, the Company refinanced $975,000 of the remaining $1,100,000 senior bridge credit facility with the proceeds of the issuance of two senior long-term notes (see Note 4).

     Through its operating subsidiaries, the Company provides creditor-placed homeowners insurance, manufactured housing homeowners insurance, debt protection administration, credit insurance, warranties and extended service contracts, individual health and small employer group health insurance, group dental insurance, group disability insurance, group life insurance and prefunded funeral insurance.

2. Basis of Presentation

     The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

     In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation of the financial statements have been included. Certain prior period amounts have been reclassified to conform to the 2004 presentation.

     Dollar amounts are in thousands, except for number of shares and per share amounts.

     The consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant inter-company transactions and balances are eliminated in consolidation.

7

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

     Operating results for the three and nine months ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. The accompanying interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2003.

3. Recent Accounting Pronouncements

     On July 7, 2003, the Accounting Standards Executive Committee (“AcSEC”) of the American Institute of Certified Public Accountants (“AICPA”) issued Statement of Position 03-1,Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long Duration Contracts and for Separate Accounts(“SOP 03-1”). SOP 03-1 provides guidance on a number of topics unique to insurance enterprises, including separate account presentation, interest in separate accounts, gains and losses on the transfer of assets from the general account to a separate account, liability valuation, returns based on a contractually referenced pool of assets or index, accounting for contracts that contain death or other insurance benefit features, accounting for reinsurance and other similar contracts, accounting for annuitization benefits and sales inducements to contract holders. SOP 03-1 was adopted by the Company on January 1, 2004. The adoption of this statement did not have a material impact on the Company’s financial position or the results of operations.

     In March 2004, the Emerging Issues Task Force (“EITF”) reached a final consensus on Issue 03-1, “The Meaning of Other Than Temporary Impairment and Its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 provides guidance on the disclosure requirements for other than temporary impairments of debt and marketable equity investments that are accounted for under Financial Accounting Standard 115 (“FAS 115”). EITF 03-1 also provides guidance for evaluating whether an investment is other than temporarily impaired. The adoption of EITF 03-1 required the Company to include certain quantitative and qualitative disclosures for debt and marketable equity securities classified as available-for-sale or held-to-maturity under FAS 115 that are impaired at the balance sheet date but for which an other than temporary impairment has not been recognized. The disclosures were effective for financial statements for fiscal years ending after December 15, 2003. The Company adopted the disclosure requirements of EITF 03-1 at December 31, 2003. The guidance for evaluating whether an investment is other than temporarily impaired is effective for reporting periods beginning after June 15, 2004; however, the Financial Accounting Standards Board (“FASB”) has issued two new proposed Staff Positions. EITF 03-1a, which would defer the June 15, 2004 effective date of the requirement to record impairment losses caused by the effect of increases in interest rates or sector spreads on debt securities subject to paragraph 16 of EITF 03-1 until further guidance is provided, and EITF 03-1b, which would exclude minor impairments from the requirement. Both Staff Positions are still in the comment period phase. The Company is continuing to evaluate the impact of adoption of this issue given the fact that portions of the issue are still in the comment period. The Company currently follows the guidance on other than temporary impairments provided by Staff Accounting Bulletin (“SAB”) 59,Accounting for Noncurrent Marketable Equity Securities.

     In May 2004, the FASB issued FASB Staff Position (“FSP”) FAS 106-2,Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003(“FAS 106-2”). This statement provides guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“The Act”) for employers that sponsor postretirement health care plans that provide prescription drug benefits. FAS 106-2 also requires employers to provide certain disclosures regarding the effect of the federal subsidy provided by The Act. The Company’s Retirement and Other Employees Benefits plan’s Accumulated Pension Benefit Obligation and net periodic postretirement benefit cost do not reflect any amounts associated with the subsidy due to the fact that the Company is unable to determine whether the benefits provided by its’ Retirement and Other Employee Benefits plans are actuarially equivalent to Medicare Part D under the Act. The adoption of this statement did not have a material impact on the Company’s financial position or the results of operations.

8

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

4. Debt

     In February 2004, the Company issued two series of senior notes with an aggregate principal amount of $975,000. The Company received net proceeds from this transaction of $971,538, which represents the principal amount less the discount. The discount will be amortized over the life of the notes. The first series is $500,000 in principal amount, bears interest at 5.63% per year and is payable in a single installment due February 15, 2014 and was issued at a 0.11% discount. The second series is $475,000 in principal amount, bears interest at 6.75% per year and is payable in a single installment due February 15, 2034 and was issued at a 0.61% discount. Interest on the senior notes is payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2004. The senior notes are unsecured obligations and rank equally with all of the Company’s other senior unsecured indebtedness. The senior notes are not redeemable prior to maturity. The Company filed a registration statement under the Securities Act of 1933 on May 4, 2004 to permit the exchange of the senior notes for registered notes having identical terms. This registration statement was declared effective on May 12, 2004. The exchange offer expired on June 15, 2004 and all of the holders exchanged their notes for the new, registered notes.

     The interest expense incurred for the three and nine months ended September 30, 2004 relating to the senior notes was $15,047 and $37,116, respectively.

     In March 2004, the Company established a $500,000 commercial paper program, which is available for working capital and other general corporate purposes. The Company’s subsidiaries do not maintain commercial paper or other borrowing facilities at their level. This program is backed up by a $500,000 senior revolving credit facility with a syndicate of banks arranged by Banc One Capital Markets, Inc. and Citigroup Global Markets, Inc., which was established on January 30, 2004. The revolving credit facility is unsecured and is available until February 2007, so long as the Company is in compliance with all the covenants. This facility is also available for general corporate purposes, but to the extent used thereto, would be unavailable to back up the commercial paper program. On June 1, 2004 and August 9, 2004, the Company used $20,000 and $40,000, respectively, from the commercial paper program for general corporate purposes, which was repaid on June 15, 2004 and August 20, 2004, respectively. There were no amounts relating to the commercial paper program outstanding at September 30, 2004. The Company did not use the revolving credit facility during the nine months ended September 30, 2004 and no amounts are currently outstanding.

     The revolving credit facility contains restrictive covenants. The terms of the revolving credit facility also require that the Company maintain certain specified minimum ratio and thresholds. The Company is in compliance with all covenants and the Company maintains all specified minimum ratios and thresholds.

5. Stock Based Compensation

     2004 Long-Term Incentive Plan

     The 2004 Long-Term Incentive Plan authorizes the granting of awards to employees, officers, and directors. Upon closing of the IPO, the Company issued 68,976 restricted shares of Common Stock of Assurant, Inc. to certain officers and directors of the Company. The Board of Directors received 9,546 of those shares, which are fully vested. The remaining 59,430 shares will vest and be expensed over a three-year period. The Company, in accounting for the restricted shares, set up a contra equity account called “Unamortized Restricted Stock Compensation” in the stockholders’ equity section of the balance sheet for $1,517. The $1,517 will be expensed over a three year period in line with the vesting of these shares. The expense recorded for the three and nine months ended September 30, 2004 was $200 and $809, respectively.

     Executive 401K Plan

     The Executive 401K Plan is offered to employees who meet certain eligibility requirements. The requirements include being regularly scheduled to work 20 or more hours per week, having completed one year of

9

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

service, and earning eligible pay in excess of the IRS limits ($205,000 for 2004). The Company contributes an amount equal to 7% of an employee’s eligible pay in excess of the IRS limit to the plan. This expense is not material to the Company’s financial statements. No employee contribution is permitted to the plan. Employees are 100% vested in these contributions after a three year vesting period. Employees who are vested receive their account balance in cash upon termination of their employment.

     Effective May 18, 2004, the Company added an “Assurant Stock Fund” to the plan’s investment option. During the second and third quarter of 2004, the Company purchased 32,226 Treasury shares for $801 via a Rabbi Trust which was allocated to the Assurant Stock Fund. See Note 6 for further information.

     Employee Stock Purchase Plan

     The Company established an Employee Stock Purchase Plan (“ESPP”) which went into effect on July 1, 2004. The ESPP allows employees to purchase shares of the Company’s stock at a 10% discount with funds contributed through payroll deductions. Participants can contribute 1% to 15% of their base compensation to purchase Company shares up to a maximum of $6,000 per offering period. There are two offering periods during the year (January 1 through June 30 and July 1 through December 31). Shares are purchased at the end of the offering period at 90% of the lower of the closing price of Company’s stock on the first or last day of the offering period. Participants must be employed on the last day of the offering period in order to purchase Company shares under the ESPP.

     The ESPP is offered to individuals who are scheduled to work at least 20 hours per week and at least five months per year, have been continuously employed for at least six months by the start of the offering period, not temporary employees (employed less than 12 months), and have not been on a leave of absence for more than 90 days immediately preceding the offering period.

     The Company accounts for the ESPP in accordance with Accounting Principles Board Opinion No. 25,“Accounting for Stock Issued to Employees”(“APB 25”), and accordingly does not record any compensation expense. The following pro forma information of net income and net income per share amounts were determined as if the Company had accounted for the ESPP under the fair value method of Statement of Financial Accounting Standards No. 123 (“FAS 123”).

	For the Three		For the Nine
	Months Ended		Months Ended
	September 30, 2004		September 30, 2004
Net income as reported	$	74,844	$	264,432
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		152		152
Pro forma net income	$	74,996	$	264,584
Earnings per share as reported:
Basic	$	0.53	$	1.92
Diluted	$	0.53	$	1.92
Pro forma earnings per share:
Basic	$	0.53	$	1.92
Diluted	$	0.53	$	1.92

10

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

6. Stock Repurchase

     The following table shows the shares repurchased during the periods indicated:

					Total Number of Shares
					Purchased as Part of
Period	Number of		Average Price		Publicly Announced
in 2004	Shares Purchased		Paid Per Share		Plans or Programs
April		—		—		—
May		28,626	$	24.75		—
June		3,500		25.65		—
July		—		—		—
August		896,300		25.74		896,300
September		458,900		26.51		458,800
		1,387,326	$	25.97		1,355,100

     On August 2, 2004, the Company’s Board of Directors approved a share repurchase program under which the Company may repurchase up to 10% of its outstanding common stock. In the third quarter the Company repurchased 1,355,100 shares of the Company’s outstanding common stock at a cost of $35,234. The total remaining number of shares that can be purchased pursuant to the repurchase program at September 30, 2004 was 12,871,711 shares.

     There were 32,226 shares repurchased for $801 that were not part of the Company’s repurchase program. The shares were repurchased pursuant to the Company’s Executive 401K Plan. See Note 5 –Stock Based Compensation– for a detailed description of the Executive 401K Plan.

11

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

7. Retirement and Other Employee Benefits

     The components of net periodic benefits cost for the three and nine months ended September 30, 2004 and 2003 were as follows:

	Pension Benefits						Retirement Health Benefits
	For the Three Months						For the Three Months
	Ended September 30,						Ended September 30,
	2004			2003			2004			2003
Service cost	$	4,189		$	3,817		$	534		$	578
Interest cost		4,859			4,486			716			786
Expected return on plan assets		(5,603	)		(4,858	)		(135	)		(36	)
Amortization of prior service cost		761			740			327			327
Amortization of net loss		1,636			552			—			—
Net periodic benefit cost	$	5,842		$	4,737		$	1,442		$	1,655

	Pension Benefits						Retirement Health Benefits
	For the Nine Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2004			2003			2004			2003
Service cost	$	12,790		$	11,451		$	1,638		$	1,734
Interest cost		14,553			13,458			2,220			2,358
Expected return on plan assets		(16,728	)		(14,574	)		(405	)		(108	)
Amortization of prior service cost		2,261			2,220			981			981
Amortization of net loss		3,983			1,656			—			—
Net periodic benefit cost	$	16,859		$	14,211		$	4,434		$	4,965

     As of September 30, 2004, the Company contributed $19,500 and $900 to the pension plan and the retirement health benefit plan, respectively. The Company expects to contribute an additional $6,500 and $6,500 to its pension plan and retirement health benefit plan, respectively, in the fourth quarter of 2004.

8. Segment Information

     The Company has five reportable segments, which are defined based on the nature of the products and services offered: Assurant Solutions, Assurant Health, Assurant Employee Benefits, Assurant Preneed, and Corporate and Other. Assurant Solutions provides credit insurance, including life, disability and unemployment, debt protection administration services, warranties and extended service contracts, creditor-placed homeowners insurance and manufactured housing homeowners insurance. Assurant Health provides individual, short-term and small group health insurance. Assurant Employee Benefits provides employee and employer paid dental, disability, and life insurance products and related services. Assurant Preneed provides life insurance policies and annuity products that provide benefits to fund pre-arranged funerals. Corporate and Other includes activities of the holding company, financing expenses, net realized gains (losses) on investments and interest income earned from short-term investments held. Corporate and Other also includes the amortization of deferred gains associated with the sales of Fortis Financial Group (“FFG”) and Long-Term Care (“LTC”) through reinsurance agreements and interest income from surplus the Company is required to carry related to FFG and LTC.

     The Company evaluates performance based on segment income after-tax excluding realized gains (losses) on investments. The Company determines reportable segments in a manner consistent with the way the Company organizes for purposes of making operating decisions and assessing performance.

12

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

     As of January 1, 2004, the Company changed the segment invested assets allocation methodology. Previously, the Company allocated a notional amount of invested assets to the segments primarily based on future policy benefits, claims and unearned premiums, and capital allocated to each segment. As of January 1, 2004, the Company primarily allocates invested assets based on the actual investment portfolios supporting the segments. This change resulted in an increase in investment income of $2,835, $1,763, and $530 in Assurant Health, Assurant Employee Benefits, and Assurant Preneed, respectively, with a decrease in investment income of $84 and $5,044 in Assurant Solutions and Corporate and Other, respectively, for the three months ended September 30, 2004. The change resulted in an increase in investment income of $9,007, $2,751, and $2,987 in Assurant Health, Assurant Employee Benefits, and Assurant Preneed, respectively, with a decrease in investment income of $126 and $14,619 in Assurant Solutions and Corporate and Other, respectively, for the nine months ended September 30, 2004. The Company assigns net deferred acquisition costs, value of businesses acquired, reinsurance recoverables, and other assets and liabilities to the respective segments where those assets or liabilities originate.

     On May 3, 2004, the Company sold the assets of its WorkAbility division. The selling price was $3,536 in cash and the net loss on the sale was $9,232 pre-tax. The loss has been recorded to the Corporate and Other segment.

13

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

     The following tables summarize selected financial information by segment:

	Three Months Ended September 30, 2004
					Employee					Corporate &
	Solutions		Health		Benefits		Preneed			Other			Consolidated
Revenues
Net earned premiums and other considerations	$	602,720	$	563,165	$	305,827	$	131,836		$	—		$	1,603,548
Net investment income		48,201		16,874		37,496		50,982			6,481			160,034
Net realized gains on investments		—		—		—		—			2,501			2,501
Amortization of deferred gain on disposal of businesses		—		—		—		—			14,539			14,539
Fees and other income		36,818		8,436		5,411		(20	)		593			51,238
Total revenues		687,739		588,475		348,734		182,798			24,114			1,831,860
Benefits, losses and expenses
Policyholder benefits		272,088		350,188		224,083		130,575			—			976,934
Amortization of deferred acquisition costs and value of business acquired		177,992		8,887		3,741		29,472			—			220,092
Underwriting, general and administrative expenses		234,161		156,221		97,877		9,382			12,832			510,473
Interest expense		—		—		—		—			15,107			15,107
Total benefits, losses and expenses		684,241		515,296		325,701		169,429			27,939			1,722,606
Segment income (loss) before income tax		3,498		73,179		23,033		13,369			(3,825	)		109,254
Income taxes		524		25,279		8,066		4,427			(3,886	)		34,410
Segment income after tax	$	2,974	$	47,900	$	14,967	$	8,942		$	61
Net income													$	74,844

	Three Months Ended September 30, 2003
					Employee				Corporate &
	Solutions		Health		Benefits		Preneed		Other		Consolidated
Revenues
Net earned premiums and other considerations	$	612,882	$	506,702	$	297,258	$	129,632	$	—	$	1,546,474
Net investment income		46,315		11,460		34,512		46,371		12,065		150,723
Net realized gains on investments		—		—		—		—		7,334		7,334
Amortization of deferred gain on disposal of businesses		—		—		—		—		17,522		17,522
Fees and other income		31,218		8,590		3,832		1,167		8,717		53,524
Total revenues		690,415		526,752		335,602		177,170		45,638		1,775,577
Benefits, losses and expenses
Policyholder benefits		221,755		334,681		196,910		125,975		—		879,321
Amortization of deferred acquisition costs and value of business acquired		190,187		17,677		2,415		22,563		—		232,842
Underwriting, general and administrative expenses		234,120		128,000		102,292		15,202		8,736		488,350
Distributions on preferred securities of subsidiary trusts		—		—		—		—		29,288		29,288
Total benefits, losses and expenses		646,062		480,358		301,617		163,740		38,024		1,629,801
Segment income before income tax		44,353		46,394		33,985		13,430		7,614		145,776
Income taxes		12,929		15,768		11,894		4,573		1,214		46,378
Segment income after tax	$	31,424	$	30,626	$	22,091	$	8,857	$	6,400
Net income											$	99,398

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Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

	Nine Months Ended September 30, 2004
					Employee				Corporate &
	Solutions		Health		Benefits		Preneed		Other			Consolidated
Revenues
Net earned premiums and other considerations	$	1,836,415	$	1,673,473	$	933,030	$	401,341	$	—		$	4,844,259
Net investment income		137,828		50,537		110,655		153,628		18,838			471,486
Net realized gains on investments		—		—		—		—		22,447			22,447
Amortization of deferred gain on disposal of businesses		—		—		—		—		43,298			43,298
Fees and other income		97,681		28,826		22,529		3,515		1,960			154,511
Total revenues		2,071,924		1,752,836		1,066,214		558,484		86,543			5,536,001
Benefits, losses and expenses
Policyholder benefits		723,879		1,065,032		697,251		402,786		—			2,888,948
Amortization of deferred acquisition costs and value of business acquired		542,330		29,892		11,476		84,562		—			668,260
Underwriting, general and administrative expenses		686,598		468,370		292,224		32,195		50,848			1,530,235
Interest expense		—		—		—		—		41,104			41,104
Loss on disposal of business		—		—		—		—		9,232			9,232
Distributions on preferred securities of subsidiary trusts		—		—		—		—		2,163			2,163
Total benefits, losses and expenses		1,952,807		1,563,294		1,000,951		519,543		103,347			5,139,942
Segment income (loss) before income tax		119,117		189,542		65,263		38,941		(16,804	)		396,059
Income taxes		37,522		64,999		23,020		13,404		(7,318	)		131,627
Segment income (loss) after tax	$	81,595	$	124,543	$	42,243	$	25,537	$	(9,486	)
Net income												$	264,432
Segment Assets:	As of September 30, 2004
Segments assets, excluding goodwill	$	7,187,166	$	1,704,376	$	2,658,183	$	3,949,234	$	7,307,989		$	22,806,948
Goodwill													831,346
Total assets												$	23,638,294

	Nine Months Ended September 30, 2003
					Employee				Corporate &
	Solutions		Health		Benefits		Preneed		Other			Consolidated
Revenues
Net earned premiums and other considerations	$	1,736,816	$	1,475,537	$	920,296	$	400,854	$	—		$	4,533,503
Net investment income		142,192		36,460		104,429		139,861		33,666			456,608
Net realized gains on investments		—		—		—		—		14,808			14,808
Amortization of deferred gain on disposal of businesses		—		—		—		—		52,235			52,235
Fees and other income		99,391		23,731		36,895		3,655		9,092			172,764
Total revenues		1,978,399		1,535,728		1,061,620		544,370		109,801			5,229,918
Benefits, losses and expenses
Policyholder benefits		632,148		965,203		667,683		391,291		—			2,656,325
Amortization of deferred acquisition costs and value of business acquired		544,017		56,095		8,623		76,086		—			684,821
Underwriting, general and administrative expenses		656,096		372,485		310,500		34,405		33,683			1,407,169
Distributions on preferred securities of subsidiary trusts		—		—		—		—		87,854			87,854
Total benefits, losses and expenses		1,832,261		1,393,783		986,806		501,782		121,537			4,836,169
Segment income (loss) before income tax		146,138		141,945		74,814		42,588		(11,736	)		393,749
Income taxes		46,034		49,353		26,185		14,725		(5,833	)		130,464
Segment income (loss) after tax	$	100,104	$	92,592	$	48,629	$	27,863	$	(5,903	)
Net Income												$	263,285
Segment Assets:	As of December 30, 2003
Segment assets, excluding goodwill	$	6,885,077	$	1,129,614	$	2,412,924	$	3,718,354	$	8,753,827		$	22,899,796
Goodwill													828,523
Total assets												$	23,728,319

15

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

9. Commitments and Contingencies

     In the normal course of business, letters of credit are issued to support reinsurance arrangements and other corporate initiatives. These letters of credit are supported by commitments with financial institutions. The Company had approximately $69,414 of letters of credit outstanding as of September 30, 2004.

     The Company is regularly involved in litigation in the ordinary course of business, both as a defendant and as a plaintiff. The Company may from time to time be subject to a variety of legal and regulatory actions relating to the Company’s current and past business operations. While the Company cannot predict the outcome of any pending or future litigation, examination or investigation, the Company does not believe that any pending matter will have a material adverse effect on the Company’s financial condition or results of operations.

     The Solutions segment is subject to a number of pending actions, primarily in the State of Mississippi, many of which allege that the Company’s credit insurance products were packaged and sold with lenders’ products without buyer consent. The judicial climate in Mississippi is such that the outcome of these cases is extremely unpredictable. The Company has been advised by legal counsel that the Company has meritorious defenses to all claims being asserted against the Company. The Company believes, based on information currently available, that the amounts accrued are adequate.

     On October 1, 2003, a grand jury in Mower County, Minnesota, issued an indictment of American Bankers Insurance Company (“ABIC”), part of the Solutions segment, and two of its officers. The indictment alleged that ABIC and its two named corporate officers each violated the Minnesota Fair Campaign Practices Act in connection with two contributions by ABIC to the Republican National State Election Committee totaling $15. On April 5, 2004, the prosecuting authorities voluntarily dismissed all charges against ABIC and the two officers. ABIC, in turn, agreed to reimburse Mower County for costs of investigation and prosecution, these costs are not material to the financial statements.

     In addition, another part of the Solutions segment, American Reliable Insurance Company (“ARIC”), participated in certain excess of loss reinsurance programs in the London market and, as a result, reinsured certain personal accident, ransom and kidnap insurance risks from 1995 to 1997. ARIC and a foreign affiliate ceded a portion of these risks to other reinsurers (retrocessionaires). ARIC ceased reinsuring such business in 1997. However, certain risks continued beyond 1997 due to the nature of the reinsurance contracts written. ARIC and some of the other reinsurers involved in the programs are seeking to avoid certain treaties on various grounds, including material misrepresentation and non-disclosure by the ceding companies and intermediaries involved in the programs. Similarly, some of the retrocessionaires are seeking avoidance of certain treaties with ARIC and the other reinsurers and some reinsureds are seeking collection of disputed balances under some of the treaties. The disputes generally involve multiple layers of reinsurance, and allegations that the reinsurance programs involved interrelated claims “spirals” devised to disproportionately pass claims losses to higher-level reinsurance layers. Many of the companies involved in these programs, including ARIC, are currently involved in negotiations, arbitration and/or litigation between multiple layers of retrocessionaires, reinsurers, ceding companies and intermediaries, including brokers, in an effort to resolve these disputes. Many of those disputes relating to the 1995 program year, including those involving ARIC, were settled on December 3, 2003. Loss accruals previously established relating to the 1995 program year were adequate. However, the Company’s exposure under the 1995 program year was less significant than the exposure remaining under the 1996 and 1997 program years. In addition, disputes with two affiliated reinsurers involved in the 1996 and 1997 program years were settled by a commutation agreement. Loss accruals previously established relating to this business were adequate. The Company believes, based on information currently available, that the amounts accrued for currently outstanding disputes are adequate. This loss accrual is management’s best estimate. However, the inherent uncertainty of arbitrations and lawsuits, including the uncertainty of estimating whether any settlements the Company may enter into in the future would be on favorable terms, makes it difficult to predict the outcomes with certainty.

16

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 2004 and 2003 (Unaudited)

10. Significant Events

     The Company’s Solutions segment incurred catastrophe losses in 2004 relating to Hurricanes Charley, Frances, Ivan & Jeanne. The losses relating to the Hurricanes were $75,500 and $77,100 for the three and nine months ended September 30, 2004, respectively, net of reinsurance. In 2003, the Company’s Solutions segment incurred losses relating to Hurricane Isabel and the Midwest hail storms and tornadoes of $10,000 and $18,400 for the three and nine months ended September 30, 2003, respectively, also net of reinsurance.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(Dollar amounts in thousands except share data)

     Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses the financial condition of Assurant, Inc. and its subsidiaries (which we refer to collectively as Assurant) as of September 30, 2004, compared with December 31, 2003, and our results of operations for the three and nine months ended September 30, 2004 and 2003. This discussion should be read in conjunction with our MD&A and annual audited financial statements as of December 31, 2003 included in our Form 10-K for the year ended December 31, 2003 filed with the U.S. Securities and Exchange Commission and the September 30, 2004 unaudited consolidated financial statements and related notes included elsewhere in this Form 10-Q.

     Some of the statements in this MD&A and elsewhere in this report may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in this report. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read in this report reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity.

Company Overview

     Assurant is a premier provider of specialized insurance products and related services in North America and selected international markets. The four business segments — Assurant Solutions; Assurant Health; Assurant Employee Benefits; and Assurant Preneed — have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance market segments in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit insurance; warranties and extended services contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.

Financial Highlights

     Our results for the three months ended September 30, 2004 were impacted by the unprecedented level of hurricane activity. Excluding the impact of the four hurricanes, Assurant had a very good third quarter, demonstrating the strength of our diversified specialty insurance strategy. Net income decreased by $24,554, or 25%, from $99,398 for the three months ended September 30, 2003, to $74,844 for the three months ended September 30, 2004. Catastrophe losses, after reinsurance recoveries and taxes, were $49,075 for the three months ended September 30, 2004 compared to $6,500 for the three months ended September 30, 2003. Despite the hurricanes, on a year to date basis, we continued to grow with net income increasing by $1,147, or less than 1%, from $263,285 for the nine months ended September 30, 2003, to $264,432 for the nine months ended September 30, 2004.

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     Assurant Solutions, our specialty property and consumer protection product segment, took the full weight of the catastrophe losses. But, as a result of our reinsurance arrangements, the losses netted to $49,075 after tax and reinsurance, allowing Assurant Solutions to earn net income of $2,974 for the three months ended September 30, 2004. Excluding the catastrophes, loss ratios were excellent in our specialty property businesses. We continue to see good premium growth in our creditor placed homeowners insurance and our international businesses.

     Exhibiting the strength of our diversified strategy, Assurant Health experienced an especially good quarter, partially offsetting the catastrophe losses which affected Assurant Solutions. Earnings growth at Assurant Health was primarily driven by premium growth in our individual health business and continued improvement in the overall combined ratio. Assurant Health’s combined ratio for the three months ended September 30, 2004 was 90.1% compared to 93.2% for the three months ended September 30, 2003.

     Health Savings Accounts (HSAs) in which we have a first mover advantage, continued to be a strong contributor to individual health sales for the three and nine months ended September 30, 2004. Despite increased competition and new entrants into the HSA market, we continue to benefit from our leadership position and are seeing increasing interest and applications.

     In Assurant Employee Benefits, net income decreased for the three months ended September 30, 2004, when compared to the three months ended September 30, 2003, primarily due to an $11,645 after tax net reserve reduction which occurred in the three months ended September 30, 2003. Assurant Employee Benefits had modest premium growth for the three and nine months ended September 30, 2004, as a result of growth in disability, offset by declines in dental and group life. Several other companies have now increased their rates for disability, making us more competitive, since we took our rate actions earlier than most of our competitors.

     In Assurant Preneed, net income for the three months ended September 30, 2004 is essentially unchanged compared to the same period in 2003. Our actions to reduce crediting rates, where we have the ability to do so, are starting to benefit income, but the continued low level of new money rates has had an offsetting impact. Any rise in interest rates should benefit the profitability of this business.

     Our Corporate and Other segment includes public company costs, expenses related to Sarbanes-Oxley 404 compliance and investment income, which was lower than last year. Amortization of deferred gains from businesses sold through reinsurance declined consistent with the run off of policies associated with these businesses. Interest expense for the three months ended September 30, 2004 declined compared to the three months ended September 30, 2003 as a result of less debt and lower interest rates.

     Continuing with our strategy to optimize deployment of our capital, we used available cash to repurchase 1,355,100 Assurant, Inc. shares during the three months ended September 30, 2004. This represents a portion of the total shares our Board authorized us to repurchase.

Critical Accounting Estimates

     Reserves

          Long Duration

     The following is a discussion of the process by which we determine the reserve for our major long duration product line.

     Reserves for future policy benefits are recorded as the present value of future benefits to policyholders and related expenses less the present value of future net premiums. Reserve assumptions are selected using best estimates for expected investment yield, inflation, mortality and withdrawal rates. These assumptions reflect current trends and are based on our experience and include a provision for possible

19

unfavorable deviation. An unearned premium reserve is also recorded which represents the balance of the excess of gross premiums over net premiums that is still to be recognized as income in future years in a constant relationship to insurance in force.

     Loss recognition testing is performed annually and reviewed quarterly. Such testing involves the use of best estimate assumptions to determine if the net liability position (all liabilities less Deferred Acquisition Costs (“DAC”)) exceeds the minimum liability needed. Any premium deficiency would first be addressed by removing the provision for unfavorable deviation. To the extent a premium deficiency still remains, it would be recognized immediately by a charge to the statement of operations and a corresponding reduction in DAC. Any deficiency in excess of DAC would be recognized as a premium deficiency reserve. There were no premium deficiencies recognized for the three and nine months ended September 30, 2004 and 2003.

          Short Duration

     For short duration contracts, claims and benefits payable reserves are recorded when insured events occur. The liability is based on the expected ultimate cost of settling the claims. The claims and benefits payable reserves include (1) case reserves for known but unpaid claims as of the balance sheet date; (2) incurred but not reported (“IBNR”) reserves for claims where the insured event has occurred but has not been reported to us as of the balance sheet date; and (3) loss adjustment expense reserves for the expected handling costs of settling the claims. Periodically we review emerging experience and make adjustments to our case reserves and assumptions where necessary. Below are further discussions on the reserving process for our major short duration products.

          Group Disability and Group Term Life

     Case or claim reserves are set for active individual claims on group disability policies and for disability waiver of premium benefits on group term life policies. Assumptions considered in setting such reserves include disabled life mortality and claim termination rates (the rates at which disabled claimants come off claim, either through recovery or death), claim management practices, awards for social security and other benefit offsets and yield rates earned on assets supporting the reserves.

     Factors considered when setting IBNR reserves include patterns in elapsed time from claim incidence to claim reporting, and elapsed time from claim reporting to claim payment.

          Medical

     IBNR reserves represent the largest component of reserves estimated for claims and benefits payable in our Medical line of business, and we use a number of methods in their estimation, including the loss development method and the projected claim method for recent claim periods. We use several methods in our Medical line of business because of the limitations of relying exclusively on a single method. Loss development factors selected take into consideration claims processing levels, claims under case management, medical cost inflation, seasonal effects, medical provider discounts and product mix.

          Property and Warranty

     Our Property and Warranty line of business includes creditor-placed homeowners, manufactured housing homeowners, credit property, credit unemployment and warranty insurance and some longer-tail coverages which we no longer write (e.g. asbestos, environmental, other general liability and personal accident). Our Property and Warranty loss reserves consist of case reserves and bulk reserves. Bulk reserves consist of IBNR and development on case reserves. The method we most often use in setting our Property and Warranty bulk reserves is the loss development method. Under this method, we estimate ultimate losses for each accident period by multiplying the current cumulative losses by the appropriate loss development factor. We then calculate the bulk reserve as the difference between the estimate of ultimate losses and the current case-incurred losses (paid losses plus case reserves). We select loss development

20

factors based on a review of historical averages, and we consider recent trends and business specific matters such as current claims payment practices.

     We may use other methods depending on data credibility and product line. We use the estimates generated by the various methods to establish a range of reasonable estimates. The best estimate of reserves is selected from the middle to upper end of third quartile of the range of reasonable estimates.

     Reinsurance

     We utilize ceded reinsurance for loss protection and capital management, business dispositions and, in Assurant Solutions, for client risk and profit sharing.

          Loss Protection and Capital Management

     As part of our overall risk and capacity management strategy, we purchase reinsurance for certain risks underwritten by our various business segments, including significant individual or catastrophic claims, which enables us to free up capital to enable us to write additional business.

     For those product lines where there is exposure to catastrophes, we closely monitor and manage the aggregate risk exposure by geographic area, and we have entered into reinsurance treaties to manage exposure to these types of events.

     Under indemnity reinsurance transactions in which we are the ceding insurer, we remain liable for policy claims if the assuming company fails to meet its obligations. To minimize this risk, we have control procedures to evaluate the financial condition of reinsurers and to monitor the concentration of credit risk. The selection of reinsurance companies is based on criteria related to solvency and reliability and, to a lesser degree, diversification as well as developing strong relationships with our reinsurers for the sharing of risks.

          Business Dispositions

     We have used reinsurance to exit certain businesses to facilitate the transactions because the businesses share legal entities with business segments that we retain. Assets backing liabilities ceded relating to these businesses are held in trusts, and the separate accounts relating to the divested business are still reflected in our balance sheet.

          Assurant Solutions Segment Client Risk and Profit Sharing

     The Assurant Solutions segment writes business produced by its clients, such as mortgage lenders and servicers and financial institutions, and reinsures all or a portion of such business to insurance subsidiaries of the clients. Such arrangements allow significant flexibility in structuring the sharing of risks and profits on the underlying business.

     A substantial portion of Assurant Solutions’ reinsurance activities are related to agreements to reinsure premiums and risk related to business generated by certain clients to the client’s captive insurance companies or to reinsurance subsidiaries in which the clients have an ownership interest. Through these arrangements, our insurance subsidiaries share some of the premiums and risk related to client-generated business with these clients. When the reinsurance companies are not authorized to do business in our insurance subsidiary’s domiciliary state, our insurance subsidiary generally obtains collateral, such as a trust or a letter of credit, from the reinsurance company or its affiliate in an amount equal to the outstanding reserves to obtain full financial credit in the domiciliary state for the reinsurance. Our reinsurance agreements do not relieve us from our direct obligation to our insured. Thus, a credit exposure exists to the extent that any reinsurer is unable to meet the obligations assumed in the reinsurance agreements. To

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minimize our exposure to reinsurance insolvencies, we evaluate the financial condition of our reinsurers and hold substantial collateral (in the form of funds, trusts and letters of credit) as security under the reinsurance agreements.

     Retirement and Other Employee Benefits

     We sponsor a pension and a retirement health benefit plan covering our employees who meet specified eligibility requirements. The reported expense and liability associated with these plans requires an extensive use of assumptions which include the discount rate, expected return on plan assets and rate of future compensation increases. We determine these assumptions based upon currently available market and industry data, historical performance of the plan and its assets, and consultation with an independent consulting actuarial firm to aid us in selecting appropriate assumptions and valuing our related liabilities. The actuarial assumptions used in the calculation of our aggregate projected benefit obligation may vary and include an expectation of long-term market appreciation in equity markets which is not changed by minor short-term market fluctuations, but does change when large interim deviations occur. The assumptions we use may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of the participants.

Critical Accounting Policies

     Our 2003 Form 10-K described the accounting policies that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies described in the 2003 Form 10-K were consistently applied to the consolidated interim financial statements for the three and nine months ended September 30, 2004 and 2003.

     As stated in our 2003 Form 10-K, we adopted FAS 142,Goodwill and Other Intangible Assets, on January 1, 2002. As part of the adoption of FAS 142, we are required to test goodwill on an annual basis. We performed a January 1, 2004 impairment test at June 30, 2004 and concluded that goodwill was not impaired.

Recent Accounting Pronouncements

     See – Financial Statement Footnote 3.

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Results of Operations

Consolidated Overview

     The tables below present information regarding our consolidated results of operations:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	1,603,548		$	1,546,474		$	4,844,259		$	4,533,503
Net investment income		160,034			150,723			471,486			456,608
Net realized gains on investments		2,501			7,334			22,447			14,808
Amortization of deferred gain on disposal of businesses		14,539			17,522			43,298			52,235
Fees and other income		51,238			53,524			154,511			172,764
Total revenues		1,831,860			1,775,577			5,536,001			5,229,918
Benefits, losses and expenses:
Policyholder benefits		(976,934	)		(879,321	)		(2,888,948	)		(2,656,325	)
Selling, underwriting and general expenses(1)		(730,565	)		(721,192	)		(2,198,495	)		(2,091,990	)
Interest expense		(15,107	)		—			(41,104	)		—
Loss on disposal of businessess		—			—			(9,232	)		—
Distributions on mandatorily redeemable preferred securities of subsidiary trusts		—			(29,288	)		(2,163	)		(87,854	)
Total benefits, losses and expenses		(1,722,606	)		(1,629,801	)		(5,139,942	)		(4,836,169	)
Income before income taxes		109,254			145,776			396,059			393,749
Income taxes		(34,410	)		(46,378	)		(131,627	)		(130,464	)
Net income	$	74,844		$	99,398		$	264,432		$	263,285

(1) Includes amortization of DAC and VOBA.

For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

Total Revenues

     Total revenues increased by $56,283, or 3%, from $1,775,577 for the three months ended September 30, 2003, to $1,831,860 for the three months ended September 30, 2004. Total revenues increased by $306,083, or 6%, from $5,229,918 for the nine months ended September 30, 2003, to $5,536,001 for the nine months ended September 30, 2004.

     Net earned premiums and other considerations increased by $57,074, or 4%, from $1,546,474 for the three months ended September 30, 2003, to $1,603,548 for the three months ended September 30, 2004. Net earned premiums and other considerations increased by $310,756, or 7%, from $4,533,503 for the nine months ended September 30, 2003, to $4,844,259 for the nine months ended September 30, 2004. The increase for the three months ended September 30, 2004 was primarily due to an increase of $56,463 in Assurant Health. The increase for the nine months ended September 30, 2004 was primarily due to increases of $99,599 and $197,936 in Assurant Solutions and Assurant Health, respectively. The increase in Assurant Solutions for the nine months ended September 30, 2004 was primarily due to growth in their credit-placed homeowners insurance product line along with growth in the extended service contract and international business, offset by a decline in the domestic credit insurance business. The increases in

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Assurant Health for the three and nine months ended September 30, 2004 were primarily due to continued sales which partially reflect the success of Health Savings Accounts and premium rate increases.

     Net investment income increased by $9,311, or 6%, from $150,723 for the three months ended September 30, 2003, to $160,034 for the three months ended September 30, 2004. Net investment income increased by $14,878, or 3%, from $456,608 for the nine months ended September 30, 2003, to $471,486 for the nine months ended September 30, 2004. The average portfolio yield decreased 15 basis points from 5.71% for the three months ended September 30, 2003, to 5.56% for the three months ended September 30, 2004. The average portfolio yield decreased 34 basis points from 5.81% for the nine months ended September 30, 2003, to 5.47% for the nine months ended September 30, 2004. The decrease in the average portfolio yield for both periods was due to the lower interest rate environment. The average invested assets increased by approximately 9% and 10%, respectively, for the three and nine months ended September 30, 2004 compared to the three and nine months ended September 30, 2003.

     Net realized gains on investments declined by $4,833, or 66%, from net realized gains of $7,334 for the three months ended September 30, 2003, to net realized gains of $2,501 for the three months ended September 30, 2004. Net realized gains on investments improved by $7,639, or 52%, from net realized gains of $14,808 for the nine months ended September 30, 2003, to net realized gains of $22,447 for the nine months ended September 30, 2004. Net realized gains on investments are comprised of both other-than-temporary impairments and realized gains/(losses) on sales of securities. For the three months ended September 30, 2004 and 2003, we had other-than-temporary impairments of zero and $145, respectively. For the nine months ended September 30, 2004 and 2003, we had other-than-temporary impairments of $817 and $16,638, respectively. There were no individual impairments in excess of $10,000 for the three and nine months ended September 30, 2004 and 2003.

     Amortization of deferred gain on disposal of businesses decreased by $2,983, or 17%, from $17,522 for the three months ended September 30, 2003, to $14,539 for the three months ended September 30, 2004. Amortization of deferred gain on disposal of businesses decreased by $8,937, or 17%, from $52,235 for the nine months ended September 30, 2003, to $43,298 for the nine months ended September 30, 2004. The decreases were consistent with the run-off of the business ceded to The Hartford in 2001 and John Hancock in 2000.

     Fees and other income decreased by $2,286, or 4%, from $53,524 for the three months ended September 30, 2003, to $51,238 for the three months ended September 30, 2004. Fees and other income decreased by $18,253, or 11%, from $172,764 for the nine months ended September 30, 2003, to $154,511 for the nine months ended September 30, 2004. The decrease for the three months ended September 30, 2004 was primarily due to an increase in Assurant Solutions of $5,600, offset by a decrease in Corporate and Other of $8,124. The increase in Assurant Solutions was primarily due to growth in the extended service contracts and debt deferment business. The decrease in Corporate and Other was primarily due to a one-time adjustment recorded in the third quarter of 2003. The decrease for the nine months ended September 30, 2004 was primarily due to an increase in Assurant Health of $5,095, offset by decreases of $14,366 and $7,132 in Assurant Employee Benefits and Corporate and Other, respectively. The increase in Assurant Health was primarily due to additional insurance policy fees and higher fee-based product sales in individual markets. The decrease in Assurant Employee Benefits was primarily driven by lower fee income resulting from the sale of the Workability division.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $92,805, or 6%, from $1,629,801 for the three months ended September 30, 2003, to $1,722,606 for the three months ended September 30, 2004. Total benefits, losses and expenses increased by $303,773, or 6%, from $4,836,169 for the nine months ended September 30, 2003, to $5,139,942 for the nine months ended September 30, 2004.

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     Policyholder benefits increased by $97,613, or 11%, from $879,321 for the three months ended September 30, 2003, to $976,934 for the three months ended September 30, 2004. Policyholder benefits increased by $232,623, or 9%, from $2,656,325 for the nine months ended September 30, 2003, to $2,888,948 for the nine months ended September 30, 2004. The increase for the three months ended September 30, 2004 was primarily due to increases of $50,333, $15,507 and $27,173 in Assurant Solutions, Assurant Health and Assurant Employee Benefits, respectively. The increase for the nine months ended September 30, 2004 was primarily due to increases of $91,731, $99,829 and $29,568 in Assurant Solutions, Assurant Health and Assurant Employee Benefits, respectively. The increases in Assurant Solutions were primarily due to higher catastrophe losses, net of reinsurance, in 2004 from Hurricanes Charley, Frances, Ivan, and Jeanne. We incurred losses from catastrophes, net of reinsurance, of $75,500 and $10,000 for the three months ended September 30, 2004 and 2003, respectively, and $77,100 and $18,400 for the nine months ended September 30, 2004 and 2003, respectively. The increases in Assurant Health were primarily due to continued sales which partially reflect the success of Health Savings Accounts. The Assurant Health loss ratio improved for the three and nine months ended September 30, 2004 primarily due to favorable loss experience predominantly on individual health insurance business. The increases in Assurant Employees Benefits were primarily due to a reserve reduction in 2003. During the third quarter of 2003, we completed actuarial reserve adequacy studies which reflected that reserves were redundant by $17,915. Therefore, we reduced reserves by $17,915 in the third quarter of 2003 to reflect these estimates.

     Selling, underwriting and general expenses increased by $9,373, or 1%, from $721,192 for the three months ended September 30, 2003, to $730,565 for the three months ended September 30, 2004. Selling, underwriting and general expenses increased by $106,505, or 5%, from $2,091,990 for the nine months ended September 30, 2003, to $2,198,495 for the nine months ended September 30, 2004. The increase for the three months ended September 30, 2004 was primarily due to increases of $19,431 in Assurant Health, offset by a decrease of $12,154 in Assurant Solutions. The increase in Assurant Health for the three months ended September 30, 2004 was primarily related to increased commission expense on first year individual health insurance business. The decrease in Assurant Solutions for the three months ended September 30, 2004 was due to a change in the mix of business. The increase for the nine months ended September 30, 2004 was primarily due to increases of $28,815, $69,682, $6,266 and $17,165 in Assurant Solutions, Assurant Health, Assurant Preneed and Corporate and other, respectively, offset by a decrease in Assurant Employee Benefits of $15,423. The increase in Assurant Solutions for the nine months ending September 30, 2004 was primarily from increased business in the extended service contracts products and creditor-placed homeowners insurance product. The increase in Assurant Health for the nine months ending September 30, 2004 was primarily due to increased commission expense. The decrease in Assurant Employee Benefits for the nine months ending September 30, 2004 was primarily due to the sale of the Workability division. The increase in Assurant Preneed for the nine months ending September 30, 2004 was primarily due to additional maintenance expenses on a larger inforce block of business. The increase in Corporate and Other for the nine months ended September 30, 2004 was primarily due to costs related to the IPO in February and increased costs as a result of being a public company.

     Interest expense increased by $15,107, or 100%, from zero for the three months ended September 30, 2003, to $15,107 for the three months ended September 30, 2004. Interest expense increased by $41,104, or 100%, from zero for the nine months ended September 30, 2003, to $41,104 for the nine months ended September 30, 2004. The increases were the result of the two senior notes that we issued in February 2004. See –Liquidity and Capital Resources.

     On May 3, 2004 we sold our WorkAbility division. We incurred a $9,232 loss on disposal of this business in the second quarter of 2004.

     Distributions on mandatorily redeemable preferred securities of subsidiary trusts decreased by $29,288, or 100%, from $29,288 for the three months ended September 30, 2003, to zero for the three months ended September 30, 2004. Distributions on mandatorily redeemable preferred securities of subsidiary trusts decreased by $85,691, or 98%, from $87,854 for the nine months ended September 30,

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2003, to $2,163 for the nine months ended September 30, 2004. The declines were due to the early redemption of $1,249,850 of mandatorily redeemable preferred securities of subsidiary trusts in December 2003 and $196,224 of mandatorily redeemable preferred securities of subsidiary trusts in January 2004.

Net Income

     Net income decreased by $24,554, or 25%, from $99,398 for the three months ended September 30, 2003, to $74,844 for the three months ended September 30, 2004. Net income increased by $1,147, or less than 1%, from $263,285 for the nine months ended September 30, 2003, to $264,432 for the nine months ended September 30, 2004.

     Income taxes decreased by $11,968, or 26%, from $46,378 for the three months ended September 30, 2003, to $34,410 for the three months ended September 30, 2004. Income taxes increased by $1,163, or 1%, from $130,464 for the nine months ended September 30, 2003, to $131,627 for the nine months ended September 30, 2004. The effective tax rate for the three months ended September 30, 2003 was 31.8% compared to 31.5% for the three months ended September 30, 2004. The effective tax rate for the nine months ended September 30, 2003 was 33.1% compared to 33.2% for the nine months ended September 30, 2004.

Assurant Solutions

Overview

     The tables below present information regarding Assurant Solutions’ segment results of operations:

	For the Three Months						For the Nine Months
	Ended						Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	602,720		$	612,882		$	1,836,415		$	1,736,816
Net investment income		48,201			46,315			137,828			142,192
Fees and other income		36,818			31,218			97,681			99,391
Total revenues		687,739			690,415			2,071,924			1,978,399
Benefits, losses and expenses:
Policyholder benefits		(272,088	)		(221,755	)		(723,879	)		(632,148	)
Selling, underwriting and general expenses		(412,153	)		(424,307	)		(1,228,928	)		(1,200,113	)
Total benefits, losses and expenses		(684,241	)		(646,062	)		(1,952,807	)		(1,832,261	)
Segment income before income tax		3,498			44,353			119,117			146,138
Income taxes		(524	)		(12,929	)		(37,522	)		(46,034	)
Segment income after tax	$	2,974		$	31,424		$	81,595		$	100,104
Net earned premiums and other considerations by major product groupings:
Specialty Property Solutions(1)	$	202,337		$	184,746		$	578,075		$	526,959
Consumer Protection Solutions(2)		400,383			428,136			1,258,340			1,209,857
Total	$	602,720		$	612,882		$	1,836,415		$	1,736,816

(1)	“Specialty Property Solutions” includes a variety of specialized property insurance programs that are coupled with differentiated administrative capabilities.
(2)	“Consumer Protection Solutions” includes an array of debt protection administration services, credit insurance programs and warranties and extended service contracts.

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For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

Total Revenues

     Total revenues decreased by $2,676, less than 1%, from $690,415 for the three months ended September 30, 2003, to $687,739 for the three months ended September 30, 2004. Total revenues increased by $93,525, or 5%, from $1,978,399 for the nine months ended September 30, 2003, to $2,071,924 for the nine months ended September 30, 2004.

     Net earned premiums and other considerations decreased by $10,162, or 2% from $612,882 for the three months ended September 30, 2003, to $602,720 for the three months ended September 30, 2004. Net earned premiums and other considerations increased by $99,599, or 6% from $1,736,816 for the nine months ended September 30, 2003, to $1,836,415 for the nine months ended September 30, 2004. For the three months ended September 30, 2004, net earned premiums and other considerations from our consumer protection solutions products decreased by $27,753, primarily from the decline of our domestic credit insurance business and lower net earned premiums in our extended service contracts business due to the acquisition of new clients and the timing of earned premiums from those portfolios. These decreases were partially offset by growth in our international businesses. For the nine months ended September 30, 2004, net earned premiums and other considerations from our consumer protection solutions products increased by $48,483, primarily due to growth in our extended service contract and international businesses, partially offset by the decline of our domestic credit insurance business. For the three and nine months ended September 30, 2004, net earned premiums and other considerations from our specialty property solutions products increased by $17,591 and $51,116, respectively, primarily from growth in our creditor-placed homeowners insurance product line.

     Net investment income increased by $1,886, or 4%, from $46,315 for the three months ended September 30, 2003, to $48,201 for the three months ended September 30, 2004. Net investment income decreased by $4,364, or 3%, from $142,192 for the nine months ended September 30, 2003, to $137,828 for the nine months ended September 30, 2004. The average portfolio yield decreased 14 basis points from 5.11% for the three months ended September 30, 2003, to 4.97% for the three months ended September 30, 2004. The average portfolio yield decreased 49 basis points from 5.26% for the nine months ended September 30, 2003, to 4.77% for the nine months ended September 30, 2004. The decreased in the average portfolio yield for both periods was due to the lower interest rate environment. The average invested assets increased by approximately 7% for both the three and nine months ended September 30, 2004 compared to the three and nine months ended September 30, 2003.

     Fees and other income increased by $5,600, or 18%, from $31,218 for the three months ended September 30, 2003, to $36,818 for the three months ended September 30, 2004. Fees and other income decreased by $1,710, or 2%, from $99,391 for the nine months ended September 30, 2003, to $97,681 for the nine months ended September 30, 2004. The increase in fees and other income for the three months ended September 30, 2004 was primarily due to growth in our extended service contracts and debt deferment businesses. The decrease in fees and other income for the nine months ended September 30, 2004 was due to two factors. The first nine months of 2003 included fee income of $5,577 pertaining to certain non-profitable membership programs that were discontinued in the latter part of 2003 and in the first quarter of 2003 we recognized $3,000 of fees for a one-time project. The decrease for the nine months was partially offset with an increase in fees related to growth in our extended service warranty business and an increase in our debt protection programs.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $38,179, or 6%, from $646,062 for the three months ended September 30, 2003, to $684,241 for the three months ended September 30, 2004. Total benefits, losses and expenses increased by $120,546, or 7%, from $1,832,261 for the nine months ended September 30, 2003, to $1,952,807 for the nine months ended September 30, 2004.

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     Policyholder benefits increased by $50,333, or 23%, from $221,755 for the three months ended September 30, 2003, to $272,088 for the three months ended September 30, 2004. Policyholder benefits increased by $91,731, or 15%, from $632,148 for the nine months ended September 30, 2003, to $723,879 for the nine months ended September 30, 2004. The increases were primarily due to higher catastrophe losses, net of reinsurance, in 2004 from Hurricanes Charley, Frances, Ivan, and Jeanne. We incurred losses, net of reinsurance, from catastrophes of $75,500 and $10,000 for the three months ended September 30, 2004 and 2003 respectively, and $77,100 and $18,400 for the nine months ended September 30, 2004 and 2003 respectively.

     Selling, underwriting and general expenses decreased by $12,154, or 3%, from $424,307 for the three months ended September 30, 2003, to $412,153 for the three months ended September 30, 2004. Selling, underwriting and general expenses increased by $28,815, or 2%, from $1,200,113 for the nine months ended September 30, 2003, to $1,228,928 for the nine months ended September 30, 2004. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, decreased by $26,682 and $9,896 for the three and nine months ended September 30, 2004, respectively, primarily due to a change in the mix of business. General expenses increased by $14,528 and $38,711, for the three and nine months ended September 30, 2004, respectively, primarily from increased business from our extended service contracts products and our creditor-placed homeowners insurance product.

Segment Income After Tax

     Segment income after tax decreased by $28,450, or 91%, from $31,424 for the three months ended September 30, 2003, to $2,974 for the three months ended September 30, 2004. Segment income after tax decreased by $18,509, or 18%, from $100,104 for the nine months ended September 30, 2003, to $81,595 for the nine months ended September 30, 2004.

     Income taxes decreased by $12,405, or 96%, from $12,929 for the three months ended September 30, 2003, to $524 or the three months ended September 30, 2004. Income taxes decreased by $8,512, or 18%, from $46,034 for the nine months ended September 30, 2003, to $37,522 for the nine months ended September 30, 2004. These decreases were mainly due to the decrease in pre-tax income.

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Assurant Health

Overview

     The tables below present information regarding Assurant Health’s segment results of operations:

	For the Three Months						For the Nine Months
	Ended						Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	563,165		$	506,702		$	1,673,473		$	1,475,537
Net investment income		16,874			11,460			50,537			36,460
Fees and other income		8,436			8,590			28,826			23,731
Total revenues		588,475			526,752			1,752,836			1,535,728
Benefits, losses and expenses:
Policyholder benefits		(350,188	)		(334,681	)		(1,065,032	)		(965,203	)
Selling, underwriting and general expenses		(165,108	)		(145,677	)		(498,262	)		(428,580	)
Total benefits, losses and expenses		(515,296	)		(480,358	)		(1,563,294	)		(1,393,783	)
Segment income before income tax		73,179			46,394			189,542			141,945
Income taxes		(25,279	)		(15,768	)		(64,999	)		(49,353	)
Segment income after tax	$	47,900		$	30,626		$	124,543		$	92,592
Loss ratio(1)		62.2	%		66.1	%		63.6	%		65.4	%
Expense ratio(2)		28.9	%		28.3	%		29.3	%		28.6	%
Combined ratio(3)		90.1	%		93.2	%		91.8	%		93.0	%
Membership by product line:
Individual								807			755
Small employer group								348			365
Total								1,155			1,120

(1)	The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(2)	The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(3)	The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.

For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

Total Revenues

     Total revenues increased by $61,723, or 12%, from $526,752 for the three months ended September 30, 2003, to $588,475 for the three months ended September 30, 2004. Total revenues increased by $217,108, or 14%, from $1,535,728 for the nine months ended September 30, 2003, to $1,752,836 for the nine months ended September 30, 2004.

     Net earned premiums and other considerations increased by $56,463, or 11%, from $506,702 for the three months ended September 30, 2003, to $563,165 for the three months ended September 30, 2004. Net earned premiums and other considerations increased by $197,936, or 13%, from $1,475,537 for the nine months ended September 30, 2003, to $1,673,473 for the nine months ended September 30, 2004. Net

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earned premium growth in individual health insurance business is attributable to continued sales which partially reflect the success of Health Savings Accounts that were introduced on January 1, 2004, and premium rate increases. Net earned premium growth in small employer group health insurance business is attributable to premium rate increases partially offset by decreases in membership.

     Net investment income increased by $5,414, or 47%, from $11,460 for the three months ended September 30, 2003, to $16,874 for the three months ended September 30, 2004. Net investment income increased by $14,077, or 39%, from $36,460 for the nine months ended September 30, 2003, to $50,537 for the nine months ended September 30, 2004. The average portfolio yield increased 33 basis points from 5.07% for the three months ended September 30, 2003, to 5.40% for the three months ended September 30, 2004. The average portfolio yield increased 2 basis points from 5.45% for the nine months ended September 30, 2003, to 5.47% for the nine months ended September 30, 2004. The increase in the average portfolio yield for both periods was due to higher income from real estate investments and higher prepayment fees on commercial mortgage loans, offset by the lower interest rate environment. The average invested assets increased by approximately 38% for both the three and nine months ended September 30, 2004 compared to the three and nine months ended September 30, 2003.

     Fees and other income decreased by $154, or 2%, from $8,590 for the three months ended September 30, 2003, to $8,436 for the three months ended September 30, 2004. Fees and other income increased by $5,095, or 22%, from $23,731 for the nine months ended September 30, 2003, to $28,826 for the nine months ended September 30, 2004. The decrease in the three month was due to a one time true-up of unearned policy fees in individual markets. The nine month increase was primarily due to additional insurance policy fees and higher fee-based product sales in individual markets, such as sales of our non-insurance health access discount cards.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $34,938, or 7%, from $480,358 for the three months ended September 30, 2003, to $515,296 for the three months ended September 30, 2004. Total benefits, losses and expenses increased by $169,511, or 12%, from $1,393,783 for the nine months ended September 30, 2003, to $1,563,294 for the nine months ended September 30, 2004.

     Policyholder benefits increased by $15,507, or 5%, from $334,681 for the three months ended September 30, 2003, to $350,188 for the three months ended September 30, 2004. Policyholder benefits increased by $99,829, or 10%, from $965,203 for the nine months ended September 30, 2003, to $1,065,032 for the nine months ended September 30, 2004. The loss ratio improved 390 basis points from 66.1% for the three months ended September 30, 2003, to 62.2% for the three months ended September 30, 2004. The loss ratio improved 180 basis points from 65.4% for the nine months ended September 30, 2003, to 63.6% for the nine months ended September 30, 2004. These improvements were attributable to favorable loss experience predominantly on individual health insurance business, as well as a higher mix of individual health insurance business compared to small employer group health insurance business in 2004.

     Selling, underwriting and general expenses increased by $19,431, or 13%, from $145,677 for the three months ended September 30, 2003, to $165,108 for the three months ended September 30, 2004. Selling, underwriting and general expenses increased by $69,682, or 16%, from $428,580 for the nine months ended September 30, 2003, to $498,262 for the nine months ended September 30, 2004. The expense ratio increased 60 basis points from 28.3% for the three months ended September 30, 2003, to 28.9% for the three months ended September 30, 2004. The expense ratio increased 70 basis points from 28.6% for the nine months ended September 30, 2003, to 29.3% for the nine months ended September 30, 2004. These increases were primarily related to increased commission expense on first year individual health insurance business.

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Segment Income After Tax

     Segment income after tax increased by $17,274, or 56%, from $30,626 for the three months ended September 30, 2003, to $47,900 for the three months ended September 30, 2004. Segment income after tax increased by $31,951, or 35%, from $92,592 for the nine months ended September 30, 2003, to $124,543 for the nine months ended September 30, 2004.

     Income taxes increased by $9,511, or 60%, from $15,768 for the three months ended September 30, 2003, to $25,279 for the three months ended September 30, 2004. Income taxes increased by $15,646, or 32%, from $49,353 for the nine months ended September 30, 2003, to $64,999 for the nine months ended September 30, 2004. These increases were primarily due to the increases in pre-tax income.

Assurant Employee Benefits

Overview

     The tables below present information regarding Assurant Employee Benefits’ segment results of operations:

	For the Three Months						For the Nine Months
	Ended						Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	305,827		$	297,258		$	933,030		$	920,296
Net investment income		37,496			34,512			110,655			104,429
Fees and other income		5,411			3,832			22,529			36,895
Total revenues		348,734			335,602			1,066,214			1,061,620
Benefits, losses and expenses:
Policyholder benefits		(224,083	)		(196,910	)		(697,251	)		(667,683	)
Selling, underwriting and general expenses		(101,618	)		(104,707	)		(303,700	)		(319,123	)
Total benefits, losses and expenses		(325,701	)		(301,617	)		(1,000,951	)		(986,806	)
Segment income before income tax		23,033			33,985			65,263			74,814
Income taxes		(8,066	)		(11,894	)		(23,020	)		(26,185	)
Segment income after tax	$	14,967		$	22,091		$	42,243		$	48,629
Loss ratio (1)		73.3	%		66.2	%		74.7	%		72.6	%
Expense ratio (2)		32.6	%		34.8	%		31.8	%		33.3	%
Net earned premiums and other considerations by major product grouping
Group dental	$	128,232		$	132,159		$	389,952		$	403,677
Group disability		115,770			102,336			354,560			321,138
Group life		61,825			62,763			188,518			195,481
Total	$	305,827		$	297,258		$	933,030		$	920,296

(1)	The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(2)	The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.

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For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

Total Revenues

     Total revenues increased by $13,132, or 4%, from $335,602 for the three months ended September 30, 2003, to $348,734 for the three months ended September 30, 2004. Total revenues increased by $4,594, or less than 1%, from $1,061,620 for the nine months ended September 30, 2003, to $1,066,214 for the nine months ended September 30, 2004.

     Net earned premiums and other considerations increased by $8,569, or 3%, from $297,258 for the three months ended September 30, 2003, to $305,827 for the three months ended September 30, 2004. Net earned premiums and other considerations increased by $12,734, or 1%, from $920,296 for the nine months ended September 30, 2003, to $933,030 for the nine months ended September 30, 2004. Net earned premium growth is driven by our disability business. Group disability net earned premiums increased by $13,434 and $33,422 for the three and nine months ended September 30, respectively, compared to prior year. The increases are primarily driven by an increase in business written through alternate distribution sources, as well as the transition of a block of business from administrative fee only business to fully insured business. These increases in disability net earned premiums were partially offset by decreases in dental and life net earned premiums and other considerations. Group Dental net earned premiums and other considerations decreased by $3,927 and $13,725 for the three and nine months ended September 30, respectively, compared to prior year. We are maintaining pricing discipline in an increasingly competitive market which has resulted in lower sales and renewals. Group life net earned premiums decreased by $938 and $6,963 for the three and nine months ended September 30, respectively, compared to prior year. The decreases were due to the non-renewal of certain unprofitable business.

     Net investment income increased by $2,984, or 9%, from $34,512 for the three months ended September 30, 2003, to $37,496 for the three months ended September 30, 2004. Net investment income increased by $6,226, or 6%, from $104,429 for the nine months ended September 30, 2003, to $110,655 for the nine months ended September 30, 2004. The average portfolio yield decreased 20 basis points from 6.33% for the three months ended September 30, 2003, to 6.13% for the three months ended September 30, 2004. The average portfolio yield decreased 27 basis points from 6.43% for the nine months ended September 30, 2003, to 6.16% for the nine months ended September 30, 2004. The decrease in the average portfolio yield for both periods was due to the lower interest rate environment. The average invested assets increased by approximately 12% and 10%, respectively, for the three and nine months ended September 30, 2004 compared to the three and nine months ended September 30, 2003.

     Fees and other income increased by $1,579, or 41%, from $3,832 for the three months ended September 30, 2003, to $5,411 for the three months ended September 30, 2004. Fees and other income decreased by $14,366, or 39%, from $36,895 for the nine months ended September 30, 2003, to $22,529 for the nine months ended September 30, 2004. The decrease for the nine months ended September 30, 2004 was primarily driven by lower fee income resulting from the sale of the Workability division (See – Corporate and Other Segment), as well as the transition of a block of business from administrative fee only business to fully insured business.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $24,084, or 8%, from $301,617 for the three months ended September 30, 2003, to $325,701 for the three months ended September 30, 2004. Total benefits, losses and expenses increased by $14,145, or 1%, from $986,806 for the nine months ended September 30, 2003, to $1,000,951 for the nine months ended September 30, 2004.

     Policyholder benefits increased by $27,173, or 14%, from $196,910 for the three months ended September 30, 2003, to $224,083 for the three months ended September 30, 2004. The loss ratio has

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increased by 710 basis points, from 66.2% for the three months ended September 30, 2003, to 73.3% for the three months ended September 30, 2004. Policyholder benefits increased by $29,568, or 4%, from $667,683 for the nine months ended September 30, 2003, to $697,251 for the nine months ended September 30, 2004. The loss ratio increased by 210 basis points, from 72.6% for the nine months ended September 30, 2003, to 74.7% for the nine months ended September 30, 2004. These increases are primarily driven by a reduction in reserves during the three months ended September 30, 2003. During the third quarter of 2003, we completed actuarial reserve adequacy studies for the group disability, group life, and group dental products, which reflected that, in the aggregate, these reserves were redundant by $17,915. Therefore, we reduced reserves by $17,915 in the third quarter of 2003 to reflect these estimates. Also contributing to the increases in 2004 were poor experience on a single large disability case and deterioration in group dental experience, partially offset by lower group disability incidence and improved group life mortality experience.

     Selling, underwriting and general expenses decreased by $3,089, or 3%, from $104,707 for the three months ended September 30, 2003, to $101,618 for the three months ended September 30, 2004. The expense ratio has decreased by 220 basis points, from 34.8% for the three months ended September 30, 2003, to 32.6% for the three months ended September 30, 2004. Selling, underwriting and general expenses decreased by $15,423, or 5%, from $319,123 for the nine months ended September 30, 2003, to $303,700 for the nine months ended September 30, 2004. The expense ratio decreased by 150 basis points, from 33.3% for the nine months ended September 30, 2003, to 31.8% for the nine months ended September 30, 2004. The decreases are driven by the sale of the Workability division noted earlier, as well as non-recurring expenses that were incurred during 2003.

Segment Income After Tax

     Segment income after tax decreased by $7,124, or 32%, from $22,091 for the three months ended September 30, 2003, to $14,967 for the three months ended September 30, 2004. Segment income after tax decreased by $6,386, or 13%, from $48,629 for the nine months ended September 30, 2003, to $42,243 for the nine months ended September 30, 2004.

     Income taxes decreased by $3,828, or 32%, from $11,894 for the three months ended September 30, 2003, to $8,066 for the three months ended September 30, 2004. Income taxes decreased by $3,165, or 12%, from $26,185 for the nine months ended September 30, 2003, to $23,020 for the nine months ended September 30, 2004. The decreases were primarily due to the decreases in pre-tax income.

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Assurant PreNeed

Overview

     The tables below present information regarding Assurant Preneed’s segment results of operations:

	For the Three Months						For the Nine Months
	Ended						Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	131,836		$	129,632		$	401,341		$	400,854
Net investment income		50,982			46,371			153,628			139,861
Fees and other income		(20	)		1,167			3,515			3,655
Total revenues		182,798			177,170			558,484			544,370
Benefits, losses and expenses:
Policyholder benefits		(130,575	)		(125,975	)		(402,786	)		(391,291	)
Selling, underwriting and general expenses		(38,854	)		(37,765	)		(116,757	)		(110,491	)
Total benefits, losses and expenses		(169,429	)		(163,740	)		(519,543	)		(501,782	)
Segment income before income tax		13,369			13,430			38,941			42,588
Income taxes		(4,427	)		(4,573	)		(13,404	)		(14,725	)
Segment income after tax	$	8,942		$	8,857		$	25,537		$	27,863
Net earned premiums and other considerations by channel
AMLIC	$	69,362		$	68,683		$	211,409		$	215,848
Independent		62,474			60,949			189,932			185,006
Total	$	131,836		$	129,632		$	401,341		$	400,854

For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

Total Revenues

     Total revenues increased by $5,628, or 3%, from $177,170 for the three months ended September 30, 2003, to $182,798 for the three months ended September 30, 2004. Total revenues increased by $14,114, or 3%, from $544,370 for the nine months ended September 30, 2003, to $558,484 for the nine months ended September 30, 2004.

     Net earned premiums and other considerations increased by $2,204, or 2%, from $129,632 for the three months ended September 30, 2003, to $131,836 for the three months ended September 30, 2004. Net earned premiums and other considerations increased by $487, or less than 1%, from $400,854 for the nine months ended September 30, 2003, to $401,341 for the nine months ended September 30, 2004. These increases are primarily due to a change in the mix of business from limited pay sales to single pay sales, offset by a 3% decline in new sales.

     Net investment income increased by $4,611, or 10%, from $46,371 for the three months ended September 30, 2003, to $50,982 for the three months ended September 30, 2004. Net investment income increased by $13,767, or 10%, from $139,861 for the nine months ended September 30, 2003, to $153,628 for the nine months ended September 30, 2004. The average portfolio yield decreased 6 basis points from 6.35% for the three months ended September 30, 2003, to 6.29% for the three months ended September 30,

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2004. The average portfolio yield decreased 16 basis points from 6.57% for the nine months ended September 30, 2003, to 6.41% for the nine months ended September 30, 2004. The decrease in the average portfolio yield for both periods was due to the lower interest rate environment. The average invested assets increased by approximately 11% and 13%, respectively, for the three and nine months ended September 30, 2004 compared to the three and nine months ended September 30, 2003.

     Fees and other income decreased by $1,187, or 102%, from $1,167 for the three months ended September 30, 2003, to $(20) for the three months ended September 30, 2004. Fees and other income decreased by $140, or 4%, from $3,655 for the nine months ended September 30, 2003, to $3,515 for the nine months ended September 30, 2004. The three month decrease is primarily due to a $1,100 market decline in the value of a derivative instrument, the Consumer Price Index (CPI) Cap.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $5,689, or 3%, from $163,740 for the three months ended September 30, 2003, to $169,429 for the three months ended September 30, 2004. Total benefits, losses and expenses increased by $17,761, or 4%, from $501,782 for the nine months ended September 30, 2003, to $519,543 for the nine months ended September 30, 2004.

     Policyholder benefits increased by $4,600, or 4%, from $125,975 for the three months ended September 30, 2003, to $130,575 for the three months ended September 30, 2004. Policyholder benefits increased by $11,495, or 3%, from $391,291 for the nine months ended September 30, 2003, to $402,786 for the nine months ended September 30, 2004. The increases were primarily due to the crediting of policy growth to a larger inforce block of business. This increase was partially offset by a reduction in crediting rates on the discretionary growth business which reduced policyholder benefits by $1,200 for the three months ended September 30, 2004 and $3,000 for the nine months ended September 30, 2004.

     Selling, underwriting and general expenses increased by $1,089, or 3%, from $37,765 for the three months ended September 30, 2003, to $38,854 for the three months ended September 30, 2004. Selling, underwriting and general expenses increased $6,266, or 6%, from $110,491 for the nine months ended September 30, 2003, to $116,757 for the nine months ended September 30, 2004. The increases are primarily due to additional maintenance expense on a larger inforce block of business.

Segment Income After Tax

     Segment income after tax increased by $85, or 1%, from $8,857 for the three months ended September 30, 2003, to $8,942 for the three months ended September 30, 2004. Segment income after tax decreased by $2,326, or 8%, from $27,863 for the nine months ended September 30, 2003, to $25,537 for the nine months ended September 30, 2004.

     Income taxes decreased by $146, or 3%, from $4,573 for the three months ended September 30, 2003, to $4,427 for the three months ended September 30, 2004. Income taxes decreased by $1,321, or 9%, from $14,725 for the nine months ended September 30, 2003, to $13,404 for the nine months ended September 30, 2004. The decrease for the nine months ended September 30, 2004 was primarily due to the decrease in pre-tax income.

Corporate and Other

Overview

     The Corporate and Other segment includes activities of the holding company, financing expenses, net realized gains (losses) on investments and interest income earned from short-term investments held. The Corporate and Other segment also includes the amortization of deferred gains associated with the sales of Fortis Financial Group (FFG) (a business we sold via reinsurance on April 2, 2001) and Long Term Care

35

(LTC) (a business we sold via reinsurance on March 1, 2000), and interest income from surplus we are required to carry related to FFG and LTC.

     As of September 30, 2004, we had approximately $344,054 (pre-tax) of deferred gains that had not yet been amortized. We expect to amortize deferred gains from dispositions through 2031. The deferred gains are being amortized in a pattern consistent with the expected future reduction of the in force blocks of business ceded to The Hartford and John Hancock. This reduction is expected to be more rapid in the first few years after sale and to be slower as the liabilities in the blocks decrease.

     The tables below present information regarding Corporate and Other’s segment results of operations:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2004			2003			2004			2003
	(in thousands)						(in thousands)
Revenues:
Net investment income	$	6,481		$	12,065		$	18,838		$	33,666
Net realized gains on investments		2,501			7,334			22,447			14,808
Amortization of deferred gains on disposal of businesses		14,539			17,522			43,298			52,235
Fees and other income		593			8,717			1,960			9,092
Total revenues		24,114			45,638			86,543			109,801
Benefits, losses and expenses:
Selling, underwriting and general expenses		(12,832	)		( 8,736	)		(50,848	)		(33,683	)
Interest expense		(15,107	)		—			(41,104	)		—
Loss on disposal of business		—			—			(9,232	)		—
Distributions on mandatorily redeemable preferred securities of subsidiary trusts		—			(29,288	)		(2,163	)		(87,854	)
Total benefits, losses and expenses		(27,939	)		(38,024	)		(103,347	)		(121,537	)
Segment income (loss) before income tax		(3,825	)		7,614			(16,804	)		(11,736	)
Income taxes		3,886			(1,214	)		7,318			5,833
Segment income (loss) after tax	$	61		$	6,400		$	(9,486	)	$	(5,903	)

For The Three and Nine Months Ended September 30, 2004 Compared to The Three and Nine Months Ended September 30, 2003

     Total revenues decreased by $21,524, or 47%, from $45,638 for the three months ended September 30, 2003, to $24,114 for the three months ended September 30, 2004. Total revenues decreased by $23,258, or 21%, from $109,801 for the nine months ended September 30, 2003, to $86,543 for the nine months ended September 30, 2004.

     Net investment income decreased by $5,584, or 46%, from $12,065 for the three months ended September 30, 2003, to $6,481 for the three months ended September 30, 2004. Net investment income decreased by $14,828, or 44%, from $33,666 for the nine months ended September 30, 2003, to $18,838 for the nine months ended September 30, 2004. These declines were mainly due to the lower interest rate environment and the decrease in average invested assets.

     Net realized gains on investments declined by $4,833, or 66%, from net realized gains of $7,334 for the three months ended September 30, 2003, to net realized gains of $2,501 for the three months ended

36

September 30, 2004. Net realized gains on investments improved by $7,639, or 52%, from net realized gains of $14,808 for the nine months ended September 30, 2003, to net realized gains of $22,447 for the nine months ended September 30, 2004. Net realized gains on investments are comprised of both other-than-temporary impairments and realized gains/(losses) on sales of securities. For the three months ended September 30, 2004 and 2003, we had other-than-temporary impairments of zero and $145, respectively. For the nine months ended September 30, 2004 and 2003, we had other-than-temporary impairments of $817 and $16,638, respectively. There were no individual impairments in excess of $10,000 for the three and nine months ended September 30, 2004 and 2003.

     Amortization of deferred gain on disposal of businesses decreased by $2,983, or 17%, from $17,522 for the three months ended September 30, 2003, to $14,539 for the three months ended September 30, 2004. Amortization of deferred gain on disposal of businesses decreased by $8,937, or 17%, from $52,235 for the nine months ended September 30, 2003, to $43,298 for the nine months ended September 30, 2004. The decreases were consistent with the run-off of the business ceded to The Hartford in 2001 and John Hancock in 2000.

     Fees and other income decreased by $8,124, or 93%, from $8,717 for the three months ended September 30, 2003, to $593 for the three months ended September 30, 2004. Fees and other income decreased by $7,132, or 78%, from $9,092 for the nine months ended September 30, 2003, to $1,960 for the nine months ended September 30, 2004. Both the three and nine month decreases are primarily due to a one-time adjustment recorded in the third quarter of 2003.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $10,085, or 27%, from $38,024 for the three months ended September 30, 2003, to $27,939 for the three months ended September 30, 2004. Total benefits, losses and expenses decreased by $18,190, or 15%, from $121,537 for the nine months ended September 30, 2003, to $103,347 for the nine months ended September 30, 2004.

     Selling, underwriting and general expenses increased by $4,096, or 47%, from $8,736 for the three months ended September 30, 2003, to $12,832 for the three months ended September 30, 2004. Selling, underwriting and general expenses increased by $17,165, or 51%, from $33,683 for the nine months ended September 30, 2003, to $50,848 for the nine months ended September 30, 2004. The increase in expenses for the three and nine months ended September 30, 2004 was primarily due to an increase of $3,442 and $18,686, respectively, of costs related to being a public company. Costs related to the IPO of $3,591 are included in the $18,686.

     Interest expense increased by $15,107, or 100%, from zero for the three months ended September 30, 2003, to $15,107 for the three months ended September 30, 2004. Interest expense increased by $41,104, or 100%, from zero for the nine months ended September 30, 2003, to $41,104 for the nine months ended September 30, 2004. The increases were the result of the two senior notes that we issued in February 2004. See —Liquidity and Capital Resources.

     On May 3, 2004 we sold our WorkAbility division. We incurred a $9,232 loss on disposal of business in the second quarter of 2004.

     Distributions on mandatorily redeemable preferred securities of subsidiary trusts decreased by $29,288, or 100%, from $29,288 for the three months ended September 30, 2003, to zero for the three months ended September 30, 2004. Distributions on mandatorily redeemable preferred securities of subsidiary trusts decreased by $85,691, or 98%, from $87,854 for the nine months ended September 30, 2003, to $2,163 for the nine months ended September 30, 2004. The declines were due to the early redemption of $1,249,850 of mandatorily redeemable preferred securities of subsidiary trusts in December 2003 and $196,224 of mandatorily redeemable preferred securities of subsidiary trusts in January 2004.

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Segment Income/(Loss) After Tax

     Segment income after tax decreased by $6,339, or 99%, from $6,400 for the three months ended September 30, 2003, to $61 for the three months ended September 30, 2004. Segment loss after tax increased by $3,583, or 61%, from $5,903 for the nine months ended September 30, 2003, to $9,486 for the nine months ended September 30, 2004.

     Income tax benefit/(expense) improved by $5,100, from an income tax expense of $1,214 for the three months ended September 30, 2003, to a income tax benefit of $3,886 for the three months ended September 30, 2004. Income tax benefit improved by $1,485, or 25%, from an income tax benefit of $5,833 for the nine months ended September 30, 2003, to an income tax benefit of $7,318 for the nine months ended September 30, 2004. These improvements are primarily due to estimated to actual tax return true-up adjustments.

Investments

     The following table shows the carrying value of our investments by type of security as of the dates indicated:

	As of				As of
	September 30,				December 31,
	2004				2003
	(in thousands)
Fixed maturities	$	9,045,812	79	%	$	8,728,838	80	%
Equity securities		548,203	5			456,440	4
Commercial mortgage loans on real estate		1,039,914	9			932,791	9
Policy loans		66,025	1			68,185	1
Short-term investments		225,851	2			275,878	2
Other investments		508,398	4			461,473	4
Total investments	$	11,434,203	100	%	$	10,923,605	100	%

     Of our fixed maturity securities shown above, 68% and 70% (based on total fair value) were invested in securities rated “A” or better as of September 30, 2004 and December 31, 2003, respectively.

     The following table provides the cumulative net unrealized gains (pre-tax) on fixed maturity securities and equity securities as of the dates indicated:

	As of		As of
	September 30,		December 31,
	2004		2003
	(in thousands)
Fixed maturities:
Amortized cost	$	8,567,856	$	8,229,861
Net unrealized gains		477,956		498,977
Fair value	$	9,045,812	$	8,728,838
Equities:
Cost	$	540,062	$	436,823
Net unrealized gains		8,141		19,617
Fair value	$	548,203	$	456,440

     Net unrealized gains on fixed maturity securities decreased by $21,021, or 4%, from December 31, 2003 to September 30, 2004. Net unrealized gains on equity securities decreased by $11,476, or 59%, from December 31, 2003, to September 30, 2004. The decrease in net unrealized gains was primarily due to the net effect of the change in treasury yields. The 10-year treasury yield decreased 13 basis points between

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December 31, 2003 and September 30, 2004 and the 5-year treasury yield increased 15 basis points between December 31, 2003 and September 30, 2004.

     The investment category of the Company’s gross unrealized losses on fixed maturities and equity securities at September 30, 2004 and the length of time the securities have been in an unrealized loss position were as follows:

	Less than 12 months					12 Months or More					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
Fixed maturities
Bonds	$	969,102	$	(11,634	)	$	121,430	$	(3,666	)	$	1,090,532	$	(15,300	)
Equity securities
Common Stock	$	501	$	(68	)	$	8	$	(4	)	$	509	$	(72	)
Non-redeemable preferred stocks		175,623		(4,838	)		7,662		(627	)		183,285		(5,465	)
Total equity securities	$	176,124	$	(4,906	)	$	7,670	$	(631	)	$	183,794	$	(5,537	)

     The unrealized loss position at September 30, 2004 consisted of approximately $15,300 in unrealized losses on fixed maturity securities and approximately $5,537 in unrealized losses on equity securities. The total unrealized loss represents less than 2% of the aggregate fair value of the related securities. Approximately 79% of these unrealized losses have been in a continuous loss position for less than twelve months. The total unrealized losses are comprised of 503 individual securities with 95% of the individual securities having an unrealized loss of less than $200. The total unrealized losses on securities that were in a continuous unrealized loss position for greater than six months but less than 12 months were approximately $11,924.

     As part of our ongoing monitoring process, we regularly review our investment portfolio to ensure that investments that may be other than temporarily impaired are identified in a timely fashion and that any impairment is charged against earnings in the proper period. The Company has reviewed these securities and concluded that there were no additional other than temporary impairments as of September 30, 2004. Due to issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and their continued expectations to do so, as well as our evaluation of the fundamentals of the issuers’ financial condition, the Company believes that the prices of the securities in the sectors discussed above were temporarily depressed primarily as a result of the prevailing level of interest rates at the time the securities were purchased.

Liquidity and Capital Resources

     Assurant, Inc. is a holding company, and as such, has limited direct operations of its own. Our holding company assets consist primarily of the capital stock of our subsidiaries. Accordingly, our future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries, such as payments under our tax allocation agreement and under management agreements with our subsidiaries. The ability to pay such dividends and to make such other payments will be limited by applicable laws and regulations of the states in which our subsidiaries are domiciled, which subject our subsidiaries to significant regulatory restrictions. The dividend requirements and regulations vary from state to state and by type of insurance provided by the applicable subsidiary. These laws and regulations require, among other things, our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay to the holding company. Solvency regulations, capital requirements and rating agencies are some of the factors used in determining the amount of capital used for dividends. For 2004, the maximum amount of distributions our subsidiaries could pay under applicable laws and regulations without prior regulatory approval is $302,000.

     Dividends paid by our subsidiaries totaled $244,030 and $99,500 for the nine months ended September 30, 2004 and the year ended December 31, 2003, respectively. We use these cash inflows

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primarily to pay expenses, to make interest payments on indebtedness, to make dividend payments to our stockholders, and to repurchase our outstanding shares. On June 8, 2004 and September 7, 2004, we paid a quarterly cash dividend of $0.07 per common share to stockholders of record as of May 24, 2004 and August 23, 2004, respectively. On October 22, 2004, we declared a quarterly cash dividend of $0.07 per common share. The dividend will be payable on December 7, 2004 to stockholders of record as of November 22, 2004.

     On August 2, 2004, our Board of Directors approved a share repurchase program under which we may repurchase up to 10% of our outstanding common stock. In the third quarter we repurchased 1,355,100 shares of our outstanding common stock at a cost of $35,234. The total remaining number of shares that can be repurchased pursuant to the repurchase program at September 30, 2004 was 12,871,711 shares.

     The primary sources of funds for our subsidiaries consist of premiums and fees collected, the proceeds from the sales and maturity of investments and investment income. Cash is primarily used to pay insurance claims, agent commissions, operating expenses and taxes. We generally invest our subsidiaries excess funds in order to generate income.

     Our qualified pension plan was under-funded by $60,218 at December 31, 2003. We established a funding policy in which service cost plus 15% of plan deficit will be contributed annually. We contributed $19,500 as of September 30, 2004 and will contribute an additional $6,500 in the fourth quarter of 2004. This funding policy will be revised annually to take into effect any assumption changes and return on plan assets. See Note 7 of Notes to the Consolidated Unaudited Interim Financial Statements included elsewhere in this report for the components of the net periodic benefit cost for the three and nine months ended September 30, 2004 and 2003.

     In March 2004, we established a $500,000 commercial paper program, which is available for working capital and other general corporate purposes. Our subsidiaries do not maintain commercial paper or other borrowing facilities at their level. This program is backed up by a $500,000 senior revolving credit facility with a syndicate of banks arranged by Banc One Capital Markets, Inc. and Citigroup Global Market, Inc., which was established on January 30, 2004. The revolving credit facility is unsecured and is available until February 2007, so long as we are in compliance with all the covenants. This facility is also available for general corporate purposes, but to the extent used thereto, would be unavailable to back up the commercial paper program. On June 1, 2004 and August 9, 2004, we used $20,000 and $40,000, respectively, from the commercial paper program for general corporate purposes, which was repaid on June 15, 2004 and August 20, 2004, respectively. There were no amounts relating to the commercial paper program outstanding at September 30, 2004. We did not use the revolving credit facility during the nine months ended September 30, 2004 and no amounts are currently outstanding.

     The revolving credit facility contains restrictive covenants. The terms of the revolving credit facility also require that we maintain certain specified minimum ratios or thresholds. We are in compliance with all covenants and we maintain all specified minimum ratios and thresholds.

     In December 2003, we entered into two senior bridge credit facilities of $650,000 and $1,100,000. The aggregate indebtedness of $1,750,000 under the facility was in connection with the extinguishment of our mandatorily redeemable preferred securities of subsidiary trusts.

     On February 5, 2004, we received a $725,500 capital contribution from Fortis simultaneously with the closing of the IPO. The proceeds from that contribution were used to repay the $650,000 of outstanding indebtedness under the senior bridge credit facility and $75,500 of outstanding indebtedness under the $1,100,000 senior bridge credit facility. In addition, we repaid a portion of the $1,100,000 senior bridge credit facility with $49,500 in cash. We also refinanced the remaining amount outstanding under the $1,100,000 senior bridge credit facility with the proceeds of our $975,000 senior note offering described below.

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     On February 18, 2004, we issued two series of senior notes in an aggregate principal amount of $975,000. The first series is $500,000 in principal amount, bears interest at 5.625% per year and is payable in a single installment due February 15, 2014. The second series is $475,000 in principal amount, bears interest at 6.750% per year and is payable in a single installment due February 15, 2034.

     Interest on our senior notes is payable semi-annually on February 15 and August 15 of each year, commencing August 15, 2004. The senior notes are our unsecured obligations and rank equally with all of our other senior unsecured indebtedness. The senior notes are not redeemable prior to maturity. The net proceeds from the issuance of the senior notes were used to repay a portion of our outstanding indebtedness under our $1,100,000 senior bridge facility.

     At the time of offering our senior notes, we entered into a registration rights agreement. The registration rights agreement required us to file a registration statement under the Securities Act of 1933 to permit the exchange of the senior notes for registered notes having nearly identical terms as the senior notes or to permit the registered resale of the senior notes. This requirement was met on May 4, 2004 when we filed a registration statement on Form S-4 with the Securities and Exchange Commission. This registration statement was declared effective on May 12, 2004. The exchange offer expired on June 15, 2004 and all of the holders exchanged their notes for the new, registered notes.

     During January 2004 we paid to participants in the Assurant Appreciation Incentive Rights Plan an aggregate of $25,000 in connection with the cash-out of all outstanding Fortis, Inc. incentive rights.

     In management’s opinion, our subsidiaries’ cash flow from operations together with our income and gains from our investment portfolio will provide sufficient liquidity to meet our needs in the ordinary course of business.

Cash Flows

     We monitor cash flows at both the consolidated and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs.

     The table below shows our recent net cash flows:

	For The Nine Months
	Ended September 30,
	2004			2003
	(in thousands)
Net cash provided by (used in):
Operating activities	$	607,459		$	631,603
Investing activities		(568,166	)		(515,530	)
Financing activities		(305,117	)		(182,402	)
Net change in cash	$	(265,824	)	$	(66,329	)

     The key changes of the net cash outflow of $265,824 for the nine months ended September 30, 2004 were net purchases of fixed maturity securities of $1,087,863, maturities of fixed maturity securities of $767,028, issuance of debt of $971,538, issuance of common stock of $725,491, and repayment of debt of $1,750,000. The key changes of the net cash outflow of $66,329 for the nine months ended September 30, 2003 were net purchases of fixed maturity securities of $1,571,347, maturities of these securities of $976,153, net sales of short term investments of $368,114, net purchase of equity securities of $159,772, payment of dividends in the amount of $181,187, and cash from operating activities.

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     At September 30, 2004, we had total debt outstanding of $995,753, as compared to $1,970,384 at December 31, 2003. At September 30, 2004 this debt consisted of $971,593 of senior notes and $24,160 of mandatorily redeemable preferred stock. At December 31, 2003 this debt consisted of $1,750,000 of two senior bridge credit facility arrangements, $196,224 of mandatorily redeemable preferred securities of subsidiary trusts, and $24,160 of mandatorily redeemable preferred stock.

     The table below shows our cash outflows for distributions and dividends for the periods indicated:

	For the Nine Months Ended
	September 30,
Security	2004		2003
	(in thousands)
Mandatorily redeemable preferred securities of subsidiary trusts	$	2,163	$	87,854
Mandatorily redeemable preferred stock dividends and interest paid		2,759		715
Common Stock dividends		19,887		181,187
Total	$	24,809	$	269,756

Letters of Credit

     In the normal course of business, letters of credit are issued to support reinsurance arrangements and other corporate initiatives. These letters of credit are supported by commitments with financial institutions. We had approximately $69,414 and $118,000 of letters of credit outstanding as of September 30, 2004 and December 31, 2003, respectively.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

     There has been no quantitative or qualitative changes with respect to market risk exposure during the nine months ended September 30, 2004.

Item 4. Controls and Procedures.

     Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2004. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of that date in providing a reasonable level of assurance that information we are required to disclose in reports we file or furnish under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods in SEC rules and forms. Further, our disclosure controls and procedures were effective in providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

     In our most recent Form 10-K filing we discussed a dispute involving one of our subsidiaries, American Reliable Insurance Company (ARIC) arising out of certain personal accident excess of loss reinsurance programs entered into between 1995 and 1997. While the majority of the negotiations,

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arbitration and/or litigation between the multiple layers of reinsurers, ceding companies and intermediaries are still ongoing, ARIC and an affiliated company, Bankers Insurance Company Limited (BICL) did resolve disputes with two of its reinsurers in the 1996 and 1997 program years by means of a commutation agreement. As a result of the settlement, the two affiliated reinsurers paid ARIC and BICL $6 million and both parties agreed to release each other from any past, present or future obligations of any kind.

Item 2. Unregistered Sale of Equity Security and Use of Proceeds.

						Total Number of		Maximum Number of
						Shares Purchased as		Shares that may yet
						Part of Publicly		be Purchased under
	Total Number of			Average Price Paid		Announced Plans or		the Plans or
Period	Shares Purchased			per Share		Programs		Programs (2)
April 1, 2004 – April 30, 2004		—			—		—		—
May 1, 2004 – May 31, 2004		28,626	(1)	$	24.75		—		—
June 1, 2004 – June 30, 2004		3,500	(1)		25.65		—		—
July 1, 2004 – July 31, 2004		—			—		—		—
August 1, 2004 – August 31, 2004		896,300	(2)		25.74		896,300		—
September 1, 2004 – September 30, 2004		458,900	(1)(2)		26.51		458,800		—
Total		1,387,326		$	25.97		1,355,100		12,871,711

1     Shares were purchased by a rabbi trust pursuant to the Company’s Executive 401(k) Plan in open market purchases. The shares are held of record in the name of the trust, and continue to be considered issued and outstanding. For accounting purposes, however, these shares are classified as treasury shares and are also excluded from the calculation of basic earnings per share.

2     On August 2, 2004, the Company announced that its Board of Directors had approved a share repurchase program under which the Company may repurchase up to 10% of its outstanding common stock.

Item 5. Other Information

(a) We intend to hold our 2005 Annual Stockholder Meeting in the second quarter of 2005. Any stockholder desiring to submit a proposal for action at our 2005 Annual Stockholder Meeting, and have such proposal included in our proxy statement, must submit such proposal by certified mail, return receipt requested, to Assurant, Inc., One Chase Manhattan Plaza, 41^st Floor, New York, NY 10005, Attention: Katherine Greenzang, Senior Vice President, General Counsel and Secretary. All such proposals must be received by us in writing no earlier than January 18, 2005 and no later than February 17, 2005. In addition, any stockholder proposal must comply with the rules of the Securities and Exchange Commission and our Bylaws in order to be considered for inclusion in our proxy materials.

(b) In our Annual Report on Form 10-K for the year ended December 31, 2003, we reported in “Item 11. Executive Compensation — Summary Compensation Table” the compensation of Philip Bruce Camacho as one of the Named Executive Officers. Based on the salary and bonus paid to our executive officers in 2003, Mr. Camacho should not have appeared in the Summary Compensation Table as one of the four most highly compensated executive officers, after our Chief Executive Officer, during the fiscal year ended December 31, 2003, but instead Ms. Lucinda Landreth should have been included in the table. Set forth below is the compensation information with regard to Ms. Lucinda Landreth for the fiscal years ended December 31, 2003 and 2002 (Ms. Landreth was not an Executive Officer during the third prior fiscal year), that should have been disclosed in our Summary Compensation Table.

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									Long-Term
									Compensation
									Awards		Payouts
	Annual Compensation						Other Annual		Securities Underlying				All Other
Name and Principal Position	Year		Salary		Bonus		Compensation		Options		LTIP		Compensation (1)
			($)		($)		($)		(#)		($)		($)
Lucinda Landreth		2003		400,000		877,200		—		1,000		282,910		66,076
President and Chief		2002		212,307		330,804		—		1,000		—		8,000
Investment Officer

(1)     Amounts shown in this column include (i) for the fiscal year ended December 31, 2003, $14,000 for Company contributions under the Assurant 401(k) Plan, $37,156 for Company contributions under the 401(k) portion of the Assurant Executive Pension and 401(k) Plan, and $14,920 in payment of the fair value for stock options to purchase Fortis, Inc.’s Series D Preferred Stock granted pursuant to the Fortis, Inc. Stock Option Plan that were cancelled on September 22, 2003; and (ii) for the fiscal year ended December 31, 2002, $8,000 for Company contributions under the Assurant 401(k) Plan.

Long-Term Incentive Plan Awards

     The following table presents information concerning long-term incentive plan awards under the Assurant Appreciation Incentive Rights Plan during the fiscal year ended December 31, 2003:

					Estimated
					Future Payouts
					Under Non-
			Performance or		Stock Price-
	Number of Shares,		Other Period		Based Plans
	Units or Other		Until Maturation
Name	Rights (#)		or Payout		Target(1) ($)
Lucinda Landreth		- 0 -		- 0 -		- 0 -

(1)     An eligible employee of Assurant, Inc. receives 75% of his or her award in Assurant, Inc. incentive rights and 25% of his or her award in operating business segment incentive rights. Conversely, an eligible employee of an operating business segment of Assurant receives 25% of his or her award in Assurant, Inc. incentive rights and 75% of his or her award in operating business segment incentive rights. Each incentive right represents the right to the appreciation in value of an incentive right over the vesting period of the award, based on a valuation provided by an independent, qualified appraiser.

     On September 29, 2004, the Company announced that Lucinda Landreth, President and Chief Investment Officer of Assurant Asset Management, will be retiring at the end of December 2004. Christopher Pagano, Executive Vice President of Assurant Asset Management, will replace Ms. Landreth as President and Chief Investment Officer of Assurant Asset Management effective January 1, 2005.

Item 6. Exhibits.

     The following exhibits either (a) are filed with this report or (b) have previously been filed with the SEC and are incorporated herein by reference to those prior filings. Exhibits are available upon request at the investor relations section of our website at www.assurant.com.

Exhibit
Number	Exhibit Description
3.1	Restated Certificate of Incorporation of the Registrant (incorporated by reference from Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-109984) and amendments thereto, originally filed on January 13, 2004).

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Exhibit Number	Exhibit Description
3.2	Amended and Restated By-Laws of the Registrant (incorporated by reference from Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-109984) and amendments thereto, originally filed on January 13, 2004).
3.3	Shareholders’ Agreement between the Registrant and Fortis Insurance N.V. (incorporated by reference from Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-109984) and amendments thereto, originally filed on January 13, 2004).
3.4	Registration Rights Agreement between the Registrant and Fortis Insurance N.V. (incorporated by reference from Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-109984) and amendments thereto, originally filed on January 13, 2004).
4.1	Specimen Common Stock Certificate (incorporated by reference from Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-109984) and amendments thereto, originally filed on January 13, 2004).
10.1	Amendment Number One to the Assurant, Inc. Amended and Restated 2004 Employee Stock Repurchase Plan.
10.2	Amendment Number One to the Fortis Executive Pension and 401K Plan.
10.3	Amendment Number Two to the Fortis, Inc. Supplemental Executive Retirement Plan.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
32.1	Certification of Chief Executive Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

     Pursuant to the requirements the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ASSURANT, INC.
Date: November 10, 2004	By:	/s/ J. Kerry Clayton
		Name:	J. Kerry Clayton
		Title:	President and Chief Executive Officer

Date: November 10, 2004	By:	/s/ Robert B. Pollock
		Name:	Robert B. Pollock
		Title:	Executive Vice President and Chief Financial Officer

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