Assurant (AIZ) 10-Q 2005 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2005

	OR
o	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 of Incorporation or Organization)	(I.R.S. Employer 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.

Yesþ Noo

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

Yeso Noþ

     The number of shares of the registrant’s Common Stock outstanding at May 2, 2005 was 138,113,659.

ASSURANT, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

TABLE OF CONTENTS

Item		Page
Number		Number
	PART I
	FINANCIAL INFORMATION
1.	Financial Statements		2
	Assurant, Inc. and Subsidiaries Consolidated Balance Sheets at March 31, 2005 (unaudited) and December 31, 2004		2
	Assurant, Inc. and Subsidiaries Consolidated Statement of Operations Three months ended March 31, 2005 and 2004 (unaudited)		4
	Assurant, Inc. and Subsidiaries Consolidated Statement of Changes in Stockholders’ Equity From December 31, 2004 through March 31, 2005 (unaudited)		5
	Assurant, Inc. and Subsidiaries Consolidated Statement of Cash Flows Three months ended March 31, 2005 and 2004 (unaudited)		6
	Assurant, Inc. and Subsidiaries Notes to Consolidated Financial Statements Three Months Ended March 31, 2005 and 2004 (unaudited)		7
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
3.	Quantitative and Qualitative Disclosures About Market Risk		38
4.	Controls and Procedures		38
	PART II
	OTHER INFORMATION
1.	Legal Proceedings		39
2.	Unregistered Sale of Equity Securities and Use of Proceeds		39
6.	Exhibits		40
	Signatures		41
EX-10.2 AMENDED & RESTATED REVOLVING CREDIT AGREEEMENT
EX-31.1 CERTIFICATION
EX-31.2 CERTIFICATION
EX-32.1 CERTIFICATION
EX-32.2 CERTIFICATION

Assurant, Inc. and Subsidiaries
Consolidated Balance Sheets
At March 31, 2005 (unaudited) and December 31, 2004

	March 31,		December 31,
	2005		2004
	(in thousands except number of shares)
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost — $8,822,521 in 2005 and $8,625,394 in 2004)	$	9,167,851	$	9,122,902
Equity securities available for sale, at fair value (cost — $546,248 in 2005 and $506,879 in 2004)		545,057		520,882
Commercial mortgage loans on real estate at amortized cost		1,041,226		1,053,872
Policy loans		64,182		64,886
Short-term investments		438,768		300,093
Collateral held under securities lending		600,321		535,331
Other investments		540,113		550,080
Total investments		12,397,518		12,148,046
Cash and cash equivalents		475,034		807,082
Premiums and accounts receivable, net		459,981		456,319
Reinsurance recoverables		4,161,982		4,196,810
Accrued investment income		130,843		127,583
Deferred acquisition costs		1,711,132		1,647,654
Property and equipment, at cost less accumulated depreciation		278,691		277,088
Deferred income taxes, net		31,757		—
Goodwill		820,617		823,054
Value of business acquired		165,814		170,663
Other assets		216,435		216,460
Assets held in separate accounts		3,472,170		3,717,149
Total assets	$	24,321,974	$	24,587,908

See the accompanying notes to the consolidated financial statements

2

Assurant, Inc. and Subsidiaries
Consolidated Balance Sheets
At March 31, 2005 (unaudited) and December 31, 2004

	March 31,			December 31,
	2005			2004
	(in thousands except number of shares)
Liabilities
Future policy benefits and expenses	$	6,461,838		$	6,412,688
Unearned premiums		3,381,896			3,354,299
Claims and benefits payable		3,622,965			3,614,949
Commissions payable		248,648			334,363
Reinsurance balances payable		172,133			157,405
Funds held under reinsurance		93,617			96,226
Deferred gain on disposal of businesses		317,857			329,720
Obligation under securities lending		600,321			535,331
Accounts payable and other liabilities		1,209,002			1,328,483
Deferred income taxes, net		—			4,224
Tax payable		110,159			71,869
Debt		971,631			971,611
Mandatorily redeemable preferred stock		24,160			24,160
Liabilities related to separate accounts		3,472,170			3,717,149
Total liabilities	$	20,686,397		$	20,952,477
Commitments and contingencies (note 9)	$	—		$	—
Stockholders’ equity
Common stock, par value $.01 per share, 800,000,000 shares authorized, 142,335,159 and 142,263,299 shares issued, 139,135,069 and 139,766,177 shares outstanding at March 31, 2005 and December 31, 2004, respectively	$	1,423		$	1,423
Additional paid-in capital		2,792,176			2,790,476
Retained earnings		674,208			569,605
Unamortized restricted stock compensation; 34,664 and 51,996 shares at March 31, 2005 and December 31, 2004, respectively		(529	)		(608	)
Accumulated other comprehensive income		256,529			338,163
Treasury stock, at cost; 3,165,426 and 2,445,126 shares at March 31, 2005 and December 31, 2004, respectively		(88,230	)		(63,628	)
Total stockholders’ equity		3,635,577			3,635,431
Total liabilities and stockholders’ equity	$	24,321,974		$	24,587,908

See the accompanying notes to the consolidated financial statements

3

Assurant, Inc. and Subsidiaries
Consolidated Statement of Operations
Three Months Ended March 31, 2005 and 2004 (Unaudited)

	Three Months Ended March 31,
	2005		2004
	(in thousands except number of
	shares and per share amounts)
Revenues
Net earned premiums and other considerations	$	1,631,894	$	1,625,238
Net investment income		164,200		153,824
Net realized gain on investments		492		14,224
Amortization of deferred gain on disposal of businesses		11,863		14,497
Fees and other income		53,905		52,125
Total revenues		1,862,354		1,859,908
Benefits, losses and expenses
Policyholder benefits		943,524		968,965
Amortization of deferred acquisition costs and value of business acquired		227,586		197,262
Underwriting, general and administrative expenses		499,207		538,594
Interest expense		15,314		10,163
Distributions on mandatorily redeemable preferred securities		—		2,163
Total benefits, losses and expenses		1,685,631		1,717,147
Income before income taxes		176,723		142,761
Income taxes		62,325		48,383
Net income	$	114,398	$	94,378
Earnings per share:
Basic	$	0.82	$	0.73
Diluted	$	0.82	$	0.73
			$
Dividends per share	$	0.07		—
Share Data:
Weighted average shares outstanding used in basic per share calculations		139,736,533		129,521,599
Plus: Dilutive securities		96,480		—
Weighted average shares used in diluted per share calculations		139,833,013		129,521,599

See the accompanying notes to the consolidated financial statements

4

Assurant, Inc. and Subsidiaries
Consolidated Statement of Changes in Stockholders’ Equity
From December 31, 2004 through March 31, 2005 (unaudited)

											Accumulated
			Additional					Unamortized			Other									Shares of
	Common		Paid-in		Retained			Restricted Stock			Comprehensive			Treasury						Common
	Stock		Capital		Earnings			Compensation			Income (Loss)			Stock			Total			Stock Issued
								(in thousands except number of shares)
Balance, December 31, 2004	$	1,423	$	2,790,476	$	569,605		$	(608	)	$	338,163		$	(63,628	)	$	3,635,431			142,263,299
Issuance of Common stock		—		1,700		—			—			—			—			1,700			71,860
Dividends		—		—		(9,795	)		—			—			—			(9,795	)		—
Acquistion of Treasury Shares		—		—		—			—			—			(24,602	)		(24,602	)		—
Amortization of restricted stock compensation		—		—		—			79			—			—			79			—
Comprehensive income (loss):
Net income		—		—		114,398			—			—			—			114,398			—
Net change in unrealized gains on securities		—		—		—			—			(104,748	)		—			(104,748	)		—
Change in minimum pension liability		—		—		—			—			28,086			—			28,086
Foreign currency translation		—		—		—			—			(4,972	)		—			(4,972	)		—
Total comprehensive income																		32,764
Balance, March 31, 2005	$	1,423	$	2,792,176	$	674,208		$	(529	)	$	256,529		$	(88,230	)	$	3,635,577			142,335,159

See the accompanying notes to the consolidated financial statements

5

Assurant, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Three Months Ended March 31, 2005 and 2004 (unaudited)

	Three Months Ended
	March 31,
	2005			2004
	(in thousands)
Net cash provided by operating activities	$	82,896		$	177,341
Investing activities
Sales of:
Fixed maturities available for sale		404,361			479,321
Equity securities available for sale		23,208			25,450
Property and equipment		29			4
Maturities, prepayments, and scheduled redemption of:
Fixed maturities available for sale		202,215			160,510
Purchases of:
Fixed maturities available for sale		(805,399	)		(654,188	)
Equity securities available for sale		(62,266	)		(93,690	)
Property and equipment		(13,618	)		(13,315	)
Change in commercial mortgage loans on real estate		12,509			(43,270	)
Change in short term investments		(138,747	)		(129,091	)
Change in other invested assets		(5,237	)		(44,104	)
Change in policy loans		698			(360	)
Change in collateral held under securities lending		(64,990	)		(182,899	)
Net cash used in investing activities		(447,237	)		(495,632	)
Financing activities
Repayment of preferred securities of subsidiary trusts		—			(196,224	)
Issuance of debt		—			971,537
Issuance of common stock		1,700			725,743
Repayment of debt		—			(1,750,000	)
Purchase of treasury stock		(24,602	)		—
Dividends paid		(9,795	)		—
Change in obligation under securities lending		64,990			182,899
Net cash provided by (used in) financing activities		32,293			(66,045	)
Change in cash and cash equivalents		(332,048	)		(384,336	)
Cash and cash equivalents at beginning of period		807,082			958,197
Cash and cash equivalents at end of period	$	475,034		$	573,861

See the accompanying notes to the consolidated financial statements

6

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (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 international markets. Prior to the Initial Public Offering (“the IPO”) 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 the IPO and retained approximately 35% of its ownership (50,199,130 shares). 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 Company’s IPO: (1) redeemed the outstanding $196,224 of mandatorily redeemable preferred securities in January 2004, (2) issued 68,976 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).

     On January 21, 2005, Fortis owned approximately 36% (50,199,130 shares) of the Company based on the number of shares outstanding that day and sold 27,200,000 of those shares in a secondary offering to the public. The Company did not receive any of the proceeds from the sale of shares of common stock by Fortis. Fortis received all net proceeds from the sale. Fortis concurrently sold exchangeable bonds, due January 26, 2008, that are mandatorily exchangeable for their remaining 22,999,130 shares of Assurant. Fortis may elect, prior to the maturity date of the bonds, a cash settlement alternative and pay the bondholders an amount of cash equal to the applicable market value of the Company’s common stock. The exchangeable bonds and the shares of the Company’s common stock into which they are exchangeable have not been and will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

     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 pre-funded 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 statement of the financial statements have been included. Certain prior period amounts have been reclassified to conform to the 2005 presentation.

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

7

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

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

     Operating results for the three months ended March 31, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. 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, 2004.

3. Recent Accounting Pronouncements

     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 Statement of Financial Accounting Standards 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”) 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 December 2004, FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment(“FAS 123R’’) which replaces Statement of Financial Accounting Standards No. 123, Share-Based Payment and supersedes Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees. FAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The pro forma disclosures previously permitted under FAS 123 no longer will be an alternative to financial statement recognition. Under FAS 123R, the company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost, and the transition method to be used at date of adoption. The permitted transition methods include either retrospective or prospective adoption. Under the retrospective option, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented for all unvested stock options beginning with the first period presented. The prospective method requires that compensation expense be recorded for all unvested stock options at the beginning of the first quarter of adoption of FAS 123R. In April 2005, the Securities and Exchange Commission approved a new rule for public companies which delays the effective date of FAS 123R. Under the new rule, public companies are required to adopt FAS 123R in the first annual period after June 15, 2005, and, therefore, the Company is required to adopt FAS 123R by the first quarter of 2006. Except for this deferral of the effective date, the guidance in FAS 123R is unchanged. The Company is currently evaluating the requirements of FAS 123R.

8

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

4. Debt

     In December 2003, the Company 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 the Company’s Mandatorily Redeemable Preferred Securities. The $1,750,000 aggregate indebtedness under the senior bridge credit facility was paid in full in January 2004.

     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 $971,537, 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. 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 senior notes were registered with the Securities and Exchange Commission in 2004 and all of the holders exchanged their notes for the new, registered notes.

     The interest expense incurred for the three months ended March 31, 2005 and 2004 relating to the senior notes was $15,047 and $6,688, respectively.

     The Company maintains 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 J.P. Morgan Securities, Inc. (successor by merger to 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 February 3, 2005, the Company used $40,000 from the commercial paper program for general corporate purchases, which was repaid on February 17, 2005. There were no amounts relating to the commercial paper program outstanding at March 31, 2005. The Company did not use the revolving credit facility during the three months ended March 31, 2005 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 ratios and thresholds. The Company is in compliance with all covenants and the Company maintains all specified minimum ratios and thresholds.

     In April 2005, the Company amended and restated its $500,000 senior revolving credit facility with a syndicate of banks arranged by Citibank and JP Morgan Chase Bank. The amended and restated credit facility is unsecured and is available until April 2010, so long as the Company is in compliance with all the covenants.

9

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

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. Currently, the Company has awarded only restricted shares under the plan. The expense recorded related to the long-term incentive plan for the three months ended March 31, 2005 and 2004 was $79 and $252, respectively.

	For the Three
	Months Ended
	March 31, 2005
Restricted shares outstanding, December 31, 2004		51,996
Grants		—
Vested		(17,332	)
Forfeitures		—
Restricted shares outstanding, March 31, 2005		34,664

     Executive 401K Plan

          During 2005, the Company purchased 10,300 treasury shares for $350 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. In January 2005, the Company issued 71,860 shares to employees relating to the ESPP at a price of $23.67 for the offering period of July 1 through December 31, 2004.

          The Company accounts for the ESPP in accordance with Accounting Principles Board Opinion No. 25,“Accounting for Stock Issued to Employees”(“APB 25”) after meeting the requirement for a non-compensatory plan, 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 FAS 123.

	For the Three
	Months Ended
	March 31, 2005
Net income as reported	$	114,398
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(158	)
Pro forma net income	$	114,240
Earnings per share as reported:
Basic	$	0.82
Diluted	$	0.82
Pro forma earnings per share:
Basic	$	0.82
Diluted	$	0.82

10

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (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 2005	Shares Purchased		Paid Per Share		Plans or Programs
January		—		—		—
February		68,400		34.37		60,000
March		651,900		34.13		650,000
		720,300	$	34.16		710,000

     For the period ending March 31, 2005, the Company repurchased 710,000 shares of the Company’s outstanding stock at a cost of $24,252. The total remaining number of shares that can be purchased pursuant to the repurchase program previously approved by the Company’s Board of Directors was 11,105,311 shares at March 31, 2005.

     There were 10,300 shares repurchased during 2005 for $350 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.

11

Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

7. Retirement and Other Employee Benefits

     The components of net periodic benefits cost for the three months ended March 31, 2005 and 2004 were as follows:

	Pension Benefits						Retirement Health Benefits
	2005			2004			2005			2004
Service cost	$	4,485		$	4,412		$	566		$	570
Interest cost		5,051			4,835			778			788
Expected return on plan assets		(5,989	)		(5,522	)		(146	)		(135	)
Amortization of prior service cost		764			739			327			327
Amortization of net loss		1,639			711			—			—
Net periodic benefit cost	$	5,950		$	5,175		$	1,525		$	1,550

     During the three months ended March 31, 2005, the Company contributed $40,000 and zero to the pension plan and the retirement health benefit plan, respectively. This is consistent with the Company’s projected contribution amounts disclosed in its 2004 Form 10-K. As a result of the $40,000 cash contribution to its qualified pension plan, the Company reversed $28,086, net of tax, representing a portion of the minimum pension liability, which was previously recorded in accumulated other comprehensive income. An additional minimum pension liability of $9,485, net of tax, related to the non-qualified plan, remains within accumulated other comprehensive income.

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 and Long-Term Care through reinsurance agreements.

     The Company evaluates performance of the operating business segments 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.

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Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

     The following tables summarize selected financial information by segment:

	Three Months Ended March 31, 2005
					Employee				Corporate &
	Solutions		Health		Benefits		Preneed		Other			Consolidated
Revenues
Net earned premiums and other considerations	$	615,247	$	549,526	$	345,922	$	121,199	$	—		$	1,631,894
Net investment income		48,165		17,705		37,983		53,012		7,335			164,200
Net realized gains on investments		—		—		—		—		492			492
Amortization of deferred gain on disposal of businesses		—		—		—		—		11,863			11,863
Fees and other income		36,103		10,331		6,189		1,179		103			53,905
Total revenues		699,515		577,562		390,094		175,390		19,793			1,862,354
Benefits, losses and expenses
Policyholder benefits		203,265		345,368		267,738		127,153		—			943,524
Amortization of deferred acquisition costs and value of business acquired		187,220		8,923		4,706		26,737		—			227,586
Underwriting, general and administrative expenses		227,369		147,840		92,311		10,794		20,893			499,207
Interest expense		—		—		—		—		15,314			15,314
Total benefits, losses and expenses		617,854		502,131		364,755		164,684		36,207			1,685,631
Segment income (loss) before income tax		81,661		75,431		25,339		10,706		(16,414	)		176,723
Income taxes		26,891		25,758		8,960		3,750		(3,034	)		62,325
Segment income (loss) after tax	$	54,770	$	49,673	$	16,379	$	6,956	$	(13,380	)
Net income												$	114,398

Segment Assets:	As of March 31, 2005
Segments assets, excluding goodwill	$	7,168,545	$	1,774,665	$	2,744,020	$	4,127,660	$	7,686,467	$	23,501,357
Goodwill												820,617
Total Assets											$	24,321,974

	Three Months Ended March 31, 2004
					Employee				Corporate &
	Solutions		Health		Benefits		Preneed		Other			Consolidated
Revenues
Net earned premiums and other considerations	$	623,065	$	550,947	$	318,044	$	133,182	$	—		$	1,625,238
Net investment income		44,759		16,947		35,722		50,177		6,219			153,824
Net realized gains on investments		—		—		—		—		14,224			14,224
Amortization of deferred gain on disposal of businesses		—		—		—		—		14,497			14,497
Fees and other income		29,207		9,355		10,384		2,041		1,138			52,125
Total revenues		697,031		577,249		364,150		185,400		36,078			1,859,908
Benefits, losses and expenses
Policyholder benefits		231,576		356,115		244,326		136,948		—			968,965
Amortization of deferred acquisition costs and value of business acquired		157,502		10,989		1,515		27,256		—			197,262
Underwriting, general and administrative expenses		249,048		154,412		97,830		11,257		26,047			538,594
Interest expense		—		—		—		—		10,163			10,163
Distributions on mandatorily redeemable preferred securities		—		—		—		—		2,163			2,163
Total benefits, losses and expenses		638,126		521,516		343,671		175,461		38,373			1,717,147
Segment income (loss) before income tax		58,905		55,733		20,479		9,939		(2,295	)		142,761
Income taxes		18,852		19,025		7,229		3,483		(206	)		48,383
Segment income (loss) after tax	$	40,053	$	36,708	$	13,250	$	6,456	$	(2,089	)
Net income												$	94,378

Segment Assets:	Year Ended December 31, 2004
Segments assets, excluding goodwill	$	7,273,575	$	1,706,024	$	2,703,990	$	4,060,240	$	8,021,025	$	23,764,854
Goodwill												823,054
Total assets											$	24,587,908

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Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

9. Commitments and Contingencies

     In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements. These letters of credit are supported by commitments with financial institutions. The Company had $75,263 of letters of credit outstanding as of March 31, 2005.

     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.

     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.

     The Company was notified on August 26, 2004 that one of our employees is being investigated by the criminal division of the Internal Revenue Service (“IRS”) for responses he made to questions he was asked by the IRS relating to an approximately $18,000 tax reserve taken by the Company in 1999. At this stage, it would be speculative to predict the outcome of this investigation. However, it could result in a fine assessed against the employee and the Company, negative publicity for the Company or more serious sanctions.

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Assurant, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2005 and 2004 (Unaudited)

10. Subsequent Events

     On April 7, 2005, the Company approved an amendment to the Assurant Appreciation Incentive Rights Plan (“AAIR Plan”). The amendment, which becomes effective June 30, 2005, amends the plan from one that pays appreciation to participants in the form of cash to a plan that pays appreciation to participants in the form of company stock. Until adoption of FAS 123R (see Note 3), the Company will continue to account for the AAIR Plan as a variable plan in accordance with the provisions of APB 25 and its interpretations.

     On April 8, 2005, the Company announced that the Board of Directors declared a quarterly dividend of $0.08 per common share. The dividend will be payable on June 7, 2005 to shareholders of record as of May 23, 2005.

     On May 2, 2005, the Company received a subpoena from the United States Securities and Exchange Commission (“SEC”) seeking documents relating to “certain loss mitigation insurance products.” Assurant intends to fully cooperate with the SEC’s request. In addition, the Audit Committee of the Board of Directors is conducting a review of the matters raised by the subpoena.

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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 March 31, 2005, compared with December 31, 2004, and our results of operations for the three months ended March 31, 2005 and 2004.. This discussion should be read in conjunction with our MD&A and annual audited financial statements as of December 31, 2004 included in the our Form 10-K for the year ended December 31, 2004 filed with the U.S. Securities and Exchange Commission and the March 31, 2005 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 services; credit insurance including life, disability and unemployment; warranties and extended services contracts; individual, short-term and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.

Business Discussion

     We are pleased with Assurant’s first quarter performance. We continue to demonstrate the strength of our diversified specialty insurance strategy and continue to deliver shareholder value and profitable growth. Our net income for the first quarter was $114,398, or $0.82 per share, an increase of 21% over the first quarter of 2004.

     Assurant Solutions had a strong quarter, due in large part to outstanding loss experience in our specialty property businesses. Assurant Solutions has seen significant growth internationally, in both extended service contracts and credit insurance. Expanding off our base in the UK and Canada, we’ve made progress landing new client relationships in Argentina and Brazil. Last week, we had a formal launch of our operations in Mexico.

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     With a long term focus on risk management, Assurant Health delivered a record low combined ratio. Market conditions continue to be difficult for writing new business.

     Assurant Employee Benefits had strong growth in net operating income in the first quarter of 2005. While we are very pleased with that result, our quarterly results benefited from some one time expense items. Without these items our earnings would have been approximately comparable to the first quarter of 2004. This reflects a challenging competitive environment, particularly in our dental products.

     Assurant Preneed, the market leader in preneed funeral insurance, benefited from pricing actions taken over the past 2 years. However, these pricing actions continue to affect new sales activity.

Critical Accounting Estimates

Reserves

Long Duration

     The following is a discussion of the process by which we determine one 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 unfavorable deviation. An unearned revenue 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 months ended March 31, 2005.

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.

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     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 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.

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Business Dispositions

     We have used reinsurance to exit certain businesses to facilitate the transaction 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 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 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.

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Critical Accounting Policies

     Our 2004 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 2004 Form 10-K were consistently applied to the consolidated interim financial statements for the three months ended March 31, 2005.

     As stated in our 2004 Form 10K, 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, 2005 impairment test during the three months ended March 31, 2005 and concluded that goodwill is 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
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net earned premiums and other considerations	$	1,631,894		$	1,625,238
Net investment income		164,200			153,824
Net realized gains on investments		492			14,224
Amortization of deferred gain on disposal of businesses		11,863			14,497
Fees and other income		53,905			52,125
Total revenues		1,862,354			1,859,908
Benefits, losses and expenses:
Policyholder benefits		(943,524	)		(968,965	)
Selling, underwriting and general expenses(1)		(726,793	)		(735,856	)
Interest expense		(15,314	)		(10,163	)
Distributions on preferred securities		—			(2,163	)
Total benefits, losses and expenses		(1,685,631	)		(1,717,147	)
Income before income taxes		176,723			142,761
Income taxes		(62,325	)		(48,383	)
Net income	$	114,398		$	94,378

(1) Includes amortization of DAC and VOBA and underwriting, general and administrative expenses.

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

     Total revenues increased by $2,446, or less than 1%, to $1,862,354 for the three months ended March 31, 2005 from $1,859,908 for the three months ended March 31, 2004.

     Net earned premiums and other considerations increased by $6,656, or less than 1%, to $1,631,894 for the three months ended March 31, 2005 from $1,625,238 for the three months ended March 31, 2004. The increase in net earned premiums is primarily due to increased group disability business in Assurant Employee Benefits. This increase is the result of an increase in group disability business written through alternate distribution sources and an increase in single premium for risk related to a closed block of group disability business. The increase was partially offset by decreases in Assurant Solutions and Assurant Preneed. The decrease in Assurant Solutions was primarily driven by a decrease in consumer protection solutions products. This decrease was primarily due to the continued decline of our domestic credit insurance business and lower net earned premiums in our extended service contract business due to the timing and revenue recognition of earned premiums. The decrease in Assurant Preneed was due to a decline in sales of life policies in the AMLIC and Independent- United States channels.

     Net investment income increased by $10,376, or 7%, to $164,200 for the three months ended March 31, 2005 from $153,824 for the three months ended March 31, 2004. The increase was primarily due to an increase in invested assets and in yields. The average portfolio yield increased by 8 basis points to

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5.51% for the three months ended March 31, 2005 from 5.43% for the three months ended March 31, 2004. The average invested assets increased by approximately 5%.

     Net realized gains on investments declined by $13,732, to net realized gains of $492 for the three months ended March 31, 2005 from net realized gains of $14,224 for the three months ended March 31, 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 March 31, 2005 and 2004, we had other-than-temporary impairments on fixed maturity and equity securities of $0 and $600, respectively. For the three months ended March 31, 2005 and 2004, we also recorded realized losses of $0 and $217, respectively, related to other investments.

     Amortization of deferred gain on disposal of businesses decreased by $2,634, or 18%, to $11,863 for the three months ended March 31, 2005 from $14,497 for the three months ended March 31, 2004. This decrease in amortization was consistent with the anticipated run off of the sold businesses.

     Fees and other income increased by $1,780, or 3%, to $53,905 for the three months ended March 31, 2005 from $52,125 for the three months ended March 31, 2004. The increase in fees and other income is primarily due to increased fees related to growth in Assurant Solutions’ extended service contract and debt deferment businesses. The increase is partially offset primarily by a decrease in Assurant Employee Benefits as a result of the sale of the Workability division in May of 2004.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $31,516, or 2%, to $1,685,631 for the three months ended March 31, 2005 from $1,717,147 for the three months ended March 31, 2004.

     Policyholder benefits decreased by $25,441, or 3%, to $943,524 for the three months ended March 31, 2005 from $968,965 for the three months ended March 31, 2004. The decrease was primarily driven by a decrease in Assurant Solutions as a result of improved loss experience in specialty property product lines, a decrease in Assurant Health primarily due to favorable large claim experience in the small employer group health insurance business, and a decrease in Assurant Preneed due to the decline in sales of life polices. The decreases were partially offset by an increase in Assurant Employee Benefits primarily driven by an increase due to the assumption of risk related to a closed block of group disability business and reduced group disability claim closures.

     Selling, underwriting and general expenses decreased by $9,063, or 1%, to 726,793 for the three months ended March 31, 2005 from $735,856 for the three months ended March 31, 2004. The decrease is primarily due to a decrease in Assurant Health as a result of the decline in first year business in individual markets and small employer group businesses and a decrease in Corporate and Other as a result of costs incurred during the three months ended March 31, 2004 related to our initial public offering. These decreases were partially offset by an increase in Assurant Solutions primarily due to the change in their mix of business.

     Interest expense increased by $5,151, or 51%, to $15,314 for the three months ended March 31, 2005 from $10,163 for the three months ended March 31, 2004. Interest expense increased due to the refinancing of $1,750,000 of short term notes to $975,000 of long term debt at higher interest rates in February 2004.

     Distributions on preferred securities decreased by $2,163, or 100%, to zero for the three months ended March 31, 2005 from $2,163 for the three months ended March 31, 2004. The remaining $196,224 of preferred securities were redeemed in January 2004.

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Net Income

     Net income increased by $20,020, or 21%, to $114,398 for the three months ended March 31, 2005, from $94,378 for the three months ended March 31, 2004.

     Income taxes increased by $13,942, or 29%, to $62,325 for the three months ended March 31, 2005 from $48,383 for the three months ended March 31, 2004. The effective tax rate for the three months ended March 31, 2005 was 35.3% compared to 33.9% for the three months ended March 31, 2004.

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Assurant Solutions

Overview

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

	For the Three Months
	Ended
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net earned premiums and other considerations	$	615,247		$	623,065
Net investment income		48,165			44,759
Fees and other income		36,103			29,207
Total revenues		699,515			697,031
Benefits, losses and expenses:
Policyholder benefits		(203,265	)		(231,576	)
Selling, underwriting and general expenses		(414,589	)		(406,550	)
Total benefits, losses and expenses		(617,854	)		(638,126	)
Segment income before income tax		81,661			58,905
Income taxes		(26,891	)		(18,852	)
Segment income after tax	$	54,770		$	40,053
Net earned premiums and other considerations by major product groupings:
Specialty Property (1)	$	201,118		$	182,981
Consumer Protection (2)		414,129			440,084
Total	$	615,247		$	623,065
Gross written premiums for selected product groupings: (3)
Domestic Credit	$	190,718		$	236,480
International Credit	$	162,747		$	128,591
Domestic Extended Service Contracts (4)	$	253,249		$	263,333
International Extended Service Contracts (4)	$	47,570		$	10,697
Specialty Property (1)	$	299,357		$	303,073

(1)	“Specialty Property” includes a variety of specialized property insurance programs that are coupled with differentiated administrative capabilities, such as creditor placed and voluntary homeowners, manufactured housing homeowners and other specialty property products.
(2)	“Consumer Protection” includes an array of credit insurance programs and extended service contracts.
(3)	Gross written premium does not necessarily translate to an equal amount of subsequent net earned premium since Assurant Solutions reinsures a portion of its premiums to insurance subsidiaries of its clients.
(4)	Extended Service Contracts includes warranty contracts for products such as personal computers, consumer electronics and appliances.

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

     Total revenues increased by $2,484, or less than 1%, to $699,515 for the three months ended March 31, 2005, from $697,031 the three months ended March 31, 2004.

     Net earned premiums and other considerations decreased by $7,818, or 1%, to $615,247 for the three months ended March 31, 2005, from $623,065 for the three months ended March 31, 2004. This decrease was primarily due to a decrease of $25,955 in net earned premiums and other considerations from our consumer protection solutions products, primarily due to the continued decline of our domestic credit insurance business and lower net earned premiums in our extended service contracts business due to the timing and revenue recognition of earned premiums. Net earned premiums and other considerations from

24

our specialty property solutions products increased by $18,137, primarily from growth in our creditor-placed and voluntary homeowners insurance product lines.

     Net investment income increased by $3,406, or 8%, to $48,165 for the three months ended March 31, 2005, from $44,759 for the three months ended March 31, 2004. The increase was primarily due to an increase in invested assets. The average portfolio yield increased by 13 basis points to 4.87% for the three months ended March 31, 2005, from 4.74% for the three months ended March 31, 2004. The average invested assets increased by approximately 5% for the three months ended March 31, 2005 compared to the three months ended March 31, 2004.

     Fees and other income increased $6,896, or 24%, to $36,103 for the three months ended March 31, 2005, from $29,207 for the three months ended March 31, 2004, mainly due to an increase in fees related to growth in our extended service contract and debt deferment businesses.

     Gross written premiums in our domestic credit insurance business decreased by $45,762, or 19%, to $190,718 for the three months ended March 31, 2005 from $236,480 for the three months ended March 31, 2004 due to the continued decline of this product line. Gross written premiums from our international credit insurance business increased by $34,156, or 27%, to $162,747 for the three months ended March 31, 2005 from $128,591 for the three months ended March 31, 2004, primarily due to our focus on international expansion of credit insurance. Gross written premiums in our domestic extended service contract business decreased by $10,084, or 4%, to $253,249 for the three months ended March 31, 2005 from $263,333 for the three months ended March 31, 2004. The first quarter 2004 results included approximately $18,000 of additional gross written premium due to higher gross written premiums reported from an extended service contract client, however this had a corresponding immaterial impact to net operating income for the three months ended March 31, 2004. Gross written premiums in our international extended service contract business increased by $36,873, or 345%, to $47,570 for the three months ended March 31, 2005 from $10,697 for the three months ended March 31, 2004, primarily due to the signing of a new client in Canada. Gross written premiums from our specialty property solutions products decreased by $3,716, or 1%, to $299,357 for the three months ended March 31, 2005 from $303,073 for the three months ended March 31, 2004, primarily from the reduced emphasis on sales of certain specialty property products with high combined ratios.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $20,272 or 3%, to $617,854 for the three months ended March 31, 2005, from $638,126 for the three months ended March 31, 2004.

     Policyholder benefits decreased by $28,311, or 12%, to $203,265 for the three months ended March 31, 2005, from $231,576 for the three months ended March 31, 2004. The decrease was primarily attributable to improved loss experience from our specialty property product lines, especially our manufactured housing homeowners product line, and decreased losses associated with the decline of our domestic credit insurance business.

     Selling, underwriting and general expenses increased by $8,039, or 2%, to $414,589 for the three months ended March 31, 2005, from $406,550 for the three months ended March 31, 2004. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, increased by $9,571. The first quarter of 2005 included a one-time credit of $7,100 attributable to the release of a commission liability that was settled during the first quarter of 2005. Absent this item, commissions, taxes, licenses and fees would have increased by $16,671, primarily as a result of the change in the mix of business. General expenses decreased by $1,530, primarily due to productivity gain initiatives in our domestic credit insurance product line, partially offset by additional expenses attributable to growth in our extended service contract and international product lines.

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Segment Income After Tax

     Segment income after tax increased by $14,717, or 37%, to $54,770 for the three months ended March 31, 2005, from $40,053 for the three months ended March 31, 2004.

     Income taxes increased by $8,039, or 43%, to $26,891 for the three months ended March 31, 2005, from $18,852 for the three months ended March 31, 2004. The change in income taxes is consistent with the change in pretax 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
	Ended
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net earned premiums and other considerations	$	549,526		$	550,947
Net investment income		17,705			16,947
Fees and other income		10,331			9,355
Total revenues		577,562			577,249
Benefits, losses and expenses:
Policyholder benefits		(345,368	)		(356,115	)
Selling, underwriting and general expenses		(156,763	)		(165,401	)
Total benefits, losses and expenses		(502,131	)		(521,516	)
Segment income before income tax		75,431			55,733
Income taxes		(25,758	)		(19,025	)
Segment income after tax	$	49,673		$	36,708
Net earned premiums and other considerations:
Individual markets:
Individual medical	$	287,312		$	263,972
Short term medical		25,876			27,655
Subtotal		313,188			291,627
Small employer group:		236,338			259,320
Total	$	549,526		$	550,947
Membership by product line:
Individual markets:
Individual medical		671			657
Short term medical		116			129
Subtotal		787			786
Small employer group:		308			375
Total		1,095			1,161
Ratios:
Loss ratio (1)		62.8	%		64.6	%
Expense ratio (2)		28.0	%		29.5	%
Combined ratio (3)		89.7	%		93.1	%

(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.

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

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     Total revenues increased by $313, or less than 1%, to $577,562 for the three months ended March 31, 2005 from $577,249 for the three months ended March 31, 2004.

     Net earned premiums and other considerations decreased by $1,421, or less than 1%, to $549,526 for the three months ended March 31, 2005 from $550,947 for the three months ended March 31, 2004. Net earned premiums for individual markets increased by $21,561 primarily due to premium rate increases. Net earned premiums for small employer group health insurance business decreased by $22,982 due to a decline in members partially offset by premium rate increases. Both individual markets and the small employer group health insurance business have experienced decreases in new business written primarily due to increased competition in their respective markets.

     Net investment income increased by $758, or 4%, to $17,705 for the three months ended March 31, 2005 from $16,947 for the three months ended March 31, 2004. The increase was primarily due to an increase in invested assets, partially offset by a decrease in investment yield driven by the lower interest rate environment. The average portfolio yield decreased 6 basis points to 5.44% for the three months ended March 31, 2005, from 5.50% for the three months ended March 31, 2004. The average invested assets increased by approximately 6%.

     Fees and other income increased by $976, or 10%, to $10,331 for the three months ended March 31, 2005 from $9,355 for the three months ended March 31, 2004. This increase was primarily attributable to additional insurance policy fees and higher fee-based product sales in individual markets, such as our non-insurance health access discount cards and ancillary coverages underwritten by other carriers.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $19,385, or 4%, to $502,131 for the three months ended March 31, 2005 from $521,516 for the three months ended March 31, 2004. The combined ratio improved by 340 basis points to 89.7% for the three months ended March 31, 2005 from 93.1% for the three months ended March 31, 2004. The improvement of the combined ratio was primarily in the small employer group health insurance business.

     Policyholder benefits decreased by $10,747, or 3%, to $345,368 for the three months ended March 31, 2005 from $356,115 for the three months ended March 31, 2004,. The benefit loss ratio improved by 180 basis points to 62.8% for the three months ended March 31, 2005 from 64.6% for the three months ended March 31, 2004. This improvement was primarily due to favorable large claims experience in the small employer group health insurance business.

     Selling, underwriting and general expenses decreased by $8,638, or 5%, to $156,763 for the three months ended March 31, 2005 from $165,401 for the three months ended March 31, 2004. The expense ratio improved by 150 basis points to 28.0% for the three months ended March 31, 2005 from 29.5% for the three months ended March 31, 2004. This reduction and ratio improvement was primarily attributable to a decline in first year business in 2005 compared to 2004, resulting in decreased commission expense and other acquisition costs in both individual markets and small employer group business.

Segment Income After Tax

     Segment income after tax increased by $12,965, or 35%, to $49,673 for the three months ended March 31, 2005 from $36,708 for the three months ended March 31, 2004.

     Income taxes increased by $6,733, or 35%, to $25,758 for the three months ended March 31, 2005 from $19,025 for the three months ended March 31, 2004. This increase was primarily due to the increase in pre-tax income.

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Assurant Employee Benefits

Overview

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

	For the Three Months Ended
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net earned premiums and other considerations	$	345,922		$	318,044
Net investment income		37,983			35,722
Fees and other income		6,189			10,384
Total revenues		390,094			364,150
Benefits, losses and expenses:
Policyholder benefits		(267,738	)		(244,326	)
Selling, underwriting and general expenses		(97,017	)		(99,345	)
Total benefits, losses and expenses		(364,755	)		(343,671	)
Segment income before income tax		25,339			20,479
Income taxes		(8,960	)		(7,229	)
Segment income after tax	$	16,379		$	13,250
Ratios:
Loss ratio (1)		77.4	%		76.8	%
Expense ratio (2)		27.6	%		30.2	%
Net earned premiums and other considerations
By major product grouping:
Group dental	$	128,242		$	131,267
Group disability single premiums for closed blocks (3)		26,700			13,103
All Other group disability		124,777			110,701
Group life		66,203			62,973
Total	$	345,922		$	318,044

(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)	This represents single premium on closed blocks of group disability business.

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

     Total revenues increased by $25,944, or 7%, to $390,094 for the three months ended March 31, 2005 from $364,150 for the three months ended March 31, 2004.

     Net earned premiums increased by $27,878, or 9%, to $345,922 for the three months ended March 31, 2005 from $318,044 for the three months ended March 31, 2004. Net earned premiums growth was driven by increases in our group disability and life businesses, offset by a decrease in group dental business. Total group disability net earned premiums increased by $27,673, or 22%, to $151,477 for the three months ended March 31, 2005 from $123,804 for the three months ended March 31, 2004. The increase is primarily driven by an increase in business written through alternate distribution sources and an increase of $13,597 in single premiums for risk related to closed blocks of business. Group life premiums increased by $3,230, or 5%, to $66,203 for the three months ended March 31, 2005 from $62,973 for the

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three months ended March 31, 2004. The increase is due to higher sales and renewals during the later half of 2004. Group dental premiums decreased by $3,025, or 2%, to $128,242 for the three months ended March 31, 2005 from $131,267 for the three months ended March 31, 2004. This increase was primarily due to lower sales and renewals as a result of continued pricing discipline in an increasingly competitive market.

     Net investment income increased by $2,261, or 6%, to $37,983 for the three months ended March 31, 2005 from $35,722 for the three months ended March 31, 2004. The increase was primarily due to an increase in invested assets and in the yield. The average portfolio yield increased 11 basis points to 6.12% for the three months ended March 31, 2005 from 6.01% for the three months ended March 31, 2004. The average invested assets increased by approximately 4%.

     Fee income decreased by $4,195, or 40%, to $6,189 for the three months ended March 31, 2005 from $10,384 for the three months ended March 31, 2004. The decrease was driven by lower fee income resulting from the sale of the Workability division, in May 2004.

Total Benefits, Losses and Expenses

     Total benefits, losses and expenses increased by $21,084, or 6%, to $364,755 for the three months ended March 31, 2005 from $343,671 for the three months ended March 31, 2004.

     Policyholder benefits increased by $23,412, or 10%, to $267,738 for the three months ended March 31, 2005 from $244,326 for the three months ended March 31, 2004. The loss ratio has increased 60 basis points to 77.4% for the three months ended March 31, 2005 from 76.8% for the three months ended March 31, 2004. The increase was driven by an increase of $13,265 due to the assumption of risk related to a closed block of group disability business, reduced group disability claim closures and unfavorable group dental experience. Partially offsetting these increases was favorable development in group life mortality.

     Selling, underwriting, and general expenses decreased by $2,328, or 2%, to $97,017 for the three months ended March 31, 2005 from $99,345 for the three months ended March 31, 2004. The expense ratio improved 260 basis points to 27.6% for the three months ended March 31, 2005 from 30.2% for the three months ended March 31, 2004. This reduction and ratio improvement was primarily driven by a decrease in general expenses resulting from the sale of the Workability division and a non-recurring reduction in short-term incentive compensation expenses. Partially offsetting this decrease was an increase in commission expenses driven by increases in group disability and group life earned premiums.

Segment Income After Tax

     Segment operating income after tax increased by $3,129, or 24%, to $16,379 for the three months ended March 31, 2005 from $13,250 for the three months ended March 31, 2004.

     Income tax expense increased by $1,731, or 24%, to $8,960 for the three months ended March 31, 2005 from $7,229 for the three months ended March 31, 2004. The increase is due to an increase 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 Ended
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net earned premiums and other considerations	$	121,199		$	133,182
Net investment income		53,012			50,177
Fees and other income		1,179			2,041
Total revenues		175,390			185,400
Benefits, losses and expenses:
Policyholder benefits		(127,153	)		(136,948	)
Selling, underwriting and general expenses		(37,531	)		(38,513	)
Total benefits, losses and expenses		(164,684	)		(175,461	)
Segment income before income tax		10,706			9,939
Income taxes		(3,750	)		(3,483	)
Segment income after tax	$	6,956		$	6,456
Net earned premiums and other considerations by channel
AMLIC	$	64,589		$	71,668
Independent-United States		50,859			57,418
Independent-Canada		5,751			4,096
Total	$	121,199		$	133,182

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

     Total revenues decreased by $10,010, or 5%, to $175,390 for the three months ended March 31, 2005 from $185,400 for the three months ended March 31, 2004.

     Net earned premiums and other considerations decreased by $11,983, or 9%, to $121,199 for the three months ended March 31, 2005 from $133,182 for the three months ended March 31, 2004. This is due to a decline in sales of life policies in the AMLIC and Independent-United States channels. Sales at AMLIC have declined due to changes in the sales force structure at SCI, AMLIC’s principal customer. Independent-United States sales have declined as a result of continued pricing discipline on certain new business, resulting in the loss of several larger customers. This decrease was marginally offset by an increase in sales in the Independent – Canada channel due to increased sales to national accounts.

     Net investment income increased by $2,835, or 6%, to $53,012 for the three months ended March 31, 2005 from $50,177 for the three months ended March 31, 2004. The increase was primarily due to an increase in invested assets, partially offset by a decrease in investment yield driven by the lower interest rate environment. The average portfolio yield decreased 4 basis point to 6.23% for the three months ended March 31, 2005 from 6.27% for the three months ended March 31, 2004. The average invested assets increased by approximately 6%.

     Fees and other income decreased by $862, or 42%, to $1,179 for the three months ended March 31, 2005 from $2,041 for the three months ended March 31, 2004. This decrease is primarily due to a decline in the value of the Consumer Price Index cap, a derivative instrument.

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Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $10,777, or 6%, to $164,684 for the three months ended March 31, 2005 from $175,461 for the three months ended March 31, 2004.

     Policyholder benefits decreased by $9,795, or 7%, to $127,153 for the three months ended March 31, 2005 from $136,948 for the three months ended March 31, 2004. The decrease is primarily a result of lower reserve increases due to the decline in sales of life policies.

     Selling, underwriting and general expenses decreased by $982, or 3%, to $37,531 for the three months ended March 31, 2005 from $38,513 for the three months ended March 31, 2004. The decrease is primarily due to a decline in sales of life policies and lower premium tax rates.

Segment Income After Tax

     Segment income after tax increased by $500, or 8%, to $6,956 for the three months ended March 31, 2005 from $6,456 for the three months ended March 31, 2004.

     Income taxes increased by $267, or 8%,to $3,750 for the three months ended March 31, 2005 from $3,483 for the three months ended March 31, 2004. This was primarily due to the increase 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 (LTC) (a business we sold via reinsurance on March 1, 2000).

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The table below presents information regarding Corporate and Other’s segment results of operations:

	For the Three Months Ended
	March 31,
	2005			2004
	(in thousands)
Revenues:
Net investment income	$	7,335		$	6,219
Net realized gains on investments		492			14,224
Amortization of deferred gains on disposal of businesses		11,863			14,497
Fees and other income		103			1,138
Total revenues		19,793			36,078
Benefits, losses and expenses:
Selling, underwriting and general expenses		(20,893	)		(26,047	)
Interest expense		(15,314	)		(10,163	)
Distributions on preferred securities		—			(2,163	)
Total benefits, losses and expenses		(36,207	)		(38,373	)
Segment loss before income tax		(16,414	)		(2,295	)
Income tax benefit		(3,034	)		(206	)
Segment loss after tax	$	(13,380	)	$	(2,089	)

     As of March 31, 2005, we had approximately $317,857 (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.

Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004

Total Revenues

     Total revenues decreased by $16,285, or 45%, to $19,793 for the three months ended March 31, 2005 from $36,078 for the three months ended March 31, 2004.

     Net investment income increased by $1,116, or 18%, to $7,335 for the three months ended March 31, 2005 from $6,219 for the three months ended March 31, 2004. The increase in investment income was mainly due to an increase in average invested assets.

     Net realized gains on investments declined by $13,732, to net realized gains of $492 for the three months ended March 31, 2005 from net realized gains of $14,224 for the three months ended March 31, 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 March 31, 2005 and 2004, we had other-than-temporary impairments on fixed maturity and equity securities of $0 and $600, respectively. For the three months ended March 31, 2005 and 2004, we also recorded realized losses of $0 and $217, respectively, related to other investments.

     Amortization of deferred gain on disposal of businesses decreased by $2,634, or 18%, to $11,863 for the three months ended March 31, 2005 from $14,497 for the three months ended March 31, 2004. This decrease in amortization was consistent with the anticipated run off of the sold businesses.

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Total Benefits, Losses and Expenses

     Total benefits, losses and expenses decreased by $2,166, or 6%, to $36,207 for the three months ended March 31, 2005 from $38,373 for the three months ended March 31, 2004.

     Selling, underwriting and general expenses decreased by $5,154, or 20%, to $20,893 for the three months ended March 31, 2005 from $26,047 for the three months ended March 31, 2004. This decrease in expenses was mainly due to $3,591 of costs incurred during the three months ended March 31, 2004 related to the our initial public offering, compared to $1,600 of costs incurred during the three months ended March 31, 2005 related to our secondary stock offering.

     Interest expense increased by $5,151, or 51%, to $15,314 for the three months ended March 31, 2005 from $10,163 for the three months ended March 31, 2004. Interest expense increased due to the refinancing of $1,750,000 of short term notes to $975,000 of long term debt at higher interest rates in February 2004.

     Distributions on preferred securities decreased by $2,163, or 100%, to zero for the three months ended March 31, 2005 from $2,163 for the three months ended March 31, 2004. The remaining $196,224 of preferred securities were redeemed in January 2004.

Segment Loss After Tax

     Segment loss after tax increased by $11,291, or over 100%, to $13,380 for the three months ended March 31, 2005 from $2,089 for the three months ended March 31, 2004.

     Income tax benefit improved by $2,828, to a benefit of $3,034 for the three months ended March 31, 2005 from a benefit of $206 for the three months ended March 31, 2004.

Investments

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

	As of					As of
	March 31,					December 31,
	2005					2004
			(in thousands)
Fixed maturities	$	9,167,851		78	%	$	9,122,902	79	%
Equity securities		545,057		5			520,882	4
Commercial mortgage loans on real estate		1,041,226		9			1,053,872	9
Policy loans		64,182		1			64,886	1
Short-term investments		438,768		3			300,093	3
Other investments		540,113		4			550,080	4
Total investments	$	11,797,197		100	%	$	11,612,715	100	%

     Of our fixed maturity securities shown above, 69% and 67% (based on total fair value) were invested in securities rated “A” or better as of March 31, 2005 and December 31, 2004, respectively.

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

	As of			As of
	March 31,			December 31,
	2005			2004
	(in thousands)
Fixed maturities:
Amortized cost	$	8,822,521		$	8,625,394
Net unrealized gains		345,330			497,508
Fair value	$	9,167,851		$	9,122,902
Equities:
Cost	$	546,248		$	506,879
Net unrealized gains (losses)		(1,191	)		14,003
Fair value	$	545,057		$	520,882

     Net unrealized gains on fixed maturity securities decreased by $152,178, or 31%, from December 31, 2004 to March 31, 2005. Net unrealized gains (losses) on equity securities decreased by $15,194, or more than 100%, from December 31, 2004 to March 31, 2005. The decrease in net unrealized gains was primarily due to the net effect of the change in treasury yields. The 10-year treasury yield increased 26 basis points between December 31, 2004 and March 31, 2005 and the 5-year treasury yield increased 56 basis points between December 31, 2004 and March 31, 2005.

     The investment category of the Company’s gross unrealized losses on fixed maturities and equity securities at March 31, 2005 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	$	2,294,781	$	(42,555	)	$	284,784	$	(12,066	)	$	2,579,565	$	(54,621	)
Equity securities
Common Stock	$	2	$	(42	)	$	26	$	(9	)	$	28	$	(51	)
Non-redeemable preferred stocks		265,422		(5,626	)		43,964		(2,966	)		309,386		(8,592	)
Total equity securities	$	265,424	$	(5,668	)	$	43,990	$	(2,975	)	$	309,414	$	(8,643	)

     The total unrealized loss represents less than 3% of the aggregate fair value of the related securities. Approximately 76% of these unrealized losses have been in a continuous loss position for less than twelve months. The total unrealized losses are comprised of 950 individual securities with 92% 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 $5,962, with no security with a unrealized loss of greater than $200 having a market value below 81% of book value.

     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 on a timely basis fashion and that any impairment is charged against earnings in the proper period. We have reviewed these securities and concluded that there were no additional other than temporary impairments as of March 31, 2005. 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, we believe that the prices of the securities in an unrealized loss position as of March

35

31, 2005 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 2005, the maximum amount of distributions our subsidiaries could pay under applicable laws and regulations without prior regulatory approval is approximately $364,000.

     Dividends paid by our subsidiaries were zero and $361,730 for the three months ended March 31, 2005, and the year ended December 31, 2004, respectively. We use these cash inflows primarily to pay expenses, to make interest payments on indebtedness, to make dividend payments to our stockholders, and to repurchase our outstanding 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.

     On April 9, 2005 the Company announced that our board of directors has declared a quarterly dividend of $0.08 per common share payable on June 7, 2005 to shareholders of record as of May 23, 2005. We paid dividends of $0.07 per common share on March 14, 2005 to shareholders of record as of February 28, 2005. Any determination to pay future dividends will be at the discretion of our board of directors and will be dependent upon: our subsidiaries’ payment of dividends and/or other statutorily permissible payments to us; our results of operations and cash flows; our financial position and capital requirements; general business conditions; any legal, tax, regulatory and contractual restrictions on the payment of dividends; and any other factors our board of directors deems relevant.

     Our qualified pension plan was under-funded by $57,400 at December 31, 2004. We established a funding policy in which service cost plus 15% of plan deficit will be contributed annually. We contributed $40,000 as of March 31, 2005. We don’t expect to make any additional contributions for the remainder of 2005. 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 months ended March 31, 2005 and 2004.

     The Company maintains 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 J.P. Morgan Securities, Inc. (successor by merger to 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. There were no amounts relating to

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the commercial paper program outstanding at March 31, 2005. We did not use the revolving credit facility during the three months ended March 31, 2005 and no amounts are 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 April 2005, we amended and restated our $500,000 senior revolving credit facility with a syndicate of banks arranged by Citibank and JP Morgan Chase Bank. The amended and restated credit facility is unsecured and is available until April 2010, so long as the Company is in compliance with all the covenants.

     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. 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.

     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 Three Months
	Ended March 31,
	2005			2004
	(in thousands)
Net cash provided by (used in):
Operating activities	$	82,896		$	177,341
Investing activities		(447,237	)		(495,632	)
Financing activities		32,293			(66,045	)
Net change in cash	$	(332,048	)	$	(384,336	)

     The key changes of the net cash outflow of $332,048 for the three months ended March 31, 2005 were net purchases of fixed maturity securities of $401,038, maturities of fixed maturity securities of $202,215, and change in short term investments of $138,747. The key changes of the net cash outflow of $384,336 for the three months ended March 31, 2004 were net purchases of fixed maturity securities of $174,867, issuance of debt of $971,537, issuance of common stock of $725,743 and repayment of debt of $1,750,000.

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

	For the Three Months Ended
	March 31,
Security	2005		2004
	(in thousands)
Mandatorily redeemable preferred securities of subsidiary trusts	$	—	$	2,163
Mandatorily redeemable preferred stock dividends and interest paid		247		3,438
Common Stock dividends		9,795		—
Total	$	10,042	$	5,601

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 $75,263 and $65,607 of letters of credit outstanding as of March 31, 2005 and December 31, 2004, 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 three months ended March 31, 2005.

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 March 31, 2005. 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.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

On May 2, 2005, we received a subpoena from the United States Securities and Exchange Commission (“SEC”) seeking documents relating to “certain loss mitigation insurance products.” Assurant intends to fully cooperate with the SEC’s request. In addition, the Audit Committee of the Board of Directors is conducting a review of the matters raised by the subpoena.

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

						Total Number		Maximum
						of Shares		Number of
						Purchased as		Shares that may
	Total					Part of Publicly		yet be
	Number of					Announced		Purchased
	Shares			Average Price		Plans or		under the Plans
Period	Purchased			Paid per Share		Programs		or Programs (2)
January 1, 2005 – January 31, 2005		—			—		—		—
February 1, 2005 – February 28, 2005		68,400	(1)(2)		34.37		60,000		—
March 1, 2005 – March 31, 2005		651,900	(1)(2)		34.13		650,000		—
Total		720,300		$	34.16		710,000		11,105,311

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.

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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
10.1	Assurant Long Term Incentive Plan (ALTIP) (incorporated by reference from Registrant’s Form 8-k filed April 13, 2005).
10.2	Amended and Restated Revolving Credit Agreement dated April 29, 2005 by and among Assurant, Inc., as the borrower, certain banks and financial institutions, as the lenders, and arranged by J.P. Morgan Securities Inc. and Citigroup Global Markets, Inc.
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: May 16, 2005	By:	/s/ J. Kerry Clayton
		Name:J. Kerry Clayton Title:President and Chief Executive Officer
Date: May 16, 2005	By:	/s/ Robert B. Pollock
		Name:Robert B. Pollock
		Title:Executive Vice President and Chief Financial Officer

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