Exhibit 99.2
Assurant, Inc. (AIZ)
Financial Information for New Business Segmentation
ASSURANT, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION FOR
NEW BUSINESS SEGMENTATION
INDEX TO SUPPLEMENT
Page: | ||
REGULATION G – NON GAAP MEASURES | 1 | |
SEGMENTED BALANCE SHEET AT DECEMBER 31, 2005 (unaudited) | 2 | |
RECONCILIATIONS OF NET OPERATING INCOME TO NET INCOME (unaudited) | 3 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | 4 | |
CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited) | 5 |
About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and selected other markets. The four key business segments – Assurant Solutions; Assurant Specialty Property; Assurant Health; and Assurant Employee Benefits – have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance markets in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit insurance; warranties and extended services contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.
The Company, which is traded on the New York Stock Exchange under the symbol AIZ, has over $20 billion in assets and $7 billion in annual revenue. Assurant has more than 12,000 employees and is headquartered in New York’s financial district.
Safe Harbor Statement:
Some of the statements included in this statistical supplement, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, posted on the Assurant website at www.assurant.com.
Regulation G – Non GAAP Measure
Assurant uses the following non-GAAP financial measure to analyze the company’s operating performance for the periods presented in the press release. Because Assurant’s calculation of this measure may differ from similar measures used by other companies, investors should be careful when comparing Assurant’s non-GAAP financial measure to those of other companies.
(1) Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income, excluding net realized gains (losses) on investments and unusual and/or infrequent items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes both the effect of realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur. Please see Page 3 for reconciliation.
Page 1
Assurant, Inc. and Subsidiaries
Segmented Condensed Balance Sheets
At December 31, 2005
(Unaudited)
At December 31, 2005 | ||||||||||||||||||
Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other | Consolidated | |||||||||||||
($ in thousands) | ||||||||||||||||||
Assets | ||||||||||||||||||
Investments and cash and cash equivalents | $ | 6,962,324 | $ | 1,125,980 | $ | 1,246,798 | $ | 2,714,308 | $ | 1,321,982 | $ | 13,371,392 | ||||||
Reinsurance recoverables | 812,466 | 816,533 | 198,468 | 23,193 | 2,597,150 | 4,447,810 | ||||||||||||
Deferred acquisition costs | 1,784,366 | 132,456 | 76,593 | 28,893 | — | 2,022,308 | ||||||||||||
Goodwill | — | — | — | — | 804,864 | 804,864 | ||||||||||||
Assets held in separate accounts | 246,859 | — | — | — | 3,225,576 | 3,472,435 | ||||||||||||
Other assets | 651,100 | 187,932 | 123,960 | 132,078 | 151,574 | 1,246,644 | ||||||||||||
Total assets | 10,457,115 | 2,262,901 | 1,645,819 | 2,898,472 | 8,101,146 | 25,365,453 | ||||||||||||
Liabilities | ||||||||||||||||||
Policyholder benefits and claims payable | $ | 4,241,237 | $ | 670,999 | $ | 791,454 | $ | 1,926,396 | $ | 2,909,991 | 10,540,077 | |||||||
Unearned premiums | 2,970,104 | 700,183 | 126,554 | 12,481 | 42,292 | 3,851,614 | ||||||||||||
Debt | — | — | — | — | 971,690 | 971,690 | ||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 24,160 | 24,160 | ||||||||||||
Liabilities related to separate accounts | 246,859 | — | — | — | 3,225,576 | 3,472,435 | ||||||||||||
Accounts payable and other liabilities | 1,422,739 | 367,316 | 247,472 | 349,347 | 419,044 | 2,805,918 | ||||||||||||
Total liabilities | 8,880,939 | 1,738,498 | 1,165,480 | 2,288,224 | 7,592,753 | 21,665,894 | ||||||||||||
Stockholders’ equity | ||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,576,176 | 524,403 | 480,339 | 610,248 | 288,894 | 3,480,060 | ||||||||||||
Accumulated other comprehensive income | — | — | — | — | 219,499 | 219,499 | ||||||||||||
Total stockholders’ equity | 1,576,176 | 524,403 | 480,339 | 610,248 | 508,393 | 3,699,559 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 10,457,115 | $ | 2,262,901 | $ | 1,645,819 | $ | 2,898,472 | $ | 8,101,146 | $ | 25,365,453 | ||||||
Page 2
Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands, net of tax) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Assurant Solutions | $ | 39,747 | $ | 35,382 | $ | 31,939 | $ | 42,392 | $ | 23,434 | $ | 133,147 | $ | 90,718 | ||||||||||||||
Assurant Specialty Property | 64,444 | 39,037 | 31,685 | 34,213 | 38,292 | 143,227 | 74,941 | |||||||||||||||||||||
Assurant Health | 45,096 | 33,297 | 45,718 | 49,367 | 49,673 | 178,055 | 158,287 | |||||||||||||||||||||
Assurant Employee Benefits | 19,185 | 19,329 | 22,846 | 9,812 | 16,379 | 68,366 | 62,210 | |||||||||||||||||||||
Corporate and other | (439 | ) | 20,701 | (4,289 | ) | (3,314 | ) | (10,417 | ) | 2,681 | (40,548 | ) | ||||||||||||||||
Amortization of deferred gain on disposal of businesses | 5,741 | 4,651 | 7,609 | 7,660 | 7,711 | 27,631 | 37,461 | |||||||||||||||||||||
Interest expense | (9,955 | ) | (9,955 | ) | (9,955 | ) | (9,954 | ) | (9,954 | ) | (39,818 | ) | (38,078 | ) | ||||||||||||||
Net operating income | 163,819 | 142,442 | 125,553 | 130,176 | 115,118 | 513,289 | 344,991 | |||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Net realized (loss) gain on investments | (2,894 | ) | (5,396 | ) | 9,794 | 2,651 | 320 | 7,369 | 15,800 | |||||||||||||||||||
Excess loss of reinsurance program (1995-1997) | — | — | (35,060 | ) | (5,203 | ) | — | (40,263 | ) | — | ||||||||||||||||||
Loss on disposal of business | — | — | — | — | — | — | (6,337 | ) | ||||||||||||||||||||
Expenses directly related to the initial and secondary public offerings | — | — | — | — | (1,040 | ) | (1,040 | ) | (3,894 | ) | ||||||||||||||||||
Net income before cumulative effect of change in accounting principle | 160,925 | 137,046 | 100,287 | 127,624 | 114,398 | 479,355 | 350,560 | |||||||||||||||||||||
Cumulative effect of change in accounting principle | 1,547 | — | — | — | — | — | — | |||||||||||||||||||||
Net income | $ | 162,472 | $ | 137,046 | $ | 100,287 | $ | 127,624 | $ | 114,398 | $ | 479,355 | $ | 350,560 | ||||||||||||||
Page 3
Assurant, Inc. and Subsidiaries
Consolidated Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 1,672,653 | $ | 1,644,477 | $ | 1,621,186 | $ | 1,623,239 | $ | 1,631,894 | $ | 6,520,796 | $ | 6,482,871 | ||||||||||||||
Net investment income | 192,562 | 170,864 | 175,175 | 177,018 | 164,200 | 687,257 | 634,749 | |||||||||||||||||||||
Net realized (loss) gain on investments | (4,452 | ) | (8,301 | ) | 11,965 | 4,079 | 492 | 8,235 | 24,308 | |||||||||||||||||||
Loss on disposal of businesses | — | — | — | — | — | — | (9,232 | ) | ||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | 8,833 | 7,155 | 11,706 | 11,784 | 11,863 | 42,508 | 57,632 | |||||||||||||||||||||
Fees and other income | 60,186 | 67,382 | 59,409 | 58,183 | 53,905 | 238,879 | 220,386 | |||||||||||||||||||||
1,929,782 | 1,881,577 | 1,879,441 | 1,874,303 | 1,862,354 | 7,497,675 | 7,410,714 | ||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits | 889,679 | 869,678 | 970,596 | 924,011 | 943,524 | 3,707,809 | 3,839,769 | |||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 782,432 | 847,172 | 752,156 | 746,879 | 726,793 | 3,073,000 | 2,976,436 | |||||||||||||||||||||
Interest expense | 15,315 | 15,315 | 15,315 | 15,314 | 15,314 | 61,258 | 58,581 | |||||||||||||||||||||
1,687,426 | 1,732,165 | 1,738,067 | 1,686,204 | 1,685,631 | 6,842,067 | 6,874,786 | ||||||||||||||||||||||
Income before income taxes and cumulative effect of change in accounting principle | 242,356 | 149,412 | 141,374 | 188,099 | 176,723 | 655,608 | 535,928 | |||||||||||||||||||||
Income taxes | 81,431 | 12,366 | 41,087 | 60,475 | 62,325 | 176,253 | 185,368 | |||||||||||||||||||||
Net income before cumulative effect of change in accounting principle | 160,925 | 137,046 | 100,287 | 127,624 | 114,398 | 479,355 | 350,560 | |||||||||||||||||||||
Cumulative effect of change in accounting principle | 1,547 | — | — | — | — | — | — | |||||||||||||||||||||
Net income | $ | 162,472 | $ | 137,046 | $ | 100,287 | $ | 127,624 | $ | 114,398 | $ | 479,355 | $ | 350,560 | ||||||||||||||
Share repurchase program: | ||||||||||||||||||||||||||||
Shares repurchased | 1,416,800 | 2,014,468 | 3,910,926 | 2,797,500 | 710,000 | 9,432,894 | 2,411,500 | |||||||||||||||||||||
Average repurchase price per share | $ | 45.17 | $ | 38.00 | $ | 37.38 | $ | 34.32 | $ | 34.16 | $ | 36.36 | $ | 26.04 | ||||||||||||||
Repurchase price | $ | 64,001 | $ | 76,551 | $ | 146,181 | $ | 96,006 | $ | 24,252 | $ | 342,990 | $ | 62,786 | ||||||||||||||
AIZ Closing stock price (NYSE) | $ | 49.25 | $ | 43.49 | $ | 38.06 | $ | 36.10 | $ | 33.70 | $ | 43.49 | $ | 30.55 | ||||||||||||||
Investment yield(1) | 5.75 | % | 5.54 | % | 5.71 | % | 5.63 | % | 5.51 | % | 5.54 | % | 5.46 | % | ||||||||||||||
Real estate investment income(1) | $ | 14,735 | $ | — | $ | 3,156 | $ | 9,409 | $ | — | $ | 12,565 | $ | — |
(1) | Investment yield excludes investment income from real estate partnerships. |
Page 4
Assurant Solutions
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | ||||||||||||||
Revenues: | |||||||||||||||||||||
Net earned premiums and other considerations | $ | 570,388 | $ | 573,880 | $ | 556,084 | $ | 554,829 | $ | 535,352 | $ | 2,220,145 | $ | 2,205,988 | |||||||
Net investment income | 97,082 | 93,192 | 92,070 | 100,107 | 86,196 | 371,565 | 318,705 | ||||||||||||||
Fees and other income | 34,170 | 41,004 | 32,063 | 30,574 | 29,089 | 132,730 | 113,515 | ||||||||||||||
701,640 | 708,076 | 680,217 | 685,510 | 650,637 | 2,724,440 | 2,638,208 | |||||||||||||||
Benefits, losses and expenses: | |||||||||||||||||||||
Policyholder benefits | 248,380 | 246,585 | 271,357 | 269,284 | 259,674 | 1,046,900 | 1,094,884 | ||||||||||||||
Selling, underwriting, general and administrative expenses | 394,878 | 406,259 | 360,947 | 353,299 | 357,000 | 1,477,505 | 1,413,562 | ||||||||||||||
643,258 | 652,844 | 632,304 | 622,583 | 616,674 | 2,524,405 | 2,508,446 | |||||||||||||||
Income before income taxes | 58,382 | 55,232 | 47,913 | 62,927 | 33,963 | 200,035 | 129,762 | ||||||||||||||
Income taxes | 18,635 | 19,850 | 15,974 | 20,535 | 10,529 | 66,888 | 39,044 | ||||||||||||||
Net operating income | $ | 39,747 | $ | 35,382 | $ | 31,939 | $ | 42,392 | $ | 23,434 | $ | 133,147 | $ | 90,718 | |||||||
Gross written premiums for selected product groupings: | |||||||||||||||||||||
Domestic Credit | $ | 168,927 | $ | 199,082 | $ | 182,999 | $ | 194,667 | $ | 190,718 | $ | 767,466 | $ | 853,011 | |||||||
International Credit | $ | 161,024 | $ | 160,858 | $ | 166,413 | $ | 157,449 | $ | 162,747 | $ | 647,467 | $ | 594,646 | |||||||
Domestic extended service contracts | $ | 285,504 | $ | 326,974 | $ | 298,969 | $ | 241,035 | $ | 253,249 | $ | 1,120,227 | $ | 960,352 | |||||||
International extended service contracts | $ | 66,256 | $ | 86,674 | $ | 62,669 | $ | 50,593 | $ | 47,570 | $ | 247,506 | $ | 73,103 | |||||||
Preneed (Face Sales) | $ | 123,688 | $ | 123,202 | $ | 141,786 | $ | 144,508 | $ | 133,019 | $ | 542,515 | $ | 582,197 | |||||||
Real estate investment income | $ | 2,506 | $ | — | $ | — | $ | 9,409 | $ | — | $ | 9,409 | $ | — |
Page 5
Assurant Specialty Property
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 252,749 | $ | 230,684 | $ | 219,374 | $ | 207,696 | $ | 201,094 | $ | 858,848 | $ | 768,773 | ||||||||||||||
Net investment income | 16,790 | 15,481 | 16,648 | 14,843 | 14,981 | 61,953 | 72,546 | |||||||||||||||||||||
Fees and other income | 9,458 | 9,948 | 9,850 | 10,168 | 8,193 | 38,159 | 37,013 | |||||||||||||||||||||
278,997 | 256,113 | 245,872 | 232,707 | 224,268 | 958,960 | 878,332 | ||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits | 70,459 | 77,762 | 96,707 | 72,294 | 70,744 | 317,507 | 363,926 | |||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 109,089 | 118,811 | 100,838 | 108,230 | 95,120 | 422,999 | 401,327 | |||||||||||||||||||||
179,548 | 196,573 | 197,545 | 180,524 | 165,864 | 740,506 | 765,253 | ||||||||||||||||||||||
Income before income taxes | 99,449 | 59,540 | 48,327 | 52,183 | 58,404 | 218,454 | 113,079 | |||||||||||||||||||||
Income taxes | 35,005 | 20,503 | 16,642 | 17,970 | 20,112 | 75,227 | 38,138 | |||||||||||||||||||||
Net operating income | $ | 64,444 | $ | 39,037 | $ | 31,685 | $ | 34,213 | $ | 38,292 | $ | 143,227 | $ | 74,941 | ||||||||||||||
Net earned premiums and other considerations by: | ||||||||||||||||||||||||||||
Major product grouping: | ||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 142,892 | $ | 118,070 | $ | 114,965 | $ | 107,219 | $ | 103,272 | $ | 443,526 | $ | 392,561 | ||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 55,968 | 57,957 | 52,699 | 53,252 | 53,516 | 217,424 | 210,824 | |||||||||||||||||||||
Other | 53,889 | 54,657 | 51,710 | 47,225 | 44,306 | 197,898 | 165,388 | |||||||||||||||||||||
Total | $ | 252,749 | $ | 230,684 | $ | 219,374 | $ | 207,696 | $ | 201,094 | $ | 858,848 | $ | 768,773 | ||||||||||||||
Ratios: | ||||||||||||||||||||||||||||
Loss ratio (a) | 27.9 | % | 33.7 | % | 44.1 | % | 34.8 | % | 35.2 | % | 37.0 | % | 47.3 | % | ||||||||||||||
Expense ratio (b) | 41.6 | % | 49.4 | % | 44.0 | % | 49.7 | % | 45.4 | % | 47.2 | % | 49.8 | % | ||||||||||||||
Combined ratio (c) | 68.5 | % | 81.7 | % | 86.2 | % | 82.9 | % | 79.3 | % | 82.6 | % | 95.0 | % | ||||||||||||||
Real estate investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
(a) | The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations. |
(b) | The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income. |
(c) | The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income. |
Page 6
Assurant Health
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | ||||||||||||||
Revenues: | |||||||||||||||||||||
Net earned premiums and other considerations | $ | 523,405 | $ | 531,345 | $ | 538,800 | $ | 544,294 | $ | 549,526 | $ | 2,163,965 | $ | 2,231,298 | |||||||
Net investment income | 24,001 | 16,474 | 17,707 | 17,170 | 17,705 | 69,056 | 67,902 | ||||||||||||||
Fees and other income | 9,726 | 9,323 | 10,420 | 10,270 | 10,331 | 40,344 | 38,708 | ||||||||||||||
557,132 | 557,142 | 566,927 | 571,734 | 577,562 | 2,273,365 | 2,337,908 | |||||||||||||||
Benefits, losses and expenses: | |||||||||||||||||||||
Policyholder benefits | 325,401 | 329,793 | 336,362 | 333,101 | 345,368 | 1,344,624 | 1,422,783 | ||||||||||||||
Selling, underwriting, general and administrative expenses | 162,712 | 176,626 | 161,125 | 163,385 | 156,763 | 657,899 | 674,907 | ||||||||||||||
488,113 | 506,419 | 497,487 | 496,486 | 502,131 | 2,002,523 | 2,097,690 | |||||||||||||||
Income before income taxes | 69,019 | 50,723 | 69,440 | 75,248 | 75,431 | 270,842 | 240,218 | ||||||||||||||
Income taxes | 23,923 | 17,426 | 23,722 | 25,881 | 25,758 | 92,787 | 81,931 | ||||||||||||||
Net operating income | $ | 45,096 | $ | 33,297 | $ | 45,718 | $ | 49,367 | $ | 49,673 | $ | 178,055 | $ | 158,287 | |||||||
Net earned premiums and other considerations by: | |||||||||||||||||||||
Major product grouping: | |||||||||||||||||||||
Individual: | |||||||||||||||||||||
Individual medical | $ | 297,338 | $ | 295,322 | $ | 291,817 | $ | 290,047 | $ | 287,312 | $ | 1,164,498 | $ | 1,100,869 | |||||||
Short-term medical | 25,001 | 26,664 | 30,257 | 28,115 | 25,876 | 110,912 | 114,583 | ||||||||||||||
Subtotal | 322,339 | 321,986 | 322,074 | 318,162 | 313,188 | 1,275,410 | 1,215,452 | ||||||||||||||
Small employer group | 201,066 | 209,359 | 216,726 | 226,132 | 236,338 | 888,555 | 1,015,846 | ||||||||||||||
Total | $ | 523,405 | $ | 531,345 | $ | 538,800 | $ | 544,294 | $ | 549,526 | $ | 2,163,965 | $ | 2,231,298 | |||||||
Page 7
Assurant Health (continued)
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Sales (Annualized issued premiums): | ||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||
Individual medical | $ | 76,192 | $ | 71,745 | $ | 69,343 | $ | 68,137 | $ | 76,389 | $ | 285,614 | $ | 344,794 | ||||||||||||||
Short-term medical | 30,248 | 24,747 | 34,889 | 31,566 | 28,716 | 119,918 | 117,396 | |||||||||||||||||||||
Subtotal | 106,440 | 96,492 | 104,232 | 99,703 | 105,105 | 405,532 | 462,190 | |||||||||||||||||||||
Small employer group | 34,573 | 36,466 | 36,224 | 41,211 | 45,486 | 159,387 | 233,809 | |||||||||||||||||||||
Total | $ | 141,013 | $ | 132,958 | $ | 140,456 | $ | 140,914 | $ | 150,591 | $ | 564,919 | $ | 695,999 | ||||||||||||||
Membership by product line: | ||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||
Individual medical | 636 | 644 | 647 | 662 | 671 | 644 | 675 | |||||||||||||||||||||
Short-term medical | 100 | 102 | 122 | 129 | 116 | 102 | 107 | |||||||||||||||||||||
Subtotal | 736 | 746 | 769 | 791 | 787 | 746 | 782 | |||||||||||||||||||||
Small employer group | 239 | 255 | 267 | 287 | 308 | 255 | 333 | |||||||||||||||||||||
Total | 975 | 1,001 | 1,036 | 1,078 | 1,095 | 1,001 | 1,115 | |||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||
Loss ratio (a) | 62.2 | % | 62.1 | % | 62.4 | % | 61.2 | % | 62.8 | % | 62.1 | % | 63.8 | % | ||||||||||||||
Expense ratio (b) | 30.5 | % | 32.7 | % | 29.3 | % | 29.5 | % | 28.0 | % | 29.8 | % | 29.7 | % | ||||||||||||||
Combined ratio (c) | 91.6 | % | 93.7 | % | 90.6 | % | 89.5 | % | 89.7 | % | 90.8 | % | 92.4 | % | ||||||||||||||
Investment yield(1) | 5.70 | % | 5.57 | % | 5.48 | % | 5.23 | % | 5.44 | % | 5.61 | % | 5.47 | % | ||||||||||||||
Real estate investment income(1) | $ | 7,372 | $ | — | $ | 596 | $ | — | $ | — | $ | 596 | $ | — |
(a) | The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations. |
(b) | The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income. |
(c) | The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income. |
(1) | Investment yield excludes investment income from real estate partnerships. |
Page 8
Assurant Employee Benefits
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | ||||||||||||||
Revenues: | |||||||||||||||||||||
Net earned premiums and other considerations | $ | 326,111 | $ | 308,568 | $ | 306,928 | $ | 316,420 | $ | 345,922 | $ | 1,277,838 | $ | 1,276,812 | |||||||
Net investment income | 40,839 | 38,754 | 41,878 | 38,274 | 37,983 | 156,889 | 149,718 | ||||||||||||||
Fees and other income | 6,832 | 6,056 | 6,976 | 6,993 | 6,189 | 26,214 | 29,306 | ||||||||||||||
373,782 | 353,378 | 355,782 | 361,687 | 390,094 | 1,460,941 | 1,455,836 | |||||||||||||||
Benefits, losses and expenses: | |||||||||||||||||||||
Policyholder benefits | 245,439 | 215,538 | 212,022 | 241,537 | 267,738 | 936,835 | 950,235 | ||||||||||||||
Selling, underwriting, general and administrative expenses | 99,114 | 108,095 | 108,403 | 105,027 | 97,017 | 418,542 | 409,737 | ||||||||||||||
344,553 | 323,633 | 320,425 | 346,564 | 364,755 | 1,355,377 | 1,359,972 | |||||||||||||||
Income before income taxes | 29,229 | 29,745 | 35,357 | 15,123 | 25,339 | 105,564 | 95,864 | ||||||||||||||
Income taxes | 10,044 | 10,416 | 12,511 | 5,311 | 8,960 | 37,198 | 33,654 | ||||||||||||||
Net operating income | $ | 19,185 | $ | 19,329 | $ | 22,846 | $ | 9,812 | $ | 16,379 | $ | 68,366 | $ | 62,210 | |||||||
Net earned premiums and other considerations by: | |||||||||||||||||||||
Major product grouping: | |||||||||||||||||||||
Group dental | $ | 111,393 | $ | 121,444 | $ | 124,780 | $ | 128,323 | $ | 128,242 | $ | 502,789 | $ | 520,513 | |||||||
Group disability single premiums for closed blocks | 33,920 | — | — | — | 26,700 | 26,700 | 40,906 | ||||||||||||||
All other group disability | 121,586 | 123,390 | 118,595 | 123,078 | 124,777 | 489,840 | 465,517 | ||||||||||||||
Group life | 59,212 | 63,734 | 63,553 | 65,019 | 66,203 | 258,509 | 249,876 | ||||||||||||||
Total | $ | 326,111 | $ | 308,568 | $ | 306,928 | $ | 316,420 | $ | 345,922 | $ | 1,277,838 | $ | 1,276,812 | |||||||
Page 9
Assurant Employee Benefits (continued)
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||
Group dental | $ | 26,979 | $ | 17,316 | $ | 21,588 | $ | 18,187 | $ | 41,757 | $ | 98,848 | $ | 119,064 | ||||||||||||||
Group disability | 13,633 | 9,722 | 12,649 | 14,864 | 25,420 | 62,655 | 70,387 | |||||||||||||||||||||
Group life | 6,681 | 6,702 | 5,883 | 10,898 | 18,561 | 42,044 | 48,486 | |||||||||||||||||||||
Total | $ | 47,293 | $ | 33,740 | $ | 40,120 | $ | 43,949 | $ | 85,738 | $ | 203,547 | $ | 237,937 | ||||||||||||||
Ratios: | ||||||||||||||||||||||||||||
Loss ratio (a) | 75.3 | % | 69.9 | % | 69.1 | % | 76.3 | % | 77.4 | % | 73.3 | % | 74.4 | % | ||||||||||||||
Expense ratio (b) | 29.8 | % | 34.4 | % | 34.5 | % | 32.5 | % | 27.6 | % | 32.1 | % | 31.4 | % | ||||||||||||||
Investment yield(1) | 6.47 | % | 6.15 | % | 6.29 | % | 6.14 | % | 6.12 | % | 6.19 | % | 6.22 | % | ||||||||||||||
Real estate investment income(1) | $ | — | $ | — | $ | 2,560 | $ | — | $ | — | $ | 2,560 | $ | — |
(a) | The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations. ` |
(b) | The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income. |
(1) | Investment yield excludes investment income from real estate partnerships. |
Page 10
Assurant Corporate and Other
Condensed Statement of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||
($ in thousands) | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2005 | December 31, 2004 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Net investment income | 13,850 | 6,963 | 6,872 | 6,624 | 7,335 | 27,794 | 25,878 | |||||||||||||||||||||
Net realized (loss) gain on investments | (4,452 | ) | (8,301 | ) | 11,965 | 4,079 | 492 | 8,235 | 24,308 | |||||||||||||||||||
Loss on disposal of businesses | — | — | — | — | — | — | (9,232 | ) | ||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | 8,833 | 7,155 | 11,706 | 11,784 | 11,863 | 42,508 | 57,632 | |||||||||||||||||||||
Fees and other income | — | 1,051 | 100 | 178 | 103 | 1,432 | 1,844 | |||||||||||||||||||||
18,231 | 6,868 | 30,643 | 22,665 | 19,793 | 79,969 | 100,430 | ||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits | — | — | 54,148 | 7,795 | — | 61,943 | 7,941 | |||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 16,639 | 37,381 | 20,843 | 16,938 | 20,893 | 96,055 | 76,903 | |||||||||||||||||||||
Interest expense | 15,315 | 15,315 | 15,315 | 15,314 | 15,314 | 61,258 | 58,581 | |||||||||||||||||||||
31,954 | 52,696 | 90,306 | 40,047 | 36,207 | 219,256 | 143,425 | ||||||||||||||||||||||
Loss before income taxes and cumulative effect of change in accounting principle | (13,723 | ) | (45,828 | ) | (59,663 | ) | (17,382 | ) | (16,414 | ) | (139,287 | ) | (42,995 | ) | ||||||||||||||
Income taxes | (6,176 | ) | (55,829 | ) | (27,762 | ) | (9,222 | ) | (3,034 | ) | (95,847 | ) | (7,399 | ) | ||||||||||||||
Net operating (loss) income before cumulative effect of change in accounting principle | (7,547 | ) | 10,001 | (31,901 | ) | (8,160 | ) | (13,380 | ) | (43,440 | ) | (35,596 | ) | |||||||||||||||
Cumulative effect of change in accounting principle | 1,547 | — | — | — | — | — | — | |||||||||||||||||||||
Net operating (loss) income | $ | (6,000 | ) | $ | 10,001 | $ | (31,901 | ) | $ | (8,160 | ) | $ | (13,380 | ) | $ | (43,440 | ) | $ | (35,596 | ) | ||||||||
Real estate investment income | $ | 4,857 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Corporate and Other Reconciliation | ||||||||||||||||||||||||||||
Assurant Corporate and Other Segment Net Operating Income | $ | (6,000 | ) | $ | 10,001 | $ | (31,901 | ) | $ | (8,160 | ) | $ | (13,380 | ) | $ | (43,440 | ) | $ | (35,596 | ) | ||||||||
Adjustments, net of tax: | ||||||||||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | (5,741 | ) | (4,651 | ) | (7,609 | ) | (7,660 | ) | (7,711 | ) | (27,631 | ) | (37,461 | ) | ||||||||||||||
Interest expense | 9,955 | 9,955 | 9,955 | 9,954 | 9,954 | 39,818 | 38,078 | |||||||||||||||||||||
Net realized loss (gain) on investments | 2,894 | 5,396 | (9,794 | ) | (2,651 | ) | (320 | ) | (7,369 | ) | (15,800 | ) | ||||||||||||||||
Excess loss of reinsurance program (1995-1997) | — | — | 35,060 | 5,203 | — | 40,263 | — | |||||||||||||||||||||
Loss on disposal of business | — | — | — | — | — | — | 6,337 | |||||||||||||||||||||
Expense directly related to the initial and secondary public offerings | — | — | — | — | 1,040 | 1,040 | 3,894 | |||||||||||||||||||||
Cumulative effect of change in accounting principle | (1,547 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Corporate and other per Reconciliation of Net Operating | ||||||||||||||||||||||||||||
Income to Net Income (page 3) | $ | (439 | ) | $ | 20,701 | $ | (4,289 | ) | $ | (3,314 | ) | $ | (10,417 | ) | $ | 2,681 | $ | (40,548 | ) | |||||||||
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