Exhibit 99.2
Assurant, Inc. (AIZ)
Additional Financial Disclosure for the Assurant Solutions Segment
ASSURANT, INC. AND SUBSIDIARIES
ADDITIONAL FINANCIAL DISCLOSURE FOR THE
ASSURANT SOLUTIONS SEGMENT
INDEX | ||
Page: | ||
REGULATION G – NON GAAP MEASURES | 1 | |
SEGMENTED CONDENSED BALANCE SHEETS (unaudited) | 2 | |
RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited) | 3 | |
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited) | 4 | |
CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited) | 5 | |
DISCLOSED ITEMS SUMMARY | 13 |
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, including, but not limited to our 10-K, as filed with the SEC.
Regulation G – Non GAAP Measures
Assurant uses the following non-GAAP financial measures to analyze the company’s operating performance for the periods presented in the press release. Because Assurant’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing Assurant’s non-GAAP financial measures 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.
Page 1
Assurant, Inc. and Subsidiaries
Segmented Condensed Balance Sheets
At December 31, 2006 and December 31, 2005
(Unaudited)
At December 31, 2006 | ||||||||||||||||||
Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other(1) | Consolidated | |||||||||||||
($ in thousands) | ||||||||||||||||||
Assets | ||||||||||||||||||
Investments and cash and cash equivalents | $ | 6,875,585 | $ | 1,473,357 | $ | 1,150,679 | $ | 2,569,710 | $ | 1,347,486 | $ | 13,416,817 | ||||||
Reinsurance recoverables | 721,134 | 290,653 | 5,239 | 22,872 | 2,875,074 | 3,914,972 | ||||||||||||
Deferred acquisition costs | 2,168,708 | 148,635 | 53,059 | 27,504 | — | 2,397,906 | ||||||||||||
Goodwill | — | — | — | — | 790,519 | 790,519 | ||||||||||||
Assets held in separate accounts | 255,784 | — | — | — | 3,042,759 | 3,298,543 | ||||||||||||
Other assets | 615,941 | 277,028 | 69,131 | 186,251 | 198,040 | 1,346,391 | ||||||||||||
Total assets | 10,637,152 | 2,189,673 | 1,278,108 | 2,806,337 | 8,253,878 | 25,165,148 | ||||||||||||
Liabilities | ||||||||||||||||||
Policyholder benefits and claims payable | 4,253,205 | 278,664 | 556,726 | 1,936,662 | 3,153,252 | 10,178,509 | ||||||||||||
Unearned premiums | 3,431,658 | 820,533 | 119,934 | 12,694 | 45,074 | 4,429,893 | ||||||||||||
Debt | — | — | — | — | 971,774 | 971,774 | ||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 22,160 | 22,160 | ||||||||||||
Liabilities related to separate accounts | 255,784 | — | — | — | 3,042,759 | 3,298,543 | ||||||||||||
Accounts payable and other liabilities | 1,131,710 | 337,563 | 184,683 | 241,369 | 536,347 | 2,431,672 | ||||||||||||
Total liabilities | 9,072,357 | 1,436,760 | 861,343 | 2,190,725 | 7,771,366 | 21,332,551 | ||||||||||||
Stockholders’ equity | ||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,564,795 | 752,913 | 416,765 | 615,612 | 394,448 | 3,744,533 | ||||||||||||
Accumulated other comprehensive income | — | — | — | — | 88,064 | 88,064 | ||||||||||||
Total stockholders’ equity | 1,564,795 | 752,913 | 416,765 | 615,612 | 482,512 | 3,832,597 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 10,637,152 | $ | 2,189,673 | $ | 1,278,108 | $ | 2,806,337 | $ | 8,253,878 | $ | 25,165,148 | ||||||
At December 31, 2005 | ||||||||||||||||||
Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other(1) | 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 | 5,527 | 23,193 | 2,790,091 | 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 | 187,933 | 123,960 | 132,077 | 151,574 | 1,246,644 | ||||||||||||
Total assets | 10,457,115 | 2,262,902 | 1,452,878 | 2,898,471 | 8,294,087 | 25,365,453 | ||||||||||||
Liabilities | ||||||||||||||||||
Policyholder benefits and claims payable | 4,241,237 | 670,999 | 603,807 | 1,926,396 | 3,097,638 | 10,540,077 | ||||||||||||
Unearned premiums | 2,970,104 | 700,184 | 121,959 | 12,480 | 46,887 | 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 | 247,548 | 349,347 | 418,968 | 2,805,918 | ||||||||||||
Total liabilities | 8,880,939 | 1,738,499 | 973,314 | 2,288,223 | 7,784,919 | 21,665,894 | ||||||||||||
Stockholders’ equity | ||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,576,176 | 524,403 | 479,564 | 610,248 | 289,669 | 3,480,060 | ||||||||||||
Accumulated other comprehensive income | — | — | — | — | 219,499 | 219,499 | ||||||||||||
Total stockholders’ equity | 1,576,176 | 524,403 | 479,564 | 610,248 | 509,168 | 3,699,559 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 10,457,115 | $ | 2,262,902 | $ | 1,452,878 | $ | 2,898,471 | $ | 8,294,087 | $ | 25,365,453 | ||||||
(1) | Corporate and Other segment includes Accumulated Other Comprehensive Income, Reinsurance Recoverables related to the disposal of FFG and LTC businesses, goodwill, separate accounts related to the disposal of FFG business and all of Assurant, Inc.’s debt. |
Page 2
Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
($ in thousands, | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Assurant Solutions | $ | 39,810 | $ | 41,707 | $ | 37,148 | $ | 39,747 | $ | 35,382 | $ | 31,939 | $ | 42,392 | $ | 23,434 | $ | 158,412 | $ | 133,147 | ||||||||||||||||||||
Assurant Specialty Property | 63,956 | 53,445 | 59,276 | 64,444 | 39,037 | 31,685 | 34,213 | 38,292 | 241,121 | 143,227 | ||||||||||||||||||||||||||||||
Assurant Health | 36,960 | 44,847 | 41,016 | 45,096 | 33,297 | 45,718 | 49,367 | 49,673 | 167,919 | 178,055 | ||||||||||||||||||||||||||||||
Assurant Employee Benefits | 19,428 | 24,400 | 20,590 | 19,185 | 19,329 | 22,846 | 9,812 | 16,379 | 83,603 | 68,366 | ||||||||||||||||||||||||||||||
Corporate and other | (19,908 | ) | (7,535 | ) | (4,930 | ) | (439 | ) | 20,701 | (4,289 | ) | (3,314 | ) | (10,417 | ) | (32,812 | ) | 2,681 | ||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 5,861 | 6,128 | 6,514 | 5,741 | 4,651 | 7,609 | 7,660 | 7,711 | 24,244 | 27,631 | ||||||||||||||||||||||||||||||
Interest expense | (9,949 | ) | (9,950 | ) | (9,955 | ) | (9,955 | ) | (9,955 | ) | (9,955 | ) | (9,954 | ) | (9,954 | ) | (39,809 | ) | (39,818 | ) | ||||||||||||||||||||
Net operating income | 136,158 | 153,042 | 149,659 | 163,819 | 142,442 | 125,553 | 130,176 | 115,118 | 602,678 | 513,289 | ||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Net realized gains (losses) on investments, excluding gain | 75,868 | (1,739 | ) | 1,477 | (2,894 | ) | (5,396 | ) | 9,794 | 2,651 | 320 | 72,712 | 7,369 | |||||||||||||||||||||||||||
Assurant Solutions legal settlement | 40,481 | — | — | — | — | — | — | — | 40,481 | — | ||||||||||||||||||||||||||||||
Excess of loss reinsurance program (1995-1997) | — | — | — | — | — | (35,060 | ) | (5,203 | ) | — | — | (40,263 | ) | |||||||||||||||||||||||||||
Expenses directly related to the secondary public offering | — | — | — | — | — | — | — | (1,040 | ) | — | (1,040 | ) | ||||||||||||||||||||||||||||
Net income before cumulative effect of change in accounting principle | 252,507 | 151,303 | 151,136 | 160,925 | 137,046 | 100,287 | 127,624 | 114,398 | 715,871 | 479,355 | ||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | — | 1,547 | — | — | — | — | 1,547 | — | ||||||||||||||||||||||||||||||
Net income | $ | 252,507 | $ | 151,303 | $ | 151,136 | $ | 162,472 | $ | 137,046 | $ | 100,287 | $ | 127,624 | $ | 114,398 | $ | 717,418 | $ | 479,355 | ||||||||||||||||||||
Page 3
Assurant, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 1,768,160 | $ | 1,717,640 | $ | 1,685,322 | $ | 1,672,653 | $ | 1,644,477 | $ | 1,621,186 | $ | 1,623,239 | $ | 1,631,894 | $ | 6,843,775 | $ | 6,520,796 | ||||||||||||||||||||
Net investment income | 183,014 | 180,672 | 180,438 | 192,562 | 170,864 | 175,175 | 177,018 | 164,200 | 736,686 | 687,257 | ||||||||||||||||||||||||||||||
Net realized gains (losses) on investments | 116,720 | (2,675 | ) | 2,272 | (4,452 | ) | (8,301 | ) | 11,965 | 4,079 | 492 | 111,865 | 8,235 | |||||||||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | 9,017 | 9,428 | 10,022 | 8,833 | 7,155 | 11,706 | 11,784 | 11,863 | 37,300 | 42,508 | ||||||||||||||||||||||||||||||
Fees and other income* | 130,722 | 79,014 | 71,036 | 60,186 | 67,382 | 59,409 | 58,183 | 53,905 | 340,958 | 238,879 | ||||||||||||||||||||||||||||||
2,207,633 | 1,984,079 | 1,949,090 | 1,929,782 | 1,881,577 | 1,879,441 | 1,874,303 | 1,862,354 | 8,070,584 | 7,497,675 | |||||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | 886,747 | 888,317 | 874,204 | 889,679 | 869,678 | 970,596 | 924,011 | 943,524 | 3,538,947 | 3,707,809 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 915,398 | 849,414 | 827,408 | 782,432 | 847,172 | 752,156 | 746,879 | 726,793 | 3,374,652 | 3,073,000 | ||||||||||||||||||||||||||||||
Interest expense | 15,306 | 15,307 | 15,315 | 15,315 | 15,315 | 15,315 | 15,314 | 15,314 | 61,243 | 61,258 | ||||||||||||||||||||||||||||||
1,817,451 | 1,753,038 | 1,716,927 | 1,687,426 | 1,732,165 | 1,738,067 | 1,686,204 | 1,685,631 | 6,974,842 | 6,842,067 | |||||||||||||||||||||||||||||||
Income before income taxes and cumulative effect of change in accounting principle | 390,182 | 231,041 | 232,163 | 242,356 | 149,412 | 141,374 | 188,099 | 176,723 | 1,095,742 | 655,608 | ||||||||||||||||||||||||||||||
Income taxes | 137,675 | 79,738 | 81,027 | 81,431 | 12,366 | 41,087 | 60,475 | 62,325 | 379,871 | 176,253 | ||||||||||||||||||||||||||||||
Net income before cumulative effect of change in accounting principle | 252,507 | 151,303 | 151,136 | 160,925 | 137,046 | 100,287 | 127,624 | 114,398 | 715,871 | 479,355 | ||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | — | 1,547 | — | — | — | — | 1,547 | — | ||||||||||||||||||||||||||||||
Net income | $ | 252,507 | $ | 151,303 | $ | 151,136 | $ | 162,472 | $ | 137,046 | $ | 100,287 | $ | 127,624 | $ | 114,398 | $ | 717,418 | $ | 479,355 | ||||||||||||||||||||
Share repurchase program: | ||||||||||||||||||||||||||||||||||||||||
Shares repurchased | 1,826,416 | 3,081,000 | 2,140,000 | 1,416,800 | 2,014,468 | 3,910,926 | 2,797,500 | 710,000 | 8,464,216 | 9,432,894 | ||||||||||||||||||||||||||||||
Average repurchase price per share | $ | 54.45 | $ | 50.34 | $ | 48.43 | $ | 45.17 | $ | 38.00 | $ | 37.38 | $ | 34.32 | $ | 34.16 | $ | 49.88 | $ | 36.36 | ||||||||||||||||||||
Repurchase price | $ | 99,444 | $ | 155,109 | $ | 103,630 | $ | 64,001 | $ | 76,551 | $ | 146,181 | $ | 96,006 | $ | 24,252 | $ | 422,184 | $ | 342,990 | ||||||||||||||||||||
AIZ Closing stock price (NYSE) | $ | 55.25 | $ | 53.41 | $ | 48.40 | $ | 49.25 | $ | 43.49 | $ | 38.06 | $ | 36.10 | $ | 33.70 | $ | 53.41 | $ | 43.49 | ||||||||||||||||||||
Investment yield(1) | 5.73 | % | 5.66 | % | 5.83 | % | 5.75 | % | 5.54 | % | 5.71 | % | 5.63 | % | 5.51 | % | 5.67 | % | 5.54 | % | ||||||||||||||||||||
Real estate investment income(1) | $ | 614 | $ | 3,229 | $ | — | $ | 14,735 | $ | — | $ | 3,156 | $ | 9,409 | $ | — | $ | 18,578 | $ | 12,565 |
(1) | Investment yield excludes investment income from real estate partnerships. |
* | The three months ended and year ended December 31, 2006 includes $62,278 related to a legal settlement in Assurant Solutions. See page 5. |
Page 4
Assurant Solutions
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 617,798 | $ | 591,237 | $ | 592,182 | $ | 570,388 | $ | 573,880 | $ | 556,084 | $ | 554,829 | $ | 535,352 | $ | 2,371,605 | $ | 2,220,145 | |||||||||||
Net investment income | 99,852 | 96,625 | 98,951 | 97,082 | 93,192 | 92,070 | 100,107 | 86,196 | 392,510 | 371,565 | |||||||||||||||||||||
Fees and other income* | 38,516 | 47,262 | 39,525 | 34,170 | 41,004 | 32,063 | 30,574 | 29,089 | 159,473 | 132,730 | |||||||||||||||||||||
756,166 | 735,124 | 730,658 | 701,640 | 708,076 | 680,217 | 685,510 | 650,637 | 2,923,588 | 2,724,440 | ||||||||||||||||||||||
Benefits, losses and expenses: | |||||||||||||||||||||||||||||||
Policyholder benefits | 252,296 | 250,886 | 247,208 | 248,380 | 246,585 | 271,357 | 269,284 | 259,674 | 998,770 | 1,046,900 | |||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 446,185 | 424,284 | 424,429 | 394,878 | 406,259 | 360,947 | 353,299 | 357,000 | 1,689,776 | 1,477,505 | |||||||||||||||||||||
698,481 | 675,170 | 671,637 | 643,258 | 652,844 | 632,304 | 622,583 | 616,674 | 2,688,546 | 2,524,405 | ||||||||||||||||||||||
Income before income taxes | 57,685 | 59,954 | 59,021 | 58,382 | 55,232 | 47,913 | 62,927 | 33,963 | 235,042 | 200,035 | |||||||||||||||||||||
Income taxes* | 17,875 | 18,247 | 21,873 | 18,635 | 19,850 | 15,974 | 20,535 | 10,529 | 76,630 | 66,888 | |||||||||||||||||||||
Net operating income* | $ | 39,810 | $ | 41,707 | $ | 37,148 | $ | 39,747 | $ | 35,382 | $ | 31,939 | $ | 42,392 | $ | 23,434 | $ | 158,412 | $ | 133,147 | |||||||||||
Net earned premiums and other considerations: | |||||||||||||||||||||||||||||||
Domestic: | |||||||||||||||||||||||||||||||
Credit | $ | 86,185 | $ | 88,470 | $ | 98,206 | $ | 95,851 | $ | 100,216 | $ | 84,516 | $ | 85,287 | $ | 81,320 | $ | 368,712 | $ | 351,339 | |||||||||||
Service contracts | 278,691 | 255,962 | 256,135 | 249,982 | 226,433 | 204,147 | 204,876 | 200,369 | 1,040,770 | 835,825 | |||||||||||||||||||||
Other | 19,791 | 18,034 | 19,759 | 23,699 | 31,228 | 36,968 | 41,318 | 44,979 | 81,283 | 154,493 | |||||||||||||||||||||
Total Domestic | 384,667 | 362,466 | 374,100 | 369,532 | 357,877 | 325,631 | 331,481 | 326,668 | 1,490,765 | 1,341,657 | |||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||
Credit | 104,288 | 104,372 | 97,612 | 88,210 | 95,481 | 79,288 | 91,234 | 73,224 | 394,482 | 339,227 | |||||||||||||||||||||
Service contracts | 41,449 | 18,868 | 24,416 | 14,761 | 11,905 | 9,983 | 10,977 | 8,141 | 99,494 | 41,006 | |||||||||||||||||||||
Other | 15,158 | 24,327 | 13,311 | 13,933 | 17,122 | 13,735 | (4,701 | ) | 6,120 | 66,729 | 32,276 | ||||||||||||||||||||
Total International | 160,895 | 147,567 | 135,339 | 116,904 | 124,508 | 103,006 | 97,510 | 87,485 | 560,705 | 412,509 | |||||||||||||||||||||
Preneed | 72,236 | 81,204 | 82,743 | 83,952 | 91,495 | 127,447 | 125,838 | 121,199 | 320,135 | 465,979 | |||||||||||||||||||||
Total | $ | 617,798 | $ | 591,237 | $ | 592,182 | $ | 570,388 | $ | 573,880 | $ | 556,084 | $ | 554,829 | $ | 535,352 | $ | 2,371,605 | $ | 2,220,145 | |||||||||||
Fee income: | |||||||||||||||||||||||||||||||
Domestic: | |||||||||||||||||||||||||||||||
Debt protection | $ | 13,523 | $ | 13,698 | $ | 13,750 | $ | 13,082 | $ | 15,080 | $ | 11,467 | $ | 12,985 | $ | 11,888 | $ | 54,053 | $ | 51,420 | |||||||||||
Service contracts | 15,872 | 23,556 | 14,432 | 12,567 | 16,982 | 11,047 | 9,785 | 8,709 | 66,427 | 46,523 | |||||||||||||||||||||
Other | 4,092 | 4,884 | 4,796 | 4,022 | 4,363 | 4,509 | 5,251 | 4,870 | 17,794 | 18,993 | |||||||||||||||||||||
Total Domestic | 33,487 | 42,138 | 32,978 | 29,671 | 36,425 | 27,023 | 28,021 | 25,467 | 138,274 | 116,936 | |||||||||||||||||||||
International | 4,433 | 4,069 | 4,165 | 4,276 | 3,992 | 3,117 | 2,750 | 2,443 | 16,943 | 12,302 | |||||||||||||||||||||
Preneed | 596 | 1,055 | 2,382 | 223 | 587 | 1,923 | (197 | ) | 1,179 | 4,256 | 3,492 | ||||||||||||||||||||
Total | $ | 38,516 | $ | 47,262 | $ | 39,525 | $ | 34,170 | $ | 41,004 | $ | 32,063 | $ | 30,574 | $ | 29,089 | $ | 159,473 | $ | 132,730 | |||||||||||
* | For supplemental purposes, segment net operating income for the three months and year ended December 31, 2006 excludes $62,278 of fees and other income and related tax expense of $21,797 resulting from a third-party legal settlement. These amounts are included in the Consolidated Statements of Operations for the three months and year ended December 31, 2006 in this disclosure (see Page 4). In compliance with GAAP standards and SEC reporting requirements, the impact of this legal settlement is included in the Assurant Solutions segment statements of operations in Assurant, Inc.’s annual report on Form 10-K for the fiscal year ended December 31, 2006 filed with the SEC. |
Page 5
Assurant Solutions
Condensed Statements of Operations
(Unaudited)
($ in | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Gross written premiums (1): | ||||||||||||||||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||||||||||||
Credit | $ | 179,255 | $ | 184,120 | $ | 182,489 | $ | 168,927 | $ | 199,082 | $ | 182,999 | $ | 194,667 | $ | 190,718 | $ | 714,791 | $ | 767,466 | ||||||||||||||||||||
Service contracts | 468,820 | 398,170 | 378,636 | 354,962 | 395,520 | 376,934 | 322,625 | 319,450 | 1,600,588 | 1,414,529 | ||||||||||||||||||||||||||||||
Other | 26,905 | 25,851 | 24,335 | 31,478 | 41,700 | 47,168 | 51,154 | 52,834 | 108,569 | 192,856 | ||||||||||||||||||||||||||||||
Total Domestic | 674,980 | 608,141 | 585,460 | 555,367 | 636,302 | 607,101 | 568,446 | 563,002 | 2,423,948 | 2,374,851 | ||||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||||||||||||||
Credit | 184,448 | 175,417 | 159,208 | 161,024 | 160,858 | 166,413 | 157,449 | 162,747 | 680,097 | 647,467 | ||||||||||||||||||||||||||||||
Service contracts | 112,893 | 91,407 | 71,330 | 66,256 | 86,674 | 62,669 | 50,593 | 47,570 | 341,886 | 247,506 | ||||||||||||||||||||||||||||||
Other | 10,048 | 11,353 | 11,817 | 11,437 | 21,992 | 22,676 | 26,887 | 34,407 | 44,655 | 105,962 | ||||||||||||||||||||||||||||||
Total International | 307,389 | 278,177 | 242,355 | 238,717 | 269,524 | 251,758 | 234,929 | 244,724 | 1,066,638 | 1,000,935 | ||||||||||||||||||||||||||||||
Total | $ | 982,369 | $ | 886,318 | $ | 827,815 | $ | 794,084 | $ | 905,826 | $ | 858,859 | $ | 803,375 | $ | 807,726 | $ | 3,490,586 | $ | 3,375,786 | ||||||||||||||||||||
Preneed (face sales) | $ | 84,246 | $ | 105,031 | $ | 120,545 | $ | 123,688 | $ | 123,202 | $ | 141,786 | $ | 144,508 | $ | 133,019 | $ | 433,510 | $ | 542,515 | ||||||||||||||||||||
Combined ratios (a): | ||||||||||||||||||||||||||||||||||||||||
Domestic | 100.1 | % | 98.4 | % | 99.1 | % | 100.0 | % | 96.0 | % | 101.6 | % | 98.6 | % | 103.8 | % | 99.4 | % | 99.9 | % | ||||||||||||||||||||
International | 99.3 | % | 101.7 | % | 100.0 | % | 95.2 | % | 103.4 | % | 98.5 | % | 99.1 | % | 96.3 | % | 99.2 | % | 99.7 | % | ||||||||||||||||||||
Preneed yield (2) | 6.36 | % | 6.21 | % | 6.35 | % | 6.32 | % | 6.35 | % | 6.41 | % | 6.16 | % | 6.23 | % | 6.42 | % | 6.35 | % | ||||||||||||||||||||
Preneed average invested assets | $ | 3,600,069 | $ | 3,644,564 | $ | 3,565,666 | $ | 3,468,298 | $ | 3,461,114 | $ | 3,465,772 | $ | 3,449,655 | $ | 3,403,333 | $ | 3,509,475 | $ | 3,414,937 | ||||||||||||||||||||
Investment yield (2)* | 5.93 | % | 5.67 | % | N/A | N/A | N/A | N/A | N/A | N/A | 5.84 | % | N/A | |||||||||||||||||||||||||||
Real estate investment income(2) | $ | 276 | $ | 1,453 | $ | — | $ | 2,506 | $ | — | $ | — | $ | 9,409 | $ | — | $ | 4,235 | $ | 9,409 |
(a) | The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the preneed business. |
(1) | Historical domestic service contract gross written premiums have been increased to reflect addiitonal products, including vehicle service contracts, and “Other” has been added to reflect emerging products and run-off lines of business. |
(2) | Investment yield excludes investment income from real estate partnerships. |
* | Segment balance sheets as of March 31, 2006, September 30, 2005, June 30, 2005 and March 31, 2005 are not available. Therefore, investment yields are not available. |
Page 6
Assurant Specialty Property
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 350,946 | $ | 313,644 | $ | 290,972 | $ | 252,749 | $ | 230,684 | $ | 219,374 | $ | 207,696 | $ | 201,094 | $ | 1,208,311 | $ | 858,848 | ||||||||||||||||||||
Net investment income | 20,204 | 19,584 | 17,923 | 16,790 | 15,481 | 16,648 | 14,843 | 14,981 | 74,501 | 61,953 | ||||||||||||||||||||||||||||||
Fees and other income | 13,050 | 13,329 | 13,587 | 9,458 | 9,948 | 9,850 | 10,168 | 8,193 | 49,424 | 38,159 | ||||||||||||||||||||||||||||||
384,200 | 346,557 | 322,482 | 278,997 | 256,113 | 245,872 | 232,707 | 224,268 | 1,332,236 | 958,960 | |||||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | 112,409 | 115,379 | 110,474 | 70,459 | 77,762 | 96,707 | 72,294 | 70,744 | 408,721 | 317,507 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 173,454 | 148,540 | 122,369 | 109,089 | 118,811 | 100,838 | 108,230 | 95,120 | 553,452 | 422,999 | ||||||||||||||||||||||||||||||
285,863 | 263,919 | 232,843 | 179,548 | 196,573 | 197,545 | 180,524 | 165,864 | 962,173 | 740,506 | |||||||||||||||||||||||||||||||
Income before income taxes | 98,337 | 82,638 | 89,639 | 99,449 | 59,540 | 48,327 | 52,183 | 58,404 | 370,063 | 218,454 | ||||||||||||||||||||||||||||||
Income taxes | 34,381 | 29,193 | 30,363 | 35,005 | 20,503 | 16,642 | 17,970 | 20,112 | 128,942 | 75,227 | ||||||||||||||||||||||||||||||
Net operating income | $ | 63,956 | $ | 53,445 | $ | 59,276 | $ | 64,444 | $ | 39,037 | $ | 31,685 | $ | 34,213 | $ | 38,292 | $ | 241,121 | $ | 143,227 | ||||||||||||||||||||
Net Earned Premiums for selected product groupings: | ||||||||||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 233,181 | $ | 198,733 | $ | 178,363 | $ | 142,892 | $ | 118,070 | $ | 114,965 | $ | 107,219 | $ | 103,272 | $ | 753,169 | $ | 443,526 | ||||||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 51,774 | 52,535 | 54,184 | 55,968 | 57,957 | 52,699 | 53,252 | 53,516 | 214,461 | 217,424 | ||||||||||||||||||||||||||||||
Other | 65,991 | 62,376 | 58,425 | 53,889 | 54,657 | 51,710 | 47,225 | 44,306 | 240,681 | 197,898 | ||||||||||||||||||||||||||||||
Total | $ | 350,946 | $ | 313,644 | $ | 290,972 | $ | 252,749 | $ | 230,684 | $ | 219,374 | $ | 207,696 | $ | 201,094 | $ | 1,208,311 | $ | 858,848 | ||||||||||||||||||||
Gross Written Premiums for selected product groupings: | ||||||||||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 330,882 | $ | 271,632 | $ | 247,538 | $ | 184,096 | $ | 219,423 | $ | 190,975 | $ | 150,359 | $ | 136,894 | $ | 1,034,148 | $ | 697,651 | ||||||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 73,590 | 82,401 | 80,981 | 69,610 | 80,616 | 81,818 | 80,094 | 69,264 | 306,582 | 311,792 | ||||||||||||||||||||||||||||||
Other | 121,711 | 130,820 | 127,555 | 101,386 | 111,173 | 105,733 | 110,819 | 93,066 | 481,472 | 420,791 | ||||||||||||||||||||||||||||||
Total | $ | 526,183 | $ | 484,853 | $ | 456,074 | $ | 355,092 | $ | 411,212 | $ | 378,526 | $ | 341,272 | $ | 299,224 | $ | 1,822,202 | $ | 1,430,234 | ||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 32.0 | % | 36.8 | % | 38.0 | % | 27.9 | % | 33.7 | % | 44.1 | % | 34.8 | % | 35.2 | % | 33.8 | % | 37.0 | % | ||||||||||||||||||||
Expense ratio (b) | 47.7 | % | 45.4 | % | 40.2 | % | 41.6 | % | 49.4 | % | 44.0 | % | 49.7 | % | 45.4 | % | 44.0 | % | 47.2 | % | ||||||||||||||||||||
Combined ratio (c) | 78.5 | % | 80.7 | % | 76.5 | % | 68.5 | % | 81.7 | % | 86.2 | % | 82.9 | % | 79.3 | % | 76.5 | % | 82.6 | % | ||||||||||||||||||||
Investment yield (1)* | 5.54 | % | 5.62 | % | N/A | N/A | N/A | N/A | N/A | N/A | 5.73 | % | N/A | |||||||||||||||||||||||||||
Real estate investment income (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
(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. |
* | Segment balance sheets as of March 31, 2006, September 30, 2005, June 30, 2005 and March 31, 2005 are not available. Therefore, investment yields are not available. |
Page 7
Assurant Health
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 519,438 | $ | 521,527 | $ | 519,587 | $ | 523,405 | $ | 531,345 | $ | 538,800 | $ | 544,294 | $ | 549,526 | $ | 2,083,957 | $ | 2,163,965 | ||||||||||
Net investment income | 16,415 | 17,689 | 17,110 | 24,001 | 16,474 | 17,707 | 17,170 | 17,705 | 75,215 | 69,056 | ||||||||||||||||||||
Fees and other income | 10,549 | 11,035 | 10,250 | 9,726 | 9,323 | 10,420 | 10,270 | 10,331 | 41,560 | 40,344 | ||||||||||||||||||||
546,402 | 550,251 | 546,947 | 557,132 | 557,142 | 566,927 | 571,734 | 577,562 | 2,200,732 | 2,273,365 | |||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||
Policyholder benefits | 328,769 | 325,325 | 321,322 | 325,401 | 329,793 | 336,362 | 333,101 | 345,368 | 1,300,817 | 1,344,624 | ||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 160,411 | 155,186 | 163,019 | 162,712 | 176,626 | 161,125 | 163,385 | 156,763 | 641,328 | 657,899 | ||||||||||||||||||||
489,180 | 480,511 | 484,341 | 488,113 | 506,419 | 497,487 | 496,486 | 502,131 | 1,942,145 | 2,002,523 | |||||||||||||||||||||
Income before income taxes | 57,222 | 69,740 | 62,606 | 69,019 | 50,723 | 69,440 | 75,248 | 75,431 | 258,587 | 270,842 | ||||||||||||||||||||
Income taxes | 20,262 | 24,893 | 21,590 | 23,923 | 17,426 | 23,722 | 25,881 | 25,758 | 90,668 | 92,787 | ||||||||||||||||||||
Net operating income | $ | 36,960 | $ | 44,847 | $ | 41,016 | $ | 45,096 | $ | 33,297 | $ | 45,718 | $ | 49,367 | $ | 49,673 | $ | 167,919 | $ | 178,055 | ||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||
Individual medical | $ | 310,826 | $ | 305,246 | $ | 300,267 | $ | 297,338 | $ | 295,322 | $ | 291,817 | $ | 290,047 | $ | 287,312 | $ | 1,213,677 | $ | 1,164,498 | ||||||||||
Short-term medical | 24,125 | 26,839 | 25,489 | 25,001 | 26,664 | 30,257 | 28,115 | 25,876 | 101,454 | 110,912 | ||||||||||||||||||||
Subtotal | 334,951 | 332,085 | 325,756 | 322,339 | 321,986 | 322,074 | 318,162 | 313,188 | 1,315,131 | 1,275,410 | ||||||||||||||||||||
Small employer group | 184,487 | 189,442 | 193,831 | 201,066 | 209,359 | 216,726 | 226,132 | 236,338 | 768,826 | 888,555 | ||||||||||||||||||||
Total | $ | 519,438 | $ | 521,527 | $ | 519,587 | $ | 523,405 | $ | 531,345 | $ | 538,800 | $ | 544,294 | $ | 549,526 | $ | 2,083,957 | $ | 2,163,965 | ||||||||||
Page 8
Assurant Health (continued)
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Sales (Annualized issued premiums): | ||||||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||||||
Individual medical | $ | 88,154 | $ | 90,271 | $ | 76,616 | $ | 76,192 | $ | 71,745 | $ | 69,343 | $ | 68,137 | $ | 76,389 | $ | 331,233 | $ | 285,614 | ||||||||||||||||||||
Short-term medical * | 29,078 | 34,841 | 33,612 | 35,014 | 31,102 | 40,129 | 38,110 | 35,135 | 132,545 | 144,476 | ||||||||||||||||||||||||||||||
Subtotal | 117,232 | 125,112 | 110,228 | 111,206 | 102,847 | 109,472 | 106,247 | 111,524 | 463,778 | 430,090 | ||||||||||||||||||||||||||||||
Small employer group | 28,652 | 33,336 | 32,527 | 34,573 | 36,466 | 36,224 | 41,211 | 45,486 | 129,088 | 159,387 | ||||||||||||||||||||||||||||||
Total | $ | 145,884 | $ | 158,448 | $ | 142,755 | $ | 145,779 | $ | 139,313 | $ | 145,696 | $ | 147,458 | $ | 157,010 | $ | 592,866 | $ | 589,477 | ||||||||||||||||||||
Membership by product line: | ||||||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||||||
Individual medical | 641 | 639 | 632 | 636 | 644 | 647 | 662 | 671 | 641 | 644 | ||||||||||||||||||||||||||||||
Short-term medical | 87 | 99 | 105 | 100 | 102 | 122 | 129 | 116 | 87 | 102 | ||||||||||||||||||||||||||||||
Subtotal | 728 | 738 | 737 | 736 | 746 | 769 | 791 | 787 | 728 | 746 | ||||||||||||||||||||||||||||||
Small employer group | 207 | 216 | 226 | 239 | 255 | 267 | 287 | 308 | 207 | 255 | ||||||||||||||||||||||||||||||
Total | 935 | 954 | 963 | 975 | 1,001 | 1,036 | 1,078 | 1,095 | 935 | 1,001 | ||||||||||||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 63.3 | % | 62.4 | % | 61.8 | % | 62.2 | % | 62.1 | % | 62.4 | % | 61.2 | % | 62.8 | % | 62.4 | % | 62.1 | % | ||||||||||||||||||||
Expense ratio (b) | 30.3 | % | 29.1 | % | 30.8 | % | 30.5 | % | 32.7 | % | 29.3 | % | 29.5 | % | 28.0 | % | 30.2 | % | 29.8 | % | ||||||||||||||||||||
Combined ratio (c) | 92.3 | % | 90.2 | % | 91.4 | % | 91.6 | % | 93.7 | % | 90.6 | % | 89.5 | % | 89.7 | % | 91.4 | % | 90.8 | % | ||||||||||||||||||||
Investment yield(1) | 5.69 | % | 5.76 | % | 5.83 | % | 5.70 | % | 5.57 | % | 5.48 | % | 5.23 | % | 5.44 | % | 5.91 | % | 5.61 | % | ||||||||||||||||||||
Real estate investment income(1) | $ | 123 | $ | 646 | $ | — | $ | 7,372 | $ | — | $ | 596 | $ | — | $ | — | $ | 8,141 | $ | 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. |
* | Historical short-term medical sales have been increased to reflect a refinement in the calculation of the premium we anticipate to receive on monthly paid policies. |
Page 9
Assurant Employee Benefits
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 279,978 | $ | 291,232 | $ | 282,581 | $ | 326,111 | $ | 308,568 | $ | 306,928 | $ | 316,420 | $ | 345,922 | $ | 1,179,902 | $ | 1,277,838 | ||||||||||
Net investment income | 39,049 | 39,893 | 38,744 | 40,839 | 38,754 | 41,878 | 38,274 | 37,983 | 158,525 | 156,889 | ||||||||||||||||||||
Fees and other income | 6,477 | 6,685 | 7,547 | 6,832 | 6,056 | 6,976 | 6,993 | 6,189 | 27,541 | 26,214 | ||||||||||||||||||||
325,504 | 337,810 | 328,872 | 373,782 | 353,378 | 355,782 | 361,687 | 390,094 | 1,365,968 | 1,460,941 | |||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||
Policyholder benefits | 193,273 | 196,727 | 195,195 | 245,439 | 215,538 | 212,022 | 241,537 | 267,738 | 830,634 | 936,835 | ||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 102,353 | 103,726 | 101,827 | 99,114 | 108,095 | 108,403 | 105,027 | 97,017 | 407,020 | 418,542 | ||||||||||||||||||||
295,626 | 300,453 | 297,022 | 344,553 | 323,633 | 320,425 | 346,564 | 364,755 | 1,237,654 | 1,355,377 | |||||||||||||||||||||
Income before income taxes | 29,878 | 37,357 | 31,850 | 29,229 | 29,745 | 35,357 | 15,123 | 25,339 | 128,314 | 105,564 | ||||||||||||||||||||
Income taxes | 10,450 | 12,957 | 11,260 | 10,044 | 10,416 | 12,511 | 5,311 | 8,960 | 44,711 | 37,198 | ||||||||||||||||||||
Net operating income | $ | 19,428 | $ | 24,400 | $ | 20,590 | $ | 19,185 | $ | 19,329 | $ | 22,846 | $ | 9,812 | $ | 16,379 | $ | 83,603 | $ | 68,366 | ||||||||||
Net earned premiums and other considerations by: | ||||||||||||||||||||||||||||||
Major product grouping: | ||||||||||||||||||||||||||||||
Group dental | $ | 104,448 | $ | 104,367 | $ | 108,010 | $ | 111,393 | $ | 121,444 | $ | 124,780 | $ | 128,323 | $ | 128,242 | $ | 428,218 | $ | 502,789 | ||||||||||
Group disability single premiums for closed blocks | — | 12,393 | — | 33,920 | — | — | — | 26,700 | 46,313 | 26,700 | ||||||||||||||||||||
All other group disability | 119,812 | 119,679 | 119,847 | 121,586 | 123,390 | 118,595 | 123,078 | 124,777 | 480,924 | 489,840 | ||||||||||||||||||||
Group life | 55,718 | 54,793 | 54,724 | 59,212 | 63,734 | 63,553 | 65,019 | 66,203 | 224,447 | 258,509 | ||||||||||||||||||||
Total | $ | 279,978 | $ | 291,232 | $ | 282,581 | $ | 326,111 | $ | 308,568 | $ | 306,928 | $ | 316,420 | $ | 345,922 | $ | 1,179,902 | $ | 1,277,838 | ||||||||||
Page 10
Assurant Employee Benefits (continued)
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||||||||||||||
Group dental | $ | 17,119 | $ | 20,678 | $ | 12,843 | $ | 26,979 | $ | 17,316 | $ | 21,588 | $ | 18,187 | $ | 41,757 | $ | 77,619 | $ | 98,848 | ||||||||||||||||||||
Group disability | 11,126 | 12,362 | 10,022 | 13,633 | 9,722 | 12,649 | 14,864 | 25,420 | 47,143 | 62,655 | ||||||||||||||||||||||||||||||
Group life | 5,859 | 6,954 | 5,344 | 6,681 | 6,702 | 5,883 | 10,898 | 18,561 | 24,838 | 42,044 | ||||||||||||||||||||||||||||||
Total | $ | 34,104 | $ | 39,994 | $ | 28,209 | $ | 47,293 | $ | 33,740 | $ | 40,120 | $ | 43,949 | $ | 85,738 | $ | 149,600 | $ | 203,547 | ||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 69.0 | % | 67.5 | % | 69.1 | % | 75.3 | % | 69.9 | % | 69.1 | % | 76.3 | % | 77.4 | % | 70.4 | % | 73.3 | % | ||||||||||||||||||||
Expense ratio (b) | 35.7 | % | 34.8 | % | 35.1 | % | 29.8 | % | 34.4 | % | 34.5 | % | 32.5 | % | 27.6 | % | 33.7 | % | 32.1 | % | ||||||||||||||||||||
Investment yield(1) | 6.32 | % | 6.25 | % | 6.17 | % | 6.47 | % | 6.15 | % | 6.29 | % | 6.14 | % | 6.12 | % | 6.31 | % | 6.19 | % | ||||||||||||||||||||
Real estate investment income (1) | $ | 215 | $ | 1,130 | $ | — | $ | — | $ | — | $ | 2,560 | $ | — | $ | — | $ | 1,345 | $ | 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 11
Assurant Corporate and Other
Condensed Statements of Operations
(Unaudited)
($ in thousands) | For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||||||
December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Net investment income | 7,494 | 6,881 | 7,710 | 13,850 | 6,963 | 6,872 | 6,624 | 7,335 | 35,935 | 27,794 | ||||||||||||||||||||||||||||||
Net realized gains (losses) on investments | 116,720 | (2,675 | ) | 2,272 | (4,452 | ) | (8,301 | ) | 11,965 | 4,079 | 492 | 111,865 | 8,235 | |||||||||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | 9,017 | 9,428 | 10,022 | 8,833 | 7,155 | 11,706 | 11,784 | 11,863 | 37,300 | 42,508 | ||||||||||||||||||||||||||||||
Fees and other income | (148 | ) | 703 | 127 | — | 1,051 | 100 | 178 | 103 | 682 | 1,432 | |||||||||||||||||||||||||||||
133,083 | 14,337 | 20,131 | 18,231 | 6,868 | 30,643 | 22,665 | 19,793 | 185,782 | 79,969 | |||||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | — | — | 5 | — | — | 54,148 | 7,795 | — | 5 | 61,943 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 32,995 | 17,678 | 15,764 | 16,639 | 37,381 | 20,843 | 16,938 | 20,893 | 83,076 | 96,055 | ||||||||||||||||||||||||||||||
Interest expense | 15,306 | 15,307 | 15,315 | 15,315 | 15,315 | 15,315 | 15,314 | 15,314 | 61,243 | 61,258 | ||||||||||||||||||||||||||||||
48,301 | 32,985 | 31,084 | 31,954 | 52,696 | 90,306 | 40,047 | 36,207 | 144,324 | 219,256 | |||||||||||||||||||||||||||||||
Loss before income taxes and cumulative effect of change in accounting principle | 84,782 | (18,648 | ) | (10,953 | ) | (13,723 | ) | (45,828 | ) | (59,663 | ) | (17,382 | ) | (16,414 | ) | 41,458 | (139,287 | ) | ||||||||||||||||||||||
Income taxes | 32,910 | (5,552 | ) | (4,059 | ) | (6,176 | ) | (55,829 | ) | (27,762 | ) | (9,222 | ) | (3,034 | ) | 17,123 | (95,847 | ) | ||||||||||||||||||||||
Net operating (loss) income before cumulative effect of change in accounting principle | 51,872 | (13,096 | ) | (6,894 | ) | (7,547 | ) | 10,001 | (31,901 | ) | (8,160 | ) | (13,380 | ) | 24,335 | (43,440 | ) | |||||||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | — | 1,547 | — | — | — | — | 1,547 | — | ||||||||||||||||||||||||||||||
Net operating (loss) income | $ | 51,872 | $ | (13,096 | ) | $ | (6,894 | ) | $ | (6,000 | ) | $ | 10,001 | $ | (31,901 | ) | $ | (8,160 | ) | $ | (13,380 | ) | $ | 25,882 | $ | (43,440 | ) | |||||||||||||
Real estate investment income | $ | — | $ | — | $ | — | $ | 4,857 | $ | — | $ | — | $ | — | $ | — | $ | 4,857 | $ | — | ||||||||||||||||||||
Corporate and Other Reconciliation | ||||||||||||||||||||||||||||||||||||||||
Assurant Corporate and Other Segment Net Operating Income | $ | 51,872 | $ | (13,096 | ) | $ | (6,894 | ) | $ | (6,000 | ) | $ | 10,001 | $ | (31,901 | ) | $ | (8,160 | ) | $ | (13,380 | ) | $ | 25,882 | $ | (43,440 | ) | |||||||||||||
Adjustments, net of tax: | ||||||||||||||||||||||||||||||||||||||||
Amortization of deferred gain on disposal of businesses | (5,861 | ) | (6,128 | ) | (6,514 | ) | (5,741 | ) | (4,651 | ) | (7,609 | ) | (7,660 | ) | (7,711 | ) | (24,244 | ) | (27,631 | ) | ||||||||||||||||||||
Interest expense | 9,949 | 9,950 | 9,955 | 9,955 | 9,955 | 9,955 | 9,954 | 9,954 | 39,809 | 39,818 | ||||||||||||||||||||||||||||||
Net realized (gains) losses on investments | (75,868 | ) | 1,739 | (1,477 | ) | 2,894 | 5,396 | (9,794 | ) | (2,651 | ) | (320 | ) | (72,712 | ) | (7,369 | ) | |||||||||||||||||||||||
Excess of loss reinsurance program (1995-1997) | — | — | — | — | — | 35,060 | 5,203 | — | — | 40,263 | ||||||||||||||||||||||||||||||
Expenses directly related to the secondary public offering | — | — | — | — | — | — | — | 1,040 | — | 1,040 | ||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | — | (1,547 | ) | — | — | — | — | (1,547 | ) | — | ||||||||||||||||||||||||||||
Corporate and other per Reconciliation of Net Operating | $ | (19,908 | ) | $ | (7,535 | ) | $ | (4,930 | ) | $ | (439 | ) | $ | 20,701 | $ | (4,289 | ) | $ | (3,314 | ) | $ | (10,417 | ) | $ | (32,812 | ) | $ | 2,681 | ||||||||||||
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Assurant, Inc. and Subsidiaries | ||
Summary of Net Operating Income Disclosed Items - (Note 1) | ||
Income / (Expense) Items | ||
(unaudited) |
For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, after-tax) | December 31, 2006 | September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | June 30, 2005 | March 31, 2005 | ||||||||||||||||||||||||||||||||||||||||||
$ | EPS | $ | EPS | $ | EPS | $ | EPS | $ | EPS | $ | EPS | $ | EPS | $ | EPS | |||||||||||||||||||||||||||||||||||
Assurant Solutions: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Closed block of extended service contracts (d) | $ | — | — | $ | 5.4 | 0.04 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||||||
Expense on sale of US pre-need independent franchise (f) | $ | — | — | $ | — | — | $ | (0.7 | ) | (0.01 | ) | $ | (1.3 | ) | (0.01 | ) | $ | (3.9 | ) | (0.03 | ) | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||
Assurant Specialty Property: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Additional reinsurance premiums (a) | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | (5.9 | ) | (0.04 | ) | $ | (11.1 | ) | (0.08 | ) | $ | — | — | $ | — | — | ||||||||||||||||||||||
Client related settlements (e) | $ | 5.5 | 0.04 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | 6.5 | 0.05 | $ | — | — | $ | 4.6 | 0.03 | ||||||||||||||||||||||||||
Processing fees for the National Flood Insurance Program (e) | �� | $ | — | — | $ | 0.3 | 0.00 | $ | 1.3 | 0.01 | $ | 5.2 | 0.04 | $ | 11.3 | 0.09 | $ | — | — | $ | — | — | $ | — | — | |||||||||||||||||||||||||
Catastrophe losses, net of reinsurance (e) | $ | — | — | $ | — | — | $ | (4.5 | ) | (0.03 | ) | $ | — | — | $ | (11.4 | ) | (0.09 | ) | $ | (20.2 | ) | (0.15 | ) | $ | — | — | $ | — | — | ||||||||||||||||||||
Assurant Health: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Legal related settlements (f) | $ | — | — | $ | 2.6 | 0.02 | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||||||
Higher than normal technology and marketing expense (f) | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | (6.5 | ) | (0.05 | ) | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||||
Assurant Corporate and Other: | �� | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment to deferred gains on disposal of businesses (c) | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | (3.1 | ) | (0.02 | ) | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||||
Assurant Foundation funding (f) | $ | (3.3 | ) | (0.03 | ) | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||||||||||
Change in certain tax liabilities (g) | $ | (6.2 | ) | (0.05 | ) | $ | — | — | $ | — | — | $ | — | — | $ | 39.4 | 0.30 | $ | — | — | $ | 5.5 | 0.04 | $ | — | — |
Statement of Operations line impact:
(a) | Net earned premiums and other considerations |
(b) | Net investment income |
(c) | Amortization of deferred gains on sale of businesses |
(d) | Fees and other income |
(e) | Policyholder benefits |
(f) | Selling, underwriting, general and administrative expenses |
(g) | Income taxes |
(Note 1) Schedule excludes investment income from real estate joint ventures, which are shown separately in the Consolidated and Segment statements of operations.
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