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Exhibit 99.2
Assurant, Inc. (AIZ)
Financial Supplement as of December 31, 2008
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ASSURANT, INC. AND SUBSIDIARIES
FINANCIAL SUPPLEMENT
(UNAUDITED)
AS OF DECEMBER 31, 2008
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SAFE HARBOR STATEMENT & REGULATION G – NON GAAP FINANCIAL MEASURES | 1 | |
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About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and selected other international markets. The four key businesses – 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 market segments in the U.S. and selected international markets. The Assurant business units provide debt protection administration; credit-related insurance; warranties and service contracts; pre-funded funeral insurance; creditor-placed homeowners insurance; manufactured housing homeowners insurance; individual health and small employer group health insurance; group dental insurance; group disability insurance; and group life insurance.
Assurant, a Fortune 500 company and a member of the S & P 500, is traded on the New York Stock Exchange under the symbol AIZ. Assurant has more than $24 billion in assets and $8 billion in annual revenue. Assurant has approximately 14,000 employees worldwide and is headquartered in New York’s financial district.www.assurant.com.
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Some of the statements included in this press release and its exhibits, 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. You can identify these statements by the fact that they may use words such as “will,” “anticipate,” “expect,” “estimate,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” or the negative versions of those words and terms with a similar meaning. Our actual results might differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements in this financial supplement as a result of new information or future events or developments.
The following risk factors could cause our actual results to differ materially from those currently estimated by management: (i) failure to maintain significant client relationships, distribution sources and contractual arrangements; (ii) deterioration in the company’s market capitalization compared to its book value that could impair the company’s goodwill; (iii) failure to attract and retain sales representatives; (iv) general global economic, financial market and political conditions (including difficult conditions in financial, capital and credit markets, the global economic slowdown, fluctuations in interest rates, mortgage rates, monetary policies and inflationary pressure); (v) inadequacy of reserves established for future claims losses; (vi) failure to predict or manage benefits, claims and other costs; (vii) diminished value of invested assets in our investment portfolio (due to, among other things, the recent volatility in financial markets, the global economic slowdown, credit and liquidity risk, other than temporary impairments, environmental liability exposure and inability to target an appropriate overall risk level); (viii) losses due to natural and man-made catastrophes; (ix) increases or decreases in tax valuation allowances; (x) unavailability, inadequacy and unaffordable pricing of reinsurance coverage; (xi) inability of reinsurers to meet their obligations; (xii) insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; (xiii) credit risk of some of our agents in Assurant Specialty Property and Solutions; (xiv) a further decline in the manufactured housing industry; (xv) a decline in our credit or financial strength ratings (including the currently heightened risk of ratings downgrades in the insurance industry); (xvi) failure to effectively maintain and modernize our information systems; (xvii) failure to protect client information and privacy; (xviii) failure to find and integrate suitable acquisitions and new insurance ventures; (xix) inability of our subsidiaries to pay sufficient dividends; (xx) failure to provide for succession of senior management and key executives; (xxi) negative publicity and impact on our business due to unfavorable outcomes in litigation and regulatory investigations (including the potential impact on our reputation and business of a negative outcome in the ongoing SEC investigation); (xxii) significant competitive pressures in our businesses and cyclicality of the insurance industry: (xxiii) current or new laws and regulations that could increase our costs or limit our growth.
For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to, our 2007 Annual Report on Form 10-K, our 2008 third quarter Form 10-Q and our upcoming 2008 Annual Report on Form 10-K, as filed with the SEC.
Regulation G – Non GAAP Financial Measures
Assurant uses the following non-GAAP financial measures to analyze the Company’s operating performance for the periods presented in this financial supplement. 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 net 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 refer to page 5 for a reconciliation net operating income to net income.
(2) Assurant uses annualized operating ROE as an important measure of the company’s operating performance. Annualized operating ROE equals year-to-date net operating income divided by average stockholders’ equity for the year to date period, excluding AOCI, and then the return is annualized. The company believes annualized operating ROE provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes the effect of realized gains (losses) on investments that tend to be highly variable and those events that are unusual and/or unlikely to recur. The comparable GAAP measure for this included measure would be annualized GAAP return on equity, defined as the annualized return of net income divided by average stockholders’ equity for the period. Consolidated GAAP ROE for the three months and year ended December, 2008 was 19.6% and 11.5%, respectively. Please refer to page 6 for the reconciliation of annualized operating ROE to annualized GAAP return on average equity.
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Assurant, Inc. and Subsidiaries
Summary Financial Highlights
(Unaudited)
For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||
($ in thousands, except number of shares and per share amounts) | 2008 | 2007 | 2008 | 2007 | ||||||||||||
Net operating income (1) | $ | 153,719 | $ | 154,376 | $ | 637,443 | $ | 694,188 | ||||||||
Net realized (losses) on investments | (33,642 | ) | (33,558 | ) | (278,641 | ) | (40,442 | ) | ||||||||
Tax benefit realized from the sale of an inactive | 62,364 | — | 88,994 | — | ||||||||||||
Net income | $ | 182,441 | $ | 120,818 | $ | 447,796 | $ | 653,746 | ||||||||
Total revenues | $ | 2,220,608 | $ | 2,183,333 | $ | 8,601,228 | $ | 8,453,515 | ||||||||
PER SHARE AND SHARE DATA: | ||||||||||||||||
Basic earnings per common share | ||||||||||||||||
Net operating income | $ | 1.31 | $ | 1.31 | $ | 5.41 | $ | 5.80 | ||||||||
Net income | $ | 1.55 | $ | 1.03 | $ | 3.80 | $ | 5.46 | ||||||||
Weighted average common shares outstanding - basic | 117,367,781 | 117,758,560 | 117,764,288 | 119,737,556 | ||||||||||||
Diluted earnings per common share | ||||||||||||||||
Net operating income | $ | 1.31 | $ | 1.29 | $ | 5.36 | $ | 5.72 | ||||||||
Net income | $ | 1.55 | $ | 1.01 | $ | 3.77 | $ | 5.38 | ||||||||
Weighted average common shares outstanding - diluted | 117,751,459 | 119,386,294 | 118,836,331 | 121,436,693 |
(1) | See Footnote (1) Regulation G - Non GAAP Financial Measures on page 1. |
(2) | Full year 2008 results include a gain from the sale of an inactive subsidiary realized in the second quarter of 2008. |
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Assurant, Inc. and Subsidiaries
Summary Financial Highlights (continued)
(Unaudited)
($ in thousands, except shares and per share amounts) | As of December 31, 2008 | As of December 31, 2007 | ||||||
Total assets | $ | 24,514,586 | $ | 26,750,316 | ||||
Total stockholders’ equity | $ | 3,709,505 | $ | 4,088,903 | ||||
Total stockholders’ equity (excluding AOCI) | $ | 4,380,451 | $ | 4,034,992 | ||||
Basic book value per share | $ | 31.61 | $ | 34.71 | ||||
Basic book value per share (excluding AOCI) | $ | 37.32 | $ | 34.25 | ||||
Shares outstanding for basic book value per share calculation | 117,368,534 | 117,808,007 | ||||||
Diluted book value per share | $ | 31.51 | $ | 34.19 | ||||
Diluted book value per share (excluding AOCI) | $ | 37.21 | $ | 33.73 | ||||
Shares outstanding for diluted book value per share calculation | 117,721,944 | 119,609,423 | ||||||
Debt to total capital ratio (excluding AOCI) | 18.3 | % | 19.7 | % |
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Assurant, Inc. and Subsidiaries
Segmented Condensed Balance Sheets
(Unaudited)
At December 31, 2008 | ||||||||||||||||||||
Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other(1) | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Investments and cash and cash equivalents | $ | 7,457,948 | $ | 2,434,697 | $ | 899,271 | $ | 2,376,324 | $ | (60,764 | ) | $ | 13,107,476 | |||||||
Reinsurance recoverables | 625,127 | 369,328 | 7,333 | 21,414 | 2,986,968 | 4,010,170 | ||||||||||||||
Deferred acquisition costs | 2,407,675 | 201,817 | 16,623 | 24,557 | — | 2,650,672 | ||||||||||||||
Goodwill | — | — | — | — | 1,001,899 | 1,001,899 | ||||||||||||||
Assets held in separate accounts | 208,352 | — | — | — | 1,570,457 | 1,778,809 | ||||||||||||||
Other assets | 452,076 | 329,288 | 117,534 | 136,770 | 929,892 | 1,965,560 | ||||||||||||||
Total assets | $ | 11,151,178 | $ | 3,335,130 | $ | 1,040,761 | $ | 2,559,065 | $ | 6,428,452 | $ | 24,514,586 | ||||||||
Liabilities | ||||||||||||||||||||
Policyholder benefits and claims payable | $ | 4,588,939 | $ | 414,832 | $ | 423,100 | $ | 1,775,990 | $ | 3,195,515 | $ | 10,398,376 | ||||||||
Unearned premiums | 3,985,167 | 1,243,043 | 124,759 | 13,168 | 41,722 | 5,407,859 | ||||||||||||||
Debt | — | — | — | — | 971,957 | 971,957 | ||||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 11,160 | 11,160 | ||||||||||||||
Liabilities related to separate accounts | 208,352 | — | — | — | 1,570,457 | 1,778,809 | ||||||||||||||
Accounts payable and other liabilities | 828,654 | 400,652 | 155,427 | 266,356 | 585,831 | 2,236,920 | ||||||||||||||
Total liabilities | 9,611,112 | 2,058,527 | 703,286 | 2,055,514 | 6,376,642 | 20,805,081 | ||||||||||||||
Stockholders’ equity | ||||||||||||||||||||
Equity, excluding accumulated other comprehensive loss | 1,540,066 | 1,276,603 | 337,475 | 503,551 | 722,756 | 4,380,451 | ||||||||||||||
Accumulated other comprehensive loss | — | — | — | — | (670,946 | ) | (670,946 | ) | ||||||||||||
Total stockholders’ equity | 1,540,066 | 1,276,603 | 337,475 | 503,551 | 51,810 | 3,709,505 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,151,178 | $ | 3,335,130 | $ | 1,040,761 | $ | 2,559,065 | $ | 6,428,452 | $ | 24,514,586 | ||||||||
At December 31, 2007 | ||||||||||||||||||||
Specialty | Employee | Corporate & | ||||||||||||||||||
Solutions | Property | Health | Benefits | Other(1) | Consolidated | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Investments and cash and cash equivalents | $ | 7,691,655 | $ | 2,237,372 | $ | 1,113,771 | $ | 2,564,741 | $ | 944,576 | $ | 14,552,115 | ||||||||
Reinsurance recoverables | 687,441 | 277,395 | 5,036 | 17,584 | 2,916,892 | 3,904,348 | ||||||||||||||
Deferred acquisition costs | 2,658,207 | 178,398 | 34,175 | 24,565 | — | 2,895,345 | ||||||||||||||
Goodwill | — | — | — | — | 832,656 | 832,656 | ||||||||||||||
Assets held in separate accounts | 255,341 | — | — | — | 2,887,947 | 3,143,288 | ||||||||||||||
Other assets | 644,132 | 263,249 | 83,609 | 200,808 | 230,766 | 1,422,564 | ||||||||||||||
Total assets | $ | 11,936,776 | $ | 2,956,414 | $ | 1,236,591 | $ | 2,807,698 | $ | 7,812,837 | $ | 26,750,316 | ||||||||
Liabilities | ||||||||||||||||||||
Policyholder benefits and claims payable | $ | 4,676,416 | $ | 314,062 | $ | 500,126 | $ | 1,842,861 | $ | 3,159,115 | $ | 10,492,580 | ||||||||
Unearned premiums | 4,171,003 | 1,052,326 | 128,756 | 14,259 | 44,365 | 5,410,709 | ||||||||||||||
Debt | — | — | — | — | 971,863 | 971,863 | ||||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 21,160 | 21,160 | ||||||||||||||
Liabilities related to separate accounts | 255,341 | — | — | — | 2,887,947 | 3,143,288 | ||||||||||||||
Accounts payable and other liabilities | 1,238,933 | 431,952 | 196,812 | 345,220 | 408,896 | 2,621,813 | ||||||||||||||
Total liabilities | 10,341,693 | 1,798,340 | 825,694 | 2,202,340 | 7,493,346 | 22,661,413 | ||||||||||||||
Stockholders’ equity | ||||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,595,083 | 1,158,074 | 410,897 | 605,358 | 265,580 | 4,034,992 | ||||||||||||||
Accumulated other comprehensive income | — | — | — | — | 53,911 | 53,911 | ||||||||||||||
Total stockholders’ equity | 1,595,083 | 1,158,074 | 410,897 | 605,358 | 319,491 | 4,088,903 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,936,776 | $ | 2,956,414 | $ | 1,236,591 | $ | 2,807,698 | $ | 7,812,837 | $ | 26,750,316 | ||||||||
(1) | The Corporate and Other segment includes accumulated other comprehensive income (loss), reinsurance recoverables related to the disposal of Fortis Financial Group and Long Term Care businesses, goodwill, separate accounts related to the disposal of FFG business and all of Assurant, Inc.’s debt. |
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Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||
($ in thousands, net of tax) | 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Assurant Solutions | $ | 11,884 | $ | 20,387 | $ | 32,355 | $ | 47,557 | $ | 32,265 | $ | 37,377 | $ | 30,210 | $ | 44,069 | $ | 112,183 | $ | 143,921 | ||||||||||||||||||||
Assurant Specialty Property | 118,475 | 30,942 | 131,042 | 124,744 | 99,917 | 114,682 | 90,207 | 74,434 | 405,203 | 379,240 | ||||||||||||||||||||||||||||||
Assurant Health | 25,066 | 30,204 | 27,721 | 37,263 | 38,016 | 39,365 | 33,838 | 40,524 | 120,254 | 151,743 | ||||||||||||||||||||||||||||||
Assurant Employee Benefits | 14,138 | 21,457 | 18,630 | 16,332 | 16,197 | 20,392 | 21,475 | 28,957 | 70,557 | 87,021 | ||||||||||||||||||||||||||||||
Corporate and other | (10,735 | ) | (14,858 | ) | (18,777 | ) | (5,882 | ) | (27,436 | ) | (11,583 | ) | (2,862 | ) | (7,632 | ) | (50,252 | ) | (49,513 | ) | ||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 4,763 | 4,796 | 4,763 | 4,796 | 5,360 | 5,394 | 5,360 | 5,427 | 19,118 | 21,541 | ||||||||||||||||||||||||||||||
Interest expense | (9,872 | ) | (9,874 | ) | (9,937 | ) | (9,937 | ) | (9,943 | ) | (9,937 | ) | (9,942 | ) | (9,943 | ) | (39,620 | ) | (39,765 | ) | ||||||||||||||||||||
Net operating income | 153,719 | 83,054 | 185,797 | 214,873 | 154,376 | 195,690 | 168,286 | 175,836 | 637,443 | 694,188 | ||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||
Net realized (losses) gains on investments | (33,642 | ) | (194,483 | ) | (22,473 | ) | (28,043 | ) | (33,558 | ) | (8,499 | ) | (2,006 | ) | 3,621 | (278,641 | ) | (40,442 | ) | |||||||||||||||||||||
Tax benefit realized from the sale of an inactive subsidiary | 62,364 | — | 26,630 | — | — | — | — | — | 88,994 | — | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 182,441 | $ | (111,429 | ) | $ | 189,954 | $ | 186,830 | $ | 120,818 | $ | 187,191 | $ | 166,280 | $ | 179,457 | $ | 447,796 | $ | 653,746 | |||||||||||||||||||
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Assurant, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||
($ in thousands, except per | 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 2,004,279 | $ | 1,984,136 | $ | 1,995,516 | $ | 1,941,417 | $ | 1,956,146 | $ | 1,893,388 | $ | 1,798,687 | $ | 1,759,509 | $ | 7,925,348 | $ | 7,407,730 | ||||||||||||||||||||
Net investment income | 183,048 | 192,314 | 201,211 | 197,774 | 197,826 | 194,049 | 190,302 | 216,896 | 774,347 | 799,073 | ||||||||||||||||||||||||||||||
Net realized (losses) gains on investments | (51,757 | ) | (299,205 | ) | (34,574 | ) | (43,143 | ) | (51,628 | ) | (13,076 | ) | (3,086 | ) | 5,570 | (428,679 | ) | (62,220 | ) | |||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 7,327 | 7,379 | 7,327 | 7,379 | 8,246 | 8,298 | 8,246 | 8,349 | 29,412 | 33,139 | ||||||||||||||||||||||||||||||
Fees and other income | 77,711 | 69,911 | 79,280 | 73,898 | 72,743 | 65,533 | 70,578 | 66,939 | 300,800 | 275,793 | ||||||||||||||||||||||||||||||
2,220,608 | 1,954,535 | 2,248,760 | 2,177,325 | 2,183,333 | 2,148,192 | 2,064,727 | 2,057,263 | 8,601,228 | 8,453,515 | |||||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | 988,432 | 1,095,048 | 998,208 | 937,459 | 985,591 | 935,545 | 902,053 | 889,522 | 4,019,147 | 3,712,711 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 1,025,532 | 1,007,817 | 985,851 | 938,650 | 985,542 | 913,214 | 894,904 | 874,926 | 3,957,850 | 3,668,586 | ||||||||||||||||||||||||||||||
Interest expense | 15,188 | 15,190 | 15,287 | 15,288 | 15,297 | 15,288 | 15,296 | 15,297 | 60,953 | 61,178 | ||||||||||||||||||||||||||||||
2,029,152 | 2,118,055 | 1,999,346 | 1,891,397 | 1,986,430 | 1,864,047 | 1,812,253 | 1,779,745 | 8,037,950 | 7,442,475 | |||||||||||||||||||||||||||||||
Income (loss) before provision for income taxes | 191,456 | (163,520 | ) | 249,414 | 285,928 | 196,903 | 284,145 | 252,474 | 277,518 | 563,278 | 1,011,040 | |||||||||||||||||||||||||||||
(Benefit) provision for income taxes | 9,015 | (52,091 | ) | 59,460 | 99,098 | 76,085 | 96,954 | 86,194 | 98,061 | 115,482 | 357,294 | |||||||||||||||||||||||||||||
Net income (loss) | $ | 182,441 | $ | (111,429 | ) | $ | 189,954 | $ | 186,830 | $ | 120,818 | $ | 187,191 | $ | 166,280 | $ | 179,457 | $ | 447,796 | $ | 653,746 | |||||||||||||||||||
Diluted per share data: | ||||||||||||||||||||||||||||||||||||||||
Net operating income per diluted share | $ | 1.31 | $ | 0.70 | $ | 1.55 | $ | 1.80 | $ | 1.29 | $ | 1.63 | $ | 1.37 | $ | 1.42 | $ | 5.36 | $ | 5.72 | ||||||||||||||||||||
Book value per diluted share (excluding AOCI) | $ | 37.21 | $ | 35.60 | $ | 36.68 | $ | 35.33 | $ | 33.73 | $ | 32.99 | $ | 31.81 | $ | 31.14 | $ | 37.21 | $ | 34.25 | ||||||||||||||||||||
Computation of return on average equity measures: | ||||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||||
Net operating income | $ | 153,719 | $ | 83,054 | $ | 185,797 | $ | 214,873 | $ | 154,376 | $ | 195,690 | $ | 168,286 | $ | 175,836 | $ | 637,443 | $ | 694,188 | ||||||||||||||||||||
Net income (loss) | $ | 182,441 | $ | (111,429 | ) | $ | 189,954 | $ | 186,830 | $ | 120,818 | $ | 187,191 | $ | 166,280 | $ | 179,457 | $ | 447,796 | $ | 653,746 | |||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||||||||||
Average equity, excluding AOCI | $ | 4,294,030 | $ | 4,296,429 | $ | 4,298,980 | $ | 4,123,852 | $ | 3,980,272 | $ | 3,894,080 | $ | 3,847,440 | $ | 3,788,402 | $ | 4,207,722 | $ | 3,889,763 | ||||||||||||||||||||
Add: Average AOCI | (573,372 | ) | (306,783 | ) | (71,632 | ) | 24,207 | 25,712 | (25,351 | ) | 20,387 | 88,527 | (308,518 | ) | 70,987 | |||||||||||||||||||||||||
Average equity, including AOCI | $ | 3,720,658 | $ | 3,989,646 | $ | 4,227,348 | $ | 4,148,059 | $ | 4,005,984 | $ | 3,868,729 | $ | 3,867,827 | $ | 3,876,929 | $ | 3,899,204 | $ | 3,960,750 | ||||||||||||||||||||
Annualized operating return on average equity | 14.3 | % | 7.7 | % | 17.3 | % | 20.8 | % | 15.5 | % | 20.1 | % | 17.5 | % | 18.6 | % | 15.1 | % | 17.8 | % | ||||||||||||||||||||
Annualized GAAP return on average equity | 19.6 | % | -11.2 | % | 18.0 | % | 18.0 | % | 12.1 | % | 19.4 | % | 17.2 | % | 18.5 | % | 11.5 | % | 16.5 | % | ||||||||||||||||||||
Annualized operating return on average equity (excluding AOCI)(1) | 14.3 | % | 7.7 | % | 17.3 | % | 20.8 | % | 15.5 | % | 20.1 | % | 17.5 | % | 18.6 | % | 15.1 | % | 17.8 | % | ||||||||||||||||||||
Net realized (losses) gains on investments | -0.8 | % | -18.1 | % | -2.1 | % | -2.7 | % | -3.4 | % | -0.9 | % | -0.2 | % | 0.4 | % | -7.5 | % | -1.0 | % | ||||||||||||||||||||
Tax benefit realized from the sale of an inactive subsidiary | 1.5 | % | — | 2.5 | % | — | — | — | — | — | 2.4 | % | — | |||||||||||||||||||||||||||
Change due to effect of including AOCI | 4.6 | % | -0.8 | % | 0.3 | % | -0.1 | % | — | 0.2 | % | -0.1 | % | -0.4 | % | 1.5 | % | -0.3 | % | |||||||||||||||||||||
Annualized GAAP return on average equity (1) | 19.6 | % | -11.2 | % | 18.0 | % | 18.0 | % | 12.1 | % | 19.4 | % | 17.2 | % | 18.5 | % | 11.5 | % | 16.5 | % | ||||||||||||||||||||
Share repurchases: | ||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | 1,000,000 | — | — | — | 2,283,100 | 1,984,400 | 1,421,833 | 1,000,000 | 5,689,333 | ||||||||||||||||||||||||||||||
Average repurchase price per share | $ | — | $ | 59.00 | $ | — | $ | — | $ | — | $ | 52.07 | $ | 58.56 | $ | 54.48 | $ | 59.00 | $ | 54.94 | ||||||||||||||||||||
Repurchase price | $ | — | $ | 59,000 | $ | — | $ | — | $ | — | $ | 118,887 | $ | 116,216 | $ | 77,460 | $ | 59,000 | $ | 312,563 | ||||||||||||||||||||
AIZ Closing stock price (NYSE) | $ | 30.00 | $ | 55.00 | $ | 65.96 | $ | 60.86 | $ | 66.90 | $ | 53.50 | $ | 58.92 | $ | 53.63 | $ | — | $ | — | ||||||||||||||||||||
Investment yield(2) | 5.29 | % | 5.44 | % | 5.56 | % | 5.61 | % | 5.70 | % | 5.73 | % | 5.69 | % | 5.66 | % | 5.50 | % | 5.69 | % | ||||||||||||||||||||
Tax-adjusted yield(2) (3) | 5.44 | % | 5.59 | % | 5.71 | % | 5.72 | % | 5.79 | % | 5.81 | % | 5.77 | % | 5.71 | % | 5.64 | % | 5.76 | % | ||||||||||||||||||||
Investment income from real estate joint venture partnerships | $ | 414 | $ | — | $ | 3,457 | $ | — | $ | 127 | $ | 534 | $ | 2,972 | $ | 33,540 | $ | 3,871 | $ | 37,173 |
(1) | See Footnote (2) Regulation G - Non GAAP Financial Measures on page 1. |
(2) | Investment yield excludes investment income from real estate joint venture partnerships shown above. |
(3) | Tax-adjusted yield represents the yield on the portfolio after including the incremental benefit of investing in certain, tax-advantaged securities. |
6
Table of Contents
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | |||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 722,170 | $ | 707,115 | $ | 700,629 | $ | 683,493 | $ | 678,844 | $ | 649,915 | $ | 618,675 | $ | 583,011 | $ | 2,813,407 | $ | 2,530,445 | |||||||||||
Net investment income | 99,921 | 105,539 | 108,425 | 106,730 | 108,899 | 105,631 | 100,784 | 112,017 | 420,615 | 427,331 | |||||||||||||||||||||
Fees and other income | 49,936 | 40,623 | 47,668 | 44,281 | 43,580 | 36,623 | 40,957 | 38,051 | 182,508 | 159,211 | |||||||||||||||||||||
872,027 | 853,277 | 856,722 | 834,504 | 831,323 | 792,169 | 760,416 | 733,079 | 3,416,530 | 3,116,987 | ||||||||||||||||||||||
Benefits, losses and expenses: | |||||||||||||||||||||||||||||||
Policyholder benefits | 310,715 | 295,190 | 306,173 | 286,680 | 287,232 | 284,755 | 258,527 | 243,344 | 1,198,758 | 1,073,858 | |||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 535,507 | 527,779 | 503,073 | 475,533 | 496,414 | 451,510 | 455,140 | 427,645 | 2,041,892 | 1,830,709 | |||||||||||||||||||||
846,222 | 822,969 | 809,246 | 762,213 | 783,646 | 736,265 | 713,667 | 670,989 | 3,240,650 | 2,904,567 | ||||||||||||||||||||||
Income before provision for income taxes | 25,805 | 30,308 | 47,476 | 72,291 | 47,677 | 55,904 | 46,749 | 62,090 | 175,880 | 212,420 | |||||||||||||||||||||
Provision for income taxes | 13,921 | 9,921 | 15,121 | 24,734 | 15,412 | 18,527 | 16,539 | 18,021 | 63,697 | 68,499 | |||||||||||||||||||||
Net operating income | $ | 11,884 | $ | 20,387 | $ | 32,355 | $ | 47,557 | $ | 32,265 | $ | 37,377 | $ | 30,210 | $ | 44,069 | $ | 112,183 | $ | 143,921 | |||||||||||
Net earned premiums and other considerations: | |||||||||||||||||||||||||||||||
Domestic: | |||||||||||||||||||||||||||||||
Credit | $ | 66,166 | $ | 70,270 | $ | 69,808 | $ | 73,253 | $ | 70,563 | $ | 75,638 | $ | 76,109 | $ | 80,921 | $ | 279,497 | $ | 303,231 | |||||||||||
Service contracts | 375,433 | 334,386 | 335,552 | 319,515 | 322,092 | 292,762 | 280,274 | 261,863 | 1,364,886 | 1,156,991 | |||||||||||||||||||||
Other | 15,854 | 13,685 | 15,186 | 15,434 | 16,007 | 14,496 | 15,517 | 16,689 | 60,159 | 62,709 | |||||||||||||||||||||
Total Domestic | 457,453 | 418,341 | 420,546 | 408,202 | 408,662 | 382,896 | 371,900 | 359,473 | 1,704,542 | 1,522,931 | |||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||
Credit | 82,872 | 98,645 | 88,661 | 98,264 | 88,988 | 98,431 | 92,413 | 96,877 | 368,442 | 376,709 | |||||||||||||||||||||
Service contracts | 93,708 | 93,745 | 90,128 | 77,667 | 79,982 | 64,561 | 62,543 | 42,717 | 355,248 | 249,803 | |||||||||||||||||||||
Other | 3,813 | (139 | ) | 6,903 | 9,598 | 11,598 | 8,307 | 10,260 | 8,979 | 20,175 | 39,144 | ||||||||||||||||||||
Total International | 180,393 | 192,251 | 185,692 | 185,529 | 180,568 | 171,299 | 165,216 | 148,573 | 743,865 | 665,656 | |||||||||||||||||||||
Preneed: | |||||||||||||||||||||||||||||||
Domestic and international | 76,616 | 88,293 | 85,253 | 80,654 | 79,446 | 85,050 | 70,358 | 63,288 | 330,816 | 298,142 | |||||||||||||||||||||
Domestic independent runoff | 7,708 | 8,230 | 9,138 | 9,108 | 10,168 | 10,670 | 11,201 | 11,677 | 34,184 | 43,716 | |||||||||||||||||||||
Total Preneed | 84,324 | 96,523 | 94,391 | 89,762 | 89,614 | 95,720 | 81,559 | 74,965 | 365,000 | 341,858 | |||||||||||||||||||||
Total | $ | 722,170 | $ | 707,115 | $ | 700,629 | $ | 683,493 | $ | 678,844 | $ | 649,915 | $ | 618,675 | $ | 583,011 | $ | 2,813,407 | $ | 2,530,445 | |||||||||||
Fee income: | |||||||||||||||||||||||||||||||
Domestic: | |||||||||||||||||||||||||||||||
Debt protection | $ | 9,765 | $ | 8,495 | $ | 8,284 | $ | 7,915 | $ | 7,459 | $ | 7,415 | $ | 7,469 | $ | 8,750 | $ | 34,459 | $ | 31,093 | |||||||||||
Service contracts | 22,515 | 18,472 | 19,941 | 18,370 | 19,963 | 16,679 | 17,190 | 16,877 | 79,298 | 70,709 | |||||||||||||||||||||
Other | 6,614 | 6,873 | 7,439 | 5,735 | 7,021 | 6,320 | 5,205 | 6,493 | 26,661 | 25,039 | |||||||||||||||||||||
Total Domestic | 38,894 | 33,840 | 35,664 | 32,020 | 34,443 | 30,414 | 29,864 | 32,120 | 140,418 | 126,841 | |||||||||||||||||||||
International | 6,201 | 7,272 | 9,706 | 9,740 | 8,113 | 5,179 | 4,384 | 4,492 | 32,919 | 22,168 | |||||||||||||||||||||
Preneed | 4,841 | (489 | ) | 2,298 | 2,521 | 1,024 | 1,030 | 6,709 | 1,439 | 9,171 | 10,202 | ||||||||||||||||||||
Total | $ | 49,936 | $ | 40,623 | $ | 47,668 | $ | 44,281 | $ | 43,580 | $ | 36,623 | $ | 40,957 | $ | 38,051 | $ | 182,508 | $ | 159,211 | |||||||||||
7
Table of Contents
Assurant Solutions (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||
($ in thousands) | 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||||||||||||
Credit | $ | 147,313 | $ | 151,717 | $ | 152,730 | $ | 152,341 | $ | 159,259 | $ | 168,135 | $ | 167,738 | $ | 161,843 | $ | 604,101 | $ | 656,975 | ||||||||||||||||||||
Service contracts | 355,163 | 385,153 | 396,157 | 393,811 | 491,036 | 434,465 | 448,143 | 454,404 | 1,530,284 | 1,828,048 | ||||||||||||||||||||||||||||||
Other | 19,701 | 17,858 | 17,076 | 16,758 | 19,773 | 22,353 | 22,014 | 20,865 | 71,393 | 85,005 | ||||||||||||||||||||||||||||||
Total Domestic | 522,177 | 554,728 | 565,963 | 562,910 | 670,068 | 624,953 | 637,895 | 637,112 | 2,205,778 | 2,570,028 | ||||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||||||||||||||
Credit | 180,516 | 213,322 | 214,407 | 219,212 | 221,181 | 219,945 | 201,353 | 191,415 | 827,457 | 833,894 | ||||||||||||||||||||||||||||||
Service contracts | 132,710 | 133,226 | 110,714 | 101,002 | 137,385 | 118,754 | 86,948 | 79,582 | 477,652 | 422,669 | ||||||||||||||||||||||||||||||
Other | 5,696 | 1,375 | 8,962 | 11,348 | 11,059 | 11,176 | 13,933 | 10,422 | 27,381 | 46,590 | ||||||||||||||||||||||||||||||
Total International | 318,922 | 347,923 | 334,083 | 331,562 | 369,625 | 349,875 | 302,234 | 281,419 | 1,332,490 | 1,303,153 | ||||||||||||||||||||||||||||||
Total | $ | 841,099 | $ | 902,651 | $ | 900,046 | $ | 894,472 | $ | 1,039,693 | $ | 974,828 | $ | 940,129 | $ | 918,531 | $ | 3,538,268 | $ | 3,873,181 | ||||||||||||||||||||
Preneed (face sales) | $ | 99,009 | $ | 121,021 | $ | 120,859 | $ | 104,424 | $ | 100,031 | $ | 107,341 | $ | 102,360 | $ | 86,058 | $ | 445,313 | $ | 395,790 | ||||||||||||||||||||
Foreign currency translation (FX) impact (1): | ||||||||||||||||||||||||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||||||
Including FX impact | -19.10 | % | -7.40 | % | -4.26 | % | -2.62 | % | 5.84 | % | 9.99 | % | 13.57 | % | 15.67 | % | -8.65 | % | 10.96 | % | ||||||||||||||||||||
FX impact | -5.53 | % | 0.96 | % | 2.34 | % | 3.43 | % | 3.09 | % | 1.21 | % | 0.85 | % | 0.48 | % | 0.14 | % | 1.49 | % | ||||||||||||||||||||
Excluding FX impact | -13.57 | % | -8.36 | % | -6.60 | % | -6.05 | % | 2.75 | % | 8.78 | % | 12.72 | % | 15.19 | % | -8.79 | % | 9.47 | % | ||||||||||||||||||||
Net earned premiums: | ||||||||||||||||||||||||||||||||||||||||
Including FX impact | 6.38 | % | 8.80 | % | 13.25 | % | 17.23 | % | 9.88 | % | 9.92 | % | 4.47 | % | 2.21 | % | 11.18 | % | 6.70 | % | ||||||||||||||||||||
FX impact | -4.42 | % | 0.56 | % | 1.65 | % | 2.42 | % | 2.40 | % | 1.15 | % | 0.87 | % | 0.67 | % | -0.08 | % | 1.29 | % | ||||||||||||||||||||
Excluding FX impact | 10.80 | % | 8.24 | % | 11.60 | % | 14.81 | % | 7.48 | % | 8.77 | % | 3.60 | % | 1.54 | % | 11.26 | % | 5.41 | % | ||||||||||||||||||||
Net operating income (2): | ||||||||||||||||||||||||||||||||||||||||
Including FX impact | -63.17 | % | -45.45 | % | 7.10 | % | 7.91 | % | -18.95 | % | -10.38 | % | -18.68 | % | 10.87 | % | -22.05 | % | -9.15 | % | ||||||||||||||||||||
FX impact | 0.24 | % | -1.42 | % | -4.64 | % | 1.99 | % | -0.88 | % | -1.49 | % | -2.01 | % | -1.33 | % | -1.00 | % | -1.65 | % | ||||||||||||||||||||
Excluding FX impact | -63.41 | % | -44.03 | % | 11.74 | % | 5.92 | % | -18.07 | % | -8.89 | % | -16.67 | % | 12.20 | % | -21.05 | % | -7.50 | % | ||||||||||||||||||||
Combined ratios (a): | ||||||||||||||||||||||||||||||||||||||||
Domestic | 101.6 | % | 104.7 | % | 99.4 | % | 96.5 | % | 101.9 | % | 100.9 | % | 100.8 | % | 100.9 | % | 100.6 | % | 101.1 | % | ||||||||||||||||||||
International | 113.9 | % | 105.6 | % | 111.4 | % | 102.3 | % | 106.1 | % | 102.3 | % | 109.7 | % | 102.1 | % | 108.2 | % | 105.1 | % | ||||||||||||||||||||
Preneed yield (3) | 5.89 | % | 6.04 | % | 6.28 | % | 6.13 | % | 6.30 | % | 6.50 | % | 6.27 | % | 6.29 | % | 6.06 | % | 6.32 | % | ||||||||||||||||||||
Preneed average invested assets | $ | 3,896,574 | $ | 3,919,388 | $ | 3,937,722 | $ | 3,963,127 | $ | 3,986,933 | $ | 3,832,047 | $ | 3,650,784 | $ | 3,600,420 | $ | 3,927,096 | $ | 3,767,556 | ||||||||||||||||||||
Investment yield(3) | 5.34 | % | 5.60 | % | 5.76 | % | 5.72 | % | 5.83 | % | 5.84 | % | 5.83 | % | 5.80 | % | 5.62 | % | 5.80 | % | ||||||||||||||||||||
Tax-adjusted yield(3) (4) | 5.45 | % | 5.72 | % | 5.89 | % | 5.81 | % | 5.90 | % | 5.91 | % | 5.84 | % | 5.81 | % | 5.73 | % | 5.87 | % | ||||||||||||||||||||
Investment income from real estate joint venture partnerships | $ | 240 | $ | — | $ | 1,210 | $ | — | $ | 44 | $ | 187 | $ | 1,045 | $ | 14,448 | $ | 1,450 | $ | 15,724 |
(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) | Total Solutions percentage growth from year-ago period due to conversion of income statement transactions at weighted average foreign currency exchange rates. |
(2) | Net operating income growth for the three months ended December 31, 2007 compared to the year-ago period excludes $40,481 of after-tax income related to a third-party legal settlement previously disclosed in the Financial Supplement as of December 31, 2007. |
(3) | Investment yield excludes investment income from real estate joint venture partnerships shown above. |
(4) | Tax-adjusted yield represents the yield on the portfolio after including the incremental benefit of investing in certain, tax-advantaged securities. |
8
Table of Contents
Assurant Specialty Property
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | |||||||||||||||||||||||||||||||
($ in thousands) | 2008 | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 519,669 | $ | 513,228 | $ | 533,914 | $ | 481,427 | $ | 476,400 | $ | 445,211 | $ | 393,614 | $ | 367,041 | $ | 2,048,238 | $ | 1,682,266 | ||||||||||||||||||||
Net investment income | 30,542 | 31,129 | 31,997 | 29,375 | 28,812 | 25,862 | 23,667 | 21,869 | 123,043 | 100,210 | ||||||||||||||||||||||||||||||
Fees and other income | 11,910 | 12,501 | 11,996 | 13,593 | 13,943 | 12,063 | 12,654 | 12,596 | 50,000 | 51,256 | ||||||||||||||||||||||||||||||
562,121 | 556,858 | 577,907 | 524,395 | 519,155 | 483,136 | 429,935 | 401,506 | 2,221,281 | 1,833,732 | |||||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | 166,692 | 302,105 | 171,793 | 144,813 | 171,866 | 129,354 | 130,866 | 116,787 | 785,403 | 548,873 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 214,148 | 208,519 | 206,339 | 188,842 | 194,129 | 177,738 | 159,292 | 170,799 | 817,848 | 701,958 | ||||||||||||||||||||||||||||||
380,840 | 510,624 | 378,132 | 333,655 | 365,995 | 307,092 | 290,158 | 287,586 | 1,603,251 | 1,250,831 | |||||||||||||||||||||||||||||||
Income before provision for income taxes | 181,281 | 46,234 | 199,775 | 190,740 | 153,160 | 176,044 | 139,777 | 113,920 | 618,030 | 582,901 | ||||||||||||||||||||||||||||||
Provision for income taxes | 62,806 | 15,292 | 68,733 | 65,996 | 53,243 | 61,362 | 49,570 | 39,486 | 212,827 | 203,661 | ||||||||||||||||||||||||||||||
Net operating income | $ | 118,475 | $ | 30,942 | $ | 131,042 | $ | 124,744 | $ | 99,917 | $ | 114,682 | $ | 90,207 | $ | 74,434 | $ | 405,203 | $ | 379,240 | ||||||||||||||||||||
Net earned premiums: | ||||||||||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 369,458 | $ | 368,066 | $ | 391,153 | $ | 342,335 | $ | 342,931 | $ | 317,607 | $ | 276,663 | $ | 250,889 | $ | 1,471,012 | $ | 1,188,090 | ||||||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 56,275 | 55,389 | 56,484 | 57,061 | 53,850 | 54,132 | 50,452 | 50,670 | 225,209 | 209,104 | ||||||||||||||||||||||||||||||
Other | 93,936 | 89,773 | 86,277 | 82,031 | 79,619 | 73,472 | 66,499 | 65,482 | 352,017 | 285,072 | ||||||||||||||||||||||||||||||
Total | $ | 519,669 | $ | 513,228 | $ | 533,914 | $ | 481,427 | $ | 476,400 | $ | 445,211 | $ | 393,614 | $ | 367,041 | $ | 2,048,238 | $ | 1,682,266 | ||||||||||||||||||||
Gross earned premiums: | ||||||||||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 456,631 | $ | 450,274 | $ | 460,818 | $ | 402,062 | $ | 403,036 | $ | 367,503 | $ | 332,188 | $ | 302,392 | $ | 1,769,785 | $ | 1,405,119 | ||||||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 79,690 | 80,570 | 80,069 | 80,850 | 77,345 | 77,571 | 77,408 | 77,356 | 321,179 | 309,680 | ||||||||||||||||||||||||||||||
Other | 156,843 | 152,899 | 146,880 | 140,793 | 136,476 | 131,643 | 125,058 | 118,857 | 597,415 | 512,034 | ||||||||||||||||||||||||||||||
Total | $ | 693,164 | $ | 683,743 | $ | 687,767 | $ | 623,705 | $ | 616,857 | $ | 576,717 | $ | 534,654 | $ | 498,605 | $ | 2,688,379 | $ | 2,226,833 | ||||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||||||
Homeowners (Creditor Placed & Voluntary) | $ | 502,162 | $ | 492,069 | $ | 529,444 | $ | 419,501 | $ | 462,730 | $ | 420,184 | $ | 380,099 | $ | 319,053 | $ | 1,943,176 | $ | 1,582,066 | ||||||||||||||||||||
Manufactured Housing (Creditor Placed & Voluntary) | 76,346 | 80,909 | 79,451 | 70,131 | 79,193 | 77,885 | 77,042 | 67,785 | 306,837 | 301,905 | ||||||||||||||||||||||||||||||
Other | 147,675 | 187,929 | 169,849 | 125,316 | 146,182 | 156,235 | 150,435 | 112,322 | 630,769 | 565,174 | ||||||||||||||||||||||||||||||
Total | $ | 726,183 | $ | 760,907 | $ | 778,744 | $ | 614,948 | $ | 688,105 | $ | 654,304 | $ | 607,576 | $ | 499,160 | $ | 2,880,782 | $ | 2,449,145 | ||||||||||||||||||||
Reconciliation of gross earned premiums to net earned premiums: | ||||||||||||||||||||||||||||||||||||||||
Gross earned premiums | $ | 693,164 | $ | 683,743 | $ | 687,767 | $ | 623,705 | $ | 616,857 | $ | 576,717 | $ | 534,654 | $ | 498,605 | $ | 2,688,379 | $ | 2,226,833 | ||||||||||||||||||||
Ceded catastrophe reinsurance and reinstatements | (36,793 | ) | (53,149 | ) | (34,015 | ) | (30,030 | ) | (33,442 | ) | (26,546 | ) | (39,771 | ) | (33,328 | ) | (153,987 | ) | (133,087 | ) | ||||||||||||||||||||
Ceded to clients including U.S. Government | (136,702 | ) | (117,366 | ) | (119,838 | ) | (112,248 | ) | (107,015 | ) | (104,960 | ) | (101,269 | ) | (98,236 | ) | (486,154 | ) | (411,480 | ) | ||||||||||||||||||||
Net earned premiums | $ | 519,669 | $ | 513,228 | $ | 533,914 | $ | 481,427 | $ | 476,400 | $ | 445,211 | $ | 393,614 | $ | 367,041 | $ | 2,048,238 | $ | 1,682,266 | ||||||||||||||||||||
9
Table of Contents
Assurant Specialty Property (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Creditor-Placed Homeowners Insurance: | ||||||||||||||||||||||||||||||||||||||||
Loans tracked(in millions): | ||||||||||||||||||||||||||||||||||||||||
Prime | 25.9 | 26.2 | 26.3 | 26.2 | 26.2 | 26.1 | 24.5 | 24.3 | 25.5 | 25.7 | ||||||||||||||||||||||||||||||
Sub-prime | 4.0 | 4.1 | 4.2 | 4.4 | 4.6 | 5.0 | 5.3 | 5.4 | 4.0 | 5.2 | ||||||||||||||||||||||||||||||
29.9 | 30.3 | 30.5 | 30.6 | 30.8 | 31.1 | 29.8 | 29.7 | 29.5 | 30.9 | |||||||||||||||||||||||||||||||
Penetration rate ranges: | ||||||||||||||||||||||||||||||||||||||||
Prime range | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | 1% - 2% | ||||||||||||||||||||||||||||||
Sub-prime range | 6% - 15% | 6% - 15% | 6% - 15% | 6% - 15% | 6% - 15% | 5% - 11% | 3% - 8% | 3% - 8% | 6% - 15% | 6% - 15% | ||||||||||||||||||||||||||||||
Average insured value (AIV): | ||||||||||||||||||||||||||||||||||||||||
Total | $ | 176 | $ | 173 | $ | 170 | $ | 165 | $ | 159 | $ | 151 | $ | 146 | $ | 141 | $ | 176 | $ | 159 | ||||||||||||||||||||
Creditor-placed | $ | 167 | $ | 166 | $ | 164 | $ | 161 | $ | 156 | $ | 150 | $ | 145 | $ | 141 | $ | 167 | $ | 156 | ||||||||||||||||||||
Real estate owned | $ | 250 | $ | 241 | $ | 228 | $ | 216 | $ | 198 | $ | 181 | $ | 161 | $ | 141 | $ | 250 | $ | 198 | ||||||||||||||||||||
Percent of Real Estate Owned Policies: | ||||||||||||||||||||||||||||||||||||||||
% of creditor-placed gross earned premiums from REO policies | 23 | % | 23 | % | 21 | % | 21 | % | 17 | % | 16 | % | 14 | % | 12 | % | 23 | % | 17 | % | ||||||||||||||||||||
% of creditor-placed gross written premiums from REO policies | 19 | % | 23 | % | 22 | % | 21 | % | 19 | % | 19 | % | 16 | % | 14 | % | 19 | % | 19 | % | ||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 32.1 | % | 58.9 | % | 32.2 | % | 30.1 | % | 36.1 | % | 29.1 | % | 33.2 | % | 31.8 | % | 38.3 | % | 32.6 | % | ||||||||||||||||||||
Expense ratio (b) | 40.3 | % | 39.7 | % | 37.8 | % | 38.1 | % | 39.6 | % | 38.9 | % | 39.2 | % | 45.0 | % | 39.0 | % | 40.5 | % | ||||||||||||||||||||
Combined ratio (c) | 71.6 | % | 97.1 | % | 69.3 | % | 67.4 | % | 74.6 | % | 67.2 | % | 71.4 | % | 75.8 | % | 76.4 | % | 72.2 | % | ||||||||||||||||||||
Investment yield (1) | 5.01 | % | 5.11 | % | 5.16 | % | 5.11 | % | 5.58 | % | 5.46 | % | 5.28 | % | 5.51 | % | 5.15 | % | 5.57 | % | ||||||||||||||||||||
Tax-adjusted yield (1) (2) | 5.32 | % | 5.43 | % | 5.47 | % | 5.32 | % | 5.74 | % | 5.63 | % | 5.68 | % | 5.78 | % | 5.44 | % | 5.71 | % | ||||||||||||||||||||
Investment income from real estatejoint venture partnerships | $ | 39 | $ | — | $ | 346 | $ | — | $ | 13 | $ | 53 | $ | 297 | $ | 159 | $ | 385 | 522 |
(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, general and administrative 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 joint venture partnerships shown above. |
(2) | Tax-adjusted yield represents the yield on the portfolio after including the incremental benefit of investing in certain, tax-advantaged securities. |
10
Table of Contents
Assurant Health
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 481,470 | $ | 486,700 | $ | 487,725 | $ | 496,060 | $ | 509,327 | $ | 514,233 | $ | 513,936 | $ | 512,784 | $ | 1,951,955 | $ | 2,050,280 | ||||||||||
Net investment income | 12,745 | 13,769 | 15,302 | 15,648 | 15,321 | 15,753 | 16,290 | 19,270 | 57,464 | 66,634 | ||||||||||||||||||||
Fees and other income | 9,774 | 10,100 | 9,637 | 9,406 | 9,762 | 10,688 | 10,445 | 9,688 | 38,917 | 40,583 | ||||||||||||||||||||
503,989 | 510,569 | 512,664 | 521,114 | 534,410 | 540,674 | 540,671 | 541,742 | 2,048,336 | 2,157,497 | |||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||
Policyholder benefits | 314,329 | 311,790 | 325,504 | 306,565 | 321,851 | 326,479 | 329,327 | 317,784 | 1,258,188 | 1,295,441 | ||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 151,275 | 152,345 | 143,804 | 157,181 | 152,922 | 153,928 | 159,088 | 161,410 | 604,605 | 627,348 | ||||||||||||||||||||
465,604 | 464,135 | 469,308 | 463,746 | 474,773 | 480,407 | 488,415 | 479,194 | 1,862,793 | 1,922,789 | |||||||||||||||||||||
Income before provision for income taxes | 38,385 | 46,434 | 43,356 | 57,368 | 59,637 | 60,267 | 52,256 | 62,548 | 185,543 | 234,708 | ||||||||||||||||||||
Provision for income taxes | 13,319 | 16,230 | 15,635 | 20,105 | 21,621 | 20,902 | 18,418 | 22,024 | 65,289 | 82,965 | ||||||||||||||||||||
Net operating income | $ | 25,066 | $ | 30,204 | $ | 27,721 | $ | 37,263 | $ | 38,016 | $ | 39,365 | $ | 33,838 | $ | 40,524 | $ | 120,254 | $ | 151,743 | ||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||
Individual medical | $ | 319,704 | $ | 319,188 | $ | 318,095 | $ | 319,756 | $ | 324,727 | $ | 323,490 | $ | 320,442 | $ | 314,662 | $ | 1,276,743 | $ | 1,283,321 | ||||||||||
Short-term medical | 25,978 | 27,335 | 24,583 | 23,539 | 24,441 | 26,336 | 23,499 | 22,561 | 101,435 | 96,837 | ||||||||||||||||||||
Subtotal | 345,682 | 346,523 | 342,678 | 343,295 | 349,168 | 349,826 | 343,941 | 337,223 | 1,378,178 | 1,380,158 | ||||||||||||||||||||
Small employer group | 135,788 | 140,177 | 145,047 | 152,765 | 160,159 | 164,407 | 169,995 | 175,561 | 573,777 | 670,122 | ||||||||||||||||||||
Total | $ | 481,470 | $ | 486,700 | $ | 487,725 | $ | 496,060 | $ | 509,327 | $ | 514,233 | $ | 513,936 | $ | 512,784 | $ | 1,951,955 | $ | 2,050,280 | ||||||||||
11
Table of Contents
Assurant Health (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Sales (annualized issued premiums): | ||||||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||||||
Individual medical | 84,603 | $ | 87,600 | $ | 78,080 | $ | 79,976 | $ | 67,680 | $ | 85,089 | $ | 100,468 | $ | 99,614 | $ | 330,259 | $ | 352,851 | |||||||||||||||||||||
Short-term medical | 33,785 | 35,969 | 34,990 | 32,972 | 30,219 | 35,285 | 33,606 | 31,939 | 137,716 | 131,049 | ||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||
Subtotal | 118,388 | 123,569 | 113,070 | 112,948 | 97,899 | 120,374 | 134,074 | 131,553 | 467,975 | 483,900 | ||||||||||||||||||||||||||||||
Small employer group | 27,008 | 27,189 | 25,864 | 26,161 | 27,345 | 27,414 | 28,307 | 29,520 | 106,222 | 112,586 | ||||||||||||||||||||||||||||||
Total | $ | 145,396 | $ | 150,758 | $ | 138,934 | $ | 139,109 | $ | 125,244 | $ | 147,788 | $ | 162,381 | $ | 161,073 | $ | 574,197 | $ | 596,486 | ||||||||||||||||||||
Membership by product line(in thousands): | ||||||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||||||
Individual medical | 578 | 585 | 587 | 599 | 619 | 638 | 650 | 641 | 578 | 619 | ||||||||||||||||||||||||||||||
Short-term medical | 92 | 101 | 101 | 87 | 87 | 101 | 99 | 85 | 92 | 87 | ||||||||||||||||||||||||||||||
Subtotal | 670 | 686 | 688 | 686 | 706 | 739 | 749 | 726 | 670 | 706 | ||||||||||||||||||||||||||||||
Small employer group | 131 | 136 | 142 | 152 | 165 | 171 | 181 | 191 | 131 | 165 | ||||||||||||||||||||||||||||||
Total | 801 | 822 | 830 | 838 | 871 | 910 | 930 | 917 | 801 | 871 | ||||||||||||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 65.3 | % | 64.1 | % | 66.7 | % | 61.8 | % | 63.2 | % | 63.5 | % | 64.1 | % | 62.0 | % | 64.5 | % | 63.2 | % | ||||||||||||||||||||
Expense ratio (b) | 30.8 | % | 30.7 | % | 28.9 | % | 31.1 | % | 29.5 | % | 29.3 | % | 30.3 | % | 30.9 | % | 30.4 | % | 30.0 | % | ||||||||||||||||||||
Combined ratio (c) | 94.8 | % | 93.4 | % | 94.4 | % | 91.7 | % | 91.5 | % | 91.5 | % | 93.1 | % | 91.7 | % | 93.6 | % | 92.0 | % | ||||||||||||||||||||
Investment yield(1) | 5.51 | % | 5.67 | % | 5.84 | % | 6.12 | % | 5.79 | % | 5.93 | % | 5.84 | % | 5.70 | % | 5.80 | % | 5.81 | % | ||||||||||||||||||||
Tax-adjusted yield(1) (2) | 5.78 | % | 5.95 | % | 6.13 | % | 6.32 | % | 5.94 | % | 6.07 | % | 5.96 | % | 5.75 | % | 6.06 | % | 5.93 | % | ||||||||||||||||||||
Investment income from real estate joint venture partnerships | $ | 51 | $ | — | $ | 691 | $ | — | $ | 25 | $ | 107 | $ | 590 | $ | 3,535 | $ | 742 | $ | 4,257 |
(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, general and administrative 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 joint venture partnerships shown above. |
(2) | Tax-adjusted yield represents the yield on the portfolio after including the incremental benefit of investing in certain, tax-advantaged securities. |
12
Table of Contents
Assurant Employee Benefits
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 280,970 | $ | 277,093 | $ | 273,248 | $ | 280,437 | $ | 291,575 | $ | 284,029 | $ | 272,462 | $ | 296,673 | $ | 1,111,748 | $ | 1,144,739 | ||||||||||
Net investment income | 34,461 | 35,278 | 38,919 | 38,369 | 37,614 | 38,046 | 39,408 | 51,887 | 147,027 | 166,955 | ||||||||||||||||||||
Fees and other income | 5,901 | 6,475 | 7,208 | 6,555 | 5,301 | 6,040 | 6,379 | 6,277 | 26,139 | 23,997 | ||||||||||||||||||||
321,332 | 318,846 | 319,375 | 325,361 | 334,490 | 328,115 | 318,249 | 354,837 | 1,284,914 | 1,335,691 | |||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||
Policyholder benefits | 196,690 | 185,951 | 193,642 | 199,401 | 200,673 | 194,957 | 183,333 | 211,607 | 775,684 | 790,570 | ||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 102,835 | 99,726 | 97,354 | 100,901 | 108,847 | 101,978 | 102,090 | 98,953 | 400,816 | 411,868 | ||||||||||||||||||||
299,525 | 285,677 | 290,996 | 300,302 | 309,520 | 296,935 | 285,423 | 310,560 | 1,176,500 | 1,202,438 | |||||||||||||||||||||
Income before provision for income taxes | 21,807 | 33,169 | 28,379 | 25,059 | 24,970 | 31,180 | 32,826 | 44,277 | 108,414 | 133,253 | ||||||||||||||||||||
Provision for income taxes | 7,669 | 11,712 | 9,749 | 8,727 | 8,773 | 10,788 | 11,351 | 15,320 | 37,857 | 46,232 | ||||||||||||||||||||
Net operating income | $ | 14,138 | $ | 21,457 | $ | 18,630 | $ | 16,332 | $ | 16,197 | $ | 20,392 | $ | 21,475 | $ | 28,957 | $ | 70,557 | $ | 87,021 | ||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||
Group dental | $ | 110,084 | $ | 109,982 | $ | 108,976 | $ | 106,073 | $ | 104,938 | $ | 103,770 | $ | 102,567 | $ | 101,535 | $ | 435,115 | $ | 412,810 | ||||||||||
Group disability single premiums for closed blocks | 5,947 | — | — | 5,500 | 14,326 | 12,283 | — | 22,847 | 11,447 | 49,456 | ||||||||||||||||||||
All other group disability | 113,832 | 115,749 | 113,327 | 116,300 | 118,858 | 114,904 | 115,539 | 118,189 | 459,208 | 467,490 | ||||||||||||||||||||
Group life | 51,107 | 51,362 | 50,945 | 52,564 | 53,453 | 53,072 | 54,356 | 54,102 | 205,978 | 214,983 | ||||||||||||||||||||
Total | $ | 280,970 | $ | 277,093 | $ | 273,248 | $ | 280,437 | $ | 291,575 | $ | 284,029 | $ | 272,462 | $ | 296,673 | $ | 1,111,748 | $ | 1,144,739 | ||||||||||
13
Table of Contents
Assurant Employee Benefits (continued)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||||||||||||||
Group dental | $ | 16,487 | $ | 24,918 | $ | 23,021 | $ | 45,625 | $ | 16,969 | $ | 26,780 | $ | 19,747 | $ | 42,212 | $ | 110,051 | $ | 105,708 | ||||||||||||||||||||
Group disability | 9,310 | 13,972 | 10,404 | 18,909 | 10,984 | 12,314 | 14,121 | 20,394 | 52,595 | 57,813 | ||||||||||||||||||||||||||||||
Group life | 5,738 | 6,936 | 5,775 | 9,836 | 6,069 | 6,210 | 7,051 | 11,875 | 28,285 | 31,205 | ||||||||||||||||||||||||||||||
Total | $ | 31,535 | $ | 45,826 | $ | 39,200 | $ | 74,370 | $ | 34,022 | $ | 45,304 | $ | 40,919 | $ | 74,481 | $ | 190,931 | $ | 194,726 | ||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||||||
Loss ratio (a) | 70.0 | % | 67.1 | % | 70.9 | % | 71.1 | % | 68.8 | % | 68.6 | % | 67.3 | % | 71.3 | % | 69.8 | % | 69.1 | % | ||||||||||||||||||||
Expense ratio (b) | 35.8 | % | 35.2 | % | 34.7 | % | 35.2 | % | 36.7 | % | 35.2 | % | 36.6 | % | 32.7 | % | 35.2 | % | 35.2 | % | ||||||||||||||||||||
Investment yield(1) | 5.94 | % | 5.98 | % | 6.25 | % | 6.29 | % | 6.16 | % | 6.19 | % | 6.21 | % | 6.09 | % | 6.13 | % | 6.17 | % | ||||||||||||||||||||
Tax-adjusted yield(1) (2) | 6.01 | % | 6.06 | % | 6.33 | % | 6.35 | % | 6.21 | % | 6.24 | % | 6.25 | % | 6.13 | % | 6.20 | % | 6.21 | % | ||||||||||||||||||||
Investment income from real estate joint venture partnerships | $ | 84 | $ | — | $ | 1,210 | $ | — | $ | 45 | $ | 187 | $ | 1,040 | $ | 14,164 | $ | 1,294 | $ | 15,436 |
(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, general and administrative expenses divided by net earned premiums and other considerations and fees and other income. |
(1) | Investment yield excludes investment income from real estate joint venture partnerships shown above. |
(2) | Tax-adjusted yield represents the yield on the portfolio after including the incremental benefit of investing in certain, tax-advantaged securities. |
14
Table of Contents
Assurant Corporate and Other
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||||||
($ in thousands) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Net investment income | 5,379 | 6,599 | 6,568 | 7,652 | 7,180 | 8,757 | 10,153 | 11,853 | 26,198 | 37,943 | ||||||||||||||||||||||||||||||
Net realized (losses) gains on investments | (51,757 | ) | (299,205 | ) | (34,574 | ) | (43,143 | ) | (51,628 | ) | (13,076 | ) | (3,086 | ) | 5,570 | (428,679 | ) | (62,220 | ) | |||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 7,327 | 7,379 | 7,327 | 7,379 | 8,246 | 8,298 | 8,246 | 8,349 | 29,412 | 33,139 | ||||||||||||||||||||||||||||||
Fees and other income | 190 | 212 | 2,771 | 63 | 157 | 119 | 143 | 327 | 3,236 | 746 | ||||||||||||||||||||||||||||||
(38,861 | ) | (285,015 | ) | (17,908 | ) | (28,049 | ) | (36,045 | ) | 4,098 | 15,456 | 26,099 | (369,833 | ) | 9,608 | |||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||||||
Policyholder benefits | 6 | 12 | 1,096 | — | 3,969 | — | — | — | 1,114 | 3,969 | ||||||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 21,767 | 19,448 | 35,281 | 16,193 | 33,230 | 28,060 | 19,294 | 16,119 | 92,689 | 96,703 | ||||||||||||||||||||||||||||||
Interest expense | 15,188 | 15,190 | 15,287 | 15,288 | 15,297 | 15,288 | 15,296 | 15,297 | 60,953 | 61,178 | ||||||||||||||||||||||||||||||
36,961 | 34,650 | 51,664 | 31,481 | 52,496 | 43,348 | 34,590 | 31,416 | 154,756 | 161,850 | |||||||||||||||||||||||||||||||
Loss before benefit for income taxes | (75,822 | ) | (319,665 | ) | (69,572 | ) | (59,530 | ) | (88,541 | ) | (39,250 | ) | (19,134 | ) | (5,317 | ) | (524,589 | ) | (152,242 | ) | ||||||||||||||||||||
(Benefit) provision for income taxes | (88,700 | ) | (105,246 | ) | (49,778 | ) | (20,464 | ) | (22,964 | ) | (14,625 | ) | (9,684 | ) | 3,210 | (264,188 | ) | (44,063 | ) | |||||||||||||||||||||
Net income (loss) | $ | 12,878 | $ | (214,419 | ) | $ | (19,794 | ) | $ | (39,066 | ) | $ | (65,577 | ) | $ | (24,625 | ) | $ | (9,450 | ) | $ | (8,527 | ) | $ | (260,401 | ) | $ | (108,179 | ) | |||||||||||
Real estate investment income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,234 | $ | — | $ | 1,234 | ||||||||||||||||||||
Corporate and Other Reconciliation | ||||||||||||||||||||||||||||||||||||||||
Assurant Corporate and Other Segment Net Income (loss) | $ | 12,878 | $ | (214,419 | ) | $ | (19,794 | ) | $ | (39,066 | ) | $ | (65,577 | ) | $ | (24,625 | ) | $ | (9,450 | ) | $ | (8,527 | ) | $ | (260,401 | ) | $ | (108,179 | ) | |||||||||||
Adjustments, net of tax: | ||||||||||||||||||||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | (4,763 | ) | (4,796 | ) | (4,763 | ) | (4,796 | ) | (5,360 | ) | (5,394 | ) | (5,360 | ) | (5,427 | ) | (19,118 | ) | (21,541 | ) | ||||||||||||||||||||
Interest expense | 9,872 | 9,874 | 9,937 | 9,937 | 9,943 | 9,937 | 9,942 | 9,943 | 39,620 | 39,765 | ||||||||||||||||||||||||||||||
Net realized losses (gains) on investments | 33,642 | 194,483 | 22,473 | 28,043 | 33,558 | 8,499 | 2,006 | (3,621 | ) | 278,641 | 40,442 | |||||||||||||||||||||||||||||
Tax benefit realized from the sale of an inactive subsidiary | (62,364 | ) | — | (26,630 | ) | — | — | — | — | — | (88,994 | ) | — | |||||||||||||||||||||||||||
Corporate and other line item result (1) | $ | (10,735 | ) | $ | (14,858 | ) | $ | (18,777 | ) | $ | (5,882 | ) | $ | (27,436 | ) | $ | (11,583 | ) | $ | (2,862 | ) | $ | (7,632 | ) | $ | (50,252 | ) | $ | (49,513 | ) | ||||||||||
(1) | Agrees to Corporate and other result per Reconciliation of Net Operating Income to Net Income on page 5. |
15
Table of Contents
Assurant, Inc. and Subsidiaries
Investments
(Unaudited)
As of | As of | |||||||||||
December 31, | December 31, | |||||||||||
($ in thousands) | 2008 | 2007 | ||||||||||
Investments by type | ||||||||||||
Fixed maturity securities: available for sale, at fair value | $ | 8,591,266 | 65.5 | % | $ | 10,126,415 | 69.6 | % | ||||
Equity securities: available for sale, at fair value | ||||||||||||
Preferred stock | 470,823 | 3.6 | % | 613,525 | 4.2 | % | ||||||
Common stock | 4,050 | 0.1 | % | 22,476 | 0.2 | % | ||||||
Commercial mortgage loans on real estate, at amortized cost | 1,506,694 | 11.5 | % | 1,433,626 | 9.9 | % | ||||||
Policy loans | 58,096 | 0.4 | % | 57,107 | 0.4 | % | ||||||
Short-term investments | 703,402 | 5.4 | % | 410,878 | 2.8 | % | ||||||
Collateral held under securities lending | 234,027 | 1.8 | % | 541,650 | 3.7 | % | ||||||
Other investments | 498,434 | 3.8 | % | 541,474 | 3.7 | % | ||||||
Total investments | 12,066,792 | 92.1 | % | 13,747,151 | 94.5 | % | ||||||
Cash and cash equivalents | 1,040,684 | 7.9 | % | 804,964 | 5.5 | % | ||||||
Total investments and cash and cash equivalents | $ | 13,107,476 | 100.0 | % | $ | 14,552,115 | 100.0 | % | ||||
Fixed Maturity Securities by Credit Quality (Fair Value) | ||||||||||||
Aaa / Aa / A | $ | 5,706,913 | 66.4 | % | $ | 6,917,249 | 68.3 | % | ||||
Baa | 2,364,693 | 27.5 | % | 2,570,640 | 25.4 | % | ||||||
Ba | 402,942 | 4.7 | % | 492,822 | 4.9 | % | ||||||
B and lower | 116,718 | 1.4 | % | 145,704 | 1.4 | % | ||||||
Total | $ | 8,591,266 | 100.0 | % | $ | 10,126,415 | 100.0 | % | ||||
16
Table of Contents
Assurant, Inc. and Subsidiaries
Investments (continued)
(Unaudited)
As of December 31, 2008 | As of December 31, 2007 | |||||||||||||||||||||||||
($ in thousands) | Book Value | Fair Value | % of Fair Value | Unrealized Gain (Loss) | Book Value | Fair Value | % of Fair Value | Unrealized Gain (Loss) | ||||||||||||||||||
Fixed Maturity Securities by Issuer Type: | ||||||||||||||||||||||||||
Government: | ||||||||||||||||||||||||||
U.S. Government and government agencies | $ | 136,725 | $ | 150,487 | 1.8 | % | $ | 13,762 | $ | 287,064 | $ | 297,278 | 2.9 | % | $ | 10,214 | ||||||||||
State, municipalities and political subdivisions | 874,134 | 873,580 | 10.2 | % | (554 | ) | 630,196 | 646,549 | 6.4 | % | 16,353 | |||||||||||||||
Foreign governments | 503,620 | 513,318 | 6.0 | % | 9,698 | 680,097 | 704,246 | 7.0 | % | 24,149 | ||||||||||||||||
Corporate (1): | ||||||||||||||||||||||||||
Consumer Cyclical | 1,004,262 | 891,923 | 10.4 | % | (112,339 | ) | 983,565 | 984,229 | 9.7 | % | 664 | |||||||||||||||
Consumer Non-Cyclical | 315,544 | 302,847 | 3.5 | % | (12,697 | ) | 357,261 | 364,006 | 3.6 | % | 6,745 | |||||||||||||||
Energy | 670,000 | 604,332 | 7.0 | % | (65,668 | ) | 700,259 | 730,301 | 7.2 | % | 30,042 | |||||||||||||||
Financials | 1,900,557 | 1,671,617 | 19.5 | % | (228,940 | ) | 2,302,555 | 2,274,551 | 22.5 | % | (28,004 | ) | ||||||||||||||
Health Care | 305,795 | 290,201 | 3.4 | % | (15,594 | ) | 381,497 | 383,799 | 3.8 | % | 2,302 | |||||||||||||||
Industrials | 959,652 | 859,641 | 10.0 | % | (100,011 | ) | 988,412 | 1,000,547 | 9.9 | % | 12,135 | |||||||||||||||
Materials | 262,411 | 220,934 | 2.6 | % | (41,477 | ) | 300,704 | 300,447 | 3.0 | % | (257 | ) | ||||||||||||||
Technology | 131,069 | 124,490 | 1.4 | % | (6,579 | ) | 186,930 | 189,095 | 1.9 | % | 2,165 | |||||||||||||||
Telecommunications | 378,661 | 367,051 | 4.3 | % | (11,610 | ) | 387,947 | 403,953 | 4.0 | % | 16,006 | |||||||||||||||
Utilities | 774,343 | 750,551 | 8.7 | % | (23,792 | ) | 723,920 | 730,391 | 7.2 | % | 6,471 | |||||||||||||||
Other corporate | 363 | 374 | 0.0 | % | 11 | 746 | 747 | 0.0 | % | 1 | ||||||||||||||||
Asset-backed securities | 62,183 | 59,906 | 0.7 | % | (2,277 | ) | 91,796 | 91,833 | 0.9 | % | 37 | |||||||||||||||
Commercial mortgage-backed securities | 241,458 | 198,103 | 2.3 | % | (43,355 | ) | 192,425 | 192,237 | 1.9 | % | (188 | ) | ||||||||||||||
Residential mortgage-backed securities (RMBS): | ||||||||||||||||||||||||||
Agency | 654,371 | 683,521 | 8.0 | % | 29,150 | 688,161 | 696,539 | 6.9 | % | 8,378 | ||||||||||||||||
Alt-A | — | — | 0.0 | % | — | — | — | 0.0 | % | — | ||||||||||||||||
Subprime | 22,911 | 22,390 | 0.3 | % | (521 | ) | 79,876 | 77,562 | 0.8 | % | (2,314 | ) | ||||||||||||||
Other | 352 | 365 | 0.0 | % | 13 | 406 | 421 | 0.0 | % | 15 | ||||||||||||||||
Collaterized debt obligations: | ||||||||||||||||||||||||||
Credit backed | 5,817 | 5,635 | 0.1 | % | (182 | ) | 62,538 | 57,684 | 0.6 | % | (4,854 | ) | ||||||||||||||
RMBS backed | — | — | 0.0 | % | — | — | — | 0.0 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 9,204,228 | $ | 8,591,266 | 100.0 | % | $ | (612,962 | ) | $ | 10,026,355 | $ | 10,126,415 | 100.0 | % | $ | 100,060 | |||||||||
(1) | Industry classifications are based on a combination of published index classifications as well as Assurant’s view of underlying creditor risk. These resulting classifications are then mapped to the Global Industry Classification Standard (GICS®). |
17
Table of Contents
Assurant, Inc. and Subsidiaries
Investment Results by Asset Category and Annualized Yields
(Unaudited)
For the Three Months Ended December 31, 2008 | For the Three Months Ended December 31, 2007 | For the Year Ended December 31, 2008 | For the Year Ended December 31, 2007 | |||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Yield | Investment Income | Net realized gain (loss) | Yield | Investment Income | Net realized gain (loss) | Yield | Investment Income | Net realized gain (loss) | Yield | Investment Income | Net realized gain (loss) | ||||||||||||||||||||||||||||||||
Fixed maturity securities: available for sale, at fair value | 5.96 | % | $ | 140,721 | $ | (36,334 | ) | 5.99 | % | $ | 148,887 | $ | (30,357 | ) | 6.01 | % | $ | 582,869 | $ | (223,997 | ) | 5.96 | % | $ | 564,369 | $ | (45,587 | ) | ||||||||||||||||
Equity securities: available for sale, at fair value | 6.93 | % | 10,154 | (4,319 | ) | 6.28 | % | 11,299 | (21,154 | ) | 6.88 | % | 47,618 | (181,178 | ) | 6.46 | % | 47,264 | (27,248 | ) | ||||||||||||||||||||||||
Commercial mortgage loans on real estate, at amortized cost | 6.34 | % | 23,839 | (626 | ) | 6.79 | % | 24,112 | (532 | ) | 6.42 | % | 95,013 | 326 | 6.79 | % | 91,702 | (532 | ) | |||||||||||||||||||||||||
Policy loans | 6.35 | % | 918 | — | 7.78 | % | 1,117 | — | 6.50 | % | 3,717 | — | 6.84 | % | 3,967 | — | ||||||||||||||||||||||||||||
Cash and short-term investments | 2.02 | % | 8,617 | 2 | 4.73 | % | 13,904 | — | 2.80 | % | 43,246 | (1 | ) | 4.69 | % | 57,353 | 94 | |||||||||||||||||||||||||||
Other investments* | 3.86 | % | 4,981 | (10,480 | ) | 3.81 | % | 5,187 | 415 | 5.07 | % | 27,395 | (23,829 | ) | 10.85 | % | 59,998 | 11,053 | ||||||||||||||||||||||||||
Total | 189,230 | $ | (51,757 | ) | 204,506 | $ | (51,628 | ) | 799,858 | $ | (428,679 | ) | 824,653 | $ | (62,220 | ) | ||||||||||||||||||||||||||||
Investment expenses | (6,182 | ) | (6,680 | ) | (25,511 | ) | (25,580 | ) | ||||||||||||||||||||||||||||||||||||
Net investment income | $ | 183,048 | $ | 197,826 | $ | 774,347 | $ | 799,073 | ||||||||||||||||||||||||||||||||||||
Gross realized gains | $ | 12,835 | $ | 11,854 | $ | 67,945 | $ | 41,863 | ||||||||||||||||||||||||||||||||||||
Gross realized losses | (24,569 | ) | (21,997 | ) | (156,471 | ) | (55,899 | ) | ||||||||||||||||||||||||||||||||||||
Other-than-temporary impairments on available for sale securities | (40,023 | ) | (41,485 | ) | (340,153 | ) | (48,184 | ) | ||||||||||||||||||||||||||||||||||||
Net realized (losses) gains | $ | (51,757 | ) | $ | (51,628 | ) | $ | (428,679 | ) | $ | (62,220 | ) | ||||||||||||||||||||||||||||||||
* | Consists primarily of investments in joint venture partnerships, invested assets associated with a modified coinsurance agreement, and invested assets associated with the Assurant Investment Plan. |
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Table of Contents
Assurant, Inc. and Subsidiaries
Summary of Net Operating Income Disclosed Items
Income / (Expense) Items
(unaudited)
For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, after-tax) | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Assurant Solutions: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exit cost for international business | (c | )(d) | $ | (9.7 | ) | $ | (0.08 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | —�� | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Fees from sale of US pre-need independent franchise | (a | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3.5 | $ | 0.03 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Loss from repriced/discontinued international product | (b | )(c) | $ | — | $ | — | $ | — | $ | — | $ | (6.9 | ) | $ | (0.06 | ) | $ | — | $ | — | $ | — | $ | — | $ | (2.2 | ) | $ | (0.02 | ) | $ | (4.4 | ) | $ | (0.04 | ) | $ | — | $ | — | |||||||||||||||||||||||||||
Reconciliation of client commissions project | (c | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3.8 | $ | 0.03 | $ | 0.6 | $ | 0.01 | $ | 4.5 | $ | 0.04 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Client bankruptcies | (c | ) | $ | (8.1 | ) | $ | (0.07 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Client related settlements | (a | )(c) | $ | 5.9 | $ | 0.05 | $ | (7.7 | ) | $ | (0.06 | ) | $ | — | $ | — | $ | 11.7 | $ | 0.10 | $ | (3.4 | ) | $ | (0.03 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||
Assurant Specialty Property: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of client commissions project | (c | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 5.9 | $ | 0.05 | $ | 2.3 | $ | 0.02 | $ | 5.5 | $ | 0.04 | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Catastrophe losses, net of reinsurance (1) | (b | ) | $ | (5.1 | ) | $ | (0.04 | ) | $ | (86.2 | ) | $ | (0.73 | ) | $ | (11.5 | ) | $ | (0.10 | ) | $ | — | $ | — | $ | (22.2 | ) | $ | (0.19 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Client related settlements | (c | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 4.6 | $ | 0.04 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Reinsurance reinstatement premiums | (e | ) | $ | — | $ | — | $ | (8.6 | ) | $ | (0.07 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Assurant Health: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal related settlements | (c | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2.5 | $ | 0.02 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||
$ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assurant Employee Benefits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in administration of state specific contract provisions | (b | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (2.1 | ) | $ | (0.02 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Reserve adequacy study adjustment | (b | ) | $ | 3.5 | $ | 0.03 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||
Assurant Corporate and Other: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses related to SEC investigation (2) | (c | ) | $ | 1.7 | $ | 0.01 | $ | — | $ | — | $ | (3.0 | ) | $ | (0.03 | ) | $ | (1.6 | ) | $ | (0.01 | ) | $ | (4.3 | ) | $ | (0.04 | ) | $ | (3.2 | ) | $ | (0.03 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Change in various tax liabilities/receivables | (d | ) | $ | — | $ | — | $ | (4.0 | ) | $ | (0.03 | ) | $ | — | $ | — | $ | — | $ | — | $ | (6.4 | ) | $ | (0.05 | ) | $ | (0.6 | ) | $ | (0.01 | ) | $ | 2.9 | $ | 0.02 | $ | (5.8 | ) | $ | (0.05 | ) |
Statement of Operations line impact:
(a) | Fees and other income |
(b) | Policyholder benefits |
(c) | Selling, underwriting, general and administrative expenses |
(d) | Income taxes |
(e) | Net earned premiums |
(*) | Schedule excludes investment income from real estate joint ventures, which are shown separately in the Consolidated and Segment statements of operations. |
(1) | Assurant disclosed catastrophe losses including Individual Services Office (ISO) and non-ISO events with losses greater than $5 million. Catastrophe losses in the three months ended June 30, 2008 include paid losses and case reserves on all ISO events, but do not include IBNR reserves. |
(2) | This item includes both SEC investigation-related expenses and reimbursements received related to SEC expenses covered under Director & Officer insurance. During the three months ended December 31, 2008, Assurant incurred SEC expenses of $0.1 million and received reimbursements of $1.8 million. During the three months ended September 30, 2008, Assurant incurred expenses of $2.1 million and received reimbursements of $2.1 million. |
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Table of Contents
Assurant, Inc. and Subsidiaries
Ratings Summary
(Unaudited)
Company | A.M. Best | Moody’s | Standard & Poors | |||
American Bankers Insurance Company | A | A2 | A- | |||
American Bankers Insurance Company (CAB) | A | N/A | N/A | |||
American Bankers Life Assurance Company | A- | A2 | A- | |||
American Bankers Life Assurance Company (CAB) | A- | N/A | N/A | |||
American Memorial Life Insurance Company | A- | N/A | A- | |||
American Reliable Insurance Company | A- | N/A | N/A | |||
American Security Insurance Company | A | A2 | A- | |||
Assurant Life of Canada | A- | N/A | N/A | |||
Caribbean American Life Assurance Company | A- | N/A | N/A | |||
Caribbean American Property Insurance Company | A- | N/A | N/A | |||
John Alden Life Insurance Company | A- | A2 | A | |||
Reliable Lloyds | A- | N/A | N/A | |||
Standard Guaranty Insurance Company | A | N/A | N/A | |||
Time Insurance Company | A- | A2 | A | |||
UDC Dental California | A- | N/A | N/A | |||
Union Security Dental Care New Jersey | A- | N/A | N/A | |||
Union Security Insurance Company | A- | A2 | A- | |||
Union Security Life Insurance Company of New York | A- | N/A | N/A | |||
United Dental Care of Arizona | A- | N/A | N/A | |||
United Dental Care of Colorado | A- | N/A | N/A | |||
United Dental Care of Michigan | NR-3 | N/A | N/A | |||
United Dental Care of Missouri | A- | N/A | N/A | |||
United Dental Care of New Mexico | A- | N/A | N/A | |||
United Dental Care of Ohio | NR-3 | N/A | N/A | |||
United Dental Care of Texas | A- | N/A | N/A | |||
United Dental Care of Utah | NR-3 | N/A | N/A | |||
Voyager Indemnity Insurance Company | A- | N/A | N/A | |||
Commercial Paper | AMB-2 | P-2 | A- | |||
Senior Debt | bbb | Baa1 | BBB+ |
20
Table of Contents
Assurant, Inc. and Subsidiaries
Top 30 Corporate Issuer Exposures
(unaudited)
As of December 31, 2008 | ||||||||||||||||||||
($ in thousands) | Fixed Maturity Securities | Preferred Stocks | ||||||||||||||||||
Corporate Issuer | Fair Value | Book Value | Unrealized Gain/Loss | Fair Value | Book Value | Unrealized Gain/Loss | ||||||||||||||
Bank of America Corp | $ | 85,799 | $ | 90,522 | $ | (4,723 | ) | $ | 38,953 | $ | 55,421 | $ | (16,468 | ) | ||||||
General Electric Co | 111,038 | 119,708 | (8,670 | ) | 7,758 | 10,100 | (2,342 | ) | ||||||||||||
Wells Fargo & Company | 98,125 | 103,204 | (5,079 | ) | 18,767 | 16,926 | 1,841 | |||||||||||||
HSBC Holdings PLC | 68,803 | 73,115 | (4,312 | ) | 30,084 | 32,868 | (2,784 | ) | ||||||||||||
AT&T Inc | 89,112 | 86,187 | 2,925 | 4,389 | 4,460 | (71 | ) | |||||||||||||
J.P. Morgan Chase & Co | 58,214 | 65,653 | (7,439 | ) | 16,047 | 18,410 | (2,363 | ) | ||||||||||||
Citigroup Inc | 53,390 | 58,744 | (5,354 | ) | 19,889 | 31,326 | (11,437 | ) | ||||||||||||
MidAmerican Energy Hldgs | 63,621 | 63,909 | (288 | ) | 4,573 | 5,920 | (1,347 | ) | ||||||||||||
Verizon Communications Inc | 63,267 | 64,342 | (1,075 | ) | 2,480 | 2,758 | (278 | ) | ||||||||||||
Comcast Corp | 53,835 | 54,686 | (851 | ) | 10,349 | 11,889 | (1,540 | ) | ||||||||||||
IBM Corp | 63,365 | 61,865 | 1,500 | 573 | 617 | (44 | ) | |||||||||||||
US Bancorp | 23,356 | 33,218 | (9,862 | ) | 36,494 | 38,808 | (2,314 | ) | ||||||||||||
Canadian Imperial Bank | 54,790 | 50,905 | 3,885 | — | — | — | ||||||||||||||
Wal-Mart Stores Inc | 53,960 | 50,195 | 3,765 | — | — | — | ||||||||||||||
FMR LLC | 48,891 | 55,088 | (6,197 | ) | — | — | — | |||||||||||||
Duke Energy Corp | 48,407 | 46,716 | 1,691 | — | — | — | ||||||||||||||
Goldman Sachs Group Inc | 38,194 | 48,270 | (10,076 | ) | 9,600 | 13,311 | (3,711 | ) | ||||||||||||
PNC Financial Services | 29,770 | 27,487 | 2,283 | 17,912 | 19,001 | (1,089 | ) | |||||||||||||
Wyeth | 46,598 | 43,843 | 2,755 | — | — | — | ||||||||||||||
News Corp | 45,958 | 49,076 | (3,118 | ) | — | — | — | |||||||||||||
Burlington Northern Santa Fe | 45,294 | 46,078 | (784 | ) | — | — | — | |||||||||||||
Prudential Financial Inc | 42,878 | 55,751 | (12,873 | ) | 472 | 807 | (335 | ) | ||||||||||||
ConocoPhillips | 42,636 | 40,791 | 1,845 | — | — | — | ||||||||||||||
Deere & Co | 42,155 | 41,485 | 670 | — | — | — | ||||||||||||||
Manulife Financial Corp | 29,843 | 33,821 | (3,978 | ) | 11,877 | 12,657 | (780 | ) | ||||||||||||
Allstate Corp | 40,532 | 45,871 | (5,339 | ) | — | — | — | |||||||||||||
FPL Group Inc | 36,924 | 36,219 | 705 | 3,548 | 3,670 | (122 | ) | |||||||||||||
Credit Suisse Group AG | 31,221 | 32,370 | (1,149 | ) | 8,339 | 10,147 | (1,808 | ) | ||||||||||||
Procter & Gamble Co | 38,628 | 35,860 | 2,768 | — | — | — | ||||||||||||||
MetLife Inc | 25,773 | 29,659 | (3,886 | ) | 12,191 | 17,349 | (5,158 | ) | ||||||||||||
$ | 1,574,377 | $ | 1,644,638 | $ | (70,261 | ) | $ | 254,295 | $ | 306,445 | $ | (52,150 | ) | |||||||
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Table of Contents
Assurant, Inc. and Subsidiaries
Top 10 Foreign Government Exposures
(unaudited)
As of December 31, 2008 | ||||||||||
($ in thousands) | Fixed Maturity Securities | |||||||||
Issuer | Fair Value | Book Value | Unrealized Gain/Loss | |||||||
Province of Ontario | $ | 139,638 | $ | 136,291 | $ | 3,347 | ||||
Government of Brazil | 49,036 | 49,775 | (739 | ) | ||||||
United Kingdom of Great Britain | 41,605 | 38,240 | 3,365 | |||||||
Province of Quebec | 32,972 | 32,275 | 697 | |||||||
Corp Andina De Fomento | 28,353 | 31,407 | (3,054 | ) | ||||||
United Mexican States | 27,547 | 25,191 | 2,356 | |||||||
Province of Manitoba | 24,129 | 23,445 | 684 | |||||||
Bundesobligation | 18,332 | 17,861 | 471 | |||||||
Kingdom of Denmark | 16,430 | 15,718 | 712 | |||||||
Swedish Export Credit | 15,275 | 12,974 | 2,301 | |||||||
Other | 120,001 | 120,443 | (442 | ) | ||||||
$ | 513,318 | $ | 503,620 | $ | 9,698 | |||||
22
Table of Contents
Assurant, Inc. and Subsidiaries
Commercial Mortgage Loans Summary
(unaudited)
($ in thousands) | As of December 31, 2008 | ||||||
Book Value | % of Total | ||||||
Summary of Commercial Mortgage Loans | |||||||
Geographic Region | |||||||
Pacific | $ | 511,386 | 34 | % | |||
Middle Atlantic | 274,062 | 18 | % | ||||
New England | 176,802 | 12 | % | ||||
South Atlantic | 177,827 | 12 | % | ||||
Mountain | 170,343 | 11 | % | ||||
West South Central | 86,481 | 6 | % | ||||
West North Central | 46,324 | 3 | % | ||||
East South Central | 28,071 | 2 | % | ||||
Canada | 22,284 | 1 | % | ||||
East North Central | 19,022 | 1 | % | ||||
Allowance for loan losses | (5,908 | ) | — | ||||
Total | $ | 1,506,694 | 100 | % | |||
Property Type | |||||||
Retail | $ | 493,337 | 33 | % | |||
Office | 506,247 | 34 | % | ||||
Industrial | 374,959 | 25 | % | ||||
Other | 76,690 | 5 | % | ||||
Apartments | 61,369 | 4 | % | ||||
Allowance for loan losses | (5,908 | ) | — | ||||
Total | $ | 1,506,694 | 100 | % | |||
Loan Size | |||||||
Under $3 million | $ | 579,518 | 38 | % | |||
$3 million but less than $6 million | 509,674 | 34 | % | ||||
$6 million but less than $9 million | 244,296 | 16 | % | ||||
$9 million but less than $12 million | 58,822 | 4 | % | ||||
$12 million and over | 120,292 | 8 | % | ||||
Allowance for loan losses | (5,908 | ) | — | ||||
Total | $ | 1,506,694 | 100 | % | |||
Commercial Mortgage Loan Information by Vintage
As of December 31, 2008
Book value | Delinquent loan balance | Number of loans (whole number) | Number of delinquent loans | Average balance per loan | Property value weighted average loan-to-value | Book value weighted average loan-to-value | |||||||||||||
Loan year | |||||||||||||||||||
2004 and prior | $ | 631,270 | — | 306 | — | $ | 2,104 | 31.08 | % | 39.39 | % | ||||||||
2005 | 253,222 | — | 72 | — | 3,517 | 49.66 | % | 54.84 | % | ||||||||||
2006 | 180,929 | — | 64 | — | 2,827 | 44.31 | % | 52.08 | % | ||||||||||
2007 | 290,241 | — | 90 | — | 3,189 | 55.59 | % | 60.43 | % | ||||||||||
2008 | 156,940 | — | 42 | — | 3,737 | 57.22 | % | 58.84 | % | ||||||||||
Allowance for loan losses | (5,908 | ) | — | N/A | — | N/A | N/A | N/A | |||||||||||
Total | $ | 1,506,694 | — | 574 | — | $ | 2,648 | 40.38 | % | 49.75 | % | ||||||||
1) | Based upon property appraisals as of June 30,2008 |
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