Exhibit 99.2
Assurant, Inc. (AIZ)
Financial Supplement as of September 30, 2010
ASSURANT, INC.
FINANCIAL SUPPLEMENT
(UNAUDITED)
AS OF SEPTEMBER 30, 2010
| Page: | ||||
INDEX TO SUPPLEMENT | ||||
SAFE HARBOR STATEMENT | 1 | |||
REGULATION G - NON GAAP FINANCIAL MEASURES | 1 | |||
SUMMARY FINANCIAL HIGHLIGHTS | 2 | |||
SEGMENTED CONDENSED BALANCE SHEETS | 4 | |||
RECONCILIATION OF NET OPERATING INCOME TO NET INCOME | 5 | |||
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS AND SELECTED DATA | 6 | |||
CONDENSED SEGMENT STATEMENTS OF OPERATIONS AND SELECTED DATA | 8 | |||
INVESTMENTS | 16 | |||
INVESTMENT RESULTS BY ASSET CATEGORY & ANNUALIZED YIELDS | 18 | |||
SUMMARY OF NET OPERATING INCOME DISCLOSED ITEMS | 19 | |||
RATINGS SUMMARY | 20 | |||
EXHIBIT I - COMMERCIAL MORTGAGE LOANS SUMMARY | 21 | |||
EXHIBIT II - TOP 10 FOREIGN GOVERNMENT EXPOSURES | 22 | |||
CONTACT INFORMATION | ||||
Corporate Headquarters Address: | Investor Inquiries: | |||
| One Chase Manhattan Plaza | Melissa Kivett | Brian Koppy | ||
| New York, New York 10005 | Senior Vice President | Vice President | ||
| 212-859-7000 | Investor Relations | Investor Relations | ||
| 212-859-7029 | 212-859-7197 | |||
| Website Address: | melissa.kivett@assurant.com | brian.koppy@assurant.com | ||
| www.assurant.com | ||||
About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and select worldwide 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 approximately $27 billion in assets and $8 billion in annual revenue. Assurant has approximately 14,500 employees worldwide and is headquartered in New York’s financial district.www.assurant.com.
Safe Harbor Statement:
Some of the statements included in this financial supplement and its exhibits, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 may 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 or its exhibits 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) the effects of the Patient Protection and Affordable Care Act and the rules and regulations thereunder on our health and employee benefits businesses; (ii) factors, including the effects of health care reform and the relationship between the Company’s market capitalization and its book value, that could result in a material impairment of goodwill on the company’s balance sheet; (iii) loss of significant client relationships, distribution sources and contracts; (iv) failure to attract and retain sales representatives; (v) losses due to natural and man-made catastrophes; (vi) a decline in our credit or financial strength ratings (including the risk of ratings downgrades in the insurance industry); (vii) unfavorable outcomes in litigation and/or regulatory investigations that could negatively affect our business and reputation; (viii) current or new laws and regulations that could increase our costs and/or decrease our revenues; (ix) 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, unemployment and inflationary pressure); (x) inadequacy of reserves established for future claims losses; (xi) failure to predict or manage benefits, claims and other costs; (xii) increases or decreases in tax valuation allowances; (xiii) fluctuations in exchange rates and other risks related to our international operations; (xiv) unavailability, inadequacy and unaffordable pricing of reinsurance coverage; (xv) diminished value of invested assets in our investment portfolio (due to, among other things, volatility in financial markets, the global economic slowdown, credit and liquidity risk, other than temporary impairments and inability to target an appropriate overall risk level); (xvi) insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; (xvii) inability of reinsurers to meet their obligations; (xviii) credit risk of some of our agents in Assurant Specialty Property and Assurant Solutions; (xix) failure to effectively maintain and modernize our information systems; (xx) failure to protect client information and privacy; (xxi) failure to find and integrate suitable acquisitions and new insurance ventures; (xxii) inability of our subsidiaries to pay sufficient dividends; (xxiii) failure to provide for succession of senior management and key executives; and (xxiv) significant competitive pressures in our businesses and cyclicality of the insurance industry. 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 2009 Annual Report on Form 10-K and upcoming September 30, 2010 Form 10-Q, 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 of 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 net operating income for the periods presented divided by average stockholders’ equity for the year to date period, excluding accumulated other comprehensive income ("AOCI"), and then the return is annualized, if necessary. 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 net 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 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 ended September 30, 2010 and 2009 was 10.9% and 12.5%, respectively, and for the nine months ended September 30, 2010 and 2009 was 12.1% and 13.0%, respectively. Segment ROEs are measured consistently with GAAP. Please refer to page 6 for the reconciliation of annualized operating ROE to annualized GAAP return on average equity.
(3) Assurant uses book value per diluted share excluding AOCI as an important measure of the Company’s stockholder value. Book value per diluted share excluding AOCI equals total stockholders’ equity excluding AOCI divided by diluted shares outstanding. The company believes book value per diluted share excluding AOCI provides investors a valuable measure of stockholder value because it excludes the effect of unrealized gains (losses) on investments which tend to be highly variable from period to period and other comprehensive income items. The comparable GAAP measure would be book value per diluted share defined as total stockholders’ equity divided by diluted shares outstanding. Book value per diluted share was $49.41 as of September 30, 2010, as shown in the reconciliation below.
| As of September 30, 2010 | ||||
Book value per diluted share (excluding AOCI) | $ | 44.67 | ||
Change due to effect of including AOCI | 4.74 | |||
Book value per diluted share | $ | 49.41 | ||
1
Assurant, Inc.
Summary Financial Highlights
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||
($ in thousands, except number of shares and per share amounts) | 3Q | 3Q | 2010 | 2009 | ||||||||||||
Net operating income(1) | $ | 137,742 | $ | 126,228 | $ | 444,284 | $ | 363,304 | ||||||||
Net realized gains (losses) on investments | 3,928 | 12,913 | 19,284 | (27,277 | ) | |||||||||||
Change in tax valuation allowance | — | 7,043 | — | (936 | ) | |||||||||||
Legal settlement and related expenses | — | (1,454 | ) | — | 83,542 | |||||||||||
Net income | $ | 141,670 | $ | 144,730 | $ | 463,568 | $ | 418,633 | ||||||||
Total revenues | $ | 2,113,971 | $ | 2,156,873 | $ | 6,422,121 | $ | 6,518,359 | ||||||||
PER SHARE AND SHARE DATA: | ||||||||||||||||
Basic earnings per common share | ||||||||||||||||
Net operating income | $ | 1.28 | $ | 1.07 | $ | 3.96 | $ | 3.07 | ||||||||
Net income | $ | 1.31 | $ | 1.22 | $ | 4.13 | $ | 3.54 | ||||||||
Weighted average common shares outstanding - basic | 107,806,207 | 118,184,367 | 112,137,558 | 118,187,358 | ||||||||||||
Diluted earnings per common share | ||||||||||||||||
Net operating income | $ | 1.27 | $ | 1.07 | $ | 3.94 | $ | 3.07 | ||||||||
Net income | $ | 1.30 | $ | 1.22 | $ | 4.11 | $ | 3.54 | ||||||||
Weighted average common shares outstanding - diluted | 108,584,282 | 118,291,841 | 112,791,123 | 118,261,464 | ||||||||||||
| (1) | See Footnote (1) in Regulation G - Non GAAP Financial Measures on page 1. |
2
Assurant, Inc.
Summary Financial Highlights (continued)
(Unaudited)
($ in thousands, except | 2010 | 2009 | ||||||||||||||||||||||||||
| 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | ||||||||||||||||||||||
Total assets | $ | 26,845,334 | $ | 26,115,330 | $ | 26,238,814 | $ | 25,860,667 | $ | 25,665,578 | $ | 24,822,474 | $ | 23,820,644 | ||||||||||||||
Total stockholders’ equity | $ | 5,366,541 | $ | 5,038,168 | $ | 4,973,585 | $ | 4,853,249 | $ | 4,903,449 | $ | 4,364,577 | $ | 3,670,322 | ||||||||||||||
Total stockholders’ equity (excluding AOCI) | $ | 4,851,870 | $ | 4,760,017 | $ | 4,819,547 | $ | 4,787,324 | $ | 4,781,088 | $ | 4,676,177 | $ | 4,452,650 | ||||||||||||||
Basic book value per share | $ | 49.87 | $ | 46.35 | $ | 43.36 | $ | 41.27 | $ | 41.71 | $ | 36.83 | $ | 30.99 | ||||||||||||||
Basic book value per share (excluding AOCI) | $ | 45.08 | $ | 43.79 | $ | 42.02 | $ | 40.71 | $ | 40.66 | $ | 39.46 | $ | 37.60 | ||||||||||||||
Shares outstanding for basic book value per share calculation | 107,617,921 | 108,703,559 | 114,705,703 | 117,591,250 | 117,572,997 | 118,494,717 | 118,432,367 | |||||||||||||||||||||
Diluted book value per share | $ | 49.41 | $ | 45.95 | $ | 43.16 | $ | 41.03 | $ | 41.61 | $ | 36.76 | $ | 30.98 | ||||||||||||||
Diluted book value per share (excluding AOCI)(1) | $ | 44.67 | $ | 43.42 | $ | 41.82 | $ | 40.47 | $ | 40.57 | $ | 39.38 | $ | 37.58 | ||||||||||||||
Shares outstanding for diluted book value per share calculation | 108,612,511 | 109,635,918 | 115,243,238 | 118,293,293 | 117,854,377 | 118,736,239 | 118,477,818 | |||||||||||||||||||||
Debt to total capital ratio (excluding AOCI) | 16.8 | % | 17.1 | % | 16.9 | % | 17.0 | % | 17.0 | % | 17.3 | % | 18.0 | % | ||||||||||||||
| (1) | See Footnote (3) in Regulation G - Non GAAP Financial Measures on page 1. |
3
Assurant, Inc.
Segmented Condensed Balance Sheets
(Unaudited)
| At September 30, 2010 | ||||||||||||||||||||||||
| Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other(1) | Consolidated | |||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Investments and cash and cash equivalents | $ | 7,292,988 | $ | 2,303,560 | $ | 992,666 | $ | 2,311,412 | $ | 2,167,807 | $ | 15,068,433 | ||||||||||||
Reinsurance recoverables | 629,700 | 439,739 | 7,610 | 13,414 | 3,840,688 | 4,931,151 | ||||||||||||||||||
Deferred acquisition costs | 2,199,340 | 204,820 | 5,017 | 23,813 | 2,432,990 | |||||||||||||||||||
Goodwill | — | — | — | — | 926,195 | 926,195 | ||||||||||||||||||
Assets held in separate accounts | 220,140 | — | — | — | 1,670,081 | 1,890,221 | ||||||||||||||||||
Other assets | 736,964 | 401,399 | 59,291 | 191,291 | 207,399 | 1,596,344 | ||||||||||||||||||
Total assets | $ | 11,079,132 | $ | 3,349,518 | $ | 1,064,584 | $ | 2,539,930 | $ | 8,812,170 | $ | 26,845,334 | ||||||||||||
Liabilities | ||||||||||||||||||||||||
Policyholder benefits and claims payable | $ | 4,877,989 | $ | 375,668 | $ | 451,839 | $ | 1,697,677 | $ | 4,041,997 | $ | 11,445,170 | ||||||||||||
Unearned premiums | 3,447,463 | 1,337,699 | 125,321 | 10,876 | 43,309 | 4,964,668 | ||||||||||||||||||
Debt | — | — | — | 972,137 | 972,137 | |||||||||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 8,160 | 8,160 | ||||||||||||||||||
Liabilities related to separate accounts | 220,140 | — | — | — | 1,670,081 | 1,890,221 | ||||||||||||||||||
Deferred gain on disposal of businesses | — | — | — | — | 146,770 | 146,770 | ||||||||||||||||||
Accounts payable and other liabilities | 1,032,050 | 382,914 | 116,185 | 234,929 | 285,589 | 2,051,667 | ||||||||||||||||||
Total liabilities | 9,577,642 | 2,096,281 | 693,345 | 1,943,482 | 7,168,043 | 21,478,793 | ||||||||||||||||||
Stockholders’ equity | ||||||||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,501,490 | 1,253,237 | 371,239 | 596,448 | 1,129,456 | 4,851,870 | ||||||||||||||||||
Accumulated other comprehensive income | — | — | — | — | 514,671 | 514,671 | ||||||||||||||||||
Total stockholders’ equity | 1,501,490 | 1,253,237 | 371,239 | 596,448 | 1,644,127 | 5,366,541 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,079,132 | $ | 3,349,518 | $ | 1,064,584 | $ | 2,539,930 | $ | 8,812,170 | $ | 26,845,334 | ||||||||||||
| At December 31, 2009 | ||||||||||||||||||||||||
| Solutions | Specialty Property | Health | Employee Benefits | Corporate & Other(1) | Consolidated | |||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Investments and cash and cash equivalents | $ | 7,393,989 | $ | 2,287,688 | $ | 954,132 | $ | 2,343,922 | $ | 1,496,653 | $ | 14,476,384 | ||||||||||||
Reinsurance recoverables | 689,800 | 333,389 | 7,251 | 21,589 | 3,179,705 | 4,231,734 | ||||||||||||||||||
Deferred acquisition costs | 2,257,568 | 214,300 | 8,338 | 24,448 | — | 2,504,654 | ||||||||||||||||||
Goodwill | — | — | — | — | 926,398 | 926,398 | ||||||||||||||||||
Assets held in separate accounts | 219,166 | — | — | — | 1,753,166 | 1,972,332 | ||||||||||||||||||
Other assets | 546,271 | 355,240 | 108,846 | 131,708 | 607,100 | 1,749,165 | ||||||||||||||||||
Total assets | $ | 11,106,794 | $ | 3,190,617 | $ | 1,078,567 | $ | 2,521,667 | $ | 7,963,022 | $ | 25,860,667 | ||||||||||||
Liabilities | ||||||||||||||||||||||||
Policyholder benefits and claims payable | $ | 4,772,514 | $ | 345,109 | $ | 491,899 | $ | 1,718,623 | $ | 3,387,815 | $ | 10,715,960 | ||||||||||||
Unearned premiums | 3,655,942 | 1,315,881 | 124,515 | 15,721 | 41,505 | 5,153,564 | ||||||||||||||||||
Debt | — | — | — | — | 972,058 | 972,058 | ||||||||||||||||||
Mandatorily redeemable preferred stock | — | — | — | — | 8,160 | 8,160 | ||||||||||||||||||
Liabilities related to separate accounts | 219,166 | — | — | — | 1,753,166 | 1,972,332 | ||||||||||||||||||
Deferred gain on disposal of businesses | — | — | — | — | 164,899 | 164,899 | ||||||||||||||||||
Accounts payable and other liabilities | 805,355 | 344,829 | 152,947 | 250,282 | 467,032 | 2,020,445 | ||||||||||||||||||
Total liabilities | 9,452,977 | 2,005,819 | 769,361 | 1,984,626 | 6,794,635 | 21,007,418 | ||||||||||||||||||
Stockholders’ equity | ||||||||||||||||||||||||
Equity, excluding accumulated other comprehensive income | 1,653,817 | 1,184,798 | 309,206 | 537,041 | 1,102,462 | 4,787,324 | ||||||||||||||||||
Accumulated other comprehensive income | — | — | — | — | 65,925 | 65,925 | ||||||||||||||||||
Total stockholders’ equity | 1,653,817 | 1,184,798 | 309,206 | 537,041 | 1,168,387 | 4,853,249 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 11,106,794 | $ | 3,190,617 | $ | 1,078,567 | $ | 2,521,667 | $ | 7,963,022 | $ | 25,860,667 | ||||||||||||
| (1) | Corporate & Other includes all accumulated other comprehensive income/loss and goodwill as well as reinsurance recoverables and separate accounts related to the sale of businesses by reinsurance. |
4
Assurant, Inc.
Reconciliation of Net Operating Income to Net Income
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands, net of tax) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Assurant Solutions | $ | 32,333 | $ | 30,323 | $ | 28,866 | $ | 30,203 | $ | 31,644 | $ | 27,894 | $ | 30,311 | $ | 91,522 | $ | 89,849 | ||||||||||||||||||
Assurant Specialty Property | 106,653 | 103,717 | 118,478 | 106,944 | 103,157 | 91,228 | 104,668 | 328,848 | 299,053 | |||||||||||||||||||||||||||
Assurant Health | 5,340 | 25,300 | 8,369 | (29,715 | ) | (4,847 | ) | (10,330 | ) | 14,672 | 39,009 | (505 | ) | |||||||||||||||||||||||
Assurant Employee Benefits | 16,932 | 12,393 | 16,467 | 11,556 | 11,450 | 12,128 | 7,022 | 45,792 | 30,600 | |||||||||||||||||||||||||||
Corporate and other | (17,577 | ) | (13,568 | ) | (11,962 | ) | (8,938 | ) | (9,743 | ) | (16,157 | ) | (13,442 | ) | (43,107 | ) | (39,342 | ) | ||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 3,916 | 3,916 | 3,953 | 1,370 | 4,421 | 4,388 | 4,421 | 11,785 | 13,230 | |||||||||||||||||||||||||||
Interest expense | (9,855 | ) | (9,855 | ) | (9,855 | ) | (9,854 | ) | (9,854 | ) | (9,854 | ) | (9,873 | ) | (29,565 | ) | (29,581 | ) | ||||||||||||||||||
Net operating income | 137,742 | 152,226 | 154,316 | 101,566 | 126,228 | 99,297 | 137,779 | 444,284 | 363,304 | |||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||
Net realized gains (losses) on investments | 3,928 | 12,449 | 2,907 | (7,561 | ) | 12,913 | (3,992 | ) | (36,198 | ) | 19,284 | (27,277 | ) | |||||||||||||||||||||||
Change in tax valuation allowance | — | — | — | 936 | 7,043 | 13,021 | (21,000 | ) | — | (936 | ) | |||||||||||||||||||||||||
Legal settlement and related expenses | — | — | — | — | (1,454 | ) | 84,996 | — | — | 83,542 | ||||||||||||||||||||||||||
Goodwill impairment | — | — | — | (83,000 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Net income | $ | 141,670 | $ | 164,675 | $ | 157,223 | $ | 11,941 | $ | 144,730 | $ | 193,322 | $ | 80,581 | $ | 463,568 | $ | 418,633 | ||||||||||||||||||
5
Assurant, Inc.
Consolidated Condensed Statements of Operations
(Unaudited)
($ in thousands, except per share | 2010 | 2009 | Nine Months | |||||||||||||||||||||||||||||||||
| 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 1,832,514 | $ | 1,849,895 | $ | 1,906,643 | $ | 1,925,492 | $ | 1,874,398 | $ | 1,875,866 | $ | 1,874,579 | $ | 5,589,052 | $ | 5,624,843 | ||||||||||||||||||
Net investment income | 176,170 | 175,196 | 174,014 | 172,503 | 172,924 | 174,932 | 178,479 | 525,380 | 526,335 | |||||||||||||||||||||||||||
Net realized gains (losses) on investments | 6,043 | 19,152 | 4,473 | (11,632 | ) | 19,866 | (6,142 | ) | (55,689 | ) | 29,668 | (41,965 | ) | |||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 6,024 | 6,024 | 6,081 | 2,107 | 6,802 | 6,750 | 6,802 | 18,129 | 20,354 | |||||||||||||||||||||||||||
Fees and other income | 93,220 | 90,027 | 76,645 | 93,672 | 82,883 | 222,203 | 83,706 | 259,892 | 388,792 | |||||||||||||||||||||||||||
| 2,113,971 | 2,140,294 | 2,167,856 | 2,182,142 | 2,156,873 | 2,273,609 | 2,087,877 | 6,422,121 | 6,518,359 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 913,253 | 905,316 | 927,996 | 977,093 | 941,145 | 989,402 | 960,342 | 2,746,565 | 2,890,889 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 958,824 | 966,361 | 976,333 | 1,045,734 | 991,502 | 987,529 | 954,479 | 2,901,518 | 2,933,510 | |||||||||||||||||||||||||||
Goodwill impairment | — | — | — | 83,000 | — | — | — | — | — | |||||||||||||||||||||||||||
Interest expense | 15,162 | 15,161 | 15,161 | 15,160 | 15,160 | 15,160 | 15,189 | 45,484 | 45,509 | |||||||||||||||||||||||||||
| 1,887,239 | 1,886,838 | 1,919,490 | 2,120,987 | 1,947,807 | 1,992,091 | 1,930,010 | 5,693,567 | 5,869,908 | ||||||||||||||||||||||||||||
Income before provision for income taxes | 226,732 | 253,456 | 248,366 | 61,155 | 209,066 | 281,518 | 157,867 | 728,554 | 648,451 | |||||||||||||||||||||||||||
Provision for income taxes | 85,062 | 88,781 | 91,143 | 49,214 | 64,336 | 88,196 | 77,286 | 264,986 | 229,818 | |||||||||||||||||||||||||||
Net income | $ | 141,670 | $ | 164,675 | $ | 157,223 | $ | 11,941 | $ | 144,730 | $ | 193,322 | $ | 80,581 | $ | 463,568 | $ | 418,633 | ||||||||||||||||||
Diluted per share data: | ||||||||||||||||||||||||||||||||||||
Net operating income per diluted share | $ | 1.27 | $ | 1.35 | $ | 1.32 | $ | 0.86 | $ | 1.07 | $ | 0.84 | $ | 1.17 | $ | 3.94 | $ | 3.07 | ||||||||||||||||||
Book value per diluted share (excluding AOCI) | $ | 44.67 | $ | 43.42 | $ | 41.82 | $ | 40.47 | $ | 40.57 | $ | 39.38 | $ | 37.58 | $ | 44.67 | $ | 40.57 | ||||||||||||||||||
Computation of return on average equity measures: | ||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||
Net operating income | $ | 137,742 | $ | 152,226 | $ | 154,316 | $ | 101,566 | $ | 126,228 | $ | 99,297 | $ | 137,779 | $ | 444,284 | $ | 363,304 | ||||||||||||||||||
Net income | 141,670 | 164,675 | 157,223 | 11,941 | 144,730 | 193,322 | 80,581 | 463,568 | 418,633 | |||||||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||||||
Average equity, excluding AOCI | $ | 4,805,944 | $ | 4,789,782 | $ | 4,803,435 | 4,784,207 | 4,728,633 | 4,564,413 | 4,416,551 | 4,819,598 | 4,580,770 | ||||||||||||||||||||||||
Add: Average AOCI | 396,411 | 216,095 | 109,982 | 94,143 | (94,620 | ) | (546,964 | ) | (726,637 | ) | 290,298 | (274,293 | ) | |||||||||||||||||||||||
Average equity, including AOCI | $ | 5,202,355 | $ | 5,005,877 | $ | 4,913,417 | $ | 4,878,350 | $ | 4,634,013 | $ | 4,017,449 | $ | 3,689,914 | $ | 5,109,896 | $ | 4,306,477 | ||||||||||||||||||
Annualized operating return on average equity (excluding AOCI) (1) | 11.5 | % | 12.7 | % | 12.9 | % | 8.5 | % | 10.7 | % | 8.7 | % | 12.5 | % | 12.3 | % | 10.6 | % | ||||||||||||||||||
Annualized GAAP return on average equity | 10.9 | % | 13.2 | % | 12.8 | % | 1.0 | % | 12.5 | % | 19.2 | % | 8.7 | % | 12.1 | % | 13.0 | % | ||||||||||||||||||
Annualized operating return on average equity (excluding AOCI)(1) | 11.5 | % | 12.7 | % | 12.9 | % | 8.5 | % | 10.7 | % | 8.7 | % | 12.5 | % | 12.3 | % | 10.6 | % | ||||||||||||||||||
Net realized gains (losses) on investments | 0.3 | % | 1.1 | % | 0.2 | % | -0.6 | % | 1.1 | % | -0.3 | % | -3.3 | % | 0.5 | % | -0.8 | % | ||||||||||||||||||
Change in tax valuation allowance | — | — | — | 0.1 | % | 0.6 | % | 1.1 | % | -1.9 | % | — | — | |||||||||||||||||||||||
Legal settlement and related expenses | — | — | — | — | -0.1 | % | 7.4 | % | — | — | 2.4 | % | ||||||||||||||||||||||||
Goodwill impairment | — | — | — | -6.8 | % | — | — | — | — | — | ||||||||||||||||||||||||||
Change due to effect of including AOCI | -0.9 | % | -0.6 | % | -0.3 | % | -0.2 | % | 0.2 | % | 2.3 | % | 1.4 | % | -0.7 | % | 0.8 | % | ||||||||||||||||||
Annualized GAAP return on average equity | 10.9 | % | 13.2 | % | 12.8 | % | 1.0 | % | 12.5 | % | 19.2 | % | 8.7 | % | 12.1 | % | 13.0 | % | ||||||||||||||||||
| (1) | See Footnote (2) Regulation G - Non GAAP Financial Measures on page 1. |
6
Assurant, Inc.
Consolidated Condensed Statements of Operations (continued)
(Unaudited)
($ in thousands, except per | 2010 | 2009 | Nine Months | |||||||||||||||||||||||||||||||||
| 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | ||||||||||||||||||||||||||||
Share repurchases: | ||||||||||||||||||||||||||||||||||||
Shares repurchased | 1,237,000 | 6,066,216 | 3,426,469 | — | 1,122,050 | — | — | 10,729,685 | 1,122,050 | |||||||||||||||||||||||||||
Average repurchase price per share | $ | 36.27 | $ | 35.46 | $ | 31.86 | $ | — | $ | 28.47 | $ | — | $ | — | $ | 34.41 | $ | 28.47 | ||||||||||||||||||
Total cost of share repurchase | $ | 44,866 | $ | 215,110 | $ | 109,184 | $ | — | $ | 31,948 | $ | — | $ | — | $ | 369,160 | $ | 31,948 | ||||||||||||||||||
AIZ Closing stock price (NYSE) | $ | 40.70 | $ | 34.70 | $ | 34.38 | $ | 29.48 | $ | 32.06 | $ | 24.09 | $ | 21.78 | $ | 40.70 | $ | 32.06 | ||||||||||||||||||
Investment yield(2) | 5.05 | % | 5.02 | % | 4.98 | % | 4.96 | % | 5.08 | % | 5.23 | % | 5.32 | % | 5.01 | % | 5.19 | % | ||||||||||||||||||
| (2) | Investment yield excludes investment (loss) income from real estate joint venture partnerships. |
7
Assurant Solutions
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 611,264 | $ | 629,682 | $ | 645,364 | $ | 690,150 | $ | 669,344 | $ | 666,935 | $ | 644,612 | $ | 1,886,310 | $ | 1,980,891 | ||||||||||||||||||
Net investment income | 99,084 | 98,956 | 98,453 | 98,447 | 97,681 | 97,106 | 97,995 | 296,493 | 292,782 | |||||||||||||||||||||||||||
Fees and other income | 59,090 | 54,580 | 45,712 | 62,466 | 50,093 | 51,960 | 52,031 | 159,382 | 154,084 | |||||||||||||||||||||||||||
| 769,438 | 783,218 | 789,529 | 851,063 | 817,118 | 816,001 | 794,638 | 2,342,185 | 2,427,757 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 223,597 | 228,776 | 227,631 | 246,871 | 248,933 | 261,325 | 272,022 | 680,004 | 782,280 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 496,032 | 503,172 | 511,090 | 550,139 | 520,217 | 509,388 | 475,604 | 1,510,294 | 1,505,209 | |||||||||||||||||||||||||||
| 719,629 | 731,948 | 738,721 | 797,010 | 769,150 | 770,713 | 747,626 | 2,190,298 | 2,287,489 | ||||||||||||||||||||||||||||
Income before provision for income taxes | 49,809 | 51,270 | 50,808 | 54,053 | 47,968 | 45,288 | 47,012 | 151,887 | 140,268 | |||||||||||||||||||||||||||
Provision for income taxes | 17,476 | 20,947 | 21,942 | 23,850 | 16,324 | 17,394 | 16,701 | 60,365 | 50,419 | |||||||||||||||||||||||||||
Net operating income | $ | 32,333 | $ | 30,323 | $ | 28,866 | $ | 30,203 | $ | 31,644 | $ | 27,894 | $ | 30,311 | $ | 91,522 | $ | 89,849 | ||||||||||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||||||||
Credit | $ | 46,791 | $ | 47,343 | $ | 50,928 | $ | 53,050 | $ | 59,562 | $ | 62,740 | $ | 65,941 | $ | 145,062 | $ | 188,243 | ||||||||||||||||||
Service contracts | 313,861 | 336,043 | 339,096 | 362,404 | 348,258 | 354,783 | 346,508 | 989,000 | 1,049,549 | |||||||||||||||||||||||||||
Other | 11,677 | 12,723 | 12,213 | 23,835 | 24,471 | 22,054 | 14,579 | 36,613 | 61,104 | |||||||||||||||||||||||||||
Total Domestic | 372,329 | 396,109 | 402,237 | 439,289 | 432,291 | 439,577 | 427,028 | 1,170,675 | 1,298,896 | |||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||||||||||
Credit | 87,901 | 83,360 | 86,739 | 85,711 | 80,743 | 79,835 | 74,173 | 258,000 | 234,751 | |||||||||||||||||||||||||||
Service contracts | 116,049 | 109,275 | 117,189 | 122,053 | 108,458 | 97,280 | 87,903 | 342,513 | 293,641 | |||||||||||||||||||||||||||
Other | 4,217 | 5,261 | 4,106 | 3,939 | 4,025 | 4,107 | 3,660 | 13,584 | 11,792 | |||||||||||||||||||||||||||
Total International | 208,167 | 197,896 | 208,034 | 211,703 | 193,226 | 181,222 | 165,736 | 614,097 | 540,184 | |||||||||||||||||||||||||||
Preneed: | ||||||||||||||||||||||||||||||||||||
Domestic and international | 25,439 | 27,112 | 29,045 | 33,374 | 37,123 | 39,229 | 44,486 | 81,596 | 120,838 | |||||||||||||||||||||||||||
Domestic independent runoff | 5,329 | 8,565 | 6,048 | 5,784 | 6,704 | 6,907 | 7,362 | 19,942 | 20,973 | |||||||||||||||||||||||||||
Total Preneed | 30,768 | 35,677 | 35,093 | 39,158 | 43,827 | 46,136 | 51,848 | 101,538 | 141,811 | |||||||||||||||||||||||||||
Total | $ | 611,264 | $ | 629,682 | $ | 645,364 | $ | 690,150 | $ | 669,344 | $ | 666,935 | $ | 644,612 | $ | 1,886,310 | $ | 1,980,891 | ||||||||||||||||||
Fees and other income: | ||||||||||||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||||||||
Debt protection | $ | 7,541 | $ | 8,434 | $ | 9,636 | $ | 10,014 | $ | 10,541 | $ | 10,232 | $ | 9,271 | $ | 25,611 | $ | 30,044 | ||||||||||||||||||
Service contracts | 29,216 | 27,509 | 23,156 | 28,249 | 23,384 | 23,068 | 27,709 | 79,881 | 74,161 | |||||||||||||||||||||||||||
Other | 2,127 | 2,108 | 2,555 | 4,551 | 4,443 | 5,593 | 3,947 | 6,790 | 13,983 | |||||||||||||||||||||||||||
Total Domestic | 38,884 | 38,051 | 35,347 | 42,814 | 38,368 | 38,893 | 40,927 | 112,282 | 118,188 | |||||||||||||||||||||||||||
International | 7,561 | 6,920 | 6,395 | 6,928 | 7,400 | 7,330 | 6,072 | 20,876 | 20,802 | |||||||||||||||||||||||||||
Preneed | 12,645 | 9,609 | 3,970 | 12,724 | 4,325 | 5,737 | 5,032 | 26,224 | 15,094 | |||||||||||||||||||||||||||
Total | $ | 59,090 | $ | 54,580 | $ | 45,712 | $ | 62,466 | $ | 50,093 | $ | 51,960 | $ | 52,031 | $ | 159,382 | $ | 154,084 | ||||||||||||||||||
8
Assurant Solutions
Condensed Statements of Operations (continued)
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||||||||||||||
Credit | $ | 109,389 | $ | 107,259 | $ | 103,870 | $ | 120,139 | $ | 134,597 | $ | 136,450 | $ | 135,346 | $ | 320,518 | $ | 406,393 | ||||||||||||||||||
Service contracts | 272,044 | 291,426 | 277,729 | 261,165 | 259,316 | 245,306 | 246,883 | 841,199 | 751,505 | |||||||||||||||||||||||||||
Other | 17,014 | 15,293 | 14,918 | 18,842 | 14,210 | 43,985 | 15,074 | 47,225 | 73,269 | |||||||||||||||||||||||||||
Total Domestic | 398,447 | 413,978 | 396,517 | 400,146 | 408,123 | 425,741 | 397,303 | 1,208,942 | 1,231,167 | |||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||||||||||
Credit | 238,510 | 240,348 | 246,532 | 252,660 | 221,581 | 197,605 | 171,379 | 725,390 | 590,565 | |||||||||||||||||||||||||||
Service contracts | 129,984 | 110,116 | 121,292 | 139,144 | 118,256 | 98,494 | 107,070 | 361,392 | 323,820 | |||||||||||||||||||||||||||
Other | 5,159 | 6,330 | 5,216 | 6,794 | 7,652 | 6,734 | 5,387 | 16,705 | 19,773 | |||||||||||||||||||||||||||
Total International | 373,653 | 356,794 | 373,040 | 398,598 | 347,489 | 302,833 | 283,836 | 1,103,487 | 934,158 | |||||||||||||||||||||||||||
Total | $ | 772,100 | $ | 770,772 | $ | 769,557 | $ | 798,744 | $ | 755,612 | $ | 728,574 | $ | 681,139 | $ | 2,312,429 | $ | 2,165,325 | ||||||||||||||||||
Foreign currency translation (FX) impact(1): | ||||||||||||||||||||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||
Including FX impact | 2.18 | % | 5.79 | % | 12.98 | % | -5.04 | % | -16.29 | % | -19.05 | % | -23.85 | % | 6.79 | % | -19.72 | % | ||||||||||||||||||
FX impact | 2.05 | % | 4.37 | % | 6.23 | % | 3.24 | % | -3.12 | % | -5.03 | % | -6.83 | % | 4.15 | % | -4.99 | % | ||||||||||||||||||
Excluding FX impact | 0.13 | % | 1.42 | % | 6.75 | % | -8.28 | % | -13.17 | % | -14.02 | % | -17.02 | % | 2.64 | % | -14.73 | % | ||||||||||||||||||
Net earned premiums: | ||||||||||||||||||||||||||||||||||||
Including FX impact | -8.68 | % | -5.59 | % | 0.12 | % | -4.43 | % | -5.34 | % | -4.81 | % | -5.69 | % | -4.77 | % | -5.28 | % | ||||||||||||||||||
FX impact | 0.90 | % | 2.25 | % | 3.32 | % | 1.63 | % | -2.64 | % | -3.76 | % | -5.37 | % | 2.14 | % | -3.91 | % | ||||||||||||||||||
Excluding FX impact | -9.58 | % | -7.84 | % | -3.20 | % | -6.06 | % | -2.70 | % | -1.05 | % | -0.32 | % | -6.91 | % | -1.37 | % | ||||||||||||||||||
Net operating income: | ||||||||||||||||||||||||||||||||||||
Including FX impact | 2.17 | % | 8.71 | % | -4.77 | % | 154.14 | % | 55.21 | % | -13.79 | % | -36.26 | % | 1.86 | % | -10.42 | % | ||||||||||||||||||
FX impact | 4.28 | % | 5.57 | % | 5.02 | % | 4.79 | % | -8.34 | % | 3.32 | % | -0.51 | % | 4.93 | % | -0.87 | % | ||||||||||||||||||
Excluding FX impact | -2.11 | % | 3.14 | % | -9.79 | % | 149.35 | % | 63.55 | % | -17.11 | % | -35.75 | % | -3.07 | % | -9.55 | % | ||||||||||||||||||
Combined ratios(a): | ||||||||||||||||||||||||||||||||||||
Domestic | 99.8 | % | 97.8 | % | 96.2 | % | 94.6 | % | 98.2 | % | 97.6 | % | 98.3 | % | 97.9 | % | 98.1 | % | ||||||||||||||||||
International | 104.1 | % | 107.3 | % | 107.8 | % | 114.5 | % | 108.8 | % | 111.6 | % | 107.3 | % | 106.3 | % | 109.3 | % | ||||||||||||||||||
Investment yield(2) | 5.55 | % | 5.47 | % | 5.41 | % | 5.40 | % | 5.36 | % | 5.41 | % | 5.45 | % | 5.48 | % | 5.39 | % | ||||||||||||||||||
| (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) | Investment yield excludes investment income (loss) from real estate joint venture partnerships. |
9
Assurant Solutions - Preneed
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 30,768 | $ | 35,678 | $ | 35,093 | $ | 39,158 | $ | 43,827 | $ | 46,136 | $ | 51,848 | $ | 101,539 | $ | 141,811 | ||||||||||||||||||
Net investment income | 61,585 | 61,103 | 60,873 | �� | 59,553 | 58,655 | 56,923 | 57,299 | 183,561 | 172,877 | ||||||||||||||||||||||||||
Fees and other income: | ||||||||||||||||||||||||||||||||||||
Change in value of CPI Caps) (1) | (585 | ) | (916 | ) | (4,424 | ) | 5,086 | (656 | ) | (35 | ) | 1,779 | (5,925 | ) | 1,088 | |||||||||||||||||||||
Other | 13,231 | 10,526 | 8,394 | 7,638 | 4,981 | 5,772 | 3,253 | 32,151 | 14,006 | |||||||||||||||||||||||||||
Total fees and other income | 12,646 | 9,610 | 3,970 | 12,724 | 4,325 | 5,737 | 5,032 | 26,226 | 15,094 | |||||||||||||||||||||||||||
| 104,999 | 106,391 | 99,936 | 111,435 | 106,807 | 108,796 | 114,179 | 311,326 | 329,782 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 60,450 | 65,132 | 65,199 | 66,532 | 67,055 | 70,929 | 78,392 | 190,781 | 216,376 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 24,413 | 22,545 | 21,687 | 23,880 | 21,468 | 22,457 | 24,655 | 68,645 | 68,580 | |||||||||||||||||||||||||||
| 84,863 | 87,677 | 86,886 | 90,412 | 88,523 | 93,386 | 103,047 | 259,426 | 284,956 | ||||||||||||||||||||||||||||
Income before provision for income taxes | 20,136 | 18,714 | 13,050 | 21,023 | 18,284 | 15,410 | 11,132 | 51,900 | 44,826 | |||||||||||||||||||||||||||
Income before provision for income taxes excluding CPI Cap | 20,721 | 19,630 | 17,474 | 15,937 | 18,940 | 15,445 | 9,353 | 57,825 | 43,738 | |||||||||||||||||||||||||||
Provision for income taxes | 6,907 | 6,895 | 4,657 | 7,162 | 6,524 | 5,338 | 3,834 | 18,459 | 15,696 | |||||||||||||||||||||||||||
Net operating income | $ | 13,229 | $ | 11,819 | $ | 8,393 | $ | 13,861 | $ | 11,760 | $ | 10,072 | $ | 7,298 | $ | 33,441 | $ | 29,130 | ||||||||||||||||||
Face sales | $ | 211,834 | $ | 216,681 | $ | 151,074 | $ | 145,678 | $ | 137,301 | $ | 126,263 | $ | 103,124 | $ | 579,589 | $ | 366,688 | ||||||||||||||||||
CPI Cap value | $ | 7,030 | $ | 7,615 | $ | 8,531 | $ | 12,955 | $ | 7,869 | $ | 8,525 | $ | 8,560 | $ | 7,030 | $ | 7,869 | ||||||||||||||||||
Preneed yield(2) | 5.85 | % | 5.85 | % | 5.91 | % | 5.87 | % | 5.89 | % | 5.83 | % | 5.94 | % | 5.86 | % | 5.88 | % | ||||||||||||||||||
Preneed average invested assets | $ | 4,207,980 | $ | 4,178,346 | $ | 4,118,775 | $ | 4,055,563 | $ | 3,996,330 | $ | 3,907,868 | $ | 3,861,302 | $ | 4,173,332 | $ | 3,928,816 | ||||||||||||||||||
| (1) | The Company utilizes derivative instruments, Consumer Price Index Caps ("CPI Caps"), in managing the pre-arranged funeral business exposure to inflation risk on certain policies. The CPI Caps do not qualify under GAAP as effective hedges; therefore, they are marked-to-market on a quarterly basis and the accumulated gain or loss is recognized in the statement of operations in fees and other income. |
| (2) | Investment yield excludes investment income (loss) from real estate joint venture partnerships. |
10
Assurant Specialty Property
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 481,108 | $ | 477,122 | $ | 508,822 | $ | 497,200 | $ | 478,701 | $ | 477,838 | $ | 493,790 | $ | 1,467,052 | $ | 1,450,329 | ||||||||||||||||||
Net investment income | 27,064 | 27,022 | 26,921 | 26,031 | 26,550 | 28,320 | 29,436 | 81,007 | 84,306 | |||||||||||||||||||||||||||
Fees and other income | 18,544 | 18,848 | 13,100 | 14,824 | 15,100 | 13,642 | 13,324 | 50,492 | 42,066 | |||||||||||||||||||||||||||
| 526,716 | 522,992 | 548,843 | 538,055 | 520,351 | 519,800 | 536,550 | 1,598,551 | 1,576,701 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 165,977 | 175,206 | 162,533 | 162,139 | 156,076 | 178,167 | 167,800 | 503,716 | 502,043 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 197,992 | 189,846 | 207,017 | 212,203 | 206,992 | 203,416 | 209,917 | 594,855 | 620,325 | |||||||||||||||||||||||||||
| 363,969 | 365,052 | 369,550 | 374,342 | 363,068 | 381,583 | 377,717 | 1,098,571 | 1,122,368 | ||||||||||||||||||||||||||||
Income before provision for income taxes | 162,747 | 157,940 | 179,293 | 163,713 | 157,283 | 138,217 | 158,833 | 499,980 | 454,333 | |||||||||||||||||||||||||||
Provision for income taxes | 56,094 | 54,223 | 60,815 | 56,769 | 54,126 | 46,989 | 54,165 | 171,132 | 155,280 | |||||||||||||||||||||||||||
Net operating income | $ | 106,653 | $ | 103,717 | $ | 118,478 | $ | 106,944 | $ | 103,157 | $ | 91,228 | $ | 104,668 | $ | 328,848 | $ | 299,053 | ||||||||||||||||||
Net earned premiums: | ||||||||||||||||||||||||||||||||||||
Homeowners (Creditor-Placed & Voluntary) | $ | 330,375 | $ | 325,735 | $ | 354,409 | $ | 351,178 | $ | 333,068 | $ | 336,338 | $ | 348,447 | $ | 1,010,519 | $ | 1,017,853 | ||||||||||||||||||
Manufactured Housing (Creditor-Placed & Voluntary) | 54,120 | 53,686 | 57,500 | 54,609 | 54,347 | 55,128 | 55,876 | 165,306 | 165,351 | |||||||||||||||||||||||||||
Other | 96,613 | 97,701 | 96,913 | 91,413 | 91,286 | 86,372 | 89,467 | 291,227 | 267,125 | |||||||||||||||||||||||||||
Total | $ | 481,108 | $ | 477,122 | $ | 508,822 | $ | 497,200 | $ | 478,701 | $ | 477,838 | $ | 493,790 | $ | 1,467,052 | $ | 1,450,329 | ||||||||||||||||||
Gross earned premiums: | ||||||||||||||||||||||||||||||||||||
Homeowners (Creditor-Placed & Voluntary) | $ | 463,138 | $ | 446,650 | $ | 463,570 | $ | 460,289 | $ | 427,030 | $ | 430,568 | $ | 437,391 | $ | 1,373,358 | $ | 1,294,989 | ||||||||||||||||||
Manufactured Housing (Creditor-Placed & Voluntary) | 76,132 | 76,688 | 79,693 | 76,339 | 76,448 | 77,083 | 77,484 | 232,513 | 231,015 | |||||||||||||||||||||||||||
Other | 162,359 | 160,897 | 155,471 | 150,695 | 150,604 | 147,449 | 151,429 | 478,727 | 449,482 | |||||||||||||||||||||||||||
Total | $ | 701,629 | $ | 684,235 | $ | 698,734 | $ | 687,323 | $ | 654,082 | $ | 655,100 | $ | 666,304 | $ | 2,084,598 | $ | 1,975,486 | ||||||||||||||||||
Gross written premiums: | ||||||||||||||||||||||||||||||||||||
Homeowners (Creditor-Placed & Voluntary) | $ | 482,756 | $ | 435,403 | $ | 440,073 | $ | 533,454 | $ | 437,835 | $ | 437,271 | $ | 412,706 | $ | 1,358,232 | $ | 1,287,812 | ||||||||||||||||||
Manufactured Housing (Creditor-Placed & Voluntary) | 76,008 | 74,219 | 80,040 | 76,441 | 75,935 | 77,969 | 69,852 | 230,267 | 223,756 | |||||||||||||||||||||||||||
Other | 165,518 | 195,609 | 156,853 | 157,209 | 167,968 | 154,864 | 131,701 | 517,980 | 454,533 | |||||||||||||||||||||||||||
Total | $ | 724,282 | $ | 705,231 | $ | 676,966 | $ | 767,104 | $ | 681,738 | $ | 670,104 | $ | 614,259 | $ | 2,106,479 | $ | 1,966,101 | ||||||||||||||||||
Reconciliation of gross earned premiums to net earned premiums: | ||||||||||||||||||||||||||||||||||||
Gross earned premiums | $ | 701,629 | $ | 684,235 | $ | 698,734 | $ | 687,323 | $ | 654,082 | $ | 655,100 | $ | 666,304 | $ | 2,084,598 | $ | 1,975,486 | ||||||||||||||||||
Ceded catastrophe reinsurance and reinstatements | (49,905 | ) | (47,735 | ) | (45,129 | ) | (46,945 | ) | (48,794 | ) | (44,688 | ) | (42,994 | ) | (142,769 | ) | (136,476 | ) | ||||||||||||||||||
Ceded to clients including U.S. Government | (170,616 | ) | (159,378 | ) | (144,783 | ) | (143,178 | ) | (126,587 | ) | (132,574 | ) | (129,520 | ) | (474,777 | ) | (388,681 | ) | ||||||||||||||||||
Net earned premiums | $ | 481,108 | $ | 477,122 | $ | 508,822 | $ | 497,200 | $ | 478,701 | $ | 477,838 | $ | 493,790 | $ | 1,467,052 | $ | 1,450,329 | ||||||||||||||||||
11
Assurant Specialty Property (continued)
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Creditor-Placed Homeowners Insurance(1): | ||||||||||||||||||||||||||||||||||||
Loans tracked(in millions): | ||||||||||||||||||||||||||||||||||||
Prime | 25.4 | 25.6 | 25.6 | 25.6 | 25.7 | 25.4 | 25.7 | 25.4 | 25.7 | |||||||||||||||||||||||||||
Sub-prime | 3.5 | 3.6 | 3.6 | 3.9 | 3.8 | 3.6 | 3.8 | 3.5 | 3.8 | |||||||||||||||||||||||||||
Total | 28.9 | 29.2 | 29.2 | 29.5 | 29.5 | 29.0 | 29.5 | 28.9 | 29.5 | |||||||||||||||||||||||||||
Average placement rates(2): | ||||||||||||||||||||||||||||||||||||
Prime | 1.38 | % | 1.32 | % | 1.28 | % | 1.24 | % | 1.18 | % | 1.18 | % | 1.13 | % | 1.38 | % | 1.18 | % | ||||||||||||||||||
Sub-prime | 9.54 | % | 9.54 | % | 9.54 | % | 9.51 | % | 9.51 | % | 9.39 | % | 9.14 | % | 9.54 | % | 9.51 | % | ||||||||||||||||||
Average insured value (AIV): | ||||||||||||||||||||||||||||||||||||
Creditor-placed | $ | 180 | $ | 179 | $ | 179 | $ | 177 | $ | 174 | $ | 172 | $ | 168 | $ | 180 | $ | 174 | ||||||||||||||||||
Real estate owned | $ | 232 | $ | 234 | $ | 228 | $ | 227 | $ | 226 | $ | 228 | $ | 228 | $ | 232 | $ | 226 | ||||||||||||||||||
Percent of creditor-placed premiums from real estate owned policies: | ||||||||||||||||||||||||||||||||||||
% of gross earned premiums | 12 | % | 12 | % | 12 | % | 12 | % | 14 | % | 16 | % | 20 | % | 12 | % | 17 | % | ||||||||||||||||||
% of gross written premiums | 7 | % | 12 | % | 12 | % | 9 | % | 12 | % | 12 | % | 20 | % | 10 | % | 15 | % | ||||||||||||||||||
Geographical spread of exposure(3): | ||||||||||||||||||||||||||||||||||||
U.S. Region: | ||||||||||||||||||||||||||||||||||||
Middle U.S. | 15.0 | % | 15.1 | % | 15.2 | % | 15.9 | % | 16.2 | % | 16.3 | % | 16.5 | % | 15.0 | % | 16.2 | % | ||||||||||||||||||
Northeastern coastal | 17.0 | % | 16.6 | % | 16.1 | % | 15.9 | % | 15.2 | % | 14.7 | % | 14.2 | % | 17.0 | % | 15.2 | % | ||||||||||||||||||
Northern inland | 3.7 | % | 3.6 | % | 3.7 | % | 3.7 | % | 3.8 | % | 3.8 | % | 3.8 | % | 3.7 | % | 3.8 | % | ||||||||||||||||||
Southern inland | 8.9 | % | 8.9 | % | 9.4 | % | 9.9 | % | 9.8 | % | 9.7 | % | 9.5 | % | 8.9 | % | 9.8 | % | ||||||||||||||||||
Southern and Hawaii coastal | 23.9 | % | 24.0 | % | 23.3 | % | 22.4 | % | 21.9 | % | 21.5 | % | 20.8 | % | 23.9 | % | 21.9 | % | ||||||||||||||||||
West | 31.5 | % | 31.8 | % | 32.3 | % | 32.2 | % | 33.1 | % | 34.0 | % | 35.2 | % | 31.5 | % | 33.1 | % | ||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||
Loss ratio(a) | 34.5 | % | 36.7 | % | 31.9 | % | 32.6 | % | 32.6 | % | 37.3 | % | 34.0 | % | 34.3 | % | 34.6 | % | ||||||||||||||||||
Expense ratio(b) | 39.6 | % | 38.3 | % | 39.7 | % | 41.4 | % | 41.9 | % | 41.4 | % | 41.4 | % | 39.2 | % | 41.6 | % | ||||||||||||||||||
Combined ratio(c) | 72.8 | % | 73.6 | % | 70.8 | % | 73.1 | % | 73.5 | % | 77.6 | % | 74.5 | % | 72.4 | % | 75.2 | % | ||||||||||||||||||
Investment yield(4) | 4.52 | % | 4.39 | % | 4.56 | % | 4.42 | % | 4.46 | % | 4.77 | % | 4.87 | % | 4.54 | % | 4.68 | % | ||||||||||||||||||
| (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) | Estimates based on client information and classification. |
| (2) | Does not include real estate owned policies. |
| (3) | Geographical spread of exposure is based on the Company’s assessment of total insured value for all of Assurant Specialty Property. |
| (4) | Investment yield excludes investment income (loss) from real estate joint venture partnerships. |
12
Assurant Health
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 467,726 | $ | 467,705 | $ | 467,442 | $ | 468,002 | $ | 470,385 | $ | 468,895 | $ | 472,346 | $ | 1,402,873 | $ | 1,411,626 | ||||||||||||||||||
Net investment income | 11,985 | 12,078 | 11,565 | 11,338 | 11,770 | 12,073 | 12,477 | 35,628 | 36,320 | |||||||||||||||||||||||||||
Fees and other income | 10,027 | 10,248 | 10,408 | 9,978 | 10,140 | 9,847 | 9,914 | 30,683 | 29,901 | |||||||||||||||||||||||||||
| 489,738 | 490,031 | 489,415 | 489,318 | 492,295 | 490,815 | 494,737 | 1,469,184 | 1,477,847 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 334,216 | 312,767 | 333,640 | 377,155 | 353,412 | 357,644 | 321,960 | 980,623 | 1,033,016 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 145,694 | 138,801 | 143,119 | 157,826 | 147,475 | 149,157 | 150,240 | 427,614 | 446,872 | |||||||||||||||||||||||||||
| 479,910 | 451,568 | 476,759 | 534,981 | 500,887 | 506,801 | 472,200 | 1,408,237 | 1,479,888 | ||||||||||||||||||||||||||||
Income (loss) before provision (benefit) for income taxes | 9,828 | 38,463 | 12,656 | (45,663 | ) | (8,592 | ) | (15,986 | ) | 22,537 | 60,947 | (2,041 | ) | |||||||||||||||||||||||
Provision (benefit) for income taxes | 4,488 | 13,163 | 4,287 | (15,948 | ) | (3,745 | ) | (5,656 | ) | 7,865 | 21,938 | (1,536 | ) | |||||||||||||||||||||||
Net operating income (loss) | $ | 5,340 | $ | 25,300 | $ | 8,369 | $ | (29,715 | ) | $ | (4,847 | ) | $ | (10,330 | ) | $ | 14,672 | $ | 39,009 | $ | (505 | ) | ||||||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||
Individual medical | $ | 323,871 | $ | 324,079 | $ | 321,783 | $ | 319,215 | $ | 317,820 | $ | 316,093 | $ | 317,070 | $ | 969,733 | $ | 950,983 | ||||||||||||||||||
Short-term medical | 22,131 | 21,434 | 22,118 | 24,308 | 27,278 | 26,604 | 26,048 | 65,683 | 79,930 | |||||||||||||||||||||||||||
Subtotal | 346,002 | 345,513 | 343,901 | 343,523 | 345,098 | 342,697 | 343,118 | 1,035,416 | 1,030,913 | |||||||||||||||||||||||||||
Small employer group | 121,724 | 122,192 | 123,541 | 124,479 | 125,287 | 126,198 | 129,228 | 367,457 | 380,713 | |||||||||||||||||||||||||||
Total | $ | 467,726 | $ | 467,705 | $ | 467,442 | $ | 468,002 | $ | 470,385 | $ | 468,895 | $ | 472,346 | $ | 1,402,873 | $ | 1,411,626 | ||||||||||||||||||
Sales (annualized issued premiums): | ||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||
Individual medical | $ | 59,421 | $ | 83,696 | $ | 94,249 | $ | 92,068 | $ | 91,434 | $ | 84,707 | $ | 88,769 | $ | 237,366 | $ | 264,910 | ||||||||||||||||||
Short-term medical | 27,152 | 26,262 | 28,314 | 27,870 | 34,296 | 34,509 | 37,199 | 81,728 | 106,004 | |||||||||||||||||||||||||||
Subtotal | 86,573 | 109,958 | 122,563 | 119,938 | 125,730 | 119,216 | 125,968 | 319,094 | 370,914 | |||||||||||||||||||||||||||
Small employer group | 30,157 | 30,445 | 35,705 | 33,701 | 31,588 | 37,708 | 29,978 | 96,307 | 99,274 | |||||||||||||||||||||||||||
Total | $ | 116,730 | $ | 140,403 | $ | 158,268 | $ | 153,639 | $ | 157,318 | $ | 156,924 | $ | 155,946 | $ | 415,401 | $ | 470,188 | ||||||||||||||||||
Membership by product line(in thousands): | ||||||||||||||||||||||||||||||||||||
Individual: | ||||||||||||||||||||||||||||||||||||
Individual medical | 538 | 558 | 564 | 568 | 568 | 570 | 572 | 538 | 568 | |||||||||||||||||||||||||||
Short-term medical | 70 | 73 | 71 | 78 | 91 | 95 | 94 | 70 | 91 | |||||||||||||||||||||||||||
Subtotal | 608 | 631 | 635 | 646 | 659 | 665 | 666 | 608 | 659 | |||||||||||||||||||||||||||
Small employer group | 113 | 116 | 118 | 121 | 122 | 123 | 123 | 113 | 122 | |||||||||||||||||||||||||||
Total | 721 | 747 | 753 | 767 | 781 | 788 | 789 | 721 | 781 | |||||||||||||||||||||||||||
Ratios: | ||||||||||||||||||||||||||||||||||||
Loss ratio(a) | 71.5 | % | 66.9 | % | 71.4 | % | 80.6 | % | 75.1 | % | 76.3 | % | 68.2 | % | 69.9 | % | 73.2 | % | ||||||||||||||||||
Expense ratio (b) | 30.5 | % | 29.0 | % | 30.0 | % | 33.0 | % | 30.7 | % | 31.2 | % | 31.2 | % | 29.8 | % | 31.0 | % | ||||||||||||||||||
Combined ratio(c) | 100.5 | % | 94.5 | % | 99.8 | % | 111.9 | % | 104.2 | % | 105.9 | % | 97.9 | % | 98.2 | % | 102.7 | % | ||||||||||||||||||
Investment yield(1) | 4.99 | % | 5.01 | % | 4.82 | % | 4.82 | % | 5.24 | % | 5.45 | % | 5.59 | % | 4.93 | % | 5.40 | % | ||||||||||||||||||
| (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 (loss) income from real estate joint venture partnerships. |
13
Assurant Employee Benefits
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | 272,416 | $ | 275,386 | $ | 285,015 | $ | 270,140 | $ | 255,968 | $ | 262,198 | $ | 263,831 | $ | 832,817 | $ | 781,997 | ||||||||||||||||||
Net investment income | 33,599 | 32,599 | 32,810 | 32,703 | 33,039 | 33,466 | 34,157 | 99,008 | 100,662 | |||||||||||||||||||||||||||
Fees and other income | 5,528 | 6,252 | 7,311 | 6,578 | 7,467 | 7,540 | 6,758 | 19,091 | 21,765 | |||||||||||||||||||||||||||
| 311,543 | 314,237 | 325,136 | 309,421 | 296,474 | 303,204 | 304,746 | 950,916 | 904,424 | ||||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | 189,463 | 190,555 | 204,242 | 188,940 | 182,632 | 186,770 | 198,728 | 584,260 | 568,130 | |||||||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 96,162 | 104,667 | 95,922 | 103,092 | 96,529 | 97,993 | 95,287 | 296,751 | 289,809 | |||||||||||||||||||||||||||
| 285,625 | �� | 295,222 | 300,164 | 292,032 | 279,161 | 284,763 | 294,015 | 881,011 | 857,939 | |||||||||||||||||||||||||||
Income before provision for income taxes | 25,918 | 19,015 | 24,972 | 17,389 | 17,313 | 18,441 | 10,731 | 69,905 | 46,485 | |||||||||||||||||||||||||||
Provision for income taxes | 8,986 | 6,622 | 8,505 | 5,833 | 5,863 | 6,313 | 3,709 | 24,113 | 15,885 | |||||||||||||||||||||||||||
Net operating income | $ | 16,932 | $ | 12,393 | $ | 16,467 | $ | 11,556 | $ | 11,450 | $ | 12,128 | $ | 7,022 | $ | 45,792 | $ | 30,600 | ||||||||||||||||||
Net earned premiums and other considerations: | ||||||||||||||||||||||||||||||||||||
Group dental | $ | 103,786 | $ | 104,778 | $ | 107,581 | $ | 108,910 | $ | 105,507 | $ | 105,306 | $ | 105,565 | $ | 316,145 | $ | 316,378 | ||||||||||||||||||
All other group disability | 120,562 | 121,880 | 129,927 | 112,722 | 103,460 | 108,495 | 109,704 | 372,369 | 321,659 | |||||||||||||||||||||||||||
Group life | 48,068 | 48,728 | 47,507 | 48,508 | 47,001 | 48,397 | 48,562 | 144,303 | 143,960 | |||||||||||||||||||||||||||
Total | $ | 272,416 | $ | 275,386 | $ | 285,015 | $ | 270,140 | $ | 255,968 | $ | 262,198 | $ | 263,831 | $ | 832,817 | $ | 781,997 | ||||||||||||||||||
Sales(1): | ||||||||||||||||||||||||||||||||||||
Group dental | $ | 15,897 | $ | 12,842 | $ | 33,549 | $ | 14,354 | $ | 21,202 | $ | 16,904 | $ | 31,573 | $ | 62,288 | $ | 69,679 | ||||||||||||||||||
Group disability | 7,734 | 7,257 | 13,516 | 6,351 | 10,587 | 8,207 | 14,172 | 28,507 | 32,966 | |||||||||||||||||||||||||||
Group life | 6,418 | 5,188 | 8,517 | 4,509 | 6,547 | 5,086 | 9,859 | 20,123 | 21,492 | |||||||||||||||||||||||||||
Total | $ | 30,049 | $ | 25,287 | $ | 55,582 | $ | 25,214 | $ | 38,336 | $ | 30,197 | $ | 55,604 | $ | 110,918 | $ | 124,137 | ||||||||||||||||||
Loss ratio(a) | 69.5 | % | 69.2 | % | 71.7 | % | 69.9 | % | 71.3 | % | 71.2 | % | 75.3 | % | 70.2 | % | 72.7 | % | ||||||||||||||||||
Expense ratio(b) | 34.6 | % | 37.2 | % | 32.8 | % | 37.3 | % | 36.6 | % | 36.3 | % | 35.2 | % | 34.8 | % | 36.1 | % | ||||||||||||||||||
Investment yield(2) | 5.83 | % | 5.78 | % | 5.77 | % | 5.79 | % | 5.88 | % | 5.86 | % | 5.98 | % | 5.80 | % | 5.92 | % | ||||||||||||||||||
| (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) | Sales do not include any sales from assumed business, only direct. |
| (2) | Investment yield excludes investment (loss) income from real estate joint venture partnerships. |
14
Assurant Corporate and Other
Condensed Statements of Operations
(Unaudited)
| 2010 | 2009 | Nine Months | ||||||||||||||||||||||||||||||||||
($ in thousands) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | 2010 | 2009 | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||
Net earned premiums and other considerations | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Net investment income | 4,438 | 4,541 | 4,265 | 3,984 | 3,884 | 3,967 | 4,414 | 13,244 | 12,265 | |||||||||||||||||||||||||||
Net realized gains (losses) on investments | 6,043 | 19,152 | 4,473 | (11,632 | ) | 19,866 | (6,142 | ) | (55,689 | ) | 29,668 | (41,965 | ) | |||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | 6,024 | 6,024 | 6,081 | 2,107 | 6,802 | 6,750 | 6,802 | 18,129 | 20,354 | |||||||||||||||||||||||||||
Fees and other income | 31 | 99 | 114 | (174 | ) | 83 | 139,214 | 1,679 | 244 | 140,976 | ||||||||||||||||||||||||||
| 16,536 | 29,816 | 14,933 | (5,715 | ) | 30,635 | 143,789 | (42,794 | ) | 61,285 | 131,630 | ||||||||||||||||||||||||||
Benefits, losses and expenses: | ||||||||||||||||||||||||||||||||||||
Policyholder benefits | — | (1,988 | ) | (50 | ) | 1,988 | 92 | 5,496 | (168 | ) | (2,038 | ) | 5,420 | |||||||||||||||||||||||
Selling, underwriting, general and administrative expenses | 22,944 | 29,875 | 19,185 | 22,474 | 20,289 | 27,575 | 23,431 | 72,004 | 71,295 | |||||||||||||||||||||||||||
Interest expense | 15,162 | 15,161 | 15,161 | 15,160 | 15,160 | 15,160 | 15,189 | 45,484 | 45,509 | |||||||||||||||||||||||||||
| 38,106 | 43,048 | 34,296 | 39,622 | 35,541 | 48,231 | 38,452 | 115,450 | 122,224 | ||||||||||||||||||||||||||||
(Loss) income before (benefit) provision for income taxes | (21,570 | ) | (13,232 | ) | (19,363 | ) | (45,337 | ) | (4,906 | ) | 95,558 | (81,246 | ) | (54,165 | ) | 9,406 | ||||||||||||||||||||
(Benefit) provision for income taxes | (1,982 | ) | (6,174 | ) | (4,406 | ) | (21,290 | ) | (8,232 | ) | 23,156 | (5,154 | ) | (12,562 | ) | 9,770 | ||||||||||||||||||||
Net (loss) income | $ | (19,588 | ) | $ | (7,058 | ) | $ | (14,957 | ) | $ | (24,047 | ) | $ | 3,326 | $ | 72,402 | $ | (76,092 | ) | $ | (41,603 | ) | $ | (364 | ) | |||||||||||
Corporate and Other Reconciliation | ||||||||||||||||||||||||||||||||||||
Assurant Corporate and Other Segment Net (loss) income | $ | (19,588 | ) | $ | (7,058 | ) | $ | (14,957 | ) | $ | (24,047 | ) | $ | 3,326 | $ | 72,402 | $ | (76,092 | ) | $ | (41,603 | ) | $ | (364 | ) | |||||||||||
Adjustments, net of tax: | ||||||||||||||||||||||||||||||||||||
Amortization of deferred gains on disposal of businesses | (3,916 | ) | (3,916 | ) | (3,953 | ) | (1,370 | ) | (4,421 | ) | (4,388 | ) | (4,421 | ) | (11,785 | ) | (13,230 | ) | ||||||||||||||||||
Interest expense | 9,855 | 9,855 | 9,855 | 9,854 | 9,854 | 9,854 | 9,873 | 29,565 | 29,581 | |||||||||||||||||||||||||||
Net realized (gains) losses on investments | (3,928 | ) | (12,449 | ) | (2,907 | ) | 7,561 | (12,913 | ) | 3,992 | 36,198 | (19,284 | ) | 27,277 | ||||||||||||||||||||||
Change in tax valuation allowance | — | — | — | (936 | ) | (7,043 | ) | (13,021 | ) | 21,000 | — | 936 | ||||||||||||||||||||||||
Legal settlement and related expenses | — | — | — | — | 1,454 | (84,996 | ) | — | — | (83,542 | ) | |||||||||||||||||||||||||
Corporate and other line item result (1) | $ | (17,577 | ) | $ | (13,568 | ) | $ | (11,962 | ) | $ | (8,938 | ) | $ | (9,743 | ) | $ | (16,157 | ) | $ | (13,442 | ) | $ | (43,107 | ) | $ | (39,342 | ) | |||||||||
| (1) | Reconciles to Corporate and other result per Reconciliation of Net Operating Income to Net Income (Loss) on page 5. |
15
Assurant, Inc.
Investments
(Unaudited)
($ in thousands) | At September 30, 2010 | At December 31, 2009 | ||||||||||||||
Investments by type | ||||||||||||||||
Fixed maturity securities available for sale, at fair value | $ | 10,823,195 | 71.8 | % | $ | 9,966,772 | 68.9 | % | ||||||||
Equity securities available for sale, at fair value | ||||||||||||||||
Preferred stock | 491,034 | 3.3 | % | 508,458 | 3.5 | % | ||||||||||
Common stock | 5,068 | — | 4,529 | — | ||||||||||||
Commercial mortgage whole loans on real estate, at amortized cost | 1,355,871 | 9.0 | % | 1,428,027 | 9.9 | % | ||||||||||
Policy loans | 56,685 | 0.4 | % | 56,407 | 0.4 | % | ||||||||||
Short-term investments | 452,008 | 3.0 | % | 453,469 | 3.1 | % | ||||||||||
Collateral held under securities lending | 134,348 | 0.9 | % | 218,129 | 1.5 | % | ||||||||||
Other investments | 581,917 | 3.8 | % | 522,041 | 3.6 | % | ||||||||||
Total investments | 13,900,126 | 92.2 | % | 13,157,832 | 90.9 | % | ||||||||||
Cash and cash equivalents | 1,168,307 | 7.8 | % | 1,318,552 | 9.1 | % | ||||||||||
Total investments and cash and cash equivalents | $ | 15,068,433 | 100.0 | % | $ | 14,476,384 | 100.0 | % | ||||||||
Fixed Maturity Securities by Credit Quality (Fair Value) | ||||||||||||||||
Aaa / Aa / A | $ | 6,619,971 | 61.1 | % | $ | 6,152,842 | 61.8 | % | ||||||||
Baa | 3,309,157 | 30.6 | % | 2,953,964 | 29.6 | % | ||||||||||
Ba | 658,234 | 6.1 | % | 647,321 | 6.5 | % | ||||||||||
B and lower | 235,833 | 2.2 | % | 212,645 | 2.1 | % | ||||||||||
Total | $ | 10,823,195 | 100.0 | % | $ | 9,966,772 | 100.0 | % | ||||||||
16
Assurant, Inc.
Investments (continued)
(Unaudited)
| At September 30, 2010 | At December 31, 2009 | |||||||||||||||||||||||||||||||
($ in thousands) | Book Value | Fair Value | % of Fair Value | Net Unrealized Gain | Book Value | Fair Value | % of Fair Value | Net Unrealized Gain (Loss) | ||||||||||||||||||||||||
Fixed Maturity Securities by Issuer Type: | ||||||||||||||||||||||||||||||||
Government: | ||||||||||||||||||||||||||||||||
U.S. Government and government agencies | $ | 168,795 | $ | 177,390 | 1.6 | % | $ | 8,595 | $ | 115,268 | $ | 120,330 | 1.2 | % | $ | 5,062 | ||||||||||||||||
State, municipalities and political subdivisions | 831,906 | 911,042 | 8.4 | % | 79,136 | 873,548 | 910,068 | 9.1 | % | $ | 36,520 | |||||||||||||||||||||
Foreign governments | 602,062 | 643,028 | 5.9 | % | 40,966 | 545,166 | 558,463 | 5.6 | % | $ | 13,297 | |||||||||||||||||||||
Corporate (1): | ||||||||||||||||||||||||||||||||
Canadian Municipals | 79,464 | 87,509 | 0.8 | % | 8,045 | 67,603 | 68,841 | 0.7 | % | 1,238 | ||||||||||||||||||||||
Consumer cyclical | 1,046,106 | 1,161,538 | 10.7 | % | 115,432 | 975,965 | 1,014,735 | 10.2 | % | 38,770 | ||||||||||||||||||||||
Consumer non-cyclical | 335,384 | 379,932 | 3.5 | % | 44,548 | 306,841 | 322,638 | 3.2 | % | 15,797 | ||||||||||||||||||||||
Energy | 704,320 | 788,353 | 7.3 | % | 84,033 | 751,097 | 790,437 | 7.9 | % | 39,340 | ||||||||||||||||||||||
Financials | 2,028,558 | 2,155,681 | 19.9 | % | 127,123 | 2,088,433 | 2,075,697 | 20.8 | % | (12,736 | ) | |||||||||||||||||||||
Health care | 393,341 | 438,869 | 4.1 | % | 45,528 | 416,581 | 431,155 | 4.3 | % | 14,574 | ||||||||||||||||||||||
Industrials | 891,077 | 987,506 | 9.1 | % | 96,429 | 874,504 | 899,217 | 9.0 | % | 24,713 | ||||||||||||||||||||||
Materials | 308,000 | 329,836 | 3.1 | % | 21,836 | 287,338 | 292,502 | 2.9 | % | 5,164 | ||||||||||||||||||||||
Technology | 164,455 | 183,218 | 1.7 | % | 18,763 | 150,542 | 156,272 | 1.6 | % | 5,730 | ||||||||||||||||||||||
Telecommunications | 488,207 | 545,592 | 5.1 | % | 57,385 | 474,025 | 502,267 | 5.0 | % | 28,242 | ||||||||||||||||||||||
Utilities | 904,604 | 1,023,553 | 9.5 | % | 118,949 | 856,645 | 894,794 | 9.0 | % | 38,149 | ||||||||||||||||||||||
Other corporate | — | — | 0.0 | % | — | 349 | 357 | 0.0 | % | 8 | ||||||||||||||||||||||
Asset-backed securities | 43,817 | 46,756 | 0.4 | % | 2,939 | 51,834 | 53,963 | 0.5 | % | 2,129 | ||||||||||||||||||||||
Commercial mortgage-backed securities | 107,215 | 113,373 | 1.0 | % | 6,158 | 159,780 | 159,907 | 1.6 | % | 127 | ||||||||||||||||||||||
Residential mortgage-backed securities (RMBS): | ||||||||||||||||||||||||||||||||
Agency | 784,056 | 825,225 | 7.6 | % | 41,169 | 663,407 | 690,632 | 6.9 | % | 27,225 | ||||||||||||||||||||||
Alt-A | — | — | 0.0 | % | — | — | — | 0.0 | % | — | ||||||||||||||||||||||
Subprime | 14,198 | 17,601 | 0.2 | % | 3,403 | 17,739 | 17,307 | 0.3 | % | (432 | ) | |||||||||||||||||||||
Other | 3,778 | 3,836 | 0.1 | % | 58 | 4,227 | 4,064 | 0.1 | % | (163 | ) | |||||||||||||||||||||
Collaterized debt obligations: | ||||||||||||||||||||||||||||||||
Credit backed | 2,741 | 3,357 | 0.0 | % | 616 | 3,191 | 3,126 | 0.1 | % | (65 | ) | |||||||||||||||||||||
RMBS backed | — | — | 0.0 | % | — | — | — | 0.0 | % | — | ||||||||||||||||||||||
Total fixed maturity securities | $ | 9,902,084 | $ | 10,823,195 | 100.0 | % | $ | 921,111 | $ | 9,684,083 | $ | 9,966,772 | 100.0 | % | $ | 282,689 | ||||||||||||||||
| (1) | Industry classifications are based on a combination of published index classifications as well as Assurant's view of underlying issuer risk. These resulting classifications are then mapped to the Global Industry Classification Standard (GICS®). |
17
Assurant, Inc.
Investment Results by Asset Category and Annualized Yields
(Unaudited)
| Quarter Ended September 30 2010 | Quarter Ended September 30 2009 | |||||||||||||||||||||||
($ in thousands) | Yield | Investment Income | Net realized gain (loss) | Yield | Investment Income | Net realized gain (loss) | ||||||||||||||||||
Fixed maturity securities, available for sale | 5.76 | % | $ | 143,412 | $ | 13,895 | 5.82 | % | $ | 139,803 | $ | 18,659 | ||||||||||||
Equity securities, available for sale | 7.01 | % | 8,350 | 2,057 | 7.43 | % | 9,683 | 825 | ||||||||||||||||
Commercial mortgage whole loans on real estate | 6.26 | % | 21,381 | (9,000 | ) | 6.30 | % | 22,983 | — | |||||||||||||||
Policy loans | 6.28 | % | 886 | — | 6.09 | % | 860 | — | ||||||||||||||||
Cash and short-term investments | 0.82 | % | 3,116 | 4 | 0.86 | % | 3,247 | 94 | ||||||||||||||||
Other investments* | 3.62 | % | 5,254 | (913 | ) | 2.41 | % | 3,192 | 288 | |||||||||||||||
Total | 182,399 | $ | 6,043 | 179,768 | $ | 19,866 | ||||||||||||||||||
Investment expenses | (6,229 | ) | (6,844 | ) | ||||||||||||||||||||
Net investment income | $ | 176,170 | $ | 172,924 | ||||||||||||||||||||
Gross realized gains | $ | 19,093 | $ | 25,458 | ||||||||||||||||||||
Gross realized losses | (11,813 | ) | (2,950 | ) | ||||||||||||||||||||
Other-than-temporary impairments on available for sale securities | (1,237 | ) | (2,642 | ) | ||||||||||||||||||||
Net realized gains (losses) on investments | $ | 6,043 | $ | 19,866 | ||||||||||||||||||||
| Nine Months Ended September 30 2010 | Nine Months Ended September 30 2009 | |||||||||||||||||||||||
| Yield | Investment Income | Net realized gain (loss) | Yield | Investment Income | Net realized gain (loss) | |||||||||||||||||||
Fixed maturity securities, available for sale | 5.78 | % | $ | 429,949 | $ | 37,035 | 5.91 | % | $ | 418,343 | $ | (80 | ) | |||||||||||
Equity securities, available for sale | 7.00 | % | 25,901 | 4,487 | 7.30 | % | 29,069 | (35,570 | ) | |||||||||||||||
Commercial mortgage whole loans on real estate | 6.23 | % | 64,990 | (15,772 | ) | 6.31 | % | 70,085 | (5,306 | ) | ||||||||||||||
Policy loans | 5.53 | % | 2,340 | — | 5.71 | % | 2,451 | — | ||||||||||||||||
Cash and short-term investments | 0.67 | % | 7,710 | 11 | 1.20 | % | 13,665 | 147 | ||||||||||||||||
Other investments* | 3.27 | % | 13,778 | 3,907 | 3.44 | % | 13,202 | (1,156 | ) | |||||||||||||||
Total | 544,668 | $ | 29,668 | 546,815 | $ | (41,965 | ) | |||||||||||||||||
Investment expenses | (19,288 | ) | (20,480 | ) | ||||||||||||||||||||
Net investment income | $ | 525,380 | $ | 526,335 | ||||||||||||||||||||
Gross realized gains | $ | 57,317 | $ | 40,804 | ||||||||||||||||||||
Gross realized losses | (23,612 | ) | (50,374 | ) | ||||||||||||||||||||
Other-than-temporary impairments on available for sale securities | (4,037 | ) | (32,395 | ) | ||||||||||||||||||||
Net realized losses on investments | $ | 29,668 | $ | (41,965 | ) | |||||||||||||||||||
| * | Consists primarily of investments in joint venture partnerships, invested assets associated with a modified coinsurance agreement, and invested assets associated with deferred compensation plans. |
18
Assurant, Inc.
Summary of Net Operating Income(1) Disclosed Items
Income / (Expense) Items
(Unaudited)
| 2010 | 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions, after-tax) | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | $ | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||
Assurant Solutions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | (d | ) | — | — | — | — | — | — | (8.4 | ) | (0.07 | ) | — | — | (2.4 | ) | (0.02 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||
Change in various tax liabilities/receivables | (e | ) | — | — | — | — | (2.8 | ) | (0.02 | ) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Assurant Specialty Property: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Catastrophe losses, net of reinsurance | (c | ) | — | — | (5.0 | ) | (0.04 | ) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | (d | ) | — | — | — | — | — | — | — | — | — | — | (2.5 | ) | (0.02 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Subrogation reimbursement | (c | ) | — | — | — | — | — | — | — | — | 5.9 | 0.05 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Unearned premium reserve review adjustment (2) | (a | ) | — | — | — | — | 7.6 | 0.06 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Assurant Health: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve strengthening | (c | ) | — | — | — | — | — | — | — | — | — | — | (9.0 | ) | (0.08 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Litigation reserve | (c | ) | — | — | 17.4 | 0.15 | — | — | (24.0 | ) | (0.20 | ) | (8.1 | ) | (0.07 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Restructuring costs | (d | ) | (5.0 | ) | (0.05 | ) | — | — | — | — | (2.9 | ) | (0.02 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
H1N1 related medical expenses | (c | ) | — | — | — | — | — | — | (2.5 | ) | (0.02 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Assurant Employee Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve adequacy study adjustment | (c | ) | — | — | — | — | — | — | 2.1 | 0.02 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | (d | ) | — | — | (4.4 | ) | (0.04 | ) | — | — | (1.0 | ) | (0.01 | ) | — | — | (1.5 | ) | (0.01 | ) | — | — | ||||||||||||||||||||||||||||||||||||||
Assurant Corporate and Other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses related to SEC investigation (3) | (d | ) | — | — | — | — | — | — | (3.5 | ) | (0.03 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Change in various tax liabilities/receivables | (e | ) | — | — | — | — | — | — | 4.5 | 0.04 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Compensation expense | (d | ) | — | — | — | — | — | — | — | — | — | — | — | — | (4.6 | ) | (0.04 | ) | ||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | (d | ) | — | — | (2.9 | ) | (0.03 | ) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Statement of Operations line impact:
| (a) | Net earned premiums and other considerations |
| (b) | Fees and other income |
| (c) | Policyholder benefits |
| (d) | Selling, underwriting, general and administrative expenses |
| (e) | Provision for income taxes |
| (1) | See Footnote (1) Regulation G - Non GAAP Financial Measures on page 1. |
| (2) | In the first quarter 2010, the $7.6 million represents the net impact on net operating income. It increased net earned premiums by $13.6 million pre-tax. |
| (3) | This item includes both SEC investigation-related expenses and reimbursements received related to SEC expenses covered under Director & Officer insurance. |
19
Assurant, Inc.
Ratings Summary
(Unaudited)
| As of September 30, 2010 | ||||||||||||
| A.M. Best | Moody’s | Standard & Poor’s | ||||||||||
Outlook | Stable | Stable | Negative | |||||||||
Company | ||||||||||||
American Bankers Insurance Company | A | A2 | A- | |||||||||
American Bankers Insurance Company (CAB) | A | N/A | N/A | |||||||||
American Bankers Life Assurance Company | A- | A3 | 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- | A3 | BBB+ | |||||||||
Reliable Lloyds | A | N/A | N/A | |||||||||
Standard Guaranty Insurance Company | A | N/A | N/A | |||||||||
Time Insurance Company | A- | A3 | BBB+ | |||||||||
UDC Dental California | A- | N/A | N/A | |||||||||
Union Security Dental Care New Jersey | A- | N/A | N/A | |||||||||
Union Security Insurance Company | A- | A3 | 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-2 | |||||||||
Senior Debt | bbb | Baa2 | BBB | |||||||||
20
Exhibit I
Assurant, Inc.
Commercial Mortgage Loans Summary (1)
(Unaudited)
| As of September 30, 2010 | ||||||||
($ in thousands) | Book Value | % of Total | ||||||
Summary of Commercial Mortgage Loans | ||||||||
Geographic Region | ||||||||
Pacific | $ | 478,472 | 34 | % | ||||
Middle Atlantic | 240,694 | 17 | % | |||||
New England | 167,600 | 12 | % | |||||
South Atlantic | 162,020 | 12 | % | |||||
Mountain | 151,499 | 11 | % | |||||
West South Central | 80,450 | 6 | % | |||||
West North Central | 42,206 | 3 | % | |||||
East South Central | 23,904 | 2 | % | |||||
Canada | 24,956 | 2 | % | |||||
East North Central | 15,971 | 1 | % | |||||
Allowance for loan losses | (31,901 | ) | — | |||||
Total | $ | 1,355,871 | 100 | % | ||||
Property Type | ||||||||
Retail | $ | 449,846 | 33 | % | ||||
Office | 459,648 | 33 | % | |||||
Industrial | 362,758 | 26 | % | |||||
Other | 57,492 | 4 | % | |||||
Apartments | 58,028 | 4 | % | |||||
Allowance for loan losses | (31,901 | ) | — | |||||
Total | $ | 1,355,871 | 100 | % | ||||
Loan Size | ||||||||
Under $3 million | $ | 559,489 | 40 | % | ||||
$3 million but less than $6 million | 439,065 | 32 | % | |||||
$6 million but less than $9 million | 226,299 | 16 | % | |||||
$9 million but less than $12 million | 69,660 | 5 | % | |||||
$12 million and over | 93,259 | 7 | % | |||||
Allowance for loan losses | (31,901 | ) | — | |||||
Total | $ | 1,355,871 | 100 | % | ||||
Commercial Mortgage Loan Information by Vintage
As of September 30, 2010
Loan year | Book value | Delinquent loan balance | Number of loans (whole number) | Number of delinquent loans | Average balance per loan | Book value weighted average loan-to-value (2) | ||||||||||||||||||
2004 and prior | $ | 515,205 | — | 260 | — | $ | 1,982 | 43.89 | % | |||||||||||||||
2005 | 237,412 | — | 69 | — | 3,441 | 64.22 | % | |||||||||||||||||
2006 | 158,176 | — | 60 | — | 2,636 | 62.30 | % | |||||||||||||||||
2007 | 281,896 | — | 89 | — | 3,167 | 76.65 | % | |||||||||||||||||
2008 | 151,563 | — | 42 | — | 3,609 | 68.68 | % | |||||||||||||||||
2009 | 18,032 | — | 3 | — | 6,011 | 63.20 | % | |||||||||||||||||
2010 | 25,488 | — | 8 | — | 3,186 | 46.53 | % | |||||||||||||||||
Allowance for loan losses | (31,901) | — | N/A | — | N/A | N/A | ||||||||||||||||||
Total | $ | 1,355,871 | — | 531 | — | $ | 2,553 | 59.13 | % | |||||||||||||||
| (1) | We originate fixed rate mortgage loans on commercial real estate. We are the sole lender and generally hold these loans to maturity. We do not typically securitize or otherwise sell these loans. |
| (2) | Based on property appraisals as of September 30, 2010. |
21
Exhibit II
Assurant, Inc. and Subsidiaries
Top 10 Foreign Government Exposures
(unaudited)
| As of September 30, 2010 | ||||||||||||
($ in thousands) | Fixed Maturity Securities | |||||||||||
Issuer | Fair Value | Book Value | Unrealized Gain/Loss | |||||||||
Province of Ontario | $ | 124,706 | $ | 112,124 | $ | 12,582 | ||||||
Province of Quebec | 77,171 | 69,636 | 7,535 | |||||||||
Government of Brazil | 75,889 | 75,822 | 67 | |||||||||
Province of British Columbia | 74,816 | 70,188 | 4,628 | |||||||||
United Kingdom of Great Britain | 37,696 | 35,745 | 1,951 | |||||||||
Corp Andina de Fomento | 33,538 | 31,042 | 2,496 | |||||||||
Province of Manitoba | 29,106 | 27,181 | 1,925 | |||||||||
KFW | 27,742 | 27,715 | 27 | |||||||||
Canada Housting Trust | 25,015 | 24,428 | 587 | |||||||||
United Mexican States | 22,402 | 17,792 | 4,610 | |||||||||
Other | 114,947 | 110,389 | 4,558 | |||||||||
| $ | 643,028 | $ | 602,062 | $ | 40,966 | |||||||
22