Exhibit 99.2

Assurant, Inc. (AIZ)

Financial Supplement as of March 31, 2010

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ASSURANT, INC.

FINANCIAL SUPPLEMENT

(UNAUDITED)

AS OF MARCH 31, 2010

 

INDEX TO SUPPLEMENT
		Page:
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

CONTACT INFORMATION

 

Corporate Headquarters Address:		Investor Inquiries:
One Chase Manhattan Plaza New York, New York 10005 (212) 859-7000   Website Address: www.assurant.com		Melissa Kivett Senior Vice President Investor Relations (212) 859-7029 melissa.kivett@assurant.com		Suzanne Shepherd Manager Investor Relations (212) 859-7062 suzanne.shepherd@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 more than $26 billion in assets and $8 billion in annual revenue. Assurant has approximately 15,000 employees worldwide and is headquartered in New York's financial district. www.assurant.com.

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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 to be promulgated thereunder on our health and employee benefits businesses and consequent changes that may occur in the market for individual and small group health insurance and dental insurance; (ii) deterioration in the Company’s market capitalization compared to its book value that could impair the Company’s goodwill; (iii) failure to maintain significant client relationships, distribution sources and contractual arrangements; (iv) failure to attract and retain sales representatives; (v) unfavorable outcomes in litigation and/or regulatory investigations that could negatively impact our business and reputation; (vi) current or new laws and regulations that could increase our costs and/or decrease our revenues; (vii) 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); (viii) inadequacy of reserves established for future claims losses; (ix) failure to predict or manage benefits, claims and other costs; (x) losses due to natural and man-made catastrophes; (xi) increases or decreases in tax valuation allowances; (xii) fluctuations in exchange rates and other risks related to our international operations; (xiii) unavailability, inadequacy and unaffordable pricing of reinsurance coverage; (xiv) 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 and inability to target an appropriate overall risk level); (xv) inability of reinsurers to meet their obligations; (xvi) insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; (xvii) credit risk of some of our agents in Assurant Specialty Property and Assurant Solutions; (xviii) a decline in our credit or financial strength ratings (including the risk of ratings downgrades in the insurance industry); (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 our upcoming first quarter 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 March 31, 2010 and 2009 was 12.8% and 8.7%, respectively, and for the year ended December 31, 2009 and 2008 was 10.1% and 11.5%, 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 for this included measure would be book value per diluted share defined as total stockholders’ equity divided by diluted shares outstanding. Book value per diluted share was $43.16 as of March 31, 2010, as shown in the reconciliation below.

		As of March 31, 2010
Book value per diluted share (excluding AOCI)		$	41.82
Change due to effect of including AOCI			1.34
Book value per diluted share		$	43.16

 

1

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Assurant, Inc.

Summary Financial Highlights

(Unaudited)

 

 

 

		2010			2009				Full Year
($ in thousands, except number of shares and per share amounts)		1Q			1Q				2009				2008
Net operating income (1)		$	154,316		$	137,779			$	464,870			$	637,443
Net realized gains (losses) on investments			2,907			(36,198	)			(34,838	)			(278,641	)
Tax benefit realized from the sale of an inactive subsidiary			—			—				—				88,994
Change in tax valuation allowance			—			(21,000	)			—				—
Legal settlement and related expenses			—			—				83,542				—
Goodwill impairment			—			—				(83,000	)			—
Net income		$	157,223		$	80,581			$	430,574			$	447,796
Total revenues		$	2,167,856		$	2,087,877			$	8,700,501			$	8,601,228
PER SHARE AND SHARE DATA:
Basic earnings per common share
Net operating income		$	1.32		$	1.17			$	3.94			$	5.40
Net income		$	1.35		$	0.68			$	3.65			$	3.79
Weighted average common shares outstanding - basic			116,817,005			117,891,543				118,036,632				118,005,967
Diluted earnings per common share
Net operating income		$	1.32		$	1.17			$	3.92			$	5.36
Net income		$	1.34		$	0.68			$	3.63			$	3.76
Weighted average common shares outstanding - diluted			117,194,873			117,967,747				118,495,640				118,974,679

 

(1)	See Footnote (1) in Regulation G - Non GAAP Financial Measures on page 1.

 

 

 

2

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Assurant, Inc.

Summary Financial Highlights (continued)

(Unaudited)

 

 

 

		2010				2009
($ in thousands, except number of shares and per share amounts)		1Q				4Q				3Q				2Q				1Q
Total assets		$	26,238,814			$	25,841,796			$	25,665,578			$	24,822,474			$	23,820,644
Total stockholders’ equity		$	4,973,585			$	4,853,249			$	4,903,449			$	4,364,577			$	3,670,322
Total stockholders’ equity (excluding AOCI)		$	4,819,547			$	4,787,324			$	4,781,088			$	4,676,177			$	4,452,650
Basic book value per share		$	43.36			$	41.27			$	41.71			$	36.83			$	30.99
Basic book value per share (excluding AOCI)		$	42.02			$	40.71			$	40.66			$	39.46			$	37.60
Shares outstanding for basic book value per share calculation			114,705,703				117,591,250				117,572,997				118,494,717				118,432,367
Diluted book value per share		$	43.16			$	41.03			$	41.61			$	36.76			$	30.98
Diluted book value per share (excluding AOCI) (1)		$	41.82			$	40.47			$	40.57			$	39.38			$	37.58
Shares outstanding for diluted book value per share calculation			115,243,238				118,293,293				117,854,377				118,736,239				118,477,818
Debt to total capital ratio (excluding AOCI)			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

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Assurant, Inc.

Segmented Condensed Balance Sheets

(Unaudited)

 

		At March 31, 2010
		Solutions			Specialty Property			Health			Employee Benefits			Corporate & Other(1)			Consolidated
		($ in thousands)
Assets
Investments and cash and cash equivalents		$	7,407,391		$	2,439,205		$	966,655		$	2,312,028		$	1,415,850		$	14,541,129
Reinsurance recoverables			647,481			358,727			7,340			14,833			3,566,280			4,594,661
Deferred acquisition costs			2,226,646			206,693			6,688			28,219			—			2,468,246
Goodwill			—			—			—			—			924,834			924,834
Assets held in separate accounts			220,850			—			—			—			1,771,066			1,991,916
Other assets			496,506			372,545			122,169			166,357			560,451			1,718,028
Total assets		$	10,998,874		$	3,377,170		$	1,102,852		$	2,521,437		$	8,238,481		$	26,238,814
Liabilities
Policyholder benefits and claims payable		$	4,795,503		$	359,994		$	481,465		$	1,718,901		$	3,770,080		$	11,125,943
Unearned premiums			3,563,848			1,294,049			130,389			15,519			41,731			5,045,536
Debt			—			—			—			—			972,084			972,084
Mandatorily redeemable preferred stock			—			—			—			—			8,160			8,160
Liabilities related to separate accounts			220,850			—			—			—			1,771,066			1,991,916
Deferred gain on disposal of businesses			—			—			—			—			158,819			158,819
Accounts payable and other liabilities			757,075			456,365			112,397			209,402			427,532			1,962,771
Total liabilities			9,337,276			2,110,408			724,251			1,943,822			7,149,472			21,265,229
Stockholders' equity
Equity, excluding accumulated other comprehensive income			1,661,598			1,266,762			378,601			577,615			934,971			4,819,547
Accumulated other comprehensive income			—			—			—			—			154,038			154,038
Total stockholders' equity			1,661,598			1,266,762			378,601			577,615			1,089,009			4,973,585
Total liabilities and stockholders' equity		$	10,998,874		$	3,377,170		$	1,102,852		$	2,521,437		$	8,238,481		$	26,238,814
		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			674,806			329,512			7,251			21,589			3,179,705			4,212,863
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		$	11,091,800		$	3,186,740		$	1,078,567		$	2,521,667		$	7,963,022		$	25,841,796
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			790,361			340,952			152,947			250,282			467,032			2,001,574
Total liabilities			9,437,983			2,001,942			769,361			1,984,626			6,794,635			20,988,547
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		$	11,091,800		$	3,186,740		$	1,078,567		$	2,521,667		$	7,963,022		$	25,841,796

 

(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.

 

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Assurant, Inc.

Reconciliation of Net Operating Income to Net Income

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands, net of tax)		1Q				4Q				3Q				2Q				1Q				2009				2008
Assurant Solutions		$	28,866			$	30,203			$	31,644			$	27,894			$	30,311			$	120,052			$	112,183
Assurant Specialty Property			118,478				106,944				103,157				91,228				104,668				405,997				405,203
Assurant Health			8,369				(29,715	)			(4,847	)			(10,330	)			14,672				(30,220	)			120,254
Assurant Employee Benefits			16,467				11,556				11,450				12,128				7,022				42,156				70,557
Corporate and other			(11,962	)			(8,938	)			(9,743	)			(16,157	)			(13,442	)			(48,280	)			(50,252	)
Amortization of deferred gains on disposal of businesses			3,953				1,370				4,421				4,388				4,421				14,600				19,118
Interest expense			(9,855	)			(9,854	)			(9,854	)			(9,854	)			(9,873	)			(39,435	)			(39,620	)
Net operating income			154,316				101,566				126,228				99,297				137,779				464,870				637,443
Adjustments:
Net realized gains (losses) on investments			2,907				(7,561	)			12,913				(3,992	)			(36,198	)			(34,838	)			(278,641	)
Tax benefit realized from the sale of an inactive subsidiary			—				—				—				—				—				—				88,994
Change in tax valuation allowance			—				936				7,043				13,021				(21,000	)			—				—
Legal settlement and related expenses			—				—				(1,454	)			84,996				—				83,542				—
Goodwill impairment			—				(83,000	)			—				—				—				(83,000	)			—
Net income		$	157,223			$	11,941			$	144,730			$	193,322			$	80,581			$	430,574			$	447,796

 

 

 

5

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Assurant, Inc.

Consolidated Condensed Statements of Operations

(Unaudited)

 

 

 

($ in thousands, except per share data and closing stock price)		2010				2009																Full Year
		1Q				4Q				3Q				2Q				1Q				2009				2008
Revenues:
Net earned premiums and other considerations		$	1,906,643			$	1,925,492			$	1,874,398			$	1,875,866			$	1,874,579			$	7,550,335			$	7,925,348
Net investment income			174,014				172,503				172,924				174,932				178,479				698,838				774,347
Net realized gains (losses) on investments			4,473				(11,632	)			19,866				(6,142	)			(55,689	)			(53,597	)			(428,679	)
Amortization of deferred gains on disposal of businesses			6,081				2,107				6,802				6,750				6,802				22,461				29,412
Fees and other income			76,645				93,672				82,883				222,203				83,706				482,464				300,800
			2,167,856				2,182,142				2,156,873				2,273,609				2,087,877				8,700,501				8,601,228
Benefits, losses and expenses:
Policyholder benefits			927,996				977,093				941,145				989,402				960,342				3,867,982				4,019,147
Selling, underwriting, general and administrative expenses			976,333				1,045,734				991,502				987,529				954,479				3,979,244				3,957,850
Goodwill impairment			—				83,000				—				—				—				83,000				—
Interest expense			15,161				15,160				15,160				15,160				15,189				60,669				60,953
			1,919,490				2,120,987				1,947,807				1,992,091				1,930,010				7,990,895				8,037,950
Income before provision for income taxes			248,366				61,155				209,066				281,518				157,867				709,606				563,278
Provision for income taxes			91,143				49,214				64,336				88,196				77,286				279,032				115,482
Net income		$	157,223			$	11,941			$	144,730			$	193,322			$	80,581			$	430,574			$	447,796
Diluted per share data:
Net operating income per diluted share		$	1.32			$	0.86			$	1.07			$	0.84			$	1.17			$	3.92			$	5.36
Book value per diluted share (excluding AOCI)		$	41.82			$	40.47			$	40.57			$	39.38			$	37.58			$	40.47			$	37.16
Computation of return on average equity measures:
Numerator:
Net operating income		$	154,316			$	101,566			$	126,228			$	99,297			$	137,779			$	464,870			$	637,443
Net income (loss)			157,223				11,941				144,730				193,322				80,581				430,574				447,796
Denominator:
Average equity, excluding AOCI		$	4,803,435				4,784,207				4,728,633				4,564,413				4,416,551				4,583,888				4,207,722
Add: Average AOCI			109,982				94,143				(94,620	)			(546,964	)			(726,637	)			(302,511	)			(308,518	)
Average equity, including AOCI		$	4,913,417			$	4,878,350			$	4,634,013			$	4,017,449			$	3,689,914			$	4,281,377			$	3,899,204
Annualized operating return on average equity (excluding AOCI) (1)			12.9	%			8.5	%			10.7	%			8.7	%			12.5	%			10.1	%			15.1	%
Annualized GAAP return on average equity			12.8	%			1.0	%			12.5	%			19.2	%			8.7	%			10.1	%			11.5	%
Annualized operating return on average equity (excluding AOCI) (1)			12.9	%			8.5	%			10.7	%			8.7	%			12.5	%			10.1	%			15.1	%
Net realized gains (losses) on investments			0.2	%			-0.6	%			1.1	%			-0.3	%			-3.3	%			-0.8	%			-6.6	%
Tax benefit realized from the sale of an inactive subsidiary			—				—				—				—				—				—				2.1	%
Change in tax valuation allowance			—				0.1	%			0.6	%			1.1	%			-1.9	%			—				—
Legal settlement and related expenses			—				—				-0.1	%			7.4	%			—				1.8	%			—
Goodwill impairment			—				-6.8	%			—				—				—				-7.7	%			—
Change due to effect of including AOCI			-0.3	%			-0.2	%			0.2	%			2.3	%			1.4	%			6.6	%			0.8	%
Annualized GAAP return on average equity			12.8	%			1.0	%			12.5	%			19.2	%			8.7	%			10.1	%			11.5	%

 

(1)	See Footnote (2) Regulation G—Non GAAP Financial Measures on page 1.

 

 

 

6

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Assurant, Inc.

Consolidated Condensed Statements of Operations (continued)

(Unaudited)

 

 

 

($ in thousands, except per share data and closing stock price)		2010				2009																Full Year
		1Q				4Q				3Q				2Q				1Q				2009				2008
Share repurchases:
Shares repurchased			3,426,469				—				1,122,050				—				—				1,122,050				1,000,000
Average repurchase price per share		$	31.86			$	—			$	28.47			$	—			$	—			$	28.47			$	59.00
Total cost of share repurchase		$	109,184			$	—			$	31,948			$	—			$	—			$	31,948			$	59,000
AIZ Closing stock price (NYSE) as of quarter/year end		$	34.38			$	29.48			$	32.06			$	24.09			$	21.78			$	29.48			$	30.00
Investment yield (2)			4.98	%			4.96	%			5.08	%			5.23	%			5.32	%			5.13	%			5.50	%

 

(2)	Investment yield excludes investment (loss) income from real estate joint venture partnerships.

 

 

 

7

---

Assurant Solutions

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010			2009												Full Year
($ in thousands)		1Q			4Q			3Q			2Q			1Q			2009			2008
Revenues:
Net earned premiums and other considerations		$	645,364		$	690,150		$	669,344		$	666,935		$	644,612		$	2,671,041		$	2,813,407
Net investment income			98,453			98,447			97,681			97,106			97,995			391,229			420,615
Fees and other income			45,712			62,466			50,093			51,960			52,031			216,550			182,508
			789,529			851,063			817,118			816,001			794,638			3,278,820			3,416,530
Benefits, losses and expenses:
Policyholder benefits			227,631			246,871			248,933			261,325			272,022			1,029,151			1,198,758
Selling, underwriting, general and administrative expenses			511,090			550,139			520,217			509,388			475,604			2,055,348			2,041,892
			738,721			797,010			769,150			770,713			747,626			3,084,499			3,240,650
Income before provision for income taxes			50,808			54,053			47,968			45,288			47,012			194,321			175,880
Provision for income taxes			21,942			23,850			16,324			17,394			16,701			74,269			63,697
Net operating income		$	28,866		$	30,203		$	31,644		$	27,894		$	30,311		$	120,052		$	112,183
Net earned premiums and other considerations:
Domestic:
Credit		$	50,928		$	53,050		$	59,562		$	62,740		$	65,941		$	241,293		$	279,497
Service contracts			339,096			362,404			348,258			354,783			346,508			1,411,953			1,364,886
Other			12,213			23,835			24,471			22,054			14,579			84,939			60,159
Total Domestic			402,237			439,289			432,291			439,577			427,028			1,738,185			1,704,542
International:
Credit			86,739			85,711			80,743			79,835			74,173			320,462			368,442
Service contracts			117,189			122,053			108,458			97,280			87,903			415,694			355,248
Other			4,106			3,939			4,025			4,107			3,660			15,731			20,175
Total International			208,034			211,703			193,226			181,222			165,736			751,887			743,865
Preneed*:
Domestic and international			29,045			33,374			37,123			39,229			44,486			154,212			330,816
Domestic independent runoff			6,048			5,784			6,704			6,907			7,362			26,757			34,184
Total Preneed			35,093			39,158			43,827			46,136			51,848			180,969			365,000
Total		$	645,364		$	690,150		$	669,344		$	666,935		$	644,612		$	2,671,041		$	2,813,407
Fees and other income:
Domestic:
Debt protection		$	9,636		$	10,014		$	10,541		$	10,232		$	9,271		$	40,058		$	34,459
Service contracts			23,156			28,249			23,384			23,068			27,709			102,410			79,298
Other			2,555			4,551			4,443			5,593			3,947			18,534			26,661
Total Domestic			35,347			42,814			38,368			38,893			40,927			161,002			140,418
International			6,395			6,928			7,400			7,330			6,072			27,730			32,919
Preneed			3,970			12,724			4,325			5,737			5,032			27,818			9,171
Total		$	45,712		$	62,466		$	50,093		$	51,960		$	52,031		$	216,550		$	182,508

 

 

*	As of January 1, 2009, net earned premiums are recorded in accordance with universal life insurance guidance. As a result, net earned premiums no longer include new preneed sales.

 

 

 

8

---

Assurant Solutions

Condensed Statements of Operations (continued)

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Gross written premiums:
Domestic:
Credit		$	103,870			$	120,139			$	134,597			$	136,450			$	135,346			$	526,532			$	604,101
Service contracts			277,729				261,165				259,316				245,306				246,883				1,012,670				1,530,284
Other			14,918				18,842				14,210				43,985				15,074				92,111				71,393
Total Domestic			396,517				400,146				408,123				425,741				397,303				1,631,313				2,205,778
International:
Credit			246,532				252,660				221,581				197,605				171,379				843,225				827,457
Service contracts			121,292				139,144				118,256				98,494				107,070				462,964				477,652
Other			5,216				6,794				7,652				6,734				5,387				26,567				27,381
Total International			373,040				398,598				347,489				302,833				283,836				1,332,756				1,332,490
Total		$	769,557			$	798,744			$	755,612			$	728,574			$	681,139			$	2,964,069			$	3,538,268
Foreign currency translation (FX) impact (1):
Gross written premiums:
Including FX impact			12.98	%			-5.04	%			-16.29	%			-19.05	%			-23.85	%			-16.23	%			-8.65	%
FX impact			6.23	%			3.24	%			-3.12	%			-5.03	%			-6.83	%			-3.04	%			0.14	%
Excluding FX impact			6.75	%			-8.28	%			-13.17	%			-14.02	%			-17.02	%			-13.19	%			-8.79	%
Net earned premiums:
Including FX impact			0.12	%			-4.43	%			-5.34	%			-4.81	%			-5.69	%			-5.06	%			11.18	%
FX impact			3.32	%			1.63	%			-2.64	%			-3.76	%			-5.37	%			-2.49	%			-0.08	%
Excluding FX impact			-3.20	%			-6.06	%			-2.70	%			-1.05	%			-0.32	%			-2.57	%			11.26	%
Net operating income:
Including FX impact			-4.77	%			154.14	%			55.21	%			-13.79	%			-36.26	%			7.01	%			-22.05	%
FX impact			5.02	%			4.79	%			-8.34	%			3.32	%			-0.51	%			-0.27	%			-1.00	%
Excluding FX impact			-9.79	%			149.35	%			63.55	%			-17.11	%			-35.75	%			7.28	%			-21.05	%
Combined ratios (a):
Domestic			96.2	%			94.6	%			98.2	%			97.6	%			98.3	%			97.2	%			100.6	%
International			107.8	%			114.5	%			108.8	%			111.6	%			107.3	%			110.7	%			108.2	%
Investment yield (2)			5.41	%			5.40	%			5.36	%			5.41	%			5.45	%			5.40	%			5.62	%

 

(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 (loss) income from real estate joint venture partnerships.

 

 

 

9

---

Assurant Solutions—Preneed

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010				2009														Full Year
($ in thousands)		1Q				4Q			3Q				2Q				1Q			2009			2008
Revenues:
Net earned premiums and other considerations		$	35,093			$	39,158		$	43,827			$	46,136			$	51,848		$	180,969		$	365,001
Net investment income			60,873				59,553			58,655				56,923				57,299			232,430			239,434
Fees and other income:
Change in value of CPI Caps (1)			(4,424	)			5,086			(656	)			(35	)			1,779			6,174			4,183
Other			8,394				7,638			4,981				5,772				3,253			21,644			4,988
Total fees and other income			3,970				12,724			4,325				5,737				5,032			27,818			9,171
			99,936				111,435			106,807				108,796				114,179			441,217			613,606
Benefits, losses and expenses:
Policyholder benefits			65,199				66,532			67,055				70,929				78,392			282,908			416,856
Selling, underwriting, general and administrative expenses			21,687				23,880			21,468				22,457				24,655			92,460			127,447
			86,886				90,412			88,523				93,386				103,047			375,368			544,303
Income before provision for income taxes			13,050				21,023			18,284				15,410				11,132			65,849			69,303
Income before provision for income taxes excluding CPI Cap			17,474				15,937			18,940				15,445				9,353			59,675			65,120
Provision for income taxes			4,657				7,162			6,524				5,338				3,834			22,858			24,560
Net operating income		$	8,393			$	13,861		$	11,760			$	10,072			$	7,298		$	42,991		$	44,743
Face sales		$	151,074			$	145,678		$	137,301			$	126,263			$	103,124		$	512,366		$	445,313
CPI Caps Value		$	8,531			$	12,955		$	7,869			$	8,525			$	8,560		$	12,955		$	6,781

 

(1)

The Company utilizes Consumer Price Index Caps ("CPI Caps") derivative instruments 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.

 

 

 

10

---

Assurant Specialty Property

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Revenues:
Net earned premiums and other considerations		$	508,822			$	497,200			$	478,701			$	477,838			$	493,790			$	1,947,529			$	2,048,238
Net investment income			26,921				26,031				26,550				28,320				29,436				110,337				123,043
Fees and other income			13,100				14,824				15,100				13,642				13,324				56,890				50,000
			548,843				538,055				520,351				519,800				536,550				2,114,756				2,221,281
Benefits, losses and expenses:
Policyholder benefits			162,533				162,139				156,076				178,167				167,800				664,182				785,403
Selling, underwriting, general and administrative expenses			207,017				212,203				206,992				203,416				209,917				832,528				817,848
			369,550				374,342				363,068				381,583				377,717				1,496,710				1,603,251
Income before provision for income taxes			179,293				163,713				157,283				138,217				158,833				618,046				618,030
Provision for income taxes			60,815				56,769				54,126				46,989				54,165				212,049				212,827
Net operating income		$	118,478			$	106,944			$	103,157			$	91,228			$	104,668			$	405,997			$	405,203
Net earned premiums:
Homeowners (Creditor-Placed & Voluntary)		$	354,409			$	351,178			$	333,068			$	336,338			$	348,447			$	1,369,031			$	1,471,012
Manufactured Housing (Creditor-Placed & Voluntary)			57,500				54,609				54,347				55,128				55,876				219,960				225,208
Other			96,913				91,413				91,286				86,372				89,467				358,538				352,018
Total		$	508,822			$	497,200			$	478,701			$	477,838			$	493,790			$	1,947,529			$	2,048,238
Gross earned premiums:
Homeowners (Creditor-Placed & Voluntary)		$	463,570			$	460,289			$	427,030			$	430,568			$	437,391			$	1,755,278			$	1,769,785
Manufactured Housing (Creditor-Placed & Voluntary)			79,693				76,339				76,448				77,083				77,484				307,354				321,179
Other			155,471				150,695				150,604				147,449				151,429				600,177				597,415
Total		$	698,734			$	687,323			$	654,082			$	655,100			$	666,304			$	2,662,809			$	2,688,379
Gross written premiums:
Homeowners (Creditor-Placed & Voluntary)		$	440,073			$	533,454			$	437,835			$	437,271			$	412,706			$	1,821,266			$	1,943,176
Manufactured Housing (Creditor-Placed & Voluntary)			80,040				76,441				75,935				77,969				69,852				300,197				306,837
Other			156,853				157,209				167,968				154,864				131,701				611,742				630,769
Total		$	676,966			$	767,104			$	681,738			$	670,104			$	614,259			$	2,733,205			$	2,880,782
Reconciliation of gross earned premiums to net earned premiums:
Gross earned premiums		$	698,734			$	687,323			$	654,082			$	655,100			$	666,304			$	2,662,809			$	2,688,379
Ceded catastrophe reinsurance and reinstatements			(45,129	)			(46,945	)			(48,794	)			(44,688	)			(42,994	)			(183,421	)			(153,987	)
Ceded to clients including U.S. Government			(144,783	)			(143,178	)			(126,587	)			(132,574	)			(129,520	)			(531,859	)			(486,154	)
Net earned premiums		$	508,822			$	497,200			$	478,701			$	477,838			$	493,790			$	1,947,529			$	2,048,238

 

 

 

11

---

Assurant Specialty Property (continued)

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Creditor-Placed Homeowners Insurance (1):
Loans tracked (in millions):
Prime			25.6				25.6				25.7				25.4				25.7				25.6				25.9
Sub-prime			3.6				3.9				3.8				3.6				3.8				3.9				4.0
			29.2				29.5				29.5				29.0				29.5				29.5				29.9
Average placement rates (2):
Prime			1.28	%			1.24	%			1.18	%			1.18	%			1.13	%			1.24	%			1.07	%
Sub-prime			9.54	%			9.51	%			9.51	%			9.39	%			9.14	%			9.51	%			9.19	%
Average insured value (AIV):
Creditor-placed		$	179			$	177			$	174			$	172			$	168			$	177			$	167
Real estate owned		$	228			$	227			$	226			$	228			$	228			$	227			$	228
Percent of creditor-placed premiums from real estate owned policies:
% of gross earned premiums			12	%			12	%			14	%			16	%			20	%			16	%			22	%
% of gross written premiums			12	%			9	%			12	%			12	%			20	%			13	%			22	%
Ratios:
Loss ratio (a)			31.9	%			32.6	%			32.6	%			37.3	%			34.0	%			34.1	%			38.3	%
Expense ratio (b)			39.7	%			41.4	%			41.9	%			41.4	%			41.4	%			41.5	%			39.0	%
Combined ratio (c)			70.8	%			73.1	%			73.5	%			77.6	%			74.5	%			74.7	%			76.4	%
Investment yield (3)			4.56	%			4.42	%			4.46	%			4.77	%			4.87	%			4.64	%			5.15	%

 

(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)	Investment yield excludes investment (loss) income from real estate joint venture partnerships.

 

 

 

12

---

Assurant Health

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Revenues:
Net earned premiums and other considerations		$	467,442			$	468,002			$	470,385			$	468,895			$	472,346			$	1,879,628			$	1,951,955
Net investment income			11,565				11,338				11,770				12,073				12,477				47,658				57,464
Fees and other income			10,408				9,978				10,140				9,847				9,914				39,879				38,917
			489,415				489,318				492,295				490,815				494,737				1,967,165				2,048,336
Benefits, losses and expenses:
Policyholder benefits			333,640				377,155				353,412				357,644				321,960				1,410,171				1,258,188
Selling, underwriting, general and administrative expenses			143,119				157,826				147,475				149,157				150,240				604,698				604,605
			476,759				534,981				500,887				506,801				472,200				2,014,869				1,862,793
Income (loss) before provision (benefit) for income taxes			12,656				(45,663	)			(8,592	)			(15,986	)			22,537				(47,704	)			185,543
Provision (benefit) for income taxes			4,287				(15,948	)			(3,745	)			(5,656	)			7,865				(17,484	)			65,289
Net operating income (loss)		$	8,369			$	(29,715	)		$	(4,847	)		$	(10,330	)		$	14,672			$	(30,220	)		$	120,254
Net earned premiums and other considerations:
Individual:
Individual medical		$	321,783			$	319,215			$	317,820			$	316,093			$	317,070			$	1,270,198			$	1,276,743
Short-term medical			22,118				24,308				27,278				26,604				26,048				104,238				101,435
Subtotal			343,901				343,523				345,098				342,697				343,118				1,374,436				1,378,178
Small employer group			123,541				124,479				125,287				126,198				129,228				505,192				573,777
Total		$	467,442			$	468,002			$	470,385			$	468,895			$	472,346			$	1,879,628			$	1,951,955
Sales (annualized issued premiums):
Individual:
Individual medical		$	94,249			$	92,068			$	91,434			$	84,707			$	88,769			$	356,978			$	330,259
Short-term medical			28,314				27,870				34,296				34,509				37,199				133,874				137,716
Subtotal			122,563				119,938				125,730				119,216				125,968				490,852				467,975
Small employer group			35,705				33,701				31,588				37,708				29,978				132,975				106,222
Total		$	158,268			$	153,639			$	157,318			$	156,924			$	155,946			$	623,827			$	574,197
Membership by product line (in thousands):
Individual:
Individual medical			564				568				568				570				572				568				578
Short-term medical			71				78				91				95				94				78				92
Subtotal			635				646				659				665				666				646				670
Small employer group			118				121				122				123				123				121				131
Total			753				767				781				788				789				767				801
Ratios:
Loss ratio (a)			71.4	%			80.6	%			75.1	%			76.3	%			68.2	%			75.0	%			64.5	%
Expense ratio (b)			30.0	%			33.0	%			30.7	%			31.2	%			31.2	%			31.5	%			30.4	%
Combined ratio (c)			99.8	%			111.9	%			104.2	%			105.9	%			97.9	%			105.0	%			93.6	%
Investment yield (1)			4.82	%			4.82	%			5.24	%			5.45	%			5.59	%			5.25	%			5.80	%

 

(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																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Revenues:
Net earned premiums and other considerations		$	285,015			$	270,140			$	255,968			$	262,198			$	263,831			$	1,052,137			$	1,111,748
Net investment income			32,810				32,703				33,039				33,466				34,157				133,365				147,027
Fees and other income			7,311				6,578				7,467				7,540				6,758				28,343				26,139
			325,136				309,421				296,474				303,204				304,746				1,213,845				1,284,914
Benefits, losses and expenses:
Policyholder benefits			204,242				188,940				182,632				186,770				198,728				757,070				775,684
Selling, underwriting, general and administrative expenses			95,922				103,092				96,529				97,993				95,287				392,901				400,816
			300,164				292,032				279,161				284,763				294,015				1,149,971				1,176,500
Income before provision for income taxes			24,972				17,389				17,313				18,441				10,731				63,874				108,414
Provision for income taxes			8,505				5,833				5,863				6,313				3,709				21,718				37,857
Net operating income		$	16,467			$	11,556			$	11,450			$	12,128			$	7,022			$	42,156			$	70,557
Net earned premiums and other considerations:
Group dental		$	107,581			$	108,910			$	105,507			$	105,306			$	105,565			$	425,288			$	435,115
Group disability single premiums for closed blocks			—				—				—				—				—				—				11,447
All other group disability			129,927				112,722				103,460				108,495				109,704				434,381				459,208
Group life			47,507				48,508				47,001				48,397				48,562				192,468				205,978
Total		$	285,015			$	270,140			$	255,968			$	262,198			$	263,831			$	1,052,137			$	1,111,748
Sales (1):
Group dental		$	33,549			$	14,354			$	21,202			$	16,904			$	31,573			$	84,033			$	110,051
Group disability			13,516				6,351				10,587				8,207				14,172				39,317				52,595
Group life			8,517				4,509				6,547				5,086				9,859				26,001				28,285
Total		$	55,582			$	25,214			$	38,336			$	30,197			$	55,604			$	149,351			$	190,931
Ratios:
Loss ratio (a)			71.7	%			69.9	%			71.3	%			71.2	%			75.3	%			72.0	%			69.8	%
Expense ratio (b)			32.8	%			37.3	%			36.6	%			36.3	%			35.2	%			36.4	%			35.2	%
Investment yield (2)			5.77	%			5.79	%			5.88	%			5.86	%			5.98	%			5.87	%			6.13	%

 

(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

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Assurant Corporate and Other

Condensed Statements of Operations

(Unaudited)

 

 

 

		2010				2009																Full Year
($ in thousands)		1Q				4Q				3Q				2Q				1Q				2009				2008
Revenues:
Net earned premiums and other considerations		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Net investment income			4,265				3,984				3,884				3,967				4,414				16,249				26,198
Net realized gains (losses) on investments			4,473				(11,632	)			19,866				(6,142	)			(55,689	)			(53,597	)			(428,679	)
Amortization of deferred gains on disposal of businesses			6,081				2,107				6,802				6,750				6,802				22,461				29,412
Fees and other income			114				(174	)			83				139,214				1,679				140,802				3,236
			14,933				(5,715	)			30,635				143,789				(42,794	)			125,915				(369,833	)
Benefits, losses and expenses:
Policyholder benefits			(50	)			1,988				92				5,496				(168	)			7,408				1,114
Selling, underwriting, general and administrative expenses			19,185				22,474				20,289				27,575				23,431				93,769				92,689
Interest expense			15,161				15,160				15,160				15,160				15,189				60,669				60,953
			34,296				39,622				35,541				48,231				38,452				161,846				154,756
(Loss) income before (benefit) provision for income taxes			(19,363	)			(45,337	)			(4,906	)			95,558				(81,246	)			(35,931	)			(524,589	)
(Benefit) provision for income taxes			(4,406	)			(21,290	)			(8,232	)			23,156				(5,154	)			(11,520	)			(264,188	)
Net (loss) income		$	(14,957	)		$	(24,047	)		$	3,326			$	72,402			$	(76,092	)		$	(24,411	)		$	(260,401	)
Real estate investment income		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Corporate and Other Reconciliation
Assurant Corporate and Other Segment Net income (loss)		$	(14,957	)		$	(24,047	)		$	3,326			$	72,402			$	(76,092	)		$	(24,411	)		$	(260,401	)
Adjustments, net of tax:
Amortization of deferred gains on disposal of businesses			(3,953	)			(1,370	)			(4,421	)			(4,388	)			(4,421	)			(14,600	)			(19,118	)
Interest expense			9,855				9,854				9,854				9,854				9,873				39,435				39,620
Net realized (gains) losses on investments			(2,907	)			7,561				(12,913	)			3,992				36,198				34,838				278,641
Tax benefit realized from the sale of an inactive subsidiary			—				—				—				—				—				—				(88,994	)
Change in tax valuation allowance			—				(936	)			(7,043	)			(13,021	)			21,000				—				—
Legal settlement and related expenses			—				—				1,454				(84,996	)			—				(83,542	)			—
Corporate and other line item result (1)		$	(11,962	)		$	(8,938	)		$	(9,743	)		$	(16,157	)		$	(13,442	)		$	(48,280	)		$	(50,252	)

 

(1)	Reconciles to Corporate and other result per Reconciliation of Net Operating Income to Net Income (Loss) on page 5.

 

 

 

15

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Assurant, Inc.

Investments

(Unaudited)

 

 

 

($ in thousands)		At March 31, 2010						At December 31, 2009
Investments by type
Fixed maturity securities available for sale, at fair value		$	10,479,317		72.0	%		$	9,966,772		68.9	%
Equity securities available for sale, at fair value
Preferred stock			519,729		3.6	%			508,458		3.5	%
Common stock			4,885		0.0	%			4,529		0.0	%
Commercial mortgage whole loans on real estate, at amortized cost			1,405,876		9.7	%			1,428,027		9.9	%
Policy loans			56,275		0.4	%			56,407		0.4	%
Short-term investments			436,398		3.0	%			453,469		3.1	%
Collateral held under securities lending			142,381		1.0	%			218,129		1.5	%
Other investments			563,727		3.9	%			522,041		3.6	%
Total investments			13,608,588		93.6	%			13,157,832		90.9	%
Cash and cash equivalents			932,541		6.4	%			1,318,552		9.1	%
Total investments and cash and cash equivalents		$	14,541,129		100.0	%		$	14,476,384		100.0	%
Fixed Maturity Securities by Credit Quality (Fair Value)
Aaa / Aa / A		$	6,459,995		61.7	%		$	6,152,842		61.8	%
Baa			3,074,584		29.3	%			2,953,964		29.6	%
Ba			696,022		6.6	%			647,321		6.5	%
B and lower			248,716		2.4	%			212,645		2.1	%
Total		$	10,479,317		100.0	%		$	9,966,772		100.0	%

 

16

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Assurant, Inc.

Investments (continued)

(Unaudited)

 

 

 

		At March 31, 2010													At December 31, 2009
($ 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		$	140,561		$	145,647		1.4	%		$	5,086			$	115,268		$	120,330		1.2	%		$	5,062
State, municipalities and political subdivisions			857,885			896,499		8.6	%			38,614				873,548			910,068		9.1	%			36,520
Foreign governments			580,787			597,483		5.7	%			16,696				558,254			572,827		5.8	%			14,573
Corporate (1):
Consumer cyclical			1,025,817			1,078,560		10.3	%			52,743				975,965			1,014,735		10.2	%			38,770
Consumer non-cyclical			348,479			368,384		3.5	%			19,905				306,841			322,638		3.2	%			15,797
Energy			753,548			800,356		7.6	%			46,808				751,097			790,437		7.9	%			39,340
Financials			2,146,869			2,181,974		20.8	%			35,105				2,089,298			2,076,599		20.8	%			(12,699	)
Health care			433,463			453,699		4.3	%			20,236				416,581			431,155		4.3	%			14,574
Industrials			965,992			1,003,182		9.6	%			37,190				928,154			952,792		9.6	%			24,638
Materials			319,942			329,389		3.2	%			9,447				287,338			292,502		2.9	%			5,164
Technology			153,125			160,859		1.5	%			7,734				150,542			156,272		1.6	%			5,730
Telecommunications			467,865			497,667		4.8	%			29,802				474,025			502,267		5.0	%			28,242
Utilities			891,275			932,914		8.9	%			41,639				856,645			894,794		9.0	%			38,149
Other corporate			348			354		0.0	%			6				349			357		0.0	%			8
Asset-backed securities			51,221			53,537		0.5	%			2,316				51,834			53,963		0.5	%			2,129
Commercial mortgage-backed securities			132,443			136,744		1.3	%			4,301				159,780			159,907		1.6	%			127
Residential mortgage-backed securities (RMBS):
Agency			788,427			819,063		7.8	%			30,636				663,407			690,632		6.9	%			27,225
Alt-A			—			—		0.0	%			—				—			—		0.0	%			—
Subprime			16,083			15,925		0.2	%			(158	)			17,739			17,307		0.2	%			(432	)
Other			3,827			3,787		0.0	%			(40	)			4,227			4,064		0.1	%			(163	)
Collaterized debt obligations:
Credit backed			3,118			3,294		0.0	%			176				3,191			3,126		0.1	%			(65	)
RMBS backed			—			—		0.0	%			—				—			—		0.0	%			—
Total fixed maturity securities		$	10,081,075		$	10,479,317		100.0	%		$	398,242			$	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

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Assurant, Inc.

Investment Results by Asset Category and Annualized Yields

(Unaudited)

 

 

 

		Quarter Ended March 31											Quarter Ended March 31
		2010											2009
					Investment				Net realized							Investment				Net realized
($ in thousands)		Yield			Income				gain (loss)				Yield			Income				gain (loss)
Fixed maturity securities, available for sale		5.76	%		$	142,418			$	10,054			5.98	%		$	138,773			$	(20,112	)
Equity securities, available for sale		7.03	%			8,962				1,164			7.30	%			9,870				(35,540	)
Commercial mortgage whole loans on real estate		6.24	%			22,094				(6,772	)		6.31	%			23,683				—
Policy loans		5.13	%			722				—			5.35	%			775				—
Cash and short-term investments		0.51	%			1,986				1			1.66	%			6,383				3
Other investments*		3.31	%			4,495				26			4.69	%			5,787				(40	)
Total						180,677			$	4,473							185,271			$	(55,689	)
Investment expenses						(6,663	)										(6,792	)
Net investment income					$	174,014										$	178,479
Gross realized gains									$	14,849										$	6,596
Gross realized losses										(9,531	)										(36,846	)
Other-than-temporary impairments on available for sale securities										(845	)										(25,439	)
Net realized gains (losses) on investments									$	4,473										$	(55,689	)
		Twelve Months Ended December 31											Twelve Months Ended December 31
		2009											2008
					Investment				Net realized							Investment				Net realized
		Yield			Income				gain (loss)				Yield			Income				gain (loss)
Fixed maturity securities, available for sale		5.89	%		$	558,639			$	(5,587	)		6.02	%		$	584,712			$	(215,648	)
Equity securities, available for sale		7.24	%			38,189				(35,486	)		6.76	%			45,775				(189,527	)
Commercial mortgage whole loans on real estate		6.27	%			92,116				(10,219	)		6.42	%			95,013				326
Policy loans		5.84	%			3,329				—			6.50	%			3,717				—
Cash and short-term investments		1.04	%			16,292				127			2.80	%			43,246				(1	)
Other investments*		3.40	%			17,453				(2,432	)		5.07	%			27,395				(23,829	)
Total						726,018			$	(53,597	)						799,858			$	(428,679	)
Investment expenses						(27,180	)										(25,511	)
Net investment income					$	698,838										$	774,347
Gross realized gains									$	55,695										$	67,945
Gross realized losses										(70,632	)										(156,471	)
Other-than-temporary impairments on available for sale securities										(38,660	)										(340,153	)
Net realized losses on investments									$	(53,597	)									$	(428,679	)

 

*	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

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Assurant, Inc.

Summary of Net Operating Income (1) Disclosed Items

Income / (Expense) Items

(Unaudited)

 

 

 

				2010						2009
( in millions, after-tax)				1Q						4Q						3Q						2Q						1Q
				$			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:
Restructuring costs		(d)		—			—			—			—			—			—			(2.5	)		(0.02	)		—			—
Subrogation reimbursement		(c)		—			—			—			—			5.9			0.05			—			—			—			—
Unearned premium reserve review adjustment		(a)		7.6			0.06			—			—			—			—			—			—			—			—
Assurant Health:
Reserve strengthening		(c)		—			—			—			—			—			—			(9.0	)		(0.08	)		—			—
Litigation reserve		(c)		—			—			(24.0	)		(0.20	)		(8.1	)		(0.07	)		—			—			—			—
Restructuring costs		(d)		—			—			(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)		—			—			(1.0	)		(0.01	)		—			—			(1.5	)		(0.01	)		—			—
Assurant Corporate and Other:
Expenses related to SEC investigation (2)		(d)		—			—			(3.5	)		(0.03	)		—			—			—			—			—			—
Change in various tax liabilities/receivables		(e)		—			—			4.5			0.04			—			—			—			—			—			—
Compensation expense		(d)		—			—			—			—			—			—			—			—			(4.6	)		(0.04	)

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)	This item includes both SEC investigation-related expenses and reimbursements received related to SEC expenses covered under Director & Officer insurance.

 

 

 

19

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Assurant, Inc.

Ratings Summary

(Unaudited)

 

 

 

		As of March 31, 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-		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		BBB+
Reliable Lloyds		A		N/A		N/A
Standard Guaranty Insurance Company		A		N/A		N/A
Time Insurance Company		A-		A2		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-		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-2
Senior Debt		bbb		Baa1		BBB

 

 

 

20

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Exhibit I

Assurant, Inc.

Commercial Mortgage Loans Summary (1)

(Unaudited)

 

($ in thousands)		As of March 31, 2010
		Book Value				% of Total
Summary of Commercial Mortgage Loans
Geographic Region
Pacific		$	480,621			34	%
Middle Atlantic			255,023			18	%
New England			174,683			12	%
South Atlantic			166,896			12	%
Mountain			158,461			11	%
West South Central			81,868			5	%
West North Central			43,261			3	%
East South Central			25,973			2	%
Canada			25,612			2	%
East North Central			16,379			1	%
Allowance for loan losses			(22,901	)		—
Total		$	1,405,876			100	%
Property Type
Retail		$	469,743			33	%
Office			466,974			33	%
Industrial			366,973			26	%
Other			69,594			5	%
Apartments			55,493			3	%
Allowance for loan losses			(22,901	)		—
Total		$	1,405,876			100	%
Loan Size
Under $3 million		$	567,614			40	%
$3 million but less than $6 million			454,735			32	%
$6 million but less than $9 million			237,637			17	%
$9 million but less than $12 million			49,167			3	%
$12 million and over			119,624			8	%
Allowance for loan losses			(22,901	)		—
Total		$	1,405,876			100	%

Commercial Mortgage Loan Information by Vintage

As of March 31, 2010

 

		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)
Loan year
2004 and prior		$	554,732			—		271		—		$	2,047		47.05	%
2005			243,936			—		72		—			3,388		66.43	%
2006			171,092			—		62		—			2,760		62.57	%
2007			286,120			—		90		—			3,179		78.38	%
2008			153,205			—		42		—			3,648		72.86	%
2009			18,164			—		3		—			6,055		72.25	%
2010			1,528			—		1		—			1,528		38.21	%
Allowance for loan losses			(22,901	)		—		N/A		—			N/A		N/A
Total		$	1,405,876			—		541		—		$	2,599		61.57	%

 

(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, 2009.

 

21