EX-99.2 3 y17277exv99w2.htm EX-99.2: PRESENTATION OF FINANCIAL SUPPLEMENT EX-99.2
 

Exhibit 99.2
(ASSURANT LOGO)
Assurant, Inc. (AIZ)
Financial Supplement as of December 31, 2005

 


 

(ASSURANT LOGO)
ASSURANT, INC. AND SUBSIDIARIES
EARNINGS RELEASE SUPPLEMENT
AS OF DECEMBER 31, 2005
INDEX TO SUPPLEMENT
         
    Page:
REGULATION G – NON GAAP MEASURES
    1  
 
       
SUMMARY FINANCIAL HIGHLIGHTS (unaudited)
    2  
 
       
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited)
    4  
 
       
RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited)
    5  
 
       
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)
    6  
 
       
CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited)
    7  
 
       
INVESTMENTS (unaudited)
    14  
 
       
INVESTMENT RESULTS BY ASSET CATEGORY & ANNUALIZED YIELDS (unaudited)
    15  
About Assurant:
Assurant is a premier provider of specialized insurance products and related services in North America and selected other international markets. The five key business segments – Assurant Employee Benefits; Assurant Health; Assurant Preneed; Assurant Solutions and Assurant Specialty Property – have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance markets in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit-related insurance; warranties and extended service contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.
The company, which is traded on the New York Stock Exchange under the symbol AIZ, has over $20 billion in assets and $7 billion in annual revenue. Assurant has more than 12,000 employees and is headquartered in New York’s financial district.
Safe Harbor Statement:
Some of the statements included in this statistical supplement, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, posted on the Assurant website at www.assurant.com.

 


 

(ASSURANT LOGO)
Regulation G – Non GAAP Measures
Assurant uses the following non-GAAP financial measures to analyze the company’s operating performance for the periods presented in the press release. Because Assurant’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing Assurant’s non-GAAP financial measures to those of other companies.
(1) Assurant uses net operating income as an important measure of the company’s operating performance. Net operating income equals net income, excluding net realized gains (losses) on investments and unusual and/or infrequent items. The company believes net operating income provides investors a valuable measure of the performance of the company’s ongoing business, because it excludes both the effect of realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur.
(2) Pro forma earnings per share has been included as a measure of operating performance. In February 2004, Assurant completed a significant capital restructuring in conjunction with its initial public offering of common stock. Pro forma earnings per share reflects earnings per share adjusted as if this capital restructuring had occurred on January 1, 2003. This restructuring included: a stock split and conversion of Class B and C shares resulting in total outstanding shares of 109,222,276; the issuance of 32,976,854 shares of Assurant common stock to Fortis Insurance N.V. in exchange for a capital contribution of $725.5 million, and the issuance of 68,976 restricted shares of Assurant common stock to certain officers and directors of the company pursuant to specific restricted stock grants. These transactions occurred subsequent to the December 31, 2003 balance sheet, but management believes that this adjusted measure provides a better indication of operating performance than the corresponding GAAP measure, earnings per share.
(3) Book value per share excluding accumulated other comprehensive income (AOCI) has been included as a measure of stockholder value. The company believes book value per share excluding AOCI provides investors a better measure of stockholder value than book value per share because it excludes the effect of unrealized gains (losses) on investments and foreign currency translation, which tend to be highly variable from period to period.
(4) Pro forma book value per share and Pro forma book value per share excluding AOCI have been included as measures of stockholder value. In February 2004, Assurant completed a significant capital restructuring in conjunction with its initial public offering of common stock. These Pro forma book value per share measures reflect book value per share adjusted as if this capital restructuring had occurred on January 1, 2003. This restructuring included: a stock split and conversion of Class B and C shares resulting in total outstanding shares of 109,222,276; the issuance of 32,976,854 shares of Assurant common stock to Fortis Insurance N.V. in exchange for a capital contribution of $725.5 million, and the issuance of 68,976 restricted shares of Assurant common stock to certain officers and directors of the company pursuant to specific restricted stock grants. These transactions occurred subsequent to the December 31, 2003 balance sheet, but management believes that these adjusted measures provide a better indication of stockholder value than the corresponding GAAP measures, book value per share and book value per share excluding AOCI.

Page 1


 

(ASSIRAMT LOGO)
Assurant, Inc. and Subsidiaries
Summary Financial Highlights
(Unaudited)
                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     December 31,  
($ in thousands, except per share amounts)   2005     2004     2005     2004  
Net operating income (1)
  $ 142,442     $ 86,478     $ 513,289     $ 344,991  
 
                               
Net realized (loss) gain from investments
    (5,396 )     1,210       7,369       15,800  
 
                               
Excess of loss reinsurance program (1995-1997)
                (40,263 )      
 
                               
Loss on disposal of business
                      (6,337 )
 
                               
Expenses directly related to the initial and secondary public offerings
          (1,560 )     (1,040 )     (3,894 )
 
                       
 
                               
Net income
  $ 137,046     $ 86,128     $ 479,355     $ 350,560  
 
                       
 
                               
Total revenues
  $ 1,881,577     $ 1,878,096     $ 7,497,675     $ 7,410,714  
 
                               
PER SHARE AND SHARE DATA:
                               
 
                               
Basic earnings per share
                               
Net operating income
  $ 1.09     $ 0.62     $ 3.78     $ 2.49  
Net income
  $ 1.05     $ 0.62     $ 3.53     $ 2.53  
Weighted average of common shares outstanding - basic
    131,057,816       139,968,130       135,773,551       138,358,767  
 
                               
Diluted earnings per share
                               
Net operating income
  $ 1.07     $ 0.62     $ 3.75     $ 2.49  
Net income
  $ 1.03     $ 0.61     $ 3.50     $ 2.53  
Weighted average of common shares outstanding - diluted
    132,816,188       140,054,287       136,945,310       138,467,564  
 
                               
Pro forma earnings per share (2)
                               
Net operating income
    N/A       N/A       N/A     $ 2.44  
Net income
    N/A       N/A       N/A     $ 2.48  
Pro forma common shares outstanding
    N/A       N/A       N/A       141,622,001  

Page 2


 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Summary Financial Highlights (continued)
(Unaudited)
                         
    As of   As of
    December 31,   December 31,
($ in thousands, except per share amounts)   2005   2004   2003
Total assets
  $ 25,365,453     $ 24,548,106     $ 24,093,444  
 
                       
Total stockholders’ equity
  $ 3,699,559     $ 3,635,431     $ 2,632,103  
Capital contribution from Fortis
                725,500  
Pro forma stockholders’ equity (3)
    N/A       N/A     $ 3,357,603  
 
                       
Total stockholders’ equity (excluding AOCI) (4)
  $ 3,480,060     $ 3,297,268     $ 2,313,576  
Capital contribution from Fortis
                725,500  
Pro forma stockholders’ equity (excluding AOCI) (3)
    N/A       N/A     $ 3,039,076  
 
                       
Basic book value per share
  $ 28.33     $ 26.01     $ 24.10  
Basic book value per share (excluding AOCI) (4)
  $ 26.65     $ 23.59     $ 21.18  
Shares outstanding for basic book value per share calculation
    130,591,834       139,766,177       109,222,276  
 
                       
Diluted book value per share
  $ 27.90     $ 25.99     $ 24.10  
Diluted book value per share (excluding AOCI) (4)
  $ 26.25     $ 23.57     $ 21.18  
Shares outstanding for diluted book value per share calculation
    132,598,736       139,901,760       109,222,276  
 
                       
Pro forma book value per share (3)
    N/A       N/A     $ 23.61  
Pro forma book value per share (excluding AOCI) (3)
    N/A       N/A     $ 21.37  
Pro forma shares outstanding
    N/A       N/A       142,208,676  
 
                       
Debt to total capital ratio (excluding AOCI) (4)
    22.2 %     23.2 %     43.4 %
Pro forma debt to total capital ratio (excluding AOCI) (3)
    N/A       N/A       24.7 %

Page 3


 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(Unaudited)
                         
    As of     As of  
    December 31,     December 31,  
($ in thousands)   2005     2004     2003  
Assets
                       
Investments and cash and cash equivalents
  $ 13,371,392     $ 12,955,128     $ 12,302,585  
Reinsurance recoverables
    4,447,810       4,196,810       4,409,949  
Goodwill
    804,864       823,054       828,523  
Assets held in separate accounts
    3,472,435       3,717,149       3,805,058  
Other assets
    3,268,952       2,855,965       2,747,329  
 
                 
Total assets
    25,365,453       24,548,106       24,093,444  
 
                 
 
                       
Liabilities
                       
Policyholder liability
    14,391,691       13,381,936       12,840,554  
Debt
    971,690       971,611       1,750,000  
Mandatorily redeemable preferred securities
                196,224  
Mandatorily redeemable preferred stock
    24,160       24,160       24,160  
Liabilities related to separate accounts
    3,472,435       3,717,149       3,805,058  
Accounts payable and other liabilities
    2,805,918       2,817,819       2,845,345  
 
                 
Total liabilities
    21,665,894       20,912,675       21,461,341  
 
                       
Stockholders’ equity
                       
Equity, excluding accumulated other comprehensive income
    3,480,060       3,297,268       2,313,576  
Accumulated other comprehensive income
    219,499       338,163       318,527  
 
                 
Total stockholders’ equity
    3,699,559       3,635,431       2,632,103  
 
                 
 
 
                 
Total liabilities and stockholders’ equity
  $ 25,365,453     $ 24,548,106     $ 24,093,444  
 
                 

Page 4


 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Reconciliation of Net Operating Income to Net Income
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands, net of tax)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Assurant Solutions and Assurant Specialty Property
  $ 69,636     $ 53,149     $ 63,765     $ 54,770     $ 44,563     $ 2,974     $ 38,568     $ 40,053     $ 241,320     $ 126,158  
Assurant Health
    33,297       45,718       49,367       49,673       33,744       47,900       39,935       36,708       178,055       158,287  
Assurant Employee Benefits
    19,329       22,846       9,812       16,379       19,967       14,967       14,026       13,250       68,366       62,210  
Assurant Preneed
    4,783       10,475       12,840       6,956       8,698       8,942       10,139       6,456       35,054       34,235  
Corporate and other
    20,701       (4,289 )     (3,314 )     (10,417 )     (19,857 )     (1,195 )     (3,818 )     (10,412 )     2,681       (35,282 )
Amortization of deferred gain on disposal of businesses
    4,651       7,609       7,660       7,711       9,318       9,450       9,270       9,423       27,631       37,461  
Interest expense
    (9,955 )     (9,955 )     (9,954 )     (9,954 )     (9,955 )     (9,819 )     (10,292 )     (8,012 )     (39,818 )     (38,078 )
 
                                                           
Net operating income
    142,442       125,553       130,176       115,118       86,478       73,219       97,828       87,466       513,289       344,991  
 
                                                                               
Adjustments:
                                                                               
Net realized (losses) gains on investments
    (5,396 )     9,794       2,651       320       1,210       1,625       3,719       9,246       7,369       15,800  
Excess of loss reinsurance program (1995-1997)
          (35,060 )     (5,203 )                                   (40,263 )      
Loss on disposal of business
                                        (6,337 )                 (6,337 )
Expenses directly related to the initial and secondary public offerings
                      (1,040 )     (1,560 )                 (2,334 )     (1,040 )     (3,894 )
 
                                                           
Net income
  $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 86,128     $ 74,844     $ 95,210     $ 94,378     $ 479,355     $ 350,560  
 
                                                           

Page 5


 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Consolidated Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $ 1,644,477     $ 1,621,186     $ 1,623,239     $ 1,631,894     $ 1,638,612     $ 1,603,548     $ 1,615,473     $ 1,625,238     $ 6,520,796     $ 6,482,871  
Net investment income
    170,864       175,175       177,018       164,200       163,263       160,034       157,628       153,824       687,257       634,749  
Net realized (losses) gains on investments
    (8,301 )     11,965       4,079       492       1,861       2,501       5,722       14,224       8,235       24,308  
Loss on disposal of business
                                        (9,232 )                 (9,232 )
Amortization of deferred gain on disposal of businesses
    7,155       11,706       11,784       11,863       14,334       14,539       14,262       14,497       42,508       57,632  
Fees and other income
    67,382       59,409       58,183       53,905       60,026       52,923       55,312       52,125       238,879       220,386  
 
                                                           
 
    1,881,577       1,879,441       1,874,303       1,862,354       1,878,096       1,833,545       1,839,165       1,859,908       7,497,675       7,410,714  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
    869,678       970,596       924,011       943,524       950,821       976,934       943,049       968,965       3,707,809       3,839,769  
Selling, underwriting, general and administrative expenses
    847,172       752,156       746,879       726,793       772,092       732,250       736,238       735,856       3,073,000       2,976,436  
Interest expense
    15,315       15,315       15,314       15,314       15,314       15,107       15,834       12,326       61,258       58,581  
 
                                                           
 
    1,732,165       1,738,067       1,686,204       1,685,631       1,738,227       1,724,291       1,695,121       1,717,147       6,842,067       6,874,786  
 
                                                           
Income before income taxes
    149,412       141,374       188,099       176,723       139,869       109,254       144,044       142,761       655,608       535,928  
Income tax expense
    12,366       41,087       60,475       62,325       53,741       34,410       48,834       48,383       176,253       185,368  
 
                                                           
Net income
  $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 86,128     $ 74,844     $ 95,210     $ 94,378     $ 479,355     $ 350,560  
 
                                                           
 
                                                                               
Share repurchase program:
                                                                               
Shares repurchased
    2,014,468       3,910,926       2,797,500       710,000       1,056,400       1,355,100       N/A       N/A       9,432,894       2,411,500  
Average repurchase price per share
  $ 38.00     $ 37.38     $ 34.32     $ 34.16     $ 26.08     $ 26.00       N/A       N/A     $ 36.36     $ 26.04  
Repurchase price
  $ 76,551     $ 146,181     $ 96,006     $ 24,252     $ 27,552     $ 35,234       N/A       N/A     $ 342,990     $ 62,786  
 
                                                                               
AIZ Closing stock price (NYSE)
  $ 43.49     $ 38.06     $ 36.10     $ 33.70     $ 30.55     $ 26.00     $ 26.38     $ 25.15     $ 43.49     $ 30.55  
 
                                                                               
Investment yield (1)
    5.54 %     5.71 %     5.63 %     5.51 %     5.55 %     5.56 %     5.57 %     5.43 %     5.54 %     5.46 %
 
(1)   The investment yields for the three months ended September 30, 2005 and June 30, 2005 exclude $3,156 and $9,409, respectively, of investment income realized from real estate partnerships. The investment yield for the year ended December 31, 2005 excludes $12,565 of investment income realized from real estate partnerships.

Page 6


 

(ASSURANT LOGO)
Assurant Solutions and Assurant Specialty Property
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $ 713,068     $ 648,011     $ 636,688     $ 615,247     $ 612,226     $ 602,720     $ 610,630     $ 623,065     $ 2,613,014     $ 2,448,641  
Net investment income
    51,621       52,514       52,262       48,165       47,123       48,201       44,868       44,759       204,562       184,951  
Fees and other income
    50,365       39,991       40,938       36,103       40,188       38,503       35,820       29,207       167,397       143,718  
 
                                                           
 
    815,054       740,516       729,888       699,515       699,537       689,424       691,318       697,031       2,984,973       2,777,310  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
    223,627       238,148       213,678       203,265       211,552       272,088       220,215       231,576       878,718       935,431  
Selling, underwriting, general and administrative expenses
    484,256       422,215       420,797       414,589       423,625       413,838       414,389       406,550       1,741,857       1,658,402  
 
                                                           
 
    707,883       660,363       634,475       617,854       635,177       685,926       634,604       638,126       2,620,575       2,593,833  
 
                                                           
 
Income before income taxes
    107,171       80,153       95,413       81,661       64,360       3,498       56,714       58,905       364,398       183,477  
Income tax expense
    37,535       27,004       31,648       26,891       19,797       524       18,146       18,852       123,078       57,319  
 
                                                               
Net operating income
  $ 69,636     $ 53,149     $ 63,765     $ 54,770     $ 44,563     $ 2,974     $ 38,568     $ 40,053     $ 241,320     $ 126,158  
 
                                                           
 
                                                                               
Net earned premiums and other considerations by major product groupings:
                                                                               
Assurant Specialty Property
  $ 230,692     $ 219,324     $ 207,723     $ 201,118     $ 190,803     $ 202,336     $ 192,755     $ 182,981     $ 858,857     $ 768,875  
Assurant Solutions
    482,376       428,687       428,965       414,129       421,423       400,384       417,875       440,084       1,754,157       1,679,766  
 
                                                           
Total
  $ 713,068     $ 648,011     $ 636,688     $ 615,247     $ 612,226     $ 602,720     $ 610,630     $ 623,065     $ 2,613,014     $ 2,448,641  
 
                                                           
 
                                                                               
Gross written premiums for selected product groupings:
                                                                               
Domestic Credit
  $ 199,082     $ 182,999     $ 194,667     $ 190,718     $ 200,303     $ 204,586     $ 211,642     $ 236,480     $ 767,466     $ 853,011  
International Credit
  $ 160,858     $ 166,413     $ 157,449     $ 162,747     $ 170,491     $ 155,586     $ 139,978     $ 128,591     $ 647,467     $ 594,646  
Domestic extended service contracts
  $ 326,974     $ 298,969     $ 241,035     $ 253,249     $ 247,305     $ 238,030     $ 211,684     $ 263,333     $ 1,120,227     $ 960,352  
International extended service contracts
  $ 86,674     $ 62,669     $ 50,593     $ 47,570     $ 39,704     $ 11,604     $ 11,098     $ 10,697     $ 247,506     $ 73,103  
Specialty Property Solutions
  $ 411,212     $ 378,474     $ 341,298     $ 299,357     $ 315,886     $ 335,681     $ 320,717     $ 303,073     $ 1,430,341     $ 1,275,357  
Investment yield
    4.75 %     5.10 %     5.28 %     4.87 %     4.79 %     4.97 %     4.73 %     4.74 %     4.88 %     4.78 %

Page 7


 

(ASSURANT LOGO)
Assurant Health
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $ 531,345     $ 538,800     $ 544,294     $ 549,526     $ 557,825     $ 563,165     $ 559,361     $ 550,947     $ 2,163,965     $ 2,231,298  
Net investment income
    16,474       17,707       17,170       17,705       17,365       16,874       16,716       16,947       69,056       67,902  
Fees and other income
    9,323       10,420       10,270       10,331       9,882       8,436       11,035       9,355       40,344       38,708  
 
                                                           
 
    557,142       566,927       571,734       577,562       585,072       588,475       587,112       577,249       2,273,365       2,337,908  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
    329,793       336,362       333,101       345,368       357,751       350,188       358,729       356,115       1,344,624       1,422,783  
Selling, underwriting, general and administrative expenses
    176,626       161,125       163,385       156,763       176,645       165,108       167,753       165,401       657,899       674,907  
 
                                                           
 
    506,419       497,487       496,486       502,131       534,396       515,296       526,482       521,516       2,002,523       2,097,690  
 
                                                           
 
                                                                               
Income before income taxes
    50,723       69,440       75,248       75,431       50,676       73,179       60,630       55,733       270,842       240,218  
Income tax expense
    17,426       23,722       25,881       25,758       16,932       25,279       20,695       19,025       92,787       81,931  
 
                                                           
Net operating income
  $ 33,297     $ 45,718     $ 49,367     $ 49,673     $ 33,744     $ 47,900     $ 39,935     $ 36,708     $ 178,055     $ 158,287  
 
                                                           
 
                                                                               
Net earned premiums and other considerations:
                                                                               
Individual:
                                                                               
Individual medical
  $ 295,322     $ 291,817     $ 290,047     $ 287,312     $ 284,248     $ 280,056     $ 272,593     $ 263,972     $ 1,164,498     $ 1,100,869  
Short-term medical
    26,664       30,257       28,115       25,876       27,452       30,754       28,722       27,655       110,912       114,583  
 
                                                           
Subtotal
    321,986       322,074       318,162       313,188       311,700       310,810       301,315       291,627       1,275,410       1,215,452  
Small employer group
    209,359       216,726       226,132       236,338       246,125       252,355       258,046       259,320       888,555       1,015,846  
 
                                                           
Total
  $ 531,345     $ 538,800     $ 544,294     $ 549,526     $ 557,825     $ 563,165     $ 559,361     $ 550,947     $ 2,163,965     $ 2,231,298  
 
                                                           

Page 8


 

(ASSURANT LOGO)
Assurant Health (continued)
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Sales (Annualized issued premiums):
                                                                               
Individual:
                                                                               
Individual medical
  $ 71,745     $ 69,343     $ 68,137     $ 76,389     $ 74,743     $ 82,546     $ 89,290     $ 98,215     $ 285,614     $ 344,794  
Short-term medical
    24,747       34,889       31,566       28,716       25,942       33,430       29,195       28,829       119,918       117,396  
 
                                                           
Subtotal
    96,492       104,232       99,703       105,105       100,685       115,976       118,485       127,044       405,532       462,190  
Small employer group
    36,466       36,224       41,211       45,486       39,826       49,285       66,728       77,970       159,387       233,809  
 
                                                           
 
                                                                             
Total
  $ 132,958     $ 140,456     $ 140,914     $ 150,591     $ 140,511     $ 165,261     $ 185,213     $ 205,014     $ 564,919     $ 695,999  
 
                                                           
 
                                                                               
Membership by product line:
                                                                               
Individual:
                                                                               
Individual medical
    644       647       662       671       675       677       673       657       644       675  
Short-term medical
    102       122       129       116       107       130       137       129       102       107  
 
                                                           
Subtotal
    746       769       791       787       782       807       810       786       746       782  
Small employer group
    255       267       287       308       333       348       367       375       255       333  
 
                                                           
Total
    1,001       1,036       1,078       1,095       1,115       1,155       1,177       1,161       1,001       1,115  
 
                                                           
 
                                                                               
Ratios:
                                                                               
Loss ratio (a)
    62.1 %     62.4 %     61.2 %     62.8 %     64.1 %     62.2 %     64.1 %     64.6 %     62.1 %     63.8 %
Expense ratio (b)
    32.7 %     29.3 %     29.5 %     28.0 %     31.1 %     28.9 %     29.4 %     29.5 %     29.8 %     29.7 %
Combined ratio (c)
    93.7 %     90.6 %     89.5 %     89.7 %     94.1 %     90.1 %     92.3 %     93.1 %     90.8 %     92.4 %
 
                                                                               
Investment yield (1)
    5.57 %     5.48 %     5.23 %     5.44 %     5.48 %     5.40 %     5.33 %     5.50 %     5.61 %     5.47 %
 
(a)   The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
 
(b)   The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
 
(c)   The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.
 
(1)   The investment yields for the three months ended September 30, 2005 and for the year ended December 31, 2005 exclude $596 of investment income realized from a real estate partnership.

Page 9


 

(ASSURANT LOGO)
Assurant Employee Benefits
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $ 308,568     $ 306,928     $ 316,420     $ 345,922     $ 343,782     $ 305,827     $ 309,159     $ 318,044     $ 1,277,838     $ 1,276,812  
Net investment income
    38,754       41,878       38,274       37,983       39,063       37,496       37,437       35,722       156,889       149,718  
Fees and other income
    6,056       6,976       6,993       6,189       6,777       5,411       6,734       10,384       26,214       29,306  
 
                                                           
 
    353,378       355,782       361,687       390,094       389,622       348,734       353,330       364,150       1,460,941       1,455,836  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
    215,538       212,022       241,537       267,738       252,984       224,083       228,842       244,326       936,835       950,235  
Selling, underwriting, general and administrative expenses
    108,095       108,403       105,027       97,017       106,037       101,618       102,737       99,345       418,542       409,737  
 
                                                           
 
    323,633       320,425       346,564       364,755       359,021       325,701       331,579       343,671       1,355,377       1,359,972  
 
                                                           
 
                                                                               
Income before income taxes
    29,745       35,357       15,123       25,339       30,601       23,033       21,751       20,479       105,564       95,864  
Income tax expense
    10,416       12,511       5,311       8,960       10,634       8,066       7,725       7,229       37,198       33,654  
 
                                                           
Net operating income
  $ 19,329     $ 22,846     $ 9,812     $ 16,379     $ 19,967     $ 14,967     $ 14,026     $ 13,250     $ 68,366     $ 62,210  
 
                                                           
 
                                                                               
Net earned premiums and other considerations by:
                                                                               
Major product grouping:
                                                                               
Group dental
  $ 121,444     $ 124,780     $ 128,323     $ 128,242     $ 130,561     $ 128,232     $ 130,453     $ 131,267     $ 502,789     $ 520,513  
Group disability single premiums for closed blocks
                      26,700       27,831                   13,075       26,700       40,906  
All other group disability
    123,390       118,595       123,078       124,777       124,032       115,770       114,986       110,729       489,840       465,517  
Group life
    63,734       63,553       65,019       66,203       61,358       61,825       63,720       62,973       258,509       249,876  
 
                                                           
Total
  $ 308,568     $ 306,928     $ 316,420     $ 345,922     $ 343,782     $ 305,827     $ 309,159     $ 318,044     $ 1,277,838     $ 1,276,812  
 
                                                           

Page 10


 

(ASSURANT LOGO)
Assurant Employee Benefits (continued)
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Sales:
                                                                               
Group dental
  $ 17,316     $ 21,588     $ 18,187     $ 41,757     $ 28,063     $ 27,508     $ 17,558     $ 45,935     $ 98,848     $ 119,064  
Group disability
    9,722       12,649       14,864       25,420       15,358       17,286       11,420       26,323       62,655       70,387  
Group life
    6,702       5,883       10,898       18,561       9,981       10,063       15,273       13,169       42,044       48,486  
 
                                                           
Total
  $ 33,740     $ 40,120     $ 43,949     $ 85,738     $ 53,402     $ 54,857     $ 44,251     $ 85,427     $ 203,547     $ 237,937  
 
                                                           
 
                                                                               
Ratios:
                                                                               
Loss ratio (a)
    69.9 %     69.1 %     76.3 %     77.4 %     73.6 %     73.3 %     74.0 %     76.8 %     73.3 %     74.4 %
Expense ratio (b)
    34.4 %     34.5 %     32.5 %     27.6 %     30.2 %     32.6 %     32.5 %     30.2 %     32.1 %     31.4 %
Investment yield (1)
    6.15 %     6.29 %     6.14 %     6.12 %     6.40 %     6.13 %     6.15 %     6.01 %     6.19 %     6.22 %
 
(a)   The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
 
(b)   The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
 
(1)   The investment yields for the three months ended September 30, 2005 and for the year ended December 31, 2005 exclude $2,560 of investment income realized from a real estate partnership.

Page 11


 

(ASSURANT LOGO)
Assurant Preneed
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $ 91,496     $ 127,447     $ 125,837     $ 121,199     $ 124,779     $ 131,836     $ 136,323     $ 133,182     $ 465,979     $ 526,120  
Net investment income
    57,052       56,204       62,688       53,012       52,672       50,982       52,469       50,177       228,956       206,300  
Fees and other income
    587       1,922       (196 )     1,179       3,295       (20 )     1,494       2,041       3,492       6,810  
 
                                                           
 
    149,135       185,573       188,329       175,390       180,746       182,798       190,286       185,400       698,427       739,230  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
    100,720       129,916       127,900       127,153       128,534       130,575       135,263       136,948       485,689       531,320  
Selling, underwriting, general and administrative expenses
    40,814       39,570       40,732       37,531       39,729       38,854       39,390       38,513       158,647       156,486  
 
                                                           
 
    141,534       169,486       168,632       164,684       168,263       169,429       174,653       175,461       644,336       687,806  
 
                                                           
 
                                                                               
Income before income taxes
    7,601       16,087       19,697       10,706       12,483       13,369       15,633       9,939       54,091       51,424  
Income tax expense
    2,818       5,612       6,857       3,750       3,785       4,427       5,494       3,483       19,037       17,189  
 
                                                           
Net operating income
  $ 4,783     $ 10,475     $ 12,840     $ 6,956     $ 8,698     $ 8,942     $ 10,139     $ 6,456     $ 35,054     $ 34,235  
 
                                                           
 
                                                                               
Net earned premiums and other considerations by channel:
                                                                               
AMLIC
  $ 56,738     $ 64,210     $ 64,299     $ 64,589     $ 61,738     $ 69,362     $ 70,379     $ 71,668     $ 249,836     $ 273,147  
Independent — United States
    27,633       56,703       55,353       50,859       57,867       57,701       61,190       57,418       190,548       234,176  
Independent — Canada
    7,125       6,534       6,185       5,751       5,174       4,773       4,754       4,096       25,595       18,797  
 
                                                           
Total
  $ 91,496     $ 127,447     $ 125,837     $ 121,199     $ 124,779     $ 131,836     $ 136,323     $ 133,182     $ 465,979     $ 526,120  
 
                                                           
 
                                                                               
Life and annuity sales by channel:
                                                                               
AMLIC
  $ 60,631     $ 68,715     $ 72,531     $ 71,370     $ 63,806     $ 74,774     $ 78,729     $ 77,399     $ 273,247     $ 294,708  
Independent — United States
    39,335       50,614       49,499       43,552       50,937       51,544       57,273       54,869       183,000       214,623  
Independent — Canada
    23,236       22,457       22,478       18,097       23,278       15,998       18,671       14,919       86,268       72,866  
 
                                                           
Total
  $ 123,202     $ 141,786     $ 144,508     $ 133,019     $ 138,021     $ 142,316     $ 154,673     $ 147,187     $ 542,515     $ 582,197  
 
                                                           
 
                                                                               
Investment yield (1)
    6.59 %     6.49 %     6.18 %     6.23 %     6.35 %     6.29 %     6.47 %     6.27 %     6.43 %     6.34 %
 
(1)   The investment yields for the three months ended June 30, 2005 and for the year ended December 31, 2005 exclude $9,409 of investment income realized from a real estate partnership.

Page 12


 

(ASSURANT LOGO)
Assurant Corporate and Other
Condensed Statement of Operations
(Unaudited)
                                                                                 
    For the Three Months Ended     For the Year Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  
($ in thousands)   2005     2005     2005     2005     2004     2004     2004     2004     2005     2004  
Revenues:
                                                                               
Net earned premiums and other considerations
  $     $     $     $     $     $     $     $     $     $  
Net investment income
    6,963       6,872       6,624       7,335       7,040       6,481       6,138       6,219       27,794       25,878  
Net realized (losses) gains on investments
    (8,301 )     11,965       4,079       492       1,861       2,501       5,722       14,224       8,235       24,308  
Loss on disposal of business
                                        (9,232 )                 (9,232 )
Amortization of deferred gain on disposal of businesses
    7,155       11,706       11,784       11,863       14,334       14,539       14,262       14,497       42,508       57,632  
Fees and other income
    1,051       100       178       103       (116 )     593       229       1,138       1,432       1,844  
 
                                                           
 
    6,868       30,643       22,665       19,793       23,119       24,114       17,119       36,078       79,969       100,430  
 
                                                           
 
                                                                               
Benefits, losses and expenses:
                                                                               
Policyholder benefits
          54,148       7,795                                     61,943        
Selling, underwriting, general and administrative expenses
    37,381       20,843       16,938       20,893       26,056       12,832       11,969       26,047       96,055       76,904  
Interest expense
    15,315       15,315       15,314       15,314       15,314       15,107       15,834       12,326       61,258       58,581  
 
                                                           
 
    52,696       90,306       40,047       36,207       41,370       27,939       27,803       38,373       219,256       135,485  
 
                                                           
 
                                                                               
Loss before income taxes
    (45,828 )     (59,663 )     (17,382 )     (16,414 )     (18,251 )     (3,825 )     (10,684 )     (2,295 )     (139,287 )     (35,055 )
Income tax (benefit) expense
    (55,829 )     (27,762 )     (9,222 )     (3,034 )     2,593       (3,886 )     (3,226 )     (206 )     (95,847 )     (4,725 )
 
                                                           
Net operating income (loss)
  $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ (20,844 )   $ 61     $ (7,458 )   $ (2,089 )   $ (43,440 )   $ (30,330 )
 
                                                           

Page 13


 

(ASSURANT LOGO)
Assurant, Inc. and Subsidiaries
Investments
(Unaudited)
                                 
    As of             As of          
    December 31,             December 31,          
($ in thousands)   2005             2004          
Investments by Type
                               
Fixed maturities: available-for-sale, at fair value
  $ 8,961,778             $ 9,009,290          
Equity Securities: available-for-sale
                               
Preferred stocks
    691,523               635,671          
Common stocks
    1,578               2,067          
Commercial mortgage loans on real estate, at amortized cost
    1,212,006               1,053,872          
Policy loans
    61,043               64,886          
Cash and short-term investments
    1,283,043               1,107,175          
Collateral held under securities lending
    610,662               535,331          
Other investments
    549,759               546,836          
 
                           
Total
  $ 13,371,392             $ 12,955,128          
 
                           
 
                               
Fixed Maturity Securities by Credit Quality (Fair Value)
                               
Aaa / Aa / A
  $ 6,211,058       69 %   $ 6,186,640       69 %
Baa
    2,122,752       24 %     2,300,421       26 %
Ba
    515,740       6 %     405,324       4 %
B
    101,724       1 %     100,466       1 %
Caa and lower
    9,764       0 %     16,095       0 %
In or near default
    740       0 %     344       0 %
 
                         
Total
  $ 8,961,778       100 %   $ 9,009,290       100 %
 
                       
 
                               
Fixed Maturity Securities by Issuer Type (Fair Value)
                               
U.S government and government agencies and authorities
  $ 1,400,251       16 %   $ 1,232,396       14 %
State, municipalities and political subdivisions
    235,932       3 %     217,864       2 %
Foreign government
    589,353       6 %     527,428       6 %
Public utilities
    1,064,591       12 %     1,082,725       12 %
All other corporate bonds
    5,671,651       63 %     5,948,877       66 %
 
                         
Total
  $ 8,961,778       100 %   $ 9,009,290       100 %
 
                       

Page 14


 

(ASSURANT LOGO)
Assurant, Inc.
Investment Results by Asset Category and Annualized Yields
(Unaudited)
                                                                                                 
    For the Three Months Ended     For the Three Months Ended              
    December 31, 2005     December 31, 2004     For the Year Ended December 31, 2005     For the Year Ended December 31, 2004  
            Investment     Investment     Investment     Investment             Investment     Investment             Investment     Investment  
($ in thousands)   Yield     Income     Gain (Loss)     Yield     Income     Gain (Loss)     Yield     Income     Gain (Loss)     Yield     Income     Gain (Loss)  
Fixed maturities: available-for-sale, at fair value
    5.63 %   $ 122,559     $ (7,049 )     5.95 %   $ 125,841     $ 11,381       5.82 %   $ 499,950     $ (8,628 )     5.82 %   $ 484,232     $ 30,761  
Equity Securities: available-for-sale
    7.95 %     13,763       (2,066 )     6.90 %     10,838       643       6.95 %     45,621       (2,929 )     7.37 %     41,591       900  
Commercial mortgage loans on real estate, at amortized cost
    7.46 %     21,898       (1,142 )     7.75 %     20,284       (747 )     7.59 %     85,942       (2,714 )     7.99 %     79,334       (1,197 )
Policy loans
    5.38 %     838             5.16 %     844             5.87 %     3,699             5.76 %     3,832        
Cash and short-term investments
    2.66 %     7,675       282       1.48 %     3,739             2.03 %     24,316       346       0.86 %     10,100       17  
Other investments
    7.39 %     10,150       1,674       5.65 %     7,860       (9,416 )     9.54 %     52,296       22,160       7.64 %     39,927       (6,173 )
 
                                                                               
Total
            176,883     $ (8,301 )             169,406     $ 1,861               711,824     $ 8,235               659,016     $ 24,308  
Investment expenses
            (6,019 )                     (6,143 )                     (24,567 )                     (24,267 )        
 
                                                                                       
Net investment income
          $ 170,864                     $ 163,263                     $ 687,257                     $ 634,749          
 
                                                                                       
 
                                                                                               
 
Gross investment gain
                  $ 12,949                     $ 18,486                     $ 55,845                     $ 58,640  
Gross investment loss
                    (20,485 )                     (16,625 )                     (46,845 )                     (33,515 )
Write-downs on available- for-sale securities
                    (765 )                                           (765 )                     (817 )
 
                                                                                       
Net investment gain
                  $ (8,301 )                   $ 1,861                     $ 8,235                     $ 24,308  
 
                                                                                       

Page 15