EX-99.2 3 dex992.htm PRESENTATION ENTITLED "ASSURANT, INC. FINANCIAL SUPPLEMENT AS OF SEPTEMBER 30" Presentation entitled "Assurant, Inc. Financial Supplement as of September 30"

Exhibit 99.2

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Assurant, Inc. (AIZ)

Financial Supplement as of September 30, 2006


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ASSURANT, INC. AND SUBSIDIARIES

EARNINGS RELEASE SUPPLEMENT

AS OF SEPTEMBER 30, 2006

 

INDEX TO SUPPLEMENT   
     Page:

REGULATION G – NON GAAP MEASURES

   1

SUMMARY FINANCIAL HIGHLIGHTS (unaudited)

   2

SEGMENTED BALANCE SHEETS (unaudited)

   4

RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited)

   5

CONDENSED CONSOLIDATED 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 markets. The four key business segments – Assurant Solutions; Assurant Specialty Property; Assurant Health; and Assurant Employee Benefits – have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance markets in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration; credit insurance; warranties and extended services contracts; individual health and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.

The company, which is traded on the New York Stock Exchange under the symbol AIZ, has over $20 billion in assets and $7 billion in annual revenue. Assurant has more than 12,000 employees and is headquartered in New York’s financial district.

Safe Harbor Statement:

Some of the statements included in this statistical supplement, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. For a discussion of the factors that could affect our actual results please refer to the risk factors identified from time to time in our SEC reports, including, but not limited to our 10-K, as filed with the SEC.


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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) 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.

 

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Assurant, Inc. and Subsidiaries

Summary Financial Highlights

(Unaudited)

 

     For the Three-Months Ended
September 30,
    For the Nine-Months Ended
September 30,
 
($ in thousands, except shares and per share amounts)    2006     2005     2006     2005  

Net operating income (1)

   $ 153,042     $ 125,553     $ 466,520     $ 370,847  

Net realized (losses) gains on investments

     (1,739 )     9,794       (3,156 )     12,765  

Excess of loss reinsurance program (1995-1997)

     —         (35,060 )     —         (40,263 )

Expenses directly related to the secondary public offering

     —         —         —         (1,040 )
                                

Net income before cumulative effect of change in accounting principle

     151,303       100,287       463,364       342,309  

Cumulative effect of change in accounting principle

     —         —         1,547       —    
                                

Net income

   $ 151,303     $ 100,287     $ 464,911     $ 342,309  
                                

Total revenues

   $ 1,984,079     $ 1,879,441     $ 5,862,951     $ 5,616,098  

PER SHARE AND SHARE DATA:

        

Basic earnings per share

        

Net operating income

   $ 1.22     $ 0.93     $ 3.64     $ 2.70  

Net income before cumulative effect of change in accounting principle

   $ 1.20     $ 0.74     $ 3.62     $ 2.49  

Net income

   $ 1.20     $ 0.74     $ 3.63     $ 2.49  

Weighted average of common shares outstanding - basic

     125,793,731       134,706,785       128,078,026       137,362,736  

Diluted earnings per share

        

Net operating income

   $ 1.20     $ 0.92     $ 3.59     $ 2.67  

Net income before cumulative effect of change in accounting principle

   $ 1.18     $ 0.74     $ 3.57     $ 2.47  

Net income

   $ 1.18     $ 0.74     $ 3.58     $ 2.47  

Weighted average of common shares outstanding - diluted

     127,766,049       136,177,498       129,877,613       138,712,630  

 

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Assurant, Inc. and Subsidiaries

Summary Financial Highlights (continued)

(Unaudited)

 

($ in thousands, except shares and per share amounts)

  

As of

September 30,

2006

   

As of

December 31,

2005

 
    
    

Total assets

   $ 25,023,450     $ 25,365,453  

Total stockholders’ equity

   $ 3,759,441     $ 3,699,559  

Total stockholders’ equity (excluding AOCI)

   $ 3,601,291     $ 3,480,060  

Basic book value per share

   $ 30.24     $ 28.33  

Basic book value per share (excluding AOCI) (2)

   $ 28.97     $ 26.65  

Shares outstanding for basic book value per share calculation

     124,302,731       130,591,834  

Diluted book value per share

   $ 29.72     $ 27.90  

Diluted book value per share (excluding AOCI) (2)

   $ 28.47     $ 26.25  

Shares outstanding for diluted book value per share calculation

     126,500,683       132,598,736  

Debt to total capital ratio (excluding AOCI)

     21.6 %     22.2 %

 

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Assurant, Inc. and Subsidiaries

Segmented Condensed Balance Sheets

At September 30, 2006 and December 31, 2005

(Unaudited)

 

     At September 30, 2006
   Solutions    Specialty
Property
   Health    Employee
Benefits
   Corporate &
Other(1)
   Consolidated
     ($ in thousands)

Assets

                 

Investments and cash and cash equivalents

   $ 7,143,936    $ 1,446,040    $ 1,281,098    $ 2,652,487    $ 904,945    $ 13,428,506

Reinsurance recoverables

     752,051      345,603      5,561      23,193      2,852,721      3,979,129

Deferred acquisition costs

     2,044,207      141,530      58,370      27,928      —        2,272,035

Goodwill

     —        —        —        —        805,186      805,186

Assets held in separate accounts

     248,609      —        —        —        2,964,076      3,212,685

Other assets

     555,998      269,787      95,884      203,101      201,139      1,325,909
                                         

Total assets

     10,744,801      2,202,960      1,440,913      2,906,709      7,728,067      25,023,450
                                         

Liabilities

                 

Policyholder benefits and claims payable

     4,300,564      288,098      588,198      1,938,131      3,134,749      10,249,740

Unearned premiums

     3,259,045      769,914      127,355      13,411      45,890      4,215,615

Debt

     —        —        —        —        971,753      971,753

Mandatorily redeemable preferred stock

     —        —        —        —        23,160      23,160

Liabilities related to separate accounts

     248,609      —        —        —        2,964,076      3,212,685

Accounts payable and other liabilities

     1,246,608      428,053      226,144      319,510      370,741      2,591,056
                                         

Total liabilities

     9,054,826      1,486,065      941,697      2,271,052      7,510,369      21,264,009

Stockholders’ equity

                 

Equity, excluding accumulated other comprehensive income

     1,689,975      716,895      499,216      635,657      59,548      3,601,291

Accumulated other comprehensive income

     —        —        —        —        158,150      158,150
                                         

Total stockholders’ equity

     1,689,975      716,895      499,216      635,657      217,698      3,759,441
                                         

Total liabilities and stockholders’ equity

   $ 10,744,801    $ 2,202,960    $ 1,440,913    $ 2,906,709    $ 7,728,067    $ 25,023,450
                                         

 

     At December 31, 2005
   Solutions    Specialty
Property
   Health    Employee
Benefits
   Corporate &
Other(1)
   Consolidated
   ($ in thousands)

Assets

                 

Investments and cash and cash equivalents

   $ 6,962,324    $ 1,125,980    $ 1,246,798    $ 2,714,308    $ 1,321,982    $ 13,371,392

Reinsurance recoverables

     812,466      816,533      5,527      23,193      2,790,091      4,447,810

Deferred acquisition costs

     1,784,366      132,456      76,593      28,893      —        2,022,308

Goodwill

     —        —        —        —        804,864      804,864

Assets held in separate accounts

     246,859      —        —        —        3,225,576      3,472,435

Other assets

     651,100      187,932      123,960      132,078      151,574      1,246,644
                                         

Total assets

     10,457,115      2,262,901      1,452,878      2,898,472      8,294,087      25,365,453
                                         

Liabilities

                 

Policyholder benefits and claims payable

     4,241,237      670,999      603,807      1,926,396      3,097,638      10,540,077

Unearned premiums

     2,970,104      700,183      121,959      12,481      46,887      3,851,614

Debt

     —        —        —        —        971,690      971,690

Mandatorily redeemable preferred stock

     —        —        —        —        24,160      24,160

Liabilities related to separate accounts

     246,859      —        —        —        3,225,576      3,472,435

Accounts payable and other liabilities

     1,422,739      367,316      247,548      349,347      418,968      2,805,918
                                         

Total liabilities

     8,880,939      1,738,498      973,314      2,288,224      7,784,919      21,665,894
                 

Stockholders’ equity

                 

Equity, excluding accumulated other comprehensive income

     1,576,176      524,403      479,564      610,248      289,669      3,480,060

Accumulated other comprehensive income

     —        —        —        —        219,499      219,499
                                         

Total stockholders’ equity

     1,576,176      524,403      479,564      610,248      509,168      3,699,559
                                         

Total liabilities and stockholders’ equity

   $ 10,457,115    $ 2,262,901    $ 1,452,878    $ 2,898,472    $ 8,294,087    $ 25,365,453
                                         

(1) Corporate and Other segment includes Accumulated Other Comprehensive Income, Reinsurance Recoverables related to the disposal of FFG and LTC businesses, goodwill, separate accounts related to the disposal of FFG business and all of Assurant, Inc.’s debt.

 

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Assurant, Inc. and Subsidiaries

Reconciliation of Net Operating Income to Net Income

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands, net of tax)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Assurant Solutions

   $ 41,707     $ 37,148     $ 39,747     $ 35,382     $ 31,939     $ 42,392     $ 23,434     $ 118,602     $ 97,765  

Assurant Specialty Property

     53,445       59,276       64,444       39,037       31,685       34,213       38,292       177,165       104,190  

Assurant Health

     44,847       41,016       45,096       33,297       45,718       49,367       49,673       130,959       144,758  

Assurant Employee Benefits

     24,400       20,590       19,185       19,329       22,846       9,812       16,379       64,175       49,037  

Corporate and other

     (7,535 )     (4,930 )     (439 )     20,701       (4,289 )     (3,314 )     (10,417 )     (12,904 )     (18,020 )

Amortization of deferred gain on disposal of businesses

     6,128       6,514       5,741       4,651       7,609       7,660       7,711       18,383       22,980  

Interest expense

     (9,950 )     (9,955 )     (9,955 )     (9,955 )     (9,955 )     (9,954 )     (9,954 )     (29,860 )     (29,863 )
                                                                        

Net operating income

     153,042       149,659       163,819       142,442       125,553       130,176       115,118       466,520       370,847  

Adjustments:

                  

Net realized (losses) gains on investments

     (1,739 )     1,477       (2,894 )     (5,396 )     9,794       2,651       320       (3,156 )     12,765  

Excess of loss reinsurance program (1995-1997)

     —         —         —         —         (35,060 )     (5,203 )     —         —         (40,263 )

Expenses directly related to the secondary public offering

     —         —         —         —         —         —         (1,040 )     —         (1,040 )
                                                                        

Net income before cumulative effect of change in accounting principle

     151,303       151,136       160,925       137,046       100,287       127,624       114,398       463,364       342,309  

Cumulative effect of change in accounting principle

     —         —         1,547       —         —         —         —         1,547       —    
                                                                        

Net income

   $ 151,303     $ 151,136     $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 464,911     $ 342,309  
                                                                        

 

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Assurant, Inc. and Subsidiaries

Consolidated Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Revenues:

                  

Net earned premiums and other considerations

   $ 1,717,640     $ 1,685,322     $ 1,672,653     $ 1,644,477     $ 1,621,186     $ 1,623,239     $ 1,631,894     $ 5,075,615     $ 4,876,319  

Net investment income

     180,672       180,438       192,562       170,864       175,175       177,018       164,200       553,672       516,393  

Net realized (losses) gains on investments

     (2,675 )     2,272       (4,452 )     (8,301 )     11,965       4,079       492       (4,855 )     16,536  

Amortization of deferred gain on disposal of businesses

     9,428       10,022       8,833       7,155       11,706       11,784       11,863       28,283       35,353  

Fees and other income

     79,014       71,036       60,186       67,382       59,409       58,183       53,905       210,236       171,497  
                                                                        
     1,984,079       1,949,090       1,929,782       1,881,577       1,879,441       1,874,303       1,862,354       5,862,951       5,616,098  
                                                                        

Benefits, losses and expenses:

                  

Policyholder benefits

     888,317       874,204       889,679       869,678       970,596       924,011       943,524       2,652,200       2,838,131  

Selling, underwriting, general and administrative expenses

     849,414       827,408       782,432       847,172       752,156       746,879       726,793       2,459,254       2,225,828  

Interest expense

     15,307       15,315       15,315       15,315       15,315       15,314       15,314       45,937       45,943  
                                                                        
     1,753,038       1,716,927       1,687,426       1,732,165       1,738,067       1,686,204       1,685,631       5,157,391       5,109,902  
                                                                        

Income before income taxes and cumulative effect of change in accounting principle

     231,041       232,163       242,356       149,412       141,374       188,099       176,723       705,560       506,196  

Income taxes

     79,738       81,027       81,431       12,366       41,087       60,475       62,325       242,196       163,887  
                                                                        

Net income before cumulative effect of change in accounting principle

     151,303       151,136       160,925       137,046       100,287       127,624       114,398       463,364       342,309  

Cumulative effect of change in accounting principle

     —         —         1,547       —         —         —         —         1,547       —    
                                                                        

Net income

   $ 151,303     $ 151,136     $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 464,911     $ 342,309  
                                                                        

Share repurchase program:

                  

Shares repurchased

     3,081,000       2,140,000       1,416,800       2,014,468       3,910,926       2,797,500       710,000       6,637,800       7,418,426  

Average repurchase price per share

   $ 50.34     $ 48.43     $ 45.17     $ 38.00     $ 37.38     $ 34.32     $ 34.16     $ 47.13     $ 35.92  

Repurchase price

   $ 155,109     $ 103,630     $ 64,001     $ 76,551     $ 146,181     $ 96,006     $ 24,252     $ 322,740     $ 266,439  

AIZ Closing stock price (NYSE)

   $ 53.41     $ 48.40     $ 49.25     $ 43.49     $ 38.06     $ 36.10     $ 33.70     $ 53.41     $ 38.06  

Investment yield (1)

     5.66 %     5.83 %     5.75 %     5.54 %     5.71 %     5.63 %     5.51 %     5.70 %     5.57 %

Real estate investment income (1)

   $ 3,229     $ —       $ 14,735     $ —       $ 3,156     $ 9,409     $ —       $ 17,964     $ 12,565  

(1) Investment yield excludes investment income from real estate partnerships.

 

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Assurant Solutions

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended    For the Nine Months Ended
($ in thousands)    September 30,
2006
    June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
   March 31,
2005
   September 30,
2006
    September 30,
2005

Revenues:

                        

Net earned premiums and other considerations

   $ 591,237     $ 592,182    $ 570,388    $ 573,880    $ 556,084    $ 554,829    $ 535,352    $ 1,753,807     $ 1,646,265

Net investment income

     96,625       98,951      97,082      93,192      92,070      100,107      86,196      292,658       278,373

Fees and other income

     47,262       39,525      34,170      41,004      32,063      30,574      29,089      120,957       91,726
                                                                
     735,124       730,658      701,640      708,076      680,217      685,510      650,637      2,167,422       2,016,364
                                                                

Benefits, losses and expenses:

                        

Policyholder benefits

     250,886       247,208      248,380      246,585      271,357      269,284      259,674      746,474       800,315

Selling, underwriting, general and administrative expenses

     424,284       424,429      394,878      406,259      360,947      353,299      357,000      1,243,591       1,071,246
                                                                
     675,170       671,637      643,258      652,844      632,304      622,583      616,674      1,990,065       1,871,561
                                                                

Income before income taxes

     59,954       59,021      58,382      55,232      47,913      62,927      33,963      177,357       144,803

Income taxes

     18,247       21,873      18,635      19,850      15,974      20,535      10,529      58,755       47,038
                                                                

Net operating income

   $ 41,707     $ 37,148    $ 39,747    $ 35,382    $ 31,939    $ 42,392    $ 23,434    $ 118,602     $ 97,765
                                                                

Gross written premiums for selected product groupings:

                        

Domestic Credit

   $ 184,120     $ 182,489    $ 168,927    $ 199,082    $ 182,999    $ 194,667    $ 190,718    $ 535,536     $ 568,384

International Credit

   $ 175,417     $ 159,208    $ 161,024    $ 160,858    $ 166,413    $ 157,449    $ 162,747    $ 495,649     $ 486,609

Domestic extended service contracts

   $ 299,215     $ 290,851    $ 285,504    $ 326,974    $ 298,969    $ 241,035    $ 253,249    $ 875,570     $ 793,253

International extended service contracts

   $ 91,407     $ 71,330    $ 66,256    $ 86,674    $ 62,669    $ 50,593    $ 47,570    $ 228,993     $ 160,832

Preneed (Face Sales)

   $ 105,031     $ 120,545    $ 123,688    $ 123,202    $ 141,786    $ 144,508    $ 133,019    $ 349,264     $ 419,313

Investment yield (1) *

     5.67 %     N/A      N/A      N/A      N/A      N/A      N/A      5.75 %     N/A

Real estate investment income (1)

   $ 1,453     $ —      $ 2,506    $ —      $ —      $ 9,409    $ —      $ 3,959     $ 9,409

(1) Investment yield excludes investment income from real estate partnerships.
* Segment balance sheets as of March 31, 2006, September 30, 2005, June 30, 2005 and March 31, 2005 are not available. Therefore, investment yields are not available.

 

Page 7


LOGO

Assurant Specialty Property

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Revenues:

                  

Net earned premiums and other considerations

   $ 313,644     $ 290,972     $ 252,749     $ 230,684     $ 219,374     $ 207,696     $ 201,094     $ 857,365     $ 628,164  

Net investment income

     19,584       17,923       16,790       15,481       16,648       14,843       14,981       54,297       46,472  

Fees and other income

     13,329       13,587       9,458       9,948       9,850       10,168       8,193       36,374       28,211  
                                                                        
     346,557       322,482       278,997       256,113       245,872       232,707       224,268       948,036       702,847  
                                                                        

Benefits, losses and expenses:

                  

Policyholder benefits

     115,379       110,474       70,459       77,762       96,707       72,294       70,744       296,312       239,745  

Selling, underwriting, general and administrative expenses

     148,540       122,369       109,089       118,811       100,838       108,230       95,120       379,998       304,188  
                                                                        
     263,919       232,843       179,548       196,573       197,545       180,524       165,864       676,310       543,933  
                                                                        

Income before income taxes

     82,638       89,639       99,449       59,540       48,327       52,183       58,404       271,726       158,914  

Income taxes

     29,193       30,363       35,005       20,503       16,642       17,970       20,112       94,561       54,724  
                                                                        

Net operating income

   $ 53,445     $ 59,276     $ 64,444     $ 39,037     $ 31,685     $ 34,213     $ 38,292     $ 177,165     $ 104,190  
                                                                        

Net Earned Premiums for selected product groupings:

                  

Homeowners (Creditor Placed & Voluntary)

   $ 198,733     $ 178,363     $ 142,892     $ 118,070     $ 114,965     $ 107,219     $ 103,272     $ 519,988     $ 325,456  

Manufactured Housing (Creditor Placed & Voluntary)

     52,535       54,184       55,968       57,957       52,699       53,252       53,516       162,687       159,467  

Other

     62,376       58,425       53,889       54,657       51,710       47,225       44,306       174,690       143,241  
                                                                        

Total

   $ 313,644     $ 290,972     $ 252,749     $ 230,684     $ 219,374     $ 207,696     $ 201,094     $ 857,365     $ 628,164  
                                                                        

Gross Written Premiums for selected product groupings:

                  

Homeowners (Creditor Placed & Voluntary)

   $ 271,632     $ 247,538     $ 184,096     $ 219,423     $ 190,975     $ 150,359     $ 136,894     $ 703,266     $ 478,228  

Manufactured Housing (Creditor Placed & Voluntary)

     82,401       80,981       69,610       80,616       81,818       80,094       69,264       232,992       231,176  

Other

     130,820       127,555       101,386       111,173       105,733       110,819       93,066       359,761       309,618  
                                                                        

Total

   $ 484,853     $ 456,074     $ 355,092     $ 411,212     $ 378,526     $ 341,272     $ 299,224     $ 1,296,019     $ 1,019,022  
                                                                        

Ratios:

                  

Loss ratio (a)

     36.8 %     38.0 %     27.9 %     33.7 %     44.1 %     34.8 %     35.2 %     34.6 %     38.2 %

Expense ratio (b)

     45.4 %     40.2 %     41.6 %     49.4 %     44.0 %     49.7 %     45.4 %     42.5 %     46.3 %

Combined ratio (c)

     80.7 %     76.5 %     68.5 %     81.7 %     86.2 %     82.9 %     79.3 %     75.7 %     82.9 %

Investment yield (1)*

     5.62 %     N/A       N/A       N/A       N/A       N/A       N/A       5.63 %     N/A  

Real estate investment income (1)

   $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —    

(a) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(b) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(c) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.
(1) Investment yield excludes investment income from real estate partnerships.
* Segment balance sheets as of March 31, 2006, September 30, 2005, June 30, 2005 and March 31, 2005 are not available. Therefore, investment yields are not available.

 

Page 8


LOGO

Assurant Health

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended    For the Nine Months Ended
($ in thousands)    September 30,
2006
   June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
   March 31,
2005
   September 30,
2006
   September 30,
2005

Revenues:

                          

Net earned premiums and other considerations

   $ 521,527    $ 519,587    $ 523,405    $ 531,345    $ 538,800    $ 544,294    $ 549,526    $ 1,564,519    $ 1,632,620

Net investment income

     17,689      17,110      24,001      16,474      17,707      17,170      17,705      58,800      52,582

Fees and other income

     11,035      10,250      9,726      9,323      10,420      10,270      10,331      31,011      31,021
                                                              
     550,251      546,947      557,132      557,142      566,927      571,734      577,562      1,654,330      1,716,223
                                                              

Benefits, losses and expenses:

                          

Policyholder benefits

     325,325      321,322      325,401      329,793      336,362      333,101      345,368      972,048      1,014,831

Selling, underwriting, general and administrative expenses

     155,186      163,019      162,712      176,626      161,125      163,385      156,763      480,917      481,273
                                                              
     480,511      484,341      488,113      506,419      497,487      496,486      502,131      1,452,965      1,496,104
                                                              

Income before income taxes

     69,740      62,606      69,019      50,723      69,440      75,248      75,431      201,365      220,119

Income taxes

     24,893      21,590      23,923      17,426      23,722      25,881      25,758      70,406      75,361
                                                              

Net operating income

   $ 44,847    $ 41,016    $ 45,096    $ 33,297    $ 45,718    $ 49,367    $ 49,673    $ 130,959    $ 144,758
                                                              

Net earned premiums and other considerations:

                          

Individual:

                          

Individual medical

   $ 305,246    $ 300,267    $ 297,338    $ 295,322    $ 291,817    $ 290,047    $ 287,312    $ 902,851    $ 869,176

Short-term medical

     26,839      25,489      25,001      26,664      30,257      28,115      25,876      77,329      84,248
                                                              

Subtotal

     332,085      325,756      322,339      321,986      322,074      318,162      313,188      980,180      953,424

Small employer group

     189,442      193,831      201,066      209,359      216,726      226,132      236,338      584,339      679,196
                                                              

Total

   $ 521,527    $ 519,587    $ 523,405    $ 531,345    $ 538,800    $ 544,294    $ 549,526    $ 1,564,519    $ 1,632,620
                                                              

 

Page 9


LOGO

Assurant Health (continued)

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Sales (Annualized issued premiums):

                  

Individual:

                  

Individual medical

   $ 90,271     $ 76,616     $ 76,192     $ 71,745     $ 69,343     $ 68,137     $ 76,389     $ 243,079     $ 213,869  

Short-term medical

     31,364       28,128       30,248       24,747       34,889       31,566       28,716       89,740       95,171  
                                                                        

Subtotal

     121,635       104,744       106,440       96,492       104,232       99,703       105,105       332,819       309,040  

Small employer group

     33,336       32,527       34,573       36,466       36,224       41,211       45,486       100,436       122,921  
                                                                        

Total

   $ 154,971     $ 137,271     $ 141,013     $ 132,958     $ 140,456     $ 140,914     $ 150,591     $ 433,255     $ 431,961  
                                                                        

Membership by product line:

                  

Individual:

                  

Individual medical

     639       632       636       644       647       662       671       639       647  

Short-term medical

     99       105       100       102       122       129       116       99       122  
                                                                        

Subtotal

     738       737       736       746       769       791       787       738       769  

Small employer group

     216       226       239       255       267       287       308       216       267  
                                                                        

Total

     954       963       975       1,001       1,036       1,078       1,095       954       1,036  
                                                                        

Ratios:

                  

Loss ratio (a)

     62.4 %     61.8 %     62.2 %     62.1 %     62.4 %     61.2 %     62.8 %     62.1 %     62.2 %

Expense ratio (b)

     29.1 %     30.8 %     30.5 %     32.7 %     29.3 %     29.5 %     28.0 %     30.1 %     28.9 %

Combined ratio (c)

     90.2 %     91.4 %     91.6 %     93.7 %     90.6 %     89.5 %     89.7 %     91.1 %     89.9 %

Investment yield (1)

     5.76 %     5.83 %     5.70 %     5.57 %     5.48 %     5.23 %     5.44 %     5.75 %     5.59 %

Real estate investment income (1)

   $ 646     $ —       $ 7,372     $ —       $ 596     $ —       $ —       $ 8,018     $ 596  

(a) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(b) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(c) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.
(1) Investment yield excludes investment income from real estate partnerships.

 

Page 10


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Assurant Employee Benefits

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended    For the Nine Months Ended
($ in thousands)    September 30,
2006
   June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
   March 31,
2005
   September 30,
2006
   September 30,
2005

Revenues:

                          

Net earned premiums and other considerations

   $ 291,232    $ 282,581    $ 326,111    $ 308,568    $ 306,928    $ 316,420    $ 345,922    $ 899,924    $ 969,270

Net investment income

     39,893      38,744      40,839      38,754      41,878      38,274      37,983      119,476      118,135

Fees and other income

     6,685      7,547      6,832      6,056      6,976      6,993      6,189      21,064      20,158
                                                              
     337,810      328,872      373,782      353,378      355,782      361,687      390,094      1,040,464      1,107,563
                                                              

Benefits, losses and expenses:

                          

Policyholder benefits

     196,727      195,195      245,439      215,538      212,022      241,537      267,738      637,361      721,297

Selling, underwriting, general and administrative expenses

     103,726      101,827      99,114      108,095      108,403      105,027      97,017      304,667      310,447
                                                              
     300,453      297,022      344,553      323,633      320,425      346,564      364,755      942,028      1,031,744
                                                              

Income before income taxes

     37,357      31,850      29,229      29,745      35,357      15,123      25,339      98,436      75,819

Income taxes

     12,957      11,260      10,044      10,416      12,511      5,311      8,960      34,261      26,782
                                                              

Net operating income

   $ 24,400    $ 20,590    $ 19,185    $ 19,329    $ 22,846    $ 9,812    $ 16,379    $ 64,175    $ 49,037
                                                              

Net earned premiums and other considerations by:

                          

Major product grouping:

                          

Group dental

   $ 104,367    $ 108,010    $ 111,393    $ 121,444    $ 124,780    $ 128,323    $ 128,242    $ 323,770    $ 381,345

Group disability single premiums for closed blocks

     12,393      —        33,920      —        —        —        26,700      46,313      26,700

All other group disability

     119,679      119,847      121,586      123,390      118,595      123,078      124,777      361,112      366,450

Group life

     54,793      54,724      59,212      63,734      63,553      65,019      66,203      168,729      194,775
                                                              

Total

   $ 291,232    $ 282,581    $ 326,111    $ 308,568    $ 306,928    $ 316,420    $ 345,922    $ 899,924    $ 969,270
                                                              

 

Page 11


LOGO

Assurant Employee Benefits (continued)

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Sales:

                  

Group dental

   $ 20,678     $ 12,843     $ 26,979     $ 17,316     $ 21,588     $ 18,187     $ 41,757     $ 60,500     $ 81,532  

Group disability

     12,362       10,022       13,633       9,722       12,649       14,864       25,420       36,017       52,933  

Group life

     6,954       5,344       6,681       6,702       5,883       10,898       18,561       18,979       35,342  
                                                                        

Total

   $ 39,994     $ 28,209     $ 47,293     $ 33,740     $ 40,120     $ 43,949     $ 85,738     $ 115,496     $ 169,807  
                                                                        

Ratios:

                  

Loss ratio (a)

     67.5 %     69.1 %     75.3 %     69.9 %     69.1 %     76.3 %     77.4 %     70.8 %     74.4 %

Expense ratio (b)

     34.8 %     35.1 %     29.8 %     34.4 %     34.5 %     32.5 %     27.6 %     33.1 %     31.4 %

Investment yield (1)

     6.25 %     6.17 %     6.47 %     6.15 %     6.29 %     6.14 %     6.12 %     6.33 %     6.20 %

Real estate investment income (1)

   $ 1,130     $ —       $ —       $ —       $ 2,560     $ —       $ —       $ 1,130     $ 2,560  

(a) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(b) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(1) Investment yield excludes investment income from real estate partnerships.

 

Page 12


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Assurant Corporate and Other

Condensed Statement of Operations

(Unaudited)

 

     For the Three Months Ended     For the Nine Months Ended  
($ in thousands)    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    September 30,
2006
    September 30,
2005
 

Revenues:

                  

Net earned premiums and other considerations

   $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —    

Net investment income

     6,881       7,710       13,850       6,963       6,872       6,624       7,335       28,441       20,831  

Net realized (losses) gains on investments

     (2,675 )     2,272       (4,452 )     (8,301 )     11,965       4,079       492       (4,855 )     16,536  

Amortization of deferred gain on disposal of businesses

     9,428       10,022       8,833       7,155       11,706       11,784       11,863       28,283       35,353  

Fees and other income

     703       127       —         1,051       100       178       103       830       381  
                                                                        
     14,337       20,131       18,231       6,868       30,643       22,665       19,793       52,699       73,101  
                                                                        

Benefits, losses and expenses:

                  

Policyholder benefits

     —         5       —         —         54,148       7,795       —         5       61,943  

Selling, underwriting, general and administrative expenses

     17,678       15,764       16,639       37,381       20,843       16,938       20,893       50,081       58,674  

Interest expense

     15,307       15,315       15,315       15,315       15,315       15,314       15,314       45,937       45,943  
                                                                        
     32,985       31,084       31,954       52,696       90,306       40,047       36,207       96,023       166,560  
                                                                        

Loss before income taxes and cumulative effect of change in accounting principle

     (18,648 )     (10,953 )     (13,723 )     (45,828 )     (59,663 )     (17,382 )     (16,414 )     (43,324 )     (93,459 )

Income taxes

     (5,552 )     (4,059 )     (6,176 )     (55,829 )     (27,762 )     (9,222 )     (3,034 )     (15,787 )     (40,018 )
                                                                        

Net operating (loss) income before cumulative effect of change in accounting principle

     (13,096 )     (6,894 )     (7,547 )     10,001       (31,901 )     (8,160 )     (13,380 )     (27,537 )     (53,441 )

Cumulative effect of change in accounting principle

     —         —         1,547       —         —         —         —         1,547       —    
                                                                        

Net operating (loss) income

   $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ (25,990 )   $ (53,441 )
                                                                        

Real estate investment income

   $ —       $ —       $ 4,857     $ —       $ —       $ —       $ —       $ 4,857     $ —    

Corporate and Other Reconciliation

                  

Assurant Corporate and Other Segment Net Operating Income

   $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ (25,990 )   $ (53,441 )

Adjustments, net of tax:

                  

Amortization of deferred gain on disposal of businesses

     (6,128 )     (6,514 )     (5,741 )     (4,651 )     (7,609 )     (7,660 )     (7,711 )     (18,383 )     (22,980 )

Interest expense

     9,950       9,955       9,955       9,955       9,955       9,954       9,954       29,860       29,863  

Net realized loss (gain) on investments

     1,739       (1,477 )     2,894       5,396       (9,794 )     (2,651 )     (320 )     3,156       (12,765 )

Excess of loss reinsurance program (1995-1997)

     —         —         —         —         35,060       5,203       —         —         40,263  

Expenses directly related to the secondary public offering

     —         —         —         —         —         —         1,040       —         1,040  

Cumulative effect of change in accounting principle

     —         —         (1,547 )     —         —         —         —         (1,547 )     —    
                                                                        

Corporate and other per Reconciliation of Net Operating Income to Net Income (page 5)

   $ (7,535 )   $ (4,930 )   $ (439 )   $ 20,701     $ (4,289 )   $ (3,314 )   $ (10,417 )   $ (12,904 )   $ (18,020 )
                                                                        

 

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LOGO

Assurant, Inc. and Subsidiaries

Investments

(Unaudited)

 

($ in thousands)    As of
September 30,
2006
         As of
December 31,
2005
      

Investments by Type

          

Fixed maturities: available-for-sale, at fair value

   $ 9,232,537      $ 8,961,778   

Equity Securities: available-for-sale

          

Preferred stocks

     759,121        691,523   

Common stocks

     1,045        1,578   

Commercial mortgage loans on real estate, at amortized cost

     1,261,254        1,212,006   

Policy loans

     58,561        61,043   

Cash and short-term investments

     918,292        1,283,043   

Collateral held under securities lending

     662,607        610,662   

Other investments

     535,089        549,759   
                  

Total

   $ 13,428,506      $ 13,371,392   
                  

Fixed Maturity Securities by Credit Quality (Fair Value)

          

Aaa / Aa / A

   $ 6,412,358    69 %   $ 6,211,058    69 %

Baa

     2,180,887    24 %     2,122,752    24 %

Ba

     524,586    6 %     515,740    6 %

B

     111,455    1 %     101,724    1 %

Caa and lower

     2,507    0 %     9,764    0 %

In or near default

     744    0 %     740    0 %
                          

Total

   $ 9,232,537    100 %   $ 8,961,778    100 %
                          

Fixed Maturity Securities by Issuer Type (Fair Value)

          

U.S government and government agencies and authorities

   $ 173,776    2 %   $ 207,711    2 %

State, municipalities and political subdivisions

     249,755    3 %     235,933    3 %

Foreign government

     682,735    7 %     589,353    6 %

Public utilities

     1,159,592    12 %     1,064,591    12 %

Mortgage backed securities

     1,345,161    15 %     1,492,684    17 %

All other corporate bonds

     5,621,518    61 %     5,371,506    60 %
                          

Total

   $ 9,232,537    100 %   $ 8,961,778    100 %
                          

 

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LOGO

Assurant, Inc.

Investment Results by Asset Category and Annualized Yields

(Unaudited)

 

($ in thousands)    For the Three Months Ended
September 30, 2006
    For the Three Months Ended
September 30, 2005
    For the Nine Months Ended
September 30, 2006
    For the Nine Months Ended
September 30, 2005
 
   Yield     Investment
Income
    Investment
Gain (Loss)
    Yield     Investment
Income
    Investment
Gain (Loss)
    Yield     Investment
Income
    Investment
Gain (Loss)
    Yield     Investment
Income
    Investment
Gain (Loss)
 

Fixed maturities: available-for-sale, at fair value

   5.88 %   $ 132,429     $ (1,758 )   5.79 %   $ 126,716     $ 1,793     5.83 %   $ 386,996     $ (4,632 )   5.82 %   $ 376,718     $ (1,536 )

Equity Securities: available-for-sale

   6.45 %     12,230       (961 )   6.99 %     11,876       164     6.73 %     37,533       (2,578 )   6.60 %     32,196       (725 )

Commercial mortgage loans on real estate, at amortized cost

   6.70 %     21,038       (70 )   8.71 %     24,421       (577 )   7.20 %     66,800       (404 )   7.79 %     64,043       (1,572 )

Policy loans

   1.37 %     202       —       5.75 %     917       —       5.65 %     2,532       —       5.94 %     2,861       —    

Cash and short-term investments

   4.50 %     10,236       3     2.65 %     5,908       81     3.72 %     30,709       151     2.08 %     16,642       64  

Other investments

   7.93 %     10,673       111     8.36 %     11,546       10,504     11.74 %     47,757       2,608     10.31 %     42,481       20,305  
                                                                        

Total

       186,808     $ (2,675 )       181,384     $ 11,965         572,327     $ (4,855 )       534,941     $ 16,536  

Investment expenses

       (6,136 )         (6,209 )         (18,655 )         (18,548 )  
                                                

Net investment income

     $ 180,672         $ 175,175         $ 553,672         $ 516,393    
                                                

Gross investment gain

       $ 5,294         $ 15,512         $ 22,072         $ 42,896  

Gross investment loss

         (7,969 )         (3,547 )         (26,927 )         (26,360 )

Write-downs on available-for-sale securities

         —             —             —             —    
                                                

Net investment gain

       $ (2,675 )       $ 11,965         $ (4,855 )       $ 16,536  
                                                

 

Page 15