EX-99.2 3 dex992.htm PRESENTATION ENTITLED "ADDITIONAL FINANCIAL DISCLOSURE FOR THE ASSURANT Presentation entitled "Additional Financial Disclosure for the Assurant

Exhibit 99.2

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Assurant, Inc. (AIZ)

Additional Financial Disclosure for the Assurant Solutions Segment


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ASSURANT, INC. AND SUBSIDIARIES

ADDITIONAL FINANCIAL DISCLOSURE FOR THE

ASSURANT SOLUTIONS SEGMENT

 

INDEX

  
     Page:

REGULATION G – NON GAAP MEASURES

   1

SEGMENTED CONDENSED BALANCE SHEETS (unaudited)

   2

RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited)

   3

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)

   4

CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited)

   5

DISCLOSED ITEMS SUMMARY

   13

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.

 

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Assurant, Inc. and Subsidiaries

Segmented Condensed Balance Sheets

At December 31, 2006 and December 31, 2005

(Unaudited)

 

     At December 31, 2006
   Solutions    Specialty
Property
   Health    Employee
Benefits
   Corporate &
Other(1)
   Consolidated
   ($ in thousands)

Assets

                 

Investments and cash and cash equivalents

   $ 6,875,585    $ 1,473,357    $ 1,150,679    $ 2,569,710    $ 1,347,486    $ 13,416,817

Reinsurance recoverables

     721,134      290,653      5,239      22,872      2,875,074      3,914,972

Deferred acquisition costs

     2,168,708      148,635      53,059      27,504      —        2,397,906

Goodwill

     —        —        —        —        790,519      790,519

Assets held in separate accounts

     255,784      —        —        —        3,042,759      3,298,543

Other assets

     615,941      277,028      69,131      186,251      198,040      1,346,391
                                         

Total assets

     10,637,152      2,189,673      1,278,108      2,806,337      8,253,878      25,165,148
                                         

Liabilities

                 

Policyholder benefits and claims payable

     4,253,205      278,664      556,726      1,936,662      3,153,252      10,178,509

Unearned premiums

     3,431,658      820,533      119,934      12,694      45,074      4,429,893

Debt

     —        —        —        —        971,774      971,774

Mandatorily redeemable preferred stock

     —        —        —        —        22,160      22,160

Liabilities related to separate accounts

     255,784      —        —        —        3,042,759      3,298,543

Accounts payable and other liabilities

     1,131,710      337,563      184,683      241,369      536,347      2,431,672
                                         

Total liabilities

     9,072,357      1,436,760      861,343      2,190,725      7,771,366      21,332,551

Stockholders’ equity

                 

Equity, excluding accumulated other comprehensive income

     1,564,795      752,913      416,765      615,612      394,448      3,744,533

Accumulated other comprehensive income

     —        —        —        —        88,064      88,064
                                         

Total stockholders’ equity

     1,564,795      752,913      416,765      615,612      482,512      3,832,597
                                         

Total liabilities and stockholders’ equity

   $ 10,637,152    $ 2,189,673    $ 1,278,108    $ 2,806,337    $ 8,253,878    $ 25,165,148
                                         
     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      187,933      123,960      132,077      151,574      1,246,644
                                         

Total assets

     10,457,115      2,262,902      1,452,878      2,898,471      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      700,184      121,959      12,480      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      1,738,499      973,314      2,288,223      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    $ 2,262,902    $ 1,452,878    $ 2,898,471    $ 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)

 

($ in thousands,
net of tax)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Assurant Solutions

   $ 39,810     $ 41,707     $ 37,148     $ 39,747     $ 35,382     $ 31,939     $ 42,392     $ 23,434     $ 158,412     $ 133,147  

Assurant Specialty Property

     63,956       53,445       59,276       64,444       39,037       31,685       34,213       38,292       241,121       143,227  

Assurant Health

     36,960       44,847       41,016       45,096       33,297       45,718       49,367       49,673       167,919       178,055  

Assurant Employee Benefits

     19,428       24,400       20,590       19,185       19,329       22,846       9,812       16,379       83,603       68,366  

Corporate and other

     (19,908 )     (7,535 )     (4,930 )     (439 )     20,701       (4,289 )     (3,314 )     (10,417 )     (32,812 )     2,681  

Amortization of deferred gains on disposal of businesses

     5,861       6,128       6,514       5,741       4,651       7,609       7,660       7,711       24,244       27,631  

Interest expense

     (9,949 )     (9,950 )     (9,955 )     (9,955 )     (9,955 )     (9,955 )     (9,954 )     (9,954 )     (39,809 )     (39,818 )
                                                                                

Net operating income

     136,158       153,042       149,659       163,819       142,442       125,553       130,176       115,118       602,678       513,289  

Adjustments:

                    

Net realized gains (losses) on investments, excluding gain

     75,868       (1,739 )     1,477       (2,894 )     (5,396 )     9,794       2,651       320       72,712       7,369  

Assurant Solutions legal settlement

     40,481       —         —         —         —         —         —         —         40,481       —    

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

     252,507       151,303       151,136       160,925       137,046       100,287       127,624       114,398       715,871       479,355  

Cumulative effect of change in accounting principle

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

Net income

   $ 252,507     $ 151,303     $ 151,136     $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 717,418     $ 479,355  
                                                                                

 

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Assurant, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Unaudited)

 

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

Revenues:

                    

Net earned premiums and other considerations

   $ 1,768,160     $ 1,717,640     $ 1,685,322     $ 1,672,653     $ 1,644,477     $ 1,621,186     $ 1,623,239     $ 1,631,894     $ 6,843,775     $ 6,520,796  

Net investment income

     183,014       180,672       180,438       192,562       170,864       175,175       177,018       164,200       736,686       687,257  

Net realized gains (losses) on investments

     116,720       (2,675 )     2,272       (4,452 )     (8,301 )     11,965       4,079       492       111,865       8,235  

Amortization of deferred gain on disposal of businesses

     9,017       9,428       10,022       8,833       7,155       11,706       11,784       11,863       37,300       42,508  

Fees and other income*

     130,722       79,014       71,036       60,186       67,382       59,409       58,183       53,905       340,958       238,879  
                                                                                
     2,207,633       1,984,079       1,949,090       1,929,782       1,881,577       1,879,441       1,874,303       1,862,354       8,070,584       7,497,675  
                                                                                

Benefits, losses and expenses:

                    

Policyholder benefits

     886,747       888,317       874,204       889,679       869,678       970,596       924,011       943,524       3,538,947       3,707,809  

Selling, underwriting, general and administrative expenses

     915,398       849,414       827,408       782,432       847,172       752,156       746,879       726,793       3,374,652       3,073,000  

Interest expense

     15,306       15,307       15,315       15,315       15,315       15,315       15,314       15,314       61,243       61,258  
                                                                                
     1,817,451       1,753,038       1,716,927       1,687,426       1,732,165       1,738,067       1,686,204       1,685,631       6,974,842       6,842,067  
                                                                                

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

     390,182       231,041       232,163       242,356       149,412       141,374       188,099       176,723       1,095,742       655,608  

Income taxes

     137,675       79,738       81,027       81,431       12,366       41,087       60,475       62,325       379,871       176,253  
                                                                                

Net income before cumulative effect of change in accounting principle

     252,507       151,303       151,136       160,925       137,046       100,287       127,624       114,398       715,871       479,355  

Cumulative effect of change in accounting principle

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

Net income

   $ 252,507     $ 151,303     $ 151,136     $ 162,472     $ 137,046     $ 100,287     $ 127,624     $ 114,398     $ 717,418     $ 479,355  
                                                                                

Share repurchase program:

                    

Shares repurchased

     1,826,416       3,081,000       2,140,000       1,416,800       2,014,468       3,910,926       2,797,500       710,000       8,464,216       9,432,894  

Average repurchase price per share

   $ 54.45     $ 50.34     $ 48.43     $ 45.17     $ 38.00     $ 37.38     $ 34.32     $ 34.16     $ 49.88     $ 36.36  

Repurchase price

   $ 99,444     $ 155,109     $ 103,630     $ 64,001     $ 76,551     $ 146,181     $ 96,006     $ 24,252     $ 422,184     $ 342,990  

AIZ Closing stock price (NYSE)

   $ 55.25     $ 53.41     $ 48.40     $ 49.25     $ 43.49     $ 38.06     $ 36.10     $ 33.70     $ 53.41     $ 43.49  

Investment yield (1)

     5.73 %     5.66 %     5.83 %     5.75 %     5.54 %     5.71 %     5.63 %     5.51 %     5.67 %     5.54 %

Real estate investment income (1)

   $ 614     $ 3,229     $ —       $ 14,735     $ —       $ 3,156     $ 9,409     $ —       $ 18,578     $ 12,565  

(1) Investment yield excludes investment income from real estate partnerships.
* The three months ended and year ended December 31, 2006 includes $62,278 related to a legal settlement in Assurant Solutions. See page 5.

 

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Assurant Solutions

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended    For the Year Ended
   December 31,
2006
   September 30,
2006
   June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
    March 31,
2005
   December 31,
2006
   December 31,
2005

Revenues:

                            

Net earned premiums and other considerations

   $ 617,798    $ 591,237    $ 592,182    $ 570,388    $ 573,880    $ 556,084    $ 554,829     $ 535,352    $ 2,371,605    $ 2,220,145

Net investment income

     99,852      96,625      98,951      97,082      93,192      92,070      100,107       86,196      392,510      371,565

Fees and other income*

     38,516      47,262      39,525      34,170      41,004      32,063      30,574       29,089      159,473      132,730
                                                                      
     756,166      735,124      730,658      701,640      708,076      680,217      685,510       650,637      2,923,588      2,724,440
                                                                      

Benefits, losses and expenses:

                            

Policyholder benefits

     252,296      250,886      247,208      248,380      246,585      271,357      269,284       259,674      998,770      1,046,900

Selling, underwriting, general and administrative expenses

     446,185      424,284      424,429      394,878      406,259      360,947      353,299       357,000      1,689,776      1,477,505
                                                                      
     698,481      675,170      671,637      643,258      652,844      632,304      622,583       616,674      2,688,546      2,524,405
                                                                      

Income before income taxes

     57,685      59,954      59,021      58,382      55,232      47,913      62,927       33,963      235,042      200,035

Income taxes*

     17,875      18,247      21,873      18,635      19,850      15,974      20,535       10,529      76,630      66,888
                                                                      

Net operating income*

   $ 39,810    $ 41,707    $ 37,148    $ 39,747    $ 35,382    $ 31,939    $ 42,392     $ 23,434    $ 158,412    $ 133,147
                                                                      

Net earned premiums and other considerations:

                            

Domestic:

                            

Credit

   $ 86,185    $ 88,470    $ 98,206    $ 95,851    $ 100,216    $ 84,516    $ 85,287     $ 81,320    $ 368,712    $ 351,339

Service contracts

     278,691      255,962      256,135      249,982      226,433      204,147      204,876       200,369      1,040,770      835,825

Other

     19,791      18,034      19,759      23,699      31,228      36,968      41,318       44,979      81,283      154,493
                                                                      

Total Domestic

     384,667      362,466      374,100      369,532      357,877      325,631      331,481       326,668      1,490,765      1,341,657
                                                                      

International:

                            

Credit

     104,288      104,372      97,612      88,210      95,481      79,288      91,234       73,224      394,482      339,227

Service contracts

     41,449      18,868      24,416      14,761      11,905      9,983      10,977       8,141      99,494      41,006

Other

     15,158      24,327      13,311      13,933      17,122      13,735      (4,701 )     6,120      66,729      32,276
                                                                      

Total International

     160,895      147,567      135,339      116,904      124,508      103,006      97,510       87,485      560,705      412,509
                                                                      

Preneed

     72,236      81,204      82,743      83,952      91,495      127,447      125,838       121,199      320,135      465,979
                                                                      

Total

   $ 617,798    $ 591,237    $ 592,182    $ 570,388    $ 573,880    $ 556,084    $ 554,829     $ 535,352    $ 2,371,605    $ 2,220,145
                                                                      

Fee income:

                            

Domestic:

                            

Debt protection

   $ 13,523    $ 13,698    $ 13,750    $ 13,082    $ 15,080    $ 11,467    $ 12,985     $ 11,888    $ 54,053    $ 51,420

Service contracts

     15,872      23,556      14,432      12,567      16,982      11,047      9,785       8,709      66,427      46,523

Other

     4,092      4,884      4,796      4,022      4,363      4,509      5,251       4,870      17,794      18,993
                                                                      

Total Domestic

     33,487      42,138      32,978      29,671      36,425      27,023      28,021       25,467      138,274      116,936
                                                                      

International

     4,433      4,069      4,165      4,276      3,992      3,117      2,750       2,443      16,943      12,302

Preneed

     596      1,055      2,382      223      587      1,923      (197 )     1,179      4,256      3,492
                                                                      

Total

   $ 38,516    $ 47,262    $ 39,525    $ 34,170    $ 41,004    $ 32,063    $ 30,574     $ 29,089    $ 159,473    $ 132,730
                                                                      

* For supplemental purposes, segment net operating income for the three months and year ended December 31, 2006 excludes $62,278 of fees and other income and related tax expense of $21,797 resulting from a third-party legal settlement. These amounts are included in the Consolidated Statements of Operations for the three months and year ended December 31, 2006 in this disclosure (see Page 4). In compliance with GAAP standards and SEC reporting requirements, the impact of this legal settlement is included in the Assurant Solutions segment statements of operations in Assurant, Inc.’s annual report on Form 10-K for the fiscal year ended December 31, 2006 filed with the SEC.

 

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Assurant Solutions

Condensed Statements of Operations

(Unaudited)

 

($ in
thousands)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Gross written premiums (1):

                    

Domestic:

                    

Credit

   $ 179,255     $ 184,120     $ 182,489     $ 168,927     $ 199,082     $ 182,999     $ 194,667     $ 190,718     $ 714,791     $ 767,466  

Service contracts

     468,820       398,170       378,636       354,962       395,520       376,934       322,625       319,450       1,600,588       1,414,529  

Other

     26,905       25,851       24,335       31,478       41,700       47,168       51,154       52,834       108,569       192,856  
                                                                                

Total Domestic

     674,980       608,141       585,460       555,367       636,302       607,101       568,446       563,002       2,423,948       2,374,851  
                                                                                

International:

                    

Credit

     184,448       175,417       159,208       161,024       160,858       166,413       157,449       162,747       680,097       647,467  

Service contracts

     112,893       91,407       71,330       66,256       86,674       62,669       50,593       47,570       341,886       247,506  

Other

     10,048       11,353       11,817       11,437       21,992       22,676       26,887       34,407       44,655       105,962  
                                                                                

Total International

     307,389       278,177       242,355       238,717       269,524       251,758       234,929       244,724       1,066,638       1,000,935  
                                                                                

Total

   $ 982,369     $ 886,318     $ 827,815     $ 794,084     $ 905,826     $ 858,859     $ 803,375     $ 807,726     $ 3,490,586     $ 3,375,786  
                                                                                

Preneed (face sales)

   $ 84,246     $ 105,031     $ 120,545     $ 123,688     $ 123,202     $ 141,786     $ 144,508     $ 133,019     $ 433,510     $ 542,515  

Combined ratios (a):

                    

Domestic

     100.1 %     98.4 %     99.1 %     100.0 %     96.0 %     101.6 %     98.6 %     103.8 %     99.4 %     99.9 %

International

     99.3 %     101.7 %     100.0 %     95.2 %     103.4 %     98.5 %     99.1 %     96.3 %     99.2 %     99.7 %

Preneed yield (2)

     6.36 %     6.21 %     6.35 %     6.32 %     6.35 %     6.41 %     6.16 %     6.23 %     6.42 %     6.35 %

Preneed average invested assets

   $ 3,600,069     $ 3,644,564     $ 3,565,666     $ 3,468,298     $ 3,461,114     $ 3,465,772     $ 3,449,655     $ 3,403,333     $ 3,509,475     $ 3,414,937  

Investment yield (2)*

     5.93 %     5.67 %     N/A       N/A       N/A       N/A       N/A       N/A       5.84 %     N/A  

Real estate investment income (2)

   $ 276     $ 1,453     $ —       $ 2,506     $ —       $ —       $ 9,409     $ —       $ 4,235     $ 9,409  

(a) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the preneed business.
(1) Historical domestic service contract gross written premiums have been increased to reflect addiitonal products, including vehicle service contracts, and “Other” has been added to reflect emerging products and run-off lines of business.
(2) 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.

 

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Assurant Specialty Property

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Revenues:

                    

Net earned premiums and other considerations

   $ 350,946     $ 313,644     $ 290,972     $ 252,749     $ 230,684     $ 219,374     $ 207,696     $ 201,094     $ 1,208,311     $ 858,848  

Net investment income

     20,204       19,584       17,923       16,790       15,481       16,648       14,843       14,981       74,501       61,953  

Fees and other income

     13,050       13,329       13,587       9,458       9,948       9,850       10,168       8,193       49,424       38,159  
                                                                                
     384,200       346,557       322,482       278,997       256,113       245,872       232,707       224,268       1,332,236       958,960  
                                                                                

Benefits, losses and expenses:

                    

Policyholder benefits

     112,409       115,379       110,474       70,459       77,762       96,707       72,294       70,744       408,721       317,507  

Selling, underwriting, general and administrative expenses

     173,454       148,540       122,369       109,089       118,811       100,838       108,230       95,120       553,452       422,999  
                                                                                
     285,863       263,919       232,843       179,548       196,573       197,545       180,524       165,864       962,173       740,506  
                                                                                

Income before income taxes

     98,337       82,638       89,639       99,449       59,540       48,327       52,183       58,404       370,063       218,454  

Income taxes

     34,381       29,193       30,363       35,005       20,503       16,642       17,970       20,112       128,942       75,227  
                                                                                

Net operating income

   $ 63,956     $ 53,445     $ 59,276     $ 64,444     $ 39,037     $ 31,685     $ 34,213     $ 38,292     $ 241,121     $ 143,227  
                                                                                

Net Earned Premiums for selected product groupings:

                    

Homeowners (Creditor Placed & Voluntary)

   $ 233,181     $ 198,733     $ 178,363     $ 142,892     $ 118,070     $ 114,965     $ 107,219     $ 103,272     $ 753,169     $ 443,526  

Manufactured Housing (Creditor Placed & Voluntary)

     51,774       52,535       54,184       55,968       57,957       52,699       53,252       53,516       214,461       217,424  

Other

     65,991       62,376       58,425       53,889       54,657       51,710       47,225       44,306       240,681       197,898  
                                                                                

Total

   $ 350,946     $ 313,644     $ 290,972     $ 252,749     $ 230,684     $ 219,374     $ 207,696     $ 201,094     $ 1,208,311     $ 858,848  
                                                                                

Gross Written Premiums for selected product groupings:

                    

Homeowners (Creditor Placed & Voluntary)

   $ 330,882     $ 271,632     $ 247,538     $ 184,096     $ 219,423     $ 190,975     $ 150,359     $ 136,894     $ 1,034,148     $ 697,651  

Manufactured Housing (Creditor Placed & Voluntary)

     73,590       82,401       80,981       69,610       80,616       81,818       80,094       69,264       306,582       311,792  

Other

     121,711       130,820       127,555       101,386       111,173       105,733       110,819       93,066       481,472       420,791  
                                                                                

Total

   $ 526,183     $ 484,853     $ 456,074     $ 355,092     $ 411,212     $ 378,526     $ 341,272     $ 299,224     $ 1,822,202     $ 1,430,234  
                                                                                

Ratios:

                    

Loss ratio (a)

     32.0 %     36.8 %     38.0 %     27.9 %     33.7 %     44.1 %     34.8 %     35.2 %     33.8 %     37.0 %

Expense ratio (b)

     47.7 %     45.4 %     40.2 %     41.6 %     49.4 %     44.0 %     49.7 %     45.4 %     44.0 %     47.2 %

Combined ratio (c)

     78.5 %     80.7 %     76.5 %     68.5 %     81.7 %     86.2 %     82.9 %     79.3 %     76.5 %     82.6 %

Investment yield (1)*

     5.54 %     5.62 %     N/A       N/A       N/A       N/A       N/A       N/A       5.73 %     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.

 

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Assurant Health

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended    For the Year Ended
   December 31,
2006
   September 30,
2006
   June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
   March 31,
2005
   December 31,
2006
   December 31,
2005

Revenues:

                             

Net earned premiums and other considerations

   $ 519,438    $ 521,527    $ 519,587    $ 523,405    $ 531,345    $ 538,800    $ 544,294    $ 549,526    $ 2,083,957    $ 2,163,965

Net investment income

     16,415      17,689      17,110      24,001      16,474      17,707      17,170      17,705      75,215      69,056

Fees and other income

     10,549      11,035      10,250      9,726      9,323      10,420      10,270      10,331      41,560      40,344
                                                                     
     546,402      550,251      546,947      557,132      557,142      566,927      571,734      577,562      2,200,732      2,273,365
                                                                     

Benefits, losses and expenses:

                             

Policyholder benefits

     328,769      325,325      321,322      325,401      329,793      336,362      333,101      345,368      1,300,817      1,344,624

Selling, underwriting, general and administrative expenses

     160,411      155,186      163,019      162,712      176,626      161,125      163,385      156,763      641,328      657,899
                                                                     
     489,180      480,511      484,341      488,113      506,419      497,487      496,486      502,131      1,942,145      2,002,523
                                                                     

Income before income taxes

     57,222      69,740      62,606      69,019      50,723      69,440      75,248      75,431      258,587      270,842

Income taxes

     20,262      24,893      21,590      23,923      17,426      23,722      25,881      25,758      90,668      92,787
                                                                     

Net operating income

   $ 36,960    $ 44,847    $ 41,016    $ 45,096    $ 33,297    $ 45,718    $ 49,367    $ 49,673    $ 167,919    $ 178,055
                                                                     

Net earned premiums and other considerations:

                             

Individual:

                             

Individual medical

   $ 310,826    $ 305,246    $ 300,267    $ 297,338    $ 295,322    $ 291,817    $ 290,047    $ 287,312    $ 1,213,677    $ 1,164,498

Short-term medical

     24,125      26,839      25,489      25,001      26,664      30,257      28,115      25,876      101,454      110,912
                                                                     

Subtotal

     334,951      332,085      325,756      322,339      321,986      322,074      318,162      313,188      1,315,131      1,275,410

Small employer group

     184,487      189,442      193,831      201,066      209,359      216,726      226,132      236,338      768,826      888,555
                                                                     

Total

   $ 519,438    $ 521,527    $ 519,587    $ 523,405    $ 531,345    $ 538,800    $ 544,294    $ 549,526    $ 2,083,957    $ 2,163,965
                                                                     

 

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Assurant Health (continued)

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Sales (Annualized issued premiums):

                    

Individual:

                    

Individual medical

   $ 88,154     $ 90,271     $ 76,616     $ 76,192     $ 71,745     $ 69,343     $ 68,137     $ 76,389     $ 331,233     $ 285,614  

Short-term medical *

     29,078       34,841       33,612       35,014       31,102       40,129       38,110       35,135       132,545       144,476  
                                                                                

Subtotal

     117,232       125,112       110,228       111,206       102,847       109,472       106,247       111,524       463,778       430,090  

Small employer group

     28,652       33,336       32,527       34,573       36,466       36,224       41,211       45,486       129,088       159,387  
                                                                                

Total

   $ 145,884     $ 158,448     $ 142,755     $ 145,779     $ 139,313     $ 145,696     $ 147,458     $ 157,010     $ 592,866     $ 589,477  
                                                                                

Membership by product line:

                    

Individual:

                    

Individual medical

     641       639       632       636       644       647       662       671       641       644  

Short-term medical

     87       99       105       100       102       122       129       116       87       102  
                                                                                

Subtotal

     728       738       737       736       746       769       791       787       728       746  

Small employer group

     207       216       226       239       255       267       287       308       207       255  
                                                                                

Total

     935       954       963       975       1,001       1,036       1,078       1,095       935       1,001  
                                                                                

Ratios:

                    

Loss ratio (a)

     63.3 %     62.4 %     61.8 %     62.2 %     62.1 %     62.4 %     61.2 %     62.8 %     62.4 %     62.1 %

Expense ratio (b)

     30.3 %     29.1 %     30.8 %     30.5 %     32.7 %     29.3 %     29.5 %     28.0 %     30.2 %     29.8 %

Combined ratio (c)

     92.3 %     90.2 %     91.4 %     91.6 %     93.7 %     90.6 %     89.5 %     89.7 %     91.4 %     90.8 %

Investment yield (1)

     5.69 %     5.76 %     5.83 %     5.70 %     5.57 %     5.48 %     5.23 %     5.44 %     5.91 %     5.61 %

Real estate investment income (1)

   $ 123     $ 646     $ —       $ 7,372     $ —       $ 596     $ —       $ —       $ 8,141     $ 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.
* Historical short-term medical sales have been increased to reflect a refinement in the calculation of the premium we anticipate to receive on monthly paid policies.

 

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Assurant Employee Benefits

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended    For the Year Ended
   December 31,
2006
   September 30,
2006
   June 30,
2006
   March 31,
2006
   December 31,
2005
   September 30,
2005
   June 30,
2005
   March 31,
2005
   December 31,
2006
   December 31,
2005

Revenues:

                             

Net earned premiums and other considerations

   $ 279,978    $ 291,232    $ 282,581    $ 326,111    $ 308,568    $ 306,928    $ 316,420    $ 345,922    $ 1,179,902    $ 1,277,838

Net investment income

     39,049      39,893      38,744      40,839      38,754      41,878      38,274      37,983      158,525      156,889

Fees and other income

     6,477      6,685      7,547      6,832      6,056      6,976      6,993      6,189      27,541      26,214
                                                                     
     325,504      337,810      328,872      373,782      353,378      355,782      361,687      390,094      1,365,968      1,460,941
                                                                     

Benefits, losses and expenses:

                             

Policyholder benefits

     193,273      196,727      195,195      245,439      215,538      212,022      241,537      267,738      830,634      936,835

Selling, underwriting, general and administrative expenses

     102,353      103,726      101,827      99,114      108,095      108,403      105,027      97,017      407,020      418,542
                                                                     
     295,626      300,453      297,022      344,553      323,633      320,425      346,564      364,755      1,237,654      1,355,377
                                                                     

Income before income taxes

     29,878      37,357      31,850      29,229      29,745      35,357      15,123      25,339      128,314      105,564

Income taxes

     10,450      12,957      11,260      10,044      10,416      12,511      5,311      8,960      44,711      37,198
                                                                     

Net operating income

   $ 19,428    $ 24,400    $ 20,590    $ 19,185    $ 19,329    $ 22,846    $ 9,812    $ 16,379    $ 83,603    $ 68,366
                                                                     

Net earned premiums and other considerations by:

                             

Major product grouping:

                             

Group dental

   $ 104,448    $ 104,367    $ 108,010    $ 111,393    $ 121,444    $ 124,780    $ 128,323    $ 128,242    $ 428,218    $ 502,789

Group disability single premiums for closed blocks

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

All other group disability

     119,812      119,679      119,847      121,586      123,390      118,595      123,078      124,777      480,924      489,840

Group life

     55,718      54,793      54,724      59,212      63,734      63,553      65,019      66,203      224,447      258,509
                                                                     

Total

   $ 279,978    $ 291,232    $ 282,581    $ 326,111    $ 308,568    $ 306,928    $ 316,420    $ 345,922    $ 1,179,902    $ 1,277,838
                                                                     

 

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Assurant Employee Benefits (continued)

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Sales:

                    

Group dental

   $ 17,119     $ 20,678     $ 12,843     $ 26,979     $ 17,316     $ 21,588     $ 18,187     $ 41,757     $ 77,619     $ 98,848  

Group disability

     11,126       12,362       10,022       13,633       9,722       12,649       14,864       25,420       47,143       62,655  

Group life

     5,859       6,954       5,344       6,681       6,702       5,883       10,898       18,561       24,838       42,044  
                                                                                

Total

   $ 34,104     $ 39,994     $ 28,209     $ 47,293     $ 33,740     $ 40,120     $ 43,949     $ 85,738     $ 149,600     $ 203,547  
                                                                                

Ratios:

                    

Loss ratio (a)

     69.0 %     67.5 %     69.1 %     75.3 %     69.9 %     69.1 %     76.3 %     77.4 %     70.4 %     73.3 %

Expense ratio (b)

     35.7 %     34.8 %     35.1 %     29.8 %     34.4 %     34.5 %     32.5 %     27.6 %     33.7 %     32.1 %

Investment yield (1)

     6.32 %     6.25 %     6.17 %     6.47 %     6.15 %     6.29 %     6.14 %     6.12 %     6.31 %     6.19 %

Real estate investment income (1)

   $ 215     $ 1,130     $ —       $ —       $ —       $ 2,560     $ —       $ —       $ 1,345     $ 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.

 

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Assurant Corporate and Other

Condensed Statements of Operations

(Unaudited)

 

($ in thousands)

   For the Three Months Ended     For the Year Ended  
   December 31,
2006
    September 30,
2006
    June 30,
2006
    March 31,
2006
    December 31,
2005
    September 30,
2005
    June 30,
2005
    March 31,
2005
    December 31,
2006
    December 31,
2005
 

Revenues:

                    

Net earned premiums and other considerations

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

Net investment income

     7,494       6,881       7,710       13,850       6,963       6,872       6,624       7,335       35,935       27,794  

Net realized gains (losses) on investments

     116,720       (2,675 )     2,272       (4,452 )     (8,301 )     11,965       4,079       492       111,865       8,235  

Amortization of deferred gain on disposal of businesses

     9,017       9,428       10,022       8,833       7,155       11,706       11,784       11,863       37,300       42,508  

Fees and other income

     (148 )     703       127       —         1,051       100       178       103       682       1,432  
                                                                                
     133,083       14,337       20,131       18,231       6,868       30,643       22,665       19,793       185,782       79,969  
                                                                                

Benefits, losses and expenses:

                    

Policyholder benefits

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

Selling, underwriting, general and administrative expenses

     32,995       17,678       15,764       16,639       37,381       20,843       16,938       20,893       83,076       96,055  

Interest expense

     15,306       15,307       15,315       15,315       15,315       15,315       15,314       15,314       61,243       61,258  
                                                                                
     48,301       32,985       31,084       31,954       52,696       90,306       40,047       36,207       144,324       219,256  
                                                                                

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

     84,782       (18,648 )     (10,953 )     (13,723 )     (45,828 )     (59,663 )     (17,382 )     (16,414 )     41,458       (139,287 )

Income taxes

     32,910       (5,552 )     (4,059 )     (6,176 )     (55,829 )     (27,762 )     (9,222 )     (3,034 )     17,123       (95,847 )
                                                                                

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

     51,872       (13,096 )     (6,894 )     (7,547 )     10,001       (31,901 )     (8,160 )     (13,380 )     24,335       (43,440 )

Cumulative effect of change in accounting principle

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

Net operating (loss) income

   $ 51,872     $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ 25,882     $ (43,440 )
                                                                                

Real estate investment income

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

Corporate and Other Reconciliation

                    

Assurant Corporate and Other Segment Net Operating Income

   $ 51,872     $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 10,001     $ (31,901 )   $ (8,160 )   $ (13,380 )   $ 25,882     $ (43,440 )

Adjustments, net of tax:

                    

Amortization of deferred gain on disposal of businesses

     (5,861 )     (6,128 )     (6,514 )     (5,741 )     (4,651 )     (7,609 )     (7,660 )     (7,711 )     (24,244 )     (27,631 )

Interest expense

     9,949       9,950       9,955       9,955       9,955       9,955       9,954       9,954       39,809       39,818  

Net realized (gains) losses on investments

     (75,868 )     1,739       (1,477 )     2,894       5,396       (9,794 )     (2,651 )     (320 )     (72,712 )     (7,369 )

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)

   $ (19,908 )   $ (7,535 )   $ (4,930 )   $ (439 )   $ 20,701     $ (4,289 )   $ (3,314 )   $ (10,417 )   $ (32,812 )   $ 2,681  
                                                                                

 

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Assurant, Inc. and Subsidiaries   
Summary of Net Operating Income Disclosed Items - (Note 1)   
Income / (Expense) Items   
(unaudited)   

 

    For the Three Months Ended

($ in millions, after-tax)

  December 31,
2006
    September 30,
2006
 

June 30,

2006

    March 31,
2006
    December 31,
2005
    September 30,
2005
   

June 30,

2005

  March 31,
2005
    $     EPS     $   EPS   $     EPS     $     EPS     $     EPS     $     EPS     $   EPS   $   EPS

Assurant Solutions:

                               

Closed block of extended service contracts (d)

  $ —       —       $ 5.4   0.04   $ —       —       $ —       —       $ —       —       $ —       —       $ —     —     $ —     —  

Expense on sale of US pre-need independent franchise (f)

  $ —       —       $ —     —     $ (0.7 )   (0.01 )   $ (1.3 )   (0.01 )   $ (3.9 )   (0.03 )   $ —       —       $ —     —     $ —     —  

Assurant Specialty Property:

                               

Additional reinsurance premiums (a)

  $ —       —       $ —     —     $ —       —       $ —       —       $ (5.9 )   (0.04 )   $ (11.1 )   (0.08 )   $ —     —     $ —     —  

Client related settlements (e)

  $ 5.5     0.04     $ —     —     $ —       —       $ —       —       $ —       —       $ 6.5     0.05     $ —     —     $ 4.6   0.03

Processing fees for the National Flood Insurance Program (e)

  $ —       —       $ 0.3   0.00   $ 1.3     0.01     $ 5.2     0.04     $ 11.3     0.09     $ —       —       $ —     —     $ —     —  

Catastrophe losses, net of reinsurance (e)

  $ —       —       $ —     —     $ (4.5 )   (0.03 )   $ —       —       $ (11.4 )   (0.09 )   $ (20.2 )   (0.15 )   $ —     —     $ —     —  

Assurant Health:

                               

Legal related settlements (f)

  $ —       —       $ 2.6   0.02   $ —       —       $ —       —       $ —       —       $ —       —       $ —     —     $ —     —  

Higher than normal technology and marketing expense (f)

  $ —       —       $ —     —     $ —       —       $ —       —       $ (6.5 )   (0.05 )   $ —       —       $ —     —     $ —     —  

Assurant Corporate and Other:

                               

Adjustment to deferred gains on disposal of businesses (c)

  $ —       —       $ —     —     $ —       —       $ —       —       $ (3.1 )   (0.02 )   $ —       —       $ —     —     $ —     —  

Assurant Foundation funding (f)

  $ (3.3 )   (0.03 )   $ —     —     $ —       —       $ —       —       $ —       —       $ —       —       $ —     —     $ —     —  

Change in certain tax liabilities (g)

  $ (6.2 )   (0.05 )   $ —     —     $ —       —       $ —       —       $ 39.4     0.30     $ —       —       $ 5.5   0.04   $ —     —  

Statement of Operations line impact:

 

(a) Net earned premiums and other considerations

 

(b) Net investment income

 

(c) Amortization of deferred gains on sale of businesses

 

(d) Fees and other income

 

(e) Policyholder benefits

 

(f) Selling, underwriting, general and administrative expenses

 

(g) Income taxes

(Note 1) Schedule excludes investment income from real estate joint ventures, which are shown separately in the Consolidated and Segment statements of operations.

 

Page 13