EX-99.2 3 dex992.htm PRESENTATION ENTITLED "ASSURANT, INC. FINANCIAL SUPPLEMENT AS OF MARCH 31, 2007" Presentation entitled "Assurant, Inc. Financial Supplement as of March 31, 2007"

Exhibit 99.2

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Assurant, Inc. (AIZ)

Financial Supplement as of March 31, 2007


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ASSURANT, INC. AND SUBSIDIARIES

EARNINGS RELEASE SUPPLEMENT

AS OF MARCH 31, 2007

 

INDEX TO SUPPLEMENT

  
     Page:

REGULATION G – NON GAAP MEASURES

   1

SUMMARY FINANCIAL HIGHLIGHTS (unaudited)

   2

SEGMENTED CONDENSED BALANCE SHEETS (unaudited)

   4

RECONCILIATION OF NET OPERATING INCOME TO NET INCOME (unaudited)

   5

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (unaudited)

   6

CONDENSED SEGMENT STATEMENTS OF OPERATIONS (unaudited)

   7

INVESTMENTS (unaudited)

   15

INVESTMENT RESULTS BY ASSET CATEGORY & ANNUALIZED YIELDS (unaudited)

   16

SUMMARY OF NET OPERATING INCOME DISCLOSED ITEMS (unaudited)

   17

About Assurant:

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

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     For the Year Ended  
     March 31,     December 31,  

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

   2007    2006     2006    2005  

Net operating income (1)

   $ 175,836    $ 163,819     $ 602,678    $ 513,289  

Net realized gains (losses) on investments

     3,621      (2,894 )     72,712      7,369  

Assurant Solutions legal settlement

     —        —         40,481      —    

Excess of loss reinsurance program (1995-1997)

     —        —         —        (40,263 )

Expenses directly related to the secondary public offering

     —        —         —        (1,040 )
                              

Net income before cumulative effect of change in accounting principle

     179,457      160,925       715,871      479,355  

Cumulative effect of change in accounting principle

     —        1,547       1,547      —    
                              

Net income

   $ 179,457    $ 162,472     $ 717,418    $ 479,355  
                              

Total revenues

   $ 2,057,263    $ 1,929,782     $ 8,070,584    $ 7,497,675  

PER SHARE AND SHARE DATA:

          

Basic earnings per share

          

Net operating income

   $ 1.44    $ 1.26     $ 4.75    $ 3.78  

Net income before cumulative effect of change in accounting principle

   $ 1.47    $ 1.24     $ 5.65    $ 3.53  

Net income

   $ 1.47    $ 1.25     $ 5.66    $ 3.53  

Weighted average of common shares outstanding—basic

     122,149,873      129,998,426       126,846,990      135,773,551  

Diluted earnings per share

          

Net operating income

   $ 1.42    $ 1.24     $ 4.68    $ 3.75  

Net income before cumulative effect of change in accounting principle

   $ 1.45    $ 1.22     $ 5.56    $ 3.50  

Net income

   $ 1.45    $ 1.23     $ 5.57    $ 3.50  

Weighted average of common shares outstanding—diluted

     124,111,534      132,000,306       128,812,813      136,945,310  

 

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Assurant, Inc. and Subsidiaries

Summary Financial Highlights (continued)

(Unaudited)

 

     As of     As of  
     March 31,     December 31,  

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

   2007     2006  

Total assets

   $ 25,461,049     $ 25,165,148  

Total stockholders’ equity

   $ 3,921,261     $ 3,832,597  

Total stockholders’ equity (excluding AOCI)

   $ 3,832,271     $ 3,744,533  

Basic book value per share

   $ 32.29     $ 31.26  

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

   $ 31.56     $ 30.54  

Shares outstanding for basic book value per share calculation

     121,433,177       122,618,317  

Diluted book value per share

   $ 31.87     $ 30.68  

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

   $ 31.14     $ 29.97  

Shares outstanding for diluted book value per share calculation

     123,055,327       124,926,639  

Debt to total capital ratio (excluding AOCI)

     20.6 %     21.0 %

 

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Assurant, Inc. and Subsidiaries

Segmented Condensed Balance Sheets

At March 31, 2007 and December 31, 2006

(Unaudited)

 

     At March 31, 2007
     Solutions    Specialty
Property
   Health    Employee
Benefits
   Corporate &
Other(1)
   Consolidated
     ($ in thousands)

Assets

                 

Investments and cash and cash equivalents

   $ 7,126,323    $ 1,675,929    $ 1,173,246    $ 2,668,120    $ 1,163,115    $ 13,806,733

Reinsurance recoverables

     692,607      259,526      5,045      21,110      2,889,779      3,868,067

Deferred acquisition costs

     2,288,404      145,506      47,164      25,476      —        2,506,550

Goodwill

     —        —        —        —        790,545      790,545

Assets held in separate accounts

     257,262      —        —        —        2,971,859      3,229,121

Other assets

     529,479      259,649      86,329      165,604      218,972      1,260,033
                                         

Total assets

     10,894,075      2,340,610      1,311,784      2,880,310      8,034,270      25,461,049
                                         

Liabilities

                 

Policyholder benefits and claims payable

     4,242,611      278,919      532,647      1,943,246      3,164,521      10,161,944

Unearned premiums

     3,595,539      820,979      128,539      13,055      44,648      4,602,760

Debt

     —        —        —        —        971,796      971,796

Mandatorily redeemable preferred stock

     —        —        —        —        22,160      22,160

Liabilities related to separate accounts

     257,262      —        —        —        2,971,859      3,229,121

Accounts payable and other liabilities

     1,208,035      418,999      171,132      271,504      482,337      2,552,007
                                         

Total liabilities

     9,303,447      1,518,897      832,318      2,227,805      7,657,321      21,539,788

Stockholders’ equity

                 

Equity, excluding accumulated other comprehensive income

     1,590,628      821,713      479,466      652,505      287,959      3,832,271

Accumulated other comprehensive income

     —        —        —        —        88,990      88,990
                                         

Total stockholders’ equity

     1,590,628      821,713      479,466      652,505      376,949      3,921,261
                                         

Total liabilities and stockholders’ equity

   $ 10,894,075    $ 2,340,610    $ 1,311,784    $ 2,880,310    $ 8,034,270    $ 25,461,049
                                         
     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
                                         

(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 Year Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,     December 31,     December 31,  

($ in thousands, net of tax)

   2007     2006     2006     2006     2006     2006     2005  

Assurant Solutions

   $ 44,069     $ 39,810     $ 41,707     $ 37,148     $ 39,747     $ 158,412     $ 133,147  

Assurant Specialty Property

     74,434       63,956       53,445       59,276       64,444       241,121       143,227  

Assurant Health

     40,524       36,960       44,847       41,016       45,096       167,919       178,055  

Assurant Employee Benefits

     28,957       19,428       24,400       20,590       19,185       83,603       68,366  

Corporate and other

     (7,632 )     (19,908 )     (7,535 )     (4,930 )     (439 )     (32,812 )     2,681  

Amortization of deferred gains on disposal of businesses

     5,427       5,861       6,128       6,514       5,741       24,244       27,631  

Interest expense

     (9,943 )     (9,949 )     (9,950 )     (9,955 )     (9,955 )     (39,809 )     (39,818 )
                                                        

Net operating income

     175,836       136,158       153,042       149,659       163,819       602,678       513,289  

Adjustments:

              

Net realized gains (losses) on investments

     3,621       75,868       (1,739 )     1,477       (2,894 )     72,712       7,369  

Assurant Solutions legal settlement

     —         40,481       —         —         —         40,481       —    

Excess of loss reinsurance program (1995-1997)

     —         —         —         —         —         —         (40,263 )

Expenses directly related to the secondary public offering

     —         —         —         —         —         —         (1,040 )
                                                        

Net income before cumulative effect of change in accounting principle

     179,457       252,507       151,303       151,136       160,925       715,871       479,355  

Cumulative effect of change in accounting principle

     —         —         —         —         1,547       1,547       —    
                                                        

Net income

   $ 179,457     $ 252,507     $ 151,303     $ 151,136     $ 162,472     $ 717,418     $ 479,355  
                                                        

 

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Assurant, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Unaudited)

 

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

($ in thousands)

   2007     2006     2006     2006     2006     2006     2005  

Revenues:

              

Net earned premiums and other considerations

   $ 1,759,509     $ 1,768,160     $ 1,717,640     $ 1,685,322     $ 1,672,653     $ 6,843,775     $ 6,520,796  

Net investment income

     216,896       183,014       180,672       180,438       192,562       736,686       687,257  

Net realized gains (losses) on investments

     5,570       116,720       (2,675 )     2,272       (4,452 )     111,865       8,235  

Amortization of deferred gains on disposal of businesses

     8,349       9,017       9,428       10,022       8,833       37,300       42,508  

Fees and other income*

     66,939       130,722       79,014       71,036       60,186       340,958       238,879  
                                                        
     2,057,263       2,207,633       1,984,079       1,949,090       1,929,782       8,070,584       7,497,675  
                                                        

Benefits, losses and expenses:

              

Policyholder benefits

     890,449       886,747       888,317       874,204       889,679       3,538,947       3,707,809  

Selling, underwriting, general and administrative expenses

     873,999       915,398       849,414       827,408       782,432       3,374,652       3,073,000  

Interest expense

     15,297       15,306       15,307       15,315       15,315       61,243       61,258  
                                                        
     1,779,745       1,817,451       1,753,038       1,716,927       1,687,426       6,974,842       6,842,067  
                                                        

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

     277,518       390,182       231,041       232,163       242,356       1,095,742       655,608  

Income taxes

     98,061       137,675       79,738       81,027       81,431       379,871       176,253  
                                                        

Net income before cumulative effect of change in accounting principle

     179,457       252,507       151,303       151,136       160,925       715,871       479,355  

Cumulative effect of change in accounting principle

     —         —         —         —         1,547       1,547       —    
                                                        

Net income

   $ 179,457     $ 252,507     $ 151,303     $ 151,136     $ 162,472     $ 717,418     $ 479,355  
                                                        

Share repurchase program:

              

Shares repurchased

     1,421,833       1,826,416       3,081,000       2,140,000       1,416,800       8,464,216       9,432,894  

Average repurchase price per share

   $ 54.48     $ 54.45     $ 50.34     $ 48.43     $ 45.17     $ 49.88     $ 36.36  

Repurchase price

   $ 77,460     $ 99,444     $ 155,109     $ 103,630     $ 64,001     $ 422,184     $ 342,990  

AIZ Closing stock price (NYSE)

   $ 53.63     $ 55.25     $ 53.41     $ 48.40     $ 49.25     $ 53.41     $ 43.49  

Investment yield (1)

     5.66 %     5.73 %     5.66 %     5.83 %     5.75 %     5.73 %     5.54 %

Real estate investment income (1)

   $ 33,540     $ 614     $ 3,229     $ —       $ 14,735     $ 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 7.

 

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Assurant Solutions

Condensed Statements of Operations

(Unaudited)

 

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

($ in thousands)

   2007    2006    2006    2006    2006    2006    2005

Revenues:

                    

Net earned premiums and other considerations

   $ 583,011    $ 617,798    $ 591,237    $ 592,182    $ 570,388    $ 2,371,605    $ 2,220,145

Net investment income

     112,017      99,852      96,625      98,951      97,082      392,510      371,565

Fees and other income*

     38,051      38,516      47,262      39,525      34,170      159,473      132,730
                                                
     733,079      756,166      735,124      730,658      701,640      2,923,588      2,724,440
                                                

Benefits, losses and expenses:

                    

Policyholder benefits

     243,344      252,296      250,886      247,208      248,380      998,770      1,046,900

Selling, underwriting, general and administrative expenses

     427,645      446,185      424,284      424,429      394,878      1,689,776      1,477,505
                                                
     670,989      698,481      675,170      671,637      643,258      2,688,546      2,524,405
                                                

Income before income taxes

     62,090      57,685      59,954      59,021      58,382      235,042      200,035

Income taxes*

     18,021      17,875      18,247      21,873      18,635      76,630      66,888
                                                

Net operating income*

   $ 44,069    $ 39,810    $ 41,707    $ 37,148    $ 39,747    $ 158,412    $ 133,147
                                                

Net earned premiums and other considerations:

                    

Domestic:

                    

Credit

   $ 80,921    $ 86,185    $ 88,470    $ 98,206    $ 95,851    $ 368,712    $ 351,339

Service contracts

     261,863      278,691      255,962      256,135      249,982      1,040,770      835,825

Other

     16,689      19,791      18,034      19,759      23,699      81,283      154,493
                                                

Total Domestic

     359,473      384,667      362,466      374,100      369,532      1,490,765      1,341,657
                                                

International:

                    

Credit

     96,877      104,288      104,372      97,612      88,210      394,482      339,227

Service contracts

     42,717      41,449      18,868      24,416      14,761      99,494      41,006

Other

     8,979      15,158      24,327      13,311      13,933      66,729      32,276
                                                

Total International

     148,573      160,895      147,567      135,339      116,904      560,705      412,509
                                                

Preneed

     74,965      72,236      81,204      82,743      83,952      320,135      465,979
                                                

Total

   $ 583,011    $ 617,798    $ 591,237    $ 592,182    $ 570,388    $ 2,371,605    $ 2,220,145
                                                

Fee income:

                    

Domestic:

                    

Debt protection

   $ 8,750    $ 13,523    $ 13,698    $ 13,750    $ 13,082    $ 54,053    $ 51,420

Service contracts

     16,877      15,872      23,556      14,432      12,567      66,427      46,523

Other

     6,493      4,092      4,884      4,796      4,022      17,794      18,993
                                                

Total Domestic

     32,120      33,487      42,138      32,978      29,671      138,274      116,936
                                                

International

     4,492      4,433      4,069      4,165      4,276      16,943      12,302

Preneed

     1,439      596      1,055      2,382      223      4,256      3,492
                                                

Total

   $ 38,051    $ 38,516    $ 47,262    $ 39,525    $ 34,170    $ 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 5). 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 (continued)

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended     For the Year Ended  

($ in thousands)

  

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

   

December 31,

2006

    December 31,
2005
 

Gross written premiums:

              

Domestic:

              

Credit

   $ 161,843     $ 179,255     $ 184,120     $ 182,489     $ 168,927     $ 714,791     $ 767,466  

Service contracts

     454,404       468,820       398,170       378,636       354,962       1,600,588       1,414,529  

Other

     20,865       26,905       25,851       24,335       31,478       108,569       192,856  
                                                        

Total Domestic

     637,112       674,980       608,141       585,460       555,367       2,423,948       2,374,851  
                                                        

International:

              

Credit

     191,415       184,448       175,417       159,208       161,024       680,097       647,467  

Service contracts

     79,582       112,893       91,407       71,330       66,256       341,886       247,506  

Other

     10,422       10,048       11,353       11,817       11,437       44,655       105,962  
                                                        

Total International

     281,419       307,389       278,177       242,355       238,717       1,066,638       1,000,935  
                                                        

Total

   $ 918,531     $ 982,369     $ 886,318     $ 827,815     $ 794,084     $ 3,490,586     $ 3,375,786  
                                                        

Preneed (face sales)

   $ 86,058     $ 84,246     $ 105,031     $ 120,545     $ 123,688     $ 433,510     $ 542,515  

Combined ratios (a):

              

Domestic

     100.9 %     100.1 %     98.4 %     99.1 %     100.0 %     99.4 %     99.9 %

International

     102.1 %     99.3 %     101.7 %     100.0 %     95.2 %     99.2 %     99.7 %

Preneed yield (1)

     6.29 %     6.36 %     6.21 %     6.35 %     6.32 %     6.42 %     6.35 %

Preneed average invested assets

   $ 3,600,420     $ 3,600,069     $ 3,644,564     $ 3,565,666     $ 3,468,298     $ 3,509,475     $ 3,414,937  

Investment yield (1) *

     5.80 %     5.93 %     5.67 %     5.94 %     5.77 %     5.84 %     N/A  

Real estate investment income (1)

   $ 14,448     $ 276     $ 1,453     $ —       $ 2,506     $ 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) Investment yield excludes investment income from real estate partnerships.
 * Segment balance sheets as of December 31, 2004 are not available. Therefore, investment yield for the year ended December 31, 2005 is not available.

 

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Assurant Specialty Property

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended     For the Year Ended  

($ in thousands)

  

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

    December 31,
2006
   

December 31,

2005

 
              

Revenues:

              

Net earned premiums and other considerations

   $ 367,041     $ 350,946     $ 313,644     $ 290,972     $ 252,749     $ 1,208,311     $ 858,848  

Net investment income

     21,869       20,204       19,584       17,923       16,790       74,501       61,953  

Fees and other income

     12,596       13,050       13,329       13,587       9,458       49,424       38,159  
                                                        
     401,506       384,200       346,557       322,482       278,997       1,332,236       958,960  
                                                        

Benefits, losses and expenses:

              

Policyholder benefits

     116,787       112,409       115,379       110,474       70,459       408,721       317,507  

Selling, underwriting, general and administrative expenses

     170,799       173,454       148,540       122,369       109,089       553,452       422,999  
                                                        
     287,586       285,863       263,919       232,843       179,548       962,173       740,506  
                                                        

Income before income taxes

     113,920       98,337       82,638       89,639       99,449       370,063       218,454  

Income taxes

     39,486       34,381       29,193       30,363       35,005       128,942       75,227  
                                                        

Net operating income

   $ 74,434     $ 63,956     $ 53,445     $ 59,276     $ 64,444     $ 241,121     $ 143,227  
                                                        

Net Earned Premiums for selected product groupings:

              

Homeowners (Creditor Placed & Voluntary)

   $ 250,889     $ 233,181     $ 198,733     $ 178,363     $ 142,892     $ 753,169     $ 443,526  

Manufactured Housing (Creditor Placed & Voluntary)

     50,670       51,774       52,535       54,184       55,968       214,461       217,424  

Other

     65,482       65,991       62,376       58,425       53,889       240,681       197,898  
                                                        

Total

   $ 367,041     $ 350,946     $ 313,644     $ 290,972     $ 252,749     $ 1,208,311     $ 858,848  
                                                        

Gross Written Premiums for selected product groupings:

              

Homeowners (Creditor Placed & Voluntary)

   $ 319,053     $ 330,882     $ 271,632     $ 247,538     $ 184,096     $ 1,034,148     $ 697,651  

Manufactured Housing (Creditor Placed & Voluntary)

     67,785       73,590       82,401       80,981       69,610       306,582       311,792  

Other

     112,322       121,711       130,820       127,555       101,386       481,472       420,791  
                                                        

Total

   $ 499,160     $ 526,183     $ 484,853     $ 456,074     $ 355,092     $ 1,822,202     $ 1,430,234  
                                                        

Ratios:

              

Loss ratio (a)

     31.8 %     32.0 %     36.8 %     38.0 %     27.9 %     33.8 %     37.0 %

Expense ratio (b)

     45.0 %     47.7 %     45.4 %     40.2 %     41.6 %     44.0 %     47.2 %

Combined ratio (c)

     75.8 %     78.5 %     80.7 %     76.5 %     68.5 %     76.5 %     82.6 %

Investment yield (1)*

     5.51 %     5.54 %     5.62 %     5.70 %     5.82 %     5.67 %     N/A  

Real estate investment income (1)

   $ 159     $ —       $ —       $ —       $ —       $ —       $ —    

(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 December 31, 2004 are not available. Therefore, investment yield for the year ended December 31, 2005 is not available.

 

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Assurant Health

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended    For the Year Ended

($ in thousands)

  

March 31,

2007

  

December 31,

2006

  

September 30,

2006

  

June 30,

2006

  

March 31,

2006

  

December 31,

2006

  

December 31,

2005

                    

Revenues:

                    

Net earned premiums and other considerations

   $ 512,784    $ 519,438    $ 521,527    $ 519,587    $ 523,405    $ 2,083,957    $ 2,163,965

Net investment income

     19,270      16,415      17,689      17,110      24,001      75,215      69,056

Fees and other income

     9,688      10,549      11,035      10,250      9,726      41,560      40,344
                                                
     541,742      546,402      550,251      546,947      557,132      2,200,732      2,273,365
                                                

Benefits, losses and expenses:

                    

Policyholder benefits

     317,784      328,769      325,325      321,322      325,401      1,300,817      1,344,624

Selling, underwriting, general and administrative expenses

     161,410      160,411      155,186      163,019      162,712      641,328      657,899
                                                
     479,194      489,180      480,511      484,341      488,113      1,942,145      2,002,523
                                                

Income before income taxes

     62,548      57,222      69,740      62,606      69,019      258,587      270,842

Income taxes

     22,024      20,262      24,893      21,590      23,923      90,668      92,787
                                                

Net operating income

   $ 40,524    $ 36,960    $ 44,847    $ 41,016    $ 45,096    $ 167,919    $ 178,055
                                                

Net earned premiums and other considerations:

                    

Individual:

                    

Individual medical

   $ 314,662    $ 310,826    $ 305,246    $ 300,267    $ 297,338    $ 1,213,677    $ 1,164,498

Short-term medical

     22,561      24,125      26,839      25,489      25,001      101,454      110,912
                                                

Subtotal

     337,223      334,951      332,085      325,756      322,339      1,315,131      1,275,410

Small employer group

     175,561      184,487      189,442      193,831      201,066      768,826      888,555
                                                

Total

   $ 512,784    $ 519,438    $ 521,527    $ 519,587    $ 523,405    $ 2,083,957    $ 2,163,965
                                                

 

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Assurant Health (continued)

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended     For the Year Ended  

($ in thousands)

  

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

   

December 31,

2006

   

December 31,

2005

 
              

Sales (Annualized issued premiums):

              

Individual:

              

Individual medical

   $ 99,614     $ 88,154     $ 90,271     $ 76,616     $ 76,192     $ 331,233     $ 285,614  

Short-term medical

     31,939       29,078       34,841       33,612       35,014       132,545       144,476  
                                                        

Subtotal

     131,553       117,232       125,112       110,228       111,206       463,778       430,090  

Small employer group

     29,520       28,652       33,336       32,527       34,573       129,088       159,387  
                                                        

Total

   $ 161,073     $ 145,884     $ 158,448     $ 142,755     $ 145,779     $ 592,866     $ 589,477  
                                                        

Membership by product line:

              

Individual:

              

Individual medical

     641       641       639       632       636       641       644  

Short-term medical

     85       87       99       105       100       87       102  
                                                        

Subtotal

     726       728       738       737       736       728       746  

Small employer group

     191       207       216       226       239       207       255  
                                                        

Total

     917       935       954       963       975       935       1,001  
                                                        

Ratios:

              

Loss ratio (a)

     62.0 %     63.3 %     62.4 %     61.8 %     62.2 %     62.4 %     62.1 %

Expense ratio (b)

     30.9 %     30.3 %     29.1 %     30.8 %     30.5 %     30.2 %     29.8 %

Combined ratio (c)

     91.7 %     92.3 %     90.2 %     91.4 %     91.6 %     91.4 %     90.8 %

Investment yield (1)

     5.70 %     5.69 %     5.76 %     5.83 %     5.70 %     5.78 %     5.61 %

Real estate investment income (1)

   $ 3,535     $ 123     $ 646     $ —       $ 7,372     $ 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.

 

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Assurant Employee Benefits

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended    For the Year Ended

($ in thousands)

  

March 31,

2007

  

December 31,

2006

  

September 30,

2006

  

June 30,

2006

  

March 31,

2006

  

December 31,

2006

  

December 31,

2005

                    

Revenues:

                    

Net earned premiums and other considerations

   $ 296,673    $ 279,978    $ 291,232    $ 282,581    $ 326,111    $ 1,179,902    $ 1,277,838

Net investment income

     51,887      39,049      39,893      38,744      40,839      158,525      156,889

Fees and other income

     6,277      6,477      6,685      7,547      6,832      27,541      26,214
                                                
     354,837      325,504      337,810      328,872      373,782      1,365,968      1,460,941
                                                

Benefits, losses and expenses:

                    

Policyholder benefits

     212,534      193,273      196,727      195,195      245,439      830,634      936,835

Selling, underwriting, general and administrative expenses

     98,026      102,353      103,726      101,827      99,114      407,020      418,542
                                                
     310,560      295,626      300,453      297,022      344,553      1,237,654      1,355,377
                                                

Income before income taxes

     44,277      29,878      37,357      31,850      29,229      128,314      105,564

Income taxes

     15,320      10,450      12,957      11,260      10,044      44,711      37,198
                                                

Net operating income

   $ 28,957    $ 19,428    $ 24,400    $ 20,590    $ 19,185    $ 83,603    $ 68,366
                                                

Net earned premiums and other considerations by:

                    

Major product grouping:

                    

Group dental

   $ 101,535    $ 104,448    $ 104,367    $ 108,010    $ 111,393    $ 428,218    $ 502,789

Group disability single premiums for closed blocks

     22,847      —        12,393      —        33,920      46,313      26,700

All other group disability

     118,189      119,812      119,679      119,847      121,586      480,924      489,840

Group life

     54,102      55,718      54,793      54,724      59,212      224,447      258,509
                                                

Total

   $ 296,673    $ 279,978    $ 291,232    $ 282,581    $ 326,111    $ 1,179,902    $ 1,277,838
                                                

 

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Assurant Employee Benefits (continued)

Condensed Statements of Operations

(Unaudited)

 

     For the Three Months Ended     For the Year Ended  

($ in thousands)

  

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

   

December 31,

2006

   

December 31,

2005

 
              

Sales:

              

Group dental

   $ 42,212     $ 17,119     $ 20,678     $ 12,843     $ 26,979     $ 77,619     $ 98,848  

Group disability

     20,394       11,126       12,362       10,022       13,633       47,143       62,655  

Group life

     11,875       5,859       6,954       5,344       6,681       24,838       42,044  
                                                        

Total

   $ 74,481     $ 34,104     $ 39,994     $ 28,209     $ 47,293     $ 149,600     $ 203,547  
                                                        

Ratios:

              

Loss ratio (a)

     71.6 %     69.0 %     67.5 %     69.1 %     75.3 %     70.4 %     73.3 %

Expense ratio (b)

     32.4 %     35.7 %     34.8 %     35.1 %     29.8 %     33.7 %     32.1 %

Investment yield (1)

     6.09 %     6.32 %     6.25 %     6.17 %     6.47 %     6.30 %     6.19 %

Real estate investment income (1)

   $ 14,164     $ 215     $ 1,130     $ —       $ —       $ 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)

 

     For the Three Months Ended     For the Year Ended  

($ in thousands)

  

March 31,

2007

   

December 31,

2006

   

September 30,

2006

   

June 30,

2006

   

March 31,

2006

   

December 31,

2006

   

December 31,

2005

 
              

Revenues:

              

Net earned premiums and other considerations

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

Net investment income

     11,853       7,494       6,881       7,710       13,850       35,935       27,794  

Net realized gains (losses) on investments

     5,570       116,720       (2,675 )     2,272       (4,452 )     111,865       8,235  

Amortization of deferred gains on disposal of businesses

     8,349       9,017       9,428       10,022       8,833       37,300       42,508  

Fees and other income

     327       (148 )     703       127       —         682       1,432  
                                                        
     26,099       133,083       14,337       20,131       18,231       185,782       79,969  
                                                        

Benefits, losses and expenses:

              

Policyholder benefits

       —         —         5       —         5       61,943  

Selling, underwriting, general and administrative expenses

     16,119       32,995       17,678       15,764       16,639       83,076       96,055  

Interest expense

     15,297       15,306       15,307       15,315       15,315       61,243       61,258  
                                                        
     31,416       48,301       32,985       31,084       31,954       144,324       219,256  
                                                        

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

     (5,317 )     84,782       (18,648 )     (10,953 )     (13,723 )     41,458       (139,287 )

Income taxes

     3,210       32,910       (5,552 )     (4,059 )     (6,176 )     17,123       (95,847 )
                                                        

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

     (8,527 )     51,872       (13,096 )     (6,894 )     (7,547 )     24,335       (43,440 )

Cumulative effect of change in accounting principle

     —         —         —         —         1,547       1,547       —    
                                                        

Net operating (loss) income

   $ (8,527 )   $ 51,872     $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 25,882     $ (43,440 )
                                                        

Real estate investment income

   $ 1,234     $ —       $ —       $ —       $ 4,857     $ 4,857     $ —    

Corporate and Other Reconciliation

              

Assurant Corporate and Other Segment Net Operating Income

   $ (8,527 )   $ 51,872     $ (13,096 )   $ (6,894 )   $ (6,000 )   $ 25,882     $ (43,440 )

Adjustments, net of tax:

              

Amortization of deferred gains on disposal of businesses

     (5,427 )     (5,861 )     (6,128 )     (6,514 )     (5,741 )     (24,244 )     (27,631 )

Interest expense

     9,943       9,949       9,950       9,955       9,955       39,809       39,818  

Net realized (gains) losses on investments

     (3,621 )     (75,868 )     1,739       (1,477 )     2,894       (72,712 )     (7,369 )

Excess of loss reinsurance program (1995-1997)

     —         —         —         —         —         —         40,263  

Expenses directly related to the secondary public offering

     —         —         —         —         —         —         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)

   $ (7,632 )   $ (19,908 )   $ (7,535 )   $ (4,930 )   $ (439 )   $ (32,812 )   $ 2,681  
                                                        

 

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Assurant, Inc. and Subsidiaries

Investments

(Unaudited)

 

     As of          As of       

($ in thousands)

  

March 31,

2007

        

December 31,

2006

      
          

Investments by Type

          

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

   $ 9,377,836      $ 9,118,049   

Equity Securities: available-for-sale, at fair value

          

Preferred stocks

     750,956        740,603   

Common stocks

     842        1,036   

Commercial mortgage loans on real estate, at amortized cost

     1,287,058        1,266,158   

Policy loans

     58,413        58,733   

Cash and short-term investments

     1,190,605        1,301,786   

Collateral held under securities lending

     576,129        365,958   

Other investments

     564,894        564,494   
                  

Total

   $ 13,806,733      $ 13,416,817   
                  

Fixed Maturity Securities by Credit Quality (Fair Value)

          

Aaa / Aa / A

   $ 6,334,781    68 %   $ 6,416,438    70 %

Baa

     2,422,981    26 %     2,067,922    23 %

Ba

     485,836    5 %     531,685    6 %

B

     120,670    1 %     87,359    1 %

Caa and lower

     13,568    0 %     14,203    0 %

In or near default

     —      0 %     442    0 %
                          

Total

   $ 9,377,836    100 %   $ 9,118,049    100 %
                          

Fixed Maturity Securities by Issuer Type (Fair Value)

          

U.S government and government agencies and authorities

   $ 302,173    3 %   $ 219,245    2 %

State, municipalities and political subdivisions

     401,900    4 %     236,429    3 %

Foreign government

     696,747    8 %     652,662    7 %

Public utilities

     1,111,055    12 %     1,104,167    12 %

Mortgage backed securities

     1,150,261    12 %     1,314,815    15 %

All other corporate bonds

     5,715,700    61 %     5,590,731    61 %
                          

Total

   $ 9,377,836    100 %   $ 9,118,049    100 %
                          

 

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Assurant, Inc. and Subsidiaries

Investment Results by Asset Category and Annualized Yields

(Unaudited)

 

     For the Three Months Ended
March 31, 2007
    For the Three Months Ended
March 31, 2006
   

For the Year Ended

December 31, 2006

    For the Year Ended
December 31, 2005
 

($ in thousands)

   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

   5.83 %   $ 132,142     $ 3,476     5.83 %   $ 126,841     $ (2,617 )   5.89 %   $ 517,744     $ (147 )   5.82 %   $ 499,950     $ (8,628 )

Equity Securities: available for sale, at fair value

   6.56 %     12,140       (348 )   6.32 %     11,783       (1,653 )   6.80 %     49,779       (3,742 )   6.95 %     45,621       (2,929 )

Commercial mortgage loans on real estate, at amortized cost

   6.76 %     21,559       —       7.64 %     23,353       (126 )   7.26 %     90,000       15,177     7.59 %     85,942       (2,714 )

Policy loans

   5.96 %     873       —       5.77 %     873       —       6.13 %     3,669       —       5.87 %     3,699       —    

Cash and short-term investments

   4.77 %     14,863       17     3.66 %     10,056       141     4.38 %     42,411       163     2.03 %     24,316       346  

Other investments

   29.49 %     41,630       2,425     18.79 %     25,965       (197 )   10.38 %     57,836       100,414     9.54 %     52,296       22,160  
                                                                        

Total

       223,207     $ 5,570         198,871     $ (4,452 )       761,439     $ 111,865         711,824     $ 8,235  
                                                

Investment expenses

       (6,311 )         (6,309 )         (24,753 )         (24,567 )  
                                                

Net investment income

     $ 216,896         $ 192,562         $ 736,686         $ 687,257    
                                                

Gross investment gain

       $ 10,455         $ 6,125         $ 153,607         $ 55,845  

Gross investment loss

         (4,885 )         (10,577 )         (40,932 )         (46,845 )

Write-downs on available for sale securities

         —             —             (810 )         (765 )
                                                

Net investment gain

       $ 5,570         $ (4,452 )       $ 111,865         $ 8,235  
                                                

 

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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)

        

March 31,

2007

   

December 31,

2006

    September 30,
2006
  

June 30,

2006

   

March 31,

2006

 
                 Diluted           Diluted          Diluted          Diluted           Diluted  
           $     EPS     $     EPS     $    EPS    $     EPS     $     EPS  

Assurant Solutions:

                        

Closed block of extended service contracts

   (a )   $ —       —       $ —       —       $ 5.4    0.04    $ —       —       $ —       —    

Expense on sale of US pre-need independent franchise

   (c )   $ —       —       $ —       —       $ —      —      $ (0.7 )   (0.01 )   $ (1.3 )   (0.01 )

Assurant Specialty Property:

                        

Client related settlements

   (b )   $ —       —       $ 5.5     0.04     $ —      —      $ —       —       $ —       —    

Processing fees for the National Flood Insurance Program

   (b )   $ —       —       $ —       —       $ 0.3    0.00    $ 1.3     0.01     $ 5.2     0.04  

Catastrophe losses, net of reinsurance

   (b )   $ —       —       $ —       —       $ —      —      $ (4.5 )   (0.03 )   $ —       —    

Assurant Health:

                        

Legal related settlements

   (c )   $ —       —       $ —       —       $ 2.6    0.02    $ —       —       $ —       —    

Assurant Corporate and Other:

                        

Assurant Foundation funding

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

Change in certain tax liabilities

   (d )   $ (5.8 )   (0.05 )   $ (6.2 )   (0.05 )   $ —      —      $ —       —       $ —       —    
                                                                      

(a) Fees and other income
(b) Policyholder benefits
(c) Selling, underwriting, general and administrative expenses
(d) 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.

 

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