[February 09, 2016] |
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Assurant Reports Fourth Quarter and Full-Year 2015 Financial Results
Assurant,
Inc. (NYSE:AIZ), a premier provider of specialty protection products
and related services, today reported results for fourth quarter and
full-year ended Dec. 31, 2015.
"Assurant made significant strides in 2015 as we realigned our business
portfolio and evolved our organizational framework to support
sustainable long-term, profitable growth," said Assurant President and
CEO Alan
B. Colberg.
"While fourth quarter results were disappointing and fell short of our
expectations, we believe our transformation strategy will improve
results and drive shareholder value. We are focusing resources and
investments in targeted markets and increasing operating efficiency
across the company as we continue to return capital to shareholders,"
Colberg added.
Reconciliation of Net Operating Income to Net Income
Beginning in second quarter 2015, Assurant revised its presentation of
results to reflect the company's previously announced strategic
realignment to focus on specialty housing and lifestyle protection
products and services. As the company continues to wind down its health
insurance business, Assurant Health results have been removed from net
operating income and now are reflected in net income as runoff
operations. Prior period amounts have been revised to conform to the
updated presentation. In the third quarter, the company announced the
sale of Assurant Employee Benefits. Assurant will continue to report
this business under operating results until the sale of the business is
closed, which is expected to occur by the end of first quarter 2016.
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(UNAUDITED)
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4Q
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4Q
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12 Months
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12 Months
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(dollars in millions, net of tax)
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2015
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2014
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2015
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2014
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Housing and Lifestyle
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Assurant Solutions
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$
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29.6
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$
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58.1
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$
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197.2
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$
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218.9
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Assurant Specialty Property
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57.8
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71.0
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307.7
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341.8
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Subtotal
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87.4
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129.1
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504.9
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560.7
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Assurant Employee Benefits
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15.5
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7.2
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47.3
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48.7
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Corporate and other
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(30.7
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(19.4
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(70.4
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(67.7
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Amortization of deferred gain on disposal of businesses
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2.1
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(8.1
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8.4
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(1.0
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Interest expense
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(9.0
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(9.0
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(35.8
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(37.9
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Net operating income
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65.3
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99.8
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454.4
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502.8
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Adjustments:
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Assurant Health runoff operations (a)
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(15.8
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(36.8
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(367.9
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(63.7
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Net realized gains on investments
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6.3
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11.3
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20.8
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39.4
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Gain (loss) on divested business
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10.0
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(19.4
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10.7
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(19.4
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Change in tax liabilities
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-
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(6.8
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16.0
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14.0
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Payment received related to previous sale of subsidiary
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-
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-
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9.9
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-
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Change in derivative investment
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(0.1
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1.7
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(2.3
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(2.2
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Net income
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$
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65.7
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$
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49.8
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$
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141.6
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$
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470.9
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(a) Assurant Health runoff operations include results for the total
segment, including major medical operations and portions of the business
that Assurant sold to National General Holdings Corp. on Oct. 1, 2015.
Note: Additional financial information, including a schedule of
disclosed items that affected Assurant's results by business for the
last eight quarters appears on page 21 of the company's Financial
Supplement, and is located in the Investor Relations section of www.assurant.com.
Fourth Quarter 2015 Consolidated Results
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Net operating income2 decreased to $65.3 million, or
$0.97 per diluted share, compared to fourth quarter 2014 net operating
income of $99.8 million, or $1.38 per diluted share. The decrease
primarily reflects lower contributions from the mobile business at
Assurant Solutions and ongoing normalization of lender-placed
insurance business at Assurant Specialty Property.
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Net income increased to $65.7 million, or $0.97 per
diluted share, compared to fourth quarter 2014 net income of $49.8
million, or $0.69 per diluted share. Results primarily benefited from
a $10.0 million gain from the fourth quarter sale of an Assurant
Specialty Property legacy auto title business, compared to a $19.4
million net loss on the sale of Assurant Specialty Property's general
agency business and associated insurance carrier, American Reliable
Insurance Company (ARIC), recognized in fourth quarter 2014.
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Net earned premiums, fees and other income, excluding Assurant
Health runoff operations, decreased to $1.9 billion, compared to $2.0
billion in fourth quarter 2014. The decline reflects the divestiture
of ARIC, the ongoing normalization of lender-placed insurance
business, the loss of business from an Assurant Specialty Property
client and the effect of foreign exchange volatility at Assurant
Solutions. Fee income increased to $376.3 million, compared to $304.7
million in fourth quarter 2014, driven by expanded service offerings
in mobile and mortgage solutions.
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Net investment income, excluding Assurant Health runoff
operations, totaled $152.8 million, compared to $151.0 million in
fourth quarter 2014.
Full-Year 2015 Consolidated Results
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Net operating income decreased to $454.4
million, or $6.58 per diluted share, compared to $502.8 million, or
$6.87 per diluted share in 2014, primarily due to the factors noted
above.
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Net income decreased to $141.6 million, or $2.05 per
diluted share, compared to $470.9 million, or $6.44 per diluted share
in 2014, reflecting increased claims from Affordable Care Act (ACA)
qualified policies and charges associated with the wind down of the
Assurant Health business including an accrual for premium deficiency
reserves.
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Net earned premiums, fees and other income, excluding Assurant
Health runoff operations, were $7.4 billion, down 4.0 percent
compared to $7.7 billion in 2014. The divestiture of ARIC, the ongoing
normalization of lender-placed insurance business as well as the loss
of business from an Assurant Specialty Property client and the effect
of foreign exchange volatility at Assurant Solutions reduced premiums.
Fee income increased to $1.2 billion, compared to $1.0 billion in
2014, due to the expansion of mobile programs and the mortgage
solutions business.
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Net investment income, excluding Assurant Health runoff
operations, decreased to $601.7 million from $621.1 million in 2014,
due to lower investment yields and invested assets.
Housing and Lifestyle
Assurant Solutions
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(in millions)
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4Q15
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4Q14
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% Change
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12M15
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12M14
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% Change
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Net operating income
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$
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29.6
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$
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58.1
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(49)%
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$
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197.2
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$
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218.9
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(10)%
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Net earned premiums, fees and other
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$
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1,003.2
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$
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1,000.0
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0%
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$
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3,801.5
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$
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3,796.7
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0%
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Net operating income decreased compared to fourth quarter 2014,
primarily due to lower contributions from mobile, including the
previously disclosed loss of a domestic tablet program and higher
operating expenses to support existing programs and expected program
launches. Results also were negatively affected by foreign exchange
losses and approximately $8 million of prior-period accounting
adjustments, partially offset by a decrease in legal reserves related
to an outstanding matter.
Full-year 2015 net operating
income, excluding disclosed items, decreased compared to 2014,
primarily due to lower service contract volumes from North American
retail clients and the loss of the domestic tablet program.
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Net earned premiums, fees and other income were flat in the
quarter and full-year 2015, compared to the same periods in 2014.
Growth in fee income from domestic mobile and the auto warranty
business were offset by the effect of foreign exchange volatility,
loss of the domestic tablet program and declines in credit insurance
and lower service contract production from North American retailers.
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Domestic combined ratio increased to 100.1 percent, compared to
92.9 percent in fourth quarter 2014, reflecting lower contributions
from mobile.
For full-year 2015, the domestic combined
ratio increased to 95.1 percent, compared to 93.5 percent in 2014.
Results reflect lower service contract premiums from North American
retailers as well as lower contributions from credit insurance and
mobile businesses.
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International combined ratio improved to 101.4 percent,
compared to 103.4 percent in fourth quarter 2014, primarily due to the
decrease in the legal reserves noted above.
For full-year
2015, the international combined ratio increased to 102.8 percent,
compared to 101.5 percent in 2014. Results primarily reflect revenue
declines and shifts in the mix of business.
Assurant Specialty Property
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(in millions)
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4Q15
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4Q14
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% Change
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12M15
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12M14
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% Change
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Net operating income
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$
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57.8
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$
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71.0
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(19)%
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$
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307.7
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$
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341.8
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(10)%
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Net earned premiums, fees and other
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$
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601.7
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$
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686.5
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(12)%
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$
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2,450.2
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$
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2,807.1
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(13)%
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Note: In fourth quarter 2014, ARIC accounted for net earned premiums,
fees and other income and net operating income of $62.3 million and $6.4
million, respectively. For the 12 months ended 2014, ARIC accounted for
net earned premiums, fees and other income and net operating income of
$249.3 million and $12.1 million, respectively. This divested business
did not contribute to 2015 results.
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Net operating income decreased in fourth quarter and full-year
2015, compared to the same periods in 2014, primarily due to the
ongoing normalization of lender-placed insurance, including the
previously disclosed loss of client business as well as increased
legal expenses. More favorable non-catastrophe loss experience and
lower catastrophe reinsurance costs partially offset the decline.
Fourth
quarter 2015 results include $9.8 million in reportable catastrophes,
compared to no reportable catastrophe losses in fourth quarter 2014.
Full-year 2015 results include $19.3 million in reportable catastrophe
losses, compared to $18.5 million in 2014.
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Net earned premiums, fees and other income decreased in the
quarter and for the full year, compared to the same periods in 2014.
Net earned premiums decreased primarily due to the divestiture of ARIC
and the ongoing normalization of lender-placed insurance, including
the loss of client business. Fee income increased in the quarter and
in full-year 2015, primarily reflecting organic growth from the
mortgage solutions business.
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Combined ratio increased in the quarter to 90.0 percent,
compared to 87.8 percent in fourth quarter 2014, primarily due to
lower lender-placed insurance net earned premiums and an increase in
expenses related to outstanding legal matters. Lower frequency and
severity of non-catastrophe losses partially offset the increase.
For
full-year 2015, the combined ratio was 84.9 percent, compared to 85.2
percent in 2014. Results reflect lower non-catastrophe claims,
partially offset by lower lender-placed insurance revenue and higher
mix of fee-based businesses.
Employee Benefits
As announced on Sept. 9, 2015, Assurant entered into a definitive
agreement to sell Assurant Employee Benefits to Sun Life Assurance
Company of Canada, the wholly-owned subsidiary of Sun Life Financial
Inc., for $940 million in cash. The transaction is expected to close by
the end of first quarter 2016.
Assurant Employee Benefits
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(in millions)
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4Q15
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4Q14
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% Change
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12M15
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12M14
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% Change
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Net operating income
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$
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15.5
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$
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7.2
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114%
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$
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47.3
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$
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48.7
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(3)%
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Net earned premiums, fees and other
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$
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270.8
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$
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269.4
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1%
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$
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1,091.8
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$
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1,075.9
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2%
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-
Net operating income increased in the quarter, primarily due to
favorable disability and life experience.
Full-year 2015
net operating income declined, compared to 2014, primarily due to less
favorable life experience.
-
Net earned premiums, fees and other income increased slightly
in fourth quarter and full-year 2015, primarily due to continued
growth in voluntary products.
-
Sales increased in the quarter and full year 2015. Results
reflect continued growth in voluntary products sales.
Corporate & Other
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(in millions)
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4Q15
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4Q14
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% Change
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12M15
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12M14
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% Change
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Net operating loss
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$
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(30.7)
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$
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(19.4)
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(58)%
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$
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(70.4)
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$
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(67.7)
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(4)%
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-
Net operating loss increased in the fourth quarter, primarily
reflecting a partial reversal of prior quarter tax benefits as well as
severance and other expenses related to Assurant's strategic
realignment.
For full-year 2015, net operating loss
increased, primarily reflecting severance and other expenses related
to Assurant's strategic realignment.
Assurant Health Runoff Operations
The company announced on June 10, 2015 that it was beginning the process
to exit the health business, following a review of strategic options for
Assurant Health. Related to these plans, the company established a
premium deficiency reserve accrual in 2015 for claims and direct
expenses on ACA-qualified policies. The company completed the sale of
Assurant Health's supplemental and small group self-funded product lines
and certain other assets to National General Holdings Corp. on Oct. 1,
2015 for $14 million.
Assurant Health
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(in millions)
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4Q15
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4Q14
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% Change
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12M15
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12M14
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% Change
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Net loss
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$
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(15.8)
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$
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(36.8)
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57%
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$
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(367.9)
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$
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(63.7)
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(477)%
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-
Net loss in fourth quarter primarily reflects $11.2 million
after-tax of severance and other exit-related costs as well as
indirect expenses not included in the previously established premium
deficiency reserves. Actual operating losses were in line with the
premium deficiency accrual estimate established in third quarter 2015.
Full-year
2015 results, compared to 2014, reflect unfavorable loss experience on
ACA-qualified policies and charges related to the company's exit of
the health insurance market.
-
ACA risk-mitigation payments received from the Centers for
Medicare and Medicaid Services as of Dec. 31, 2015 for 2014
ACA-qualified policies totaled a net $351.8 million with no further
remaining receivables accrued for 2014 policies.
As of Dec.
31, 2015, ACA risk-mitigation estimated recoverables for 2015
ACA-qualified policies totaled $521.6 million, reflecting $225.2
million from the risk-adjustment program and $296.4 million from the
reinsurance program. The company did not record any net recoverables
for the 2015 risk-corridors program.
Capital Position
-
Corporate capital approximated $460 million as of Dec. 31,
2015. Adjusting for the company's $250 million risk buffer, deployable
capital totaled $210 million.
During the quarter, operating
business segments, consisting of Assurant Solutions, Assurant
Specialty Property, and Assurant Employee Benefits, paid approximately
$262 million of dividends to the holding company. Excluding proceeds
from the sale of certain assets to National General, the company
infused approximately $260 million into Assurant Health to ensure
adequate levels of statutory surplus and to fund estimated
exit-related charges and claims through the wind-down process.
For
full-year 2015, operating business segments paid approximately $675
million of dividends net of infusions to the holding company.
Excluding proceeds from the sale of certain assets to National
General, the company infused approximately $500 million into Assurant
Health to ensure adequate levels of statutory surplus and to fund
estimated exit-related charges and claims, through the wind-down
process.
-
Share repurchases and dividends totaled $107.5 million in
fourth quarter 2015. Dividends to shareholders totaled $33.3 million,
and Assurant repurchased approximately 925,000 shares of common stock
for $74.2 million.
For full-year 2015, share repurchases
and dividends totaled $378.8 million. Dividends to shareholders
totaled $94.2 million, and Assurant repurchased approximately 4.2
million shares of common stock for $284.6 million. Through Feb. 5,
2016, the company repurchased an additional 1.1 million shares for
$90.0 million, with $862.1 million remaining in the current repurchase
authorization.
Financial Position
-
Stockholders' equity, excluding accumulated other comprehensive
income (AOCI), decreased to $4.4 billion at Dec. 31, 2015, down $220.1
million since Dec. 31, 2014 due to share repurchases and dividends.
-
Annual operating return on average equity (ROE)1,
excluding AOCI and Assurant Health runoff operations, was 11.3 percent
for 2015 compared to 12.1 percent for 2014.
-
Total assets, as of Dec. 31, 2015, were approximately $30.1
billion.
-
Ratio of debt to total capital3, excluding AOCI and
Assurant Health runoff operations, increased to 23.4 percent at Dec.
31, 2015 from 21.9 percent at Dec. 31, 2014.
Company Outlook
Based on current market conditions, for full-year 2016, the company
expects:
-
Assurant Solutions' net earned premiums and fees and net
operating income to increase from 2015 levels. Overall results
expected to improve in the second half of the year driven by new
mobile programs, improved international profitability and additional
expense initiatives. Results to be affected by foreign exchange
volatility, lower service contract revenue from legacy North American
retail clients and continued declines in credit insurance.
-
Assurant Specialty Property's net earned premiums and net
operating income to decrease from 2015 levels. Results to be affected
by the ongoing normalization of lender-placed insurance business
partially offset by increased efficiencies and expense savings
initiatives. Multi-family housing and mortgage solutions businesses to
expand via market share gains. Overall results to be affected by
catastrophe losses.
-
Capital to be deployed through a combination of share
repurchases, common stock dividends, reinvestments in the business and
acquisitions in Housing and Lifestyle, subject to market conditions
and other factors. Business segment dividends from Assurant Solutions
and Assurant Specialty Property to approximate segment net operating
income, subject to the growth of the businesses, rating agency and
regulatory capital requirements. Sale of Assurant Employee Benefits to
provide approximately $1 billion of net proceeds, including capital
releases.
-
Corporate & Other full-year net operating loss to
approximate $70 million. Expense savings actions to offset residual
expenses associated with Assurant Employee Benefits and Assurant
Health.
Based on the announced exit from the health insurance market, the
company expects:
-
Assurant Health to substantially complete the process to exit
the health insurance market in 2016. During the remainder of the wind
down, the company to incur up to $40 to $50 million pre-tax of
additional exit-related charges, as well as certain overhead expenses
that are excluded from the premium deficiency reserve accrual.
Assurant Health dividends expected to approximate $475 million,
subject to ultimate development of claims, actual expenses needed to
wind down operations, recoveries from ACA-risk mitigation payments and
regulatory approval.
Earnings Conference Call
-
The fourth quarter 2015 earnings conference call and webcast to be
held on Feb. 10, 2016 at 8:00 a.m. ET. The live and archived webcast
along with supplemental information will be available in the Investor
Relations section of www.assurant.com.
About Assurant
A global provider of specialty protection products and related services,
Assurant (NYSE: AIZ) safeguards clients and consumers against risk. A
Fortune 500 company, Assurant partners with clients who are leaders in
their industries to provide consumers peace of mind and financial
security. Our diverse range of products and services includes: mobile
device protection products and services; extended service products and
related services for consumer electronics, appliances and vehicles;
pre-funded funeral insurance; lender-placed homeowners insurance;
property preservation and valuation services; flood insurance; renters
insurance and related products; debt protection administration; credit
insurance; manufactured housing homeowners insurance; group dental
insurance; group disability insurance; and group life insurance.
With approximately $30 billion in assets and $8 billion in annual
revenue, Assurant provides its specialty protection offerings primarily
through Assurant Solutions, Assurant Specialty Property, and Assurant
Employee Benefits. Through the Assurant Foundation, established more
than 30 years ago, the company and its employees are dedicated to
supporting and partnering with organizations that improve communities.
Visit www.assurant.com
and follow us on Twitter @AssurantNews.
Safe Harbor Statement
Some of the statements included in this news release and its exhibits,
particularly those anticipating future financial performance, business
prospects, growth and operating strategies and similar matters, are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
statements by the use of words such as "will," "may," "anticipates,"
"expects," "estimates," "projects," "intends," "plans," "believes,"
"targets," "forecasts," "potential," "approximately," or the negative
version of those words and other words and terms with a similar meaning.
Any forward-looking statements contained in this news release or its
exhibits are based upon our historical performance and on current plans,
estimates and expectations. The inclusion of this forward-looking
information should not be regarded as a representation by us or any
other person that the future plans, estimates or expectations
contemplated by us will be achieved. Our actual results might differ
materially from those projected in the forward-looking statements. The
company undertakes no obligation to update or review any forward-looking
statements in this news release or the exhibits, whether as a result of
new information, future events or other developments. The following risk
factors could cause our actual results to differ materially from those
currently estimated by management, including those projected in the
company outlook:
|
|
(i)
|
actions by governmental agencies or government sponsored entities or
other circumstances, including pending regulatory matters affecting
our lender-placed insurance business, that could result in
reductions of premium rates or increases in expenses, including
claims, fines, penalties or other expenses;
|
|
|
(ii)
|
inability to implement, or delays in implementing, strategic plans
for the Assurant Employee Benefits and Assurant Health segments;
|
|
|
(iii)
|
loss of significant client relationships or business, distribution
sources or contracts and reliance on a few clients;
|
|
|
(iv)
|
the effects of the Patient Protection and Affordable Care Act and
the Health Care and Education Reconciliation Act of 2010 (the
"Affordable Care Act"), and the rules and regulations thereunder,
on our health and employee benefits businesses; potential
variations between the final risk adjustment amount and
reinsurance amounts, as determined by the U.S. Department of
Health and Human Services under the Affordable Care Act, and the
company's estimate;
|
|
|
(v)
|
unfavorable outcomes in litigation and/or regulatory investigations
that could negatively affect our results, business and reputation;
|
|
|
(vi)
|
inability to execute strategic plans related to acquisitions,
dispositions or new ventures;
|
|
|
(vii)
|
failure to adequately predict or manage benefits, claims and other
costs;
|
|
|
(viii)
|
inadequacy of reserves established for future claims;
|
|
|
(ix)
|
current or new laws and regulations that could increase our costs
and decrease our revenues;
|
|
|
(x)
|
significant competitive pressures in our businesses;
|
|
|
(xi)
|
failure to attract and retain sales representatives, key managers,
agents or brokers;
|
|
|
(xii)
|
losses due to natural or man-made catastrophes;
|
|
|
(xiii)
|
a decline in our credit or financial strength ratings (including the
risk of ratings downgrades in the insurance industry);
|
|
|
(xiv)
|
deterioration in the company's market capitalization compared to its
book value that could result in an impairment of goodwill;
|
|
|
(xv)
|
risks related to our international operations, including
fluctuations in exchange rates;
|
|
|
(xvi)
|
data breaches compromising client information and privacy;
|
|
|
(xvii)
|
general global economic, financial market and political conditions
(including difficult conditions in financial, capital, credit and
currency markets, the global economic slowdown, fluctuations in
interest rates or a prolonged period of low interest rates, monetary
policies, unemployment and inflationary pressure);
|
|
|
(xviii)
|
cyber security threats and cyber attacks;
|
|
|
(xix)
|
failure to effectively maintain and modernize our information
systems;
|
|
|
(xx)
|
uncertain tax positions and unexpected tax liabilities;
|
|
|
(xxi)
|
risks related to outsourcing activities;
|
|
|
(xxii)
|
unavailability, inadequacy and unaffordable pricing of reinsurance
coverage;
|
|
|
(xxiii)
|
diminished value of invested assets in our investment portfolio (due
to, among other things, volatility in financial markets; the global
economic slowdown; credit, currency and liquidity risk; other than
temporary impairments and increases in interest rates);
|
|
|
(xxiv)
|
insolvency of third parties to whom we have sold or may sell
businesses through reinsurance or modified co-insurance;
|
|
|
(xxv)
|
inability of reinsurers to meet their obligations;
|
|
|
(xxvi)
|
credit risk of some of our agents in Assurant Specialty Property and
Assurant Solutions;
|
|
|
(xxvii)
|
inability of our subsidiaries to pay sufficient dividends;
|
|
|
(xxviii)
|
failure to provide for succession of senior management and key
executives; and
|
|
|
(xxix)
|
cyclicality of the insurance industry.
|
For a detailed discussion of the risk factors that could affect our
actual results, please refer to the risk factors identified in our SEC
reports, including, but not limited to our 2014 Annual Report on Form
10-K and 2015 First Quarter, Second Quarter and Third Quarter Quarterly
Reports on Form 10-Q, as filed with the SEC.
Non-GAAP Financial Measures
Assurant uses the following non-GAAP financial measures to analyze the
company's operating performance for the periods presented in this news
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 operating ROE, excluding AOCI and Assurant Health
runoff operations, as an important measure of the company's
operating performance. Operating ROE equals net operating income for
the periods presented divided by average stockholders' equity for
the year-to-date period, excluding AOCI and Assurant Health runoff
operations. The company believes operating ROE, excluding AOCI and
Assurant Health runoff operations, provides investors a valuable
measure of the performance of the company's ongoing business,
because it excludes the effect of net realized gains (losses) on
investments that tend to be highly variable from period-to-period,
other AOCI items, Assurant Health runoff operations and those events
that are unusual and/or unlikely to recur. The comparable GAAP
measure would be GAAP ROE, defined as net income, for the periods
presented, divided by average stockholders' equity for the
year-to-date period. GAAP ROE for the 12 months ended Dec. 31, 2015
and 12 months ended Dec. 31, 2014 was 2.9 percent and 9.4 percent,
respectively, as shown in the following reconciliation table.
|
|
|
|
12 Months
|
|
|
12 Months
|
|
|
|
2015
|
|
|
2014
|
Annual operating return on average equity (excluding AOCI and
Assurant Health runoff operations)
|
|
|
11
|
.3%
|
|
|
12
|
.1%
|
Assurant Health runoff operations
|
|
|
(9
|
.2)%
|
|
|
(1
|
.5)%
|
Net realized gains on investments
|
|
|
0
|
.5%
|
|
|
1
|
.0%
|
Gain (loss) on divested business
|
|
|
0
|
.3%
|
|
|
(0
|
.5)%
|
Change in tax liabilities
|
|
|
0
|
.4%
|
|
|
0
|
.3%
|
Payment received related to previous sale of subsidiary
|
|
|
0
|
.2%
|
|
|
-
|
|
Change in derivative investment
|
|
|
(0
|
.1)%
|
|
|
(0
|
.1)%
|
Change due to effect of including AOCI
|
|
|
(0
|
.5)%
|
|
|
(1
|
.9)%
|
Annual GAAP return on average equity
|
|
|
2
|
.9%
|
|
|
9
|
.4%
|
(2)
|
|
Assurant uses net operating income as an important measure of the
company's operating performance. As shown in the net operating
income reconciliation table, net operating income equals net
income, excluding net realized gains (losses) on investments,
other unusual and/or infrequent items and Assurant Health runoff
operations. The company believes net operating income provides
investors a valuable measure of the performance of the company's
ongoing business, because it excludes the effect of net realized
gains (losses) on investments that tend to be highly variable from
period-to-period, those events that are unusual and/or unlikely to
recur and Assurant Health runoff operations. Please refer to page
2 of this release for a reconciliation of net operating income to
net income.
|
|
|
|
(3)
|
|
Assurant uses a ratio of debt to total capital, excluding AOCI and
Assurant Health runoff operations, as an important measure of the
company's financial leverage. Assurant's debt to total capital
ratio, excluding AOCI and Assurant Health runoff operations, equals
debt divided by the sum of debt and total stockholders' equity
excluding AOCI and Assurant Health runoff operations. The company
believes that the debt to total capital ratio, excluding AOCI and
Assurant Health runoff operations, provides investors a valuable
measure of financial leverage, because it excludes the effect of
unrealized gains (losses) on investments, which tend to be highly
variable from period-to-period, other AOCI items and Assurant Health
runoff operations. The comparable GAAP measure would be the ratio of
debt to total capital. The debt to total capital ratio as of Dec.
31, 2015 and Dec. 31, 2014 was 20.6 percent and 18.4 percent,
respectively, as shown in the following reconciliation table.
|
|
|
|
|
|
|
|
|
|
|
4Q
|
|
|
4Q
|
|
|
|
2015
|
|
|
2014
|
Debt to total capital ratio (excluding AOCI and Assurant Health
runoff operations)
|
|
|
23.4
|
%
|
|
|
21.9
|
%
|
Change due to effect of including AOCI
|
|
|
(0.4
|
)%
|
|
|
(1.8
|
)%
|
Change due to effect of including Assurant Health runoff operations
|
|
|
(2.4
|
)%
|
|
|
(1.7
|
)%
|
Debt to total capital ratio
|
|
|
20.6
|
%
|
|
|
18.4
|
%
|
A summary of net operating income disclosed items is included on page 21
of the company's Financial Supplement, which is available in the
Investor Relations section of www.assurant.com.
Assurant, Inc.
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Operations (unaudited)
|
|
|
|
|
Three and 12 Months Ended Dec. 31, 2015 and 2014
|
|
|
|
|
|
|
4Q
|
|
12 Months
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
(in thousands except number of shares and per share amounts)
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Net earned premiums
|
|
$
|
1,994,756
|
|
$
|
2,142,137
|
|
|
$
|
8,350,997
|
|
$
|
8,632,142
|
|
Fees and other income
|
|
|
382,772
|
|
|
316,955
|
|
|
|
1,303,466
|
|
|
1,033,805
|
|
Net investment income
|
|
|
157,392
|
|
|
158,854
|
|
|
|
626,217
|
|
|
656,429
|
|
Net realized gains on investments
|
|
|
9,669
|
|
|
17,201
|
|
|
|
31,826
|
|
|
60,783
|
|
Amortization of deferred gain on disposal of businesses
|
|
|
3,245
|
|
|
(12,455
|
)
|
|
|
12,988
|
|
|
(1,506
|
)
|
Total revenues
|
|
|
2,547,834
|
|
|
2,622,692
|
|
|
|
10,325,494
|
|
|
10,381,653
|
|
Benefits, losses and expenses
|
|
|
|
|
|
|
|
|
Policyholder benefits
|
|
|
1,009,889
|
|
|
1,123,995
|
|
|
|
4,742,535
|
|
|
4,405,333
|
|
Selling, underwriting, general and administrative expenses
|
|
|
1,413,950
|
|
|
1,394,573
|
|
|
|
5,326,662
|
|
|
5,173,788
|
|
Interest expense
|
|
|
13,781
|
|
|
13,778
|
|
|
|
55,116
|
|
|
58,395
|
|
Total benefits, losses and expenses
|
|
|
2,437,620
|
|
|
2,532,346
|
|
|
|
10,124,313
|
|
|
9,637,516
|
|
Income before provision for income taxes
|
|
|
110,214
|
|
|
90,346
|
|
|
|
201,181
|
|
|
744,137
|
|
Provision for income taxes
|
|
|
44,470
|
|
|
40,591
|
|
|
|
59,626
|
|
|
273,230
|
|
Net income
|
|
$
|
65,744
|
|
$
|
49,755
|
|
|
$
|
141,555
|
|
$
|
470,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.99
|
|
$
|
0.70
|
|
|
$
|
2.08
|
|
$
|
6.52
|
|
Diluted
|
|
$
|
0.97
|
|
$
|
0.69
|
|
|
$
|
2.05
|
|
$
|
6.44
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.50
|
|
$
|
0.27
|
|
|
$
|
1.37
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
Share data:
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
66,732,896
|
|
|
71,054,598
|
|
|
|
68,163,825
|
|
|
72,181,447
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
67,592,973
|
|
|
72,104,349
|
|
|
|
69,017,209
|
|
|
73,152,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assurant, Inc.
|
|
|
|
|
|
Consolidated Condensed Balance Sheets (unaudited)
|
|
|
|
|
|
At Dec. 31, 2015 and Dec. 31, 2014
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Investments and cash and cash equivalents
|
|
|
$
|
14,315,897
|
|
$
|
15,450,108
|
Reinsurance recoverables
|
|
|
|
7,470,403
|
|
|
7,254,585
|
Deferred acquisition costs
|
|
|
|
3,150,934
|
|
|
2,957,740
|
Goodwill
|
|
|
|
833,512
|
|
|
841,239
|
Assets held in separate accounts
|
|
|
|
1,798,104
|
|
|
1,906,237
|
Other assets
|
|
|
|
2,507,098
|
|
|
3,152,557
|
Total assets
|
|
|
$
|
30,075,948
|
|
$
|
31,562,466
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Policyholder benefits and claims payable
|
|
|
$
|
13,363,413
|
|
$
|
13,182,278
|
Unearned premiums
|
|
|
|
6,423,720
|
|
|
6,529,675
|
Debt
|
|
|
|
1,171,382
|
|
|
1,171,079
|
Liabilities related to separate accounts
|
|
|
|
1,798,104
|
|
|
1,906,237
|
Deferred gain on disposal of businesses
|
|
|
|
92,327
|
|
|
100,817
|
Accounts payable and other liabilities
|
|
|
|
2,703,035
|
|
|
3,491,073
|
Total liabilities
|
|
|
|
25,551,981
|
|
|
26,381,159
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
Equity, excluding accumulated other comprehensive income
|
|
|
|
4,405,418
|
|
|
4,625,540
|
Accumulated other comprehensive income
|
|
|
|
118,549
|
|
|
555,767
|
Total stockholders' equity
|
|
|
|
4,523,967
|
|
|
5,181,307
|
Total liabilities and stockholders' equity
|
|
|
$
|
30,075,948
|
|
$
|
31,562,466
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160209006700/en/
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