[August 01, 2017] |
|
Assurant Reports Second Quarter 2017 Financial Results
Assurant,
Inc. (NYSE: AIZ), a premier global provider of risk management
solutions, today reported results for second quarter ended June 30, 2017.
"Overall results in the second quarter were in line with our
expectations, despite higher non-catastrophe claims," said Assurant
President and Chief Executive Officer Alan Colberg.
"We've made continued progress toward achieving our 2017 commitments,
including capital deployment," he continued. "And we remain confident
that our ongoing transformation is establishing a firm foundation for
profitable growth in 2018 and beyond."
Reconciliation of Net Operating Income to GAAP Net Income
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
(in millions, net of tax)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Global Housing
|
|
$
|
56.2
|
|
|
$
|
56.9
|
|
|
$
|
118.1
|
|
|
$
|
133.3
|
|
Global Lifestyle
|
|
|
40.2
|
|
|
|
50.1
|
|
|
|
92.6
|
|
|
|
91.5
|
|
Global Preneed
|
|
|
12.8
|
|
|
|
11.3
|
|
|
|
22.7
|
|
|
|
17.0
|
|
Corporate and other
|
|
|
(10.6
|
)
|
|
|
(19.4
|
)
|
|
|
(20.7
|
)
|
|
|
(33.3
|
)
|
Interest expense
|
|
|
(8.1
|
)
|
|
|
(9.9
|
)
|
|
|
(16.3
|
)
|
|
|
(19.3
|
)
|
Net operating income
|
|
|
90.5
|
|
|
|
89.0
|
|
|
|
196.4
|
|
|
|
189.2
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
3.5
|
|
|
|
(5.4
|
)
|
|
|
11.4
|
|
|
|
(32.6
|
)
|
Assurant Employee Benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10.5
|
|
Net realized gains on investments
|
|
|
8.6
|
|
|
|
14.0
|
|
|
|
10.8
|
|
|
|
119.1
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
15.2
|
|
|
|
81.8
|
|
|
|
39.3
|
|
|
|
112.7
|
|
Other adjustments
|
|
|
2.4
|
|
|
|
(10.1
|
)
|
|
|
6.1
|
|
|
|
(9.2
|
)
|
GAAP net income
|
|
$
|
120.2
|
|
|
$
|
169.3
|
|
|
$
|
264.0
|
|
|
$
|
389.7
|
|
Note: Beginning with first quarter 2017, all amounts (excluding share
and per share amounts) are presented in millions. Prior period amounts
have been updated to reflect the current presentation and may result in
rounding differences.
Additional financial information, including a schedule of disclosed
items that affected Assurant's results by business for the last eight
quarters, appears on page 19 of the company's Financial Supplement and
is located in the Investor Relations section of www.assurant.com.
Second Quarter 2017 Consolidated Results
-
Net income was $120.2 million, or $2.16 per diluted share,
compared to second quarter 2016 net income of $169.3 million, or $2.70
per diluted share. The decline primarily reflects a lower amortization
of deferred gains from the sale of Assurant Employee Benefits,
partially offset by improvements in Health and other items.
-
Net operating income4 increased to $90.5 million, or
$1.63 per diluted share, compared to second quarter 2016 net operating
income of $89.0 million, or $1.42 per diluted share. Results
benefitted primarily from lower Corporate and other expenses,
partially offset by lower contributions from Global Lifestyle driven
by the absence of an $18 million one-time tax benefit in the year-ago
quarter. Assurant incurred no reportable catastrophe losses in second
quarter 2017, compared to $16 million of reportable catastrophe losses
in second quarter 2016.
Excluding catastrophe losses, net
operating income for second quarter 2017 totaled $90.5 million,
compared to $105 million in second quarter 2016. The decrease was
attributable to the tax benefit recorded in Global Lifestyle in the
prior-year quarter.
-
Net earned premiums, fees and other income from the Global
Housing, Global Lifestyle and Global Preneed segments totaled $1.43
billion compared to $1.52 billion in second quarter 2016, driven by a
change in program structure implemented in fourth quarter 2016 for a
large service contract client in Global Lifestyle. Absent this change,
revenue increased, reflecting growth from all major business lines in
Global Lifestyle as well as from multi-family housing in Global
Housing, partially offset by lower lender-placed premiums.
Reportable Segments
Global Housing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
2Q17
|
|
|
2Q16
|
|
% Change
|
|
|
6M17
|
|
|
6M16
|
|
% Change
|
Net operating income
|
|
$
|
56.2
|
|
$
|
56.9
|
|
(1)%
|
|
$
|
118.1
|
|
$
|
133.3
|
|
(11)%
|
Net earned premiums, fees and other
|
|
$
|
550.2
|
|
$
|
561.1
|
|
(2)%
|
|
$
|
1,081.9
|
|
$
|
1,138.5
|
|
(5)%
|
-
Net operating income was generally level with second quarter
2016, reflecting $16 million of lower reportable catastrophes
year-over-year. Excluding catastrophe losses, second quarter 2017
results declined, primarily due to ongoing lender-placed insurance
normalization and higher non-catastrophe losses, including claims that
did not reach Assurant's reportable catastrophe threshold.
-
Net earned premiums, fees and other income decreased in second
quarter 2017, primarily due to expected lower placement rates in
lender-placed insurance and reduced demand for originations and field
services in mortgage solutions. Growth in multi-family housing and
from new lender-placed clients partially offset the decline.
-
Combined ratio for risk-based businesses(a) was
87.0 percent in the second quarter 2017 compared to 87.3 percent in
prior-year quarter. This improvement resulted from lower reportable
catastrophe losses, partially offset by higher frequency and severity
of non-catastrophe claims, as well as expenses to support new
lender-placed clients.
-
Pre-tax margin for fee-based, capital-light businesses(b)
was 11.7 percent, up from 11.2 percent from the second
quarter of 2016. The improvement resulted from growth in multi-family
housing, largely through expansion within our affinity channels. This
increase was partially offset by ongoing market weakness and lower
client volumes in mortgage solutions. Actions taken to lower expenses
in these businesses helped mitigate declines.
(a) Combined
ratio for the Global Housing risk-based businesses is equal to total
policyholder benefits, losses and expenses, including reportable
catastrophe losses, divided by net earned premiums and fees and other
income, for lender-placed and manufactured housing and other
businesses.
(b) Pre-tax margin for the Global Housing
fee-based, capital-light businesses is equal to income before
provision for income taxes divided by total net earned premiums, fees
and other income, for multi-family housing and mortgage solutions
businesses.
Global Lifestyle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
2Q17
|
|
|
2Q16
|
|
% Change
|
|
|
6M17
|
|
|
6M16
|
|
% Change
|
Net operating income
|
|
$
|
40.2
|
|
$
|
50.1
|
|
(20)%
|
|
$
|
92.6
|
|
$
|
91.5
|
|
1 %
|
Net earned premiums, fees and other
|
|
$
|
836.0
|
|
$
|
914.9
|
|
(9)%
|
|
$
|
1,640.9
|
|
$
|
1,849.2
|
|
(11)%
|
-
Net operating income decreased in second quarter 2017 due to an
$18 million one-time tax benefit in the prior-year quarter. Excluding
the tax benefit, second quarter 2017 net operating income increased,
primarily due to improved profitability in Connected Living,
reflecting lower expenses and a one-time client adjustment in extended
service contracts, as well as modest growth in mobile. Less favorable
loss experience in vehicle protection partially offset the increase.
-
Net earned premiums, fees and other income decreased compared
to the prior-year period entirely due to a change in program structure
in fourth quarter 2016 for a large service contract client in
Connected Living. Excluding this $138 million reduction, second
quarter 2017 revenue increased across all major lines of business,
primarily in mobile and extended service contracts. Foreign exchange
volatility partially offset the increase.
-
Combined ratio for risk-based businesses(a)
increased to 97.0 percent from 95.8 percent in second quarter
2016, driven largely by less favorable experience in vehicle
protection.
-
Pre-tax margin for fee-based, capital-light businesses(b)
was 6.4 percent, up from 3.2 percent in second quarter 2016. The
increase was driven in part by the change in client program structure.
Higher contributions from Connected Living and ongoing expense
management efforts also contributed to the improvement.
(a)
Combined ratio for the Global Lifestyle risk-based businesses is equal
to total policyholder benefits, losses and expenses, divided by net
earned premiums and fees and other income, for vehicle protection,
credit and other businesses.
(b) Pre-tax margin for the
Global Lifestyle fee-based, capital-light businesses is equal to
income before provision for income taxes divided by total net earned
premiums, fees and other income, for Connected Living, including
mobile, extended service contracts and assistance services.
Global Preneed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
2Q17
|
|
|
2Q16
|
|
% Change
|
|
|
6M17
|
|
|
6M16
|
|
% Change
|
Net operating income
|
|
$
|
12.8
|
|
$
|
11.3
|
|
13 %
|
|
$
|
22.7
|
|
$
|
17.0
|
|
34 %
|
Net earned premiums, fees and other
|
|
$
|
46.3
|
|
$
|
43.3
|
|
7 %
|
|
$
|
90.5
|
|
$
|
86.0
|
|
5 %
|
-
Net operating income increased primarily due to higher fee and
investment income, partially offset by higher expenses.
-
Net earned premiums, fees and other income was up, driven
mainly by increased volume in Canada.
-
Face sales totaled $239.0 million, down from $245.6 million in
second quarter 2016, reflecting lower volumes of final need policies.
Corporate & Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
2Q17
|
|
|
2Q16
|
|
% Change
|
|
|
6M17
|
|
|
6M16
|
|
% Change
|
Net operating loss (5)
|
|
$
|
(10.6)
|
|
$
|
(19.4)
|
|
(45)%
|
|
$
|
(20.7)
|
|
$
|
(33.3)
|
|
(38)%
|
-
Net operating loss5 declined compared
to second quarter 2016 primarily due to lower taxes and fees
associated with Assurant Employee Benefits, which was sold in March
2016, as well as reduced corporate expenses in second quarter 2017.
Capital Position
-
Corporate capital approximated $625 million as of June 30,
2017. Deployable capital totaled approximately $375 million, net of
the company's $250 million risk buffer.
Dividends from the
businesses paid to the holding company in second quarter 2017 totaled
$160 million. This included $71 million from Assurant Employee
Benefits and Assurant Health and $89 million from Global Housing,
Global Lifestyle and Global Preneed operating segments.
-
Share repurchases and dividends totaled $142 million in second
quarter 2017. Dividends to shareholders totaled $30 million, and
Assurant repurchased approximately 1.1 million shares of common stock
for $112 million. From July 1 through July 28, 2017, the company
repurchased an additional 235,000 shares for approximately $25
million, with $442 million remaining under the current repurchase
authorization.
Company Outlook
Based on current market conditions, for full-year 2017 Assurant now
expects:
-
Assurant net operating income, excluding reportable catastrophe
losses, to be roughly level with 2016 results, excluding
catastrophe losses. Profitable growth primarily in fee-based,
capital-light offerings and a lower net operating loss at Corporate to
be offset by declines in lender-placed insurance and legacy businesses.
-
Assurant operating earnings per diluted share, excluding
catastrophe losses, to grow double-digits from 2016 primarily due
to share repurchase activity.
-
Global Housing net earned premiums and net operating income,
excluding reportable catastrophe losses, to decrease from 2016 as a
result of additional declines in lender-placed insurance reflecting
lower placement rates anticipated for the second half of 2017, as well
as reduced contributions from mortgage solutions. Ongoing expense
management initiatives within Global Housing and growth in
multi-family housing to partially mitigate declines.
-
Global Lifestyle to increase net operating income as a result
of improved performance in Connected Living, driven primarily by
growth in mobile, as well as higher contributions from vehicle
protection and from expense efficiencies. Declines in legacy credit
insurance and retail clients to continue. Revenue expected to
decrease, largely due to a change in program structure for a large
service contract client. Under the new structure, the overall
economics of the program are maintained with no impact to
profitability, however net earned premiums will be lower by
approximately $500 million compared to 2016 with a commensurate
reduction in expenses. Excluding this, net earned premiums and fee
income to increase from growth in Connected Living and vehicle
protection globally. Results to be impacted by foreign exchange.
-
Global Preneed fee income and earnings to increase due
to sales growth across North America from our alignment with market
leaders and operational efficiencies.
-
Corporate & Other6 full-year net operating loss
to be approximately $60 million, compared to $71 million in 2016,
primarily reflecting lower tax and employee-related costs as well as
reduced corporate expenditures.
-
Capital to be deployed through a combination of share
repurchases, common stock dividends, and reinvestments and
acquisitions in the business, subject to market conditions and other
factors. Business segment dividends from Global Housing, Global
Lifestyle and Global Preneed to approximate segment net operating
income including catastrophe losses, subject to the growth of the
businesses, rating agency and regulatory capital requirements. In
addition to the $86 million received year-to-date, approximately $15
million in dividends expected from Assurant Health and Assurant
Employee Benefits, subject to regulatory approval.
Earnings Conference Call
The second quarter 2017 earnings conference call and webcast will be
held Wednesday, Aug. 2, 2017 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
Assurant (NYSE:AIZ) is a global leader in risk management solutions,
helping protect where people live and the goods they buy. Millions of
consumers count on Assurant's innovative products, services and support
for major purchases like homes, cars, appliances, mobile devices and
funerals. Assurant partners with leading companies that make, sell or
finance those purchases to take great care of their customers and help
their business grow. A member of the Fortune 500, Assurant has a market
presence in 16 countries worldwide. As of June 30, 2017, the company had
$30 billion in assets and $6 billion in annualized revenue. Learn more
at assurant.com
or 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 "outlook," "will," "may," "can,"
"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)
|
|
loss of significant client relationships or business, distribution
sources or contracts and reliance on a few clients;
|
(ii)
|
|
general global economic, financial market and political conditions
and conditions in the markets in which we operate, including
uncertainty surrounding the new administration;
|
(iii)
|
|
failure to adequately predict or manage claims and other costs;
|
(iv)
|
|
inadequacy of reserves established for future claims;
|
(v)
|
|
losses due to natural or man-made catastrophes;
|
(vi)
|
|
a decline in our credit or financial strength ratings;
|
(vii)
|
|
risks related to our international operations, including
fluctuations in exchange rates;
|
(viii)
|
|
deterioration in our market capitalization compared to its book
value that could result in an impairment of goodwill;
|
(ix)
|
|
failure to maintain effective internal control over financial
reporting;
|
(x)
|
|
failure to effectively maintain and modernize our information
technology systems;
|
(xi)
|
|
data breaches compromising client information and privacy;
|
(xii)
|
|
cyber security threats and cyber-attacks;
|
(xiii)
|
|
significant competitive pressures in our businesses;
|
(xiv)
|
|
inability to execute strategic plans related to acquisitions,
dispositions or new ventures or integrate them effectively;
|
(xv)
|
|
failure to develop or maintain distribution sources or attract and
retain sales representatives;
|
(xvi)
|
|
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);
|
(xvii)
|
|
unfavorable outcomes in litigation and/or regulatory investigations
that could negatively affect our results, business and reputation;
|
(xviii)
|
|
current or new laws and regulations that could increase our costs
and decrease our revenue;
|
(xix)
|
|
uncertain tax positions, changes in tax laws and unexpected tax
liabilities;
|
(xx)
|
|
risks related to outsourcing activities;
|
(xxi)
|
|
decline in the value of mobile devices in our inventory or subject
to guaranteed buyback;
|
(xxii)
|
|
employee misconduct;
|
(xxiii)
|
|
unavailability, inadequacy and unaffordable pricing of reinsurance
coverage;
|
(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;
|
(xxvii)
|
|
inability of our subsidiaries to pay sufficient dividends; and
|
(xxviii)
|
|
failure to successfully execute our transformation, retain and
hire qualified personnel including key executives and provide for
succession of key executives.
|
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 Annual Report on Form 10-K,
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 net operating income (as defined below), excluding
reportable catastrophe losses, as an important measure of the
company's operating performance. The company believes net operating
income, excluding reportable catastrophe losses, provides investors
a valuable measure of the performance of the company's ongoing
business because it excludes the effect of reportable catastrophe
losses, which can be volatile. The comparable GAAP measure is net
income.
|
|
|
|
|
|
|
|
|
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Global Housing, excluding catastrophe losses
|
|
$
|
56.2
|
|
|
$
|
72.9
|
|
|
$
|
118.7
|
|
|
$
|
158.6
|
|
Global Lifestyle
|
|
|
40.2
|
|
|
|
50.1
|
|
|
|
92.6
|
|
|
|
91.5
|
|
Global Preneed
|
|
|
12.8
|
|
|
|
11.3
|
|
|
|
22.7
|
|
|
|
17.0
|
|
Corporate and other
|
|
|
(10.6
|
)
|
|
|
(19.4
|
)
|
|
|
(20.7
|
)
|
|
|
(33.3
|
)
|
Interest expense
|
|
|
(8.1
|
)
|
|
|
(9.9
|
)
|
|
|
(16.3
|
)
|
|
|
(19.3
|
)
|
Net operating income
|
|
|
90.5
|
|
|
|
105.0
|
|
|
|
197.0
|
|
|
|
214.5
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
4.3
|
|
|
|
(7.7
|
)
|
|
|
16.9
|
|
|
|
(42.0
|
)
|
Assurant Employee Benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16.8
|
|
Net realized gains on investments
|
|
|
13.2
|
|
|
|
21.6
|
|
|
|
16.6
|
|
|
|
183.3
|
|
Reportable catastrophe losses
|
|
|
-
|
|
|
|
(24.6
|
)
|
|
|
(0.9
|
)
|
|
|
(39.0
|
)
|
Amortization of deferred gains and gains on disposal of
businesses
|
|
|
23.4
|
|
|
|
125.8
|
|
|
|
60.4
|
|
|
|
173.4
|
|
Other adjustments
|
|
|
3.9
|
|
|
|
(15.6
|
)
|
|
|
9.7
|
|
|
|
(14.2
|
)
|
Provision for income taxes
|
|
|
(15.1
|
)
|
|
|
(35.2
|
)
|
|
|
(35.7
|
)
|
|
|
(103.1
|
)
|
GAAP net income
|
|
$
|
120.2
|
|
|
$
|
169.3
|
|
|
$
|
264.0
|
|
|
$
|
389.7
|
|
(2)
|
|
Assurant uses net operating income (as defined below) per diluted
share, excluding reportable catastrophe losses, as an important
measure of the company's stockholder value. The company believes
this metric provides investors a valuable measure of stockholder
value because it excludes the effect of reportable catastrophe
losses, which can be volatile. The comparable GAAP measure is net
income per diluted share, defined as net income divided by weighted
average diluted shares outstanding.
|
|
|
|
|
|
|
|
|
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net operating income, excluding catastrophe losses,
per diluted share
|
|
$
|
1.63
|
|
|
$
|
1.67
|
|
|
$
|
3.51
|
|
|
$
|
3.34
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
0.08
|
|
|
|
(0.12
|
)
|
|
|
0.30
|
|
|
|
(0.65
|
)
|
Assurant Employee Benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.26
|
|
Net realized gains on investments
|
|
|
0.24
|
|
|
|
0.34
|
|
|
|
0.30
|
|
|
|
2.85
|
|
Amortization of deferred gains and gains on disposal of
businesses
|
|
|
0.42
|
|
|
|
2.01
|
|
|
|
1.09
|
|
|
|
2.70
|
|
Reportable catastrophe losses
|
|
|
-
|
|
|
|
(0.39
|
)
|
|
|
(0.02
|
)
|
|
|
(0.61
|
)
|
Other adjustments
|
|
|
0.07
|
|
|
|
(0.25
|
)
|
|
|
0.17
|
|
|
|
(0.22
|
)
|
Provision for income taxes
|
|
|
(0.28
|
)
|
|
|
(0.56
|
)
|
|
|
(0.64
|
)
|
|
|
(1.61
|
)
|
Net income per diluted share
|
|
$
|
2.16
|
|
|
$
|
2.70
|
|
|
$
|
4.71
|
|
|
$
|
6.06
|
|
(3)
|
|
Assurant uses operating return on equity ("Operating ROE"),
excluding accumulated other comprehensive income ("AOCI") and
reportable catastrophe losses, as an important measure of the
company's operating performance. Operating ROE, excluding AOCI and
reportable catastrophe losses, equals net operating income (as
defined below) for the periods presented divided by average
stockholders' equity, excluding AOCI and reportable catastrophe
losses, for the year-to-date period. The company believes Operating
ROE excluding AOCI and reportable catastrophe losses provides
investors a valuable measure of the performance of the company's
ongoing business, because it excludes the effect of Assurant Health
runoff operations, the divested Assurant Employee Benefits business,
which was sold on March 1, 2016, and reportable catastrophe losses,
which can be volatile. The calculation also excludes net realized
gains (losses) on investments, amortization of deferred gains and
gains on disposal of businesses and those events that are highly
variable and do not represent the ongoing operations of the company.
The comparable GAAP measure is GAAP return on equity ("GAAP ROE"),
defined as net income, for the period presented, divided by average
stockholders' equity for the year-to-date period.
|
|
|
|
|
|
|
|
|
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Annual operating return on average equity, excluding
AOCI and reportable catastrophe losses
|
|
9.2
|
%
|
|
10.9
|
%
|
|
10.0
|
%
|
|
11.9
|
%
|
Assurant Health runoff operations
|
|
0.4
|
%
|
|
(0.6
|
)%
|
|
0.6
|
%
|
|
(1.8
|
)%
|
Assurant Employee Benefits
|
|
-
|
%
|
|
-
|
%
|
|
-
|
%
|
|
0.6
|
%
|
Net realized gains on investments
|
|
0.9
|
%
|
|
1.5
|
%
|
|
0.6
|
%
|
|
6.6
|
%
|
Amortization of deferred gains and gains on disposal of
businesses
|
|
1.5
|
%
|
|
8.5
|
%
|
|
2.0
|
%
|
|
6.3
|
%
|
Reportable catastrophe losses
|
|
-
|
%
|
|
(1.7
|
)%
|
|
-
|
%
|
|
(1.4
|
)%
|
Other adjustments:
|
|
|
|
|
|
|
|
|
Gain related to benefit plan activity
|
|
0.4
|
%
|
|
-
|
%
|
|
0.5
|
%
|
|
1.0
|
%
|
Amount related to the sale of AEB
|
|
-
|
%
|
|
-
|
%
|
|
-
|
%
|
|
(1.0
|
)%
|
Post-close cont. liab. on previous disposition
|
|
(0.1
|
)%
|
|
-
|
%
|
|
(0.1
|
)%
|
|
-
|
%
|
Intangible asset impairment
|
|
-
|
%
|
|
(1.1
|
)%
|
|
-
|
%
|
|
(0.5
|
)%
|
Change in derivative investment
|
|
(0.1
|
)%
|
|
0.1
|
%
|
|
(0.1
|
)%
|
|
-
|
%
|
Change due to effect of including AOCI
|
|
(0.7
|
)%
|
|
(2.8
|
)%
|
|
(0.8
|
)%
|
|
(4.6
|
)%
|
Annual GAAP return on average equity
|
|
11.5
|
%
|
|
14.8
|
%
|
|
12.7
|
%
|
|
17.1
|
%
|
(4)
|
|
Assurant uses net operating income as an important measure of the
company's operating performance. Net operating income equals net
income excluding Assurant Health runoff operations, Assurant
Employee Benefits, net realized gains (losses) on investments,
amortization of deferred gains and gains on disposal of businesses
and other highly variable items. The company believes net operating
income provides a valuable measure of the performance of the
company's ongoing business because it excludes the effect of
Assurant Health runoff operations and the divested Assurant Employee
Benefits business, which the company sold on March 1, 2016. The
calculation also excludes net realized gains (losses) on
investments, amortization of deferred gains and gains on disposal of
businesses and those events that are highly variable and do not
represent the ongoing operations of the company. The comparable GAAP
measure is net income.
|
|
|
|
|
|
|
|
|
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net operating income
|
|
$
|
90.5
|
|
|
$
|
89.0
|
|
|
$
|
196.4
|
|
|
$
|
189.2
|
|
Adjustments (pre-tax):
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
4.3
|
|
|
|
(7.7
|
)
|
|
|
16.9
|
|
|
|
(42.0
|
)
|
Assurant Employee Benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16.8
|
|
Net realized gains on investments
|
|
|
13.2
|
|
|
|
21.6
|
|
|
|
16.6
|
|
|
|
183.3
|
|
Amortization of deferred gains and gains on disposal of
businesses
|
|
|
23.4
|
|
|
|
125.8
|
|
|
|
60.4
|
|
|
|
173.4
|
|
Other adjustments
|
|
|
3.9
|
|
|
|
(15.6
|
)
|
|
|
9.7
|
|
|
|
(14.2
|
)
|
Provision for income taxes
|
|
|
(15.1
|
)
|
|
|
(43.8
|
)
|
|
|
(36.0
|
)
|
|
|
(116.8
|
)
|
GAAP net income
|
|
$
|
120.2
|
|
|
$
|
169.3
|
|
|
$
|
264.0
|
|
|
$
|
389.7
|
|
(5)
|
|
Assurant uses Corporate & Other net operating loss as an important
measure of the corporate segment's operating performance. Corporate
& Other net operating loss equals Total Corporate & Other segment
net income, excluding Health runoff operations net income (loss),
amortization of deferred gains and gains on disposal of businesses,
net realized gains (losses) on investments, interest expense and
other highly variable items. The company believes Corporate & Other
net operating loss provides a valuable measure of the performance of
the company's corporate segment because it excludes the effect of
amortization of deferred gains and gains on disposal of businesses,
net realized gains (losses) on investments, interest expense and
those events that are highly variable and do not represent the
ongoing operations of the company's corporate segment. The
comparable GAAP measure is Total Corporate & Other segment net
income.
|
|
|
|
|
|
|
|
|
|
(UNAUDITED)
|
|
2Q
|
|
2Q
|
|
6 Months
|
|
6 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
GAAP Total Corporate & Other segment net income
|
|
$
|
11.0
|
|
|
$
|
51.0
|
|
|
$
|
30.6
|
|
|
$
|
137.4
|
|
Excluding: Health runoff operations net income (loss)
|
|
|
3.5
|
|
|
|
(5.4
|
)
|
|
|
11.4
|
|
|
|
(32.6
|
)
|
GAAP Corporate & Other segment net income
|
|
|
7.5
|
|
|
|
56.4
|
|
|
|
19.2
|
|
|
|
170.0
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
(23.4
|
)
|
|
|
(125.8
|
)
|
|
|
(60.4
|
)
|
|
|
(173.4
|
)
|
Interest expense
|
|
|
12.4
|
|
|
|
15.2
|
|
|
|
25.0
|
|
|
|
29.7
|
|
Net realized gains on investments
|
|
|
(13.2
|
)
|
|
|
(21.6
|
)
|
|
|
(16.6
|
)
|
|
|
(183.3
|
)
|
Other adjustments
|
|
|
(3.9
|
)
|
|
|
15.6
|
|
|
|
(9.7
|
)
|
|
|
14.2
|
|
Provision for income taxes
|
|
|
10.0
|
|
|
|
40.8
|
|
|
|
21.8
|
|
|
|
109.5
|
|
Corporate & other net operating loss
|
|
$
|
(10.6
|
)
|
|
$
|
(19.4
|
)
|
|
$
|
(20.7
|
)
|
|
$
|
(33.3
|
)
|
(6)
|
|
The company outlook for Corporate & Other full-year net operating
loss constitutes forward-looking information and the company
believes that it cannot reconcile such forward-looking information
to the most comparable GAAP measure without unreasonable efforts. A
reconciliation would require the company to quantify amortization of
deferred gains and gains on disposal of businesses, interest
expense, net realized gains on investments, and change in derivative
investment. The last two components cannot be reliably quantified
due to the combination of variability and volatility of such
components and may, depending on the size of the components, have a
significant impact on the reconciliation. The company is able to
reasonably quantify a range for the first two components for the
forecast period, based on certain assumptions relating to future
reinsured premium on disposed business and level of interest on
non-recourse debt during the forecast period. In addition, the
company is assuming it does not incur additional recourse debt or
extinguish recourse debt in the forecast period. Amortization of
deferred gains and gains on disposal of businesses is expected to be
approximately $62-72 million after-tax while interest expense is
expected to be approximately $32-35 million after-tax.
|
|
|
|
|
|
A summary of net operating income disclosed items is included on
page 19 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 Months and Six Months Ended June 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
2Q
|
|
6 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(in millions except number of shares and per share amounts)
|
Revenues
|
|
|
|
|
|
|
|
|
Net earned premiums
|
|
$
|
1,115.3
|
|
$
|
1,202.3
|
|
$
|
2,165.6
|
|
$
|
2,617.5
|
Fees and other income
|
|
|
326.9
|
|
|
328.3
|
|
|
667.1
|
|
|
686.0
|
Net investment income
|
|
|
121.7
|
|
|
119.8
|
|
|
242.3
|
|
|
255.5
|
Net realized gains on investments
|
|
|
13.2
|
|
|
21.6
|
|
|
16.6
|
|
|
183.3
|
Gain on pension plan curtailment
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
29.6
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
23.4
|
|
|
125.8
|
|
|
60.4
|
|
|
173.4
|
Total revenues
|
|
|
1,600.5
|
|
|
1,797.8
|
|
|
3,152.0
|
|
|
3,945.3
|
Benefits, losses and expenses
|
|
|
|
|
|
|
|
|
Policyholder benefits
|
|
|
416.4
|
|
|
400.8
|
|
|
774.4
|
|
|
944.6
|
Selling, underwriting, general and administrative expenses
|
|
|
993.0
|
|
|
1,146.3
|
|
|
1,958.8
|
|
|
2,397.9
|
Interest expense
|
|
|
12.4
|
|
|
15.2
|
|
|
25.0
|
|
|
29.7
|
Total benefits, losses and expenses
|
|
|
1,421.8
|
|
|
1,562.3
|
|
|
2,758.2
|
|
|
3,372.2
|
Income before provision for income taxes
|
|
|
178.7
|
|
|
235.5
|
|
|
393.8
|
|
|
573.1
|
Provision for income taxes
|
|
|
58.5
|
|
|
66.2
|
|
|
129.8
|
|
|
183.4
|
Net income
|
|
$
|
120.2
|
|
$
|
169.3
|
|
$
|
264.0
|
|
$
|
389.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.18
|
|
$
|
2.72
|
|
$
|
4.74
|
|
$
|
6.12
|
Diluted
|
|
$
|
2.16
|
|
$
|
2.70
|
|
$
|
4.71
|
|
$
|
6.06
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.53
|
|
$
|
0.50
|
|
$
|
1.06
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share data:
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
55,230,367
|
|
|
62,244,778
|
|
|
55,713,172
|
|
|
63,665,856
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
55,509,898
|
|
|
62,723,292
|
|
|
56,075,152
|
|
|
64,274,009
|
Assurant, Inc.
Consolidated Condensed Balance Sheets (unaudited)
At June 30, 2017 and Dec. 31, 2016
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions)
|
Assets
|
|
|
|
|
Investments and cash and cash equivalents
|
|
$
|
12,488.4
|
|
$
|
12,511.0
|
Reinsurance recoverables
|
|
|
8,953.2
|
|
|
9,083.2
|
Deferred acquisition costs
|
|
|
3,326.6
|
|
|
3,267.4
|
Goodwill
|
|
|
905.5
|
|
|
830.9
|
Assets held in separate accounts
|
|
|
1,779.1
|
|
|
1,692.3
|
Other assets
|
|
|
2,606.1
|
|
|
2,324.3
|
Total assets
|
|
$
|
30,058.9
|
|
$
|
29,709.1
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Policyholder benefits and claims payable
|
|
$
|
13,371.4
|
|
$
|
13,414.1
|
Unearned premiums
|
|
|
6,718.3
|
|
|
6,626.5
|
Debt
|
|
|
1,136.6
|
|
|
1,067.0
|
Liabilities related to separate accounts
|
|
|
1,779.1
|
|
|
1,692.3
|
Deferred gain on disposal of businesses
|
|
|
170.1
|
|
|
232.2
|
Accounts payable and other liabilities
|
|
|
2,658.8
|
|
|
2,578.9
|
Total liabilities
|
|
|
25,834.3
|
|
|
25,611.0
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Equity, excluding accumulated other comprehensive income
|
|
|
3,987.7
|
|
|
4,003.5
|
Accumulated other comprehensive income
|
|
|
236.9
|
|
|
94.6
|
Total stockholders' equity
|
|
|
4,224.6
|
|
|
4,098.1
|
Total liabilities and stockholders' equity
|
|
$
|
30,058.9
|
|
$
|
29,709.1
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170801006619/en/
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