[November 02, 2017] |
|
Assurant Reports Third Quarter 2017 Financial Results
Assurant,
Inc. (NYSE:AIZ), a premier global provider of risk management
solutions, today reported results for third quarter ended September 30,
2017.
"While we incurred significant losses in the quarter associated with
Hurricanes Harvey, Irma and Maria, our underlying results were in-line
with expectations," said Assurant President and Chief Executive Officer
Alan Colberg.
"We remain confident in our ability to deliver our full-year 2017
financial objectives and as we look ahead to 2018, we expect our
acquisition of The Warranty Group to enhance our opportunities to scale
and innovate our lifestyle offerings, while generating more predictable
and diversified earnings and cash flow long-term."
Reconciliation of Net Operating Income (Loss) to GAAP Net
Income (Loss)
|
(UNAUDITED)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
(in millions, net of tax)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Global Housing
|
|
$
|
|
|
(110.3
|
)
|
|
$
|
|
|
44.5
|
|
|
$
|
|
|
7.8
|
|
|
$
|
|
|
177.8
|
|
Global Lifestyle
|
|
|
|
|
42.6
|
|
|
|
|
|
28.3
|
|
|
|
|
|
135.2
|
|
|
|
|
|
119.8
|
|
Global Preneed
|
|
|
|
|
12.3
|
|
|
|
|
|
14.4
|
|
|
|
|
|
35.0
|
|
|
|
|
|
31.4
|
|
Corporate and other
|
|
|
|
|
(13.0
|
)
|
|
|
|
|
(17.4
|
)
|
|
|
|
|
(33.7
|
)
|
|
|
|
|
(50.7
|
)
|
Interest expense
|
|
|
|
|
(7.9
|
)
|
|
|
|
|
(9.1
|
)
|
|
|
|
|
(24.2
|
)
|
|
|
|
|
(28.4
|
)
|
Net operating (loss) income
|
|
|
|
|
(76.3
|
)
|
|
|
|
|
60.7
|
|
|
|
|
|
120.1
|
|
|
|
|
|
249.9
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
|
|
0.1
|
|
|
|
|
|
(1.7
|
)
|
|
|
|
|
11.5
|
|
|
|
|
|
(34.3
|
)
|
Assurant Employee Benefits
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
10.5
|
|
Net realized gains on investments
|
|
|
|
|
5.5
|
|
|
|
|
|
7.0
|
|
|
|
|
|
16.3
|
|
|
|
|
|
126.1
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
|
|
15.0
|
|
|
|
|
|
88.3
|
|
|
|
|
|
54.3
|
|
|
|
|
|
201.0
|
|
Other adjustments
|
|
|
|
|
(1.6
|
)
|
|
|
|
|
(9.9
|
)
|
|
|
|
|
4.5
|
|
|
|
|
|
(19.1
|
)
|
GAAP net (loss) income
|
|
$
|
|
|
(57.3
|
)
|
|
$
|
|
|
144.4
|
|
|
$
|
|
|
206.7
|
|
|
$
|
|
|
534.1
|
|
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. Also, in accordance with earnings per
share guidance, weighted average shares outstanding used to calculate
net loss and net operating loss per share for the third quarter 2017
exclude the effect of 274,489 shares of dilutive securities.
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.
Third Quarter 2017 Consolidated Results
-
Net loss was $57.3 million, or $1.05 per share, compared to
third quarter 2016 net income of $144.4 million, or $2.37 per diluted
share. The decline primarily reflects $191.8 million of reportable
catastrophes mostly in Global Housing from Hurricanes Harvey, Irma and
Maria and the Mexico City earthquake, as well as lower amortization of
deferred gains primarily from the sale of Assurant Employee Benefits.
Reportable catastrophes in the quarter include catastrophe losses, net
of reinsurance and client profit sharing adjustments, as well as
reinstatement and other premiums.
-
Net operating loss4 was $76.3 million, or $1.40 per
share, compared to third quarter 2016 net operating income of $60.7
million, or $1.00 per diluted share. Assurant incurred $191.8 million
of reportable catastrophes in third quarter 2017, compared to $33.2
million of reportable catastrophes in third quarter 2016.
Excluding
reportable catastrophes, net operating income for third quarter 2017
totaled $115.5 million, compared to $93.9 million in third quarter
2016. The increase was attributable to higher contributions from
Global Lifestyle, including a $9.6 million tax benefit, and $7.5
million of additional income from a real estate joint venture
partnership gain primarily affecting Global Housing and Global
Lifestyle.
-
Net earned premiums, fees and other income from the Global
Housing, Global Lifestyle and Global Preneed segments totaled $1.42
billion compared to $1.55 billion in third quarter 2016, driven by a
previously disclosed change in program structure for a large service
contract client in Global Lifestyle. Absent this change, revenue was
flat, reflecting growth in mobile and vehicle protection businesses in
Global Lifestyle, offset by reductions in lender-placed insurance and
mortgage solutions in Global Housing.
Reportable Segments
Global Housing
|
(in millions)
|
|
|
3Q17
|
|
|
|
3Q16
|
|
|
% Change
|
|
|
|
9M17
|
|
|
|
9M16
|
|
|
% Change
|
Net operating (loss) income
|
|
$
|
|
(110.3
|
)
|
|
|
$
|
|
44.5
|
|
|
|
(348
|
)%
|
|
|
$
|
|
7.8
|
|
|
|
$
|
|
177.8
|
|
|
|
(96
|
)%
|
Net earned premiums, fees and other
|
|
$
|
|
530.3
|
|
|
|
$
|
|
579.0
|
|
|
|
(8
|
)%
|
|
|
$
|
|
1,612.2
|
|
|
|
$
|
|
1,717.5
|
|
|
|
(6
|
)%
|
-
Net operating loss was primarily due to $186.8 million of
reportable catastrophes from Hurricanes Harvey, Irma and Maria, and
the Mexico City earthquake. Excluding reportable catastrophes, third
quarter 2017 net operating income was down slightly with the same
period of last year. The ongoing normalization of lender-placed
insurance was partially offset by additional income from a real estate
joint venture partnership gain.
-
Net earned premiums, fees and other income decreased in third
quarter 2017, mainly from lower placement rates in lender-placed
insurance and catastrophe premiums. Softer market demand for
originations and field services along with lower client volumes in
mortgage solutions also contributed to the decline. Results were
partially offset by revenue growth in multi-family housing.
-
Combined ratio for risk-based businesses(a) increased
to 154.9 percent in the third quarter 2017 compared to 92.0 percent in
the prior-year quarter due to elevated reportable catastrophes.
Excluding this, the combined ratio was 80.7 percent compared to 79.5
percent in third quarter 2016.
-
Pre-tax margin for fee-based, capital-light businesses(b)
was 9.0 percent, down from 9.7 percent from the third
quarter of 2016. This was primarily due to $7.4 million of pre-tax
reportable catastrophes that impacted multi-family housing. Excluding
these losses, pre-tax margin increased to 13.6 percent primarily from
growth in multi-family housing, partially offset by less favorable
non-catastrophe loss experience in multi-family housing.
(a)
Combined ratio for the Global Housing risk-based businesses (i.e.,
lender-placed and manufactured housing and other businesses) is equal
to total policyholder benefits, losses and expenses, including
reportable catastrophe losses, divided by net earned premiums and fees
and other income.
(b) Pre-tax margin for the
Global Housing fee-based, capital-light businesses (i.e., multi-family
housing and mortgage solutions businesses) is equal to income before
provision for income taxes divided by total net earned premiums, fees
and other income.
Global Lifestyle
|
(in millions)
|
|
|
3Q17
|
|
|
|
3Q16
|
|
|
% Change
|
|
|
|
9M17
|
|
|
|
9M16
|
|
|
% Change
|
Net operating income
|
|
$
|
|
42.6
|
|
|
|
$
|
|
28.3
|
|
|
|
51
|
%
|
|
|
$
|
|
135.2
|
|
|
|
$
|
|
119.8
|
|
|
|
13
|
%
|
Net earned premiums, fees and other
|
|
$
|
|
841.7
|
|
|
|
$
|
|
927.8
|
|
|
|
(9
|
)%
|
|
|
$
|
|
2,482.6
|
|
|
|
$
|
|
2,777.0
|
|
|
|
(11
|
)%
|
-
Net operating income increased in third quarter 2017 primarily
due to a $9.6 million tax benefit, growth in mobile and additional
real estate joint venture partnership income. This increase was
partially offset by $5 million in reportable catastrophes, primarily
in the vehicle protection business from extreme flooding caused by
Hurricane Harvey.
-
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 $139 million reduction, third quarter
2017 revenues increased, benefitting mainly from growth in new mobile
programs and vehicle protection businesses. Declines from legacy
retail clients partially offset the increase.
-
Combined ratio for risk-based businesses(a)
increased to 99.2 percent from 97.9 percent in third quarter 2016,
driven by reportable catastrophes, primarily in the vehicle protection
business. Excluding these losses, the combined ratio improved to 96.6
percent mainly due to higher contributions from the vehicle protection
business.
-
Pre-tax margin for fee-based, capital-light businesses(b)
was 3.8 percent, up from 2.6 percent in third quarter 2016 due to
the change in the program structure for a large service contract
client and contributions from mobile programs. This was
partially offset by lower than expected trade-in volumes, reduced
profitability in extended service contracts and additional expenses to
support new Connected Living client programs.
(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)
|
|
|
3Q17
|
|
|
|
3Q16
|
|
% Change
|
|
|
|
9M17
|
|
|
|
9M16
|
|
|
% Change
|
Net operating income
|
|
$
|
|
12.3
|
|
|
|
$
|
|
14.4
|
|
|
(15
|
)%
|
|
|
$
|
|
35.0
|
|
|
|
$
|
|
31.4
|
|
|
|
11
|
%
|
Net earned premiums, fees and other
|
|
$
|
|
44.6
|
|
|
|
$
|
|
43.2
|
|
|
3
|
%
|
|
|
$
|
|
135.1
|
|
|
|
$
|
|
129.2
|
|
|
|
5
|
%
|
-
Net operating income decreased primarily due to lower real
estate joint venture investment income.
-
Net earned premiums, fees and other income increased driven
mainly by growth in the U.S. and Canada, particularly in Final Need.
-
Face sales totaled $220.0 million, down from $238.7 million in
third quarter 2016, due in part to lower sales from regions impacted
by Hurricanes Harvey and Irma.
Corporate & Other
|
(in millions)
|
|
|
3Q17
|
|
|
|
3Q16
|
|
|
% Change
|
|
|
|
9M17
|
|
|
9M16
|
|
|
% Change
|
Net operating loss (5)
|
|
$
|
|
(13.0
|
)
|
|
|
$
|
|
(17.4
|
)
|
|
|
(25
|
)%
|
|
|
$
|
|
(33.7
|
)
|
|
|
$
|
|
(50.7
|
)
|
|
|
(34
|
)%
|
-
Net operating loss5 decreased compared
to third quarter 2016 primarily from lower taxes and reduced corporate
expenses in third quarter 2017.
Capital Position
-
Corporate capital was approximately $570 million as of
September 30, 2017. Deployable capital totaled approximately $320
million, net of the company's $250 million risk buffer.
Dividends
from the businesses paid to the holding company in third quarter 2017
totaled $42 million. This included $38 million from Assurant Employee
Benefits and Assurant Health, and $4 million from Global Housing,
Global Lifestyle and Global Preneed operating segments.
-
Share repurchases and dividends totaled $63 million in third
quarter 2017. Dividends to shareholders totaled $29 million and
Assurant repurchased approximately 0.3 million shares of common stock
for $34 million. The company expects to complete its return of $1.5
billion of capital to shareholders by year-end 2017.
Company Outlook
Based on current market conditions, for full-year 2017 Assurant now
expects:
-
Assurant net operating income, excluding reportable catastrophe
losses to be up modestly in comparison to 2016 results, excluding
catastrophe losses. Profitable growth primarily in fee-based,
capital-light offerings, lower net operating loss at Corporate as well
as some one-time benefits to offset 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 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 new and existing mobile programs, 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 from
our alignment with market leaders and operational efficiencies.
-
Corporate & Other6 full-year net operating loss
to be in a range of $55 million to $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.
Dividends from Assurant Health and Assurant Employee Benefits to total
$124 million.
Earnings Conference Call
The third quarter 2017 earnings conference call and webcast will be held
Friday, November 3, 2017 at 8:30 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 September 30, 2017, the
company had $32 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 including
with respect to the pending transaction with The Warranty Group and the
benefits and synergies of the transaction, 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)
|
|
inability to successfully or timely close the pending transaction
with The Warranty Group or realize the anticipated benefits of the
transaction;
|
|
|
|
(vii)
|
|
a decline in our credit or financial strength ratings;
|
|
|
|
(viii)
|
|
risks related to our international operations, including
fluctuations in exchange rates;
|
|
|
|
(ix)
|
|
deterioration in our market capitalization compared to its book
value that could result in an impairment of goodwill;
|
|
|
|
(x)
|
|
failure to maintain effective internal control over financial
reporting;
|
|
|
|
(xi)
|
|
failure to effectively maintain and modernize our information
technology systems;
|
|
|
|
(xii)
|
|
data breaches compromising client information and privacy;
|
|
|
|
(xiii)
|
|
cyber security threats and cyber-attacks;
|
|
|
|
(xiv)
|
|
significant competitive pressures in our businesses;
|
|
|
|
(xv)
|
|
inability to execute strategic plans related to acquisitions,
dispositions or new ventures or integrate them effectively;
|
|
|
|
(xvi)
|
|
failure to develop or maintain distribution sources or attract and
retain sales representatives;
|
|
|
|
(xvii)
|
|
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);
|
|
|
|
(xviii)
|
|
unfavorable outcomes in litigation and/or regulatory investigations
that could negatively affect our results, business and reputation;
|
|
|
|
(xix)
|
|
current or new laws and regulations that could increase our costs
and decrease our revenue;
|
|
|
|
(xx)
|
|
uncertain tax positions, changes in tax laws and unexpected tax
liabilities;
|
|
|
|
(xxi)
|
|
risks related to outsourcing activities;
|
|
|
|
(xxii)
|
|
decline in the value of mobile devices in our inventory or subject
to guaranteed buyback;
|
|
|
|
(xxiii)
|
|
employee misconduct;
|
|
|
|
(xxiv)
|
|
unavailability, inadequacy and unaffordable pricing of reinsurance
coverage;
|
|
|
|
(xxv)
|
|
insolvency of third parties to whom we have sold or may sell
businesses through reinsurance or modified co-insurance;
|
|
|
|
(xxvi)
|
|
inability of reinsurers to meet their obligations;
|
|
|
|
(xxvii)
|
|
credit risk of some of our agents;
|
|
|
|
(xxviii)
|
|
inability of our subsidiaries to pay sufficient dividends; and
|
|
|
|
(xxix)
|
|
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 catastrophes, as an important measure of the company's
operating performance. The company believes net operating income,
excluding reportable catastrophes, provides investors a valuable
measure of the performance of the company's ongoing business because
it excludes the effect of reportable catastrophes, which can be
volatile. The comparable GAAP measure is net income.
|
|
(UNAUDITED)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Global Housing, excluding reportable catastrophes
|
|
$
|
|
76.5
|
|
|
$
|
|
77.7
|
|
|
$
|
|
195.2
|
|
|
$
|
|
236.3
|
|
Global Lifestyle*
|
|
|
|
47.6
|
|
|
|
|
28.3
|
|
|
|
|
140.2
|
|
|
|
|
119.8
|
|
Global Preneed
|
|
|
|
12.3
|
|
|
|
|
14.4
|
|
|
|
|
35.0
|
|
|
|
|
31.4
|
|
Corporate and other
|
|
|
|
(13.0
|
)
|
|
|
|
(17.4
|
)
|
|
|
|
(33.7
|
)
|
|
|
|
(50.7
|
)
|
Interest expense
|
|
|
|
(7.9
|
)
|
|
|
|
(9.1
|
)
|
|
|
|
(24.2
|
)
|
|
|
|
(28.4
|
)
|
Net operating income
|
|
|
|
115.5
|
|
|
|
|
93.9
|
|
|
|
|
312.5
|
|
|
|
|
308.4
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
|
1.0
|
|
|
|
|
-
|
|
|
|
|
17.9
|
|
|
|
|
(42.0
|
)
|
Assurant Employee Benefits
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16.8
|
|
Net realized gains on investments
|
|
|
|
8.5
|
|
|
|
|
10.7
|
|
|
|
|
25.1
|
|
|
|
|
194.0
|
|
Reportable catastrophes
|
|
|
|
(294.7
|
)
|
|
|
|
(50.9
|
)
|
|
|
|
(295.6
|
)
|
|
|
|
(89.9
|
)
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
|
23.1
|
|
|
|
|
135.8
|
|
|
|
|
83.5
|
|
|
|
|
309.2
|
|
Other adjustments
|
|
|
|
(2.5
|
)
|
|
|
|
(15.4
|
)
|
|
|
|
7.2
|
|
|
|
|
(29.6
|
)
|
Provision for income taxes
|
|
|
|
91.8
|
|
|
|
|
(29.7
|
)
|
|
|
|
56.1
|
|
|
|
|
(132.8
|
)
|
GAAP net (loss) income
|
|
$
|
|
(57.3
|
)
|
|
$
|
|
144.4
|
|
|
$
|
|
206.7
|
|
|
$
|
|
534.1
|
|
*Due to significant flooding from Hurricane Harvey, 3Q17 excludes
$5.0 million after-tax ($7.7 million pre-tax) of reportable catastrophes
primarily related to vehicle protection products.
|
|
|
(2)
|
|
Assurant uses net operating income (as defined below) per diluted
share, excluding reportable catastrophes, 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 catastrophes, 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. In accordance with earnings per share guidance,
weighted average shares outstanding used to calculate net loss per
share in 3Q 2017 exclude the effect of 274,489 shares of dilutive
securities.
|
|
(UNAUDITED)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net operating income, excluding reportable catastrophes, per
diluted share
|
|
$
|
|
2.12
|
|
|
$
|
|
1.54
|
|
|
$
|
|
5.64
|
|
|
$
|
|
4.89
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
|
0.02
|
|
|
|
|
-
|
|
|
|
|
0.32
|
|
|
|
|
(0.68
|
)
|
Assurant Employee Benefits
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.27
|
|
Net realized gains on investments
|
|
|
|
0.16
|
|
|
|
|
0.18
|
|
|
|
|
0.46
|
|
|
|
|
3.08
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
|
0.42
|
|
|
|
|
2.23
|
|
|
|
|
1.51
|
|
|
|
|
4.90
|
|
Reportable catastrophes
|
|
|
|
(5.40
|
)
|
|
|
|
(0.84
|
)
|
|
|
|
(5.33
|
)
|
|
|
|
(1.43
|
)
|
Other adjustments
|
|
|
|
(0.05
|
)
|
|
|
|
(0.26
|
)
|
|
|
|
0.12
|
|
|
|
|
(0.47
|
)
|
Provision for income taxes
|
|
|
|
1.68
|
|
|
|
|
(0.48
|
)
|
|
|
|
1.01
|
|
|
|
|
(2.10
|
)
|
Net (loss) income per diluted share
|
|
$
|
|
(1.05
|
)
|
|
$
|
|
2.37
|
|
|
$
|
|
3.73
|
|
|
$
|
|
8.46
|
|
|
|
|
(3)
|
|
Assurant uses operating return on equity ("Operating ROE"),
excluding accumulated other comprehensive income ("AOCI") and
reportable catastrophes, 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 catastrophes, 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 catastrophes, 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)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Annual operating return on average equity, excluding AOCI and
reportable catastrophes
|
|
|
11.9
|
%
|
|
|
9.5
|
%
|
|
|
10.7
|
%
|
|
|
11.3
|
%
|
Assurant Health runoff operations
|
|
|
-
|
%
|
|
|
(0.2
|
)%
|
|
|
0.4
|
%
|
|
|
(1.3
|
)%
|
Assurant Employee Benefits
|
|
|
-
|
%
|
|
|
-
|
%
|
|
|
-
|
%
|
|
|
0.4
|
%
|
Net realized gains on investments
|
|
|
0.6
|
%
|
|
|
0.7
|
%
|
|
|
0.6
|
%
|
|
|
4.6
|
%
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
1.5
|
%
|
|
|
9.0
|
%
|
|
|
1.9
|
%
|
|
|
7.4
|
%
|
Reportable catastrophes
|
|
|
(19.7
|
)%
|
|
|
(3.3
|
)%
|
|
|
(6.6
|
)%
|
|
|
(2.1
|
)%
|
Other adjustments:
|
|
|
(0.2
|
)%
|
|
|
(1.0
|
)%
|
|
|
0.2
|
%
|
|
|
(0.7
|
)%
|
Change due to effect of including AOCI
|
|
0.4
|
%
|
|
(2.0
|
)%
|
|
(0.5
|
)%
|
|
(3.8
|
)%
|
Annual GAAP return on average equity
|
|
(5.5
|
)%
|
|
12.7
|
%
|
|
6.7
|
%
|
|
15.8
|
%
|
|
|
|
(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)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net operating (loss) income
|
|
$
|
|
(76.3
|
)
|
|
$
|
|
60.7
|
|
|
$
|
|
120.1
|
|
|
$
|
|
249.9
|
|
Adjustments (pre-tax):
|
|
|
|
|
|
|
|
|
Assurant Health runoff operations
|
|
|
|
1.0
|
|
|
|
|
-
|
|
|
|
|
17.9
|
|
|
|
|
(42.0
|
)
|
Assurant Employee Benefits
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
16.8
|
|
Net realized gains on investments
|
|
|
|
8.5
|
|
|
|
|
10.7
|
|
|
|
|
25.1
|
|
|
|
|
194.0
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
|
23.1
|
|
|
|
|
135.8
|
|
|
|
|
83.5
|
|
|
|
|
309.2
|
|
Other adjustments
|
|
|
|
(2.5
|
)
|
|
|
|
(15.4
|
)
|
|
|
|
7.2
|
|
|
|
|
(29.6
|
)
|
Provision for income taxes
|
|
|
|
(11.1
|
)
|
|
|
|
(47.4
|
)
|
|
|
|
(47.1
|
)
|
|
|
|
(164.2
|
)
|
GAAP net (loss) income
|
|
$
|
|
(57.3
|
)
|
|
$
|
|
144.4
|
|
|
$
|
|
206.7
|
|
|
$
|
|
534.1
|
|
|
|
|
(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 Assurant 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)
|
|
3Q
|
|
3Q
|
|
9 Months
|
|
9 Months
|
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
GAAP Total Corporate & Other segment net (loss) income
|
|
$
|
|
(1.9
|
)
|
|
$
|
|
57.2
|
|
|
$
|
|
28.7
|
|
|
$
|
|
194.6
|
|
Excluding: Health runoff operations net income (loss)
|
|
|
|
0.1
|
|
|
|
|
(1.7
|
)
|
|
|
|
11.5
|
|
|
|
|
(34.3
|
)
|
GAAP Corporate & Other segment net (loss) income
|
|
|
|
(2.0
|
)
|
|
|
|
58.9
|
|
|
|
|
17.2
|
|
|
|
|
228.9
|
|
Adjustments, pre-tax:
|
|
|
|
|
|
|
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
|
(23.1
|
)
|
|
|
|
(135.8
|
)
|
|
|
|
(83.5
|
)
|
|
|
|
(309.2
|
)
|
Interest expense
|
|
|
|
12.2
|
|
|
|
|
14.0
|
|
|
|
|
37.2
|
|
|
|
|
43.7
|
|
Net realized gains on investments
|
|
|
|
(8.5
|
)
|
|
|
|
(10.7
|
)
|
|
|
|
(25.1
|
)
|
|
|
|
(194.0
|
)
|
Other adjustments
|
|
|
|
2.5
|
|
|
|
|
15.4
|
|
|
|
|
(7.2
|
)
|
|
|
|
29.6
|
|
Provision for income taxes
|
|
|
|
5.9
|
|
|
|
|
40.8
|
|
|
|
|
27.7
|
|
|
|
|
150.3
|
|
Corporate & other net operating loss
|
|
$
|
|
(13.0
|
)
|
|
$
|
|
(17.4
|
)
|
|
$
|
|
(33.7
|
)
|
|
$
|
|
(50.7
|
)
|
|
|
|
(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 component for the forecast
period, based on certain assumptions relating to future reinsured
premium on disposed business during the forecast period. In
addition, the company is assuming it does not incur additional debt
or extinguish 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 $32-33 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 Nine Months Ended September 30, 2017 and 2016
|
|
|
|
3Q
|
|
9 Months
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(in millions except number of shares and per share amounts)
|
Revenues
|
|
|
|
|
|
|
|
|
Net earned premiums
|
|
$
|
1,073.1
|
|
|
$
|
1,215.1
|
|
|
$
|
3,238.7
|
|
|
$
|
3,832.6
|
|
Fees and other income
|
|
|
349.1
|
|
|
|
347.7
|
|
|
|
1,016.2
|
|
|
|
1,033.7
|
|
Net investment income
|
|
|
132.6
|
|
|
|
124.8
|
|
|
|
374.9
|
|
|
|
380.3
|
|
Net realized gains on investments
|
|
|
8.5
|
|
|
|
10.7
|
|
|
|
25.1
|
|
|
|
194.0
|
|
Gain on pension plan curtailment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29.6
|
|
Amortization of deferred gains and gains on disposal of businesses
|
|
|
23.1
|
|
|
|
135.8
|
|
|
|
83.5
|
|
|
|
309.2
|
|
Total revenues
|
|
|
1,586.4
|
|
|
|
1,834.1
|
|
|
|
4,738.4
|
|
|
|
5,779.4
|
|
Benefits, losses and expenses
|
|
|
|
|
|
|
|
|
Policyholder benefits
|
|
|
682.2
|
|
|
|
435.2
|
|
|
|
1,456.6
|
|
|
|
1,379.8
|
|
Selling, underwriting, general and administrative expenses
|
|
|
999.6
|
|
|
|
1,164.0
|
|
|
|
2,958.4
|
|
|
|
3,561.9
|
|
Interest expense
|
|
|
12.2
|
|
|
|
14.0
|
|
|
|
37.2
|
|
|
|
43.7
|
|
Total benefits, losses and expenses
|
|
|
1,694.0
|
|
|
|
1,613.2
|
|
|
|
4,452.2
|
|
|
|
4,985.4
|
|
(Loss) income before (benefit) provision for income taxes
|
|
|
(107.6
|
)
|
|
|
220.9
|
|
|
|
286.2
|
|
|
|
794.0
|
|
(Benefit) provision for income taxes
|
|
|
(50.3
|
)
|
|
|
76.5
|
|
|
|
79.5
|
|
|
|
259.9
|
|
Net (loss) income
|
|
$
|
(57.3
|
)
|
|
$
|
144.4
|
|
|
$
|
206.7
|
|
|
$
|
534.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.05
|
)
|
|
$
|
2.40
|
|
|
$
|
3.75
|
|
|
$
|
8.54
|
|
Diluted
|
|
$
|
(1.05
|
)
|
|
$
|
2.37
|
|
|
$
|
3.73
|
|
|
$
|
8.46
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.53
|
|
|
$
|
0.50
|
|
|
$
|
1.59
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share data:
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
54,524,874
|
|
|
|
60,262,073
|
|
|
|
55,096,933
|
|
|
|
62,522,980
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
54,524,874
|
|
|
|
60,828,341
|
|
|
|
55,409,251
|
|
|
|
63,093,320
|
|
|
Assurant, Inc.
|
Consolidated Condensed Balance Sheets (unaudited)
|
At September 30, 2017 and December 31, 2016
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions)
|
Assets
|
|
|
|
|
Investments and cash and cash equivalents
|
|
$
|
12,669.4
|
|
|
$
|
12,511.0
|
|
Reinsurance recoverables
|
|
|
10,578.3
|
|
|
|
9,083.2
|
|
Deferred acquisition costs
|
|
|
3,482.6
|
|
|
|
3,267.4
|
|
Goodwill
|
|
|
916.0
|
|
|
|
830.9
|
|
Assets held in separate accounts
|
|
|
1,800.3
|
|
|
|
1,692.3
|
|
Other assets
|
|
|
2,958.6
|
|
|
|
2,324.3
|
|
Total assets
|
|
$
|
32,405.2
|
|
|
$
|
29,709.1
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Policyholder benefits and claims payable
|
|
$
|
15,231.1
|
|
|
$
|
13,414.1
|
|
Unearned premiums
|
|
|
6,962.6
|
|
|
|
6,626.5
|
|
Debt
|
|
|
1,067.9
|
|
|
|
1,067.0
|
|
Liabilities related to separate accounts
|
|
|
1,800.3
|
|
|
|
1,692.3
|
|
Deferred gain on disposal of businesses
|
|
|
148.5
|
|
|
|
232.2
|
|
Accounts payable and other liabilities
|
|
|
3,056.6
|
|
|
|
2,578.9
|
|
Total liabilities
|
|
|
28,267.0
|
|
|
|
25,611.0
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Equity, excluding accumulated other comprehensive income
|
|
|
3,881.8
|
|
|
|
4,003.5
|
|
Accumulated other comprehensive income
|
|
|
256.4
|
|
|
|
94.6
|
|
Total stockholders' equity
|
|
|
4,138.2
|
|
|
|
4,098.1
|
|
Total liabilities and stockholders' equity
|
|
$
|
32,405.2
|
|
|
$
|
29,709.1
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006619/en/
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