Assurant 2010 Annual Report Download - page 48

42 ASSURANT, INC.  2010 Form 10K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
premiums written in prior periods and from a one-time campaign with
Ford Motor Company conducted and completed in Second Quarter
2009.  is increase was partially off set by unfavorable changes in foreign
exchange rates as the U.S. dollar strengthened against international
currencies, combined with the continued runoff of our domestic credit
insurance business. Also contributing to the decrease in revenues
was lower net investment income of $29,386, or 7%, primarily due
to lower average invested assets and lower investment yields.  ese
decreases were partially off set by an increase in fees and other income
of $34,042, or 19%, primarily from the application of the universal
life insurance accounting guidance for our Preneed business and the
continued growth of our service contract businesses resulting from
acquisitions made in the latter part of 2008.
Gross written premiums decreased $574,199, or 16%, to $2,964,069
for Twelve Months 2009 from $3,538,268 for Twelve Months 2008.
 is decrease was driven primarily by lower domestic service contract
business of $517,614, primarily due to a client bankruptcy and decreased
retail and auto sales due to the slowdown in consumer spending.
Gross written premiums from our domestic credit insurance business
decreased $77,569, due to the continued runoff of this product line.
Gross written premiums from our international service contract business
decreased $14,688, primarily the result of unfavorable changes in
foreign exchange rates.  is was partially off set by growth from both
new and existing clients, consistent with our international expansion
strategy. Gross written premiums from our international credit business
increased $15,768 primarily driven by growth in several countries due
to strong growth from new and existing clients.  is was partially off set
by unfavorable changes in foreign exchange rates and the slowdown
in the U.K. mortgage market. Preneed face sales were $67,053 higher
due to growth from our exclusive distribution partnership with SCI
and increased sales initiatives.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses decreased $156,151, or 5%, to
$3,084,499 for Twelve Months 2009 from $3,240,650 for Twelve
Months 2008. Policyholder benefi ts decreased $169,607, primarily
due to the above mentioned application of universal life insurance
accounting guidance, in our Preneed business. Also contributing to
the decrease were lower losses from a discontinued credit life product
in Brazil and improved loss experience in our domestic service contract
business from existing and run-off clients.  is was partially off set
by unfavorable loss experience in our U.K. credit insurance business
primarily resulting from higher unemployment rates than the prior year.
During the Twelve Months 2009, we ceased distributing unemployment
insurance-related products through the internet but losses from similar
products sold through more traditional distribution channels increased
as a result of the prolonged high unemployment in the U.K. Selling,
underwriting and general expenses increased $13,456. General expenses
increased $82,616, primarily due to higher expenses associated with
recent domestic extended service contract business acquisitions and
restructuring charges relating to our international businesses of $10,600
and $5,900 for our domestic businesses. Commissions, taxes, licenses
and fees, of which amortization of DAC is a component, decreased
$69,160, primarily due to the corresponding favorable change in foreign
exchange rates in our international business and reduced commission
expense resulting from acquisitions completed in the latter part of
2008. Also contributing to the decrease was the above-mentioned
application of universal life insurance accounting guidance in our
Preneed business.  ese declines in Twelve Months 2009 were partially
off set by an $18,000 reduction in commission expense related to the
accrual of contractual receivables established from certain domestic
service contract clients recorded in Twelve Months 2008.