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46 ASSURANT, INC.2010 Form 10K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Assurant Employee Benefi ts
Overview
e table below presents information regarding Assurant Employee Benefi ts’ segment results of operations:
For the Years Ended December 31,
2010 2009 2008
Revenues:
Net earned premiums and other considerations $ 1,101,395 $ 1,052,137 $ 1,111,748
Net investment income 132,388 133,365 147,027
Fees and other income 25,152 28,343 26,139
Total revenues 1,258,935 1,213,845 1,284,914
Benefi ts, losses and expenses:
Policyholder benefi ts 766,049 757,070 775,684
Selling, underwriting and general expenses 395,759 392,901 400,816
Total benefi ts, losses and expenses 1,161,808 1,149,971 1,176,500
Segment income before provision for income tax 97,127 63,874 108,414
Provision for income taxes 33,589 21,718 37,857
SEGMENT NET INCOME $ 63,538 $ 42,156 $ 70,557
Net earned premiums and other considerations:
By major product groupings:
Group dental $ 420,690 $ 425,288 $ 435,115
Group disability single premiums for closed blocks (3) — — 11,447
All other group disability 488,813 434,381 459,208
Group life 191,892 192,468 205,978
TOTAL $ 1,101,395 $ 1,052,137 $ 1,111,748
Ratios:
Loss ratio (1) 69.6 % 72.0 % 69.8 %
Expense ratio (2) 35.1 % 36.4 % 35.2 %
(1) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(2) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(3) This represents single premium on closed blocks of group disability business. For closed blocks of business we receive a single, upfront premium and in turn we record a virtually equal
amount of claim reserves. We then manage the claims using our claim management practices.
Year Ended December 31, 2010 Compared to the Year
Ended December 31, 2009
Net Income
Segment net income increased 51% to $63,538 for Twelve Months
2010 from $42,156 for Twelve Months 2009.  e increase in net
income was primarily attributable to favorable loss experience in all
product lines. Favorable disability results and life mortality, as well as
dental pricing actions, contributed to the improvement. Twelve Months
2010 includes restructuring charges of $4,349 (after-tax) compared to
restructuring charges of $2,445 (after-tax) in Twelve Months 2009.
Total Revenues
Total revenues increased 4% to $1,258,935 for Twelve Months 2010
from $1,213,845 for Twelve Months 2009. Net earned premiums
increased 5% or $49,258 mainly due to assumed premiums from two
new clients in our DRMS distribution channel and the acquisition
of a block of business from Shenandoah Life Insurance Company, all
added in Fourth Quarter 2009.  is was partially off set by decreases
in our direct products as a result of a challenging sales and persistency
environment which continues to aff ect revenue growth.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses increased 1% to $1,161,808 for
Twelve Months 2010 from $1,149,971 for Twelve Months 2009.  e
loss ratio decreased to 69.6% in Twelve Months 2010 from 72.0% in
Twelve Months 2009 primarily due to higher net earned premiums
and favorable loss experience across the disability, life, and dental
products. Disability incidence and life mortality levels continue to be
very favorable compared to prior year.
e expense ratio decreased to 35.1% for Twelve Months 2010 from
36.4% for Twelve Months 2009 driven by higher net earned premiums
and expense management initiatives partially off set by restructuring
charges. Twelve Months 2010 includes $6,690 in restructuring charges
compared to $3,760 in Twelve Months 2009.
Year Ended December 31, 2009 Compared to the Year
Ended December 31, 2008
Net Income
Segment net income decreased $28,401 or 40%, to $42,156 for Twelve
Months 2009 from $70,557 for Twelve Months 2008.  e decrease in
net income was primarily driven by lower net earned premiums and
less favorable life, dental and disability loss experience. In addition, net
investment income was lower by $8,880 (after-tax) due to decreased