Assurant 2011 Annual Report Download - page 12

ASSURANT, INC.2011 Form10-K4
PARTI
ITEM 1 Business
Segments
For additional information on our segments, see “Item7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Results of Operations” and Note22 to the Consolidated Financial Statements included elsewhere in this report.
Assurant Solutions
For the Years Ended
December31,2011 December31,2010
Gross written premiums for selected product groupings (1):
Domestic extended service contracts and warranties(2) $ 1,470,605 $ 1,193,423
International extended service contracts and warranties(2) 622,674 523,382
Preneed life insurance (face sales) 759,692 734,884
Domestic credit insurance 399,564 422,825
International credit insurance 1,013,486 968,878
Net earned premiums and other considerations $ 2,438,407 $ 2,484,299
Segment net income $ 141,553 $ 103,206
Equity(3) $ 1,443,797 $ 1,448,684
(1) Gross written premiums does not necessarily translate to an equal amount of subsequent net earned premium since Assurant Solutions reinsures a portion of their premiums to third
parties and to insurance subsidiaries of its clients.
(2) Extended service contracts include warranty contracts for products such as cellular phones, personal computers, consumer electronics, appliances, automobiles and recreational vehicles.
(3) Equity excludes accumulated other comprehensive income.
Products and Services
Assurant Solutions targets growth in three key product areas: domestic
and international extended service contracts (“ESC”) and warranties;
preneed life insurance; and international credit insurance.
ESC and Warranties
 rough partnerships with leading retailers and original equipment
manufacturers, we underwrite and provide administrative services for
ESC and warranties.  ese contracts provide consumers with coverage on
cellular phones, personal computers, consumer electronics, appliances,
automobiles and recreational vehicles, protecting them from certain
covered losses. We pay the cost of repairing or replacing customers’
property in the event of mechanical breakdown, accidental damage,
and casualty losses such as theft,  re, and water damage. Our strategy
is to provide service to our clients that addresses all aspects of the
extended service contract or warranty, including program design and
marketing strategy. We provide administration, claims handling and
customer service. We believe that we maintain a di erentiated position
in this marketplace as a provider of both the required administrative
infrastructure and insurance underwriting capabilities.
Preneed Life Insurance
Preneed life insurance allows individuals to prepay for a funeral in a
single payment or in multiple payments over a  xed number of years.
 e insurance policy proceeds are used to address funeral costs at
death.  ese products are only sold in the U.S. and Canada and are
generally structured as whole life insurance policies in the U.S. and
annuity products in Canada.
Credit Insurance
Our credit insurance products o er protection from life events and
uncertainties that arise in purchasing and borrowing transactions.
Credit insurance programs generally o er consumers the option to
protect a credit card balance or installment loan in the event of death,
involuntary unemployment or disability, and are generally available
to all consumers without the underwriting restrictions that apply to
term life insurance.
Regulatory changes have reduced the demand for credit insurance in
the U.S. Consequently, we have seen a reduction in credit insurance
domestic gross written premiums, a trend we expect to continue.
Marketing and Distribution
Assurant Solutions focuses on establishing strong, long-term relationships
with leading distributors of its products and services. We partner with
some of the largest consumer electronics and appliance retailers and
original equipment manufacturers to market our ESC and warranty
products. In our Preneed business, we have an exclusive relationship
with Services Corporation International (“SCI”), the largest funeral
provider in North America.
Several of our distribution agreements are exclusive. Typically these
agreements have terms of one to  ve years and allow us to integrate
our administrative systems with those of our clients.
In addition to the domestic market, we operate in Canada, the United
Kingdom (“U.K.”), Argentina, Brazil, Puerto Rico, Chile, Germany,
Spain, Italy, Mexico and China. In these markets, we primarily
sell ESC and credit insurance products through agreements with
 nancial institutions, retailers and wireless service providers. Although
there has been contraction in the domestic credit insurance market,
several international markets are experiencing growth in the credit