Assurant 2011 Annual Report Download - page 52

ASSURANT, INC.2011 Form10-K44
PARTII
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Gross written premiums increased $232,578, or 8%, to $3,196,647 for
Twelve Months 2010 from $2,964,069 for Twelve Months 2009. Gross
written premiums from our domestic service contract business increased
$180,753 due to the addition of new clients and an increase in automobile
vehicle service contracts as automobile sales increased and from premiums
reported by certain clients in a timelier manner than in the past.  is
had no e ect on net earned premiums. In addition, consistent with our
international expansion strategy, our international credit business increased
$125,653 due to growth across several countries from both new and
existing clients and from the favorable impact of foreign exchange rates.
Gross written premiums from our international service contract business
increased $60,418, primarily due to favorable foreign exchange rates and
growth from existing clients, partially o set by lower premiums in Denmark
due to our decision to exit that market in 2009. Gross written premiums
from our domestic credit insurance business decreased $103,707, due to
the continued runo of this product line. Other domestic gross written
premiums decreased $26,379 mainly due to a one-time campaign with
Ford Motor Company conducted and completed in Second Quarter 2009.
Preneed face sales increased $222,518 primarily due to increased
consumer buying in advance of a less favorable tax rate change in certain
Canadian provinces, as well as growth from our exclusive distribution
partnership with SCI the largest funeral provider in North America,
and increased sales initiatives.
Total Benefi ts, Losses and Expenses
Total bene ts, losses and expenses decreased $142,484, or 5%, to
$2,942,015 for Twelve Months 2010 from $3,084,499 for Twelve
Months 2009. Policyholder bene ts decreased $139,764 primarily
due to improved loss experience in our U.K. credit business and in our
domestic service contract business from existing and run-o clients,
the run-o of preneed policies sold before January1,2009, and the
continued run-o of our domestic credit business.
Selling, underwriting and general expenses decreased $2,720.
Commissions, taxes, licenses and fees, of which amortization of DAC
is a component, decreased $42,585 as commission expense related to
our domestic service contract business declined due to lower net earned
premiums, partially o set by increased commission expense in our
international business due to higher net earned premiums in that business
coupled with the unfavorable impact of foreign exchange rates. General
expenses increased $39,865 primarily due to the above-mentioned
$47,612 (pre-tax) intangible asset impairment charge, the amortization
of previously capitalized upfront client commission payments, as we
continue to grow our international business and distribution channels,
and the unfavorable impact of foreign exchange rates. Partially o setting
these increases was cost savings realized in Twelve Months 2010 as a
result of a restructuring in Twelve Months 2009.  is restructuring
added $16,500 to expenses in Twelve Months 2009.
Assurant Specialty Property
Overview
 e table below presents information regarding Assurant Specialty Property’s segment results of operations:
For the Years Ended December31,
2011 2010 2009
Revenues:
Net earned premiums and other considerations $ 1,904,638 $ 1,953,223 $ 1,947,529
Net investment income 103,259 107,092 110,337
Fees and other income 79,337 69,147 56,890
Total revenues 2,087,234 2,129,462 2,114,756
Bene ts, losses and expenses:
Policyholder bene ts 857,223 684,652 664,182
Selling, underwriting and general expenses 767,761 797,996 832,528
Total bene ts, losses and expenses 1,624,984 1,482,648 1,496,710
Segment income before provision for income tax 462,250 646,814 618,046
Provision for income taxes 157,185 222,527 212,049
SEGMENT NET INCOME $ 305,065 $ 424,287 $ 405,997
Net earned premiums and other considerations by major product groupings:
Homeowners (lender-placed and voluntary) $ 1,274,485 $ 1,342,791 $ 1,369,031
Manufactured housing (lender-placed and voluntary) 216,613 220,309 219,960
Other(1) 413,540 390,123 358,538
TOTAL $ 1,904,638 $ 1,953,223 $ 1,947,529
Ratios:
Loss ratio(2) 45.0% 35.1% 34.1%
Expense ratio(3) 38.7% 39.5% 41.5%
Combined ratio(4) 81.9% 73.3% 74.7%
(1) Primarily includes lender-placed flood, miscellaneous specialty property and multi-family housing insurance products.
(2) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(3) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(4) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.