Assurant 2011 Annual Report Download - page 53

ASSURANT, INC.2011 Form10-K 45
PARTII
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31, 2011 Compared to the Year
Ended December 31, 2010
Net Income
Segment net income decreased $119,222, or 28%, to $305,065 for
Twelve Months 2011 from $424,287 for Twelve Months 2010.  e
decline was primarily due to an increase in reportable catastrophe losses
of $87,673 (after-tax) in Twelve Months 2011. Increased frequency of
non-catastrophe weather related losses during Twelve Months 2011
compared with Twelve Months 2010 also contributed to the decline.
Total Revenues
Total revenues decreased $42,228, or 2%, to $2,087,234 for Twelve
Months 2011 from $2,129,462 for Twelve Months 2010. Growth in
lender-placed homeowners and multi-family housing gross earned
premiums was more than o set by increased ceded lender-placed
homeowners’ premiums and $21,501 in increased catastrophe reinsurance
premiums.
Total Benefi ts, Losses and Expenses
Total bene ts, losses and expenses increased $142,336, or 10%, to
$1,624,984 for Twelve Months 2011 from $1,482,648 for Twelve
Months 2010.  e loss ratio increased 990 basis points with 710 basis
points attributed to $134,881 of increased reportable catastrophe losses
in Twelve Months 2011 compared to Twelve Months 2010. Reportable
loss events for Twelve Months 2011 included Hurricane Irene, Tropical
Storm Lee, wild res in Texas and severe storms, including tornados in
the southeast.  e principal causes of loss for these events were wind and
 ood. Reportable loss events for Twelve Months 2010 included Arizona
wind and hailstorms and Tennessee storms. Reportable catastrophe
losses includes only individual catastrophic events that generated losses
to the Company in excess of $5,000, pre-tax and net of reinsurance.
Commissions, taxes, licenses, and fees decreased $37,021 primarily due
to client contract changes which resulted in lower commission expense.
General expenses increased $6,791 primarily due to increased employee
bene t expenses and costs associated with the June2011 SureDeposit
acquisition including associated intangible asset amortization.
Year Ended December 31, 2010 Compared to the Year
Ended December 31, 2009
Net Income
Segment net income increased $18,290, or 5%, to $424,287 for
Twelve Months 2010 from $405,997 for Twelve Months 2009.  e
improvement is primarily due to an improved expense ratio as a result
of lower commission expense due to increases in client-ceded premiums
and operational improvements. Results for Twelve Months 2010
include $14,797 (after tax) of reportable catastrophe losses, including
losses from Arizona wind and hailstorms in fourth quarter 2010 and
Tennessee storms during second quarter 2010.  ere were no reportable
catastrophes during Twelve Months 2009.
Total Revenues
Total revenues increased $14,706, or 1%, to $2,129,462 for Twelve
Months 2010 from $2,114,756 for Twelve Months 2009. Growth in
lender-placed homeowners, lender-placed  ood and renters insurance
products gross earned premiums and increased fee income were partially
o set by increased ceded lender-placed homeowners’ premiums and
lower real estate owned premiums.
Total Benefi ts, Losses and Expenses
Total bene ts, losses and expenses decreased $14,062, or 1%, to
$1,482,648 for Twelve Months 2010 from $1,496,710 for Twelve Months
2009.  e decrease was primarily due to lower selling, underwriting,
and general expenses of $34,532 compared with Twelve Months 2009,
partially o set by increased policyholder bene ts of $20,470.  e
overall loss ratio increased 100 basis points primarily due to $22,764 of
reportable catastrophes in Twelve Months 2010 and the non-recurrence
of a $9,023 subrogation reimbursement in Twelve Months 2009.  ese
items are partially o set by lower small-scale weather related losses.
Commissions, taxes, licenses and fees decreased $37,676, primarily due
to client contract changes that resulted in lower commission expenses
and a release of a premium tax reserve. General expenses increased
$3,144 primarily due to increased employee related expenses.