Assurant 2014 Annual Report Download - page 110

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ASSURANT, INC. – 2014 Form 10-KF-22
5 Investments
default rates, recoveries and changes in value. The net
present value is calculated by discounting the Company’s
best estimate of projected future cash fl ows at the effective
interest rate implicit in the fi xed maturity security prior to
impairment at the balance sheet date. The discounted cash
fl ows become the new amortized cost basis of the fi xed
maturity security.
In periods subsequent to the recognition of an OTTI, the
Company generally accretes the discount (or amortizes
the reduced premium) into net investment income, up to
the non-discounted amount of projected future cash fl ows,
resulting from the reduction in cost basis, based upon the
amount and timing of the expected future cash fl ows over
the estimated period of cash fl ows.
The investment category and duration of the Company’s gross unrealized losses on fi xed maturity securities and equity
securities at December 31, 2014 and 2013 were as follows:
December 31, 2014
Less than 12 months 12 Months or More Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Fixed maturity securities:
United States Government and
government agencies and authorities $ 34,551 $ (188) $ 21,488 $ (241) $ 56,039 $ (429)
States, municipalities and political
subdivisions 3,050 (282) 4,633 (71) 7,683 (353)
Foreign governments 19,886 (67) 37,741 (1,390) 57,627 (1,457)
Asset-backed — — 1,348 (78) 1,348 (78)
Residential mortgage-backed 22,337 (71) 61,682 (1,083) 84,019 (1,154)
Corporate 640,641 (13,132) 113,918 (3,482) 754,559 (16,614)
TOTAL FIXED MATURITY SECURITIES $ 720,465 $ (13,740) $ 240,810 $ (6,345) $ 961,275 $ (20,085)
Equity securities:
Common stock $ — $ — $ 196 $ (1) $ 196 $ (1)
Non-redeemable preferred stocks 8,844 (264) 24,784 (1,829) 33,628 (2,093)
TOTAL EQUITY SECURITIES $ 8,844 $ (264) $ 24,980 $ (1,830) $ 33,824 $ (2,094)
December 31, 2013
Less than 12 months 12 Months or More Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Fixed maturity securities:
United States Government and
government agencies and authorities $ 52,615 $ (1,464) $ 3,514 $ (424) $ 56,129 $ (1,888)
States, municipalities and political
subdivisions 30,145 (2,624) — — 30,145 (2,624)
Foreign governments 217,708 (7,596) 111 (12) 217,819 (7,608)
Asset-backed — — 1,442 (56) 1,442 (56)
Commercial mortgage-backed 5,036 (82) — — 5,036 (82)
Residential mortgage-backed 407,808 (11,667) 31,498 (1,550) 439,306 (13,217)
Corporate 1,412,611 (36,848) 19,291 (805) 1,431,902 (37,653)
TOTAL FIXED MATURITY SECURITIES $ 2,125,923 $ (60,281) $ 55,856 $ (2,847) $ 2,181,779 $ (63,128)
Equity securities:
Common stock $ 187 $(10) $—$—$187 $(10)
Non-redeemable preferred stocks 159,723 (8,200) 11,807 (1,199) 171,530 (9,399)
TOTAL EQUITY SECURITIES $ 159,910 $ (8,210) $ 11,807 $ (1,199) $ 171,717 $ (9,409)
Total gross unrealized losses represent approximately 2% and
3% of the aggregate fair value of the related securities at
December 31, 2014 and 2013, respectively. Approximately
63% and 94% of these gross unrealized losses have been in
a continuous loss position for less than twelve months at
December 31, 2014 and 2013, respectively. The total gross
unrealized losses are comprised of 385 and 667 individual
securities at December 31, 2014 and 2013, respectively. In
accordance with its policy described above, the Company
concluded that for these securities an adjustment to its results
of operations for other-than-temporary impairments of the
gross unrealized losses was not warranted at December 31,
2014 and 2013. These conclusions were based on a detailed
analysis of the underlying credit and expected cash fl ows of
each security. As of December 31, 2014, the gross unrealized
losses that have been in a continuous loss position for twelve
months or more were concentrated in the Company’s foreign
governments, residential mortgage-backed and corporate fi xed