Assurant 2014 Annual Report Download - page 68

54 ASSURANT, INC. – 2014 Form 10-K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31, 2014 Compared
to the Year Ended December 31, 2013
Net Loss
Segment net loss decreased $25,510 or 25%, to $74,731 for
Twelve Months 2014 compared with a net loss of $100,241
for Twelve Months 2013. The decrease is primarily due to a
$20,753 one-time tax benefi t related to the conversion of
the Canadian branch operations of certain U.S. subsidiaries
to foreign corporate entities, a $17,068 (after-tax) change in
net realized gains on investments, lower employee-related
costs and impact of expense reduction initiatives. These
items were partially offset by a $19,400 (after-tax) loss on
an asset held for sale.
Total Revenues
Total revenues increased $7,189 or 10%, to $79,282 for
Twelve Months 2014 compared with $72,093 for Twelve
Months 2013. The increase in revenues is mainly due to an
$26,258 increase in net realized gains on investments partially
offset by a decrease of $17,816 in amortization of deferred
gain on disposal of businesses (“amortization of deferred
gain”). The reduction in the amortization of deferred gain
is related to a change in estimate for the recognition of a
deferred gain associated with FFG that we previously sold
through reinsurance.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses decreased $19,600 or 9%,
to $201,473 in Twelve Months 2014 compared with $221,073
in Twelve Months 2013. Interest expense declined $19,340
primarily due to repayment of the 2004 Senior Notes with
an aggregate principal amount of $500,000 on February 18,
2014. Included in selling, underwriting and general expenses
is a $21,526 loss on an asset held for sale. Excluding this
item, Twelve Months 2014 had lower selling, underwriting
and general expenses compared with Twelve Months 2013
primarily due to lower employee-related costs and impact
of expense reduction initiatives.
Year Ended December 31, 2013 Compared
to the Year Ended December 31, 2012
Net Loss
Segment net loss increased $45,183 or 82%, to $100,241 for
Twelve Months 2013 compared with a net loss of $55,058
for Twelve Months 2012. The increase is primarily related
to a $19,388 (after-tax) decrease in net realized gains on
investments, increased employee-related and business
acquisition-related expenses and additional expenses in areas
targeted for growth. In addition, interest expense increased
$11,329 (after-tax) due to the March 2013 issuance of senior
notes with an aggregate principal amount of $700,000.
Total Revenues
Total revenues decreased $34,713 or 33%, to $72,093 for
Twelve Months 2013 compared with $106,806 for Twelve
Months 2012. The decrease in revenues is mainly due to
decreased net realized gains on investments.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses increased $50,405 or 30%,
to $221,073 in Twelve Months 2013 compared with $170,668
in Twelve Months 2012. The increase is primarily due to
increased employee-related and business acquisition-related
expenses, additional expenses in areas targeted for growth
and increased interest expense related to the March 2013
debt issuance mentioned above. In addition, policyholders
benefi ts increased $5,949 attributable to increased claims
payable accruals associated with discontinued businesses.
Investments
The Company had total investments of $14,131,452 and $14,244,015 as of December 31, 2014 and December 31, 2013,
respectively. For more information on our investments see Note 5 to the Consolidated Financial Statements included
elsewhere in this report.
The following table shows the credit quality of our fi xed maturity securities portfolio as of the dates indicated:
Fixed Maturity Securities by Credit Quality (Fair Value)
As of
December 31, 2014 December 31, 2013
Aaa / Aa / A $ 7,314,208 65.0% $ 7,214,256 63.9%
Baa 3,255,505 28.9% 3,316,035 29.4%
Ba 432,203 3.8% 523,175 4.6%
B and lower 261,258 2.3% 238,409 2.1%
TOTAL $ 11,263,174 100.0% $ 11,291,875 100.0%