Assurant 2008 Annual Report Download - page 8

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Assurant Employee Benets
Assurant Employee Benefits continued its focus on the small-employer segment
of the employee benefits market in 2008. Although revenues and net operating
income were down for the year, loss ratio results continue to be excellent, and the
business’s products and services are in step with market needs. As the benefits
marketplace shifts toward more voluntary options, Assurant Employee Benefits is well
positioned to capitalize on these emerging dynamics by offering more targeted and
customizable choices to small businesses than non-specialized insurance carriers
can provide. Today, more than 80% of its customers are businesses with fewer than
500 employees. Assurant Employee Benefits also renewed its Dental PPO network
access-sharing agreement with Aetna in 2008, providing our customers and plan
members with access to over 90,000 referable dental locations in the United States.
We believe these results are further evidence that Assurant Employee Benefits’
small-employer strategy is taking hold and gaining momentum in the marketplace.
Assurant Solutions
Assurant Solutions, despite a very challenging macroeconomic environment
during 2008, continued to make progress in positioning itself for long-term growth
and improved profitability and remained focused on advancing in its three targeted
growth areas — extended service contracts, preneed, and international markets. Net
earned premiums were $2.8 billion, up 11% over the prior year, due primarily to
steady growth in domestic and international extended service contracts and strong
face sales growth in our preneed business. To temper the effects of the consumer
spending slowdown, Assurant Solutions is focused on finding opportunities to
“play offense” — by helping existing customers improve revenues, by finding
new clients and by expanding distribution. We began a new partnership with
Royal Bank of Canada, which should provide us an excellent opportunity in the
international credit insurance space. We also completed two key acquisitions in
the service contract space during the year: the GE Consumer and Industrial’s
Warranty Management Group, and Signal Holdings, LLC, both of which will enable
Assurant Solutions to further strengthen its competitive position in the extended
service contract marketplace. Consistent with our prudent approach to international
growth and focus on profitability metrics, we made the difficult decision to close
our Denmark operation. We believe this action will help improve our international
combined ratios while allowing us to focus resources in our other developing markets.
Assurant Specialty Property
Assurant Specialty Property posted yet another exceptional year, and creditor-
placed homeowners insurance continued to be the primary engine driving results.
Net earned premiums totaled $2.05 billion, an increase of 22% over 2007, as
average insured values and policy placement rates continued to rise. Net operating
income rose 7% to $405.2 million despite $111.4 million in reportable catastrophe