Assurant 2010 Annual Report Download - page 10

4ASSURANT, INC.  2010 Form 10K
PART I
ITEM 1 Business
Segments
For additional information on our segments, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Results of Operations” and Note 23 to the Consolidated Financial Statements included elsewhere in this report.
Assurant Solutions
For the Years Ended
December 31, 2010 December 31, 2009
Gross written premiums for selected product groupings (1):
Domestic extended service contracts and warranties (2) $ 1,193,423 $ 1,012,670
International extended service contracts and warranties (2) 523,382 462,964
Preneed life insurance (face sales) 734,884 512,366
Domestic credit insurance 422,825 526,532
International credit insurance 968,878 843,225
Net earned premiums and other considerations $ 2,484,299 $ 2,671,041
Segment net income $ 103,206 $ 120,052
Equity (3) $ 1,448,684 $ 1,653,817
(1) Gross written premiums does not necessarily translate to an equal amount of subsequent net earned premium since Assurant Solutions reinsure a portion of their premiums to third
parties and to insurance subsidiaries of its clients.
(2) Extended service contracts include warranty contracts for products such as cellular phones, personal computers, consumer electronics and appliances.
(3) Equity excludes accumulated other comprehensive income.
Products and Services
Assurant Solutions targets growth in three key product areas: domestic
and international extended service contracts (“ESC”) and warranties;
preneed life insurance; and international credit insurance.
ESC and Warranties
 rough partnerships with leading retailers and original equipment
manufacturers, we underwrite and provide administrative services for
extended service contracts and warranties.  ese contracts provide
consumers with coverage on appliances, consumer electronics, personal
computers, cellular phones, automobiles and recreational vehicles,
protecting them from certain covered losses. We pay the cost of
repairing or replacing customers’ property in the event of damages
due to mechanical breakdown, accidental damage, and casualty losses
such as theft, fi re, and water damage. Our strategy is to provide service
to our clients that addresses all aspects of the warranty or extended
service contract, including program design and marketing strategy.
We provide administration, claims handling and customer service. We
believe that we maintain a diff erentiated position in this marketplace
as a provider of both the required administrative infrastructure and
insurance underwriting capabilities.
Preneed Life Insurance
Preneed life insurance allows individuals to prepay for a funeral in a
single payment or in multiple payments over a fi xed number of years.
 e insurance policy proceeds are used to address funeral costs at
death.  ese products are only sold in the U.S. and Canada and are
generally structured as whole life insurance policies in the U.S. and
annuity products in Canada.
Credit Insurance
Our credit insurance products off er protection from life events and
uncertainties that arise in purchasing and borrowing transactions. Credit
insurance programs generally off er consumers the option to protect a
credit card balance or installment loan in the event of death, involuntary
unemployment or disability, and are generally available to all consumers
without the underwriting restrictions that apply to term life insurance.
Regulatory changes have reduced the demand for credit insurance in the
United States. Consequently, we have seen a reduction in domestic gross
written premiums generated in the credit insurance market, a trend, we
expect to continue.
Marketing and Distribution
Assurant Solutions focuses on establishing strong, long-term relationships
with leading distributors of its products and services. We partner with some
of the largest consumer electronics and appliance retailers and original
equipment manufacturers to market our extended service contract
and warranty products.
Several of our distribution agreements are exclusive. Typically these
agreements have terms of one to fi ve years and allow us to integrate our
administrative systems with those of our clients.
In addition to the domestic market, we operate in Canada, the United
Kingdom (“U.K.”), Argentina, Brazil, Puerto Rico, Chile, Germany, Spain,
Italy, Mexico and China. In these markets, we primarily sell ESC and
credit insurance products through agreements with fi nancial institutions,
retailers and wireless service providers. Although there has been contraction
in the domestic credit insurance market, several international markets are
experiencing growth in the credit insurance business. Expertise gained
in the domestic credit insurance market has enabled us to extend our
administrative infrastructure internationally. Systems, training, computer
hardware and our overall market development approach are customized to
fi t the particular needs of each targeted international market.