Assurant 2010 Annual Report Download - page 50

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44 ASSURANT, INC.2010 Form 10K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
losses from California wildfi res. ere were no reportable catastrophe
losses in Twelve Months 2009, however, net earned premiums decreased
$65,461 (after-tax) compared with Twelve Months 2008 primarily
related to reduced real estate owned insurance business and higher
reinsurance costs.
Total Revenues
Total revenues decreased $106,525, or 5%, to $2,114,756 for Twelve
Months 2009 from $2,221,281 for Twelve Months 2008.  e decrease
in revenues is primarily due to decreased net earned premiums of
$100,709, or 5%.  e decrease is primarily attributable to lower
lender-placed homeowners insurance net earned premiums due to
decreased premiums from real estate owned property, several lost clients
due to the fi nancial industry consolidation and a $29,434 increase in
catastrophe reinsurance costs. Increased placement rates in our non-
real estate owned lender-placed business and increased average insured
values partially off set these negative eff ects.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses decreased $106,541 or 7%, to
$1,496,710 for Twelve Months 2009 from $1,603,251 for Twelve
Months 2008.  e decrease was due to lower policyholder benefi ts of
$121,221 partially off set by higher selling, underwriting, and general
expenses of $14,680.  e decrease in policyholder benefi ts was due
to a decrease in reportable catastrophe losses of $132,600, net of
reinsurance, related to Hurricanes Ike and Gustav and $7,770 related
to California wildfi re losses in Twelve Months 2008.  ere were no
reportable catastrophe losses in Twelve Months 2009. Commissions,
taxes, licenses and fees decreased $32,022, primarily due to the decline
in net earned premiums. General expenses increased $46,702 primarily
due to additional services provided to our clients, such as loss drafts,
along with investment in technology and infrastructure initiatives. In
addition, Twelve Months 2009 included $3,800 in severance costs
related to a reduction in force, including the closure of our California
operations center. Twelve Months 2009 combined ratio was 74.7%
compared with 76.4% for Twelve Months 2008.
Assurant Health
Overview
e table below presents information regarding Assurant Health’s segment results of operations:
For the Years Ended December 31,
2010 2009 2008
Revenues:
Net earned premiums and other considerations $ 1,864,122 $ 1,879,628 $ 1,951,955
Net investment income 48,540 47,658 57,464
Fees and other income 40,133 39,879 38,917
Total revenues 1,952,795 1,967,165 2,048,336
Benefi ts, losses and expenses:
Policyholder benefi ts 1,302,928 1,410,171 1,258,188
Selling, underwriting and general expenses 565,060 604,698 604,605
Total benefi ts, losses and expenses 1,867,988 2,014,869 1,862,793
Segment income (loss) before provision for income tax 84,807 (47,704 ) 185,543
Provision (benefi t) for income taxes 30,778 (17,484 ) 65,289
SEGMENT NET INCOME LOSS $ 54,029 $ 30,220 $ 120,254
Net earned premiums and other considerations:
Individual Markets:
Individual medical $ 1,289,181 $ 1,270,198 $ 1,276,743
Short-term medical 85,824 104,238 101,435
Subtotal 1,375,005 1,374,436 1,378,178
Small employer group:
489,117 505,192 573,777
TOTAL $ 1,864,122 $ 1,879,628 $ 1,951,955
Membership by product line:
Individual Markets:
Individual medical 557 568 578
Short-term medical 60 78 92
Subtotal 617 646 670
Small employer group: 144 121 131
TOTAL 761 767 801
Ratios:
Loss ratio (1) 69.9 % 75.0 % 64.5 %
Expense ratio (2) 29.7 % 31.5 % 30.4 %
Combined ratio (3) 98.1 % 105.0 % 93.6 %
(1) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(2) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(3) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.