Assurant 2010 Annual Report Download - page 53

47ASSURANT, INC.  2010 Form 10K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
average invested assets and lower investment yields. In addition, net
income includes a reserve release related to annual reserve adequacy
studies of $2,102 (after-tax) in Twelve Months 2009 compared with
$3,485 (after-tax) in Twelve Months 2008.
Total Revenues
Total revenues decreased 5% to $1,213,845 for Twelve Months 2009
from $1,284,914 for Twelve Months 2008. Twelve Months 2008 net
earned premiums include $11,447 of single premiums on closed blocks
of business. Excluding single premiums on closed blocks of business,
net earned premiums decreased 4%, or $48,164, driven by decreases in
all products.  e overall decrease is due to increased lapses and fewer
covered lives due to higher unemployment, along with a diffi cult sales
environment which presents a challenge to revenue growth. Although
we added two new clients in the fourth quarter of 2009, assumed
premiums from our DRMS distribution channel decreased $7,626 or
5% for Twelve Months 2009 compared to the prior year, excluding
single premiums from closed blocks of business. An additional $4,594
of assumed premiums in the fourth quarter of 2009 is attributable to
the acquisition of a block of business from Shenandoah Life Insurance
Company. Net investment income decreased 9% or $13,662 due to
a decrease in average invested assets and lower investment yields. In
addition, Twelve Months 2008 included $1,294 in real estate joint
venture partnership income while Twelve Months 2009 includes a loss
of $237 from real estate joint venture partnerships.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses decreased 2 % to $1,149,971 for
Twelve Months 2009 from $1,176,500 for Twelve Months 2008.  e
loss ratio increased to 72.0% from 69.8%, primarily driven by less
favorable experience across all products with the exception of assumed
disability business through our Disability RMS distribution channel.
Overall, disability recovery rates were less favorable for Twelve Months
2009 compared with the prior year, although incidence remained steady.
Group life and dental experience were less favorable when compared
with the prior year. Dental experience was impacted by higher utilization
in Twelve Months 2009. Our annual reserve adequacy studies led to a
release of $3,234, for Twelve Months 2009 resulting in a reduction to
benefi ts and expenses compared with $5,362 in Twelve Months 2008.
Excluding the single premiums on closed blocks of business in the
prior year, the expense ratio increased to 36.4% from 35.2% driven
by lower net earned premiums as well as additional costs incurred
with new client additions and $3,760 of restructuring costs in Twelve
Months 2009. We continued to manage expenses and experienced a 2%
or $7,915 decrease for Twelve Months 2009 in selling, underwriting
and general expenses compared with Twelve Months 2008.
Corporate and Other
 e table below presents information regarding the Corporate and Other segment’s results of operations:
For the Years Ended December 31,
2010 2009 2008
Revenues:
Net investment income $ 17,873 $ 16,249 $ 26,198
Net realized gains (losses) on investments 48,403 (53,597) (428,679)
Amortization of deferred gains on disposal of businesses 10,406 22,461 29,412
Fees and other income 200 140,802 3,236
Total revenues 76,882 125,915 (369,833)
Benefi ts, losses and expenses:
Policyholder benefi ts (2,038) 7,408 1,114
Selling, underwriting and general expenses 101,830 93,769 92,689
Interest expense 60,646 60,669 60,953
Total benefi ts, losses and expenses 160,438 161,846 154,756
Segment loss before benefi t for income taxes (83,556) (35,931) (524,589)
Benefi t for income taxes (24,054) (11,520) (264,188)
SEGMENT NET LOSS $ 59,502 $ 24,411 $ 260,401
Year Ended December 31, 2010 Compared to the Year
Ended December 31, 2009
Net Loss
Segment net loss increased $35,091 to $(59,502) for Twelve Months
2010 compared to a net loss of $(24,411) for Twelve Months 2009.
 is increase is mainly due to the non-recurrence of an $83,542 (after-
tax) favorable legal settlement, net of attorney fees and allowances
for related recoverables with Willis Limited in Twelve Months 2009.
In addition, amortization of deferred gains on disposal of businesses
declined $7,836 (after-tax) as a portion of the deferred gain liability
was re-established during the fourth quarter of 2010 resulting from
refi nements to assumptions associated with policy run-off . Partially
off setting these items is a $66,300 (after-tax) increase in realized gains
on investments.
Total Revenues
Total revenues decreased $49,033, to $76,882 for Twelve Months
2010 compared with $125,915 for Twelve Months 2009.  is decrease
is primarily due to the above-mentioned favorable legal settlement
of $139,000 with Willis Limited in Twelve Months 2009, partially
off set by increased net realized gains on investments of $102,000.
In addition, amortization of deferred gains on disposal of businesses
declined $12,055 for reasons noted above.