Assurant 2012 Annual Report Download - page 12

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ASSURANT, INC.2012 Form10-K4
PARTI
ITEM 1 Business
Competition
Assurant’s businesses focus on niche products and related services
within broader insurance markets. Although we face competition in
each of our businesses, we believe that no single competitor competes
against us in all of our business lines.  e business lines in which we
operate are generally characterized by a limited number of competitors.
Competition in each business is based on a number of factors, including
quality of service, product features, price, scope of distribution,  nancial
strength ratings and name recognition.  e relative importance of these
factors varies by product and market. We compete for customers and
distributors with insurance companies and other  nancial services
companies in our businesses.
Competitors of Assurant Solutions and Assurant Specialty Property
include insurance companies and  nancial institutions. Assurant
Health’s main competitors are other health insurance companies, Health
Maintenance Organizations (“HMOs”) and the Blue Cross/Blue Shield
plans in states where we write business. Assurant Employee Bene ts’
competitors include other bene t and life insurance companies, dental
managed care entities and not-for-pro t dental plans.
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21 to the Consolidated Financial Statements included elsewhere in this report.
Assurant Solutions
For the Years Ended
December31, 2012
December31, 2011
Net earned premiums and other considerations for selected product groupings:
Domestic extended service contracts and warranties(1) $ 1,260,578 $ 1,198,510
International extended service contracts and warranties(1) 556,207 495,853
Preneed life insurance 80,978 101,722
Domestic credit insurance 165,765 173,287
International credit insurance 425,078 391,124
Other 90,614 77,911
TOTAL $ 2,579,220 $ 2,438,407
Segment net income $ 123,753 $ 136,050
Combined ratio(2):
Domestic 98.9% 97.3%
International 104.8% 104.0%
Equity(3) $ 1,335,819 $ 1,316,957
(1) Extended service contracts include warranty contracts for products such as mobile phones, personal computers, consumer electronics, appliances, automobiles and recreational vehicles.
(2) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the preneed business.
(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
ESC and warranties.  ese contracts provide consumers with coverage
on mobile phones, personal computers, consumer electronics, appliances,
automobiles and recreational vehicles, protecting them from certain
covered losses. We pay the cost of repairing or replacing customers’
property in the event of mechanical breakdown, accidental damage,
and casualty losses such as theft,  re, and water damage. Our strategy
is to provide service to our clients that addresses all aspects of the ESC
or warranty, including program design and marketing strategy. We
provide administration, claims handling and customer service. We
believe that we maintain a di 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  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.