Assurant 2012 Annual Report Download - page 52

ASSURANT, INC.2012 Form10-K44
PARTII
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
growth from new and existing clients, particularly in Latin America,
and the favorable impact of foreign exchange rates. Partially o setting
these increases was a $23,261 decrease in our domestic credit insurance
business, due to the continued run-o of this product line.
Preneed face sales increased $24,808, to $759,692 for Twelve Months
2011 from $734,884 for Twelve Months 2010.  is increase was
primarily attributable to domestic growth from our exclusive distribution
partnership with SCI, the largest funeral provider in North America.
 is exclusive distribution partnership is e ective through September29,
2014. Twelve Months 2011 face sales also bene ted from recent
acquisitions made by SCI.  is was partially o set by reduced sales
in Canada compared to 2010, when consumer buying increased in
advance of a consumer tax rate change that took e ect July1, 2010
in certain provinces.
Total Benefi ts, Losses and Expenses
Total bene ts, losses and expenses decreased $58,716, or 2%, to
$2,884,934 for Twelve Months 2011 from $2,943,650 for Twelve
Months 2010. Policyholder bene ts decreased $37,151 primarily due to
improved loss experience across our international and domestic service
contract businesses and a decrease associated with certain domestic
lines of business that are in run-o . Partially o setting these items
was a $7,500 increase to policyholder bene ts for unreported claims
related to the use of the U.S. Social Security Administration Death
Master File to identify deceased policyholders and bene ciaries in our
preneed business during fourth quarter 2011.
Selling, underwriting and general expenses decreased $21,565.
Commissions, taxes, licenses and fees, of which amortization of
DAC is a component, increased $3,789 due to higher earnings in
our international business resulting from growth of the business
coupled with the unfavorable impact of foreign exchange rates.  is
was partially o set by lower earnings in our domestic service contract
business. General expenses decreased $25,354 primarily due to the
above mentioned $47,612 intangible asset impairment charge and
from expense management e orts in domestic lines of business that
are in run-o .  ese decreases were partially o set by higher expenses
associated with the growth of our international and domestic service
contract businesses.
Assurant Specialty Property
Overview
 e table below presents information regarding Assurant Specialty Property’s segment results of operations:
For the Years Ended December31,
2012 2011 2010
Revenues:
Net earned premiums and other considerations $ 2,054,041 $ 1,904,638 $ 1,953,223
Net investment income 103,327 103,259 107,092
Fees and other income 98,621 79,337 69,147
Total revenues 2,255,989 2,087,234 2,129,462
Bene ts, losses and expenses:
Policyholder bene ts 949,157 857,223 684,653
Selling, underwriting and general expenses 844,288 769,826 797,620
Total bene ts, losses and expenses 1,793,445 1,627,049 1,482,273
Segment income before provision for income taxes 462,544 460,185 647,189
Provision for income taxes 157,593 156,462 222,658
SEGMENT NET INCOME $ 304,951 $ 303,723 $ 424,531
Net earned premiums and other considerations by major product groupings:
Homeowners (lender-placed and voluntary) $ 1,418,061 $ 1,274,485 $ 1,342,791
Manufactured housing (lender-placed and voluntary) 207,675 216,613 220,309
Other(1) 428,305 413,540 390,123
TOTAL $ 2,054,041 $ 1,904,638 $ 1,953,223
Ratios:
Loss ratio(2) 46.2% 45.0% 35.1%
Expense ratio(3) 39.2% 38.8% 39.4%
Combined ratio(4) 83.3% 82.0% 73.3%
(1) This primarily includes multi-family housing, lender-placed flood, and miscellaneous insurance products.
(2) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.
(3) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.
(4) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.