Assurant 2012 Annual Report Download - page 54

ASSURANT, INC.2012 Form10-K46
PARTII
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Total Revenues
Total revenues decreased $42,228, or 2%, to $2,087,234 for Twelve
Months 2011 from $2,129,462 for Twelve Months 2010. Growth in
lender-placed homeowners and multi-family housing gross earned
premiums was more than o set by increased ceded lender-placed
homeowners’ premiums and $21,501 in increased catastrophe reinsurance
premiums.
Total Benefi ts, Losses and Expenses
Total bene ts, losses and expenses increased $144,776, or 10%, to
$1,627,049 for Twelve Months 2011 from $1,482,273 for Twelve
Months 2010.  e loss ratio increased 990 basis points with 710 basis
points attributed to $134,881 of increased reportable catastrophe losses
in Twelve Months 2011 compared to Twelve Months 2010. Reportable
loss events for Twelve Months 2011 included Hurricane Irene, Tropical
Storm Lee, wild res in Texas and severe storms, including tornados in
the southeast.  e principal causes of loss for these events were wind and
 ood. Reportable loss events for Twelve Months 2010 included Arizona
wind and hailstorms and Tennessee storms. Reportable catastrophe
losses include only individual catastrophic events that generated losses
to the Company in excess of $5,000, pre-tax and net of reinsurance.
Commissions, taxes, licenses, and fees decreased $36,869 primarily due
to client contract changes which resulted in lower commission expense.
General expenses increased $9,075 primarily due to increased employee
bene t expenses and costs associated with the June2011 SureDeposit
acquisition including associated intangible asset amortization.
Assurant Health
Overview
 e table below presents information regarding Assurant Health’s segment results of operations:
For the Years Ended December31,
2012 2011 2010
Revenues:
Net earned premiums and other considerations(4) $ 1,589,459 $ 1,718,300 $ 1,864,122
Net investment income 64,308 45,911 48,540
Fees and other income 30,518 34,635 40,133
Total revenues 1,684,285 1,798,846 1,952,795
Bene ts, losses and expenses:
Policyholder bene ts 1,174,108 1,271,060 1,302,929
Selling, underwriting and general expenses 421,070 460,646 563,759
Total bene ts, losses and expenses 1,595,178 1,731,706 1,866,688
Segment income before provision for income taxes 89,107 67,140 86,107
Provision for income taxes 37,107 26,254 31,233
SEGMENT NET INCOME $ 52,000 $ 40,886 $ 54,874
Net earned premiums and other considerations:
Individual Markets:
Individual markets $ 1,178,878 $ 1,251,447 $ 1,375,005
Small employer group markets 410,581 466,853 489,117
TOTAL $ 1,589,459 $ 1,718,300 $ 1,864,122
Insured lives by product line(5):
Individual Markets:
Individual 663 603 617
Small employer group 109 129 144
TOTAL 772 732 761
Ratios:
Loss ratio(1) 73.9% 74.0% 69.9%
Expense ratio(2) 26.0% 26.3% 29.6%
Combined ratio(3) 98.5% 98.8% 98.0%
(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.
(4) As of January1, 2011, the Company began accruing premium rebates to comply with the minimum medical loss ratio requirements under the Affordable Care Act. Rebate payments
and accruals are reflected within net earned premiums and other considerations.
(5) As of January1, 2011, insured lives consist of all policies, including supplemental coverages and self-funded group products, purchased by policyholders. Prior periods consisted only of
medical policies.