Assurant 2013 Annual Report Download - page 4

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2 < 2013 ASSURANT ANNUAL REPORT
Our legacy of adapting to meet emerging opportunities
inspires us to encourage innovation and try fresh
approaches in the global marketplace. By doing so,
we are able to support consumers and clients
affected by signifi cant changes in the housing,
fi nancial services and health insurance sectors. In
2013, for example, the fi rst open enrollment period
of the Affordable Care Act had a dramatic impact for
consumers as well as on the healthcare industry.
Similarly, as the U.S. housing market continued to
rebound, new guidelines and processes reshaped
many aspects of the mortgage servicing industry.
The agility of our business model to adapt to change
is an enduring strength of Assurant.
2013 RESULTS FROM OPERATIONS
Assurant Solutions
Throughout 2013, Assurant Solutions focused on improving effi ciency while meeting the evolving needs
of consumers. Net operating income was up slightly from the previous year. Resources were shifted from
non-growth areas to support growth opportunities in mobile, as well as expand our footprint in Latin America.
The acquisition of Lifestyle Services Group in 2013 is
expected to transform Assurant Solutions’ European
business to a mobile platform we can build upon.
A strategic investment in Iké Asistencia launched a
partnership to cross-sell complementary products and
assistance services in several Latin American countries
and will expand revenue streams in the future.
Net earned premiums, fees and other income
improved year-over-year, primarily driven by
increases in service and vehicle contracts business in
the U.S. as well as Latin America. Fee income
increased 27.5 percent, largely due to mobile
programs launched in 2013. At year-end 2013,
Assurant Solutions’ global protection programs
supported more than 15 million mobile devices.
New and expanded relationships launched last year
– including a partnership with T-Mobile – will generate
higher revenue going forward as we administer
protection programs to help customers.
Expense management actions already taken, along
with ongoing plans, are expected to produce up to
$25 million in annual pre-tax savings by year-end
2014. Combined with growth, especially in mobile
and Latin America, we expect Assurant Solutions’
earnings to improve during the second half of 2014
and longer term.
Assurant Specialty Property
In 2013, net operating income increased at Assurant Specialty Property, largely refl ecting the absence
of hurricane activity during the year. Lender-placed insurance net earned premiums benefi ted from an
increase in loans serviced by our clients.
During the year, we continued the rollout of a new
lender-placed insurance product that is now available
in 44 states. The product helps our clients adapt to
the changing market and provides the fl exibility to
support new industry regulations enacted last year.
As the mortgage industry continues to evolve, we
believe lender-placed insurance will remain a strong
specialty business. We expect premiums and returns
to decline, however, as the housing market continues
to stabilize.