Assurant 2013 Annual Report Download - page 65

ASSURANT, INC. – 2013 Form 10-K 53
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Assurant Employee Benefi ts
Overview
The table below presents information regarding Assurant Employee Benefi ts’ segment results of operations:
For the Years Ended December 31,
2013
2012 2011
Revenues:
Net earned premiums $ 1,014,587 $ 1,014,264 $ 1,064,023
Net investment income 117,853 128,485 129,640
Fees and other income 23,434 28,468 25,382
Total revenues 1,155,874 1,171,217 1,219,045
Benefi ts, losses and expenses:
Policyholder benefi ts 715,656 693,067 767,723
Selling, underwriting and general expenses 388,159 390,042 386,072
Total benefi ts, losses and expenses 1,103,815 1,083,109 1,153,795
Segment income before provision for income taxes 52,059 88,108 65,250
Provision for income taxes 17,506 30,049 22,175
SEGMENT NET INCOME $ 34,553 $ 58,059 $ 43,075
Net earned premiums:
Group dental $ 383,223 $ 394,413 $ 412,339
Group disability 403,286 409,757 449,293
Group life 192,392 188,246 193,914
Group supplemental and vision products 35,686 21,848 8,477
TOTAL $ 1,014,587 $ 1,014,264 $ 1,064,023
Voluntary $ 393,969 $ 368,576 $ 348,666
Employer-paid and other 620,618 645,688 715,357
TOTAL $ 1,014,587 $ 1,014,264 $ 1,064,023
Ratios:
Loss ratio(1) 70.5% 68.3% 72.2%
Expense ratio(2) 37.4% 37.4% 35.4%
(1) The loss ratio is equal to policyholder benefits divided by net earned premiums.
(2) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and fees and other income.
Year Ended December 31, 2013 Compared
to the Year Ended December 31, 2012
Net Income
Segment net income decreased 40% to $34,553 for Twelve
Months 2013 from $58,059 for Twelve Months 2012. The
decrease was primarily attributable to less favorable disability
loss experience, including a previously disclosed decrease
in the reserve discount rate primarily for new long-term
disability claims. Additionally, Twelve Months 2013 results
were also impacted by lower investment income compared
to Twelve Months 2012.
Total Revenues
Total revenues decreased 1% to $1,155,874 for Twelve Months
2013 from $1,171,217 for Twelve Months 2012. Twelve Months
2013 net earned premiums increased slightly as growth in our
voluntary products was offset by declines in employer-paid
products. Net investment income decreased 8% or $10,632
driven by lower average invested assets, a decrease in the
average investment yield and lower real estate joint venture
income in Twelve Months Ended 2013 compared to Twelve
Months Ended 2012.
Total Benefi ts, Losses and Expenses
Total benefi ts, losses and expenses increased 2% to $1,103,815
for Twelve Months 2013 from $1,083,109 for Twelve Months
2012. The loss ratio increased to 70.5% from 68.3% primarily
driven by unfavorable disability and life loss experience. The
expense ratio remained fl at at 37.4%.
Year Ended December 31, 2012 Compared
to the Year Ended December 31, 2011
Net Income
Segment net income increased $14,984, or 35%, to $58,059
for Twelve Months 2012 from $43,075 for Twelve Months
2011. Results for Twelve Months 2012 were driven primarily
by favorable loss experience across most major product lines.