Assurant 2014 Annual Report Download - page 4

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2 ▪ 2014 ASSURANT ANNUAL REPORT
Net operating income
(1)
was $439.0 million. Operating return on equity, excluding accumulated other
comprehensive income (AOCI)
(2)
, was 9. 7 percent. Our book value per diluted share, excluding AOCI
(3)
,
increased 9.0 percent compared to the previous year-end.
In 2014, our operating segments generated signifi cant free cash fl ow. This allowed us to invest in the business
to support organic growth and return $296 million to shareholders through share repurchases and common stock
dividends. Last year, we increased our dividend again as we have every year since becoming a public company.
We also deployed $162 million to complete four acquisitions to further strengthen our specialty capabilities.
After taking these actions, we ended the year with $560 million of holding company capital.
ADAPT
During 2014, we continued to adapt our portfolio of specialty products and services in response to the
evolving marketplace and to capitalize on macro trends. We invested in areas such as mobile, mortgage
solutions, multi-family housing and voluntary benefi ts where we believe we can leverage our skills and
deliver profi table long -term growth. In aggregate, these targeted growth areas now account for 25 percent
of total revenue. Additionally, earnings from these product lines more than tripled year over year.
There are many examples of our progress in aligning resources toward these targeted offerings.
Protect ing consumers’ increasingly connected lives from disruption was the driving force behind the launch
of Assurant Solutions’ Connected Living platform in 2014. With a comprehensive array of mobile and extended
warranty programs for smart phones, appliances, consumer electronics and other devices, we see many
opportunities to serve the rapidly expanding base of connected consumers. In 2014, Assurant Solutions
delivered exceptional results by leveraging an integrated offering and our deep expertise. To build on our
momentum, we completed the integration of Lifestyle Services Group and added the CWI Group to further
expand our global footprint and distribution capabilities.
Assurant Specialty Property also took many steps in 2014 to further diversify our sources of revenue and
profi tability long term. We added StreetLinks and eMortgage Logic, which along with Field Asset Services,
now constitute our Mortgage Solutions business and we are capturing market share. In addition, our Multi-
F amily Housing business expanded its distribution and now protects more than one million policyholders. The
Mortgage Solutions and Multi- Family Housing businesses are increasingly important as the broader U.S.
housing market improves and our lender-placed insurance business continues to normalize.
2014 also marked substantial change for the health insurance market with the introduction of guaranteed
issue and the public exchanges under the Affordable Care Act. Our colleagues at Assurant Health demonstrated
agility in adapting to an evolving landscape. For the fi rst time, we offered consumers individual medical
coverage through our participation on public exchanges in 16 states for 2015-effective policies. Sales were
strong, yet net operating income was disappointing. We have accelerated actions to improve performance
and achieve the specialty returns we require and our shareholders expect.