Assurant 2015 Annual Report Download - page 106

ASSURANT, INC. – 2015 Form 10-KF-20
5 Investments
December 31, 2014
Cost or Amortized
Cost
Gross Unrealized
Gains
Gross Unrealized
Losses Fair Value
OTTI
in AOCI(a)
Fixed maturity securities:
United States Government and government
agencies and authorities $ 172,070 $ 5,201 $ (429) $ 176,842 $ —
States, municipalities and political
subdivisions 703,167 67,027 (353) 769,841 —
Foreign governments 591,981 74,339 (1,457) 664,863 —
Asset-backed 3,917 1,680 (78) 5,519 1,570
Commercial mortgage-backed 44,907 1,109 —46,016 —
Residential mortgage-backed 911,004 58,876 (1,154) 968,726 17,732
Corporate 7,621,054 1,026,927 (16,614) 8,631,367 21,612
TOTAL FIXED MATURITY SECURITIES $10,048,100 $1,235,159 $(20,085) $ 11,263,174 $40,914
Equity securities:
Common stocks $ 22,300 $ 15,651 $ (1) $ 37,950 $ —
Non-redeemable preferred stocks 412,575 50,975 (2,093) 461,457 —
TOTAL EQUITY SECURITIES $434,875 $66,626 $(2,094) $ 499,407 $ —
(a) Represents the amount of OTTI recognized in accumulated other comprehensive income (“AOCI”). Amount includes unrealized gains and losses on
impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.
The Company’s states, municipalities and political subdivisions
holdings are highly diversied across the U.S. and Puerto
Rico, with no individual state’s exposure (including both
general obligation and revenue securities) exceeding 0.5%
of the overall investment portfolio as of December 31, 2015
and 2014� At December 31, 2015 and 2014, the securities
include general obligation and revenue bonds issued by
states, cities, counties, school districts and similar issuers,
including $319,654 and $270,107, respectively, of advance
refunded or escrowed-to-maturity bonds (collectively referred
to as “pre-refunded bonds”), which are bonds for which an
irrevocable trust has been established to fund the remaining
payments of principal and interest� As of December 31,
2015 and 2014, revenue bonds account for 50% and 51% of
the holdings, respectively� Excluding pre-refunded revenue
bonds, the activities supporting the income streams of the
Company’s revenue bonds are across a broad range of sectors,
primarily highway, water, transit, airport and marina, higher
education, specically pledged tax revenues, and other
miscellaneous sources such as bond banks, nance authorities
and appropriations�
The Company’s investments in foreign government xed
maturity securities are held mainly in countries and currencies
where the Company has policyholder liabilities, which allow
the assets and liabilities to be more appropriately matched�
At December 31, 2015, approximately 79%, 8%, and 5% of
the foreign government securities were held in the Canadian
government/provincials and the governments of Brazil and
Germany, respectively� At December 31, 2014, approximately
76%, 10% and 5% of the foreign government securities were
held in the Canadian government/provincials and the
governments of Brazil and Germany, respectively� No other
country represented more than 3% of the Company’s foreign
government securities as of December 31, 2015 and 2014�
The Company has European investment exposure in its
corporate xed maturity and equity securities of $888,923
with a net unrealized gain of $67,957 at December 31, 2015
and $1,060,655 with a net unrealized gain of $116,975 at
December 31, 2014. Approximately 25% and 22% of the
corporate European exposure is held in the nancial industry
at December 31, 2015 and 2014, respectively. The Company’s
largest European country exposure represented approximately
5% of the fair value of the Company’s corporate securities
as of December 31, 2015 and 2014. Approximately 6% of the
fair value of the corporate European securities are pound
and euro-denominated and are not hedged to U�S� dollars,
but held to support those foreign-denominated liabilities�
The Company’s international investments are managed as
part of the overall portfolio with the same approach to risk
management and focus on diversication.
The Company has exposure to the energy sector in its
corporate xed maturity securities of $779,720 with a net
unrealized loss of $6,985 at December 31, 2015 and $992,012
with a net unrealized gain of $89,590 at December 31,
2014. Approximately 89% of the energy exposure is rated as
investment grade as of December 31, 2015 and 2014�
The cost or amortized cost and fair value of xed maturity
securities at December 31, 2015 by contractual maturity are
shown below� Expected maturities may differ from contractual
maturities because issuers of the securities may have the
right to call or prepay obligations with or without call or
prepayment penalties�