Assurant 2015 Annual Report Download - page 109

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ASSURANT, INC. – 2015 Form 10-K F-23
5 Investments
internal estimates� In addition to prepayment assumptions,
cash ow estimates vary based on assumptions regarding
the underlying collateral including default rates, recoveries
and changes in value� The net present value is calculated
by discounting the Company’s best estimate of projected
future cash ows at the effective interest rate implicit
in the xed maturity security prior to impairment at the
balance sheet date. The discounted cash ows become the
new amortized cost basis of the xed maturity security.
In periods subsequent to the recognition of an OTTI, the
Company generally accretes the discount (or amortizes
the reduced premium) into net investment income, up to
the non-discounted amount of projected future cash ows,
resulting from the reduction in cost basis, based upon the
amount and timing of the expected future cash ows over
the estimated period of cash ows.
The investment category and duration of the Company’s gross unrealized losses on xed maturity securities and equity
securities at December 31, 2015 and 2014 were as follows:
December 31, 2015
Less than 12 months 12 Months or More Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Fixed maturity securities:
United States Government and
government agencies and authorities $ 90,008 $ (465) $ 5,564 $ (72) $ 95,572 $ (537)
States, municipalities and political
subdivisions 6,881 (94) — — 6,881 (94)
Foreign governments 24,071 (347) 22,239 (376) 46,310 (723)
Asset-backed — — 1,136 (204) 1,136 (204)
Residential mortgage-backed 260,620 (3,179) 11,147 (230) 271,767 (3,409)
Corporate 1,636,457 (85,247) 54,029 (10,665) 1,690,486 (95,912)
TOTAL FIXED MATURITY SECURITIES $2,018,037 $(89,332) $ 94,115 $(11,547) $ 2,112,152 $(100,879)
Equity securities:
Common stock $ 623 $ (7) $ —$—$ 623 $ (7)
Non-redeemable preferred stocks 63,665 (1,632) 13,806 (985) 77,471 (2,617)
TOTAL EQUITY SECURITIES $64,288 $(1,639) $ 13,806 $(985) $ 78,094 $(2,624)
December 31, 2014
Less than 12 months 12 Months or More Total
Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Fixed maturity securities:
United States Government and
government agencies and authorities $ 34,551 $ (188) $ 21,488 $ (241) $ 56,039 $ (429)
States, municipalities and political
subdivisions 3,050 (282) 4,633 (71) 7,683 (353)
Foreign governments 19,886 (67) 37,741 (1,390) 57,627 (1,457)
Asset-backed — — 1,348 (78) 1,348 (78)
Residential mortgage-backed 22,337 (71) 61,682 (1,083) 84,019 (1,154)
Corporate 640,641 (13,132) 113,918 (3,482) 754,559 (16,614)
TOTAL FIXED MATURITY SECURITIES $720,465 $(13,740) $ 240,810 $(6,345) $ 961,275 $(20,085)
Equity securities:
Common stock $ —$—$ 196 $ (1) $ 196 $ (1)
Non-redeemable preferred stocks 8,844 (264) 24,784 (1,829) 33,628 (2,093)
TOTAL EQUITY SECURITIES $8,844 $(264) $ 24,980 $(1,830) $ 33,824 $(2,094)
Total gross unrealized losses represent approximately 5% and
2% of the aggregate fair value of the related securities at
December 31, 2015 and 2014, respectively� Approximately
88% and 63% of these gross unrealized losses have been in
a continuous loss position for less than twelve months at
December 31, 2015 and 2014, respectively� The total gross
unrealized losses are comprised of 884 and 385 individual
securities at December 31, 2015 and 2014, respectively� In
accordance with its policy described above, the Company
concluded that for these securities an adjustment to its results
of operations for other-than-temporary impairments of the
gross unrealized losses was not warranted at December 31,
2015 and 2014� These conclusions were based on a detailed
analysis of the underlying credit and expected cash ows of