Assurant 2015 Annual Report Download - page 20

ASSURANT, INC. – 2015 Form 10-K8
PART I
ITEM 1 Business
Products and Services
After a comprehensive review of strategic alternatives, the
Company decided to exit the health insurance market as
it focuses on its housing and lifestyle protection offerings�
Assurant began to wind down its major medical operations in
June 2015, and the Company expects to substantially complete
its exit of the health insurance market by the end of 2016.
Until we put Assurant Health in run-off in 2015, it competed in
the individual and small-group medical insurance markets by
offering major medical insurance, short-term medical insurance,
and supplemental coverage options to individuals and families.
Our products were offered with different plan options to meet
a broad range of customer needs, levels of affordability and to
meet the requirements of the Patient Protection and Affordable
Care Act and the Health Care and Education Reconciliation Act
of 2010, and the rules and regulations thereunder (together, the
“Affordable Care Act”)� Assurant Health also offered medical
insurance to small employer groups�
Individual Medical
Assurant Health provided medical insurance products to
individuals, primarily between the ages of 18 and 64, and
their families, who did not have employer-sponsored coverage.
We offered a wide variety of benet plans at different price
points, which allow customers to tailor their coverage to
t their unique needs. These plans include those with the
essential health benets required under the Affordable Care
Act, as well as supplemental products.
Small Employer Group Medical
Assurant Health provided group medical insurance to small
companies with two to fty employees, although larger
employer coverage is available. We offered fully insured
products with the essential health benets required by the
Affordable Care Act, as well as self-funded employer options
and individual products sold through the workplace.
On October 1, 2015, we sold our supplemental and small-
group self funded lines of business and certain assets to
National General Holdings Corp. (“National General”) for
cash consideration of $14,000�
In March 2012, we entered into a new provider network
arrangement with Aetna Signature Administrators
®
(“Aetna”)�
This multi-year agreement provides our major medical
customers with access to more than one million health care
providers and 7,500 hospitals nationwide.
Marketing and Distribution
Until we put Assurant Health in run-off in 2015, our health
insurance products were principally marketed through a
network of independent agents. We also marketed through
a variety of exclusive and non-exclusive national account
relationships and direct distribution channels�
Underwriting and Risk Management
Following the passage of the Affordable Care Act, many of the
traditional risk management techniques used to manage the
risks of providing health insurance have become less relevant.
Assurant Health took steps to adjust its products, pricing and
business practices to comply with the new requirements.
Following the announcement of the Company’s decision
to exit the health insurance market, sales of new health
insurance policies have ended.
Please see “Management’s Discussion and Analysis — Assurant
Health” and “Risk Factors — Risks Related to our Industry
— Reform of the health insurance industry could materially
reduce the protability of certain of our businesses or render
them unprotable” for further details.
Assurant Employee Benets
For the Years Ended
December 31, 2015
December 31, 2014
Net Earned Premiums:
Group disability $398,172 $ 409,028
Group dental 396,925 392,502
Group life 204,526 200,285
Group supplemental and vision products 67,131 49,910
TOTAL $ 1,066,754 $ 1,051,725
Voluntary $ 478,588 $ 441,479
Employer-paid and other 588,166 610,246
TOTAL $ 1,066,754 $ 1,051,725
Fees and other income $ 25,006 $ 24,204
Segment net income $ 47,322 $ 48,681
Loss ratio(1) 68.4% 68.2%
Expense ratio(2) 36.5% 37.1%
Equity(3) $ 532,332 $ 540,964
(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.
(3) Equity excludes accumulated other comprehensive income.