Assurant 2015 Annual Report Download - page 21

ASSURANT, INC. – 2015 Form 10-K 9
PART I
ITEM 1 Business
On September 9, 2015, the Company agreed to sell its
Assurant Employee Benets Segment business to Sun Life.
The transaction is expected to close by the end of the rst
quarter of 2016.
Products and Services
Assurant Employee Benets offers group disability, dental,
life, vision and supplemental products as well as individual
dental products. The group products are offered with funding
options ranging from fully employer-paid to fully employee-
paid (voluntary). In addition, we reinsure disability and life
products through our wholly owned subsidiary, Disability
Reinsurance Management Services, Inc. (“DRMS”).
We focus on the needs of the small to mid-size employer.
We believe that our group risk selection expertise, ease of
enrollment and administration, our broad product suite,
expansive dental network and strong relationships with brokers
who work primarily with small to mid-size businesses give us
a competitive advantage versus other carriers in this market.
Group Disability
Group disability insurance provides partial replacement of
lost earnings for insured employees who become disabled, as
dened by their plan provisions. Our products include both
short- and long-term disability coverage options. We also
reinsure disability policies written by other carriers through
our DRMS subsidiary�
Group Dental
Dental benet plans provide funding for necessary or elective
dental care� Customers may select a traditional indemnity
arrangement, a Preferred Provider Organization (“PPO”)
arrangement, or a prepaid or managed care arrangement�
Coverage is subject to deductibles, coinsurance and annual
or lifetime maximums. In a prepaid plan, members must use
participating dentists in order to receive benets.
Success in the group dental business is heavily dependent
on a strong provider network. Assurant Employee Benefits
owns and operates Dental Health Alliance, L.L.C. (“DHA”),
a leading dental PPO network. The Company has a larger
network with DHA, marketed as Assurant Dental Network,
which combines network agreements with partners such
as Aetna and United Concordia Dental. We believe that
our large combined network, Assurant Dental Network,
increases the attractiveness of our products in the
marketplace and the strength of the Assurant Employee
Benefits dental offering�
Group Life
Group term life insurance provided through the workplace
provides benets in the event of death. We also provide
accidental death and dismemberment insurance. Insurance
consists primarily of renewable term life insurance with the
amount of coverage provided being either a at amount, a
multiple of the employee’s earnings, or a combination of the
two. We also reinsure life policies written by other carriers
through DRMS�
Group Supplemental and Vision Products
Fully-insured vision coverage is offered through our
agreement with Vision Service Plan, Inc., a leading
national supplier of vision insurance. Our plans cover eye
exams, glasses, and contact lenses and are usually sold in
combination with one or more of our other products. In
addition to the traditional voluntary products, we provide
group critical illness, cancer, accident, and gap insurance�
These products are generally paid for by the employee
through payroll deductions, and the employee is enrolled
in the coverage(s) at the worksite.
Marketing and Distribution
Our products and services are distributed through a group
sales force located in 32 ofces near major metropolitan
areas. Our sales representatives distribute our products and
services through independent brokers and employee-benets
advisors. Daily account management is provided through local
sales ofces, further supported by a centralized home ofce
customer service department. Broker compensation in some
cases includes an annual performance incentive, based on
volume and retention of business.
DRMS provides turnkey group disability and life insurance
solutions to insurance carriers that want to supplement
their core product offerings. Our services include product
development, state insurance regulatory lings, underwriting,
claims management, and other functions typically performed by
an insurer’s back ofce. Assurant Employee Benets reinsures
the risks written by DRMS’ clients, with the clients generally
retaining shares that vary by contract.
Underwriting and Risk Management
The pricing of our products is based on the expected cost of
benets, calculated using assumptions for mortality, morbidity,
interest, expenses and persistency, and other underwriting
factors. Our block of business is diversied by industry and
geographic location, which serves to limit some of the risks
associated with changing economic conditions.
Disability claims management focuses on helping claimants
return to work through a supportive network of services that
may include physical therapy, vocational rehabilitation, and
workplace accommodation. We employ or contract with a staff
of doctors, nurses and vocational rehabilitation specialists,
and use a broad range of additional outside medical and
vocational experts to assist our claim specialists.