Assurant 2015 Annual Report Download - page 28

ASSURANT, INC. – 2015 Form 10-K16
PART I
ITEM 1A Risk Factors
result, competition may adversely affect the persistency of
our policies, as well as our ability to sell products. In addition,
some of our competitors may price their products below ours,
putting us at a competitive disadvantage and potentially
adversely affecting our revenues and results of operations.
Additionally, for Assurant Solutions, our ability to adequately
and effectively price our products is affected by, among other
things, the evolving nature of consumer needs and preferences
and improvements in technology, which could cause us to
reduce the price of products and services we offer. For
Assurant Specialty Property, our lender-placed homeowners
insurance program and certain of our manufactured housing
products are not underwritten on an individual policy basis
and our contracts with clients require us to issue these
policies automatically when a borrower’s insurance coverage
is not maintained� Consequently, our inability to adequately
monitor and provide for pricing adequacy for these products,
subject to regulatory constraints, could potentially adversely
affect our results of operations�
New competition and technological advancements could also
cause the supply of insurance to change, which could affect
our ability to price our products at attractive rates and thereby
adversely affect our underwriting results. Although there are
some impediments facing potential competitors who wish to
enter the markets we serve, the entry of new competitors
into our markets can occur, affording our customers signicant
exibility in moving to other insurance providers.
In our lender-placed insurance business, we use a proprietary
insurance-tracking administration system linked with the
administrative systems of our clients to monitor the clients’
mortgage portfolios to verify the existence of insurance
on each mortgaged property and identify those that are
uninsured. If, in addition to our current competitors, others
in this industry develop a competing system or equivalent
administering capabilities, this could reduce the revenues
and results of operations in this business�
A number of factors outside the Company’s
control could impair the Company’s ability
to close the sale of the Assurant Employee
Benets segment and complete the wind-down
of the Assurant Health segment.
The sale of Assurant Employee Benets and wind-down of
Assurant Health involve a number of challenges, uncertainties
and risks, including the risk related to the closing of the
Assurant Employee Benets transaction and regulatory risk
related to the wind-down of Assurant Health.
Sales of our products and services may decline
if we are unable to attract and retain sales
representatives or to develop and maintain
distribution sources.
We distribute many of our insurance products and services
through a variety of distribution channels, including independent
employee benets specialists, brokers, managing general
agents, life agents, nancial institutions, mortgage lenders
and servicers, retailers, funeral homes, association groups
and other third-party marketing organizations.
Our relationships with these distributors are signicant both for
our revenues and prots. We do not distribute our insurance
products and services through captive or afliated agents. In
Assurant Employee Benets, independent agents and brokers
who act as advisors to our customers market and distribute
our products. There is intense competition between insurers
to form relationships with agents and brokers of demonstrated
ability. We compete with other insurers for relationships with
agents, brokers, and other intermediaries primarily on the basis
of our nancial position, support services, product features
and, more generally, through our ability to meet the needs of
their clients, our customers. Independent agents and brokers
are typically not exclusively dedicated to us, but instead usually
also market the products of our competitors and therefore we
face continued competition from our competitors’ products�
Moreover, our ability to market our products and services
depends on our ability to tailor our channels of distribution to
comply with changes in the regulatory environment in which
we and such agents and brokers operate.
We have our own sales representatives whose distribution
process varies by segment. We depend in large part on
our sales representatives to develop and maintain client
relationships. Our inability to attract and retain effective
sales representatives could materially adversely affect our
results of operations and nancial condition.
General economic, nancial market and
political conditions may materially adversely
affect our results of operations and nancial
condition. Particularly, difcult conditions
in nancial markets and the global economy
may negatively affect the results of all of
our business segments.
General economic, nancial market and political disruptions
could have a material adverse effect on our results of
operations and nancial condition. Limited availability of
credit, deteriorations of the global mortgage and real estate
markets, declines in consumer condence and consumer
spending, increases in prices or in the rate of ination,
continuing periods of high unemployment, or disruptive
geopolitical events could contribute to increased volatility
and diminished expectations for the economy and the
nancial markets, including the market for our stock. These
conditions could also affect all of our business segments�
Specically, during periods of economic downturn:
• individuals and businesses may (i) choose not to purchase our
insurance products, warranties and other related products
and services, (ii) terminate existing policies or contracts
or permit them to lapse, and (iii) choose to reduce the
amount of coverage they purchase;
• clients are more likely to experience nancial distress or
declare bankruptcy or liquidation which could have an
adverse impact on the remittance of premiums from such
clients as well as the collection of receivables from such
clients for items such as unearned premiums;
• disability insurance claims and claims on other specialized
insurance products tend to rise;