Assurant 2015 Annual Report Download - page 58

46 ASSURANT, INC. – 2015 Form 10-K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Year Ended December 31, 2015 Compared
to the Year Ended December 31, 2014
Net Income
Segment net income decreased $21,765, or 10%, to $197,183
for Twelve Months 2015 from $218,948 for Twelve Months 2014�
The decrease was primarily due to the previously disclosed
loss of a domestic mobile tablet program and declining
service contract volumes from North American retail clients�
Total Revenues
Total revenues were relatively at at $4,178,140 for Twelve
Months 2015 compared with $4,179,360 for Twelve Months
2014� Net earned premiums decreased $113,022 primarily
due to foreign exchange volatility, the loss of a domestic
mobile tablet program, lower service contract volumes from
North American retail clients and the continued run-off of
our credit insurance business� These items were partially
offset by growth from our auto warranty business and from
a large domestic service contract client� Fees and other
income increased $117,759 primarily driven by contributions
from global mobile programs and related services� A few
signicant clients continued to account for a substantial
portion of segment revenues�
Gross written premiums increased $473,445, or 9%, to
$5,759,867 for Twelve Months 2015 from $5,286,422 for
Twelve Months 2014� Gross written premiums from our
domestic service contract business increased $798,200,
primarily driven by growth in the number of covered mobile
devices and increased activity from existing clients in our
auto warranty and extended service contract business� This
increase was partially offset by the continued runoff of our
credit insurance business and foreign exchange volatility�
Preneed face sales decreased $33,350, or 3%, to $936,434 for
Twelve Months 2015 from $969,784 for Twelve Months 2014�
This decrease was mostly attributable to a change in product
offerings, a client’s temporary operational change, and foreign
exchange volatility� On June 25, 2014, we extended our
exclusive distribution partnership with Services Corporation
International (“SCI”), for an additional 10 years, through
September 29, 2024�
Total Benets, Losses and Expenses
Total benets, losses and expenses increased $44,139, or
1%, to $3,901,666 for Twelve Months 2015 from $3,857,527
for Twelve Months 2014. Policyholder benets decreased
$108,066 driven by favorable loss experience in our domestic
service contract business and from our mobile business in
Europe� Selling, underwriting and general expenses increased
$152,205� Commissions, taxes, licenses and fees, of which
amortization of DAC is a component, decreased $12,666 due
to the loss of a domestic mobile tablet program� General
expenses increased $164,871 primarily due to growth in our
domestic mobile business and the 2014 CWI acquisition�
Year Ended December 31, 2014 Compared
to the Year Ended December 31, 2013
Net Income
Segment net income increased $93,796, or 75%, to $218,948
for Twelve Months 2014 from $125,152 for Twelve Months
2013� The increase was primarily driven by improved results
in our domestic mobile business, reecting growth in mobile
subscribers, contributions from ongoing client marketing
programs, continued favorable loss experience and expense
savings in our domestic credit and domestic service contract
businesses�
Total Revenues
Total revenues increased $618,987, or 17%, to $4,179,360
for Twelve Months 2014 from $3,560,373 for Twelve Months
2013� The increase was primarily driven by higher net earned
premiums in our domestic and international service contract
businesses� The increase in domestic service contract business
reects continued growth in mobile subscribers, growth at a
large client due to increased subscribers and price increases
as well as higher contributions from vehicle service contracts
due to increased sales from new and existing dealers� The
increase in international service contracts is due to growth
in mobile subscribers� Fees and other income increased
$267,482 primarily driven by mobile client marketing programs
and from the Lifestyle Service Group (“LSG”) acquisition in
October 2013�
Gross written premiums increased $910,407, or 21%, to
$5,286,422 for Twelve Months 2014 from $4,376,015 for Twelve
Months 2013� Gross written premiums from our domestic
service contract business increased $1,022,366 primarily driven
by growth in mobile subscribers� Gross written premiums
from our international service contract business increased
$45,653 primarily due to growth in the number of global
mobile subscribers, the LSG acquisition and new and existing
clients in Latin America� This increase was partially offset
by the unfavorable impact of changes in foreign exchange
rates, primarily in Latin America and Canada�
Preneed face sales decreased $38,131 or 4%, to $969,784
for Twelve Months 2014 from $1,007,915 for Twelve Months
2013� This decrease was mostly attributable to a change in
product offerings and a client’s temporary operational change�
Total Benets, Losses and Expenses
Total benets, losses and expenses increased $487,764, or
14%, to $3,857,527 for Twelve Months 2014 from $3,369,763
for Twelve Months 2013. Policyholder benets increased
$131,965 primarily related to the LSG acquisition partially
offset by favorable loss experience in our domestic mobile
business� Selling, underwriting and general expenses increased
$355,799� Commissions, taxes, licenses and fees, of which
amortization of DAC is a component, increased $82,828
due to higher net earned premiums in our domestic service