Assurant 2015 Annual Report Download - page 60

48 ASSURANT, INC. – 2015 Form 10-K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Total Revenues
Total revenues decreased $365,948, or 13%, to $2,543,105
for Twelve Months 2015 from $2,909,053 for Twelve Months
2014� The decrease was primarily due to the divestiture
of ARIC, combined with lower lender-placed homeowners
insurance net earned premiums� The decline in lender-placed
homeowners insurance net earned premiums is primarily
due to a decline in placement rates, lower premium rates
and previously disclosed loss of client business� These items
were partially offset by an increase in fees and other income
reecting contributions from mortgage solutions businesses. A
few signicant clients continued to account for a substantial
portion of segment revenues�
Total Benets, Losses and Expenses
Total benets, losses and expenses decreased $311,139 or 13%,
to $2,079,486 for Twelve Months 2015 from $2,390,625 for
Twelve Months 2014� The loss ratio decreased 470 basis points
due to fewer non-catastrophe losses primarily attributable
to lower frequency and severity of theft and re claims and
the impact of the ARIC divestiture, partially offset by lower
premium rates from the implementation of a new lender-
placed insurance product� Reportable catastrophe losses for
Twelve Months 2015 were $29,652 compared to $28,410 for
Twelve Months 2014� Reportable catastrophe losses include
only individual catastrophic events that generated losses
to the Company in excess of $5,000, pre-tax and net of
reinsurance� The expense ratio increased 620 basis points
for Twelve Months 2015 compared with Twelve Months 2014
mainly due to lower lender-placed homeowners insurance
net earned premiums and a higher mix of fee-based business�
Year Ended December 31, 2014 Compared
to the Year Ended December 31, 2013
Net Income
Segment net income decreased $81,829, or 19%, to $341,757
for Twelve Months 2014 from $423,586 for Twelve Months
2013� The decrease is primarily due to lower placement
and premium rates and higher non-catastrophe losses in
our lender-placed insurance business� Twelve Months 2013
results included a $14,000 (non-tax deductible) regulatory
settlement with the NYDFS�
Total Revenues
Total revenues increased $296,939, or 11%, to $2,909,053
for Twelve Months 2014 from $2,612,114 for Twelve Months
2013� The increase was primarily due to growth in lender-
placed homeowners insurance net earned premiums, as
well as fee income from the acquisitions of Field Asset
Services (“FAS”) and StreetLinks� Growth in lender-placed
homeowners insurance was primarily due to the previously
disclosed discontinuation of a client quota share reinsurance
agreement and loan portfolios added in 2013 and was partially
offset by the impact of lower placement and premium rates�
Total Benets, Losses and Expenses
Total benets, losses and expenses increased $431,943 or
22%, to $2,390,625 for Twelve Months 2014 from $1,958,682
for Twelve Months 2013� The loss ratio increased to 43�3% for
Twelve Months 2014 from 37�4% for Twelve Months 2013 due
to higher non-catastrophe losses from severe weather, high
severity re claims and lower premium rates from the new
lender-placed homeowners insurance product� Reportable
catastrophe losses for Twelve Months 2014 were $28,410
compared to reportable catastrophe losses for Twelve Months
2013 of $29,503� Reportable catastrophe losses include only
individual catastrophic events that generated losses to the
Company in excess of $5,000, pre-tax and net of reinsurance�
The expense ratio increased to 46�5% for Twelve Months 2014
from 42�5% for Twelve Months 2013 primarily due to growth in
fee-based businesses� Twelve Months 2013 included a $14,000
(non-tax deductible) regulatory settlement with the NYDFS�
Assurant Health
As previously announced, the Company concluded a
comprehensive review of its portfolio and decided to sharpen
its focus on specialty housing and lifestyle protection products
and services� As a result, the Company will exit the health
insurance market� For more information, see Notes 3 and 4 of
the Notes to the Consolidated Financial Statements included
elsewhere in this report� The Company expects to substantially
complete its exit of the health insurance market by the end
of 2016�