2Q 2015 Net Operating Income of $143.6
million, $2.07 per diluted share
2Q 2015 Net Income of $32.8 million, $0.47
per diluted share
- 13.3 percent annualized operating ROE,
excluding AOCI, year-to-date1
- 3.3 percent annualized GAAP ROE
year-to-date
- $124 million returned to shareholders
in dividends and share repurchases in 2Q 2015
- $460 million corporate capital at
quarter-end
Assurant, Inc. (NYSE:AIZ), a premier provider of specialty
protection products and related services, today reported results
for second quarter ended June 30, 2015.
“In the quarter, we continued to successfully execute on our
strategic realignment and leverage our specialty capabilities to
serve the housing and lifestyle markets," said Alan B. Colberg,
Assurant president and CEO. “The wind down of our health insurance
operations is underway and market interest in our employee benefits
segment reaffirms our belief about its value as a business.”
“We remain focused on meeting the needs of our customers,
creating value for our shareholders and building a stronger company
with the expertise and commitment of our employees,” Colberg
added.
Reconciliation of Net Operating Income to Net Income
Beginning in second quarter 2015, Assurant is revising its
presentation of results to reflect the Company’s previously
announced strategic realignment to focus on specialty housing and
lifestyle protection products and services. As the Company winds
down its health insurance business, Assurant Health results have
been removed from net operating income and now are reflected in net
income as runoff operations. The Company continues to report
Assurant Employee Benefits under operating results as the sales
process for the business is ongoing. Prior period amounts have been
revised to conform to the new presentation.
(UNAUDITED) 2Q
2Q 6 Months 6
Months (dollars in millions, net of tax)
2015 2014 2015
2014 Housing and Lifestyle Assurant
Solutions $ 60.8
$ 59.5 $ 115.2
$ 109.0 Assurant Specialty Property 87.5 68.3
162.6 166.1
Subtotal
148.3 127.8 277.8
275.1 Assurant Employee Benefits 11.3 14.4 21.4 28.3
Corporate and other (9.1 ) (14.2 ) (13.2 ) (35.2 ) Amortization of
deferred gain on disposal of businesses 2.1 2.4 4.2 4.7 Interest
expense (9.0 ) (9.0 ) (17.9 ) (20.0 )
Net operating income 143.6 121.4
272.3 252.9
Adjustments:
Assurant Health runoff operations (a) (123.8 ) (2.5 ) (207.7
) (9.6 ) Net realized gains on investments 7.8 3.9 10.4 16.8 Gain
(loss) on divested business (2.7 ) - 0.7 - Change in tax
liabilities - 20.8 - 20.8 Payment received related to previous sale
of subsidiary 9.9 - 9.9 - Change in derivative investment
(2.0 ) - (2.8 ) -
Net
income $ 32.8 $ 143.6 $ 82.8 $ 280.9
(a) Assurant Health runoff operations reflect results for the
total segment, including major medical operations and portions of
the business that Assurant is negotiating to sell to National
General Holdings Corp., subject to final documentation and
regulatory approval. The amount recorded in the quarter reflects
exit-related charges of $106.7 million after-tax, including $79.6
million after-tax of premium deficiency reserves.
Note: Additional financial information, including a schedule of
disclosed items that affected Assurant’s results by business for
the last five quarters appears on page 21 of the Company’s
Financial Supplement, and is located in the Investor Relations
section of www.assurant.com.
Second Quarter 2015 Results
- Net operating income2 increased
to $143.6 million, or $2.07 per diluted share, compared to second
quarter 2014 net operating income of $121.4 million, or $1.65 per
diluted share, primarily reflecting fewer weather-related claims at
Assurant Specialty Property. Results include an $8.4 million net
tax benefit at Assurant Solutions and lower corporate
expenses.
- Net income decreased to $32.8
million, or $0.47 per diluted share, compared to second quarter
2014 net income of $143.6 million, or $1.95 per diluted share. The
decrease primarily reflects $106.7 million of charges associated
with the wind down of the Assurant Health business including
premium deficiency reserves.
- Net earned premiums, fees and other
income, excluding Assurant Health runoff operations, decreased
to $1.86 billion, compared to $1.92 billion in second quarter 2014.
Results reflect the Jan. 1, 2015 divestiture of American Reliable
Insurance Company (ARIC), the ongoing normalization of
lender-placed insurance and the previously disclosed loss of a
domestic tablet program.
- Net investment income, excluding
Assurant Health runoff operations, increased to $160.8 million,
compared to $157.1 million in second quarter 2014. Results
benefited from $8.1 million in additional investment income from
real estate joint venture partnerships.
Housing & Lifestyle
Assurant Solutions
(in millions)
2Q15 2Q14
% Change
6M15 6M14 %
Change Net operating income $ 60.8 $ 59.5 2% $ 115.2
$
109.0 6%
Net earned premiums, fees and
other
$ 931.2 $ 933.4
(0)% $ 1,858.7
$
1,827.4 2%
- Net operating income increased
in second quarter 2015, due to an $8.4 million net tax benefit
primarily from international operations. Absent this item, net
operating income declined primarily due to the previously disclosed
loss of a domestic tablet program and lower contributions from
mobile carrier-marketing programs. Improved mortality experience at
preneed partially offset the decline.
- Net earned premiums, fees and other
income were flat in the quarter. Premiums decreased in the
quarter due to foreign exchange volatility and the loss of a mobile
tablet program. Growth from a large domestic service contract
client and auto warranty business partially offset the decline. Fee
income increased, primarily reflecting contributions from mobile
protection programs and related services.
- Domestic combined ratio
increased to 93.9 percent, compared to 91.4 percent in the prior
year, reflecting lower contributions from mobile.
- International combined ratio
increased to 103.0 percent, compared to 102.1 percent in second
quarter 2014, primarily reflecting additional legal expenses.
Assurant Specialty Property
(in millions)
2Q15
2Q14 % Change
6M15 6M14
% Change Net operating income $
87.5 $ 68.3 28 % $ 162.6 $ 166.1 (2)%
Net earned premiums, fees
and other $ 638.2 $ 714.3
(11)% $ 1,250.8
$ 1,378.5 (9)%
Note: In second quarter 2014, American Reliable Insurance
Company (ARIC) accounted for net earned premiums, fees and other
income and net operating income of $62.5 million and $1.0 million,
respectively. For the six months 2014, ARIC accounted for net
earned premiums, fees and other income and net operating income of
$124.6 million and $4.1 million, respectively. This divested
business has not contributed to 2015 results.
- Net operating income increased
in second quarter 2015 driven by lower non-catastrophe losses,
fewer reportable catastrophes as well as reduced reinsurance costs.
Ongoing normalization of lender-placed insurance partially offset
the improvement. Second quarter 2014 results included adverse
reserve development from severe winter weather.
- Net earned premiums, fees and other
income decreased in second quarter 2015, primarily due to the
divestiture of ARIC and lower placement and premium rates in
lender-placed insurance. Fee income grew, reflecting contributions
from mortgage solutions.
- Combined ratio decreased in the
quarter to 83.6 percent, compared to 89.1 percent in second quarter
2014. Results benefited primarily from lower frequency and severity
of non-catastrophe claims and fewer reportable catastrophes,
partially offset by lower lender-placed net earned premiums.
Employee Benefits
As announced on April 28, 2015, Assurant is pursuing a sale of
Assurant Employee Benefits.
Assurant Employee Benefits
(in millions)
2Q15
2Q14 % Change
6M15 6M14
% Change Net operating income $
11.3 $ 14.4 (22)% $ 21.4 $ 28.3 (24)%
Net earned premiums, fees
and other $ 275.6 $
268.8 3% $ 548.8
$ 536.5 2%
- Net operating income decreased
in the quarter, primarily due to less favorable life and disability
loss experience.
- Net earned premiums, fees and other
income increased in second quarter 2015 due to continued growth
in voluntary products.
- Sales increased slightly in the
quarter. The increase reflects higher voluntary product sales,
partially offset by a decline in employer-paid products.
Corporate & Other
(in millions)
2Q15
2Q14 % Change
6M15 6M14
% Change Net operating loss
$ (9.1) $ (14.2)
35% $ (13.2)
$ (35.2) 62%
- Net operating loss decreased in
second quarter 2015, reflecting a favorable change in tax
liabilities and lower employee-related benefit costs. This tax
benefit is expected to reverse in the second half of the year.
Runoff Operations
After exploring potential strategic options for Assurant Health,
the Company announced on June 10, 2015 that it was beginning the
process to exit the business to maximize shareholder value. The
Company also announced an agreement in principle to sell Assurant
Health's supplemental and small group self-funded product lines and
certain other assets to National General Holdings Corp. At this
time, Assurant continues to include results for supplemental and
small group self-funded product lines in its results.
Assurant Health
(in millions)
2Q15 2Q14 % Change
6M15 6M14 % Change Net loss $
(123.8) $ (2.5) NM
$ (207.7) $
(9.6) NM
- Net loss increased in second
quarter 2015, compared to the prior year, due to $106.7 million
after-tax of exit-related charges including premium deficiency
reserves as well as less favorable loss experience on Affordable
Care Act (ACA) qualified policies.The Company expects future
premiums and current policyholder reserves for major medical
policies to be inadequate to cover future claim payments and direct
expenses during the wind down. In the quarter, the Company recorded
a premium deficiency reserve charge of $79.6 million after-tax for
the period July 1, 2015 through the wind-down process.Other
exit-related charges totaled $27.1 million after-tax in the quarter
and include severance and retention, asset impairments and other
related transaction costs.
- ACA risk-mitigation estimated
recoverables for 2014 qualified policies were revised in the
quarter to $355.5 million from $346.3 million, based on final
notification from the Centers for Medicare and Medicaid Services.As
of June 30, 2015, recoverables under 2015 ACA Risk Adjustment and
Reinsurance for ACA-qualified policies were estimated at $237.0
million.
Capital Position
- Corporate capital approximated
$460 million as of June 30, 2015. Adjusting for the Company’s $250
million risk buffer, deployable capital totaled approximately $210
million. Business segments, excluding Assurant Health, paid
approximately $155 million of dividends to the holding company in
the quarter. In addition, approximately $225 million was infused
into the Company’s business segments, including $215 million into
Assurant Health to fund estimated exit-related charges, including
premium deficiency reserves, through the wind-down process.
- Share repurchases and dividends
totaled $123.8 million in second quarter 2015. Dividends to
shareholders totaled $21.6 million. Through July 24, 2015, the
Company repurchased an additional 257,000 shares for $18.1 million,
with $284.7 million remaining in the current repurchase
authorization.
Financial Position Excluding Assurant Health Runoff
Operations
- Stockholders’ equity3,
excluding accumulated other comprehensive income (AOCI), decreased
to $4.0 billion at June 30, 2015, down $188.1 million since Dec.
31, 2014. The decline reflects share repurchases and dividends to
shareholders, partially offset by net income.
- Book value per diluted
share4, excluding AOCI, decreased to $58.21 at June 30,
2015, compared to $58.61 at Dec. 31, 2014. AOCI decreased $207.4
million to $348.4 million as of June 30, 2015, from $555.8 million
at Dec. 31, 2014.
- Annualized operating return on
average equity (ROE)1, excluding AOCI, was 13.3 percent
year-to-date compared to 12.1 percent for full-year 2014.
- Total assets5 as of June 30,
2015 were approximately $29.3 billion. The ratio of debt to total
capital6, excluding AOCI, increased to 22.7 percent at June 30,
2015 from 21.9 percent at Dec. 31, 2014.
Company Outlook
Based on current market conditions, for full-year 2015, the
Company now expects:
- Capital to be deployed on share
repurchases, common stock dividends, investments in the business
and strategic acquisitions, subject to market conditions and legal
requirements. Business segment dividends, excluding Assurant
Health, to exceed segment net operating income and to be subject to
the growth of the businesses, rating agency and regulatory capital
requirements. Capital infused into the health business as of June
30, 2015 to fund total exit-related charges, including premium
deficiency reserves. Additional infusions into Assurant Health to
reflect runoff capital ratio targets and potential changes in
estimates for exit-related costs, future experience on major
medical policies, recoverables under ACA risk-mitigation programs
as well as timing and amount of expense reductions during the
course of the wind down.
Consistent with the previously reported outlook, for full-year
2015, the Company continues to expect:
- Assurant Solutions’ net earned
premiums and fees and net operating income to approximate 2014
levels driven by continued growth from mobile and vehicle service
contracts globally. Results to be affected by the previously
disclosed loss of a domestic mobile tablet program,
carrier-marketing programs, declining volumes at certain retailers
and foreign exchange volatility.
- Assurant Specialty Property’s
net earned premiums and net operating income to decrease from 2014,
reflecting ongoing normalization of lender-placed insurance
business, previously announced loss of client business and the sale
of ARIC. Initiatives to lower expenses in lender-placed insurance
to generate net savings in the latter part of the year.
Contributions from multi-family housing and mortgage solutions to
partially offset the decline. Overall results to be affected by
catastrophe losses.
- Assurant Employee Benefits’ net
earned premiums and fees to increase compared to 2014 due to growth
in voluntary products. Continued expense management actions
to offset pressures from lower investment income. Results to be
affected by U.S. employment trends and capital market
conditions.
- Corporate & Other full-year
net operating loss to decline to $60-$65 million, reflecting
expense reductions.
Based on the announced exit from the health insurance market,
the Company expects:
- Assurant Health to substantially
complete the process to exit the health insurance market in 2016.
Assurant Health results through the wind down to include
approximately $80 million to $95 million pre-tax of additional
exit-related charges as well as certain overhead expenses that are
excluded from the premium deficiency reserve calculation. Capital
infusions as of June 30, 2015 took into account these additional
expenses. The Company to refine exit-related costs and premium
deficiency reserve estimates based on future claims experience on
major medical policies, estimated ACA risk-mitigation recoverables
and timing and amount of expense reductions during the wind
down.
Earnings Conference Call
- The second quarter 2015 earnings
conference call and webcast to be held on July 29, 2015 at 8:00
a.m. ET. The live and archived webcast along with supplemental
information also will be available in the Investor Relations
section of www.assurant.com.
About Assurant
A global provider of specialty protection products and related
services, Assurant (NYSE: AIZ) safeguards clients and consumers
against risk. A Fortune 500 company, Assurant partners with clients
who are leaders in their industries to provide consumers peace of
mind and financial security. Our diverse range of products and
services includes: mobile device protection products and services;
debt protection administration; credit-related insurance;
warranties and extended service products and related services for
consumer electronics, appliances and vehicles; pre-funded funeral
insurance; lender-placed homeowners insurance; property
preservation and valuation services; flood insurance; renters
insurance and related products; manufactured housing homeowners
insurance; group dental insurance; group disability insurance; and
group life insurance.
With approximately $30 billion in assets and $8 billion in
annual revenue, Assurant operates through three business segments:
Assurant Solutions, Assurant Specialty Property and Assurant
Employee Benefits. Through the Assurant Foundation, established
more than 30 years ago, the company and its employees are dedicated
to supporting and partnering with organizations that improve
communities. www.assurant.com and follow us on
Twitter @AssurantNews.
Safe Harbor Statement
Some of the statements included in this news release and its
exhibits, particularly those anticipating future financial
performance, business prospects, growth and operating strategies
and similar matters, are forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these statements by the use of words such as
“will,” “may,” “anticipates,” “expects,” “estimates,” “projects,”
“intends,” “plans,” “believes,” “targets,” “forecasts,”
“potential,” “approximately,” or the negative version of those
words and other words and terms with a similar meaning. Any
forward-looking statements contained in this news release or the
exhibits are based upon our historical performance and on current
plans, estimates and expectations. The inclusion of this
forward-looking information should not be regarded as a
representation by us or any other person that the future plans,
estimates or expectations contemplated by us will be achieved. Our
actual results might differ materially from those projected in the
forward-looking statements. The Company undertakes no obligation to
update or review any forward-looking statements in this news
release or the exhibits as a result of new information or future
events or other developments. The following risk factors could
cause our actual results to differ materially from those currently
estimated by management, including those projected in the Company
outlook:
(i) actions by governmental agencies or government sponsored
entities or other circumstances, including pending regulatory
matters affecting our lender-placed insurance business, that could
result in reductions of premium rates or increases in expenses,
including claims, commissions, fines, penalties or other expenses;
(ii) inability to implement, or delays in implementing, strategic
plans for the Assurant Employee Benefits and Assurant Health
segments; (iii) loss of significant client relationships or
business, distribution sources or contracts and reliance on a few
clients; (iv) the effects of the Patient Protection and Affordable
Care Act and the Health Care and Education Reconciliation Act of
2010 (“the Affordable Care Act”), and the rules and regulations
thereunder, on our health and employee benefits businesses; (v)
potential variations between the final risk adjustment amount and
reinsurance amounts, as determined by the U.S. Department of Health
and Human Services under the Affordable Care Act, and the Company's
estimate; (vi) unfavorable outcomes in litigation and/or regulatory
investigations that could negatively affect our results, business
and reputation; (vii) inability to execute strategic plans related
to acquisitions, dispositions or new ventures; (viii) current or
new laws and regulations that could increase our costs and decrease
our revenues; (ix) significant competitive pressures in our
businesses; (x) failure to attract and retain sales
representatives, key managers, agents or brokers; (xi) losses due
to natural or man-made catastrophes; (xii) a decline in our credit
or financial strength ratings (including the risk of ratings
downgrades in the insurance industry); (xiii) deterioration in the
Company’s market capitalization compared to its book value that
could result in an impairment of goodwill; (xiv) risks related to
our international operations, including fluctuations in exchange
rates; (xv) data breaches compromising client information and
privacy; (xvi) general global economic, financial market and
political conditions (including difficult conditions in financial,
capital, credit and currency markets, the global economic slowdown,
fluctuations in interest rates or a prolonged period of low
interest rates, monetary policies, unemployment and inflationary
pressure); (xvii) cyber security threats and cyber attacks; (xviii)
failure to effectively maintain and modernize our information
systems; (xix) failure to predict or manage benefits, claims and
other costs; (xx) uncertain tax positions and unexpected tax
liabilities; (xxi) inadequacy of reserves established for future
claims; (xxii) risks related to outsourcing activities; (xxiii)
unavailability, inadequacy and unaffordable pricing of reinsurance
coverage; (xxiv) diminished value of invested assets in our
investment portfolio (due to, among other things, volatility in
financial markets; the global economic slowdown; credit, currency
and liquidity risk; other than temporary impairments and increases
in interest rates); (xxv) insolvency of third parties to whom we
have sold or may sell businesses through reinsurance or modified
co-insurance; (xxvi) inability of reinsurers to meet their
obligations; (xxvii) credit risk of some of our agents in Assurant
Specialty Property and Assurant Solutions; (xxviii) inability of
our subsidiaries to pay sufficient dividends; (xxix) failure to
provide for succession of senior management and key executives; and
(xxx) cyclicality of the insurance industry.
For a detailed discussion of the risk factors that could affect
our actual results, please refer to the risk factors identified in
our SEC reports, including, but not limited to our 2014 Annual
Report on Form 10-K and 2015 First Quarter Form 10-Q, as filed with
the SEC.
Non-GAAP Financial Measures
Assurant uses the following non-GAAP financial measures to
analyze the Company’s operating performance for the periods
presented in this news release. Because Assurant’s calculation of
these measures may differ from similar measures used by other
companies, investors should be careful when comparing Assurant’s
non-GAAP financial measures to those of other companies.
(1) Assurant uses annualized operating ROE, excluding AOCI
and Assurant Health runoff operations, as an important measure of
the Company’s operating performance. Annualized operating ROE
equals net operating income for the periods presented divided by
average stockholders’ equity for the year-to-date period, excluding
AOCI and Assurant Health runoff operations, and then the return is
annualized, if necessary. The Company believes annualized operating
ROE, excluding AOCI and Assurant Health runoff operations, provides
investors a valuable measure of the performance of the Company’s
ongoing business, because it excludes the effect of net realized
gains (losses) on investments that tend to be highly variable from
period-to-period, other AOCI items, Assurant Health runoff
operations and those events that are unusual and/or unlikely to
recur. The comparable GAAP measure would be annualized GAAP ROE,
defined as net income, for the periods presented, divided by
average stockholders’ equity for the year-to-date period, and then
the return is annualized, if necessary. Consolidated annualized
GAAP ROE for the six months ended June 30, 2015 and 12 months ended
Dec. 31, 2014 was 3.3 percent and 9.4 percent, respectively, as
shown in the following reconciliation table.
6 Months
12Months
2015 2014 Annual operating
return on average equity (excluding AOCI and Assurant Health runoff
operations) 13.3% 12.1%
Assurant Health runoff operations
(10.2)% (6.1)% Net realized gains on investments 0.5% 3.8% Gain
(loss) on divested business 0.0% (1.9)% Change in tax liabilities -
1.4% Payment received related to previous sale of subsidiary 0.5% -
Change in derivative investment (0.1)% (0.2)% Change due to effect
of including AOCI (0.7)% 0.3%
Annual GAAP
return on average equity 3.3% 9.4%
(2) Assurant uses net operating income as an important
measure of the Company’s operating performance. As shown in the net
operating income reconciliation table, net operating income equals
net income, excluding net realized gains (losses) on investments,
other unusual and/or infrequent items and Assurant Health runoff
operations. The Company believes net operating income provides
investors a valuable measure of the performance of the Company’s
ongoing business, because it excludes the effect of net realized
gains (losses) on investments that tend to be highly variable from
period to period, those events that are unusual and/or unlikely to
recur and Assurant Health runoff operations. Please refer to page 2
of this release for a reconciliation of net operating income to net
income. (3) Assurant uses stockholders’ equity, excluding
AOCI and Assurant Health runoff operations, as an important measure
of the Company’s financial position. Assurant’s stockholders’
equity, excluding AOCI and Assurant Health runoff operations,
equals consolidated stockholders’ equity, excluding AOCI, less
Assurant Health runoff operations equity. The Company believes that
stockholders’ equity, excluding AOCI and Assurant Health runoff
operations, provides investors a valuable measure of financial
position, because it excludes the effect of unrealized gains
(losses) on investments, which tend to be highly variable from
period to period, other AOCI items and Assurant Health runoff
operations. The comparable GAAP measure would be consolidated
stockholders’ equity, excluding AOCI. Stockholders’ equity,
excluding AOCI and Assurant Health runoff operations, as of June
30, 2015 and Dec. 31, 2014 was $3,994.0 million and $4,182.2
million, respectively, as shown in the following reconciliation
table.
6 Months
12 Months 2015
2014
Stockholders' equity excluding AOCI and
Assurant Health runoff operations equity
$3,994.0 $4,182.2 Assurant Health runoff operations equity 485.5
443.3
Consolidated stockholders' equity,
excluding AOCI
$4,479.5 $4,625.5 (4) Assurant
uses book value per diluted share, excluding AOCI and Assurant
Health runoff operations, as an important measure of the Company’s
stockholders’ value. Book value per diluted share, excluding AOCI
and Assurant Health runoff operations, equals total stockholders’
equity, excluding AOCI and Assurant Health results, divided by
diluted shares outstanding. The Company believes book value per
diluted share, excluding AOCI and Assurant Health runoff
operations, provides investors a valuable measure of stockholders’
value because it excludes the effect of unrealized gains (losses)
on investments, which tend to be highly variable from period to
period, other AOCI items and Assurant Health runoff operations. The
comparable GAAP measure would be book value per diluted share,
defined as total stockholders’ equity divided by diluted shares
outstanding. Book value per diluted share was $70.36 and $72.61 as
of June 30, 2015 and Dec. 31, 2014, respectively, as shown in the
reconciliation table below.
2Q 4Q 2015
2014 Book value per diluted share (excluding AOCI and
Assurant Health runoff operations) $58.21 $58.61 Change due to
effect of including AOCI 5.07 7.79 Change due to effect of
including Assurant Health runoff operations 7.08
6.21
Book value per diluted share $70.36
$72.61 (5) Assurant uses total assets,
excluding Assurant Health runoff operations, as an important
measure of the Company’s financial position. Assurant’s total
assets, excluding Assurant Health runoff operations, equals
consolidated total assets, less Assurant Health runoff operations
assets. The Company believes that total assets, excluding Assurant
Health runoff operations, provides investors a valuable measure of
financial position, because it excludes the effect of Assurant
Health runoff operations. The comparable GAAP measure would be
consolidated total assets. Total assets, excluding Assurant Health
runoff operations, as of June 30, 2015 and Dec. 31, 2014 was
$29,349.9 million and $30,351.9 million, respectively, as shown in
the following reconciliation table.
6 Months 12 Months 2015
2014 Total assets, excluding
Assurant Health runoff operations assets $29,349.9 $30,351.9
Assurant Health runoff operations assets 1,492.2
1,210.6
Consolidated total assets $30,842.1
$31,562.5 (6) Assurant uses a ratio of
debt to total capital, excluding AOCI and Assurant Health runoff
operations, as an important measure of the Company’s financial
leverage. Assurant’s debt to total capital ratio, excluding AOCI
and Assurant Health runoff operations, equals debt divided by the
sum of debt and total stockholders’ equity excluding AOCI and
Assurant Health runoff operations. The Company believes that the
debt to total capital ratio, excluding AOCI and Assurant Health
runoff operations, provides investors a valuable measure of
financial leverage, because it excludes the effect of unrealized
gains (losses) on investments, which tend to be highly variable
from period to period, other AOCI items and Assurant Health runoff
operations. The comparable GAAP measure would be the ratio of debt
to total capital. The debt to total capital ratio as of June 30,
2015 and Dec. 31, 2014 was 19.5 percent and 18.4 percent,
respectively, as shown in the following reconciliation table.
2Q 4Q
2015 2014 Debt to total
capital ratio (excluding AOCI and Assurant Health runoff
operations) 22.7% 21.9% Change due to effect of including AOCI
(1.2)% (1.8)%
Change due to effect of including Assurant
Health runoff operations
(2.0)% (1.7)%
Debt to total capital
ratio 19.5% 18.4%
A summary of net operating income disclosed items is included on
page 21 of the Company’s Financial Supplement, which is available
in the Investor Relations section of www.assurant.com.
Assurant, Inc.Consolidated Statement of
Operations (unaudited)Three and Six Months Ended June 30, 2015 and
2014
2Q 6 Months
2015 2014
2015 2014 (in thousands
except number of shares and per share amounts)
Revenues Net earned premiums $
2,138,258 $ 2,171,734 $ 4,297,820 $ 4,232,196
Fees and other income 323,609 259,128 603,171 455,569 Net
investment income 167,786 167,508 320,059 335,566 Net realized
gains on investments 11,999 6,087 15,954 25,838 Amortization of
deferred gain on disposal of businesses 3,242
3,644 6,500 7,304 Total revenues
2,644,894 2,608,101 5,243,504
5,056,473
Benefits, losses and expenses Policyholder
benefits 1,267,714 1,149,613 2,478,441 2,157,645 Selling,
underwriting, general and administrative expenses 1,323,377
1,250,925 2,614,289 2,438,947 Interest expense 13,778
13,776 27,556 30,841 Total
benefits, losses and expenses 2,604,869
2,414,314 5,120,286 4,627,433 Income
before provision for income taxes 40,025 193,787 123,218 429,040
Provision for income taxes 7,236 50,177
40,385 148,185 Net income $ 32,789 $
143,610 $ 82,833 $ 280,855
Net
income per share: Basic $ 0.48 $ 1.98 $ 1.20 $ 3.86 Diluted $
0.47 $ 1.95 $ 1.18 $ 3.81
Dividends per share $ 0.30
$ 0.27 $ 0.57 $ 0.52
Share data: Basic weighted
average shares outstanding 68,558,472 72,659,590 69,161,001
72,753,651 Diluted weighted average shares outstanding
69,244,399 73,544,191 69,946,364 73,735,399
Assurant, Inc.Consolidated
Condensed Balance Sheets (unaudited)At June 30, 2015 and
Dec. 31, 2014
June 30,
December 31, 2015 2014 (in thousands)
Assets Investments and cash and cash equivalents $
15,002,943 $ 15,450,108 Reinsurance recoverables 7,376,942
7,254,585 Deferred acquisition costs 3,078,233 2,957,740 Goodwill
842,202 841,239 Assets held in separate accounts 1,919,609
1,906,237 Other assets 2,622,153 3,152,557 Total
assets $ 30,842,082 $ 31,562,466
Liabilities
Policyholder benefits and claims payable $ 13,500,609 $ 13,182,278
Unearned premiums 6,429,804 6,529,675 Debt 1,171,229 1,171,079
Liabilities related to separate accounts 1,919,609 1,906,237
Deferred gain on disposal of businesses 94,317 100,817 Accounts
payable and other liabilities 2,898,554 3,491,073
Total liabilities 26,014,122 26,381,159
Stockholders' equity Equity, excluding accumulated other
comprehensive income 4,479,541 4,625,540 Accumulated other
comprehensive income 348,419 555,767 Total
stockholders' equity 4,827,960 5,181,307 Total
liabilities and stockholders' equity $ 30,842,082 $ 31,562,466
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150728006558/en/
Assurant, Inc.Media:Vera Carley,
212-859-7002Assistant Vice President, External
Communicationvera.carley@assurant.comorInvestor
Relations:Suzanne Shepherd, 212-859-7062Assistant Vice
President, Investor Relationssuzanne.shepherd@assurant.com
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