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NEW YORK, Oct. 24, 2012 /PRNewswire/ --
Assurant, Inc. (NYSE: AIZ), a premier provider of specialty insurance and insurance-related products and services, today reported results for the third quarter ended Sept. 30, 2012.
"We are pleased with our results this quarter, especially with the progress we are making in areas targeted for growth," said Robert B. Pollock, president and CEO of Assurant. "We took actions to adapt to evolving consumer and client needs, returned capital to shareholders through dividends and share repurchases and delivered a solid quarter."
Third Quarter 2012 Consolidated Results
Reconciliation of Net Operating Income to Net Income
(dollars in millions, net of tax)
Assurant Specialty Property
Assurant Employee Benefits
Corporate and other
Amortization of deferred gain on disposal of businesses
Net operating income
Net realized gains on investments
Change in tax valuation allowance
Change in tax liabilities
Note: Additional financial information, including a schedule of disclosed items that affected Assurant's results by business for the last seven quarters (page 20), is available in the Company's Financial Supplement, located in the Investor Relations section of www.assurant.com.
Net earned premiums, fees and other
Corporate & Other
Net operating loss
Based on current market conditions, the Company now expects for full-year 2012:
Earnings Conference Call
About AssurantAssurant is a premier provider of specialized insurance products and related services in North America and select worldwide markets. The four key businesses -- Assurant Solutions, Assurant Specialty Property, Assurant Health and Assurant Employee Benefits -- partner with clients who are leaders in their industries and build leadership positions in a number of specialty insurance market segments. Assurant provides debt protection administration; credit-related insurance; warranties and service contracts; pre-funded funeral insurance; solar project insurance; lender-placed homeowners insurance; manufactured housing homeowners insurance; individual health and small employer group health insurance; group dental insurance; group disability insurance; and group life insurance.
Assurant, a Fortune 500 company and a member of the S&P 500, is traded on the New York Stock Exchange under the symbol AIZ. Assurant has approximately $28 billion in assets and $8 billion in annual revenue. Assurant has approximately 14,000 employees worldwide and is headquartered in New York's financial district. www.assurant.com.
Safe Harbor StatementSome 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 fact that they may use words such as "will," "anticipate," "expect," "estimate," "project," "intend," "plan," "believe," "target," "forecast," or the negative versions of those words and terms with a similar meaning. Our actual results may differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements in this earnings release or the exhibits as a result of new information or future events or 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) the effects of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, and the rules and regulations thereunder, on our health and employee benefits businesses;
(ii) actions by governmental agencies or government sponsored entities or other circumstances, including pending regulatory matters affecting the lender-placed insurance business, that could require us to reduce premium rates or result in increases in the claims we pay or in other expenses;
(iii) loss of significant client relationships, distribution sources and contracts;
(iv) failure to attract and retain sales representatives;
(v) losses due to natural and man-made catastrophes;
(vi) a decline in our credit or financial strength ratings (including the risk of ratings downgrades in the insurance industry);
(vii) deterioration in the Company's market capitalization compared to its book value that could result in further impairment of goodwill;
(viii) unfavorable outcomes in litigation and/or regulatory investigations that could negatively affect our business and reputation;
(ix) current or new laws and regulations that could increase our costs and decrease our revenues;
(x) general global economic, financial market and political conditions (including difficult conditions in financial, capital and credit markets, the global economic slowdown, fluctuations in interest rates, monetary policies, unemployment and inflationary pressure);
(xi) inadequacy of reserves established for future claims;
(xii) failure to predict or manage benefits, claims and other costs;
(xiii) uncertain tax positions;
(xiv) fluctuations in exchange rates and other risks related to our international operations;
(xv) unavailability, inadequacy and unaffordable pricing of reinsurance coverage;
(xvi) diminished value of invested assets in our investment portfolio (due to, among other things, volatility in financial markets, the global economic slowdown, credit and liquidity risk, other than temporary impairments and increases in interest rates);
(xvii) insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance;
(xviii) inability of reinsurers to meet their obligations;
(xix) credit risk of some of our agents in Assurant Specialty Property and Assurant Solutions;
(xx) failure to effectively maintain and modernize our information systems and protect them from cyber-security threats;
(xxi) risks related to outsourcing activities;
(xxii) failure to protect client information and privacy;
(xxiii) failure to find and integrate suitable acquisitions and new ventures;
(xxiv) inability of our subsidiaries to pay sufficient dividends;
(xxv) failure to provide for succession of senior management and key executives;
(xxvi) significant competitive pressures in our businesses; and
(xxvii) 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 2011 Annual Report on Form 10-K, Second Quarter Form 10-Q and upcoming Third Quarter Form 10-Q, as filed with the SEC. Non-GAAP Financial MeasuresAssurant 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 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 and other unusual and/or infrequent items. The Company believes net operating income provides investors a valuable measure of the performance of the Company's ongoing business, because it excludes both the effect of net realized gains (losses) on investments that tend to be highly variable from period to period, and those events that are unusual and/or unlikely to recur.
(2) Assurant uses book value per diluted share excluding AOCI, as an important measure of the Company's stockholder value. Book value per diluted share excluding AOCI equals total stockholders' equity excluding AOCI divided by diluted shares outstanding. The Company believes book value per diluted share excluding AOCI provides investors a valuable measure of stockholder value because it excludes the effect of unrealized gains (losses) on investments, which tend to be highly variable from period to period and other AOCI items. 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 $64.26 and $53.46 as of Sept. 30, 2012 and Dec. 31, 2011, respectively, as shown in the reconciliation table below.
Book value per diluted share (excluding AOCI)
Change due to effect of including AOCI
Book value per diluted share
(3) Assurant uses annualized operating ROE, excluding AOCI, 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 then the return is annualized, if necessary. The Company believes annualized operating ROE, excluding AOCI, 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, AOCI items 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 period presented, divided by average stockholders' equity for the period and then the return is annualized, if necessary. Consolidated annualized GAAP ROE for the three and nine months ended Sept. 30, 2012 was 9.8 percent and 12.1 percent, respectively, as shown in the following reconciliation table.
Annualized operating return on average equity (excluding AOCI)
Annualized GAAP return on average equity
(4) Assurant uses a ratio of debt to total capital, excluding AOCI, as an important measure of the Company's financial leverage. Assurant's debt to total capital ratio, excluding AOCI, equals debt (which would include mandatorily redeemable preferred stock, if any) divided by the sum of debt and total stockholders' equity excluding AOCI. The Company believes that the debt to total capital ratio, excluding AOCI, 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, and other AOCI items. The comparable GAAP measure would be the ratio of debt to total capital. The debt to total capital ratio as of Sept. 30, 2012 and Dec. 31, 2011 was 15.7 percent and 16.6 percent, respectively, as shown in the following reconciliation table.
Debt to total capital ratio (excluding AOCI)
Debt to total capital ratio
A summary of net operating income disclosed items is included on page 20 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 Nine Months Ended Sept. 30, 2012 and 2011
(in thousands except number of shares and per share amounts)
Net earned premiums and other considerations
Net investment income
Fees and other income
Benefits, losses and expenses
Selling, underwriting, general and administrative expenses
Total benefits, losses and expenses
Income before provision for income taxes
Provision for income taxes
Net income per share:
Dividends per share
Basic weighted average shares outstanding
Diluted weighted average shares outstanding
Assurant, Inc.Consolidated Condensed Balance Sheets (unaudited)At Sept. 30, 2012 and Dec. 31, 2011
Investments and cash and cash equivalents
Deferred acquisition costs
Assets held in separate accounts
Policyholder benefits and claims payable
Liabilities related to separate accounts
Deferred gain on disposal of businesses
Accounts payable and other liabilities
Equity, excluding accumulated other comprehensive income
Accumulated other comprehensive income
Total stockholders' equity
Total liabilities and stockholders' equity
SOURCE Assurant, Inc.