Second Quarter Results

Net income in the second quarter of 2009 increased 2 percent to $193.3 million, or $1.63 per diluted share, versus net income of $190.0 million, or $1.59 per diluted share, in the second quarter 2008. The second quarter results benefited from $85.0 million of after-tax income related to a legal settlement. Improving credit markets increased the fair value of invested assets and realized losses and other-than-temporary-impairments ("OTTI") were lower.

Net operating income(1) for the second quarter 2009 decreased 47 percent to $99.3 million, or $0.84 per diluted share, compared to second quarter 2008 net operating income of $185.8 million, or $1.55 per diluted share. The decrease was primarily driven by losses at Assurant Health and reduced earnings at Assurant Specialty Property. The results for the quarter also reflect $6.4 million after-tax of restructuring charges.

"We are taking decisive actions throughout Assurant to improve performance, reduce expenses, enhance revenues and best position the company for the long term," says Robert B. Pollock, president and CEO. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."

"The good news is that even in a challenging economy our financial position remains strong. We've grown our book value per share and for the six month period achieved double-digit annualized operating return on equity ("ROE")(2) of 10.5 percent. Our disciplined investment and capital management strategies have positioned us to take advantage of investment opportunities when the time is right."

Net earned premiums in the second quarter 2009 were $1.9 billion, a decrease of 6 percent, from $2.0 billion in the same 2008 period, declining across all Assurant businesses.

Net investment income in the second quarter 2009 decreased 13 percent to $174.9 million compared to $201.2 million in the second quarter 2008, reflecting a decline in average invested assets and lower investment yields.

Six-Month Results

Net income in the first half of 2009 was $273.9 million, or $2.31 per diluted share, a decrease of 27 percent versus first half 2008 net income of $376.8 million, or $3.15 per diluted share. The decline is primarily due to lower net operating income and lower tax benefits, despite a $10.3 million after-tax decrease in net realized losses on investments and $85.0 million of after-tax income from the legal settlement.

Net operating income for the first half 2009 was $237.1 million, or $2.00 per diluted share, a decrease of 41 percent versus first half 2008 net operating income of $400.7 million, or $3.35 per diluted share. The decrease was primarily driven by reduced earnings at Assurant Health and Assurant Specialty Property.

Net earned premiums of $3.8 billion in the first half of 2009 represent a 5 percent decrease over first half 2008 net earned premiums of $3.9 billion, declining across all Assurant businesses.

Net investment income in the first half of 2009 decreased 11 percent to $353.4 million, from $399.0 million in the first half of 2008, primarily due to a decrease in average invested assets and lower investment yields.

The following chart provides a reconciliation of net operating income to net income for Assurant:

                                  For the Three           For the Six                                   Months Ended           Months Ended                                ------------------     -------------------                                June 30,   June 30,    June 30,    June 30,                                  2009       2008        2009        2008                                                (UNAUDITED)                                     (dollars in millions, net of tax)    Assurant Solutions            $27.9       $32.4       $58.2       $79.9   Assurant Specialty Property    91.2       131.0       195.9       255.8   Assurant Health               (10.3)       27.7         4.3        65.0   Assurant Employee Benefits     12.1        18.6        19.2        35.0   Corporate and other           (16.1)      (18.8)      (29.6)      (24.7)   Amortization of deferred    gain on disposal of    businesses                     4.4         4.8         8.8         9.6   Interest expense               (9.9)       (9.9)      (19.7)      (19.9)                                  ----        ----       -----       -----     Net operating income         99.3       185.8       237.1       400.7    Adjustments:   Net realized losses on    investments                   (4.0)      (22.4)      (40.2)      (50.5)   Tax benefit realized from    the sale of an inactive    subsidiary                       -        26.6           -        26.6   Change in tax valuation    allowance                     13.0           -        (8.0)          -   Legal settlement               85.0           -        85.0           -                                  ----         ---        ----         ---     Net income                 $193.3      $190.0      $273.9      $376.8                                ======      ======      ======      ======   Assurant Solutions   

Assurant Solutions second quarter 2009 net operating income was $27.9 million, a 14 percent decrease from second quarter 2008 net operating income of $32.4 million. Net operating income for the six months of 2009 was $58.2 million, down 27 percent from $79.9 million for the first six months of 2008. For both the quarter and six months, the decline was primarily the result of unfavorable credit insurance loss experience in the United Kingdom, which increased the combined ratio, as well as lower net investment income. The domestic combined ratio continued to improve sequentially and on a quarterly basis. Results for the second quarter 2009 include a $2.4 million restructuring charge, and results for the six months of 2008 include $6.9 million of losses from Brazilian operations and $11.7 million of income from a client related settlement.

Assurant Solutions second quarter 2009 net earned premiums decreased 5 percent to $666.9 million, from $700.6 million in the second quarter 2008. Net earned premiums for the first six months of 2009 decreased 5 percent to $1.3 billion. The decrease for the quarter and the six months was primarily driven by the application of Statement of Financial Accounting Standards 97 ("FASB 97") for pre-need insurance contracts sold in 2009 and the unfavorable impact of foreign exchange. Absent the application of FASB 97 and the impact of foreign exchange, net earned premiums would have increased $36.0 million, or 5.1 percent, for the second quarter of 2009.

Assurant Specialty Property

Assurant Specialty Property second quarter 2009 net operating income was $91.2 million, a 30 percent decrease from second quarter 2008 net operating income of $131.0 million. Net operating income for the first six months of 2009 was $195.9 million, down 23 percent from $255.8 million for the first six months of 2008. Net operating income for the quarter and six months was affected primarily by three factors which reduced revenue: loans lost in servicer consolidation; fewer policies on real estate owned ("REO") properties; and higher catastrophe reinsurance costs. Second quarter 2009 also included a $2.5 million restructuring charge. The loss ratio for the second quarter 2009 increased due to higher than normal frequency of smaller-scale weather events. The impact of Insurance Services Office (ISO) catastrophic losses for 2009 was consistent with the $11.5 million losses reported in second quarter 2008. In addition, the first six months of 2008 had a favorable $4.6 million client-related settlement.

Assurant Specialty Property second quarter 2009 net earned premiums decreased 11 percent, to $477.8 million, from $533.9 million in the second quarter 2008. Net earned premiums for the first six months of 2009 decreased 4 percent to $971.6 million. Net earned premium for the second quarter and first six months of 2009 declined due to the three factors noted above.

Assurant Health

Assurant Health net operating loss for second quarter 2009 was $10.3 million, compared to second quarter 2008 net operating income of $27.7 million. Net operating income for the first six months of 2009 was $4.3 million, down 93 percent from $65.0 million in 2008. For both the quarter and six months, loss experience was significantly higher than a year ago.