Oct. 28, 2009 (PR Newswire) -- NEW YORK, Oct. 28 /PRNewswire-FirstCall/ -- Assurant, Inc. ("Assurant") (NYSE: AIZ), a premier provider of specialized insurance and insurance-related products and services, today reported results for the third quarter and first nine months of 2009.

Third Quarter Results

Net income in the third quarter 2009 was $144.7 million, or $1.22 per diluted share, versus a net loss of $111.4 million, or ($0.94) per diluted share, in the third quarter 2008. Quarterly results benefited from a $12.9 million after-tax realized gain in the investment portfolio versus a $194.5 million after-tax loss in the third quarter 2008. In addition, there were no reportable catastrophe losses compared to $94.8 million after-tax of reportable catastrophe losses and reinstatement premiums in the third quarter 2008.

Net operating income(1) for the third quarter 2009 was $126.2 million, or $1.07 per diluted share, compared to third quarter 2008 net operating income of $83.1 million, or $0.70 per diluted share. The improvement reflects the absence of reportable catastrophe losses at Assurant Specialty Property and increased profitability at Assurant Solutions. Less favorable results at Assurant Employee Benefits and a loss at Assurant Health partially offset the increase.

"The third quarter 2009 was good on several fronts as we grew our capital position, increased book value per share and generated a consolidated annualized operating ROE(2) of 10.7 percent," said Robert B. Pollock, Assurant's president and chief executive officer.

"Assurant Specialty Property delivered excellent results while Assurant Solutions continued to show improved performance. Assurant Health and Assurant Employee Benefits are managing through an especially challenging landscape. Both were affected by economic pressures on consumers and small businesses."

Net earned premiums in the third quarter 2009 were $1.9 billion, a 6 percent decrease from $2.0 billion in the same 2008 period, declining across all Assurant businesses driven primarily by the difficult economic environment.

Net investment income in the third quarter 2009 decreased 10 percent to $172.9 million compared to $192.3 million in the third quarter 2008 due to lower average invested assets and lower yields.

Nine-Month Results

Net income in the first nine months of 2009 was $418.6 million, or $3.54 per diluted share, an increase of 58 percent compared to $265.4 million, or $2.22 per diluted share, for the first nine months of 2008. The increase reflects $217.6 million fewer after-tax realized losses in the investment portfolio, $83.5 million of after-tax income from a legal settlement, and no reportable catastrophe losses in 2009. Nine-month results in 2008 included $94.8 million of net after-tax reportable catastrophe losses and reinstatement premiums.

Net operating income for the first nine months of 2009 decreased 25 percent to $363.3 million, or $3.07 per diluted share, from $483.7 million, or $4.06 per diluted share, for the first nine months of 2008. The decrease was driven primarily by net operating losses at Assurant Health and lower operating earnings at Assurant Employee Benefits.

Net earned premiums for the first nine months of 2009 were $5.6 billion, a 5 percent decrease from $5.9 billion in the first nine months of 2008, declining across all Assurant businesses due primarily to the difficult economic conditions.

Net investment income for the first nine months of 2009 decreased 11 percent to $526.3 million, from $591.3 million in the first nine months of 2008, primarily due to decreases in average invested assets and investment yields.

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

For the Three Months Ended    For the Nine Months Ended
--------------------------    -------------------------
September 30,  September 30,  September 30,  September 30,
2009           2008           2009           2008
(UNAUDITED)
(amounts in millions, net of tax)

Assurant Solutions   $31.6         $20.4          $89.8         $100.3
Assurant Specialty
Property            103.2          30.9          299.1          286.7
Assurant Health       (4.8)         30.2           (0.5)          95.2
Assurant Employee
Benefits             11.5          21.5           30.6           56.4
Corporate and other   (9.8)        (14.8)         (39.3)         (39.5)
Amortization of
deferred gains on
disposal of
businesses            4.4           4.8           13.2           14.4
Interest expense      (9.9)         (9.9)         (29.6)         (29.8)
----          ----          -----          -----
Net operating
income            126.2          83.1          363.3          483.7

Adjustments:
Net realized gains
(losses) on
investments          12.9        (194.5)         (27.3)        (244.9)
Tax benefit realized
from the sale of an
inactive subsidiary     -             -              -           26.6
Change in tax
valuation allowance   7.0             -           (0.9)             -
Legal settlement and
related expenses     (1.4)            -           83.5              -
----            --           ----             --
Net income
(loss)           $144.7       $(111.4)        $418.6         $265.4
======       =======         ======         ======

A schedule of disclosed items that affected Assurant's quarterly results by segment for the last seven quarters can be found in the Company's financial supplement on page 20.

Assurant Solutions

Assurant Solutions third quarter 2009 net operating income was $31.6 million, a 55 percent increase from third quarter 2008 net operating income of $20.4 million. Results for the third quarter of 2008 included a charge of $7.7 million after-tax related to the acquisition of GE's Warranty Management Group. Results for the quarter improved as the domestic combined ratio benefited from favorable underwriting in the service contract business. Net operating income for the first nine months was $89.8 million, down 10 percent from $100.3 million in 2008. Lower investment income and an increase in the international combined ratio due to continued unfavorable credit insurance loss experience in the United Kingdom drove the decrease.

Third quarter 2009 net earned premiums decreased 5 percent to $669.3 million, versus $707.1 million in 2008. Nine-month net earned premiums decreased 5 percent to $2.0 billion. Decreases for the quarter and nine months were primarily driven by the application of universal life insurance accounting to new preneed business sold in 2009 and the unfavorable impact of foreign exchange. Absent these two factors, net earned premiums for the third quarter of 2009 would have increased 4 percent and premiums for the first nine months of 2009 would have increased 5 percent.

Assurant Specialty Property

Assurant Specialty Property third quarter 2009 net operating income was $103.2 million, an increase from third quarter 2008 net operating income of $30.9 million. Net operating income for the first nine months of 2009 was $299.1 million, up 4 percent from $286.7 million in 2008. Improvements for the third quarter and first nine months of 2009 were primarily the result of no reportable catastrophe losses. This compares to $94.8 million of reportable catastrophe losses and reinstatement premiums in the third quarter and nine months of 2008. The third quarter 2009 results benefited from a $5.9 million after-tax subrogation reimbursement related to the 2007 California wildfires.

Third quarter 2009 net earned premiums decreased 7 percent, to $478.7 million, as compared to $513.2 million in 2008. Nine-month net earned premiums decreased 5 percent to $1.5 billion. Lower premium from real estate-owned policies, less premium from loans lost due to servicer consolidation and higher reinsurance costs caused the declines.

Assurant Health

Assurant Health reported a net operating loss for the third quarter 2009 of $4.8 million, compared to third quarter 2008 net operating income of $30.2 million.