UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2020

OR 

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Assurant, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-31978	39-1126612
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

28 Liberty Street, 41st Floor

New York, New York 10005

(212) 859-7000

(Address, including zip code, and telephone number, including area code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 Par Value	AIZ	New York Stock Exchange
6.50% Series D Mandatory Convertible Preferred Stock, $1.00 Par Value	AIZP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

The number of shares of the registrant’s common stock outstanding at July 31, 2020 was 59,648,077.

ASSURANT, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020

TABLE OF CONTENTS

Item Number		Page Number
	PART I FINANCIAL INFORMATION
1.	Consolidated Financial Statements (unaudited) of Assurant, Inc.:
	Consolidated Balance Sheets (unaudited) as of June 30, 2020 and December 31, 2019	2
	Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2020 and 2019	4
	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2020 and 2019	5
	Consolidated Statements of Changes in Equity (unaudited) for the three and six months ended June 30, 2020 and 2019	6
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2020 and 2019	8
	Notes to Consolidated Financial Statements (unaudited)	10
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
3.	Quantitative and Qualitative Disclosures About Market Risk	68
4.	Controls and Procedures	68
	PART II OTHER INFORMATION
1.	Legal Proceedings	69
1A.	Risk Factors	69
2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
6.	Exhibits	70
	Signatures	71

1

Assurant, Inc.

Consolidated Balance Sheets (unaudited)

	June 30, 2020			December 31, 2019
	(in millions, except number of  shares and per share amounts)
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost - $11,050.4 and $11,064.8 at June 30, 2020 and December 31, 2019, respectively)	$	12,639.6		$	12,322.4
Equity securities at fair value	376.3			388.5
Commercial mortgage loans on real estate, at amortized cost (net of allowances for credit losses of $4.1 at June 30, 2020)	790.1			815.0
Short-term investments	207.8			402.5
Other investments (net of allowances for credit losses of $1.4 at June 30, 2020)	632.4			638.9
Total investments	14,646.2			14,567.3
Cash and cash equivalents	2,137.5			1,867.1
Premiums and accounts receivable (net of allowances for credit losses of $16.8 at June 30, 2020)	1,475.4			1,692.8
Reinsurance recoverables (net of allowances for credit losses of $26.8 at June 30, 2020)	9,581.9			9,593.4
Accrued investment income	143.0			131.1
Deferred acquisition costs	7,003.2			6,668.0
Property and equipment, net	450.1			433.7
Goodwill	2,441.4			2,343.4
Value of business acquired	1,539.9			2,004.3
Other intangible assets, net	582.1			540.2
Other assets (net of allowances for credit losses of $1.9 at June 30, 2020)	708.1			590.1
Assets held in separate accounts	1,853.6			1,839.7
Assets of consolidated investment entities (1)	1,670.8			2,020.1
Total assets	$	44,233.2		$	44,291.2
Liabilities
Future policy benefits and expenses	$	9,817.4		$	9,807.3
Unearned premiums	16,557.2			16,603.6
Claims and benefits payable	2,669.1			2,687.7
Commissions payable	473.7			540.5
Reinsurance balances payable	364.8			358.5
Funds held under reinsurance	346.8			319.4
Accounts payable and other liabilities	2,417.3			2,758.5
Debt	2,208.0			2,006.9
Liabilities related to separate accounts	1,853.6			1,839.7
Liabilities of consolidated investment entities (1)	1,540.8			1,687.0
Total liabilities	38,248.7			38,609.1
Commitments and contingencies (Note 20)
Stockholders’ equity
6.50% Series D mandatory convertible preferred stock, par value $1.00 per share, 2,875,000 shares authorized, issued and outstanding at June 30, 2020 and December 31, 2019, respectively	2.9			2.9
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 161,968,591 and 161,607,866 shares issued and 59,571,651 and 59,945,893 shares outstanding at June 30, 2020 and December 31, 2019, respectively	1.6			1.6
Additional paid-in capital	4,550.4			4,537.7
Retained earnings	6,194.4			5,966.4
Accumulated other comprehensive income	568.9			411.5
Treasury stock, at cost; 102,396,940 and 101,661,973 shares at June 30, 2020 and December 31, 2019, respectively	(5,350.4		)	(5,267.3		)
Total Assurant, Inc. stockholders’ equity	5,967.8			5,652.8
Non-controlling interests	16.7			29.3
Total equity	5,984.5			5,682.1
Total liabilities and equity	$	44,233.2		$	44,291.2

(1) The following table presents information on assets and liabilities related to consolidated investment entities as of June 30, 2020 and December 31, 2019.

2

Assurant, Inc.

Consolidated Balance Sheets (unaudited)

	June 30, 2020		December 31, 2019
	(in millions)
Assets
Cash and cash equivalents	$	14.9	$	32.9
Investments, at fair value	1,635.5		1,957.9
Other receivables	20.4		29.3
Total assets	$	1,670.8	$	2,020.1
Liabilities
Collateralized loan obligation notes, at fair value	1,505.0		1,603.1
Other liabilities	35.8		83.9
Total liabilities	$	1,540.8	$	1,687.0

See the accompanying Notes to Consolidated Financial Statements

3

Assurant, Inc.

Consolidated Statements of Operations (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(in millions, except number of shares and per share amounts)
Revenues
Net earned premiums	$	2,036.4		$	2,032.7		$	4,120.2		$	3,937.1
Fees and other income	271.5			336.1			688.4			664.4
Net investment income	137.2			154.2			293.2			320.5
Net realized gains (losses) on investments (including $(7.8), $(0.6), $(13.1), and $(0.9) of impairment losses for the three and six months ended June 30, 2020 and 2019, respectively)	24.1			17.8			(71.2		)	46.6
Amortization of deferred gains on disposal of businesses	2.4			4.7			6.6			12.5
Total revenues	2,471.6			2,545.5			5,037.2			4,981.1
Benefits, losses and expenses
Policyholder benefits	592.1			687.0			1,199.3			1,301.7
Amortization of deferred acquisition costs and value of business acquired	885.3			815.8			1,799.5			1,593.1
Underwriting, general and administrative expenses	736.2			823.7			1,644.3			1,623.6
Iké net losses (Note 5)	4.5			9.2			5.9			9.4
Interest expense	26.7			26.5			52.2			53.0
Total benefits, losses and expenses	2,244.8			2,362.2			4,701.2			4,580.8
Income before provision for income taxes	226.8			183.3			336.0			400.3
Provision for income taxes	48.4			40.7			1.8			89.1
Net income	178.4			142.6			334.2			311.2
Less: Net (income) loss attributable to non-controlling interests	(0.3		)	1.5			(1.4		)	(1.4		)
Net income attributable to stockholders	178.1			144.1			332.8			309.8
Less: Preferred stock dividends	(4.6		)	(4.6		)	(9.3		)	(9.3		)
Net income attributable to common stockholders	$	173.5		$	139.5		$	323.5		$	300.5
Earnings Per Common Share
Basic	$	2.87		$	2.24		$	5.35		$	4.82
Diluted	$	2.81		$	2.21		$	5.24		$	4.73
Share Data
Weighted average common shares outstanding used in basic per common share calculations	60,363,577			62,222,090			60,483,244			62,407,429
Plus: Dilutive securities	2,983,612			3,066,357			2,990,068			3,153,501
Weighted average common shares used in diluted per common share calculations	63,347,189			65,288,447			63,473,312			65,560,930

See the accompanying Notes to Consolidated Financial Statements

4

Assurant, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(in millions)
Net income	$	178.4		$	142.6		$	334.2		$	311.2
Other comprehensive income (loss):
Change in unrealized gains on investments, net of taxes of $(126.5), $(60.0), $(41.4) and $(129.0) for the three and six months ended June 30, 2020 and 2019, respectively	434.7			228.5			132.6			477.4
Change in unrealized gains on derivative transactions, net of taxes of $0.2, $0.1, $0.3 and $0.3 for the three and six months ended June 30, 2020 and 2019, respectively	(0.6		)	(2.9		)	(1.2		)	(3.2		)
Change in non-credit related impairment losses, net of taxes of $(0.4), $(0.2), $0.3 and $(0.1) for the three and six months ended June 30, 2020 and 2019, respectively	1.5			0.7			(1.2		)	0.5
Change in foreign currency translation, net of taxes of ($4.0), $(0.8), $5.7 and $(1.4) for the three and six months ended June 30, 2020 and 2019, respectively	46.6			(1.2		)	(20.1		)	9.0
Change in pension and postretirement unrecognized net periodic benefit cost, net of taxes of $0.5, $(0.1), $(12.6) and $(0.1) for the three and six months ended June 30, 2020 and 2019, respectively (1)	(1.7		)	0.2			47.3			0.4
Total other comprehensive income	480.5			225.3			157.4			484.1
Total comprehensive income	658.9			367.9			491.6			795.3
Less: Comprehensive (income) loss attributable to non-controlling interests	(0.3		)	1.5			(1.4		)	(1.4		)
Total comprehensive income attributable to stockholders	$	658.6		$	369.4		$	490.2		$	793.9

(1) Change in six months ended June 30, 2020 includes the prior service credit resulting from the February 2020 amendment of the Retirement Health Benefits plan. Refer to Note 19 for further information.

See the accompanying Notes to Consolidated Financial Statements

5

Assurant, Inc.

Consolidated Statements of Changes in Equity (unaudited)

	Three Months Ended June 30, 2020
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interests		Total
	(in millions)
Balance at March 31, 2020	$	2.9	$	1.6	$	4,540.6		$	6,061.1		$	88.4	$	(5,324.6	)	$	16.2	$	5,386.2
Stock plan issuances	—		—		—			—			—		—			—		—
Stock plan compensation expense	—		—		14.9			—			—		—			—		14.9
Common stock dividends ($0.63 per share)	—		—		—			(39.6		)	—		—			—		(39.6		)
Acquisition of common stock	—		—		(5.1		)	—			—		(25.8		)	—		(30.9		)
Net income	—		—		—			178.1			—		—			0.3		178.4
Preferred stock dividends ($1.63 per share)	—		—		—			(4.6		)	—		—			—		(4.6		)
Change in equity of non-controlling interests	—		—		—			(0.6		)	—		—			0.2		(0.4		)
Other comprehensive income	—		—		—			—			480.5		—			—		480.5
Balance at June 30, 2020	$	2.9	$	1.6	$	4,550.4		$	6,194.4		$	568.9	$	(5,350.4	)	$	16.7	$	5,984.5

	Three Months Ended June 30, 2019
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interests			Total
	(in millions)
Balance at March 31, 2019	$	2.9	$	1.6	$	4,496.0		$	5,879.7		$	103.4	$	(5,043.0	)	$	31.1		$	5,471.7
Stock plan issuances	—		—		—			—			—		—			—			—
Stock plan compensation expense	—		—		14.2			—			—		—			—			14.2
Common stock dividends ($0.60 per share)	—		—		—			(38.3		)	—		—			—			(38.3		)
Acquisition of common stock	—		—		(1.0		)	—			—		(50.1		)	—			(51.1		)
Net income	—		—		—			144.1			—		—			(1.5		)	142.6
Preferred stock dividends ($1.63 per share)	—		—		—			(4.6		)	—		—			—			(4.6		)
Change in equity of non-controlling interests	—		—		—			—			—		—			0.5			0.5
Other comprehensive income	—		—		—			—			225.3		—			—			225.3
Balance at June 30, 2019	$	2.9	$	1.6	$	4,509.2		$	5,980.9		$	328.7	$	(5,093.1	)	$	30.1		$	5,760.3

6

Assurant, Inc.

Consolidated Statements of Changes in Equity (unaudited)

	Six Months Ended June 30, 2020
	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Non-controlling Interests			Total
	(in millions)
Balance at December 31, 2019	$	2.9	$	1.6	$	4,537.7		$	5,966.4		$	411.5	$	(5,267.3	)	$	29.3		$	5,682.1
Cumulative effect of change in accounting principles, net of taxes (1)	—		—		—			(20.4		)	—		—			—			(20.4		)
Stock plan issuances	—		—		3.9			—			—		—			—			3.9
Stock plan compensation expense	—		—		26.4			—			—		—			—			26.4
Common stock dividends ($1.26 per share)	—		—		—			(77.6		)	—		—			—			(77.6		)
Acquisition of common stock	—		—		(17.6		)	—			—		(83.1		)	—			(100.7		)
Net income	—		—		—			332.8			—		—			1.4			334.2
Preferred stock dividends ($3.25 per share)	—		—		—			(9.3		)	—		—			—			(9.3		)
Change in equity of non-controlling interests	—		—		—			2.5			—		—			(14.0		)	(11.5		)
Other comprehensive income	—		—		—			—			157.4		—			—			157.4
Balance at June 30, 2020	$	2.9	$	1.6	$	4,550.4		$	6,194.4		$	568.9	$	(5,350.4	)	$	16.7		$	5,984.5

	Six Months Ended June 30, 2019
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Non-controlling Interests	Total
	(in millions)
Balance at December 31, 2018	$	2.9	$	1.6	$	4,495.6