Form 8-K ASSURANT INC For: Jun 28
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 28, 2018
Assurant, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-31978
DE | 39-1126612 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
28 Liberty Street, 41st Floor
New York, New York 10005
(Address of principal executive offices, including zip code)
(212) 859-7000
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 7.01. | Regulation FD |
On June 28, 2018, Assurant, Inc. issued a news release announcing the completion of its 2018 Property Catastrophe Reinsurance Program. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information being furnished pursuant to this Item 7.01 shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended.
Item 9.01. | Financial Statements and Exhibits |
Exhibit 99.1 | News Release, dated June 28, 2018. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Assurant, Inc. | ||
By: | /s/ Carey S. Roberts | |
Carey S. Roberts | ||
Executive Vice President, Chief Legal Officer and Secretary |
Date: June 28, 2018
Exhibit 99.1
Assurant Announces $1.3 Billion 2018 Property Catastrophe Reinsurance Program
Protecting 2.9 Million Policyholders Worldwide at Attractive Terms
NEW YORK, N.Y.,
June 28, 2018 Assurant, Inc. (NYSE: AIZ), a global provider of risk management solutions, today announced it has finalized a $1.3 billion¹ 2018 property catastrophe reinsurance program, reducing the companys financial exposure
and protecting 2.9 million homeowners and renters policyholders against severe weather and other hazards.
2018 reinsurance premiums for this program are
estimated to be $121 million1,2, compared to $126 million in 2017. This reduction is mainly driven by Assurants declining catastrophe exposure within its lender-placed insurance offering. Coverage was placed with more than 40 reinsurers that
are all rated A- or better by A.M. Best.
In 2017, our catastrophe reinsurance program proved strong and resilient, absorbing over $600 million in total gross
losses, and more importantly Assurant was able to support policyholders during their time of need, said Michael P. Campbell, President, Assurant Global Home.
This year, weve secured comprehensive catastrophe coverage with attractive terms and conditions due to our risk management expertise and strong
relationships with our reinsurance partners, he added. Assurant is not only dedicated to providing protection to our policyholders but also to our shareholders, as we gradually reduce our overall net loss retention, in conjunction with
our declining exposure, over time.
Amount includes extension of the 2017 Latin America protection which will renew on September 1, 2018 and is subject
to changes in coverage amount, retention and cost.
2 Actual reinsurance premiums will vary if exposure changes significantly from estimates or if reinstatement
premiums are required due to catastrophe events.
Note: 2018 Catastrophe Reinsurance Program also includes coverage in the Caribbean of up to $162.5 million in excess of $17.5 million, and the extension of our 2017 Latin America protection of up to $183.5 million in excess of $4.5 million which will renew on September 1, 2018 and is subject to changes in coverage amount, retention and cost.
2018 Catastrophe Program Components
U.S. per-occurrence catastrophe coverage includes:
o A main reinsurance program providing $985
million of coverage in excess of a $120 million retention. The main U.S. tower protects the companys projected probable maximum loss (PML) for approximately a 1 in 170-year storm. As a result, the probability of exceeding the top of the
program in one year is less than 1 percent3.
o Multiyear reinsurance contracts covering 32 percent of the $855 million layers in excess of $240 million.
3 Probable Maximum Loss is projected based on estimated 12/31/18 exposure and a blend of industry modeling tools. Actual losses may differ materially from
projections.
o All layers of the program allow for one automatic reinstatement and include a cascading feature that provides multi-event protection
in which higher coverage layers drop down as the lower layers and reinstatement limit are exhausted.
o Florida Hurricane Catastrophe Fund coverage for losses up to
90 percent of $283 million in excess of a $88 million retention. In the event of a Florida hurricane, this coverage will be utilized prior to the main U.S. reinsurance program. After applying coverage, any remaining losses would then be eligible for
recovery within our main tower. The program is covered for gross Florida losses of up to $1.4 billion which is approximately a 1-250-year Florida event based on projected modeled loss estimates. Utilizing both the coverage from the U.S. tower and
the Florida Hurricane Catastrophe Fund, the maximum retention for a Florida event would be $120 million.
International per-occurrence catastrophe coverage
increased as Assurant continues to expand its business in select property markets. Specifics include:
o Caribbean protection of up to $162.5 million in excess of a
$17.5 million retention, and Latin America protection of up to $183.5 million in excess of a $4.5 million retention which is an extension of 2017s protection that will renew on September 1, 2018 and is subject to changes in coverage
amount and retention.
o In these regions, Assurants product offerings are primarily residential dwelling policies covering the structure and contents.
Historical Loss and Global Housing Net Earned Premium Information
Several
features noted above also provided comprehensive coverage in 2017 and protected the company against significant losses from multiple storms. Despite over $600 million in gross losses last year, mostly associated with Hurricanes Harvey, Irma and
Maria, Assurant retained only $295 million of pre-tax losses ($192 million after-tax), demonstrating the effectiveness of the catastrophe reinsurance program. This was net of reinsurance and client profit sharing adjustments, as well as
reinstatement and other premiums.
To further exemplify the resilience of the 2018 program, the Company tested the program against several of the most significant
historical catastrophes since recording began in the 1850s using an industry leading catastrophe model. The modeling assumes the same geographic path of each hurricane and illustrates that to the extent these events were to recur today,
Assurants loss would be well within the U.S. catastrophe reinsurance programs limit.
4 All events are modeled gross losses based on the reoccurrence of each event as of December 31, 2017 exposure under the 2018 U.S.
property catastrophe reinsurance program except hurricanes Irma and Harvey which are based on actual gross losses. In addition, these events may also have coverage from the Florida Hurricane Catastrophe Fund or Caribbean programs.
For informational purposes, below is an outline of the top five states based on net earned premiums for Assurants Global Housing business as of year-end 2017. Global Housing
products, including lender-placed homeowners and flood, multi-family housing and manufactured housing account for the majority of catastrophe-exposed business at Assurant. 2017 Net Earned Premiums: Top 5 U.S. States in Global Housing Net Earned Net
Earned State Premiums Premiums as % of ($M) Global Housing Total Florida $359 21% Texas $171 10% California $133 8% New York $123 7% New Jersey $90 5% Total Global Housing $1,714
Illustrative Event Examples
Below are three
examples to demonstrate how Assurants 2018 property catastrophe reinsurance program would hypothetically work for a Florida-only event, Texas-only and a multi-storm scenario. These examples do not include the impact of reinstatement premiums.
Actual results may differ materially from these examples.
Example One
($M,
pre-tax) Florida Event Description Hurricane A Event Gross Loss $885M Florida Hurricane Catastrophe Fund Recoveries B = 90% of A - Loss in Excess of $88.3M 255 (Max of 90% of $283.0M) Loss Net of Florida Hurricane C 630 Catastrophe Fund Recoveries
(A - B) Recoveries from Main US Cat Program D 510 (C - $120M retention) Assurant Pre-Tax Net Catastrophe Loss Before E $120M Reinstatement Premiums (A-B-D)
A
hurricane strikes Florida-only and causes gross losses for Assurant of $885 million. We would expect this to result in a pre-tax net catastrophe loss of $120 million for Assurant before the impact of reinstatement premiums.
Example Two
A
hurricane strikes Texas-only and causes gross losses for Assurant of $265 million. We would expect this to result in a pre-tax net catastrophe loss of $120 million for Assurant before the impact of reinstatement premiums.
Example Three
Multiple hurricanes strike and cause
gross losses for Assurant of $1.72 billion. We would expect this to result in a pre-tax net catastrophe loss of $360 million for Assurant before the impact of reinstatement premiums. In this example, the cascading feature is implemented for Layers 1
& 2 after the second event.
($M, pre-tax) Texas Event Description Hurricane A Event Gross Loss $265M Recoveries from Main US Cat Program B 145 (A - $120M
retention) Assurant Pre-Tax Net Catastrophe Loss Before C $120M Reinstatement Premiums (A-B) ($M, pre-tax) Event 1 Event 2 Event 3 Florida Northeast Florida Event Description Total Hurricane Hurricane Hurricane A Event Gross Loss $495M $240M $985M
$1,720M Florida Hurricane Catastrophe Fund Recoveries B = 90% of A - Loss in Excess of $88.3M 255 0 0 255 (Max of 90% of $283.0M) Loss Net of Florida Hurricane C 240 240 985 1,465 Catastrophe Fund Recoveries (A - B) Recoveries from Main US Cat
Program D 120 120 865 1,105 (C - $120M retention) Assurant Pre-Tax Net Catastrophe Loss Before E $120M $120M $120M $360M Reinstatement Premiums (A-B-D)
About Assurant
Assurant, Inc. (NYSE: AIZ) is a global provider of risk management
solutions, protecting where consumers live and the goods they buy. A Fortune 500 company, Assurant focuses on the housing and lifestyle markets, and is among the market leaders in mobile device protection and related services; extended service
contracts; vehicle protection; pre-funded funeral insurance; renters insurance; lender-placed homeowners insurance; and mortgage valuation and field services. Assurant has a market presence in 21
countries, while its Assurant Foundation works to support and improve communities. Learn more at assurant.com or on Twitter
@AssurantNews.
Safe Harbor Statement
Some of the statements included in this
news release constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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 news release as a result of new information or future events or developments. For a detailed discussion of risk factors that could affect our results, please refer to the risk factors
identified in our annual and periodic reports filed with the U.S. Securities and Exchange Commission.
Media Contacts:
Linda Recupero
Senior Vice President, Enterprise Communication
212.859.7005
[email protected]
David Blumenthal
Director, Enterprise Communication
770.763.1073
[email protected]
Investor Relations Contacts:
Suzanne Shepherd
Vice President, Investor Relations
212.859.7062
[email protected]
Sean Moshier
Manager, Investor Relations
212.859.5831
[email protected]