Assurant, Inc. · NYSE:AIZ
Assurant — The Annual AIFA Conference 2006
31 slides from Assurant's conference presentation, Mar 6, 2006
Slide 1: Assurant Disability Business
Assurant Disability Business John S. Roberts Senior Vice President Assurant Employee Benefits The Annual AIFA Conference Monday, March 6, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement Some of the statements included in this presentation, particularly those anticipating future financial performance, business prospects, growth and operating strategies and similar matters, are forward-looking statements that involve a number of risks and uncertainties. For th
Slide 3: Agenda
Agenda Assurant (AIZ) Assurant Disability Business and Focus A Few Marketplace Trends New Product Initiatives at Assurant Employee Benefits 2
Slide 4: AIZ is Focused and Diverse Businesses
12% AIZ is Focused and Diverse Businesses (Based on 2005 net operating income) Assurant Preneed Pre-funded funeral insurance Assurant Health: Individual health insurance Short-term health insurance 34% Consumer Directed 7% Healthcare including Health Savings Accounts (HSA’s) 13% Small employer
Slide 5: Vanessa Wilson, Florida, Mobile Home Owner
Vanessa Wilson, Florida, Mobile Home Owner Manufactured Home Individual Medical Policy Homeowners/Mobilowners Policy • High deductible policy with HSA • Includes Physical Damage Coverage to dwelling • Includes Coverage for Additional Living Expense • Optional Adjacent Structures Coverage • Optional
Slide 6: John Nadel, Small Town USA, Hardware Store Owner
John Nadel, Small Town USA, Hardware Store Owner LTD/STD/Life • Employer sponsored products Short Term Health Policy on Kids • Voluntary or employee paid • Wide variety of medical options • Recent graduates or persons in need of 6 – 12 months coverage Virus Protection – CompUSA • Blocks unknown viru
Slide 7: All of the businesses have common operating expertise
All of the businesses have common operating expertise Highly Disciplined Risk Management Assurant Strategic Integration of Distribution Complex Relationships with Administration Market Leaders And Systems Skills 6
Slide 8: Assurant Employee Benefits: Overview
Assurant Employee Benefits: Overview Provides specialized group non-medical benefit products to small and mid-sized employers A market leader by # of employers* Life Concentrate on small to medium-sized employers 20% Disability — Small case risk expertise 40% Strong growth in Voluntary product
Slide 9: Core Business Focus – Small to Mid-size Employers
Core Business Focus – Small to Mid-size Employers Among top 4 carriers for each product measured by contracts inforce (2005)* Dental LTD Life 27,062 18,011 31,543 (contracts) (contracts) (contracts) Rank: #3 Rank: #4 Rank: #4 Wide array of product choices – small companies can buy like the big o
Slide 10: Why the Small Case Market?
Why the Small Case Market? 100% 80% It is a less 10 to 99 60% 10 to 499 penetrated 40% 500+ market 20% 0% Me De Lif LT ST dic n tal e D D al & Ho sp it a l Source: The Changing Group Insurance and Healthcare Marketplace, LIMRA 2003 Average Annual Growth – Firms1 2000 – 2005 It is where 10 to 24 25 t
Slide 11: Why the Small Case Market?
Why the Small Case Market? Persistency is Better LTD Prices are Higher Persistency (2001 - 2003) $250 $216 89.0% $190 $196 $184 88.1% 88.0% $200 87.0% $150 86.0% 85.0% 84.5% $100 83.9% 83.9% 84.0% $50 83.0% 82.0% $0 81.0% <200 200-299 1000-2500 2500+ <100 100-499 500-1999 2000+ Sources: Group Market
Slide 12: Assurant Employee Benefits LTD Business
Assurant Employee Benefits LTD Business 11
Slide 13: Our LTD Business
Our LTD Business LTD Premiums .5 .3 78 .2 59 .6 $3 42 .4 .7 .0 13 $3 97 05 $3 .1 89 $3 64 $2 $3 $2 $2 '98 '99 '00 '01 '02 '03 '04 '05 Growth slow due to movement Goals: away from large case — Be #5 writer of new LTD cases in 2006 Since 2001, purchase of — Maintain #4 position in inforce Disabi
Slide 14: Pulling the Curtain Back on LTD Business
Pulling the Curtain Back on LTD Business Two complimentary channels of distribution: — AEB distribution z 146 Sales Reps z 35 Offices — Disability RMS z Quota share reinsurance with a turnkey services z 30+ partnerships with regional and national companies z Over 375 sales reps of partner companie
Slide 15: Disability RMS Clients
Disability RMS Clients (1994) (2000) (2004) (1998) (1995) (2003) (2003) (2005) (1999) 14
Slide 16: LTD Business by Distribution Channel
LTD Business by Distribution Channel $400 $378.6 $342.2 $359.3 $313.6 Premium (in millions) $300 $39.4 $89.8 $128.2 $116.9 AEB/DRMS $200 AEB Direct $274.2 $252.4 $242.4 $250.4 $100 $0 2002 2003 2004 2005 Direct AEB is 66% of total business and began to reposition block to smaller cases in 2002 G
Slide 17: Business Mix AEB Direct
Business Mix AEB Direct Size 21% Premium base $250.4 million <100 Business primarily in core market 100-250 47% 250-1000 Midwest dominate due to strong 1000+ 16% home office presence – Kansas City Risk spread wide by industry 16% Geographic 9% SIC 16% 14% 10% 32% All Others Northeast Healthc
Slide 18: Business Mix AEB/Disability RMS
Business Mix AEB/Disability RMS Premium $128.2 million Size Small case focus strong, but less 28% 33% pronounced due to need to focus on <100 partner business 100-299 300-999 SIC code distribution wide; insurance 1000+ company concentration in partner home offices 20% 19% Geographic distribu
Slide 19: Business Focus on AEB Strategy
Business Focus on AEB Strategy Size Size 21% 28% 33% <100 <100 100-250 100-299 47% 250-1000 300-999 1000+ 1000+ 16% 20% 16% 19% Geographic Geographic 16% 14% 22% 30% Northeast Northeast Midwest Midwest South South West West 29% 41% 13% 34% 9% SIC SIC 15% 10% 32% All Others All Others Healthcare 8% 3
Slide 20: Focus for 2006
Focus for 2006 For direct business: — Continued focus on being “Easy to do business with” — Innovate while building on voluntary product spectrum — MVP Broker Program expansion Disability RMS: — Add 1 or 2 new partners — Execute on one block buyout — Prospect for clients primarily in AEB target
Slide 21: A View of the Marketplace
A View of the Marketplace 20 ASSURANT
Slide 22: Topics
Topics Sales and pricing in 2005 Persistency and churn Voluntary business 21
Slide 23: Industry Sales Results
Industry Sales Results Premium ($ Millions) Cases $1,159 $1,293 $1,195 $1,290 39,787 38,014 39,902 40,500 39,840 $1,134 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Premium Per Life $162 $187 $193 $201 $193 2001 2002 2003 2004 2005 Sources: Group Marketshare LLC and JHA Market Survey 22 2006 Co
Slide 24: Industry Premium Per Life by Case Size
Industry Premium Per Life by Case Size 10 - 199 200 - 999 $229 $175 $188 $176 $190 $200 $210 $207 $213 $162 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 1000 - 2500 2500+ $193 $193 $197 $173 $214 $164 $180 $169 $178 $134 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Sources: Group Marketsha
Slide 25: Persistency
Persistency Persistency (2001 - 2003) Policies issued 2001 through 2003 89.0% 88.1% 88.0% 87.0% 86.0% 85.0% 83.9% 83.9% 84.5% Overall 84.0% 83.0% persistency of 82.0% 81.0% new business is <100 100-499 500-1999 2000+ down in recent years Source: Group Marketshare LLC; 2005 Copyright Assurant Emplo
Slide 26: Persistency
Persistency Regional differences seem to indicate price discounting on initial offer Price discipline up front critical to retention of business Source: Group Marketshare LLC 2005 Copyright Assurant Employee Benefits 25
Slide 27: New Disability Product at Assurant Employee Benefits
New Disability Product at Assurant Employee Benefits 26
Slide 28: Voluntary Disability At AEB
Voluntary Disability At AEB Voluntary STD Voluntary LTD Colonial American Fidelity Assurant Jefferson Pilot Allstate CIGNA American Fidelity Assurant Jefferson Pilot Guardian Source: LIMRA, 3Q’05 Fast growing part of disability sales Hold promise for penetrating untapped market Non-traditional
Slide 29: Voluntary Disability – New Product Spectrum at AEB
Voluntary Disability – New Product Spectrum at AEB Voluntary products are the best way to reach the first- time buyer Non-traditional competitors offer low cost products Assurant’s voluntary disability spectrum offers a new way to target this market Voluntary Disability Spectrum Serious Illnes
Slide 30: Summary
Summary Assurant is positioned to focus on the small to mid-size employer The Assurant LTD business utilizes partner distribution similar to other AIZ businesses The market remains competitive, especially on the large case size We all need to pursue, more closely, the first-time buyer 29
Slide 31: Questions
© ASSURANT Questions