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 September 30, 20192020
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)
Delaware001-3197839-1126612
(State or other jurisdiction

of incorporation)
(Commission

File Number)
(I.R.S. Employer

Identification No.)
28 Liberty Street,, 41st Floor
New York,, New York10005
(212) (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 ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 Par ValueAIZNew York Stock Exchange
6.50% Series D Mandatory Convertible Preferred Stock, $1.00 Par ValueAIZPNew 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☐
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 Stockcommon stock outstanding at November 1, 2019October 30, 2020 was 60,635,832.
58,759,191.



ASSURANT, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20192020
TABLE OF CONTENTS
 
Item
Number
 
Page
Number
PART I
FINANCIAL INFORMATION
1.
2
4
5
6
8
10
2.
44
3.
68
4.
68
PART II
OTHER INFORMATION
1.
69
1A.
69
2.
69
6.
70
71

1
Item
Number
 
Page
Number
 
PART I
FINANCIAL INFORMATION
 
   
1.
Consolidated Financial Statements (unaudited) of Assurant, Inc.:
 
   
 
Consolidated Balance Sheets (unaudited) as of September 30, 2019 and December 31, 2018
2
   
 
Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2019 and 2018
4
   
 
Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2019 and 2018
5
   
 
Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended September 30, 2019 and 2018
6
   
 
Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2019 and 2018
8
   
 
Notes to Consolidated Financial Statements (unaudited)
10
   
2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
42
   
3.
Quantitative and Qualitative Disclosures About Market Risk
65
   
4.
Controls and Procedures
65
   
 
PART II
OTHER INFORMATION
 
   
1.
Legal Proceedings
66
   
1A.
Risk Factors
66
   
2.
Unregistered Sales of Equity Securities and Use of Proceeds
70
   
6.
Exhibits
71
   
 
Signatures
72

Amounts are presented in United States of America (“U.S.”) dollars and all amounts are in millions, except number of shares and per share amounts.


Assurant, Inc.
Consolidated Balance Sheets (unaudited)
As of September 30, 2019 and December 31, 2018




September 30, 2020December 31, 2019
 (in millions, except number of 
shares and per share amounts)
Assets
Investments:
Fixed maturity securities available for sale, at fair value (net of allowances for credit losses of $1.5 at September 30, 2020; amortized cost - $11,379.3 and $11,064.8 at September 30, 2020 and December 31, 2019, respectively)$13,094.5 $12,322.4 
Equity securities at fair value384.4 388.5 
Commercial mortgage loans on real estate, at amortized cost (net of allowances for credit losses of $6.9 at September 30, 2020)771.1 815.0 
Short-term investments250.0 402.5 
Other investments (net of allowances for credit losses of $1.4 at September 30, 2020)705.9 638.9 
Total investments15,205.9 14,567.3 
Cash and cash equivalents2,203.0 1,867.1 
Premiums and accounts receivable (net of allowances for credit losses of $15.9 at September 30, 2020)1,576.7 1,692.8 
Reinsurance recoverables (net of allowances for credit losses of $25.5 at September 30, 2020)9,796.2 9,593.4 
Accrued investment income133.0 131.1 
Deferred acquisition costs7,405.5 6,668.0 
Property and equipment, net468.4 433.7 
Goodwill2,325.8 2,343.4 
Value of business acquired1,339.8 2,004.3 
Other intangible assets, net581.8 540.2 
Other assets (net of allowances for credit losses of $1.8 at September 30, 2020)540.4 590.1 
Assets held in separate accounts2,006.1 1,839.7 
Assets of consolidated investment entities (1)0 2,020.1 
Total assets$43,582.6 $44,291.2 
Liabilities
Future policy benefits and expenses$9,907.4 $9,807.3 
Unearned premiums17,116.6 16,603.6 
Claims and benefits payable2,758.2 2,687.7 
Commissions payable547.0 540.5 
Reinsurance balances payable435.4 358.5 
Funds held under reinsurance361.2 319.4 
Accounts payable and other liabilities2,502.1 2,758.5 
Debt2,008.6 2,006.9 
Liabilities related to separate accounts2,006.1 1,839.7 
Liabilities of consolidated investment entities (1)0 1,687.0 
Total liabilities37,642.6 38,609.1 
Commitments and contingencies (Note 21)
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 September 30, 2020 and December 31, 2019, respectively2.9 2.9 
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 162,051,167 and 161,607,866 shares issued and 59,076,751 and 59,945,893 shares outstanding at September 30, 2020 and December 31, 2019, respectively1.6 1.6 
Additional paid-in capital4,568.2 4,537.7 
Retained earnings6,126.0 5,966.4 
Accumulated other comprehensive income658.2 411.5 
Treasury stock, at cost; 102,974,416 and 101,661,973 shares at September 30, 2020 and December 31, 2019, respectively(5,420.5)(5,267.3)
Total Assurant, Inc. stockholders’ equity5,936.4 5,652.8 
Non-controlling interests3.6 29.3 
Total equity5,940.0 5,682.1 
Total liabilities and equity$43,582.6 $44,291.2 
(1)The following table presents information on assets and liabilities related to consolidated investment entities as of December 31, 2019. During the third quarter of 2020, the Company sold its collateralized loan obligation asset management platform and outsourced its real estate asset management, which resulted in the deconsolidation of the consolidated investment entities. Refer to Notes 5 and 12 for additional information.
2
 September 30, 2019 December 31, 2018
 
(in millions, except number of 
shares and per share amounts)
Assets
Investments:   
Fixed maturity securities available for sale, at fair value (amortized cost - $11,104.5 and $10,834.0 at September 30, 2019 and December 31, 2018, respectively)$12,420.8
 $11,257.1
Equity securities at fair value406.9
 378.8
Commercial mortgage loans on real estate, at amortized cost804.6
 759.6
Short-term investments266.2
 373.2
Other investments653.5
 635.2
Total investments14,552.0
 13,403.9
Cash and cash equivalents1,749.3
 1,254.0
Premiums and accounts receivable, net1,767.1
 1,643.5
Reinsurance recoverables9,510.6
 9,166.0
Accrued investment income127.2
 125.5
Deferred acquisition costs6,161.2
 5,103.0
Property and equipment, at cost less accumulated depreciation418.8
 392.5
Goodwill2,331.0
 2,321.8
Value of business acquired2,262.3
 3,157.8
Other intangible assets, net547.8
 622.4
Other assets500.0
 603.8
Assets held in separate accounts1,747.2
 1,609.7
Assets of consolidated investment entities (1)2,077.0
 1,685.4
Total assets$43,751.5
 $41,089.3
Liabilities   
Future policy benefits and expenses$9,564.8
 $9,240.9
Unearned premiums16,383.2
 15,648.0
Claims and benefits payable2,871.1
 2,813.7
Commissions payable511.2
 338.6
Reinsurance balances payable345.2
 330.9
Funds held under reinsurance287.9
 272.0
Accounts payable and other liabilities2,637.9
 2,240.5
Debt2,006.3
 2,006.0
Liabilities related to separate accounts1,747.2
 1,609.7
Liabilities of consolidated investment entities (1)1,706.3
 1,455.1
Total liabilities38,061.1
 35,955.4
Commitments and contingencies (Note 18)

 

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 September 30, 2019 and December 31, 2018, respectively2.9
 2.9
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 161,585,665 and 161,153,454 shares issued and 60,758,742 and 61,908,979 shares outstanding at September 30, 2019 and December 31, 2018, respectively1.6
 1.6
Additional paid-in capital4,524.5
 4,495.6
Retained earnings5,882.9
 5,759.7
Accumulated other comprehensive income (loss)405.2
 (155.4)
Treasury stock, at cost; 100,812,923 and 99,244,475 shares at September 30, 2019 and December 31, 2018, respectively(5,158.5) (4,992.4)
Total Assurant, Inc. stockholders’ equity5,658.6
 5,112.0
Non-controlling interests31.8
 21.9
Total equity5,690.4
 5,133.9
Total liabilities and equity$43,751.5
 $41,089.3
(1)The following table presents information on assets and liabilities related to consolidated investment entities as of September 30, 2019 and December 31, 2018.


Assurant, Inc.
Consolidated Balance Sheets (unaudited)
As of September 30, 2019 and December 31, 2018
December 31, 2019
Assets
Cash and cash equivalents$32.9 
Investments, at fair value1,957.9 
Other receivables29.3 
Total assets$2,020.1 
Liabilities
Collateralized loan obligation notes, at fair value1,603.1 
Other liabilities83.9 
Total liabilities$1,687.0 

 September 30, 2019 December 31, 2018
 (in millions)
Assets   
Cash and cash equivalents$64.3
 $62.6
Investments, at fair value1,996.4
 1,576.2
Other receivables16.3
 46.6
Total assets$2,077.0
 $1,685.4
Liabilities   
Collateralized loan obligation notes, at fair value1,610.2
 1,316.7
Other liabilities96.1
 138.4
Total liabilities$1,706.3
 $1,455.1



See the accompanying Notes to Consolidated Financial Statements
3


Assurant, Inc.
Consolidated Statements of Operations (unaudited)
Three and Nine Months Ended September 30, 2019 and 2018

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30,Nine Months Ended September 30,
2019 2018 2019 2018 2020201920202019
(in millions, except number of shares and per share amounts) (in millions, except number of shares and per share amounts)
Revenues       Revenues
Net earned premiums$2,015.4
 $1,853.6
 $5,952.5
 $4,316.8
Net earned premiums$2,102.8 $2,015.4 $6,223.0 $5,952.5 
Fees and other income295.1
 257.9
 959.5
 976.6
Fees and other income245.9 295.1 934.3 959.5 
Net investment income169.5
 151.8
 490.0
 417.6
Net investment income135.1 169.5 428.3 490.0 
Net realized gains (losses) on investments, excluding other-than-temporary impairment losses15.1
 (5.2) 62.6
 (16.1)
Other-than-temporary impairment losses recognized in earnings(0.2) (0.5) (1.1) (0.5)
Net realized gains (losses) on investments (including $(1.5), $(0.2), $(14.6), and $(1.1) of impairment losses for the three and nine months ended September 30, 2020 and 2019, respectively)Net realized gains (losses) on investments (including $(1.5), $(0.2), $(14.6), and $(1.1) of impairment losses for the three and nine months ended September 30, 2020 and 2019, respectively)16.6 14.9 (54.6)61.5 
Amortization of deferred gains on disposal of businesses4.4
 12.7
 16.9
 46.2
Amortization of deferred gains on disposal of businesses2.1 4.4 8.7 16.9 
Total revenues2,499.3
 2,270.3
 7,480.4
 5,740.6
Total revenues2,502.5 2,499.3 7,539.7 7,480.4 
Benefits, losses and expenses       Benefits, losses and expenses
Policyholder benefits705.2
 680.9
 2,006.9
 1,586.1
Policyholder benefits709.6 705.2 1,908.9 2,006.9 
Amortization of deferred acquisition costs and value of business acquired869.5
 750.6
 2,462.6
 1,560.2
Amortization of deferred acquisition costs and value of business acquired946.2 869.5 2,745.7 2,462.6 
Underwriting, general and administrative expenses764.5
 736.5
 2,388.1
 2,229.7
Underwriting, general and administrative expenses687.5 764.5 2,331.8 2,388.1 
Goodwill impairment (Note 6)Goodwill impairment (Note 6)137.8 0 137.8 0 
Iké net losses (Note 5)121.1
 —
 130.5
 —
Iké net losses (Note 5)0 121.1 5.9 130.5 
Interest expense32.2
 26.5
 85.2
 74.0
Interest expense25.5 32.2 77.7 85.2 
Loss on extinguishment of debt31.4
 —
 31.4
 —
Loss on extinguishment of debt0 31.4 0 31.4 
Total benefits, losses and expenses2,523.9
 2,194.5
 7,104.7
 5,450.0
Total benefits, losses and expenses2,506.6 2,523.9 7,207.8 7,104.7 
(Loss) income before provision for income taxes(24.6) 75.8
 375.7
 290.6
(Loss) income before provision for income taxes(4.1)(24.6)331.9 375.7 
Provision for income taxes28.6
 22.8
 117.7
 64.6
Provision for income taxes26.4 28.6 28.2 117.7 
Net (loss) income(53.2) 53.0
 258.0
 226.0
Net (loss) income(30.5)(53.2)303.7 258.0 
Less: Net income attributable to non-controlling interests(1.6) —
 (3.0) —
Less: Net loss (income) attributable to non-controlling interestsLess: Net loss (income) attributable to non-controlling interests0.3 (1.6)(1.1)(3.0)
Net (loss) income attributable to stockholders(54.8) 53.0
 255.0
 226.0
Net (loss) income attributable to stockholders(30.2)(54.8)302.6 255.0 
Less: Preferred stock dividends(4.7) (4.7) (14.0) (9.5)Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net (loss) income attributable to common stockholders$(59.5) $48.3
 $241.0
 $216.5
Net (loss) income attributable to common stockholders$(34.9)$(59.5)$288.6 $241.0 
       
Earnings Per Common Share       Earnings Per Common Share
Basic$(0.96) $0.76
 $3.88
 $3.73
Basic$(0.58)$(0.96)$4.78 $3.88 
Diluted$(0.96) $0.76
 $3.86
 $3.72
Diluted$(0.58)$(0.96)$4.76 $3.86 
Share Data       Share Data
Weighted average common shares outstanding used in basic per common share calculations61,804,492
 63,621,184
 62,204,242
 57,988,570
Weighted average common shares outstanding used in basic per common share calculations60,190,103 61,804,492 60,384,817 62,204,242 
Plus: Dilutive securities—
 179,163
 256,003
 205,370
Plus: Dilutive securities0 0 256,128 256,003 
Weighted average common shares used in diluted per common share calculations61,804,492
 63,800,347
 62,460,245
 58,193,940
Weighted average common shares used in diluted per common share calculations60,190,103 61,804,492 60,640,945 62,460,245 
See the accompanying Notes to Consolidated Financial Statements
4


Assurant, Inc.
Consolidated Statements of Comprehensive Income (unaudited)
Three and Nine Months Ended September 30, 2019 and 2018
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
 (in millions)
Net (loss) income$(30.5)$(53.2)$303.7 $258.0 
Other comprehensive income (loss):
Change in unrealized gains on investments, net of taxes of $(12.3), $(28.5), $(53.7) and $(157.5) for the three and nine months ended September 30, 2020 and 2019, respectively54.1 97.4 186.7 574.8 
Change in unrealized gains on derivative transactions, net of taxes of $0.2, $0.2, $0.5 and $0.5 for the three and nine months ended September 30, 2020 and 2019, respectively(0.6)2.7 (1.8)(0.5)
Change in credit related impairment losses, net of taxes of $(0.3) for the three and nine months ended September 30, 20201.2 0 1.2 0 
Change in non-credit related impairment losses, net of taxes of $(0.4), $(0.1), $(0.1) and $(0.2) for the three and nine months ended September 30, 2020 and 2019, respectively1.5 0.2 0.3 0.7 
Change in foreign currency translation, net of taxes of $(1.5), $0.8, $4.2 and $(0.6) for the three and nine months ended September 30, 2020 and 2019, respectively35.3 (23.6)15.2 (14.6)
Change in pension and postretirement unrecognized net periodic benefit cost, net of taxes of $0.6, $0, $(12.0) and $(0.1) for the three and nine months ended September 30, 2020 and 2019, respectively (1)(2.2)(0.2)45.1 0.2 
Total other comprehensive income89.3 76.5 246.7 560.6 
Total comprehensive income58.8 23.3 550.4 818.6 
Less: Comprehensive loss (income) attributable to non-controlling interests0.3 (1.6)(1.1)(3.0)
Total comprehensive income attributable to stockholders$59.1 $21.7 $549.3 $815.6 

(1)Change in nine months ended September 30, 2020 includes the prior service credit resulting from the February 2020 amendment of the Retirement Health Benefits plan. Refer to Note 20 for further information.
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
 (in millions)
Net (loss) income$(53.2) $53.0
 $258.0
 $226.0
Other comprehensive income (loss):       
Change in unrealized gains on securities, net of taxes of $(28.5), $13.7, $(157.5) and $89.7 for the three and nine months ended September 30, 2019 and 2018, respectively97.4
 (47.0) 574.8
 (328.1)
Change in unrealized gains on derivative transactions, net of taxes of $0.2, $0.1, $0.5 and $(5.3) for the three and nine months ended September 30, 2019 and 2018, respectively2.7
 0.1
 (0.5) 21.0
Change in other-than-temporary impairment losses, net of taxes of $(0.1), $0.1, $(0.2) and $1.4 for the three and nine months ended September 30, 2019 and 2018, respectively0.2
 (0.5) 0.7
 (5.4)
Change in foreign currency translation, net of taxes of $0.8, $(0.8), $(0.6) and $0.7 for the three and nine months ended September 30, 2019 and 2018, respectively(23.6) 4.8
 (14.6) (69.1)
Amortization of pension and postretirement unrecognized net periodic benefit cost, net of taxes of $0.0, $(0.2), $(0.1) and $(0.5) for the three and nine months ended September 30, 2019 and 2018, respectively(0.2) 0.8
 0.2
 1.8
Total other comprehensive income (loss)76.5
 (41.8) 560.6
 (379.8)
Total comprehensive income (loss)23.3
 11.2
 818.6
 (153.8)
Less: Comprehensive income attributable to non-controlling interests(1.6) —
 (3.0) —
Total comprehensive income (loss) attributable to stockholders$21.7
 $11.2
 $815.6
 $(153.8)

See the accompanying Notes to Consolidated Financial Statements
5


Assurant, Inc.
Consolidated Statements of Changes in Equity (unaudited)
Three and Nine Months Ended September 30, 2019 and 2018

Three Months Ended September 30, 2020
Preferred StockCommon StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income		Treasury
Stock		Non-controlling InterestsTotal
 (in millions)
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 
Stock plan issuances— — 4.7 — — — — 4.7 
Stock plan compensation expense— — 15.5 — — — — 15.5 
Common stock dividends ($0.63 per share)— — — (37.5)— — — (37.5)
Acquisition of common stock— — (1.7)— — (70.1)— (71.8)
Net loss— — — (30.2)— — (0.3)(30.5)
Preferred stock dividends ($1.63 per share)— — — (4.7)— — — (4.7)
Change in equity of non-controlling interests— — — 4.0 — — (11.2)(7.2)
Acquisition of non-controlling interests— — (0.7)— — — (1.6)(2.3)
Other comprehensive income— — — — 89.3 — — 89.3 
Balance at September 30, 2020$2.9 $1.6 $4,568.2 $6,126.0 $658.2 $(5,420.5)$3.6 $5,940.0 
Three Months Ended September 30, 2019
Preferred StockCommon StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income		Treasury
Stock		Non-controlling InterestsTotal
 (in millions)
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 
Stock plan issuances— — 3.6 — — — — 3.6 
Stock plan compensation expense— — 15.0 — — — — 15.0 
Common stock dividends ($0.60 per share)— — — (37.3)— — — (37.3)
Acquisition of common stock— — (3.3)— — (65.4)— (68.7)
Net (loss) income— — — (54.8)— — 1.6 (53.2)
Preferred stock dividends ($1.63 per share)— — — (4.7)— — — (4.7)
Change in equity of non-controlling interests— — — (1.2)— — 0.1 (1.1)
Other comprehensive income— — — — 76.5 — — 76.5 
Balance at September 30, 2019$2.9 $1.6 $4,524.5 $5,882.9 $405.2 $(5,158.5)$31.8 $5,690.4 
6
 Three Months Ended September 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 June 30, 2019$2.9
 $1.6
 $4,509.2
 $5,980.9
 $328.7
 $(5,093.1) $30.1
 $5,760.3
Stock plan exercises—
 —
 0.3
 —
 —
 —
 —
 0.3
Stock plan compensation expense—
 —
 15.0
 —
 —
 —
 —
 15.0
Common stock dividends ($0.60 per share)—
 —
 —
 (37.3) —
 —
 —
 (37.3)
Acquisition of common stock—
 —
 —
 —
 —
 (65.4) —
 (65.4)
Net (loss) income—
 —
 —
 (54.8) —
 —
 1.6
 (53.2)
Preferred stock dividends ($1.63 per share)—
 —
 —
 (4.7) —
 —
 —
 (4.7)
Change in equity of non-controlling interests—
 —
 —
 (1.2) —
 —
 0.1
 (1.1)
Other comprehensive income—
 —
 —
 —
 76.5
 —
 —
 76.5
Balance at September 30, 2019$2.9
 $1.6
 $4,524.5
 $5,882.9
 $405.2
 $(5,158.5) $31.8
 $5,690.4


 Three Months Ended September 30, 2018
 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 June 30, 2018$2.9
 $1.6
 $4,459.7
 $5,846.3
 $(137.9) $(4,860.1) $20.4
 $5,332.9
Cumulative effect of change in accounting principles, net of taxes—
 —
 —
 (82.0) 82.0
 —
 —
 —
Stock plan exercises—
 —
 1.7
 —
 —
 —
 —
 1.7
Stock plan compensation expense—
 —
 17.4
 —
 —
 —
 —
 17.4
Common stock dividends ($0.56 per share)—
 —
 —
 (35.5) —
 —
 —
 (35.5)
Acquisition of common stock—
 —
 —
 —
 —
 (83.2) —
 (83.2)
Net income—
 —
 —
 53.0
 —
 —
 —
 53.0
Preferred stock dividends ($1.63 per share)—
 —
 —
 (4.7) —
 —
 —
 (4.7)
Change in equity of non-controlling interests—
 —
 —
 —
 —
 —
 (0.1) (0.1)
Other comprehensive loss—
 —
 —
 —
 (41.8) —
 —
 (41.8)
Balance at September 30, 2018$2.9
 $1.6
 $4,478.8
 $5,777.1
 $(97.7) $(4,943.3) $20.3
 $5,239.7



Assurant, Inc.
Consolidated Statements of Changes in Equity (unaudited)
Three and Nine Months Ended September 30, 2019 and 2018
Nine Months Ended September 30, 2020
Preferred StockCommon StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive Income		Treasury
Stock		Non-controlling InterestsTotal
 (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— — 8.6 — — — — 8.6 
Stock plan compensation expense— — 41.9 — — — — 41.9 
Common stock dividends ($1.89 per share)— — — (115.1)— — — (115.1)
Acquisition of common stock— — (19.3)— — (153.2)— (172.5)
Net income— — — 302.6 — — 1.1 303.7 
Preferred stock dividends ($4.88 per share)— — — (14.0)— — — (14.0)
Change in equity of non-controlling interests— — — 6.5 — — (25.2)(18.7)
Acquisition of non-controlling interests— — (0.7)— — — (1.6)(2.3)
Other comprehensive income— — — — 246.7 — — 246.7 
Balance at September 30, 2020$2.9 $1.6 $4,568.2 $6,126.0 $658.2 $(5,420.5)$3.6 $5,940.0 

Nine Months Ended September 30, 2019
Preferred StockCommon StockAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Treasury
Stock		Non-controlling InterestsTotal
 (in millions)
Balance at December 31, 2018$2.9 $1.6 $4,495.6 $5,759.7 $(155.4)$(4,992.4)$21.9 $5,133.9 
Stock plan issuances— — 7.1 ��� — — — 7.1 
Stock plan compensation expense— — 40.7 — — — — 40.7 
Common stock dividends ($1.80 per share)— — — (113.0)— — — (113.0)
Acquisition of common stock— — (18.9)— — (166.1)— (185.0)
Net income— — — 255.0 — — 3.0 258.0 
Preferred stock dividends ($4.88 per share)— — — (14.0)— — — (14.0)
Change in equity of non-controlling interests— — — (4.8)— — 6.9 2.1 
Other comprehensive income— — — — 560.6 — — 560.6 
Balance at September 30, 2019$2.9 $1.6 $4,524.5 $5,882.9 $405.2 $(5,158.5)$31.8 $5,690.4 
(1)Amount relates to the adoption of a new accounting standard for accounting for expected credit losses for assets held at amortized cost, which established allowances for such expected credit losses as of January 1, 2020. Refer to Notes 3 and 7 for additional information.
 Nine Months Ended September 30, 2019
 Preferred Stock Common Stock 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Treasury
Stock
 Non-controlling Interests Total
 (in millions)
Balance at December 31, 2018$2.9
 $1.6
 $4,495.6
 $5,759.7
 $(155.4) $(4,992.4) $21.9
 $5,133.9
Stock plan exercises—
 —
 (11.8) —
 —
 —
 —
 (11.8)
Stock plan compensation expense—
 —
 40.7
 —
 —
 —
 —
 40.7
Common stock dividends ($1.80 per share)—
 —
 —
 (113.0) —
 —
 —
 (113.0)
Acquisition of common stock—
 —
 —
 —
 —
 (166.1) —
 (166.1)
Net income—
 —
 —
 255.0
 —
 —
 3.0
 258.0
Preferred stock dividends ($4.88 per share)—
 —
 —
 (14.0) —
 —
 —
 (14.0)
Change in equity of non-controlling interests—
 —
 —
 (4.8) —
 —
 6.9
 2.1
Other comprehensive income—
 —
 —
 —
 560.6
 —
 —
 560.6
Balance at September 30, 2019$2.9
 $1.6
 $4,524.5
 $5,882.9
 $405.2
 $(5,158.5) $31.8
 $5,690.4


 Nine Months Ended September 30, 2018
 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, 2017$—
 $1.5
 $3,197.9
 $5,697.3
 $234.0
 $(4,860.1) $10.9
 $4,281.5
Cumulative effect of change in accounting principles, net of taxes—
 —
 —
 (40.6) 48.1
 —
 —
 7.5
Stock plan exercises—
 —
 (7.1) —
 —
 —
 —
 (7.1)
Stock plan compensation expense—
 —
 39.1
 —
 —
 —
 —
 39.1
Common stock dividends ($1.68 per share)—
 —
 —
 (96.1) —
 —
 —
 (96.1)
Acquisition of common stock—
 —
 —
 —
 —
 (83.2) —
 (83.2)
Net income—
 —
 —
 226.0
 —
 —
 —
 226.0
Issuance of preferred stock2.9
 —
 273.5
 —
 —
 —
 —
 276.4
Issuance of common stock—
 0.1
 975.4
 —
 —
 —
 —
 975.5
Preferred stock dividends ($3.30 per share)—
 —
 —
 (9.5) —
 —
 —
 (9.5)
Change in equity of non-controlling interests—
 —
 —
 —
 —
 —
 9.4
 9.4
Other comprehensive loss—
 —
 —
 —
 (379.8) —
 —
 (379.8)
Balance at September 30, 2018$2.9
 $1.6
 $4,478.8
 $5,777.1
 $(97.7) $(4,943.3) $20.3
 $5,239.7


See the accompanying Notes to Consolidated Financial Statements
7


Assurant, Inc.
Consolidated Statements of Cash Flows (unaudited)
Nine Months Ended September 30, 2019 and 2018

Nine Months Ended September 30,
 20202019
(in millions)
Operating activities
Net income attributable to stockholders$302.6 $255.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income:
Deferred tax expense172.1 40.6 
Amortization of deferred gains on disposal of businesses(8.7)(16.9)
Depreciation and amortization105.1 87.4 
Net realized losses (gains) on investments, including impairment losses54.6 (61.5)
Loss on extinguishment of debt0 31.4 
Loss on sale of business0 9.6 
Stock based compensation expense41.9 40.7 
Other intangible asset impairment0 16.2 
Goodwill impairment137.8 0 
Iké related charges, net of derivative gains (1)1.7 130.5 
Changes in operating assets and liabilities:
Change in insurance policy reserves and expenses825.9 1,393.2 
Change in premiums and accounts receivable102.8 (138.8)
Change in commissions payable14.1 75.2 
Change in reinsurance recoverable(154.5)(259.5)
Change in reinsurance balance payable80.5 12.9 
Change in funds withheld under reinsurance42.6 13.4 
Change in deferred acquisition costs and value of business acquired(418.3)(685.1)
Change in taxes (receivable) payable (5)(33.0)63.8 
Change in other assets and other liabilities(371.5)163.6 
Other5.9 (3.8)
Net cash provided by operating activities901.6 1,167.9 
Investing activities
Sales of:
Fixed maturity securities available for sale489.2 1,730.0 
Equity securities21.4 85.3 
Other invested assets87.4 45.8 
Iké foreign currency hedge (1)22.0 0 
Maturities, calls, prepayments, and scheduled redemption of:
Fixed maturity securities available for sale723.6 483.9 
Commercial mortgage loans on real estate38.5 41.7 
Purchases of:
Fixed maturity securities available for sale(1,543.7)(2,434.1)
Equity securities(27.9)(81.8)
Commercial mortgage loans on real estate(3.0)(84.3)
Other invested assets (2)(78.6)(33.4)
Property and equipment and other(81.1)(70.5)
Subsidiaries, net of cash transferred (3)(166.1)0 
Net cash outflow related to sale of interests in Iké and termination of put/call obligations (1)(73.3)0 
8
 Nine Months Ended September 30,
 2019 2018
 (in millions)
Operating activities   
Net income attributable to stockholders$255.0
 $226.0
Adjustments to reconcile net income to net cash provided by operating activities:   
Noncash revenues, expenses, gains and losses included in income:   
Deferred tax expense40.6
 25.0
Amortization of deferred gains on disposal of businesses(16.9) (46.2)
Depreciation and amortization87.4
 90.6
Net realized (gains) losses on investments(61.5) 16.6
Loss on extinguishment of debt31.4
 —
Loss on sale of business9.6
 41.0
Stock based compensation expense40.7
 39.1
Costs associated with exit or disposal activities

5.0
 —
Other intangible asset impairment16.2
 —
Iké net losses130.5
 —
Changes in operating assets and liabilities:   
Change in insurance policy reserves and expenses1,393.2
 14.5
Change in premiums and accounts receivable(138.8) (109.1)
Change in commissions payable75.2
 (37.8)
Change in reinsurance recoverable(259.5) 838.0
Change in reinsurance balance payable12.9
 (28.9)
Change in funds withheld under reinsurance13.4
 (100.1)
Change in deferred acquisition costs and value of business acquired(685.1) (439.7)
Change in accounts payable168.2
 (207.3)
Change in other assets and other liabilities(4.6) 10.2
Change in taxes payable63.8
 123.1
Other(8.8) (0.4)
Net cash provided by operating activities1,167.9
 454.6
Investing activities   
Sales of:   
Fixed maturity securities available for sale1,730.0
 2,616.3
Equity securities85.3
 62.7
Other invested assets45.8
 47.1
Subsidiary, net of cash transferred—
 36.7
Maturities, calls, prepayments, and scheduled redemption of:   
Fixed maturity securities available for sale483.9
 593.8
Commercial mortgage loans on real estate41.7
 102.8
Purchases of:   
Fixed maturity securities available for sale(2,434.1) (2,941.0)
Equity securities(81.8) (44.5)
Commercial mortgage loans on real estate(84.3) (192.6)
Other invested assets(33.4) (25.0)
Property and equipment and other(70.5) (58.9)
Subsidiaries, net of cash transferred—
 (1,213.5)
Consolidated investment entities (1):   



Assurant, Inc.
Consolidated Statements of Cash Flows (unaudited)
Nine Months Ended September 30, 2019 and 2018
Consolidated investment entities (4):
Purchases of investments(353.1)(1,163.1)
Sale of investments550.2 754.4 
Change in short-term investments118.9 108.5 
Other0.4 4.0 
Net cash used in investing activities(275.2)(613.6)
Financing activities
Issuance of debt, net of issuance costs0 346.7 
Repayment of debt, including tender offer premium0 (379.6)
Issuance of collateralized loan obligation notes (4)0 404.8 
Issuance of debt for consolidated investment entities (4)0 189.1 
Repayment of debt for consolidated investment entities (4)(1.2)(318.7)
Payment of contingent liability0 (19.3)
Borrowings under secured revolving credit facility200.0 0 
Payments on secured revolving credit facility(200.0)0 
Acquisition of common stock(154.5)(164.3)
Common stock dividends paid(115.1)(113.0)
Preferred stock dividends paid(14.0)(14.0)
Employee stock purchases and withholdings(12.0)18.1 
Other0 0.1 
Net cash used in financing activities(296.8)(50.1)
Effect of exchange rate changes on cash and cash equivalents6.3 (8.9)
Change in cash and cash equivalents335.9 495.3 
Cash and cash equivalents at beginning of period1,867.1 1,254.0 
Cash and cash equivalents at end of period$2,203.0 $1,749.3 

Purchases of investments(1,163.1) (1,362.2)
Sale of investments754.4
 573.7
Change in short-term investments108.5
 (101.4)
Other4.0
 1.6
Net cash used in investing activities(613.6) (1,904.4)
Financing activities   
Issuance of mandatory convertible preferred stock, net of issuance costs (2)—
 276.4
Issuance of debt, net of issuance costs (3)346.7
 1,285.7
Repayment of debt, including tender offer premium (3)(379.6) (350.0)
Issuance of collateralized loan obligation notes (1)404.8
 831.4
Issuance of debt for consolidated investment entities (1)189.1
 509.0
Repayment of debt for consolidated investment entities (1)(318.7) (591.6)
Payment of contingent liability (4)(19.3) —
Acquisition of common stock(164.3) (87.2)
Common stock dividends paid(113.0) (96.1)
Preferred stock dividends paid(14.0) (9.5)
Withholding on stock based compensation18.1
 14.6
Non-controlling interest—
 7.6
Other0.1
 0.1
Net cash (used in) provided by financing activities(50.1) 1,790.4
Effect of exchange rate changes on cash and cash equivalents(8.9) (30.8)
Change in cash and cash equivalents495.3
 309.8
Cash and cash equivalents at beginning of period1,254.0
 996.8
Cash and cash equivalents at end of period$1,749.3
 $1,306.6
(1)Relates to Iké disposition and related financing. Refer to Note 5 for additional information.
(1)Relates to cash flows from our variable interest entities. Refer to Note 9 for further information.
(2)Refer to Note 15 for additional information.
(3)Refer to Note 12 for additional information.
(4)Relates to the current year settlement of a contingent payable from the Company’s acquisition of certain renewal rights in a prior year.

(2)Includes loan to Iké Grupo. Refer to Note 5 for additional information.
(3)Consists of $175.4 million in cash consideration for the acquisition of American Financial & Automotive Services, Inc., net of $39.6 million of cash acquired, and $30.3 million in total cash consideration for 3 business acquisitions within the Global Lifestyle business. Refer to Note 4 for additional information.
(4)Relates to cash flows from the Company’s variable interest entities. Refer to Note 12 for additional information.
(5)Includes receipt of the $204.9 million federal tax refund, which includes interest, related to the ability to carryback net operating losses to prior periods under the CARES Act. Refer to Note 8 for additional information.




See the accompanying Notes to Consolidated Financial Statements





9
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)





1. Nature of Operations
Assurant, Inc. (the “Company”) is a global provider of risk managementlifestyle and housing solutions in the housingthat support, protect and lifestyle markets, protecting where people liveconnect major consumer purchases. The Company partners with leading brands to develop innovative products and the goods they buy.services and to deliver enhanced customer experience. The Company operates in North America, Latin America, Europe and Asia Pacific through 3 operating segments: Global Housing,Lifestyle, Global LifestyleHousing and Global Preneed. The Company partners with clients who are leaders in their industries to provide consumers a diverse range of protection products and services. Through its Global Housing segment, the Company provides lender-placed homeowners insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”). Through its Global Lifestyle segment, the Company provides mobile device protection products and related servicessolutions and extended service products and related services for consumer electronics and appliances (referred to as “Connected Living”); vehicle protection and related services (referred to as “Global Automotive”); and credit and other insurance products (referred to as “Global Financial Services and Other”). Through its Global Housing segment, the Company provides lender-placed homeowners insurance, lender-placed manufactured housing insurance and lender-placed flood insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and voluntary manufactured housing insurance, voluntary homeowners insurance and other specialty products (referred to as “Specialty and Other”). Through its Global Preneed segment, the Company provides pre-funded funeral insurance, final need insurance and annuity products.related services.
The Company’s common stock is traded on the New York Stock Exchange under the symbol “AIZ.”“AIZ”.

2. Basis of Presentation
The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements.
The interim financial data as of September 30, 20192020 and for the three and nine months ended September 30, 20192020 and 20182019 is unaudited. In the opinion of management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. The unaudited interim Consolidated Financial Statements include the accounts of the Company and all of its wholly owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. 
Operating results for the three and nine months ended September 30, 20192020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.2020. The accompanying unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.2019.
For the three and nine months ended September 30, 2019, the Company recorded an out of period adjustment that decreased net income attributable to common stockholders by $9.9 million ($14.2 million pre-tax). The adjustment related to a net over-capitalization of deferred acquisition costs, primarily at one of the Global Preneed international subsidiaries, occurring over a ten-year period. The Company has evaluated the impact of the adjustments and concluded that it is not material, individually and in the aggregate, to the current year-to-date period or any prior period financial statements.

3. Recent Accounting Pronouncements
Adopted
Lease accounting: Measurement of credit losses on financial instruments held at amortized cost (“CECL”)On January 1, 2019,: In June 2016, the Company adopted the new leaseFinancial Accounting Standards Board (“FASB”) issued amended guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities (codified in the FASB Accounting Standards Codification Topic 326 (“ASC 326”)). For assets held at amortized cost, the amended guidance eliminates the probable recognition threshold and instead requires an entity to reflect the current estimate of all expected credit losses. For available for sale debt securities, credit losses are measured in a modified retrospective basis and therefore did not restate comparative periods. The newmanner similar to accounting requirements in effect prior to adoption; however, the amended guidance requires that entities recognize assets and liabilities associated withcredit-related impairment losses be presented as an allowance rather than as a permanent impairment. The amendments affect loans, debt securities, trade receivables, net investments in leases, on theoff balance sheet credit exposures, premium receivables, reinsurance receivables, and disclose key information about leasing arrangements.any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company and its subsidiaries lease office space and equipment under operating lease arrangements for which the Company is the lessee. Therefore, the primary change at the time of adoption involved the recognition of right-of-use assets and lease liabilities related to operating leases with terms in excess of 12 months in which the Company is the lessee. Upon adoption, the Company elected the package of practical expedients permitted under the transition guidance, which allowed the carryforward of 1) historical lease classifications, 2) the prior assessment of whether a contract is or contains a lease, and 3) initial direct costs for any leases that existed prior to adoption. Asadopted this standard as of January 1, 2019,2020. Refer to Note 7 for additional information.
Customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract: In August 2018, the new lease liability and right-of-use asset was $85.3 million andFASB issued guidance aligning the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain
10
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




$78.0 million, respectively. Deferred rent liabilityinternal-use software. For these arrangements, the guidance also limits the period to expense capitalized implementation costs based on the term of $7.3 million, which was required under the previoushosting agreement, including the noncancelable period of the arrangement plus periods covered by options to extend the arrangement that are reasonably certain of exercise. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. The Company adopted the guidance was reversed. There was an immaterialon its effective date of January 1, 2020 with no material impact on equity upon adoption.
Asits financial position and results of September 30, 2019, the lease liability and right-of-use asset was $83.0 million and $75.8 million, respectively. These balances are included in accounts payable and other liabilities and other assets, respectively, in the consolidated balance sheets. For the three and nine months ended September 30, 2019, the operating lease cost recognized for leases with terms in excess of 12 months was $5.3 million and $16.7 million, respectively, and related cash outflows reducing the lease liability was $5.2 million and $15.8 million, respectively. At September 30, 2019, the weighted average remaining lease term and discount rate was 6.6 years and 4.5%, respectively.operations.
Not Yet Adopted
Measurement of credit losses on financial instruments held at amortized cost (“CECL”): In June 2016, the Financial Accounting Standards Board (“FASB”) issued amended guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities. For assets held at amortized cost, the amended guidance eliminates the probable recognition threshold and instead requires an entity to reflect the current estimate of all expected credit losses. For available for sale debt securities, credit losses will be measured in a manner similar to current accounting requirements; however, the amended guidance requires that credit losses be presented as an allowance rather than as a permanent impairment. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, premium receivables, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company expects to adopt the amended guidance on its effective date of January 1, 2020. The Company is evaluating the requirements of this amended guidance and the potential impact on the Company’s financial position and results of operations. While the Company expects an increase in its allowances for credit losses related to financial assets within scope of the standard, principally reinsurance receivables and commercial mortgage loans on real estate, the amount of the allowance will be dependent on the asset composition and economic conditions at that time of adoption.
Financial Instruments—Credit Losses: Targeted Transition Relief: In May 2019, the FASB issued guidance which provides transition relief for entities adopting CECL. The transition relief will allow companies to irrevocably elect, upon adoption of CECL, the fair value option on financial instruments that were previously measured at amortized cost basis. Entities are required to make this election on an instrument-by-instrument basis.
The effective date of the guidance will be the same as the effective date for CECL. An entity may early adopt the guidance in any interim period after its issuance if the entity has adopted CECL. The transition amendments should be applied on a modified-retrospective basis by means of a cumulative-effect adjustment to the opening balance of retained earnings balance in the statement of financial position as of the date that an entity adopted the amendments in CECL. The Company is evaluating the cost and benefit of the transition relief from this guidance in its overall adoption of the guidance under CECL and the potential impact on the Company’s financial position and results of operations.
Customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract: In August 2018, the FASB issued guidance aligning the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. For these arrangements, the guidance also limits the period to expense capitalized implementation costs based on the term of the hosting agreement, including the noncancellable period of the arrangement plus periods covered by options to extend the arrangement that are reasonably certain of exercise. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The guidance is required to be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations.
Targeted improvements to the accounting for long-duration contracts: In August 2018, the FASB issued guidance that provides targeted improvements to the accounting for long-duration contracts. The guidance includes the following primary changes: assumptions supporting benefit reserves will no longer be locked-in but must be updated at least annually with the impact of changes to the liability reflected in earnings (except for discount rates); the discount rate assumptions will be based on anthe upper-medium grade (low credit risk) fixed-income instrument yield instead of the earnings rate of invested assets; the discount rate must be evaluated at each reporting date and the impact of changes to the liability estimate as a result of updating
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




the discount rate assumption is required to be recognized in other comprehensive income; the provision for adverse deviation is eliminated; and premium deficiency testing is eliminated. Other noteworthy changes include the following: differing models for amortizing deferred acquisition costs will become uniform for all long-duration contracts based on a constant rate over the expected term of the related in-force contracts; all market risk benefits associated with deposit contracts must be reported at fair value with changes reflected in income except for changes related to credit risk which will be recognized in other comprehensive income; and disclosures will be expanded to include disaggregated roll forwards of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs, as well as information about significant inputs, judgments, assumptions and methods used in measurement.
As the FASB has approved a one-year delay in October 2019 for public business entities, theThe guidance is nowwill be effective for fiscal yearsthe Company beginning after December 15, 2021, andJanuary 1, 2022, including interim periods within those fiscal years.that year. Early adoption is permitted. Generally, the amendments are applied retrospectively as of the beginning of the earliest period presented with two transition options available for changing the assumptions. In July 2020, the FASB issued a proposed accounting standards update that, if adopted, would extend the effective date of this guidance for the Company to January 1, 2023 (with early adoption permitted) and the application transition date would be January 1, 2022.
This guidance will apply to the Company’s preneed life insurance policies, as well as its annuity and universal life products (which are no longer offered and are in runoff)run-off). The Company is evaluating the requirements of this guidance and the potential impact on the Company’s financial position and results of operations.

4. Acquisitions
TWG Acquisition
On May 31, 2018 (the “Acquisition Date”),Simplifying the Accounting for Income Taxes: In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The standard will be effective for the Company acquired TWG Holdings Limited and its subsidiaries (as subsequently reorganized, “TWG”) for total considerationbeginning on January 1, 2021, including interim periods within that year. Early adoption is permitted, including adoption in any interim period. The Company is evaluating the impact of $2.47 billion. This amount included $894.9 million in cash,adopting this new accounting guidance on the repaymentconsolidated financial statements.
Facilitation of TWG’s $595.9 million pre-existing debt and issuancethe Effects of $975.5 million of Assurant, Inc. common stock. As a result, the equityholders of TWG, including TPG Capital and certain of its affiliates (“TPG”), received a total of 10.4 million shares of Assurant, Inc. common stock. Reference Rate Reform on Financial Reporting: In March 2019, TPG sold2020, the FASB issued guidance which provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.
The relief is applicable only to legacy contracts if the amendments made to the agreements are solely for reference rate reform activities. The provisions must be applied consistently for all remaining sharesrelevant transactions other than derivatives, which may be applied at a hedging relationship level. The guidance is effective upon issuance. The guidance on contract modifications is applied prospectively from any date beginning March 12, 2020. Unlike other topics, the provisions of common stock held by certainthis update are only available until December 31, 2022, when the reference rate replacement activity is expected to have been completed.
As LIBOR is expected to be discontinued after 2021, the Company is evaluating the provisions of its affiliatesthis new accounting guidance and the impact to debt, investments and derivatives that have references to LIBOR and the subsequent transition to alternative reference rates. 
Improvements to Convertible Instruments and Contracts in an underwritten secondary public offering. TWG specializes inEntity’s Own Equity: In August 2020, the underwriting, administration and marketing of service contracts on a wide variety of consumer goods, including automobiles, consumer electronics and major home appliances.
Fair Value of Net Assets Acquired and Liabilities Assumed
The initialFASB issued guidance that simplifies accounting for the net assets acquired and liabilities assumed included certain provisional amounts recorded as of June 30, 2018 (the end of the reporting period in which the acquisition occurred). During the measurement period (which included the period from June 1, 2018 to May 31, 2019), the Company adjusted the provisional amounts to reflect new information obtained about facts and circumstances that existed as of the Acquisition Date, which, if known, would have affected the measurement of the amounts recognized as of that date. Such adjustments impacted certain identifiable assets acquired and liabilities assumed, resulting in a net increase to total identifiable net assets acquired and a corresponding decrease in goodwill of $25.7 million. The adjustments to income that would have been recognized in previous periods if the measurement period adjustments had been completed as of the Acquisition Date were immaterial.convertible instruments by removing major separation models required under current
11
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Assets acquired and (liabilities) assumed
Fixed maturity securities available for sale $2,268.8
Equity securities 49.4
Short-term investments 165.5
Other investments 100.9
Cash and cash equivalents 380.1
Premiums and accounts receivable, net 286.2
Reinsurance recoverables 1,908.7
Accrued investment income 31.6
Property and equipment 15.4
Value of business acquired 3,973.0
Other intangible assets 459.7
Other assets 200.0
Unearned premiums and contract fees (7,512.6)
Claims and benefits payable (419.9)
Commissions payable (106.8)
Reinsurance balances payable (186.1)
Funds held under reinsurance (202.2)
Accounts payable and other liabilities (381.7)
Non-controlling interest (1.8)
Total identifiable net assets acquired 1,028.2
Goodwill 1,438.1
Total acquisition consideration $2,466.3

Total goodwill

GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The guidance removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more contracts in an entity’s own equity to qualify for it. The guidance also simplifies the diluted earnings per common share (“EPS”) calculation in the areas of $1.44 billionconvertible instruments and instruments that qualify for the derivatives scope exception for contracts in an entity’s own equity to address accounting for the guidance changes to the classification, recognition and measurement.
This guidance will be effective for the Company beginning January 1, 2022. Early adoption is mainly attributable to expected growthpermitted. The Company is evaluating the requirements of this guidance and profitability, NaNthe potential impact on its financial position and results of which is expected to be deductible for income tax purposes.operations.
VOBA
4. Acquisition
American Financial & Automotive Services
On May 1, 2020, the Company acquired American Financial & Automotive Services, Inc. (“AFAS”), a provider of auto finance and Other Intangible Assets
insurance products and services, including vehicle service contracts, guaranteed asset protection insurance and other ancillary products sold directly through a network of nearly 600 franchised dealership clients across 40 states. The following table shows thetotal consideration was $176.9 million, comprised of a base purchase price allocation to value of business acquired (“VOBA”)$157.5 million, contingent consideration of $1.5 million and other intangible assets,purchase price adjustments of $17.9 million, including excess cash in the effect of measurement period adjustments tobusiness. The transaction resulted in provisional estimates as described above.
 Amount
Value of business acquired (1)$3,973.0
  
Finite life (1): 
Customer related intangibles (distribution network)$390.3
Technology based intangibles57.8
Total finite life other intangible assets448.1
Indefinite life: 
Contract based intangibles11.6
Total other intangible assets$459.7
(1)Refer to future estimated amortization table below for the amortization pattern of VOBA and other intangible assets with finite lives.
Total amortization of VOBA related to TWG for the three months ended September 30, 2019$2.9 million in net liabilities, $104.0 million of goodwill and 2018 was $282.4$75.8 million and $105.7 million, respectively, and for the nine months ended September 30, 2019 and 2018 was $874.8 million and
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




$139.9 million, respectively. Total amortization of other intangible assets, related to TWG for the three months ended September 30, 2019 and 2018 was $4.7 million and $3.9 million, respectively, and for the nine months ended September 30, 2019 and 2018 was $13.8 million and $5.3 million, respectively. At September 30, 2019, the estimated amortization of VOBA and other intangible assets with finite lives related to TWG for the remainder of 2019, the next five years and thereafter is as follows:which are primarily dealer relationships amortizable over 15 years.
PeriodVOBA Other Intangible Assets (with Finite Lives)
October 1 - December 31, 2019$241.4
 $4.4
2020801.0
 26.1
2021562.3
 31.0
2022346.1
 34.9
2023215.3
 36.1
202476.7
 36.5
Thereafter7.3
 254.0
Total$2,250.1
 $423.0

Acquisition-related Costs
Transaction5. Dispositions
Sale of Collateralized Loan Obligation (“CLO”) Asset Management Platform
In July 2020, the Company sold its CLO asset management platform for $20.0 million in cash consideration, resulting in a net gain of $18.3 million, including costs related to the acquisition were expensed as incurred. These costs include advisory, legal, accounting, valuation and other professional or consulting fees, as well as general and administrative costs. Transaction costs incurred to date in connection with the acquisition of TWG totaled $40.4 million. There were 0 significant transactions costssell, for the three and nine months ended September 30, 2019. Transaction costs included2020, reported through underwriting, general and administrative expenses in the consolidated statements of operations. The Company incurred additional exit related expenses of $6.1 million and $7.5 million for the three and nine months ended September 30, 20182020, respectively, that were $0.2 million and $30.2 million, respectively. Transaction costs were reported through thealso included in underwriting, general and administrative expenses line item in the consolidated statements of operations.
As a part of Prior to the ongoing integration of TWG’s operations,sale, the CLOs were variable interest entities (“VIEs”) that the Company has incurred, and will continue to incur, costs associated with restructuring systems, processes and workforce. These costs include such itemsconsolidated, as severance, retention, facilities and consulting. Integration costs incurred to datedescribed in connection with the acquisition of TWG totaled $52.4 million, including $5.3 million and $10.1 million for the three months ended September 30, 2019 and 2018, respectively, and $21.9 million and $22.9 million for the nine months ended September 30, 2019 and 2018, respectively, which were reported through the underwriting, general and administrative expenses line itemNote 12. The Company retained its direct investments in the consolidated statementsCLOs following the sale, but deconsolidated the CLOs in third quarter 2020 since it no longer acts as collateral manager and, as a result, no longer has the power to control the CLO entities.
Sale of operations.

5. Investment in Iké
In 2014, the Company made an approximately 40% investment in Iké Group,Grupo, Iké Asistencia and certain of their subsidiariesaffiliates (collectively, “Iké”), a services assistance business, for which wethe Company paid approximately $110.0 million. TheAt the same time, the Company also entered into a shareholdersshareholders’ agreement with the majority shareholders that provided us with the right to acquire the remainder of Iké from the majority shareholders and the majority shareholders the right to put their interests in Iké to usthe Company (together, the “put/call”) in mid-2019. In Aprilmid-2019 at a predetermined price. During 2019, the Company entered into a cooperation agreement with the majority shareholders of Iké to explore strategic alternatives. The Company also agreed to extend the put/call tocall. In January 31, 2020. Based on2020, in lieu of exercising the review of strategic alternatives as of September 30, 2019,put/call, the Company has decidedentered into a formal agreement to pursuesell its interests in Iké.
In May 2020, the Company completed the sale of its interests in Iké.
and terminated its put/call obligations recognizing a net loss on sale of $3.9 million pre-tax and $2.9 million after-tax in the second quarter of 2020. Prior to the sale, in 2020, the Company recorded aggregate impairment losses and put/call valuation losses of $22.3 million compared to $130.5 million for the nine months ended September 30, 2019. In connection with the anticipated sale, the Company entered into a financial derivative in January 2020 that provided an economic hedge against declines in the Mexican Peso relative to the U.S. Dollar since the purchase price was to be paid in Mexican Pesos. The Company has determined that Iké issettled its position upon the sale, resulting in a variable interest entity (“VIE”); however, we do not havecash inflow of $22.0 million, and net realized (losses) gains on the controlling financial interest to directderivative of $20.3 million during the activitiessecond quarter of the VIE that most significantly impact the VIE’s economic performance. Accordingly, the investment in Iké is recorded under the equity method of accounting and is included in other assets in the consolidated balance sheets. The Company’s income from its investment in Iké is included in fees and other income in the consolidated statements of operations. The estimated fair value of the put/call is remeasured each quarter and is included in accounts payable and other liabilities of the consolidated balance sheets and any gain or loss from changes in fair value is recorded in the consolidated statements of operations.2020.
12
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Impairment of Investment and Charge on Put/Call
The Company’s investment in Iké is assessed for possible impairment when events indicate that the fair value of the investment may be below the carrying value. The Company has committed to a plan to sell its interest in Iké and based on the current expectation of sales price, the Company determined that carrying value exceeds fair value and such impairment is other than temporary. For the three months ended September 30, 2019,In total, the Company recorded an impairment on its 40% equity method investment in Ikénet pre-tax charges of $66.8$121.1 million that includes consideration of cumulative foreign currency translation losses of $41.0 million recorded in other comprehensive income.
In addition, the Company recorded a charge of $54.3 million related to the change in value of the put/call for the three months ended September 30, 2019.
Valuation Allowance of Deferred Tax Assets Related to Investment in Iké
The losses referenced above generated deferred tax assets when applying the applicable effective tax rate. The Company’s ability to realize the deferred tax assets depends on its ability to generate sufficient taxable income of the same character within the carryback or carryforward periods in the impacted jurisdiction. In assessing future taxable income, the Company considered all sources of taxable income available to realize the deferred tax assets, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in carryback years and tax-planning strategies. The Company must record a valuation allowance to fully offset deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on an evaluation of the limited future sources of income in the impacted jurisdiction, the Company recorded a full valuation allowance on the $36.3 million of deferred taxes arising from the losses incurred for the three months ended September 30, 2019, and $5.9 million and $130.5 million for the nine months ended September 30, 2020 and 2019, respectively, presented as well asIké net losses in the consolidated statements of operations. For the nine months ended September 30, 2020, total impairment and put/call losses resulted in a $3.7 milliontax benefit of $6.7 million; however, this was fully offset by a valuation allowance against deferredas the realizability of the tax assets establishedlosses in prior periods.
In total, the Company recorded pre-tax chargesrelated tax jurisdiction is unlikely. There was tax expense of $121.1$4.3 million andon the income arising on the financial derivative in the second quarter of 2020, as such contract was originated in the U.S. tax jurisdiction. As such, after-tax charges of $124.8 million were recorded for the three months ended September 30, 2019. 2019, and $9.3 million and $131.4 million were recorded for the nine months ended September 30, 2020 and 2019, respectively.
In connection with the sale, the Company provided financing to Iké Grupo in an aggregate principal amount of $34.0 million (the “Iké Loan”). The Iké Loan matures in May 2025, bears floating interest at a rate equal to three-month LIBOR plus 4.25% per annum payable quarterly and provides for quarterly principal amortization payments through the maturity date. The Iké Loan, which has an outstanding balance of $33.2 million as of September 30, 2020, is classified in other investments in the consolidated balance sheets and interest income is reflected as a component of net investment income in the consolidated statements of operations.

6. Goodwill
Goodwill is deemed to have an indefinite life and is not amortized, but rather is tested at least annually for impairment. The Company performs its annual goodwill impairment test as of October 1 each year, or more frequently if indicators of impairment exist. For the year ended December 31, 2019, goodwill of all reporting units was not considered impaired based on qualitative and quantitative tests.
Global Preneed Goodwill Impairment
During the third quarter of 2020, the Company identified impairment indicators impacting the fair value of the Global Preneed reportable segment in connection with exploring strategic alternatives for the Global Preneed business, including the possible sale of the business, to focus on opportunities within the Global Lifestyle and Global Housing segments. Such impairment indicators included the evaluation of the long term economic performance of the segment in light of further expected declines in interest rates from the resurgence of COVID-19 cases. As interest rates are critical to the performance of the business, the anticipated long-term declines in interest rates are expected to have adverse impacts on existing business and cause significant challenges to profitability from new business. The overall expected adverse impact to the business in the segment was an important indicator that triggered the requirement for an interim goodwill impairment analysis in the third quarter of 2020. As a result, an updated fair value assessment was completed based on how a market participant would consider the long-term outlook for business performance, long-term forecasts of the interest rate environment and its impact on the fair value of liabilities.
The fair value of the reportable segment was determined using a discounted cash flow method which calculates the present value of future earnings developed from projected earnings arising from existing and new business and considers all aspects of the business including investment assumptions of asset portfolios. The fair value calculated in the third quarter of 2020 was lower than the carrying value of the reportable segment, resulting in the pre-tax impairment charge of the entire goodwill of $137.8 million and after-tax impairment charge of $135.6 million (substantial portion is not tax deductible) related to the segment. The goodwill impairment charge is reported separately in the consolidated statements of operations for the three and nine months ended September 30, 2020, with a corresponding reduction to goodwill in the consolidated balance sheet as of September 30, 2020.
The Company had previously determined in the first two quarters of 2020 that the impact of COVID-19 and suppression of interest rates was expected to be short term and due to excess fair value over carrying value of the reporting unit from the prior quantitative test, concluded that no indicators were triggered that would have required an interim impairment test.

13
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
7. Allowance for Credit Losses
The Company adopted ASC 326 using a modified retrospective method for all financial assets measured at amortized cost. Results for the reporting periods beginning January 1, 2020 and after are presented under ASC 326 while prior period amounts are reported in accordance with previous applicable GAAP. The Company recorded a decrease of $20.4 million to retained earnings, net of tax, as of January 1, 2020 for the cumulative impact of adoption.
The following table illustrates the impact of adoption:
As of January 1, 2020
Prior to adoptionAs reported on adoptionImpact of adoption
Financial assets, at amortized cost:
Reinsurance recoverables$9,593.4 $9,570.9 $(22.5)
Premiums and accounts receivable, net1,692.8 1,691.0 (1.8)
Commercial mortgage loans on real estate815.0 813.4 (1.6)
Total$12,101.2 $12,075.3 (25.9)
Tax effect5.5 
Cumulative effect of adoption$(20.4)
The total allowance for credit losses for the financial assets was $53.0 million, $46.2 million and $20.3 million as of September 30, 2020, January 1, 2020 (date of adoption) and December 31, 2019, respectively.
For the nine months ended September 30, 2019,2020, the net increase in the allowance for credit losses that reduced pre-tax income was $10.2 million, consisting of increases in the allowance for credit losses of $14.1 million, partially offset by recoveries of $3.9 million, principally related to account write-downs established prior to implementation of the new standard. The net increase is classified in the consolidated statements of operations as follows: $2.6 million is included in underwriting, general and administrative expenses and $7.6 million included in net realized losses on investments, comprised of $4.7 million related to commercial mortgage loans on real estate, $1.5 million related to available for sale fixed maturity securities and $1.4 million related to the Iké Loan (as referenced in Note 5).
Reinsurance Recoverables
As part of the Company’s overall risk and capacity management strategy, reinsurance is used to mitigate certain risks underwritten by various business segments. The Company is exposed to the credit risk of reinsurers, as the Company remains liable to insureds regardless of whether related reinsurance recoverables are collected. As of September 30, 2020 and December 31, 2019, reinsurance recoverables totaled $9.80 billion and $9.59 billion, respectively, the majority of which are protected from credit risk by various types of collateral or other risk mitigation mechanisms, such as trusts, letters of credit or by withholding the assets in a modified coinsurance or funds withheld arrangement.
Methodology:
The Company uses a probability of default and loss given default methodology in estimating the allowance, whereby the credit ratings of reinsurers are used in determining the probability of default. The allowance is established for reinsurance recoverables on paid and unpaid future policy benefits and claims and benefits. Prior to applying default factors, the net exposure to credit risk is reduced for any collateral for which the right of offset exists, such as funds withheld, assets held in trust and letters of credit, which are part of the reinsurance arrangements, with adjustments to include consideration of credit exposure on the collateral. The methodology used by the Company incorporates historical default factors for each reinsurer based on their credit rating using comparably rated bonds as published by a major ratings service. The allowance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing and other relevant factors.
The Company utilizes external credit ratings published by S&P Global Ratings, a division of S&P Global Inc., at the balance sheet date when determining the allowance. Where rates are not available, the Company assigns default credit ratings
14
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
based on if the reinsurer is authorized or unauthorized. Of the total recoverables subject to the allowance, 77% were rated A- or better, 17% were rated BBB or BB, and 6% were not rated based on the Company’s analysis and assigned ratings.
The following table presents the changes in the CECL allowance for reinsurance recoverables by portfolio segment for the nine months ended September 30, 2020.
Global LifestyleGlobal HousingGlobal PreneedCorporate and OtherTotal
Balance, December 31, 2019$2.5 $0.3 $0 $0 $2.8 
Cumulative effect of adoption3.9 0.7 0.2 17.7 22.5 
Incremental allowance0.1 (0.4)0 3.1 2.8 
Recoveries(2.5)0 0 0 (2.5)
Other0 0 (0.1)0 (0.1)
Balance, September 30, 2020$4.0 $0.6 $0.1 $20.8 $25.5 
For the nine months ended September 30, 2020, the incremental allowance of $2.8 million was principally due to the reduction of anticipated recoveries upon default following the recent economic impact related to COVID-19. When determining the allowance at September 30, 2020, the Company did not increase default probabilities by reinsurer since there had been no credit rating downgrades or major negative credit indications of the Company’s reinsurers that has impacted rating. The allowance may be increased and income reduced in future periods if there are future ratings downgrades or other measurable information supporting an increase in reinsurer default probabilities, including, but not limited to, collateral reductions.
Premium and Accounts Receivables
The Company is exposed to credit risk from premiums and other accounts receivables. For premiums receivable, the exposure to loss upon a default is often mitigated by the ability to terminate the policy on default and offset the corresponding unearned premium liability. The Company has other mitigating offsets from amounts payable on commissions and profit share arrangements when the counterparty to the receivable is a sponsor/agent of the Company’s insurance product.
Methodology:
For receivables due directly from the insured or consumer, the allowance is generally calculated by aging receivable balances and applying default factors based on the Company’s historical collection data. For receivables due from product sponsors or agents, receivable balances are generally segregated by the sponsor or agent and an appropriate default factor determined based on creditworthiness, billing terms and aging of balances. The financial exposure of a credit loss is determined net of offsets (such as related unearned premium reserves for consumer receivables and receivables net of commissions payable, profit share liabilities and captive reinsurance for balances due from sponsors/agents) prior to applying a default factor.
The following table presents the changes in the allowance for credit losses by portfolio segment for premium and account receivables for the nine months ended September 30, 2020.
Global LifestyleGlobal HousingGlobal PreneedCorporate and OtherTotal
Balance, December 31, 2019$14.2 $0.2 $0.5 $0.4 $15.3 
Cumulative effect of adoption1.3 0.5 0 0 1.8 
Acquired allowance as of acquisition date0.4 0 0 0 0.4 
Incremental allowance2.2 1.1 0 0.2 3.5 
Recoveries(1.4)0 0 0 (1.4)
Write-offs(3.4)0 0 0 (3.4)
Foreign currency translation(0.3)0 0 0 (0.3)
Balance, September 30, 2020$13.0 $1.8 $0.5 $0.6 $15.9 
15
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
For the nine months ended September 30, 2020, the incremental allowance of $3.5 million relates to an increase in past due accounts and default factors following the economic impact related to COVID-19 to reflect the expectation that future defaults will exceed historical defaults. There is a risk that income may be reduced in future periods for additional credit losses.
Commercial Mortgage Loans
The Company has entered into commercial mortgage loans, collateralized by the underlying real estate, on properties located throughout the U.S. and Canada. As of September 30, 2020, approximately 40% of the outstanding principal balance of commercial mortgage loans was concentrated in the states of California, Utah and New York. Although the Company has a diversified loan portfolio, an economic downturn could have an adverse impact on the ability of its debtors to repay their loans. The outstanding balance of commercial mortgage loans range in size from $0.1 million to $12.2 million as of September 30, 2020 and from $0.1 million to $12.3 million as of December 31, 2019.
Methodology:
The Company records commercial mortgage loans at amortized cost, net of the allowance for credit losses. The allowance for the Company’s commercial mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, utilizing a probability-of-default and loss methodology, which incorporates various probability weighted economic scenarios. The probability of default is estimated using macroeconomic factors as well as individual loan characteristics, including loan-to-value (“LTV”) and debt service coverage ratios (“DSC”), loan term, collateral type, geography and underlying credit. The loss given default is driven primarily by the type and value of underlying collateral, and to a lesser extent by expected liquidation costs and time to recovery. Each loan is analyzed individually based on loan-specific data elements to estimate the expected loss and then aggregated.
The Company places loans on nonaccrual status after 90 days of delinquent payments (unless the loans are secured and in the process of collection). A loan may be placed on nonaccrual status before this time if information is available that suggests collection is unlikely. The Company charges off loan and accrued interest balances that are deemed uncollectible. Charge offs are recorded pre-tax chargesto net income in the period deemed uncollectible.
Upon adoption of $130.5ASC 326 on January 1, 2020, the Company increased its allowance for credit losses from $0.6 million to $2.2 million with the after-tax impact of $1.3 million reflected in retained earnings. For the nine months ended September 30, 2020, the CECL allowance was increased by an additional $4.7 million due to an increase in anticipated default factors following the recent economic impact related to COVID-19.
The following table presents the amortized cost basis of commercial mortgage loans, excluding allowance for credit losses, by origination year for certain key credit quality indicators at September 30, 2020.
16
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and after-tax charges of $131.4 million, reflecting additional change inper share amounts)
Origination Year
2019201820172016PriorTotal% of Total
Loan to value ratios (1):
70% and less$109.2 $187.9 $146.2 $90.7 $225.6 $759.6 97.6 %
71% to 80%7.0 0 0 6.9 0 13.9 1.8 %
81% to 95%0 0 0 0 4.5 4.5 0.6 %
Total$116.2 $187.9 $146.2 $97.6 $230.1 $778.0 100.0 %
Origination Year
2019201820172016PriorTotal% of Total
Debt service coverage ratios (2):
Greater than 2.0$37.3 $71.2 $72.3 $67.2 $106.3 $354.3 45.5 %
1.5 to 2.041.6 73.7 47.7 20.8 55.0 238.8 30.7 %
1.0 to 1.537.3 43.0 26.2 9.6 64.5 180.6 23.2 %
Less than 1.00 0 0 0 4.3 4.3 0.6 %
Total$116.2 $187.9 $146.2 $97.6 $230.1 $778.0 100.0 %
(1)LTV ratio derived from current loan balance divided by the fair value of the put/callproperty. The fair value of the underlying commercial properties is updated at least annually.
(2)DSC ratio calculated using most recent reported operating income results from property operators divided by annual debt service coverage.

Available for Sale Securities
ASC 326 includes certain changes to the accounting and reporting for impairments involving available for sale securities, including presentation of credit-related impairments as an allowance rather than as a permanent impairment, eliminating duration of unrealized loss as a consideration when assessing recognition of an impairment, recognition of credit impairments upon purchase of securities as applicable, and requiring reversals of previously recognized credit-related impairments when applicable. Effective January 1, 2020, the Company’s updated accounting policy for available for sale securities is as follows:
For available for sale fixed maturity securities in an unrealized loss position for which the Company does not intend to sell or for which it is more likely than not that the Company would not be required to sell before an anticipated recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost basis, changes to the credit rating of the security by a nationally recognized statistical ratings organization and any adverse conditions specifically related to the security, industry or geographic area, among other factors. If this assessment indicates a potential credit loss may exist, the present value of cash flows expected to be collected are compared to the security’s amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit-related impairment exists, and a charge to income and an associated allowance for credit losses is recorded for the credit-related impairment. Any impairment not related to credit losses is recorded through other comprehensive income. The amount of the allowance for credit losses is limited to the amount by which fair value is less than the amortized cost basis. Upon recognizing a credit-related impairment, the cost basis of the security is not adjusted.
Subsequent changes in the year-to-date period.allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. For fixed maturities where the Company records a credit loss, a determination is made as to the cause of the impairment and whether the Company expects a recovery in the value. Write-offs are charged against the allowance when management concludes the financial asset is uncollectible. For fixed maturities where the Company expects a recovery in value, the effective yield method is utilized, and the investment is amortized to par. The Company recorded a $1.5 million allowance for credit losses on fixed maturity securities available for sale for the three and nine months ended September 30, 2020.

17
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
6.(in millions, except number of shares and per share amounts)
For available for sale fixed maturity securities that the Company intends to sell, or for which it is more likely than not that the Company will be required to sell before recovery of its amortized cost basis, the entire impairment loss, or difference between the fair value and amortized cost basis of the security, is recognized in net realized gains (losses). The new cost basis of the security is the previous amortized cost basis less the impairment recognized and is not adjusted for any subsequent recoveries in fair value. 
The Company reports receivables for accrued investment income separately from fixed maturities available for sale and elected not to measure allowances for credit losses for accrued investment income as uncollectible balances are written off in a timely manner.

8. Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits.
During the nine months ended September 30, 2020, the Company filed a refund claim for $198.4 million and recorded a $79.3 million tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of the deferred tax asset of $107.1 million and increase to the current receivable of $186.4 million. The Company accrued a $5.2 million after-tax interest benefit related to the refund from the carryback for the nine months ended September 30, 2020, included in the provision for income taxes in the consolidated statements of operations. The Company received the full amount of the refund plus interest in July 2020. The Company also recorded refundable employee retention tax credits of $3.1 million and $4.8 million for the three and nine months ended September 30, 2020, respectively, included in underwriting, general and administrative expenses in the consolidated statements of operations. Due to the recent enactment of this legislation, the Company continues to assess the potential tax impacts on its financial position and results of operations.

9. Segment Information
As of September 30, 2019,2020, the Company had 4 reportable segments, which are defined based on the manner in which ourthe Company’s chief operating decision maker, the Chief Executive Officer (“CEO”), reviews the business to assess performance and allocate resources, and which align to the nature of the products and services offered:
Global Housing: provides lender-placed homeowners insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”);
•Global Lifestyle: provides mobile device protection products and related servicessolutions and extended service products and related services for consumer electronics and appliances (referred to as “Connected Living”); vehicle protection and related services (referred to as “Global Automotive”); and credit and other insurance products (referred to as “Global Financial Services and Other”);
•Global Housing: provides lender-placed homeowners insurance, lender-placed manufactured housing insurance and lender-placed flood insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and voluntary manufactured housing insurance, voluntary homeowners insurance and other specialty products (referred to as “Specialty and Other”);
•Global Preneed: provides pre-funded funeral insurance, final need insurance and annuity products;related services; and
•Corporate and Other: includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments (which includes unrealized gains (losses) on equity securities and changes in fair value of direct investments in collateralized loan obligations), interest income earned from short-term investments held, and income (expenses) primarily related to the Company’s frozen benefit plans.plans, amounts related to businesses previously disposed of through reinsurance and the run-off of the Assurant Health business. Corporate and Other also includes the amortization of deferred gains associated with the sales of businesses through reinsurance agreements, expenses related to the acquisition of TWG, foreign currency gains (losses) from remeasurement of monetary assets and liabilities, changes in the gain or loss on the salefair value of businesses, gains or losses associated with the valuation of the investment in Ikéderivative instruments and other unusual or infrequent items. Additionally, the Corporate and Other segment includes amountsexpenses related to businesses previously disposedmerger and acquisition activities, as well as other highly variable or unusual items other than reportable catastrophes (reportable catastrophe losses, net of through reinsurance and the runoff of the Assurant Health business.client profit sharing adjustments, and including reinstatement and other premiums).
18
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




The following tables summarize selected financial information by segment:
Three Months Ended September 30, 2020
Global LifestyleGlobal HousingGlobal PreneedCorporate
and Other		Consolidated
Revenues
Net earned premiums$1,633.2 $453.6 $16.0 $0 $2,102.8 
Fees and other income171.8 37.7 35.9 0.5 245.9 
Net investment income44.6 16.5 70.1 3.9 135.1 
Net realized gains on investments0 0 0 16.6 16.6 
Amortization of deferred gains on disposal of businesses0 0 0 2.1 2.1 
Total revenues1,849.6 507.8 122.0 23.1 2,502.5 
Benefits, losses and expenses
Policyholder benefits365.4 272.8 71.1 0.3 709.6 
Amortization of deferred acquisition costs and value of business acquired870.5 56.8 18.9 0 946.2 
Underwriting, general and administrative expenses480.8 162.2 15.3 29.2 687.5 
Goodwill impairment0 0 0 137.8 137.8 
Interest expense0 0 0 25.5 25.5 
Total benefits, losses and expenses1,716.7 491.8 105.3 192.8 2,506.6 
Segment income (loss) before provision (benefit) for income tax132.9 16.0 16.7 (169.7)(4.1)
Provision (benefit) for income taxes26.3 2.9 3.5 (6.3)26.4 
Segment income (loss) after taxes106.6 13.1 13.2 (163.4)(30.5)
Less: Net loss attributable to non-controlling interests0 0 0 0.3 0.3 
Net income (loss) attributable to stockholders106.6 13.1 13.2 (163.1)(30.2)
Less: Preferred stock dividends0 0 0 (4.7)(4.7)
Net income (loss) attributable to common stockholders$106.6 $13.1 $13.2 $(167.8)$(34.9)
As of September 30, 2020
Segment assets:$23,563.3 $4,194.2 $7,507.0 $8,318.1 $43,582.6 
19
 Three Months Ended September 30, 2019
          
 Global Housing Global Lifestyle Global Preneed Corporate and Other Consolidated
Revenues         
Net earned premiums$475.2
 $1,525.1
 $15.1
 $—
 $2,015.4
Fees and other income35.1
 224.2
 35.7
 0.1
 295.1
Net investment income22.4
 62.1
 73.0
 12.0
 169.5
Net realized gains on investments—
 —
 —
 14.9
 14.9
Amortization of deferred gains on disposal of businesses—
 —
 —
 4.4
 4.4
Total revenues532.7
 1,811.4
 123.8
 31.4
 2,499.3
Benefits, losses and expenses         
Policyholder benefits245.8
 392.1
 67.3
 —
 705.2
Amortization of deferred acquisition costs and value of business acquired47.3
 791.9
 30.3
 —
 869.5
Underwriting, general and administrative expenses (1)187.6
 496.6
 18.2
 62.1
 764.5
Iké net losses—
 —
 —
 121.1
 121.1
Interest expense—
 —
 —
 32.2
 32.2
Loss on extinguishment of debt—
 —
 —
 31.4
 31.4
Total benefits, losses and expenses480.7
 1,680.6
 115.8
 246.8
 2,523.9
Segment income (loss) before provision (benefit) for income tax52.0
 130.8
 8.0
 (215.4) (24.6)
Provision (benefit) for income taxes10.4
 28.7
 0.6
 (11.1) 28.6
Segment income (loss) after taxes41.6
 102.1
 7.4
 (204.3) (53.2)
Less: Net income attributable to non-controlling interests—
 —
 —
 (1.6) (1.6)
Net income (loss) attributable to stockholders41.6
 102.1
 7.4
 (205.9) (54.8)
Less: Preferred stock dividends—
 —
 —
 (4.7) (4.7)
Net income (loss) attributable to common stockholders$41.6
 $102.1
 $7.4
 $(210.6) $(59.5)
 As of September 30, 2019
          
Segment assets:$4,272.7
 $22,552.1
 $7,348.0
 $9,578.7
 $43,751.5
(1)Corporate and Other includes (i) $11.3 million of net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina as a result of the classification of Argentina’s economy as highly inflationary beginning July 1, 2018; and (ii) a $5.6 million loss on assets held for sale associated with an office building previously used as the headquarters for a business in runoff.

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




 Three Months Ended September 30, 2018
          
 Global Housing Global Lifestyle Global Preneed Corporate and Other Consolidated
Revenues         
Net earned premiums$463.0
 $1,376.0
 $14.6
 $—
 $1,853.6
Fees and other income58.6
 165.5
 33.5
 0.3
 257.9
Net investment income17.1
 54.7
 70.1
 9.9
 151.8
Net realized losses on investments—
 —
 —
 (5.7) (5.7)
Amortization of deferred gains on disposal of businesses—
 —
 —
 12.7
 12.7
Total revenues538.7
 1,596.2
 118.2
 17.2
 2,270.3
Benefits, losses and expenses         
Policyholder benefits264.8
 352.2
 64.5
 (0.6) 680.9
Amortization of deferred acquisition costs and value of business acquired51.2
 681.5
 17.9
 —
 750.6
Underwriting, general and administrative expenses (1)198.7
 463.0
 14.4
 60.4
 736.5
Interest expense—
 —
 —
 26.5
 26.5
Total benefits, losses and expenses514.7
 1,496.7
 96.8
 86.3
 2,194.5
Segment income (loss) before provision (benefit) for income tax24.0
 99.5
 21.4
 (69.1) 75.8
Provision (benefit) for income taxes4.6
 23.6
 4.6
 (10.0) 22.8
Segment income (loss) after taxes19.4
 75.9
 16.8
 (59.1) 53.0
Less: Preferred stock dividends—
 —
 —
 (4.7) (4.7)
Net income (loss) attributable to common stockholders$19.4
 $75.9
 $16.8
 $(63.8) $48.3

(1)Corporate and Other includes $17.9 million of net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina as a result of the classification of Argentina’s economy as highly inflationary beginning July 1, 2018.

Three Months Ended September 30, 2019
Global LifestyleGlobal HousingGlobal PreneedCorporate
and Other		Consolidated
Revenues
Net earned premiums$1,525.1 $475.2 $15.1 $0 $2,015.4 
Fees and other income224.2 35.1 35.7 0.1 295.1 
Net investment income62.1 22.4 73.0 12.0 169.5 
Net realized gains on investments0 0 0 14.9 14.9 
Amortization of deferred gains on disposal of businesses0 0 0 4.4 4.4 
Total revenues1,811.4 532.7 123.8 31.4 2,499.3 
Benefits, losses and expenses
Policyholder benefits392.1 245.8 67.3 0 705.2 
Amortization of deferred acquisition costs and value of business acquired791.9 47.3 30.3 0 869.5 
Underwriting, general and administrative expenses496.6 187.6 18.2 62.1 764.5 
Iké net losses0 0 0 121.1 121.1 
Interest expense0 0 0 32.2 32.2 
Loss on extinguishment of debt0 0 0 31.4 31.4 
Total benefits, losses and expenses1,680.6 480.7 115.8 246.8 2,523.9 
Segment income (loss) before provision (benefit) for income tax130.8 52.0 8.0 (215.4)(24.6)
Provision (benefit) for income taxes28.7 10.4 0.6 (11.1)28.6 
Segment income (loss) after taxes102.1 41.6 7.4 (204.3)(53.2)
Less: Net income attributable to non-controlling interest0 0 0 (1.6)(1.6)
Net income (loss) attributable to stockholders102.1 41.6 7.4 (205.9)(54.8)
Less: Preferred stock dividends0 0 0 (4.7)(4.7)
Net income (loss) attributable to common stockholders$102.1 $41.6 $7.4 $(210.6)$(59.5)
20
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Nine Months Ended September 30, 2020
Global LifestyleGlobal HousingGlobal PreneedCorporate
and Other		Consolidated
Revenues
Net earned premiums$4,799.0 $1,374.6 $49.4 $0 $6,223.0 
Fees and other income721.6 106.0 106.2 0.5 934.3 
Net investment income143.5 54.9 210.3 19.6 428.3 
Net realized losses on investments0 0 0 (54.6)(54.6)
Amortization of deferred gains on disposal of businesses0 0 0 8.7 8.7 
Total revenues5,664.1 1,535.5 365.9 (25.8)7,539.7 
Benefits, losses and expenses
Policyholder benefits1,044.7 651.9 211.6 0.7 1,908.9 
Amortization of deferred acquisition costs and value of business acquired2,519.7 169.9 56.1 0 2,745.7 
Underwriting, general and administrative expenses1,649.4 496.6 48.4 137.4 2,331.8 
Goodwill impairment0 0 0 137.8 137.8 
Iké net losses0 0 0 5.9 5.9 
Interest expense0 0 0 77.7 77.7 
Total benefits, losses and expenses5,213.8 1,318.4 316.1 359.5 7,207.8 
Segment income (loss) before provision (benefit) for income tax450.3 217.1 49.8 (385.3)331.9 
Provision (benefit) for income taxes101.0 44.4 10.6 (127.8)28.2 
Segment income (loss) after taxes349.3 172.7 39.2 (257.5)303.7 
Less: Net income attributable to non-controlling interests0 0 0 (1.1)(1.1)
Net income (loss) attributable to stockholders349.3 172.7 39.2 (258.6)302.6 
Less: Preferred stock dividends0 0 0 (14.0)(14.0)
Net income (loss) attributable to common stockholders$349.3 $172.7 $39.2 $(272.6)$288.6 
21
 Nine Months Ended September 30, 2019
          
 Global Housing Global Lifestyle Global Preneed Corporate and Other Consolidated
Revenues         
Net earned premiums$1,407.1
 $4,499.1
 $46.3
 $—
 $5,952.5
Fees and other income113.3
 740.9
 103.2
 2.1
 959.5
Net investment income66.6
 177.5
 212.7
 33.2
 490.0
Net realized gains on investments—
 —
 —
 61.5
 61.5
Amortization of deferred gains on disposal of businesses—
 —
 —
 16.9
 16.9
Total revenues1,587.0
 5,417.5
 362.2
 113.7
 7,480.4
Benefits, losses and expenses         
Policyholder benefits652.5
 1,152.2
 202.1
 0.1
 2,006.9
Amortization of deferred acquisition costs and value of business acquired158.7
 2,238.4
 65.5
 —
 2,462.6
Underwriting, general and administrative expenses (1)541.6
 1,622.6
 49.8
 174.1
 2,388.1
Iké net losses—
 —
 —
 130.5
 130.5
Interest expense—
 —
 —
 85.2
 85.2
Loss on extinguishment of debt—
 —
 —
 31.4
 31.4
Total benefits, losses and expenses1,352.8
 5,013.2
 317.4
 421.3
 7,104.7
Segment income (loss) before provision (benefit) for income tax234.2
 404.3
 44.8
 (307.6) 375.7
Provision (benefit) for income taxes48.4
 92.3
 8.7
 (31.7) 117.7
Segment income (loss) after taxes185.8
 312.0
 36.1
 (275.9) 258.0
Less: Net income attributable to non-controlling interests—
 —
 —
 (3.0) (3.0)
Net income (loss) attributable to stockholders185.8
 312.0
 36.1
 (278.9) 255.0
Less: Preferred stock dividends—
 —
 —
 (14.0) (14.0)
Net income (loss) attributable to common stockholders$185.8
 $312.0
 $36.1
 $(292.9) $241.0
(1)Corporate and Other includes (i) $16.6 million of net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina as a result of the classification of Argentina’s economy as highly inflationary beginning July 1, 2018; (ii) a $15.6 million impairment of certain intangible assets from the acquisition of Green Tree as a result of developments related to the financial status of a business partner providing new and renewal business to Green Tree; and (iii) a $5.6 million loss on assets held for sale associated with an office building previously used as the headquarters for a business in runoff.

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Nine Months Ended September 30, 2019
Global LifestyleGlobal HousingGlobal PreneedCorporate
and Other		Consolidated
Revenues
Net earned premiums$4,499.1 $1,407.1 $46.3 $0 $5,952.5 
Fees and other income740.9 113.3 103.2 2.1 959.5 
Net investment income177.5 66.6 212.7 33.2 490.0 
Net realized gains on investments0 0 0 61.5 61.5 
Amortization of deferred gains on disposal of businesses0 0 0 16.9 16.9 
Total revenues5,417.5 1,587.0 362.2 113.7 7,480.4 
Benefits, losses and expenses
Policyholder benefits1,152.2 652.5 202.1 0.1 2,006.9 
Amortization of deferred acquisition costs and value of business acquired2,238.4 158.7 65.5 0 2,462.6 
Underwriting, general and administrative expenses1,622.6 541.6 49.8 174.1 2,388.1 
Iké net losses0 0 0 130.5 130.5 
Interest expense0 0 0 85.2 85.2 
Loss on extinguishment of debt0 0 0 31.4 31.4 
Total benefits, losses and expenses5,013.2 1,352.8 317.4 421.3 7,104.7 
Segment income (loss) before provision (benefit) for income tax404.3 234.2 44.8 (307.6)375.7 
Provision (benefit) for income taxes92.3 48.4 8.7 (31.7)117.7 
Segment income (loss) after taxes312.0 185.8 36.1 (275.9)258.0 
Less: Net income attributable to non-controlling interest0 0 0 (3.0)(3.0)
Net income (loss) attributable to stockholders312.0 185.8 36.1 (278.9)255.0 
Less: Preferred stock dividends0 0 0 (14.0)(14.0)
Net income (loss) attributable to common stockholders$312.0 $185.8 $36.1 $(292.9)$241.0 
 Nine Months Ended September 30, 2018
          
 Global Housing Global Lifestyle Global Preneed Corporate and Other Consolidated
Revenues         
Net earned premiums$1,349.1
 $2,923.9
 $43.4
 $0.4
 $4,316.8
Fees and other income238.1
 638.3
 97.8
 2.4
 976.6
Net investment income53.2
 123.4
 203.8
 37.2
 417.6
Net realized losses on investments—
 —
 —
 (16.6) (16.6)
Amortization of deferred gains on disposal of businesses—
 —
 —
 46.2
 46.2
Total revenues1,640.4
 3,685.6
 345.0
 69.6
 5,740.6
Benefits, losses and expenses         
Policyholder benefits621.1
 773.1
 196.2
 (4.3) 1,586.1
Amortization of deferred acquisition costs and value of business acquired151.2
 1,357.4
 51.6
 —
 1,560.2
Underwriting, general and administrative expenses (1)662.9
 1,298.4
 44.4
 224.0
 2,229.7
Interest expense—
 —
 —
 74.0
 74.0
Total benefits, losses and expenses1,435.2
 3,428.9
 292.2
 293.7
 5,450.0
Segment income (loss) before provision (benefit) for income tax205.2
 256.7
 52.8
 (224.1) 290.6
Provision (benefit) for income taxes42.0
 56.9
 11.5
 (45.8) 64.6
Segment income (loss) after taxes163.2
 199.8
 41.3
 (178.3) 226.0
Less: Preferred stock dividends—
 —
 —
 (9.5) (9.5)
Net income (loss) attributable to common stockholders$163.2
 $199.8
 $41.3
 $(187.8) $216.5
(1)Corporate and Other includes $17.9 million of net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina as a result of the classification of Argentina’s economy as highly inflationary beginning July 1, 2018.

7.10. Contract Revenues
The Company partners with clients to provide consumers a diverse range of protection products and services. The Company’s revenues from protection products are accounted for as insurance contracts and are recognized over the term of the insurance protection provided. RevenueRevenues from service contracts and sales of products are recognized as the contractual performance obligations are satisfied or the products are delivered. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for performing the services or transferring products. If payments are received before the related revenue is recognized, the amount is recorded as unearned revenue or advance payment liabilities, until the performance obligations are satisfied or the products are transferred.
The disaggregated revenues from service contracts included in fees and other income on the consolidated statementstatements of operations are $23.8$124.6 million and $48.5$188.8 million for Global HousingLifestyle and $188.8$25.3 million and $147.4$23.8 million for Global LifestyleHousing for the three months ended September 30, 20192020 and 2018,2019, respectively. The disaggregated revenues from service contracts included in fees and other income on the consolidated statementstatements of operations are $81.4$579.3 million and $208.8 million for Global Housing and $614.6 million and $471.2 million for Global Lifestyle for the nine months ended September 30, 2019 and 2018, respectively.
22
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Global Housing
In the Company’sLifestyle and $71.1 million and $81.4 million for Global Housing segment, revenues from service contractsfor the nine months ended September 30, 2020 and sales of products are primarily from the Company’s Lender-placed Insurance business. Under the Company’s Lender-placed Insurance business, the Company provides loan and claim payment tracking services for lenders. Until the sale of the Mortgage Solutions business on August 1, 2018, the Company previously offered valuation and title services and products across the origination, home equity and default markets, as well as field services, inspection services, restoration and real estate owned asset management services to mortgage servicing clients and investors. The Company generally invoices its customers weekly or monthly based on the volume of services provided during the billing period with payment due within a short-term period. Each service is an individual performance obligation with a standalone selling price. The Company recognizes revenue as it invoices, which corresponds to the value transferred to the customer.2019, respectively.
Global Lifestyle
In the Company’s Global Lifestyle segment, revenues from service contracts and sales of products are primarily from the Company’s Connected Living business. Through partnerships with mobile carriers, the Company provides administrative services related to its mobile device protection products, including program design and marketing strategy, risk management, data analytics, customer support and claims handling, supply chain and service delivery, repair and logistics, and device disposition. Administrative fees are generally billed monthly based on the volume of services provided during the billing period (for example, based on the number of mobile subscribers) with payment due within a short-term period. Each service or bundle of services, depending on the contract, is an individual performance obligation with a standalone selling price. The Company recognizes revenue as it invoices, which corresponds to the value transferred to the customer.
The Company also repairs, refurbishes and then sells repaired or refurbished mobile and other electronic devices. Revenue from products solddevices, on behalf of its client, for a bundled per unit fee. The entire processing of the device is recognized when risk of ownership transfers to customers, generally upon shipment. Each product hasconsidered one performance obligation with a standalone selling price thatand thus, the per unit fee is determined through analysis of various factors including market data, historical costs and product lifecycle status. Paymentsrecognized when the products are generally duesold. Payment for the products is received prior to shipment and the Company deducts its per unit fee prior to remitting the remainder to the client.
Global Housing
In the Company’s Global Housing segment, revenues from service contracts and sales of products are primarily from the Company’s Lender-placed Insurance business. Under the Company’s Lender-placed Insurance business, the Company provides loan and claim payment tracking services for lenders. The Company generally invoices its customers weekly or monthly based on the volume of services provided during the billing period with payment due within a short-term period. Each service is an individual performance obligation with a standalone selling price. The Company recognizes revenue as it invoices, which corresponds to the value transferred to the customer.
Contract Balances
The receivables and unearned revenue under these contracts were $183.3$210.0 million and $89.4$85.7 million, respectively, as of September 30, 2019,2020, and $183.7$185.0 million and $88.7$87.6 million, respectively, as of December 31, 2018.2019. These balances are included in premiums and accounts receivable and the accounts payable and other liabilities, respectively, in the consolidated balance sheets. Revenue from service contracts and sales of products recognized during the three and nine months ended September 30, 2020 and 2019 that was included in unearned revenue as of December 31, 2019 and 2018 was $10.3 million and $14.5 million, respectively. Revenue from service contracts and sales of products recognized during the nine months ended September 30, 2020 and 2019 that was included in unearned revenue as of December 31, 2019 and 2018 was $37.5 million and $44.7 million, respectively.
In certain circumstances, the Company defers upfront commissions and other costs in connection with client contracts in excess of one year where the Company can demonstrate future economic benefit. For these contracts, expense is recognized as revenues are earned. The Company periodically assesses recoverability based on the performance of the related contracts. As of September 30, 20192020 and December 31, 2018,2019, the Company has approximately $28.5$14.2 million and $29.0$25.8 million, respectively, of such intangible assets attributed to service contracts that will be expensed over the term of the client contracts.

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




8.11. Investments
The following tables show the cost or amortized cost, allowance for credit losses, gross unrealized gains and losses, fair value, and other-than-temporary impairment (“OTTI”) included within AOCIaccumulated other comprehensive income (“AOCI”) of the Company’s fixed maturity securities as of the dates indicated:  
 September 30, 2019
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 Fair Value 
OTTI in
AOCI (1)
Fixed maturity securities:         
U.S. government and government agencies and authorities$187.7
 $6.4
 $(0.1) $194.0
 $—
States, municipalities and political subdivisions234.8
 29.6
 —
 264.4
 —
Foreign governments873.5
 108.8
 (0.1) 982.2
 —
Asset-backed481.9
 3.0
 (2.6) 482.3
 —
Commercial mortgage-backed226.8
 13.8
 (0.6) 240.0
 —
Residential mortgage-backed1,235.7
 61.8
 (1.0) 1,296.5
 3.6
U.S. corporate5,757.9
 829.9
 (2.7) 6,585.1
 16.4
Foreign corporate2,106.2
 270.5
 (0.4) 2,376.3
 —
Total fixed maturity securities$11,104.5
 $1,323.8
 $(7.5) $12,420.8
 $20.0
 
 December 31, 2018
 
Cost or
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 Fair Value 
OTTI in
AOCI (1)
Fixed maturity securities:         
U.S. government and government agencies and authorities$381.4
 $4.4
 $(1.2) $384.6
 $—
States, municipalities and political subdivisions238.9
 17.6
 (0.3) 256.2
 —
Foreign governments856.3
 58.8
 (3.0) 912.1
 —
Asset-backed513.6
 0.5
 (9.6) 504.5
 —
Commercial mortgage-backed79.1
 2.2
 (1.6) 79.7
 —
Residential mortgage-backed1,399.1
 21.5
 (14.8) 1,405.8
 5.0
U.S. corporate5,337.0
 315.7
 (59.7) 5,593.0
 14.1
Foreign corporate2,028.6
 110.7
 (18.1) 2,121.2
 —
Total fixed maturity securities$10,834.0
 $531.4
 $(108.3) $11,257.1
 $19.1
23
(1)Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




 September 30, 2020
 Cost or
Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair ValueImpairment in
AOCI (1)
Fixed maturity securities:
U.S. government and government agencies and authorities$125.1 $0 $6.8 $0 $131.9 $0 
States, municipalities and political subdivisions224.6 0 34.2 (0.1)258.7 0 
Foreign governments872.2 0 149.7 (1.0)1,020.9 0 
Asset-backed529.9 0 8.5 (6.0)532.4 0 
Commercial mortgage-backed327.2 0 16.8 (3.8)340.2 0 
Residential mortgage-backed1,084.7 0 95.8 (0.2)1,180.3 2.5 
U.S. corporate6,001.0 (1.5)1,100.3 (23.2)7,076.6 17.6 
Foreign corporate2,214.6 0 341.6 (2.7)2,553.5 0 
Total fixed maturity securities$11,379.3 $(1.5)$1,753.7 $(37.0)$13,094.5 $20.1 
 December 31, 2019
 Cost or
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair ValueImpairment in
AOCI (1)
Fixed maturity securities:
U.S. government and government agencies and authorities$188.9 $5.3 $(0.1)$194.1 $0 
States, municipalities and political subdivisions216.1 26.4 0 242.5 0 
Foreign governments916.9 94.3 (0.8)1,010.4 0 
Asset-backed502.4 3.1 (2.3)503.2 0 
Commercial mortgage-backed212.7 10.2 (0.8)222.1 0 
Residential mortgage-backed1,235.3 52.4 (1.4)1,286.3 3.1 
U.S. corporate5,679.8 818.9 (2.1)6,496.6 16.5 
Foreign corporate2,112.7 255.4 (0.9)2,367.2 0 
Total fixed maturity securities$11,064.8 $1,266.0 $(8.4)$12,322.4 $19.6 
(1)Represents the amount of non-credit related impairment recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date prior to adoption of ASC 326. See Note 3 for further information.
The Company’s state, municipality and political subdivision holdings are highly diversified across the U.S., with 0 individual state, municipality or political subdivision exposure (including both general obligation and revenue securities) exceeding 0.3% and 0.4% of the overall investment portfolio as of September 30, 20192020 and December 31, 2018, respectively.2019. As of September 30, 20192020 and December 31, 2018,2019, the securities included general obligation and revenue bonds issued by states, cities, counties, school districts and similar issuers, including $59.2$38.7 million and $58.4$51.9 million, respectively, of advance refunded or escrowed-to-maturity bonds (collectively referred to as “pre-refunded bonds”), which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest. As of September 30, 20192020 and December 31, 2018,2019, revenue bonds accounted for 56%63% and 60% of the holdings.holdings, respectively. Excluding pre-refunded bonds, the activities supporting the income streams of the Company’s revenue bonds are across a broad range of sectors, primarily water, airport and marina, specifically pledged tax revenues, leases, colleges and universities and other miscellaneous sources such as bond banks, finance authorities and appropriations.
24
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
The Company’s investments in foreign government fixed maturity securities are held mainly in countries and currencies where the Company has policyholder liabilities, to facilitate matching of assets to the related liabilities. As of September 30, 2019,2020, approximately 58%59%, 18%12% and 6%8% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and Mexico, respectively. As of December 31, 2018,2019, approximately 55%58%, 18%20% and 8%6% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and the United Kingdom,Mexico, respectively. No other country represented more than 5%4% and 6%5% of the Company’s foreign government securities as of September 30, 20192020 and December 31, 2018,2019, respectively.
The Company had European investment exposure in its corporate fixed maturity securities of $804.7$881.5 million with a net unrealized gain of $82.8$109.2 million as of September 30, 20192020 and $800.9$802.3 million with a net unrealized gain of $27.7$82.4 million as of December 31, 2018.2019. Approximately 27%28% of the corporate fixed maturity European exposure was held in the financial industry as of September 30, 20192020 and December 31, 2018.2019. The Company’s largest European country exposure (the United Kingdom) represented approximately 4% and 5% of the fair value of the Company’s corporate fixed maturity securities as of September 30, 20192020 and December 31, 2018, respectively.2019. The Company’s international investments are managed as part of the overall portfolio with the same approach to risk management and focus on diversification.
The Company had exposure to the energy sector in its corporate fixed maturity securities of $748.3 million with a net unrealized gain of $62.4 million as of September 30, 2020 and $784.4 million with a net unrealized gain of $93.1 million as of December 31, 2019. Approximately 86% and 94% of the energy exposure is rated as investment grade as of September 30, 2020 and December 31, 2019, respectively.
The cost or amortized cost and fair value of fixed maturity securities as of September 30, 20192020 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.
Cost or
Amortized Cost		Fair Value
Due in one year or less$463.5 $470.4 
Due after one year through five years2,547.5 2,717.6 
Due after five years through ten years2,439.3 2,744.2 
Due after ten years3,987.2 5,109.4 
Total9,437.5 11,041.6 
Asset-backed529.9 532.4 
Commercial mortgage-backed327.2 340.2 
Residential mortgage-backed1,084.7 1,180.3 
Total$11,379.3 $13,094.5 
 
Cost or
Amortized Cost
 Fair Value
Due in one year or less$355.0
 $357.0
Due after one year through five years2,511.3
 2,603.8
Due after five years through ten years2,442.4
 2,663.1
Due after ten years3,851.4
 4,778.1
Total9,160.1
 10,402.0
Asset-backed481.9
 482.3
Commercial mortgage-backed226.8
 240.0
Residential mortgage-backed1,235.7
 1,296.5
Total$11,104.5
 $12,420.8


Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




The following table sets forth the net realized gains (losses), including OTTI,impairment, recognized in the statementconsolidated statements of operations for the periods indicated: 
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net realized gains (losses) related to sales and other:       
Fixed maturity securities$7.4
 $(7.7) $15.1
 $(17.9)
Equity securities (1)9.4
 2.3
 46.3
 (1.4)
Other investments0.3
 —
 5.4
 2.5
Consolidated investment entities (2)(2.0) 0.2
 (4.2) 0.7
Total net realized gains (losses) related to sales and other15.1
 (5.2) 62.6
 (16.1)
Net realized losses related to other-than-temporary impairments:       
Fixed maturity securities(0.2) —
 (1.1) —
Other investments—
 (0.5) —
 (0.5)
Total net realized losses related to other-than-temporary impairments(0.2) (0.5) (1.1) (0.5)
Total net realized gains (losses)$14.9
 $(5.7) $61.5
 $(16.6)
25

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
(1)Nine months ended September 30, 2019 and 2018 includes $10.4 million and $10.8 million, respectively, of gains on equity investment holdings accounted for under the measurement alternative. Three months ended September 30, 2018 includes $3.0 million of gains on equity investment holdings accounted for under the measurement alternative. There were 0 changes in fair value recorded on equity investments holdings accounted for under the measurement alternative for the three months ended September 30, 2019.
(2)Consists of net realized gains (losses) from the change in fair value of the Company’s direct investment in collateralized loan obligations (“CLOs”). Refer to Note 9 for additional information.
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Net realized gains (losses) related to sales and other:
Fixed maturity securities$1.8 $7.4 $7.6 $15.1 
Equity securities (1)16.9 9.4 (9.9)46.3 
Commercial mortgage loans on real estate(2.8)0 (4.6)0 
Other investments2.2 0.3 (0.8)5.4 
Consolidated investment entities (2)0 (2.0)(32.3)(4.2)
Total net realized gains (losses) related to sales and other18.1 15.1 (40.0)62.6 
Net realized losses related to impairments:
Fixed maturity securities (3)(1.5)(0.2)(3.2)(1.1)
Other investments (4)0 0 (11.4)0 
Total net realized losses related to impairments(1.5)(0.2)(14.6)(1.1)
Total net realized gains (losses)$16.6 $14.9 $(54.6)$61.5 
(1)Nine months ended September 30, 2020 and 2019 includes $2.2 million and $10.4 million, respectively, of gains on equity investment holdings accounted for under the measurement alternative. There were 0 changes in fair value recorded on equity investments holdings accounted for under the measurement alternative for the three months ended September 30, 2020 and 2019.
(2)Consists of net realized losses from the change in fair value of the Company’s direct investment in collateralized loan obligations (“CLOs”). Refer to Notes 5 and 12 for additional information.
(3)Includes credit impairment charges recognized in net realized gains (losses) of $1.5 million on fixed maturity securities available for sale for the three and nine months ended September 30, 2020. Refer to Note 7 for additional information.
(4)Results for the nine months ended September 30, 2020 consist of impairment losses on equity investment holdings accounted for under the measurement alternative.
The following table sets forth the portion of unrealized gains (losses) related to equity securities duringfor the three and nine months ended September 30, 2019 and 2018:periods indicated:
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net gains (losses) recognized on equity securities$9.4
 $2.3
 $46.3
 $(1.4)
Less: Net realized gains (losses) related to sales of equity securities0.9
 0.2
 —
 3.9
Total net unrealized gains (losses) on equity securities held$8.5
 $2.1
 $46.3
 $(5.3)


Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net gains (losses) recognized on equity securities$16.9 $9.4 $(9.9)$46.3 
Less: Net realized gains related to sales of equity securities0.4 0.9 1.3 0 
Total net unrealized gains (losses) on equity securities held$16.5 $8.5 $(11.2)$46.3 
The investment category and duration of the Company’s gross unrealized losses on fixed maturity securities as of September 30, 20192020 and December 31, 20182019 were as follows:
 September 30, 2019
 Less than 12 months 12 Months or More Total
 Fair Value 
Unrealized
Losses
 Fair Value 
Unrealized
Losses
 Fair Value 
Unrealized
Losses
Fixed maturity securities:           
U.S. government and government agencies and authorities$—
 $—
 $38.5
 $(0.1) $38.5
 $(0.1)
Foreign governments11.5
 (0.1) —
 —
 11.5
 (0.1)
Asset-backed93.8
 (1.4) 71.1
 (1.2) 164.9
 (2.6)
Commercial mortgage-backed1.7
 (0.1) 4.7
 (0.5) 6.4
 (0.6)
Residential mortgage-backed66.7
 (0.2) 94.3
 (0.8) 161.0
 (1.0)
U.S. corporate110.0
 (2.0) 9.1
 (0.7) 119.1
 (2.7)
Foreign corporate18.6
 (0.2) 7.3
 (0.2) 25.9
 (0.4)
Total fixed maturity securities$302.3
 $(4.0) $225.0
 $(3.5) $527.3
 $(7.5)
26
Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
 December 31, 2018
 Less than 12 months 12 Months or More Total
 Fair Value 
Unrealized
Losses
 Fair Value 
Unrealized
Losses
 Fair Value 
Unrealized
Losses
Fixed maturity securities:           
U.S. government and government agencies and authorities$11.2
 $(0.1) $89.5
 $(1.1) $100.7
 $(1.2)
States, municipalities and political subdivisions31.5
 (0.1) 3.1
 (0.2) 34.6
 (0.3)
Foreign governments136.4
 (2.8) 9.2
 (0.2) 145.6
 (3.0)
Asset-backed370.6
 (9.6) —
 —
 370.6
 (9.6)
Commercial mortgage-backed29.4
 (0.7) 12.4
 (0.9) 41.8
 (1.6)
Residential mortgage-backed378.2
 (3.7) 309.6
 (11.1) 687.8
 (14.8)
U.S. corporate1,860.4
 (49.5) 173.1
 (10.2) 2,033.5
 (59.7)
Foreign corporate706.6
 (12.9) 149.5
 (5.2) 856.1
 (18.1)
Total fixed maturity securities$3,524.3
 $(79.4) $746.4
 $(28.9) $4,270.7
 $(108.3)

 September 30, 2020
 Less than 12 months12 Months or MoreTotal
Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Fixed maturity securities:
States, municipalities and political subdivisions24.7 (0.1)0 0 24.7 (0.1)
Foreign governments14.9 (1.0)0 0 14.9 (1.0)
Asset-backed112.5 (3.8)83.9 (2.2)196.4 (6.0)
Commercial mortgage-backed53.2 (2.9)3.9 (0.9)57.1 (3.8)
Residential mortgage-backed26.2 (0.1)1.5 (0.1)27.7 (0.2)
U.S. corporate307.9 (22.0)15.7 (1.2)323.6 (23.2)
Foreign corporate112.9 (2.7)0 0 112.9 (2.7)
Total fixed maturity securities$652.3 $(32.6)$105.0 $(4.4)$757.3 $(37.0)
 December 31, 2019
 Less than 12 months12 Months or MoreTotal
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Fixed maturity securities:
U.S. government and government agencies and authorities$21.9 $(0.1)$0 $0 $21.9 $(0.1)
Foreign governments115.7 (0.8)0 0 115.7 (0.8)
Asset-backed66.9 (0.2)105.1 (2.1)172.0 (2.3)
Commercial mortgage-backed20.0 (0.3)4.3 (0.5)24.3 (0.8)
Residential mortgage-backed82.5 (0.6)82.6 (0.8)165.1 (1.4)
U.S. corporate87.5 (1.4)14.4 (0.7)101.9 (2.1)
Foreign corporate45.8 (0.7)7.5 (0.2)53.3 (0.9)
Total fixed maturity securities$440.3 $(4.1)$213.9 $(4.3)$654.2 $(8.4)
Total gross unrealized losses represented approximately 1%5% and 3%1% of the aggregate fair value of the related securities as of September 30, 20192020 and December 31, 2018,2019, respectively. Approximately 53%88% and 73%49% of these gross unrealized losses had been in a continuous loss position for less than twelve months as of September 30, 20192020 and December 31, 2018,2019, respectively. The total gross unrealized losses are comprised of 287396 and 2,642330 individual securities as of September 30, 20192020 and December 31, 2018,2019, respectively. In accordance with its policy, the Company concluded that for these securities, other-than-temporary impairments of the gross unrealized losses was not warranted as of September 30, 20192020 and December 31, 2018.
The Company has entered into commercial mortgage loans, collateralized by2019 were related to non-credit factors and therefore, did not incur credit-related losses during the underlying real estate, on properties located throughout the U.S.three and Canada. As ofnine months ended September 30, 2019, approximately 37% of the outstanding principal balance of commercial mortgage loans was concentrated in the states of California, Utah and New York. Although2020. Additionally, the Company has a diversified loan portfolio,currently does not intend to and is not required to sell these investments prior to an economic downturn could have an adverse impact on the ability of its debtors to repay their loans. The outstanding balance of commercial mortgage loans rangeanticipated recovery in size from $0.1 million to $12.3 million as of September 30, 2019 and from $0.1 million to $12.5 million as of December 31, 2018.value.

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




9.12. Variable Interest Entities
In the normal course of business, the Company is involved with various types of investment entities that may be considered VIEs. The Company evaluates its involvement with each entity to determine whether consolidation is required. The Company’s maximum risk of loss is limited to the carrying value and unfunded commitments of its investments in the VIEs.
Consolidated VIEs
One of the Company’s subsidiaries iswas registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser. The subsidiary (or one of its affiliates) managesmanaged and investsinvested in CLOs and real estate funds and may conductconducted other forms of investment activities. ThePrior to third quarter 2020, the Company hashad determined that the CLOs and real estate funds are
27
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
fund were VIEs and consolidated each because the Company was deemed to be the primary beneficiary of these entities due to (i) its role asas collateral manager, which givesgave it the power to direct the activities that most significantly impact the economic performance of the entities,entities, and (ii) its economic interest in the entities, which exposesexposed it to losses and the right to receive benefits that could potentially be significant to the entities.
In connection with During the formation of CLO structures,third quarter 2020, the Company forms special purpose entities capitalized by contributions from the Company’s wholly owned subsidiaries. Subsequent to capitalization, the special purpose entities purchase senior secured leveraged loans funded by contributions fromsold its CLO asset management platform and outsourced its real estate asset management. As a result of these transactions, the Company and a short-term warehousing credit facility. Borrowings from the warehousing credit facility are non-recourse to the Company and are fully repaid oncedeconsolidated the CLO closes. Additionally,entities and real estate fund since it no longer acts as collateral manager and, as a result, no longer has the amounts contributed bypower to control these entities. See Note 5 for additional information on the Company to fund the initial capitalization are returned aftersale of the CLO closes. The Company may elect to use the return of capital to purchase a direct investment in the CLO.asset management platform.
Collateralized Loan Obligations: ThePrior to the deconsolidation in the third quarter of 2020, the CLO entities arewere collateralized financing entities. TheUnder the elected measurement alternative for collateralized financing entities, the carrying value of the CLO debt equals the fair value of the CLO assets (senior secured leveraged loans) as the assets have more observable fair values. The CLO liabilities are reduced by the fair value of the beneficial interests the Company retains in the CLO.CLO and the carrying value of any beneficial interests that represent compensation for services. CLO earnings attributable to the Company’s shareholders are measured by the change in the fair value of the Company’s CLO investments, net investment income earned and investment management and contingent performance fees earned. Investment management fees are reported as a reduction to investment expenses in the consolidated statements of operations. The assets of the CLOs are legally isolated from the Company’s creditors and can only be used to settle the obligations of the CLOs. The liabilities of the CLOs are non-recourse to the Company and the Company has no obligationsobligation to satisfy the liabilities of the CLOs.
As of September 30, 2019,2020, due to the Company and its subsidiaries held a range of 43.8% to 100.0% of the most subordinated debt tranches of four CLO entities and 5.0% of senior debt tranches in one CLO entity, which represents a range of 6.0% to 8.8% overall ownership in each ofdeconsolidation, the CLO entities.investments are reported in the consolidated balance sheet in fixed maturity securities and other investments. As of September 30,December 31, 2019, a fifth CLO structure was funded with $123.0 million in contributions from the Company’s wholly owned subsidiaries. The carrying value of the Company’s investment in the CLOs that havehad closed was $84.9 million and $55.2$77.4 million in subordinated debt tranches and $21.1 million and $21.0 million in senior debt tranches.
The Company’s retained beneficial interests in subordinated tranches as of September 30, 2019are measured at fair value using the market or income valuation techniques using significant unobservable inputs and December 31, 2018, respectively.assumptions, including prepayment, default rate, recovery lag, reinvestment, collateral liquidation price, discount rate and call date assumptions.
Real Estate Funds:Fund: Prior to the deconsolidation in the third quarter of 2020, Thethe Company’s real estate fund investments areinvestment was a closed ended fundsfund that includeincluded contributions from third party investors, which arewere recorded as non-controlling interests. Real estate fund earnings attributable to the Company’s shareholders are measured by the net investment income of the real estate funds,fund, which includes the change in fair value of the Company’s investments in the real estate fundsfund and investment management fees earned. During the nine months ended September 30, 2019, the Company formed a second real estate fund capitalized with $15.4 million of contributions from the Company’s wholly owned subsidiaries. The Company hashad a majority investment in the real estate fundsfund in the form of an equity interests.interest. As of September 30, 2020, the real estate fund is reported in the consolidated balance sheet in other investments. The carrying value of the Company’s investment in the real estate fundsfund was $117.0 million and $91.5$88.3 million as of September 30, 2019 and December 31, 2018, respectively. The Company’s unfunded commitment in the real estate funds was $3.5 million as of September 30, 2019.
For all consolidated investment entities, intercompany transactions are eliminated upon consolidation.
Fair Value of VIE Assets and Liabilities
The Company categorizes its fair value measurements according to a three-level hierarchy. See Note 1013 for the definition of the three levels of the fair value hierarchy. The following table presents the Company’s fair value hierarchy for financial assets and liabilities held by consolidated investment entities measured at fair value on a recurring basis as of the dates indicated:December 31, 2019.
28
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




December 31, 2019
TotalLevel 1Level 2Level 3
Financial Assets
Investments:
Cash and cash equivalents$32.9 $32.9 (1)$0 $0 
Corporate debt securities1,850.7 0 1,850.7 0 
Real estate fund107.2 0 0 107.2 
Total financial assets$1,990.8 $32.9 $1,850.7 $107.2 
Financial Liabilities
Collateralized loan obligation notes$1,603.1 $0 $1,603.1 $0 
Total financial liabilities$1,603.1 $0 $1,603.1 $0 
(1)Amounts consist of money market funds.
 September 30, 2019
 Total Level 1 Level 2 Level 3
Financial Assets       
Investments:       
Cash and cash equivalents$64.3
 $64.3
(1)$—
 $—
Corporate debt securities1,857.3
 —
 1,857.3
 —
Real estate funds139.1
 —
 —
 139.1
Total financial assets$2,060.7
 $64.3
 $1,857.3
 $139.1
        
Financial Liabilities       
Collateralized loan obligation notes$1,610.3
 $—
 $1,610.3
 $—
Total financial liabilities$1,610.3
 $—
 $1,610.3
 $—
 December 31, 2018
 Total Level 1 Level 2 Level 3
Financial Assets       
Investments:       
Cash and cash equivalents$62.6
 $62.6
(1)$—
 $—
Corporate debt securities1,464.2
 —
 1,464.2
 —
Real estate funds112.0
 —
 —
 112.0
Total financial assets$1,638.8
 $62.6
 $1,464.2
 $112.0
        
Financial Liabilities       
Collateralized loan obligation notes$1,316.7
 $—
 $1,316.7
 $—
Total financial liabilities$1,316.7
 $—
 $1,316.7
 $—
(1)Amounts consist of money market funds.
Level 2 Securities
Corporate debt securities: These assets are comprised of senior secured leveraged loans. The Company values these securities using estimates of fair value from a pricing service which utilizes the market valuation technique. The primary observable market inputs used by the pricing service are prices of reported trades from dealers. The fair value is calculated using a simple average of the prices received.
Collateralized loan obligation notes: As the Company elected the measurement alternative, the carrying value of the CLO debt is equal to the fair value of the CLO assets. The CLO notes are classified within Level 2 of the fair value hierarchy, consistent with the classification of the majority of the CLO financial assets.
Level 3 Securities
Real estate funds:fund: These assets are comprised of investments in limited partnerships whose underlying investments are real estate properties. TheManagement estimates the fair value of these real estate assets using the market, income andor cost approach valuation techniques, are used to calculate fair value as appropriate given the type of real estate property, as well as the use of independent external appraisals. Significantusing significant unobservable inputs and assumptions, including capitalization rates, discount rates, market comparables, expense growth rates,comparable prices, leasing assumptions and replacement costs, are used as appropriate to calculate fair value.costs.
The following table summarizes the change in balance sheet carrying value associated with Level 3 assets held by consolidated investment entities measured at fair value during the three and nine months ended September 30, 20192020 and 2018:2019:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Balance, beginning of period$54.5 $138.2 $107.2 $112.0 
Purchases0 0 0 15.4 
Sales0 (5.6)(61.0)(5.6)
Deconsolidation adjustments (1)
(54.5)0 (54.5)0 
Total income included in earnings0 6.5 8.3 17.3 
Balance, end of period$0 $139.1 $0 $139.1 
(1) Deconsolidation adjustments include $8.8 million related to non-controlling interests and $45.7 million related to investments retained, which are now included in other investments.

29
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Balance, beginning of period$138.2
 $102.5
 $112.0
 $84.7
Purchases—
 —
 15.4
 23.0
Sales(5.6) —
 (5.6) (6.8)
Total income (loss) included in retained earnings6.5
 (0.4) 17.3
 1.2
Balance, end of period$139.1
 $102.1
 $139.1
 $102.1


10.13. Fair Value Disclosures
Fair Values, Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures
The fair value measurements and disclosures guidance defines fair value and establishes a framework for measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with this guidance, the Company has categorized its recurring fair value basis financial assets and liabilities into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique.
The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and takes into account factors specific to the asset or liability.
The levels of the fair value hierarchy are described below:
•Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access.
•Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable in the marketplace for the asset or liability. The observable inputs are used in valuation models to calculate the fair value for the asset or liability.
•Level 3 inputs are unobservable but are significant to the fair value measurement for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. In such instances, the transfer between levels is reported as of the beginning of the reporting period.

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 20192020 and December 31, 2018.2019. The amounts presented below for short-term investments, other investments, cash equivalents, other receivables, other assets, assets held in and liabilities related to separate accounts and other liabilities differ from the amounts presented in the consolidated balance sheets because only certain investments or certain assets and liabilities within these line items are measured at estimated fair value. Other investments are comprised of investments in the Assurant Investment Plan (“AIP”), the American Security Insurance Company Investment Plan, the Assurant Deferred Compensation Plan, a modified coinsurance arrangement and other derivatives. Other liabilities are comprised of investments in the AIP contingent consideration related to business combinations and other derivatives.derivatives, including the put/call for Iké. The fair value amount and the majority of the associated levels presented for other investments and assets and liabilities held in separate accounts are received directly from third parties. 
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)
30




 September 30, 2019 
 Total Level 1 Level 2 Level 3 
Financial Assets        
Fixed maturity securities:        
U.S. government and government agencies and authorities$194.0
 $—
  $194.0
  $—
  
States, municipalities and political subdivisions264.4
 —
  264.4
  —
  
Foreign governments982.2
 0.2
  982.0
  —
  
Asset-backed482.3
 —
  480.7
  1.6
 
Commercial mortgage-backed240.0
 —
  214.9
  25.1
  
Residential mortgage-backed1,296.5
 —
  1,296.5
  —
  
U.S. corporate6,585.1
 —
 6,579.1
 6.0
 
Foreign corporate2,376.3
 —
  2,340.2
  36.1
  
Equity securities:        
Mutual funds40.7
 40.7
 —
 —
 
Common stocks19.5
 18.8
  0.7
  —
  
Non-redeemable preferred stocks346.7
 —
  344.5
  2.2
  
Short-term investments231.0
 129.2
(2)101.8
 —
  
Other investments232.6
 67.0
(1)165.6
(3)—
 
Cash equivalents1,051.2
 1,030.5
(2)20.7
(3)—
  
Other assets5.9
 —
 3.2
(5)2.7
(5)
Assets held in separate accounts1,715.2
 1,548.4
(1)166.8
(3)—
  
Total financial assets$16,063.6
 $2,834.8
  $13,155.1
  $73.7
  
         
Financial Liabilities        
Other liabilities$147.6
 $67.0
(1)$—
 $80.6
(6)
Liabilities related to separate accounts1,715.2
 1,548.4
(1)166.8
(3)—
   
Total financial liabilities$1,862.8
 $1,615.4
  $166.8
   
$80.6
   

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)



 September 30, 2020 
 TotalLevel 1 Level 2 Level 3 
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities$131.9 $0   $131.9   $0   
States, municipalities and political subdivisions258.7 0   258.7   0   
Foreign governments1,020.9 0.6   1,020.0   0.3   
Asset-backed532.4 0   531.6   0.8 
Commercial mortgage-backed340.2 0   320.4   19.8   
Residential mortgage-backed1,180.3 0   1,177.6   2.7   
U.S. corporate7,076.6 0 7,050.1 26.5 
Foreign corporate2,553.5 0   2,520.0   33.5   
Equity securities:
Mutual funds42.6 42.6 0 0 
Common stocks20.4 18.6   0.7   1.1   
Non-redeemable preferred stocks321.4 0   319.3   2.1   
Short-term investments217.3 174.8 (2)42.5 0   
Other investments231.7 66.4 (1)165.3 (3)0 
Cash equivalents1,592.4 1,564.8 (2)27.6 (3)0   
Other assets1.0 0 0.8 (4)0.2 (4)
Assets held in separate accounts1,972.6 1,802.1 (1)170.5 (3)0   
Total financial assets$17,493.9 $3,669.9   $13,737.0   $87.0   
Financial Liabilities
Other liabilities$66.4 $66.4 (1)$0 $0 
Liabilities related to separate accounts1,972.6 1,802.1 (1)170.5 (3)0   
Total financial liabilities$2,039.0 $1,868.5   $170.5   $0   

 December 31, 2018 
 Total Level 1 Level 2 Level 3 
Financial Assets        
Fixed maturity securities:        
U.S. government and government agencies and authorities$384.6
 $—
 $384.6
 $—
 
States, municipalities and political subdivisions256.2
 —
 256.2
 —
 
Foreign governments912.1
 0.5
 911.6
 —
 
Asset-backed504.5
 —
 504.5
 —
 
Commercial mortgage-backed79.7
 —
 40.8
 38.9
 
Residential mortgage-backed1,405.8
 —
 1,405.8
 —
 
U.S. corporate5,593.0
 —
 5,580.3
 12.7
 
Foreign corporate2,121.2
 —
 2,071.7
 49.5
 
Equity securities:        
Mutual funds45.0
 45.0
 —
 —
 
Common stocks15.3
 14.6
 0.7
 —
 
Non-redeemable preferred stocks318.5
 —
 316.3
 2.2
 
Short-term investments336.0
 188.9
(2)147.1
 —
 
Other investments224.9
 62.9
(1)161.5
(3)0.5
(4)
Cash equivalents527.7
 523.6
(2)4.1
(3)—
 
Other receivables5.0
 —
 —
 5.0
(6)
Other assets2.6
 —
  —
 2.6
(5)
Assets held in separate accounts1,575.7
 1,400.1
(1)175.6
(3)—
 
Total financial assets$14,307.8
 $2,235.6
 $11,960.8
 $111.4
 
         
Financial Liabilities        
Other liabilities$104.8
 $62.9
(1)$0.7
(5)$41.2
(6)
Liabilities related to separate accounts1,575.7
 1,400.1
(1)175.6
(3)—
 
Total financial liabilities$1,680.5
 $1,463.0
 $176.3
 $41.2
 
31
(1)Primarily includes mutual funds and related obligations.
(2)Primarily includes money market funds.
(3)Primarily includes fixed maturity securities and related obligations.
(4)Primarily includes fixed maturity securities and other derivatives.
(5)Primarily includes other derivative assets and liabilities.
(6)Primarily includes contingent consideration receivables/liabilities and the put/call related to the investment in Iké. See Note 5 for more information.





Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)



 December 31, 2019 
 TotalLevel 1 Level 2 Level 3 
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities$194.1 $0  $194.1  $0  
States, municipalities and political subdivisions242.5 0  242.5  0  
Foreign governments1,010.4 0.3  1,010.1  0  
Asset-backed503.2 0  503.2  0  
Commercial mortgage-backed222.1 0  198.6  23.5  
Residential mortgage-backed1,286.3 0  1,286.3  0  
U.S. corporate6,496.6 0 6,494.8 1.8 
Foreign corporate2,367.2 0  2,331.5  35.7  
Equity securities:
Mutual funds45.5 45.5 0 0 
Common stocks23.5 22.8  0.7  0  
Non-redeemable preferred stocks319.5 0  317.3  2.2  
Short-term investments367.5 271.4 (2)96.1 0  
Other investments234.6 70.3 (1)164.3 (3)0 
Cash equivalents1,287.5 1,277.8 (2)9.7 (3)0  
Assets held in separate accounts1,806.3 1,623.7 (1)182.6 (3)0  
Total financial assets$16,406.8 $3,311.8  $13,031.8  $63.2  
Financial Liabilities
Other liabilities$172.0 $70.3 (1)$101.5 (5)$0.2 
Liabilities related to separate accounts1,806.3 1,623.7 (1)182.6 (3)0  
Total financial liabilities$1,978.3 $1,694.0  $284.1  $0.2  
(1)Primarily includes mutual funds and related obligations.
(2)Primarily includes money market funds.
(3)Primarily includes fixed maturity securities and related obligations.
(4)Primarily includes derivative assets.
(5)Includes the put/call related to the investment in Iké. See Note 5 for more information.

The following tables disclose the carrying value, fair value and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets as of the dates indicated:
 September 30, 2019
   Fair Value
 
Carrying
Value
 Total Level 1 Level 2 Level 3
Financial Assets         
Commercial mortgage loans on real estate$804.6
 $838.4
 $—
 $—
 $838.4
Other investments138.8
 138.8
 31.2
 —
 107.6
Other assets35.5
 35.5
 —
 —
 35.5
Total financial assets$978.9
 $1,012.7
 $31.2
 $—
 $981.5
Financial Liabilities         
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)$556.4
 $574.8
 $—
 $—
 $574.8
Funds withheld under reinsurance287.9
 287.9
 287.9
 —
 —
Debt2,006.3
 2,189.2
 —
 2,189.2
 —
Total financial liabilities$2,850.6
 $3,051.9
 $287.9
 $2,189.2
 $574.8
 
 December 31, 2018
   Fair Value
  
Carrying
Value
 Total Level 1 Level 2 Level 3
Financial Assets         
Commercial mortgage loans on real estate$759.6
 $735.1
 $—
 $—
 $735.1
Other investments124.9
 124.9
 33.9
 —
 91.0
Other assets43.0
 43.0
 —
 —
 43.0
Total financial assets$927.5
 $903.0
 $33.9
 $—
 $869.1
Financial Liabilities         
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)$570.6
 $556.8
 $—
 $—
 $556.8
Funds withheld under reinsurance272.0
 272.0
 272.0
 —
 —
Debt2,006.0
 2,058.7
 —
 2,058.7
 —
Total financial liabilities$2,848.6
 $2,887.5
 $272.0
 $2,058.7
 $556.8
32
(1)Only the fair value of the Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the table above.
Reinsurance Recoverables Credit Disclosures
A key credit quality indicator for reinsurance is the A.M. Best Company (“A.M. Best”) financial strength rating of the reinsurer. The A.M. Best ratings are an independent opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. The A.M. Best ratings for new reinsurance agreements where there is material credit exposure are reviewed at the time of execution. The A.M. Best ratings for existing reinsurance agreements are reviewed on a quarterly basis, or sooner based on developments. The A.M. Best ratings for the Company’s four largest reinsurers associated with previously disposed businesses (consisting of Sun Life Assurance Company of Canada, John Hancock Life Insurance Company, Talcott Resolution Life and Annuity Insurance Company and Employers Reassurance Corporation (“ERAC”)) have not changed significantly since December 31, 2018, except for ERAC which was affirmed as B+ with a stable outlook and subsequently withdrawn at the
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




 September 30, 2020
  Fair Value
 Carrying
Value		TotalLevel 1Level 2Level 3
Financial Assets
Commercial mortgage loans on real estate$771.1 $827.0 $0 $0 $827.0 
Other investments165.4 165.4 30.3 0 135.1 
Other assets24.8 24.8 0 0 24.8 
Total financial assets$961.3 $1,017.2 $30.3 $— $986.9 
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)$527.1 $585.3 $0 $0 $585.3 
Funds withheld under reinsurance361.2 361.2 361.2 0 0 
Debt2,008.6 2,204.3 0 2,204.3 0 
Total financial liabilities$2,896.9 $3,150.8 $361.2 $2,204.3 $585.3 
 December 31, 2019
  Fair Value
  
Carrying
Value		TotalLevel 1Level 2Level 3
Financial Assets
Commercial mortgage loans on real estate$815.0 $843.8 $0 $0 $843.8 
Other investments140.0 140.0 30.7 0 109.3 
Other assets28.9 28.9 0 0 28.9 
Total financial assets$983.9 $1,012.7 $30.7 $0 $982.0 
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)$551.6 $588.4 $0 $0 $588.4 
Funds withheld under reinsurance319.4 319.4 319.4 0 0 
Debt2,006.9 2,190.6 0 2,190.6 0 
Total financial liabilities$2,877.9 $3,098.4 $319.4 $2,190.6 $588.4 
request
(1)Only the fair value of ERACthe Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in March 2019. As of September 30, 2019 and December 31, 2018, the Company had $776.3 million and $775.9 million, respectively, of reinsurance recoverables from ERAC.table above.
An allowance for doubtful accounts for reinsurance recoverables is recorded on the basis of periodic evaluations of balances due from reinsurers (net of collateral), reinsurer solvency, management’s experience and current economic conditions. The Company carried an allowance for doubtful accounts for reinsurance recoverables of $0.3 million as of September 30, 2019 and December 31, 2018, respectively.

11.14. Reserves
Reserve Roll Forward
The following table provides a roll forward of the Company’s beginning and ending claims and benefits payable balances. Claims and benefits payable is the liability for unpaid loss and loss adjustment expenses and is comprised of case and incurred but not reported (“IBNR”) reserves.
Since unpaid loss and loss adjustment expenses are estimates, the Company’s actual losses incurred may be more or less than the Company’s previously developed estimates, which is referred to as either unfavorable or favorable development, respectively.
33
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
The best estimate of ultimate loss and loss adjustment expense is generally selected from a blend of methods that are applied consistently each period. There have been no significant changes in the methodologies and assumptions utilized in estimating the liability for unpaid loss and loss adjustment expenses for any of the periods presented.
 For the Nine Months Ended September 30,
 2019 2018
Claims and benefits payable, at beginning of period$2,813.7
 $3,782.2
Less: Reinsurance ceded and other(2,053.7) (3,193.3)
Net claims and benefits payable, at beginning of period760.0
 588.9
Acquired reserves as of Acquisition Date (1)—
 140.7
Incurred losses and loss adjustment expenses related to:   
Current year2,034.2
 1,602.8
Prior years(27.3) (12.1)
Total incurred losses and loss adjustment expenses2,006.9
 1,590.7
Paid losses and loss adjustment expenses related to:   
Current year1,468.4
 1,168.8
Prior years470.4
 398.6
Total paid losses and loss adjustment expenses1,938.8
 1,567.4
Net claims and benefits payable, at end of period828.1
 752.9
Plus: Reinsurance ceded and other (2)2,043.0
 3,011.8
Claims and benefits payable, at end of period (2) (3)$2,871.1
 $3,764.7

(1)Acquired reserves from TWG on the Acquisition Date include $419.9 million of gross claims and benefits payable, and $279.2 million of ceded claims and benefits payable. The reserve roll forward includes the activity of TWG for the relevant periods since the Acquisition Date.
(2)Includes reinsurance recoverables and claims and benefits payable of $191.7 million and $265.9 million as of September 30, 2019 and 2018, respectively, which was ceded to the U.S. government. The Company acts as an administrator for the U.S. government under the voluntary National Flood Insurance Program.
(3)Claims and benefits payable and related reinsurance ceded were reduced by $730.0 million in December 2018 as result of the sale of Time Insurance Company, a legal entity associated with the previously exited Assurant Health business.
Assurant, Inc.
For the Nine Months Ended September 30,
20202019
Claims and benefits payable, at beginning of period$2,687.7 $2,813.7 
Less: Reinsurance ceded and other(1,900.0)(2,053.7)
Net claims and benefits payable, at beginning of period787.7 760.0 
Incurred losses and loss adjustment expenses related to:
Current year1,951.4 2,034.2 
Prior years(43.0)(27.3)
Total incurred losses and loss adjustment expenses1,908.4 2,006.9 
Paid losses and loss adjustment expenses related to:
Current year1,368.4 1,468.4 
Prior years463.0 470.4 
Total paid losses and loss adjustment expenses1,831.4 1,938.8 
Net claims and benefits payable, at end of period864.7 828.1 
Plus: Reinsurance ceded and other (1)1,893.5 2,043.0 
Claims and benefits payable, at end of period (1)$2,758.2 $2,871.1 
Notes(1)Includes reinsurance recoverables and claims and benefits payable of $118.4 million and $191.7 million as of September 30, 2020 and 2019, respectively, which was ceded to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




the U.S. government. The Company acts as an administrator for the U.S. government under the voluntary National Flood Insurance Program.
The Company experienced favorable development in both nine month periods presented in the roll forward table above. Global Lifestyle contributed $28.5$34.0 million and $15.9$28.5 million to the net favorable development forduring the nine months ended September 30, 20192020 and 2018,2019, respectively. The net favorable development in 2019both years was primarily attributable to mobile device protection products andnearly all lines of business acquired from TWG, where losses fromacross most of the Company’s regions with a concentration on more recent accident years were favorable to expectations. The net favorable development in 2018 was primarily attributable to lower than expected losses from extended service contracts and mobile device protection products.based on emerging evaluations regarding loss experience each period. Many of these contracts and products contain retrospective commission (profit sharing) provisions that would result in offsetting increases or decreases in expense dependent on if the development was favorable or unfavorable. Global Housing contributed $7.5$2.9 million of net favorable development and $11.4$7.5 million of net unfavorable development for the nine months ended September 30, 2020 and 2019, respectively. The net favorable development in 2020 was primarily attributable to Lender-placed Insurance products from accident year 2019 due to lower than expected claim frequency for water damage and 2018, respectively.other claims. The net unfavorable development in 2019 was primarily attributable to $4.5 million in net unfavorable development from prior catastrophes, due to rising severity trends from Hurricane Maria and Michael, partially offset by increased subrogation recoveries associated with the 2017 and 2018 California wildfires. The net unfavorable development in 2018 was attributable to prior catastrophes of $13.3 million driven by Hurricane Maria. Global Preneed Assurant Health and other contributed $6.3$6.1 million and $7.6$6.3 million in net favorable development for the nine months ended September 30, 20192020 and 2018,2019, respectively.

34
12.
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
15. Debt
The following table shows the principal amount and carrying value of the Company’s outstanding debt, less unamortized
discount and issuance costs as applicable, as of September 30, 20192020 and December 31, 2018:2019:
September 30, 2020December 31, 2019
Principal AmountCarrying ValuePrincipal AmountCarrying Value
Floating Rate Senior Notes due March 2021 (1)$50.0 $50.0 $50.0 $49.9 
4.00% Senior Notes due March 2023350.0 348.8 350.0 348.5 
4.20% Senior Notes due September 2023300.0 298.2 300.0 297.8 
4.90% Senior Notes due March 2028300.0 297.1 300.0 296.8 
3.70% Senior Notes due February 2030350.0 347.0 350.0 346.8 
6.75% Senior Notes due February 2034275.0 272.2 275.0 272.1 
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)400.0 395.3 400.0 395.0 
Total Debt$2,008.6 $2,006.9 
 September 30, 2019 December 31, 2018
 Principal Amount Carrying Value Principal Amount Carrying Value
Floating Rate Senior Notes due March 2021 (1)$50.0
 $49.8
 $300.0
 $298.1
4.00% Senior Notes due March 2023350.0
 348.4
 350.0
 348.1
4.20% Senior Notes due September 2023300.0
 297.7
 300.0
 296.8
4.90% Senior Notes due March 2028300.0
 296.8
 300.0
 297.6
3.70% Senior Notes due February 2030350.0
 346.7
 —
 —
6.75% Senior Notes due February 2034275.0
 272.1
 375.0
 370.9
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)400.0
 394.8
 400.0
 394.5
Total debt  $2,006.3
   $2,006.0
(1)(1)Bears floating interest at a rate equal to three-month LIBOR plus 1.25%.
(2)Bears a 7.00% annual interest rate from March 2018 to March 2028 and annual interest rate equal to three-month LIBOR plus 4.135% thereafter.
2030 Senior Notes: In August 2019, the Company issued senior notes with an aggregate principal amount of $350.0 million which bear interest at a rate of 3.70% per year, mature in February 2030 and were issued at a 0.035% discount to the public (the “2030 Senior Notes”). Interest is payable semi-annually in arrears beginning in February 2020. Prior to November 2029, the Company may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, the Company may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemedthree-month LIBOR plus accrued and unpaid interest.1.25% per annum.
The(2)Bears a 7.00% annual interest rate payable on the 2030 Senior Notes will be subject to adjustment from time to time, if either Moody’s Investor Service, Inc. (“Moody’s”) or S&P Global Ratings, a division of S&P Global Inc. (“S&P”) downgrades the credit rating assigned to such series of senior notes to Ba1 or below or to BB+ or below, respectively, or subsequently upgrades the credit ratings once the senior notes are at or below such levels. The following table details the increase inMarch 2028 and an annual interest rate over the issuance rate by rating with the impact equal to the sum of the number of basis points next to such rating for a maximum increase of 200 basis points over the issuance rate:three-month LIBOR plus 4.135% thereafter.
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




Rating Agencies
Rating LevelsMoody’s (1)S&P (1)Interest Rate Increase (2)
1Ba1BB+25 basis points
2Ba2BB50 basis points
3Ba3BB-75 basis points
4B1 or belowB+ or below100 basis points
(1)Including the equivalent ratings of any substitute rating agency.
(2)Applies to each rating agency individually.
The Company used the net proceeds from the offering, together with cash on hand, to purchase $100.0 million of its 6.75% senior notes due 2034 in a cash tender offer, to redeem $250.0 million of its floating rate senior notes due 2021 (the “2021 Senior Notes”) and to pay related premiums, fees and expenses. In connection with the tender offer, the Company recognized a loss on extinguishment of debt of $31.4 million, primarily related to incremental consideration required to be paid to debtholders as a result of the interest rate differential over the remaining term as compared to current rates. Additionally, the Company recognized a $2.6 million loss from the settlement of the three-year interest rate swap that hedged interest rate exposure on the portion of the 2021 Senior Notes that were redeemed in September 2019. The $2.6 million loss was reclassified out of accumulated other comprehensive income and recorded through interest expense.
In connection with the issuance of the 2030 Senior Notes, the Company recognized $3.0 million of interest expense related to premiums paid for a series of derivative transactions that were entered into in July 2019 to hedge the related interest rate risk.
Credit Facility
The Company has a senior unsecured $450.0 million revolving credit agreement (the “Credit Facility”) with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association.Association (the “Lenders”). The Credit Facility provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided the Company is in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for ourthe Company’s commercial paper program or for general corporate purposes.
On March 27, 2020, the Company drew down $200.0 million from its Credit Facility as a precautionary measure to strengthen its liquidity position and capital flexibility due to the uncertainty caused by the COVID-19 pandemic. The initial interest period for the loan ended on June 26, 2020 and bore a floating interest rate equal to three-month LIBOR plus 1.50% per annum. Upon the expiration of the initial interest period, the Company continued the $200.0 million loan for an additional month bearing a floating interest rate equal to one-month LIBOR plus 1.50% per annum. The Company repaid the full $200.0 million loan on July 29, 2020. As of September 30, 2019,2020, 0 borrowings have been madewere outstanding under the Credit facility, $441.0Facility, and $445.5 million was available under the Credit Facility, and $9.0due to $4.5 million of letters of credit were outstanding. Total interest expense on the $200.0 million draw for the nine months ended September 30, 2020 was $1.7 million.
Interest Rate Derivatives
In March 2018, the Company exercised a series of derivative transactions it had entered into in 2017 to hedge the interest rate risk related to expected borrowing to finance the acquisition of TWG acquisition.Holdings Limited and its subsidiaries. The Company determined that the derivatives qualified for hedge accounting as effective cash flow hedges and recognized a deferred gain of $26.7 million upon settlement that was reported through other comprehensive income. The deferred gain is being recognized as a reduction in interest expense related to the 4.20% senior notes due 2023, the 4.90% senior notes due 2028 and the 7.00% fixed-to-floating rate subordinated notes on an effective yield basis. The amortization of the deferred gain for the three months ended September 30, 2020 and 2019 was $0.7 million and $0.6 million, respectively, and the amortization of deferred gain for nine months ended September 30, 2020 and 2019 was $0.6$2.2 million and $2.1 million, respectively. The amortization of the deferred gain for the three and nine months ended September 30, 2018 was $0.7 million and $1.6 million. The remaining deferred gain as of September 30, 20192020 was $22.4$19.3 million. Additionally, the Company expensed $8.6 million

35
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of the premium paid for the derivatives as a component of interest expense for the nine months ended September 30, 2018.shares and per share amounts)

13.16. Accumulated Other Comprehensive Income
Certain amounts included in the consolidated statements of comprehensive income are net of reclassification adjustments. The following tables summarize those reclassification adjustments (net of taxes) for the periods indicated: 

 Three Months Ended September 30, 2020
 Foreign
currency
translation
adjustment		Net unrealized
gains on
investments		Net unrealized gains on derivative transactionsCredit related impairmentNon-credit related impairmentUnamortized net losses on Pension PlansAccumulated
other
comprehensive
income
Balance at June 30, 2020$(379.0)$989.1 $15.9 $0 $14.3 $(71.4)$568.9 
Change in accumulated other comprehensive income (loss) before reclassifications35.3 53.8 0 1.2 1.5 (0.5)91.3 
Amounts reclassified from accumulated other comprehensive income (loss)0 0.3 (0.6)0 0 (1.7)(2.0)
Net current-period other comprehensive income (loss)35.3 54.1 (0.6)1.2 1.5 (2.2)89.3 
Balance at September 30, 2020$(343.7)$1,043.2 $15.3 $1.2 $15.8 $(73.6)$658.2 
 Three Months Ended September 30, 2019
 Foreign
currency
translation
adjustment		Net unrealized
gains on
investments		Net unrealized gains on derivative transactionsCredit related impairmentNon-credit related impairmentUnamortized net (losses) gains on Pension PlansAccumulated
other
comprehensive
income
Balance at June 30, 2019$(366.6)$778.4 $15.2 $0 $15.6 $(113.9)$328.7 
Change in accumulated other comprehensive (loss) income before reclassifications(23.6)101.0 0.5 0 0.2 0.1 78.2 
Amounts reclassified from accumulated other comprehensive (loss) income0 (3.6)2.2 0 0 (0.3)(1.7)
Net current-period other comprehensive (loss) income(23.6)97.4 2.7 0 0.2 (0.2)76.5 
Balance at September 30, 2019$(390.2)$875.8 $17.9 $0 $15.8 $(114.1)$405.2 
36
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)



 Nine Months Ended September 30, 2020
 Foreign
currency
translation
adjustment		Net unrealized
gains on
securities		Net unrealized gains on derivative transactionsCredit related impairmentNon-credit related impairmentUnamortized net (losses) on Pension Plans (1)Accumulated
other
comprehensive
income
Balance at December 31, 2019$(358.9)$856.5 $17.1 $0 $15.5 $(118.7)$411.5 
Change in accumulated other comprehensive (loss) income before reclassifications(4.5)189.1 0 1.2 0.3 48.4 234.5 
Amounts reclassified from accumulated other comprehensive income (loss)19.7 (2.4)(1.8)0 0 (3.3)12.2 
Net current-period other comprehensive income (loss)15.2 186.7 (1.8)1.2 0.3 45.1 246.7 
Balance at September 30, 2020$(343.7)$1,043.2 $15.3 $1.2 $15.8 $(73.6)$658.2 
 Nine Months Ended September 30, 2019
 Foreign
currency
translation
adjustment		Net unrealized
gains on
securities		Net unrealized gains on derivative transactionsCredit related impairmentNon-credit related impairmentUnamortized net (losses) on Pension PlansAccumulated
other
comprehensive
income
Balance at December 31, 2018$(375.6)$301.0 $18.4 $0 $15.1 $(114.3)$(155.4)
Change in accumulated other comprehensive (loss) income before reclassifications(14.6)581.4 (1.5)0 0.7 0.1 566.1 
Amounts reclassified from accumulated other comprehensive (loss) income0 (6.6)1.0 0 0 0.1 (5.5)
Net current-period other
comprehensive (loss) income		(14.6)574.8 (0.5)0 0.7 0.2 560.6 
Balance at September 30, 2019$(390.2)$875.8 $17.9 $0 $15.8 $(114.1)$405.2 

(1)The Retirement Health Benefits plan was amended in February 2020, which resulted in a prior service credit recognized in other comprehensive income that will be recognized in income over the remaining period of the plan. Refer to Note 20 for additional information.
The following tables summarize the reclassifications out of AOCI for the periods indicated:
37
 Three Months Ended September 30, 2019
 
Foreign
currency
translation
adjustment
 
Net unrealized
gains on
securities
 Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans 
Accumulated
other
comprehensive
income
Balance at June 30, 2019$(366.6) $778.4
 $15.2
 $15.6
 $(113.9) $328.7
Change in accumulated other comprehensive (loss) income before reclassifications(23.6) 101.0
 0.5
 0.2
 0.1
 78.2
Amounts reclassified from accumulated other comprehensive (loss) income—
 (3.6) 2.2
 —
 (0.3) (1.7)
Net current-period other comprehensive (loss) income(23.6) 97.4
 2.7
 0.2
 (0.2) 76.5
Balance at September 30, 2019 (1)$(390.2) $875.8
 $17.9
 $15.8
 $(114.1) $405.2
            
 Three Months Ended September 30, 2018
 
Foreign
currency
translation
adjustment
 
Net unrealized
gains on
securities
 Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans 
Accumulated
other
comprehensive
income
Balance at June 30, 2018$(355.4) $266.2
 $20.9
 $13.0
 $(82.6) $(137.9)
Change in accumulated other comprehensive (loss) income before reclassifications4.8
 (51.0) 0.5
 (0.5) —
 (46.2)
Amounts reclassified from accumulated other comprehensive (loss) income—
 4.0
 (0.4) —
 0.8
 4.4
Net current-period other comprehensive (loss) income4.8
 (47.0) 0.1
 (0.5) 0.8
 (41.8)
Cumulative effect of change in accounting principles$0.1
 $96.0
 $—
 $3.9
 $(18.0) $82.0
Balance at September 30, 2018$(350.5) $315.2
 $21.0
 $16.4
 $(99.8) $(97.7)
            
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




Details about accumulated other comprehensive income componentsAmount reclassified from
accumulated other
comprehensive income		Affected line item in the
statement where net
income is presented
 Three Months Ended September 30, 
 20202019 
Net unrealized losses (gains) on investments$0.3 $(4.5)Net realized gains (losses) on investments
0 0.9 Provision for income taxes
$0.3 $(3.6)Net of tax
Net unrealized (gains) losses on derivative transactions$(0.7)$2.0 Interest expense
0.1 0.2 Provision for income taxes
$(0.6)$2.2 Net of tax
Amortization of pension and postretirement unrecognized net periodic benefit cost:
Amortization of net loss (gain)$1.3 $(0.4)(1)
Amortization of prior service credit(3.4)0 (1)
(2.1)(0.4)
0.4 0.1 Provision for income taxes
$(1.7)$(0.3)Net of tax
Total reclassifications for the period$(2.0)$(1.7)Net of tax
Details about accumulated other comprehensive income componentsAmount reclassified from
accumulated other
comprehensive income		Affected line item in the
statement where net
income is presented
Nine Months Ended September 30,
20202019
Foreign currency translation adjustment$19.7 $0 Iké net losses (see Note 5)
0 0 Provision for income taxes
$19.7 $0 Net of tax
Net unrealized gains on investments$(3.1)$(8.3)Net realized gains (losses) on investments
0.7 1.7 Provision for income taxes
$(2.4)$(6.6)Net of tax
Net unrealized (gains) losses on derivative transactions$(2.2)$0.5 Interest expense
0.4 0.5 Provision for income taxes
$(1.8)$1.0 Net of tax
Amortization of pension and postretirement unrecognized net periodic benefit cost:
Amortization of net loss$3.8 $0.2 (1)
Amortization of prior service credit(7.9)0 (1)
(4.1)0.2 
0.8 (0.1)Provision for income taxes
$(3.3)$0.1 Net of tax
Total reclassifications for the period$12.2 $(5.5)Net of tax
(1)These AOCI components are included in the computation of net periodic pension cost. See Note 20 for additional information.
 Nine Months Ended September 30, 2019
 
Foreign
currency
translation
adjustment
 
Net unrealized
gains on
securities
 Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans 
Accumulated
other
comprehensive
income
Balance at December 31, 2018$(375.6) $301.0
 $18.4
 $15.1
 $(114.3) $(155.4)
Change in accumulated other
  comprehensive (loss) income
  before reclassifications
(14.6) 581.4
 (1.5) 0.7
 0.1
 566.1
Amounts reclassified from
  accumulated other comprehensive
  (loss) income
—
 (6.6) 1.0
 —
 0.1
 (5.5)
Net current-period other
  comprehensive (loss) income
(14.6) 574.8
 (0.5) 0.7
 0.2
 560.6
Balance at September 30, 2019 (1)$(390.2) $875.8
 $17.9
 $15.8
 $(114.1) $405.2
            
 Nine Months Ended September 30, 2018
 
Foreign
currency
translation
adjustment
 
Net unrealized
gains on
securities
 Net unrealized gains on derivative transactions OTTI Unamortized net (losses) on Pension Plans 
Accumulated
other
comprehensive
income
Balance at December 31, 2017$(281.5) $581.2
 $—
 $17.9
 $(83.6) $234.0
Change in accumulated other
  comprehensive (loss) income
  before reclassifications
(69.1) (339.5) 22.1
 (5.4) —
 (391.9)
Amounts reclassified from
  accumulated other comprehensive
  (loss) income
—
 11.4
 (1.1) —
 1.8
 12.1
Net current-period other
  comprehensive (loss) income
(69.1) (328.1) 21.0
 (5.4) 1.8
 (379.8)
Cumulative effect of change in
  accounting principles
0.1
 62.1
 —
 3.9
 (18.0) 48.1
Balance at September 30, 2018$(350.5) $315.2
 $21.0
 $16.4
 $(99.8) $(97.7)
38
(1)Amount includes the $41.0 million of cumulative foreign currency translation losses associated with the investment in Iké. The amount was required to be included as part of the carrying amount of the Iké investment when evaluating that investment for impairment as of September 30, 2019. Such amount, as adjusted for experience, will be credited upon actual sale or acquisition of the equity interests in a future period.

Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




The following tables summarize the reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2019 and 2018:
Details about accumulated other comprehensive income components 
Amount reclassified from
accumulated other
comprehensive income
 
Affected line item in the
statement where net
income is presented
  Three Months Ended September 30,  
  2019 2018  
Net unrealized (gains) losses on securities $(4.5) $5.1
 Net realized gains on investments, excluding other-than-temporary impairment losses
  0.9
 (1.1) Provision for income taxes
  $(3.6) $4.0
 Net of tax
Net unrealized losses (gains) on derivative transactions $2.0
 $(0.5) Interest expense
  0.2
 0.1
 Provision for income taxes
  $2.2
 $(0.4) Net of tax
Amortization of pension and postretirement unrecognized net periodic benefit cost:      
Amortization of net (gain) loss $(0.4) $0.7
 (1)
Settlement loss —
 0.4
 (1)
  (0.4) 1.1
  
  0.1
 (0.3) Provision for income taxes
  $(0.3) $0.8
 Net of tax
Total reclassifications for the period $(1.7) $4.4
 Net of tax
       
Details about accumulated other comprehensive income components 
Amount reclassified from
accumulated other
comprehensive income
 
Affected line item in the
statement where net
income is presented
  Nine Months Ended September 30,  
  2019 2018  
Net unrealized (gains) losses on securities $(8.3) $14.5
 Net realized gains on investments, excluding other-than-temporary impairment losses
  1.7
 (3.1) Provision for income taxes
  $(6.6) $11.4
 Net of tax
Net unrealized losses (gains) on derivative transactions $0.5
 $(1.4) Interest expense
  0.5
 0.3
 Provision for income taxes
  $1.0
 $(1.1) Net of tax
Amortization of pension and postretirement
  unrecognized net periodic benefit cost:
      
Amortization of net loss $0.2
 $1.9
 (1)
Settlement loss —
 0.4
 (1)
  0.2
 2.3
  
  (0.1) (0.5) Provision for income taxes
  $0.1
 $1.8
 Net of tax
Total reclassifications for the period $(5.5) $12.1
 Net of tax
(1)These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 17 for additional information.
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




14.17. Stock Based Compensation
Under the Assurant, Inc. 2017 Long-Term Equity Incentive Plan (“ALTEIP”), as amended in May 2019, the Company is authorized to issue up to 1,588,797 new shares of the Company’s common stock to employees, officers and non-employee directors. Under the ALTEIP, the Company may grant awards based on shares of its common stock, including stock options, stock appreciation rights, (“SARs”), restricted stock (including performance shares), unrestricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and dividend equivalents. All share-based grants are awarded under the ALTEIP.
Restricted Stock Units
The following table shows a summary of RSU activity during the three and nine months ended September 30, 20192020 and 2018:2019:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2019 2018 2019 2018
RSU compensation expense$7.9
 $10.9
 $22.3
 $24.7
Income tax benefit(1.4) (1.9) (4.1) (4.2)
RSU compensation expense, net of tax$6.5
 $9.0
 $18.2
 $20.5
RSUs granted29,195
 91,579
 254,591
 513,408
Weighted average grant date fair value per unit$108.99
 $103.41
 $98.86
 $92.92
Total fair value of vested RSUs$6.4
 $3.5
 $33.2
 $22.3

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
RSU compensation expense$7.2 $7.9 $20.8 $22.3 
Income tax benefit(1.4)(1.4)(3.8)(4.1)
RSU compensation expense, net of tax$5.8 $6.5 $17.0 $18.2 
RSUs granted32,844 29,195 294,794 254,591 
Weighted average grant date fair value per unit$101.81 $108.99 $92.2 $98.86 
Total fair value of vested RSUs$4.8 $6.4 $29.2 $33.2 
As of September 30, 2019,2020, there was $25.6$24.4 million of unrecognized compensation cost related to outstanding RSUs. That cost is expected to be recognized over a weighted-average period of 1.21.1 years.
Performance Share Units
The following table shows a summary of PSU activity during the three and nine months ended September 30, 20192020 and 2018:2019:
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2019 2018 2019 2018
PSU compensation expense$6.7
 $6.1
 $17.5
 $13.4
Income tax benefit(1.0) (0.8) (2.5) (2.1)
PSU compensation expense, net of tax$5.7
 $5.3
 $15.0
 $11.3
PSUs granted—
 164,957
 246,219
 164,957
Weighted average grant date fair value per unit$—
 $123.51
 $105.23
 $123.51
Total fair value of vested PSUs$1.9
 $1.9
 $19.6
 $27.5

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
PSU compensation expense$7.6 $6.7 $19.7 $17.5 
Income tax benefit(0.8)(1.0)(2.1)(2.5)
PSU compensation expense, net of tax$6.8 $5.7 $17.6 $15.0 
PSUs granted0 0 302,274 246,219 
Weighted average grant date fair value per unit$0 $0 $87.36 $105.23 
Total fair value of vested PSUs$0.3 $1.9 $24.7 $19.6 
As of September 30, 2019,2020, there was $32.4$27.8 million of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of 1.1 years. 
The fair value of PSUs with market conditions was estimated as of the date of grant using a Monte Carlo simulation model, which utilizes multiple variables that determine the probability of satisfying the market condition stipulated in the award. Expected volatilities for awards issued during the nine months ended September 30, 20192020 and 20182019 were based on the historical stock prices of the Company’s stock and peer group. The expected term for grants issued during the nine months ended September 30, 20192020 and 20182019 was assumed to equal the average of the vesting period of the PSUs. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant.

39
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




15.18. Equity Transactions
Stock Repurchase
During the nine months ended September 30, 20192020 and 2018,2019, the Company repurchased 1,582,4481,312,443 and 783,6101,582,448 shares of the Company’s outstanding common stock at a cost of $166.1$153.2 million and $83.2$166.1 million, exclusive of commissions, respectively, leaving $595.1$333.1 million remaining under the total repurchase authorization as of September 30, 2019.2020.
The timing and the amount of future repurchases will depend on market conditions, the Company’s financial condition, results of operations and liquidity and other factors.
Issuance of Mandatory Convertible Preferred Stock (“MCPS”)
In March 2018, the Company issued 2,875,000 shares of the MCPS at a public offering price of $100.00 per share. The net proceeds from the sale of the MCPS was $276.4 million after deducting the underwriting discounts and offering expenses.
Each outstanding share of MCPS will convert automatically on March 15, 2021 into between 0.93690.9391 (the “minimum conversion rate”) and 1.12421.1269 shares of common stock, subject to customary anti-dilution adjustments. At any time prior to March 2021, holders may elect to convert each share of MCPS into shares of common stock at the minimum conversion rate or in the event of a fundamental change at the specified rates as defined in the Certificate of Designations of the MCPS.
Dividends on ourthe MCPS will be payable on a cumulative basis when, as and if declared, at an annual rate of 6.50% of the liquidation preference of $100.00 per share. The Company may pay declared dividends in cash or, subject to certain limitations, in shares of the Company’s common stock, or in any combination of cash and shares of the Company’s common stock quarterly, commencing in June 2018 and ending in March 2021. No dividend or distribution may be declared or paid on common stock or any other class or series of junior stock, and no common stock or any other class or series of junior stock or parity stock may be purchased, redeemed or otherwise acquired for consideration unless all accumulated and unpaid dividends on the MCPS for all preceding dividend periods have been declared and paid in full, subject to certain limited exceptions. The Company paid preferred stock dividends of $4.7 million and $14.0 million for the three and nine months ended September 30, 2019, respectively.2020 and 2019. The Company paid preferred stock dividends of $4.7 million and $9.5$14.0 million for the three and nine months ended September 30, 2018, respectively.2020 and 2019.

16.19. Earnings Per Common Share
The following table presents net income, the weighted average common shares used in calculating basic earnings per common share (“EPS”)EPS and those used in calculating diluted EPS for each period presented below. Diluted EPS reflects the incremental common shares from: (1) common shares issuable upon vesting of PSUs and ESPPthe purchase of shares under the Employee Stock Purchase Plan (the “ESPP”) using the treasury stock method; and (2) common shares issuable upon conversion of the MCPS using the if-converted method. Refer to Notes 17 and 18 for further information regarding potential common stock issuances. The outstanding RSUs have non-forfeitable rights to dividend equivalents and are therefore included in calculating basic and diluted EPS under the two-class method.
40
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Numerator
Net (loss) income attributable to stockholders$(30.2)$(54.8)$302.6 $255.0 
Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net (loss) income attributable to common stockholders(34.9)(59.5)288.6 241.0 
Less: Common stock dividends paid(37.5)(37.3)(115.1)(113.0)
Undistributed earnings$(72.4)$(96.8)$173.5 $128.0 
Denominator
Weighted average common shares outstanding used in basic earnings per common share calculations60,190,103 61,804,492 60,384,817 62,204,242 
Incremental common shares from:
PSUs0 0 253,982 256,003 
ESPP0 0 2,146 0 
MCPS0 0 0 0 
Weighted average common shares used in diluted earnings per common share calculations60,190,103 61,804,492 60,640,945 62,460,245 
Earnings per common share - Basic
Distributed earnings$0.62 $0.60 $1.91 $1.82 
Undistributed (losses) earnings(1.20)(1.56)2.87 2.06 
Net (loss) income attributable to common stockholders$(0.58)$(0.96)$4.78 $3.88 
Earnings per common share - Diluted (1)
Distributed earnings$0.62 $0.60 $1.90 $1.81 
Undistributed (losses) earnings(1.20)(1.56)2.86 2.05 
Net (loss) income attributable to common stockholders$(0.58)$(0.96)$4.76 $3.86 
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2019 2018 2019 2018
Numerator       
Net (loss) income attributable to stockholders$(54.8) $53.0
 $255.0
 $226.0
Less: Preferred stock dividends(4.7) (4.7) (14.0) (9.5)
Net (loss) income attributable to common stockholders(59.5) 48.3
 241.0
 216.5
Less: Common stock dividends paid(37.3) (35.5) (113.0) (96.1)
Undistributed earnings or losses$(96.8) $12.8
 $128.0
 $120.4
Denominator       
Weighted average common shares outstanding used in basic earnings per common share calculations61,804,492
 63,621,184
 62,204,242
 57,988,570
Incremental common shares from:       
PSUs—
 179,163
 256,003
 205,370
ESPP—
 —
 —
 —
MCPS—
 —
 —
 —
Weighted average common shares used in diluted earnings per common share calculations61,804,492
 63,800,347
 62,460,245
 58,193,940
Earnings per common share - Basic       
Distributed earnings$0.60
 $0.56
 $1.82
 $1.66
Undistributed earnings or losses(1.56) 0.20
 2.06
 2.07
Net (loss) income attributable to common stockholders$(0.96) $0.76
 $3.88
 $3.73
Earnings per common share - Diluted (1)       
Distributed earnings$0.60
 $0.56
 $1.81
 $1.65
Undistributed earnings or losses(1.56) 0.20
 2.05
 2.07
Net (loss) income attributable to common stockholders$(0.96) $0.76
 $3.86
 $3.72

(1)In accordance with earnings per share guidance, diluted per share amounts are computed in the same manner as basic per share amounts when a loss from operations exists.
(1)In accordance with earnings per share guidance, diluted per share amounts are computed in the same manner as basic per share amounts when a loss from operations exists.
Average PSUs totaling 261,332 and 69,624233,039 for the three months ended September 30, 20192020 were anti-dilutive and 2018, respectively, and 118 and 31,363thus not included in the computation of diluted EPS under the treasury stock method. There were 0 anti-dilutive average PSUs for the nine months ended September 30, 20192020. Average PSUs totaling 261,332 and 2018,118 for the three and nine months ended September 30, 2019, respectively, were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method. AverageIncremental common shares from ESPP totaling 2,580 and 2,631 for the three months ended September 30, 2020 and 2019, respectively, were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method. Average MCPS totaling 2,693,588 and 2,715,4382,699,913 for the three months ended September 30, 2019 and 2018, respectively, and 2,739,875 and 2,161,123 for the nine months ended September 30, 20192020 and 2018,2,693,588 and 2,739,875 for the three and nine months ended September 30, 2019, respectively, were anti-dilutive and thus not included in the computation of diluted EPS under the if-converted method.

17.20. Retirement and Other Employee Benefits
The Company and its subsidiaries participate in a non-contributory, qualified defined benefit pension plan (“Assurant Pension Plan”) covering substantially all employees. The Company also has various non-contributory, non-qualified supplemental plans covering certain employees including the Assurant Executive Pension Plan and the Assurant Supplemental Executive Retirement Plan. The qualified and non-qualified plans are referred to as “Pension Benefits” unless otherwise noted. In addition, the Company provides certain life and health care benefits (“Retirement Health Benefits”) for retired employees and their dependents. The Pension Benefits and Retirement Health Benefits (together, the “Plans”) were frozen on March 1, 2016.
41
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(Inin millions, except number of shares and per share amounts)




In February 2020, the Company amended the Retirement Health Benefits to terminate effective December 31, 2024 (the “Termination Date”). Benefits will be paid up to the Termination Date. The Retirement Health Benefits obligations were re-measured using a discount rate of 1.55%, selected based on a cash flow analysis using a bond yield curve as of February 29, 2020, and the fair market value of the Retirement Health Benefits assets as of February 29, 2020. The remeasurement resulted in a reduction to the Retirement Health Benefits obligations of $65.6 million and a corresponding prior service credit in AOCI, which will be reclassified from AOCI as it is amortized in the net periodic benefit cost over the remaining period until the Termination Date.
The following tables present the components of net periodic benefit cost for the Plans for the three and nine months ended September 30, 20192020 and 2018:2019: 
 Qualified Pension BenefitsUnfunded Non-qualified 
Pension Benefits		Retirement Health
Benefits
 For the Three Months Ended September 30,For the Three Months Ended September 30,For the Three Months Ended September 30,
 202020192020201920202019
Interest cost$5.1 $6.2 $0.5 $0.8 $0.1 $0.6 
Expected return on plan assets(7.7)(8.7)0 0 (0.8)(0.5)
Amortization of prior service credit0 0 0 0 (3.4)0 
Amortization of net loss0.7 0 0.6 0.2 0 (0.6)
Net periodic benefit cost$(1.9)$(2.5)$1.1 $1.0 $(4.1)$(0.5)
 Qualified Pension BenefitsUnfunded Nonqualified 
Pension Benefits		Retirement Health
Benefits
 For the Nine Months Ended September 30,For the Nine Months Ended September 30,For the Nine Months Ended September 30,
 202020192020201920202019
Interest cost$15.3 $19.3 $1.5 $2.2 $0.6 $2.4 
Expected return on plan assets(23.1)(26.7)0 0 (1.3)(1.4)
Amortization of prior service credit0 0 0 0 (7.9)0 
Amortization of net loss (gain)2.1 0 1.7 0.8 0 (0.6)
Net periodic benefit cost$(5.7)$(7.4)$3.2 $3.0 $(8.6)$0.4 
 Qualified Pension Benefits 
Unfunded Non-qualified 
Pension Benefits
 
Retirement Health
Benefits
 For the Three Months Ended September 30, For the Three Months Ended September 30, For the Three Months Ended September 30,
 2019 2018 2019 2018 2019 2018
Interest cost$6.2
 $5.9
 $0.8
 $0.7
 $0.6
 $0.8
Expected return on plan assets(8.7) (9.0) —
 —
 (0.5) (0.5)
Amortization of net loss (gain)—
 0.3
 0.2
 0.4
 (0.6) —
Settlement loss—
 —
 —
 0.4
 —
 —
Net periodic benefit cost$(2.5) $(2.8) $1.0
 $1.5
 $(0.5) $0.3
            
 Qualified Pension Benefits 
Unfunded Nonqualified 
Pension Benefits
 
Retirement Health
Benefits
 For the Nine Months Ended September 30, For the Nine Months Ended September 30, For the Nine Months Ended September 30,
 2019 2018 2019 2018 2019 2018
Interest cost$19.3
 $17.5
 $2.2
 $2.1
 $2.4
 $2.5
Expected return on plan assets(26.7) (27.2) —
 —
 (1.4) (1.6)
Amortization of net loss (gain)—
 0.7
 0.8
 1.2
 (0.6) —
Settlement loss—
 —
 —
 0.4
 —
 —
Net periodic benefit cost$(7.4) $(9.0) $3.0
 $3.7
 $0.4
 $0.9
The Assurant Pension Plan funded status was $70.3$54.1 million at September 30, 20192020 and $65.1$66.4 million at December 31, 20182019 (based on the fair value of the assets compared to the accumulated benefit obligation). This equates to a 109%107% and 110%109% funded status at September 30, 20192020 and December 31, 2018,2019, respectively. During the first nine months of 2019,ended September 30, 2020, 0 cash was contributed to the Assurant Pension Plan. Due to the Assurant Pension Plan’s current funded status, 0 additional cash is expected to be contributed to the Assurant Pension Plan over the remainder of 2019.2020.

18.21. Commitments and Contingencies
Letters of Credit
In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements in which the Company is the reinsurer. These letters of credit are supported by commitments under which the Company is required to indemnify the financial institution issuing the letter of credit if the letter of credit is drawn. The Company had $12.1$7.6 million and $13.2$12.1 million of letters of credit outstanding as of September 30, 20192020 and December 31, 2018,2019, respectively.
Legal and Regulatory Matters
The Company is involved in a variety of litigation and legal and regulatory proceedings relating to its current and past business operations and, from time to time, it may become involved in other such actions. In particular, the Company is a
42
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(in millions, except number of shares and per share amounts)
defendant in class actions in a number of jurisdictions regarding its Lender-placed Insurance programs. These cases assert a variety of claims under a number of legal theories. The plaintiffs typically seek premium refunds and other relief. The Company continues to defend itself vigorously in these class actions. The Company has participated and may participate in settlements on terms that the Company considers reasonable.
The Company has established an accrued liability for certain legal and regulatory proceedings. The possible loss or range of loss resulting from such litigation and regulatory proceedings, if any, in excess of the amounts accrued is inherently unpredictable and uncertain. Consequently, no estimate can be made of any possible loss or range of loss in excess of the
Assurant, Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except number of shares and per share amounts)




accrual. Although the Company cannot predict the outcome of any pending legal or regulatory proceeding, or the potential losses, fines, penalties or equitable relief, if any, that may result, it is possible that such outcome could have a material adverse effect on the Company’s consolidated results of operations or cash flows for an individual reporting period. However, on the basis of currently available information, management does not believe that the pending matters are likely to have a material adverse effect, individually or in the aggregate, on the Company’s financial condition.

Risks and Uncertainties
The Company is actively monitoring developments related to the COVID-19 pandemic to assess the ongoing impact on its business, results of operations and financial condition. While continuing to evolve, the COVID-19 pandemic has caused significant global economic and financial market disruption, resulting in increased financial market volatility, business and operational challenges such as the temporary closures of businesses, and overall diminished expectations for the economy and the financial markets.
At this time, it is not possible to estimate how long it will take to halt the spread of the virus or the long-term effects that the COVID-19 pandemic could have on the economy or the Company’s business.  The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations or financial condition, including demand for the Company’s products and services and the value of the Company’s investment portfolio and other tangible or intangible assets, among other impacts, will depend on future developments which are highly uncertain and difficult to predict. These include the severity and duration of the pandemic and the actions taken by government authorities and other third parties to contain or address its impact. Even after the COVID-19 outbreak has subsided, the Company may experience materially adverse impacts to its business, results of operations and financial condition as a result of the pandemic’s global economic impact.

22. Subsequent Event
Acquisition of HYLA Mobile
In October 2020, the Company announced the signing of a definitive agreement to acquire HYLA Mobile, a provider of smartphone software and trade-in and upgrade services, for $325.0 million. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary approvals, and to be funded through a combination of existing cash at the holding company and new debt to be issued before closing.

43


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(In millions, except number of shares and per share amounts)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and the annual audited consolidated financial statements for the year ended December 31, 20182019 and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 20182019 (the “2018“2019 Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) and the unaudited consolidated financial statements for the three and nine months ended September 30, 20192020 and accompanying notes (the “Consolidated Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q (this “Report”).
Some of the statements included in this MD&A and elsewhere in this Report, particularly those with respect to the proposed HYLA Mobile acquisition and process to explore strategic alternatives for our Global Preneed segment, including our financial plans and any statements regarding our anticipating future financial performance, business prospects, growth and operating strategies and similar matters, as well as estimated reportable catastrophe losses, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. We do not have a definitive timetable to complete our review of strategic alternatives for our Global Preneed segment and there can be no assurance that any such process will result in a transaction. You can identify these statements by the use of words such as “will,” “may,” “can,” “anticipates,” “expects,” “estimates,” “projects,” “intends,” “plans,” “believes,” “targets,” “forecasts,” “potential,” “approximately,” and the negative version of those words and other words and terms with a similar meaning. Any forward-looking statements contained in this Report are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that our future plans, estimates or expectations will be achieved. Our actual results might differ materially from those projected in the forward-looking statements. We undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments. The following factors could cause our actual results to differ materially from those currently estimated by management:
(i)the loss of significant clients, distributors or other parties with whom we do business or those parties facing financial, reputational or regulatory issues;
(ii)significant competitive pressures, changes in customer preferences and disruption;
(iii)the failure to find suitable acquisitions, integrate completed acquisitions or grow organically, and risks associated with joint ventures and franchise ownership and operations;
(iv)the impact of general economic, financial market and political conditions, including unfavorable conditions in the capital and credit markets, and conditions in the markets in which we operate;
(v)risks related to our international operations, including the United Kingdom’s withdrawal from the European Union, or fluctuations in exchange rates;
(vi)the impact of catastrophic and non-catastrophe losses;
(vii)our inability to recover should we experience a business continuity event;
(viii)our inability to develop and maintain distribution sources or attract and retain sales representatives;
(ix)the failure to manage vendors and other third parties on whom we rely to conduct business and provide services to our clients;
(x)declines in the value of mobile devices or export compliance risk in our mobile business;
(xi)negative publicity relating to our products and services or the markets in which we operate;
(xii)the failure to implement our strategy and to attract and retain key personnel, including senior management;
(xiii)employee misconduct;
(xiv)the adequacy of reserves established for claims and our inability to accurately predict and price for claims;
(xv)a decline in financial strength ratings or corporate senior debt ratings;
(xvi)an impairment of goodwill or other intangible assets;
(xvii)the failure to maintain effective internal control over financial reporting;
(xviii)a decrease in the value of our investment portfolio including due to market, credit and liquidity risks;

(i)the impact of the COVID-19 pandemic, including the scope and duration of the outbreak, government actions and restrictive measures taken in response, and its effect on the global economic and financial markets;
(xix)the impact of U.S. tax reform legislation and impairment of deferred tax assets;
(xx)the unavailability or inadequacy of reinsurance coverage and the credit risk of reinsurers, including those to whom we have sold business through reinsurance;
(xxi)the credit risk of some of our agents;
(xxii)the inability of our subsidiaries to pay sufficient dividends to the holding company and limitations on our ability to declare and pay dividends;
(xxiii)changes in the method for determining LIBOR or the replacement of LIBOR;
(xxiv)the failure to effectively maintain and modernize our information technology systems and infrastructure, or the failure to integrate those of acquired businesses;
(xxv)breaches of our information systems or those of third parties with whom we do business, or the failure to protect data in such systems, including due to cyber-attacks;
(xxvi)the costs of complying with, or the failure to comply with, extensive laws and regulations to which we are subject, including those related to privacy, data security and data protection;
(xxvii)the impact from litigation and regulatory actions;
(xxviii)reductions in the insurance premiums we charge; and
(xxix)changes in insurance and other regulation.
(ii)the loss of significant clients, distributors or other parties with whom we do business, or if we are unable to renew contracts with them on favorable terms, or those parties facing financial, reputational or regulatory issues;
(iii)significant competitive pressures, changes in customer preferences and disruption;
(iv)the failure to find suitable acquisitions, integrate completed acquisitions or grow organically, and risks associated with joint ventures and franchise ownership and operations;
(v)the impact of general economic, financial market and political conditions, including unfavorable conditions in the capital and credit markets and in the markets in which we operate, including as a result of COVID-19;
(vi)risks related to our international operations, including the United Kingdom’s withdrawal from the European Union, or fluctuations in exchange rates;
(vii)the impact of catastrophic and non-catastrophe losses, including as a result of climate change;
(viii)our inability to recover should we experience a business continuity event, including as a result of COVID-19;
(ix)our inability to develop and maintain distribution sources or attract and retain sales representatives and executives with key client relationships;
(x)the failure to manage vendors and other third parties on whom we rely to conduct business and provide services to our clients;
(xi)declines in the value of mobile devices, the risk of guaranteed buybacks or export compliance risk in our mobile business;
(xii)negative publicity relating to our products and services or the markets in which we operate;
(xiii)the failure to implement our strategy and to attract and retain key personnel, including senior management;
(xiv)employee misconduct;
44

(xv)the adequacy of reserves established for claims and our inability to accurately predict and price for claims;
(xvi)a decline in financial strength ratings or corporate senior debt ratings;
(xvii)an impairment of goodwill or other intangible assets;
(xviii)the failure to maintain effective internal control over financial reporting;
(xix)a decrease in the value of our investment portfolio, including due to market, credit and liquidity risks, changes in interest rates and COVID-19;
(xx)the impact of U.S. tax reform legislation and impairment of deferred tax assets;
(xxi)the unavailability or inadequacy of reinsurance coverage and the credit risk of reinsurers, including those to whom we have sold business through reinsurance;
(xxii)the credit risk of some of our agents, third-party administrators and clients;
(xxiii)the inability of our subsidiaries to pay sufficient dividends to the holding company and limitations on our ability to declare and pay dividends, including as a result of COVID-19;
(xxiv)changes in the method for determining LIBOR or the replacement of LIBOR;
(xxv)the failure to effectively maintain and modernize our information technology systems and infrastructure, or the failure to integrate those of acquired businesses;
(xxvi)breaches of our information systems or those of third parties with whom we do business, or the failure to protect data in such systems, including due to cyber-attacks and as a result of working remotely during the COVID-19 pandemic;
(xxvii)the costs of complying with, or the failure to comply with, extensive laws and regulations to which we are subject, including those related to privacy, data security and data protection;
(xxviii)the impact from litigation and regulatory actions, including those arising from COVID-19;
(xxix)reductions or deferrals in the insurance premiums we charge, including as a result of COVID-19; and
(xxx)changes in insurance and other regulation, including to mitigate the impact of COVID-19.
For additional information on factors that could affect our actual results, please refer to “Critical Factors Affecting Results” below and in Item 7 of our 20182019 Annual Report, and “Item 1A—Risk Factors” below and in our 20182019 Annual Report.
General
As of September 30, 2019,2020, the Company hashad four reportable segments, which are defined based on the nature of the products and services offered:
Global Housing: provides lender-placed homeowners insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and manufactured housing and flood insurance and other specialty products (referred to as “Specialty and Other”);
•Global Lifestyle: provides mobile device protection products and related servicessolutions and extended service products and related services for consumer electronics and appliances (referred to as “Connected Living”); vehicle protection and related services (referred to as “Global Automotive”); and credit and other insurance products (referred to as “Global Financial Services and Other”);
•Global Housing: provides lender-placed homeowners insurance, lender-placed manufactured housing insurance and lender-placed flood insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and voluntary manufactured housing insurance, voluntary homeowners insurance and other specialty products (referred to as “Specialty and Other”);
•Global Preneed: provides pre-funded funeral insurance, final need insurance and annuity products;related services; and
45

•Corporate and Other: includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments (which includes unrealized gains (losses) on equity securities and changes in fair value of direct investments in collateralized loan obligations), interest income earned from short-term investments held, and income (expenses) primarily related to the Company’s frozen benefit plans.plans, amounts related to businesses previously disposed of through reinsurance and the run-off of the Assurant Health business. Corporate and Other also includes the amortization of deferred gains associated with the sales of businesses through reinsurance agreements, expenses related to the acquisition of TWG Holdings Limited and its subsidiaries (as subsequently reorganized, “TWG”), foreign currency gains (losses) from remeasurement of monetary assets and liabilities, changes in the gain or loss on the salefair value of businesses, gains or losses associated with the valuation of our investment in Ikéderivative instruments and other unusual or infrequent items. Additionally, the Corporate and Other segment includes amountsexpenses related to businesses previously disposedmerger and acquisition activities, as well as other highly variable or unusual items other than reportable catastrophes (reportable catastrophe losses, net of through reinsurance and the runoff of the Assurant Health business.client profit sharing adjustments, and including reinstatement and other premiums).
The following discussion covers the three and nine months ended September 30, 2020 (“Third Quarter 2020” and “Nine Months 2020”) and the three and nine months ended September 30, 2019 (“Third Quarter 2019” and “Nine Months 2019”) and the three and nine months ended September 30, 2018 (“Third Quarter 2018” and “Nine Months 2018”).
Executive Summary
COVID-19
    While continuing to evolve, the COVID-19 pandemic has caused significant global economic and financial market disruption, resulting in increased financial market volatility, business and operational challenges such as the temporary closures of businesses, and overall diminished expectations for the economy and the financial markets.
    Toward the end of the first quarter of 2020 and into the second quarter of 2020, the pandemic impacted each of our operating segments and may continue to impact our businesses if similar conditions continue to persist or worsen. Overall, in Third Quarter 2020, we believe COVID-19 had a modest negative impact on our net income, mainly due to lower investment income from lower yields. Our investment portfolio will continue to be impacted by COVID-19 and related financial market volatility. Though we generally believe our portfolio remains well diversified and high-quality, with the majority comprised of investment grade fixed maturity assets, interest rates are expected to remain relatively low for the foreseeable future. Refer to “—Investments” below and Note 11 to the Consolidated Financial Statements included elsewhere in this Report.
Our Response to COVID-19
As a global organization, we actively monitor the developments of the continuously evolving situation resulting from COVID-19. Throughout this period of uncertainty, we have acted swiftly and deliberately to safeguard our employees, to maintain business operations and service levels for customers, and to support our local communities. Since implementing restrictions on non-essential business travel and transitioning the vast majority of our workforce to work-from-home, we have approved a limited return to office within certain Asian and European locations, as well as limited, essential business travel. For those employees who need to work in our offices or global facilities, we’ve maintained safety and hygiene protocols, such as social distancing, mandatory use of personal protection equipment and regular cleaning and disinfecting of our locations. To support our employees, we have implemented additional floating holidays, a one-time COVID-19 relief payment for eligible work-from-home employees and incentive bonuses for eligible on-site employees, as well as increased well-being and mental health support services. We offered financial support through a special COVID-19 Emergency Relief Program to eligible employees who experienced severe financial hardship caused by the pandemic. We also have been active in maintaining our support within our local communities through charitable contributions.
Evaluation of Business Trends, Capital and Liquidity
We have run multiple scenarios based on the potential duration and severity of this crisis to better understand how our business might perform and stress-tested our capital, cash flows and liquidity. Our business has performed on the high-end of the scenarios, demonstrating its overall resilience.
Although in late March and through April, our businesses experienced a reduction in new sales across our Multifamily Housing and Global Automotive lines of business, as well as Global Preneed, these trends have generally reversed through the end of Third Quarter 2020. Our mobile business experienced lower trade-in activity and slower sales growth, which also improved through the end of Third Quarter 2020. We believe we have benefitted from our installed customer base across Connected Living, Global Automotive, Multifamily Housing and Global Preneed.
Third Quarter 2020 Global Lifestyle results were modestly impacted by COVID-19-related factors, including more favorable international claims activity in Connected Living and Global Automotive and lower expenses, offset by lower investment income and foreign exchange impacts. We expect that claims activity in Connected Living and Global Automotive will continue to normalize in the fourth quarter of 2020. We also expect investment income to be impacted from lower investment yields coming from new business. Throughout Global Lifestyle, we may also continue to see adverse fluctuations in foreign exchange.
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Overview:
Third Quarter 2020 Global Housing results were modestly impacted by COVID-19-related factors, including lower real estate owned (“REO”) volumes in Lender-placed Insurance and lower investment income, partially offset by lower expenses. For Lender-placed Insurance, we will continue to monitor the state of the overall housing market and the potential impact of the current mortgage moratorium, including REO volumes. Should the housing market deteriorate for a prolonged period, we would expect a longer-term increase in our placement rates. We also expect investment income to be impacted from lower investment yields.
For Global Preneed, sales have generally rebounded from April levels but remain below 2019 levels. We are also monitoring mortality trends, which have fluctuated during the pandemic, but were not a material driver of overall Global Preneed results in the quarter. We expect longer term results to be impacted from lower yields on new sales due to the current interest rate environment, given the average duration of our investment portfolio.
We continue to take actions to mitigate potential impacts, including deferring certain discretionary expenses and delaying the fulfillment of open positions in support functions, though we expect to see increased spending in these items in the fourth quarter of 2020, as well as in investments that had been deferred.
Throughout this period, we believe our liquidity has remained strong. As of September 30, 2020, we had $460.3 million of holding company liquidity.
For a discussion of the material risks relating to COVID-19 on our business, results of operations and financial condition, refer to the risk factor disclosed in Item 8.01 of our Current Report on Form 8-K filed on May 5, 2020 and “Item 1A—Risk Factors—The value of our deferred tax assets could become impaired, which could materially and adversely affect our results of operations and financial condition” in our 2019 Annual Report.

Global Preneed Goodwill Impairment and Review of Strategic Alternatives
OnDuring Third Quarter 2020, we identified impairment indicators impacting the fair value of Global Preneed in connection with exploring strategic alternatives for the Global Preneed business, including the possible sale of the business, to focus on opportunities within the broader Global Lifestyle and Global Housing portfolio. Such impairment indicators included the evaluation of the long-term economic performance of the segment in light of further expected decline in interest rates from the resurgence of COVID-19 cases. As interest rates are critical to the performance of the business, the anticipated declines in interest rates are expected to have adverse impacts on existing business and cause significant challenges to profitability from new business. The overall expected adverse impact to the business in the segment was an important indicator that triggered the requirement for an interim goodwill impairment analysis in the Third Quarter 2020. The fair value calculated in Third Quarter 2020 was lower than the carrying value of the reporting unit, resulting in the impairment of the entire goodwill of $137.8 million related to the Global Preneed reporting unit. For additional information on the impairment test, refer to Note 6 to the Consolidated Financial Statements included elsewhere in this Report.
Iké
    In May 31, 2018,2020, we acquired TWGsold our minority interests in Iké Grupo, Iké Asistencia and certain of their affiliates (collectively, “Iké”), terminated our obligations to purchase the remaining shares of Iké, and settled a financial derivative that provided an economic hedge against declines in the Mexican Peso relative to the U.S. Dollar. These transactions resulted in net cash outflows of $85.3 million, which included financing of $34.0 million, the proceeds from the settlement of the derivative and transaction expenses. For additional information on this transaction, see “—Liquidity and Capital Resources” below and Note 5 to the Consolidated Financial Statements included elsewhere in this Report.
American Financial & Automotive Services
In May 2020, we completed our acquisition of American Financial & Automotive Services, Inc. (“AFAS”), a provider of finance and insurance products and services including vehicle service contracts, guaranteed asset protection insurance and other ancillary products sold directly through a network of nearly 600 franchised dealership clients across 40 states, for total consideration of $2.47 billion. For more information regarding the acquisition, see$176.9 million. See Note 4 to the Consolidated Financial Statements included elsewhere in this Report. On August 1, 2018, we sold our valuation and field services business (referred to as “Mortgage Solutions”) to Xome, an indirectly wholly owned subsidiary of WMIH Corp.
Catastrophe Reinsurance Program
In July 2019,June 2020, we finalized our 20192020 property catastrophe reinsurance program. The U.S. per-event catastrophe coverage provides $1.16 billion$930.0 million of protection in excess of $80.0 million of retention which was reduced from $120.0 million in the 2018 program.per event. The coverage was placed with more than 4540 reinsurers that are all rated A- or better by A.M. Best. See “Catastrophe Reinsurance Program” below.
In August 2019, we issued $350.0 millionAcquisition of 3.70% senior notes due 2030, and used the net proceeds, along with cash on hand, to complete a cash tender offer to purchase $100.0 million of the $375.0 million outstanding aggregate principal amount of our 6.75% senior notes due 2034 and to redeem $250.0 million of the $300.0 million outstanding aggregate principal amount of our floating rate senior notes due 2021. A loss on extinguishment of debt of $31.4 million, primarily related to incremental consideration required to be paid to debtholders as a result of the interest rate differential over the remaining term as compared to current rates, was reported in Third Quarter 2019 as a result of the cash tender offer. See “—Liquidity and Capital Resources,” below for further details.HYLA Mobile
In Third Quarter 2019, we recorded a $124.8 million after-tax loss related to a decrease in the estimated fair value of Iké Group, Iké Asistencia and certain of their subsidiaries (collectively, “Iké”). The loss included a $54.3 million increase in the liability related to our right to acquire the remainder of Iké from the majority shareholders (together with the majority shareholders’ right to put their interests in Iké to us, the “put/call”), a $66.8 million other-than-temporary impairment loss on our 40% ownership interest in Iké that includes consideration of cumulative foreign currency losses of $41.0 million recorded in other comprehensive income, and a $3.7 million valuation allowance against previously established deferred tax assets. In April 2019, we entered into a cooperation agreement with the majority shareholders of Iké to explore strategic alternatives. We also agreed to delay the call and put rights to January 31, 2020. Based on the review of strategic alternatives as of September 30, 2019, we have decided to pursue the sale of our interests in Iké. There can be no assurance that our efforts to sell our interests in Iké will be successful. In addition, there can be no assurance that the final sales price will approximate the expected sales price, which would result in an adjustment to the loss in a future period.
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In October 2019,2020, we acquiredannounced the remaining 60% interest in MMI-CPR, LLC (dba Cell Phone Repair),signing of a global franchisordefinitive agreement to acquire HYLA Mobile, a provider of electronic device repair stores focusing on mobile device repair.smartphone software and trade-in and upgrade services, for $325.0 million. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary approvals, and to be funded through a combination of existing cash at the holding company and new debt to be issued before closing.
Summary of Financial Results:Results
Consolidated net loss attributable to common stockholders wasdecreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2020 from $59.5 million for Third Quarter 2019 compared with2019. The decrease was largely driven by the absence of the $124.8 million reduction in fair value of Iké, as well as improved results from our Global Housing segment, excluding reportable catastrophes, partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and $51.3 million of higher after-tax reportable catastrophes for Global Housing.
Global Lifestyle segment net income attributableincreased $4.5 million, or 4%, to common stockholders of $48.3$106.6 million for Third Quarter 2018,2020 from $102.1 million for Third Quarter 2019, primarily driven by the changeConnected Living, mainly due to mobile from continued subscriber growth in fair value of the Company’sNorth America and Asia Pacific, as well as improved profitability from extended service contracts. Results were partially offset by lower investment income and unfavorable foreign exchange, as well as lower volumes and unfavorable loss experience in IkéGlobal Financial Services and Other, including impacts from COVID-19.
Global Lifestyle net earned premiums, fees and other income increased $55.7 million, or 3%, based on the Company’s strategic review process and the intent to now sell the business. In addition, a loss was recorded related mainly$1.81 billion for Third Quarter 2020 from $1.75 billion for Third Quarter 2019, primarily due to the August 2019 tender offer for a portion of the Company’s senior notes maturingprior period sales in 2034.Global Automotive, as well as continued mobile subscriber growth. The decreaseincrease was partially offset by $30.9lower mobile trade-in results, including a $39.0 million of lower reportable catastrophes (reportable catastrophe losses, net of reinsuranceimpact resulting from a previously disclosed mobile program change, and client profit sharing adjustments, and including reinstatement and other premiums) in Global Housing, and profitable growth within mobile in Global Lifestyle.unfavorable foreign exchange.
Global Housing segment net income increased $22.2decreased $28.5 million, or 114%69%, to $13.1 million for Third Quarter 2020 from $41.6 million for Third Quarter 2019 compared with $19.4 million for Third Quarter 2018, primarily due to lower reportable catastrophes.2019. Segment net income for Third Quarter 20192020 included $35.7$87.0 million of after-tax reportable catastrophes, primarily from Hurricane Dorian in the Bahamas,Laura, compared to $66.6$35.7 million inof reportable catastrophes infor Third Quarter 2018.2019. Excluding reportable catastrophes, segment net income decreasedincreased $22.8 million, primarily due to lower placement rates and lessmore favorable non-catastrophe loss experience withinacross our Specialty and Other products and Lender-placed Insurance business, as well as the cost of additional catastrophe reinsurance protection; partially offsetdriven by higher premium rates in our Lender-placed Insurancelower claims frequency, reserve releases related to run-off business and the absence of losses relatedpreviously implemented underwriting initiatives. Growth in Multifamily Housing and Specialty and Other products also contributed to the Mortgage Solutions business in Third Quarter 2018.increase.
Global Housing net earned premiums, fees and other income decreased $11.3$19.0 million, or 2%4%, to $491.3 million for Third Quarter 2020 from $510.3 million for Third Quarter 2019, from $521.6 million for Third Quarter 2018, mainly reflecting the sale of Mortgage Solutions. Excluding Mortgage Solutions, net earned premiums, fees and other income increased 1% primarily due to growth in our ride sharingexpected run-off of small commercial products and continued growthdeclines in our Multifamily Housing business, partially offset byLender-placed Insurance policies in-force from the cost of additional catastrophe reinsurance protection.
Global Lifestyle segment net income increased $26.2 million, or 35%, to $102.1 million for Third Quarter 2019 from $75.9 million for Third Quarter 2018.previously disclosed financially insolvent client. The increase was primarily due to strong organic growth in Connected Living, mainly from new and existing mobile clients in North America and Asia Pacific, as well as improved operating performance in our

European mobile business. Organic growth in Global Automotive also contributed to earnings. Thisdecrease was partially offset by continued investments to support growth in mobile.
Global Lifestyle net earned premiums, feesMultifamily Housing and other income increased $207.8 million, or 13%, to $1.75 billion for Third Quarter 2019 from $1.54 billion for Third Quarter 2018. The increase was mostly due to contributions from Connected Living, driven by continued mobile subscriber growth from protection programs added over the last two years,Specialty and higher trade-in volumes compared to the prior year period.Other products.
Global Preneed segment net income decreased $9.4increased $5.8 million, or 56%78%, to $13.2 million for Third Quarter 2020 from $7.4 million for Third Quarter 2019 from $16.8 million in2019. Third Quarter 2018, primarily due2019 included a $9.9 million after-tax expense related to an out of period adjustment of $9.9 million related to a netfor over-capitalization of deferred acquisition costs occurring over a ten-year period. Excluding this adjustment, underlying results increased modestlydecreased primarily due to higherlower investment income from lower yields and real estate joint venture partnerships and increased assets.compared to the prior year period.
Global Preneed net earned premiums, fees and other income increased $2.7$1.1 million, or 6%2%, to $51.9 million for Third Quarter 2020 from $50.8 million for Third Quarter 2019, from $48.1 million for Third Quarter 2018, primarily driven by growth in pre-funded funeral policies in the U.S. and the prior period sales of the pay for life (“Final Need”)Need product.
Critical Factors Affecting Results
Our results depend on, among other things, the appropriateness of our product pricing, underwriting, the accuracy of our reserving methodology for future policyholder benefits and claims, the frequency and severity of reportable and non-reportable catastrophes, returns on and values of invested assets, and our ability to manage our expenses and achieve expense savings. Our results will also depend on our ability to profitably grow our businesses, in particular our Connected Living, Multifamily Housing and Global Automotive businesses, and manage the pace of declines in placement ratesmaintaining our position in our Lender-placed Insurance business and the U.S.North American credit insurance business in Global Financial Services and Other. In addition, our results will be impacted by our ability to integrate TWG and achieve benefits and synergies from the acquisition. Factors affecting these items, including but not limited to,the impact of the COVID-19 pandemic and measures taken in response thereto, conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, may have a material adverse effect on our results of operations or financial condition. For more information on these and other factors that could affect our results, see “Item 1A—Risk Factors”, below and in our 20182019 Annual Report, and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our 20182019 Annual Report.Report and “—Executive Summary—COVID-19” and “—Executive Summary—Our Response to COVID-19,” above.
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Our results may be impacted by our ability to continue to grow in the markets in which we operate, including in our Connected Living, Multifamily Housing and Global Automotive businesses, and to manage our Lender-placed Insurance business, including the expected reduction in loans tracked from a financially insolvent client.businesses. Our mobile business is subject to volatility in mobile device trade-in volumes based on the actual and anticipated timing of the release of new devices and carrier promotional programs, as well as to changes in the mobile device market dynamics.consumer preferences. Our Lender-placed Insurance revenues will also be impacted by changes in the housing market. In addition, across many of our businesses, we must respond to the threat of disruption. See “Item 1A—Risk Factors—Business and Competitive Risks—Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our 20182019 Annual Report.
Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common and preferred stock.
For the nine months ended September 30, 2019,Nine Months 2020, net cash provided by operating activities was $1.17 billion;$901.6 million; net cash used in investing activities was $613.6 million$275.2 million; and net cash used in financing activities was $50.1$296.8 million. We had $1.75$2.20 billion in cash and cash equivalents as of September 30, 20192020 as compared to $1.25$1.87 billion as of December 31, 2018.2019. See “—Liquidity and Capital Resources,” below for further details.
Critical Accounting Policies and Estimates
Our 20182019 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimation process described in the 20182019 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for Third Quarter 2019.2020.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report.

Regulatory Matters
We are subject to extensive federal, state and international regulation and supervision in the jurisdictions in which we do business, including insurance holding company laws in the jurisdictions in which our insurance companies are domiciled. For example, under applicable insurance holding company regulations, no person may acquire a controlling interest in the Company or any of our insurance company subsidiaries, unless such person has obtained prior regulatory approval for such acquisition. Under these laws, “control” is presumed when any person acquires or holds, directly or indirectly, 10% or more of our common stock or of the voting securities of any of our insurance company subsidiaries. To obtain approval, the proposed acquiror must file an application with the relevant regulator, including the regulator for the insurance subsidiaries we have established in the Netherlands for continued access to the European markets after the transition period for the U.K.’s withdrawal from the European Union. As previously disclosed, our insurance subsidiaries in the Netherlands have received the necessary regulatory approvals for the Company to continue conducting business in Europe following the end of the transition period.
For additional information, see “Item 1—Business—Regulation” in our 2019 Annual Report.
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Results of Operations
Assurant Consolidated
Overview
The table below presents information regarding our consolidated results of operations for the periods indicated:
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues:       
Net earned premiums$2,015.4
 $1,853.6
 $5,952.5
 $4,316.8
Fees and other income295.1
 257.9
 959.5
 976.6
Net investment income169.5
 151.8
 490.0
 417.6
Net realized gains (losses) on investments14.9
 (5.7) 61.5
 (16.6)
Amortization of deferred gains on disposal of businesses4.4
 12.7
 16.9
 46.2
Total revenues2,499.3
 2,270.3
 7,480.4
 5,740.6
Benefits, losses and expenses:       
Policyholder benefits705.2
 680.9
 2,006.9
 1,586.1
Amortization of deferred acquisition costs and value of business acquired869.5
 750.6
 2,462.6
 1,560.2
Underwriting, general and administrative expenses764.5
 736.5
 2,388.1
 2,229.7
Iké net losses121.1
 —
 130.5
 —
Interest expense32.2
 26.5
 85.2
 74.0
Loss on extinguishment of debt31.4
 —
 31.4
 —
Total benefits, losses and expenses2,523.9
 2,194.5
 7,104.7
 5,450.0
(Loss) income before provision for income taxes(24.6) 75.8
 375.7
 290.6
Provision for income taxes28.6
 22.8
 117.7
 64.6
Net (loss) income(53.2) 53.0
 258.0
 226.0
Less: Net income attributable to non-controlling interest(1.6) —
 (3.0) —
Net (loss) income attributable to stockholders(54.8) 53.0
 255.0
 226.0
Less: Preferred stock dividends(4.7) (4.7) (14.0) (9.5)
Net (loss) income attributable to common stockholders$(59.5) $48.3
 $241.0
 $216.5
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$2,102.8 $2,015.4 $6,223.0 $5,952.5 
Fees and other income245.9 295.1 934.3 959.5 
Net investment income135.1 169.5 428.3 490.0 
Net realized gains (losses) on investments16.6 14.9 (54.6)61.5 
Amortization of deferred gains on disposal of businesses2.1 4.4 8.7 16.9 
Total revenues2,502.5 2,499.3 7,539.7 7,480.4 
Benefits, losses and expenses:
Policyholder benefits709.6 705.2 1,908.9 2,006.9 
Amortization of deferred acquisition costs and value of business acquired946.2 869.5 2,745.7 2,462.6 
Underwriting, general and administrative expenses687.5 764.5 2,331.8 2,388.1 
Goodwill impairment137.8 — 137.8 — 
Iké net losses— 121.1 5.9 130.5 
Interest expense25.5 32.2 77.7 85.2 
Loss on extinguishment of debt— 31.4 — 31.4 
Total benefits, losses and expenses2,506.6 2,523.9 7,207.8 7,104.7 
(Loss) income before provision for income taxes(4.1)(24.6)331.9 375.7 
Provision for income taxes26.4 28.6 28.2 117.7 
Net (loss) income(30.5)(53.2)303.7 258.0 
Less: Net loss (income) attributable to non-controlling interest0.3 (1.6)(1.1)(3.0)
Net (loss) income attributable to stockholders(30.2)(54.8)302.6 255.0 
Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net (loss) income attributable to common stockholders$(34.9)$(59.5)$288.6 $241.0 
For the Three Months Ended September 30, 20192020 Compared to the Three Months Ended September 30, 20182019
Net (Loss) IncomeLoss Attributable to Common Stockholders
Consolidated net loss attributable to common stockholders was $59.5decreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2019 compared with net income attributable to common stockholders of $48.32020 from $59.5 million loss for Third Quarter 2018.2019. The decrease in net loss was primarily due to the absence of certain events that occurred in Third Quarter 2019, was impacted bymainly a $124.8 million after-tax loss related to a decrease in the estimated fair value of Iké. The loss included a $54.3 million increase in the liability related to the put/call, a $66.8 million other-than-temporary impairment loss on our 40% ownership interest in Iké that includes consideration of cumulative foreign currency losses of $41.0 million previously recorded in other comprehensive income, and a $3.7 million valuation allowance for previously established deferred tax assets. The deferred tax benefits on the losses recorded in Third Quarter 2019 were fully reduced by valuation allowances. Third Quarter 2019 was also impacted by, $29.6 million of after-tax debt related charges that includedassociated with refinancing debt at a $24.8lower interest rate and a $9.9 million after-tax expense related to an out of period adjustment in our Global Preneed segment for over-capitalization of deferred acquisition costs occurring over a ten-year period. Additionally, the decrease in net loss was due to improved results from our Global Housing segment, excluding reportable catastrophes, due to more favorable non-catastrophe loss experience across our Specialty and Other products and Lender-placed Insurance driven by lower claims frequency, previously implemented underwriting initiatives and reserve releases related to run-off business, and a $9.7 million of income, net of certain exit costs, from the sale of our CLO asset management platform. The decrease in net loss was partially offset by the $135.6 million after-tax impairment on the extinguishment of debt from the $100.0 million cash tender offer of our 6.75% senior notes due 2034Global Preneed goodwill and $4.5$51.3 million of additional interest expense from debt related derivative instruments. Excluding these items, net income increased $46.6 million primarily due to a $31.4 million reduction inhigher after-tax reportable catastrophes and an increase in net income from thefor Global Lifestyle segment mostly driven by our Connected Living business due to growth in mobile device protection products and related services.Housing.
For the Nine Months Ended September 30, 20192020 Compared to the Nine Months Ended September 30, 20182019

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Net Income Attributable to Common Stockholders
Consolidated net income attributable to common stockholders increased $24.5$47.6 million, or 11%20%, to $288.6 million for Nine Months 2020 from $241.0 million for Nine Months 2019 from $216.5 million2019. Net income for Nine Months 2018. The increase was2020 included $109.9 million of reportable catastrophes, primarily driven by growthrelated to Hurricane Laura, compared to $41.4 million in our Global Lifestyle segment, benefiting from contributions from the TWG acquisition and continued organic growth in Connected Living, as well as an increase inNine Months 2019. Excluding reportable catastrophes, net realized gains on investments mostlyincome increased $116.1 million, or 41%, due to an increase in the fair valueabsence of equity securities and sales of fixed maturity securities. The increase was also due to a $42.7 million reduction in lower net charges associated with the TWG acquisition and a $32.7 million reduction in reportable catastrophes. These increases were partially offset by $131.4 million after-tax loss related to a decrease in the estimated fair value of Iké, the $29.6 million of debt related charges, as well as additional after-tax interest expense and preferred dividends from acquisition-related financing and lower after-tax amortization of deferred gains associated with the sale of Assurant Employee Benefits.

Global Housing
Overview
The table below presents information regarding the Global Housing segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues:       
Net earned premiums$475.2
 $463.0
 $1,407.1
 $1,349.1
Fees and other income35.1
 58.6
 113.3
 238.1
Net investment income22.4
 17.1
 66.6
 53.2
Total revenues532.7
 538.7
 1,587.0
 1,640.4
Benefits, losses and expenses:       
Policyholder benefits245.8
 264.8
 652.5
 621.1
Amortization of deferred acquisition costs and value of business acquired47.3
 51.2
 158.7
 151.2
Underwriting, general and administrative expenses187.6
 198.7
 541.6
 662.9
Total benefits, losses and expenses480.7
 514.7
 1,352.8
 1,435.2
Segment income before provision for income taxes52.0
 24.0
 234.2
 205.2
Provision for income taxes10.4
 4.6
 48.4
 42.0
Segment net income$41.6
 $19.4
 $185.8
 $163.2
Net earned premiums, fees and other income:       
Lender-placed Insurance$275.6
 $288.9
 $831.6
 $867.1
Multifamily Housing108.7
 103.4
 319.3
 300.9
Mortgage Solutions—
 17.3
 —
 116.1
Specialty and Other126.0
 112.0
 369.5
 303.1
Total$510.3
 $521.6
 $1,520.4
 $1,587.2
For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018
Net Income
Segment net income increased $22.2 million, or 114%, to $41.6 million for Third Quarter 2019 from $19.4 million for Third Quarter 2018, primarily due to after-tax reportable catastrophes of $35.7 million in Third Quarter 2019 compared to $66.6 million in Third Quarter 2018. Excluding reportable catastrophes, segment net income decreased $8.7 million, or 10%, primarily due to a decline in placement rates and in-force policies in our Lender-placed Insurance business, higher non-catastrophe loss experience, mainly from our small commercial product and Lender-placed Insurance, and the cost of additional catastrophe reinsurance protection secured as part of the 2019 program. The decrease that was partially offset by premium rate increases in Lender-placed Insurance and the sale of our Mortgage Solutions business in Third Quarter 2018.
Total Revenues
Total revenues decreased $6.0 million, or 1%, to $532.7 million for Third Quarter 2019 from $538.7 million for Third Quarter 2018. The decrease was mainly due to a decrease in fees and other income of $23.5 million, or 40%, primarily due to the sale of our Mortgage Solutions business. Net earned premiums increased $12.2 million, or 3%, primarily due to the growth of our Specialty and Other business, mostly driven by our ride sharing, international property and small commercial products, increased premium rates in Lender-placed Insurance and the continued growth from renters insurance in Multifamily Housing. The increase in net earned premiums was partially offset by a decline in placement rates and in-force policies in Lender-placed Insurance, higher reinsurance reinstatement premiums related to Hurricane Dorian in Third Quarter 2019 and the cost of additional catastrophe reinsurance protection. Net investment income increased $5.3 million, or 31%, primarily due to higher income from real estate related investments.

Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $34.0 million, or 7%, to $480.7 million for Third Quarter 2019 from $514.7 million for Third Quarter 2018. Total policyholder benefits decreased $19.0 million, or 7%, primarily due to a $42.0 million decrease in reportable catastrophe losses, partially offset by higher non-catastrophe losses related to reserve strengthening for our small commercial product, higher frequency and severity of water related claims and modest increases across various other products. Underwriting, general and administrative expenses decreased $11.1 million, or 6%, primarily due to the sale of our Mortgage Solutions business, partially offset by higher expenses to support growth in Specialty and Other and Multifamily Housing.
For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018
Net Income
Segment net income increased $22.6 million, or 14%, to $185.8 million for Nine Months 2019 compared to $163.2 million for Nine Months 2018, primarily due to after-tax reportable catastrophes of $41.8 millionrecorded in Nine Months 2019, comparedan $84.4 million tax benefit related to $74.3the utilization of net operating losses in connection with the CARES Act, an improvement in our results from Global Housing and Global Lifestyle as well as the absence of $29.6 million inof after-tax debt related charges from Nine Months 2018. Excluding reportable catastrophes, segment net income decreased $9.9 million, or 4%, primarily driven by a decline in placement rates in Lender-placed Insurance, the cost of additional catastrophe reinsurance protection secured as part of the 2019 program and higher non-catastrophe loss experience from an increase in the frequency and severity of losses from our small commercial product. The decrease was2019. These increases were partially offset by premium rate increasesthe $135.6 million after-tax impairment on the Global Preneed goodwill and a $67.7 million after-tax decrease in Lender-placed Insurance, the salenet unrealized gains from changes in fair value of our Mortgage Solutions business in Nine Months 2018equity securities and growth from Multifamily Housing.
Total Revenues
Total revenues decreased $53.4collateralized loan obligations that included $34.4 million or 3%, to $1.59 billionof after-tax net unrealized losses for Nine Months 2019 from $1.64 billion2020 compared to $33.3 million of after-tax net unrealized gains for Nine Months 2018. The decrease was mainly due to a decrease in fees and other income of $124.8 million, or 52%, primarily due to the sale of our Mortgage Solutions business. Net earned premiums increased $58.0 million, or 4%, primarily due to growth from our Specialty and Other business, mainly small commercial and ride sharing products, premium rate increases in Lender-placed Insurance and continued growth from renters insurance in our Multifamily Housing business, partially offset by a decline in placement rates in Lender-placed Insurance and the cost of additional catastrophe reinsurance protection. Net investment income increased $13.4 million, or 25%, primarily due to higher income from real estate related investments and an increase in invested assets.2019.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $82.4 million, or 6%, to $1.35 billion for Nine Months 2019 from $1.44 billion for Nine Months 2018. The decrease was primarily due to a decrease in underwriting, general and administrative expenses of $121.3 million, or 18%, primarily due to the sale of our Mortgage Solutions business. The decrease was partially offset by an increase in total policyholder benefits of $31.4 million, or 5%, primarily due to unfavorable non-catastrophe loss experience mainly from our small commercial product. The increase in non-catastrophe losses was partially offset by a $43.3 million decrease in reportable catastrophe losses. Amortization of deferred acquisition costs increased $7.5 million, or 5%, primarily related to growth in our small commercial product.

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Global Lifestyle
Overview
The table below presents information regarding the Global Lifestyle segment’s results of operations for the periods indicated: 
For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30,For the Nine Months Ended September 30,
2019 2018 2019 2018 2020201920202019
Revenues:       Revenues:
Net earned premiums$1,525.1
 $1,376.0
 $4,499.1
 $2,923.9
Net earned premiums$1,633.2 $1,525.1 $4,799.0 $4,499.1 
Fees and other income224.2
 165.5
 740.9
 638.3
Fees and other income171.8 224.2 721.6 740.9 
Net investment income62.1
 54.7
 177.5
 123.4
Net investment income44.6 62.1 143.5 177.5 
Total revenues1,811.4
 1,596.2
 5,417.5
 3,685.6
Total revenues1,849.6 1,811.4 5,664.1 5,417.5 
Benefits, losses and expenses:       Benefits, losses and expenses:
Policyholder benefits392.1
 352.2
 1,152.2
 773.1
Policyholder benefits365.4 392.1 1,044.7 1,152.2 
Amortization of deferred acquisition costs and value of business acquired791.9
 681.5
 2,238.4
 1,357.4
Amortization of deferred acquisition costs and value of business acquired870.5 791.9 2,519.7 2,238.4 
Underwriting, general and administrative expenses496.6
 463.0
 1,622.6
 1,298.4
Underwriting, general and administrative expenses480.8 496.6 1,649.4 1,622.6 
Total benefits, losses and expenses1,680.6
 1,496.7
 5,013.2
 3,428.9
Total benefits, losses and expenses1,716.7 1,680.6 5,213.8 5,013.2 
Segment income before provision for income taxes130.8
 99.5
 404.3
 256.7
Segment income before provision for income taxes132.9 130.8 450.3 404.3 
Provision for income taxes28.7
 23.6
 92.3
 56.9
Provision for income taxes26.3 28.7 101.0 92.3 
Segment net income$102.1
 $75.9
 $312.0
 $199.8
Segment net income$106.6 $102.1 $349.3 $312.0 
Net earned premiums, fees and other income:       Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)$931.9
 $735.3
 $2,764.6
 $1,966.7
Connected Living (mobile and service contracts)$909.5 $931.9 $2,914.4 $2,764.6 
Global Automotive706.9
 679.6
 2,131.9
 1,243.3
Global Automotive802.5 706.9 2,311.0 2,131.9 
Global Financial Services and Other110.5
 126.6
 343.5
 352.2
Global Financial Services and Other93.0 110.5 295.2 343.5 
Total$1,749.3
 $1,541.5
 $5,240.0
 $3,562.2
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
Net earned premiums, fees and other income:       Net earned premiums, fees and other income:
Domestic$1,237.6
 $1,098.8
 $3,680.0
 $2,414.5
Domestic$1,335.4 $1,237.6 $4,080.2 $3,680.0 
International511.7
 442.7
 1,560.0
 1,147.7
International469.6 511.7 1,440.4 1,560.0 
Total$1,749.3
 $1,541.5
 $5,240.0
 $3,562.2
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
For the Three Months Ended September 30, 20192020 Compared to the Three Months Ended September 30, 20182019
Net Income
Segment net income increased $26.2$4.5 million, or 35%4%, to $106.6 million for Third Quarter 2020 from $102.1 million for Third Quarter 2019 from $75.9 million for Third Quarter 2018.2019. The increase was primarily driven by organic growth in our Connected Living business, mainly from new and existing mobile protection programs in Asia Pacific and North America, higher operating performance in the European mobile business and higher domestic trade-in volumes from our mobile repair and logistics business. Favorable loss experience and organic growth in Global Automotive also contributed to segment net income. The increase was partially offset by an increase in expenses related to the continued investments in our Connected Living business and a decline in Global Financial Services and Other, mainly related to the continued runoff of our domestic credit business and unfavorable foreign exchange.
Total Revenues
Total revenues increased $215.2 million, or 13%, to $1.81 billion for Third Quarter 2019 from $1.60 billion for Third Quarter 2018. Net earned premiums increased $149.1 million, or 11%, mostly driven by our Connected Living business, mainly due to mobile due to subscriber growth in North America and Asia Pacific, as well as improved profitability from extended service contracts. This was partially offset by a reduction in investment income and unfavorable foreign exchange. The increase was further offset by lower income in our Global Financial Services and Other business, mainly due to lower volumes, including anticipated declines from business in run-off, and higher loss experience.
Total Revenues
Total revenues increased $38.2 million, or 2%, to $1.85 billion for Third Quarter 2020 from $1.81 billion for Third Quarter 2019. Net earned premiums increased $108.1 million, or 7%, primarily due to continued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs,programs. These increases in net earned premiums were partially offset by unfavorable foreign exchange and growth from extended service products anda decrease in our Global AutomotiveFinancial Services and Other business, mainly due to strong prior period sales of warranty contracts.domestic business in run-off. Fees and other income increased $58.7declined $52.4 million, or 35%23%, primarily due to higher domestic trade-in volumesdeclines in our Connected Living business, mainly driven by lower mobile repairtrade-in results from our repairs and logistics business, and growthincluding a $39.0 million impact resulting from recently launcheda previously disclosed mobile programs.program contract change. Net investment income increased $7.4declined $17.5 million, or 14%28%, primarily due to higherlower cash yields, lower income from real estate related investments.and lower yielding new money bond purchases.

52

Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $183.9$36.1 million, or 12%2%, to $1.72 billion for Third Quarter 2020 from $1.68 billion for Third Quarter 2019 from $1.50 billion for Third Quarter 2018. Policyholder benefits increased $39.92019. The increase was primarily due to a $78.6 million, or 11%10%, primarily driven by growthincrease in our Connected Living business and domestic automotive businesses. Amortizationamortization of deferred acquisition costs and value of business acquired, increased $110.4 million, or 16%, primarily duemainly related to prior period growth infrom our Connected Living and Global Automotive businesses. Underwriting, general and administrative expenses increased $33.6business. The increase was partially offset by a decrease in policyholder benefits of $26.7 million, or 7%, primarily due to growth from newlower global losses in our Global Automotive business, driven in part by COVID-19. This increase was also partially offset by a decrease in underwriting, general and existingadministrative expenses of $15.8 million, or 3%, primarily due to a mobile business, including higherprogram contract change and lower trade-in volumes fromin our domestic mobile repairrepairs and logistics business and continued investmentsfavorable foreign exchange, partially offset by growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business.
For the Nine Months Ended September 30, 20192020 Compared to the Nine Months Ended September 30, 20182019
Net Income
Segment net income increased $112.2$37.3 million, or 56%12%, to $349.3 million for Nine Months 2020 from $312.0 million for Nine Months 2019, from $199.8and included a $6.7 million after-tax benefit for Nine Months 2018,a client recoverable in our Connected Living business. Excluding this item, the increase in net income was mostly driven by our Connected Living business, primarily due to the TWG acquisition. Excluding TWG, segment netcontinued mobile subscriber growth in North America and Asia Pacific and improved profitability from extended service contracts. The increase was also due to higher income increased $52.2 million, or 33%, primarily driven byand organic growth in our Connected LivingGlobal Automotive business, as well as $9.2 million of client benefits. These increases were partially offset by lower income in our Global Financial Services and Other business mainly due to lower volumes, higher loss experience, and anticipated declines from new and existing mobile protection programsdomestic business in Asia Pacific and North America, higher operating performance in the European mobile business and higher domestic trade-in volumes and margins from our mobile repair and logistics business.run-off. The increase was partiallyfurther offset by an increasea reduction in expenses relatednet investment income due to the continued investments in our Connected Living business, the continued runoff of our domestic credit businesslower cash yields, lower income from real estate and lower yielding new money bond purchases and unfavorable foreign exchange.exchange volatility.
Total Revenues
Total revenues increased $1.73$246.6 million, or 5%, to $5.66 billion or 47%, tofor Nine Months 2020 from $5.42 billion for Nine Months 2019 from $3.69 billion for Nine Months 2018, primarily attributable to TWG. Excluding the impact of TWG, net2019. Net earned premiums increased $425.1$299.9 million, or 20%7%, mostlyprimarily driven by organiccontinued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs, and our Global Automotive business, due to strong prior period sales of warranty contracts. The increase wasprograms. These increases in net earned premiums were partially offset by unfavorable foreign exchange. Excluding the impact of TWG, feesexchange and a decrease in our Global Financial Services and Other business, mainly due to domestic business in run-off. Fees and other income increased $79.9decreased $19.3 million, or 13%3%, primarily due to higherlower mobile trade-in volumesresults, including a $39 million impact resulting from a previously disclosed mobile program contract change, partially offset by an $11.1 million benefit for a client recoverable in our mobile repair and logistics business and growth from recently launched mobile programs. Excluding the impact of TWG, net investmentConnected Living business. Investment income increased $13.6decreased $34.0 million, or 15%19%, primarily due to higherlower cash yields, lower income from real estate, related investments.lower yielding new money bond purchases and unfavorable foreign exchange volatility.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $1.58$200.6 million, or 4%, to $5.21 billion or 46%, tofor Nine Months 2020 from $5.01 billion for Nine Months 2019, from $3.43 billion for Nine Months 2018, primarily attributable to TWG. Excluding the impact of TWG, policyholder benefits increased $92.2 million, or 16%, primarily driven by growth from our Connected Living and Global Automotive businesses, partially offset by more favorable loss experience in the European mobile business and favorable foreign exchange. Excluding the impact of TWG, amortization of deferred acquisition costs and value of business acquired, which increased $107.7$281.3 million, or 12%13%, primarily due to growth from our Global Automotive and Connected Living businesses. Underwriting, general and administrative expenses increased $26.8 million, or 2%, primarily due to growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business, partially offset by a mobile program contract change in our domestic repairs and logistics business and favorable foreign exchange. These increases were partially offset by a decrease in policyholder benefits of $107.5 million, or 9%, mostly due to a favorable mix of mobile business, lower loss experience within our Connected Living businesses.and Global Automotive businesses, in part due to COVID-19, and favorable foreign exchange, partially offset by an increase from growth in our Connected Living business.
53

Global Housing
Overview
The table below presents information regarding the Global Housing segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$453.6 $475.2 $1,374.6 $1,407.1 
Fees and other income37.7 35.1 106.0 113.3 
Net investment income16.5 22.4 54.9 66.6 
Total revenues507.8 532.7 1,535.5 1,587.0 
Benefits, losses and expenses:
Policyholder benefits272.8 245.8 651.9 652.5 
Amortization of deferred acquisition costs and value of business acquired56.8 47.3 169.9 158.7 
Underwriting, general and administrative expenses162.2 187.6 496.6 541.6 
Total benefits, losses and expenses491.8 480.7 1,318.4 1,352.8 
Segment income before provision for income taxes16.0 52.0 217.1 234.2 
Provision for income taxes2.9 10.4 44.4 48.4 
Segment net income$13.1 $41.6 $172.7 $185.8 
Net earned premiums, fees and other income:
Lender-placed Insurance$258.2 $275.6 $787.5 $831.6 
Multifamily Housing117.9 108.7 338.1 319.3 
Specialty and Other115.2 126.0 355.0 369.5 
Total$491.3 $510.3 $1,480.6 $1,520.4 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income decreased $28.5 million, or 69%, to $13.1 million for Third Quarter 2020 from $41.6 million for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $35.7 million for Third Quarter 2019. Excluding reportable catastrophes, segment net income increased $22.8 million, or 29%, primarily due to more favorable non-catastrophe loss experience across Specialty and Other products and Lender-placed Insurance, driven by lower claims frequency, reserve releases related to run-off business and previously implemented underwriting initiatives. Higher premium rates in our Lender-placed Insurance business, continued growth in Multifamily Housing and our Specialty and Other products also contributed to the impactincrease. The increase was partially offset by declines in our Lender-placed Insurance policies in-force from a financially insolvent client, as well as lower REO volumes as less homes are moving to default or foreclosure due to moratoriums enacted in connection with COVID-19.
Total Revenues
Total revenues decreased $24.9 million, or 5%, to $507.8 million for Third Quarter 2020 from $532.7 million for Third Quarter 2019. Net earned premiums decreased $21.6 million, or 5%, primarily due to the run-off of TWG,our small commercial product and declines in our Lender-placed Insurance business, mainly from the reduction of policies in-force for a financially insolvent client and lower REO volume, partially offset by continued growth from renters insurance in our Multifamily Housing business and premium rate increases in our Lender-placed Insurance business. Net investment income decreased $5.9 million, or 26%, primarily due to lower income from real estate related investments and lower cash yields. These decreases were partially offset by an increase in fees and other income of $2.6 million, or 7%, primarily due to an increase in installment fees for renters insurance in our Multifamily Housing business.
54

Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $11.1 million, or 2%, to $491.8 million for Third Quarter 2020 from $480.7 million for Third Quarter 2019. The increase was primarily due to an increase in total policyholder benefits of $27.0 million, or 11%, from higher reportable catastrophe losses related to hurricanes and wildfires across the U.S. in Third Quarter 2020, partially offset by a decrease in non-catastrophe losses, as explained above. This increase was partially offset by a decrease of $15.9 million, or 7%, in amortization of deferred acquisition costs and underwriting, general and administrative expenses, increased $251.0primarily due to lower employment related expenses in our Lender-placed Insurance business.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Income
Segment net income decreased $13.1 million, or 21%7%, to $172.7 million for Nine Months 2020 from $185.8 million for Nine Months 2019. Segment income for Nine Months 2020 included $109.9 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $41.8 million in Nine Months 2019. Excluding reportable catastrophes, segment net income increased $55.0 million, or 24%, primarily driven by favorable non-catastrophe losses across all major products, higher premium rates in our Lender-placed Insurance business, the absence of losses from our small commercial product and lower operating expenses in our Lender-placed Insurance business. The increase was partially offset by a reduction in policies in-force from a financially insolvent client and lower REO volume and fee income in our Lender-placed Insurance business.
Total Revenues
Total revenues decreased $51.5 million, or 3%, to $1.54 billion for Nine Months 2020 from $1.59 billion for Nine Months 2019. Net earned premiums decreased $32.5 million, or 2%, primarily due to growthdeclines in our global mobile programs, including higher trade-in volumesLender-placed Insurance business, mainly from our domestic mobile repairthe reduction in policies in-force for a financially insolvent client and logistics business, and continued investmentslower REO volume, as well as declines in our Connected Living business,small commercial business. This decrease was partially offset by favorable foreign exchange.premium rate increases in our Lender-placed Insurance business, continued growth from renters insurance in Multifamily Housing business, and growth from our Specialty and Other business, mainly sharing economy products. Fees and other income decreased $7.3 million, or 6%, primarily due to a decline in Lender-placed Insurance, mostly due to lower loss draft volume. Net investment income decreased $11.7 million, or 18%, primarily due to lower income from real estate related investments, lower cash yields, and a decrease in invested assets.

Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $34.4 million, or 3%, to $1.32 billion for Nine Months 2020 from $1.35 billion for Nine Months 2019. The decrease was primarily due to a decrease of $33.8 million, or 5%, in amortization of deferred acquisition costs and underwriting, general and administrative expenses, primarily due to lower employment related expenses in our Lender-placed Insurance business. Policyholder benefits decreased $0.6 million mainly from lower non-catastrophe losses across all major products and the absence of losses from our small commercial product, partially offset by higher reportable catastrophe losses.

55

Catastrophe Reinsurance Program
In June 2020, we finalized our 2020 property catastrophe reinsurance program. The U.S. per-event catastrophe coverage provides $930.0 million of protection in excess of $80.0 million of retention per event. The coverage was placed with more than 40 reinsurers that are all rated A- or better by A.M. Best.
Acquisition of HYLA Mobile
47

In October 2020, we announced the signing of a definitive agreement to acquire HYLA Mobile, a provider of smartphone software and trade-in and upgrade services, for $325.0 million. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary approvals, and to be funded through a combination of existing cash at the holding company and new debt to be issued before closing.
Summary of Financial Results
Consolidated net loss attributable to common stockholders decreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2020 from $59.5 million for Third Quarter 2019. The decrease was largely driven by the absence of the $124.8 million reduction in fair value of Iké, as well as improved results from our Global Preneed
Overview
The table below presents information regardingHousing segment, excluding reportable catastrophes, partially offset by the $135.6 million after-tax impairment on the Global Preneed segment’sgoodwill and $51.3 million of higher after-tax reportable catastrophes for Global Housing.
Global Lifestyle segment net income increased $4.5 million, or 4%, to $106.6 million for Third Quarter 2020 from $102.1 million for Third Quarter 2019, primarily driven by Connected Living, mainly due to mobile from continued subscriber growth in North America and Asia Pacific, as well as improved profitability from extended service contracts. Results were partially offset by lower investment income and unfavorable foreign exchange, as well as lower volumes and unfavorable loss experience in Global Financial Services and Other, including impacts from COVID-19.
Global Lifestyle net earned premiums, fees and other income increased $55.7 million, or 3%, to $1.81 billion for Third Quarter 2020 from $1.75 billion for Third Quarter 2019, primarily due to prior period sales in Global Automotive, as well as continued mobile subscriber growth. The increase was partially offset by lower mobile trade-in results, of operationsincluding a $39.0 million impact resulting from a previously disclosed mobile program change, and unfavorable foreign exchange.
Global Housing segment net income decreased $28.5 million, or 69%, to $13.1 million for the periods indicated:
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues:       
Net earned premiums$15.1
 $14.6
 $46.3
 $43.4
Fees and other income35.7
 33.5
 103.2
 97.8
Net investment income73.0
 70.1
 212.7
 203.8
Total revenues123.8
 118.2
 362.2
 345.0
Benefits, losses and expenses:       
Policyholder benefits67.3
 64.5
 202.1
 196.2
Amortization of deferred acquisition costs and value of business acquired30.3
 17.9
 65.5
 51.6
Underwriting, general and administrative expenses18.2
 14.4
 49.8
 44.4
Total benefits, losses and expenses115.8
 96.8
 317.4
 292.2
Segment income before provision for income taxes8.0
 21.4
 44.8
 52.8
Provision for income taxes0.6
 4.6
 8.7
 11.5
Segment net income$7.4
 $16.8
 $36.1
 $41.3
For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018
Net Income
Third Quarter 2020 from $41.6 million for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million of reportable catastrophes, primarily from Hurricane Laura, compared to $35.7 million of reportable catastrophes for Third Quarter 2019. Excluding reportable catastrophes, segment net income increased $22.8 million, primarily due to more favorable non-catastrophe loss experience across our Specialty and Other products and Lender-placed Insurance driven by lower claims frequency, reserve releases related to run-off business and previously implemented underwriting initiatives. Growth in Multifamily Housing and Specialty and Other products also contributed to the increase.
Global Housing net earned premiums, fees and other income decreased $9.4$19.0 million, or 56%4%, to $7.4$491.3 million infor Third Quarter 2020 from $510.3 million for Third Quarter 2019, primarily due to expected run-off of small commercial products and declines in Lender-placed Insurance policies in-force from $16.8the previously disclosed financially insolvent client. The decrease was partially offset by continued growth in Multifamily Housing and Specialty and Other products.
Global Preneed segment net income increased $5.8 million, inor 78%, to $13.2 million for Third Quarter 2018, primarily due to2020 from $7.4 million for Third Quarter 2019. Third Quarter 2019 included a $9.9 million after-tax expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period. See Note 2Excluding this adjustment, underlying results decreased primarily due to lower investment income from lower yields and real estate joint venture partnerships compared to the prior year period.
Global Preneed net earned premiums, fees and other income increased $1.1 million, or 2%, to $51.9 million for Third Quarter 2020 from $50.8 million for Third Quarter 2019, primarily driven by prior period sales of the Final Need product.
Critical Factors Affecting Results
Our results depend on, among other things, the appropriateness of our product pricing, underwriting, the accuracy of our reserving methodology for future policyholder benefits and claims, the frequency and severity of reportable and non-reportable catastrophes, returns on and values of invested assets, and our ability to manage our expenses and achieve expense savings. Our results will also depend on our ability to profitably grow our businesses, in particular our Connected Living, Multifamily Housing and Global Automotive businesses, and maintaining our position in our Lender-placed Insurance business and the North American credit insurance business in Global Financial Services and Other. Factors affecting these items, including the impact of the COVID-19 pandemic and measures taken in response thereto, conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, may have a material adverse effect on our results of operations or financial condition. For more information on these and other factors that could affect our results, see “Item 1A—Risk Factors”, below and in our 2019 Annual Report, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our 2019 Annual Report and “—Executive Summary—COVID-19” and “—Executive Summary—Our Response to COVID-19,” above.
48

Our results may be impacted by our ability to continue to grow in the accompanying Notesmarkets in which we operate, including in our Connected Living, Multifamily Housing and Global Automotive businesses. Our mobile business is subject to volatility in mobile device trade-in volumes based on the actual and anticipated timing of the release of new devices and carrier promotional programs, as well as to changes in consumer preferences. Our Lender-placed Insurance revenues will also be impacted by changes in the housing market. In addition, across many of our businesses, we must respond to the threat of disruption. See “Item 1A—Risk Factors—Business and Competitive Risks—Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our 2019 Annual Report.
Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common and preferred stock.
For Nine Months 2020, net cash provided by operating activities was $901.6 million; net cash used in investing activities was $275.2 million; and net cash used in financing activities was $296.8 million. We had $2.20 billion in cash and cash equivalents as of September 30, 2020 as compared to $1.87 billion as of December 31, 2019. See “—Liquidity and Capital Resources,” below for further details.
Critical Accounting Policies and Estimates
Our 2019 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimation process described in the 2019 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for Third Quarter 2020.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report.
Regulatory Matters
We are subject to extensive federal, state and international regulation and supervision in the jurisdictions in which we do business, including insurance holding company laws in the jurisdictions in which our insurance companies are domiciled. For example, under applicable insurance holding company regulations, no person may acquire a controlling interest in the Company or any of our insurance company subsidiaries, unless such person has obtained prior regulatory approval for such acquisition. Under these laws, “control” is presumed when any person acquires or holds, directly or indirectly, 10% or more of our common stock or of the voting securities of any of our insurance company subsidiaries. To obtain approval, the proposed acquiror must file an application with the relevant regulator, including the regulator for the insurance subsidiaries we have established in the Netherlands for continued access to the European markets after the transition period for the U.K.’s withdrawal from the European Union. As previously disclosed, our insurance subsidiaries in the Netherlands have received the necessary regulatory approvals for the Company to continue conducting business in Europe following the end of the transition period.
For additional information, see “Item 1—Business—Regulation” in our 2019 Annual Report.
49

Results of Operations
Assurant Consolidated
Overview
The table below presents information regarding our consolidated results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$2,102.8 $2,015.4 $6,223.0 $5,952.5 
Fees and other income245.9 295.1 934.3 959.5 
Net investment income135.1 169.5 428.3 490.0 
Net realized gains (losses) on investments16.6 14.9 (54.6)61.5 
Amortization of deferred gains on disposal of businesses2.1 4.4 8.7 16.9 
Total revenues2,502.5 2,499.3 7,539.7 7,480.4 
Benefits, losses and expenses:
Policyholder benefits709.6 705.2 1,908.9 2,006.9 
Amortization of deferred acquisition costs and value of business acquired946.2 869.5 2,745.7 2,462.6 
Underwriting, general and administrative expenses687.5 764.5 2,331.8 2,388.1 
Goodwill impairment137.8 — 137.8 — 
Iké net losses— 121.1 5.9 130.5 
Interest expense25.5 32.2 77.7 85.2 
Loss on extinguishment of debt— 31.4 — 31.4 
Total benefits, losses and expenses2,506.6 2,523.9 7,207.8 7,104.7 
(Loss) income before provision for income taxes(4.1)(24.6)331.9 375.7 
Provision for income taxes26.4 28.6 28.2 117.7 
Net (loss) income(30.5)(53.2)303.7 258.0 
Less: Net loss (income) attributable to non-controlling interest0.3 (1.6)(1.1)(3.0)
Net (loss) income attributable to stockholders(30.2)(54.8)302.6 255.0 
Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net (loss) income attributable to common stockholders$(34.9)$(59.5)$288.6 $241.0 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Loss Attributable to Common Stockholders
Consolidated net loss attributable to common stockholders decreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2020 from $59.5 million loss for Third Quarter 2019. The decrease in net loss was primarily due to the absence of certain events that occurred in Third Quarter 2019, mainly a $124.8 million after-tax loss related to a decrease in the estimated fair value of Iké, $29.6 million of after-tax debt related charges associated with refinancing debt at a lower interest rate and a $9.9 million after-tax expense related to an out of period adjustment in our Global Preneed segment for over-capitalization of deferred acquisition costs occurring over a ten-year period. Additionally, the decrease in net loss was due to improved results from our Global Housing segment, excluding reportable catastrophes, due to more favorable non-catastrophe loss experience across our Specialty and Other products and Lender-placed Insurance driven by lower claims frequency, previously implemented underwriting initiatives and reserve releases related to run-off business, and a $9.7 million of income, net of certain exit costs, from the sale of our CLO asset management platform. The decrease in net loss was partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and $51.3 million of higher after-tax reportable catastrophes for Global Housing.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
50

Net Income Attributable to Common Stockholders
Consolidated net income attributable to common stockholders increased $47.6 million, or 20%, to $288.6 million for Nine Months 2020 from real estate$241.0 million for Nine Months 2019. Net income for Nine Months 2020 included $109.9 million of reportable catastrophes, primarily related investments.to Hurricane Laura, compared to $41.4 million in Nine Months 2019. Excluding reportable catastrophes, net income increased $116.1 million, or 41%, due to the absence of a $131.4 million after-tax loss related to a decrease in the estimated fair value of Iké that was recorded in Nine Months 2019, an $84.4 million tax benefit related to the utilization of net operating losses in connection with the CARES Act, an improvement in our results from Global Housing and Global Lifestyle as well as the absence of $29.6 million of after-tax debt related charges from Nine Months 2019. These increases were partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and a $67.7 million after-tax decrease in net unrealized gains from changes in fair value of our equity securities and collateralized loan obligations that included $34.4 million of after-tax net unrealized losses for Nine Months 2020 compared to $33.3 million of after-tax net unrealized gains for Nine Months 2019.



51

Global Lifestyle
Overview
The table below presents information regarding the Global Lifestyle segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$1,633.2 $1,525.1 $4,799.0 $4,499.1 
Fees and other income171.8 224.2 721.6 740.9 
Net investment income44.6 62.1 143.5 177.5 
Total revenues1,849.6 1,811.4 5,664.1 5,417.5 
Benefits, losses and expenses:
Policyholder benefits365.4 392.1 1,044.7 1,152.2 
Amortization of deferred acquisition costs and value of business acquired870.5 791.9 2,519.7 2,238.4 
Underwriting, general and administrative expenses480.8 496.6 1,649.4 1,622.6 
Total benefits, losses and expenses1,716.7 1,680.6 5,213.8 5,013.2 
Segment income before provision for income taxes132.9 130.8 450.3 404.3 
Provision for income taxes26.3 28.7 101.0 92.3 
Segment net income$106.6 $102.1 $349.3 $312.0 
Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)$909.5 $931.9 $2,914.4 $2,764.6 
Global Automotive802.5 706.9 2,311.0 2,131.9 
Global Financial Services and Other93.0 110.5 295.2 343.5 
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
Net earned premiums, fees and other income:
Domestic$1,335.4 $1,237.6 $4,080.2 $3,680.0 
International469.6 511.7 1,440.4 1,560.0 
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income increased $4.5 million, or 4%, to $106.6 million for Third Quarter 2020 from $102.1 million for Third Quarter 2019. The increase was primarily driven by our Connected Living business, mainly due to mobile due to subscriber growth in North America and Asia Pacific, as well as improved profitability from extended service contracts. This was partially offset by a reduction in investment income and unfavorable foreign exchange. The increase was further offset by lower income in our Global Financial Services and Other business, mainly due to lower volumes, including anticipated declines from business in run-off, and higher loss experience.
Total Revenues
Total revenues increased $5.6$38.2 million, or 5%2%, to $123.8 million$1.85 billion for Third Quarter 20192020 from $118.2 million$1.81 billion for Third Quarter 2018. Fees and other income2019. Net earned premiums increased $2.2$108.1 million, or 7%, primarily due to continued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs. These increases in net earned premiums were partially offset by unfavorable foreign exchange and a decrease in our Global Financial Services and Other business, mainly due to domestic business in run-off. Fees and other income declined $52.4 million, or 23%, primarily due to declines in our Connected Living business, mainly driven by lower mobile trade-in results from our repairs and logistics business, including a $39.0 million impact resulting from a previously disclosed mobile program contract change. Net investment income declined $17.5 million, or 28%, primarily due to lower cash yields, lower income from real estate and lower yielding new money bond purchases.
52

Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $36.1 million, or 2%, to $1.72 billion for Third Quarter 2020 from $1.68 billion for Third Quarter 2019. The increase was primarily due to a $78.6 million, or 10%, increase in amortization of deferred acquisition costs and value of business acquired, mainly related to prior period growth from our Global Automotive business. The increase was partially offset by a decrease in policyholder benefits of $26.7 million, or 7%, primarily due to lower global losses in our Global Automotive business, driven in part by COVID-19. This increase was also partially offset by a decrease in underwriting, general and administrative expenses of $15.8 million, or 3%, primarily due to a mobile program contract change and lower trade-in volumes in our domestic repairs and logistics business and favorable foreign exchange, partially offset by growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business.
For the U.S.Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Income
Segment net income increased $37.3 million, or 12%, to $349.3 million for Nine Months 2020 from $312.0 million for Nine Months 2019, and included a $6.7 million after-tax benefit for a client recoverable in our Connected Living business. Excluding this item, the increase in net income was mostly driven by our Connected Living business, primarily due to continued mobile subscriber growth in North America and Asia Pacific and improved profitability from extended service contracts. The increase was also due to higher income and organic growth in our Global Automotive business, as well as $9.2 million of client benefits. These increases were partially offset by lower income in our Global Financial Services and Other business mainly due to lower volumes, higher loss experience, and anticipated declines from domestic business in run-off. The increase was further offset by a reduction in net investment income due to lower cash yields, lower income from real estate and lower yielding new money bond purchases and unfavorable foreign exchange volatility.
Total Revenues
Total revenues increased $246.6 million, or 5%, to $5.66 billion for Nine Months 2020 from $5.42 billion for Nine Months 2019. Net earned premiums increased $299.9 million, or 7%, primarily driven by continued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs. These increases in net earned premiums were partially offset by unfavorable foreign exchange and a decrease in our Global Financial Services and Other business, mainly due to domestic business in run-off. Fees and other income decreased $19.3 million, or 3%, primarily due to lower mobile trade-in results, including a $39 million impact resulting from a previously disclosed mobile program contract change, partially offset by an $11.1 million benefit for a client recoverable in our Connected Living business. Investment income decreased $34.0 million, or 19%, primarily due to lower cash yields, lower income from real estate, lower yielding new money bond purchases and unfavorable foreign exchange volatility.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $200.6 million, or 4%, to $5.21 billion for Nine Months 2020 from $5.01 billion for Nine Months 2019, primarily driven by amortization of deferred acquisition costs and value of business acquired, which increased $281.3 million, or 13%, primarily due to growth from our Global Automotive and Connected Living businesses. Underwriting, general and administrative expenses increased $26.8 million, or 2%, primarily due to growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business, partially offset by a mobile program contract change in our domestic repairs and logistics business and favorable foreign exchange. These increases were partially offset by a decrease in policyholder benefits of $107.5 million, or 9%, mostly due to a favorable mix of mobile business, lower loss experience within our Connected Living and Global Automotive businesses, in part due to COVID-19, and favorable foreign exchange, partially offset by an increase from growth in our Connected Living business.
53

Global Housing
Overview
The table below presents information regarding the Global Housing segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$453.6 $475.2 $1,374.6 $1,407.1 
Fees and other income37.7 35.1 106.0 113.3 
Net investment income16.5 22.4 54.9 66.6 
Total revenues507.8 532.7 1,535.5 1,587.0 
Benefits, losses and expenses:
Policyholder benefits272.8 245.8 651.9 652.5 
Amortization of deferred acquisition costs and value of business acquired56.8 47.3 169.9 158.7 
Underwriting, general and administrative expenses162.2 187.6 496.6 541.6 
Total benefits, losses and expenses491.8 480.7 1,318.4 1,352.8 
Segment income before provision for income taxes16.0 52.0 217.1 234.2 
Provision for income taxes2.9 10.4 44.4 48.4 
Segment net income$13.1 $41.6 $172.7 $185.8 
Net earned premiums, fees and other income:
Lender-placed Insurance$258.2 $275.6 $787.5 $831.6 
Multifamily Housing117.9 108.7 338.1 319.3 
Specialty and Other115.2 126.0 355.0 369.5 
Total$491.3 $510.3 $1,480.6 $1,520.4 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income decreased $28.5 million, or 69%, to $13.1 million for Third Quarter 2020 from $41.6 million for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $35.7 million for Third Quarter 2019. Excluding reportable catastrophes, segment net income increased $22.8 million, or 29%, primarily due to more favorable non-catastrophe loss experience across Specialty and Other products and Lender-placed Insurance, driven by lower claims frequency, reserve releases related to run-off business and previously implemented underwriting initiatives. Higher premium rates in our Lender-placed Insurance business, continued growth in Multifamily Housing and our Specialty and Other products also contributed to the increase. The increase was partially offset by declines in our Lender-placed Insurance policies in-force from a financially insolvent client, as well as lower REO volumes as less homes are moving to default or foreclosure due to moratoriums enacted in connection with COVID-19.
Total Revenues
Total revenues decreased $24.9 million, or 5%, to $507.8 million for Third Quarter 2020 from $532.7 million for Third Quarter 2019. Net earned premiums decreased $21.6 million, or 5%, primarily due to the run-off of our small commercial product and declines in our Lender-placed Insurance business, mainly from the reduction of policies in-force for a financially insolvent client and lower REO volume, partially offset by continued growth from renters insurance in our Multifamily Housing business and premium rate increases in our Lender-placed Insurance business. Net investment income increased $2.9decreased $5.9 million, or 4%26%, primarily due to higherlower income from real estate related investments and lower cash yields. These decreases were partially offset by an increase in fees and other income of $2.6 million, or 7%, primarily due to an increase in installment fees for renters insurance in our Multifamily Housing business.
54

Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $11.1 million, or 2%, to $491.8 million for Third Quarter 2020 from $480.7 million for Third Quarter 2019. The increase was primarily due to an increase in total policyholder benefits of $27.0 million, or 11%, from higher reportable catastrophe losses related to hurricanes and wildfires across the U.S. in Third Quarter 2020, partially offset by a decrease in non-catastrophe losses, as explained above. This increase was partially offset by a decrease of $15.9 million, or 7%, in amortization of deferred acquisition costs and underwriting, general and administrative expenses, primarily due to lower employment related expenses in our Lender-placed Insurance business.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Income
Segment net income decreased $13.1 million, or 7%, to $172.7 million for Nine Months 2020 from $185.8 million for Nine Months 2019. Segment income for Nine Months 2020 included $109.9 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $41.8 million in Nine Months 2019. Excluding reportable catastrophes, segment net income increased $55.0 million, or 24%, primarily driven by favorable non-catastrophe losses across all major products, higher premium rates in our Lender-placed Insurance business, the absence of losses from our small commercial product and lower operating expenses in our Lender-placed Insurance business. The increase was partially offset by a reduction in policies in-force from a financially insolvent client and lower REO volume and fee income in our Lender-placed Insurance business.
Total Revenues
Total revenues decreased $51.5 million, or 3%, to $1.54 billion for Nine Months 2020 from $1.59 billion for Nine Months 2019. Net earned premiums decreased $32.5 million, or 2%, primarily due to declines in our Lender-placed Insurance business, mainly from the reduction in policies in-force for a financially insolvent client and lower REO volume, as well as declines in our small commercial business. This decrease was partially offset by premium rate increases in our Lender-placed Insurance business, continued growth from renters insurance in Multifamily Housing business, and growth from our Specialty and Other business, mainly sharing economy products. Fees and other income decreased $7.3 million, or 6%, primarily due to a decline in Lender-placed Insurance, mostly due to lower loss draft volume. Net investment income decreased $11.7 million, or 18%, primarily due to lower income from real estate related investments, lower cash yields, and a decrease in invested assets.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $19.0decreased $34.4 million, or 20%3%, to $115.8 million for Third Quarter 2019 from $96.8 million for Third Quarter 2018, primarily due to a $14.2 million out of period adjustment related to an over-capitalization of deferred acquisition costs occurring over a ten-year period.
For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018
Net Income
Segment net income decreased $5.2 million, or 13%, to $36.1 million in Nine Months 2019 from $41.3 million in Nine Months 2018, primarily due to a $9.9 million after-tax expense related to an out of period adjustment for the net over-capitalization of deferred acquisition costs occurring over a ten-year period, as well as increased general expenses. The decrease was partially offset by higher income from real estate related investments and an increase in invested assets consistent with the growth of the domestic preneed business, increased sales of Preneed policies and lower mortality.
Total Revenues

Total revenues increased $17.2 million, or 5%, to $362.2 million$1.32 billion for Nine Months 20192020 from $345.0 million$1.35 billion for Nine Months 2018. Fees and other income increased $5.4 million, or 6%, primarily due to growth in the U.S. business, partially offset by unfavorable foreign exchange. Net investment income increased $8.9 million, or 4%, primarily due to higher income from real estate related investments and an increase in invested assets in line with the growth of the domestic preneed business, partially offset by unfavorable foreign exchange.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $25.2 million, or 9%, to $317.4 million for Nine Months 2019 from $292.2 million for Nine Months 2018, primarily due to a $14.2 million out of period adjustment related to the net over-capitalization of deferred acquisition costs occurring over a ten-year period, increased information technology expense and growth in the domestic preneed business, partially offset by favorable foreign exchange.


Corporate and Other
Overview
2019. The tables below present information regarding the Corporate and Other’s segment results of operations for the periods indicated:
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues:       
Net earned premiums$—
 $—
 $—
 $0.4
Fees and other income0.1
 0.3
 2.1
 2.4
Net investment income12.0
 9.9
 33.2
 37.2
Net realized gains (losses) on investments14.9
 (5.7) 61.5
 (16.6)
Amortization of deferred gains on disposal of businesses4.4
 12.7
 16.9
 46.2
Total revenues31.4
 17.2
 113.7
 69.6
Benefits, losses and expenses:       
Policyholder benefits—
 (0.6) 0.1
 (4.3)
General and administrative expenses62.1
 60.4
 174.1
 224.0
Iké net losses121.1
 —
 130.5
 —
Interest expense32.2
 26.5
 85.2
 74.0
Loss on extinguishment of debt31.4
 —
 31.4
 —
Total benefits, losses and expenses246.8
 86.3
 421.3
 293.7
Segment loss before benefit for income taxes(215.4) (69.1) (307.6) (224.1)
Benefit for income taxes(11.1) (10.0) (31.7) (45.8)
Segment net loss(204.3) (59.1) (275.9) (178.3)
Less: Net income attributable to non-controlling interest(1.6) —
 (3.0) —
Net loss attributable to stockholders(205.9) (59.1) (278.9) (178.3)
Less: Preferred stock dividends(4.7) (4.7) (14.0) (9.5)
Net loss attributable to common stockholders$(210.6) $(63.8) $(292.9) $(187.8)
For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018
Net Loss Attributable to Common Stockholders
Segment net loss attributable to common stockholders increased $146.8 million, or 230%, to a net loss of $210.6 million for Third Quarter 2019 from a net loss of $63.8 million for Third Quarter 2018. Third Quarter 2019 included a $124.8 million of after-tax loss related to a decrease in the estimated fair value of Iké and $29.6 million of debt related charges (each as described above in this MD&A). Excluding these items, the segment net loss attributable to common stockholders decreased $7.6 million, or 12%, primarily due to an increase in net realized gains on investments due to sales of fixed maturity securities and an increase in the fair value of equity securities.
Total Revenues
Total revenues increased $14.2 million, or 83%, to $31.4 million for Third Quarter 2019 from $17.2 million for Third Quarter 2018, primarily due to an increase in net realized gains on investments due to net realized gains from sales of fixed maturity securities and an increase in the fair value of equity securities, partially offset by lower amortization of deferred gains associated with the sale of Assurant Employee Benefits.
Total Expenses
Total benefits, losses and expenses increased $160.5 million, or 186%, to $246.8 million for Third Quarter 2019 from $86.3 million for Third Quarter 2018. The increase in expenses was primarily due to a $121.1decrease of $33.8 million, loss related to a decrease

or 5%, in estimated fair valueamortization of Iké consisting of a $54.3 million increase in the liability related to the put/call to acquire the remaining 60% interest in Ikédeferred acquisition costs and a $66.8 million other-than-temporary impairment loss on our 40% ownership interest in Iké that includes consideration of cumulative foreign currency losses of $41.0 million previously recorded in other comprehensive income. The increase inunderwriting, general and administrative expenses, was further driven by $37.4 million of debt related charges that included a $31.4 million loss on extinguishment of debt and $5.6 million of additional interest expense from derivative instruments. The increase was alsoprimarily due to a $9.6lower employment related expenses in our Lender-placed Insurance business. Policyholder benefits decreased $0.6 million incremental loss from the sale our Mortgage Solutions business due to a reduction in the earn-out receivable established at the time of sale resultingmainly from lower than expected retentionnon-catastrophe losses across all major products and achievementthe absence of new business targets and unfavorable development on certain claims. These increases werelosses from our small commercial product, partially offset by lower remeasurement related foreign exchange losses from our operations in Argentina.
For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018
Net Loss Attributable to Common Stockholders
Segment net loss attributable to common stockholders increased $105.1 million, or 56%, to a net loss of $292.9 million for Nine Months 2019 from a net loss of $187.8 million for Nine Months 2018. Nine Months 2019 included a $131.4 million of after-tax loss related to a decrease in the estimated fair value of Iké and $29.6 million of after-tax debt related charges reported in Third Quarter 2019. Excluding these items, segment net loss attributable to common stockholders decreased $55.9 million, or 30%, primarily due to an increase in net realized gains on investments that was driven by an increase in the fair value of equity securities and sales of fixed maturity securities, a $42.7 million after-tax reduction in net charges associated with the TWG acquisition and a $24.9 million after-tax decrease in the loss on the sale of our Mortgage Solutions business. The decrease was partially offset by additional interest expense and preferred dividends from acquisition related financing, lower amortization of deferred gains associated with the sale of Assurant Employee Benefits and a $12.2 million after-tax impairment of certain intangible assets from our acquisition of Green Tree.
Total Revenues
Total revenues increased $44.1 million, or 63%, to $113.7 million for Nine Months 2019 from $69.6 million for Nine Months 2018, primarily due to an increase in net realized gains on investments mostly due an increase in the fair value of equity securities and sales of fixed maturity securities, partially offset by lower amortization of deferred gains associated with the sale of Assurant Employee Benefits.
Total Expenses
Total benefits, losses and expenses increased $127.6 million, or 43%, to $421.3 million for Nine Months 2019 from $293.7 million for Nine Months 2018. The increase in expenses for Nine Months 2019 was primarily due to a $130.5 million loss related to a decrease in estimated fair value of Iké, $37.4 million of debt related charges associated with debt transactions from Third Quarter 2019, an increase in financing costs related to TWG acquisition financing and a $15.6 million impairment of certain intangible assets from our acquisition of Green Tree. The increases were partially offset by a $52.6 million decrease in net charges associated with the TWG acquisition and a $31.4 million reduction in loss on the sale of our Mortgage Solutions business.




Investments
We had total investments of $14.55 billion and $13.40 billion as of September 30, 2019 and December 31, 2018, respectively. Net unrealized gains on our fixed maturity securities portfolio increased $893.2 million during Nine Months 2019, from $423.1 million as of December 31, 2018 to $1.32 billion as of September 30, 2019. This increase was mainly due to a decrease in U.S. Treasury yields and tightening credit spreads.
The following table shows the credit quality of our fixed maturity securities portfolio as of the dates indicated:
 Fair value as of
Fixed Maturity Securities by Credit QualitySeptember 30, 2019 December 31, 2018
Aaa / Aa / A$8,084.0
 65.1% $7,329.8
 65.1%
Baa3,750.9
 30.2% 3,322.7
 29.5%
Ba459.0
 3.7% 447.9
 4.0%
B and lower126.9
 1.0% 156.7
 1.4%
Total$12,420.8
 100.0% $11,257.1
 100.0%
higher reportable catastrophe losses.
The following table shows the major categories of net investment income for the periods indicated:
55
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2019 2018 2019 2018
Fixed maturity securities$125.2
 $121.6
 $370.3
 $334.0
Equity securities5.2
 5.5
 16.7
 15.6
Commercial mortgage loans on real estate8.6
 8.7
 26.3
 24.8
Short-term investments5.0
 6.7
 16.4
 12.8
Other investments10.7
 5.0
 23.0
 14.9
Cash and cash equivalents7.5
 6.4
 21.0
 20.8
Revenue from consolidated investment entities (1)25.6
 24.4
 90.2
 55.3
Total investment income187.8
 178.3
 563.9
 478.2
Investment expenses(6.3) (8.0) (18.3) (16.9)
Expenses from consolidated investment entities (1)(12.0) (18.5) $(55.6) $(43.7)
Net investment income$169.5
 $151.8
 $490.0
 $417.6
(1)The following table shows the net of revenues and expenses from consolidated investment entities for the periods indicated. Refer to Note 9 to the Consolidated Financial Statements included elsewhere in this Report for further detail.

 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2019 2018 2019 2018
Investment income (loss) from direct investments in:       
Real estate funds (1)$6.5
 $(0.4) $17.3
 $1.2
CLO entities5.3
 4.5
 12.1
 6.4
Investment management fees1.8
 1.8
 5.2
 4.0
Net investment income from consolidated investment entities$13.6
 $5.9
 $34.6
 $11.6
(1)The investment income from the real estate funds includes income (loss) attributable to non-controlling interest of $1.2 million and $2.4 million for the three and nine months ended September 30, 2019. There was no income attributable to non-controlling interest for the three and nine months ended September 30, 2018.
Net investment income increased $17.7 million, or 12%, to $169.5 million for Third Quarter 2019 from $151.8 million for Third Quarter 2018. The increase was primarily driven by higher income from consolidated investment entities (“CIEs”) and an increase in income from other investments, which was primarily driven by proceeds from the sale of a direct real estate joint venture property and an increase in fair market value of certain other properties. The higher income from CIEs was primarily related to our investment in the real estate funds due to an increase in the fair market value of certain real estate

properties and additional Assurant-issued collateralized loan obligation (“CLO”) structures launched after Third Quarter 2018. The remainder of the increase is primarily related to income from higher overall invested assets.
Net investment income increased $72.4 million, or 17%, to $490.0 million for Nine Months 2019 from $417.6 million for Nine Months 2018 benefiting from the investments acquired from the TWG acquisition. Excluding TWG, net investment income increased $31.9 million, or 8%, primarily driven by an increase in income from CIEs. The higher income from CIEs was primarily related to our investment in our real estate funds resulting from an increase in the fair market value of certain real estate properties and income from our direct investment in Assurant-issued CLO structures that were launched after Third Quarter 2018. The increase in net investment income was due to an increase in income from other investments, which was primarily driven by proceeds from the sale of direct real estate joint venture properties and an increase in fair market value of certain other properties as well as increased income from higher overall invested assets consistent with the underlying growth of our business. The increase was partially offset by a decrease of $2.9 million in interest income related to the recovery of losses on certain mortgage-backed securities and $2.4 million of interest income from the reinvestment of debt proceeds in anticipation of the TWG acquisition that were recorded for the Nine Months 2018.
As of September 30, 2019, we owned $72.2 million of securities guaranteed by financial guarantee insurance companies. Included in this amount was $59.7 million of municipal securities, whose credit rating was A+ with the guarantee, but would have had a rating of A- without the guarantee.
For more information on our investments, see Notes 8 and 10 to the Consolidated Financial Statements included elsewhere in this Report.

Catastrophe Reinsurance Program
In July 2019,June 2020, we finalized our 20192020 property catastrophe reinsurance program. 2019 reinsurance premiums for this program are estimated to be approximately $165.0The U.S. per-event catastrophe coverage provides $930.0 million pre-tax reflecting the significant decreaseof protection in catastrophe per-event retention from $120.0 million toexcess of $80.0 million and modest growth in exposure. Coverageof retention per event. The coverage was placed with more than 4540 reinsurers that are all rated A- or better by A.M. Best. Actual reinsurance premiums will vary if exposure changes significantly
Acquisition of HYLA Mobile
47

In October 2020, we announced the signing of a definitive agreement to acquire HYLA Mobile, a provider of smartphone software and trade-in and upgrade services, for $325.0 million. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary approvals, and to be funded through a combination of existing cash at the holding company and new debt to be issued before closing.
Summary of Financial Results
Consolidated net loss attributable to common stockholders decreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2020 from estimates or if reinstatement premiums are required due to catastrophe events.
$59.5 million for Third Quarter 2019. The U.S. per-occurrence catastrophe coverage includes a main reinsurance program providing $1.16 billion of coverage in excess of $80.0 million retention. In addition, it includes multi-year reinsurance contracts covering approximately 35%decrease was largely driven by the absence of the reinsurance layers. All layers$124.8 million reduction in fair value of Iké, as well as improved results from our Global Housing segment, excluding reportable catastrophes, partially offset by the program allow for one automatic reinstatement, except$135.6 million after-tax impairment on the first layer (which covers the first $40.0Global Preneed goodwill and $51.3 million of losses in excess of the $80.0higher after-tax reportable catastrophes for Global Housing.
Global Lifestyle segment net income increased $4.5 million, retention) which has two reinstatements, and include a cascading feature that provides multi-event protection in which higher coverage layers drop downor 4%, to $120.0$106.6 million as the lower layers and reinstatement limit are exhausted. When combined with the Florida Hurricane Catastrophe Fund, the program is covered for gross Florida losses of up to $1.40 billion.
The 2019 catastrophe reinsurance program also includes Caribbean protection of up to $177.5Third Quarter 2020 from $102.1 million of protection in excess of a $17.5 million retention. Infor Third Quarter 2019, primarily driven by Connected Living, mainly due to mobile from continued subscriber growth in North America and Asia Pacific, as well as improved profitability from extended service contracts. Results were partially offset by lower investment income and unfavorable foreign exchange, as well as lower volumes and unfavorable loss experience in Global Financial Services and Other, including impacts from COVID-19.
Global Lifestyle net earned premiums, fees and other income increased $55.7 million, or 3%, to $1.81 billion for Third Quarter 2020 from $1.75 billion for Third Quarter 2019, primarily due to prior period sales in Global Automotive, as well as continued mobile subscriber growth. The increase was partially offset by lower mobile trade-in results, including a $39.0 million impact resulting from a previously disclosed mobile program change, and unfavorable foreign exchange.
Global Housing segment net income decreased $28.5 million, or 69%, to $13.1 million for Third Quarter 2020 from $41.6 million for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million of reportable catastrophes, primarily from Hurricane Laura, compared to $35.7 million of reportable catastrophes for Third Quarter 2019. Excluding reportable catastrophes, segment net income increased $22.8 million, primarily due to more favorable non-catastrophe loss experience across our Specialty and Other products and Lender-placed Insurance driven by lower claims frequency, reserve releases related to run-off business and previously implemented underwriting initiatives. Growth in Multifamily Housing and Specialty and Other products also contributed to the increase.
Global Housing net earned premiums, fees and other income decreased $19.0 million, or 4%, to $491.3 million for Third Quarter 2020 from $510.3 million for Third Quarter 2019, primarily due to expected run-off of small commercial products and declines in Lender-placed Insurance policies in-force from the previously disclosed financially insolvent client. The decrease was partially offset by continued growth in Multifamily Housing and Specialty and Other products.
Global Preneed segment net income increased $5.8 million, or 78%, to $13.2 million for Third Quarter 2020 from $7.4 million for Third Quarter 2019. Third Quarter 2019 included a $9.9 million after-tax expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period. Excluding this adjustment, underlying results decreased primarily due to lower investment income from lower yields and real estate joint venture partnerships compared to the prior year period.
Global Preneed net earned premiums, fees and other income increased $1.1 million, or 2%, to $51.9 million for Third Quarter 2020 from $50.8 million for Third Quarter 2019, primarily driven by prior period sales of the Final Need product.
Critical Factors Affecting Results
Our results depend on, among other things, the appropriateness of our product pricing, underwriting, the accuracy of our reserving methodology for future policyholder benefits and claims, the frequency and severity of reportable and non-reportable catastrophes, returns on and values of invested assets, and our ability to manage our expenses and achieve expense savings. Our results will also depend on our ability to profitably grow our businesses, in particular our Connected Living, Multifamily Housing and Global Automotive businesses, and maintaining our position in our Lender-placed Insurance business and the North American credit insurance business in Global Financial Services and Other. Factors affecting these items, including the impact of the COVID-19 pandemic and measures taken in response thereto, conditions in financial markets, the global economy and the markets in which we placedoperate, fluctuations in exchange rates, interest rates and inflation, may have a material adverse effect on our results of operations or financial condition. For more information on these and other factors that could affect our results, see “Item 1A—Risk Factors”, below and in our 2019 Annual Report, “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our 2019 Annual Report and “—Executive Summary—COVID-19” and “—Executive Summary—Our Response to COVID-19,” above.
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Our results may be impacted by our ability to continue to grow in the markets in which we operate, including in our Connected Living, Multifamily Housing and Global Automotive businesses. Our mobile business is subject to volatility in mobile device trade-in volumes based on the actual and anticipated timing of the release of new devices and carrier promotional programs, as well as to changes in consumer preferences. Our Lender-placed Insurance revenues will also be impacted by changes in the housing market. In addition, across many of our businesses, we must respond to the threat of disruption. See “Item 1A—Risk Factors—Business and Competitive Risks—Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our 2019 Annual Report.
Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common and preferred stock.
For Nine Months 2020, net cash provided by operating activities was $901.6 million; net cash used in investing activities was $275.2 million; and net cash used in financing activities was $296.8 million. We had $2.20 billion in cash and cash equivalents as of September 30, 2020 as compared to $1.87 billion as of December 31, 2019. See “—Liquidity and Capital Resources,” below for further details.
Critical Accounting Policies and Estimates
Our 2019 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimation process described in the 2019 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for Third Quarter 2020.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report.
Regulatory Matters
We are subject to extensive federal, state and international regulation and supervision in the jurisdictions in which we do business, including insurance holding company laws in the jurisdictions in which our insurance companies are domiciled. For example, under applicable insurance holding company regulations, no person may acquire a controlling interest in the Company or any of our insurance company subsidiaries, unless such person has obtained prior regulatory approval for such acquisition. Under these laws, “control” is presumed when any person acquires or holds, directly or indirectly, 10% or more of our common stock or of the voting securities of any of our insurance company subsidiaries. To obtain approval, the proposed acquiror must file an application with the relevant regulator, including the regulator for the insurance subsidiaries we have established in the Netherlands for continued access to the European markets after the transition period for the U.K.’s withdrawal from the European Union. As previously disclosed, our insurance subsidiaries in the Netherlands have received the necessary regulatory approvals for the Company to continue conducting business in Europe following the end of the transition period.
For additional coverageinformation, see “Item 1—Business—Regulation” in our 2019 Annual Report.
49

Results of Operations
Assurant Consolidated
Overview
The table below presents information regarding our consolidated results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$2,102.8 $2,015.4 $6,223.0 $5,952.5 
Fees and other income245.9 295.1 934.3 959.5 
Net investment income135.1 169.5 428.3 490.0 
Net realized gains (losses) on investments16.6 14.9 (54.6)61.5 
Amortization of deferred gains on disposal of businesses2.1 4.4 8.7 16.9 
Total revenues2,502.5 2,499.3 7,539.7 7,480.4 
Benefits, losses and expenses:
Policyholder benefits709.6 705.2 1,908.9 2,006.9 
Amortization of deferred acquisition costs and value of business acquired946.2 869.5 2,745.7 2,462.6 
Underwriting, general and administrative expenses687.5 764.5 2,331.8 2,388.1 
Goodwill impairment137.8 — 137.8 — 
Iké net losses— 121.1 5.9 130.5 
Interest expense25.5 32.2 77.7 85.2 
Loss on extinguishment of debt— 31.4 — 31.4 
Total benefits, losses and expenses2,506.6 2,523.9 7,207.8 7,104.7 
(Loss) income before provision for income taxes(4.1)(24.6)331.9 375.7 
Provision for income taxes26.4 28.6 28.2 117.7 
Net (loss) income(30.5)(53.2)303.7 258.0 
Less: Net loss (income) attributable to non-controlling interest0.3 (1.6)(1.1)(3.0)
Net (loss) income attributable to stockholders(30.2)(54.8)302.6 255.0 
Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net (loss) income attributable to common stockholders$(34.9)$(59.5)$288.6 $241.0 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Loss Attributable to Common Stockholders
Consolidated net loss attributable to common stockholders decreased $24.6 million, or 41%, to $34.9 million for Third Quarter 2020 from $59.5 million loss for Third Quarter 2019. The decrease in net loss was primarily due to the absence of certain events that occurred in Third Quarter 2019, mainly a $124.8 million after-tax loss related to a decrease in the estimated fair value of Iké, $29.6 million of after-tax debt related charges associated with refinancing debt at a lower interest rate and a $9.9 million after-tax expense related to an out of period adjustment in our Global Preneed segment for over-capitalization of deferred acquisition costs occurring over a ten-year period. Additionally, the decrease in net loss was due to improved results from our Global Housing segment, excluding reportable catastrophes, due to more favorable non-catastrophe loss experience across our Specialty and Other products and Lender-placed Insurance driven by lower claims frequency, previously implemented underwriting initiatives and reserve releases related to run-off business, and a $9.7 million of income, net of certain exit costs, from the sale of our CLO asset management platform. The decrease in net loss was partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and $51.3 million of higher after-tax reportable catastrophes for Global Housing.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
50

Net Income Attributable to Common Stockholders
Consolidated net income attributable to common stockholders increased $47.6 million, or 20%, to $288.6 million for Nine Months 2020 from $241.0 million for Nine Months 2019. Net income for Nine Months 2020 included $109.9 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $41.4 million in Nine Months 2019. Excluding reportable catastrophes, net income increased $116.1 million, or 41%, due to the absence of a $131.4 million after-tax loss related to a decrease in the estimated fair value of Iké that was recorded in Nine Months 2019, an $84.4 million tax benefit related to the utilization of net operating losses in connection with the CARES Act, an improvement in our results from Global Housing and Global Lifestyle as well as the absence of $29.6 million of after-tax debt related charges from Nine Months 2019. These increases were partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and a $67.7 million after-tax decrease in net unrealized gains from changes in fair value of our equity securities and collateralized loan obligations that included $34.4 million of after-tax net unrealized losses for Nine Months 2020 compared to $33.3 million of after-tax net unrealized gains for Nine Months 2019.



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Global Lifestyle
Overview
The table below presents information regarding the Global Lifestyle segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$1,633.2 $1,525.1 $4,799.0 $4,499.1 
Fees and other income171.8 224.2 721.6 740.9 
Net investment income44.6 62.1 143.5 177.5 
Total revenues1,849.6 1,811.4 5,664.1 5,417.5 
Benefits, losses and expenses:
Policyholder benefits365.4 392.1 1,044.7 1,152.2 
Amortization of deferred acquisition costs and value of business acquired870.5 791.9 2,519.7 2,238.4 
Underwriting, general and administrative expenses480.8 496.6 1,649.4 1,622.6 
Total benefits, losses and expenses1,716.7 1,680.6 5,213.8 5,013.2 
Segment income before provision for income taxes132.9 130.8 450.3 404.3 
Provision for income taxes26.3 28.7 101.0 92.3 
Segment net income$106.6 $102.1 $349.3 $312.0 
Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)$909.5 $931.9 $2,914.4 $2,764.6 
Global Automotive802.5 706.9 2,311.0 2,131.9 
Global Financial Services and Other93.0 110.5 295.2 343.5 
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
Net earned premiums, fees and other income:
Domestic$1,335.4 $1,237.6 $4,080.2 $3,680.0 
International469.6 511.7 1,440.4 1,560.0 
Total$1,805.0 $1,749.3 $5,520.6 $5,240.0 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income increased $4.5 million, or 4%, to $106.6 million for Third Quarter 2020 from $102.1 million for Third Quarter 2019. The increase was primarily driven by our Connected Living business, mainly due to mobile due to subscriber growth in North America and Asia Pacific, as well as improved profitability from extended service contracts. This was partially offset by a reduction in investment income and unfavorable foreign exchange. The increase was further offset by lower income in our Global Financial Services and Other business, mainly due to lower volumes, including anticipated declines from business in run-off, and higher loss experience.
Total Revenues
Total revenues increased $38.2 million, or 2%, to $1.85 billion for Third Quarter 2020 from $1.81 billion for Third Quarter 2019. Net earned premiums increased $108.1 million, or 7%, primarily due to continued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs. These increases in net earned premiums were partially offset by unfavorable foreign exchange and a decrease in our Global Financial Services and Other business, mainly due to domestic business in run-off. Fees and other income declined $52.4 million, or 23%, primarily due to declines in our Connected Living business, mainly driven by lower mobile trade-in results from our repairs and logistics business, including a $39.0 million impact resulting from a previously disclosed mobile program contract change. Net investment income declined $17.5 million, or 28%, primarily due to lower cash yields, lower income from real estate and lower yielding new money bond purchases.
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Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $36.1 million, or 2%, to $1.72 billion for Third Quarter 2020 from $1.68 billion for Third Quarter 2019. The increase was primarily due to a $78.6 million, or 10%, increase in amortization of deferred acquisition costs and value of business acquired, mainly related to prior period growth from our Global Automotive business. The increase was partially offset by a decrease in policyholder benefits of $26.7 million, or 7%, primarily due to lower global losses in our Global Automotive business, driven in part by COVID-19. This increase was also partially offset by a decrease in underwriting, general and administrative expenses of $15.8 million, or 3%, primarily due to a mobile program contract change and lower trade-in volumes in our domestic repairs and logistics business and favorable foreign exchange, partially offset by growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Income
Segment net income increased $37.3 million, or 12%, to $349.3 million for Nine Months 2020 from $312.0 million for Nine Months 2019, and included a $6.7 million after-tax benefit for a third eventclient recoverable in our Connected Living business. Excluding this item, the increase in net income was mostly driven by our Connected Living business, primarily due to continued mobile subscriber growth in North America and Asia Pacific and improved profitability from extended service contracts. The increase was also due to higher income and organic growth in our Global Automotive business, as well as $9.2 million of client benefits. These increases were partially offset by lower income in our Global Financial Services and Other business mainly due to lower volumes, higher loss experience, and anticipated declines from domestic business in run-off. The increase was further offset by a reduction in net investment income due to lower cash yields, lower income from real estate and lower yielding new money bond purchases and unfavorable foreign exchange volatility.
Total Revenues
Total revenues increased $246.6 million, or 5%, to $5.66 billion for Nine Months 2020 from $5.42 billion for Nine Months 2019. Net earned premiums increased $299.9 million, or 7%, primarily driven by continued growth from prior period production in our Global Automotive business and growth in our Connected Living business, mainly due to growth in extended service contract programs and continued subscriber growth from mobile protection programs. These increases in net earned premiums were partially offset by unfavorable foreign exchange and a decrease in our Global Financial Services and Other business, mainly due to domestic business in run-off. Fees and other income decreased $19.3 million, or 3%, primarily due to lower mobile trade-in results, including a $39 million impact resulting from a previously disclosed mobile program contract change, partially offset by an $11.1 million benefit for a client recoverable in our Connected Living business. Investment income decreased $34.0 million, or 19%, primarily due to lower cash yields, lower income from real estate, lower yielding new money bond purchases and unfavorable foreign exchange volatility.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $200.6 million, or 4%, to $5.21 billion for Nine Months 2020 from $5.01 billion for Nine Months 2019, primarily driven by amortization of deferred acquisition costs and value of business acquired, which increased $281.3 million, or 13%, primarily due to growth from our Global Automotive and Connected Living businesses. Underwriting, general and administrative expenses increased $26.8 million, or 2%, primarily due to growth in our mobile protection and extended service contract programs within our Connected Living business and growth in our Global Automotive business, partially offset by a mobile program contract change in our domestic repairs and logistics business and favorable foreign exchange. These increases were partially offset by a decrease in policyholder benefits of $107.5 million, or 9%, mostly due to a favorable mix of mobile business, lower loss experience within our Connected Living and Global Automotive businesses, in part due to COVID-19, and favorable foreign exchange, partially offset by an increase from growth in our Connected Living business.
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Global Housing
Overview
The table below presents information regarding the Global Housing segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$453.6 $475.2 $1,374.6 $1,407.1 
Fees and other income37.7 35.1 106.0 113.3 
Net investment income16.5 22.4 54.9 66.6 
Total revenues507.8 532.7 1,535.5 1,587.0 
Benefits, losses and expenses:
Policyholder benefits272.8 245.8 651.9 652.5 
Amortization of deferred acquisition costs and value of business acquired56.8 47.3 169.9 158.7 
Underwriting, general and administrative expenses162.2 187.6 496.6 541.6 
Total benefits, losses and expenses491.8 480.7 1,318.4 1,352.8 
Segment income before provision for income taxes16.0 52.0 217.1 234.2 
Provision for income taxes2.9 10.4 44.4 48.4 
Segment net income$13.1 $41.6 $172.7 $185.8 
Net earned premiums, fees and other income:
Lender-placed Insurance$258.2 $275.6 $787.5 $831.6 
Multifamily Housing117.9 108.7 338.1 319.3 
Specialty and Other115.2 126.0 355.0 369.5 
Total$491.3 $510.3 $1,480.6 $1,520.4 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income decreased $28.5 million, or 69%, to $13.1 million for Third Quarter 2020 from $41.6 million for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $35.7 million for Third Quarter 2019. Excluding reportable catastrophes, segment net income increased $22.8 million, or 29%, primarily due to more favorable non-catastrophe loss experience across Specialty and Other products and Lender-placed Insurance, driven by lower claims frequency, reserve releases related to run-off business and previously implemented underwriting initiatives. Higher premium rates in our Lender-placed Insurance business, continued growth in Multifamily Housing and our Specialty and Other products also contributed to the increase. The increase was partially offset by declines in our Lender-placed Insurance policies in-force from a financially insolvent client, as well as lower REO volumes as less homes are moving to default or foreclosure due to moratoriums enacted in connection with COVID-19.
Total Revenues
Total revenues decreased $24.9 million, or 5%, to $507.8 million for Third Quarter 2020 from $532.7 million for Third Quarter 2019. Net earned premiums decreased $21.6 million, or 5%, primarily due to the run-off of our small commercial product and declines in our Lender-placed Insurance business, mainly from the reduction of policies in-force for a financially insolvent client and lower REO volume, partially offset by continued growth from renters insurance in our Multifamily Housing business and premium rate increases in our Lender-placed Insurance business. Net investment income decreased $5.9 million, or 26%, primarily due to lower income from real estate related investments and lower cash yields. These decreases were partially offset by an increase in fees and other income of $2.6 million, or 7%, primarily due to an increase in installment fees for renters insurance in our Multifamily Housing business.
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Total Benefits, Losses and Expenses
Total benefits, losses and expenses increased $11.1 million, or 2%, to $491.8 million for Third Quarter 2020 from $480.7 million for Third Quarter 2019. The increase was primarily due to an increase in total policyholder benefits of $27.0 million, or 11%, from higher reportable catastrophe losses related to hurricanes and wildfires across the U.S. in Third Quarter 2020, partially offset by a decrease in non-catastrophe losses, as explained above. This increase was partially offset by a decrease of $15.9 million, or 7%, in amortization of deferred acquisition costs and underwriting, general and administrative expenses, primarily due to lower employment related expenses in our Lender-placed Insurance business.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Income
Segment net income decreased $13.1 million, or 7%, to $172.7 million for Nine Months 2020 from $185.8 million for Nine Months 2019. Segment income for Nine Months 2020 included $109.9 million of reportable catastrophes, primarily related to Hurricane Laura, compared to $41.8 million in Nine Months 2019. Excluding reportable catastrophes, segment net income increased $55.0 million, or 24%, primarily driven by favorable non-catastrophe losses across all major products, higher premium rates in our Lender-placed Insurance business, the absence of losses from our small commercial product and lower operating expenses in our Lender-placed Insurance business. The increase was partially offset by a reduction in policies in-force from a financially insolvent client and lower REO volume and fee income in our Lender-placed Insurance business.
Total Revenues
Total revenues decreased $51.5 million, or 3%, to $1.54 billion for Nine Months 2020 from $1.59 billion for Nine Months 2019. Net earned premiums decreased $32.5 million, or 2%, primarily due to declines in our Lender-placed Insurance business, mainly from the reduction in policies in-force for a financially insolvent client and lower REO volume, as well as declines in our small commercial business. This decrease was partially offset by premium rate increases in our Lender-placed Insurance business, continued growth from renters insurance in Multifamily Housing business, and growth from our Specialty and Other business, mainly sharing economy products. Fees and other income decreased $7.3 million, or 6%, primarily due to a decline in Lender-placed Insurance, mostly due to lower loss draft volume. Net investment income decreased $11.7 million, or 18%, primarily due to lower income from real estate related investments, lower cash yields, and a decrease in invested assets.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $34.4 million, or 3%, to $1.32 billion for Nine Months 2020 from $1.35 billion for Nine Months 2019. The decrease was primarily due to a decrease of $33.8 million, or 5%, in amortization of deferred acquisition costs and underwriting, general and administrative expenses, primarily due to lower employment related expenses in our Lender-placed Insurance business. Policyholder benefits decreased $0.6 million mainly from lower non-catastrophe losses across all major products and the absence of losses from our small commercial product, partially offset by higher reportable catastrophe losses.

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Global Preneed
Overview
The table below presents information regarding the Global Preneed segment’s results of operations for the periods indicated:
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2020201920202019
Revenues:
Net earned premiums$16.0 $15.1 $49.4 $46.3 
Fees and other income35.9 35.7 106.2 103.2 
Net investment income70.1 73.0 210.3 212.7 
Total revenues122.0 123.8 365.9 362.2 
Benefits, losses and expenses:
Policyholder benefits71.1 67.3 211.6 202.1 
Amortization of deferred acquisition costs and value of business acquired18.9 30.3 56.1 65.5 
Underwriting, general and administrative expenses15.3 18.2 48.4 49.8 
Total benefits, losses and expenses105.3 115.8 316.1 317.4 
Segment income before provision for income taxes16.7 8.0 49.8 44.8 
Provision for income taxes3.5 0.6 10.6 8.7 
Segment net income$13.2 $7.4 $39.2 $36.1 
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Income
Segment net income increased $5.8 million, or 78%, to $13.2 million for Third Quarter 2020 from $7.4 million for Third Quarter 2019, primarily due to absence of a $9.9 million after-tax expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period recorded in Third Quarter 2019. This was partially offset by a decrease in investment income.
Total Revenues
Total revenues were relatively flat at $122.0 million for Third Quarter 2020 compared to $123.8 million for Third Quarter 2019 mostly due to decreased investment income primarily driven by lower income from real estate.This was partially offset by increased sales of the Final Need product.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $10.5 million, or 9%, to $105.3 million for Third Quarter 2020 from $115.8 million for Third Quarter 2019. Amortization of deferred acquisition costs and value of business acquired decreased $11.4 million, or 38%, primarily due to the absence of a $14.2 million expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period in Third Quarter 2019. Underwriting, general and administrative expenses decreased $2.9 million, or 16%, due to a decrease in general expenses. This was partially offset by an increase in policyholder benefits of $3.8 million, or 6%, driven by growth in the Caribbean, with protection of updomestic preneed business.
For the Nine Months Ended September 30, 2020 Compared to $27.5the Nine Months Ended September 30, 2019
Net Income
Segment net income increased $3.1 million, in excessor 9%, to $39.2 million for Nine Months 2020 from $36.1 million for Nine Months 2019, primarily due to the absence of a $17.5$9.9 million retention,after-tax expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period recorded in Nine Months 2019. This was partially offset by a decrease in investment income and Latin America protectionan increase in policyholder benefits driven by growth in the domestic preneed business.
Total Revenues
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Total revenues increased $3.7 million, or 1%, to $365.9 million for Nine Months 2020 from $362.2 million for Nine Months 2019, primarily due to growth in pre-funded funeral policies in the U.S. and sales of upthe Final Need product. This was offset by lower investment income driven by an increase in investment expenses related to $423.0our strategic decision to outsource the management of our investment portfolio, lower income from real estate and lower yielding new money bond purchases, partially offset by an increase in invested assets.
Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $1.3 million to $316.1 million for Nine Months 2020 from $317.4 million for Nine Months 2019. Amortization of deferred acquisition costs and value of business acquired decreased $9.4 million, or 14%, primarily due to the absence of a $14.2 million expense related to an out of period adjustment for over-capitalization of deferred acquisition costs occurring over a ten-year period in Nine Months 2019. Underwriting, general and administrative expenses decreased $1.4 million, or 3%, due to decrease in general expenses. This was partially offset by an increase in policyholder benefits of $9.5 million, or 5%, driven by the growth in the domestic preneed business.

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Corporate and Other
Overview
The tables below present information regarding the Corporate and Other’s segment results of operations for the periods indicated:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2020201920202019
Revenues:
Net earned premiums$— $— $— $— 
Fees and other income0.5 0.1 0.5 2.1 
Net investment income3.9 12.0 19.6 33.2 
Net realized gains (losses) on investments16.6 14.9 (54.6)61.5 
Amortization of deferred gains on disposal of businesses2.1 4.4 8.7 16.9 
Total revenues23.1 31.4 (25.8)113.7 
Benefits, losses and expenses:
Policyholder benefits0.3 — 0.7 0.1 
General and administrative expenses29.2 62.1 137.4 174.1 
Goodwill impairment137.8 — 137.8 — 
Iké net losses— 121.1 5.9 130.5 
Interest expense25.5 32.2 77.7 85.2 
Loss on extinguishment of debt— 31.4 — 31.4 
Total benefits, losses and expenses192.8 246.8 359.5 421.3 
Segment loss before benefit for income taxes(169.7)(215.4)(385.3)(307.6)
Benefit for income taxes(6.3)(11.1)(127.8)(31.7)
Segment net loss(163.4)(204.3)(257.5)(275.9)
Less: Net loss (income) attributable to non-controlling interest0.3 (1.6)(1.1)(3.0)
Net loss attributable to stockholders(163.1)(205.9)(258.6)(278.9)
Less: Preferred stock dividends(4.7)(4.7)(14.0)(14.0)
Net loss attributable to common stockholders$(167.8)$(210.6)$(272.6)$(292.9)
For the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019
Net Loss Attributable to Common Stockholders
Segment net loss attributable to common stockholders decreased $42.8 million, or 20%, to $167.8 million for Third Quarter 2020 from $210.6 million for Third Quarter 2019. The decrease in net loss was primarily due to the absence of a $124.8 million after-tax loss related to a decrease in the estimated fair value of Iké and $29.6 million of protectionafter-tax debt related charges associated with refinancing debt at a lower interest rate that were both recorded in excessThird Quarter 2019. The decrease in net loss was also due $10.0 million of lower net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina, a highly inflationary currency, and a $9.7 million of income, net of certain exit costs, from the sale of our CLO asset management platform. The decrease in net loss was partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill.
Total Revenues
Total revenues decreased $8.3 million, or 26%, to $23.1 million for Third Quarter 2020 from $31.4 million for Third Quarter 2019, primarily due to an $8.1 million decrease in net investment income driven by lower income from a higher concentration of lower yielding liquid investments for Third Quarter 2020 compared to Third Quarter 2019 and lower income from real estate.
Total Benefits, Losses and Expenses
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Total benefits, losses and expenses decreased $54.0 million, or 22%, to $192.8 million for Third Quarter 2020 from $246.8 million for Third Quarter 2019, mostly due to the absence of the $121.1 million loss related to a decrease in the estimated fair value of Iké and $37.4 million of debt-related charges associated with refinancing debt at a lower interest rate that were both recorded in Third Quarter 2019. The decrease was also due to a $12.2 million income, net of certain exit costs, from the sale of our CLO asset management platform, $10.0 million of lower net losses from foreign change related to the remeasurement of net monetary assets in Argentina and a $9.6 million loss on sale of Mortgage Solutions. The decrease was partially offset by the $137.8 million impairment on the Global Preneed goodwill.
For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
Net Loss Attributable to Common Stockholders
Segment net loss attributable to common stockholders decreased $20.3 million, or 7%, to $272.6 million for Nine Months 2020 from $292.9 million for Nine Months 2019 due to the absence of a $4.5$131.4 million retention.of after-tax loss related to a decrease in the estimated fair value of Iké that was recorded in Nine Months 2019, an $84.4 million tax benefit related to the utilization of net operating losses in connection with the CARES Act and the absence of $29.6 million of after-tax debt related charges associated with refinancing debt at a lower interest rate from Nine Months 2019. These increases were partially offset by the $135.6 million after-tax impairment on the Global Preneed goodwill and a $67.7 million after-tax decrease in net unrealized gains from changes in fair value of our equity securities and collateralized loan obligations that included $34.4 million of after-tax net unrealized losses for Nine Months 2020 compared to $33.3 million of after-tax net unrealized gains for Nine Months 2019, as well as $17.3 million of after-tax direct and incremental operating expenses incurred in connection with the COVID-19 pandemic.
Total Revenues
Total revenues decreased $139.5 million to $(25.8) million for Nine Months 2020 from $113.7 million for Nine Months 2019, primarily due to an increase in unrealized losses on investments mostly related to a net decrease in the fair value of our equity securities and collateralized loan obligations. The decrease was also due to lower net investment income, driven by lower income from a higher concentration of lower yielding liquid investments for Third Quarter 2020 compared to Third Quarter 2019 and lower income from real estate, as well as lower amortization of deferred gains associated with the sale of Assurant Employee Benefits.
Total Benefits, Losses and Expenses
Total benefits, losses and expenses decreased $61.8 million, or 15%, to $359.5 million for Nine Months 2020 from $421.3 million for Nine Months 2019, primarily due to the absence of certain events that occurred in Nine Months 2019, mainly $124.6 million of lower losses associated with Iké, $37.4 million of debt related charges associated with refinancing debt at a lower interest rates and a $15.6 million impairment of certain intangible assets from our acquisition of Green Tree Insurance Agency. The decrease was also due to an $11.5 million decrease in integration expenses associated with the TWG acquisition, $11.3 million of lower net losses from foreign exchange related to the remeasurement of net monetary assets in Argentina and $10.8 million of income, net of certain exit costs, from the sale of our CLO asset management platform. These decrease were partially offset by the $137.8 million impairment on the Global Preneed goodwill and $21.9 million of direct and incremental operating expenses incurred in connection with the COVID-19 pandemic.

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Investments
We had total investments of $15.21 billion and $14.57 billion as of September 30, 2020 and December 31, 2019, respectively. Net unrealized gains on our fixed maturity securities portfolio increased by $459.1 million during Nine Months 2020, from $1.26 billion as of December 31, 2019 to $1.72 billion as of September 30, 2020, primarily due to spread compression, partially offset by decreases in foreign exchange rates in several countries.
The following table shows the credit quality of our fixed maturity securities portfolio as of the dates indicated:
 Fair value as of
Fixed Maturity Securities by Credit QualitySeptember 30, 2020December 31, 2019
Aaa / Aa / A$8,185.0 62.5 %$8,014.7 65.1 %
Baa4,274.8 32.6 %3,734.7 30.3 %
Ba534.3 4.1 %480.7 3.9 %
B and lower100.4 0.8 %92.3 0.7 %
Total$13,094.5 100.0 %$12,322.4 100.0 %
The following table shows the major categories of net investment income for the periods indicated:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Fixed maturity securities$120.6 $125.2 $359.5 $370.3 
Equity securities5.1 5.2 15.5 16.7 
Commercial mortgage loans on real estate8.8 8.6 27.1 26.3 
Short-term investments1.1 5.0 5.4 16.4 
Other investments2.9 10.7 11.2 23.0 
Cash and cash equivalents1.5 7.5 10.8 21.0 
Revenue from consolidated investment entities (1)3.9 25.6 56.3 90.2 
Total investment income143.9 187.8 485.8 563.9 
Investment expenses(4.9)(6.3)(20.6)(18.3)
Expenses from consolidated investment entities (1)(3.9)(12.0)$(36.9)$(55.6)
Net investment income$135.1 $169.5 $428.3 $490.0 
(1)The following table shows the net of revenues and expenses from consolidated investment entities for the periods indicated. Refer to Note 5 and 12 to the Consolidated Financial Statements included elsewhere in this Report for further detail.
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Investment income from direct investments in:
Real estate fund (1)$— $6.5 $8.3 $17.3 
CLO entities— 5.3 8.0 12.1 
Investment management fees— 1.8 3.1 5.2 
Net investment income from consolidated investment entities$— $13.6 $19.4 $34.6 
(1)The investment income from the real estate funds includes (loss) income attributable to non-controlling interest of $1.2 million for the three months ended September 30, 2019 and $1.1 million and $2.4 million for the nine months ended September 30, 2020 and 2019, respectively.
Net investment income decreased $34.4 million, or 20%, to $135.1 million for Third Quarter 2020 from $169.5 million for Third Quarter 2019. The decrease was primarily driven by a decrease in income from real estate, lower income from short term investments and cash and cash equivalents driven by lower cash yields, and a reduction in income from fixed maturity securities due to lower yielding new money bond purchases.
Net investment income decreased $61.7 million, or 13%, to $428.3 million for Nine Months 2020 from $490.0 million for Nine Months 2019. The decrease was primarily driven by lower income from short term investments and cash and cash equivalents, mainly due to lower cash yields and unfavorable foreign exchange, and a decrease in income from real estate. The decrease was also due to a reduction in income from fixed maturity securities due to lower yielding new money bond purchases.
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As of September 30, 2020, we owned $68.0 million of securities guaranteed by financial guarantee insurance companies. Included in this amount was $58.6 million of municipal securities, whose credit rating was AA- with the guarantee, but would have had a rating of A without the guarantee.
For more information on our investments, see Notes 11 and 13 to the Consolidated Financial Statements included elsewhere in this Report.

Liquidity and Capital Resources
COVID-19 did not materially impact our liquidity and capital resources during Third Quarter 2020. Throughout this period, we believe our liquidity remained strong. As of September 30, 2020, we had $460.3 million of holding company liquidity. Refer to the risk factor disclosed in Item 8.01 of our Current Report on Form 8-K filed on May 5, 2020 for a discussion of COVID-19 related factors that could impact our liquidity and capital resources in the future.
The CARES Act, which was enacted on March 27, 2020, includes measures to assist companies in response to the COVID-19 pandemic. These measures include the ability to carry back net operating losses to prior years taxed at higher rates and defer the due dates of certain tax payments. Pursuant to the CARES Act, we carried back net operating losses to 2013 and 2014, resulting in a refund claim of $198.4 million. We also deferred our first quarter 2020 and second quarter 2020 federal estimated tax payments and payments related to the employer’s portion of social security tax in 2020. This will have the effect of increasing cash outlays for these taxes during the second half of 2020, 2021 and 2022. In July 2020, we received the full amount of the refund plus interest related to the net operating losses we carried back under the CARES Act, a portion of which was included in Third Quarter 2020 holding company liquidity. We continue to monitor and assess the potential tax impact of this and other COVID-19-related legislation on our liquidity, financial position and results of operations.
Regulatory Requirements
Assurant, Inc. is a holding company and, as such, has limited direct operations of its own. Our assets consist primarily of the capital stock of our subsidiaries. Accordingly, our future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries, such as payments under our tax allocation agreement and under management agreements with our subsidiaries. Our insurance subsidiaries’ ability to pay such dividends and to make such other payments will be limited by applicable laws and regulations of the jurisdictions in which our subsidiaries are domiciled, which subject our subsidiaries to significant regulatory restrictions. The dividend requirements and regulations vary from jurisdiction to jurisdiction and by type of insurance provided by the applicable subsidiary. These laws and regulations require, among other things, our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends they can pay to the holding company. Regulatory actions in response to COVID-19 could further restrict our insurance subsidiaries’ ability to pay us dividends. See “Item 1—Business—Regulation—U.S. Insurance Regulation” and “Item 1A—Risk Factors—Legal and Regulatory Risks—Changes in insurance regulation may reduce our profitability and limit our growth”growth” in our 20182019 Annual Report.Report and the risk factor disclosed in Item 8.01 of our Current Report on Form 8-K filed on May 5, 2020. Along with solvency regulations, the primary driver in determining the amount of capital used for dividends is the level of capital needed to maintain desired financial strength ratings from A.M. Best Company (“A.M. Best”).
Regulators or rating agencies could become more conservative in their methodology and criteria, increasing capital requirements for our insurance subsidiaries.subsidiaries and may base these changes using different factors including industry studies, management actions or market conditions. The rating agencies’ assessment of the Company may consider the results of internally developed stress testing models and potential impacts to our earnings and capital, including from COVID-19 and the associated economic environment. For further information on our ratings and the risks of ratings downgrades, see “Item 1—Business—Ratings” and “Item 1A—Risk Factors—Financial Risks—A decline in the financial strength ratings of our insurance company subsidiaries could adversely affect our results of operations and financial condition” in our 20182019 Annual Report.
For 2019,the year ending December 31, 2020, the maximum amount of dividends our regulated U.S. domiciled insurance subsidiaries could pay us, under applicable laws and regulations currently in effect and without prior regulatory approval, is approximately $353.3$423.7 million. In addition, our international and non-insurance subsidiaries provide additional sources of dividends.
Holding Company
As of September 30, 2019,2020, we had approximately $385.0$460.3 million in holding company liquidity, $160.0which was $235.3 million above our targeted minimum level of $225.0 million. The target minimum level of holding company liquidity, which can be used for unforeseen capital needs at our subsidiaries or liquidity needs at the holding company, is calibrated based on approximately one year of corporate operating and interest expenses and Mandatory Convertible Preferred Stock (“MCPS”)
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dividends. We use the term “holding company liquidity” to represent the portion of cash and other liquid marketable securities held at Assurant, Inc., out of a total of $544.2$576.1 million of holding company investment securities and cash, which we are not otherwise holding for a specific purpose as of the balance sheet date. We can use suchthe assets that comprise holding company liquidity for stock repurchases, stockholder dividends, acquisitions and other corporate purposes.
Dividends or returns of capital paid by our subsidiaries, net of infusions and excluding amounts used for acquisitions or received for dispositions, were approximately $472.0$529.0 million for Nine Months 2019.2020. In 2018,2019, dividends, net of infusions and excluding amounts used for acquisitions or received for dispositions, made to the holding company were $739.0 million, which included approximately $727.0 million from subsidiaries in our Global Housing, Global Lifestyle and Global Preneed operating segments and approximately $12.0 million from Assurant Health and capital formerly backing Assurant Employee Benefits.$748.0 million.
In addition to paying expenses, making interest payments on indebtedness and making dividend payments on our preferred stock, our capital management strategy provides for several uses of the cash generated by our subsidiaries, including without limitation, returning capital to common stockholders through share repurchases and dividends, investing in our business to support growth in targeted areas and making prudent and opportunistic acquisitions. From time to time, we may also seek to purchase outstanding debt in open market repurchases or privately negotiated transactions. During Nine Months 20192020 and the year ended December 31, 2018,2019, we made common stock repurchases and paid dividends to our common stockholders of $279.1$268.3 million and $266.1$426.3 million, respectively. We expect to deploy capital primarily to support business growth, fund other investments and return capital to shareholders, subject to approval by the Company’s Board of Directors (the “Board”) approval and market conditions.

In 2014,May 2020, we made an approximately 40% investment in Iké, a services assistance business, for which we paid approximately $110.0 million. We also entered into a shareholders agreement with the majority shareholders that provided us with the right to acquire the remainder of Iké from the majority shareholders, and the majority shareholders the right to put theirsold our minority interests in Iké and terminated our obligations to us, in mid-2019.purchase the remaining shares of Iké (collectively, the “Sale”). In April 2019, we entered into a cooperation agreementconnection with the majority shareholdersSale, we provided financing to Iké Grupo in an aggregate principal amount of $34.0 million (the “Iké Loan”). The Iké Loan matures in May 2025, bears floating interest at a rate equal to explore strategic alternatives. We also agreed to delaythree-month LIBOR plus 4.25% per annum payable quarterly and provides for quarterly principal amortization payments through the call and put rights to January 31, 2020. Based onmaturity date. The outstanding balance of the review of strategic alternativesIké Loan as of September 30, 2019, we have decided to pursue the sale of our interests in Iké. In Third Quarter 2019, we recorded a $124.8 million after-tax loss2020 was $33.2 million.
For Nine Months 2020, net cash outflows related to the Sale were $85.3 million, including net proceeds paid of $73.3 million and the Iké Loan of $34.0 million, less cash inflows of $22.0 million upon settling a decreasefinancial derivative we had entered into in the estimated fair value of Iké. There can be no assurance thatconnection with our effortsagreement to sell our interests in Iké will be successful. In addition, there can be no assurance that. The financial derivative had provided an economic hedge against declines in the final sales price will approximate the expected sales price, which would result in an adjustmentMexican Peso relative to the lossU.S. Dollar since the purchase price was to be paid in a future period.Mexican Pesos. See Note 5 in the accompanying Notes to Consolidated Financial Statements elsewhere in this Report.
On May 1, 2020, we completed our acquisition of AFAS, a provider of finance and insurance products and services including vehicle service contracts, guaranteed asset protection insurance and other ancillary products sold directly through a network of nearly 600 franchised dealership clients across 40 states, for total consideration of $176.9 million. See Note 4 in the accompanying Notes to Consolidated Financial Statements elsewhere in this Report.
In October 2020, we announced the signing of a definitive agreement to acquire HYLA Mobile, a provider of smartphone software and trade-in and upgrade services, for $325.0 million. The acquisition is expected to close by the end of 2020, subject to regulatory and other customary approvals, and to be funded through a combination of existing cash at the holding company and new debt to be issued before closing. In parallel, we are exploring a range of strategic alternatives for Global Preneed, including the possible sale of the business, to focus on opportunities within the broader lifestyle and housing portfolio.
In management’s opinion, dividends from our subsidiaries and other expected cash inflows together with our income and gains from our investment portfolio and cash and liquid assets on hand will provide sufficient liquidity to meet our needs in the ordinary course of business.
Assurant Subsidiaries
The primary sources of funds for our subsidiaries consist of premiums and fees collected, proceeds from the sales and maturity of investments and net investment income. Cash is primarily used to pay insurance claims, agent commissions, operating expenses and taxes. We generally invest our subsidiaries’ excess funds in order to generate investment income.
We conduct periodic asset liability studies to measure the duration of our insurance liabilities, to develop optimal asset portfolio maturity structures for our significant lines of business and ultimately to assess that cash flows are sufficient to meet the timing of cash needs. These studies are conducted in accordance with formal company-wide Asset Liability Management guidelines.
To complete a study for a particular line of business, models are developed to project asset and liability cash flows and balance sheet items under a large, varied set of plausible economic scenarios. These models consider many factors including the current investment portfolio, the required capital for the related assets and liabilities, our tax position and projected cash flows from both existing and projected new business.
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Alternative asset portfolio structures are analyzed for significant lines of business. An investment portfolio maturity structure is then selected from these profiles given our return hurdle and risk preference. SensitivityScenario testing of significant liability assumptions and new business projections is also performed. Specific to COVID-19, several scenarios around impact on near term asset and liability projections, including new business, were modeled and evaluated.
Our liabilities generally have limited policyholder optionality, which means that the timing of payments is relatively insensitive to the interest rate environment. In addition, our investment portfolio is largely comprised of highly liquid fixed maturity securities with a sufficient component of such securities invested that are near maturity which may be sold with minimal risk of loss to meet cash needs. Therefore, we believe we have limited exposure to disintermediation risk.
Generally, our subsidiaries’ premiums, fees and investment income, along with planned asset sales and maturities, provide sufficient cash to pay claims and expenses. However, there may be instances when unexpected cash needs arise in excess of that available from usual operating sources. In such instances, we have several options to raise needed funds, including selling assets from the subsidiaries’ investment portfolios, using holding company cash (if available), issuing commercial paper, or drawing funds from the five-year senior unsecured $450.0 million revolving credit agreement (the “Credit Facility”) with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association (of which $445.5 million was available as of September 30, 2020). In addition, in January 2018, we filed an automatically effective shelf registration statement on Form S-3 with the SEC. This registration statement allows us to issue equity, debt or other types of securities through one or more methods of distribution. The terms of any offering would be established at the time of the offering, subject to market conditions. If we decide to make an offering of securities, we will consider the nature of the cash requirement as well as the cost of capital in determining what type of securities we may offer.

Dividends and Repurchases
We paid dividends of $0.60$0.63 per common share on September 16, 201922, 2020 to stockholders of record as of August 26, 2019,31, 2020 and dividends of $1.6250 per share of MCPS on September 16, 201915, 2020 to stockholders of record as of September 1, 2019.2020. Any determination to pay future dividends will be at the discretion of the Board and will be dependent upon various factors, including: our subsidiaries’ payments of dividends and other statutorily permissible payments to us; our results of operations and cash flows; our financial condition and capital requirements; general business conditions and growth prospects; legal, tax, regulatory and contractual restrictions on the payment of dividends; and other factors the Board deems relevant.relevant, including the impact of COVID-19 on our business. Payments of dividends on shares of common stock are subject to the preferential rights of the MCPS. The Credit Facility contains limitations on our ability to pay dividends to our stockholders if we are in default, or such dividend payments would cause us to be in default, of our obligations thereunder. In addition, if we defer the payment of interest on our Subordinated Notes (as defined below), we generally may not make payments on our capital stock.
During Nine Months 2019,2020, the Company repurchased 1,582,4481,312,443 shares of our outstanding common stock at a cost of $166.1$153.2 million, exclusive of commissions. As of September 30, 2019, $595.12020, $333.1 million remained under the Board repurchase authorization. The timing and the amount of future repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors.factors, including the impact of COVID-19 on our business.
Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common and preferred stock.
Mandatory Convertible Preferred Stock
In March 2018, we issued 2,875,000 shares of our 6.50% MCPS, with a par value of $1.00 per share. Each outstanding share of MCPS will convert automatically on March 15, 2021 into between 0.93690.9391 (the “minimum conversion rate”) and 1.12421.1269 shares of common stock, subject to customary anti-dilution adjustments. At any time prior to March 2021, holders may elect to convert each share of MCPS into shares of common stock at the minimum conversion rate or in the event of a fundamental change at the specified rates defined in the Certificate of Designations of the MCPS.
Dividends on the MCPS will be payable on a cumulative basis when, as and if declared, at an annual rate of 6.50% of the liquidation preference of $100.00 per share. We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, or in any combination of cash and shares of our common stock quarterly, commencing in June 2018 and ending in March 2021. No dividend or distribution may be declared or paid on common stock or any other class or series of junior stock, and no common stock or any other class or series of junior stock or parity stock may be purchased, redeemed or otherwise acquired for consideration unless all accumulated and unpaid dividends on the MCPS for all preceding dividend periods have been declared and paid in full, subject to certain limited exceptions. We paid preferred stock dividends of $4.7 million for each of Third Quarter 2020 and Third Quarter 2019, and $14.0 million for Third Quarter 2019each of Nine Months 2020 and Nine Months 2019, respectively.2019. For additional information regarding the MCPS, see Note 1518 in the Consolidated Financial Statements included elsewhere in this Report.
Credit Facility
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We have a Credit Facility with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association. The Credit Facility provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided we are in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for our commercial paper program or for general corporate purposes. As of September 30, 2019, $441.0 million was available under the Credit Facility and $9.0 million letters of credit were outstanding.
Senior and Subordinated NotesOutstanding Debt
The following table shows the principal amount and carrying value of our outstanding debt, less unamortized discount and issuance costs as applicable, as of September 30, 20192020 and December 31, 2018:2019:

September 30, 2020December 31, 2019
Principal AmountCarrying ValuePrincipal AmountCarrying Value
Floating Rate Senior Notes due March 2021 (1)$50.0 $50.0 $50.0 $49.9 
4.00% Senior Notes due March 2023350.0 348.8 350.0 348.5 
4.20% Senior Notes due September 2023300.0 298.2 300.0 297.8 
4.90% Senior Notes due March 2028300.0 297.1 300.0 296.8 
3.70% Senior Notes due February 2030350.0 347.0 350.0 346.8 
6.75% Senior Notes due February 2034275.0 272.2 275.0 272.1 
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)400.0 395.3 400.0 395.0 
Total Debt$2,008.6 $2,006.9 
(1)Bears floating interest at a rate equal to three-month LIBOR plus 1.25% per annum.
 September 30, 2019 December 31, 2018
 Principal Amount Carrying Value Principal Amount Carrying Value
Floating Rate Senior Notes due March 2021 (1)$50.0
 $49.8
 $300.0
 $298.1
4.00% Senior Notes due March 2023350.0
 348.4
 350.0
 348.1
4.20% Senior Notes due September 2023300.0
 297.7
 300.0
 296.8
4.90% Senior Notes due March 2028300.0
 296.8
 300.0
 297.6
3.70% Senior Notes due February 2030350.0
 346.7
 —
 —
6.75% Senior Notes due February 2034275.0
 272.1
 375.0
 370.9
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)400.0
 394.8
 400.0
 394.5
Total debt  $2,006.3
   $2,006.0
(2)Bears a 7.00% annual interest rate to March 2028 and an annual interest rate equal to three-month LIBOR plus 4.135% thereafter.
(1)Bears floating interest at a rate equal to three-month LIBOR plus 1.25%.
(2)Bears a 7.00% annual interest rate from March 2018 to March 2028 and annual interest rate equal to three-month LIBOR plus 4.135% thereafter.

Senior and Subordinated Notes
2030 Senior Notes: In August 2019, we issued senior notes with an aggregate principal amount of $350.0 million which bear interest at a rate of 3.70% per year, mature in February 2030 and were issued at a 0.035% discount to the public (the “2030 Senior Notes”). Interest is payable semi-annually in arrears beginning in February 2020. Prior to November 2029, we may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.
We used the net proceeds from the offering, together with cash on hand, to purchase $100.0 million of our 6.75% senior notes due 2034 in a cash tender offer, to redeem $250.0 million of our floating rate senior notes due 2021 and to pay related premiums, fees and expenses.
2021, 2023 and 2028 Senior Notes
In March 2018, we issued the following three series of senior notes with an aggregate principal amount of $900.0 million:
•
2021 Senior Notes: The first series of senior notes is $300.0 million in principal amount, bears floating interest rate equal to three-month LIBOR plus 1.25% (3.36% as of September 30, 2019)
•2021 Senior Notes: The first series of senior notes is $300.0 million in principal amount, bears floating interest at a rate equal to three-month LIBOR plus 1.25% (3.36% as of September 30, 2020) per year and matures in March 2021 (the “2021 Senior Notes”). Interest on the 2021 Senior Notes is payable quarterly. Commencing on or after March 2019, we may redeem the 2021 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest. In August 2019, we redeemed $250.0 million of the $300.0 million outstanding aggregate principal amount of the 2021 Senior Notes.
•2023 Senior Notes: The second series of senior notes is $300.0 million in principal amount, bears interest at 4.20% per year, matures in September 2023 and was issued at a 0.233% discount to the public (the “2023 Senior Notes”). Interest on the 2023 Senior Notes is payable semi-annually. Prior to August 2023, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.
•2028 Senior Notes: The third series of senior notes is $300.0 million in principal amount, bears interest at 4.90% per year, matures in March 2028 and was issued at a 0.383% discount to the public (the “2028 Senior Notes”). Interest on the 2028 Senior Notes is payable semi-annually. Prior to December 2027, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part of a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.
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•
2023 Senior Notes: The second series of senior notes is $300.0 million in principal amount, bears interest at 4.20% per year, matures in September 2023 and was issued at a 0.233% discount to the public (the “2023 Senior Notes”). Interest on the 2023 Senior Notes is payable semi-annually. Prior to August 2023, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.
•
2028 Senior Notes: The third series of senior notes is $300.0 million in principal amount, bears interest at 4.90% per year, matures in March 2028 and was issued at a 0.383% discount to the public (the “2028 Senior Notes”). Interest on the 2028 Senior Notes is payable semi-annually. Prior to December 2027, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part of a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

The interest rate payable on each of the 2021 Senior Notes, the 2023 Senior Notes, the 2028 Senior Notes and the 2030 Senior Notes will be subject to adjustment from time to time, if either Moody’s Investor Service, Inc. (“Moody’s”) or S&P Global Ratings, a division of S&P Global Inc. (“S&P”) downgrades the credit rating assigned to such series of senior notes to Ba1 or below or to BB+ or below, respectively, or subsequently upgrades the credit ratings once the senior notes are at or below such levels. The following table details the increase in interest rate over the issuance rate by rating with the impact equal to the sum of the number of basis points next to such rating for a maximum increase of 200 basis points over the issuance rate:
Rating Agencies
Rating LevelsMoody’s (1)S&P (1)Interest Rate Increase (2)
1Ba1BB+25 basis points
2Ba2BB50 basis points
3Ba3BB-75 basis points
4B1 or belowB+ or below100 basis points
(1)Including the equivalent ratings of any substitute rating agency.
(2)Applies to each rating agency individually.
(1)Including the equivalent ratings of any substitute rating agency.
(2)Applies to each rating agency individually.
Subordinated Notes
In March 2018, we issued fixed-to-floating rate subordinated notes due March 2048 with a principal amount of $400.0 million (the “Subordinated Notes”), which bear interest from March 2018 to March 2028 at an annual rate of 7.00%, payable semi-annually. The Subordinated Notes will bear interest at an annual rate equal to three-month LIBOR plus 4.135%, payable quarterly, beginning in June 2028. On or after March 2028, we may redeem the Subordinated Notes in whole at any time or in part from time to time, at a redemption price equal to their principal amount plus accrued and unpaid interest provided that if they are not redeemed in whole, a minimum amount must remain outstanding. At any time prior to March 2028, we may redeem the Subordinated Notes in whole but not in part after the occurrence of a tax event, rating agency event or regulatory capital event as defined in the global note representing the Subordinated Notes, at a redemption price equal to (i) with respect to a rating agency event 102% of their principal amount and (ii) with respect to a tax event or regulatory capital event, their principal amount plus accrued and unpaid interest.
In addition, so long as no event of default with respect to the Subordinated Notes has occurred and is continuing, we have the right, on one or more occasions, to defer the payment of interest on the Subordinated Notes for one or more consecutive interest periods for up to five years as described in the global note representing the Subordinated Notes. During a deferral period, interest will continue to accrue on the Subordinated Notes at the then-applicable interest rate. At any time when we have given notice of our election to defer interest payments on the Subordinated Notes, we generally may not make payments on or redeem or purchase any shares of our capital stock or any of our debt securities or guarantees that rank upon our liquidation on a parity with or junior to the Subordinated Notes, subject to certain limited exceptions.
Other Notes
In March 2013, we issued two series of senior notes with an aggregate principal amount of $700.0 million. The first series was $350.0 million in principal amount, bore interest at 2.50% per year and was repaid at maturity in March 2018. The second series is $350.0 million in principal amount and was issued at a 0.365% discount to the public. This series bears interest at 4.00% per year and matures in March 2023. Interest is payable semi-annually. We may redeem the outstanding series of senior notes in whole or in part at any time and from time to time before maturity at the redemption price set forth in the global note representing the outstanding series of senior notes.
In February 2004, we issued senior notes with an aggregate principal amount of $475.0 million at a 0.61% discount to the public, which bear interest at 6.75% per year and matures in February 2034. Interest is payable semi-annually. These senior notes are not redeemable prior to maturity. In December 2016 and August 2019, we completed cash tender offers of $100.0 million each in aggregate principal amount of such senior notes. A loss on extinguishment of debt of $31.4 million was reported in Third Quarter 2019the third quarter of 2019.
Credit Facility and Commercial Paper Program
We have a Credit Facility that provides for revolving loans and the outstandingissuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate principal amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided we are in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for our commercial paper program or for general corporate purposes.
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On March 27, 2020, we drew down $200.0 million from our Credit Facility. We repaid the seniorloan on July 29, 2020, at the end of the then-current interest period, during which the loan bore interest at a floating rate equal to one-month LIBOR plus 1.50% per annum.
Our commercial paper program requires us to maintain liquidity facilities either in an available amount equal to any outstanding notes from the program or in an amount sufficient to maintain the ratings assigned to the notes issued from the program. Our commercial paper is rated AMB-1 by A.M. Best, P-3 by Moody’s and A-2 by S&P. Our subsidiaries do not maintain commercial paper or other borrowing facilities. This program is currently backed up by the Credit Facility, of which $445.5 million out of the $450.0 million was $275.0 millionavailable as of September 30, 2019.2020, due to $4.5 million of letters of credit outstanding.
Retirement and Other Employee Benefits
For information on our retirement and other employee benefits, see Note 1720 to the Consolidated Financial Statements, included elsewhere in this Report.

Cash Flows
We monitor cash flows at the consolidated, holding company and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs, making adjustments to the forecasts when needed.
The table below shows our net cash flows for the periods indicated:
 For the Nine Months Ended September 30,
Net cash provided by (used in):20202019
Operating activities$901.6 $1,167.9 
Investing activities(275.2)(613.6)
Financing activities(296.8)(50.1)
Effect of exchange rate changes on cash and cash equivalents6.3 (8.9)
Net change in cash$335.9 $495.3 
 For the Nine Months Ended September 30,
Net cash provided by (used in):2019 2018
Operating activities$1,167.9
 $454.6
Investing activities(613.6) (1,904.4)
Financing activities(50.1) 1,790.4
Effect of exchange rate changes on cash and cash equivalents(8.9) (30.8)
Net change in cash$495.3
 $309.8
We typically generate operating cash inflows from premiums collected from our insurance products, fees received for services and income received from our investments while outflows consist of policy acquisition costs, benefits paid and operating expenses. These net cash flows are then invested to support the obligations of our insurance products and required capital supporting these products. Our cash flows from operating activities are affected by the timing of premiums, fees, and investment income received and expenses paid.
Net cash provided by operating activities was $901.6 million for Nine Months 2020 compared to $1.17 billion for Nine Months 2019 compared to $454.6 million for Nine Months 2018.2019. The increasedecrease in net cash provided by operating activities was primarily due to growththe timing of certain cash payments and business activities from our Global Lifestyle business. The primary factors contributing to the decrease in cash from operations included the absence of a prior year receipt of prepaid premiums for our Japan business that benefittedgiven subsequent changes in payment terms under the program, an increase in advanced commission payments as a result of subscriber growth from the TWG acquisition and organic growth in Connected Living from new and existing mobile protection programs domestically and internationally as well asgrowth from our Global Automotive business, the timing of cumulative payments to a decreasevendor related to a program initiated in claim2019 for acquiring mobile devices used to meet insurance claims or generate profits through sales to third parties, and an increase in follow-on commission payments for reportable catastrophes. Additionally, Nine Months 2018 includedassociated with both higher fourth quarter 2019 premiums and 2019 full year programs. These decreases were partially offset by higher collections of premium receivable balances mostly due to timing and the receipt of a $41.5$204.9 million payment of an accrued indemnification liabilitytax refund, which includes interest, related to the previous sale of our general agency business inability to carryback net operating losses to prior periods under the prior year.CARES Act.
Net cash used in investing activities was $275.2 million for Nine Months 2020 compared to $613.6 million for Nine Months 2019 compared to $1.90 billion for Nine Months 2018.2019. The decrease in net cash used in investing activities was primarily due to the acquisition of TWGdriven by The decrease in the Second Quarter 2018 when $1.49 billion of cash was used to fund a portion of the $2.47 billion purchase price. Also contributing to the decrease was less cash used in
investing activities fromwas primarily driven by our CIEs, mostly dueconsolidated investment entities (“CIEs”) related to the timing of purchases of securities in connection with CLO structures launched in each year. See Note 92019. The decrease was partially offset by $135.8 million of cash used for the AFAS acquisition, which was partially offset by AFAS cash acquired of $39.6 million, and $73.3 million of net cash used for the sale of our interests in Iké in Second Quarter 2020. For additional information on CIEs, the AFAS acquisition and our sale of Iké, see Notes 12, 4 and 5, respectively, to the Consolidated Financial Statements included elsewhere in this Report, for additional information. These are partially offset by normalReport. The remaining changes inwere due to the ongoing management of our operatinginvestment portfolio.
Net cash used in financing activities was $296.8 million for Nine Months 2020 compared to $50.1 million for Nine Months 2019 compared to $1.79 billion of net cash provided by financing activities for Nine Months 2018.2019. The decreaseincrease in net cash provided byused in financing activities was primarily due to acquisition related financing obtained in Nine Months 2018 in anticipation of the TWG acquisition. Net proceeds from the issuance of debt and preferred stock related to the TWG acquisition were $1.29 billion and $276.4 million respectively. A portion of these proceeds were used to repay the Company’s then outstanding $350.0 million senior notes that matured in March of 2018. The decrease in netlower cash provided by financing activities also included a $473.6 million decrease in cash provided byfrom our CIEs provided, net of repayments of borrowings to short-term warehouse facilities, primarily related to the timing of CLO structures launched in each year and2019, partially offset by a $31.4 million loss on extinguishment of debt in connection with the tender
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offer of $100.0 million of our 6.75% senior notes due 2034. Additionally, net cash used2034 recorded in financing activities for Nine Months 2019 included a $19.3 million settlement of a contingent payable related2019. For additional information on CIEs, see Note 12 to the Company’s acquisition of certain renewal rightsConsolidated Financial Statements included elsewhere in this Report.
We monitor cash flows at the consolidated, holding company and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs, making adjustments to the National Flood Insurance Program block of business of Nationwide Mutual Insurance Company that was established on the acquisition date in March 2016.forecasts when needed.
The table below shows our cash outflows for interest and dividends for the periods indicated:

For the Nine Months Ended September 30, For the Nine Months Ended September 30,
2019 2018 20202019
Interest paid on debt$102.8
 $72.5
Interest paid on debt$103.2 $102.8 
Common stock dividends113.0
 96.1
Common stock dividends115.1 113.0 
Preferred stock dividends14.0
 9.5
Preferred stock dividends14.0 14.0 
Total$229.8
 $178.1
Total$232.3 $229.8 
Letters of Credit
In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements in which we are the reinsurer. These letters of credit are supported by commitments under which we are required to indemnify the financial institution issuing the letter of credit if the letter of credit is drawn. We had $12.1$7.6 million and $13.2$12.1 million of letters of credit outstanding as of September 30, 20192020 and December 31, 2018,2019, respectively.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity or capital resources of the Company.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our 20182019 Annual Report described our Quantitative and Qualitative Disclosures About Market Risk. The A.M. Best rating for Employers Reassurance Corporation (“ERAC”), oneAs of our largest reinsurers, was affirmed as B+ with a stable outlook and subsequently withdrawn at the request of ERAC in March 2019. Refer to Note 10 to our Consolidated Financial Statements included elsewhere in this Report for more information. ThereSeptember 30, 2020, there were no other material changes to the assumptions or risks during Third Quarter 2019.risks.

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2019.2020. Based on such evaluation, management, including our CEO and CFO, has concluded that as of September 30, 2019,2020, our disclosure controls and procedures were effective and provide reasonable assurance that information we are required to disclose in our reports pursuant to Rule 13a-15(e) or 15d-15(e) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Our CEO and CFO also have concluded that as of September 30, 2019,2020, information that we are required to disclose in our reports under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
On May 31, 2018, we completed our acquisition of TWG. During the quarter ended September 30, 2019, we continued to integrate TWG into our internal control environment. There were no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarterly period ended September 30, 20192020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in litigation in the ordinary courseFor a description of business, both as a defendant and as a plaintiff, and may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations, including regulatory examinations, investigations and inquiries. Although we cannot predict the outcome of any litigation or regulatory examinations, investigations or inquiries, it is possible that the outcome of such matters could have a material adverse effect on our consolidated results of operations or cash flows for an individual reporting period. However, on the basis of currently available information, management does not believe that the pending matters are likely to have a material adverse effect, individually or in the aggregate, on our financial condition. For additional information on certain legal and regulatory matters in which we are or have been involved, see “Commitments and Contingencies—Legal and Regulatory Matters” in Note 1821 to the Consolidated Financial Statements included elsewhere in this Report.Report, which is hereby incorporated by reference.

Item 1A. Risk Factors

Certain factors may have a material adverse effect on our business, financial condition, results of operations and cash flows, and you should carefully consider them. It is not possible to predict or identify all such factors. For a discussion of potential risks or uncertainties affecting us, please refer to the information under the heading “Item 1A. 1A—Risk Factors” in our 20182019 Annual Report and below in this Report. Except as set forth below, there have been no material changes during Third Quarter 2019 to the risk factorsfactor disclosed in Item 8.01 of our 2018 Annual Report. The risk factors set forth below should be read together with the other risk factors disclosed in our 2018 Annual Report.Current Report on Form 8-K filed on May 5, 2020. Additional risks and uncertainties that are not yet identified or that we currently believe to be immaterial may also materially harm our business, financial condition, results of operations and cash flows.

Business and Competitive Risks

We face risks associated with our international operations.

Our international operations face economic, political, legal, compliance, regulatory, operational and other risks. For example, we face the risk of restrictions on currency conversion or the transfer of funds; burdens and costs of compliance with a variety of foreign laws and regulations and the associated risk of non-compliance; exposure to undeveloped or evolving legal systems, which may result in unpredictable or inconsistent application of laws and regulations; exposure to commercial, political, legal or regulatory corruption; political or economic instability in countries in which we conduct business, including possible terrorist acts; the imposition of tariffs, trade barriers or other protectionist laws or business practices that favor local competition, increase costs and adversely affect our business; inflation and foreign exchange rate fluctuations; diminished ability to enforce our contractual rights; potential increased risk of data breaches; differences in cultural environments; changes in regulatory requirements, including changes in regulatory treatment of certain products or services; exposure to local economic conditions and their impact on clients’ performance and creditworthiness; and restrictions on the repatriation of non-U.S. investments and earnings.

If our business model is not successful in a particular country or region, or a country or region in which we do business experiences economic, political or other instability, we may lose all or part of our investment in that country or region. As we continue to expand in select worldwide markets, our business becomes increasingly exposed to these and other risks, in particular where certain countries or regions have recently experienced economic or political instability, such as in Argentina, Brazil, South Korea and the United Kingdom (the “U.K.”). For information on the U.K. and Brexit (as defined hereafter), see “ - The withdrawal of the United Kingdom from the European Union may adversely affect our business, financial condition and results of operations in the region.”

As we engage with international clients, we may make certain up-front commission payments or similar cash outlays, which we may not recover if the business does not develop as we expect. These up-front payments are typically supported by various protections, such as letters of credit, letters of guarantee and real estate, but we may not recover amounts owed to us fully or timely as a result of difficulties enforcing contracts or judgments in undeveloped or evolving legal systems and other factors. As our international business grows, we rely increasingly on fronting carriers or intermediaries in certain countries to maintain their licenses and product approvals, satisfy local regulatory requirements and continue in business, including if there

is a no-deal Brexit. If they fail to do so, our business, reputation and relationships with our customers could be adversely affected.

For additional information on the significant international regulations that apply to us, including data protection regulations, and the risks relating thereto, see “Item 1 - Business - Regulation - International Regulation” in our 2018 Annual Report, “Item 1A - Risk Factors - Technology, Cybersecurity and Privacy Risks - The costs of complying with, or our failure to comply with, U.S. and foreign laws related to privacy, data security and data protection could adversely affect our financial condition, operating results and reputation” in our 2018 Annual Report, “ - Legal and Regulatory Risks - We are subject to extensive laws and regulations, which increase our costs and could restrict the conduct of our business, and violations or alleged violations of such laws and regulations could have a material adverse effect on our reputation, business and results of operations” and “Item 1A - Risk Factors - Legal and Regulatory Risks - Our business is subject to risks related to litigation and regulatory actions” in our 2018 Annual Report.

The withdrawal of the United Kingdom from the European Union may adversely affect our business, financial condition and results of operations in the region.

There is considerable uncertainty concerning the terms and timing of the withdrawal of the U.K. from the European Union (the “E.U.”), referred to as “Brexit”. In October 2019, the E.U. and the U.K. government agreed to the terms of a withdrawal agreement, which has not yet been ratified by the U.K. parliament. The E.U. and the U.K. also agreed to extend the date on which the U.K. will leave the E.U. to January 31, 2020 (the “Exit Date”).

We currently conduct business in Europe through our U.K. insurance subsidiaries. If the U.K. parliament ratifies the withdrawal agreement prior to the date on which the U.K. leaves the E.U., we expect to be able to continue to use our U.K. insurers to conduct business in Europe until at least December 31, 2020. If the U.K. leaves the E.U. on the Exit Date with no agreement (known as a “no-deal Brexit”), we will no longer be able to use our U.K. insurers to write new business in Europe. Under guidance issued by the European Insurance and Occupational Pensions Authority, we expect that our U.K. insurers would be able to continue to service existing insurance policies following a no-deal Brexit for a transitional period of at least 9 months.

We are continuing to prepare for potential outcomes of Brexit, including a no-deal Brexit. We have established insurance subsidiaries in the Netherlands and are in the process of obtaining the necessary regulatory approvals. There can be no assurance that we will receive them in time for us to transition our business in the E.U. by the Exit Date, or at all. We are separately working on contingency arrangements to permit us to write new business in Europe if our Dutch insurers are not approved by the Exit Date. These arrangements require time to operationalize, and they may not be in place for all of our European business by the Exit Date.

If we are unable to write new business in Europe following Brexit, either through our Dutch insurers or through contingency arrangements, our European business may be adversely affected due to, among other things, financial exposure to client losses, increased cost of doing business and reputational damage. Additionally, the terms and timing of Brexit could subject us to operational challenges in Europe, which may have a negative impact on our business, and post-Brexit changes to the E.U. and U.K. legal, trade and regulatory frameworks could increase compliance costs and negatively impact the region’s economic conditions, financial markets and exchange rates. Based on our current assumptions, estimates and expectations, and the size of our operations in Europe, we do not believe that the impact of Brexit, including a no-deal Brexit, will be material to our overall financial condition or annual results of operations.

We face risks associated with joint ventures, franchises and investments in which we share ownership or management with third parties.

From time to time, we have and may continue to enter into joint ventures and franchises and invest in entities in which we share ownership or management with third parties. In certain circumstances, we may not have complete control over governance, financial reporting, operations, legal and regulatory compliance or other matters relating to such joint ventures, franchises or entities. As a result, we may face certain operating, financial, legal, regulatory, compliance and other risks relating to these joint ventures, franchises and entities, including risks related to the financial strength of joint venture partners, franchisees and other investors; the willingness of joint venture partners, franchisees and other investors to provide adequate funding for the joint venture, franchise or entity; differing goals, strategies, priorities or objectives between us and joint venture partners, franchisees or other investors; our inability to unilaterally implement actions, policies or procedures with respect to the joint venture, franchise or entity that we believe are favorable; legal and regulatory compliance risks relating to actions of the joint venture, franchise, entity, joint venture partners, franchisees or other investors; the risk that the actions of joint venture partners, franchisees and other investors could damage our brand image and reputation; and the risk that we will be unable to

resolve disputes with joint venture partners, franchisees or other investors. As a result, joint ventures, franchises and investments in which we share ownership or management subject us to risk and may contribute significantly less than anticipated to our earnings and cash flows.

Our mobile business is subject to the risk of declines in the value of mobile devices in our inventory or subject to guaranteed buybacks and to export compliance and other risks.

The value of the mobile devices that we collect and refurbish for our clients may fall below the prices we have paid or guaranteed, which could adversely affect our profitability. In our mobile business, we carry inventory to meet the delivery requirements of certain clients and we provide the guaranteed buyback of devices as part of our trade-in and upgrade offerings. These devices are ultimately disposed of through sales to third parties. Our mobile business is subject to the risk that the value of devices and parts will be adversely affected by price reductions, technological changes affecting the usefulness or desirability of the devices and parts, physical problems resulting from faulty design or manufacturing, increased competition and growing industry emphasis on cost containment. The value of devices may also be impacted by any adverse trade relationship between the U.S. and China, including with respect to trade policies, treaties, government relations, tariffs and other trade restrictions. If the value of devices or parts is significantly reduced, it could have a material adverse effect on our profitability.

Our sales of mobile devices to third parties, particularly those domiciled outside of the U.S., subject us to compliance risks relating to export control laws and regulations. Furthermore, third parties to whom we sell mobile devices may violate such laws and regulations, which could subject us to liability. Non-compliance with such laws could adversely affect our business, financial condition and results of operations. For more information on the risks relating to our international operations, see “ - We face risks associated with our international operations.”

Financial Risks

A credit rating agency downgrade of our corporate senior debt rating could have a significant adverse impact on our business.

Currently, Assurant, Inc.’s senior debt is rated BBB by S&P and Baa3 by Moody’s, reflecting one notch downgrades following the financing and closing of the TWG transaction. The ratings from both S&P and Moody’s currently carry a stable outlook.

If our senior debt credit ratings were downgraded below investment grade, our business, financial condition and results of operations, and perceptions of our financial strength, could be adversely affected. In particular, a downgrade could adversely affect our liquidity, increase our borrowing costs, decrease demand for our debt securities and increase the expense and difficulty of financing our operations. For example, the interest rate payable on each of the 2021 Senior Notes, the 2023 Senior Notes, the 2028 Senior Notes and the 2030 Senior Notes is subject to increase if either of Moody’s or S&P downgrades the credit rating assigned to such series of senior notes to Ba1 or below or to BB+ or below, respectively. Additionally, we could be subject to more restrictive financial and operational covenants in any indebtedness we issue in the future, which could reduce our operational flexibility. There can be no assurance that our credit ratings will not be downgraded further. See Note 18 to the consolidated financial statements included in our 2018 Annual Report, Note 12 to the Consolidated Financial Statements included elsewhere in this Report and the MD&A included elsewhere in this Report for additional information on the 2021 Senior Notes, the 2023 Senior Notes, the 2028 Senior Notes and the 2030 Senior Notes, and the impact of rating changes.

Failure to maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price.

As a public company, we are required to maintain effective internal control over financial reporting. During the nine months ended September 30, 2019, we continued to integrate TWG into our internal control environment. While management has certified that our internal control over financial reporting was effective as of September 30, 2019, because internal control over financial reporting is complex, there can be no assurance that our internal control over financial reporting will be effective in the future. We also rely on manual processes and procedures that involve a higher risk of error than automated processes. Any failure to implement required controls, or difficulties or errors encountered in their operation, could adversely affect our results of operations or cause us to fail to meet our reporting obligations. If we are not able to maintain or document effective internal control over financial reporting, our independent registered public accounting firm would be unable to certify the effectiveness of our internal control over financial reporting or opine that our financial statements fairly present, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP. Internal control deficiencies may also prevent us from reporting our financial information on a timely basis; or cause us to restate previously issued

financial information, and thereby subject us to litigation and adverse regulatory consequences, including fines and other sanctions. If any of the foregoing were to occur, investor confidence in us and the reliability of our financial statements could erode, resulting in a decline in our stock price, impairing our ability to raise capital, negatively affecting our reputation and subjecting us to legal and regulatory risk.

Through reinsurance, we have sold or exited businesses that could again become our direct financial and administrative responsibility if the reinsurers become insolvent.

In the past, we have sold, and in the future we may sell, businesses through reinsurance ceded to third parties. We have also exited certain businesses through reinsurance. For example, we have sold our Long-Term Care division, the insurance operations of our Fortis Financial Group division, including individual life operations and annuity business, and our Assurant Employee Benefits segment. The reinsurance recoverable relating to these dispositions was $4.33 billion as of September 30, 2019. The four reinsurers with the largest reinsurance recoverable balances relating to these dispositions were Sun Life Assurance Company of Canada (“Sun Life”), John Hancock Life Insurance Company (“John Hancock”), Talcott Resolution Life and Annuity Insurance Company (“Talcott Resolution”) and Employers Reassurance Corporation (“ERAC”). The A.M. Best ratings of Sun Life, John Hancock and Talcott Resolution are currently A+, A+ and B++, respectively. A.M. Best withdrew its rating for ERAC on March 26, 2019. Most of the assets backing reserves coinsured under these and other sales are held in trusts or separate accounts. However, if the reinsurers became insolvent, the assets in the trusts or separate accounts could prove insufficient to support the liabilities that would revert to us. In addition, there are no assets or other collateral backing reserves relating to the reinsurance recoverable for ERAC.

We also face the risk of again becoming responsible for administering these businesses in the event of reinsurer insolvency. We do not currently have the administrative systems and capabilities to process these businesses. Accordingly, we would need to obtain those capabilities in the event of an insolvency of one or more of the reinsurers. We might be forced to obtain such capabilities on unfavorable terms with a resulting material adverse effect on our results of operations and financial condition. In addition, other third parties to whom we have sold businesses in the past may in turn sell these businesses to other third parties, through reinsurance or otherwise, and we could face credit risks and risks related to the new administrative systems and capabilities of these third parties in administering these businesses.

For more information on these arrangements, including the reinsurance recoverables and risk mitigation mechanisms used, see “Item 7A - Quantitative and Qualitative Disclosures About Market Risks - Credit Risk” in our 2018 Annual Report.

Legal and Regulatory Risks

We are subject to extensive laws and regulations, which increase our costs and could restrict the conduct of our business, and violations or alleged violations of such laws and regulations could have a material adverse effect on our reputation, business and results of operations.

We are subject to extensive regulation under the laws of the U.S. and its various states and territories, the E.U. and its member states, and the other jurisdictions in which we operate. For example, we are subject to regulation by state and territory insurance regulators in the U.S., by the Prudential Regulatory Authority and the Financial Conduct Authority in the U.K. and agencies such as the SEC, both in our capacity as a publicly-traded company and through our registered investment adviser subsidiary. We are also subject to anti-bribery and anti-corruption laws, such as the FCPA and the U.K. Anti-Bribery Act, trade sanctions, export control regulations and restrictions and anti-money laundering laws. We are subject to other laws and regulations on matters as diverse as antitrust, internal control over financial reporting and disclosure controls and procedures, data privacy and protection, taxation, environmental protection, wage-and-hour standards and employment and labor relations. Furthermore, our domestic and international insurance subsidiaries are subject to extensive regulatory oversight, including: restrictions and requirements related to licensing; capital, surplus and dividends; underwriting limitations; the ability to enter, exit and continue to operate in markets, including as a result of Brexit; statutory accounting and other disclosure requirements; coverage; the ability to provide, terminate or cancel certain coverages; premium rates, including regulatory ability to disapprove or reduce the premium rates companies may charge; trade and claims practices; content of disclosures to consumers; type, amount and valuation of investments; assessments or other surcharges for guaranty funds and companies’ ability to recover assessments through premium increases; and market conduct and sales practices.

The U.S. and foreign laws and regulations that apply to our operations are complex and may change rapidly, and our efforts to comply and keep up with them require significant resources and increase the costs and risks of doing business in these jurisdictions. The regulations we are subject to have become more stringent over time, may decrease the need for our services, impose significant operational limits on our business and may be inconsistent across jurisdictions. Further, the laws and regulations affecting our business are subject to change as a result of, among other things, new interpretations and judicial

decisions, and any such changes may increase the regulatory requirements imposed on us, impact the way we are able to do business and significantly harm our business and results of operations. While we attempt to comply with applicable laws and regulations, there can be no assurance that we or our employees, consultants, contractors and other agents are in full compliance with such laws and regulations at all times or that we will be able to comply with any future laws or regulations. If we fail to comply with applicable laws and regulations, we may be subject to investigations, criminal penalties, civil remedies or other adverse consequences, including fines, injunctions, loss of an operating license or approval, increased scrutiny or oversight by regulatory authorities, the suspension of individual employees, limitations on engaging in a particular business, redress to clients, exposure to negative publicity or reputational damage and harm to client, employee and other relationships. Moreover, our failure to comply with laws or regulations in one jurisdiction may result in increased regulatory scrutiny by other regulatory agencies in that jurisdiction or regulatory agencies in other jurisdictions. The cost of compliance and the consequences of non-compliance could have a material adverse effect on our business, results of operations and financial condition. For additional discussion of the various laws and regulations affecting our business, see “Item 1 - Business - Regulation” in our 2018 Annual Report and “ - Business and Competitive Risks - The withdrawal of the United Kingdom from the European Union may adversely affect our business, financial condition and results of operations in the region.”

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
RepurchaseIssuer Purchases of Equity Securities:
(In millions, except number of shares and per share amounts)
Period in 2020Total
Number of
Shares Purchased		Average Price
Paid Per Share		Total Number of Shares
Purchased as Part of
Publicly Announced
Programs (1)		Approximate
Dollar Value of
Shares that
May Yet be
Purchased
Under the
Programs (1)
January 1 - January 31117,870 $131.23 117,870 $470.8 
February 1 - February 29134,000 136.52 134,000 452.5 
March 1 - March 31229,097 102.30 229,097 429.0 
April 1 - April 30162,000 104.96 162,000 412.1 
May 1 - May 3192,000 96.46 92,000 403.2 
June 1 - June 30— — — 403.2 
July 1 - July 31— — — 403.2 
August 1 - August 31242,000 123.28 242,000 373.4 
September 1 - September 30335,476 120.03 335,476 333.1 
Total1,312,443 $116.71 1,312,443 $333.1 
(1)Shares purchased pursuant to the November 5, 2018 publicly announced share repurchase authorization of up to $600.0 million of outstanding common stock. As of September 30, 2020, approximately $333.1 million remained under the November 2018 authorization.

69
(In millions, except number of shares and per share amounts)
Period in 2019
Total
Number of
Shares Repurchased
 
Average Price
Paid Per Share
 
Total Number of Shares
Repurchased as Part of
Publicly Announced
Programs (1)
 
Approximate
Dollar Value of
Shares that
May Yet be
Repurchased
Under the
Programs (1)
January 1 - 31189,230
 $93.43
 189,230
 $743.5
February 1 - 28152,000
 98.39
 152,000
 728.5
March 1 - 31184,449
 97.07
 184,449
 710.6
April 1 - 30196,583
 94.37
 196,583
 692.1
May 1 - 31184,000
 97.13
 184,000
 674.2
June 1 - 30131,000
 104.93
 131,000
 660.5
July 1 - 31154,000
 111.57
 154,000
 643.3
August 1 - 31125,186
 118.80
 125,186
 628.4
September 1 - 30266,000
 125.38
 266,000
 595.1
Total1,582,448
 $104.97
 1,582,448
 $595.1
(1)Shares purchased pursuant to the November 14, 2016 publicly announced share repurchase authorization of up to $600.0 million of outstanding common stock. On November 5, 2018, our Board of Directors authorized the Company to repurchase up to an additional $600.0 million of its outstanding common stock. As of September 30, 2019, approximately $595.1 million remained under the November 2018 authorization.


Item 6. Exhibits
Pursuant to the rules and regulations of the SEC, we have filed or incorporated by reference certain agreements as exhibits to this Report. These agreements may contain representations and warranties by the parties thereto. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.
The following exhibits either (a) are filed with this Report or (b) have previously been filed with the SEC and are incorporated herein by reference to those prior filings. Exhibits are available upon request at the investor relations section of our website, located at www.assurant.com. The information on our website is not a part of this Report and is not incorporated by reference in this Report.


31.1
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
101The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2019,2020, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Management contract or compensatory plans


70

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

ASSURANT, INC.
By:
/s/     ALAN B. COLBERG      
Name:Alan B. Colberg
Title:President and Chief Executive Officer and Director
By:/s/    RICHARD S. DZIADZIO
Name:Richard S. Dziadzio
Title:Executive Vice President and Chief Financial Officer

Date: November 7, 2019

5, 2020
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