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, 2020~~March 31, 2021


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

For the transition period from to

Assurant, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-31978

39-1126612

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

28 Liberty Street, 41st Floor

New York, New York 10005

(212) 859-7000

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

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


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 Par Value	AIZ	New York Stock Exchange
~~6.50% Series D Mandatory Convertible Preferred Stock, $1.00 Par Value~~5.25% Subordinated Notes due 2061	~~AIZP~~AIZN	New York Stock Exchange

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

The number of shares of the registrant’s common stock outstanding at ~~October~~April 30, ~~2020~~2021 was ~~58,759,191.~~60,566,633.

ASSURANT, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2020~~MARCH 31, 2021

TABLE OF CONTENTS


Item Number	Item Number		Page Number	Item Number		Page Number
		PART I FINANCIAL INFORMATION			PART I FINANCIAL INFORMATION

1.	1.	Consolidated Financial Statements (unaudited) of Assurant, Inc.:		1.	Consolidated Financial Statements (unaudited) of Assurant, Inc.:

		Consolidated Balance Sheets (unaudited) as of September 30, 2020 and December 31, 2019	2		Consolidated Balance Sheets (unaudited) as of March 31, 2021 and December 31, 2020	2

		Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2020 and 2019	4		Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2021 and 2020	3

		Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2020 and 2019	5		Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2021 and 2020	4

		Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended September 30, 2020 and 2019	6		Consolidated Statements of Changes in Equity (unaudited) for the three months ended March 31, 2021 and 2020	5

		Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2020 and 2019	8		Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2021 and 2020	6

		Notes to Consolidated Financial Statements (unaudited)	10		Notes to Consolidated Financial Statements (unaudited)	8

2.	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

3.	3.	Quantitative and Qualitative Disclosures About Market Risk	68	3.	Quantitative and Qualitative Disclosures About Market Risk	51

4.	4.	Controls and Procedures	68	4.	Controls and Procedures	51

		PART II OTHER INFORMATION			PART II OTHER INFORMATION

1.	1.	Legal Proceedings	69	1.	Legal Proceedings	52

1A.	1A.	Risk Factors	69	1A.	Risk Factors	52

2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	69	2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

6.	6.	Exhibits	70	6.	Exhibits	53

		Signatures	71		Signatures	54

Assurant, Inc.

Consolidated Balance Sheets (unaudited)


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(in millions, except number of shares and per share amounts)					(in millions, except number of shares and per share amounts)
Assets	Assets					Assets
Investments:	Investments:					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
Fixed maturity securities available for sale, at fair value (net of allowances for credit losses of $1.2 at March 31, 2021 and December 31, 2020; amortized cost - $6,206.8 and $6,245.8 at March 31, 2021 and December 31, 2020, respectively)						Fixed maturity securities available for sale, at fair value (net of allowances for credit losses of $1.2 at March 31, 2021 and December 31, 2020; amortized cost - $6,206.8 and $6,245.8 at March 31, 2021 and December 31, 2020, respectively)	$	6,575.9	$	6,815.5
Equity securities at fair value	Equity securities at fair value	384.4		388.5		Equity securities at fair value	293.2		290.2
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
Commercial mortgage loans on real estate, at amortized cost (net of allowances for credit losses of $1.2 and $1.6 at March 31, 2021 and December 31, 2020, respectively)						Commercial mortgage loans on real estate, at amortized cost (net of allowances for credit losses of $1.2 and $1.6 at March 31, 2021 and December 31, 2020, respectively)	147.9		138.3
Short-term investments	Short-term investments	250.0		402.5		Short-term investments	145.3		292.0
Other investments (net of allowances for credit losses of $1.4 at September 30, 2020)		705.9		638.9
Other investments (net of allowances for credit losses of $1.4 at March 31, 2021 and December 31, 2020)						Other investments (net of allowances for credit losses of $1.4 at March 31, 2021 and December 31, 2020)	707.7		686.8
Total investments	Total investments	15,205.9		14,567.3		Total investments	7,870.0		8,222.8
Cash and cash equivalents	Cash and cash equivalents	2,203.0		1,867.1		Cash and cash equivalents	1,651.3		2,207.6
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
Premiums and accounts receivable (net of allowances for credit losses of $12.2 and $13.3 at March 31, 2021 and December 31, 2020, respectively)						Premiums and accounts receivable (net of allowances for credit losses of $12.2 and $13.3 at March 31, 2021 and December 31, 2020, respectively)	1,924.2		1,548.9
Reinsurance recoverables (net of allowances for credit losses of $22.8 and $24.6 at March 31, 2021 and December 31, 2020, respectively)						Reinsurance recoverables (net of allowances for credit losses of $22.8 and $24.6 at March 31, 2021 and December 31, 2020, respectively)	6,528.1		6,605.4
Accrued investment income	Accrued investment income	133.0		131.1		Accrued investment income	73.3		67.0
Deferred acquisition costs	Deferred acquisition costs	7,405.5		6,668.0		Deferred acquisition costs	7,649.7		7,388.0
Property and equipment, net	Property and equipment, net	468.4		433.7		Property and equipment, net	469.1		446.1
Goodwill	Goodwill	2,325.8		2,343.4		Goodwill	2,586.0		2,589.3
Value of business acquired	Value of business acquired	1,339.8		2,004.3		Value of business acquired	988.0		1,152.2
Other intangible assets, net	Other intangible assets, net	581.8		540.2		Other intangible assets, net	672.7		696.2
Other assets (net of allowances for credit losses of $1.8 at September 30, 2020)		540.4		590.1
Other assets (net of allowances for credit losses of $1.8 at March 31, 2021 and December 31, 2020)						Other assets (net of allowances for credit losses of $1.8 at March 31, 2021 and December 31, 2020)	495.4		496.2
Assets held in separate accounts	Assets held in separate accounts	2,006.1		1,839.7		Assets held in separate accounts	11.3		11.5
Assets of consolidated investment entities (1)		0		2,020.1
Assets held for sale (Note 4)						Assets held for sale (Note 4)	13,491.5		13,218.7
Total assets	Total assets	$	43,582.6	$	44,291.2	Total assets	$	44,410.6	$	44,649.9
Liabilities	Liabilities					Liabilities
Future policy benefits and expenses	Future policy benefits and expenses	$	9,907.4	$	9,807.3	Future policy benefits and expenses	$	1,356.5	$	1,358.5
Unearned premiums	Unearned premiums	17,116.6		16,603.6		Unearned premiums	17,301.0		17,293.1
Claims and benefits payable	Claims and benefits payable	2,758.2		2,687.7		Claims and benefits payable	1,578.0		1,610.3
Commissions payable	Commissions payable	547.0		540.5		Commissions payable	599.0		699.1
Reinsurance balances payable	Reinsurance balances payable	435.4		358.5		Reinsurance balances payable	422.2		359.3
Funds held under reinsurance	Funds held under reinsurance	361.2		319.4		Funds held under reinsurance	359.8		358.6
Accounts payable and other liabilities	Accounts payable and other liabilities	2,502.1		2,758.5		Accounts payable and other liabilities	2,388.3		2,640.5
Debt	Debt	2,008.6		2,006.9		Debt	2,203.7		2,252.9
Liabilities related to separate accounts	Liabilities related to separate accounts	2,006.1		1,839.7		Liabilities related to separate accounts	11.3		11.5
Liabilities of consolidated investment entities (1)		0		1,687.0
Liabilities held for sale (Note 4)						Liabilities held for sale (Note 4)	12,365.2		12,111.3
Total liabilities	Total liabilities	37,642.6		38,609.1		Total liabilities	38,585.0		38,695.1
Commitments and contingencies (Note 21)
Commitments and contingencies (Note 16)						Commitments and contingencies (Note 16)	0		0
Stockholders’ equity	Stockholders’ equity					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, respectively		2.9		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, respectively		1.6		1.6
6.50% Series D mandatory convertible preferred stock, par value $1.00 per share, 0 shares and 2,875,000 shares authorized, issued and outstanding at March 31, 2021 and December 31, 2020, respectively (1)						6.50% Series D mandatory convertible preferred stock, par value $1.00 per share, 0 shares and 2,875,000 shares authorized, issued and outstanding at March 31, 2021 and December 31, 2020, respectively (1)	0		2.9
Common stock, par value $0.01 per share, 800,000,000 shares authorized, 62,947,351 and 62,967,808 shares issued and 60,651,262 and 57,967,808 shares outstanding at March 31, 2021 and December 31, 2020, respectively						Common stock, par value $0.01 per share, 800,000,000 shares authorized, 62,947,351 and 62,967,808 shares issued and 60,651,262 and 57,967,808 shares outstanding at March 31, 2021 and December 31, 2020, respectively	0.7		0.6
Additional paid-in capital	Additional paid-in capital	4,568.2		4,537.7		Additional paid-in capital	1,804.3		1,956.8
Retained earnings	Retained earnings	6,126.0		5,966.4		Retained earnings	3,635.5		3,548.7
Accumulated other comprehensive income	Accumulated other comprehensive income	658.2		411.5		Accumulated other comprehensive income	504.5		709.8
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)
Treasury stock, at cost; 2,296,089 and 5,000,000 shares at March 31, 2021 and December 31, 2020, respectively						Treasury stock, at cost; 2,296,089 and 5,000,000 shares at March 31, 2021 and December 31, 2020, respectively	(122.8)		(267.4)
Total Assurant, Inc. stockholders’ equity	Total Assurant, Inc. stockholders’ equity	5,936.4		5,652.8		Total Assurant, Inc. stockholders’ equity	5,822.2		5,951.4
Non-controlling interests	Non-controlling interests	3.6		29.3		Non-controlling interests	3.4		3.4
Total equity	Total equity	5,940.0		5,682.1		Total equity	5,825.6		5,954.8
Total liabilities and equity	Total liabilities and equity	$	43,582.6	$	44,291.2	Total liabilities and equity	$	44,410.6	$	44,649.9

(1)~~The following table presents information on assets and liabilities related~~Each outstanding share of mandatory convertible preferred stock converted 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 resultedcommon stock in ~~the deconsolidation of the consolidated investment entities.~~March 2021. Refer to ~~Notes 5 and 12~~Note 13 for ~~additional~~further information.

~~Assurant, Inc.~~

~~Consolidated Balance Sheets (unaudited)~~


	~~December 31, 2019~~

~~Assets~~
~~Cash and cash equivalents~~	$	~~32.9~~
~~Investments, at fair value~~	~~1,957.9~~
~~Other receivables~~	~~29.3~~
~~Total assets~~	$	~~2,020.1~~
~~Liabilities~~
~~Collateralized loan obligation notes, at fair value~~	~~1,603.1~~
~~Other liabilities~~	~~83.9~~
~~Total liabilities~~	$	~~1,687.0~~

See the accompanying Notes to Consolidated Financial Statements (unaudited)

Assurant, Inc.

Consolidated Statements of Operations (unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
		(in millions, except number of shares and per share amounts)									(in millions, except number of shares and per share amounts)
Revenues	Revenues									Revenues
Net earned premiums	Net earned premiums	$	2,102.8	$	2,015.4	$	6,223.0	$	5,952.5	Net earned premiums	$	2,105.6	$	2,065.5
Fees and other income	Fees and other income	245.9		295.1		934.3		959.5		Fees and other income	249.9		383.6
Net investment income	Net investment income	135.1		169.5		428.3		490.0		Net investment income	76.3		83.6
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 businesses		2.1		4.4		8.7		16.9
Net realized gains (losses) on investments (including $1.0 and $5.3 of impairment losses for the three months ended March 31, 2021 and 2020, respectively)										Net realized gains (losses) on investments (including $1.0 and $5.3 of impairment losses for the three months ended March 31, 2021 and 2020, respectively)	0.8		(84.0)

Total revenues	Total revenues	2,502.5		2,499.3		7,539.7		7,480.4		Total revenues	2,432.6		2,448.7
Benefits, losses and expenses	Benefits, losses and expenses									Benefits, losses and expenses
Policyholder benefits	Policyholder benefits	709.6		705.2		1,908.9		2,006.9		Policyholder benefits	528.7		535.2
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	946.2		869.5		2,745.7		2,462.6		Amortization of deferred acquisition costs and value of business acquired	946.7		895.3
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	687.5		764.5		2,331.8		2,388.1		Underwriting, general and administrative expenses	735.7		892.6
Goodwill impairment (Note 6)		137.8		0		137.8		0
Iké net losses (Note 5)		0		121.1		5.9		130.5

Interest expense	Interest expense	25.5		32.2		77.7		85.2		Interest expense	28.4		25.5
Loss on extinguishment of debt		0		31.4		0		31.4

Total benefits, losses and expenses	Total benefits, losses and expenses	2,506.6		2,523.9		7,207.8		7,104.7		Total benefits, losses and expenses	2,239.5		2,348.6
(Loss) income before provision for income taxes		(4.1)		(24.6)		331.9		375.7
Provision for income taxes		26.4		28.6		28.2		117.7
Net (loss) income		(30.5)		(53.2)		303.7		258.0
Income from continuing operations before income tax expense (benefit)										Income from continuing operations before income tax expense (benefit)	193.1		100.1
Income tax expense (benefit)										Income tax expense (benefit)	44.6		(48.5)
Net income from continuing operations										Net income from continuing operations	148.5		148.6
Net income from discontinued operations (Note 4)										Net income from discontinued operations (Note 4)	14.3		7.2
Net income										Net income	162.8		155.8
Less: Net loss (income) attributable to non-controlling interests	Less: Net loss (income) attributable to non-controlling interests	0.3		(1.6)		(1.1)		(3.0)		Less: Net loss (income) attributable to non-controlling interests	0.2		(1.1)
Net (loss) income attributable to stockholders		(30.2)		(54.8)		302.6		255.0
Net income attributable to stockholders										Net income attributable to stockholders	163.0		154.7
Less: Preferred stock dividends	Less: Preferred stock dividends	(4.7)		(4.7)		(14.0)		(14.0)		Less: Preferred stock dividends	(4.7)		(4.7)
Net (loss) income attributable to common stockholders		$	(34.9)	$	(59.5)	$	288.6	$	241.0
Net income attributable to common stockholders										Net income attributable to common stockholders	$	158.3	$	150.0

Earnings Per Common Share	Earnings Per Common Share									Earnings Per Common Share
Basic	Basic	$	(0.58)	$	(0.96)	$	4.78	$	3.88	Basic
Net income from continuing operations										Net income from continuing operations	$	2.43	$	2.36
Net income from discontinued operations										Net income from discontinued operations	$	0.24	$	0.12
Net income attributable to common stockholders										Net income attributable to common stockholders	$	2.67	$	2.48
Diluted	Diluted	$	(0.58)	$	(0.96)	$	4.76	$	3.86	Diluted
Net income from continuing operations										Net income from continuing operations	$	2.41	$	2.32
Net income from discontinued operations										Net income from discontinued operations	$	0.23	$	0.11
Net income attributable to common stockholders										Net income attributable to common stockholders	$	2.64	$	2.43
Share Data	Share Data									Share Data
Weighted average common shares outstanding used in basic per common share calculations	Weighted average common shares outstanding used in basic per common share calculations	60,190,103		61,804,492		60,384,817		62,204,242		Weighted average common shares outstanding used in basic per common share calculations	59,192,880		60,602,911
Plus: Dilutive securities	Plus: Dilutive securities	0		0		256,128		256,003		Plus: Dilutive securities	2,590,512		3,024,015
Weighted average common shares used in diluted per common share calculations		60,190,103		61,804,492		60,640,945		62,460,245
Weighted average common shares outstanding used in diluted per common share calculations										Weighted average common shares outstanding used in diluted per common share calculations	61,783,392		63,626,926

See the accompanying Notes to Consolidated Financial Statements (unaudited)

Assurant, Inc.

Consolidated Statements of Comprehensive Income (unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(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, respectively 54.1 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, 2020 1.2 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, respectively 1.5 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, respectively 35.3 (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 income 89.3 76.5 246.7 560.6
Total comprehensive income 58.8 23.3 550.4 818.6
Less: Comprehensive loss (income) attributable to non-controlling interests 0.3 (1.6) (1.1) (3.0)
Total comprehensive income attributable to stockholders $ 59.1 $ 21.7 $ 549.3 $ 815.6


	Three Months Ended March 31,
	2021		2020
	(in millions)
Net income	$	162.8	$	155.8
Other comprehensive (loss) income:
Change in unrealized gains on investments, net of taxes of $58.6 and $85.1 for the three months ended March 31, 2021 and 2020, respectively	(209.5)		(302.1)
Change in unrealized gains on derivative transactions, net of taxes of $0.2 for each of the three months ended March 31, 2021 and 2020	(0.6)		(0.6)

Change in non-credit related impairment losses, net of taxes of $0.2 and $0.7 for the three months ended March 31, 2021 and 2020, respectively	(0.8)		(2.7)
Change in foreign currency translation, net of taxes of $2.1 and $9.7 for the three months ended March 31, 2021 and 2020, respectively	7.2		(66.7)
Change in pension and postretirement unrecognized net periodic benefit cost, net of taxes of $0.5 and $(13.0) or the three months ended March 31, 2021 and 2020, respectively (1)	(1.6)		49.0
Total other comprehensive loss	(205.3)		(323.1)
Total comprehensive loss	(42.5)		(167.3)
Less: Comprehensive loss (income) attributable to non-controlling interests	0.2		(1.1)
Total comprehensive loss attributable to stockholders	$	(42.3)	$	(168.4)

(1)Change in ~~nine~~three months ended ~~September 30,~~March 31, 2020 includes the prior service credit resulting from the February 2020 amendment of the Retirement Health Benefits plan. Refer to Note 2015 for further information.

See the accompanying Notes to Consolidated Financial Statements (unaudited)

Assurant, Inc.

Consolidated Statements of Changes in Equity (unaudited)

Three Months Ended September 30, 2020
Preferred Stock Common Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income Treasury
Stock Non-controlling Interests Total
(in millions)
Balance at 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 March 31, 2021
	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Non-controlling Interests		Total
	(in millions)
Balance at December 31, 2020	$	2.9	$	0.6	$	1,956.8	$	3,548.7	$	709.8	$	(267.4)	$	3.4	$	5,954.8

Stock plan issuances	—		—		5.4		—		—		—		—		5.4
Stock plan compensation expense	—		—		13.2		—		—		—		—		13.2
Common stock dividends ($0.66 per share)	—		—		—		(38.2)		—		—		—		(38.2)
Acquisition of common stock	—		—		(29.3)		(33.3)		—		0		—		(62.6)

Net income (loss)	—		—		—		163.0		—		—		(0.2)		162.8
Preferred stock conversion	(2.9)		0.1		(141.8)		—		—		144.6		—		—
Preferred stock dividends ($1.63 per share)	—		—		—		(4.7)		—		—		—		(4.7)
Change in equity of non-controlling interests	—		—		—		0		—		—		0.2		0.2

Other comprehensive loss	—		—		—		—		(205.3)		—		—		(205.3)
Balance at March 31, 2021	$	0	$	0.7	$	1,804.3	$	3,635.5	$	504.5	$	(122.8)	$	3.4	$	5,825.6

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 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

~~Assurant, Inc.~~

~~Consolidated Statements of Changes in Equity (unaudited)~~

Nine Months Ended September 30, 2020
Preferred Stock Common Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive Income Treasury
Stock Non-controlling Interests Total
(in millions)
Balance at December 31, 2019 $ 2.9 $ 1.6 $ 4,537.7 $ 5,966.4 $ 411.5 $ (5,267.3) $ 29.3 $ 5,682.1
Cumulative effect of change in accounting principles, net of taxes (1) — — — (20.4) — — — (20.4)
Stock plan issuances — — 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																	Three Months Ended March 31, 2020
		Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Non-controlling Interests		Total			Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Non-controlling Interests		Total
		(in millions)																	(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
Balance at December 31, 2019																		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)																		Cumulative effect of change in accounting principles, net of taxes (1)	—		—		—		(20.4)		—		—		—		(20.4)
Stock plan issuances	Stock plan issuances	—		—		7.1		��		—		—		—		7.1		Stock plan issuances	—		—		3.9		—		—		—		—		3.9
Stock plan compensation expense	Stock plan compensation expense	—		—		40.7		—		—		—		—		40.7		Stock plan compensation expense	—		—		11.5		—		—		—		—		11.5
Common stock dividends ($1.80 per share)		—		—		—		(113.0)		—		—		—		(113.0)
Common stock dividends ($0.63 per share)																		Common stock dividends ($0.63 per share)	—		—		—		(38.0)		—		—		—		(38.0)
Acquisition of common stock	Acquisition of common stock	—		—		(18.9)		—		—		(166.1)		—		(185.0)		Acquisition of common stock	—		—		(12.5)		—		—		(57.3)		—		(69.8)
Net income	Net income	—		—		—		255.0		—		—		3.0		258.0		Net income	—		—		—		154.7		—		—		1.1		155.8
Preferred stock dividends ($4.88 per share)		—		—		—		(14.0)		—		—		—		(14.0)
Preferred stock dividends ($1.63 per share)																		Preferred stock dividends ($1.63 per share)	—		—		—		(4.7)		—		—		0		(4.7)
Change in equity of non-controlling interests	Change in equity of non-controlling interests	—		—		—		(4.8)		—		—		6.9		2.1		Change in equity of non-controlling interests	—		—		—		3.1		—		—		(14.2)		(11.1)
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
Other comprehensive loss																		Other comprehensive loss	—		—		—		—		(323.1)		—		—		(323.1)
Balance at March 31, 2020																		Balance at March 31, 2020	$	2.9	$	1.6	$	4,540.6	$	6,061.1	$	88.4	$	(5,324.6)	$	16.2	$	5,386.2

(1)Amount relates to the adoption of ~~a new~~the 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.~~

See the accompanying Notes to Consolidated Financial Statements (unaudited)

Assurant, Inc.

Consolidated Statements of Cash Flows (unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
		(in millions)					(in millions)
Operating activities	Operating activities					Operating activities
Net income attributable to stockholders	Net income attributable to stockholders	$	302.6	$	255.0	Net income attributable to stockholders	$	163.0	$	154.7
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Noncash revenues, expenses, gains and losses included in income:
Noncash revenues, expenses, gains and losses included in net income from continuing operations:						Noncash revenues, expenses, gains and losses included in net income from continuing operations:
Deferred tax expense	Deferred tax expense	172.1		40.6		Deferred tax expense	19.2		120.0
Amortization of deferred gains on disposal of businesses		(8.7)		(16.9)

Depreciation and amortization	Depreciation and amortization	105.1		87.4		Depreciation and amortization	41.4		32.5
Net realized losses (gains) on investments, including impairment losses		54.6		(61.5)
Loss on extinguishment of debt		0		31.4
Loss on sale of business		0		9.6
Net realized (gains) losses on investments, including impairment losses						Net realized (gains) losses on investments, including impairment losses	(0.8)		84.0

Stock based compensation expense	Stock based compensation expense	41.9		40.7		Stock based compensation expense	13.2		11.5

Other intangible asset impairment		0		16.2
Goodwill impairment		137.8		0

Iké related charges, net of derivative gains (1)		1.7		130.5
Iké related charges, net of derivative gains						Iké related charges, net of derivative gains	0		1.4
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Change in insurance policy reserves and expenses	Change in insurance policy reserves and expenses	825.9		1,393.2		Change in insurance policy reserves and expenses	4.9		24.5
Change in premiums and accounts receivable	Change in premiums and accounts receivable	102.8		(138.8)		Change in premiums and accounts receivable	(385.0)		47.6
Change in commissions payable	Change in commissions payable	14.1		75.2		Change in commissions payable	(142.6)		(108.6)
Change in reinsurance recoverable	Change in reinsurance recoverable	(154.5)		(259.5)		Change in reinsurance recoverable	69.9		(9.5)
Change in reinsurance balance payable	Change in reinsurance balance payable	80.5		12.9		Change in reinsurance balance payable	64.0		(7.7)
Change in funds withheld under reinsurance	Change in funds withheld under reinsurance	42.6		13.4		Change in funds withheld under reinsurance	0.6		34.5
Change in deferred acquisition costs and value of business acquired	Change in deferred acquisition costs and value of business acquired	(418.3)		(685.1)		Change in deferred acquisition costs and value of business acquired	(111.4)		(95.2)

Change in taxes (receivable) payable (5)		(33.0)		63.8
Change in taxes payable (receivable)						Change in taxes payable (receivable)	6.5		(190.4)
Change in other assets and other liabilities	Change in other assets and other liabilities	(371.5)		163.6		Change in other assets and other liabilities	(187.9)		(289.4)
Other	Other	5.9		(3.8)		Other	(9.0)		22.6
Net cash provided by operating activities		901.6		1,167.9
Net cash provided by operating activities - discontinued operations						Net cash provided by operating activities - discontinued operations	35.3		43.8
Net cash used in operating activities						Net cash used in operating activities	(418.7)		(123.7)
Investing activities	Investing activities					Investing activities
Sales of:	Sales of:					Sales of:
Fixed maturity securities available for sale	Fixed maturity securities available for sale	489.2		1,730.0		Fixed maturity securities available for sale	215.5		199.4
Equity securities	Equity securities	21.4		85.3		Equity securities	3.4		1.7
Other invested assets	Other invested assets	87.4		45.8		Other invested assets	25.8		30.9

Iké foreign currency hedge (1)		22.0		0
Maturities, calls, prepayments, and scheduled redemption of:	Maturities, calls, prepayments, and scheduled redemption of:					Maturities, calls, prepayments, and scheduled redemption of:
Fixed maturity securities available for sale	Fixed maturity securities available for sale	723.6		483.9		Fixed maturity securities available for sale	239.0		160.7
Commercial mortgage loans on real estate	Commercial mortgage loans on real estate	38.5		41.7		Commercial mortgage loans on real estate	4.2		3.1
Purchases of:	Purchases of:					Purchases of:
Fixed maturity securities available for sale	Fixed maturity securities available for sale	(1,543.7)		(2,434.1)		Fixed maturity securities available for sale	(390.6)		(297.1)
Equity securities	Equity securities	(27.9)		(81.8)		Equity securities	(10.3)		(12.2)
Commercial mortgage loans on real estate	Commercial mortgage loans on real estate	(3.0)		(84.3)		Commercial mortgage loans on real estate	(10.0)		0
Other invested assets (2)		(78.6)		(33.4)
Other invested assets						Other invested assets	(12.2)		(5.7)
Property and equipment and other	Property and equipment and other	(81.1)		(70.5)		Property and equipment and other	(39.6)		(20.3)
Subsidiaries, net of cash transferred (3)		(166.1)		0
Subsidiaries, net of cash transferred						Subsidiaries, net of cash transferred	(4.1)		0

Net cash outflow related to sale of interests in Iké and termination of put/call obligations (1)		(73.3)		0
Consolidated investment entities (1):						Consolidated investment entities (1):
Purchases of investments						Purchases of investments	0		(258.7)
Sale of investments						Sale of investments	0		310.3
Change in short-term investments						Change in short-term investments	41.6		125.3
Other						Other	0.5		0.3
Net cash used in investing activities - discontinued operations						Net cash used in investing activities - discontinued operations	(48.7)		(55.8)

Assurant, Inc.

Consolidated Statements of Cash Flows (unaudited)

Consolidated investment entities (4):
Purchases of investments (353.1) (1,163.1)
Sale of investments 550.2 754.4
Change in short-term investments 118.9 108.5
Other 0.4 4.0
Net cash used in investing activities (275.2) (613.6)
Financing activities
Issuance of debt, net of issuance costs 0 346.7
Repayment of debt, including tender offer premium 0 (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 liability 0 (19.3)
Borrowings under secured revolving credit facility 200.0 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
Other 0 0.1
Net cash used in financing activities (296.8) (50.1)
Effect of exchange rate changes on cash and cash equivalents 6.3 (8.9)
Change in cash and cash equivalents 335.9 495.3
Cash and cash equivalents at beginning of period 1,867.1 1,254.0
Cash and cash equivalents at end of period $ 2,203.0 $ 1,749.3


Net cash provided by investing activities	14.5		181.9
Financing activities


Repayment of debt	(50.0)		0


Repayment of debt for consolidated investment entities (1)	0		(0.7)

Borrowings under unsecured revolving credit facility	0		200.0

Acquisition of common stock	(42.0)		(56.6)
Common stock dividends paid	(38.2)		(38.0)
Preferred stock dividends paid	(4.7)		(4.7)
Employee stock purchases and withholdings	(18.1)		(8.6)



Net cash provided by (used in) financing activities - discontinued operations	0		0
Net cash (used in) provided by financing activities	(153.0)		91.4
Effect of exchange rate changes on cash and cash equivalents - continuing operations	0		(16.4)
Effect of exchange rate changes on cash and cash equivalents - discontinued operations	0.2		(0.4)
Effect of exchange rate changes on cash and cash equivalents	0.2		(16.8)
Change in cash and cash equivalents	(557.0)		132.8
Cash and cash equivalents at beginning of period	2,228.6		1,867.1
Cash and cash equivalents at end of period	1,671.6		1,999.9
Less: Cash and cash equivalents of discontinued operations at end of period	20.3		3.8
Cash and cash equivalents of continuing operations at end of period	$	1,651.3	$	1,996.1

(1)~~Relates to Iké disposition and related financing. Refer to Note 5 for additional information.~~

~~(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

(unaudited)

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

1. Nature of Operations

Assurant, Inc. (the “Company”) is a global provider of lifestyle and housing solutions that support, protect and connect major consumer purchases. The Company partners with leading brands to develop innovative products and services and to deliver enhanced customer experience. The Company operates in North America, Latin America, Europe and Asia Pacific through 32 operating segments: Global Lifestyle ~~Global Housing~~ and Global ~~Preneed.~~Housing. Through its Global Lifestyle segment, the Company provides mobile device solutions 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~~The businesses previously reported as the Global Preneed segment, through which the Company provides pre-funded funeral insurance, final need insurance and related ~~services.~~services, as well as certain businesses previously disposed of through reinsurance, which were previously reported in the Corporate and Other segment, have been classified as held for sale. Refer to Note 4 for additional information on the pending sale.

The Company’s common stock is traded on the New York Stock Exchange under the symbol “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, 2020~~March 31, 2021 and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ 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.~~presentation, including the impacts of held for sale and discontinued operations as further summarized in Note 4.

Operating results for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020.~~2021. 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, ~~2019.~~2020.

3. Recent Accounting Pronouncements

Adopted

~~Measurement of credit losses on financial instruments held at amortized cost (“CECL”)~~Simplifying the Accounting for Income Taxes: In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued ~~amended~~new guidance ~~on reporting credit losses~~to simplify the accounting for ~~assets held at amortized cost~~income taxes by removing certain exceptions to the general principles and ~~available for sale debt securities (codified~~also simplify 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 was adopted by 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 manner similar to accounting requirements in effect prior to adoption; however, the amended guidance requires that credit-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, 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 ~~adopted this standard as of~~beginning on January 1, ~~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 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

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

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 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 on its effective date of January 1, 20202021 with no material impact on its financial position ~~and~~or results of operations.

Not Yet Adopted

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 the upper-medium grade (low credit risk) fixed-income instrument yield instead of the earnings rate of invested assets; the

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

discount rate must be evaluated at each reporting date and the impact of changes to the liability estimate as a result of updating 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.

The guidance ~~will be~~is effective for ~~the Company~~fiscal years beginning ~~January 1,~~after December 15, 2022, ~~including~~and interim periods within ~~that year.~~those fiscal years. 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 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.

~~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 beginning 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 adopting this new accounting guidance on the consolidated financial statements.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting: In March 2020, 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 relevant 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 this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have been completed.

As certain published LIBOR isperiods are expected to be discontinued after 2021, the Company is evaluating the provisions of this 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 Entity’s Own Equity: In August 2020, the FASB issued guidance that simplifies accounting for convertible instruments by removing major separation models required under current

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

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 convertible 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 permitted. The Company is evaluating the requirements of this guidance and the potential impact on its financial position and results of operations.

4. ~~Acquisition~~

~~American Financial & Automotive Services~~

~~On May 1, 2020, the Company acquired American Financial & Automotive Services, Inc. (“AFAS”), a provider of auto finance~~Business Held for Sale 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. The total consideration was $176.9 million, comprised of a base purchase price of $157.5 million, contingent consideration of $1.5 million and other purchase price adjustments of $17.9 million, including excess cash in the business. The transaction resulted in provisional estimates of $2.9 million in net liabilities, $104.0 million of goodwill and $75.8 million of other intangible assets, which are primarily dealer relationships amortizable over 15 years.

~~5. Dispositions~~

~~Sale of Collateralized Loan Obligation (“CLO”) Asset Management Platform~~Discontinued Operations

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 to sell, for the three and nine months ended September 30, 2020, 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, 2020, respectively, that were also included in underwriting, general and administrative expenses in the consolidated statements of operations. Prior to the sale, the CLOs were variable interest entities (“VIEs”) that the Company consolidated, as described in Note 12. The Company retained its direct investments in the CLOs 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 Investment in Iké~~

In 2014, the Company made an approximately 40% investment in Iké Grupo, Iké Asistencia and certain of their affiliates (collectively, “Iké”), a services assistance business, for which the Company paid approximately $110.0 million. At the same time, the Company also entered into a shareholders’ agreement that provided 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 the Company (together, the “put/call”) in mid-2019 at a predetermined price. During 2019,March 2021, the Company entered into a ~~cooperation agreement with the majority shareholders of Iké to extend the put/call. In January 2020, in lieu of exercising the put/call, the Company entered into a formal~~definitive agreement to sell ~~its interests in Iké.~~

~~In May 2020,~~ the ~~Company completed~~legal entities which comprise the ~~sale~~businesses previously reported as the Global Preneed segment and certain businesses previously disposed 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~~through reinsurance, which were previously reported in the ~~second~~Corporate and Other segment (collectively, the “disposal business”) to CUNA Mutual Group (“CUNA”) for total cash consideration of $1.25 billion, subject to certain purchase price adjustments at closing. The transaction is expected to close by the end of the third quarter of ~~2020. Prior~~2021, subject to regulatory approvals and other customary closing conditions.

The estimated carrying value of the ~~sale,~~disposal business is subject to adjustment in ~~2020,~~future quarters until closing, and may be influenced by various factors including the ~~Company recorded aggregate impairment losses~~following:

•The performance of the disposal business, including the impact of discount, interest, mortality 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 settled its position upon the sale, resulting in a cash inflow of $22.0 million,reinsurance rates; and ~~net realized (losses) gains on the derivative of $20.3 million during the second quarter of 2020.~~

129

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

In total, the Company recorded net pre-tax charges of $121.1 million 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 Iké net losses•Changes in the consolidated statements of operations. For the nine months ended September 30, 2020, total impairment and put/call losses resulted in a tax benefit of $6.7 million; however, this was fully offset by a valuation allowance as the realizabilityterms of the ~~tax losses in~~agreement with CUNA, including as a result of any subsequent negotiations, any necessary changes to obtain regulatory approval or any changes due to unanticipated developments.

The Company reports a business as held for sale when management has received approval to sell the ~~related tax jurisdiction~~business and is ~~unlikely. There was tax expense of $4.3 million on~~committed to a formal plan, the ~~income arising on~~business is available for immediate sale, 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, and $9.3 million and $131.4 million were recorded for the nine months ended September 30, 2020 and 2019, respectively.

~~In connection with~~business is being actively marketed, the sale is anticipated to occur during the ~~Company provided financing to Iké Grupo in an aggregate principal~~ensuing year and certain other specified criteria are met. A business classified as held for sale is recorded at the lower of its carrying 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~~estimated fair value ofless costs to sell, which is required to be remeasured each reporting period. If the ~~Global Preneed reportable segment in connection with exploring strategic alternatives for the Global Preneed business, including the possible sale~~carrying amount of the business ~~to focus~~exceeds its estimated fair value, which is based on ~~opportunities within~~ the ~~Global Lifestyle and Global Housing segments. Such impairment indicators included the evaluation~~estimated sales price of the ~~long term economic performance~~transaction, less costs to sell, a loss is recognized. Depreciation is not recorded on assets of a business classified as held for sale.

The Company reports the ~~segment in light~~results of ~~further expected declines in interest rates from~~operations of a business as discontinued operations if (i) the ~~resurgence of COVID-19 cases. As interest rates are critical to~~business is classified as held for sale; (ii) the ~~performance~~business represents a strategic shift that will have a major impact on the Company’s operations and financial results; (iii) the operations and cash flows of the business have been or will be eliminated from the ~~anticipated long-term declines in interest rates are expected to~~ongoing operations of the Company as a result of the disposal transaction and (iv) the Company will not have ~~adverse impacts on existing business and cause~~any significant ~~challenges to profitability from new business. The overall expected adverse impact to the business~~continuing involvement 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 aspectsoperations of the business ~~including investment assumptions~~after the disposal transaction. The results of ~~asset portfolios. The fair value calculated~~discontinued operations are reported 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 separatelynet income from discontinued operations in the consolidated statements of operations for all periods presented, commencing in the ~~three~~period in which the business is either disposed of or is classified as held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell. Assets and ~~nine months ended September 30, 2020, with~~liabilities related to a ~~corresponding reduction to goodwill~~business classified as held for sale which also meets the criteria for discontinued operations are segregated in the consolidated balance ~~sheet as of September 30, 2020.~~sheets for the current and prior periods presented.

The Company ~~had previously~~has determined ~~in the first two quarters of 2020~~ that the ~~impact of COVID-19 and suppression of interest rates was expected~~disposal business meets the criteria to be ~~short term~~classified as held for sale and ~~due to excess fair value over carrying value~~that the sale represents a strategic shift that will have a major impact on the Company’s operations and financial results. Accordingly, the results of operations of the ~~reporting unit from the prior quantitative test, concluded that no indicators were triggered that would have required an interim impairment test.~~

~~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~~disposal business 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,~~as 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 adoption As reported on adoption Impact of adoption
Financial assets, at amortized cost:
Reinsurance recoverables $ 9,593.4 $ 9,570.9 $ (22.5)
Premiums and accounts receivable, net 1,692.8 1,691.0 (1.8)
Commercial mortgage loans on real estate 815.0 813.4 (1.6)
Total $ 12,101.2 $ 12,075.3 (25.9)
Tax effect 5.5
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, 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 classifiedfrom discontinued operations in the consolidated statements of operations and segregated in the consolidated statement of cash flows for all periods presented, and the assets and liabilities for the disposal business have been classified 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 availableheld for sale ~~fixed maturity securities~~ and ~~$1.4 million related to~~segregated for all periods presented in 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~~consolidated balance ~~sheet date when determining the allowance. Where rates are not available, the Company assigns default credit ratings~~sheets.

1410

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~~major classes of assets and liabilities held for sale included in the ~~CECL allowance for reinsurance recoverables by portfolio segment for the nine months ended September 30, 2020.~~consolidated balance sheets.

Global Lifestyle Global Housing Global Preneed Corporate and Other Total
Balance, December 31, 2019 $ 2.5 $ 0.3 $ 0 $ 0 $ 2.8
Cumulative effect of adoption 3.9 0.7 0.2 17.7 22.5
Incremental allowance 0.1 (0.4) 0 3.1 2.8
Recoveries (2.5) 0 0 0 (2.5)
Other 0 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 Lifestyle Global Housing Global Preneed Corporate and Other Total
Balance, December 31, 2019 $ 14.2 $ 0.2 $ 0.5 $ 0.4 $ 15.3
Cumulative effect of adoption 1.3 0.5 0 0 1.8
Acquired allowance as of acquisition date 0.4 0 0 0 0.4
Incremental allowance 2.2 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


	March 31, 2021		December 31, 2020
Assets
Investments:
Fixed maturity securities available for sale, at fair value	$	6,325.0	$	6,633.5
Equity securities at fair value	111.0		113.9
Commercial mortgage loans on real estate, at amortized cost	606.1		616.0
Short-term investments	142.5		41.2
Other investments	15.1		52.0
Total investments	7,199.7		7,456.6
Cash and cash equivalents	20.3		21.0
Premiums and accounts receivable	7.3		7.5
Reinsurance recoverables	3,244.0		3,234.5
Accrued investment income	66.5		62.7
Deferred acquisition costs	651.0		185.5
Property and equipment, net	47.2		47.2
Value of business acquired	4.1		4.3
Other assets	21.3		22.6
Assets held in separate accounts	2,230.1		2,176.8
Total assets held for sale	$	13,491.5	$	13,218.7
Liabilities
Future policy benefits and expenses	$	8,806.0	$	8,703.5
Unearned premiums	102.1		14.9
Claims and benefits payable	1,019.0		1,049.2
Commissions payable	10.3		9.4
Reinsurance balances payable	3.5		3.1
Accounts payable and other liabilities	194.2		154.4
Liabilities related to separate accounts	2,230.1		2,176.8
Total liabilities held for sale	$	12,365.2	$	12,111.3

1511

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 to net income in the period deemed uncollectible.

Upon adoption of ASC 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.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

Origination Year
2019 2018 2017 2016 Prior Total % 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
2019 2018 2017 2016 Prior Total % 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 2.0 41.6 73.7 47.7 20.8 55.0 238.8 30.7 %
1.0 to 1.5 37.3 43.0 26.2 9.6 64.5 180.6 23.2 %
Less than 1.0 0 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 property. 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 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.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(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,~~following table summarizes 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~~components 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 correctionsincome 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,discontinued operations 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.operations:


	Three Months Ended March 31,
	2021		2020
Revenues
Net earned premiums	$	17.7	$	18.3
Fees and other income	37.5		37.5
Net investment income	72.0		72.4
Net realized losses on investments	(1.1)		(11.3)

Total revenues	126.1		116.9
Benefits, losses and expenses
Policyholder benefits	74.0		72.0
Amortization of deferred acquisition costs and value of business acquired	19.2		18.9
Underwriting, general and administrative expenses	21.8		16.9

Total benefits, losses and expenses	115.0		107.8
Income from discontinued operations before income taxes	11.1		9.1
(Benefit) provision for income taxes	(3.2)		1.9
Net income from discontinued operations	$	14.3	$	7.2

9.5. Segment Information

As of ~~September 30, 2020,~~March 31, 2021, the Company had 43 reportable segments, excluding discontinued operations described above, which are defined based on the manner in which the 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 Lifestyle: provides mobile device solutions 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”);Lifestyle;

•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 related services;~~Housing; 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, income (expenses) primarily related to the Company’s frozen benefit plans, amounts related to businesses previously disposed of through reinsurance and the run-off of the Assurant Health business. Corporate and Other also includes goodwill impairments, the foreign currency gains (losses) from remeasurement of monetary assets and liabilities, changes in the fair value of derivative instruments and other expenses related to merger and acquisition activities, as well as other highly variable or unusual items other than reportable catastrophes (reportable catastrophe losses, net of reinsurance and client profit sharing adjustments, and including reinstatement and other premiums).

1812

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

The following tables summarize selected financial information by segment:


		Three Months Ended September 30, 2020											Three Months Ended March 31, 2021

		Global Lifestyle		Global Housing		Global Preneed		Corporate and Other		Consolidated			Global Lifestyle		Global Housing		Corporate and Other		Consolidated
Revenues	Revenues											Revenues
Net earned premiums	Net earned premiums	$	1,633.2	$	453.6	$	16.0	$	0	$	2,102.8	Net earned premiums	$	1,648.7	$	456.9	$	0	$	2,105.6
Fees and other income	Fees and other income	171.8		37.7		35.9		0.5		245.9		Fees and other income	213.6		36.1		0.2		249.9
Net investment income	Net investment income	44.6		16.5		70.1		3.9		135.1		Net investment income	50.8		19.4		6.1		76.3
Net realized gains on investments	Net realized gains on investments	0		0		0		16.6		16.6		Net realized gains on investments	0		0		0.8		0.8
Amortization of deferred gains on disposal of businesses		0		0		0		2.1		2.1

Total revenues	Total revenues	1,849.6		507.8		122.0		23.1		2,502.5		Total revenues	1,913.1		512.4		7.1		2,432.6
Benefits, losses and expenses	Benefits, losses and expenses											Benefits, losses and expenses
Policyholder benefits	Policyholder benefits	365.4		272.8		71.1		0.3		709.6		Policyholder benefits	327.4		201.3		0		528.7
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	870.5		56.8		18.9		0		946.2		Amortization of deferred acquisition costs and value of business acquired	889.2		57.5		0		946.7
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	480.8		162.2		15.3		29.2		687.5		Underwriting, general and administrative expenses	527.2		168.8		39.7		735.7
Goodwill impairment		0		0		0		137.8		137.8

Interest expense	Interest expense	0		0		0		25.5		25.5		Interest expense	0		0		28.4		28.4

Total benefits, losses and expenses	Total benefits, losses and expenses	1,716.7		491.8		105.3		192.8		2,506.6		Total benefits, losses and expenses	1,743.8		427.6		68.1		2,239.5
Segment income (loss) before provision (benefit) for income tax		132.9		16.0		16.7		(169.7)		(4.1)
Segment income (loss) from continuing operations before provision (benefit) for income tax												Segment income (loss) from continuing operations before provision (benefit) for income tax	169.3		84.8		(61.0)		193.1
Provision (benefit) for income taxes	Provision (benefit) for income taxes	26.3		2.9		3.5		(6.3)		26.4		Provision (benefit) for income taxes	40.2		17.4		(13.0)		44.6
Segment income (loss) after taxes		106.6		13.1		13.2		(163.4)		(30.5)
Segment net income (loss) from continuing operations												Segment net income (loss) from continuing operations	$	129.1	$	67.4	$	(48.0)	148.5
Net income from discontinued operations												Net income from discontinued operations							14.3
Net income												Net income							162.8
Less: Net loss attributable to non-controlling interests	Less: Net loss attributable to non-controlling interests	0		0		0		0.3		0.3		Less: Net loss attributable to non-controlling interests							0.2
Net income (loss) attributable to stockholders		106.6		13.1		13.2		(163.1)		(30.2)
Net income attributable to stockholders												Net income attributable to stockholders							163.0
Less: Preferred stock dividends	Less: Preferred stock dividends	0		0		0		(4.7)		(4.7)		Less: Preferred stock dividends							(4.7)
Net income (loss) attributable to common stockholders		$	106.6	$	13.1	$	13.2	$	(167.8)	$	(34.9)
Net income attributable to common stockholders												Net income attributable to common stockholders							$	158.3
		As of September 30, 2020											As of March 31, 2021
Segment assets:	Segment assets:	$	23,563.3	$	4,194.2	$	7,507.0	$	8,318.1	$	43,582.6	Segment assets:	$	24,335.2	$	3,892.2	$	16,183.2	$	44,410.6

1913

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

Three Months Ended September 30, 2019
Global Lifestyle Global Housing Global Preneed Corporate
and Other Consolidated
Revenues
Net earned premiums $ 1,525.1 $ 475.2 $ 15.1 $ 0 $ 2,015.4
Fees and other income 224.2 35.1 35.7 0.1 295.1
Net investment income 62.1 22.4 73.0 12.0 169.5
Net realized gains on investments 0 0 0 14.9 14.9
Amortization of deferred gains on disposal of businesses 0 0 0 4.4 4.4
Total revenues 1,811.4 532.7 123.8 31.4 2,499.3
Benefits, losses and expenses
Policyholder benefits 392.1 245.8 67.3 0 705.2
Amortization of deferred acquisition costs and value of business acquired 791.9 47.3 30.3 0 869.5
Underwriting, general and administrative expenses 496.6 187.6 18.2 62.1 764.5
Iké net losses 0 0 0 121.1 121.1
Interest expense 0 0 0 32.2 32.2
Loss on extinguishment of debt 0 0 0 31.4 31.4
Total benefits, losses and expenses 1,680.6 480.7 115.8 246.8 2,523.9
Segment income (loss) before provision (benefit) for income tax 130.8 52.0 8.0 (215.4) (24.6)
Provision (benefit) for income taxes 28.7 10.4 0.6 (11.1) 28.6
Segment income (loss) after taxes 102.1 41.6 7.4 (204.3) (53.2)
Less: Net income attributable to non-controlling interest 0 0 0 (1.6) (1.6)
Net income (loss) attributable to stockholders 102.1 41.6 7.4 (205.9) (54.8)
Less: Preferred stock dividends 0 0 0 (4.7) (4.7)
Net income (loss) attributable to common stockholders $ 102.1 $ 41.6 $ 7.4 $ (210.6) $ (59.5)

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~


		Nine Months Ended September 30, 2020											Three Months Ended March 31, 2020

		Global Lifestyle		Global Housing		Global Preneed		Corporate and Other		Consolidated			Global Lifestyle		Global Housing		Corporate and Other		Consolidated
Revenues	Revenues											Revenues
Net earned premiums	Net earned premiums	$	4,799.0	$	1,374.6	$	49.4	$	0	$	6,223.0	Net earned premiums	$	1,597.7	$	467.8	$	0	$	2,065.5
Fees and other income	Fees and other income	721.6		106.0		106.2		0.5		934.3		Fees and other income	349.2		32.6		1.8		383.6
Net investment income	Net investment income	143.5		54.9		210.3		19.6		428.3		Net investment income	54.7		22.0		6.9		83.6
Net realized losses on investments	Net realized losses on investments	0		0		0		(54.6)		(54.6)		Net realized losses on investments	0		0		(84.0)		(84.0)
Amortization of deferred gains on disposal of businesses		0		0		0		8.7		8.7

Total revenues	Total revenues	5,664.1		1,535.5		365.9		(25.8)		7,539.7		Total revenues	2,001.6		522.4		(75.3)		2,448.7
Benefits, losses and expenses	Benefits, losses and expenses											Benefits, losses and expenses
Policyholder benefits	Policyholder benefits	1,044.7		651.9		211.6		0.7		1,908.9		Policyholder benefits	336.2		198.7		0.3		535.2
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	2,519.7		169.9		56.1		0		2,745.7		Amortization of deferred acquisition costs and value of business acquired	838.4		56.9		0		895.3
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	1,649.4		496.6		48.4		137.4		2,331.8		Underwriting, general and administrative expenses	667.9		173.3		51.4		892.6
Goodwill impairment		0		0		0		137.8		137.8
Iké net losses		0		0		0		5.9		5.9

Interest expense	Interest expense	0		0		0		77.7		77.7		Interest expense	0		0		25.5		25.5

Total benefits, losses and expenses	Total benefits, losses and expenses	5,213.8		1,318.4		316.1		359.5		7,207.8		Total benefits, losses and expenses	1,842.5		428.9		77.2		2,348.6
Segment income (loss) before provision (benefit) for income tax		450.3		217.1		49.8		(385.3)		331.9
Segment income (loss) from continuing operations before provision (benefit) for income taxes												Segment income (loss) from continuing operations before provision (benefit) for income taxes	159.1		93.5		(152.5)		100.1
Provision (benefit) for income taxes	Provision (benefit) for income taxes	101.0		44.4		10.6		(127.8)		28.2		Provision (benefit) for income taxes	38.2		19.3		(106.0)		(48.5)
Segment income (loss) after taxes		349.3		172.7		39.2		(257.5)		303.7
Less: Net income attributable to non-controlling interests		0		0		0		(1.1)		(1.1)
Net income (loss) attributable to stockholders		349.3		172.7		39.2		(258.6)		302.6
Segment net income (loss) from continuing operations												Segment net income (loss) from continuing operations	$	120.9	$	74.2	$	(46.5)	148.6
Net income from discontinued operations												Net income from discontinued operations							7.2
Net income												Net income							155.8
Less: Net income attributable to non-controlling interest												Less: Net income attributable to non-controlling interest							(1.1)
Net income attributable to stockholders												Net income attributable to stockholders							154.7
Less: Preferred stock dividends	Less: Preferred stock dividends	0		0		0		(14.0)		(14.0)		Less: Preferred stock dividends							(4.7)
Net income (loss) attributable to common stockholders		$	349.3	$	172.7	$	39.2	$	(272.6)	$	288.6
Net income attributable to common stockholders												Net income attributable to common stockholders							$	150.0

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

Nine Months Ended September 30, 2019
Global Lifestyle Global Housing Global Preneed Corporate
and Other Consolidated
Revenues
Net earned premiums $ 4,499.1 $ 1,407.1 $ 46.3 $ 0 $ 5,952.5
Fees and other income 740.9 113.3 103.2 2.1 959.5
Net investment income 177.5 66.6 212.7 33.2 490.0
Net realized gains on investments 0 0 0 61.5 61.5
Amortization of deferred gains on disposal of businesses 0 0 0 16.9 16.9
Total revenues 5,417.5 1,587.0 362.2 113.7 7,480.4
Benefits, losses and expenses
Policyholder benefits 1,152.2 652.5 202.1 0.1 2,006.9
Amortization of deferred acquisition costs and value of business acquired 2,238.4 158.7 65.5 0 2,462.6
Underwriting, general and administrative expenses 1,622.6 541.6 49.8 174.1 2,388.1
Iké net losses 0 0 0 130.5 130.5
Interest expense 0 0 0 85.2 85.2
Loss on extinguishment of debt 0 0 0 31.4 31.4
Total benefits, losses and expenses 5,013.2 1,352.8 317.4 421.3 7,104.7
Segment income (loss) before provision (benefit) for income tax 404.3 234.2 44.8 (307.6) 375.7
Provision (benefit) for income taxes 92.3 48.4 8.7 (31.7) 117.7
Segment income (loss) after taxes 312.0 185.8 36.1 (275.9) 258.0
Less: Net income attributable to non-controlling interest 0 0 0 (3.0) (3.0)
Net income (loss) attributable to stockholders 312.0 185.8 36.1 (278.9) 255.0
Less: Preferred stock dividends 0 0 0 (14.0) (14.0)
Net income (loss) attributable to common stockholders $ 312.0 $ 185.8 $ 36.1 $ (292.9) $ 241.0

~~10.~~6. 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. Revenues 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 statements of operations are ~~$124.6~~$164.9 million and ~~$188.8~~$299.1 million for Global Lifestyle and ~~$25.3~~$24.5 million and ~~$23.8~~$22.1 million for Global Housing for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. The disaggregated revenues from service contracts included in fees and other income on the consolidated statements of operations are $579.3 million and $614.6 million for~~

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

~~Global Lifestyle and $71.1 million and $81.4 million for Global Housing for the nine months ended September 30, 2020 and 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

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

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 mobile and other electronic devices, on behalf of its ~~client,~~clients, for a bundled per unit fee. The entire processing of the device is considered one performance obligation with a standalone selling price and thus, the per unit fee is recognized when the products are sold. ~~Payment for the products is received~~Payments are generally due prior to shipment ~~and the Company deducts its per unit fee prior to remitting the remainder to the client.~~or within a short-term period.

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 ~~$210.0~~$219.9 million and ~~$85.7~~$91.6 million, respectively, as of ~~September 30, 2020,~~March 31, 2021, and ~~$185.0~~$257.9 million and ~~$87.6~~$89.8 million, respectively, as of December 31, ~~2019.~~2020. These balances are included in premiums and accounts receivable and accounts payable and other liabilities, respectively, in the consolidated balance sheets. Revenue from service contracts and sales of products recognized during the three months ended ~~September 30,~~March 31, 2021 and 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~~$11.7 million and ~~$44.7~~$20.2 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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company ~~has~~had approximately ~~$14.2~~$10.9 million and ~~$25.8~~$13.8 million, respectively, of such intangible assets attributed to service contracts that will be expensed over the term of the client contracts.

~~11.~~

7. Investments

The following tables show the cost or amortized cost, allowance for credit losses, gross unrealized gains and losses, and fair value ~~and impairment included within accumulated other comprehensive income (“AOCI”)~~ of the Company’s fixed maturity securities as of the dates indicated:


	March 31, 2021
	Cost or Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturity securities:
U.S. government and government agencies and authorities	$	72.5	$	0	$	2.9	$	(0.4)	$	75.0
States, municipalities and political subdivisions	174.6		0		8.1		(2.0)		180.7
Foreign governments	422.0		0		13.6		(1.1)		434.5
Asset-backed	268.3		0		13.3		(0.4)		281.2
Commercial mortgage-backed	280.0		0		12.8		(2.9)		289.9
Residential mortgage-backed	629.4		0		37.6		(0.6)		666.4
U.S. corporate	3,273.8		(1.2)		271.3		(26.4)		3,517.5
Foreign corporate	1,086.2		0		56.5		(12.0)		1,130.7
Total fixed maturity securities	$	6,206.8	$	(1.2)	$	416.1	$	(45.8)	$	6,575.9

2315

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

September 30, 2020
Cost or
Amortized
Cost Allowance for Credit Losses Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value Impairment 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 subdivisions 224.6 0 34.2 (0.1) 258.7 0
Foreign governments 872.2 0 149.7 (1.0) 1,020.9 0
Asset-backed 529.9 0 8.5 (6.0) 532.4 0
Commercial mortgage-backed 327.2 0 16.8 (3.8) 340.2 0
Residential mortgage-backed 1,084.7 0 95.8 (0.2) 1,180.3 2.5
U.S. corporate 6,001.0 (1.5) 1,100.3 (23.2) 7,076.6 17.6
Foreign corporate 2,214.6 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 Value Impairment 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 subdivisions 216.1 26.4 0 242.5 0
Foreign governments 916.9 94.3 (0.8) 1,010.4 0
Asset-backed 502.4 3.1 (2.3) 503.2 0
Commercial mortgage-backed 212.7 10.2 (0.8) 222.1 0
Residential mortgage-backed 1,235.3 52.4 (1.4) 1,286.3 3.1
U.S. corporate 5,679.8 818.9 (2.1) 6,496.6 16.5
Foreign corporate 2,112.7 255.4 (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.


	December 31, 2020
	Cost or Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturity securities:
U.S. government and government agencies and authorities	$	90.4	$	0	$	3.7	$	0	$	94.1
States, municipalities and political subdivisions	164.4		0		11.0		(0.1)		175.3
Foreign governments	442.4		0		27.4		(0.1)		469.7
Asset-backed	251.9		0		9.4		(0.8)		260.5
Commercial mortgage-backed	266.3		0		16.5		(1.4)		281.4
Residential mortgage-backed	685.8		0		49.0		(0.2)		734.6
U.S. corporate	3,315.6		(1.2)		380.6		(4.4)		3,690.6
Foreign corporate	1,029.0		0		80.6		(0.3)		1,109.3
Total fixed maturity securities	$	6,245.8	$	(1.2)	$	578.2	$	(7.3)	$	6,815.5

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%~~0.4% of the overall investment portfolio as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the securities included general obligation and revenue bonds issued by states, cities, counties, school districts and similar issuers, including ~~$38.7~~$39.5 million and ~~$51.9~~$39.6 million, respectively, of advance refunded or escrowed-to-maturity bonds (collectively referred to as “pre-refunded revenue 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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, revenue bonds accounted for ~~63%~~61% and 60% of the holdings, respectively. Excluding pre-refunded revenue 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.

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 March 31, 2021, approximately 25%, 21% and 16% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and Mexico, respectively. As of December 31, 2020, approximately 26%, 24% and 16% of the foreign government securities were held in Brazil, Canadian government/provincials and Mexico, respectively. No other country represented more than 10% and 8% of the Company’s foreign government securities as of March 31, 2021 and December 31, 2020, respectively.

The Company had European investment exposure in its corporate fixed maturity securities of $617.2 million with a net unrealized gain of $21.6 million as of March 31, 2021 and $589.5 million with a net unrealized gain of $41.8 million as of December 31, 2020. Approximately 34% and 29% of the corporate fixed maturity European exposure was held in the financial industry as of March 31, 2021 and December 31, 2020, respectively. The Company’s largest European country exposure (the United Kingdom) represented approximately 6% of the fair value of the Company’s corporate fixed maturity securities as of March 31, 2021 and December 31, 2020. 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 $290.0 million with a net unrealized gain of $19.5 million as of March 31, 2021 and $319.4 million with a net unrealized gain of $23.0 million as of December 31, 2020. Approximately 82% and 81% of the energy exposure is rated as investment grade as of March 31, 2021 and December 31, 2020, respectively.

The cost or amortized cost and fair value of fixed maturity securities as of March 31, 2021 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.

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, 2020, approximately 59%, 12% and 8% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and Mexico, respectively. As of December 31, 2019, approximately 58%, 20% and 6% of the foreign government securities were held in Canadian government/provincials and the governments of Brazil and Mexico, respectively. No other country represented more than 4% and 5% of the Company’s foreign government securities as of September 30, 2020 and December 31, 2019, respectively.

The Company had European investment exposure in its corporate fixed maturity securities of $881.5 million with a net unrealized gain of $109.2 million as of September 30, 2020 and $802.3 million with a net unrealized gain of $82.4 million as of December 31, 2019. Approximately 28% of the corporate fixed maturity European exposure was held in the financial industry as of September 30, 2020 and December 31, 2019. The Company’s largest European country exposure (the United Kingdom) represented approximately 4% of the fair value of the Company’s corporate fixed maturity securities as of September 30, 2020 and December 31, 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, 2020 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 years 2,547.5 2,717.6
Due after five years through ten years 2,439.3 2,744.2
Due after ten years 3,987.2 5,109.4
Total 9,437.5 11,041.6
Asset-backed 529.9 532.4
Commercial mortgage-backed 327.2 340.2
Residential mortgage-backed 1,084.7 1,180.3
Total $ 11,379.3 $ 13,094.5


	Cost or Amortized Cost		Fair Value
Due in one year or less	$	359.0	$	363.5
Due after one year through five years	2,047.5		2,170.5
Due after five years through ten years	1,730.5		1,848.2
Due after ten years	892.1		956.2
Total	5,029.1		5,338.4
Asset-backed	268.3		281.2
Commercial mortgage-backed	280.0		289.9
Residential mortgage-backed	629.4		666.4
Total	$	6,206.8	$	6,575.9

The following table sets forth the net realized gains (losses), including impairment, recognized in the consolidated statements of operations for the periods indicated:


	Three Months Ended March 31,
	2021		2020
Net realized gains (losses) related to sales and other:
Fixed maturity securities	$	3.0	$	3.7
Equity securities (1)	(1.7)		(34.9)
Commercial mortgage loans on real estate	0.3		(0.2)
Other investments	0.2		0.9
Consolidated investment entities (2)	0		(48.2)
Total net realized gains (losses) related to sales and other	1.8		(78.7)
Net realized losses related to impairments:
Fixed maturity securities	0		(1.1)
Other investments (1)	(1.0)		(4.2)
Total net realized losses related to impairments	(1.0)		(5.3)
Total net realized gains (losses)	$	0.8	$	(84.0)

(1)Three months ended March 31, 2021 and 2020 includes $2.1 million and $2.2 million, respectively, of net gains on equity investment holdings accounted for under the measurement alternative. The carrying value of equity investments accounted for under the measurement alternative was $103.3 million and $96.0 million as of March 31, 2021 and 2020, respectively. These investments are included within other investments on the consolidated balance sheets. For the three months ended March 31, 2021 and 2020, there were impairments of $1.0 million and $4.2 million, respectively. For the three months ended March 31, 2021 and 2020, the cumulative carry value fair value increases were $37.1 million and $26.8 million, respectively. For the three months ended March 31, 2021 and 2020, the cumulative impairment losses were $19.6 million and $5.6 million, respectively.

(2)Consists of net realized losses from the change in fair value of the Company’s direct investment in collateralized loan obligations (“CLOs”).

The following table sets forth the portion of unrealized gains (losses) related to equity securities for the periods indicated:


	Three Months Ended March 31,
	2021		2020
Net losses recognized on equity securities	$	(1.7)	$	(34.9)
Less: Net realized gains related to sales of equity securities	0.9		0
Total net unrealized losses on equity securities held	$	(2.6)	$	(34.9)

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,
2020 2019 2020 2019
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 investments 2.2 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 other 18.1 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 for the periods indicated:~~

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Net gains (losses) recognized on equity securities $ 16.9 $ 9.4 $ (9.9) $ 46.3
Less: Net realized gains related to sales of equity securities 0.4 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, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows:


	March 31, 2021
	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	$	17.9	$	(0.4)	$	0	$	0	$	17.9	$	(0.4)
States, municipalities and political subdivisions	72.3		(2.0)		0		0		72.3		(2.0)
Foreign governments	54.9		(1.1)		0		0		54.9		(1.1)
Asset-backed	80.1		(0.2)		33.4		(0.2)		113.5		(0.4)
Commercial mortgage-backed	72.1		(2.3)		2.9		(0.6)		75.0		(2.9)
Residential mortgage-backed	36.7		(0.5)		3.1		(0.1)		39.8		(0.6)
U.S. corporate	397.8		(23.8)		27.7		(2.6)		425.5		(26.4)
Foreign corporate	259.0		(11.9)		3.1		(0.1)		262.1		(12.0)
Total fixed maturity securities	$	990.8	$	(42.2)	$	70.2	$	(3.6)	$	1,061.0	$	(45.8)


	December 31, 2020
	Less than 12 months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturity securities:

States, municipalities and political subdivisions	$	6.1	$	(0.1)	$	0	$	0	$	6.1	$	(0.1)
Foreign governments	28.3		(0.1)		0		0		28.3		(0.1)
Asset-backed	54.5		(0.2)		37.4		(0.6)		91.9		(0.8)
Commercial mortgage-backed	28.2		(0.7)		3.3		(0.7)		31.5		(1.4)
Residential mortgage-backed	23.9		(0.1)		1.5		(0.1)		25.4		(0.2)
U.S. corporate	71.9		(2.9)		13.8		(1.5)		85.7		(4.4)
Foreign corporate	30.1		(0.3)		0		0		30.1		(0.3)
Total fixed maturity securities	$	243.0	$	(4.4)	$	56.0	$	(2.9)	$	299.0	$	(7.3)

Total gross unrealized losses represented approximately 4% and 2% of the aggregate fair value of the related securities as of March 31, 2021 and December 31, 2020, respectively. Approximately 92% and 60% of these gross unrealized losses had been in a continuous loss position for less than twelve months as of March 31, 2021 and December 31, 2020, respectively. The total gross unrealized losses are comprised of 619 and 180 individual securities as of March 31, 2021 and December 31, 2020, respectively. In accordance with its policy, the Company concluded that for these securities, the gross unrealized losses as of March 31, 2021 and December 31, 2020 were related to non-credit factors and therefore, did not recognize credit-related losses during the three months ended March 31, 2021. Additionally, the Company currently does not intend to and is not required to sell these investments prior to an anticipated recovery in value.

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 March 31, 2021, approximately 53% of the outstanding principal balance of commercial mortgage loans was concentrated in the states of California, Texas and Oregon. 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 $0.2 million to $9.9 million as of March 31, 2021 and from $0.1 million to $9.9 million as of December 31, 2020.

Credit quality indicators for commercial mortgage loans are loan-to-value and debt-service coverage ratios. The loan-to-value ratio compares the principal amount of the loan to the fair value of the underlying property collateralizing the loan, and is

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

September 30, 2020
Less than 12 months 12 Months or More Total
Fair Value Unrealized
Losses Fair Value Unrealized
Losses Fair Value Unrealized
Losses
Fixed maturity securities:
States, municipalities and political subdivisions 24.7 (0.1) 0 0 24.7 (0.1)
Foreign governments 14.9 (1.0) 0 0 14.9 (1.0)
Asset-backed 112.5 (3.8) 83.9 (2.2) 196.4 (6.0)
Commercial mortgage-backed 53.2 (2.9) 3.9 (0.9) 57.1 (3.8)
Residential mortgage-backed 26.2 (0.1) 1.5 (0.1) 27.7 (0.2)
U.S. corporate 307.9 (22.0) 15.7 (1.2) 323.6 (23.2)
Foreign corporate 112.9 (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 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 $ 21.9 $ (0.1) $ 0 $ 0 $ 21.9 $ (0.1)
Foreign governments 115.7 (0.8) 0 0 115.7 (0.8)
Asset-backed 66.9 (0.2) 105.1 (2.1) 172.0 (2.3)
Commercial mortgage-backed 20.0 (0.3) 4.3 (0.5) 24.3 (0.8)
Residential mortgage-backed 82.5 (0.6) 82.6 (0.8) 165.1 (1.4)
U.S. corporate 87.5 (1.4) 14.4 (0.7) 101.9 (2.1)
Foreign corporate 45.8 (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)
commonly expressed as a percentage. The debt-service coverage ratio compares a property’s net operating income to its debt-service payments and is commonly expressed as a ratio. The loan-to-value and debt-service coverage ratios are generally updated annually in the fourth quarter.

~~Total gross unrealized~~The following table presents the amortized cost basis of commercial mortgage loans, excluding the allowance for credit losses, ~~represented approximately 5% and 1% of the aggregate fair value of the related securities as of September 30, 2020~~by origination year for certain key credit quality indicators at March 31, 2021 and December 31, 2019, respectively. Approximately 88% and 49% of these gross unrealized losses had been in a continuous loss position for less than twelve months as of September 30, 2020 and December 31, 2019, respectively. The total gross unrealized losses are comprised of 396 and 330 individual securities as of September 30, 2020 and December 31, 2019, respectively. In accordance with its policy, the Company concluded that for these securities, the gross unrealized losses as of September 30, 2020 and December 31, 2019 were related to non-credit factors and therefore, did not incur credit-related losses during the three and nine months ended September 30, 2020. ~~Additionally, the Company currently does not intend to and is not required to sell these investments prior to an anticipated recovery in value.~~


	March 31, 2021
	Origination Year
	2021		2020		2019		2018		2017		Prior		Total	% of Total
Loan to value ratios (1):
70% and less	$	5.5	$	2.9	$	0	$	0	$	4.1	$	115.4	127.9	85.8	%
71% to 80%	$	4.6	$	2.6	$	0	$	4.8	$	0	$	0	12.0	8.0	%
81% to 95%	$	0	$	0	$	0	$	0	$	0	$	2.1	2.1	1.4	%
Greater than 95%	$	0	$	0	$	0	$	0	$	5.9	$	1.2	7.1	4.8	%
Total	$	10.1	$	5.5	$	0	$	4.8	$	10.0	$	118.7	149.1	100.0	%


	March 31, 2021
	Origination Year
	2021		2020		2019		2018		2017		Prior		Total		% of Total
Debt service coverage ratios (2):
Greater than 2.0	$	5.8	$	5.5	$	0	$	0	$	4.1	$	81.8	$	97.2	65.3	%
1.5 to 2.0	2.9		0		0		4.8		0		17.7		25.4		17.0	%
1.0 to 1.5	1.4		0		0		0		0		14.6		16.0		10.7	%
Less than 1.0	0		0		0		0		5.9		4.6		10.5		7.0	%
Total	$	10.1	$	5.5	$	0	$	4.8	$	10.0	$	118.7	$	149.1	100.0	%

~~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 was registered with the U.S. Securities and Exchange Commission (the “SEC”) as an investment adviser. The subsidiary (or one of its affiliates) managed and invested in CLOs and real estate funds and conducted other forms of investment activities. Prior to third quarter 2020, the Company had determined that the CLOs and real estate


	December 31, 2020
	Origination Year
	2020		2019		2018		2017		2016		Prior		Total		% of Total
Loan to value ratios (1):
70% and less	$	2.9	$	0	$	0	$	4.1	$	29.0	$	87.1	$	123.1	88.0	%
71% to 80%	2.6		0		4.8		0		0		0		7.4		5.3	%
81% to 95%	0		0		0		0		0		2.2		2.2		1.6	%
Greater than 95%	0		0		0		6.0		0		1.2		7.2		5.1	%
Total	$	5.5	$	0	$	4.8	$	10.1	$	29.0	$	90.5	$	139.9	100.0	%

2719

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 as collateral manager, which gave it the power to direct the activities that most significantly impact the economic performance of the entities, and (ii) its economic interest in the entities, which exposed it to losses and the right to receive benefits that could potentially be significant to the entities. During the third quarter 2020, the Company sold its CLO asset management platform and outsourced its real estate asset management. As a result of these transactions, the Company deconsolidated the CLO entities and real estate fund since it no longer acts as collateral manager and, as a result, no longer has the power to control these entities. See Note 5 for additional information on the sale of the CLO asset management platform.

~~Collateralized Loan Obligations:~~


	December 31, 2020
	Origination Year
	2020		2019		2018		2017		2016		Prior		Total		% of Total
Debt service coverage ratios (2):
Greater than 2.0	$	5.5	$	0	$	0	$	4.1	$	26.4	$	53.3	$	89.3	63.9	%
1.5 to 2.0	0		0		4.8		0		2.6		17.5		24.9		17.8	%
1.0 to 1.5	0		0		0		0		0		15.0		15.0		10.7	%
Less than 1.0	0		0		0		6.0		0		4.7		10.7		7.6	%
Total	$	5.5	$	0	$	4.8	$	10.1	$	29.0	$	90.5	$	139.9	100.0	%

(1)Prior to the deconsolidation in the third quarter of 2020, the CLO entities were collateralized financing entities. Under 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 reducedLoan-to-value ratio derived from current loan balance divided by the fair value of the beneficial interests the Company retains in the 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 theproperty. 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 obligations of the CLOs. The liabilities of the CLOs are non-recourse to the Company and the Company has no obligation to satisfy the liabilities of the CLOs.underlying commercial properties is updated at least annually.

As of September 30, 2020, due to the deconsolidation, the CLO investments are reported in the consolidated balance sheet in fixed maturity securities and other investments. As of December 31, 2019, the carrying value of the Company’s investment in the CLOs that had closed was $77.4 million in subordinated debt tranches and $21.1 million in senior debt tranches.

The Company’s retained beneficial interests in subordinated tranches are measured at fair value using the market or income valuation techniques using significant unobservable inputs and assumptions, including prepayment, default rate, recovery lag, reinvestment, collateral liquidation price, discount rate and call date assumptions.

~~Real Estate Fund:~~(2) ~~Prior to the deconsolidation in the third quarter of 2020,~~ the Company’s real estate fund investment was a closed ended fund that included contributions from third party investors, which were 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 fund, which includes the change in fair value of the Company’s investments in the real estate fund and investment management fees earned. The Company had a majority investment in the real estate fund in the form of an equity 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 fund was $88.3 million as of December 31, 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 13 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 December 31, 2019.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

December 31, 2019
Total Level 1 Level 2 Level 3
Financial Assets
Investments:
Cash and cash equivalents $ 32.9 $ 32.9 (1) $ 0 $ 0
Corporate debt securities 1,850.7 0 1,850.7 0
Real estate fund 107.2 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.~~

~~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 isDebt-service coverage ratio 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~~most recent reported operating results from property operators divided by annual 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.~~service coverage.

~~Level 3 Securities~~

~~Real estate fund:~~ These assets are comprised of investments in limited partnerships whose underlying investments are real estate properties. Management estimates the fair value of these real estate assets using the market, income or cost approach valuation techniques, using significant unobservable inputs and assumptions, including capitalization rates, discount rates, market comparable prices, leasing assumptions and replacement 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, 2020 and 2019:

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Balance, beginning of period $ 54.5 $ 138.2 $ 107.2 $ 112.0
Purchases 0 0 0 15.4
Sales 0 (5.6) (61.0) (5.6)
Deconsolidation adjustments (1)
(54.5) 0 (54.5) 0
Total income included in earnings 0 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.~~

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

~~13.~~8. 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~~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.

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, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. The amounts presented below for short-term investments, other investments, cash equivalents, 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 and other 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.

3020

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

September 30, 2020
Total Level 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 subdivisions 258.7 0    258.7    0
Foreign governments 1,020.9 0.6    1,020.0    0.3
Asset-backed 532.4 0    531.6    0.8
Commercial mortgage-backed 340.2 0    320.4    19.8
Residential mortgage-backed 1,180.3 0    1,177.6    2.7
U.S. corporate 7,076.6 0 7,050.1 26.5
Foreign corporate 2,553.5 0    2,520.0    33.5
Equity securities:
Mutual funds 42.6 42.6 0 0
Common stocks 20.4 18.6    0.7    1.1
Non-redeemable preferred stocks 321.4 0    319.3    2.1
Short-term investments 217.3 174.8 (2) 42.5 0
Other investments 231.7 66.4 (1) 165.3 (3) 0
Cash equivalents 1,592.4 1,564.8 (2) 27.6 (3) 0
Other assets 1.0 0 0.8 (4) 0.2 (4)
Assets held in separate accounts 1,972.6 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 accounts 1,972.6 1,802.1 (1) 170.5 (3) 0
Total financial liabilities $ 2,039.0 $ 1,868.5    $ 170.5    $ 0

Plan, a modified coinsurance arrangement and other derivatives. Other liabilities are comprised of investments in the AIP, contingent considerations related to business combinations and other derivatives. 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.


	March 31, 2021
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	75.0	$	0		$	75.0		$	0
States, municipalities and political subdivisions	180.7		0			180.7			0
Foreign governments	434.5		0.5			433.6			0.4
Asset-backed	281.2		0			279.7			1.5
Commercial mortgage-backed	289.9		0			281.6			8.3
Residential mortgage-backed	666.4		0			666.4			0
U.S. corporate	3,517.5		0			3,506.3			11.2
Foreign corporate	1,130.7		0			1,126.9			3.8
Equity securities:
Mutual funds	42.1		42.1			0			0
Common stocks	15.8		13.8			0.6			1.4
Non-redeemable preferred stocks	235.3		0			234.2			1.1
Short-term investments	116.0		87.8		(2)	28.2			0
Other investments	231.4		73.0		(1)	158.3		(3)	0.1
Cash equivalents	872.5		831.5		(2)	41.0		(3)	0

Other assets	0.1		0			0.1		(4)	0
Assets held in separate accounts	11.2		6.6		(1)	4.6		(3)	0
Total financial assets	$	8,100.3	$	1,055.3		$	7,017.2		$	27.8

Financial Liabilities
Other liabilities	$	75.8	$	73.0	(1)	$	0		$	2.8	(5)
Liabilities related to separate accounts	11.2		6.6		(1)	4.6		(3)	0
Total financial liabilities	$	87.0	$	79.6		$	4.6		$	2.8

3121

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

December 31, 2019
Total Level 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 subdivisions 242.5 0 242.5 0
Foreign governments 1,010.4 0.3 1,010.1 0
Asset-backed 503.2 0 503.2 0
Commercial mortgage-backed 222.1 0 198.6 23.5
Residential mortgage-backed 1,286.3 0 1,286.3 0
U.S. corporate 6,496.6 0 6,494.8 1.8
Foreign corporate 2,367.2 0 2,331.5 35.7
Equity securities:
Mutual funds 45.5 45.5 0 0
Common stocks 23.5 22.8 0.7 0
Non-redeemable preferred stocks 319.5 0 317.3 2.2
Short-term investments 367.5 271.4 (2) 96.1 0
Other investments 234.6 70.3 (1) 164.3 (3) 0
Cash equivalents 1,287.5 1,277.8 (2) 9.7 (3) 0
Assets held in separate accounts 1,806.3 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 accounts 1,806.3 1,623.7 (1) 182.6 (3) 0
Total financial liabilities $ 1,978.3 $ 1,694.0 $ 284.1 $ 0.2


	December 31, 2020
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
U.S. government and government agencies and authorities	$	94.1	$	0		$	94.1		$	0
States, municipalities and political subdivisions	175.3		0			175.3			0
Foreign governments	469.7		0.5			468.8			0.4
Asset-backed	260.5		0			260.5			0
Commercial mortgage-backed	281.4		0			272.7			8.7
Residential mortgage-backed	734.6		0			734.6			0
U.S. corporate	3,690.6		0			3,678.6			12.0
Foreign corporate	1,109.3		0			1,105.4			3.9
Equity securities:
Mutual funds	42.3		42.3			0			0
Common stocks	15.2		13.3			0.7			1.2
Non-redeemable preferred stocks	232.7		0			231.6			1.1
Short-term investments	253.5		202.0		(2)	51.5			0
Other investments	241.3		72.9		(1)	168.3		(3)	0.1
Cash equivalents	1,558.6		1,536.6		(2)	22.0		(3)	0


Assets held in separate accounts	11.4		6.7		(1)	4.7		(3)	0
Total financial assets	$	9,170.5	$	1,874.3		$	7,268.8		$	27.4

Financial Liabilities
Other liabilities	$	76.1	$	72.9	(1)	$	0.5	(4)	$	2.7	(5)
Liabilities related to separate accounts	11.4		6.7		(1)	4.7		(3)	0
Total financial liabilities	$	87.5	$	79.6		$	5.2		$	2.7

(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.~~derivatives.

(5)Includes ~~the put/call related~~contingent consideration liabilities and other derivatives.

Assurant, Inc.

Notes to ~~the investment~~ Consolidated Financial Statements (unaudited)

(in ~~Iké. See Note 5 for more information.~~millions, except number of shares and per share amounts)

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:

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~


		September 30, 2020											March 31, 2021
				Fair Value											Fair Value
		Carrying Value		Total		Level 1		Level 2		Level 3			Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets	Financial Assets											Financial Assets
Commercial mortgage loans on real estate	Commercial mortgage loans on real estate	$	771.1	$	827.0	$	0	$	0	$	827.0	Commercial mortgage loans on real estate	$	147.9	$	160.7	$	0	$	0	$	160.7
Other investments	Other investments	165.4		165.4		30.3		0		135.1		Other investments	50.4		50.4		14.3		0		36.1
Other assets	Other assets	24.8		24.8		0		0		24.8		Other assets	21.9		21.9		0		0		21.9
Total financial assets	Total financial assets	$	961.3	$	1,017.2	$	30.3	$	—	$	986.9	Total financial assets	$	220.2	$	233.0	$	14.3	$	0	$	218.7
Financial Liabilities	Financial Liabilities											Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	527.1	$	585.3	$	0	$	0	$	585.3	Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	69.6	$	81.5	$	0	$	0	$	81.5
Funds withheld under reinsurance	Funds withheld under reinsurance	361.2		361.2		361.2		0		0		Funds withheld under reinsurance	359.8		359.8		359.8		0		0
Debt	Debt	2,008.6		2,204.3		0		2,204.3		0		Debt	2,203.7		2,455.0		0		2,455.0		0
Total financial liabilities	Total financial liabilities	$	2,896.9	$	3,150.8	$	361.2	$	2,204.3	$	585.3	Total financial liabilities	$	2,633.1	$	2,896.3	$	359.8	$	2,455.0	$	81.5

		December 31, 2019											December 31, 2020
				Fair Value											Fair Value
		Carrying Value		Total		Level 1		Level 2		Level 3			Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets	Financial Assets											Financial Assets
Commercial mortgage loans on real estate	Commercial mortgage loans on real estate	$	815.0	$	843.8	$	0	$	0	$	843.8	Commercial mortgage loans on real estate	$	138.3	$	198.3	$	0	$	0	$	198.3
Other investments	Other investments	140.0		140.0		30.7		0		109.3		Other investments	52.1		52.1		14.4		0		37.7
Other assets	Other assets	28.9		28.9		0		0		28.9		Other assets	23.3		23.3		0		0		23.3
Total financial assets	Total financial assets	$	983.9	$	1,012.7	$	30.7	$	0	$	982.0	Total financial assets	$	213.7	$	273.7	$	14.4	$	0	$	259.3
Financial Liabilities	Financial Liabilities											Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	551.6	$	588.4	$	0	$	0	$	588.4	Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	70.6	$	85.4	$	0	$	0	$	85.4
Funds withheld under reinsurance	Funds withheld under reinsurance	319.4		319.4		319.4		0		0		Funds withheld under reinsurance	358.6		358.6		358.6		0		0
Debt	Debt	2,006.9		2,190.6		0		2,190.6		0		Debt	2,252.9		2,540.0		0		2,540.0		0
Total financial liabilities	Total financial liabilities	$	2,877.9	$	3,098.4	$	319.4	$	2,190.6	$	588.4	Total financial liabilities	$	2,682.1	$	2,984.0	$	358.6	$	2,540.0	$	85.4

(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.

~~14.~~9. 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.

3323

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,					For the Three Months Ended March 31,
		2020		2019			2021		2020
Claims and benefits payable, at beginning of period	Claims and benefits payable, at beginning of period	$	2,687.7	$	2,813.7	Claims and benefits payable, at beginning of period	$	1,610.3	$	1,613.1
Less: Reinsurance ceded and other	Less: Reinsurance ceded and other	(1,900.0)		(2,053.7)		Less: Reinsurance ceded and other	(849.4)		(855.1)
Net claims and benefits payable, at beginning of period	Net claims and benefits payable, at beginning of period	787.7		760.0		Net claims and benefits payable, at beginning of period	760.9		758.0
Incurred losses and loss adjustment expenses related to:	Incurred losses and loss adjustment expenses related to:					Incurred losses and loss adjustment expenses related to:
Current year	Current year	1,951.4		2,034.2		Current year	574.9		580.2
Prior years	Prior years	(43.0)		(27.3)		Prior years	(46.2)		(45.0)
Total incurred losses and loss adjustment expenses	Total incurred losses and loss adjustment expenses	1,908.4		2,006.9		Total incurred losses and loss adjustment expenses	528.7		535.2
Paid losses and loss adjustment expenses related to:	Paid losses and loss adjustment expenses related to:					Paid losses and loss adjustment expenses related to:
Current year	Current year	1,368.4		1,468.4		Current year	235.8		277.8
Prior years	Prior years	463.0		470.4		Prior years	268.3		268.9
Total paid losses and loss adjustment expenses	Total paid losses and loss adjustment expenses	1,831.4		1,938.8		Total paid losses and loss adjustment expenses	504.1		546.7
Net claims and benefits payable, at end of period	Net claims and benefits payable, at end of period	864.7		828.1		Net claims and benefits payable, at end of period	785.5		746.5
Plus: Reinsurance ceded and other (1)	Plus: Reinsurance ceded and other (1)	1,893.5		2,043.0		Plus: Reinsurance ceded and other (1)	792.5		857.8
Claims and benefits payable, at end of period (1)	Claims and benefits payable, at end of period (1)	$	2,758.2	$	2,871.1	Claims and benefits payable, at end of period (1)	$	1,578.0	$	1,604.3

(1)Includes reinsurance recoverables and claims and benefits payable of ~~$118.4~~$66.1 million and ~~$191.7~~$72.8 million as of ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ 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.

The Company experienced favorable development in both periods presented in the roll forward table above. Global Lifestyle contributed ~~$34.0~~$30.6 million and ~~$28.5~~$29.7 million to the net favorable development during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The net favorable development in both years was attributable to nearly all lines of business across most of the Company’s regions with a concentration on more recent accident years and 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 ~~$2.9~~$12.6 million and $9.9 million of net favorable development ~~and $7.5 million of net unfavorable development~~ for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The net favorable development in ~~2020~~both years was primarily attributable to Lender-placed Insurance products from the most recent accident ~~year 2019~~years due to lower than expected non-catastrophe claim frequency for water damage and 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. Global Preneed and otherfrequency. All others contributed ~~$6.1~~$3.0 million and ~~$6.3~~$5.4 million inon net favorable development for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

3424

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

~~15.~~

10. 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, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
		Principal Amount		Carrying Value		Principal Amount		Carrying Value			Principal Amount		Carrying Value		Principal Amount		Carrying Value
Floating Rate Senior Notes due March 2021 (1)	Floating Rate Senior Notes due March 2021 (1)	$	50.0	$	50.0	$	50.0	$	49.9	Floating Rate Senior Notes due March 2021 (1)	$	0	$	0	$	50.0	$	50.0
4.00% Senior Notes due March 2023	4.00% Senior Notes due March 2023	350.0		348.8		350.0		348.5		4.00% Senior Notes due March 2023	350.0		349.0		350.0		348.9
4.20% Senior Notes due September 2023	4.20% Senior Notes due September 2023	300.0		298.2		300.0		297.8		4.20% Senior Notes due September 2023	300.0		298.5		300.0		298.4
4.90% Senior Notes due March 2028	4.90% Senior Notes due March 2028	300.0		297.1		300.0		296.8		4.90% Senior Notes due March 2028	300.0		297.2		300.0		297.2
3.70% Senior Notes due February 2030	3.70% Senior Notes due February 2030	350.0		347.0		350.0		346.8		3.70% Senior Notes due February 2030	350.0		347.1		350.0		347.0
6.75% Senior Notes due February 2034	6.75% Senior Notes due February 2034	275.0		272.2		275.0		272.1		6.75% Senior Notes due February 2034	275.0		272.3		275.0		272.3
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		395.3		400.0		395.0		7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		395.6		400.0		395.4

5.25% Subordinated Notes due January 2061										5.25% Subordinated Notes due January 2061	250.0		244.0		250.0		243.7
Total Debt	Total Debt			$	2,008.6			$	2,006.9	Total Debt			$	2,203.7			$	2,252.9

(1)~~Bears~~The outstanding aggregate principal amount was repaid in January 2021. Prior to repayment, these senior notes bore floating interest at a rate equal to three-month LIBOR plus 1.25% per annum.

(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.

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 (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 the 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, 2020,~~March 31, 2021, 0 borrowings were outstanding under the Credit Facility, and $445.5 million was available under the Credit Facility due to $4.5 million of letters of credit 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 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 due 2048, in each case on an effective yield basis. The amortization of the deferred gain for the three months ended ~~September 30,~~March 31, 2021 and 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 $2.2 million and $2.1 million, respectively.~~million. The remaining deferred gain as of ~~September 30, 2020~~March 31, 2021 was ~~$19.3~~$17.9 million.

3525

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

~~16.~~

11. 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 transactions Credit related impairment Non-credit related impairment Unamortized net losses on Pension Plans Accumulated
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 reclassifications 35.3 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 transactions Credit related impairment Non-credit related impairment Unamortized net (losses) gains on Pension Plans Accumulated
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) income 0 (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

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in 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 transactions Credit related impairment Non-credit related impairment Unamortized 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 transactions Credit related impairment Non-credit related impairment Unamortized net (losses) on Pension Plans Accumulated
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) income 0 (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


	Three Months Ended March 31, 2021
	Foreign currency translation adjustment		Net unrealized gains on investments		Net unrealized gains on derivative transactions		Credit related impairment		Non-credit related impairment		Unamortized net losses on Pension Plans		Accumulated other comprehensive income
Balance at December 31, 2020	$	(295.6)	$	1,080.3	$	14.7	$	1.2	$	16.1	$	(106.9)	$	709.8
Change in accumulated other comprehensive income (loss) before reclassifications	7.2		(207.1)		0		0		(0.8)		(0.3)		(201.0)
Amounts reclassified from accumulated other comprehensive income (loss)	0		(2.4)		(0.6)		0		0		(1.3)		(4.3)
Net current-period other comprehensive income (loss)	7.2		(209.5)		(0.6)		0		(0.8)		(1.6)		(205.3)
Balance at March 31, 2021	$	(288.4)	$	870.8	$	14.1	$	1.2	$	15.3	$	(108.5)	$	504.5

	Three Months Ended March 31, 2020
	Foreign currency translation adjustment		Net unrealized gains on investments		Net unrealized gains on derivative transactions		Credit related impairment		Non-credit related impairment		Unamortized net (losses) gains 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 income (loss) before reclassifications	(66.7)		(297.3)		0		0		(2.7)		48.9		(317.8)
Amounts reclassified from accumulated other comprehensive income (loss)	0		(4.8)		(0.6)		0		0		0.1		(5.3)
Net current-period other comprehensive income (loss)	(66.7)		(302.1)		(0.6)		0		(2.7)		49.0		(323.1)
Balance at March 31, 2020	$	(425.6)	$	554.4	$	16.5	$	0	$	12.8	$	(69.7)	$	88.4

(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 2015 for additional information.

~~The following tables summarize the reclassifications out of AOCI for the periods indicated:~~

3726

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

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,
2020 2019
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 components Amount reclassified from
accumulated other
comprehensive income Affected line item in the
statement where net
income is presented
Nine Months Ended September 30,
2020 2019
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

The following tables summarize the reclassifications out of accumulated other comprehensive income (“AOCI”) for the periods indicated:


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 March 31,
	2021		2020



Net unrealized (gains) losses on investments	$	(3.1)	$	(6.1)	Net realized gains (losses) on investments
	0.7		1.3		Provision for income taxes
	$	(2.4)	$	(4.8)	Net of tax
Net unrealized gains on derivative transactions	$	(0.7)	$	(0.7)	Interest expense
	0.1		0.1		Provision for income taxes
	$	(0.6)	$	(0.6)	Net of tax






Amortization of pension and postretirement unrecognized net periodic benefit cost:
Amortization of net loss	$	1.8	$	1.3	(1)
Amortization of prior service credit	(3.4)		(1.1)		(1)

	(1.6)		0.2
	0.3		(0.1)		Provision for income taxes
	$	(1.3)	$	0.1	Net of tax
Total reclassifications for the period	$	(4.3)	$	(5.3)	Net of tax

(1)These AOCI components are included in the computation of net periodic pension cost. See Note 2015 for additional information.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

~~17.~~12. Stock Based Compensation

Under the Assurant, Inc. 2017 Long-Term Equity Incentive Plan ~~(“ALTEIP”~~(the “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, 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, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
RSU compensation expense	RSU compensation expense	$	7.2	$	7.9	$	20.8	$	22.3	RSU compensation expense	$	6.6	$	6.3
Income tax benefit	Income tax benefit	(1.4)		(1.4)		(3.8)		(4.1)		Income tax benefit	(1.2)		(1.1)
RSU compensation expense, net of tax	RSU compensation expense, net of tax	$	5.8	$	6.5	$	17.0	$	18.2	RSU compensation expense, net of tax	$	5.4	$	5.2
RSUs granted	RSUs granted	32,844		29,195		294,794		254,591		RSUs granted	168,595		228,412
Weighted average grant date fair value per unit	Weighted average grant date fair value per unit	$	101.81	$	108.99	$	92.2	$	98.86	Weighted average grant date fair value per unit	$	137.18	$	89.58
Total fair value of vested RSUs	Total fair value of vested RSUs	$	4.8	$	6.4	$	29.2	$	33.2	Total fair value of vested RSUs	$	30.0	$	8.9

As of ~~September 30, 2020,~~March 31, 2021, there was ~~$24.4~~$37.0 million of unrecognized compensation cost related to outstanding RSUs. That cost is expected to be recognized over a weighted-average period of ~~1.1~~1.4 years.

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

Performance Share Units

The following table shows a summary of PSU activity during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
PSU compensation expense	PSU compensation expense	$	7.6	$	6.7	$	19.7	$	17.5	PSU compensation expense	$	6.2	$	4.8
Income tax benefit	Income tax benefit	(0.8)		(1.0)		(2.1)		(2.5)		Income tax benefit	(0.6)		(0.5)
PSU compensation expense, net of tax	PSU compensation expense, net of tax	$	6.8	$	5.7	$	17.6	$	15.0	PSU compensation expense, net of tax	$	5.6	$	4.3
PSUs granted	PSUs granted	0		0		302,274		246,219		PSUs granted	201,462		302,274
Weighted average grant date fair value per unit	Weighted average grant date fair value per unit	$	0	$	0	$	87.36	$	105.23	Weighted average grant date fair value per unit	$	147.32	$	87.36
Total fair value of vested PSUs	Total fair value of vested PSUs	$	0.3	$	1.9	$	24.7	$	19.6	Total fair value of vested PSUs	$	22.5	$	24.4

As of ~~September 30, 2020,~~March 31, 2021, there was ~~$27.8~~$42.3 million of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of ~~1.1~~1.2 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~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ were based on the historical stock prices of the Company’s stock and peer group. The expected term for grants issued during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ 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.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in millions, except number of shares and per share amounts)~~

~~18.~~13. Equity Transactions

Stock Repurchase

During the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company repurchased ~~1,312,443~~308,000 and ~~1,582,448~~480,967 shares of the Company’s outstanding common stock at a cost of ~~$153.2~~$41.5 million and ~~$166.1~~$57.3 million, exclusive of commissions, respectively, leaving ~~$333.1~~$745.0 million aggregate cost at purchase remaining unused under the ~~total~~existing repurchase ~~authorization~~authorizations as of ~~September 30, 2020.~~March 31, 2021.

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, with a par value of $1.00 per share, 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~~converted in March ~~15,~~ 2021 into ~~between 0.9391 (the “minimum conversion rate”) and 1.1269 shares~~0.9405 of common shares, or 2,703,911 common shares in total plus an immaterial amount of cash in lieu of fractional shares. The Company used a portion of its treasury stock ~~subject~~for the common shares, using the average cost method to ~~customary anti-dilution adjustments. At any time prior to March 2021, holders may elect to convert each share~~account for the reissuance 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.~~such shares.

Dividends on the MCPS ~~will be~~were 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 ~~for~~in each of the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019. The Company paid preferred stock dividends of $14.0 million for the nine months ended September 30, 2020 and 2019.~~2020.

~~19.~~14. Earnings Per Common Share

The following table presents net income, the weighted average common shares used in calculating basic 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 the purchase of shares under the Employee Stock Purchase Plan (the “ESPP”) using the treasury stock method; and (2) common shares issuable upon the conversion of the MCPS using the if-converted method. Refer to Notes 1712 and 1813 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.~~

4028

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,
2020 2019 2020 2019
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 calculations 60,190,103 61,804,492 60,384,817 62,204,242
Incremental common shares from:
PSUs 0 0 253,982 256,003
ESPP 0 0 2,146 0
MCPS 0 0 0 0
Weighted average common shares used in diluted earnings per common share calculations 60,190,103 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

~~(1)~~
~~In accordance with earnings per share guidance,~~

outstanding RSUs have non-forfeitable rights to dividend equivalents and are therefore included in calculating basic and diluted ~~per share amounts are computed in~~EPS under the ~~same manner as basic per share amounts when a loss from operations exists.~~two-class method.


	Three Months Ended March 31,
	2021		2020
Numerator
Net income from continuing operations	$	148.5	$	148.6
Less: Net loss (income) attributable to non-controlling interest	0.2		(1.1)
Net income from continuing operations attributable to stockholders	148.7		147.5
Less: Preferred stock dividends	(4.7)		(4.7)
Net income from continuing operations attributable to common stockholders	144.0		142.8
Less: Common stock dividends paid	(38.2)		(38.0)
Undistributed earnings	$	105.8	$	104.8

Net income from continuing operations attributable to common stockholders	$	144.0	$	142.8
Add: Net income from discontinued operations	14.3		7.2
Net income attributable to common stockholders	$	158.3	$	150.0

Denominator
Weighted average common shares outstanding used in basic per common share calculations	59,192,880		60,602,911
Incremental common shares from:
PSUs	367,274		322,692
ESPP	0		5,148
MCPS	2,223,238		2,696,175
Weighted average common shares outstanding used in diluted per common share calculations	61,783,392		63,626,926
Earnings per common share - Basic
Distributed earnings	$	0.64	$	0.63
Undistributed earnings	1.79		1.73
Net income from continuing operations	2.43		2.36
Net income from discontinued operations	0.24		0.12
Net income attributable to common stockholders	$	2.67	$	2.48
Earnings per common share - Diluted
Distributed earnings	$	0.62	$	0.60
Undistributed earnings	1.79		1.72
Net income from continuing operations	2.41		2.32
Net income from discontinued operations	0.23		0.11
Net income attributable to common stockholders	$	2.64	$	2.43

Average PSUs totaling ~~233,039~~18,373 for the three months ended ~~September 30, 2020~~March 31, 2021 were anti-dilutive and thus 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, 2020. Average PSUs totaling 261,332 and 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. Incremental 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 2,699,913 for the three and nine months ended September 30, 2020 and 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.March 31, 2020.

~~20.~~15. 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.~~employees prior to closing to new hires on January 1, 2014. The Company also has various non-contributory, non-qualified supplemental plans covering certain employees, including the Assurant Executive

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

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.

~~Assurant, Inc.~~

~~Notes to Consolidated Financial Statements (unaudited)~~

~~(in 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, 2020~~March 31, 2021 and ~~2019:~~2020:


		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,
		2020		2019		2020		2019		2020		2019
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 credit		0		0		0		0		(3.4)		0
Amortization of net loss		0.7		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 Benefits				Unfunded Nonqualified Pension Benefits				Retirement Health Benefits					Qualified Pension Benefits				Unfunded Non-qualified 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,					For the Three Months Ended March 31,				For the Three Months Ended March 31,				For the Three Months Ended March 31,
		2020		2019		2020		2019		2020		2019			2021		2020		2021		2020		2021		2020
Interest cost	Interest cost	$	15.3	$	19.3	$	1.5	$	2.2	$	0.6	$	2.4	Interest cost	$	3.5	$	5.1	$	0.3	$	0.5	$	0	$	0.4
Expected return on plan assets	Expected return on plan assets	(23.1)		(26.7)		0		0		(1.3)		(1.4)		Expected return on plan assets	(6.9)		(7.7)		0		0		(0.4)		(0.4)
Amortization of prior service credit	Amortization of prior service credit	0		0		0		0		(7.9)		0		Amortization of prior service credit	0		0		0		0		(3.4)		(1.1)
Amortization of net loss (gain)	Amortization of net loss (gain)	2.1		0		1.7		0.8		0		(0.6)		Amortization of net loss (gain)	1.2		0.7		0.8		0.6		(0.1)		0

Net periodic benefit cost	Net periodic benefit cost	$	(5.7)	$	(7.4)	$	3.2	$	3.0	$	(8.6)	$	0.4	Net periodic benefit cost	$	(2.2)	$	(1.9)	$	1.1	$	1.1	$	(3.9)	$	(1.1)

The Assurant Pension Plan funded status was ~~$54.1~~$45.8 million at ~~September 30, 2020~~March 31, 2021 and ~~$66.4~~$43.2 million at December 31, ~~2019~~2020 (based on the fair value of the assets compared to the accumulated benefit obligation). This equates to a ~~107%~~106% and ~~109%~~105% funded status at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, 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 ~~2020.~~2021.

~~21.~~16. 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 ~~$7.6~~$7.2 million and ~~$12.1~~$7.6 million of letters of credit outstanding as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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~~

~~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.~~proceedings. 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 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

Assurant, Inc.

Notes to Consolidated Financial Statements (unaudited)

(in millions, except number of shares and per share amounts)

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.

4331

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, ~~2019~~2020 and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~“2019~~“2020 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, 2020~~March 31, 2021 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~~closing of the Global Preneed ~~segment,~~transaction, including our financial plans and any statements regarding our ~~anticipating~~anticipated future financial performance, business prospects, growth and operating strategies and similar matters, 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 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;

~~(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 if those parties ~~facing~~face financial, reputational or regulatory issues;

~~(iii)~~(ii) significant competitive pressures, changes in customer preferences and disruption;

(iii) the failure to implement our strategy and to attract and retain key personnel, including key executives and senior management;

(iv)the failure to find suitable acquisitions at attractive prices, integrate ~~completed acquisitions~~acquired businesses effectively or grow ~~organically, and risks associated with joint ventures and franchise ownership and operations;~~organically;

(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;~~event;

~~(ix)our inability to develop and maintain distribution sources or attract and retain sales representatives and executives with key client relationships;~~

~~(x)~~(vi) the failure to manage vendors and other third parties on whom we rely to conduct business and provide services to our clients;

~~(xi)~~(vii) risks related to our international operations;

(viii) declines in the value of mobile devices, the risk of guaranteed buybacks, or export compliance ~~risk~~or other risks in our mobile business;

~~(xii)~~(ix) our inability to develop and maintain distribution sources or attract and retain sales representatives and executives with key client relationships;

(x) risks associated with joint ventures, franchises and investments in which we share ownership and management with third parties;

(xi) negative publicity relating to our ~~products~~business or industry;

(xii) the impact of general economic, financial market and ~~services or~~political conditions and conditions in the markets in which we operate;

(xiii)the ~~failure to implement our strategy~~impact of the COVID-19 pandemic and ~~to attract~~measures taken in response thereto;

(xiv) the impact of catastrophic and ~~retain key personnel,~~non-catastrophe losses, including ~~senior management;~~as a result of climate change;

~~(xiv)employee misconduct;~~

(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 of our insurance subsidiaries or in our corporate senior debt ratings;

(xvii) fluctuations in exchange rates;

(xviii) an impairment of goodwill or other intangible assets;

~~(xviii)~~(xix) the failure to maintain effective internal control over financial reporting;

~~(xix)~~(xx) unfavorable conditions in the capital and credit markets;

(xxi) a decrease in the value of our investment portfolio, including due to market, credit and liquidity risks, and changes in interest ~~rates and COVID-19;~~rates;

~~(xx)the impact of U.S. tax reform legislation and~~(xxii) impairment of our deferred tax assets;

~~(xxi)~~(xxiii) the unavailability or inadequacy of reinsurance coverage and the credit risk of reinsurers, including those to whom we have sold business through reinsurance;

~~(xxii)~~(xxiv) the credit risk of some of our agents, third-party administrators and clients;

~~(xxiii)~~(xxv) 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;~~or repurchase shares;

~~(xxiv)changes in the method for determining LIBOR or the replacement of LIBOR;~~

~~(xxv)~~(xxvi) the failure to effectively maintain and modernize our information technology systems and infrastructure, or the failure to integrate those of acquired businesses;

~~(xxvi)~~(xxvii) breaches of our information systems or those of third parties with whom we do business, or the failure to protect the security of data in such systems, including due to cyber-attacks and as a result of working ~~remotely during the COVID-19 pandemic;~~remotely;

~~(xxvii)~~(xxviii) 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;~~protection or tax;

~~(xxviii)~~(xxix) the impact ~~from~~of litigation and regulatory ~~actions, including those arising from COVID-19;~~actions;

~~(xxix)~~(xxx) reductions or deferrals in the insurance premiums we ~~charge, including as a result of COVID-19; and~~charge;

~~(xxx)~~(xxxi) changes in insurance, tax and other ~~regulation, including to mitigate the impact of COVID-19.~~regulation;

(xxxii) volatility in our common stock price and trading volume; and

(xxxiii) employee misconduct.

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 ~~2019~~2020 Annual Report, and “Item 1A—Risk Factors” below and in our ~~2019~~2020 Annual Report.

General

Global Preneed Discontinued Operations

In March 2021, we entered into a definitive agreement to sell the legal entities which comprise the businesses previously reported as the Global Preneed segment and certain businesses previously disposed of through reinsurance, which were previously reported in the Corporate and Other segment (collectively, the “disposal business”) to CUNA Mutual Group (“CUNA”) for total cash consideration of $1.25 billion, subject to certain purchase price adjustments at closing. The transaction is expected to close by the end of the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.

The estimated carrying value of the disposal business is subject to adjustment in future quarters until closing, and may be influenced by various factors including the following:

•The performance of the disposal business, including the impact of discount, interest, mortality and reinsurance rates; and

•Changes in the terms of the agreement with CUNA, including as a result of any subsequent negotiations, any necessary changes to obtain regulatory approval or any changes due to unanticipated developments.

We have determined that the disposal business meets the criteria to be classified as held for sale and that the sale represents a strategic shift that will have a major impact on our operations and financial results. Accordingly, the results of operations of the disposal business are presented as net income from discontinued operations in the consolidated statements of

operations and segregated in the consolidated statement of cash flows for all periods presented and the assets and liabilities for the disposal business have been classified as held for sale and segregated for all periods presented in the consolidated balance sheets. Transactions between the disposal business and businesses in our continuing operations are not eliminated to appropriately reflect the continuing operations and the assets, liabilities and results of the disposal business. Refer to “—Results of Operations—Discontinued Operations” below and Note 4 to the Consolidated Financial Statements included elsewhere in this Report.

Reportable Segments

As of ~~September 30, 2020,~~March 31, 2021, the Company had ~~four~~three reportable segments, excluding discontinued operations described above, which are defined based on the manner in which the Company’s chief operating decision maker, our 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 Preneed: provides pre-funded funeral insurance, final need insurance and related services;~~ and

The following discussion covers the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 (“~~Third~~First Quarter ~~2020” and “Nine Months 2020”~~2021”) and the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 (“~~Third~~First Quarter ~~2019” and “Nine Months 2019”~~2020”).

Executive Summary

~~COVID-19~~

~~While~~Consolidated net income from 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~~operations was relatively flat at $148.5 million for First Quarter 2021 from $148.6 million for First Quarter 2020, as the ~~temporary closures~~absence 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,a $79.3 million one-time tax benefit 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.

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~~

During 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 ThirdFirst 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 2020, we sold 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 $176.9 million. See Note 4 to the Consolidated Financial Statements included elsewhere in this Report.

~~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~~

~~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 Housing segment, excluding reportable catastrophes, partially offset by ~~the $135.6 million after-tax impairment~~higher net realized gains on ~~the Global Preneed goodwill and $51.3 million of higher after-tax reportable catastrophes for Global Housing.~~investments compared to net realized losses in First Quarter 2020.

Global Lifestyle segment net income increased ~~$4.5~~$8.2 million, or 4%7%, to ~~$106.6~~$129.1 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$102.1~~$120.9 million for ~~Third~~First Quarter ~~2019,~~2020, primarily driven by strong results in Global Automotive, including a $4.3 million one-time benefit, as well as higher investment income and underlying global growth. Connected Living ~~mainly due to~~results also increased from mobile ~~from continued~~ subscriber growth in Asia Pacific and 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~~higher trade-in volumes and ~~unfavorable loss experience in~~contributions from recent acquisitions. First Quarter 2020 included $11.7 million of one-time benefits within Connected Living and Global ~~Financial Services and Other, including impacts from COVID-19.~~Automotive.

Global Lifestyle net earned premiums, fees and other income ~~increased $55.7~~decreased $84.6 million, or 3%4%, to ~~$1.81~~$1.86 billion for ~~Third~~First Quarter 2021 from $1.95 billion for First Quarter 2020, reflecting the impact 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 athe previously disclosed mobile program ~~change,~~contract change. Excluding this $98.0 million reduction, net earned premiums, fees and ~~unfavorable foreign exchange.~~other income was flat year-over-year.

Global Housing segment net income decreased ~~$28.5~~$6.8 million, or ~~69%~~9%, to ~~$13.1~~$67.4 million for ~~Third~~First Quarter 2021 from $74.2 million for First Quarter 2020, ~~from $41.6~~driven by $21.7 million ~~for Third Quarter 2019. Segment net income for Third Quarter 2020 included $87.0 million~~ of higher reportable catastrophes primarily from ~~Hurricane Laura, compared to $35.7 million of reportable catastrophes for Third Quarter 2019.~~the severe winter storms in Texas. Excluding reportable catastrophes, segment net income increased ~~$22.8~~$14.9 million, primarily due to ~~more~~ favorable non-catastrophe loss experience, ~~across our~~mainly in Specialty and Other products driven by underwriting improvements and lower overall claims frequency, as well as growth in Multifamily Housing. Lender-placed Insurance ~~driven by~~also benefited from higher premium rates, though lower ~~claims frequency, reserve releases related~~real estate owned (“REO”) volumes, due to ~~run-off business and previously implemented underwriting initiatives. Growth in Multifamily Housing and Specialty and Other products also contributed to the increase.~~foreclosure moratoriums, offset results.

Global Housing net earned premiums, fees and other income decreased ~~$19.0~~$7.4 million, or 4%1%, to ~~$491.3~~$493.0 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$510.3~~$500.4 million for ~~Third~~First Quarter ~~2019,~~2020, primarily due to declines in Specialty and Other products, including

the expected run-off offrom our small commercial ~~products and declines~~product, as well as a modest decline in Lender-placed ~~Insurance policies in-force from the previously disclosed financially insolvent client.~~Insurance. The decrease was partially offset by ~~continued~~ growth in Multifamily ~~Housing and Specialty and Other products.~~Housing.

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~~maintain our position in our Lender-placed Insurance ~~business and the North American credit insurance business in Global Financial Services and Other.~~business. 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, including COVID-19 and measures taken in response thereto, see “Item 1A—Risk Factors”, below and in our ~~2019~~2020 Annual Report, and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our ~~2019~~2020 Annual ~~Report and “—Executive Summary—COVID-19” and “—Executive Summary—Our Response to COVID-19,” above.~~

Report.

Our results may be impacted by our ability to continue to grow in the markets in which we operate and to maintain relationships with significant clients, distributors and other parties or renew contracts with them on favorable terms, 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, Strategic and ~~Competitive~~Operational Risks—~~Significant~~Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties, or renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues” and “Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our ~~2019~~2020 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,~~First Quarter 2021, net cash used in operating activities from continuing operations was $454.0 million; net cash provided by ~~operating activities was $901.6 million; net cash used in~~ investing activities from continuing operations was ~~$275.2~~$63.2 million; and net cash used in financing activities from continuing operations was ~~$296.8~~$153.0 million. We had ~~$2.20~~$1.67 billion in cash and cash equivalents as of ~~September 30, 2020~~March 31, 2021 as compared to ~~$1.87~~$2.21 billion as of December 31, ~~2019.~~2020. See “—Liquidity and Capital Resources,” below for further details.

Critical Accounting Policies and Estimates

Our ~~2019~~2020 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~~2020 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for ~~Third~~First Quarter ~~2020.~~2021.

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.~~

4935

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,					For the Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
Net earned premiums	Net earned premiums	$	2,102.8	$	2,015.4	$	6,223.0	$	5,952.5	Net earned premiums	$	2,105.6	$	2,065.5
Fees and other income	Fees and other income	245.9		295.1		934.3		959.5		Fees and other income	249.9		383.6
Net investment income	Net investment income	135.1		169.5		428.3		490.0		Net investment income	76.3		83.6
Net realized gains (losses) on investments	Net realized gains (losses) on investments	16.6		14.9		(54.6)		61.5		Net realized gains (losses) on investments	0.8		(84.0)
Amortization of deferred gains on disposal of businesses		2.1		4.4		8.7		16.9

Total revenues	Total revenues	2,502.5		2,499.3		7,539.7		7,480.4		Total revenues	2,432.6		2,448.7
Benefits, losses and expenses:	Benefits, losses and expenses:									Benefits, losses and expenses:
Policyholder benefits	Policyholder benefits	709.6		705.2		1,908.9		2,006.9		Policyholder benefits	528.7		535.2
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	946.2		869.5		2,745.7		2,462.6		Amortization of deferred acquisition costs and value of business acquired	946.7		895.3
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	687.5		764.5		2,331.8		2,388.1		Underwriting, general and administrative expenses	735.7		892.6
Goodwill impairment		137.8		—		137.8		—
Iké net losses		—		121.1		5.9		130.5

Interest expense	Interest expense	25.5		32.2		77.7		85.2		Interest expense	28.4		25.5
Loss on extinguishment of debt		—		31.4		—		31.4

Total benefits, losses and expenses	Total benefits, losses and expenses	2,506.6		2,523.9		7,207.8		7,104.7		Total benefits, losses and expenses	2,239.5		2,348.6
(Loss) income before provision for income taxes		(4.1)		(24.6)		331.9		375.7
Provision for income taxes		26.4		28.6		28.2		117.7
Net (loss) income		(30.5)		(53.2)		303.7		258.0
Income before provision for income taxes										Income before provision for income taxes	193.1		100.1
Provision (benefit) for income taxes										Provision (benefit) for income taxes	44.6		(48.5)
Net income from continuing operations										Net income from continuing operations	148.5		148.6
Net income from discontinued operations										Net income from discontinued operations	14.3		7.2
Net income										Net income	162.8		155.8
Less: Net loss (income) attributable to non-controlling interest	Less: Net loss (income) attributable to non-controlling interest	0.3		(1.6)		(1.1)		(3.0)		Less: Net loss (income) attributable to non-controlling interest	0.2		(1.1)
Net (loss) income attributable to stockholders		(30.2)		(54.8)		302.6		255.0
Net income attributable to stockholders										Net income attributable to stockholders	163.0		154.7
Less: Preferred stock dividends	Less: Preferred stock dividends	(4.7)		(4.7)		(14.0)		(14.0)		Less: Preferred stock dividends	(4.7)		(4.7)
Net (loss) income attributable to common stockholders		$	(34.9)	$	(59.5)	$	288.6	$	241.0
Net income attributable to common stockholders										Net income attributable to common stockholders	$	158.3	$	150.0

For the Three Months Ended ~~September 30, 2020~~March 31, 2021 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~~March 31, 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~~

Net Income ~~Attributable to Common Stockholders~~from Continuing Operations

Consolidated net income ~~attributable to common stockholders increased $47.6 million, or 20%, to $288.6~~from continuing operations was flat at $148.5 million for ~~Nine Months 2020 from $241.0~~First Quarter 2021 compared to $148.6 million for ~~Nine Months 2019.~~First Quarter 2020. Net income from continuing operations for ~~Nine Months 2020~~First Quarter 2021 included ~~$109.9~~$34.5 million of reportable catastrophes, primarily related to ~~Hurricane Laura,~~the Texas winter storms, compared to ~~$41.4~~$12.9 million in ~~Nine Months 2019.~~First Quarter 2020. Excluding reportable catastrophes, net income from continuing operations increased ~~$116.1~~$21.5 million, or ~~41%,~~13% primarily due to the absence of ~~a $131.4~~$67.2 million of after-tax ~~loss related to~~net realized losses, mainly from a decrease in the ~~estimated~~ fair value of ~~Iké~~our equity securities and collateralized loan obligations in First Quarter 2020, favorable earnings contributions from Global Housing, that were primarily driven by favorable non-catastrophe loss experience and growth in Multifamily Housing, as well as an increase from Global Lifestyle, primarily due to the continued expansion in Global Automotive and Connected Living. These increases were partially offset by the absence of a $79.3 million tax benefit that was recorded in ~~Nine Months 2019, an $84.4 million tax benefit~~First Quarter 2020 related to the utilization of net operating losses in connection with the ~~CARES~~2020 Coronavirus Aid, Relief, and Economic Security 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.

(the “CARES Act”).

5136

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 March 31,
		2020		2019		2020		2019				2021		2020
Revenues:	Revenues:									Revenues:
Net earned premiums	Net earned premiums	$	1,633.2	$	1,525.1	$	4,799.0	$	4,499.1	Net earned premiums		$	1,648.7	$	1,597.7
Fees and other income	Fees and other income	171.8		224.2		721.6		740.9		Fees and other income		213.6		349.2
Net investment income	Net investment income	44.6		62.1		143.5		177.5		Net investment income		50.8		54.7
Total revenues	Total revenues	1,849.6		1,811.4		5,664.1		5,417.5		Total revenues		1,913.1		2,001.6
Benefits, losses and expenses:	Benefits, losses and expenses:									Benefits, losses and expenses:
Policyholder benefits	Policyholder benefits	365.4		392.1		1,044.7		1,152.2		Policyholder benefits		327.4		336.2
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	870.5		791.9		2,519.7		2,238.4		Amortization of deferred acquisition costs and value of business acquired		889.2		838.4
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	480.8		496.6		1,649.4		1,622.6		Underwriting, general and administrative expenses		527.2		667.9
Total benefits, losses and expenses	Total benefits, losses and expenses	1,716.7		1,680.6		5,213.8		5,013.2		Total benefits, losses and expenses		1,743.8		1,842.5
Segment income before provision for income taxes	Segment income before provision for income taxes	132.9		130.8		450.3		404.3		Segment income before provision for income taxes		169.3		159.1
Provision for income taxes	Provision for income taxes	26.3		28.7		101.0		92.3		Provision for income taxes		40.2		38.2
Segment net income	Segment net income	$	106.6	$	102.1	$	349.3	$	312.0	Segment net income		$	129.1	$	120.9
Net earned premiums, fees and other income:	Net earned premiums, fees and other income:									Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)	Connected Living (mobile and service contracts)	$	909.5	$	931.9	$	2,914.4	$	2,764.6	Connected Living (mobile and service contracts)		$	952.4	$	1,088.3
Global Automotive	Global Automotive	802.5		706.9		2,311.0		2,131.9		Global Automotive		812.4		753.1
Global Financial Services and Other	Global Financial Services and Other	93.0		110.5		295.2		343.5		Global Financial Services and Other		97.5		105.5
Total	Total	$	1,805.0	$	1,749.3	$	5,520.6	$	5,240.0	Total		$	1,862.3	$	1,946.9
Net earned premiums, fees and other income:	Net earned premiums, fees and other income:									Net earned premiums, fees and other income:
Domestic	Domestic	$	1,335.4	$	1,237.6	$	4,080.2	$	3,680.0	Domestic		$	1,380.6	$	1,434.5
International	International	469.6		511.7		1,440.4		1,560.0		International		481.7		512.4
Total	Total	$	1,805.0	$	1,749.3	$	5,520.6	$	5,240.0	Total		$	1,862.3	$	1,946.9

For the Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to the Three Months Ended ~~September 30, 2019~~March 31, 2020

Net Income

Segment net income increased ~~$4.5~~$8.2 million, or 4%7%, to ~~$106.6~~$129.1 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$102.1~~$120.9 million for ~~Third~~First Quarter ~~2019. The increase was~~2020. First Quarter 2021 included $4.3 million of one-time income in Global Automotive, compared to $11.7 million of benefits within Connected Living and Global Automotive in First Quarter 2020. Excluding these items, segment net income increased $15.6 million, or 14%, primarily driven by ~~our~~ Connected Living ~~business, mainly due to~~from mobile ~~due to~~ subscriber growth in Asia Pacific and North America, and ~~Asia Pacific,~~higher trade-in results, including contributions from recent acquisitions, as well as improved profitability ~~from~~within extended service contracts. ~~This was~~Global Automotive also contributed to the increase, mainly due to organic global growth, higher investment income and lower claims activity. These increases were 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 inthe run-off ~~and higher loss experience.~~of certain domestic mobile programs.

Total Revenues

Total revenues ~~increased $38.2~~decreased $88.5 million, or 2%4%, to ~~$1.85~~$1.91 billion for ~~Third~~First Quarter ~~2020~~2021 from ~~$1.81~~$2.00 billion for ~~Third~~First Quarter ~~2019.~~2020. Fees and other income decreased $135.6 million, or 39%, mainly driven by a previously disclosed mobile program contract change, the run-off of certain domestic mobile programs, partially offset by growth from recent mobile acquisitions. Net ~~earned premiums increased $108.1~~investment income decreased $3.9 million, or 7%, primarily due to lower cash yields and lower income from real estate, partially offset by higher income from an increase in fair value of investments in limited partnerships. These decreases in total revenues were partially offset by an increase in net earned premiums of $51.0 million, or 3%, primarily driven by continued growth from prior period ~~production~~sales 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~~the run-off of certain 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.programs.

5237

Total Benefits, Losses and Expenses

Total benefits, losses and expenses ~~increased $36.1~~decreased $98.7 million, or 2%5%, to ~~$1.72~~$1.74 billion for ~~Third~~First Quarter ~~2020~~2021 from ~~$1.68~~$1.84 billion for ~~Third~~First Quarter ~~2019.~~2020. The ~~increase~~decrease was primarily due to a ~~$78.6~~decrease in underwriting, general and administrative expenses of $140.7 million, or ~~10%~~21%, primarily due to the run-off of certain domestic mobile programs and a previously disclosed mobile program contract change, partially offset by an increase in growth in our Global Automotive and Connected Living businesses, including new mobile acquisitions. Policyholder benefits decreased $8.8 million, or 3%, primarily driven by lower loss experience from Global Automotive. The decrease in total benefits, losses and expenses was partially offset by a $50.8 million, or 6%, 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 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.

5338

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,					For the Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
Net earned premiums	Net earned premiums	$	453.6	$	475.2	$	1,374.6	$	1,407.1	Net earned premiums	$	456.9	$	467.8
Fees and other income	Fees and other income	37.7		35.1		106.0		113.3		Fees and other income	36.1		32.6
Net investment income	Net investment income	16.5		22.4		54.9		66.6		Net investment income	19.4		22.0
Total revenues	Total revenues	507.8		532.7		1,535.5		1,587.0		Total revenues	512.4		522.4
Benefits, losses and expenses:	Benefits, losses and expenses:									Benefits, losses and expenses:
Policyholder benefits	Policyholder benefits	272.8		245.8		651.9		652.5		Policyholder benefits	201.3		198.7
Amortization of deferred acquisition costs and value of business acquired	Amortization of deferred acquisition costs and value of business acquired	56.8		47.3		169.9		158.7		Amortization of deferred acquisition costs and value of business acquired	57.5		56.9
Underwriting, general and administrative expenses	Underwriting, general and administrative expenses	162.2		187.6		496.6		541.6		Underwriting, general and administrative expenses	168.8		173.3
Total benefits, losses and expenses	Total benefits, losses and expenses	491.8		480.7		1,318.4		1,352.8		Total benefits, losses and expenses	427.6		428.9
Segment income before provision for income taxes	Segment income before provision for income taxes	16.0		52.0		217.1		234.2		Segment income before provision for income taxes	84.8		93.5
Provision for income taxes	Provision for income taxes	2.9		10.4		44.4		48.4		Provision for income taxes	17.4		19.3
Segment net income	Segment net income	$	13.1	$	41.6	$	172.7	$	185.8	Segment net income	$	67.4	$	74.2
Net earned premiums, fees and other income:	Net earned premiums, fees and other income:									Net earned premiums, fees and other income:
Lender-placed Insurance	Lender-placed Insurance	$	258.2	$	275.6	$	787.5	$	831.6	Lender-placed Insurance	$	260.4	$	264.3
Multifamily Housing	Multifamily Housing	117.9		108.7		338.1		319.3		Multifamily Housing	117.3		109.0
Specialty and Other	Specialty and Other	115.2		126.0		355.0		369.5		Specialty and Other	115.3		127.1
Total	Total	$	491.3	$	510.3	$	1,480.6	$	1,520.4	Total	$	493.0	$	500.4

For the Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to the Three Months Ended ~~September 30, 2019~~March 31, 2020

Net Income

Segment net income decreased ~~$28.5~~$6.8 million, or ~~69%~~9%, to ~~$13.1~~$67.4 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$41.6~~$74.2 million for ~~Third~~First Quarter ~~2019.~~2020. Segment net income for ~~Third~~First Quarter ~~2020~~2021 included ~~$87.0~~$34.5 million of reportable catastrophes, primarily related to ~~Hurricane Laura,~~the Texas winter storms, compared to ~~$35.7~~$12.8 million for ~~Third~~First Quarter ~~2019.~~2020. Excluding reportable catastrophes, segment net income increased ~~$22.8~~$14.9 million, or ~~29%~~17%, primarily ~~due to more~~driven by favorable non-catastrophe ~~loss experience~~losses primarily 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~~higher premium rates in our Lender-placed Insurance business ~~continued~~and growth in our Multifamily Housing ~~and our Specialty and Other products also contributed to the increase. The increase was~~business. These increases were partially offset by ~~declines in our Lender-placed Insurance~~lower REO volumes related to COVID-19 and fewer 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.~~our Lender-placed Insurance business.

Total Revenues

Total revenues decreased ~~$24.9~~$10.0 million, or 5%2%, to ~~$507.8~~$512.4 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$532.7~~$522.4 million for ~~Third~~First Quarter ~~2019.~~2020. Net earned premiums decreased ~~$21.6~~$10.9 million, or 5%2%, primarily due to ~~the run-off of our small commercial product and~~ declines in our Lender-placed Insurance business, mainly ~~from the~~driven by lower REO volumes related to COVID-19 and a reduction ofin policies in-force for a financially insolvent client, the run-off of certain sharing economy offerings and ~~lower REO volume,~~the run-off of our small commercial product. This decrease was partially offset by premium rate increases in our Lender-placed Insurance business and 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~~$2.6 million, or ~~26%~~12%, primarily due to lower income from real estate related investments and lower cash yields. ~~These decreases were~~The decrease in total revenues was partially offset by an increase in fees and other income of ~~$2.6~~$3.5 million, or 7%11%, primarily due to an increase in ~~installment~~claim processing fees ~~for renters insurance~~in our Lender-placed Insurance business and growth in our Multifamily Housing business.

~~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~~$1.3 million ~~or 3%,~~ to ~~$1.32 billion~~$427.6 million for ~~Nine Months 2020~~First Quarter 2021 from ~~$1.35 billion~~$428.9 million for ~~Nine Months 2019.~~First Quarter 2020. 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 of

$4.5 million, or 3%, primarily due to lower ~~employment related~~catastrophe-related assessments and a decline in advertising expenses for the renters business in ~~our Lender-placed Insurance business.~~Multifamily Housing. Policyholder benefits ~~decreased $0.6~~increased $2.6 million, or 1%, mainly from higher reportable catastrophe losses, partially offset by lower non-catastrophe losses ~~across all major products~~in our sharing economy offerings and ~~the absence of losses from our~~ small commercial product, ~~partially offset by higher reportable catastrophe losses.~~

as well as lower frequency of theft and vandalism claims across most major products.

5540

~~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,
2020 2019 2020 2019
Revenues:
Net earned premiums $ 16.0 $ 15.1 $ 49.4 $ 46.3
Fees and other income 35.9 35.7 106.2 103.2
Net investment income 70.1 73.0 210.3 212.7
Total revenues 122.0 123.8 365.9 362.2
Benefits, losses and expenses:
Policyholder benefits 71.1 67.3 211.6 202.1
Amortization of deferred acquisition costs and value of business acquired 18.9 30.3 56.1 65.5
Underwriting, general and administrative expenses 15.3 18.2 48.4 49.8
Total benefits, losses and expenses 105.3 115.8 316.1 317.4
Segment income before provision for income taxes 16.7 8.0 49.8 44.8
Provision for income taxes 3.5 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 domestic preneed business.

~~For the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019~~

~~Net Income~~

Segment net income increased $3.1 million, or 9%, to $39.2 million for Nine Months 2020 from $36.1 million for Nine Months 2019, primarily due to the 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 Nine Months 2019. This was partially offset by a decrease in investment income and an increase in policyholder benefits driven by growth in the domestic preneed business.

~~Total Revenues~~

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 the Final Need product. This was offset by lower investment income driven by an increase in investment expenses related to our 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.

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,					For the Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
Net earned premiums		$	—	$	—	$	—	$	—

Fees and other income	Fees and other income	0.5		0.1		0.5		2.1		Fees and other income	$	0.2	$	1.8
Net investment income	Net investment income	3.9		12.0		19.6		33.2		Net investment income	6.1		6.9
Net realized gains (losses) on investments	Net realized gains (losses) on investments	16.6		14.9		(54.6)		61.5		Net realized gains (losses) on investments	0.8		(84.0)
Amortization of deferred gains on disposal of businesses		2.1		4.4		8.7		16.9

Total revenues	Total revenues	23.1		31.4		(25.8)		113.7		Total revenues	7.1		(75.3)
Benefits, losses and expenses:	Benefits, losses and expenses:									Benefits, losses and expenses:
Policyholder benefits	Policyholder benefits	0.3		—		0.7		0.1		Policyholder benefits	—		0.3
General and administrative expenses	General and administrative expenses	29.2		62.1		137.4		174.1		General and administrative expenses	39.7		51.4
Goodwill impairment		137.8		—		137.8		—
Iké net losses		—		121.1		5.9		130.5

Interest expense	Interest expense	25.5		32.2		77.7		85.2		Interest expense	28.4		25.5
Loss on extinguishment of debt		—		31.4		—		31.4

Total benefits, losses and expenses	Total benefits, losses and expenses	192.8		246.8		359.5		421.3		Total benefits, losses and expenses	68.1		77.2
Segment loss before benefit for income taxes	Segment loss before benefit for income taxes	(169.7)		(215.4)		(385.3)		(307.6)		Segment loss before benefit for income taxes	(61.0)		(152.5)
Benefit for income taxes	Benefit for income taxes	(6.3)		(11.1)		(127.8)		(31.7)		Benefit for income taxes	(13.0)		(106.0)
Segment net loss		(163.4)		(204.3)		(257.5)		(275.9)
Less: Net loss (income) attributable to non-controlling interest		0.3		(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)
Segment net loss from continuing operations										Segment net loss from continuing operations	$	(48.0)	$	(46.5)

For the Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to the Three Months Ended ~~September 30, 2019~~March 31, 2020

Net Loss ~~Attributable to Common Stockholders~~from Continuing Operations

Segment net loss ~~attributable to common stockholders decreased $42.8~~from continuing operations increased $1.5 million, or ~~20%~~3%, to ~~$167.8~~$48.0 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$210.6~~$46.5 million for ~~Third~~First Quarter ~~2019.~~2020. The ~~decrease~~increase 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 after-tax debt related charges associated with refinancing debt at a lower interest rate that were both recorded in Third 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~~

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 $131.4 million 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$79.3 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~~in First Quarter 2020. The increase was 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~~absence of ~~our equity securities and collateralized loan obligations that included $34.4~~$67.2 million of after-tax net ~~unrealized~~realized 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~~mainly 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~~obligations in First Quarter 2020, ~~compared to Third Quarter 2019 and lower income from real estate,~~ as well as ~~lower amortization~~the absence of ~~deferred gains~~$5.8 million of after-tax losses associated with the sale of ~~Assurant Employee Benefits.~~Iké and $4.2 million of after-tax acquisition related transaction costs, all recorded in First Quarter 2020.

Total Revenues

Total revenues increased $82.4 million to $7.1 million for First Quarter 2021 from $(75.3) million for First Quarter 2020, primarily due to the absence of unrealized losses on investments mostly related to a decrease in the fair value of equity securities and collateralized loan obligations in First Quarter 2020.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased ~~$61.8~~$9.1 million, or ~~15%~~12%, to ~~$359.5~~$68.1 million for ~~Nine Months 2020~~First Quarter 2021 from ~~$421.3~~$77.2 million for ~~Nine~~First Quarter 2020. The decrease was primarily driven by the absence of $5.2 million of acquisition related transaction costs from First Quarter 2020 and a $4.2 million decrease in current expected credit losses associated with our credit risk from reinsurance recoverables related to businesses in run-off.

Discontinued Operations

Overview

The table below presents information regarding the results of the discontinued operations for the periods indicated:


	For the Three Months Ended March 31,
	2021		2020
Revenues:
Net earned premiums	$	17.7	$	18.3
Fees and other income	37.5		37.5
Net investment income	72.0		72.4
Net realized losses on investments	(1.1)		(11.3)

Total revenues	126.1		116.9
Benefits, losses and expenses:
Policyholder benefits	74.0		72.0
Amortization of deferred acquisition costs and value of business acquired	19.2		18.9
Underwriting, general and administrative expenses	21.8		16.9
Total benefits, losses and expenses	115.0		107.8
Income before (benefit) provision for income taxes	11.1		9.1
(Benefit) provision for income taxes	(3.2)		1.9
Net income from discontinued operations	$	14.3	$	7.2

For the Three Months ~~2019,~~Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Net Income from Discontinued Operations

Net income from discontinued operations increased $7.1 million, or 99%, to $14.3 million for First Quarter 2021 from $7.2 million for First Quarter 2020, primarily due to the absence of ~~certain events that occurred~~unrealized losses mainly related to decreases in ~~Nine Months 2019, mainly $124.6 million~~the fair values 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 decreaseequity securities in First Quarter 2020.The increase in First Quarter 2021 was also due to ~~an $11.5~~a $1.9 million ~~decrease in integration expenses associated with the TWG acquisition, $11.3 million of lower~~ net ~~losses from foreign exchange~~gain related to the ~~remeasurement of net monetary assets in Argentina and $10.8 million of income, net of certain exit costs, from the~~pending sale of ~~our CLO asset management platform. These decrease were~~Global Preneed consisting of $5.3 million in tax benefits partially offset by ~~the $137.8 million impairment on the Global Preneed goodwill and $21.9~~$3.4 million of ~~direct and incremental operating expenses~~after-tax transaction costs incurred in connection with the ~~COVID-19 pandemic.~~pending sale. The increases in net income from discontinued operations were partially offset by a $2.4 million decrease in Global Preneed’s operating results primarily due to higher mortality in connection with COVID-19.

Total Revenues

Total revenues increased $9.2 million, or 8%, to $126.1 million for First Quarter 2021 compared to $116.9 million for First Quarter 2020, primarily due to the absence of unrealized losses mainly related to decreases in the fair values of equity securities in First Quarter 2020.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $7.2 million, or 7%, to $115.0 million for First Quarter 2021 from $107.8 million for First Quarter 2020, primarily driven by transactions expenses in First Quarter 2021 related to the pending sale and higher policyholder benefits mainly due to an increase in inforce policies and higher mortality due to COVID-19.

5942

Investments

We had total investments of ~~$15.21~~$7.87 billion and ~~$14.57~~$8.22 billion as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. Net unrealized gains on our fixed maturity securities portfolio ~~increased~~decreased by ~~$459.1~~$200.6 million during ~~Nine Months 2020,~~First Quarter 2021, from ~~$1.26 billion~~$570.9 million as of December 31, ~~2019~~2020 to ~~$1.72 billion~~$370.3 million as of ~~September 30, 2020,~~March 31, 2021, primarily due to ~~spread compression, partially offset by decreases~~an increase in ~~foreign exchange rates in several countries.~~Treasury yields.

The following table shows the credit quality of our fixed maturity securities portfolio as of the dates indicated:


		Fair value as of									Fair value as of
Fixed Maturity Securities by Credit Quality	Fixed Maturity Securities by Credit Quality	September 30, 2020				December 31, 2019				Fixed Maturity Securities by Credit Quality	March 31, 2021				December 31, 2020
Aaa / Aa / A	Aaa / Aa / A	$	8,185.0	62.5	%	$	8,014.7	65.1	%	Aaa / Aa / A	$	3,850.0	58.5	%	$	4,051.3	59.5	%
Baa	Baa	4,274.8		32.6	%	3,734.7		30.3	%	Baa	2,279.1		34.7	%	2,288.1		33.6	%
Ba	Ba	534.3		4.1	%	480.7		3.9	%	Ba	342.9		5.2	%	384.4		5.6	%
B and lower	B and lower	100.4		0.8	%	92.3		0.7	%	B and lower	103.9		1.6	%	91.7		1.3	%
Total	Total	$	13,094.5	100.0	%	$	12,322.4	100.0	%	Total	$	6,575.9	100.0	%	$	6,815.5	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,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Fixed maturity securities	Fixed maturity securities	$	120.6	$	125.2	$	359.5	$	370.3	Fixed maturity securities	$	57.4	$	57.8
Equity securities	Equity securities	5.1		5.2		15.5		16.7		Equity securities	3.6		3.6
Commercial mortgage loans on real estate	Commercial mortgage loans on real estate	8.8		8.6		27.1		26.3		Commercial mortgage loans on real estate	1.3		1.9
Short-term investments	Short-term investments	1.1		5.0		5.4		16.4		Short-term investments	0.8		2.7
Other investments	Other investments	2.9		10.7		11.2		23.0		Other investments	14.7		3.3
Cash and cash equivalents	Cash and cash equivalents	1.5		7.5		10.8		21.0		Cash and cash equivalents	1.6		7.0
Revenue from consolidated investment entities (1)	Revenue from consolidated investment entities (1)	3.9		25.6		56.3		90.2		Revenue from consolidated investment entities (1)	—		31.9
Total investment income	Total investment income	143.9		187.8		485.8		563.9		Total investment income	79.4		108.2
Investment expenses	Investment expenses	(4.9)		(6.3)		(20.6)		(18.3)		Investment expenses	(3.1)		(7.2)
Expenses from consolidated investment entities (1)	Expenses from consolidated investment entities (1)	(3.9)		(12.0)		$	(36.9)	$	(55.6)	Expenses from consolidated investment entities (1)	—		(17.4)
Net investment income	Net investment income	$	135.1	$	169.5	$	428.3	$	490.0	Net investment income	$	76.3	$	83.6

(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,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Investment income from direct investments in:	Investment income from direct investments in:									Investment income from direct investments in:
Real estate fund (1)	Real estate fund (1)	$	—	$	6.5	$	8.3	$	17.3	Real estate fund (1)	$	—	$	8.2
CLO entities	CLO entities	—		5.3		8.0		12.1		CLO entities	—		4.7
Investment management fees	Investment management fees	—		1.8		3.1		5.2		Investment management fees	—		1.6
Net investment income from consolidated investment entities	Net investment income from consolidated investment entities	$	—	$	13.6	$	19.4	$	34.6	Net investment income from consolidated investment entities	$	—	$	14.5

(1)The investment income from the real estate funds includes ~~(loss)~~ income attributable to non-controlling interest of ~~$1.2~~$1.1 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.~~March 31, 2020.

Net investment income decreased ~~$34.4~~$7.3 million, or ~~20%~~9%, to ~~$135.1~~$76.3 million for ~~Third~~First Quarter ~~2020~~2021 from ~~$169.5~~$83.6 million for ~~Third~~First Quarter ~~2019. The decrease was~~2020, primarily driven by a significant decrease in ~~income from real estate, lower income from short term investments and~~ cash and ~~cash equivalents driven by lower cash~~short-term yields and ~~a reduction in~~lower yields on fixed income ~~from fixed maturity~~ securities ~~due~~subsequent 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.First Quarter 2020. The decrease was also due to ~~a reduction in~~lower income from ~~fixed maturity securities due to lower yielding new money bond purchases.~~

real estate investments and consolidated investment entities, partially offset by higher income from an increase in fair value of investments in limited partnerships.

As of ~~September 30, 2020,~~March 31, 2021, we owned ~~$68.0~~$19.4 million of securities guaranteed by financial guarantee insurance companies. Included in this amount was ~~$58.6~~$13.0 million of municipal securities, whose credit rating was ~~AA-~~A with the guarantee, but would have had a rating of ABB without the guarantee.

For more information on our investments, see Notes 117 and 138 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~~is regulated by ~~applicable laws~~the states and ~~regulations of the jurisdictions~~territories in which our subsidiaries are ~~domiciled, which subject our subsidiaries to significant regulatory restrictions. The~~domiciled. These dividend ~~requirements and~~ regulations vary from jurisdiction to jurisdiction and by type of insurance provided by the applicable ~~subsidiary. These laws and regulations~~subsidiary, but generally require ~~among other things,~~ our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends ~~they~~these subsidiaries 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” and “—Macroeconomic, Political and Global Market Risks—The COVID-19 pandemic and measures taken in response thereto may adversely affect our business, results of operations and financial condition” in our ~~2019~~2020 Annual ~~Report and the risk factor disclosed in Item 8.01 of our Current Report on Form 8-K filed on May 5, 2020.~~Report. 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 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.~~capital. 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 ~~2019~~2020 Annual Report.

For the year ending December 31, ~~2020,~~2021, 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 ~~$423.7~~$544.7 million. This amount includes $81.6 million from subsidiaries included in the disposal business which is subject to additional restrictions pursuant to the Global Preneed transaction agreement that would reduce the maximum amount of dividends without prior regulatory approval to $52.5 million from such subsidiaries. In addition, our international and non-insurance subsidiaries provide additional sources of dividends.

Holding Company

As of ~~September 30, 2020,~~March 31, 2021, we had approximately ~~$460.3~~$332.0 million in holding company liquidity, which was ~~$235.3~~$107.0 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”)~~

~~dividends.~~expenses. 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 ~~$576.1~~$448.4 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 ~~the~~such 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 ~~$529.0~~$183.0 million for ~~Nine Months 2020.~~First Quarter 2021. In ~~2019,~~2020, dividends, net of infusions and excluding amounts used for acquisitions or received for dispositions, made to the holding company were ~~$748.0 million.~~$821.0 million (including approximately $31.0 million of dividends from subsidiaries, net of infusions, included in the disposal business).

In addition to paying expenses and 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 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 2020~~First Quarter 2021 and the year ended December 31, ~~2019,~~2020, we made common stock repurchases and paid dividends to our common stockholders of ~~$268.3~~$79.7 million and ~~$426.3~~$454.4 million, respectively. We expect to deploy capital primarily to support business growth, fund other investments and return capital to shareholders, subject to Board of Directors (the “Board”) approval and market conditions. In addition, as previously disclosed in March 2021 in connection with the Global Preneed transaction, we intend to return 75% of the expected net proceeds of $1.2 billion to shareholders through share repurchases within one year of closing, subject to Board approval.

In ~~May 2020, we sold~~connection with the sale of our minority interests in Iké ~~and terminated our obligations to purchase the remaining shares of Iké (collectively, the “Sale”). In connection with the Sale,~~in May 2020, we provided $34.0 million of 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 outstanding balance~~form of the Iké ~~Loan as of September 30, 2020 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~~Loan. In April 2021, the Iké Loan ~~of $34.0 million, less cash inflows of $22.0 million upon settling a financial derivative we had entered into~~was prepaid in connection with our agreement to sell our interests in Iké. The financial derivative had 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. 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.full.

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.

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.~~appetite. Scenario 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)~~March 31, 2021). In addition, in January ~~2018,~~2021, 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 ~~$0.63~~$0.66 per common share on ~~September 22, 2020~~March 15, 2021 to stockholders of record as of ~~August 31, 2020~~February 22, 2021 and dividends of $1.6250 per share of ~~MCPS~~our Mandatory Convertible Preferred Stock (“MCPS”) on ~~September~~March 15, ~~2020~~2021 to stockholders of record as of ~~September~~March 1, ~~2020.~~2021. As described below, the MCPS converted into common stock in March 2021. Any determination to pay future dividends on our outstanding common stock 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; any legal, tax, regulatory and contractual restrictions on the payment of dividends; and other factors the Board deems ~~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.~~relevant. The Credit Facility also 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.

In January 2021, the Board authorized a new share repurchase program for up to $600.0 million of the Company’s outstanding common stock.

During ~~Nine Months 2020,~~First Quarter 2021, the Company repurchased ~~1,312,443~~308,000 shares of our outstanding common stock at a cost of ~~$153.2~~$41.5 million, exclusive of commissions. As of ~~September 30, 2020, $333.1~~March 31, 2021, $745.0 million aggregate cost at purchase remained unused under the existing Board repurchase ~~authorization.~~authorizations. The timing and the amount of future repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other ~~factors, including the impact of COVID-19 on our business.~~factors.

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~~In March 2021, each outstanding share of MCPS ~~will convert~~converted automatically ~~on March 15, 2021~~ into ~~between 0.9391 (the “minimum conversion rate”) and 1.1269~~0.9405 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~~or 2,703,911 shares of common stock ~~at the minimum conversion rate or~~ in ~~the event~~total plus an immaterial amount of ~~a fundamental change at the specified rates defined~~cash in ~~the Certificate~~lieu of ~~Designations of the MCPS.~~

fractional shares. Dividends on the MCPS ~~will be~~were 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~~in each of ~~Third~~First Quarter ~~2020~~2021 and ~~Third~~First Quarter ~~2019, and $14.0 million for each of Nine Months 2020 and Nine Months 2019.~~2020. For additional information regarding the MCPS, see Note 1813 in the Consolidated Financial Statements included elsewhere in this Report.

Outstanding 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, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
		Principal Amount		Carrying Value		Principal Amount		Carrying Value			Principal Amount		Carrying Value		Principal Amount		Carrying Value
Floating Rate Senior Notes due March 2021 (1)	Floating Rate Senior Notes due March 2021 (1)	$	50.0	$	50.0	$	50.0	$	49.9	Floating Rate Senior Notes due March 2021 (1)	$	—	$	—	$	50.0	$	50.0
4.00% Senior Notes due March 2023	4.00% Senior Notes due March 2023	350.0		348.8		350.0		348.5		4.00% Senior Notes due March 2023	350.0		349.0		350.0		348.9
4.20% Senior Notes due September 2023	4.20% Senior Notes due September 2023	300.0		298.2		300.0		297.8		4.20% Senior Notes due September 2023	300.0		298.5		300.0		298.4
4.90% Senior Notes due March 2028	4.90% Senior Notes due March 2028	300.0		297.1		300.0		296.8		4.90% Senior Notes due March 2028	300.0		297.2		300.0		297.2
3.70% Senior Notes due February 2030	3.70% Senior Notes due February 2030	350.0		347.0		350.0		346.8		3.70% Senior Notes due February 2030	350.0		347.1		350.0		347.0
6.75% Senior Notes due February 2034	6.75% Senior Notes due February 2034	275.0		272.2		275.0		272.1		6.75% Senior Notes due February 2034	275.0		272.3		275.0		272.3
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		395.3		400.0		395.0		7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (2)	400.0		395.6		400.0		395.4

5.25% Subordinated Notes due January 2061										5.25% Subordinated Notes due January 2061	250.0		244.0		250.0		243.7
Total Debt	Total Debt			$	2,008.6			$	2,006.9	Total Debt			$	2,203.7			$	2,252.9

(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.

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~~and bore 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 iswas payable quarterly. Commencing on or after March 2019, we ~~may~~could 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.~~Notes, plus accrued and unpaid interest to the redemption date. The remaining outstanding aggregate principal amount of $50.0 million, plus accrued and unpaid interest to the redemption date, was repaid in January 2021 in advance of the original maturity in March 2021.

•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~~remaining 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 Levels

Moody’s (1)

S&P (1)

Interest Rate Increase (2)

Ba1

BB+

25 basis points

Ba2

50 basis points

Ba3

BB-

75 basis points

B1 or below

B+ or below

100 basis points

(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 the third quarter of 2019.

Subordinated Notes

2061 Subordinated Notes: In November 2020, we issued subordinated notes due January 2061 with a principal amount of $250.0 million, which bear interest at an annual rate of 5.25% (the “2061 Subordinated Notes”). Interest is payable quarterly in arrears beginning in April 2021. On or after January 2026, we may redeem the 2061 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 January 2026, we may redeem the 2061 Subordinated Notes in whole but not in part, within 90 days after the occurrence of a tax event, rating agency

event or regulatory capital event as defined in the global note representing the 2061 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 a regulatory capital event, their principal amount plus accrued and unpaid interest. See below, under 2048 Subordinated Notes (as defined below), for more information on terms applicable to both series.

2048 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 “2048 Subordinated Notes”), which bear interest from March 2018 to March 2028 at an annual rate of 7.00%, payable semi-annually. The 2048 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 2048 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 2048 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 2048 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 2048 Subordinated Notes and 2061 Subordinated Notes (together, 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.

Credit Facility and Commercial Paper Program

We have a Credit Facility that 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.

On March 27, 2020, we drew down $200.0 million from our Credit Facility. We repaid the loan 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 available as of ~~September 30, 2020,~~March 31, 2021, 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 2015 to the Consolidated Financial Statements, included elsewhere in this Report.

Cash Flows

The table below shows our net cash flows for the periods indicated:


		For the Nine Months Ended September 30,					For the Three Months Ended March 31,
Net cash provided by (used in):	Net cash provided by (used in):	2020		2019		Net cash provided by (used in):	2021		2020
Operating activities - continuing operations						Operating activities - continuing operations	$	(454.0)	$	(167.5)
Operating activities - discontinued operations						Operating activities - discontinued operations	35.3		43.8
Operating activities	Operating activities	$	901.6	$	1,167.9	Operating activities	(418.7)		(123.7)
Investing activities - continuing operations						Investing activities - continuing operations	63.2		237.7
Investing activities - discontinued operations						Investing activities - discontinued operations	(48.7)		(55.8)
Investing activities	Investing activities	(275.2)		(613.6)		Investing activities	14.5		181.9
Financing activities - continuing operations						Financing activities - continuing operations	(153.0)		91.4
Financing activities - discontinued operations						Financing activities - discontinued operations	—		—
Financing activities	Financing activities	(296.8)		(50.1)		Financing activities	(153.0)		91.4
Effect of exchange rate changes on cash and cash equivalents - continuing operations						Effect of exchange rate changes on cash and cash equivalents - continuing operations	—		(16.4)
Effect of exchange rate changes on cash and cash equivalents - discontinued operations						Effect of exchange rate changes on cash and cash equivalents - discontinued operations	0.2		(0.4)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	6.3		(8.9)		Effect of exchange rate changes on cash and cash equivalents	0.2		(16.8)
Net change in cash	Net change in cash	$	335.9	$	495.3	Net change in cash	$	(557.0)	$	132.8

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~~used in operating activities for continuing operations was ~~$901.6~~$454.0 million for ~~Nine Months 2020~~First Quarter 2021 compared to ~~$1.17 billion~~$167.5 million for ~~Nine Months 2019.~~First Quarter 2020. The ~~decrease~~increase in net cash ~~provided by~~used in operating activities was primarily due to lower premiums collected from our mobile business due to timing. Net cash used in operating activities for both First Quarter 2021 and First Quarter 2020 was also impacted by the 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 given subsequent changes in payment terms under the program, an increase in advancedfollow-on commission payments associated with fourth quarter 2020 premiums and full year programs as ~~a result of subscriber growth from mobile protection programs and growth from our Global Automotive business, the timing of cumulative~~well as payments to ~~a vendor related to a program initiated in 2019~~various vendors for ~~acquiring~~the acquisition of mobile devices used to meet insurance claims or generate profits through sales to third parties, and an increase in follow-on commission payments associated 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 $204.9 million tax refund, which includes interest, related to the ability to carryback net operating losses to prior periods under the CARES Act.parties.

Net cash ~~used in~~provided by investing activities for continuing operations was ~~$275.2~~$63.2 million for ~~Nine Months 2020~~First Quarter 2021 compared to ~~$613.6~~$237.7 million for ~~Nine Months 2019.~~First Quarter 2020. The decrease in cash ~~used in~~provided by investing activities was primarily driven by ~~The decrease in~~the ongoing management of our investment portfolio. Additionally, net cash ~~used in~~

provided by investing activities ~~was primarily driven~~for First Quarter 2021 included a $60.1 million net cash outflow for transfers between the disposal business and business in continuing operations related to investments that will not be included in the sale. Net cash provided by investing activities for First Quarter 2020 included a $51.6 million increase in net cash provided by our consolidated investment entities (“CIEs”) related to the timing of purchases of securities in connection with CLO structures launched in 2019. 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. The remaining changes were due to the ongoing management of ~~our investment portfolio.~~the CLO structures.

Net cash used in financing activities for continuing operations was ~~$296.8~~$153.0 million for ~~Nine Months 2020~~First Quarter 2021 compared to ~~$50.1~~net cash provided by financing activities for continuing operations of $91.4 million for ~~Nine Months 2019.~~First Quarter 2020. The ~~increase~~decrease in net cash ~~used in~~provided by financing activities was ~~primarily~~mainly due to ~~$276.4~~the absence of a $200.0 million ~~of lower cash~~drawdown from our ~~CIEs provided, net of repayments of borrowings~~Credit Facility in First Quarter 2020 which was taken as a precautionary measure to ~~short-term warehouse facilities, primarily related~~strengthen our liquidity position and capital flexibility due to the ~~timing of CLO structures launched in 2019, partially offset~~uncertainty caused by ~~a $31.4~~the COVID-19 pandemic. The decrease was also due to the $50.0 million ~~loss on extinguishment of debt in connection with the tender~~

~~offer of $100.0 million~~repayment of our ~~6.75% senior notes due 2034 recorded~~2021 Senior Notes in ~~Nine Months 2019.~~First Quarter 2021. For additional information, ~~on CIEs,~~ see Note 1210 to the Consolidated Financial Statements ~~included~~ elsewhere in ~~this~~the Report.

Changes in cash flows from the operating and investing activities from our discontinued operations were fairly consistent in First Quarter 2021 and First Quarter 2020.

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 cash outflows for interest and dividends for the periods indicated:


		For the Nine Months Ended September 30,					For the Three Months Ended March 31,
		2020		2019			2021		2020
Interest paid on debt	Interest paid on debt	$	103.2	$	102.8	Interest paid on debt	$	50.5	$	50.8
Common stock dividends	Common stock dividends	115.1		113.0		Common stock dividends	38.2		38.0
Preferred stock dividends	Preferred stock dividends	14.0		14.0		Preferred stock dividends	4.7		4.7
Total	Total	$	232.3	$	229.8	Total	$	93.4	$	93.5

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 ~~$7.6~~$7.2 million and ~~$12.1~~$7.6 million of letters of credit outstanding as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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.

6750

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our ~~2019~~2020 Annual Report described our Quantitative and Qualitative Disclosures About Market Risk. As of ~~September 30, 2020,~~March 31, 2021, there were no material changes to the assumptions or risks. Upon the closing of the Global Preneed transaction, we expect our interest rate risk to significantly decrease in connection with the sale of the Global Preneed-related securities in our investment portfolio.

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, 2020.~~March 31, 2021. Based on such evaluation, management, including our CEO and CFO, has concluded that as of ~~September 30, 2020,~~March 31, 2021, 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, 2020,~~March 31, 2021, 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

There were no 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, 2020~~March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

For a description of any material pending legal ~~and regulatory matters~~proceedings in which we are involved, see “Commitments and Contingencies—Legal and Regulatory Matters” in Note 2116 to the Consolidated Financial Statements included elsewhere in this 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—Risk Factors” in our ~~2019~~2020 Annual ~~Report and the risk factor disclosed in Item 8.01 of our Current Report on Form 8-K filed on May 5, 2020.~~Report. 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities:

(In millions, except number of shares and per share amounts)
Period in 2020 Total
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 31 117,870 $ 131.23 117,870 $ 470.8
February 1 - February 29 134,000 136.52 134,000 452.5
March 1 - March 31 229,097 102.30 229,097 429.0
April 1 - April 30 162,000 104.96 162,000 412.1
May 1 - May 31 92,000 96.46 92,000 403.2
June 1 - June 30 — — — 403.2
July 1 - July 31 — — — 403.2
August 1 - August 31 242,000 123.28 242,000 373.4
September 1 - September 30 335,476 120.03 335,476 333.1
Total 1,312,443 $ 116.71 1,312,443 $ 333.1


(In millions, except number of shares and per share amounts)
Period in 2021	Total 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 31	95,000	$	136.96	95,000	$	773.5
February 1 - February 29	98,000	129.10		98,000	760.8
March 1 - March 31	115,000	137.58		115,000	745.0






Total	308,000	$	134.69	308,000	$	745.0

(1)Shares purchased pursuant to the November 5, 2018 publicly announced share repurchase authorization of up to $600.0 million of outstanding common stock. In January 2021, we publicly announced that the Board authorized the repurchase of up to an additional $600.0 million aggregate cost at purchase of our outstanding common stock. As of ~~September 30, 2020,~~March 31, 2021, approximately ~~$333.1~~$745.0 million aggregate cost at purchase remained unused under ~~the November 2018 authorization.~~both authorizations.

6952

Item 6. Exhibits

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.


2.1						Equity Purchase Agreement, dated as of March 8, 2021, by and among Assurant, Inc., Interfinancial Inc., CMFG Life Insurance Company and TruStage Global Holdings, ULC (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on March 9, 2021).
10.1						~~Separation~~Form of Assurant, Inc. Restricted Stock Unit Award Agreement ~~dated~~for Performance-Based Awards under the Assurant, Inc. 2017 Long Term Equity Incentive Plan, effective as of ~~July~~March 16, ~~2020, by and between Assurant, Inc. and Robyn Price Stonehill.~~2021.*
31.1						Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.

31.2						Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.

32.1						Certification of Chief Executive Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101						The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended ~~September 30, 2020,~~ March 31, 2021, 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.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

*Management contract or compensatory ~~plans~~plan.

7053

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

By:						/s/ RICHARD S. DZIADZIO
Name:						Richard S. Dziadzio
Title:						Executive Vice President and Chief Financial Officer

Date: ~~November 5, 2020~~May 6, 2021

7154


	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 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


Consolidated investment entities (4):
Purchases of investments	(353.1)		(1,163.1)
Sale of investments	550.2		754.4
Change in short-term investments	118.9		108.5
Other	0.4		4.0
Net cash used in investing activities	(275.2)		(613.6)
Financing activities

Issuance of debt, net of issuance costs	0		346.7
Repayment of debt, including tender offer premium	0		(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 liability	0		(19.3)
Borrowings under secured revolving credit facility	200.0		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


Other	0		0.1
Net cash used in financing activities	(296.8)		(50.1)
Effect of exchange rate changes on cash and cash equivalents	6.3		(8.9)

Change in cash and cash equivalents	335.9		495.3
Cash and cash equivalents at beginning of period	1,867.1		1,254.0
Cash and cash equivalents at end of period	$	2,203.0	$	1,749.3


	As of January 1, 2020
	Prior to adoption		As reported on adoption		Impact of adoption
Financial assets, at amortized cost:
Reinsurance recoverables	$	9,593.4	$	9,570.9	$	(22.5)
Premiums and accounts receivable, net	1,692.8		1,691.0		(1.8)
Commercial mortgage loans on real estate	815.0		813.4		(1.6)
Total	$	12,101.2	$	12,075.3	(25.9)
Tax effect					5.5
Cumulative effect of adoption					$	(20.4)


	Nine Months Ended September 30, 2020
	Foreign currency translation adjustment		Net unrealized gains on securities		Net unrealized gains on derivative transactions		Credit related impairment		Non-credit related impairment		Unamortized 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 transactions		Credit related impairment		Non-credit related impairment		Unamortized net (losses) on Pension Plans		Accumulated 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) income	0		(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


(In millions, except number of shares and per share amounts)
Period in 2020	Total 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 31	117,870	$	131.23	117,870	$	470.8
February 1 - February 29	134,000	136.52		134,000	452.5
March 1 - March 31	229,097	102.30		229,097	429.0
April 1 - April 30	162,000	104.96		162,000	412.1
May 1 - May 31	92,000	96.46		92,000	403.2
June 1 - June 30	—	—		—	403.2
July 1 - July 31	—	—		—	403.2
August 1 - August 31	242,000	123.28		242,000	373.4
September 1 - September 30	335,476	120.03		335,476	333.1
Total	1,312,443	$	116.71	1,312,443	$	333.1