Letter to
Shareholders

Standing by this belief, this year on behalf of Assurant, I was proud to be a signatory of the Business Roundtable’s rewritten “Purpose of a Corporation.” And while we — like most other global companies — serve our own particular corporate purpose, we have always acted to uphold the critical commitments we make to all of our stakeholders.

My signature symbolized our continued drive to deliver differentiated value to our customers; support and invest in our employees; offer fair and ethical treatment of our suppliers and other partners; and support the communities where we live and work — and as for any public company, generate long-term, sustainable value for our capital providers, both shareholders and debtholders, alike.

And while it may seem somewhat irreverent in the context of an annual letter to place importance on anyone besides shareholders, it is just the opposite — our commitments to our customers, employees and other stakeholders helps ensure that we deliver sustained value for our shareholders.

Our purpose has always driven us and was made clear during our Investor Day in the first quarter of 2019 — a seminal moment for the year, as we defined our strategic priorities and financial objectives for the future. Since our last Investor Day in 2016, we have taken several giant steps forward, repositioning Assurant for sustainable profitable growth and achieve market leadership across key lines of business in which we operate.

Our Investor Day gave us the public platform to declare who we are as an organization and how we are best-positioned to support the ever-changing needs of the connected consumer, across mobile, auto and renters.

Our shareholders…where you need us to be

Investor Day gave us the opportunity to highlight our strong shareholder returns over the last five years, as well as since our IPO in 2004. Through the past decade and a half, we’ve also maintained a strong balance sheet with investment-grade ratings. We have been able to realize solid, profitable growth, together with strong cash flow, with 2019 being no exception. Last year, after adjusting for $41 million of after-tax reportable catastrophes and $18 million of after-tax non-recurring charges, net operating income⁽¹⁾ increased by 15 percent and earnings per share⁽²⁾ grew 10 percent — which was at the high end of our expectations for the year.

I’m also proud that our operating segments contributed a total of $748 million in capital to the holding company. This allowed us to raise our common stock dividend for the 15th consecutive year since our IPO and to return $426 million to our shareholders in common stock dividends and share repurchases.

We not only delivered strong earnings and strong cash flows, but also took actions that will help deliver on the Investor Day plans we outlined for our future.

We have been able to maintain and expand our leadership positions in key markets, while also continuing to diversify our earnings, lowering our overall catastrophe exposure. In 2019, nearly three-quarters of our segment net operating income⁽³⁾ came from non-catastrophe exposed businesses, enabling us to further generate more predictable earnings and cash flow.

Our business…where you need us to be…
in Global Lifestyle…

2019 was a record year for our Global Lifestyle business, as net operating income⁽⁴⁾ increased 37 percent to $409 million. Leading the way was Connected Living, contributing in a major way through our many long-standing client partnerships. We also grew the business successfully through 10 new mobile programs added within the last couple of years. Mobile was the standout for us this year, where we now protect over 53 million subscribers — representing an increase of 15 percent year-over-year.

International told a strong global story for Assurant this year. Following the sun, we maintained strong growth in Asia Pacific, with Japan continuing to be a source of strength for our mobile franchise. We extended a major client relationship in Japan — and we added a key new client that will help to build not only our business but our reputation in this important market. Europe delivered solid results for 2019, and a real turnaround across this multi-country region. Latin America weathered tough economic headwinds in certain countries, but delivered solid results, nonetheless.

The cementing of several key partnerships were important drivers of our success.

What we continue to pride ourselves on is our ability to drive additional value for customers through our fee-for-service offerings that go beyond standard device protection. Value-added offerings, including Personal Tech Pro and Pocket Geek, are key platforms that have allowed customers to solve those technical issues that plague their use of the technology — we’ve been able to optimize the performance of their devices, and connect to live technical assistance — ultimately providing a better customer experience. As we look ahead, we envision expanding into other service offerings like ID protection, something consumers see as a need to be fulfilled.

…in Global Preneed…

Within our Global Preneed business our continued long-term partnership with industry-leader SCI and the continued growth of our final need business marked opportunities for us. We delivered $52 million in net operating income⁽¹⁾ after taking a charge of $10 million in the third quarter of 2019 related to the historical treatment of deferred acquisition costs.

Our clients and customers…where you need us to be

In 2019, enhancing the customer experience (CX) was — and will continue to be — a central focus for Assurant — and core to our business and sustained growth. We accelerated actions supporting our enterprise vision in 2019 and looked to more deeply embed CX in our culture as a competitive differentiator. To that end, we continued to deploy technologies such as artificial intelligence to create a more seamless experience across channels for the 300 million consumers we serve globally. Importantly, we invested in our bench of talent across the enterprise within CX in 2019, underscoring the importance of continually bringing new thinking and ideas to how we enhance the customer experience and set a higher bar for our competition to deliver on customer expectations.

Culture is one of the board room buzz words right now, as organizations are waking up to the importance of a strong corporate culture and the impact it can have on businesses’ bottom line. Fortunately, we have always maintained a strong culture, and this year, following our acquisition of The Warranty Group, we embarked on a global culture initiative that will allow us to better understand what is so special and different about our culture. We know it is unique — and we believe the interconnectedness of a strong corporate culture with a positive employee experience translates into a better customer experience and greater performance overall.

This also applies to expanding our efforts to ensure a more diverse and inclusive culture, which may very well be one of the most important strategic initiatives to mark the year. We are committed to diversity and inclusion at Assurant and building a culture that ensures it’s in the DNA of who we are and how we operate. We understand the benefits to our customers, our company and our talent at all levels that we live true to this value. And, we believe that applies to our suppliers, so we’ve evolved our sourcing and procurement processes to provide additional participation opportunities for diverse suppliers.

Like many organizations, we have opportunities in this area, but we consider it a strategic imperative as we strive to continue to improve. We also view our ongoing focus on ethics and integrity reflective of a high-performing company and launched efforts like a “speak up” campaign that encourages our employees to raise their hand and be heard if something wasn’t right.

Our communities…where you need us to be

We have always understood the importance of our social responsibility efforts in furthering the value we deliver toward our long-term strategy. In 2019, we strengthened our environmental, social and governance (ESG) commitment as reflected in our social responsibility strategic framework that centers on four pillars.

Each of these pillars — Responsible Employer; Impact on Society; Integrity and Ethics; Customer Commitment — is dynamic with multiple dimensions that we align to our long-term business strategy.

Our Assurant Social Responsibility Report 2020 highlights actions, progress and our guiding principles that further support our commitments as a purpose-driven company. We hope you’ll read more about the many ways we are integrating ESG matters throughout Assurant.

Our investments…where you need us to be

The year was marked not only by investments and innovations, but by innovative investments. We saw one of our minority growth investments in Vacasa reach an implied overall valuation of at least $1 billion. And we expanded one of our areas within Global Lifestyle through the acquisition of Cell Phone Repair (CPR) — bringing our consumers same-day repair of their mobile phones and devices — while bringing us another link in the overall value chain.

Overall, 2019 will go down in our books as a strong year for Assurant. One in which we deepened client relationships, with some of the world’s top brands; we delivered superior value for our hundreds of millions of end consumers; and importantly we grew and strengthened our talent bench. All of this adds up to our ability to generate a more diversified base of earnings — from which we can continue to grow in the years ahead.

So whether it’s being at your fingertips or under the hood, at your front door or in your time of need, we pride our organization on being where our customers, employees and shareholders, partners and community members need us to be — and sometimes we’re there before they even know they need us. We take great pride in staying ahead of the needs of our stakeholders. That’s how we will continue to fulfill our purpose now and as we enter the Connected Decade. Thank you.

Alan Colberg

Alan Colberg
President and CEO

⁽¹⁾See footnote 1 on Non-GAAP Financial Measures for more information on this non-GAAP financial measure and a reconciliation of net operating income, excluding reportable catastrophes to its most comparable GAAP measure.

⁽²⁾See footnote 2 on Non-GAAP Financial Measures for more information on this non-GAAP financial measure and a reconciliation of net operating income, excluding reportable catastrophes, per diluted share to its most comparable GAAP measure.

⁽³⁾Segment net operating income for Global Lifestyle, Global Housing and Global Preneed excludes after-tax reportable catastrophes of $41 million.

⁽⁴⁾Segment net operating income is equal to GAAP net income.

⁽⁵⁾Global Housing return on equity equals Global Housing net operating income which equals GAAP net income divided by average stockholder’s equity.

^(A)See footnote 1 on Non-GAAP Financial Measures for more information on this non-GAAP financial measure and a reconciliation of net operating income, excluding reportable catastrophes to its most comparable GAAP measure.

^(B)References to total revenue refer to net earned premiums, fees and other income.

^(C)Consists of dividends from operating subsidiaries to the holding company, net of infusions, and excluding acquisitions and divestitures. Excludes proceeds and capital releases from the Assurant Employee Benefits sale and dividends from the Assurant Health wind-down of $1.3 billion in 2016, $145 million in 2017 and $12 million in 2018.