NEW YORK, July 31 Assurant, Inc. ("Assurant")(NYSE: AIZ), a premier provider of specialized insurance and insurance-relatedproducts and services, today reported its results for the second quarter andfirst six months of 2008.
Robert B. Pollock, president and chief executive officer, said: "Despite aslowing economy and uncertain capital markets, Assurant had a solid quarterand strong first half of 2008. We delivered double digit growth in netoperating income on both a quarterly and year to date basis and generated anoperating return on equity well in excess of 15% -- both key metrics forAssurant."
"Our solid results this quarter and for the first half of 2008 continue todemonstrate the value of our diversified specialty insurance platform. Wecontinue to execute our strategy and are financially well positioned for theopportunities and challenges arising from the changing economic landscape,"Mr. Pollock concluded.
Second Quarter Results
Net income in the second quarter of 2008 increased 14% to $190.0 million,or $1.59 per diluted share, versus net income of $166.3 million, or $1.36 perdiluted share, in the second quarter of 2007. The second quarter of 2008included a gain of $26.6 million after-tax from the sale of an inactivesubsidiary and $22.4 million of net after-tax realized losses on investmentsincluding $17.9 million from other than temporary impairments in theinvestment portfolio.
Net operating income (see footnote 1 at the end of this release) for thesecond quarter of 2008 increased 10% to $185.8 million, or $1.55 per dilutedshare, compared to net operating income of $168.3 million, or $1.37 perdiluted share, for the second quarter of 2007.
Net earned premiums of $2.0 billion in the second quarter of 2008increased 11% from $1.8 billion in the same period of 2007, driven primarilyby growth in Assurant Specialty Property and Assurant Solutions.
Net investment income in the second quarter of 2008 increased 6% to $201.2million from $190.3 million in the second quarter of 2007. The second quarterof 2008 benefited from an increase in average invested assets.
Net income in the first half of 2008 was $376.8 million, or $3.16 perdiluted share, an increase of 9% versus first half 2007 net income of $345.7million, or $2.80 per diluted share. Net income for the first six months of2008 included a gain of $26.6 million after-tax from the sale of an inactivesubsidiary and $50.5 million of net after-tax realized losses on investments,including $46.1 million from other than temporary impairments in theinvestment portfolio.
Net operating income for the first half of 2008 was $400.7 million, or$3.36 per diluted share, an increase of 16% versus first half 2007 netoperating income of $344.1 million, or $2.79 per diluted share.
Net earned premiums of $3.9 billion in the first half of 2008 represent an11% increase over first half 2007 net earned premiums of $3.6 billion, drivenprimarily by growth in Assurant Specialty Property and Assurant Solutions.
Net investment income in the first half of 2008 decreased 2% to $399.0million from $407.2 million in the first half of 2007. This was attributableto a decrease of $33.1 million in investment income from real estate jointventure partnerships in the first six months of 2008 compared to the sameperiod in 2007. The first six months of 2008 benefited from an increase inaverage invested assets.
The following chart provides a reconciliation of net operating income tonet income for Assurant:
Assurant Solutions second quarter 2008 net operating income was $32.4million, up 7% from second quarter 2007 net operating income of $30.2 million.The increase for the quarter was driven by favorable domestic loss experience.This was offset by a $6.9 million after-tax charge related to