AIZ Assurant Inc

A.M. Best Co. has affirmed the financial strength ratings (FSRs) of A (Excellent) and A- (Excellent) and issuer credit ratings (ICRs) of "a" and "a-" of Assurant, Inc.'s (Assurant) (NYSE: AIZ) (New York, NY) life/health subsidiaries. Concurrently, A.M. Best has affirmed the rating of "bbb" on Assurant's senior debt and AMB-2 designation for its commercial paper program. The outlook for all ratings is stable. (See link below for a detailed list of the ratings.) The rating affirmations of the life/health companies reflect Assurant's established presence in various niche markets, continued favorable operating results and more than adequate capitalization. Dividends from the numerous subsidiaries can sufficiently support the debt servicing obligations of the parent holding company. Assurant's debt-to-capital ratio remains at approximately 21%, with favorable debt service coverage of approximately 11 times. Assurant's life/health operations have traditionally been run through four distinct business units. American Bankers Life Assurance Company is the lead credit life and credit accident and health company, which operates as part of Assurant Solutions, the market leader for credit insurance and related products. Assurant Health, primarily consisting of the legal underwriting entities, Time Insurance Company and John Alden Life Insurance Company, has an established presence in the individual and small group major markets in targeted states. Assurant Employee Benefits specializes in offering employee benefit and worksite products targeted to small to mid-sized employers. This business is written mostly through the Union Security Insurance Company, a legal underwriting entity. Finally, Assurant Preneed concentrates its sales efforts in the United States through SCI-owned funeral homes, as well as multiple distribution relationships in Canada. American Memorial Life Insurance Company is the lead company within Assurant Preneed. Starting in second quarter 2006, Assurant Preneed will be realigned under the Assuranct Solutions business unit. The organization's disciplined approach has enabled it to continue to report quite favorable operating margins in most of its life/health operating companies in recent years. However, the bottom line focus, combined with increased competitive pressures in some of its markets, has caused recent top line challenges for a number of Assurant's life/health companies. Competitive pressures are most prevalent currently for Assurant Health as many large managed care organizations have become more active in the individual and small group major medical markets. Given this environment, A.M. Best believes the current reported combined ratios in the low 90s are probably not sustainable. With the numerous changes in the credit life and credit accident and health insurance market over the past five years, domestic credit life insurance premiums have contracted. To counter this trend, Assurant Solutions has been active in growing its international credit insurance business and establishing a profitable debt deferment operation. A sharpened focus on the small case market, as well as changes to Assurant Employee Benefit's sales and compensation models, have caused some premium income shortfalls in the segment over the past year. Due to a number of distractions, SCI has not produced the amount of desired preneed business for Assurant in recent years. Corrective actions have been implemented to grow this business going forward. For a complete list of Assurant Inc.'s life/health FSRs, ICRs and debt ratings, please visit www.ambest.com/press/061903assurant.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.