A.M. Best Affirms Ratings of Assurant, Inc. and Its Subsidiaries.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR) and issuer credit ratings (ICR) of the property/casualty and life/health insurance subsidiaries of Assurant, Inc. (Assurant) (New York, NY) [NYSE: AIZ]. Additionally, A.M. Best has affirmed the ICR of "bbb" and debt ratings of Assurant.

Concurrently, A.M. Best has upgraded the FSR to A (Excellent) from A- (Excellent) and ICRs to "a" from "a-" for four of Assurant's property/casualty subsidiaries: American Reliable Insurance Company (ARIC) (Scottsdale, AZ), Voyager Indemnity Insurance Company (VIIC) (Atlanta, GA), Reliable Lloyds Insurance Company (RLIC) (Austin, TX) and Caribbean American Property Insurance Company (CAPIC) (San Juan, PR). The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.)

Assurant's ratings recognize the organization's diverse business mix, established presence in numerous niche markets, very good operating results and appropriate overall capitalization. As of September 30, 2009, Assurant's unadjusted debt-to-capital and debt-to-tangible capital ratios were 16.7% and 20.2%, respectively, while maintaining a fixed interest coverage ratio at over 10 times. Assurant has a $500 million commercial paper program with a backup credit facility, with neither one utilized thus far in 2009. In addition, A.M. Best notes that cash and cash equivalents held at the holding company totaled over $300 million at September 30, 2009, and with no debt maturing until 2014, Assurant maintains solid liquidity. Although Assurant's revenue and operating results have not been adversely impacted by an outstanding Securities and Exchange Commission investigation (Wells Notices were received by Assurant and a number of key executives in July 2007), A.M. Best continues to monitor this situation and will take appropriate action if warranted.

The ratings on Assurant's property/casualty operations reflect their established presence in various specialty markets, continued favorable operating performance and adequate risk-adjusted capitalization. These positive rating attributes are derived from the group's leadership position in the delivery of credit-related insurance products, creditor placed hazard insurance, manufactured housing insurance, vehicle service contracts and retail extended service contracts and a vast customer base through the group's large number of distribution sources in North America and its growing international presence. As a result of its diversified product and distribution platform and technology focus, the group has delivered solid operating earnings over the last five years, despite periods of increased catastrophe losses and the adverse impacts that poor macro economic conditions are having on revenue in 2009.

Somewhat offsetting the positive ratings factors is the property/casualty group's natural catastrophe exposure, which has increased significantly in recent years due to growth in specialty property (both organically and through acquisition) and its continued dependence on third-party reinsurance. This, in conjunction with an increase in net retentions associated with its property catastrophe (CAT) treaty in recent years, exposes the group's earnings to a greater degree of variability over the near term. These concerns are somewhat offset by the book's geographic spread of risk, management's use of risk management tools, including tracking aggregation of risks and implementing rate increases. As many of Assurant's property/casualty group's products are tied to the spending habits of consumers and the lending practices of banks, the group will be challenged to maintain current premium levels and may continue to experience a worsening loss performance through higher utilization, given current economic pressures. A.M. Best will continue to monitor how slowing macro economic conditions impact the group's underwriting and operating profitability over time.

The ratings upgrades for ARIC, VIIC, RLIC and CAPIC were based on the reevaluation of the support provided by the lead members of Assurant's property/casualty group, including the utilization of these companies to achieve business objectives.

The affirmation of the ratings for American Banker's Life Assurance Company of Florida (ABLAC) (Miami, FL) and Caribbean American Life Assurance Company (CALAC) (San Juan, PR) reflect their adequate operating results despite challenges relating to the continued troubled economic environment. Both companies have experienced lowered top-line growth and contracting books of business over the past few years. However, the companies continue to report operating gains as well as provide dividends to the parent company.

Assurant's preneed operations, while reporting favorable statutory operating earnings over the past few years, continue to experience challenges related to the current economic environment. American Memorial Life Insurance Company (AMLIC), the lead preneed company within Assurant, has experienced good sales more recently and continues to explore new product offerings and sales strategies to help sustain its positive sales trend. Although AMLIC has reported favorable performance from mortgage loans historically, it has a significant amount of commercial mortgage loans relative to its capital and surplus base. Assurant Life of Canada continues to have a dominant market share in the Canadian preneed market.

Assurant Employee Benefits specializes in offering employee benefit and worksite products targeted to small to mid-sized employers. This business is written primarily through Union Security Insurance Company (USIC). Despite pressures from increasing competition in the last few years, the company has maintained its underwriting discipline. With the additional pressure on sales and persistency caused by the current recessionary environment, top line growth recently has been minimal. Although USIC has reported excellent performance from mortgage loans historically, A.M. Best remains concerned with the considerable amount of commercial mortgage loans as a percentage of statutory surplus, as well as an indication of ratings migration within its bond portfolio.

Assurant Health, with business written through Time Insurance Company (Time Insurance) and John Alden Life Insurance Company (John Alden), is a well known and leading writer of individual and small group major medical business. During the past nine months of 2009, the health businesses have experienced unfavorable claims utilization and larger than anticipated claims driven by the recessionary environment. While both Time Insurance and John Alden's ratings have been affirmed with a stable outlook, A.M. Best remains concerned with the operating activities within the companies. Furthermore, the addition of uncertainty related to the impact of health care reform on the overall health care industry creates added concerns regarding the future operations of both companies.

For a complete listing of Assurant, Inc.'s and its property/casualty and life/health subsidiaries FSRs, ICRs and debt ratings, please visit www.ambest.com/press/111802assurant.pdf.

The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.