This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") addresses the financial condition of Assurant, Inc. and its subsidiaries (which we refer to collectively as "Assurant") as of June 30, 2009, compared with December 31, 2008, and our results of operations for the three and six months ended June 30, 2009 and 2008. This discussion should be read in conjunction with our MD&A and annual audited consolidated financial statements as of December 31, 2008 included in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the U.S. Securities and Exchange Commission (the "SEC") and the June 30, 2009 unaudited consolidated financial statements and related notes included elsewhere in this Form 10-Q.

Some of the statements included in this MD&A and elsewhere in this report, particularly those anticipating 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. You can identify these statements by the fact that they may use words such as "will," "may," "anticipates," "expects," "estimates," "projects," "intends," "plans," "believes," "targets," "forecasts," "potential," "approximately," or 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 the future plans, estimates or expectations contemplated by us will be achieved. Our actual results might differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments.

In addition to the factors described in the section below entitled "Critical Factors Affecting Results," the following risk factors could cause our actual results to differ materially from those currently estimated by management:
(i) failure to maintain significant client relationships, distribution sources and contractual arrangements; (ii) failure to attract and retain sales representatives; (iii) deterioration in the Company's market capitalization compared to its book value that could impair the Company's goodwill;
(iv) general global economic, financial market and political conditions (including difficult conditions in financial, capital and credit markets, the global economic slowdown, fluctuations in interest rates, mortgage rates, monetary policies, unemployment and inflationary pressure); (v) inadequacy of reserves established for future claims losses; (vi) failure to predict or manage benefits, claims and other costs; (vii) losses due to natural and man-made catastrophes; (viii) increases or decreases in tax valuation allowances;
(ix) current or new laws and regulations that could increase our costs or limit our growth; (x) fluctuations in exchange rates and other risks related to our international operations; (xi) unavailability, inadequacy and unaffordable pricing of reinsurance coverage; (xii) diminished value of invested assets in our investment portfolio (due to, among other things, the recent volatility in financial markets, the global economic slowdown, credit and liquidity risk, other than temporary impairments, environmental liability exposure and inability to target an appropriate overall risk level); (xiii) inability of reinsurers to meet their obligations; (xiv) insolvency of third parties to whom we have sold or may sell businesses through reinsurance or modified co-insurance; (xv) credit risk of some of our agents in Assurant Specialty Property and Assurant Solutions; (xvi) a further decline in the manufactured housing industry;
(xvii) a decline in our credit or financial strength ratings (including the risk of ratings downgrades in the insurance industry); (xviii) failure to effectively maintain and modernize our information systems; (xix) failure to protect client information and privacy; (xx) failure to find and integrate suitable acquisitions and new insurance ventures; (xxi) inability of our subsidiaries to pay sufficient dividends; (xxii) failure to provide for succession of senior management and key executives; (xxiii) negative impact on our business and negative publicity due to unfavorable outcomes in litigation and regulatory investigations (including the potential impact on our reputation and business of a negative outcome in the ongoing SEC investigation); and (xxiv) significant competitive pressures in our businesses and cyclicality of the insurance industry. These risk factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. For a more detailed discussion of the risk factors that could affect our actual results, please refer to the "Risk Factors" in Item 1A in our 2008 Annual Report on Form 10-K.

Company Overview

Assurant is a premier provider of specialized insurance products and related services in North America and selected international markets. We have five reportable segments, four of which are operating segments, Assurant Solutions, Assurant Specialty Property, Assurant Health, and Assurant Employee Benefits. These operating segments have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance market segments in the United States of America ("U.S.") and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration services; credit-related insurance including life, disability and unemployment; warranties and service contracts; individual, short-term and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance. Our remaining segment is Corporate & Other which includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments, interest income earned from short-term investments held and additional costs associated with excess of loss reinsurance programs reinsured and ceded to certain subsidiaries in the London market between 1995 and 1997. Corporate & Other also includes the amortization of deferred gains associated with the sales of Fortis Financial Group and Long-Term Care through reinsurance agreements.

Critical Factors Affecting Results and Liquidity

Our results depend on the adequacy of our product pricing, underwriting and the accuracy of our methodology for the establishment of reserves for future policyholder benefits and claims, returns on and values of invested assets and our ability to manage our expenses. Therefore, factors affecting these items, including unemployment, difficult conditions in financial markets and the global economic slowdown, may have a material adverse effect on our results of operations or financial condition during 2009. For example, our second quarter 2009 results for Assurant Health reflected deteriorating claims experience driven by heavy utilization of medical services and a reserve strengthening of $9,000 (after-tax) to address unfavorable claims development in the first six months of 2009. Similarly, the effects of proposed or recently passed government regulation on our sales and profitability is not yet known, but could negatively affect our results of operations or financial condition during 2009. For more information on these factors, see "Item 1A-Risk Factors" and "Item 7-MD&A Critical Factors Affecting Results" in our 2008 Annual Report on Form 10-K.

Management believes the Company will have sufficient liquidity to satisfy its needs over the next twelve months. For the six months ended June 30, 2009, net cash used in operating activities totaled $(173,757); net cash provided by investing activities totaled $5,930 and net cash used in financing activities totaled $(70,524). We had $809,182 in cash and cash equivalents as of June 30, 2009. Please see "-Liquidity and Capital Resources," below for further details.

Critical Accounting Policies and Estimates

Our 2008 Annual Report on Form 10-K described 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 2008 Annual Report on Form 10-K were consistently applied to the unaudited interim consolidated financial statements for the six months ended June 30, 2009.

Assurant Consolidated

Overview

The table below presents information regarding our consolidated results of
operations:



                                             For the Three Months Ended           For the Six Months Ended
                                                      June 30,                            June 30,
                                                2009              2008              2009             2008
Revenues:
Net earned premiums and other
considerations                             $    1,875,866      $ 1,995,516      $  3,750,445      $ 3,936,933
Net investment income                             174,932          201,211           353,411          398,985
Net realized losses on investments                 (6,142 )        (34,574 )         (61,831 )        (77,717 )
Amortization of deferred gain on
disposal of businesses                              6,750            7,327            13,552           14,706
Fees and other income                             222,203           79,280           305,909          153,178

Total revenues                                  2,273,609        2,248,760         4,361,486        4,426,085

Benefits, losses and expenses:
Policyholder benefits                             989,402          998,208         1,949,744        1,935,667
Selling, underwriting and general
expenses (1)                                      987,529          985,851         1,942,008        1,924,501
Interest expense                                   15,160           15,287            30,349           30,575

Total benefits, losses and expenses             1,992,091        1,999,346         3,922,101        3,890,743

Income before provision for income taxes          281,518          249,414           439,385          535,342
Provision for income taxes                         88,196           59,460           165,482          158,558

Net income                                 $      193,322      $   189,954      $    273,903      $   376,784

(1) Includes amortization of deferred acquisition costs ("DAC") and value of business acquired ("VOBA") and underwriting, general and administrative expenses.

The following discussion provides an analysis of how the consolidated results were affected by our four operating segments and our Corporate and Other segment for the three and six months ended June 30, 2009 ("Second Quarter 2009" and "Six Months 2009", respectively) and three and six months ended June 30, 2008 ("Second Quarter 2008" and "Six Months 2008", respectively). Please see the discussion that follows, for each of these segments, for a more detailed analysis of the fluctuations.

For The Three Months Ended June 30, 2009 Compared to The Three Months Ended June 30, 2008.

Net Income

Net income increased $3,368, or 2%, to $193,322 for Second Quarter 2009 from $189,954 for Second Quarter 2008. The increase was primarily due to a favorable legal settlement of $84,996, (after-tax), net of attorney fees and allowances for related recoverables. The income related to this settlement was partially offset by less favorable underwriting results from our four operating segments and a decline of $17,081, after-tax, in net investment income due to lower average invested assets and lower investment yields.

For The Six Months Ended June 30, 2009 Compared to The Six Months Ended June 30, 2008.

Net Income

Net income decreased $102,881, or 27%, to $273,903 for Six Months 2009 from $376,784 for Six Months 2008. The decrease was primarily due to less favorable underwriting results from our four operating segments and a decline of $29,623, after-tax, in net investment income due to lower average invested assets and lower investment yields. Partially offsetting these items is a favorable legal settlement of $84,996, (after-tax), net of attorney fees and allowances for related recoverables discussed above.

Assurant Solutions

Overview

The tables below present information regarding our Assurant Solutions' segment
results of operations:



                                         For the Three Months Ended             For the Six Months Ended
                                                  June 30,                              June 30,
                                           2009                2008              2009              2008
Revenues:
Net earned premiums and other
considerations                         $     666,935        $  700,629       $  1,311,547       $ 1,384,122
Net investment income                         97,106           108,425            195,101           215,155
Fees and other income                         51,960            47,668            103,991            91,949

Total revenues                               816,001           856,722          1,610,639         1,691,226

Benefits, losses and expenses:
Policyholder benefits                        261,325           306,173            533,347           592,853
Selling, underwriting and general
expenses                                     509,388           503,073            984,992           978,606

Total benefits, losses and expenses          770,713           809,246          1,518,339         1,571,459

Segment income before provision for
income taxes                                  45,288            47,476             92,300           119,767
Provision for income taxes                    17,394            15,121             34,095            39,855

Segment net income                     $      27,894        $   32,355       $     58,205       $    79,912

Net earned premiums and other
considerations:
Domestic:
Credit                                 $      62,740        $   69,808       $    128,681       $   143,061
Service contracts                            354,783           335,552            701,291           655,066
Other (1)                                     22,054            15,186             36,633            30,620

Total domestic                               439,577           420,546            866,605           828,747

International:
Credit                                        79,835            88,661            154,008           186,925
Service contracts                             97,280            90,128            185,183           167,795
Other (1)                                      4,107             6,903              7,767            16,501

Total international                          181,222           185,692            346,958           371,221

Preneed                                       46,136            94,391             97,984           184,153

Total                                  $     666,935        $  700,629       $  1,311,547       $ 1,384,122

Fees and other income:
Domestic:
Debt protection                        $      10,232        $    8,284       $     19,503       $    16,198
Service contracts                             23,068            19,941             50,777            38,312
Other (1)                                      5,593             7,439              9,541            13,174

Total domestic                                38,893            35,664             79,821            67,684

International                                  7,330             9,706             13,401            19,446
Preneed                                        5,737             2,298             10,769             4,819

Total                                  $      51,960        $   47,668       $    103,991       $    91,949

Gross written premiums (2):
Domestic:
Credit                                 $     136,450        $  152,730       $    271,796       $   305,071
Service contracts                            245,306           396,157            492,189           789,968
Others (1)                                    43,985            17,076             59,059            33,834

Total domestic                               425,741           565,963            823,044         1,128,873

International:
Credit                                       197,605           214,407            368,984           433,619
Service contracts                             98,494           110,714            205,564           211,716
Others (1)                                     6,734             8,962             12,121            20,310

Total international                          302,833           334,083            586,669           665,645

Total                                  $     728,574        $  900,046       $  1,409,713       $ 1,794,518

Preneed (face sales)                   $     126,263        $  120,859       $    229,387       $   225,283
Combined ratios (3):
Domestic                                        97.6 %            99.4 %             98.0 %            98.0 %
International                                  111.6 %           111.4 %            109.5 %           106.9 %

(1) This includes emerging products and run-off products lines.

(2) Gross written premiums does not necessarily translate to an equal amount of subsequent net earned premiums since Assurant Solutions reinsures a portion of its premiums to insurance subsidiaries of its clients.

(3) The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the Preneed business.

For The Three Months Ended June 30, 2009 Compared to The Three Months Ended June 30, 2008.

Net Income

Segment net income decreased $4,461, or 14%, to $27,894 for Second Quarter 2009 from $32,355 for Second Quarter 2008. The decrease was primarily the result of continued unfavorable credit insurance loss experience in the United Kingdom ("UK"), due to the high unemployment rates, and duration of unemployment, and a decrease of $7,357 (after-tax) of net investment income due to lower average invested assets and lower investment yields in Second Quarter 2009 compared with Second Quarter 2008. These decreases were partially offset by improved underwriting results from our domestic service contract business. In addition, Second Quarter 2008 net income included a loss from a discontinued credit life product in Brazil of $6,900 (after-tax).

Total Revenues

Total revenues decreased $40,721, or 5%, to $816,001 for Second Quarter 2009 from $856,722 for Second Quarter 2008. The decrease is mainly attributable to reduced net earned premiums and other considerations of $33,694, primarily resulting from our application of Statement of Financial Accounting Standards ("FAS") No. 97, (see Note 2) for new Preneed life insurance policies in which death benefit increases are determined at the discretion of the Company. The difference between reporting in accordance with FAS 97 compared with FAS 60 is not material but impacted various income statement captions including net earned premiums and other considerations; however it had no impact on our overall net income. Absent this item, net earned premiums would have increased by approximately $10,000, or 1%. This increase was partially offset by the continued runoff of our domestic credit insurance and the Preneed independent U.S. businesses as well as the unfavorable impact of change in foreign exchange rates, as the U.S. dollar strengthened against international currencies. Also contributing to the decrease in revenues was lower net investment income of $11,319, or 10%, primarily due to lower average invested assets and lower investment yields. Fees and other income increased $4,292, or 9%, primarily from the continued growth of our international service contract business resulting from acquisitions made in the latter part of 2008 and the application of FAS 97 for our Preneed business.

Gross written premiums decreased $171,472, or 19%, to $728,574 for Second Quarter 2009 from $900,046 for Second Quarter 2008. Gross written premiums from our domestic service contract business decreased $150,851, primarily due to a client bankruptcy as well as lower premiums related to a decrease in retail and auto sales. Gross written premiums from our international credit business decreased $16,802, primarily driven by unfavorable impact of changes in foreign exchange rates combined with a slowdown in the UK mortgage credit market. This was partially offset by growth in other countries from increased marketing efforts and strong client production. Gross written premiums from our domestic credit insurance business decreased $16,280, due to the continued runoff of this product line. Gross written premiums from our international service contract business decreased $12,220, primarily the result of the unfavorable impact of changes in foreign exchange rates. This was partially offset by growth from both new and existing clients, which is consistent with our international expansion strategy. Other domestic gross written premiums increased $26,909, entirely driven by a temporary new program, which started and ended in Second Quarter 2009. Preneed face sales increased $5,404 due to increased sales initiatives.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $38,533, or 5%, to $770,713 for Second Quarter 2009 from $809,246 for Second Quarter 2008. Policyholder benefits decreased $44,848, primarily due to the above-mentioned application of FAS 97 in our Preneed business. Also contributing to the decrease were lower losses from a discontinued credit life product in Brazil and improved loss experience in our domestic service contract business. This was partially offset by unfavorable loss experience in our UK credit business resulting from higher unemployment rates. Selling, underwriting and general expenses increased $6,315. General expenses increased $23,775, primarily due to higher expenses associated with the recent domestic service contract business acquisitions and a $3,700 restructuring charge. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, decreased

$17,460, primarily due to the decrease in net earned premiums in our international business, favorable foreign exchange rates, and reduced commission expense resulting from the acquisitions in the latter part of 2008.

For The Six Months Ended June 30, 2009 Compared to The Six Months Ended June 30, 2008.

Net Income

Segment net income decreased $21,707, or 27%, to $58,205 for Six Months 2009 from $79,912 for Six Months 2008. The decrease was primarily the result of unfavorable loss experience in the UK and a $13,035 (after-tax) decrease of net investment income due to both lower average invested assets and lower investment yields. In addition, Six Months 2008 includes $11,700 (after-tax) of income related to the accrual of contractual receivables established for certain domestic service contracts. These items were partially offset by improved underwriting results from our domestic service contract business, a loss of $6,900 (after-tax) recorded in Six Months 2008 from a discontinued credit life product in Brazil and improved underwriting results in our international business, absent the UK credit business discussed above.

Total Revenues

Total revenues decreased $80,587, or 5%, to $1,610,639 for Six Months 2009 from $1,691,226 for Six Months 2008. The decrease is mainly attributable to reduced net earned premiums and other considerations of $72,575, primarily resulting from the above-mentioned application of FAS 97, in our Preneed business. Absent this item, net earned premiums increased $3,000, or less than 1%, due to higher earnings in our domestic and international service contract business from premiums written in prior periods. This increase was partially offset by the continued runoff of our domestic credit insurance and the Preneed independent U.S. businesses and the unfavorable impact of foreign exchange as the U.S. dollar strengthened against international currencies. Also contributing to the decrease in revenues was lower net investment income of $20,054, or 9%, due primarily to lower average invested assets and lower investment yields. These decreases were partially offset by an increase in fees and other income of $12,042, or 13%, primarily from the continued growth of our service contract businesses mostly resulting from acquisitions made in the latter part of 2008 and the application of FAS 97 for our Preneed business.

Gross written premiums decreased $384,805, or 21%, to $1,409,713 for Six Months 2009 from $1,794,518 for Six Months 2008. Gross written premiums from our domestic service contract business decreased $297,779, primarily due to a client bankruptcy, as well as lower premiums resulting from decreased retail and auto sales. Gross written premiums from our international credit business decreased $64,635 primarily driven by unfavorable impact of changes in foreign exchange rates and the slowdown in the UK mortgage market. This was partially offset by growth in other countries from increased marketing efforts and strong client production. Gross written premiums from our domestic credit insurance business decreased $33,275, due to the continued runoff of this product line. Gross written premiums from our international service contract business decreased $6,152, primarily the result of unfavorable impact of changes in foreign exchange rates. This was partially offset by growth from both new and existing clients, which is consistent with our international expansion strategy. Other domestic gross written premium increased $25,225 mainly due to a temporary new program, which started and ended in Second Quarter 2009. Preneed face sales were $4,104 higher due to increased sales initiatives.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $53,120, or 3%, to $1,518,339 for Six Months 2009 from $1,571,459 for Six Months 2008. Policyholder benefits decreased $59,506, primarily due to the above-mentioned application of FAS 97 in our Preneed business. Also contributing to the decrease were lower losses from a discontinued credit life product in Brazil and improved loss experience in our domestic service contract business. This was partially offset by unfavorable loss experience in our UK credit business resulting from higher unemployment rates. Selling, underwriting and general expenses increased $6,386. General expenses increased $41,116, primarily due to higher expenses associated with the recent domestic service contract business acquisitions. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, decreased . . .