Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except number of shares and per share amounts)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and the annual audited consolidated financial statements for the year ended December 31, 2020 and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) and the unaudited consolidated financial statements for the three and nine months ended September 30, 2021 and accompanying notes (the “Consolidated Financial Statements”) included elsewhere in this Quarterly Report on Form 10-Q (this “Report”).

Some of the statements included in this MD&A and elsewhere in this Report, including our financial plans and any statements regarding our anticipated 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 use of words such as “will,” “may,” “can,” “anticipates,” “expects,” “estimates,” “projects,” “intends,” “plans,” “believes,” “targets,” “forecasts,” “potential,” “approximately,” and 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 our future plans, estimates or expectations will be achieved. Our actual results might differ materially from those projected in the forward-looking statements. We undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments. The following factors could cause our actual results to differ materially from those currently estimated by management:

(i)the loss of significant clients, distributors or other parties with whom we do business, or if we are unable to renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues;

(ii) significant competitive pressures, changes in customer preferences and disruption;

(iii) the failure to implement our strategy and to attract and retain key personnel, including key executives and senior management;

(iv) the failure to find suitable acquisitions at attractive prices, integrate acquired businesses effectively or grow organically;

(v) our inability to recover should we experience a business continuity event;

(vi) the failure to manage vendors and other third parties on whom we rely to conduct business and provide services to our clients;

(vii) risks related to our international operations;

(viii) declines in the value of mobile devices, the risk of guaranteed buybacks, or export compliance or other risks in our mobile business;

(ix) our inability to develop and maintain distribution sources or attract and retain sales representatives and executives with key client relationships;

(x) risks associated with joint ventures, franchises and investments in which we share ownership and management with third parties;

(xi) negative publicity relating to our business or industry;

(xii) the impact of general economic, financial market and political conditions and conditions in the markets in which we operate;

(xiii) the impact of the COVID-19 pandemic and measures taken in response thereto;

(xiv) the impact of catastrophic and non-catastrophe losses, including as a result of climate change;

(xv) the adequacy of reserves established for claims and our inability to accurately predict and price for claims;

(xvi) a decline in financial strength ratings of our insurance subsidiaries or in our corporate senior debt ratings;

(xvii) fluctuations in exchange rates;

(xviii) an impairment of goodwill or other intangible assets;

(xix) the failure to maintain effective internal control over financial reporting;

(xx) unfavorable conditions in the capital and credit markets;

(xxi) a decrease in the value of our investment portfolio, including due to market, credit and liquidity risks, and changes in interest rates;

(xxii) impairment of our deferred tax assets;

(xxiii) the unavailability or inadequacy of reinsurance coverage and the credit risk of reinsurers, including those to whom we have sold business through reinsurance;

(xxiv) the credit risk of some of our agents, third-party administrators and clients;

(xxv) the inability of our subsidiaries to pay sufficient dividends to the holding company and limitations on our ability to declare and pay dividends or repurchase shares;

(xxvi) the failure to effectively maintain and modernize our information technology systems and infrastructure, or the failure to integrate those of acquired businesses;

(xxvii) breaches of our information systems or those of third parties with whom we do business, or the failure to protect the security of data in such systems, including due to cyber-attacks and as a result of working remotely;

(xxviii) the costs of complying with, or the failure to comply with, extensive laws and regulations to which we are subject, including those related to privacy, data security, data protection or tax;

(xxix) the impact of litigation and regulatory actions;

(xxx) reductions or deferrals in the insurance premiums we charge;

(xxxi) changes in insurance, tax and other regulation;

(xxxii) volatility in our common stock price and trading volume; and

(xxxiii) employee misconduct.

For additional information on factors that could affect our actual results, please refer to “Critical Factors Affecting Results” below and in Item 7 of our 2020 Annual Report, and “Item 1A—Risk Factors” below and in our 2020 Annual Report.

General

Global Preneed Discontinued Operations

In August 2021, we completed the sale of the legal entities which comprise the businesses previously reported as the Global Preneed segment and certain businesses previously disposed of through reinsurance, which were previously reported in the Corporate and Other segment (collectively, the “disposed Global Preneed business”) to subsidiaries of CUNA Mutual Group (“CUNA”) for total cash consideration of $1.25 billion, subject to certain purchase price adjustments at closing. For additional information, refer to Note 4 to the Consolidated Financial Statements included elsewhere in this Report.

Prior to the sale, we had determined that the disposed Global Preneed business met the criteria to be classified as held for sale and that the sale represented a strategic shift that will have a major impact on our operations and financial results. Accordingly, the results of operations of the disposed Global Preneed business are presented as net income from discontinued operations in the consolidated statements of operations and segregated in the consolidated statement of cash flows for all periods presented, and the assets and liabilities for the disposed Global Preneed business have been classified as held for sale and segregated for all periods presented in the consolidated balance sheets. Transactions between the disposed Global Preneed business and businesses in our continuing operations are not eliminated to appropriately reflect the continuing operations and the assets, liabilities and results of the disposed Global Preneed business. Refer to “—Results of Operations—Discontinued Operations” below and Note 4 to the Consolidated Financial Statements included elsewhere in this Report.

Reportable Segments

As of September 30, 2021, the Company had three reportable segments which are defined based on the manner in which the Company’s chief operating decision maker, our Chief Executive Officer (“CEO”), reviews the business to assess performance and allocate resources, and which align to the nature of the products and services offered:

• Global Lifestyle: provides mobile device solutions and extended service products and related services for consumer electronics and appliances (referred to as “Connected Living”); vehicle protection and related services (referred to as “Global Automotive”); and credit and other insurance products (referred to as “Global Financial Services and Other”);

• Global Housing: provides lender-placed homeowners insurance, lender-placed manufactured housing insurance and lender-placed flood insurance (referred to as “Lender-placed Insurance”); renters insurance and related products (referred to as “Multifamily Housing”); and voluntary manufactured housing insurance, voluntary homeowners insurance and other specialty products (referred to as “Specialty and Other”); and

• Corporate and Other: includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments (which includes unrealized gains (losses) on equity securities and changes in fair value of direct investments in collateralized loan obligations), interest income earned from short-term investments held, income (expenses) primarily related to the Company’s frozen benefit plans, amounts related to businesses previously disposed of through reinsurance and the run-off of the Assurant Health business. Corporate and Other also includes goodwill impairments, the foreign currency gains (losses) from remeasurement of monetary assets and liabilities, changes in the fair value of derivative instruments and other expenses related to merger and acquisition activities, as well as other highly variable or unusual items other than reportable catastrophes (reportable catastrophe losses, net of reinsurance and client profit sharing adjustments, and including reinstatement and other premiums).

The following discussion covers the three and nine months ended September 30, 2021 (“Third Quarter 2021” and “Nine Months 2021”) and the three and nine months ended September 30, 2020 (“Third Quarter 2020” and “Nine Months 2020”).

Executive Summary

Summary of Financial Results

Consolidated net income from continuing operations increased $65.6 million, or 75%, to $153.6 million for Third Quarter 2021 from $88.0 million for Third Quarter 2020, primarily driven by higher net realized gains on investments, including $58.9 million of after-tax unrealized gains from three equity positions that went public in Third Quarter 2021 and $18.2 million of after-tax unrealized gains from equity securities accounted for under the measurement alternative, and favorable earnings contributions from Global Lifestyle. This was partially offset by a $16.3 million loss on extinguishment of debt related to the repayment of our 4.00% senior notes due March 2023 and a decrease in earnings contributions from Global Housing mostly driven by anticipated higher non-catastrophe losses.

Assurant incurred $78.0 million of after-tax reportable catastrophes in Third Quarter 2021, compared to $87.0 million in Third Quarter 2020. Hurricane Ida accounted for $87 million of total pre-tax losses, as the event reached the Company’s $80 million pre-tax per-event retention. This also includes associated reinstatement premiums to restore the second layer of the Company’s catastrophe reinsurance program. The remainder of losses were primarily related to the wildfires in California.

Global Lifestyle segment net income increased $17.4 million, or 16%, to $124.0 million for Third Quarter 2021 from $106.6 million for Third Quarter 2020, primarily driven by growth across Global Automotive and Connected Living. Global Automotive’s performance was primarily driven by global growth across distribution channels, including American Financial & Automotive Services, Inc. (“AFAS”) contributions, and higher investment income. Higher earnings in Connected Living were led by mobile, mainly from subscriber growth in North America, higher contributions from Asia Pacific and an increase in trade-in volumes, including HYLA, Inc. (“HYLA”) contributions. Global Lifestyle segment net income also included a modest one-time tax benefit in Third Quarter 2021.

Global Lifestyle net earned premiums, fees and other income increased $158.0 million, or 9%, to $1.96 billion for Third Quarter 2021 from $1.81 billion for Third Quarter 2020, primarily due to fee income growth in Connected Living as a result of higher trade-in volume from increasing carrier promotions. Net earned premium growth from strong prior period sales in Global Automotive was also a driver.

Global Housing segment net income decreased $9.9 million, or 76%, to $3.2 million for Third Quarter 2021 from $13.1 million for Third Quarter 2020. Excluding reportable catastrophes, segment net income decreased $18.9 million, or 19%, primarily due to higher non-catastrophe loss experience from an anticipated increase to more normalized levels, as well as an increase in reserves in Specialty and Other and higher claims costs.

Global Housing net earned premiums, fees and other income decreased $4.6 million, or 1%, to $486.7 million for Third Quarter 2021 from $491.3 million for Third Quarter 2020, primarily due to modest declines in Specialty and Other and Lender-placed Insurance, partially offset by growth in Multifamily Housing. In Lender-placed Insurance, the catastrophe reinsurance reinstatement premium recorded in Third Quarter 2021 related to Hurricane Ida offset premium growth from higher average insured values and premium rates.

Corporate and Other segment net income was $26.4 million for Third Quarter 2021 compared to a segment net loss of $31.7 million for Third Quarter 2020. The change in results was primarily due to higher net realized gains on investments, as described above, partially offset by a $16.3 million loss on extinguishment of debt related to the repayment of our 4.00% senior notes due March 2023.

Critical Factors Affecting Results

Our results depend on, among other things, the appropriateness of our product pricing, underwriting, the accuracy of our reserving methodology for future policyholder benefits and claims, the frequency and severity of reportable and non-reportable catastrophes, returns on and values of invested assets, and our ability to manage our expenses and achieve expense savings. Our results also depend on our ability to profitably grow our businesses, in particular our Connected Living, Multifamily Housing and Global Automotive businesses, and to maintain our position in our Lender-placed Insurance business. Factors affecting these items, including conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, and competition, may have a material adverse effect on our results of operations or financial condition. For more information on these and other factors that could affect our results, see “Item 1A—Risk Factors” below and in our 2020 Annual Report, and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Factors Affecting Results” in our 2020 Annual Report.

Our results may be impacted by our ability to continue to grow in the markets in which we operate and to maintain relationships with significant clients, distributors and other parties or renew contracts with them on favorable terms, including in our Connected Living, Multifamily Housing and Global Automotive businesses. Our mobile business is subject to volatility in mobile device trade-in volumes based on the actual and anticipated timing of the release of new devices and carrier promotional programs, as well as to changes in consumer preferences. Our Lender-placed Insurance revenues will also be impacted by changes in the housing market. In addition, across many of our businesses, we must respond to the actions of our competitors and the threat of disruption. See “Item 1A—Risk Factors—Business, Strategic and Operational Risks—Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties, or renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues” and “Significant competitive pressures, changes in customer preferences and disruption could adversely affect our results of operations” in our 2020 Annual Report.

Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common stock.

For Nine Months 2021, net cash provided by operating activities from continuing operations was $375.8 million; net cash provided by investing activities from continuing operations was $181.9 million; and net cash used in financing activities from continuing operations was $757.4 million. We had $2.03 billion in cash and cash equivalents as of September 30, 2021 as compared to $2.21 billion as of December 31, 2020. See “—Liquidity and Capital Resources,” below for further details.

Critical Accounting Policies and Estimates

Our 2020 Annual Report describes 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 2020 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for Third Quarter 2021.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report.

Results of Operations

Assurant Consolidated

Overview

The table below presents information regarding our consolidated results of operations for the periods indicated:

			For the Three Months Ended September 30,												For the Nine Months Ended September 30,
			2021						2020						2021						2020
Revenues:
Net earned premiums			$	2,140.1					$	2,086.8					$	6,396.3					$	6,173.6
Fees and other income			309.6						209.4						858.0						829.4
Net investment income			76.0						63.3						235.2						212.3
Net realized gains (losses) on investments			112.1						17.2						123.2						(37.9)
Total revenues			2,637.8						2,376.7						7,612.7						7,177.4
Benefits, losses and expenses:
Policyholder benefits			614.2						638.5						1,681.2						1,697.3
Amortization of deferred acquisition costs and value of business acquired			965.6						927.3						2,903.7						2,689.6
Underwriting, general and administrative expenses			818.3						672.9						2,301.2						2,290.9
Interest expense			27.5						25.5						84.7						77.7
Loss on extinguishment of debt			20.7						—						20.7						—
Total benefits, losses and expenses			2,446.3						2,264.2						6,991.5						6,755.5
Income before provision for income taxes			191.5						112.5						621.2						421.9
Provision for income taxes			37.9						24.5						134.4						20.6
Net income from continuing operations			153.6						88.0						486.8						401.3
Net income (loss) from discontinued operations			728.8						(118.5)						762.0						(97.6)
Net income (loss)			882.4						(30.5)						1,248.8						303.7
Less: Net loss (income) attributable to non-controlling interest			—						0.3						—						(1.1)
Net income (loss) attributable to stockholders			882.4						(30.2)						1,248.8						302.6
Less: Preferred stock dividends			—						(4.7)						(4.7)						(14.0)
Net income (loss) attributable to common stockholders			$	882.4					$	(34.9)					$	1,244.1					$	288.6

For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Net Income from Continuing Operations

Consolidated net income from continuing operations increased $65.6 million, or 75%, to $153.6 million for Third Quarter 2021 from $88.0 million for Third Quarter 2020, primarily due to higher net realized gains on investments that included $58.9 million of after-tax unrealized gains from three equity positions that went public in Third Quarter 2021 and $18.2 million of after-tax unrealized gains from equity securities accounted for under the measurement alternative. The increase was also due to favorable earnings contributions from Global Lifestyle driven by growth across Global Automotive and Connected Living. These increases were partially offset by a $16.3 million after-tax loss on extinguishment of debt related to the repayment of our 4.00% senior notes due March 2023 and a decrease in earnings contributions from Global Housing mostly driven by anticipated higher non-catastrophe losses.

For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Income from Continuing Operations

Consolidated net income from continuing operations increased $85.5 million, or 21%, to $486.8 million for Nine Months 2021 from $401.3 million for Nine Months 2020, primarily due to higher net realized gains on investments that included $58.9 million of after-tax unrealized gains from three equity positions that went public in Third Quarter 2021 and the absence of $25.5 million of after-tax net unrealized losses on collateralized loan obligations from Nine Months 2020. The increase was

also due to favorable earnings contributions from Global Lifestyle, mainly due to continued organic growth in Global Automotive. These increases were partially offset by the absence of an $84.4 million tax benefit that was recorded in Nine Months 2020 related to the utilization of net operating losses in connection with the 2020 Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

Global Lifestyle

Overview

The table below presents information regarding the Global Lifestyle segment’s results of operations for the periods indicated:

			For the Three Months Ended September 30,												For the Nine Months Ended September 30,
			2021						2020						2021						2020
Revenues:
Net earned premiums			$	1,688.5					$	1,633.2					$	5,014.6					$	4,799.0
Fees and other income			274.5						171.8						748.5						721.6
Net investment income			48.5						44.6						148.7						143.5
Total revenues			2,011.5						1,849.6						5,911.8						5,664.1
Benefits, losses and expenses:
Policyholder benefits			335.1						365.4						1,007.3						1,044.7
Amortization of deferred acquisition costs and value of business acquired			910.0						870.5						2,731.8						2,519.7
Underwriting, general and administrative expenses			614.6						480.8						1,690.0						1,649.4
Total benefits, losses and expenses			1,859.7						1,716.7						5,429.1						5,213.8
Segment income before provision for income taxes			151.8						132.9						482.7						450.3
Provision for income taxes			27.8						26.3						105.8						101.0
Segment net income			$	124.0					$	106.6					$	376.9					$	349.3
Net earned premiums, fees and other income:
Connected Living (mobile and service contracts)			$	996.5					$	909.5					$	2,932.8					$	2,914.4
Global Automotive			867.1						802.5						2,535.1						2,311.0
Global Financial Services and Other			99.4						93.0						295.2						295.2
Total			$	1,963.0					$	1,805.0					$	5,763.1					$	5,520.6
Net earned premiums, fees and other income:
Domestic			$	1,502.1					$	1,335.4					$	4,347.4					$	4,080.2
International			460.9						469.6						1,415.7						1,440.4
Total			$	1,963.0					$	1,805.0					$	5,763.1					$	5,520.6

For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Net Income

Segment net income increased $17.4 million, or 16%, to $124.0 million for Third Quarter 2021 from $106.6 million for Third Quarter 2020, primarily driven by Global Automotive, mainly from global organic growth across distribution channels, higher investment income and lower loss experience in select ancillary products, and Connected Living, mainly due to mobile increases from subscriber growth in North America, higher contributions from Asia Pacific and higher trade-in volumes, including contributions from HYLA. Global Lifestyle also included a modest one-time tax benefit in Third Quarter 2021.

Total Revenues

Total revenues increased $161.9 million, or 9%, to $2.01 billion for Third Quarter 2021 from $1.85 billion for Third Quarter 2020. Fees and other income increased $102.7 million, or 60%, mainly driven by higher mobile trade-in volumes from HYLA contributions and increasing carrier promotions. Net earned premiums increased $55.3 million, or 3%, primarily driven by continued growth from strong sales in our Global Automotive business. This increase was partially offset by a modest decline in Connected Living, due to the run-off of certain global mobile programs; the Connected Living decline was partially offset by organic growth in existing mobile programs and extended service contract programs. Net investment income increased $3.9 million, or 9%, primarily due to higher income from real estate related investments and other limited partnerships.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $143.0 million, or 8%, to $1.86 billion for Third Quarter 2021 from $1.72 billion for Third Quarter 2020. The increase was primarily due to a $133.8 million, or 28%, increase in underwriting, general and administrative expenses, mainly due to higher expenses due to higher mobile trade-in volumes, including contributions from HYLA, and continued growth in Global Automotive. Amortization of deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”) increased $39.5 million, or 5%, mainly due to an increase in amortization of DAC due to growth in our Global Automotive business, partially offset by a decrease in amortization of VOBA related to the acquisition of TWG Holdings Limited and its subsidiaries (“TWG”). The increase in total benefits, losses and expenses was partially offset by a $30.3 million, or 8%, decrease in policyholder benefits, mainly due to the run-off of certain global mobile programs, improved performance in Asia Pacific and favorable claims experience in our Global Automotive business.

For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Income

Segment net income increased $27.6 million, or 8%, to $376.9 million for Nine Months 2021 from $349.3 million for Nine Months 2020, primarily driven by Global Automotive from organic growth, higher investment income and lower claims activity in select ancillary products. Global Financial Services and Other also contributed to the increase, mainly due to claims and sales recoveries as Nine Months 2020 included unfavorable impacts related to COVID-19. Connected Living results were relatively flat as declines in extended service contract programs, which included a $6.7 million after-tax benefit for a client recoverable in Nine Months 2020, were mostly offset by growth in mobile, including contributions from HYLA and better performance in Asia Pacific.

Total Revenues

Total revenues increased $247.7 million, or 4%, to $5.91 billion for Nine Months 2021 from $5.66 billion for Nine Months 2020. Net earned premiums increased $215.6 million, or 4%, primarily driven by continued growth from strong sales in our Global Automotive business as well as a modest increase in Connected Living, driven by organic growth in extended service contract programs and domestic mobile subscriber growth within our cable operator distribution channel, partially offset by the run-off of certain global mobile programs. Fees and other income increased $26.9 million, or 4%, mainly from growth in Global Automotive and Connected Living, driven by recent acquisitions and increasing mobile carrier promotions, partially offset by the previously disclosed mobile program contract change. Net investment income increased $5.2 million, or 4%, primarily due to higher income from real estate related investments.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $215.3 million, or 4%, to $5.43 billion for Nine Months 2021 from $5.21 billion for Nine Months 2020. The increase was primarily due to a $212.1 million, or 8%, increase in amortization of DAC and VOBA, mainly related to an increase in amortization of DAC due to growth in our Global Automotive business, partially offset by a decrease in amortization of VOBA related to the acquisition of TWG. Underwriting, general and administrative expenses increased $40.6 million, or 2%, primarily due to growth across the businesses, including higher mobile trade-in volumes from HYLA, partially offset by the impact of a previously disclosed mobile contract change. The increase in total benefits, losses and expenses was partially offset by a $37.4 million, or 4%, decrease in policyholder benefits, primarily due to improved claims experience in our Global Financial Services and Other and Global Automotive businesses, as well as run-off of certain global mobile programs and better performance in Asia Pacific. The decrease in policyholder benefits was partially offset by growth in our Global Automotive and Connected Living businesses and unfavorable foreign exchange.

Global Housing

Overview

The table below presents information regarding the Global Housing segment’s results of operations for the periods indicated:

			For the Three Months Ended September 30,												For the Nine Months Ended September 30,
			2021						2020						2021						2020
Revenues:
Net earned premiums			$	451.6					$	453.6					$	1,381.7					$	1,374.6
Fees and other income			35.1						37.7						109.1						106.0
Net investment income			20.2						16.5						63.3						54.9
Total revenues			506.9						507.8						1,554.1						1,535.5
Benefits, losses and expenses:
Policyholder benefits			279.1						272.8						673.9						651.9
Amortization of deferred acquisition costs and value of business acquired			55.6						56.8						171.9						169.9
Underwriting, general and administrative expenses			169.5						162.2						501.3						496.6
Total benefits, losses and expenses			504.2						491.8						1,347.1						1,318.4
Segment income before (benefit) provision for income taxes			2.7						16.0						207.0						217.1
(Benefit) provision for income taxes			(0.5)						2.9						42.7						44.4
Segment net income			$	3.2					$	13.1					$	164.3					$	172.7
Net earned premiums, fees and other income:
Lender-placed Insurance			$	256.2					$	258.2					$	790.9					$	787.5
Multifamily Housing			121.7						117.9						361.1						338.1
Specialty and Other			108.8						115.2						338.8						355.0
Total			$	486.7					$	491.3					$	1,490.8					$	1,480.6

For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Net Income

Segment net income decreased $9.9 million, or 76%, to $3.2 million for Third Quarter 2021 from $13.1 million for Third Quarter 2020. Segment net income for Third Quarter 2021 included $78.0 million of reportable catastrophes, primarily related to Hurricane Ida, compared to $87.0 million for Third Quarter 2020. Excluding reportable catastrophes, segment net income decreased $18.9 million, or 19%, driven by higher non-catastrophe loss experience from an anticipated increase to more normalized levels than experienced in Third Quarter 2020, primarily in our Lender-placed Insurance business, an increase in reserves within Specialty and Other products and higher claims costs.

Total Revenues

Total revenues decreased $0.9 million, or 0.2%, to $506.9 million for Third Quarter 2021 from $507.8 million for Third Quarter 2020. Net earned premiums decreased $2.0 million, or 0.4%, primarily due to higher reinsurance reinstatement premiums related to Hurricane Ida, a modest decline in Specialty and Other and lower REO volume within Lender-placed Insurance. This decrease was partially offset by higher average insured value and premium rate increases in our Lender-placed Insurance business and continued growth from renters insurance in our Multifamily Housing business. Fees and other income decreased $2.6 million, or 7%, primarily due to a decrease in our Lender-placed Insurance business from a loss of a client. Net investment income increased $3.7 million, or 22%, primarily due to higher income from real estate related investments.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $12.4 million, or 3%, to $504.2 million for Third Quarter 2021 from $491.8 million for Third Quarter 2020. The increase was primarily due to underwriting, general and administrative expenses, which increased $7.3 million, or 5%, mainly due to higher information technology expenses. Policyholder benefits increased $6.3 million, or 2%, primarily from higher non-catastrophe loss experience, partially offset by lower reportable catastrophe losses.

For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Income

Segment net income decreased $8.4 million, or 5%, to $164.3 million for Nine Months 2021 compared to $172.7 million for Nine Months 2020. Segment net income for Nine Months 2021 included $112.9 million of reportable catastrophes, primarily related to Hurricane Ida and the Texas winter storms, compared to $109.9 million for Nine Months 2020. Excluding reportable catastrophes, segment net income decreased $5.4 million, or 2%, driven by higher non-catastrophe loss experience from an anticipated increase to more normalized levels than experienced in Nine Months 2020, primarily in our Lender-placed Insurance business, an increase in reserves within Specialty and Other products and moderate impact from higher claims activity, as well as lower REO volumes related to COVID-19 foreclosure moratoriums. These decreases were partially offset by premium rate and average insured value increases in our Lender-placed Insurance business and higher income from real estate related investments.

Total Revenues

Total revenues increased $18.6 million, or 1%, to $1.55 billion for Nine Months 2021 from $1.54 billion for Nine Months 2020. Net investment income increased $8.4 million, or 15%, primarily due to higher income from real estate related investments. Net earned premiums increased $7.1 million, or 1%, primarily due to average insured value and premium rate increases in our Lender-placed Insurance business and continued growth from renters insurance in our Multifamily Housing business. This increase was partially offset by lower REO volume, a decline in Specialty and Other and higher reinsurance reinstatement premium primarily related to Hurricane Ida. Fees and other income increased $3.1 million, or 3%, primarily due to growth in Multifamily Housing.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $28.7 million, or 2%, to $1.35 billion for Nine Months 2021 from $1.32 billion for Nine Months 2020. The increase was primarily due to an increase in policyholder benefits of $22.0 million, or 3%, from higher non-catastrophe losses across various products, as well as an increase in reserves within Specialty and Other products, partially offset by a small decrease in reportable catastrophe losses. Underwriting, general and administrative expenses increased $4.7 million, or 1%, primarily due to higher information technology expenses.

Corporate and Other

Overview

The tables below present information regarding the Corporate and Other’s segment results of operations for the periods indicated:

			For the Three Months Ended September 30,												For the Nine Months Ended September 30,
			2021						2020						2021						2020
Revenues:
Fees and other income			$	—					$	(0.1)					$	0.4					$	1.8
Net investment income			7.3						2.2						23.2						13.9
Net realized gains (losses) on investments			112.1						17.2						123.2						(37.9)
Total revenues			119.4						19.3						146.8						(22.2)
Benefits, losses and expenses:
Policyholder benefits			—						0.3						—						0.7
General and administrative expenses			34.2						29.9						109.9						144.9
Interest expense			27.5						25.5						84.7						77.7
Loss on extinguishment of debt			20.7						—						20.7						—
Total benefits, losses and expenses			82.4						55.7						215.3						223.3
Segment income (loss) before expense (benefit) for income taxes			37.0						(36.4)						(68.5)						(245.5)
Expense (benefit) for income taxes			10.6						(4.7)						(14.1)						(124.8)
Segment net income (loss) from continuing operations			$	26.4					$	(31.7)					$	(54.4)					$	(120.7)

For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Net Income (Loss) from Continuing Operations

Segment net income from continuing operations was $26.4 million for Third Quarter 2021 compared to a segment net loss from continuing operations of $31.7 million for Third Quarter 2020. The change in results was primarily due to higher net realized gains on investments that included $58.9 million of after-tax unrealized gains from three equity positions that went public in Third Quarter 2021 and $18.2 million of after-tax unrealized gains from equity securities accounted for under the measurement alternative. The increase was partially offset by the $16.3 million after-tax loss on extinguishment of debt related to the repayment of our 4.00% senior notes due March 2023.

Total Revenues

Total revenues increased $100.1 million to $119.4 million for Third Quarter 2021 from $19.3 million for Third Quarter 2020, primarily due to higher net realized gains on investments that included $74.6 million of unrealized gains from three equity positions that went public in Third Quarter 2021 and $23.0 million of unrealized gains from equity securities accounted for under the measurement alternative.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $26.7 million, or 48%, to $82.4 million for Third Quarter 2021 from $55.7 million for Third Quarter 2020. The increase was primarily driven by $20.7 million loss on extinguishment of debt and the absence of the $11.5 million income from the sale of our CLO asset management platform in Third Quarter 2020, net of certain exit costs. The increase was partially offset by $6.6 million of lower general operating expenses, mostly driven by lower employee-related and third-party expenses as well as expense savings from real estate.

For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Loss from Continuing Operations

Segment net loss from continuing operations decreased $66.3 million, or 55%, to $54.4 million for Nine Months 2021 from $120.7 million for Nine Months 2020. The decrease in net loss was primarily due to a $128.3 million after-tax increase in net realized gains on investments that included $58.9 million of after-tax unrealized gains from three equity positions that went public in Third Quarter 2021, $18.2 million of after-tax unrealized gains from equity securities accounted for under the

measurement alternative and the absence of $25.5 million of after-tax net unrealized losses on collateralized loan obligations from Nine Months 2020. The decrease was also driven by a $13.3 million after-tax decrease in general operating expenses mostly due to a reduction in employee related incentive compensation, lower third-party fees for general corporate services and expense savings on real estate. The decrease in net loss was also driven by an $11.2 million decrease in after-tax direct and incremental operating expenses incurred in connection with the COVID-19 pandemic and the absence of a $9.3 million after-tax loss from the sale of Iké from Nine Months 2020. These items were partially offset by the absence of an $84.4 million tax benefit related to the utilization of net operating losses in connection with the CARES Act from Nine Months 2020 and the $16.3 million after-tax loss on extinguishment of debt.

Total Revenues

Total revenues increased $169.0 million to $146.8 million for Nine Months 2021 from $(22.2) million for Nine Months 2020, primarily due to higher net realized gains on investments that included $74.6 million of net unrealized gains from three equity positions that went public in Third Quarter 2021, a $23.0 million increase in unrealized gains from equity securities accounted for under the measurement alternative and the absence of $32.3 million of net unrealized losses on collateralized loan obligations from Nine Months 2020. The increase is also due to higher net investment income mostly driven by higher income from limited partnerships and a gain from the sale of a real estate joint venture property.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $8.0 million, or 4% to $215.3 million for Nine Months 2021 from $223.3 million for Nine Months 2020. The decrease was primarily driven by $16.8 million of lower general operating expenses mostly due to a reduction in employee related incentive compensation, lower third-party fees for general corporate services and expense savings on real estate, and $14.3 million of lower direct and incremental operating expenses incurred in connection with the COVID-19 pandemic. These items were partially offset by the $20.7 million loss on extinguishment and the absence of the $10.1 million income from the sale of our CLO asset management platform, net of certain exit costs.

Discontinued Operations

Overview

The table below presents information regarding the results of the discontinued operations for the periods indicated:

			For the Three Months Ended September 30,												For the Nine Months Ended September 30,
			2021						2020						2021						2020
Revenues:
Net earned premiums			$	6.1					$	16.0					$	42.6					$	49.4
Fees and other income			13.6						38.6						91.0						113.6
Net investment income			23.7						71.8						168.4						216.0
Net realized gains (losses) on investments			0.5						(0.6)						4.2						(16.7)
Gain on disposal of businesses			926.4						—						920.1						—
Total revenues			970.3						125.8						1,226.3						362.3
Benefits, losses and expenses:
Policyholder benefits			24.6						71.1						172.7						211.6
Amortization of deferred acquisition costs and value of business acquired			7.1						18.9						46.2						56.1
Underwriting, general and administrative expenses			5.7						14.6						39.0						46.8
Goodwill impairment			—						137.8						—						137.8
Total benefits, losses and expenses			37.4						242.4						257.9						452.3
Income (loss) before provision for income taxes			932.9						(116.6)						968.4						(90.0)
Provision for income taxes			204.1						1.9						206.4						7.6
Net income (loss) from discontinued operations			$	728.8					$	(118.5)					$	762.0					$	(97.6)

For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Net Income (Loss) from Discontinued Operations

Net income from discontinued operations was $728.8 million for Third Quarter 2021 compared to a net loss from discontinued operations of $118.5 million for Third Quarter 2020. The change in results was primarily due to a $723.2 million after-tax gain from the sale of our Global Preneed business. The gain is inclusive of $606.0 million in after-tax accumulated other comprehensive income (“AOCI”), primarily net unrealized gains on investments, that was recognized in earnings upon sale. The increase was also due to the absence of a $137.8 million goodwill impairment on Global Preneed from Third Quarter 2020 that was partially offset by lower operating results from the Global Preneed business since Third Quarter 2021 only included one month of results since the sale closed on August 2, 2021.

Total Revenues

Total revenues increased $844.5 million to $970.3 million for Third Quarter 2021 from $125.8 million for Third Quarter 2020, primarily due to the gain on the sale of our Global Preneed business. The gain is inclusive of $774.2 million of pre-tax AOCI, primarily net unrealized gains on investments, that was recognized in earnings upon sale. The increase in total revenues was partially offset by a $48.1 million, or 67%, decrease in net investment income, a $25.0 million, or 65%, decrease in fees and other income and a $9.9 million, or 62%, decrease in net earned premiums, primarily because Third Quarter 2021 only included one month of revenue.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $205.0 million, or 85%, to $37.4 million for Third Quarter 2021 from $242.4 million for Third Quarter 2020, primarily driven by the absence of the goodwill impairment which was recorded in Third Quarter 2020. The decrease in total benefits, losses and expenses was also due to a $46.5 million, or 65%, decrease in policyholder benefits, an $11.8 million, or 62%, decrease in amortization of DAC and VOBA and an $8.9 million, or 61%, decrease in underwriting, general and administrative expenses, primarily because Third Quarter 2021 only included one month of benefits, losses and expenses.

For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Income (Loss) from Discontinued Operations

Net income from discontinued operations was $762.0 million for Nine Months 2021 compared to a net loss from discontinued operations of $97.6 million for Nine Months 2020. The change in results was primarily due to the aforementioned gain on the sale of the disposed Global Preneed business in Nine Months 2021 and the goodwill impairment in Nine Months 2020, as well as a reduction in net realized losses on investments. These items were partially offset by lower operating results for the Global Preneed business as Nine Months 2021 only included seven months of results since the sale closed on August 2, 2021.

Total Revenues

Total revenues increased $864.0 million to $1.23 billion for Nine Months 2021 from $362.3 million for Nine Months 2020, primarily due to the gain on the sale of the disposed Global Preneed business and a reduction in net realized losses on investments mostly due to the absence of net unrealized losses on collateralized loan obligations and equity securities from Nine Months 2020. The increase in total revenues was partially offset by a $47.6 million, or 22%, decrease in net investment income, a $22.6 million, or 20%, decrease in fees and other income and a $6.8 million, or 14%, decrease in net earned premiums, primarily because Nine Months 2021 only included seven months of revenues.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $194.4 million, or 43%, to $257.9 million for Nine Months 2021 from $452.3 million for Nine Months 2020, primarily driven by the absence of the goodwill impairment which was recorded in Nine Months 2020. The decrease in total benefits, losses and expenses was also due to a $38.9 million, or 18%, decrease in policyholder benefits, a $9.9 million, or 18%, decrease in amortization of DAC and VOBA and a $7.8 million, or 17%, decrease in underwriting, general and administrative expenses, primarily because Nine Months 2021 only included seven months of benefits, losses and expenses.

Investments

We had total investments of $9.20 billion and $8.22 billion as of September 30, 2021 and December 31, 2020, respectively. Net unrealized gains on our fixed maturity securities portfolio decreased by $191.9 million during Nine Months 2021, from $570.9 million as of December 31, 2020 to $379.0 million as of September 30, 2021, primarily due to an increase in Treasury yields.

The following table shows the credit quality of our fixed maturity securities portfolio as of the dates indicated:

			Fair value as of
Fixed Maturity Securities by Credit Quality			September 30, 2021												December 31, 2020
Aaa / Aa / A			$	4,394.0					57.4		%				$	4,051.3					59.5		%
Baa			2,769.5						36.2		%				2,288.1						33.6		%
Ba			341.7						4.5		%				384.4						5.6		%
B and lower			145.1						1.9		%				91.7						1.3		%
Total			$	7,650.3					100.0		%				$	6,815.5					100.0		%

The following table shows the major categories of net investment income for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2021						2020						2021						2020
Fixed maturity securities			$	58.4					$	57.2					$	173.3					$	170.0
Equity securities			3.8						3.6						11.1						10.9
Commercial mortgage loans on real estate			2.3						2.1						5.7						5.8
Short-term investments			0.4						1.1						1.6						5.2
Other investments			13.1						1.6						48.5						6.5
Cash and cash equivalents			2.3						1.5						6.0						10.8
Revenue from consolidated investment entities (1)			—						3.9						—						56.3
Total investment income			80.3						71.0						246.2						265.5
Investment expenses			(4.3)						(3.8)						(11.0)						(16.3)
Expenses from consolidated investment entities (1)			—						(3.9)						$	—					$	(36.9)
Net investment income			$	76.0					$	63.3					$	235.2					$	212.3

(1)The following table shows the net of revenues and expenses from consolidated investment entities for the periods indicated.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2021						2020						2021						2020
Investment income from direct investments in:
Real estate fund (1)			$	—					$	—					$	—					$	8.3
CLO entities			—						—						—						8.0
Investment management fees			—						—						—						3.1
Net investment income from consolidated investment entities			$	—					$	—					$	—					$	19.4

(1)The investment income from the real estate funds includes income attributable to non-controlling interest of $1.1 million for the nine months ended September 30, 2020.

Net investment income increased $12.7 million, or 20%, to $76.0 million for Third Quarter 2021 from $63.3 million for Third Quarter 2020, primarily driven by an increase in income from other investments that included higher income from real estate, mostly related to the sale of one property during the quarter, and an increase in income from limited partnerships driven by higher valuations of underlying partnerships.

Net investment income increased $22.9 million, or 11%, to $235.2 million for Nine Months 2021 from $212.3 million for Nine Months 2020, primarily driven by an increase in income from other investments due to higher income from limited partnerships due to an increase in valuations, higher income from real estate mostly due to property sales and an increase in valuations of real estate partnerships. The increase was also due to a reduction in investment expenses as Nine Months 2020 included expenses incurred in connection with our strategic decision to outsource the management of our investment portfolio and higher income from fixed maturity securities due to higher asset levels. These increases were partially offset by a decrease

in income from consolidated investment entities and lower income from cash and short-term investments due to continued low interest rates in Nine Months 2021.

As of September 30, 2021, we owned $20.6 million of securities guaranteed by financial guarantee insurance companies. Included in this amount was $15.3 million of municipal securities, whose credit rating was A+ with the guarantee, but would have had a rating of AA- without the guarantee.

For more information on our investments, see Notes 7 and 8 to the Consolidated Financial Statements included elsewhere in this Report.

Catastrophe Reinsurance Program

In July 2021, we finalized our 2021 property catastrophe reinsurance program. 2021 reinsurance premiums for this program are estimated to be approximately $149.0 million pre-tax compared to approximately $139.0 million pre-tax for 2020, reflecting the additional multiyear coverage and reducing our retention to $55 million for certain second and third events. Coverage was placed with more than 40 reinsurers that are all rated A- or better by A.M. Best. Actual reinsurance premiums will vary if exposure changes significantly from estimates or if reinstatement premiums are required due to catastrophe events.

The U.S. per-occurrence catastrophe coverage includes a main reinsurance program providing $965.0 million of coverage in excess of $80.0 million retention for a first event, with retention lowering to $55.0 million for certain second and third events. In addition, it includes multi-year reinsurance contracts covering approximately 52% of the U.S. program, reducing volatility in future reinsurance costs. All layers of the program allow for one automatic reinstatement, except the first layer, which has two reinstatement and which covers the first $30.0 million of losses in excess of the $80.0 million retention. The 2021 program also maintains a cascading feature that provides multi-event protection in which higher coverage layers drop down to $110.0 million as the lower layers and reinstatement limit are exhausted. When combined with the Florida Hurricane Catastrophe Fund, the program is covered for gross Florida losses of up to approximately $1.2 billion.

The 2021 catastrophe reinsurance program also includes Caribbean protection of up to $150.0 million in excess of a $20.0 million retention, as well as Latin America protection of up to $158.0 million in excess of a $7.0 million retention, which renewed on August 1, 2021.

Liquidity and Capital Resources

Regulatory Requirements

Assurant, Inc. is a holding company and, as such, has limited direct operations of its own. Our assets consist primarily of the capital stock of our subsidiaries. Accordingly, our future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries, such as payments under our tax allocation agreement and under management agreements with our subsidiaries. Our subsidiaries’ ability to pay such dividends and make such other payments is regulated by the states and territories in which our subsidiaries are domiciled. These dividend regulations vary from jurisdiction to jurisdiction and by type of insurance provided by the applicable subsidiary, but generally require our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay to the holding company. See “Item 1—Business—Regulation—U.S. Insurance Regulation” and “Item 1A—Risk Factors—Legal and Regulatory Risks—Changes in insurance regulation may reduce our profitability and limit our growth” and “—Macroeconomic, Political and Global Market Risks—The COVID-19 pandemic and measures taken in response thereto may adversely affect our business, results of operations and financial condition” in our 2020 Annual Report. Along with solvency regulations, the primary driver in determining the amount of capital used for dividends is the level of capital needed to maintain desired financial strength ratings from A.M. Best Company (“A.M. Best”).

Regulators or rating agencies could become more conservative in their methodology and criteria, increasing capital requirements for our insurance subsidiaries and may base these changes using different factors including industry studies, management actions or market conditions. The rating agencies’ assessment of the Company may consider the results of internally developed stress testing models and potential impacts to our earnings and capital. For further information on our ratings and the risks of ratings downgrades, see “Item 1—Business—Ratings” and “Item 1A—Risk Factors—Financial Risks—A decline in the financial strength ratings of our insurance subsidiaries could adversely affect our results of operations and financial condition” in our 2020 Annual Report.

For the year ending December 31, 2021, the maximum amount of dividends our regulated U.S. domiciled insurance subsidiaries could pay us, under applicable laws and regulations currently in effect and without prior regulatory approval, is

$463.1 million. This amount excludes $81.6 million from subsidiaries included in the disposed Global Preneed business. In addition, our international and non-insurance subsidiaries provide additional sources of dividends.

Holding Company

As of September 30, 2021, we had approximately $1.34 billion in holding company liquidity, which was $1,110.7 million above our targeted minimum level of $225.0 million, reflecting the proceeds from the sale of the disposed Global Preneed business. The target minimum level of holding company liquidity, which can be used for unforeseen capital needs at our subsidiaries or liquidity needs at the holding company, is calibrated based on approximately one year of corporate operating and interest expenses. We use the term “holding company liquidity” to represent the portion of cash and other liquid marketable securities held at Assurant, Inc., out of a total of $1.48 billion of holding company investment securities and cash, which we are not otherwise holding for a specific purpose as of the balance sheet date. We can use such assets for stock repurchases, stockholder dividends, acquisitions and other corporate purposes.

Dividends or returns of capital paid by our subsidiaries, net of infusions and excluding amounts used for acquisitions or received for dispositions, made to the holding company were approximately $553.0 million for Nine Months 2021 (including approximately $12.0 million of dividends from subsidiaries, net of infusions, included in the disposed Global Preneed business). In 2020, dividends, net of infusions and excluding amounts used for acquisitions or received for dispositions, made to the holding company were $821.0 million (including approximately $31.0 million of dividends from subsidiaries, net of infusions, included in the disposed Global Preneed business).

In addition to paying expenses and making interest payments on indebtedness, our capital management strategy provides for several uses of the cash generated by our subsidiaries, including returning capital to common stockholders through share repurchases and dividends, investing in our business to support growth in targeted areas and making prudent and opportunistic acquisitions. From time to time, we may also seek to purchase outstanding debt in open market repurchases or privately negotiated transactions. During Nine Months 2021 and the year ended December 31, 2020, we made common stock repurchases and paid common stock dividends of $673.2 million and $454.4 million, respectively. We expect to deploy capital primarily to support business growth, fund other investments and return capital to shareholders, subject to Board of Directors (the “Board”) approval and market conditions. In addition, we completed the sale of the disposed Global Preneed business to CUNA in August 2021 for net proceeds of $1.31 billion pre-tax and, as previously disclosed, we intend to return approximately 75% of after-tax net proceeds, or $900.0 million, to shareholders through share repurchases within one year of closing. Refer to Note 4 to the Consolidated Financial Statements included elsewhere in this Report for additional information on the sale.

In connection with the sale of our minority interests in Iké in May 2020, we provided $34.0 million of financing to Iké Grupo in the form of the Iké Loan. In April 2021, the Iké Loan was prepaid in full.

In management’s opinion, dividends from our subsidiaries and other expected cash inflows together with our income and gains from our investment portfolio and cash and liquid assets on hand will provide sufficient liquidity to meet our needs in the ordinary course of business.

Assurant Subsidiaries

The primary sources of funds for our subsidiaries consist of premiums and fees collected, proceeds from the sales and maturity of investments and net investment income. Cash is primarily used to pay insurance claims, agent commissions, operating expenses and taxes. We generally invest our subsidiaries’ excess funds in order to generate investment income.

We conduct periodic asset liability studies to measure the duration of our insurance liabilities, to develop optimal asset portfolio maturity structures for our significant lines of business and ultimately to assess that cash flows are sufficient to meet the timing of cash needs. These studies are conducted in accordance with formal company-wide Asset Liability Management guidelines.

To complete a study for a particular line of business, models are developed to project asset and liability cash flows and balance sheet items under a large, varied set of plausible economic scenarios. These models consider many factors including the current investment portfolio, the required capital for the related assets and liabilities, our tax position and projected cash flows from both existing and projected new business.

Alternative asset portfolio structures are analyzed for significant lines of business. An investment portfolio maturity structure is then selected from these profiles given our return hurdle and risk appetite. Scenario testing of significant liability assumptions and new business projections is also performed. Specific to COVID-19, several scenarios around impact on near term asset and liability projections, including new business, were modeled and evaluated.

Our liabilities generally have limited policyholder optionality, which means that the timing of payments is relatively insensitive to the interest rate environment. In addition, our investment portfolio is largely comprised of highly liquid fixed maturity securities with a sufficient component of such securities invested that are near maturity which may be sold with minimal risk of loss to meet cash needs. Therefore, we believe we have limited exposure to disintermediation risk.

Generally, our subsidiaries’ premiums, fees and investment income, along with planned asset sales and maturities, provide sufficient cash to pay claims and expenses. However, there may be instances when unexpected cash needs arise in excess of that available from usual operating sources. In such instances, we have several options to raise needed funds, including selling assets from the subsidiaries’ investment portfolios, using holding company cash (if available), issuing commercial paper, or drawing funds from the five-year senior unsecured $450.0 million revolving credit agreement (the “Credit Facility”) with a syndicate of banks arranged by JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association (of which $445.5 million was available as of September 30, 2021). In addition, in January 2021, we filed an automatically effective shelf registration statement on Form S-3 with the SEC. This registration statement allows us to issue equity, debt or other types of securities through one or more methods of distribution. The terms of any offering would be established at the time of the offering, subject to market conditions. If we decide to make an offering of securities, we will consider the nature of the cash requirement as well as the cost of capital in determining what type of securities we may offer.

Dividends and Repurchases

We paid dividends of $0.66 per common share on September 21, 2021 to stockholders of record as of August 30, 2021. As described below, the Mandatory Convertible Preferred Stock (“MCPS”) converted into common stock in March 2021. Any determination to pay future dividends on our outstanding common stock will be at the discretion of the Board and will be dependent upon various factors, including: our subsidiaries’ payments of dividends and other statutorily permissible payments to us; our results of operations and cash flows; our financial condition and capital requirements; general business conditions and growth prospects; any legal, tax, regulatory and contractual restrictions on the payment of dividends; and other factors the Board deems relevant. The Credit Facility also contains limitations on our ability to pay dividends to our stockholders if we are in default, or such dividend payments would cause us to be in default, of our obligations thereunder. In addition, if we defer the payment of interest on our Subordinated Notes (as defined below), we generally may not make payments on our capital stock.

In January 2021 and May 2021, the Board authorized new share repurchase programs for up to $600.0 million and $900.0 million, respectively, of the Company’s outstanding common stock.

During Nine Months 2021, the Company repurchased 3,513,870 shares of our outstanding common stock at a cost of $554.7 million, exclusive of commissions. As of September 30, 2021, $1.13 billion aggregate cost at purchase remained unused under the existing repurchase authorizations. The timing and the amount of future repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors.

Management believes that we will have sufficient liquidity to satisfy our needs over the next twelve months, including the ability to pay interest on our debt and dividends on our common stock.

Mandatory Convertible Preferred Stock

In March 2018, we issued 2,875,000 shares of our 6.50% MCPS, with a par value of $1.00 per share. In March 2021, each outstanding share of MCPS converted automatically into 0.9405 shares of common stock, or 2,703,911 shares of common stock in total plus an immaterial amount of cash in lieu of fractional shares. Dividends on the MCPS were payable on a cumulative basis when, as and if declared, at an annual rate of 6.50% of the liquidation preference of $100.00 per share. We paid preferred stock dividends of $4.7 million in Third Quarter 2020. We paid preferred stock dividends of $4.7 million and $14.0 million for Nine Months 2021 and Nine Months 2020, respectively. For additional information regarding the MCPS, see Note 13 in the Consolidated Financial Statements included elsewhere in this Report.

Outstanding Debt

The following table shows the principal amount and carrying value of our outstanding debt, less unamortized discount and issuance costs as applicable, as of September 30, 2021 and December 31, 2020:

			September 30, 2021												December 31, 2020
			Principal Amount						Carrying Value						Principal Amount						Carrying Value
Floating Rate Senior Notes due March 2021 (1)			$	—					$	—					$	50.0					$	50.0
4.00% Senior Notes due March 2023 (2)			—						—						350.0						348.9
4.20% Senior Notes due September 2023			300.0						298.8						300.0						298.4
4.90% Senior Notes due March 2028			300.0						297.4						300.0						297.2
3.70% Senior Notes due February 2030			350.0						347.2						350.0						347.0
2.65% Senior Notes due January 2032			350.0						346.3						—						—
6.75% Senior Notes due February 2034			275.0						272.4						275.0						272.3
7.00% Fixed-to-Floating Rate Subordinated Notes due March 2048 (3)			400.0						395.8						400.0						395.4
5.25% Subordinated Notes due January 2061			250.0						244.0						250.0						243.7
Total Debt									$	2,201.9											$	2,252.9

(1)The outstanding aggregate principal amount was repaid in January 2021. Prior to repayment, these senior notes bore floating interest at a rate equal to three-month LIBOR plus 1.25% per annum.

(2)The outstanding aggregate principal amount was redeemed in full in July 2021.

(3)Bears a 7.00% annual interest rate to March 2028 and an annual interest rate equal to three-month LIBOR plus 4.135% thereafter.

Senior Notes

2032 Senior Notes: In June 2021, we issued senior notes due January 2032 with an aggregate principal amount of $350.0 million which bear interest at a rate of 2.65% per year and were issued at a 0.158% discount to the public (the “2032 Senior Notes”). Interest is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2022. Prior to October 15, 2031, we may redeem the 2032 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2032 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

In July 2021, we used the net proceeds from the sale of the 2032 Notes, together with cash on hand, to redeem all of the $350.0 million outstanding aggregate principal amount of our 4.00% senior notes due March 2023 and to pay accrued interest, related premiums, fees and expenses, including a loss on extinguishment of debt of $20.7 million which was recorded in Third Quarter 2021.

2030 Senior Notes: In August 2019, we issued senior notes with an aggregate principal amount of $350.0 million which bear interest at a rate of 3.70% per year, mature in February 2030 and were issued at a 0.035% discount to the public (the “2030 Senior Notes”). Interest is payable semi-annually in arrears beginning in February 2020. Prior to November 2029, we may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2030 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

We used the net proceeds from the offering, together with cash on hand, to purchase $100.0 million of our 6.75% senior notes due 2034 in a cash tender offer, to redeem $250.0 million of our floating rate senior notes due 2021 and to pay accrued interest, related premiums, fees and expenses.

2021, 2023 and 2028 Senior Notes

In March 2018, we issued the following three series of senior notes with an aggregate principal amount of $900.0 million:

*•*2021 Senior Notes: The first series of senior notes is $300.0 million in principal amount and bore floating interest at a rate equal to three-month LIBOR plus 1.25% per year (the “2021 Senior Notes”). Interest on the 2021 Senior Notes was payable quarterly. Commencing on or after March 2019, we could redeem the 2021 Senior Notes at any

time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest. In August 2019, we redeemed $250.0 million of the $300.0 million outstanding aggregate principal amount of the 2021 Senior Notes, plus accrued and unpaid interest to the redemption date. The remaining outstanding aggregate principal amount of $50.0 million, plus accrued and unpaid interest to the redemption date, was repaid in January 2021 in advance of the original maturity in March 2021.

• 2023 Senior Notes: The second series of senior notes is $300.0 million in principal amount, bears interest at 4.20% per year, matures in September 2023 and was issued at a 0.233% discount to the public (the “2023 Senior Notes”). Interest on the 2023 Senior Notes is payable semi-annually. Prior to August 2023, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2023 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

• 2028 Senior Notes: The third series of senior notes is $300.0 million in principal amount, bears interest at 4.90% per year, matures in March 2028 and was issued at a 0.383% discount to the public (the “2028 Senior Notes”). Interest on the 2028 Senior Notes is payable semi-annually. Prior to December 2027, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part of a make-whole premium plus accrued and unpaid interest. On or after that date, we may redeem the 2028 Senior Notes at any time in whole or from time to time in part at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest.

The interest rate payable on each of the 2023 Senior Notes, the 2028 Senior Notes, the 2030 Senior Notes and the 2032 Senior Notes will be subject to adjustment from time to time, if either Moody’s Investor Service, Inc. (“Moody’s”) or S&P Global Ratings, a division of S&P Global Inc. (“S&P”) downgrades the credit rating assigned to such series of senior notes to Ba1 or below or to BB+ or below, respectively, or subsequently upgrades the credit ratings once the senior notes are at or below such levels. The following table details the increase in interest rate over the issuance rate by rating, with the impact equal to the sum of the number of basis points next to such rating for a maximum increase of 200 basis points over the issuance rate:

						Rating Agencies
Rating Levels						Moody’s (1)						S&P (1)						Interest Rate Increase (2)
1						Ba1						BB+						25 basis points
2						Ba2						BB						50 basis points
3						Ba3						BB-						75 basis points
4						B1 or below						B+ or below						100 basis points

(1)Including the equivalent ratings of any substitute rating agency.

(2)Applies to each rating agency individually.

In March 2013, we issued two series of senior notes with an aggregate principal amount of $700.0 million. The first series was $350.0 million in principal amount, bore interest at 2.50% per year and was repaid at maturity in March 2018. The second series was $350.0 million in principal amount, bore interest at 4.00% per year, was issued at a 0.365% discount to the public, and was redeemed in whole in July 2021 at a make-whole premium plus accrued and unpaid interest.

In February 2004, we issued senior notes with an aggregate principal amount of $475.0 million at a 0.61% discount to the public, which bear interest at 6.75% per year and matures in February 2034. Interest is payable semi-annually. These senior notes are not redeemable prior to maturity. In December 2016 and August 2019, we completed cash tender offers of $100.0 million each in aggregate principal amount of such senior notes.

Subordinated Notes

2061 Subordinated Notes: In November 2020, we issued subordinated notes due January 2061 with a principal amount of $250.0 million, which bear interest at an annual rate of 5.25% (the “2061 Subordinated Notes”). Interest is payable quarterly in arrears beginning in April 2021. On or after January 2026, we may redeem the 2061 Subordinated Notes in whole at any time or in part from time to time, at a redemption price equal to their principal amount plus accrued and unpaid interest, provided that if they are not redeemed in whole, a minimum amount must remain outstanding. At any time prior to January 2026, we may redeem the 2061 Subordinated Notes in whole but not in part, within 90 days after the occurrence of a tax event, rating agency event or regulatory capital event as defined in the global note representing the 2061 Subordinated Notes, at a redemption price equal to (i) with respect to a rating agency event, 102% of their principal amount and (ii) with respect to a tax event or a regulatory capital event, their principal amount plus accrued and unpaid interest. See below, under 2048 Subordinated Notes (as defined below), for more information on terms applicable to both series.

2048 Subordinated Notes: In March 2018, we issued fixed-to-floating rate subordinated notes due March 2048 with a principal amount of $400.0 million (the “2048 Subordinated Notes”), which bear interest from March 2018 to March 2028 at an annual rate of 7.00%, payable semi-annually. The 2048 Subordinated Notes will bear interest at an annual rate equal to three-month LIBOR plus 4.135%, payable quarterly, beginning in June 2028. On or after March 2028, we may redeem the 2048 Subordinated Notes in whole at any time or in part from time to time, at a redemption price equal to their principal amount plus accrued and unpaid interest provided that if they are not redeemed in whole, a minimum amount must remain outstanding. At any time prior to March 2028, we may redeem the 2048 Subordinated Notes in whole but not in part after the occurrence of a tax event, rating agency event or regulatory capital event as defined in the global note representing the 2048 Subordinated Notes, at a redemption price equal to (i) with respect to a rating agency event 102% of their principal amount and (ii) with respect to a tax event or regulatory capital event, their principal amount plus accrued and unpaid interest.

In addition, so long as no event of default with respect to the 2048 Subordinated Notes and 2061 Subordinated Notes (together, the “Subordinated Notes”) has occurred and is continuing, we have the right, on one or more occasions, to defer the payment of interest on the Subordinated Notes for one or more consecutive interest periods for up to five years as described in the global note representing the Subordinated Notes. During a deferral period, interest will continue to accrue on the Subordinated Notes at the then-applicable interest rate. At any time when we have given notice of our election to defer interest payments on the Subordinated Notes, we generally may not make payments on or redeem or purchase any shares of our capital stock or any of our debt securities or guarantees that rank upon our liquidation on a parity with or junior to the Subordinated Notes, subject to certain limited exceptions.

Credit Facility and Commercial Paper Program

We have a Credit Facility that provides for revolving loans and the issuance of multi-bank, syndicated letters of credit and letters of credit from a sole issuing bank in an aggregate amount of $450.0 million, which may be increased up to $575.0 million. The Credit Facility is available until December 2022, provided we are in compliance with all covenants. The Credit Facility has a sub-limit for letters of credit issued thereunder of $50.0 million. The proceeds from these loans may be used for our commercial paper program or for general corporate purposes.

Our commercial paper program requires us to maintain liquidity facilities either in an available amount equal to any outstanding notes from the program or in an amount sufficient to maintain the ratings assigned to the notes issued from the program. Our commercial paper is rated AMB-1 by A.M. Best, P-3 by Moody’s and A-2 by S&P. Our subsidiaries do not maintain commercial paper or other borrowing facilities. This program is currently backed up by the Credit Facility, of which $445.5 million out of the $450.0 million was available as of September 30, 2021, due to $4.5 million of letters of credit outstanding.

Retirement and Other Employee Benefits

For information on our retirement and other employee benefits, see Note 15 to the Consolidated Financial Statements, included elsewhere in this Report.

Cash Flows

The table below shows our net cash flows for the periods indicated:

			For the Nine Months Ended September 30,
Net cash provided by (used in):			2021						2020
Operating activities - continuing operations			$	375.8					$	707.9
Operating activities - discontinued operations			151.2						193.7
Operating activities			527.0						901.6
Investing activities - continuing operations			181.9						(86.4)
Investing activities - discontinued operations			(145.2)						(188.8)
Investing activities			36.7						(275.2)
Financing activities - continuing operations			(757.4)						(296.8)
Financing activities - discontinued operations			—						—
Financing activities			(757.4)						(296.8)
Effect of exchange rate changes on cash and cash equivalents - continuing operations			(7.2)						6.5
Effect of exchange rate changes on cash and cash equivalents - discontinued operations			0.2						(0.2)
Effect of exchange rate changes on cash and cash equivalents			(7.0)						6.3
Net change in cash			$	(200.7)					$	335.9

We typically generate operating cash inflows from premiums collected from our insurance products, fees received for services and income received from our investments while outflows consist of policy acquisition costs, benefits paid and operating expenses. These net cash flows are then invested to support the obligations of our insurance products and required capital supporting these products. Our cash flows from operating activities are affected by the timing of premiums, fees, and investment income received and expenses paid.

Net cash provided by operating activities from continuing operations was $375.8 million for Nine Months 2021 compared to $707.9 million for Nine Months 2020. The decrease in net cash provided by operating activities was primarily due to the timing of certain cash payments and business activities from our Global Lifestyle segment. The primary factors contributing to the variance included timing of cumulative payments to a vendor related to various programs for acquiring mobile devices used to meet insurance claims or generate profits through sales to third parties and higher commission payments associated with fourth quarter 2020 premiums that were paid in first quarter 2021. The decrease was also due to the absence of a $204.9 million tax refund, including interest, related to the ability to carry back net operating losses to prior periods under the CARES Act that was collected in Third Quarter 2020. These decreases were partially offset by an increase in premiums collected in connection with the continued growth in Global Automotive.

Net cash provided by investing activities for continuing operations was $181.9 million for Nine Months 2021 compared to net cash used in investing activities for continuing operations of $86.4 million for Nine Months 2020. The increase in cash provided by investing activities was primarily driven by an increase in cash from sales and maturities, net of purchases and a decrease in cash from short term investments, due to the ongoing management of our investment portfolio and a reduction in net cash used for acquisitions. Nine Months 2021 included the receipt of $1.31 billion of proceeds, net of $27.3 million of cash transferred, from the sale of the disposed Global Preneed business that were mostly reinvested in short term high quality liquid fixed income investments. Nine Months 2020 included $135.8 million of net cash used for the AFAS acquisition and $51.3 million of cash outflow, net of $22.0 million of proceeds from a foreign currency hedge, for the sale of our interests in Iké. Additionally, Nine Months 2020 included a $34.0 million cash outflow to Iké Grupo for the Iké Loan that was repaid and reflected as a net cash inflow for Nine Months 2021. The aforementioned increases were partially offset by the absence of $197.1 million of net cash provided by consolidated investment entities and a $50.2 million increase in purchases of property and equipment mostly due to continued investments in information technology supporting our core operations.

Net cash used in financing activities for continuing operations was $757.4 million for Nine Months 2021 compared to $296.8 million for Nine Months 2020. The increase in net cash used in financing activities was mainly due to a $389.8 million increase in share repurchases, a portion of which were funded using the proceeds from the Global Preneed sale, the $50.0 million repayment of our 2021 Senior Notes in first quarter 2021 and the loss on extinguishment of debt related to the repayment of our 4.00% senior notes due March 2023.

Changes in cash flows from the operating and investing activities from our discontinued operations were lower for Nine Months 2021 as compared to Nine Months 2020 since Third Quarter 2021 only included one month of net cash flows since the sale closed on August 2, 2021.

We monitor cash flows at the consolidated, holding company and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs, making adjustments to the forecasts when needed.

The table below shows our cash outflows for interest and dividends for the periods indicated:

			For the Nine Months Ended September 30,
			2021						2020
Interest paid on debt			$	107.0					$	103.2
Common stock dividends			118.5						115.1
Preferred stock dividends			4.7						14.0
Total			$	230.2					$	232.3

Letters of Credit

In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements in which we are the reinsurer. These letters of credit are supported by commitments under which we are required to indemnify the financial institution issuing the letter of credit if the letter of credit is drawn. We had $7.2 million and $7.6 million of letters of credit outstanding as of September 30, 2021 and December 31, 2020, respectively.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity or capital resources of the Company.