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 March 31, 2009, compared with December 31, 2008, and our results of operations for the three months ended March 31, 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 March 31, 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 and inflationary pressure); (v) 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);
(vi) inadequacy of reserves established for future claims losses; (vii) failure to predict or manage benefits, claims and other costs; (viii) losses due to natural and man-made catastrophes; (ix) increases or decreases in tax valuation allowances; (x) fluctuations in exchange rates and other risks related to our international operations; (xi) unavailability, inadequacy and unaffordable pricing of reinsurance coverage; (xii) current or new laws and regulations that could increase our costs or limit our growth; (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 currently heightened 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 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 first quarter 2009 results reflected increased claims activity driven in some cases by heavy utilization of medical services among consumers who feared the potential loss of insurance coverage. 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 three months ended March 31, 2009, net cash used in operating activities totaled $(267,156); net cash used in investing activities totaled $(35,155) and net cash used in financing activities totaled $(74,034). We had $664,339 in cash and cash equivalents as of March 31, 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 estimates described in the 2008 Annual Report on Form 10-K were consistently applied to the unaudited interim consolidated financial statements for the three months ended March 31, 2009.

Assurant Consolidated

Overview

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



                                                               For the Three Months Ended
                                                                        March 31,
                                                                 2009                2008
Revenues:
Net earned premiums and other considerations                $    1,874,579        $ 1,941,417
Net investment income                                              178,479            197,774
Net realized losses on investments                                 (55,689 )          (43,143 )
Amortization of deferred gain on disposal of businesses              6,802              7,379
Fees and other income                                               83,706             73,898

Total revenues                                                   2,087,877          2,177,325

Benefits, losses and expenses:
Policyholder benefits                                              960,342            937,459
Selling, underwriting and general expenses (1)                     954,479            938,650
Interest expense                                                    15,189             15,288

Total benefits, losses and expenses                              1,930,010          1,891,397

Income before provision for income taxes                           157,867            285,928
Provision for income taxes                                          77,286             99,098

Net income                                                  $       80,581        $   186,830

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

The following discussion provides a high level analysis of how the consolidated results were affected by our four operating segments and our Corporate and Other segment for the three months ended March 31, 2009 ("First Quarter 2009") and three months ended March 31, 2008 ("First Quarter 2008"). Please see the discussion that follows, for each of these segments, for a more detailed analysis of the fluctuations.

For The Three Months Ended March 31, 2009 Compared to The Three Months Ended March 31, 2008.

Net Income

First Quarter 2009 had a net income of $80,581, a decrease of $106,249, or 57%, compared with $186,830 in net income for First Quarter 2008. The decrease was primarily due to less favorable underwriting results from our four operating segments, a decline of $12,542, after-tax, in net investment income due to lower average invested assets and lower investment yields and an $8,155, after-tax, increase in net realized losses on investments due primarily to realized losses on sales of investments.

Assurant Solutions

Overview

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



                                                       For the Three Months Ended
                                                                March 31,
                                                          2009               2008
  Revenues:
  Net earned premiums and other considerations       $      644,612       $  683,493
  Net investment income                                      97,995          106,730
  Fees and other income                                      52,031           44,281

  Total revenues                                            794,638          834,504

  Benefits, losses and expenses:
  Policyholder benefits                                     272,022          286,680
  Selling, underwriting and general expenses                475,604          475,533

  Total benefits, losses and expenses                       747,626          762,213

  Segment income before provision for income taxes           47,012           72,291
  Provision for income taxes                                 16,701           24,734

  Segment net income                                 $       30,311       $   47,557

  Net earned premiums and other considerations:
  Domestic:
  Credit                                             $       65,941       $   73,253
  Service contracts                                         346,508          319,515
  Other (1)                                                  14,579           15,434

  Total Domestic                                            427,028          408,202

  International:
  Credit                                                     74,173           98,264
  Service contracts                                          87,903           77,667
  Other (1)                                                   3,660            9,598

  Total International                                       165,736          185,529

  Preneed                                                    51,848           89,762

  Total                                              $      644,612       $  683,493

  Fees and other income:
  Domestic:
  Debt protection                                    $        9,271       $    7,915
  Service contracts                                          27,709           18,370
  Other (1)                                                   3,947            5,735

  Total Domestic                                             40,927           32,020

  International                                               6,072            9,740
  Preneed                                                     5,032            2,521

  Total                                              $       52,031       $   44,281

  Gross written premiums (2):
  Domestic:
  Credit                                             $      135,346       $  152,341
  Service contracts                                         246,883          393,811
  Other (1)                                                  15,074           16,758

  Total Domestic                                            397,303          562,910

  International:
  Credit                                                    171,379          219,212
  Service contracts                                         107,070          101,002
  Other (1)                                                   5,387           11,348

  Total International                                       283,836          331,562

  Total                                              $      681,139       $  894,472

  Preneed (face sales)                               $      103,124       $  104,424
  Combined ratio (3):
  Domestic                                                     98.3 %           96.5 %
  International                                               107.3 %          102.3 %

(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 March 31, 2009 Compared to The Three Months Ended March 31, 2008.

Net Income

Segment net income decreased $17,246, or 36%, to $30,311 for First Quarter 2009 from $47,557 for First Quarter 2008. The decrease was primarily due to $11,700 (after-tax) of income related to the accrual of contractual receivables established for certain domestic service contracts and unfavorable loss experience primarily in our United Kingdom ("UK") credit insurance business in First Quarter 2009 compared with First Quarter 2008. In addition, net investment income decreased $5,678 (after-tax) in First Quarter 2009 compared with the same period last year due to lower average invested assets and lower investment yields. These decreases were partially offset by improved underwriting results from our domestic businesses including earnings from acquisitions made in our domestic service contract business in the latter part of 2008 and improved underwriting results in our international business, excluding the UK credit business discussed above.

Total Revenues

Total revenues decreased $39,866, or 5%, to $794,638 for First Quarter 2009 from $834,504 for First Quarter 2008. The decrease is primarily attributable to reduced net earned premiums and other considerations of $38,881, primarily resulting from our application of Statement of Financial Accounting Standards ("FAS") No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments ("FAS 97"), beginning January 1, 2009 for new Preneed life insurance policies in which death benefit increases are determined at the discretion of the Company. These types of policies will now be accounted for as universal life contracts. For contracts sold prior to January 1, 2009, these types of Preneed life insurance sales were accounted for and will continue to be accounted for under FAS No. 60, Accounting and Reporting by Insurance Enterprises ("FAS 60"). 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 decreased by approximately $7,000, or 1%. The decrease in net earned premiums was also related to the continued runoff of our domestic credit insurance and the Preneed independent U.S. businesses and the unfavorable impact of foreign exchange. These declines were partially offset by higher revenues in our domestic service contract business from premiums written in prior periods as well as growth in our international service contract business from both new and existing clients. Also contributing to the decrease in revenues was lower net investment income of $8,735, or 8%, due primarily to lower average invested assets and lower investment yields. Fees and other income increased $7,750, or 18%, 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 $213,333, or 24%, to $681,139 for First Quarter 2009 from $894,472 for First Quarter 2008. Gross written premiums from our domestic service contract business decreased $146,928, primarily due to a client bankruptcy as well as lower retail and auto sales. Gross written premiums from our international credit business decreased $47,833 primarily driven by the unfavorable impact of foreign exchange rates as the U.S. dollar strengthened against international currencies 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 $16,995, due to the continued runoff of this product line. Gross written premiums in our international service contract business increased $6,068 attributable to growth from both new and existing clients, which is consistent with our international expansion strategy. This growth was partially offset by the unfavorable impact of foreign exchange rates. Preneed face sales were relatively consistent, decreasing $1,300.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $14,587, or 2%, to $747,626 for First Quarter 2009 from $762,213 for First Quarter 2008. Policyholder benefits decreased $14,658, primarily due to the above-mentioned application of FAS 97 in our Preneed business. This was offset by higher losses related to growth in net earned premiums from our domestic service contract business, combined with unfavorable loss experience in our UK credit business, sold through the internet resulting from higher unemployment rates. Selling, underwriting and general expenses increased $71. General expenses increased $17,340, 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 $17,269, primarily due to the decrease in net earned premiums in our international business favorable impact of foreign exchange rates, and reduced commission expense resulting from the acquisitions in the latter part of 2008. These declines in First Quarter 2009 were partially offset by an $18,000 reduction in commission expense related to the accrual of contractual receivables established from certain domestic service contract clients recorded in First Quarter 2008.

Assurant Specialty Property

Overview

The tables below present information regarding our Assurant Specialty Property's
segment results of operations:



                                                            For the Three Months Ended
                                                                     March 31,
                                                               2009               2008
Revenues:
Net earned premiums and other considerations              $      493,790       $  481,427
Net investment income                                             29,436           29,375
Fees and other income                                             13,324           13,593

Total revenues                                                   536,550          524,395

Benefits, losses and expenses:
Policyholder benefits                                            167,800          144,813
Selling, underwriting and general expenses                       209,917          188,842

Total benefits, losses and expenses                              377,717          333,655

Segment income before provision for income taxes                 158,833          190,740
Provision for income taxes                                        54,165           65,996

Segment net income                                        $      104,668       $  124,744

Net earned premiums and other considerations by major
product groupings:
Homeowners (creditor placed and voluntary)                $      348,447       $  342,335
Manufactured housing (creditor placed and voluntary)              55,876           57,061
Other (1)                                                         89,467           82,031

Total                                                     $      493,790       $  481,427

Gross earned premiums by major product
groupings:
Homeowners (creditor placed and voluntary)                $      437,391       $  402,062
Manufactured housing (creditor placed and voluntary)              77,484           80,850
Other                                                            151,429          140,793

Total                                                     $      666,304       $  623,705

Gross written premiums by major
product groupings:
Homeowners (creditor placed and voluntary)                $      412,706       $  419,501
Manufactured housing (creditor placed and voluntary)              69,852           70,131
Other (1)                                                        131,701          125,316

Total                                                     $      614,259       $  614,948

Ratios:
Loss ratio (2)                                                      34.0 %           30.1 %
Expense ratio (3)                                                   41.4 %           38.1 %
Combined ratio (4)                                                  74.5 %           67.4 %

(2) The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.

(3) The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.

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

For The Three Months Ended March 31, 2009 Compared to The Three Months Ended March 31, 2008.

Net Income

Segment net income decreased $20,076, or 16%, to $104,668 for First Quarter 2009 from $124,744 for First Quarter 2008. The decrease in net income is primarily due to increased catastrophe reinsurance costs of $8,427, after-tax, and increased benefits, losses and expenses. In addition, First Quarter 2008 included $4,618, after-tax, of income from a client-related settlement.

Total Revenues

Total revenues increased $12,155 or 2%, to $536,550 for First Quarter 2009 from $524,395 for First Quarter 2008. The increase in revenues is primarily due to increased net earned premiums of $12,363. The increase is attributable to the growth of creditor placed homeowners insurance, primarily driven by an increase in average insured value of properties and increased percentage of policies placed per loans tracked. Partially offsetting these increases is a $12,965 increase in catastrophe reinsurance costs and a 1,100 decrease in loans tracked compared with First Quarter 2008, primarily in sub-prime mortgages, due to market consolidation.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased $44,062 or 13%, to $377,717 for First Quarter 2009 from $333,655 for First Quarter 2008. This increase was due to an increase in policyholder benefits of $22,987 and higher selling, underwriting, and general expenses of $21,075. The increase in policyholder benefits is attributable to increased non-catastrophe losses associated with a normal winter weather compared to the mild winter of 2008. There were no reportable catastrophe losses for First Quarter 2009 or First Quarter 2008. . . .