Download Our actual claims losses may exceed our reserves for

Part I 
Item 1A Risk Factors
including the market for our stock. These conditions could
also affect all of our business segments. Specifically, during
periods of economic downturn:
•individuals
•
and businesses may (i) choose not to purchase
our insurance products, warranties and other products
and services, (ii) terminate existing policies or contracts
or permit them to lapse, and (iii) choose to reduce the
amount of coverage they purchase;
•clients
•
are more likely to experience financial distress or
declare bankruptcy or liquidation which could have an
adverse impact on the remittance of premiums from such
clients as well as the collection of receivables from such
clients for items such as unearned premiums;
•claims
•
on certain specialized insurance products tend to rise;
•there
•
is a higher loss ratio on credit card and installment
loan insurance due to rising unemployment and disability
levels;
•there
•
is an increased risk of fraudulent insurance claims; and
•substantial
•
decreases in loan availability and origination
could reduce the demand for credit insurance that we write
or debt cancellation or debt deferment products that we
administer, and on the placement of hazard insurance under
our lender-placed insurance programs.
General inflationary pressures may affect repair and
replacement costs on our real and personal property lines,
increasing the costs of paying claims. Inflationary pressures
may also affect the costs associated with our preneed insurance
policies, particularly those that are guaranteed to grow with
the CPI. Conversely, deflationary pressures may affect the
pricing of our products and services.
Additionally, continued uncertainty surrounding the U.S.
Federal Reserve’s monetary policy and the new administration
could adversely affect the U.S. and global economy.
Furthermore, conditions in the housing and lifestyle
markets in which we operate, such as the wireless market,
including the introduction of new products or technologies
or promotional programs, electronics and appliances retail
markets, automobile sales market, and the housing and
mortgage markets may also have a material adverse effect
on our business segments by impacting the demand and
pricing for our products and services, the costs of paying
claims or otherwise.
Our actual claims losses may exceed our
reserves for claims, requiring us to establish
additional reserves or to incur additional
expense for settling unreserved liabilities,
which could materially affect our results of
operations, profitability and capital.
We maintain reserves to cover our estimated ultimate exposure
for claims and claim adjustment expenses with respect to
reported claims and incurred but not reported claims (“IBNR”) as
of the end of each accounting period. Whether calculated under
GAAP, Statutory Accounting Principles (“SAP”) or accounting
16 ASSURANT, INC. – 2016 Form 10-K
principles applicable in foreign jurisdictions, reserves are
estimates. Reserving is inherently a matter of judgment;
our ultimate liabilities could exceed reserves for a variety of
reasons, including changes in macroeconomic factors (such as
unemployment and interest rates), case development and other
factors. From time to time, we also adjust our reserves, and
may adjust our reserving methodology, as these factors and our
claims experience changes. Reserve development, changes in our
reserving methodology and paid losses exceeding corresponding
reserves could have a material adverse effect on our results of
operations. Please see “Item 7 — Management’s Discussion &
Analysis — Critical Accounting Policies & Estimates — Reserves”
for additional detail on our reserves.
We may be unable to accurately predict and
price for claims and other costs, which could
reduce our profitability.
Our profitability could vary depending on our ability to predict
and price for claims and other costs including, but not limited
to, the frequency and severity of property claims. This ability
could be affected by factors such as inflation, changes in
the regulatory environment, changes in industry practices,
changes in legal, social or environmental conditions, or new
technologies. Political or economic conditions can also affect
the availability of programs on which our business may rely
to accurately predict claims and other costs. The inability
to accurately predict and price for claims and other costs
could materially adversely affect our results of operations
and financial condition.
Catastrophe losses, including human-made
catastrophe losses, could materially reduce
our profitability and have a material adverse
effect on our results of operations and
financial condition.
Our insurance operations expose us to claims arising out
of catastrophes and non-catastrophes (losses such as theft
and vandalism), particularly in our homeowners insurance
businesses. We have experienced, and expect to experience,
catastrophe losses that materially reduce our profitability or
have a material adverse effect on our results of operations and
financial condition. Catastrophes include reportable catastrophe
losses (individual catastrophe events that generated losses in
excess of $5,000, pre-tax and net of reinsurance). Catastrophes
can be caused by various natural events, which may be
exacerbated by climate change, including, but not limited
to, hurricanes, windstorms, earthquakes, hailstorms, floods,
severe winter weather, fires, and epidemics, or can be humanmade catastrophes, including terrorist attacks or accidents
such as airplane crashes. While the frequency and severity of
catastrophes are inherently unpredictable, increases in the
value and geographic concentration of insured property, the
geographic concentration of insured lives, and the effects of
inflation could increase the severity of claims from future
catastrophes. In addition, while the exact impact of the
physical effects of climate change is uncertain, changes in the
global climate may cause long-term increases in the frequency