Assurant to close health division; first layoffs this summer

By Katherine Michalets - Freeman Staff

June 11, 2015

MILWAUKEE - Assurant, Inc. announced Wednesday it will close its health insurance division with layoffs of 300 people occurring this summer.

The company said Wednesday it had concluded a comprehensive review of strategic alternatives for its health business and will exit the health insurance market and increase its focus on housing and lifestyle specialty protection offerings.

Assurant said it anticipates the total costs from leaving the health insurance market will be $175 million to $250 million.  This includes premium deficiency reserves, severance and retention, contract and lease terminations and other transaction costs.

“Our decision to exit the health insurance market enables us to sharpen our focus on the housing and lifestyle markets, where we see the greatest opportunity for profitable growth. After a thorough review of alternatives for our health business, we believe the actions announced today allow us to uphold our commitments to policyholders while freeing up resources in 2016 to support our capital management strategy,” said Assurant President and CEO Alan B. Colberg in a statement.

“We remain strongly committed to ensuring a smooth and orderly transition for our customers, agents and employees.”

According to the announcement, Assurant will immediately begin to wind down its major medical operations and has reached an agreement in principle to sell certain business lines and assets to National General Holdings Corp., subject to final documentation and regulatory approval.

Assurant, according to the release, expects to exit the health insurance market by the end of 2016.

About 300 people will be laid off out of approximately 1,700 positions at Assurant Health this summer. The company stated it will consider affected employees for open positions within Assurant, based on qualifications. Those unable to find another position will be offered severance, outplacement and job readiness support.

According to the announcement, National General Holdings Corp., a specialty personal lines insurance holding company, will acquire Assurant Health’s supplemental and small group self-funded product lines and certain other assets including a proprietary small group sales channel.

Assurant Health will continue sales of its supplemental and small group self-funded products as it finalizes the terms of the transaction with National General Holdings Corp. At the same time, as part of the wind-down process, Assurant Health will cease sales of its individual major medical, small group fully-insured and short-term medical health insurance policies Monday and will not participate in open enrollment under the Affordable Care Act for 2016.

There will be no changes to Assurant Health policies or benefits currently in effect.

Affected customers will receive letters from Assurant Health starting next week and can learn more at www.assuranthealth.com.

Email: kmichalets@conleynet.com