American Security Insurance Company, a subsidiary of Assurant, disclosed last night that it reached an agreement with the California Department of Insurance to reduce the premium rates for its lender-placed hazard insurance product by 30.5%. The rate reduction reflects factors specific to California including continued favorable loss experience in the state and different assumptions about future experience, the company said. The new rates in California will be implemented in January 2013. For 2012, American Security Insurance Company estimates that it will record approximately $140M of gross written premiums and $108M of net earned premiums in California for the type of policies that are subject to the rate reduction. On the basis of 2012 placement rates and the current book of business, the company estimates that annualized net earned premiums and net income would be reduced by approximately $33M and $18M, respectively. Shares of Assurant are trading down 4.6%, or $1.88, to $39.01 in early trading.
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