(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 endedDecember 31, 2020 and accompanying notes included in our Annual Report on Form 10-K for the year endedDecember 31, 2020 (the "2020 Annual Report") filed with theU.S. Securities and Exchange Commission (the "SEC") and the unaudited consolidated financial statements for the three months endedMarch 31, 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, particularly those with respect to the closing of the Global Preneed transaction, 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 theU.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; 32 -------------------------------------------------------------------------------- (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 InMarch 2021 , we entered into a definitive agreement to sell 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 "disposal business") toCUNA Mutual Group ("CUNA") for total cash consideration of$1.25 billion , subject to certain purchase price adjustments at closing. The transaction is expected to close by the end of the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. The estimated carrying value of the disposal business is subject to adjustment in future quarters until closing, and may be influenced by various factors including the following: •The performance of the disposal business, including the impact of discount, interest, mortality and reinsurance rates; and •Changes in the terms of the agreement with CUNA, including as a result of any subsequent negotiations, any necessary changes to obtain regulatory approval or any changes due to unanticipated developments. We have determined that the disposal business meets the criteria to be classified as held for sale and that the sale represents a strategic shift that will have a major impact on our operations and financial results. Accordingly, the results of operations of the disposal business are presented as net income from discontinued operations in the consolidated statements of 33 -------------------------------------------------------------------------------- operations and segregated in the consolidated statement of cash flows for all periods presented and the assets and liabilities for the disposal business have been classified as held for sale and segregated for all periods presented in the consolidated balance sheets. Transactions between the disposal business and businesses in our continuing operations are not eliminated to appropriately reflect the continuing operations and the assets, liabilities and results of the disposal 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 ofMarch 31, 2021 , the Company had three reportable segments, excluding discontinued operations described above, 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 theAssurant 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 months endedMarch 31, 2021 ("First Quarter 2021") and the three months endedMarch 31, 2020 ("First Quarter 2020"). Executive Summary Consolidated net income from continuing operations was relatively flat at$148.5 million for First Quarter 2021 from$148.6 million for First Quarter 2020, as the absence of a$79.3 million one-time tax benefit in First Quarter 2020 was offset by higher net realized gains on investments compared to net realized losses in First Quarter 2020. Global Lifestyle segment net income increased$8.2 million , or 7%, to$129.1 million for First Quarter 2021 from$120.9 million for First Quarter 2020, primarily driven by strong results inGlobal Automotive , including a$4.3 million one-time benefit, as well as higher investment income and underlying global growth. Connected Living results also increased from mobile subscriber growth inAsia Pacific andNorth America , higher trade-in volumes and contributions from recent acquisitions. First Quarter 2020 included$11.7 million of one-time benefits within Connected Living andGlobal Automotive . Global Lifestyle net earned premiums, fees and other income decreased$84.6 million , or 4%, to$1.86 billion for First Quarter 2021 from$1.95 billion for First Quarter 2020, reflecting the impact from the previously disclosed mobile program contract change. Excluding this$98.0 million reduction, net earned premiums, fees and other income was flat year-over-year.Global Housing segment net income decreased$6.8 million , or 9%, to$67.4 million for First Quarter 2021 from$74.2 million for First Quarter 2020, driven by$21.7 million of higher reportable catastrophes primarily from the severe winter storms inTexas . Excluding reportable catastrophes, segment net income increased$14.9 million , primarily due to favorable non-catastrophe loss experience, mainly in Specialty and Other products driven by underwriting improvements and lower overall claims frequency, as well as growth inMultifamily Housing .Lender-placed Insurance also benefited from higher premium rates, though lower real estate owned ("REO") volumes, due to foreclosure moratoriums, offset results.Global Housing net earned premiums, fees and other income decreased$7.4 million , or 1%, to$493.0 million for First Quarter 2021 from$500.4 million for First Quarter 2020, primarily due to declines in Specialty and Other products, including 34 -------------------------------------------------------------------------------- the expected run-off from our small commercial product, as well as a modest decline inLender-placed Insurance . The decrease was partially offset by growth inMultifamily Housing . 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 will also depend on our ability to profitably grow our businesses, in particular our Connected Living,Multifamily Housing andGlobal Automotive businesses, and maintain our position in ourLender-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, 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, including COVID-19 and measures taken in response thereto, 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 andGlobal 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. OurLender-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 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 First Quarter 2021, net cash used in operating activities from continuing operations was$454.0 million ; net cash provided by investing activities from continuing operations was$63.2 million ; and net cash used in financing activities from continuing operations was$153.0 million . We had$1.67 billion in cash and cash equivalents as ofMarch 31, 2021 as compared to$2.21 billion as ofDecember 31, 2020 . See "-Liquidity and Capital Resources," below for further details. Critical Accounting Policies and Estimates Our 2020 Annual Report describes the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimation process described in the 2020 Annual Report were consistently applied to the unaudited interim Consolidated Financial Statements for First Quarter 2021. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 3 to the Consolidated Financial Statements included elsewhere in this Report. 35 -------------------------------------------------------------------------------- Results of Operations Assurant Consolidated Overview The table below presents information regarding our consolidated results of operations for the periods indicated:
For the Three Months Ended March
31, 2021 2020 Revenues: Net earned premiums$ 2,105.6 $ 2,065.5 Fees and other income 249.9 383.6 Net investment income 76.3 83.6 Net realized gains (losses) on investments 0.8 (84.0) Total revenues 2,432.6 2,448.7 Benefits, losses and expenses: Policyholder benefits 528.7 535.2
Amortization of deferred acquisition costs and value of business acquired
946.7 895.3 Underwriting, general and administrative expenses 735.7 892.6 Interest expense 28.4 25.5 Total benefits, losses and expenses 2,239.5 2,348.6 Income before provision for income taxes 193.1 100.1 Provision (benefit) for income taxes 44.6 (48.5) Net income from continuing operations 148.5 148.6 Net income from discontinued operations 14.3 7.2 Net income 162.8 155.8 Less: Net loss (income) attributable to non-controlling interest 0.2 (1.1) Net income attributable to stockholders 163.0 154.7 Less: Preferred stock dividends (4.7) (4.7) Net income attributable to common stockholders $
158.3
For the Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Net Income from Continuing Operations Consolidated net income from continuing operations was flat at$148.5 million for First Quarter 2021 compared to$148.6 million for First Quarter 2020. Net income from continuing operations for First Quarter 2021 included$34.5 million of reportable catastrophes, primarily related to theTexas winter storms, compared to$12.9 million in First Quarter 2020. Excluding reportable catastrophes, net income from continuing operations increased$21.5 million , or 13% primarily due to the absence of$67.2 million of after-tax net realized losses, mainly from a decrease in the fair value of our equity securities and collateralized loan obligations in First Quarter 2020, favorable earnings contributions fromGlobal Housing , that were primarily driven by favorable non-catastrophe loss experience and growth inMultifamily Housing , as well as an increase from Global Lifestyle, primarily due to the continued expansion inGlobal Automotive and Connected Living. These increases were partially offset by the absence of a$79.3 million tax benefit that was recorded in First Quarter 2020 related to the utilization of net operating losses in connection with the 2020 Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). 36 -------------------------------------------------------------------------------- Global Lifestyle Overview The table below presents information regarding the Global Lifestyle segment's results of operations for the periods indicated: For the Three Months Ended March 31, 2021 2020 Revenues: Net earned premiums$ 1,648.7 $ 1,597.7 Fees and other income 213.6 349.2 Net investment income 50.8 54.7 Total revenues 1,913.1 2,001.6 Benefits, losses and expenses: Policyholder benefits 327.4 336.2
Amortization of deferred acquisition costs and value of business acquired
889.2 838.4 Underwriting, general and administrative expenses 527.2 667.9 Total benefits, losses and expenses 1,743.8 1,842.5 Segment income before provision for income taxes 169.3 159.1 Provision for income taxes 40.2 38.2 Segment net income$ 129.1 $ 120.9 Net earned premiums, fees and other income: Connected Living (mobile and service contracts)$ 952.4 $ 1,088.3 Global Automotive 812.4 753.1 Global Financial Services and Other 97.5 105.5 Total$ 1,862.3 $ 1,946.9 Net earned premiums, fees and other income: Domestic$ 1,380.6 $ 1,434.5 International 481.7 512.4 Total$ 1,862.3 $ 1,946.9 For the Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Net Income Segment net income increased$8.2 million , or 7%, to$129.1 million for First Quarter 2021 from$120.9 million for First Quarter 2020. First Quarter 2021 included$4.3 million of one-time income inGlobal Automotive , compared to$11.7 million of benefits within Connected Living andGlobal Automotive in First Quarter 2020. Excluding these items, segment net income increased$15.6 million , or 14%, primarily driven by Connected Living from mobile subscriber growth inAsia Pacific andNorth America , and higher trade-in results, including contributions from recent acquisitions, as well as improved profitability within extended service contracts.Global Automotive also contributed to the increase, mainly due to organic global growth, higher investment income and lower claims activity. These increases were partially offset by the run-off of certain domestic mobile programs. Total Revenues Total revenues decreased$88.5 million , or 4%, to$1.91 billion for First Quarter 2021 from$2.00 billion for First Quarter 2020. Fees and other income decreased$135.6 million , or 39%, mainly driven by a previously disclosed mobile program contract change, the run-off of certain domestic mobile programs, partially offset by growth from recent mobile acquisitions. Net investment income decreased$3.9 million , or 7%, primarily due to lower cash yields and lower income from real estate, partially offset by higher income from an increase in fair value of investments in limited partnerships. These decreases in total revenues were partially offset by an increase in net earned premiums of$51.0 million , or 3%, primarily driven by continued growth from prior period sales in ourGlobal Automotive business, partially offset by the run-off of certain domestic mobile programs. 37 -------------------------------------------------------------------------------- Total Benefits, Losses and Expenses Total benefits, losses and expenses decreased$98.7 million , or 5%, to$1.74 billion for First Quarter 2021 from$1.84 billion for First Quarter 2020. The decrease was primarily due to a decrease in underwriting, general and administrative expenses of$140.7 million , or 21%, primarily due to the run-off of certain domestic mobile programs and a previously disclosed mobile program contract change, partially offset by an increase in growth in ourGlobal Automotive and Connected Living businesses, including new mobile acquisitions. Policyholder benefits decreased$8.8 million , or 3%, primarily driven by lower loss experience fromGlobal Automotive . The decrease in total benefits, losses and expenses was partially offset by a$50.8 million , or 6%, increase in amortization of deferred acquisition costs and value of business acquired, mainly related to growth in ourGlobal Automotive business. 38 --------------------------------------------------------------------------------Global Housing Overview The table below presents information regarding theGlobal Housing segment's results of operations for the periods indicated:
For the Three Months Ended March
31, 2021 2020 Revenues: Net earned premiums$ 456.9 $ 467.8 Fees and other income 36.1 32.6 Net investment income 19.4 22.0 Total revenues 512.4 522.4 Benefits, losses and expenses: Policyholder benefits 201.3 198.7
Amortization of deferred acquisition costs and value of business acquired
57.5 56.9 Underwriting, general and administrative expenses 168.8 173.3 Total benefits, losses and expenses 427.6 428.9 Segment income before provision for income taxes 84.8 93.5 Provision for income taxes 17.4 19.3 Segment net income$ 67.4 $ 74.2 Net earned premiums, fees and other income: Lender-placed Insurance$ 260.4 $ 264.3 Multifamily Housing 117.3 109.0 Specialty and Other 115.3 127.1 Total$ 493.0 $ 500.4 For the Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Net Income Segment net income decreased$6.8 million , or 9%, to$67.4 million for First Quarter 2021 from$74.2 million for First Quarter 2020. Segment net income for First Quarter 2021 included$34.5 million of reportable catastrophes, primarily related to theTexas winter storms, compared to$12.8 million for First Quarter 2020. Excluding reportable catastrophes, segment net income increased$14.9 million , or 17%, primarily driven by favorable non-catastrophe losses primarily across Specialty and Other products, higher premium rates in ourLender-placed Insurance business and growth in ourMultifamily Housing business. These increases were partially offset by lower REO volumes related to COVID-19 and fewer policies in-force from a financially insolvent client in ourLender-placed Insurance business. Total Revenues Total revenues decreased$10.0 million , or 2%, to$512.4 million for First Quarter 2021 from$522.4 million for First Quarter 2020. Net earned premiums decreased$10.9 million , or 2%, primarily due to declines in ourLender-placed Insurance business, mainly driven by lower REO volumes related to COVID-19 and a reduction in policies in-force for a financially insolvent client, the run-off of certain sharing economy offerings and the run-off of our small commercial product. This decrease was partially offset by premium rate increases in ourLender-placed Insurance business and continued growth from renters insurance in ourMultifamily Housing business. Net investment income decreased$2.6 million , or 12%, primarily due to lower income from real estate related investments and lower cash yields. The decrease in total revenues was partially offset by an increase in fees and other income of$3.5 million , or 11%, primarily due to an increase in claim processing fees in ourLender-placed Insurance business and growth in ourMultifamily Housing business. Total Benefits, Losses and Expenses Total benefits, losses and expenses decreased$1.3 million to$427.6 million for First Quarter 2021 from$428.9 million for First Quarter 2020. The decrease was primarily due to a decrease in underwriting, general and administrative expenses of 39 --------------------------------------------------------------------------------$4.5 million , or 3%, primarily due to lower catastrophe-related assessments and a decline in advertising expenses for the renters business inMultifamily Housing . Policyholder benefits increased$2.6 million , or 1%, mainly from higher reportable catastrophe losses, partially offset by lower non-catastrophe losses in our sharing economy offerings and small commercial product, as well as lower frequency of theft and vandalism claims across most major products. 40 -------------------------------------------------------------------------------- Corporate and Other Overview The tables below present information regarding the Corporate and Other's segment results of operations for the periods indicated: For the
Three Months Ended March
31, 2021 2020 Revenues: Fees and other income$ 0.2 $ 1.8 Net investment income 6.1 6.9 Net realized gains (losses) on investments 0.8 (84.0) Total revenues 7.1 (75.3) Benefits, losses and expenses: Policyholder benefits - 0.3 General and administrative expenses 39.7 51.4 Interest expense 28.4 25.5 Total benefits, losses and expenses 68.1 77.2 Segment loss before benefit for income taxes (61.0) (152.5) Benefit for income taxes (13.0) (106.0) Segment net loss from continuing operations $
(48.0)
For the Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Net Loss from Continuing Operations Segment net loss from continuing operations increased$1.5 million , or 3%, to$48.0 million for First Quarter 2021 from$46.5 million for First Quarter 2020. The increase in net loss was primarily due to the absence of a$79.3 million tax benefit related to the utilization of net operating losses in connection with the CARES Act in First Quarter 2020. The increase was partially offset by the absence of$67.2 million of after-tax net realized losses, mainly from a decrease in the fair value of our equity securities and collateralized loan obligations in First Quarter 2020, as well as the absence of$5.8 million of after-tax losses associated with the sale of Iké and$4.2 million of after-tax acquisition related transaction costs, all recorded in First Quarter 2020. Total Revenues Total revenues increased$82.4 million to$7.1 million for First Quarter 2021 from$(75.3) million for First Quarter 2020, primarily due to the absence of unrealized losses on investments mostly related to a decrease in the fair value of equity securities and collateralized loan obligations in First Quarter 2020. Total Benefits, Losses and Expenses Total benefits, losses and expenses decreased$9.1 million , or 12%, to$68.1 million for First Quarter 2021 from$77.2 million for First Quarter 2020. The decrease was primarily driven by the absence of$5.2 million of acquisition related transaction costs from First Quarter 2020 and a$4.2 million decrease in current expected credit losses associated with our credit risk from reinsurance recoverables related to businesses in run-off. 41 -------------------------------------------------------------------------------- Discontinued Operations Overview The table below presents information regarding the results of the discontinued operations for the periods indicated:
For the Three Months Ended March
31, 2021 2020 Revenues: Net earned premiums$ 17.7 $ 18.3 Fees and other income 37.5 37.5 Net investment income 72.0 72.4 Net realized losses on investments (1.1) (11.3) Total revenues 126.1 116.9 Benefits, losses and expenses: Policyholder benefits 74.0 72.0
Amortization of deferred acquisition costs and value of business acquired
19.2 18.9 Underwriting, general and administrative expenses 21.8 16.9 Total benefits, losses and expenses 115.0 107.8 Income before (benefit) provision for income taxes 11.1 9.1 (Benefit) provision for income taxes (3.2) 1.9 Net income from discontinued operations $
14.3
For the Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Net Income from Discontinued Operations Net income from discontinued operations increased$7.1 million , or 99%, to$14.3 million for First Quarter 2021 from$7.2 million for First Quarter 2020, primarily due to the absence of unrealized losses mainly related to decreases in the fair values of equity securities in First Quarter 2020.The increase in First Quarter 2021 was also due to a$1.9 million net gain related to the pending sale of Global Preneed consisting of$5.3 million in tax benefits partially offset by$3.4 million of after-tax transaction costs incurred in connection with the pending sale. The increases in net income from discontinued operations were partially offset by a$2.4 million decrease in Global Preneed's operating results primarily due to higher mortality in connection with COVID-19. Total Revenues Total revenues increased$9.2 million , or 8%, to$126.1 million for First Quarter 2021 compared to$116.9 million for First Quarter 2020, primarily due to the absence of unrealized losses mainly related to decreases in the fair values of equity securities in First Quarter 2020. Total Benefits, Losses and Expenses Total benefits, losses and expenses increased$7.2 million , or 7%, to$115.0 million for First Quarter 2021 from$107.8 million for First Quarter 2020, primarily driven by transactions expenses in First Quarter 2021 related to the pending sale and higher policyholder benefits mainly due to an increase in inforce policies and higher mortality due to COVID-19. 42 --------------------------------------------------------------------------------
Investments
We had total investments of$7.87 billion and$8.22 billion as ofMarch 31, 2021 andDecember 31, 2020 , respectively. Net unrealized gains on our fixed maturity securities portfolio decreased by$200.6 million during First Quarter 2021, from$570.9 million as ofDecember 31, 2020 to$370.3 million as ofMarch 31, 2021 , primarily due to an increase inTreasury yields. The following table shows the credit quality of our fixed maturity securities portfolio as of the dates indicated: Fair value as of Fixed Maturity Securities by Credit Quality March 31, 2021 December 31, 2020 Aaa / Aa / A$ 3,850.0 58.5 %$ 4,051.3 59.5 % Baa 2,279.1 34.7 % 2,288.1 33.6 % Ba 342.9 5.2 % 384.4 5.6 % B and lower 103.9 1.6 % 91.7 1.3 % Total$ 6,575.9 100.0 %$ 6,815.5 100.0 %
The following table shows the major categories of net investment income for the periods indicated:
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