We caution you about relying on these forward-looking statements and direct you to consider the discussions of risks and uncertainties associated with our business and results of operations contained in our 2009 Form 10-K and subsequently filed forms 10-Q and 8-K, which you can find on our Web site. Assurant undertakes no obligation to update or revise any forward-looking statements.Additionally, the presentation will contain non-GAAP financial measures, which we believe are meaningful in evaluating the Company’s performance. For more detailed disclosures on these non-GAAP measures, the most comparable GAAP measures, and a reconciliation of the two, please refer to yesterday’s earnings release and the supplementary financial information that we have on our Web site. Now, I’d like to turn the call over to Rob Pollock. Rob Pollock Thanks Melissa. Good morning, everyone. Our results for the first half of 2010 are solid. We are achieving year-over-year profit improvement because of disciplined decision making and our ability to adapt and better position our businesses. Actions include redesigning products, reducing expenses and when necessary adjusting prices. We are adding new clients, retaining existing accounts and finding opportunities in the areas we have targeted for growth. Overall, we are encouraged and believe our year-to-date results demonstrate the strength of our specialty strategy. Let me begin by providing some financial highlights on the quarter as well as our outlook for the year. In the second quarter, we generated an annualized operating return on equity of 12.7%. All of our businesses saw results improved from the similar period in 2009. Specialty property led results for the quarter. We are building long-term value for our shareholders as demonstrated by a 3.8% increase in our diluted book value per share during the quarter and a 7.3% increase since year end. This excludes the impact of accumulated other comprehensive income or AOCI.
During the quarter, we took advantage of what we believe is an attractive share price by repurchasing 6.1 million shares for about $215 million. We also paid $18 million in dividends as we increased our quarterly dividend to $0.16 per share. This is the sixth consecutive year we have raised our dividend.So in total, we returned $233 million of capital to shareholders during the second quarter. In July, through the 23rd, we’ve repurchased an additional 910,000 shares for slightly less than $33 million. We have slowed repurchase activity as we enter hurricane season. We ended the second quarter with $575 million in corporate capital, up about $100 million from the end of the first quarter. This includes about $80 million in capital, we were able to free up in our Solutions business. Remember, we’re holding a $250 million capital buffer for tail-event risk leaving $325 million in deployable capital. For the year, we expect to dividend all of the businesses’ earnings to corporate unless there are material changes to A.M. Best capital formulas. Overall, our solid capital position continues to provide us with a sufficient buffer against risk and great financial flexibility. Now let me make a few comments on the business results and our future outlook. Assurant Specialty Property had another terrific quarter. We added the new client with $550,000 subprime loans. We also benefited from our partnership with a specialty servicer who added subprime loans to their portfolio. In combination, these two wins help mitigate the macro trends of declining loan originations and subprime loans outstanding. At Assurant Solutions, we continued to see improvement in the U.K. operating results. Our international combined ratio improved 50 basis points from the first quarter, slightly below our goal. However, we’ve added several new clients in Latin America and incurred some costs associated with adding them. We still expect the fourth quarter international combined ratio to be in the range of 103 to 105, which is consistent with our previously discussed targets.
The slowdown in consumer spending continues to hurt retail sales. However, we are finding new clients, both internationally and domestically, to increase our sales. Finally, our OEM and wireless strategies have us well positioned for long-term growth, especially when consumer spending rebounds.Read the rest of this transcript for free on seekingalpha.com