ASSURANT, INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Overall Performance: 2025 began strongly with 14% growth in adjusted EBITDA and 16% growth in adjusted earnings per share (both excluding reportable catastrophes). The company operates from a diversified global model with market-leading businesses in global housing and lifestyle, supported by a robust capital position.
• Global Lifestyle Details:
  • Connected Living: Enhanced customer and client experiences through investments in innovative products/services, and partnered with Verizon for the Total Wireless Protect program.
  • Global Auto: Earnings were stable with improved loss experience, benefited from unified branding and new product launches.
• Global Housing Details:
  • Homeowners: Achieved 17% top-line growth from 70,000 lender placed policies, with a combined ratio expected to be in the mid-80s including a full year catastrophe assumption of $300 million.
  • Renters: Executed a strategy to scale technology-enabled services, added a new renters book, and the Cover360 platform drove double-digit written premium growth in the Property Management Company channel.
• Catastrophe Reinsurance: The 2025 catastrophe reinsurance program was placed in April, with increased coverage at attractive terms, a retention of $160 million, and an expected full year catastrophe load of $300 million.

Segment Performance

• Global Lifestyle:
  • First quarter adjusted EBITDA down 5% (including $6M foreign exchange impact); excluding the $7M one-time client contract benefit from first quarter 2024, underlying adjusted EBITDA was up modestly on a constant currency basis. In Connected Living, earnings declined 6%, but on a constant currency basis excluding the prior year one-time benefit, it increased modestly. Revenue for Global Lifestyle grew 5% or 7% on a constant currency basis, led by Connected Living.
  • For Global Auto, adjusted EBITDA was stable; lower investment income was offset by improved loss experience. Net earned premiums, fees, and other income grew 5% or 7% on a constant currency basis.
• Global Housing:
  • First quarter adjusted EBITDA was $112 million, including $157 million in catastrophe losses ($125 million from California wildfires with subrogation recoveries). Excluding catastrophes, adjusted EBITDA increased 31% to $269 million. The homeowners business saw strong double-digit growth due to policy growth. The renters business added a new book with over 250,000 policies, and the Cover360 platform supported double-digit written premium growth in the Property Management Company channel.

Guidance

• 2025 outlook includes modest growth in adjusted EBITDA and adjusted earnings per share (both excluding catastrophes). The housing segment outlook improved due to lender placed policy growth. The share repurchase range for 2025 is between $200 million to $300 million, subject to M&A and market conditions.

Risks

• Macro-economic conditions and tariff policies can impact claims costs and consumer demand. Uncertainty around the scope and timing of tariffs poses risks to the Auto and Housing segments.

Question and Answer

Q: In Global Lifestyle, the loss ratio is still relatively high; update on when improvement is expected?

A: Connected Living grew on a constant currency normalized basis. Global Auto shows stability with improved loss experience, but overall Lifestyle was in line with expectations, with investments in new programs and clients.

Q: What range of tariff impacts are assumed and how does the new vs used car dynamic play out?

A: Tariffs are assumed to remain in place in 2025 and are manageable. The business is balanced between new and used cars, with muscles built to make adjustments in rate, product design, and claims management as needed.

Q: Details on the Total Wireless by Verizon program and its financial impact?

A: It's a brand-new launch starting from customer one, ramping naturally. Financial impact will be seen as the book ramps, and it deepens the relationship with Verizon.

Q: Details on the added renters book and its strategic impact?

A: Added over 250,000 policies, fits the Affinity business, is strategic for scale and market leadership, and the Cover360 platform supports growth.

Q: Impact of tariffs on the mobile side and why not significant?

A: Work with large clients, risk sharing/reinsurance, and a monthly pay structure for mobile business allow for nimble adjustments, mitigating significant tariff impacts.

Q: Full year guidance and changes in segments?

A: Enterprise guidance unchanged, but Housing outlook improved due to lender placed growth, with Lifestyle factoring in macro and tariff impacts but still planning growth.

Q: Sensitivity of tariffs by component in Housing and Auto?

A: Scenario planning considers tariffs, with Housing impacted by building costs and Auto by parts tariffs, but the company is well positioned to navigate these.

Q: Impact of used vs new car sales pull forward on the business?

A: Pull forward seen, but minimal long-term impact due to existing earned premiums and nimble adjustments in the business