Assurant, Inc. Q2 FY2025 earnings call

• Delivered strong second quarter with double-digit growth in adjusted EBITDA and earnings per share excluding reportable catastrophes.
• Increased full-year 2025 growth expectations, with adjusted EPS growth expected to approach 10% excluding catastrophes.
• Momentum in Global Housing with 25% increase in adjusted EBITDA YTD excluding cats, and Global Lifestyle with accelerated adjusted EBITDA growth in Q2.
• Investments in technology, including AI, to drive innovation; examples include using robotics/AI in device care centers and generative AI in housing document processing.
• Acquisitions to expand presence, such as U-Solutions in Japan, Gestauto in Brazil, and partnerships like with Ciocca Automotive.

Global Lifestyle: Second quarter adjusted EBITDA increased 6% compared to last year or 7% on a constant currency basis. Connected Living earnings increased 9% or 11% on a constant currency basis, led by global mobile device protection programs and mobile trade-in programs. Global Auto adjusted EBITDA was up modestly, with net written premiums up 8% year-to-date. Net earned premiums, fees and other income grew 8%, led by strong growth in Connected Living and a new program in Financial Services. Global Housing: Second quarter adjusted EBITDA was $214 million, including $30 million of reportable catastrophe impacts. Excluding catastrophes, Global Housing delivered double-digit growth with adjusted EBITDA increasing 18% to $244 million. Homeowners benefited from favorable non-catastrophe loss experience and increased lender-placed policies, while renters' tech-enabled services drove growth with the Cover360 plus platform achieving double-digit premium growth for 3 consecutive years.

• Full-year 2025 adjusted EPS growth expected to approach 10% excluding catastrophes, driven by mid- to high single-digit adjusted EBITDA growth.
• Share repurchases expected to be between $250 million to $300 million for the year.
• Renewed confidence in capital position with holding company liquidity at $518 million at quarter end, and robust cash flow upstreaming over $230 million to holding company in the quarter.
• Expectations of continued growth in Global Housing with policy growth in lender-placed and Global Lifestyle with growth in Connected Living and Auto.

• Macroeconomic conditions including tariffs, inflation, foreign exchange, and interest rate levels may impact the pace and timing of growth.
• Prior year reserve development is a factor in Global Housing's performance, though outlook does not contemplate additional prior year reserve development beyond the $63 million seen in the first half of 2025.

Q: When looking at the overall benefit ratio in Global Lifestyle, should we expect it to trend down as rate continues to earn through in Global Auto?

A: Keith Demmings notes pleased with progress in Q2, Keith Meier mentions improvement in vehicle service contract loss experience as an inflection point for the auto business.

Q: Investment income from other investments was negative in the first half. What are those investments? And what's driving the decline there?

A: Keith Meier states investment portfolio performs well, with book yields at 5.33%, and other investments like real estate transactions causing lumpiness but overall portfolio is in good position.

Q: Can we quantify any pull forward in consumer activity when thinking about devices or protected vehicles?

A: Keith Demmings says there was some pull forward in trade-in due to more switching activity and promotions, but bulk of Connected Living beat was from device protection growth; auto sales were strong YTD with net written premiums up 8%.

Q: How to think about the expense ratio in Global Housing and opportunity for more leverage?

A: Keith Demmings mentions cost is mostly operational execution with limited commission, growth in lender-placed portfolio and technology automation driving expense leverage; Keith Meier notes selling and underwriting expenses are ~20% of overall.

Q: Characterize where prior year development is coming from in Global Housing?

A: Keith Meier says it's related to improvements in Florida, lower frequencies, and lower than expected inflation.

Q: Thoughts on tariffs and cushion in second half guidance?

A: Keith Demmings says limited impact in first half, outlook includes best estimate based on current info and is manageable; proactive in dealing with inflation via features, rate filing, and service efficiency.

Q: New business pipeline for Lifestyle now vs 12-24 months ago?

A: Keith Demmings says there's acceleration in pipeline, $5M invested in first half for Connected Living with $10M expected in second half, excited about new client wins, expanded services, and new products across segments.