Assurant, Inc. Q3 FY2025 earnings call

• 2025 has been a remarkable year with double-digit earnings growth across Global Housing and Global Lifestyle. Through the first 9 months, achieved 13% adjusted EBITDA growth and 15% adjusted EPS growth excluding reportable catastrophes. Increased 2025 outlook with full year adjusted earnings per share growth of low double digits and adjusted EBITDA growth approaching 10% excluding cats.
• Global Lifestyle: Lifestyle earnings accelerated in 2025, with Connected Living performance from new client programs, partnerships, and enhanced capabilities. Announced 2 new Connected Living opportunities: expansion of mobile repair and logistics capabilities with a U.S. mobile carrier, and partnership with Best Buy for retail extended service contracts. Global Auto had adjusted EBITDA increase year-to-date, driven by renewed partnerships and optimized performance.
• Global Housing: Continues to outperform with strong lender-placed results in homeowners and PMC expansion in renters. Expect strong housing adjusted EBITDA growth excluding cats, with a very strong combined ratio trending below initial expectations. Strategic investments in technology and operational efficiencies drive improved margins and customer experiences.

Global Lifestyle

• Third quarter adjusted EBITDA increased 12%, driven by double-digit earnings growth across Connected Living and Global Automotive. Connected Living earnings increased 11% with 2.1 million net additions in mobile year-over-year. Global Auto adjusted EBITDA was up 15%, including a net non-run rate benefit of ~$6 million. Net earned premiums, fees and other income grew 7% primarily from Connected Living growth and Global Automotive contributions.

Global Housing

• Third quarter adjusted EBITDA was $256 million, including $3 million of reportable catastrophes; excluding cats, adjusted EBITDA increased 13% to $259 million. Homeowners business benefited from absence of a prior unfavorable non-run rate adjustment, and Renters saw continued PMC expansion. Net earned premiums, fees and other income growth was supported by favorable non-catastrophe loss experience and top line growth in lender-placed.

• Increased 2025 outlook: Now expects full year adjusted earnings per share growth of low double digits and adjusted EBITDA growth approaching 10% excluding cats, a significant increase from initial expectations.
• Global Lifestyle: Expected to continue growth with Connected Living and Global Automotive delivering full year growth despite industry inflationary pressures.
• Global Housing: Expect strong housing adjusted EBITDA growth excluding cats, with a very strong combined ratio trending below initial expectations.
• Capital deployment: Expect to return $300 million to shareholders through share repurchases at the top end of the $200 million to $300 million range. Plan to provide more guidance on share buybacks next year in February.

• Uncertainties related to forward-looking statements, including risks, uncertainties, and other factors that may cause actual results to differ materially from contemplated statements. Potential impact of inflationary pressures across the industry on Global Auto's results. Risks associated with new business launches and investments, such as the new program in an adjacent business planned for early 2026 and its impact on corporate results.

Q: You referred to a pipeline in Homeowners or Renters and said you had a strong pipeline. Could you expand on that?

A: Sure. We've seen a lot of momentum across housing. The fundamental performance of the business has been strong, and we've been investing deeply in technology and operational capabilities. Our lender-placed solution is market-leading, and there's still opportunity for white space. Renters have seen consistent PMC growth over the last 3 years and we expect that to continue.

Q: In Global Auto, the loss performance was better year-over-year, but stable sequentially. Is it hit kind of an area that you think is sustainable or likely to hold steady going forward?

A: Yes. For Auto, we're pleased with the quarter, growing EBITDA 15% year-over-year. Our vehicle service contract side has seen rate actions over the last few years and product changes, making the loss performance more stable. Loss exposures continue to diminish as expected, so we should expect those results to continue improving.

Q: You referred to new partnerships in Connected Living. Can you quantify the impact you're expecting from the reverse logistics and Geek Squad deals? Are these immediate revenue generators? And what kind of trajectory are you expecting? And how should we think about the investment spend around these next year relative to the $15 million this year?

A: On the reverse logistics side, it will begin to contribute in 2026. We'll continue to make investments, and it will have a positive EBITDA impact next year. The Best Buy opportunity will also contribute in 2026. We've made a lot of investments this year, and that will taper off, helping our go-forward EBITDA.

Q: This is James Koehne on for Bob. My first question relates to Housing. So my understanding is that you have 60-plus percent market share in lender-placed. Curious how much you think you could realistically grow share in the intermediate term? And do you have aspirations to grow share to a certain level in the intermediate term?

A: Yes. We've got a strong right to win and are incredibly focused on having the best solution and capabilities in the market. There are big client opportunities where we don't perform that service today. We're laser-focused on those, but we haven't set a threshold or target; we're trying to acquire clients all the time in every one of our businesses.

Q: This is [Molly Nolan] calling in for Tommy McJoynt. My first question is about the iPhone upgrade cycle. It has been getting a lot of attention in the media. That's led to questions about how downstream suppliers and service providers can benefit. So can you just remind us about Assurant's role and opportunity in trade-in upgrade and adding covered device counts specific to the iPhone upgrade cycle?

A: What we've seen is a robust cycle. The big driver for our business is the protection programs. Customers that have their protection program on their last phone will roll it over to the new phone, generating stability. Our clients gained 81% of the postpaid net adds, so with elevated switching, strong promotional activity, and strong demand for new iPhones, it bodes well for us both on protection as our clients grow and with trade-in opportunities.

Q: My second question would be just understanding investments are part of the business cycle. Are there any major investment projects that you currently have planned for next year that we should think about as we think about margin expansion opportunity across the business lines?

A: We will be launching a new program in an adjacent business early next year. It will create a long-term vector for growth for the company. We're looking to have the corporate investment be a little higher in 2026, which we'll talk more about in February. We've started to invest in that a little bit this year, which is why we've raised the number on our corporate loss by $5 million this year.