Assurant, Inc. 5.25% Subordinat Q4 FY2024 earnings call

Key Points

• 2024 was a strong year with 15% adjusted EBITDA growth and 19% adjusted earnings per share growth, both excluding reportable cats.
• Global Lifestyle: Connected Living had client wins and renewals, invested in innovative technology like automation, robotics and AI at device care center, partnered to launch T-Mobile’s Protection 360 HomeTech product.
• Global Auto: Made progress in stabilizing earnings through targeted actions to address claim costs.
• Global Housing: Delivered sustained outperformance, adjusted EBITDA more than doubled in past two years, outperformed P&C industry even including cats.
• 2024 had key client wins and renewals across segments. Believes in B2B2C business model, has strong distribution, financials and client transparency.
• Plan to execute new partnerships and program launches in 2025, support incremental investments for new launches, drive financial and operational excellence.

Global Lifestyle

• Fourth quarter adjusted EBITDA was down 6% compared to last year or 5% on a constant currency basis. Connected Living earnings were roughly flat on a constant currency basis. There were $4 million of incremental investments related to new capabilities and client partnerships in the fourth quarter.

Global Auto

• Quarter results were down 11% compared to last year, largely driven by lower real estate joint venture partnership income. Excluding that, results were largely flat.

Global Housing

• Fourth quarter adjusted EBITDA was $225 million which included $50 million of cat losses. Excluding cats, adjusted EBITDA increased 32%. Had robust policy growth in homeowners, benefited from expense leverage from technology investments. Renters business had tenth consecutive quarter of double digit gross written premium growth in PMC channel.

2025 Outlook

• Expect full year adjusted EBITDA and earnings per share to increase modestly, both excluding cats, overcoming $107 million of favorable prior year reserve development in Housing.
• Global Lifestyle growth driven by Connected Living and Global Auto, partially offset by foreign exchange and investments.
• Global Housing EBITDA excluding cats expected to decline modestly due to 2024 favorable prior year development, but strong underlying growth expected from Homeowners business.
• Share repurchase range for 2025 between $200 million to $300 million subject to conditions.
• Expect to continue generating meaningful cash flows.

Risks

• Reportable catastrophes from California wildfires expected to approach or slightly exceed per event catastrophe reinsurance program retention of $150 million.
• Uncertainty around reinsurance program placement and terms.
• Impact of tariffs on claims costs and consumer demand.
• Inflationary impacts on input costs for lifestyle and auto businesses.

Q: On the Homeowners business, what is a voluntary versus the lender placed and momentum for 2025?

A: Lender placed PIF grew 16% year-over-year, with a third from client growth and loan movement, a third from California hardening market, and a third from rest of country. Expect continued growth but not at same level.

Q: How should we be thinking of reinsurance renewal cost and ability to get additional rate through regulators in impacted geography?

A: Reinsurance program expected to maintain relatively consistent retention, pricing favorable. On rate, file rates at state level, have good track record of getting appropriate rates.

Q: The prior year development in the fourth quarter was the driver of that similar to what you saw earlier in the year?

A: Related to inflationary environment and lower than expected frequencies, but appropriately reserved and in good position for future.