Assurant, Inc. 5.25% Subordinat Q1 FY2025 earnings call

2025 Start

• 2025 is off to a strong start with 14% growth in adjusted EBITDA and 16% growth in adjusted earnings per share, both excluding reportable catastrophes.

Segment Highlights

• Global Lifestyle: Laser focused on Connected Living and Global Auto. Connected Living enhanced customer experience and partnered with Verizon for the Total Wireless Protect program. Global Auto earnings were stable with improved loss experience.
• Global Housing: Strong top-line growth in homeowners due to lender placed policies, achieved a combined ratio of 90% in the first quarter, and on track for a combined ratio around the mid-80s in 2025. Renters business scaled technology-enabled services.

Catastrophe Reinsurance

• Successfully placed 2025 catastrophe reinsurance program, increased coverage at attractive terms, with an expected annual catastrophe load of $175 million excluding California wildfires and $300 million including wildfire impacts.

Global Lifestyle

• First quarter adjusted EBITDA down 5% compared to last year, including a $6 million impact from unfavorable foreign exchange. Excluding a $7 million one-time client contract benefit from the first quarter of 2024, underlying adjusted EBITDA was up modestly on a constant currency basis. Connected Living earnings declined 6%, but benefited from a newly launched card benefits program. Global Auto adjusted EBITDA was stable, with improved loss experience offsetting lower investment income and unfavorable foreign exchange. Net earned premiums, fees and other income for Global Lifestyle grew 5% or 7% on a constant currency basis, led by Connected Living.

Global Housing

• First quarter adjusted EBITDA was $112 million, including $157 million of cat losses. Adjusted EBITDA excluding catastrophes increased 31% to $269 million, driven by 17% top-line growth in homeowners due to the addition of 70,000 lender placed policies. Renters business saw its 11th consecutive quarter of double-digit written premium growth in the Property Management Company channel.

• On track for 9th consecutive year of earnings growth. Adjusted EBITDA and adjusted EPS expected to grow modestly in 2025, excluding catastrophes. Housing outlook improved, while Lifestyle growth muted by foreign exchange and incremental investments. Share repurchase range for 2025 is between $200 million to $300 million subject to M&A and market conditions.

• Impact of macroeconomic conditions and tariff policies on claims cost and consumer demand. Uncertainty in the scope and timing of tariffs.

Q: In Global Lifestyle, the loss ratio is still relatively high. When to expect improvement?

A: In Connected Living, it grew on a constant currency normalized basis in the quarter. Global Auto results are stabilizing with improved loss experience.

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

A: Assumed tariffs will remain in place throughout 2025 and are manageable. The Auto business is balanced between new and used sales, well positioned to navigate shifts.

Q: How was the expense ratio in Global Housing impacted by catastrophe loss events?

A: Underlying expenses are relatively flat year-over-year, with reinsurance costs up $11 million and other expenses related to managing catastrophe claims.

Q: Details on the Total Wireless by Verizon program and renters book?

A: Total Wireless Protect is a new launch, starting from customer one and ramping over time. Renters book added over 250,000 policies, a strategic opportunity reinforcing market leadership.

Q: Impact of tariffs on the mobile side and used vs new car sales?

A: Mobile side mitigated by program admin role and close client partnerships. Pull forward of new and used car sales, but not a significant impact on the business outlook.