Assurant, Inc. 5.25% Subordinat Q3 FY2025 earnings call

• 2025 has been a remarkable year with double-digit earnings growth across Global Housing and Global Lifestyle. Achieved 13% adjusted EBITDA growth and 15% adjusted EPS growth through the first 9 months, excluding reportable catastrophes.
• Increased 2025 outlook: Expect full year adjusted earnings per share growth of low double digits and adjusted EBITDA growth approaching 10%, excluding cats.
• In Connected Living: Announced 2 new opportunities - expanding mobile repair and logistics capabilities via a multiyear agreement with a U.S. mobile carrier, and a partnership with Best Buy for retail extended service contracts administration and underwriting.
• In Global Auto: Adjusted EBITDA up 15%, with stable run rate earnings and ongoing loss experience improvement. Momentum driven by renewed partnerships across distribution channels.
• In Global Housing: Outperformed with strong lender-placed results in homeowners and PMC expansion in renters. Expect strong housing adjusted EBITDA growth, excluding cats, and a very strong combined ratio.
• Strategic investments in technology and operational efficiencies drive improved margins and customer experiences across both segments.

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 subscriber growth in mobile (2.1 million net additions year-over-year) and strength in Financial Services. Global Auto adjusted EBITDA was up 15%, including a net non-run rate benefit of ~$6 million, and normalized adjusted EBITDA was up 6% due to improved loss experience.
• Net earned premiums, fees and other income for Global Lifestyle grew 7%, primarily from Connected Living growth and contributions from Global Automotive.

Global Housing

• Third quarter adjusted EBITDA was $259 million, up 13%. Benefited from absence of a prior unfavorable non-run rate adjustment and favorable non-catastrophe loss experience. Homeowners business saw strong performance with policy growth, and Renters continued to grow with PMC expansion and technology-enabled services like the Cover360 platform. Revenue contribution %: Not explicitly stated in absolute terms but both segments are key components of the business

• Expect full year adjusted earnings per share growth of low double digits and adjusted EBITDA growth approaching 10%, excluding cats, an increase from initial expectations.
• Global Lifestyle results expected to be partially offset by investments in new partnerships and programs and unfavorable foreign exchange. Global Housing expected to have strong growth led by lender-placed.
• Corporate 2025 full year loss expected to be approximately $120 million, an increase of $5 million from previous outlook. Expect to return $300 million to shareholders through share repurchases at the top end of the $200 million to $300 million range.
• Fourth quarter expected to have a higher level of segment dividends compared to third quarter.

• Forward-looking statements subject to risks, uncertainties and other factors that may cause actual results to differ materially.
• Market conditions and fluctuations could impact business performance.
• Reinsurance market dynamics and potential changes could affect the company's risk exposure.

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

A: Sure. Seen a lot of momentum across housing. Fundamental performance strong, and have been investing deeply in technology and operational capabilities. Lender-placed solution is market-leading with further growth opportunities, and Renters have consistent PMC growth expected to continue.

Q: In Global Auto, loss performance was better year-over-year but stable sequentially. Is it sustainable?

A: Yes. Pleased with the quarter, EBITDA growth 15% year-over-year. Rate actions and product changes over the last few years have made loss performance more stable, and loss exposures continue to diminish as expected.

Q: In Homeowners, if the housing market softens, does it impact top line prospects?

A: Yes. Benefited from challenging voluntary market with policy growth. If there's a downturn in the economy, may see an uptick in placement rates. Need to monitor how various factors play together.

Q: On new partnerships in Connected Living, can you quantify impact and trajectory?

A: Reverse logistics and Geek Squad deals will contribute in 2026. Investments made this year will taper off and help EBITDA going forward.

Q: On buyback guide increased to $300 million, how about 2026 capital deployment?

A: Feel good about capital position. Will provide more guidance on share buybacks next year. Expect to grow all 3 businesses (Connected Living, Auto, Housing) in 2026. Corporate loss expected to be higher in 2026 due to launching a new program in an adjacent business.

Q: On Renters PMC deals, how does it dimension with growth this year?

A: Renters have had 13 quarters in a row of double-digit growth. Renewed largest PMC client to a multiyear agreement and added additional PMCs, which will continue to fuel momentum.

Q: In Housing, market share in lender-placed is over 60%. How much can you grow share in intermediate term?

A: Have a strong right to win, incredibly focused on best solution and capabilities. Laser-focused on acquiring clients in lender-placed, but no specific threshold or target set.

Q: Rank drivers supporting housing results - AIV, hardening of voluntary market, solid placement rates?

A: Policy growth is the biggest driver, up 8% year-over-year. Rate in AIV has been favorable but not dramatic change, and hardening of voluntary market has contributed to placement rates.

Q: Role in iPhone upgrade cycle and covered device counts?

A: Protection programs are a big driver, as customers often roll over protection to new phones. Clients gained 81% of postpaid net adds in the U.S., which bodes well for protection and trade-in opportunities.

Q: Major investment projects planned for next year?

A: Will be launching a new program in an adjacent business early next year, which will create a long-term growth vector. Corporate investment expected to be higher in 2026, with more details to be shared in February.

Q: Loss ratio difference between lender-placed and voluntary policies?

A: Premium rates differ, with lender-placed having different tracking expenses compared to voluntary commissions. Overall, premium differential varies by state, but our product has become more competitive as voluntary market raises rates.

Q: Reinsurance buy - preference for reducing retention or cost?

A: Probably buy to reduce volatility. Evaluate pricing, and in a good position going into next year with low cat activity this year. Renewal kicks in April 1, and mix of business in less cap-prone states has been positive.