Assurant (AIZ) 3 May 232023 Q1 Earnings call transcript

Welcome to Assurant’s First Quarter 2023 Conference Call and Webcast. [Operator Instructions] It is now my pleasure to turn the floor over to Suzanne Shepherd, Senior Vice President of Investor Relations and Sustainability.

You may begin.

Thank you, operator, and good morning, everyone. We look forward to discussing our first quarter 2023 results with you today.

conference Officer; Keith Chief and Assurant’s and our Financial for Executive Chief Richard me call Demmings, are President Officer. Joining Dziadzio, our

release the the our financial The supplement after market on we corresponding a Yesterday, assurant.com. available closed, release and results quarter first news for are of XXXX. issued announcing

call from Q&A start Keith We session. before Richard today’s will and with remarks a moving into

made the statements today of are Some forward-looking.

other to factors our historical may performance current risks, Forward-looking uncertainties to are subject and statements. results those based upon actual statements from contemplated that these expectations cause and materially and differ by

information Additional well earnings as can found as release SEC our in reports. regarding yesterday’s factors these in supplement and financial be

in call, refer During we evaluating measures to company’s will which performance. financial are today’s non-GAAP the important we believe

comparable on and to yesterday’s For these measures of two, supplement. most financial and the measures, please GAAP the details news refer reconciliation a more release

call Keith. I to turn now the will over

Suzanne everyone. Thanks, good and morning

performance which experiences organizational by pleased beginning driving across are We we our to ongoing Assurant. and focus to our accelerate real The realign results. and deployment announced operating the business better-than-expected our measurable Global portfolio estate on excellence simplify actions and quarter digital-first results, Housing business XXXX our in structure reflected of within first yield our are

was our broader This headwinds in line fund talent. additional sequentially and savings While in expectations. the in mitigate the and quarter, early, from results generated for our these macroeconomic improved gross impact critical initiatives to Global with are of which helping innovation Lifestyle’s investments reflected

drive client to on continue value. for and business our the demonstrate we our financial to leadership manage are portfolio shareholder will well-positioned continued of deliver first Our also believe quarter we prudently and capital global our We results our well-diversified objectives to XXXX base. to advantages

we customer improve as were Through innovative we our from management emerging expanding ways steadfast to fostering by realizing inclusion. our innovation vision America’s and including delivering to experience; global savings first, and will finding Fortune, Recently, serve and consumer investments demonstrating on and a competitive on enhance our and maintain focus we drive and ongoing companies and digital-first housing. research by recognized our we services of strengthening across culture one ahead, second, and develop innovation a the third, new markets, execution: advantages of the in the importance experience by clients on by partnerships; expense driving meaningfully Looking efforts. technologies, to consumer most key mobile, auto products and new place

to continue large of base our embedded We strengthen businesses.

we Lifestyle, subscribers In XX top the XX automobiles Global subscription protection service work a services nearly and recurring mobile global distribution range wide partners. a across with XX of protect and provide XX with million monthly for of and we valuable most nearly brands million

supports both continue Our track businesses scale record long-term their of to growth.

Our expected growth U.S. protection mobile cable Connected driver, operators. and to remain a solid with marquee Living business carriers is by mobile device anchored

In be to continues addition, trade-in a contributor our strong results. overall business to mobile

compared factors the to from of actions have headwinds to even expense previously exchange leading including growth year persist, earnings results business XXXX. impacting foreign stabilize in lower our with taken, In as begun half expectations improved international line Our benefited we the volumes. last to Europe, many continue second of when and to

strong this well-positioned from market a believe are impact the in since actions to Japan, growth. key we clients renewed implementing we the mobile of subscriber In foundation continued to X as we programs critical mature. support even are beginning declines Additionally, XXXX, solidifying ongoing and stabilize

through relationships large expanded addition Japanese growing In partnership we KDDI, other to carriers. with are our footprint multiyear with our

technology core launch and operations services. new our leveraging We are solutions to optimize offerings and mobile help

we with new CNH broad leveraging capabilities and Moving combined the and and we Overall, business the steady remain commercial Industrial, the success new and leverages making expertise short-term, business continue acquisition. in U.S., of in of are two which America focused recent Lifestyle, EPG growth legacy while Europe, Lease our modest with to we partnerships partnerships Finance our to given integrating Assurant like progress our Auto, support Outside Global the the acquisitions global in share macroeconomic Latin signed in of OEMs. year. on expect And we to ongoing full uncertainty, cautious we the quarter. expanding for

to have cash on product market-leading Housing, flow countercyclical Global competitive operate simplify to has scale. generated over than to continue higher had start the business returns renters’ while EBITDA, adjusted attractive Within we our drive invest significant we increased and as in capital-light expected this clear and cat quarter, the activity a advantages lines we strong cats, year Despite focus growth a lender-placed long-term, Housing excluding our insurance X%. where business. We that Global

primarily impact ability through costs materials labor offset actions inflation and signs rates, Policy by show Housing. which continued higher policy product cat on the is helped across lender-placed, top on impacts both higher inflation of beginning and insured average have guard and premiums came our values inflation existing to is both driven to losses non-cat by offset In reinsurance improvement. Entering claims, elevated new drive which Global to In both partially XX%, clients. our homeowners, feature increased growth and building from rate from line second quarter, costs. of lender-placed, remain and the growth grew higher and

quarters. it consider pace for to how important Global of next improves the magnitude Housing over earnings year, see recovery ongoing we loss experience over the and will be few As the

timing of is investments the in and capital. continue dividends perspective, excluding reportable $XXX quarter tax the Let’s capital the of expect this our EBITDA, and $XXX market a rate annual expenses we the adjusted deployment. strategy, growth capital turn quarter grow of executing million related upstreamed strategic to million quarter expected and single-digits cats, EBITDA compared consolidated holding both company From primarily in and several technology first rates by a year. reflecting depreciation Adjusted still to favorable low segment critical to XXXX, adjusted cats, ended EPS outlook higher Reflecting excluding to to liquidity. current conditions, higher reportable on trail our with to enterprise growth to we effective

been to capital at monitoring We the have and share levels environment given repurchases later consider ongoing modest resume but volatility. expect broader now business the deployment. quarter, we macroeconomic We market as carefully in the second

buyback of year We the expect be the XXXX the to activity. toward majority of maybe weighted share repurchases and underlying below end

strong on ahead, ability of We to world. vision innovate we our we client partnerships and be look of advancement are leading provider our the customers our more be As connected XXX vision. for million to supporting the continued our the services to global the business execution than critical focused will global believe achieving

to review the over outlook our results Richard in I will turn now XXXX first greater detail. Richard? and the to quarter call

Thank you, Keith and good morning everyone.

or adjusted a reportable $XX basis. the catastrophes, million, million X% quarter excluding on XXXX, $XXX For first year-over-year constant currency EBITDA, totaled down X% and of

above depreciation tax the driven lower Housing for million While Adjusted rate the stronger from primarily results favorability higher compared were share, performance. earnings expense. a lower quarter, reportable Global came excluding catastrophes, per than our XX% year-over-year, the higher $X.XX segment and effective and in earnings, they a down expectations, $X prior period prior the by to in year, totaled

extended or in segment on currency Lifestyle. XX% results in $XXX Global decrease a quarter, starting the offset Connected service basis decline higher income. with decreases earnings year-over-year partially currency constant reported from XX% came contracts XX% to a Living or by both basis. on let’s a a Connected weaker EBITDA Now, move Global first The from segment lower results, were results. decline million The in and constant adjusted investment and international Automotive, down Living’s of XX%

Extended which results included the relative claims in favorable an year quarter, were and service lower in claims increase experience. contract particular, prior to due to costs

higher inflation We persist of expect of the the of on year, in trends the market. during will cost level a the remainder modest broader level which depend the to

we rate which flow with mitigating the increase. increases the through should during However, recently the of implemented begin year, to several course have clients,

and however, we trends in promotions have unfavorable Sequentially, volumes, and mainly seeing as XXXX, mobile carrier in U.S. trading mobile, were and mobile expected as impacted were mobile Asia-Pacific softer results are exchange, management emerged clients as protection loss to subscriber half from that slightly results. of mobile from programs compared device lower was year-over-year lower both Japan and to mix declines earnings due to America down mainly offset cable of from Trade including repair. operator experience service in-store in flat international the by expense expected in earnings in stabilize. results, the benefit performance, are and of and margins favorable improved started North Europe, were while continue. device discontinuation to growth by In which more and second from U.S. modest foreign carrier the

joint Turning quarter. excluding industry, $X $X impacted and business rise to X% venture the in gains the to by the costs claims. elevated parts Similar was first from labor in and higher or decreased estate that a Automotive, Global million, to from auto earnings severity million contributed others real

was across also higher driven investment structures to the claims extended offset and due U.S. contracts to channels. benefiting year. higher inflation, over portion decrease are service higher experience distribution in expect We partially growth of we these recover The from higher a although being the auto businesses costs And across are cost by by income claims earnings client through to claims though expect time auto contract this persist elevated throughout yields.

an earned prior by up was mobile fees well Turning contract declines disclosed premiums driven contracts. to related earned of income, net premium impact programs. approximately runoff structures was or and Connected primarily premiums, Automotive, from Living other fees X%. million income reflecting previously by Global period sales $XX reflects to X%. net This decreased Lifestyle service vehicle as $XX other growth This and million strong the as new

America contributions The extended currency, contracts. changes grew mobile subscribers from higher contract these by service X%. Connected in growth in benefited foreign and quarter revenues North Living’s in Excluding from

savings XXXX, Lifestyle, the for existing and Living year full and year. by supported particularly we new the ongoing Connected expense growth of partnerships, in expect Global accelerating expansion modest throughout For

claims income from increasing address also the and from actions contributions positive impact We the to mentioned expect investment rising cost.

fees of premiums for grow headwinds. is Automotive foreign and other Global growth offset earned by ongoing to exchange Lifestyle in income as net is In still expected modestly XXXX, terms partially

and Adjusted $XX reportable a Housing. increase million catastrophes $XX Moving which was included to EBITDA weather events. million Global from severe tornado in

up run as or loan premium clients, were results our growth $X $XXX adjusted Policy expanded higher EBITDA to year from of and by mainly was performance, million catastrophes, existing and rates. do portfolio growth expect new books million as off progresses. X%. average reportable line lender-placed driven values policy stronger-than-expected The we mainly client the Homeowners’ portfolios from the was as although top insured Excluding well

inflation the all throughout experienced in loss Catastrophe with also increased the more losses, offset which by expectations. line million, products higher $XX reinsurance quarter to costs non-cat demonstrates from renters major in expected performance ability the continue decreased year. earnings should our and across impacts. increased While our In than non-cat our other,

continue to to full from actions XXXX, top cats, rates higher expect For to Global line improved driven the EBITDA, over expense policy year Housing due and in we Homeowners, course performance and by expansion realized in grow of excluding ongoing the to by adjusted reportable lender-placed be growth year.

the anticipate changes market We months. previous the our the remaining with expectations. program we coming cost in Currently, our we line reinsurance increase are to reinsurance place of year-over-year, third in in monitoring the as potential

Please a period significant that closely. year losses. for also continue quarter to and mind until tends in elevated be seasonally non-cat to non-catastrophe not lender-placed second monitor the are a in later anticipating the losses in keep the of we impact Lastly, inflation improvement

Moving to corporate.

The investment driven $XX lower was adjusted million, by million $X loss first EBITDA income. quarter up

be XXXX, approximately expect continue year to full loss $XXX we to corporate adjusted the For million. EBITDA

modest. are of at of represented and over our market cash a in portfolio. the high And bank fixed diversified, investment discuss investment-grade philosophy. moment $X.X regional volatility want QX. portfolio securities XX% billion take investment overall, An of Investments investments estimated last our cash and conservative our income cash cash end exposure our portfolio. I XX% rated. U.S. to of Fixed reflecting value equivalents is The the maturity is Given equivalents total our quality a and quarter, also to had the

We number of also estate across with have investment the commercial overall vehicles real portfolio well. investments a performing

geographic ratios. coverage regions with across Our security average and debt diversified assets have attractive and type low property size loan-to-value servicing and are

portfolio It represents $XX our office mortgage commercial equity approximately represents four loans also with about book X% loan diversified portfolio is with value. average X% our only approximately investment across with of loan representing portfolio only a million. office $XX of with million of is approximately XXX including buildings of our U.S., XX% a loan example, million $X.X an For variety assets amount loan the with The portfolio. portfolio highly portfolio or a investment of property real and estate classes our portfolio and diverse the

REIT those We of with rated. also XX% investment-grade positions CMBS and have investments being

While relates certainly not is portfolio to relatively low headwinds. macroeconomic believe risk current we as investment risk-free, our it

Turning $XXX ended from segments dividends with the million. million. In first to We totaled quarter, quarter holding company liquidity. our $XXX the operating

redeemed notes million senior the in intend During quarter, maturity million $XXX to of $XXX in or a We notes issued and the of notes of the balance on September. in XXXX the we XXXX. redeem to senior portion due prior

stock $XXX of and of million included $XX corporate first for interest million the quarter used to cash cash addition In common expenses, flows dividends.

of reportable continuation portfolio catastrophes. to the flow, rating generate macroeconomic year, agency of flow meaningful and regulatory XX% requirements. and to For environment the segment cash assume are including adjusted and current expectations of businesses, the growth we performance, to a the investment EBITDA, Cash subject our approximating businesses expect continue

As and the for generation, our first current we quarter. Keith we cash second performance as mentioned, in modest our the given exit buybacks to quarter resume expectations plan

accordingly. will environment monitor and continue We the to macroeconomic adjust

the first outlook. strong of And powerful in our full momentum in throughout quarter flow while macroeconomic uncertainty strength with year, the and our performance summary, likely the the us confidence In cash are will Assurant. believe and businesses year we generation differentiators for provides our continue

please open for operator, that, call with And the questions.

Instructions] [Operator is Tommy from McJoynt question Your KBW. you. from first Thank coming

Your line is open.

Tommy. Good morning,

taking morning, good here. my Hey, for Thanks questions guys.

the claims in regards to risk to numbers. how but partners of Could comments give partners ultimate the from risk detail lifestyle flow distinguished periods. hold earnings is of on past, where should cost kind so of And you’ve the So the in the claims the timing kind the the future some back Lifestyle numbers ultimately weigh the a swings? business, your unfavorable current Just the get the one, the and with bit in the those magnitude our ebb partners. between period these first see you on ultimately you standpoint, the more in on into where those goes of what could recovered we in of and

Yes.

sure to that to later Nothing add probably mobile will we can I I’ll the I’d maybe talk report Richard, couple and aside side. take from I’m an So to certainly, in. try which point the then about progress of in a things. really free to set perspective. feel on housing, there inflation

a around mobile-ly mobile So of terms lot in – stability the of business severity.

couple the So that’s on come quarters. in line fairly pressure nicely in some We the of ESC. last signaled

So the contract coverages, of partners our program adjusting business. the rate also taking in side We’ve putting actually been with retail but place. increases service rate

four continued, of is the so. pressure saw last we bit a quarters or I’d in quarter, over say, So little which three or first the

over moderate year. the to rest that expect We the of

‘XX. this benefit rest So of we’ve year. will earned the down premium through that the taken impact action And to that terms start that in will slow hopefully, over of

are severities costs. bit the but parts side, a little last on terms repair quarter, in in little we both seeing shops, auto certainly about talked this of we is elevated a Where and costs more labor the pressure

that our We’re come performance. definitely in seeing through

you risk As suggested, we a our rightly with of do lot partners. share

vast majority deals of either or the are profit So reinsured our shared.

the required, which work the keeping whether with that a is severity of risk. ratios of we’re time. our cases achieve recover to loss we with in try lot contractually that repricing partners, a just So case We over residual to clients, or will target amount through do often

than this around that already flow and as certain benefit we’ve see auto some the started do pressure auto started We the X ‘XX, we we in year probably in actions see of will than taking taking ago us more should ‘XX We to months expect results. the balance definitely over ‘XX. helpful through progress auto pricing the more in So actions. business, still in year

are seeing in good growth revenue. We

the offset pressure seeing of help also some We’re portfolio, investment of income helping terms to are those in and on severities. the

two just trading my maybe second comfort to seeing prior resume at different of plan? you previously from ahead much relative looking your just that’s where that the stock And you the month value? specifically of just what buyback of or is And Thanks. are attributed then assessment to intrinsic that is a gives assumingly question, how to

sit momentum housing a think we’ve of obviously cash company, strong a improving that we indicators. generation first inflation We we’ve today, flow housing I would had as strength we in the that Yes, And a seeing confidence seen I business, are the really the quarter fourth the quarter. that as repeated of lot fact our in positive cost here got the say in the business model.

improvement gave earlier deliver confidence think some about in against that our outlook bit fact our and stock and more want to we’re a ability feel of the we we the and as our do there forward. We’re a starting your the like little good buyback be terms activity seeing back that. with we to consistent into And is but as full capitalize point, inflation, year us and market us more to on is that move we get to for we opportunity think attractively valued,

sense. makes That Thank you.

Tommy. Thanks, Great.

Your from line next Mark question Truist from comes Hughes of the Securities.

open. Your is line

morning, Good Mark.

Could your but that has The number your Yes. little dipped held you. bit. little business a detail pretty on Good well, revenue morning. of renters you insurance Thank renters that? up give a here, has mix a shift? Is

things in I for you do out. the affinity would revenue offset channel, a things I look couple we’re on in and PMC average at the last steady, really growth PMC Yes, point, would to first Broadly, policy, couple are quarter, When with say seeing pretty growth some we’re by steady policy point pretty year your over seeing unpack revenue to the our our the of renters. sure. a per the of counts premium double-digit side. channel, softness

of we our flowed First an that adjustment back have the through in If quarter. flat the premium revenue all, would did line. that roughly out, be I

away take first to pretty So you renters, revenue drive last think performance if within pretty I an from business. there constant We year. compared underlying long-term something opportunity think quarter to stable, compared this to consistent QX is growth

did and The does through getting the NFIP, from government. flows in line. It second a flow claims a thing, we’re revenue that behalf contra paid we on fee quarter administer receive some see U.S. the That favorability not to ceding of effectively where the as through we commission.

the So certainly still The around line good normalizing what are and long-term the grow well-positioned, renters have ratios second my from saw in half real with to headline is results. loss steady perspective we believe in opportunity that business. we

How And then count, on by advertising, advertising kind Are do device the the of or your XG into marketing fee the logistical coming of still maybe of the your income seeing upgrade and driven see the what’s into assessment norm you around play over out your years? feeding same Connected Living, mobile tempo? amount that programs you the feeding operations.

Yes.

tends and strip So pretty I’d XXXX steady it’s mobile we in had respect customers of the around a the the services lot by to ecosystem, state, that volumes point, pressure ebb to certainly important quarter an and advertising little competitive flow out business. within in QX We your and to particularly from margin much important the around part within constant to impact through. first a of are a mix versus marketing driven still clients trading the have in device of consistent domestic the pretty very But used we tool saw pretty with the as the high XG. We an the activity, watermark say pretty you perspective, attract flowed provided, of volumes did mix, bit that of line, if clients see so to last service year. trade-in service and repair that QX

just strength The U.S. second protection of business, highlight thing is I particular would our device in the the in

postpaid all major at QX. up cable ads look two our mobile net for the major you with operate in we clients, customers and If top operators XX% one obviously of picked of operators,

So our clients growing. are

us will and afford services We’re time. more to obviously more in participating that add that value and growth, opportunity over do

Thank much. you very

Thank Great. you.

Piper Barnidge, John from coming Sandler. is question next Your

Your line open. is

Good morning, John.

‘XX? how with the the auto an that to is the you. Good take I’m morning. part recruitment ability do but know if number I so, could is opportunity. Appreciate can to quarters business, If correctly. Thank the it stick will of How of much of there will deficit large and understanding deficit, leak that recoup we a into

deficit The Yes. that large. isn’t

have action move to now action quarters obviously been couple in for and We’re taking we we make are a side right of sure the as taking that, that, forward.

little investment on And through next quarters, to I income. we the amount recapture think, good I the growth that your inception-to-date I We that But I an point, is an pressure will cases, ability if in see historical another about deficit strong to in we’re of loss where get seen may the of to to by actually expect we’ve a business. four cases, some point losses, losses a see and said, in basis. offset going Where definitely target As three deficits. the back. coming recover in new over ‘XX. your there or will achieve pressure actually some on of to recover think recovery historical ratios bit we not

we pricing work changes. regulatory pricing. really approvals on make require to are how feel good So, our positioned We closely with in don’t auto. about We clients

partnership clients it’s with our do just So, working to in really that.

for very at to We results to trying our we dealing normalize as find with this organization, clients XX-plus years have been and solutions are an time. good creative with over

of too, earlier I And that, side remarks we mean I is Keith investment as would add just getting the the are other that in income. John. mentioned

up, which we of the during you in are are seeing extended interest quarter. is investment income costs on but seeing the claims the contracts of auto come is increase service part just prices rates what inflationary environment, part also rising going So, have in up, the what and

the be on nearly pricing ago, Am round I a same coming inflation premium overall benefit July. in as another but increases, it won’t would will guard color. be degree Appreciate that the year should for profile? imagine then I thinking correct And in

And Xst, year, right. industry for labor. you the factor was materials it we logic April at look was And Yes, housing, inflation around look and if core where at last it if that’s XX%.

a at year, If little you X%. just over that it’s look this

So, more market. less rate, is positive on rates broader I it’s insured of the inflation think to business very normalize a manageable obviously, performance important trying perspective. it but an will modest Seeing and a terms for of of much of health adjustment which values, obviously average to keep in more have impact the consumer the premiums from the

I what feel So, are our data business. within a seeing from we really about It CoreLogic. look actually of lot good at we matches up closely the with that

feel are there. about So, positioned good how we

And a forth. to that, it, themselves aware the thing renew just am to in but year sure months the John, so of policies XX% the other takes add new to policies roll last as and probably you and come through I are number that and of

place. does increase that take into they X% when when the that policies some just comes come So, time, will as first in in, July renew the come

through averaging it’s course little get bit we So, as of a the year. the

point. Yes, great Great. it’s a

the written June, fully earn fully will XX% the it take months and AIVs book. will to there haven’t that from We through in XX through in then fully write

to So, of this growth over July. in what year, you in, the regardless goes rate of and factor are going significant course acceleration premium still feel

Appreciate the it. Thank you for answers.

Great.

you. Thank

from Your next Bank America. question of is Grace coming Carter,

open. is Your line

morning Good Grace.

Grace. morning Good

everyone. Hi

called I favorable full some pressure losses are we but any or performance out given versus quarter first sort the inflationary quarter just there the in and book, wondering, square guidance? the trying first timing So, housing I expectations, the seasonality you when that that across in cost the on the quarter items am all first consider claims said year need in to flat. above one-off but of quarter items I guidance second obviously, to came you was know in remains that

You Richard? want that, on to start

question I No, your think Yes. was well-phrased.

I and we goes a do seasonality think see bit some on, the QX claims typically, can in little see, lower. is as we year

is We that’s coming Obviously, will see there inflation what down. happens.

rates year So, claims We with or We on. that goes had that not due. have estate sales the happens numbers. as real can depends in interest investment gains did the help some any what cost the income good

area So, there is no as that one-offs in well.

We a might PIF the did goes good force. on, policies overall client see rolling – in have do as And in temper we counts off down in year – that we increase housing some goes the we that year a policies force. in mention

would say first nothing out, the than business more I So, to usual, in quarter call Grace. big

I you the certain had in think expect market growth from you. there on the you Thank of previously that reforms more or book. driving the hard including margins? growth any recent some mentioned states, levels Florida in all as Florida, impact forward going And on in housing the Okay. Is

Richard, you Yes. in. really reforms. Maybe I the early of and in will start on Florida certainly, that, would add can I say terms it’s

and I important think pricing long-term, to competitiveness it’s improve the going without that for to market really be for improve consumers question.

So to – and we are starting see through. lower coming AOBs

But future. how to I for will how see good about that’s do the time we work that feel take and will that emerges. So, through, positioned

would the in we I of market, grow year. certainly terms In Florida saw say last hard PIF count

amount largely in So, some from We the because saw the to we over of the year good reverse begin the of say that the new Grace but course it from bit, policies little had market. about XX,XXX new actually I first hard a hard would quarter. clients, market, a

Florida went a more So, potentially that’s our a PIF And marketplace. count in bit. the of I competitiveness sign into actually down little think

expecting a hard look the of the are in year. of that, not be forward rest to from as we big be Florida the So, we we market won’t but PIF driver monitoring

you. Thank

Brian line comes Meredith UBS. your next of from And from [Operator the Instructions] question

open. line Your is

Good morning Brian.

you. couple Good all are how Yes. doing? Thank a of morning, So, you. you questions for here

we when starting little bit better, Living? better, kind Europe little year-over-year bit get mobile The covered do in to first see a of some global get Japan start a to in start you could Connected growth one, devices described you to think

Yes, it’s a great question.

I talk just me will Japan. address let about quickly, So, and then Europe

that expense So, half I half the of the results question, took team with tough significant a quarter. in of and first back am had lot to the our improved first without last the really second but has actions due significantly and Europe, progress we XXXX. that made A year that pretty our of in the team pleased in a turnaround in quarter was

we expect and well-positioned And for U.S. us, Number that where so And Europe The that of has a continue. say been Japan, I really expect important – the for results the stable So, Japan, relatively of been the some a things really stable. that think would year. course market I has subscriber mobile over are we historically the declines. seen else it’s are that’s growing market couple important. have in strong there one, been in would Everywhere I say will business. I

I are and we well-positioned capabilities, around Japanese progress market. actually in market. have We made carriers of think in relationships local investing all a the talent, lot four that that’s with progress have now And incredibly in we technology.

Japan the So, models, more device quarter-over-quarter. bit last expensive actually had that. and which migrated two bigger that’s less down fall, lower is that it we when have things customers to in with attach more devices lower The driver, second in you older growth. we seen concern. on became have and nothing initial I in a XXXX of of a launched drive X-year affordable mainly product, devices subs rates And because And but we opportunities then are little exchange, the term. One, interesting to a expensive devices. protection And innovate thing, our little bit on and would to more slightly Because recently. more give creates definitely color foreign point attach see

forward. we of at where product, earlier positioned U.S. structure. rate of expect end that And to have contracts as through mobile be is monthly will we years those my time the contracts a couple Evergreen X those cancellation than book. that year, plus are gone a ending will actually that say, market. a an hitting what of the opposed going X-year Japan we we for in And then rolling continue Evergreen the in that as an is you on new product Japanese appropriate would After are to are I transition end was the seeing for grow many number the fully this be putting in the of and pay higher for moved years, and to we point, Japan their ads date some before to to years. some growth So,

about to to in And to the add we sub just Brian, – talked adding I I would always have clients. say, yes, just addition would services count,

the have the what’s then inside count have you that. sub services you So, and

to well. as and revenue the we go us more innovate client say going as provide into innovate continue on, would I So, per the we the client, to products services

macro I at conservative there this a stock stock Got the as question, probably you I end you flow I starting and the a curious, mean That’s you are cash I more my little point? capital But like second just given is at right? portfolio, little back investment your pretty understand capital more are modest, pointed then Why of going second why wouldn’t a out, And holding of cash advantage quarter. the company, excess you it. inexpensive already uncertainty, aggressively the appreciate look am the they got have buy valuation, given to but take at helpful. management. pretty flows really the expecting strong. to

on simple think play are certainly as as whether in thinking rates, a prudent. that to Interest in? free macro Richard, and going deploy company so, more add feel capital to we when are else. anything is we about able if and But prudent be more capital. there more that be with to trying trying information expect to get kick does are out. information to of be management just to we to be disciplined we is So, it’s I get we with our start a think recession, just to as I picture as just We think going trying work terms way to how the And Yes. the very

does the Outlook, also add can contemplate outlook you a recession?

things. don’t when When any look the say, at goes projecting hard of the a that take on. year we would decrease is example, I inflation sort in into of do landing into as account outlook, more take account, we are for we We there

charges, into the reinforce during take do up. We Keith quarter. the account claims we going example, the for up the account, had continue into do our claims we about to go the outlook costs we conversation when that service, year was that, in when for could So, take talking service on

Fed environment just aspects you. the to really the with about the industry on we look going was and what Keith things just and are I banking think I trying When take. and of increasing the be that are steps shaky terms inflation agree and In we macroeconomic you the and be on what’s you of be rates just saying at generally, trying is we is to cautious today prudent right capital, in on, the at going prudent. some look

are a financial – in we strong have position. a We

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from really being year of how okay play just But couple things do prudent see we to the out play if the the number next things about. it’s of share over out buybacks we towards of the see things end increasing us on So, the talked months. just

bit just Yes. how that. little question the we recession think and And on color maybe a more about

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driven regardless of recurring. the in-force emerges. unearned revenue. side, reserves have, on million were move through. And our are I that We you premium business billion will or earnings bulk then certainly over on because already then are that kept written. $XX.X monthly in-force demand that see we year block business, of roll this impacts static, And $XX an just would a how that’s lot pay of on mobile been consumer lot the XXXX, recurring and the which sitting expect auto of of in remind The on that’s the recessionary to So, are going we that by subscribers to is we economics Lifestyle we a that relatively around have don’t

really So, forward. projecting pressure good housing bad, right, perspective, good that obviously, in to if about those inflationary upside on on keeping from then we ESC watching close continues some auto and closely really maybe and ‘XX, eye two a point, and Richard’s and to inflationary feel things. trends, And perform well

you. Thank

you. Thank Great.

Richard concludes Keith over for remarks. back that hand to our Q&A. closing like to would And and I

great. Well,

Just quickly, your everyone. Appreciate thanks time.

commitments we the the and to had all always, our pleased are strong with on As we focused year quarter and on obviously of have for ‘XX. very start the delivering

and to out forward reconnecting the Sean second in look call our day. will for a August. in reach And other Have if questions. meantime, any have you quarter We to And great please again thanks Suzanne, everybody.

does This today’s your day. Please lines this at you. Thank conclude wonderful teleconference. and have time a disconnect