Assurant (AIZ) 8 May 242024 Q1 Earnings call transcript

Welcome to Assurant's First Quarter 2024 Conference Call and Webcast. [Operator Instructions]

It is now my pleasure to turn the floor over to Sean Moshier, Vice President of Investor Relations.

You may begin.

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

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

results supplement our market is the a our The a announcing quarter we Yesterday, webcast on for corresponding assurant.com. after first financial closed, the and website for participants. available news slide issued release presentation our are release on XXXX. Also

are Some of made today forward-looking. the statements

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

in factors financial our Additional these can information and found release, supplement in regarding website the our presentation as SEC earnings on reports. be well as

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

most start these reconciliation supporting the to details materials. We'll on call of For I into over with will now X, Keith Q&A. measures, news please the a turn more GAAP to the today's before remarks refer the measures moving Demmings. and and call release comparable

Thanks, good everyone. morning, Sean, and

Our Assurant the to from results strength position XXXX, which first to reflecting of represent a strong quarter operate. continues start

to year-over-year EBITDA grew adjusted XX% EPS grew both million, Adjusted XX% excluding $XXX and year-over-year, catastrophes. reportable

quarter Global Lifestyle. results continued strength as in growth of by first were Our the segment driven as our Global well Housing

strong cash and continue drive operational generation to has financial flow to ability supported solid and Our capital performance a position. excellence

financial us our and deliver results. business moment reiterate unique to Before consistently business differentiated I'd a take led has how reviewing segments, the highlights like across to model our to

benefit where integration and BXBXC deep base. with both variety Assurant of holds a scale positions market attractive from specialized client our markets leadership we across

where foundational ultimate in as have we ongoing our of and high-return These laying have success have such most Our by one thousands This world's people. capabilities across across driver globe agile artificial of in initiatives from ethical previously of innovation, the our our recognized protecting executing is supported In continued our digital Operating end Ethisphere our leadership to to companies have in for flexible Assurant businesses announced for and the testament March, well our partnerships, businesses, and targeted including intelligence for restructuring new plan day. clients' the values consumers. actions, partners who savings first our allowed us the enhanced Cost as as was competitive be positions. technology ethically and groundwork to is reinvestment employees growth. The supported our and our is brands XXXX. Assurant as a recognition own. every champion advantages

to advantages compared long-term versus double-digit cats, our adjusted outperformance earnings growth results excluding led creation. evidenced the We've and the by Composite broader the XXXX, to including has index. XXXX P&C as our growth outperforming Collectively, S&P P&C profitable to index. Since long-term continued broader unique drive and market, value P&C Assurant shareholder have delivered

EBITDA constant or which currency full basis. was quarter. our Connected by Growth X% is in of our X% XXXX. turning a like delivered increase highlights Lifestyle Now quarter the the of a double-digit growth Living year on line business adjusted expectation. $XXX with delivered our across led segments. in This adjusted share of quarter, to to I'd first EBITDA first in million Which Global reflects business, the year-over-year growth

several launch new new for mobile completed announced carrier, we're important investments in recently launches continuing Australia's including initial make growth, of partnerships, such the where largest as Telstra, support offerings. to we To several

currently We trade-in offering and upgrade base. are to Telstra's postpaid protection, subscriber

demonstrating includes strength relationship. programs. the of extension The Additionally, with we partnership recently relationship our completed expanded mobile X a our of launch Mobile, the multiyear new of Spectrum

data Plus no want. included now new of they upgrade benefit, programs, Mobile to whenever X new in phones customers first anytime upgrade is Unlimited to which consumers extra their at the the plan existing and cost allows the The Spectrum

the new and fulfillment These Spectrum which consumers. our supported capabilities. program repair Mobile the partnership innovative needs ongoing claims new second are reflect management and The first deliver to result is offerings Spectrum our replacement market device mobile solutions is of by plan, dynamic of our protection offers and commitment to with meet and customers end the long-standing

enhanced During the capabilities. quarter, global we our also

in repair investments repair in in globally example, iSmash, we offering express making example offerings new prime tech For and locations. existing Kingdom, smartphones, is XX walk-in leading scales independent laptops acquisition This United with retail enhance win tablets, and business the of we're brand repair nearly a services acquired a Europe, for further our the relationships. drop to

industry, automotive. over inflation also additional strengthening rate months, the Moving claims increases XX in the persistent elevated and actions taken past repair vehicle upon global costs. results process. continued address impacts first to while implementing parts inflation, Similar to the and adjudication take reflected build others We've quarter quarter enhancing including to that those labor our first to to in

to We For be in XXXX, are disciplined earnings long-term prospects growth business. the offset remain management to our auto we confident expect efforts continued expense auto flat. by of and growth Investment income expected be claims inflation.

growth the earnings timing years, trends. Over the next to on business actions expect of market with provide several and a rate the dependent for broader we tailwind pace

outperformance. first Global discuss the Global in quarter first nearly grew up Housing reportable our quarter, significantly earnings let's which cats. Now XX%, Housing, drove excluding

over Following financial financial an is business of P&C highly X have broader performance the attractive performance in led first the the to housing's our Housing's model, with competitive strong returns. compelling power past extraordinary delivering XXXX, market. which advantages a reinforces unique versus its differentiated return years, quarter shift

in distinct Global several advantages have Housing. We

core have in we market housing strong First, businesses. our positions

largest banks to quarter. of Lender-Placed, have strong the we onboard mortgage our servicers, began new relationships the first with including U.S. in in America, Specifically and Bank which we client,

inflation adjust course and state the costs filings. product Second, in to our building Lender-Placed to guard annual and months able designed quickly rate past normal over built-in to the business, rate XX adequacy as materials been seen XX we've feature achieve through with

scale from Third, leverage, created continue operational expense our focus and will to efficiencies going on we forward. meaningful have which benefit

of a provides hedge in housing countercyclical business Lender-Placed weakness. our potential market the event Lastly, broader

While not be policy prior through would expect increases the downturn. expect placement market significant we a to if cyclical as recessions, goes as still we housing in tailwinds

growth within other and rental capital-light and our to management business, operate renters our The market we in property catastrophe innovate positioned business limited Similarly, market. exposure profile remains with as for a channels. and our company attractive with the and secular tailwinds capitalize continue we leader has across an on well partners long-term as affinity financial

driven We've continued to written in enterprise-wide our our channel. increased we customer quarter, over by capabilities the PMC growth During create gross premiums strong improve and our leverage for to clients. value XX%, by experience

from Connected industry. a to Assurant leveraged example, first for launch multifamily For help the us troubleshooting residents support technical services, our we in the which Tech technical Living to capabilities channel, housing is Pro premium access providing

Turning to enterprise our outlook.

our For anticipate higher our XXXX XXXX, expect strong which global enterprise lead quarter outlook. the Enterprise to of EBITDA mid-single first toward included mid-single-digit adjusted by results Global growth. to of $XX cats. reserve performance grow housing million Housing, Based are we continue now within favorable end on development, We will our the trending period digits, excluding prior

Connected which by remains growth Global partially investments driven In in offset our is full Lifestyle, unchanged, Living year long-term incremental to by outlook growth. support

as including foreign as well conditions, macroeconomic exchange global levels monitor interest investments. rate to inflation, and new business continue We

adjusted now to expense per well share, higher growth, Looking we at Global earnings Housing. approximate earnings lower reflecting growth expect as expected EBITDA as EPS adjusted within depreciation

further first in results detail. turn review to and XXXX it over outlook our now I'll quarter to Keith Meier

of we deep as driving and this, long-term on Keith, our and their Thanks, needs, well the first good we everyone. decisive opportunities to value disciplined focus management enable shareholder achieve partners with and thoughtful long-term consumers' outperform. executing performance, To morning, continue actions grow quarter global end are committed as to to With capital understanding on growth. to a to strong continue and our identified

the Now by and year-end. let's the first From the of generated grew holding dividends EPS first capital up review to EBITDA adjusted with increased both million million million excluding perspective, $XXX we the XX% In our quarter, $X.XX, quarter, of $XXX first quarter results. to company million details catastrophes. XX% $XXX reportable ending $XXX quarter in a at adjusted from segment liquidity, of

position capital the return quarter, to $XX million repurchases. $XX shareholders of us in million to strong share including allowed Our

we repurchased addition, In April X. X million $XX May and of shares between

segments. business our to Turning

Lifestyle. with Global Let's begin

partially For was the growth grew X% $XXX EBITDA or adjusted by driven lower Connected Automotive. was by in Year-over-year Living, to results quarter, in offset on X% the million which currency basis. U.S., performance a particularly in Global strong constant

claim Living resulting new primarily contracts, from earnings inflation. improvements investment Connected income. U.S. capabilities XX% the promotional were client offset rate and in In including offset by or lower and from the impacts last by U.S. In decline growth protection contributions experience taken offset XX within programs margins a Connected results from actions carrier investments also were partially months partially Results momentum higher driven from increased U.S. over severities service higher were partnerships. $XX as in loss new higher programs our volumes, extended benefited Living, million, mobile and in by flat from Trade-in modest in to continued activity.

million results Living benefit favorable service in a contract Japan. Connected $X onetime included International extended client

currency the the item, stable XXXX. constant end international from were with results of this consistent trends a Excluding on basis,

growth in by remains a point adjusted exchange Foreign quarter. Lifestyle's EBITDA headwind, impacting X the percentage

higher XX% accelerated in by Elevated well declined investment costs over continue products. motor Price were quarter adjusted partially claims felt impacts to indicated auto as first nearly costs throughout impacts industry the inflation of the where rose the Index, higher persistent and Automotive, be by offset million, The driven the Consumer year-over-year as quarter. income. vehicle due of $X as X% Global In normalization inflation select costs claims ancillary EBITDA repair March or to

to from X% new other programs and from and increased contributions income. programs. earned net Connected Automotive vehicle $XXX was other Turning premiums X%, or by was Living prior and and sales Lifestyle contracts. mobile which service protection premiums, grew Global primarily by period XX%, million driven North benefiting net fees trade-in of income Growth American from earned fees

expect Connected year EBITDA For driven Global full XXXX, grow, by adjusted continue Living. we to Lifestyle's to

We be led Connected in U.S. continued business. our growth by expansion to the Living expect of

EBITDA depending Auto, improvement expected higher rate we adjusted pace expect actions time, impacts. over to pressure on past continued from claims months XX Global offset inflation. Prospective and timing loss In over are by flat as income drive to the of investment be the inflation taken is

in be to a term. will strengthening long the clients temper will Investments related over the business our but in and of driver lifestyle programs new growth critical XXXX,

may continue growth. We rates, broader the impact and to exchange which interest pace monitor macroeconomic conditions impacts, and timing foreign of

impacted seasonally and Living. lower trend benefit onetime enter mobile we sequential by we client volumes, the quarter, absence in to be EBITDA our expect trading the Connected As adjusted of the both second

to Moving Global Housing.

of million catastrophes. $XX quarter adjusted included reportable EBITDA $XXX First was million, which

reportable adjusted driven half Excluding million. XX% to and Over $XX higher ratios loss $XXX moderating trends increased premiums. of by cats, million non-cat increase EBITDA the or average claims from improving was by

A of to This reserve $XX improvement reserve $X related prior the to favorable a reduction million of was reduction $XX claims compared current year-over-year quarter in the development. the net a comprised XXXX. in of reserve was first impact period million portion million to a quarter

growth increase The adjusted an EBITDA mainly by line policies, the and in homeowners in remainder income. higher increase the driven investment reinsurance costs was of in-force lower catastrophe and of continued number top

and renters management property earnings in channel. growth our other, from For increased

outperformance. critical be as continues are a investments customer experience. As enabling role housing technology in superior and expense a throughout a has leverage to This our our differentiator played Keith strong innovations mentioned,

Given homeowners the catastrophe driven overall adjusted loss to reinsurance enterprise top strong experience, and Housing's lead quarter growth We growth. EBITDA expect our favorable anticipate XXXX in full performance, excluding continued be first growth, by non-cat lower cats, line momentum we Global will costs. year

expected of client Bank the onboarding impacted expected lender-placed addition another business the America from well Over ongoing portfolio portfolios, party. of movements. XXXX, course our of client multiple by as includes as a This of is offboarding client impacts the to including to be sale the of

quarter-to-quarter. and tracked Given the rate unique from composition loans of to impact expected movements placement each are portfolio, these

in overall driver of policies key grow is However, to for XXXX. a earnings force, expected

quarter, second year first development. following: the keep quarter As first, we mind had prior the we to of $XX million in please turn reserve

related Second, XXXX true-ups. to costs in we reinsurance well following quarter, a program as expect the which placement normalized were transition as first favorable catastrophe to impacted timing differences exposure costs the single lower by

And quarterly quarter, second Beginning which million lastly, above period loss increase from in the quarter. $XX the tends for modestly non-cat million, experience. $XX reinsurance second in expect quarter an an the be to is to first elevated premiums be the we

a which transitioned Next, single April to date. the catastrophe I placement our now X wanted placement to of XXXX reinsurance summarize program has

increased for at comparison estimated catastrophe our a million, total with program in attractive $XXX realized coverage to We be to reduction this year's terms, the savings premiums are million in XXXX approximately are pleased XXXX. including cost reinsurance $XXX placement. in

increased with As aligning previously $XXX maximum retention million, PML. probable to communicated, our or per event a loss X-inX-year

$X.X program a was approximately of main X-in-XXX-year provide U.S. policyholders X-in-XXX-year the its limit in year's the placement XX-plus and with relationships increase excess the billion will Our reinsurers. our in coverage by PML. Assurant rated against nearly our PML of to an protecting strength diversified storm, loss this aligned above of and supported Overall, retention, highly XXXX

Moving to corporate.

a million, the adjusted mainly EBITDA growth adjusted XXXX corporate with consistent due now $X approximate enterprise quarter loss first initiatives. increase, million, million to The XXXX. year-over-year was expect loss $XX to $XXX EBITDA We higher

first $XXX quarter, Turning management. generated in to dividends. significant capital the capital in segment million upstreaming We deployable

businesses and conversion segment regulatory our the generate company approximate X/X are expected reportable and including EBITDA, environment current requirements. portfolio holding adjusted to to expectations the investment macroeconomic is of of the flow businesses, assume a to expect we flow. XXXX, the to performance agency continue meaningful rating of and Cash catastrophes. growth Cash continuation cash to For subject

business look on we to shareholders. business in on range focused activity. increasingly conditions, first which forward of our to will new our a remainder we balance confident million maintaining and we continue financial market objectives. growth of to repurchase our expect M&A model million, cat the year, we share to the As quarter in to be and XXXX to the perspective, capital flexibility continue From results, $XXX opportunities, and the are achieving strength be return to $XXX of given depend differentiated Through and strategic support

growth necessary Our resources the that, value strong support questions. capital and to position operator, call long for the business with over provides open with please the term. shareholder us And

from comes with question line first Our Mark Instructions] of Truist Hughes [Operator the Securities.

but look line EBITDA and where top to super devices your How strong were long strong. stable, growth, growth. continue steady. line In When push XX%, you're your relatively top Living, to trade-ins device Connected covered stable, relatively in it's you covered be the at environment profitability count, you seem an can getting

question. it's No, Yes. great a

Connected so years year, X I had the really but the for Living probably largely with pleased Connected double-digit growth how Living certainly of by And this think Connected U.S. we're business started talked driven about we've in we've strength overall. past, the consistently. in Living the or pretty

up results, at look double Connected high I first As domestic again last digits, year. was the single quarter Living

performing the little the positioned postpaid in are A well of business, I think So did we We term. the U.S. feel well. and the incredibly in about, covered drives been that prepaid that softness which which positioned. economics, see clients bit market. as lion's count. A But our have a well of stable in really side share margins of bit incredibly our Japan, is quite bit talked although the of feel devices little in well little bulk we've longer

the in what When like look updated? for around? it does this homeowners guard And business. get go Your inflation does that

updated It very adjustment, will a X. modest get July X%. roughly will It be Yes.

north last to then the I year little in mid-teens. of year was the think was before, X%, a it low and

So we fairly normalized I forward level, look year. think, this as

a QX? then weather experience judge weather in you was How impact from sounds claims was benefiting this trends. And good rates, would much think loss the a -- you're non-cat quarter? there like housing of of better you It how do in the

Yes.

that would loss if year in out I'd in you line expect million ratio with what was the the with the for factor. full think XX%. ratio which loss our we just I expectations, development, under non-cat around line we that set quarter, was relatively called $XX in at the aside say

And tremendous you obviously, So levels And a also would Keith, drive the business we've of scale, normalized automation. we've amount then made but both certainly, to did add your come leverage from of efforts operating as the seen with inflation terms to anything? in in the lot to severity down. has say expenses, continue then impact I to want that point, a of but rate,

sure. Yes,

mentioned I loss well, we expense think to non-cat about that, ratio XX%. XX%, think of combined about have Keith a ratio, good is is XX% as Mark, way an

add in talk cat we you're XXs you in probably high coverage, about that that some on basis. a If to normal mid-

it pretty maybe better think line, I that little than in well was bit So a that.

with question Meredith comes line Our from with the Brian next UBS.

A couple of questions here.

forward? to quarter. I'm First, maybe expenses curious, going this see of largely that and Telstra. were Your Or complete I onboarding just expenses was for expecting we of more this Bank going Are quite America are below where those at point? some

Yes.

quarter. ramping -- last we've So the been on America, Bank them up of over this

tracked. and the being should of then coming second And third be the so online. those up running end quarter, loans by are and Bank now America. be on policies then the should we quarter, And those fully in third And of

we outlook I Bank America for should So think the as year. go of the be improving through

we program Telstra, with rest of then the month. And this -- part main earlier launched of program the just the the

still of went there. but the part terms in getting we in main place, launched more come to Telstra through good for we're so a lot really There's the of of And investment Telstra, program. a

just ongoing the Brian, of Maybe as a in little of add well, question color about investments. bit terms

global Living investments incremental quarter, in the size about in million long-term if the probably $X I'm growth So in quarter. of I'd first thinking Connected

X% We continue think impact growth for to full to that the to be will X% the year. overall

move the trend in with some urgency that pace year. talked just about clients as just real prospects but on number forward. continuing disclose then which solutions the on in do the that and that And a what working actively time, we're of later of question a we publicly, at think we've and clients more about we'll deploy we it's line So of not

said clients it related to contracts anything doing my with Auto. become the about this couple you of question I inflationary that forward? maybe is know issues. kind here that there were of I'm maybe going a it's pervasive. second was Global of aspects some wondering if And really historically, more And to Great. thinking you're mitigate

Yes.

So question, part it's it's unchanged. your first of that --

we've that clients short-term then based P&L it the recover share XXX%, the deal with So that to and go losses over rate on in on look our pressure their contractually if monitoring working creates and been adjustments. structures, we arrangements, profit type

good costs around So do than real I -- about our seeing. with We in working us which obviously, taken of quarter. the was. in severity it elevation the bit in are do is terms think opportunity the a pervasive a number in labor feel long-term increases But over well. I it last little Clients to adjustments more isn't took the auto. of more incredibly XX, XX rate We'll We've everyone and first continue auto there's parts quarter. the of sector, rate second in more months. feel

talk So P&L about really, over term. long this stability business at better it's about enter 'XX. the relative spot We 'XX auto to and then progressively in we right in getting the getting the as

Instructions] the have line with McJoynt KBW. Tommy from [Operator comes of We question, another

about broader in portfolio? should of the would portfolio The of terms just what on be anything also of about anything values rate different board that's considering we different your any changing additions insured and the other the comes first Bank deletions. talk tracked home that one, should you kind the America or there perhaps of in or average we nature can appreciation, or delinquencies as price expect that placement service and economy in tracking mortgage Is see client than the

Yes.

on I of that in go remarks the think our changes portfolio. Bank America, various talked got opening So we've mentioned about. where we've Obviously, within I

by of that We was another clients. client have one another added our

positive. was a that So

party. have was also client acquired by another that third We a

loans will those be coming off. So

little there's a and bit going downs. So of I to be think ups

rates lower have than the those of Some average. placement

higher the the between have movements But of about counts of quarters? Some be we rates. year, when them policy of net overall, you and the within should in now those you our placement think kind when end up

the a And today. than bounce of end point, as counts may and relatively the bit. should to at we where rate year, think a the it stable policy But placement I little sit in higher we year Yes. be around Tommy, exit Keith's

good it. or level from promotional through factor of Got and year? can Okay. as you activity about the then we That's could And color. Living carriers? that bottom switching just proceed talk Connected trade-in for programs not whether over, swing current and be the line you the expectations perhaps think in a And the your

Yes.

think maintaining margins done job overall of a I we've trade-in good side in business. the really the

serviced think as we clients about well. quite up were You and with as making additional some signaled, that margins the devices first of volume But stable, are with new we're obviously, quarter, down.

I was think point, how about feel So the relatively the good in we're activity positioned. to quarter. we really promotional And light your

within a I et higher driving were tier quite cetera, other on but market, focused customers and rate in financially. and think things clients still huge their we plans moving upgrades priority performed portfolios well premium to the wasn't

well So positioned. I we're think

And with activity particularly positioned to here hard we're beyond. dynamic well that the operators obviously, environment, the And should is the second and predict. quarter pick in big X mobile up

predict to well positioned. think hard it's really I So we Tommy, feel now, but right

Okay. I it think then last And missed the Got have one, remarks. during may I it.

is -- then think to I event costs changes that you decreased. first mention you I you I retention numbers? catch if did happening per the And that? like what secondly, to well, those repeat didn't the were say could there off, reinsurance heard

Yes, sure.

all, I It's placement. with pleased guess, first of the single the really outcome moving really the of So simplified to well, we're program.

the received was the think cost that reinsurers. it the of by well I year-over-year. We mentioned down was program

expecting versus we're it So last million year. this approximately from $XXX year to million be $XXX

per overall, loss. at retention maximum X-in-X our And event probable stayed

top up from was million. $X.XX of million. end we The So actually million from $XXX the program, $X.X to increased that

event. X-in-XXX-year So moving it from

and good of lot protection lower a cost. So

program of book I And terms rates, that our just then think rates reflection the overall move the placement and think, in XX/XX favorable a think I very given general, online of favorable the in the were date us. And overall, of a quality moving performance. the market. also, was reinsurance I was, our to So for the

further time. are at no this more There questions

And reach questions. thanks, Well, call. you. have look a the Have Thank we'll please you IR the quarter team and forward next any to everybody, out if to day. Wonderful. great

teleconference. your This Please this wonderful day. lines and disconnect have does today's at time, a conclude