• Adjusted EBITDA: Increased by 15% year-to-date, excluding catastrophes.
• Adjusted Earnings Per Share (EPS): Grew by 21% year-to-date, excluding catastrophes.
• Global Housing Earnings: Increased by 34% year-to-date, excluding reportable catastrophes.
• Connected Living Adjusted EBITDA: Increased by 3% year-to-date, or 5% on a constant currency basis.
• Global Lifestyle Net Earned Premiums, Fees, and Other Income: Grew by $144 million or 7%.
• Global Housing Adjusted EBITDA (Q3): Increased by 20% to $229 million, excluding reportable catastrophes.
• Share Repurchases: $200 million year-to-date, with $138 million in Q3.
• Holding Company Liquidity: Ended Q3 with $636 million.
• Global Housing Policy Growth: Placement rate increased to 1.92%, a 12 basis point improvement since year-end.
• Global Lifestyle Adjusted EBITDA (Q3): Decreased by 4%.
• Global Auto Earnings: Down modestly year-over-year due to elevated losses within ancillary GAP products.
• Corporate Adjusted EBITDA Loss (Q3): $30 million, an increase of $4 million year-over-year.

• Warning! GuruFocus has detected 2 Warning Sign with OSTO:MVIR.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Assurant Inc (NYSE:AIZ) reported a 15% increase in adjusted EBITDA and a 21% growth in adjusted EPS for the first nine months of 2024, excluding catastrophes.
• The company has seen strong performance in its Global Housing segment, with earnings increasing by 34% year-to-date, excluding reportable catastrophes.
• Assurant Inc (NYSE:AIZ) has successfully launched new programs, such as the partnership with Chase Card Services, enhancing its card benefits business.
• The company has made significant investments in innovation, including a new device care center in Nashville, which supports its mobile business and enhances its global supply chain.
• Assurant Inc (NYSE:AIZ) has maintained a strong capital position, allowing for $300 million in share repurchases in 2024, demonstrating robust shareholder returns.

Negative Points

• The Global Automotive segment experienced elevated claims costs, particularly in the vehicle service contract business and GAP product, impacting overall earnings.
• Unfavorable foreign exchange rates negatively affected the Global Lifestyle segment, reducing its adjusted EBITDA by 4% in the third quarter.
• The company anticipates continued elevated losses in its GAP product, although these are expected to be short-term.
• Assurant Inc (NYSE:AIZ) has incurred significant investment expenses, approximately $21 million year-to-date, in new partnerships and programs within Connected Living.
• The corporate adjusted EBITDA loss increased by $4 million year-over-year, driven by higher third-party and employee-related expenses.

Q & A Highlights

Q: With the recent catastrophe losses in Global Housing, how are you approaching pricing for 2025, and what is the outlook for your reinsurance program? A: Keith Demmings, President and CEO, stated that they feel confident about their reinsurance program, having not touched the reinsurance tower this year, which should favorably impact reinsurance costs. Pricing for 2025 is expected to remain stable, considering losses, expenses, and reinsurance costs. Keith Meier, CFO, added that they are evaluating their reinsurance structure and expect positive impacts on rates due to not hitting the reinsurance tower this year.

Q: Can you provide a preview of what to expect in Global Lifestyle for 2025, considering new programs? A: Keith Meier, CFO, highlighted that they expect accelerated growth in Global Lifestyle, particularly in Connected Living, due to investments made in 2024. These investments will not continue into 2025, allowing revenue and EBITDA to flow from client launches and efficiencies. They also anticipate growth in Global Auto from rate increases and stabilizing inflation levels.

Q: How is the voluntary business performing, and what trends are you seeing? A: Keith Demmings, President and CEO, noted strong momentum in the voluntary business, with placement rates increasing due to growth in the underlying business and challenges in finding traditional voluntary coverage. The hard market is a significant driver of this growth.

Q: Regarding the GAP product, when do you expect the higher-than-expected losses to stabilize? A: Keith Meier, CFO, explained that the impact from GAP is shorter-term compared to vehicle service contracts. They have reduced risk participation significantly, and by 2025, they expect improvements in auto results due to actions taken to mitigate risk.

Q: Can you clarify the investment spend in Connected Living and its impact on future growth? A: Keith Demmings, President and CEO, clarified that the $21 million investment in 2024 was primarily for new client launches and automation in their device care center. These investments will not recur, allowing for revenue and EBITDA benefits. They anticipate additional investments in 2025 for new programs, which is seen as positive for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.