Assurant(US:AIZ)2024-02-07 17:45Financial Data and Key Metrics Changes - Adjusted EBITDA grew 21% to nearly $1.4 billion and adjusted EPS increased by 26%, both excluding reportable catastrophes [6][19] - For Q4, adjusted EBITDA grew 29% to $382 million and adjusted EPS increased by 38% to $4.90, both excluding reportable catastrophes [19] Business Line Data and Key Metrics Changes - Global Lifestyle earnings were relatively flat on a constant currency basis, with connected living growing 3% in earnings [10] - Global Lifestyle adjusted EBITDA grew 12% to $205 million in Q4, led by a 23% increase in connected living [20] - Global Housing adjusted EBITDA was $186 million in Q4, which included $22 million of reportable catastrophes; excluding these, adjusted EBITDA increased by nearly 50% to $208 million [25] Market Data and Key Metrics Changes - In the US, high single-digit EBITDA growth was driven by mobile protection programs [11] - In Europe, earnings stabilized despite ongoing macroeconomic challenges [12] - In Asia-Pacific, a new partnership with Telstra was announced, enhancing market presence [12] Company Strategy and Development Direction - The company is focused on strengthening its business portfolio and driving operational excellence while accelerating innovation [9] - Active portfolio management has led to exiting non-core businesses, simplifying the portfolio [9] - Technology innovation is seen as a key driver for future growth and value creation [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued profitable growth in 2024, albeit at a lower rate than 2023 [15] - The company expects adjusted EBITDA growth in the mid-single digits for 2024, with similar growth rates for Global Lifestyle and Global Housing [16] - Management highlighted the importance of monitoring macroeconomic conditions and foreign exchange impacts on growth [24] Other Important Information - The company returned over $350 million to shareholders in 2023, including $200 million in share repurchases [7] - The company received multiple recognitions for its commitment to innovation and sustainability in 2023 [8] Q&A Session Summary Question: What is the expected placement rate for the Bank of America deal? - The placement rate for the Bank of America block of business is expected to be lower than the current average of 1.8% due to the nature of the loans [36][37] Question: What drove the favorable reserve development in the homeowners business? - The positive reserve development was primarily due to settling inflationary estimates rather than weather-related factors [38][39] Question: What contributed to the substantial increase in fee income in Lifestyle? - The increase in fee income was mainly driven by higher trade-in volumes and the addition of new programs [42][43] Question: Can you discuss the geography of the expense reduction program? - The expense efficiencies are a blend of employee actions and facility efficiencies, with a significant reduction in the expense ratio from 46% to about 40% [44][46] Question: How does the company plan to recoup elevated auto input costs? - The company has implemented significant rate adjustments over the past 18 months and expects improvement in 2024 [47][49] Question: What are the expectations for investment income in 2024? - Investment income is expected to be relatively flat to slightly up, with a current portfolio book yield of just under 5% [53][54] Question: How is the situation in Japan expected to evolve? - Japan is expected to remain under pressure in 2024, but new contracts and structures are anticipated to moderate this pressure [56][58]