Assurant(US:AIZ)2020-02-12 16:35Financial Data and Key Metrics Changes - For the full year 2019, net operating income excluding reportable catastrophes increased by 11%, and earnings per share grew by 6% [7] - After adjusting for nonrecurring items, net operating income increased by 15%, and earnings per share grew by 10% [7] - The company returned $426 million to shareholders and raised its common stock dividend for the 15th consecutive year [9] Business Line Data and Key Metrics Changes - Global Lifestyle earnings increased by 37% to $409 million, driven by strong performance in Connected Living [11] - Global Automotive revenue grew by 14%, with a protected vehicle count increasing by 7% [20] - Global Housing net operating income for the quarter totaled $73 million, an increase of $85 million year-over-year, largely due to lower reportable catastrophes [23] - Global Preneed reported $16 million in net operating income, down slightly year-over-year due to lower real estate income and investment yields [26] Market Data and Key Metrics Changes - The company now protects over 53 million mobile subscribers, an increase of 15% year-over-year [11] - In Global Housing, rental policies grew to 2.2 million, up 10%, while revenue increased by 6% [14] - The placement rate within the Lender-placed business decreased to 1.58%, down 5 basis points year-over-year [24] Company Strategy and Development Direction - The company aims to return a total of $1.35 billion to shareholders by the end of 2021 [9] - Investments in emerging technologies, such as artificial intelligence, are expected to enhance customer experience and drive future growth [10] - The company plans to expand services in Connected Living, including new offerings like ID protection [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 14% growth in operating earnings per diluted share for 2020 [17] - The company anticipates that the Connected decade will create opportunities as consumer lifestyles increasingly intertwine with connected ecosystems [18] - Management acknowledged that 2020 earnings growth is expected to moderate from a record 2019 but remains optimistic about long-term growth [13] Other Important Information - The company has realized $100 million in gross expense savings since 2016 [10] - The company ended the year with $534 million in liquidity, exceeding its minimum target level [28] - A pending sale of interests in EK is expected to result in a net cash outflow of approximately $54 million [29] Q&A Session Summary Question: Details on investments in Global Lifestyle - Management noted that the increase in expenses is due to a mix shift towards services and fee income, which will continue into 2020 [32] Question: Sharing economy losses in Global Housing - Management clarified that losses were related to one client and actions have been taken to improve results moving forward [35] Question: Impact of lower interest rates on Global Automotive - Management indicated that lower interest rates will impact profitability but growth in the business will offset this [37] Question: Catastrophe reinsurance program costs - Management confirmed that there will be some uptick in rates but overall housing is expected to grow next year [40] Question: Guidance on Global Preneed - Management expects slow, steady growth in the Preneed segment, contributing cash flow for investment elsewhere [65] Question: Clarification on severance charges - Management stated that severance charges were exceptional and not expected to recur [73] Question: Pricing in Lender-placed business - Management indicated that rates are going up, reflecting the strong position of the business [78]