Assurant(AIZ) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2024, the company achieved a 15% growth in adjusted EBITDA, reaching over $1.5 billion, and a 19% increase in adjusted earnings per share, exceeding$ 20, both excluding catastrophes [8][27] - The fourth quarter saw a 13% increase in adjusted EBITDA and earnings per share, both excluding catastrophes, driven primarily by Global Housing [29] Business Line Data and Key Metrics Changes - Global Lifestyle's Connected Living segment grew 9% excluding $25 million of investments and$ 12 million of unfavorable foreign exchange [28] - Global Auto experienced an 11% decline in results compared to the previous year, primarily due to lower real estate joint venture partnership income [36] - Global Housing's adjusted EBITDA was $225 million in the fourth quarter, with a 32% increase excluding catastrophes, benefiting from robust policy growth in homeowners [38][39] Market Data and Key Metrics Changes - The company reported a year-over-year increase of 16% in policies in force for the lender-placed homeowners business, driven by hard insurance markets [54] - The company has renewed significant client relationships, including major mobile carriers and financial institutions, enhancing its market position [17] Company Strategy and Development Direction - The company is focused on executing and scaling new partnerships and program launches, particularly in lifestyle and housing, with expectations of a one-year payback on investments made in 2024 [23] - The company aims to leverage its B2B2C business model to enhance customer experiences and drive growth through innovative solutions [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for Global Automotive, citing stabilization in earnings due to targeted actions [12] - The company anticipates modest growth in adjusted EBITDA and earnings per share for 2025, driven by strong underlying trends despite foreign exchange headwinds [41][43] Other Important Information - The company returned over$ 450 million to shareholders in 2024, including $300 million in share repurchases, and has increased its common stock dividend by 11% [31][32] - The company was added to the S&P High Yield Dividend Aristocrats Index, highlighting its strong capital returns [32] Q&A Session Summary Question: Can you talk about the Homeowners business and the placement rate? - Management noted a 16% year-over-year increase in policies in force, with strong growth driven by client growth and market conditions in California [54][55] Question: How do you see top-line growth in Global Lifestyle? - Management expressed excitement about growth in Connected Living, emphasizing the importance of securing mobile clients and optimizing customer experience [58][60] Question: Are you seeing elevated losses in Global Auto? - Management indicated that losses have stabilized, with expectations for growth in 2025 [74][76] Question: What is the outlook for reinsurance renewal costs? - Management expects to maintain a consistent program structure with favorable pricing due to strong relationships with reinsurers [103][106] Question: How do tariffs impact input costs? - Management has not included tariffs in their guidance due to uncertainty but is monitoring potential impacts on consumer demand and input costs [109][111] Question: What is the outlook for the combined ratio in the Housing segment? - Management expects a mid-80s combined ratio for 2025, even with anticipated losses from California wildfires [91][125] Question: How can the company be better appreciated in the market? - Management emphasized the strength and resilience of the housing business and the need to communicate its unique value proposition more effectively [128][130]