Assurant(US:AIZ)2025-08-06 13:02Financial Data and Key Metrics Changes - The company reported a strong second quarter with adjusted EBITDA increasing by 13% and adjusted earnings per share (EPS) growing by 17%, both excluding reportable catastrophes [18] - Year-to-date adjusted EBITDA increased by 14% and adjusted EPS rose by 16%, both excluding catastrophes [5][6] - The full year 2025 adjusted EPS growth expectation has been increased to approach 10%, driven by mid to high single-digit growth in adjusted EBITDA [6][26] Business Line Data and Key Metrics Changes - In Global Lifestyle, adjusted EBITDA growth accelerated, with a 6% increase compared to last year, or 7% on a constant currency basis [20] - Connected Living saw adjusted EBITDA increase by 9% or 11% on a constant currency basis, driven by strong subscriber growth [20] - Global Housing adjusted EBITDA was $244 million, an 18% increase excluding catastrophes, benefiting from favorable non-catastrophe loss experience and increased lender-placed policies [22][13] Market Data and Key Metrics Changes - Net written premiums in Global Automotive increased by 8% year-to-date, supported by rate increases and new business wins [11] - The homeowners business in Global Housing benefited from lower claims frequencies and increased lender-placed policies due to pressure in the voluntary insurance market [22][13] - The company added 2.4 million devices protected in Connected Living, bringing the total to 65 million subscribers [9] Company Strategy and Development Direction - The company is focused on leveraging technology and innovation to drive growth, including investments in AI to enhance customer experience and operational efficiency [24][25] - The diversified business model allows the company to perform consistently across various economic environments, differentiating it from the broader property and casualty industry [7] - The company aims to expand offerings and increase attachment rates with existing partners while entering attractive adjacent sectors through new product offerings [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the ninth consecutive year of profitable growth in 2025, supported by strong performance in Global Housing and continued growth in Global Lifestyle [7][26] - The company is monitoring macroeconomic conditions, including tariffs, inflation, and interest rates, which may impact growth [28] - Management highlighted the importance of maintaining balance and flexibility in capital allocation to support new business growth while returning excess capital to shareholders [29] Other Important Information - The company has completed $150 million in share repurchases so far this year and expects total repurchases for the year to be between $250 million to $300 million [19][29] - The company reported a holding company liquidity position of $518 million at quarter-end, providing flexibility for future growth [19] Q&A Session Summary Question: What is the trend for the overall benefit ratio in Global Lifestyle? - Management noted that the benefit ratio is around 23 to 24% and is expected to trend down as rates continue to earn through in Global Auto, with improvements in vehicle service contract loss experience [33][34] Question: What is driving the decline in investment income from other investments? - Management explained that the investment portfolio continues to perform well, with overall book yields up, but noted some lumpiness due to real estate transactions [35][36] Question: Can you quantify any pull forward in consumer activity regarding the number of devices and protected vehicles? - Management indicated that there was some pull forward in Connected Living, particularly in trade-ins, but the majority of growth was driven by device protection [42][44] Question: What opportunities exist for gaining more leverage in the housing segment? - Management highlighted that the expense ratio is running in the high 30s, with opportunities for leverage coming from growth in the lender-placed portfolio and technology investments [47][49] Question: What is the source of prior year development in Global Housing? - Management identified improvements in Florida due to regulatory changes, lower claim frequencies, and lower-than-expected inflation as key drivers [57] Question: What is the impact of tariffs observed so far? - Management reported limited impact from tariffs in the first half of the year and remains proactive in managing inflation and service efficiency [59] Question: How is the new business pipeline for lifestyle compared to previous years? - Management noted strong momentum in the new business pipeline, with a mix of new client wins and expansions in existing relationships, particularly in Connected Living [63][66]