Molly Knoell

Molly Knoell from KBW asked for color on the softening rate environment, increased carrier capacity, and associated tailwinds, specifically inquiring if California remains an exception with a hard market. She also asked about the impact of declining public broker multiples on private broker valuations within TWFG's M&A pipeline.

Answer

Gordy Bunch, Founder, Chairman, and CEO of TWFG, confirmed broad auto softening, including California, but noted property pricing persistence in cat-exposed areas like California (wildfire) and Colorado. He observed price deceleration in Texas property, lower hurricane reinsurance pricing, and carriers entering growth mode with relaxed underwriting. Regarding M&A, Mr. Bunch explained that private markets haven't fully caught up to public market corrections, causing some larger sellers to pause. He differentiated between smaller transactions (less correlated to public markets) and larger ones (more sensitive to public market valuations), suggesting potential softening for the latter.

Molly Knoell, on behalf of Tommy McJoynt, asked for insights into the softening rate environment, increased carrier capacity, and associated tailwinds, specifically inquiring if California remains an exception with its hard market. She also followed up on the M&A pipeline, asking if the decline in public broker multiples is translating to a decline in private broker prices and the potential significance of this trend.

Answer

Gordy Bunch, Founder, Chairman, and CEO of TWFG, confirmed broad auto insurance softening, including moderation in California, but noted property pricing persists in cat-exposed areas like wildfire-prone California and Colorado. He mentioned Texas property deceleration and reduced hurricane cat reinsurance pricing. Mr. Bunch stated that carriers are now in growth mode with relaxed underwriting and incentives. Regarding M&A, he explained that private markets haven't fully caught up to the public market's acute sell-off, suggesting larger transactions might see softening valuations, while smaller acquisitions, already lower valued, are less likely to experience significant shifts.

Molly Knoell asked about Assurant's role and opportunities in the iPhone upgrade cycle, specifically concerning trade-in, upgrades, and covered device counts, and inquired about major investment projects planned for next year and their impact on margin expansion.

Answer

CFO Keith Meyer noted a robust iPhone upgrade cycle contributing to trade-in business, with protection programs providing stability as customers roll over coverage to new devices. CEO Keith Demmings added that Assurant's clients gained 81% of postpaid net adds, benefiting protection and trade-in. Demmings also signaled a new program in an adjacent business for early next year, which will create a long-term growth vector and result in a higher corporate investment in 2026, with some initial investments already impacting the 2025 corporate loss outlook.

Molly Knoell inquired about Assurant's role and opportunities in the iPhone upgrade cycle, specifically regarding trade-in, upgrades, and covered device counts, and any major investment projects planned for next year impacting margin expansion.

Answer

Keith Meier, CFO, noted a robust iPhone cycle contributing to trade-in business, with protection programs providing stability as customers roll over coverage. Keith Demmings, President and CEO, highlighted that their clients gained 81% of postpaid net adds, benefiting Assurant from strong promotional activity and device demand. Demmings also signaled a new program launch in an adjacent business early next year, which will be a long-term growth vector and lead to higher corporate investments in 2026, as partially reflected in the Q3 corporate loss outlook.