Business Description
Assurant, Inc. is a leading global business services company that operates through two main segments: Global Lifestyle and Global Housing. The company provides a range of solutions including mobile device services, extended service contracts, and insurance products for consumer electronics, appliances, and vehicles . Additionally, Assurant offers various insurance products for homeowners, renters, and manufactured housing . The Global Lifestyle segment is the larger contributor to Assurant's revenue compared to the Global Housing segment .
- Global Lifestyle - Offers mobile device solutions, extended service contracts, and related services for consumer electronics and appliances, as well as credit and other insurance products.
- Connected Living - Provides mobile device solutions and extended service contracts for consumer electronics and appliances.
- Global Automotive - Offers vehicle protection services and other related services.
- Global Housing - Provides lender-placed homeowners, manufactured housing, and flood insurance, as well as voluntary manufactured housing, condominium, and homeowners insurance, along with renters insurance and other products.
- Homeowners Insurance - Offers insurance products for homeowners, including lender-placed and voluntary options.
- Renters and Other Products - Provides renters insurance and other related insurance products.
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Q3 2024 Summary
What went well
- Assurant (AIZ) is experiencing strong growth in their Global Housing business, with placement rates up 6 basis points sequentially and 18 basis points year-over-year, driven by onboarding a major new client and growth within existing clients, benefiting from homeowners finding it more challenging to secure traditional voluntary coverage .
- AIZ is leveraging successful strategies from their Global Housing segment to improve profitability in their Global Auto business, having implemented 16 rate changes and redesigned products to be more effective for consumers, expected to create longer-term tailwinds for profitability .
- AIZ is experiencing steady growth in their mobile device protection business, driven by new products with major cable partners generating significant momentum, and expansion in the Asia Pacific region, contributing to substantial subscriber growth .
What went wrong
- Challenges in the Global Auto business could impact profitability. The company acknowledges that elevated losses in the Auto segment require longer-term efforts to return to profitability, unlike the Housing segment which has annual policies. This suggests that the Global Auto business may continue to face profitability pressures in the near term.
- Exposure to catastrophe losses in the Global Housing segment. Despite not having touched the reinsurance tower, the company admits that 2024 has been an active season with multiple catastrophes, which could potentially impact future reinsurance costs and pricing. Stability in pricing heading into 2025 may not fully offset the risks of increased catastrophe events.
- Ongoing investment spending may pressure margins. The company has invested $21 million year-to-date in Connected Living, with plans for additional new investments next year. While these investments are aimed at growth, they represent continued expenses that may affect short-term profitability.
Q&A Summary
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Global Lifestyle 2025 Outlook
Q: What can we expect for Global Lifestyle in 2025?
A: Management expects accelerated growth in Global Lifestyle in 2025, particularly in Connected Living, as the 2024 investments will transition to generating revenue and EBITDA from new client launches and efficiencies. The auto segment is also anticipated to grow, benefiting from higher earnings from rate increases and stabilizing inflation levels. There will be some additional incremental investments in 2025 for new client programs, with details to come in February. ( ) -
Auto Profitability Improvement
Q: Will auto profitability improve with rate increases?
A: Management anticipates that auto profitability will improve as the 16 total rate changes they've implemented start earning through over the next few years, providing a tailwind. They have worked with clients to redesign products, and the pressure on auto is declining, expecting improvements as they move forward. ( ) -
Connected Living Investments
Q: How will investment spend in Connected Living change?
A: The $21 million investment spend in Connected Living in 2024 is sunsetting, with those investments resulting in new client launches generating revenue and EBITDA in 2025. Management expects additional investments in 2025 for new programs, viewing this as a positive sign of strong commercial momentum. ( ) -
Global Housing Catastrophe Losses
Q: How will catastrophe losses affect 2025 pricing?
A: Despite an active season, management hasn't touched their reinsurance tower and feels good about their program. They expect favorable reinsurance costs heading into 2025 and anticipate pricing to remain relatively stable, with no big shift in premiums. ( ) -
GAAP Losses in Auto
Q: When will GAAP losses in auto run through?
A: The impact from GAAP losses is shorter term, with claims heavier in the first 24 months. Management has reduced risk participation from 40% in 2022 to 12% in 2024. They expect auto to improve in 2025, with pressure declining. ( ) -
Device Count Growth
Q: Will device count growth continue with new Asia clients?
A: The growth in device count is a natural evolution, with continued steady growth domestically and in Asia Pacific. The monetization opportunity is aligned with their standard model, and management is pleased with material year-over-year subscriber growth. ( , ) -
Trade-in Volumes and Q4 Guidance
Q: Is Q4 guidance unusually strong due to trade-in volumes?
A: Management expects trade-in volumes to pick up in Q4 with more promotional activity following the launch of the iPhone 16. The Q4 guidance reflects seasonal improvements, new client revenue, and loss improvements, which are part of normal seasonality rather than unusually strong. ( ) -
Voluntary Business Placement Rates
Q: How are voluntary business placement rates trending?
A: Placement rates are up 6 basis points sequentially and 18 basis points year-over-year, driven by growth in the underlying business and additional policies as homeowners face challenges finding coverage in a hard market. ( ) -
Cross-Selling Opportunities
Q: Are there cross-selling opportunities between businesses?
A: Management sees opportunities to leverage relationships across wide distribution channels and is well-positioned to capitalize on clients looking to reinvent services. They consider it a positive opportunity to expand relationships, as evidenced by partnerships like Chase. ( )
Key Metrics
Revenue by Segment - in Millions of USD | FY 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | FY 2014 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | FY 2015 | Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | FY 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | FY 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | FY 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Global Lifestyle | 2,117.0 | 2,189.8 | 2,191.9 | 2,410.2 | 8,908.9 | 2,278.0 | 2,269.2 | 2,337.9 | ||||||||||||||||||||||||||||||||||||||||||||||
- Net Earned Premiums | 0.0 | 0.0 | 0.0 | - | - | 0 | 0 | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Fees and Other Income | 0.1 | 0.0 | 0.1 | - | - | 0.2 | 0.1 | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||||
- Net Investment Income | 4.5 | 3.8 | 7.3 | 5.8 | 21.4 | 5.6 | 7.1 | 7.8 | ||||||||||||||||||||||||||||||||||||||||||||||
- Connected Living | 1,026.6 | 1,079.2 | 1,082.9 | 1,188.1 | 4,376.8 | 1,140.3 | 1,148.5 | 1,223.5 | ||||||||||||||||||||||||||||||||||||||||||||||
- Global Automotive | 1,013.7 | 1,029.7 | 1,022.9 | 1,118.3 | 4,184.6 | 1,047.5 | 1,035.0 | 1,026.0 | ||||||||||||||||||||||||||||||||||||||||||||||
Global Housing | 526.5 | 561.8 | 584.8 | 469.8 | 2,142.9 | 600.7 | 663.5 | 637.3 | ||||||||||||||||||||||||||||||||||||||||||||||
- Homeowners | 391.4 | 412.3 | 434.1 | 425.6 | 1,663.4 | 447.4 | 512.7 | 478.4 | ||||||||||||||||||||||||||||||||||||||||||||||
- Renters and Other | 113.9 | 124.3 | 121.1 | 120.2 | 479.5 | 124.8 | 120.9 | 125.4 | ||||||||||||||||||||||||||||||||||||||||||||||
- Lender-placed Insurance | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Multifamily Housing | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Specialty and Other | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Global Preneed | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Corporate and Other | 4.6 | 3.8 | 7.4 | - | - | 5.8 | 7.2 | 7.9 | ||||||||||||||||||||||||||||||||||||||||||||||
- Net Realized Gains on Investments and Fair Value Changes to Equity Securities | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Health | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Solutions | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Global Connected Living | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Global Vehicle Protection | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Global Preneed | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Global Credit and Other | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Specialty Property | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Lender-Placed Insurance | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Multi-Family Housing | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Mortgage Solutions | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Manufactured Housing and Other | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | 2,642.8 | 2,731.6 | 2,774.1 | 2,983.1 | 11,131.6 | 2,880.1 | 2,924.9 | 2,967.7 | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geography - in Millions of USD | FY 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | FY 2014 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | FY 2015 | Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | FY 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | FY 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | FY 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
United States | - | - | - | - | 9,295.7 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign countries | - | - | - | - | 1,835.9 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
- Domestic | - | 1,660.1 | 1,633.8 | - | - | - | - | 1,747.3 | ||||||||||||||||||||||||||||||||||||||||||||||
- International | - | 448.8 | 472.0 | - | - | - | - | 502.2 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | - | 2,731.6 | 2,774.1 | - | 11,131.6 | - | - | 2,249.5 | ||||||||||||||||||||||||||||||||||||||||||||||
KPIs - Metric / Quarter | FY 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | FY 2014 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | FY 2015 | Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | FY 2018 | Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | FY 2019 | Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | FY 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2021 | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | FY 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
**Weighted-average liability duration** | 12.6 | 12.3 | 12.1 | 12.0 | - | 11.9 | 11.7 | 11.5 | ||||||||||||||||||||||||||||||||||||||||||||||
**U.S. per-occurrence catastrophe coverage** | - | 1.28 | 1.28 | 1.28 | - | 1.48 | 1.48 | 1.48 |
Executive Team
Questions to Ask Management
- With ongoing profitability challenges in Global Auto due to longer-term policies and elevated losses, how exactly do you plan to accelerate the turnaround in this segment, and can you provide more details on the operational efficiencies you're implementing to achieve this?
- Considering the active catastrophe season and its impact on Global Housing, how confident are you that reinsurance costs will remain stable in 2025, and what contingency plans are in place if reinsurance rates increase significantly?
- Given the substantial investment spend in Connected Living this year and expectations of similar investments next year, can you elaborate on how these investments will translate into tangible revenue and EBITDA growth, and what key metrics are you using to measure success?
- With the addition of new clients in Asia Pacific contributing to subscriber growth, how are you addressing potential challenges in scaling operations and ensuring profitability comparable to your established markets?
- You mentioned the hard market is contributing to increased placement rates in your voluntary business; with the potential for market conditions to soften, how sustainable is this growth, and what steps are you taking to mitigate the risk of declining placement rates in the future?
Past Guidance
Q3 2024 Earnings Call
- Issued Period: Q3 2024
- Guided Period: FY 2024
- Guidance:
- Adjusted EBITDA: Expected to grow in the low double digits, excluding catastrophes .
- Adjusted Earnings Per Share (EPS): Expected to increase in the mid- to high teens, excluding catastrophes .
- Global Lifestyle: Modest growth expected with investments in Connected Living .
- Global Housing: Strong growth anticipated due to policy growth and expense leverage .
- Corporate Adjusted EBITDA Loss: Approximately $115 million .
- Shareholder Returns: $300 million expected in share repurchases .
- Fourth Quarter Expectations:
- Connected Living: Sequential increase expected .
- Global Auto: Earnings expected to remain stable .
Q2 2024 Earnings Call
- Issued Period: Q2 2024
- Guided Period: FY 2024
- Guidance:
- Full Year Adjusted EBITDA: Expected to grow in the high single digits, excluding catastrophes .
- Adjusted EPS: Expected to increase in the low double digits, excluding catastrophes .
- Global Lifestyle Adjusted EBITDA: Expected to grow modestly .
- Global Auto Adjusted EBITDA: Expected to be flat to modestly down .
- Global Housing Adjusted EBITDA: Expected to drive enterprise performance .
- Corporate Adjusted EBITDA Loss: Approximately $110 million .
- Share Repurchases: Expected at the high end of $200 million to $300 million .
Q1 2024 Earnings Call
- Issued Period: Q1 2024
- Guided Period: FY 2024
- Guidance:
- Global Housing: Expected to lead enterprise growth, driven by favorable loss experience and top-line momentum .
- Global Lifestyle: Growth driven by Connected Living, especially in the U.S. .
- Global Automotive: Adjusted EBITDA expected to be flat .
- Enterprise Outlook: Adjusted EBITDA expected to grow mid-single digits .
- Capital Management: Share repurchases between $200 million to $300 million .
Q4 2023 Earnings Call
- Issued Period: Q4 2023
- Guided Period: FY 2024
- Guidance:
- Global Lifestyle: Growth driven by Connected Living and Global Automotive .
- Global Housing: Growth driven by top-line momentum .
- Corporate: Adjusted EBITDA loss expected to be $105 million .
- Capital Management: Share repurchases between $200 million to $300 million .
- Overall Financial Performance: Adjusted EBITDA expected to grow mid-single digits .
- Investment Income: Expected to be flat to slightly up, with a portfolio yield of 4.99% .
Latest news
Recent developments and announcements about AIZ.
Corporate Leadership
Board Change
Kevin Warren has been appointed to the Board of Directors of Assurant, Inc., effective January 15, 2025. He will also serve on the company's Compensation and Talent Committee. Warren previously held the position of chief marketing and customer experience officer at UPS and has extensive experience from his 34-year tenure at Xerox Corporation .
Leadership Change
Lawrence V. Jackson is retiring from the Board of Directors of Assurant, Inc., effective at the company's 2025 annual meeting of stockholders. Paget L. Alves is resigning from the Board, effective January 15, 2025, to become CEO of Sorenson. Kevin Warren has been appointed to the Board and will join the Compensation and Talent Committee, effective January 15, 2025. Warren brings extensive experience from his previous roles at UPS and Xerox .