Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Assurant Inc (AIZ, Financial) reported a strong start to 2025 with 14% growth in adjusted EBITDA and 16% growth in adjusted earnings per share, excluding reportable catastrophes.
- The company has a diversified global operating model with market-leading businesses in global housing and global lifestyle, supported by a robust capital position.
- Assurant Inc (AIZ) has a proven track record of delivering earnings growth over nine consecutive years, demonstrating resilience through various economic cycles.
- The company is expanding its partnerships, including a new mobile device protection plan with Verizon's Total Wireless, enhancing its market position in the telecom industry.
- Assurant Inc (AIZ) achieved significant top-line growth in its homeowners segment, driven by the addition of 70,000 lender-placed policies, resulting in a compelling combined ratio of 90%.
Negative Points
- The Global Lifestyle segment saw a 5% decline in adjusted EBITDA compared to the previous year, impacted by unfavorable foreign exchange and a one-time client contract benefit from the prior year.
- The company is facing potential impacts from tariffs, particularly in the Auto and Housing segments, which could lead to higher claims costs.
- Assurant Inc (AIZ) experienced elevated catastrophe losses in the first quarter, including significant impacts from California wildfires.
- The expense ratio in the Global Housing segment increased due to higher reinsurance costs and expenses related to managing catastrophe claims.
- The company anticipates that foreign exchange and incremental investments will mute growth in the Lifestyle segment by a few percentage points in 2025.
Q & A Highlights
Q: In Global Lifestyle, the loss ratio is still relatively high. Could you update us on when you expect to see improvement, particularly in Global Auto?
A: Keith Demmings, CEO, explained that the Global Lifestyle segment performed in line with expectations, with some adjustments for foreign exchange and one-time client adjustments. He noted that the Connected Living segment showed growth on a constant currency basis. Keith Meier, CFO, added that the Global Auto segment has seen stabilizing results with improved loss experience, supporting their growth outlook for the year.
Q: Could you provide an update on the size and cadence of investments for new partnerships and program launches in Connected Living?
A: Keith Demmings, CEO, stated that they invested $25 million in 2024, with $15 million for new client launches and $10 million for device care centers. For 2025, they have invested about $3 million in the first quarter and expect similar investment levels for the full year. He highlighted the launch of a partnership with Verizon's Total Wireless as a significant opportunity.
Q: How are tariffs impacting your 2025 guidance, particularly in the Auto and Housing segments?
A: Keith Demmings, CEO, mentioned that they assumed tariffs would remain throughout 2025 and believe they are manageable. Keith Meier, CFO, explained that potential impacts are more aligned with higher claims costs in Auto and Housing. They have mechanisms like inflation guard features in Housing to adjust rates quarterly, and risk-sharing arrangements in Auto to mitigate impacts.
Q: Can you discuss the impact of the Total Wireless by Verizon program and its financial implications?
A: Keith Demmings, CEO, noted that the program is a new launch starting from scratch, with potential ramp-up over three to four years. He emphasized the strategic importance of deepening relationships with major partners like Verizon, which could lead to more opportunities in the future.
Q: Regarding the renters book acquisition, what is the expected impact on growth and financial performance?
A: Keith Demmings, CEO, explained that the acquisition of a 250,000-policy renters book is strategic, adding scale and reinforcing market leadership. Keith Meier, CFO, added that the acquisition aligns with their strategy to scale technology-enabled services and will contribute to balanced growth in the renters segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
