The paragraph describes the opening of Assurant's Fourth Quarter and Full Year 2024 Conference Call and Webcast. The operator introduces the session, noting that participants are in listen-only mode until the Q&A session. Sean Moshier, Vice President of Investor Relations, welcomes attendees and mentions that Assurant's President and CEO, Keith Demmings, and CFO, Keith Meier, are present for the call. Sean highlights that a news release with the company's 2024 results was issued the previous day, and related materials are available on Assurant's website. He also mentions that some statements made will be forward-looking with inherent uncertainties, advising attendees to refer to the company's SEC reports for additional information. Non-GAAP financial measures will be discussed, with details and reconciliations available in the release. Sean then hands the call over to Keith Demmings, who expresses that 2024 was a strong year for Assurant.

The paragraph highlights the company's strong performance, driven by strategic investments in people, technology, and client partnerships, resulting in significant growth in adjusted EBITDA and earnings per share. It emphasizes the importance of the company's culture in attracting and retaining talent, along with its commitment to innovation and sustainability. This culture enables the company to enhance customer experiences and strengthen partnerships. Special achievements are noted in the Global Lifestyle sector, particularly Connected Living, with notable client wins and renewals. The company continues to invest in technology advancements like automation and AI, exemplified by the launch of T-Mobile's Protection 360 HomeTech product, which safeguards multiple WiFi-enabled devices and offers premium tech support, highlighting a strategic growth area in the connected home market.

The paragraph discusses the company's strategic investments and progress in its Global Automotive and Global Housing businesses. In automotive, they have stabilized earnings by addressing high claim costs and are optimistic about future prospects. The response to California wildfires highlights their commitment to aiding affected customers. In the housing sector, they have achieved strong performance, doubling their adjusted EBITDA from over $400 million in 2022 to over $900 million in 2024. The housing business has demonstrated significant outperformance compared to the broader property and casualty (P&C) industry, achieving a strong return on equity and a favorable combined ratio. Overall, the company sees considerable potential for growth and valuation appreciation in its housing business.

In 2024, Assurant achieved significant commercial success and client momentum, entering 2025 with strong execution that resulted in key renewals and new partnerships. The company secured major deals with top mobile carriers in the U.S., Japan, and Australia, protecting over 40 million devices. In their housing segment, they renewed contracts with lender-placed clients covering 17 million loans and continued rollout of services like Cover360 and Assurant TechPro. Assurant's B2B2C model, leveraging data-driven technology, reinforces its role as a leading global protection company, with ongoing demand and competitive advantage expected to continue into the future.

The paragraph highlights the company's successful B2B2C distribution strategy in lifestyle and housing markets, emphasizing strong partnerships, innovative customer solutions, and robust financial performance. Since 2019, the firm has significantly increased adjusted EBITDA and EPS, outperforming the S&P 1500 P&C index median, both excluding and including catastrophic events. With a track record of eight consecutive years of profitable growth, a diversified portfolio, and a commitment to future growth, the company positions itself as an attractive investment with ambitions for continued success into 2025.

The paragraph outlines the company's strategy and achievements related to their investments and operations. The focus is on executing and scaling partnerships and new program launches in the lifestyle and housing sectors, with a goal for 2024 investments to yield returns by 2025. New launches and growth opportunities, especially in the connected home and global lifestyle markets, are planned. The company emphasizes financial performance, efficiency, and technology-driven solutions to maintain its leadership position. In 2024, they achieved a 15% increase in adjusted EBITDA to over $1.5 billion and grew adjusted earnings per share to over $20, driven by strong performance in Global Housing and growth in Connected Living, despite some investments and foreign exchange challenges.

The paragraph discusses the company's strong financial performance and strategic actions as it heads into 2025. It highlights growth in the Global Auto segment and improved earnings from vehicle service contracts and GAP products in late 2024. In the fourth quarter, both adjusted EBITDA and earnings per share increased by 13%, driven by Global Housing, while substantial cash flow was generated and over $450 million was returned to shareholders through dividends and share repurchases. The company also increased its dividend for the 20th consecutive year and was added to the S&P High Yield Dividend Aristocrats Index. However, Global Lifestyle's adjusted EBITDA fell by 6% compared to last year, with Connected Living earnings remaining steady.

In the fourth quarter, the company made $4 million in investments aimed at enhancing capabilities and establishing client partnerships, which have started contributing to growth. Despite these advancements, lower U.S. trade-in program results affected overall outcomes due to shifts in business mix and lower volumes. Global Auto experienced an 11% decline in results year-over-year, primarily due to reduced income from real estate joint ventures. However, excluding a prior year's significant gain, Global Auto results were relatively steady, with investment income balancing out increased losses in GAP and vehicle service contracts. Claims experience has remained stable with improved earnings due to previous program adjustments. In terms of revenue, Global Lifestyle saw a 2% increase in net earned premiums and fees, or about 6% in constant currency, excluding favorable adjustments from the previous year. Global Housing had a strong fourth quarter, with adjusted EBITDA at $225 million, including $50 million in losses from Hurricane Milton. Excluding catastrophic losses, adjusted EBITDA rose by 32%.

In the latest quarter, there was continued robust policy growth in the homeowners sector due to increased placement rates amid market pressures, benefiting from technology-driven expense leverage. Earnings growth was buoyed by low non-catastrophe losses and reduced reinsurance costs. There was also a $38 million favorable reserve development, consistent with prior trends. The Renters business thrived with double-digit growth in the PMC channel. Looking ahead to 2025, modest growth in adjusted EBITDA and EPS is expected, overcoming a $107 million favorable reserve development from 2024. Strong growth trends are anticipated to deliver high single-digit earnings and EPS growth, excluding catastrophes. The outlook considers foreign exchange and interest rates but excludes potential tariff impacts. The business model is resilient to economic shifts. Global Lifestyle growth is expected, led by Connected Living and Global Automotive segments.

The paragraph discusses the financial outlook for 2025, highlighting several factors affecting growth. Growth is expected to be dampened by unfavorable foreign exchange rates and investments in partnerships and programs. Global Housing EBITDA is predicted to decline slightly compared to favorable reserve developments in 2024, but strong underlying growth is anticipated, driven by the Homeowners business. The recent California wildfires may significantly impact catastrophe reinsurance, with losses expected to approach or exceed retention levels. Reinsurance program placements are ongoing, with updates expected in May. The capital strategy for 2025 remains focused on balancing support for new business growth and returning excess capital to shareholders.

The paragraph outlines Assurant's financial strategies and expectations for 2025, focusing on share repurchases and cash flow generation. They anticipate repurchasing $200 to $300 million in shares, contingent on market conditions and M&A activities, while considering the impact of the California Wildfires. By February 7, they had repurchased $24 million of shares and plan for more consistent buybacks throughout the year, supported by their strong capital position and cash flow. Assurant highlights its unique lifestyle and housing portfolio, enabling strong capital efficiencies and reinvestment for growth. They expect to maintain robust cash flows and growth in 2025. The paragraph concludes with an invitation for questions, leading to a question from Mark Hughes about the performance and momentum of their Homeowners business, specifically regarding placement rates and market dislocation effects.

The paragraph discusses the growth dynamics in two main sectors: insurance policies and global lifestyle services. In terms of insurance, there was a 16% year-over-year increase in policies, driven by client growth, particularly in California due to a hardening market, and geographic diversification. This growth is expected to continue, though possibly at a slower pace. In the Global Lifestyle sector, the focus is on Connected Living, emphasizing the importance of securing mobile clients to drive long-term growth, product launches, and enhancing customer experience. Notably, the addition of Chase in the fourth quarter is expected to boost financial services growth. Overall, consistent top-line growth has been seen in the lifestyle sector, with optimism for continued momentum.

The paragraph discusses the company's positive outlook for growth, particularly in the automotive and Connected Living sectors. They highlight stability and preparedness moving into the future, specifically into 2025. The company plans to continue investing in 2024 and 2025, similar to the $25 million invested in 2024, which included automation and client-related product launches. Despite a couple of percentage points of foreign exchange headwinds and investment impacts expected for 2025, they remain optimistic due to new and existing client collaborations and product launches. The paragraph also includes a transition to a Q&A session with Jeff Schmitt from William Blair & Company.

The paragraph discusses the impact of wildfires on insurance companies in California and the stability of losses in the Global Auto GAAP book. Keith Meier mentions a moratorium in California temporarily preventing insurers from leaving due to recent wildfires, leading to an expectation of minimal short-term exits from the state. Regarding Global Auto, the losses have stabilized from the third to the fourth quarter, suggesting a positive outlook for 2025 with anticipated growth in the auto sector. Keith Demmings adds that future business will mostly reduce exposure to past risks, aiming for stability. Jeff Schmitt asks about the financial impact, and Meier notes a modest improvement of $1-2 million for the quarter. The conversation then shifts to investment spending, referencing a $25 million spend the previous year, before transitioning to a new question from Tommy McJoynt.

In the paragraph, a discussion takes place between Keith Demmings, Keith Meier, and Tommy McJoynt about the financial performance and future investments of new programs. Demmings confirms that the new programs will generate $25 million in positive EBITDA in 2025, offsetting a similar drag in 2024. The investments planned for 2025 are separate from previous initiatives, involving new marquee brands and clients, although specific details are not disclosed. The company aims for transparency, promising to share information about investments and outcomes throughout the year. Tommy McJoynt transitions the conversation to the housing sector afterward.

The paragraph involves a discussion between Keith Demmings and others about the business's financial performance and outlook, particularly focusing on the combined ratio and return on equity (ROE) for 2025. Despite challenges like the California fires, Demmings expects the combined ratio to remain in the mid-80s and continue delivering strong ROEs above 20%. The conversation highlights the impact of investment in technology and expense leverage on performance. Demmings also addresses expectations for rate neutrality in 2025, noting they will monitor rate changes, while additional discussion points towards reinsurance renewal costs and regulatory considerations in impacted geographies.

The paragraph discusses the reinsurance strategy and outlook for 2024, noting an expected increase in reinsurance costs from $186 million to around $200 million due to volume increases and favorable pricing. The company plans to maintain consistent program retention with a goal of achieving favorable pricing. Keith Demmings highlights the company's strong performance, diverse reinsurer panel, and positive relationships, expecting them to continue. Additionally, the company feels confident about obtaining appropriate rates relative to risk at the state level. James Chmiel inquires about the impact of tariffs on input costs and the foreign exchange impact for 2025, to which Demmings responds affirmatively without providing detailed specifics.

The paragraph discusses the company's approach to dealing with uncertainties related to tariffs, interest rates, and foreign exchange impacts. While they haven't factored tariffs into their annual guidance due to uncertainty, they have considered foreign exchange and interest rates, which are intertwined with tariff impacts. The company is monitoring potential long-term effects on consumer demand and short-term impacts on input costs due to tariffs. They highlight their experience with inflation in 2022, especially in housing and auto repairs, which has strengthened their strategies for managing costs. They emphasize having developed robust processes for reviewing costs and maintaining their strong business fundamentals amidst these economic challenges.

The paragraph discusses the impact of inflation adjustments on a company's housing business, which moved from annual to quarterly state-specific adjustments, allowing for stronger performance during inflationary times. Mark Hughes from Truist asks about the prior year development in the fourth quarter. Keith Meier notes that prior year development in 2024 was influenced by the past inflationary environment and lower than expected frequency rates. Despite this, the business is properly reserved and in a good future position. Keith Demmings adds that even after accounting for prior year developments, the housing business shows a 28% growth rate for the full year, and the fourth quarter's loss ratio, excluding catastrophe-related prior year development, was strong.

The paragraph discusses financial projections and expectations for 2025, focusing on the company's loss and expense ratios. Keith Demmings anticipates a non-cat loss ratio and expense ratio both in the high 30s, with a cat load of around 10 points due to California wildfires, leading to an overall ratio in the mid-80s. Keith Meier adds that the wildfire costs might reach approximately $150 million, expecting a slightly higher cat load due to company growth. The total is projected to be in the low $300 million range, to be further detailed in the next earnings call. Mark Hughes inquires about the company's potential for better market appreciation. Demmings highlights the market's recognition of the capital-light lifestyle business but suggests the strong performance and risk management of the housing segment are undervalued, emphasizing its resilience and lower volatility.

The paragraph discusses the company's strong performance with a 10-year combined ratio of 89%, significantly outperforming the market. The company's success is attributed not just to its core insurance products but also to the complementary services it provides, which are highly integrated, unique, and difficult to replicate. Assurant, the company in focus, emphasizes its strong partnerships with market leaders, enhancing its scalable and differentiated offerings across sectors like mobile, auto, and housing. The company plans to continue communicating its value proposition and will provide further updates in future earnings calls.

This summary was generated with AI and may contain some inaccuracies.