The paragraph is an introduction to Assurant's First Quarter 2025 Conference Call and Webcast. The operator sets the call in listen-only mode, with questions to follow management's remarks. Sean Moshier, the Vice President of Investor Relations, begins by welcoming participants and introduces key executives, including CEO Keith Demmings and CFO Keith Meier. Moshier highlights that a news release detailing the first-quarter results was issued after the market closed and is available online along with a slide presentation. He mentions that the call will discuss forward-looking statements subject to risks and will involve non-GAAP financial measures for evaluating the company's performance. Keith Demmings then begins his remarks, expressing a positive start to 2025.

In the first quarter, we achieved 14% growth in adjusted EBITDA and 16% growth in adjusted earnings per share, excluding major catastrophes. This performance emphasizes our strong position, supported by our diverse global operations in housing and lifestyle sectors backed by a solid capital foundation. We have consistently achieved earnings growth for nearly a decade, leveraging a unique distribution strategy and a top-tier workforce to create successful partnerships with leading brands. By offering personalized, data-driven solutions, we enhance customer experiences and solidify our long-term stability. We're meeting our 2025 goals with strategic partnerships and investments initiated in 2024, aiming to bolster new program launches and cultivate growth opportunities. Specifically, in Global Lifestyle, we're committed to expanding in Connected Living and Global Automotive.

Connected Living is enhancing customer experiences by investing in innovative technologies and strengthening partnerships with major U.S. and global telecom operators. The company is leveraging automation, robotics, and AI to offer value-added services and has launched a new mobile device protection plan with Verizon under Total Wireless. In Global Automotive, earnings are stable with improved loss experience, and the leadership team is working on a consistent branding approach to capitalize on market opportunities and expand within U.S. and international distribution channels.

The paragraph discusses a company's recent product launches and strong performance in the auto and housing insurance sectors. They introduced Assurant Vehicle Care Technology Plus, offering coverage for high-tech vehicle components. The demand for lender-placed insurance in the U.S. has increased, contributing to a 17% growth in the homeowners sector by adding 70,000 new policies. The company achieved a 90% combined ratio in the first quarter and aims for a mid-80s ratio in 2025, despite anticipating $300 million in catastrophe-related losses. They renewed two lender-placed clients and expanded their renters segment, adding over 250,000 policies. Their Cover360 platform supports premium growth in the Property Management Company channel, reinforcing their competitive position in lifestyle and housing sectors. Additionally, they were recognized by the American Red Cross for disaster relief efforts following the 2024 storms and California wildfires.

Over the past five years, Assurant has achieved significant growth, boasting an 18% compound annual adjusted EPS growth rate and a 12% adjusted EBITDA growth rate, both excluding catastrophic events. Compared to large peers in the P&C sector, Assurant has maintained low cat exposure and losses relative to net earned premiums and shareholders' equity since 2019. The company's scale and efficiency in housing have resulted in a low combined ratio of 89% over a decade. Assurant's unique business portfolio, characterized by its B2B2C distribution model in lifestyle and housing, has driven strong growth and low volatility, with expectations of continued profitable expansion. The company believes its demonstrated resilience and success should warrant a premium valuation compared to the S&P composite 1,500 P&C index median.

The paragraph highlights Assurant's future growth opportunities, including expanding investments in core markets, enhancing offerings for existing clients, and forging new global partnerships. The company aims to launch new products in adjacent sectors to seize attractive opportunities. Despite macroeconomic uncertainties and the impact of tariffs, Assurant is on track for its 9th consecutive year of earnings growth in 2025, following an exceptional 2024. The company's business model, with features like client risk-sharing contracts and inflation guard product adjustments, positions it well to navigate economic fluctuations. Their strategic partnerships and diverse supply chain access further optimize operations, with lender-placed businesses potentially acting as a hedge during market downturns.

The paragraph discusses Assurant's strong financial performance in the first quarter of 2025, highlighting double-digit growth in key metrics such as adjusted EBITDA and adjusted earnings per share, excluding catastrophes. The growth was driven by earnings improvements in Global Housing and Global Lifestyle, particularly in the lender-placed and global automotive businesses. The company's liquidity remained strong, with over $500 million at the holding company and significant cash returns to shareholders, including share repurchases. Looking forward, Assurant plans a balanced approach to share buybacks depending on M&A opportunities and market conditions. In segment results, Global Lifestyle's adjusted EBITDA was down 5% due to unfavorable foreign exchange impacts, yet showed modest growth excluding a 2024 one-time benefit, while earnings in Connected Living declined by 6%.

In the first quarter, the Connected Living segment saw a modest EBITDA increase on a constant currency basis, aided by a new card benefits program, though partially offset by weaker domestic mobile results. Investments in new capabilities, including Verizon's program, were notable. Global Auto's adjusted EBITDA remained stable as improved loss experience offset lower investment income and adverse foreign exchange effects. Global Lifestyle's revenue grew by 5% overall, or 7% on a constant currency basis, driven by Connected Living. In Global Housing, adjusted EBITDA reached $112 million, with significant impacts from California wildfires, totaling $125 million in losses. Despite these challenges, the homeowners business experienced strong growth, benefiting from significant policy growth and improved non-catastrophe loss experience. Favorable reserve development from the previous year was slightly higher than in the first quarter of 2024.

The paragraph discusses the performance and strategic updates of Assurant's renters and catastrophe reinsurance businesses. In the renters segment, the company has seen continuous growth in premiums. For catastrophe reinsurance, Assurant successfully finalized its 2025 program, increasing coverage while maintaining a stable probable maximum loss (PML) despite an increase in per event retention to $160 million due to business growth. The U.S. program offers $1.8 billion in loss coverage beyond retention, involving over 40 reputable reinsurers. The cost for 2025 reinsurance premiums is estimated at $225 million, reflecting business growth and favorable pricing rates. The expected annual catastrophe load is $175 million, excluding California wildfires, which brings the total expected load to $300 million for 2025. The company's outlook for 2025 is positive, emphasizing strong cash flow and a solid financial position, supported by a diverse customer base across its lifestyle and housing segments.

The paragraph discusses the company's diversified investment portfolio, with 93% of its fixed-income assets being investment grade. Despite macroeconomic uncertainties, the company aims to grow adjusted EBITDA and EPS modestly in 2025, building on a strong 2024 performance. It is monitoring factors like tariffs, inflation, foreign exchange, and interest rates that might affect growth. In the Lifestyle sector, growth in connected living and global automotive may be offset by foreign exchange challenges and investments in new partnerships. For Housing, an improved outlook is expected due to strong first quarter results and growth in lender-placed policies. The company plans to balance capital for new business growth while returning excess capital to shareholders, with anticipated share repurchases of $200 million to $300 million in 2025, subject to conditions.

The paragraph is part of a corporate earnings call, where the speaker, Keith Demmings, addresses a question from Jeff Schmitt about the relatively high loss ratio in the company's Global Lifestyle segment, particularly in Global Auto. Demmings provides an update, stating that although the Global Lifestyle business has performed in line with expectations, there are a few adjustments to consider, such as a $7 million one-time client adjustment from the previous year and a $4 million impact from foreign exchange. Overall, Demmings expresses satisfaction with the progress in Global Auto and notes a $3 million increase in the Connected Living segment when adjusting for these factors.

In the article paragraph, the company reports a $5 million EBITDA benefit from new programs launched last year and indicates they are on track with their one-year payback timeline, despite softer trade results. The Connected Living segment shows long-term potential with strong client momentum. In the Auto segment, Keith Meier notes continued stability and increased EBITDA over two consecutive quarters, with improvements in loss experience and GAAP levels. This trend supports the company's growth outlook for the Auto business. Jeff Schmitt inquires about investments in Connected Living, and Keith Demmings explains a $25 million investment in 2024, with $15 million for new client launches and $10 million for device care centers, expecting a full payback within the year. For 2025, an additional $3 million investment is mentioned in the first quarter.

The paragraph discusses the potential financial impact of tariffs on the company's operations, specifically in the auto and housing sectors related to parts and materials. While the company is not providing specific dollar impacts, they acknowledge the uncertainty surrounding the scope and timing of tariffs, which may evolve throughout the year. They mention maintaining a pragmatic approach using the most current information available. Additionally, they are excited about partnering with Total Wireless by Verizon for device protection, continuing investments similar to last year's $15 million, and anticipating further announcements as the year progresses.

The paragraph discusses the potential impact of tariffs on a business's Auto and Housing sectors, with a focus on claims costs. The company anticipates manageable tariff effects and aims to meet its original financial guidance. Keith Meier explains how the business has historically managed inflation in the Housing sector with quarterly, state-specific rate adjustments. In the Auto sector, around two-thirds of the business is risk-shared, reducing the impact further. Essentially, any claims impact from tariffs is expected to be in the single-digit percentage for imported parts.

The article discusses the company's strategic positioning and resilience in the face of inflation and market shifts, particularly in the Auto and Global Housing sectors. The company has implemented 18 rate increases and worked on program designs to manage inflationary impacts. It maintains a balanced position between new and used auto sales, enabling adaptability to market changes. Despite higher reinsurance costs and impacts from recent wildfires, they believe their expense ratio would be relatively flat year-over-year after normalization. Overall, the company is confident in its ability to maintain growth and deliver financial results by continuously focusing on rate adjustments, product designs, and claims management.

The paragraph discusses a conversation between Keith Demmings and Mark Hughes regarding the new Total Wireless by Verizon program. Keith Demmings highlights that this is a brand-new launch, with no existing customer base being transferred, meaning they are starting from scratch. It is expected to take three to four years to reach its full potential, influenced by consumer behavior. He emphasizes the importance of deepening partnerships, particularly with Verizon, by providing value and potentially expanding services over time. Overall, they are excited about the significant opportunity this represents.

The paragraph discusses the current trends in the homeowners and trade-in markets. Mark Hughes and Keith Meier note that there's continued growth in lender-placed homeowners' insurance, particularly in California, the Midwest, and some inland Northeast areas. Although the year-over-year placement rate improved, sequential growth has slowed, but they expect modest growth throughout the year. Regarding trade-ins, Keith Demmings mentions that while customers are keeping their devices longer, promotional activities and competitive intensity significantly influence demand. The first quarter saw muted promotional activities, but future competitiveness could stimulate demand. Overall, nothing unusual is expected in these market dynamics.

Mark Hughes asks about the growth of the renters book after acquiring 250,000 policies. Keith Demmings explains the acquisition involved taking over these policies through reinsurance, which fit well with their Affinity business and brought in about $50 million in gross written premiums annually. Although it may not drastically change financial performance, it's a strategic move to increase scale and market leadership. Keith Meier adds that this acquisition aligns with their strategy to scale their technology-enabled services, such as the Cover360 product, and leverages their investments to drive growth when others might not see the benefit. Growth is expected from the acquisition and their property management channel, which has seen double-digit growth for 11 consecutive quarters.

The paragraph is a part of a conversation about the potential impact of tariffs on the mobile side of a business, particularly concerning the import of parts and cell phones. Keith Meier explains that they collaborate closely with large clients who have well-developed supply chains, and they complement these supply chains. Many of their programs involve reinsurance or risk-sharing, which mitigates tariff impacts. Keith Demmings adds that the mobile business, especially device protection, benefits from a model where there are 64 million monthly subscribers, allowing for greater flexibility and quicker adjustments in product or pricing compared to long-term contracts. This approach helps manage potential tariff impacts effectively.

In the paragraph, the discussion centers around the company's full-year guidance. While the overall enterprise-wide outlook hasn't changed, the Housing segment has improved, indicating some adjustments due to a better-than-expected performance. The Lifestyle segment's performance, however, is slightly worse, largely due to the macro environment and tariffs. Keith Demmings emphasizes confidence in the company's financial health despite these challenges, with plans to grow the Lifestyle segment, including connected living, Auto, and Housing. Bob Huang from Morgan Stanley inquires further about the impact of tariffs on specific components like aluminum, steel, and lumber within different segments, such as Housing and Auto, to better understand future commodity sensitivity.

In the discussion, Keith Meier and Bob Huang talk about the impact of tariffs on different business sectors, such as housing and auto. Meier explains their scenario planning accounts for potential inflation in building materials and auto parts. Huang asks about the effect of tariffs on car sales, both new and used. Keith Demmings responds, acknowledging a possible pull-forward effect in sales due to tariffs but believes it won't significantly impact their business outlook. Sales may be higher initially, but could soften later.

The paragraph discusses the business outlook for Assurant, noting that while early business is beneficial, the company's $11 billion unearned premium reserve (UPR) mitigates short-term concerns, particularly in the auto sector. Keith Meier emphasizes that macroeconomic factors such as consumer impact and inflation are unlikely to significantly affect the company in 2025 due to their existing business structure. Bob Huang thanks the participants, and Keith Demmings concludes the meeting, looking forward to the next update in August.

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