Q1 2024 Assurant Inc Earnings Call
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Operator: Welcome to Assurant's first quarter 2024 conference call and webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following management's prepared remarks. If you would like to ask a question at that time, please press star 1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key.
Welcome to assurance first quarter 'twenty 'twenty four conference call and webcast at this time all participants have been placed in a listen only mode and the floor will be opened for your questions. Following management's prepared remarks.
If you would like to ask a question at that time. Please press star one on your Touchtone phone.
If at any point. Your question has been answered you may remove yourself from the queue by pressing the pound key.
Operator: We ask that you please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Sean Moshier, Vice President of Investor Relations. You may begin.
We ask that you please pick up your handset to allow optimal sound quality.
Lastly, if you should require operator assistance, please press star zero.
Speaker Change: It is now my pleasure to turn the floor over to Sean Most Shea Vice President of Investor Relations you may begin.
Sean Moshier: Thank you, operator, and good morning, everyone. We look forward to discussing our first quarter 2024 results with you today. Joining me for Assurant's conference call are Keith Demmings, our President and Chief Executive Officer, and Keith Meier, our Chief Financial Officer. Yesterday, after the market closed, we issued a news release announcing our results for the first quarter of 2024. The release and corresponding financial supplement are available on Assurant.com. Also on our website is a slide presentation for our webcast participants.
Speaker Change: Thank you operator, and good morning, everyone. We look forward to discussing our first quarter 2024 results with you today joining me for Assurance Conference call are Keith <unk>, Our President and Chief Executive Officer, and Keith Meyer, our Chief financial.
Speaker Change: Officer.
Speaker Change: Yesterday after the market closed we issued a news release announcing our results for the first quarter 2020 for the release and corresponding financial supplement are available on Assurant Dot com.
Speaker Change: Also on our website is a slide presentation for our webcast participants.
Sean Moshier: Some of the statements made today are forward-looking. Forward-looking statements are based upon our historical performance and current expectations and are subject to risk, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these states.
Speaker Change: Some of the statements made today are forward looking forward looking statements are based upon our historical performance and current expectations.
Speaker Change: And subject to risks.
Speaker Change: <unk> and other factors that may cause actual results to differ materially from those contemplated by these statements.
Sean Moshier: Additional information regarding these factors can be found in the earnings release, presentation, and financial supplement on our website, as well as in our SEC report. During today's call, we will refer to non-GAAP financial measures, which we believe are important in evaluating the company's performance. For more details on these measures, the most comparable gap measures, and a reconciliation of the two, please refer to the news release and supporting materials. We'll start today's call with remarks before moving into Q&A. I will now turn the call over to Keith Demmings.
Speaker Change: Additional information regarding these factors can be found in the earnings release presentation and financial supplement on our website as well as in our SEC reports.
Speaker Change: During today's call, we will refer to non-GAAP financial measures, which we believe are important in evaluating the company's performance for more details on these measures. The most comparable GAAP measures and a reconciliation of the two please refer to the news release and supporting materials.
Speaker Change: We will start today's call with remarks before moving into Q&A I'll now turn the call over to Keith damage.
Keith Warner Demmings: Thanks, Sean, and good morning, everyone. Our first quarter results represent a strong start to 2024, reflecting the position of strength from which Assurant continues to operate. Adjusted EBITDA grew 31% year-over-year to $384 million, and adjusted EPS grew 42% year over year, both excluding reportable catastrophes. Our first quarter results were driven by the continued strength of our global housing segment, as well as growth and global lifestyle. Our ability to continue to drive financial performance and operational excellence has supported strong cash flow generation and a solid capital position.
Keith Roland Meier: Thanks, Sean and good morning, everyone.
Keith Roland Meier: Our first quarter results represent a strong start to 2024, reflecting the position of strength from which Assurant continues to operate.
Keith Roland Meier: Adjusted EBITDA grew 31% year over year to $384 million.
Keith Roland Meier: And adjusted EPS grew 42% year over year, both excluding reportable catastrophes.
Keith Roland Meier: Our first quarter results were driven by the continued strength of our global housing segment as well as growth in global lifestyle.
Keith Roland Meier: Our ability to continue to drive financial performance and operational excellence has supported strong cash flow generation and a solid capital position.
Keith Warner Demmings: Before reviewing the highlights across our business segments, I'd like to take a moment to reiterate how our unique and differentiated business model has led us to consistently deliver financial results. Assurant holds market leadership positions across a variety of attractive, specialized markets, where we benefit from both scale and deep integration with our B2B2C client base. Our competitive advantages across our businesses have allowed us to be flexible and agile in delivering for our partners and for end consumers.
Keith Roland Meier: Before reviewing the highlights across our business segments I'd like to take a moment to reiterate how our unique and differentiated business model has led us to consistently deliver financial results.
Keith Roland Meier: Assurant holds market leadership positions across a variety of attractive specialized markets.
Keith Roland Meier: Where we benefit from both scale and deep integration with our <unk> client base.
Keith Roland Meier: Our competitive advantages across our businesses have allowed us to be flexible and agile and executing for our partners and for end consumers.
Keith Warner Demmings: Cost savings from targeted actions, such as our previously announced restructuring plan, and ongoing technological innovation, including digital first and artificial intelligence, have supported reinvestment in businesses where we have leadership positions. These high-return initiatives have enhanced our capabilities and supported new partnerships, laying the groundwork for continued growth. The ultimate driver of our success is our people. In March, Assurant was recognized by Ethosphere as one of the world's most ethical companies for 2024. Operating ethically is foundational to protecting our clients' brands across the globe as well as our own.
Keith Roland Meier: Cost savings from targeted actions such as our previously announced restructuring plan and ongoing technology innovation, including digital first and artificial intelligence have supported reinvestment in businesses, where we have leadership positions.
Keith Roland Meier: These high return initiatives have enhanced our capabilities and supported new partnerships laying the groundwork for continued growth.
Keith Roland Meier: The ultimate driver of our success is our people.
Keith Roland Meier: In March assure it was recognized by Ethisphere as one of the world's most ethical companies in 2024.
Keith Roland Meier: Operating ethically as foundational to protecting our clients brands across the globe as well as our own.
Keith Warner Demmings: This recognition is a testament to the thousands of Assurant employees who champion our values every day. Collectively, our unique advantages have led to long-term profitable growth and shareholder value creation. We've continued to drive outperformance versus the broader PNC market, as evidenced by our long-term results compared to the S&P composite 1500 PNC index. Since 2019, Assurant has delivered double-digit adjusted earnings growth, including and excluding CATs, outperforming the broader PNC index. Now turning to the quarter, I'd like to share highlights across our business segments. Global Lifestyle delivered adjusted EBITDA of $208 million in the first quarter of 2024.
Keith Roland Meier: This recognition is a testament to the thousands of assured employees, who champion our values every day.
Keith Roland Meier: Collectively our unique advantages have led to long term profitable growth and shareholder value creation.
Keith Roland Meier: We've continued to drive outperformance versus the broader P&C market.
Keith Roland Meier: As evidenced by our long term results compared to the S&P composite 500 PNC index.
Keith Roland Meier: Since 2019, Assura has delivered double digit adjusted earnings growth, including and excluding cats outperforming the broader P&C index.
Keith Roland Meier: Now turning to the quarter I'd like to share highlights across our business segments.
Keith Roland Meier: Global lifestyle delivered adjusted EBITDA of $208 million in the first quarter of 2024.
Keith Warner Demmings: This reflects a year-over-year increase of 4% or 5% on a constant currency basis, which is in line with our full-year growth expectation. Growth was led by our Connected Living business, which delivered double-digit adjusted EBITDA growth in the first quarter. To support growth, we're continuing to make several important investments in new partnerships, including recently announced new launches such as Telstra, Australia's largest mobile carrier, where we completed the initial launch of several operations.
Keith Roland Meier: This reflects a year over year increase of 4% or 5% on a constant currency basis, which is in line with our full year growth expectation.
Keith Roland Meier: Growth was led by our connected living business, which delivered double digit adjusted EBITDA growth in the first quarter.
Keith Roland Meier: To support growth, we're continuing to make several important investments in new partnerships, including for recently announced new launches such as Telstra Australia's largest mobile carrier, where we completed the initial launch of several offerings.
Keith Warner Demmings: We are currently offering protection, upgrade, and trade-in to Telstra's post-paid subscriber base. Additionally, we recently completed a multi-year extension of our partnership with Spectrum Mobile, demonstrating the strength of our relationship. The expanded relationship includes the launch of two new mobile programs. The first of the two programs, the new Anytime Upgrade Benefit, which is now included in the Spectrum Mobile Unlimited Plus Data Plan at no extra cost to consumers, allows new and existing customers to upgrade their phones whenever they want.
Keith Roland Meier: We are currently offering protection upgrade and trade in to <unk> postpaid subscriber base.
Keith Roland Meier: Additionally, we recently completed a multiyear extension of our partnership with spectrum mobile.
Keith Roland Meier: Demonstrating the strength of our relationship.
Keith Roland Meier: The expanded relationship includes the launch of two new mobile programs.
Keith Roland Meier: The first of the two programs the new anytime upgrade benefit which is now included in the spectrum mobile unlimited plus data plan at no extra cost to consumers.
Keith Roland Meier: Allows new and existing customers to upgrade their phones whenever they want.
Keith Warner Demmings: The second program is the new Spectrum Mobile Repair and Replacement Plan, which offers customers device protection and is supported by our dynamic fulfillment and claims management capability. These innovative new offerings with Spectrum Mobile are the result of our long-standing partnership and reflect our ongoing commitment to deliver market-first solutions to meet the needs of end consumers. During the quarter, we also enhanced our global capability. For example, in Europe, we acquired iSmash, a leading independent tech repair brand in the United Kingdom, offering express drop-in repair services for smartphones, tablets, and laptops at nearly 40 retail locations.
Keith Roland Meier: The second program is the new spectrum mobile repair and replacement plan, which offers customers device protection and is supported by our dynamic fulfillment and claims management capabilities.
Keith Roland Meier: These innovative new offerings with spectrum mobile are the result of our long standing partnership and reflect our ongoing commitment to deliver market first solutions to meet the needs of end consumers.
Keith Roland Meier: During the quarter, we also enhanced our global capabilities for.
Keith Roland Meier: For example in Europe, we acquired ice smash.
Keith Roland Meier: Leading independent tank repair brand in the United Kingdom.
Keith Roland Meier: Offering express drop and repair services for smartphones tablets laptops with nearly 40 retail locations.
Keith Warner Demmings: This acquisition further scales our walk-in repair offerings and is a prime example of the investments we're making globally to win new business and enhance existing relationships. Moving to Global Automotive Similar to others in the industry, our first quarter results reflected persistent inflation impacts on vehicle parts and labor repair costs. We've continued to take actions to address elevated inflation, including implementing additional rate increases in the first quarter that build upon those taken over the past 18 months, while also strengthening and enhancing our claims adjudication process. For 2024, we expect auto earnings to be flat.
Keith Roland Meier: This acquisition further scales, our walk in repair offerings and is a Prime example of the investments, we're making globally to win new business and enhance existing relationships.
Keith Roland Meier: Moving to global automotive.
Keith Roland Meier: Similar to others in the industry first quarter results reflected persistent inflation impacts to vehicle parts and labor repair costs.
Keith Roland Meier: We've continued to take actions to address elevated inflation.
Keith Roland Meier: Implementing additional rate increases in the first quarter that build upon those taken over the past 18 months.
Keith Roland Meier: While also strengthening and enhancing our claims adjudication process.
Keith Roland Meier: For 2024, we expect auto earnings to be flat <unk>.
Keith Warner Demmings: Investment income growth and disciplined expense management efforts are expected to be offset by continued claims inflation. However, we remain confident in the long-term growth prospects of our auto business. Over the next several years, we expect rate actions to provide a tailwind for the business, with the pace and timing of earnings growth dependent on broader market trends. Now, let's discuss global housing, which drove our first quarter outperformance. Global housing earnings grew significantly in the first quarter, up nearly 75%, excluding reportable cash.
Keith Roland Meier: Investment income growth and disciplined expense management efforts are expected to be offset by continued claims inflation.
Keith Roland Meier: We remain confident in the long term growth prospects of our auto business.
Keith Roland Meier: Over the next several years, we expect rate actions to provide a tailwind for the business with the pace and timing of earnings growth dependent on broader market trends.
Keith Roland Meier: Now, let's discuss global housing, which drove our first quarter outperformance.
Keith Roland Meier: Global housing earnings grew significantly in the first quarter up nearly 75% excluding reportable cats.
Keith Warner Demmings: Following an extraordinary 2023, housing's first quarter performance reinforces the power of our unique business model, which is highly differentiated versus the broader P&C market. Housing's competitive advantages have led to a compelling shift in its financial return over the past two years, delivering strong financial performance with attractive returns. We have several distinct advantages in global housing. First, we have strong market positions in our core housing business. Specifically, at Lender Placed, we have strong relationships with the largest U.S. banks and mortgage servicers, including our new client, Bank of America, which we began to onboard in the first quarter.
Keith Roland Meier: Following an extraordinary 2023 housings first quarter performance reinforces the power of our unique business model, which is highly differentiated versus the broader P&C market.
Keith Roland Meier: Housings competitive advantages have led to a compelling shift in its financial return over the past two years delivering.
Keith Roland Meier: Delivering strong financial performance with attractive returns.
Keith Roland Meier: We have several distinct advantages in global housing.
Keith Warner Demmings: Second, as seen over the past 18 to 24 months in our lender place business, we've been able to achieve rate adequacy quickly through the built-in annual inflation guard product feature designed to adjust with building and materials costs and normal course state rate volatility. Third, our scale and focus on operational efficiencies have created meaningful expense leverage, which we will continue to benefit from going forward. Lastly, our lender-placed business provides a counter-cyclical hedge in the event of potential broader housing market weakness. While we would not expect tailwinds to be as significant as in prior recessions, we still expect policy placement increases if the housing market goes through a cyclical downturn.
Keith Roland Meier: First we have strong market positions in our core housing businesses.
Keith Roland Meier: Specifically in lender placed we have strong relationships with the largest U S banks and mortgage servicers, including our new client Bank of America, which we began to onboard in the first quarter.
Keith Roland Meier: Second as seen over the past 18 months to 24 months in our lender placed business, we've been able to achieve rate adequacy quickly through the built in annual inflation guard product feature designed to adjust with building and materials costs and normal course state rate filings.
Keith Roland Meier: Third our scale and focus on operational efficiencies have created meaningful expense leverage, which we will continue to benefit from going forward.
Keith Roland Meier: Lastly, our lender placed business provides a countercyclical hedge in the event of potential broader housing market weakness.
Keith Roland Meier: While we would not expect <unk> to be as significant as in prior recessions, we still expect policy placement increases if the housing market goes through a cyclical downturn.
Keith Warner Demmings: Similarly, in our renters and other business, we operate as a market leader across our affinity and property management company channels. The business has an attractive capital-light financial profile with limited catastrophe exposure and remains well positioned for long-term growth as we continue to innovate with our partners and capitalize on secular tailwinds within the rental market. During the quarter, we increased gross written premiums by over 15%, driven by strong growth in our PMC channel.
Keith Roland Meier: Similarly in our renters and other business, we operate as a market leader across our affinity and property management company channels.
Keith Roland Meier: The business has an attractive capital light financial profile with limited catastrophe exposure and remains well positioned for long term growth as we continue to innovate with our partners and capitalize on secular tailwind within the rental market.
Keith Roland Meier: During the quarter, we increased gross written premiums by over 15% driven by strong growth in our PMC channel.
Keith Warner Demmings: We've continued to leverage enterprise-wide capabilities to improve our customer experience and create value for our clients. For example, we leverage our premium technical support capabilities from Connected Living to help us launch Assurant TechPro for the multifamily housing channel, providing residents access to technical troubleshooting services, which is a first in the industry, turning to our Enterprise Outlook.
Keith Roland Meier: We've continued to leverage enterprise wide capabilities to improve our customer experience and create value for our clients.
Keith Roland Meier: For example, we leveraged our premium technical support capabilities from connected living to help us launch Assurant Tech pro for the multifamily housing channel.
Keith Roland Meier: Providing residents access to technical troubleshooting services, which is a first in the industry.
Keith Roland Meier: Turning to our enterprise outlook.
Keith Roland Meier: For 2024, we continue to expect enterprise-adjusted EBITDA to grow by mid-single digits, excluding cash. Based on our strong first quarter performance within global housing, which included $22 million of favorable prior period reserve development, our 2024 results are trending toward the higher end of the mid-single-digit outlook. We now anticipate global housing will lead our enterprise growth, and Global Lifestyle, our full-year outlook remains unchanged, driven by growth and connected living, which is partially offset by incremental investments to support long-term growth.
Keith Roland Meier: For 2024, we continue to expect enterprise adjusted EBITDA to grow by mid single digits, excluding cats.
Based on our strong first quarter performance within global housing, which included $22 million of favorable prior period Reserve development our.
Keith Roland Meier: Our 2024 results are trending toward the higher end of the mid single digit outlook.
Keith Roland Meier: We now anticipate global housing will lead our enterprise growth.
Keith Roland Meier: In global lifestyle, our full year outlook remains unchanged.
Keith Roland Meier: Driven by growth in connected living which is partially offset by incremental investments to support long term growth.
Keith Roland Meier: We continue to monitor global macroeconomic conditions, including inflation, foreign exchange, and interest rate levels, as well as new business investments. Looking at earnings per share, we now expect adjusted EPS growth to approximate adjusted EBITDA growth, reflecting lower expected depreciation expense, as well as higher earnings within global housing. I'll now turn it over to Keith Meier to review our first quarter results and 2024 outlook in further detail.
Keith Roland Meier: We continue to monitor global macroeconomic conditions, including inflation foreign exchange and interest rate levels as well as new business investments.
Keith Roland Meier: Looking at earnings per share, we now expect adjusted EPS growth to approximate adjusted EBIT growth, reflecting lower expected depreciation expense as well as higher earnings within global housing.
Keith Roland Meier: I'll now turn it over to Keith Meyer to review, our first quarter results and 2024 outlook in further detail.
Keith Roland Meier: Thanks, Keith, and good morning, everyone. With our strong first quarter performance, we continue to focus on driving long-term shareholder value with thoughtful and decisive actions to continue to grow and outperform. To achieve this, we are committed to a deep understanding of our global partners and their end consumers' needs, executing on the opportunities identified, as well as disciplined capital management to enable long-term growth. Now, let's review the details of our first quarter results.
Keith Roland Meier: Thanks, Keith and good morning, everyone.
Keith Roland Meier: With our strong first quarter performance, we continue to focus on driving long term shareholder value with thoughtful and decisive actions to continue to grow and outperform.
Keith Roland Meier: To achieve this we are committed to a deep understanding of our global partners and their end consumers needs executing on the opportunities identified as well as disciplined capital management to enable long term growth.
Keith Roland Meier: In the first quarter, adjusted EBITA grew 31% to $384 million, and adjusted EPS increased by $42% to $4.97, both excluding reportable catastrophes. From a capital perspective, we generated $254 million of segment dividends in the first quarter, ending the quarter with $622 million of holding company liquidity, up from $606 million at year end. Our strong capital position allowed us to return $77 million to shareholders in the quarter, including $40 million of share repurchase. In addition, we repurchased $10 million of shares between April 1st and May 3rd.
Speaker Change: Now, let's review the details of our first quarter results.
Speaker Change: In the first quarter, adjusted EBITDA grew 31% to $384 million and adjusted EPS increased by 42% to $4 97.
Speaker Change: Both excluding reportable catastrophes.
Speaker Change: From a capital perspective, we generated $254 million of segment dividends in the first quarter ending the quarter with $622 million of holding company liquidity.
Speaker Change: Up from $606 million at year end.
Speaker Change: Our strong capital position allowed us to returned $77 million to shareholders in the quarter <unk>.
Including $40 million of share repurchases.
Speaker Change: In addition, we repurchased $10 million of shares between April one and May 3rd.
Keith Roland Meier: Turning to our business segments, let's begin with Global Lifestyle. For the quarter, adjusted ebita grew 4% to $208 million, or 5% on a constant currency basis. Year-over-year growth was driven by strong performance in connected living, particularly in the U.S., which was partially offset by lower results in global automotive. In connected living, earnings increased 14 percent, or $16 million, primarily driven by continued momentum in our U.S. mobile protection programs and higher investment income.
Speaker Change: Turning to our business segments, let's begin with global lifestyle.
Speaker Change: For the quarter, adjusted EBITDA grew 4% to $208 million or 5% on a constant currency basis.
Speaker Change: Year over year growth was driven by strong performance in connected living particularly in the U S, which was partially offset by lower results in global automotive.
Speaker Change: In connected living earnings increased 14% or $16 million, primarily driven by continued momentum in our U S mobile protection programs and higher investment income.
Keith Roland Meier: Results were partially offset by investments in new capabilities and client partnerships. In the U.S., connected living growth also benefited from modest improvements in loss experience within extended service contracts, resulting from rate actions taken over the last 18 months to offset higher claim severities from inflation. Trade-in results were flat, as higher margins and contributions from new U.S. programs were partially offset by a decline in carrier volume, including impacts from lower promotional activity.
Speaker Change: Also were partially offset by investments in new capabilities and client partnerships.
Speaker Change: In the U S connected living growth also benefited from modest improvements in loss experienced within extended service contracts, resulting from rate actions taken over the last 18 months to offset higher claim severities from inflation.
Speaker Change: Trading results were flat as higher margins and contributions from new U S programs were partially offset by a decline in carrier volumes, including impacts from lower promotional activity.
Keith Roland Meier: International Connected Living Results included a $7 million favorable one-time extended service contract client benefit in Japan. Excluding this item, international results were stable on a constant currency basis, consistent with the trends from the end of 2023.
Speaker Change: International connected living results included a $7 million favorable onetime extended service contract client benefit in Japan.
Speaker Change: Excluding this item international results were stable on a constant currency basis consistent with the trends from the end of 2023.
Keith Roland Meier: Foreign exchange remains a headwind, impacting lifestyles adjusted EBITDA growth by one percentage point in the quarter. And Global Automotive's first quarter adjusted EBITDA declines 9%, or $7 million, driven by higher claims costs due to persistent inflation impacts as well as the normalization of select ancillary products. The impacts of inflation continue to be felt throughout the auto industry, as indicated in the March Consumer Price Index, where motor vehicle repair costs rose nearly 12% year over year and accelerated over the quarter.
Speaker Change: Foreign exchange remains a headwind impacting lifestyles adjusted EBITDA growth by one percentage point in the quarter.
Speaker Change: In global automotive first quarter, adjusted EBITDA declined 9% for $7 million driven by higher claims costs due to persistent inflation impacts as well as the normalization of select ancillary products.
Speaker Change: The impacts of inflation continue to be felt throughout the auto industry.
Speaker Change: As indicated in the March consumer price index, where motor vehicle repair costs rose nearly 12% year over year and accelerated over the quarter.
Speaker Change: Elevated claims costs were partially offset by higher investment income.
Keith Roland Meier: Elevated claims costs were partially offset by higher investment income. Turning to net earner premiums, fees, and other incomes, Lifestyle grew by $148 million, or 7%, and Connected Living increased 11%, benefiting from contributions from new trade-in programs and the North American Mobile Protection Program. Growth from Global Automotive's Net Earned Premiums, Fees, and Other Income was 3%, which was primarily driven by prior period sales of vehicle service contracts. For full year 2024, we continue to expect Global Lifestyles Adjusted EBITDA to grow, driven by connected living.
Speaker Change: Turning to net earned premiums fees and other income.
Speaker Change: If style grew by $148 million or 7% and.
Speaker Change: In connected living increased 11% benefiting from contributions from new trading programs in North America in mobile protection programs.
Speaker Change: Growth in global automotive net earned premiums fees and other income was 3%.
Speaker Change: Which was primarily driven by prior period sales of vehicle service contracts.
Speaker Change: For full year 2024, we continue to expect global Lifestyle's adjusted EBITDA to grow driven by connected living.
Keith Roland Meier: We expect growth in connected living to be led by the continued expansion of our U.S. business. In global auto, we expect adjusted EBITDA to be flat as higher investment income is offset by continued loss pressure from inflation.
Speaker Change: We expect growth in connected living to be led by the continued expansion of our U S business.
Speaker Change: And global Auto we expect adjusted EBITDA to be flat as higher investment income is offset by continued loss pressure from inflation.
Keith Roland Meier: Prospective rate actions taken over the past 18 months are expected to drive improvement over time, depending on the timing and pace of claims inflation impact. Investments related to new clients and programs will temper lifestyle growth in 2024 but will be a critical driver in the strengthening of our business over the long term. We continue to monitor foreign exchange impacts, broader macroeconomic conditions, and interest rates, which may impact the pace and timing of growth.
Speaker Change: Prospective rate actions taken over the past 18 months are expected to drive improvement over time, depending on the timing and pace of claims inflation impacts.
Speaker Change: Investments related to new clients and programs will temper lifestyle growth in 2024.
Speaker Change: So it will be a critical driver in the strengthening of our business over the long term.
Speaker Change: We continue to monitor foreign exchange impacts broader macroeconomic conditions and interest rates.
Speaker Change: Which may impact the pace and timing of growth.
Keith Roland Meier: As we enter the second quarter... We expect our sequential adjusted EBITDA trend to be impacted by the absence of the one-time client benefit and seasonally lower mobile trade-in volume, both in Connected Living. Moving to global housing.
Speaker Change: As we enter the second quarter.
Speaker Change: We expect our sequential adjusted EBITDA trend to be impacted by the absence of the onetime client benefit and seasonally lower mobile trading volumes both in connected living.
Moving to global housing.
Keith Roland Meier: First quarter adjusted EBTA was $193 million, which included $13 million of reportable catastrophe losses. Excluding reportable losses, adjusted EBITDA increased by 74%, or $88 million, to $205 million. Over half of the increase was driven by improving non-CAT loss ratios from moderating claims trends and higher average premiums. A portion of the claims improvement was related to a $16 million favorable year-over-year net impact on prior period reserve development. This was comprised of a $22 million reserve reduction in the current quarter, compared to a $6 million reserve reduction in the first quarter of 2023.
Speaker Change: First quarter, adjusted EBITDA was $193 million, which.
Speaker Change: Which included $13 million of reportable catastrophes.
Speaker Change: Excluding reportable cats, adjusted EBITDA increased by 74% or $88 million to $205 million.
Speaker Change: Over half of the increase was driven by improving non cat loss ratios for moderating claims trends and higher average premiums.
Speaker Change: A portion of the claims improvement was it related to a $16 million favorable year over year net impact to prior period Reserve development.
Speaker Change: This was comprised of a $22 million reserve reduction in the current quarter.
Speaker Change: Compared to a $6 million reserve reduction in the first quarter of 2023.
Keith Roland Meier: The remainder of the adjusted EBITDA increase was mainly driven by continued top line growth in homeowners and an increase in the number of enforced policies, lower cash-free reinsurance costs, and higher investment income. For renters and others, earnings increased from growth in our property management channel. As Keith mentioned, expense leverage throughout housing continues to be a strong differentiator as our technology investments and innovations are enabling a superior customer experience. This has played a critical role in our outperformance.
Speaker Change: The remainder of the adjusted EBIT increase was mainly driven by continued topline growth in homeowners.
Speaker Change: And an increase in the number of in force policies, lower catastrophe reinsurance costs and higher investment income.
Speaker Change: For renters, another earnings increase from growth in our property management channel.
Speaker Change: As Keith mentioned expense leverage throughout housing continues to be a strong differentiator as our technology investments and innovations are enabling a superior customer experience.
Speaker Change: This has played a critical role in our outperformance.
Keith Roland Meier: Given the strong first quarter performance, we expect Global Housing's full-year 2024 adjusted EBITDA growth, excluding CAHPS, to lead our overall enterprise growth. We anticipate growth will be driven by favorable non-cat loss experience, continued top-line momentum in homeowners, and lower catastrophe reinsurance costs. Over the course of 2024, our lender-placed business is expected to be impacted by ongoing client portfolio movement. This includes the addition of multiple client portfolios, including the onboarding of Bank of America, as well as expected offboarding impacts from the sale of a client to another party.
Speaker Change: Given the strong first quarter performance, we expect global Housing's full year 2024, adjusted EBITDA growth, excluding cats to lead our overall enterprise growth.
Speaker Change: We anticipate growth will be driven by favorable non cat loss experience continued topline momentum in homeowners and lower catastrophe reinsurance costs.
Speaker Change: Over the course of 2020 for our lender placed business is expected to be impacted by ongoing client portfolio movements.
Speaker Change: This includes the addition of multiple client portfolios, including the Onboarding of Bank of America, as well as expected off boarding impacts from the sale of a client to another party.
Keith Roland Meier: Given the unique composition of each portfolio, these movements are expected to impact track loans and placement rates from quarter to quarter. However, policies in force, a key driver of earnings, are expected to grow overall for 2024. As we turn to the second quarter, please keep in mind the following.
Speaker Change: Given the unique composition of each portfolio. These movements are expected to impact track loans and placement rate from quarter to quarter.
Speaker Change: However policies in force a key driver of earnings is expected to grow overall for 2024.
Speaker Change: As we turn to the second quarter. Please keep in mind the following.
Keith Roland Meier: First, we had $22 million in first quarter prior year reserve development. Second, we expect normalized catastrophe reinsurance costs following lower costs in the first quarter, which were impacted by timing differences related to the program transition to a single place, as well as favorable 2023 exposure trua. Beginning in the second quarter, we expect quarterly reinsurance premiums to be modestly above $50 million, which is an increase from the $34 million in the first quarter. And lastly, the second quarter tends to be an elevated period for non-CAT losses.
Speaker Change: First we had $22 million a first quarter prior year reserve development.
Speaker Change: Second.
Speaker Change: We expect normalized catastrophe reinsurance costs following lower costs in the first quarter, which were impacted by timing differences related to the program transitioned to a single placement as well as favorable 2023 exposure true ups.
Speaker Change: Beginning in the second quarter, we expect quarterly reinsurance premiums to be modestly above $50 million, which is an increase from the $34 million in the first quarter.
Speaker Change: And lastly, the second quarter tends to be an elevated period for non cat loss experience.
Keith Roland Meier: Next, I wanted to summarize the placement of our 2024 Catastrophe Reinsurance Program, which has now transitioned to a single April 1st placement. We are pleased with our increased coverage at Attractive Terms, including cost savings realized in this year's placement. 2024 catastrophe reinsurance premiums for the total program are estimated to be approximately $190 million, a reduction in comparison to $207 million in 2023. As previously communicated, our per-event retention has increased to $150 million, aligning with a one-in-five-year probable maximum loss, or PML.
Speaker Change: Next I wanted to summarize the placement of our 2020 for catastrophe reinsurance program, which is now transitioned to a single April 1st placement date.
Speaker Change: We are pleased with our increased coverage at attractive terms, including cost savings realized in this year's placement.
Speaker Change: 2020 for catastrophe reinsurance premiums for the total program are estimated to be approximately $190 million.
Speaker Change: The reduction in comparison to $207 million in 2023.
Speaker Change: As previously communicated our per event retention increased to $150 million aligning with a one in five year probable maximum loss for P&L.
Keith Roland Meier: Our main U.S. program will provide nearly $1.5 billion in loss coverage in excess of our retail, protecting Assurant and its policyholders against a PML of approximately a 1 in 265-year storm, an increase above the 2023 limit aligned to a 1 in 225-year PML. Overall, this year's placement was diversified and supported by the strength of our relationships with 40 plus highly rated re-insurers Moving to corporate, the first quarter adjusted EBITDA loss was $30 million.
Speaker Change: Our main U S program will provide nearly $1 5 billion in loss coverage in excess of our retention protecting assurant and its policyholders against the PMO of approximately a one in 265 year storm.
Speaker Change: An increase above the 2023 limit aligned to a one in 225 year P&L.
Speaker Change: Overall this year's placement was diversified and supported by the strength of our relationships with 40, plus highly rated reinsurers.
Keith Roland Meier: $5 million dollar-over-year, mainly due to higher enterprise growth initiatives. We now expect the 2024 corporate adjusted EBITA loss to approximate $110 million, consistent with 2023.
Speaker Change: Moving to corporate the.
Speaker Change: First quarter adjusted EBITDA loss was $30 million a.
Speaker Change: $5 million year over year increase mainly due to higher enterprise growth initiatives.
We now expect the 2020 for corporate adjusted EBITDA loss to approximate $110 million consistent with 2023.
Keith Roland Meier: Turning to capital management, we generated significant deployable capital in the first quarter, upstreaming $254 million in segment dividends. For 2024, we expect our businesses to continue to generate meaningful cash flow. Cash conversion to the holding company is expected to approximate two-thirds of segment-adjusted EBITDA, including reportable cashflow expectations assume a continuation of the current macroeconomic environment and are subject to the growth of the businesses, Investment Portfolio Performance, and Rating Agency and Regulatory Requirements.
Speaker Change: Turning to capital management.
Speaker Change: We generated significant deployable capital in the first quarter upstream in $254 million in segment dividends.
Speaker Change: For 2024, we expect our businesses to continue to generate meaningful cash flow.
Speaker Change: Cash conversion to the holding company is expected to approximate two thirds of segment adjusted EBITDA, including reportable catastrophes.
Speaker Change: Cash flow expectations assume a continuation of the current macroeconomic environment.
Speaker Change: And are subject to the growth of the businesses.
Speaker Change: Investment portfolio performance.
Speaker Change: Rating agency and regulatory requirements.
Keith Roland Meier: As we look forward to the remainder of the year, we continue to be focused on maintaining balance and flexibility to support new business growth and return capital to shareholders. From a share repurchase perspective, we continue to expect to be in the range of 200 to 300 million dollars, which will depend on strategic M&A opportunities, market conditions, and consumer activity. Through the strength of our differentiated business model and given our first quarter results, we are increasingly confident in achieving our 2024 financial objective. Our strong capital position provides us with the necessary resources to support business growth and shareholder value over the long term. And with that, operator, please open the call for questions.
Speaker Change: As we look forward to the remainder of the year, we continue to be focused on maintaining balance and flexibility to support new business growth and return capital to shareholders.
Speaker Change: From a share repurchase perspective, we continue to expect to be in the range of $200 million to $300 million.
Which will depend on strategic M&A opportunities market conditions and cat activity.
Speaker Change: Through the strength of our differentiated business model and given our first quarter results. We are increasingly confident in achieving our 2024 financial objectives.
Speaker Change: Our strong capital position provides us with the necessary resources to support business growth and shareholder value over the long term.
Speaker Change: And with that operator, please open the call for questions.
Operator: The floor is now open for questions. At this time, if you have a question or comments, please press star 1 on your touchtone phone. At any point during the question-answering process, you may remove yourself from the queue by pressing the pound. [inaudible] We do ask that, while you post your question, you pick up your headset to provide optimal sound quality. Thank you. Our first question comes from the line of markets with the truest securities.
Speaker Change: Florida is now open for questions.
Speaker Change: We have a question.
Speaker Change: <unk> on your Touchtone phone.
Speaker Change: Any questions.
Speaker Change: David will start from Keybanc.
Speaker Change: Yeah.
David: Hi, Dan.
David: You ask why do you publish your question that you pick up there.
David: Like optimal sound quality.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of products.
Unknown Securities: <unk> Securities Your line is open.
Mark Douglas Hughes: Morning, Mark. Yeah, thank you very much. Good morning. Hello.
Products: Good morning, Mark Yes, Thank you very much good morning.
Keith Warner Demmings: In Connected Living, your EBITDA growth of 14% is super strong. When you look at your covered device count, it's relatively stable. Trade-ins were stable, but you're getting strong top-line growth. How long can you continue to push the top line and profitability in an environment where covered devices seem to be relatively steady? No, it's a great question.
Products: Hello.
Mark: In connected living.
Mark: EBITDA growth, 14% Super strong.
Mark: When you look at your covered device count.
Mark: Relatively stable trade ins were stable, but youre getting strong topline growth.
Mark: How long can you continue to push the topline and profitability.
Mark: Environment, where covered devices seem to be relatively steady.
Keith Warner Demmings: I think we're, you know, really pleased with certainly how connected living started the year. Largely driven by the strength of the US connected living business overall, you know, and we've talked about this in the past. But we've had double-digit growth in connected living for probably seven or so years pretty consistently, as they look at the first quarter results. Domestic connected living again was up double digits High single last year. So I think we feel incredibly well positioned. You know, we did see a little bit of softness in the number of devices covered.
Speaker Change: Yeah, No. That's a great question I think we're we're really pleased with certainly how connected living started the year.
Speaker Change: Largely driven by the strength of the U S connected living business overall, and we've talked about this in the past, but we've had double digit growth in connected living for probably seven or so years pretty consistently as I look at the first quarter results domestic connected living again was up double digits high single last year. So.
Speaker Change: I think we feel incredibly well positioned we did see a little bit of softness in the <unk>.
Keith Warner Demmings: A little bit of that is in Japan, which we've talked about, although our margins have been quite stable in that market. A little bit on the prepaid side as well, but the bulk of our U.S. postpaid business, which drives the lion's share of the economics, clients are performing incredibly well and feel really well positioned longer term.
Speaker Change: Devices covered count a little bit of that is in Japan, which we've talked about although our margins have been quite stable in that market a little bit in the prepaid side as well, but the bulk of our U S postpaid business, which drives the lion's share of the economics clients are performing incredibly well and feel really well positioned longer term.
Speaker Change: Okay.
Keith Warner Demmings: You're an inflation guard in the homeowners business. When does that get updated? And what does it look like for this go around?
Speaker Change: Inflation guard in the.
Speaker Change: Homeowners business when does that.
Speaker Change: Good updated and what it looked like.
Speaker Change: Let's go round.
Keith Warner Demmings: Yeah, it'll get updated July 1st. It'll be a very modest adjustment, roughly one percent. I think last year was a little north of three, and then the year before it was in the low to mid teens. So, you know, a fairly normalized level, I think, as we look forward this year.
Speaker Change: Yes, it will get updated.
Speaker Change: July one it'll be a very modest adjustment roughly 1% think last year was a little north of three and then the year before it was in the in the low to mid teens, so fairly normalized level I think as we look forward this year.
Speaker Change: And then the non cat loss experience.
Speaker Change: Housing.
Keith Warner Demmings: and then the non-cat loss experience in housing was good. How would you judge the weather this quarter? It sounds like you're benefiting from great better claims trends. How much of a weather impact do you think there was?
Speaker Change: Good good.
Speaker Change: How would you judge the weather this quarter it sounds like Youre benefiting right better claims trend.
Speaker Change: How much of a weather impact do you think there was in Q1.
Keith Warner Demmings: I think if you if you set aside the development which we called out at 22 million in the quarter the non-cat loss ratio was just under 39% you know I'd say that was relatively in line with our expectations in line with what we would expect you know for the full year around that loss ratio factor so I would say you know certainly we've seen normalized severity levels as inflation has come down and then to your point you know obviously a lot of impact in the business from rate but then a tremendous amount of leverage in terms of the operating expenses you know both with scale but also the efforts that we've made to continue to drive automation. And Keith, did you want anything?
Speaker Change: Yes, I think if you if you set aside the development, which we called out at $22 million in the quarter.
Speaker Change: The non cat loss ratio was just under 39%.
Speaker Change: That was relatively in line with our expectations in line with what we would expect.
Speaker Change: For the full year around that loss ratio factor. So I would say certainly we see normalized.
Speaker Change: Severity levels as inflation has come down and then to your point, obviously a lot of impact in the business from rate, but then a tremendous amount of leverage in terms of the operating expenses.
Speaker Change: Both with scale, but also the efforts that we've made to continue to drive automation.
Speaker Change: And Keith do you want to add anything thank you.
Keith Warner Demmings: Thank you. Yeah, sure. You know, I think a good way to think about that, Mark, as well as Keith mentioned 39% non-CAT loss ratio. We have an expense ratio of about 38%, combined to 77%. If you add in some CAT coverage, you're probably in that mid, mid to high 80s that we talk about on a normal basis. So I think it was pretty well in that line, maybe a little bit better than that. Understand, appreciate.
Keith Roland Meier: Yes sure.
Keith Roland Meier: So a good way to think about that mark as well as.
Keith Roland Meier: Keith mentioned, 39% non cat loss ratio, we have an expense ratio of about 38% combined 77%.
Keith Roland Meier: Adding some.
Keith Roland Meier: Some cat coverage you are probably in that mid <unk> mid <unk> mid to high 80 that we talk about on a on a normal basis. So I think it was pretty well in that line, maybe a little bit better than that.
Mark Douglas Hughes: understood. I appreciate the detail.
Speaker Change: Understood I appreciate the detail.
Speaker Change: Great. Thanks, Mark.
Brian Robert Meredith: Our next question comes from Brian Meredith with UBS.
Speaker Change: Our next question comes from.
Speaker Change: Okay.
Speaker Change: Sure.
Brian Robert Meredith: Yeah, thanks. Good morning. First, I'm just curious about the onboarding expenses for Bank of America and maybe Testra, are those largely complete at this point? Are we going to see some more of that going forward? Your expenses were quite below where I was expecting this quarter.
Speaker Change: Yes.
Speaker Change: Good morning.
Speaker Change: Couple of questions here first I'm just curious on boarding expenses for bank of America, and maybe capture are those largely complete at this point are we going to see some more of that going forward. Your expenses are quite below where I was expecting this quarter.
Keith Roland Meier: Yeah, so on Bank of America, you know, we've been ramping them up over the last quarter, and so those loans are now being tracked. And then in the second and third quarters, those policies should be coming online, and then by the end of the third quarter, we should be fully up and running on Bank of America. So I think the outlook for Bank of America should be improving as we go through the year.
Speaker Change: Yeah. So.
Speaker Change: And bank of America, we've been ramping them up.
Speaker Change: Over the last quarter and so.
Speaker Change: Loans are now being tracked and then in the second and third quarter those policies should be coming online and then by the end of the third quarter, we should be fully up and running on bank of America. So I think the.
Speaker Change: The outlook for bank of America should be improving as we go through the year.
Keith Roland Meier: And then with Telstra, we just launched the rest of the program, the main part of the program, earlier this month. And so we went through a lot of investment there. There's still more to come for Telstra, but we're in a really good place getting Telstra launched in terms of the main part of the program.
Speaker Change: And then with Telstra.
Speaker Change: We just launched.
Speaker Change: The rest of the program the main part of the program.
Speaker Change: Earlier this month and so we went through a lot of investment there there is still more to come for Telstra, but we're in a really good place.
Speaker Change: Getting Telstra launched in terms of the main part of the program.
Keith Roland Meier: Yeah, and maybe just add a little bit of color as well, Brian, in terms of the question about ongoing investment. So if I'm thinking about global connected living in the first quarter, I'd probably size $5 million of incremental investments in long-term growth for the quarter. We continue to think that it'll have a 2% to 3% impact on overall growth for the full year. So we're thinking about that trend line continuing as we move forward, and then it's just a question of at what pace and urgency do we deploy some of the solutions with, you know, not just the clients that we've talked about publicly, but a number of clients and prospects that we're actively working on in real time, which we'll disclose more on later in the year.
Speaker Change: Greg maybe I'll, just add a little bit of color as well Brian in terms of the the <unk>.
Greg: Question about ongoing investment so if I'm thinking about global connected living in the first quarter I would probably size $5 million of.
Speaker Change: Your mental investments in long term growth in the quarter.
Speaker Change: We continue to think that it'll be two years to 3% impact too.
Speaker Change: To the overall growth for the full year, so think about that trend line continuing as we move forward and then it's just a question of at what pace and urgency do we deploy some of the solutions with Nacho.
Speaker Change: Not just the clients that we've talked about publicly but a number of clients and prospects that we're actively working on in real time, which we'll disclose more on later in the year.
Brian Robert Meredith: Great. And my second question is related to global auto. I know historically you said it was a couple of clients maybe that were really the issues, but I'm wondering if it's become more pervasive. And is there anything that you're kind of thinking about doing with contracts to maybe mitigate, you know, some of this inflationary aspect here going forward? Yeah, so it, you know, it's that first part of your question; it's unchanged. So the clients that we've been monitoring and working with.
Speaker Change: Great and my second question related to global auto.
Speaker Change: I know historically you said it was a couple of clients maybe that were really the issues I'm wondering if it's become more pervasive and is there anything that youre thinking about doing with contracts and maybe mitigate.
Speaker Change: Some of this inflationary aspects here going forward.
Keith Roland Meier: Yeah so you know it's that first part of your question it's unchanged so the the clients that we've been monitoring and working on based on the deal structures their profit share type arrangements if losses go over a hundred percent it creates short-term pressure in our P&L and then we look to recover that contractually with rate adjustment so it isn't more pervasive than it was but obviously the there's a little bit of elevation in terms of the the severity around parts and labor costs in the auto sector which I think everyone is seeing I do feel you know continue to feel real good about our long-term opportunity in auto you know clients are working with us incredibly well we've taken a number of rate increases over the last 18-20 months we took more rate adjustments in the first quarter we'll do more in the second quarter so you know really it's a it's about getting this business to the right spot over the long term we talk about relative stability in the P&L at auto in 24 and then progressively getting better as we enter 25 Great. Thank you. You bet.
Speaker Change: Yeah. So.
Speaker Change: That first part of your question, it's unchanged. So the clients that we've been monitoring and working on based on the deal structure is there a profit share type arrangements if losses go over 100%. It creates short term pressure in our P&L and then we look to recover that contractually with rate adjustment. So.
Speaker Change: It isn't more pervasive than it was but obviously there is a little bit of elevation in terms of the the severity around parts and labor costs in the auto sector, which I think everyone is seeing do feel continue to feel real good about our long term opportunity in auto clients are working with us incredibly well we've taken a number of.
Speaker Change: Rate increases over the last 18 20 months, we took more rate adjustments in the first quarter, we will do more in the second quarter. So really it's a it's about getting this business.
Speaker Change: To the right spot over the long term, we talk about relative stability in the P&L. It auto in 'twenty, four and then progressively getting better as we enter 2005.
Speaker Change: Great. Thank you.
Speaker Change: You bet.
Operator: Once again, if you do have a question, you may press star 1 on your touch-tone phone at this time. We have another question. It comes from the line of Tommy Mcjoynt with KDW. Your line is open.
Speaker Change: Once again, if you do have a question you May press are one thing I've touched on.
Speaker Change: Another question comes from the line of Tom Brian.
Thomas Patrick Mcjoynt: Your line is open.
Thomas Patrick Mcjoynt: Hey Tommy, good morning. Hey Tommy.
Thomas Patrick Mcjoynt: Hey, Tommy good morning, Amit.
Thomas Patrick Mcjoynt: Hey, good morning, guys. Thanks for taking my questions. The first one, can you talk about, you know, as the Bank of America portfolio comes on board and perhaps also considering any other, you know, service or client additions or deletions, is there anything that we should expect in the placement rate or the average insured values that would be different than what we should just see in a broader economy in terms of tracking mortgage delinquencies and home price appreciation? Anything different that's kind of changing about the nature of your track portfolio?
Thomas Patrick Mcjoynt: Hey, good morning, guys. Thanks for taking my questions.
Thomas Patrick Mcjoynt: The first one.
Thomas Patrick Mcjoynt: Can you talk about you know as the bank of America portfolio comes on Board.
Thomas Patrick Mcjoynt: And perhaps also considering any other servicer client additions or deletions.
Thomas Patrick Mcjoynt: Is there anything that we should expect in the placement rate or the average insured values that would be different than what we should just see in the broader economy in terms of tracking mortgage delinquencies and home price appreciation anything different that's kind of changing about the nature of your <unk> portfolio.
Keith Roland Meier: Yeah, so I think I mentioned in the opening remarks about the various changes that are happening within our portfolio, obviously Bank of America, we talked about. We have another client that was added by another one of our clients, so that was positive. We also have another client that was acquired by a third party, so those loans will be coming off.
Speaker Change: Yes, So I think I've mentioned in the opening remarks, where we've we've got.
Speaker Change: Various changes that go on within the portfolio, Obviously bank of America, we've talked about.
Speaker Change: We have another.
Speaker Change: Client that was added.
Speaker Change: By another one of our clients. So that was a positive. We also have another client that was acquired by a third party. So those loans will be coming off so I think there's going to be a little bit of ups and down some of those have lower placement rates in the average some of them have higher placement rates.
Keith Roland Meier: So I think there's going to be a little bit of ups and downs. Some of those have lower placement rates than the average. Some of them have higher placement rates. But when you think about between now and the end of the year, overall, we should be up in our policy counts when you net those kind of movements within the quarter. Yeah, and I think in a
Speaker Change: But when you think about between now and the end of the year overall, we should be up and our policy counts when you net those kind of movements within the quarters.
Keith Roland Meier: Yeah, and I think at a relatively stable placement rate as we exit the year, Tommy, and it may bounce around a little bit, but to Keith's point, policy counts at the end of the year should be higher than where we sit today.
Speaker Change: Yeah, and I think in a relatively stable placement rate as we exit the year, Tommy and it may bounce around a little bit, but Turkey point.
Speaker Change: Policy counts at the end of the year should be higher than where we sit today.
Speaker Change: Okay.
Thomas Patrick Mcjoynt: Okay, got it. That's a good color. And then, switching over, can you talk about the current level and perhaps your expectations for trade-in programs and promotional activity from the carriers? And just whether or not you think that could be a swing factor in the bottom line of connected living as we proceed through the year? Yeah, I think so.
Speaker Change: Okay got it that's good color.
Speaker Change: And then switching over can you talk about the current level and perhaps your expectations for <unk>.
Speaker Change: Trade in programs and promotional activity from from the carriers.
Speaker Change: Whether or not you think that could be a swing factor in the in the bottom line of connected living as we as we proceed through the year.
Keith Warner Demmings: Yeah, I think we've, you know, we've done a really good job maintaining overall margins in the trade-in side of the business. If you think about the first quarter, obviously, devices serviced were down.
Speaker Change: Yes, I think we've you know we've done a really good job maintaining overall margins in in the trade inside of the business you.
Speaker Change: Do you think about the first quarter, obviously devices serviced where we're down.
Keith Warner Demmings: But, as we signaled, margins are quite stable, and we're making up some of that with additional volume with new clients as well. So I think we feel really good about how we're positioned, and to your point, the promotional activity was relatively light in the quarter. I think clients were focused on, you know, other things within their portfolios and moving customers to higher-tier premium rate plans, et cetera, and driving upgrades wasn't a huge priority in the market.
Speaker Change: As we signaled margins are quite stable and we're making up.
Speaker Change: Some of that with additional volume with new clients as well. So I think we feel really good about our position and to your point that the promotional activity was relatively light in the quarter I think clients were focused on other things within their portfolios and moving customers to higher tier premium rate plans et cetera and drive.
Speaker Change: <unk> upgrades wasn't a huge priority in the market, but we still performed quite well financially. So I think we're well positioned in that.
Keith Warner Demmings: But we still performed quite well financially, so I think we're well-positioned, and, you know, the dynamic environment, particularly with the big three mobile operators, is hard to predict. And, you know, obviously, we're well-positioned should that activity pick up here in the second quarter and beyond. So it's hard to predict right now, Tommy, but I think we feel really well-positioned.
Speaker Change: The dynamic environment.
Speaker Change: Particularly with the big three.
Speaker Change: Mobile operators is hard to predict and.
Speaker Change: Obviously, we're well positioned should that activity pick up here in the second quarter and beyond so it's hard to predict right now tell me, but I think we feel really well positioned.
Thomas Patrick Mcjoynt: Okay, got it. And then last one, I think I may have missed it during the remarks. I think I heard you say that the reinsurance costs decreased, but I didn't catch that.
Speaker Change: Okay got it.
Speaker Change: Then last one I think I may have missed it during the.
Speaker Change: Remarks.
Speaker Change: I heard you say that the reinsurance cost decreased I didn't catch well fed.
Thomas Patrick Mcjoynt: Well, first off, could you repeat those numbers? And then secondly, did you mention what is happening to the per event retention? If there were changes to that?
Speaker Change: First off could you repeat those numbers and then secondly did you mentioned like what is happening to the per event retention. If there were changes to that.
Keith Roland Meier: Yeah, sure. So, Well, I guess, first of all, you know, we're really pleased with the outcome of moving to the single placement. It's really simplified the program, and I think it was well-received by the reinsurers. We mentioned that the cost of the program was down year over year, so we're expecting it to be approximately $190 million this year versus $207 million from last year. And overall, our per-event retention stayed at a one in five probable maximum loss.
Speaker Change: Yes sure so.
Speaker Change: Well I guess first of all we're really pleased with the outcome of moving to.
Keith Meier: The single placement, it's really simplified the program I think it was well received by the reinsurers.
Keith Roland Meier: We mentioned that the cost of the program was down year over year. So.
Keith Roland Meier: We're expecting it to be approximately 190 million this year versus $207 million from last year.
Keith Roland Meier: And.
Keith Roland Meier: Overall.
Keith Roland Meier: Our per event retention stayed at home.
Keith Roland Meier: One in five probable maximum loss.
Keith Roland Meier: So that was up from 125. At the top end of the program, we actually increased from 1.4 million to 1.63 million. So moving it from a one in 225 year event to a one in 265 year event. So a lot of good protection and a lower cost. So I think overall moving the program to the four one placement date was, I think, a very favorable move for us. And then also, just in terms of the rates, the rates were favorable online, given the reinsurance market. And I think that was a reflection of the quality of our book and our overall performance.
Keith Roland Meier: So that was up from 125, the top end of the program, we actually increased from $1 4 million to $163 million. So.
Thomas Patrick Mcjoynt: Got it. Thanks for recapping. Thank you.
Operator: Thank you. My pleasure. There are no more further questions at this time.
Operator: Moving it from one and 225, a year two 1% and 265 year event. So.
Operator: A lot of good protection and a lower cost. So I think overall moving the program to the four one placement date was was I think a very favorable move for US and then also just in general in terms of the rates the rates were favorable online given the reinsurance market.
Operator: And I think that was a reflection of the quality of our book and our overall performance.
Operator: Got it thanks, so recapping that.
Speaker Change: Thank you.
Operator: Sure.
Operator: Yes.
Operator: There are no more further questions at this time.
Keith Roland Meier: Wonderful. Well, thanks, everybody, and we'll look forward to the next quarterly call. And please reach out to the IR team if you have any questions.
Speaker Change: Wonderful well, thanks, everybody and we'll look forward to the next quarter call and please reach out to the IR team. If you have any questions.
Speaker Change: Have a great day.
Speaker Change: Thank you.
Operator: This concludes today's teleconference. Please disconnect your lines at this time and have a wonderful day.
Speaker Change: This concludes today's teleconference. Please disconnect your lines at this time and have a wonderful day.
Operator: Yeah.
Operator: Yeah.
Operator: Yeah.
Operator: Yes.