Q1 2025 Assurant Inc Earnings Call
in a listen-only mode, and the floor will be open for your questions following
If you would like to ask a question at that time, please press star 9 to raise your hand and star 6 to unmute.
We ask that you please pick up your handset to allow optimal sound quality.
Speaker Change: It is now my pleasure to turn the floor over to Sean Moshier, Vice President of Investor Relations. You may begin.
Speaker Change: Thank you, operator, and good morning, everyone. We look forward to discussing our first quarter 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.
Speaker Change: Yesterday, after the market closed, we issued an earnings release announcing our results for the first quarter 2025.
Speaker Change: The release and corresponding financial supplement are available on Assurant.com also on our website is a slide presentation for our webcast participants.
Some of the statements made today are forward-looking.
Speaker Change: Ford-looking statements are based upon our historical performance and current expectations and subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements.
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 FEC reports.
Speaker Change: During today's call, we will refer to non-GAAP financial measures, which we believe are important in analyzing the company's performance.
Speaker Change: For more details on these measures, the most comparable GAAP measures and a reconciliation of the two, please refer to the earnings release, presentation, and financial supplement on our website.
Speaker Change: We'll start today's call with remarks before moving into Q&A.
I will now turn the call over to Keith Demmings.
Thanks, Sean, and good morning, everyone.
Speaker Change: I'm pleased to share that 2025 is off to a strong start.
Speaker Change: For the first quarter, we continue to demonstrate momentum, delivering 14% growth in adjusted EBITDA and 16% growth in adjusted earnings per share, both excluding reportable catastrophes.
Speaker Change: This quarter's performance highlights the position of strength from which we continue to operate and is supported by our diversified global operating model where we have market leading businesses across global housing and global lifestyle that are underpinned by our robust capital position.
Speaker Change: We have a proven track record of delivering through various economic cycles over the long term, and we remain well positioned to achieve our ninth consecutive year of earnings growth.
Speaker Change: Our differentiated business-to-business-to-consumer distribution strategy in attractive markets is reinforced by our world-class workforce that enables us to win, build, and scale transparent partnerships with many of the world's leading brands.
Speaker Change: and our ability to deliver exceptional customer experiences through customized data-driven solutions and comprehensive wraparound services reinforces the strength of assurance long-term fundamentals.
Speaker Change: Last quarter, we outlined our 2025 priorities and I'm incredibly proud of our team's progress to date.
Speaker Change: We're executing, optimizing and scaling significant partnerships across lifestyle and housing through the foundational investments we made in new programs and clients in 2024.
Speaker Change: We've continued to make high-value incremental investments to support new program launches in our pipeline and accelerate emerging growth opportunities.
Speaker Change: and we remain focused on achieving our 2025 outlook by driving operational excellence and financial performance.
Speaker Change: Next, I want to share a few segment highlights that support our attractive position.
Speaker Change: Starting with Global Lifestyle, we're laser focused on achieving our growth objectives across connected living and global automotive.
Speaker Change: This has allowed us to build relationships with every major US mobile operator along with many global leaders in the telecom industry.
Speaker Change: As mobile and cable operators continue to innovate and compete in the wireless space, Assurance Strengthened Partnerships enhance our market position and support long-term growth.
Speaker Change: Our approach continues to generate momentum. And through key investments in leading edge technology, including automation, robotics, and AI at our device care centers, we anticipate meaningful opportunities to offer additional value-added services to our key mobile clients in the near future.
Speaker Change: During the first quarter, we continue to build our track record of deepening relationships with Keith Clients.
Reinforcing our position as a preferred partner.
Speaker Change: Recently, we partnered with Verizon to launch a new mobile device protection plan from Total Wireless. Verizon's fast-growing no-contract wireless provider.
Speaker Change: The program, Total Wireless Protect, will allow new and existing customers affordable replacement and repair against accidents and mechanical breakdowns.
Speaker Change: Supported by our more than 900 Assurant Authorized Repair Center's nationwide.
Speaker Change: This provides an opportunity to continue building deeper relationships with another US mobile carrier.
Speaker Change: In Global Out of Motif, earnings remained stable, supported by a year-over-year improvement in loss experience.
Speaker Change: Our leadership team is quickly making progress to enable further success.
Speaker Change: including a unified, consistent branding approach in our go-to-market strategy, allowing us to better leverage our scale as a market leader.
Speaker Change: This has contributed to new wins within our U.S. and international distribution channels with runaway to gain additional share with large national dealers.
Speaker Change: and we're launching several new products within Global Auto this year.
Speaker Change: We recently launched Assurant Vehicle Care Technology Plus, which provides coverage for high-tech vehicle components, wear-and-care items, and smartphone repairs.
Moving to housing.
Speaker Change: Shifts in the voluntary insurance market throughout the U.S. have increased demand for lender-placed insurance products within homeowners.
Speaker Change: Our product helps lenders, investors and homeowners remove the risk about insured loss.
Speaker Change: Through the exceptional efforts of our claims team, we remain committed to supporting our policy holders when they need us most.
Speaker Change: We're proud to be honored by the American Red Cross as a 2025 disaster relief hero. Recognizing our support for those impacted by 2024 storms, including hurricanes Helene and Milton and the wildfires in California.
Speaker Change: As we look at results, our strong performance continued in the first quarter, driven by 17% top-line growth within homeowners, primarily due to the addition of 70,000 lender-place
Speaker Change: We've achieved significant expense leverage, resulting in a compelling combined ratio.
Speaker Change: Even with elevated cats in the first quarter, we delivered a combined ratio of 90 percent.
Speaker Change: For 2025, we're on track to deliver a combined ratio around the mid-80s, including our full-year cat-assumption of $300 million.
Speaker Change: We continue to extend the tenure of our client base, renewing two lender-place clients in the first quarter, and we see meaningful opportunity to expand with new clients by leveraging our existing infrastructure.
Speaker Change: In renters, we're executing our strategy to scale our technology enabled services.
Speaker Change: and recently added a new renters book with over 250,000 policies.
Speaker Change: Our COVER360 platform continues to support double-digit written premium growth in our property management company or PMC channel, demonstrating our competitive edge in a distribution channel with further growth potential.
Speaker Change: The strength of our combined lifestyle and housing businesses has enabled us to grow significantly.
Speaker Change: Over the last five years, we've delivered a compound annual adjusted EPS growth rate of 18 percent, and a 12 percent adjusted ebit of growth rate, both excluding cats.
Speaker Change: Since we successfully placed our 2025 Category Insurance Program in April , which Keith Meier will cover, I want to take a moment to highlight how Assurant compares to certain large cat-exposed PNC peers.
Speaker Change: When we look over the past six years, Assurant ranks among the lowest in terms of cat exposure as a percentage of netter impremiums and as a percentage of shareholders equity.
Speaker Change: Since 2019, we had the lowest average cat losses as a percentage of net earn premiums, as well as the third lowest as a percentage of shareholders equity.
Speaker Change: Equally compelling, our volatility across both metrics is among the lowest in the group.
Speaker Change: Over the last 10 years, our increased scale and efficiency within housing has driven a 10-year average combined ratio of 89%, compared to the broader PNC market of 95%.
Speaker Change: This data illustrates the power of assurance unique and advantage business portfolio as global lifestyle and global housing have delivered strong growth and returns with lower volatility.
Speaker Change: Given our demonstrated resilience over time through various economic environments, balanced risk management, and compelling growth path ahead, it's our belief that we should be valued at a premium to the S&P, composite 1500 P&C index median.
Speaker Change: Our strategy is centered around our powerful B2B2C distribution model across lifestyle and housing, which bolsters our competitive advantage and financial performance.
Speaker Change: In the attractive markets where we operate, we see expanding opportunities to continue to profitable growth through the scale and efficiency of our service delivery networks.
Speaker Change: We expect to continue extending our track record of winning new clients and solidifying relationships
Speaker Change: Our business model has created diversified sources of earnings in capital while generating strong returns, cash flow and growth.
Speaker Change: Looking toward the future, we believe there are expanding growth opportunities, including increasing investments in our core markets.
Speaker Change: Continue to expand offerings with existing clients and winning new global partnerships.
and entering attractive adjacent sectors through new product launches.
Speaker Change: Before handing it over to Keith, I want to spend a moment on the evolving economic landscape and insurance position.
Speaker Change: 2024 marked an exceptional year of outperformance representing our eighth consecutive year of earnings growth.
Keith: Given the strong start to the year and the strength of our businesses, we remain on track to deliver our ninth consecutive year of profitable growth in 2025, reaffirming our enterprise outlook.
Keith: We are closely monitoring the impact of macroeconomic conditions and tariff policies on our claims cost and consumer demand.
Keith: We are also taking action to remain well positioned and stay ahead of future developments.
Keith: While they remain significant uncertainty, our outlook considers the impact of tariffs.
Keith: The differentiated features of our business model positions us to navigate and dynamic macroeconomic environment.
Keith: In lifestyle, our alignment of financial interests with our partners enables us to work side by side to help mitigate risk.
Keith: This includes client risk sharing contracts that allow us to manage financial exposure through connected living and global auto.
Keith: Our partnerships with Leading Brands provides us access to diverse supply chains across the world as our clients partner with us to optimize claims costs.
Keith: Within housing, our installation guard product feature includes quarterly state-by-state rate adjustments and will allow us to rack quickly to hire materials costs in our lender-place
Keith: In addition, Lenderplace may also serve as a countercyclical hedge in the event of a broader market downturn, differentiating us from other PNC companies.
Keith: Overall, the attributes that unify our lifestyle and housing segments also position assurant to deliver shareholder value over time through growth and discipline capital management.
I'll now turn it over to Keith Meier.
Thanks, Keith, and good morning everyone.
Keith: Let me begin by sharing some key highlights we saw in the first quarter.
Keith: 2025 is off to a strong start with double digit growth across our primary performance metrics.
Keith: Achieving mid-teens growth for adjusted EBITDA and adjusted earnings per share, both excluding catastrophes.
Keith: Our first quarter performance was driven by double-digit earnings growth in global housing led by our Lunderplace business.
Keith: Within Global Lifestyle, we were pleased to see improved loss experience within Global Automotive.
Keith: as well as solid contributions from our card-benefits business in connected living.
Keith: Looking at capital, our holding company liquidity position remained solid at over $500 million
Keith: Our cash generation allowed us to return over $100 million of cash to our shareholders, including $62 million of share repurchases.
Keith: Through May 2nd, we've repurchased an additional $25 million of shares.
Keith: As we look ahead to the remainder of 2025, we continue to expect our buybacks will remain more balanced throughout the year, due to the ability of our businesses to generate significant cash flow.
Keith: Our ultimate level of repurchases will depend on M&A opportunities and other market conditions.
Turning to our segment results. Let's begin with Global Lifestyle.
Keith: 1st quarter adjusted EBITDA was down 5% compared to last year and included a $6 million impact from unfavorable foreign exchange.
Keith: As a reminder, first quarter of 2024 included a $7 million one-time client contract benefit that was previously disclosed.
Keith: Excluding this benefit, Global Lifestyles underlying adjusted EBITDA was up modestly on a constant currency basis.
Keith: and Connected Living, earnings declined 6%, excluding the one-time benefit from the prior year, Connected Living EBITDA also increased modestly on a constant currency basis.
Keith: Results benefited from a newly launched CARB benefits program within the financial services business where we continue to be encouraged by the growth of a new client.
Keith: The increase was partially offset by lower results in domestic mobile from device protection and trade in programs.
Keith: First quarter results also included approximately $3 million of incremental investments related to new capabilities and client partnerships including Verizon's Total Wireless Pre-Pay Protection program.
Keith: Turning to Global Auto. Adjusted EBITDA was stable as lower investment income, mainly from lower real estate joint venture income, an unfavorable foreign exchange was offset by improved loss experience.
Keith: We were pleased to see improved loss experience both year-over-year and sequentially, as program changes and rate increases continue to earn through our book.
Keith: In terms of revenue, our netter and premiums fees and other income for global lifestyle grew 5% or 7% on a constant currency basis led by connected living.
Keith: Moving to global housing, first quarter adjusted EBITDA was $112 million, which included $157 million of cat losses.
Keith: The impacts from the California Wallifiers were $125 million, which includes estimated
Keith: We saw another quarter of strong double-digit growth as adjusted EBIT increased 31% to $269 million, excluding cats.
Keith: Our homeowner's business continued to benefit from significant policy growth from higher placement rates, including impacts from voluntary insurance market pressure.
Keith: Non-Catastry Lot's experience was also favorable year-over-year due to lower claim
Keith: Looking at housing reserves in the first quarter, favorable prior year reserve development was $26 million, which is modestly higher than the $22 million in first quarter of 2024.
Keith: Within our renters business, we continue to benefit from results in our PMC channel, which achieved its 11th consecutive quarter of double digit written premium growth.
Moving to Catastrophe Reinsurance.
Keith: We are very pleased with the outcome of our 2025 program placement, which was finalized on April 1st.
Keith: We increase coverage at more attractive terms while maintaining a one-on-five-year probable maximum loss or PML for our per-event retention level.
which is now $160 million.
Keith: This is slightly above the $150 million program retention in 2024 due to growth in the business but maintains the same PML.
Keith: Our main US program provides nearly $1.8 billion in loss coverage and excess of our retention.
Keith: Protecting Assurant and its policyholders against severe events pour up to a 1 in 265 year
Keith: We continue to partner with a diversified group of over 40 highly rated re-insures.
Keith: In terms of cost, our 2025 catastrophe re-insurance premiums are estimated to be approximately $225 million.
Keith: Compared to a normalized view of $203 million in 2024, which adjusts for the timing impact of our program placement change in the first quarter of last year.
Keith: The increase in costs reflects the growth of the business partially offset by lower rates where we believe we priced on the lower end compared to the broader market.
Keith: With the placement of our 2025 program, our expected annual catastrophe load is now $175 million, excluding the California wildfires.
Keith: including the wildfire impacts in the first quarter, our expected full-year 2025 catastrophe load is $300 million.
Moving to our outlook for 2025.
Keith: I want to reinforce that we continue to operate from a position of strength across the company.
Keith: As we've demonstrated in previous macro cycles, Strong Cash Flow is one of the hallmarks of our company.
Keith: The ongoing cash generation from our businesses is supported by our large base of customers across our diverse lifestyle and housing segments.
Keith: Our balance sheet is in a strong position. Our over $10 billion investment portfolio is well diversified across industries.
and 93% of our fixed income assets are investment grade.
Keith: And from a growth perspective, despite macro uncertainty, we continue to prioritize targeted investing across our businesses as we look to scale and win across the globe.
Keith: Turning to our Enterprise Outlook, we remain on track to deliver on the object as we outlined at the start of the year, to grow adjusted EBITDA and adjusted EPS modestly in 2025, both excluding
Keith: Keep in mind that the outlook includes growing off of a very strong 2024, including favorable prior year reserve development of $107 million last year.
Keith: Given our first quarter results and the resiliency of our business model over the long term we are well-positioned to navigate the dynamic environment.
Keith: We have considered the impacts of tariffs within our outlook and continue to monitor macroeconomic conditions including inflation, foreign exchange and interest rate levels which may impact the pace and timing of growth.
Keith: In lifestyle, growth in connected living and global automotive is expected to be partially offset by unfavorable foreign exchange, as well as investments in new partnerships and programs in 2025.
Keith: Combined, we continue to expect foreign exchange and incremental investments to mute lifestyle growth by a few percentage points.
Turning the housing
We are increasing our outlook and now expect growth.
Keith: Reflecting our first quarter results, as well as the expected continuation of lender-placed policy growth in our homeowners business.
Keith: Our capital objectives for 2025 remain consistent as we focus on maintaining balance and flexibility to support new business growth while returning excess capital to shareholders.
Keith: From a Sherry Purchase Perspective, our expected range for 2025 continues to be between 200 to 300 million dollars, subject to M&A as well as market and other conditions.
Keith: Overall, we are off to a great start in 2025, as we continue to drive long-term shareholder value.
and with that operator, please open the call for questions.
Keith: Paul is now open to questions. At this time, if you have a question or comment, please press star 9 to raise your hand.
Keith: Star Six to unmute. Again, we do ask that while you pose your question, that you pick up your handset to provide optimal sound quality.
Jeff Schmidt: Thank you. Our first question is coming from Jeff Schmitt with William Blair.
Morning Jeff, hi Jeff.
Thank you very much.
Speaker Change: Hey, Jeffrey, are you there? Please press the six on your hands to unmute your line.
Jeff Schmidt: I'm sorry about that. Can you hear me? Yeah, yeah, we got you Jeff. Good morning.
Speaker Change: Alright, good. So in global lifestyle, the loss ratio still relatively high versus historical
Speaker Change: I know you've taken a lot of actions there in global auto just in terms of rate increases, process changes, things like that but could you maybe give us an update on when you expect to see improvement there?
Speaker Change: Yeah, now you're speaking specifically to Otto, or are you talking more broadly to lifestyle overall?
Speaker Change: Well, yeah, I guess lifestyle overall, but I guess global auto may drive that down.
Speaker Change: Yeah, maybe let me let me provide a few thoughts overall and then and then Keith can talk a little bit about the progress in auto. We're obviously pleased with with how that business continues to perform, but
Speaker Change: You know, when I look at lifestyle in the quarter, you know, came in very much in line with our expectations overall. If you look at connected living, you know, there's a couple of adjustments that I would suggest you make relative to the results we had.
Speaker Change: Actually grown on a constant currency sort of normalized basis in the quarter, we had a 7 million one time client adjustment last year in the first quarter and then we had about 4 million of foreign exchange. So if I look at kick to living, normalize we're up about 3 million dollars.
Speaker Change: in the quarter. We actually had some benefit, and this will be a question we'll get today at some point.
Speaker Change: We had about $5 million of EBITDA benefit in the quarter, relative to the new programs that we talked about launching last year, so I'd say we're on track with our one-year payback timeline that we expected.
Speaker Change: A little bit softer results around trading in the quarter, but nothing unexpected. So we're generally pleased with the long-term opportunity around connected living, and certainly we've got a lot of quiet momentum, which we'll talk about. And then auto, we've certainly seen continued stability in the performance, and maybe Keith can provide a couple highlights just on loss, performance, and development relative to those rate increases.
Keith: Yeah, so Jeff in terms of auto, you know, I think we've continued to see the results stabilizing. You know, this is...
Keith: Two quarters in a row of increased EBITF for that business. We've seen our loss experience in the VSC side of the business improving quarter over quarter.
Keith: and we've also seen our gap experience level off now as well. So I think overall, you know, that provides some encouraging trends in terms of how we...
Keith: Steve the year playing out. And then I think that also is what enables us to reinforce our outlook for growth for our auto business as we think about the full year ahead. So overall, you know, pleased with the progress that's taken place so far.
Speaker Change: Okay, great. And then in connected living, could you give us an update on the size and in cadence of higher investments, or just new partnerships, program launches, things like that? And when do you expect that to kind of roll off this year?
Speaker Change: Yeah, so, you know, we talked about the 25 million that we invested in 2024 and if you'll remember, we said about 50 million was relative to new client launches and then 10 million was related to investments in our device care centers.
Speaker Change: Relative to the client launches, so last year was 15. It's probably in that order of magnitude for the full year We'll see how things progress and again very excited about being able to announce
Speaker Change: What that all relates to is we get further through the year. You saw, you know, in our Prepared
Speaker Change: Launching a relationship with Total Wireless by Verizon. We're obviously incredibly proud and excited about the opportunity.
Speaker Change: to become a device protection partner with such an important client.
Speaker Change: and there'll be more things we'll talk about as the year goes on and I think we're still on track for that type of investment level this year.
Okay, great, thank you.
You bet. Thanks, Chef.
Speaker Change: Our next question is coming from John Barnidge with Piper Sandler.
Hey, John , good morning. Morning, John .
Good morning. Thanks for the opportunity. Hope you're both well.
Speaker Change: My first question is about tariffs. I believe 25 guidance now assumes impact from tariffs. What range of impacts are you assuming? And how do you view the new versus used car dynamic playing out within that?
Thank you.
Speaker Change: Yes, so maybe I'll provide a few high-level thoughts around context. Keith can talk about where we see, we mentioned we'll see some impacts certainly in auto and housing around parts of material. He can walk through.
Speaker Change: Our thoughts on how to think about the impact. We're not going to size a specific dollar amount, but we will give you a sense of how we think about it.
Keith: The first thing I would just say is, obviously, there's still both.
Keith: A lot of uncertainty when it comes to the scope and the timing of tariffs and
Keith: We tried to take a really pragmatic approach and worked with really the most current information we had available. We went ahead and assumed tariffs would remain in place throughout the entirety of 2025.
Keith: and at the end of the day, when we looked at...
Speaker Change: The underlying performance in the business are really, really strong first quarter. We believe, you know, we'll be manageable this year and we'll deliver the original guidance that we had laid out, but maybe keep just a little bit of color. We talked about auto and housing having greater impact. How do we think about that flowing through the claims cost?
Speaker Change: Yeah, and I think as we think about any potential impact, I think it probably is more in mind with higher claims cost potentially in our auto, in our housing business.
Speaker Change: and the way we have approached that is, you know, in our housing business we have a history of navigating potential inflationary aspects and I think one of the
Utilize our...
Speaker Change: Our inflation guard features and so I think us being able to now adjust our rates based on inflation every quarter and by state, whereas a couple of years ago it used to be you know once a year across the across the board so overall I think we're in a good position to. So.
Speaker Change: Navigate, those types of impacts in housing. And then when it comes to auto, I think you have to kind of...
Speaker Change: Frame it up in terms of the actual impact to our claims. So, you know, probably about two-thirds of our business is more risk-shared with with our clients and reinsurance arrangements and so forth. So you're already at a third of our business at that point. And then
Speaker Change: All that third, you know, basically you could think about claims being half parts and half labor. So now you're down into the, you know, mid to high teens percentage of our business that could be affected. Good.
Speaker Change: and then even of those parts probably half or so is imported and so now you're talking
Speaker Change: You know, single-digit kind of impacts on our claims and so with all the work we're doing with our clients on an ongoing basis just because of the inflationary aspects of the business from the last few years and we've been putting in 18 rate increases and also working on program designs. I think we're in a good position to navigate. We're in a good position to navigate.
Speaker Change: Impact in Auto as well. So overall, I think we're in a good position to manage through that. And I think that's what also gave us confidence to reinforce our guidance for growth across all of our businesses.
Yeah, and maybe just to pick up
The question I'm new and used, I think.
You know, as we've talked about before, we're-
Pretty well positioned across our auto business. We've got-
Speaker Change: Very much balance between new and used. It's in the range of 50-50. So...
Speaker Change: Should we see, you know, dynamic shift there where there maybe there's more use sales, less new sales, I think we're well positioned overall from that perspective. You know, we'll obviously monitor that closely. We're working with our partners, but we do feel like we've got muscles built the last couple of years. [inaudible]
Speaker Change: with clients to make the right adjustments, whether it's rate, product design, claims management. That will continue as we go forward and we're going to continue to focus on growth and executing and delivering financial results.
Speaker Change: Thank you for that. My follow-up question is from Global Housing.
Speaker Change: It's about the expense ratio in the quarter. We able to identify by how much that expense ratio was impacted by dealing with the catastrophe loss events that occurred in the quarter.
Speaker Change: Related to the wildfires, that brought it to 39.1 versus 37.9 a year ago. Thank you. That's, it's a great question. I would say that if we sort of made adjustments to normalize, we'd be relatively flat.
Speaker Change: Year over year. If you look at the first quarter, 25, we had re-insurance costs up 11 million over last year. That's 110 basis points. The balance of the difference is related to the higher expenses related to managing through the claim. The claims cost from the cat.
Speaker Change: Broadly speaking, I would say underlying expenses as a racial or flat year-rear.
Speaker Change: I think you can think about our expense ratio as being that high 30s kind of percentage and so I think in general we're on track with that and like Keith said I think you should expect it to be a similar kind of normalized rate year over year.
Thanks for the answers.
You got it? Annick. Good day.
Our next question is coming from Mark Hughes with truest.
Morning, Mark. Hey, Mark.
Please press the next step.
Speaker Change: The total wireless buy Verizon is pretty interesting. How many subscribers under that program? I think the fact that you're extending your relationship or deepening your relationship with Verizon is great. How much financial impact on that program would you anticipate?
Speaker Change: Yeah, I think first thing I would say is it's starting, it's not an existing base of business that's porting across to us, so this is a brand new launch, so we're starting from customer one as we build that book, so it will naturally ramp.
Speaker Change: You know, probably three or four years to get to its full run rate potential, depending on, you know, consumer behavior, etc. So
Speaker Change: I think that's the first thing to recognize. The second thing, yeah, we're really excited. I mean, we're-
Speaker Change: Deepening relationships with clients, we've done an amazing job in the mobile business and I think we continue to demonstrate that we can add value to major partners and this is just another example of that and
Speaker Change: Obviously there are massive potential clients for other things and we'll look to continue to execute and deliver and prove our value to them. So we earn the right to do more over time. But it's a big opportunity for us and we're very, very happy with it.
Yeah.
Speaker Change: Good mention on the homeowners shifts in voluntary or increasing demand. How is that trending now? Is there still as much pressure on the homeowners that's benefiting you or is that starting to take a little bit?
Speaker Change: Yeah, I think we're still seeing and expecting growth in our policies for our underplaced business. You know, I think in...
Speaker Change: in California, we're still seeing a little bit of growth, and also in the Midwest and some of the inland Northeast as well.
Speaker Change: Overall, I think the business is continuing to see that type of progress and progressive growth. So I think our product is only becoming more and more valuable over time.
Yeah, and I think, I think to your point, uh,
Speaker Change: The year-over-year placement rate improved pretty significantly, you know, it's definitely slowed down as we look at the sequential view, but the key point, you know, we expect to see, you know, kind of modest.
Speaker Change: Growth over the Bounce of Year and I think we're really well positioned with how that business is performing and how it's performed through various cycles as well
Speaker Change: and then on the trade-in, anything structural around trade-ins, people keeping their phone longer, anything like that, or was it just timing of customer promotional activity that impacted the quarter?
Yeah, I think it's both. Definitely customers are keeping devices longer.
Speaker Change: I saw a little bit more muted in the first quarter, I don't think it was different but it was different.
and then we expected it to be...
Speaker Change: We'll see how that plays out. It's a pretty competitive environment today.
Speaker Change: I think our clients are going to be looking to drive growth and that could ultimately stimulate more competition than yet to be seen as we look at Q2 in the rest of the year, but nothing that is unusual in terms of those dynamics.
Speaker Change: Sure. I'll talk about the book and then Keith can cover sort of the growth and how we think about it across the areas within renters. So, again, we worked with an insurer who was looking to exit the renters business really more of a book role. We talk about 250,000 policies, about 50 million dollars of growth in premium annually. [inaudible] and then I'll talk about the book
Speaker Change: This insurance company served a wide range of affinity clients, so it fits in incredibly well with our affinity business.
Keith: It was acquired through reinsurance. We'll convert it to our paper over time. And I would say as we think about the contribution, you know, I don't expect a massive step change in overall financial performance, but it is a very strategic opportunity. It generates a lot of scale and it continues to reinforce. And I would like to thank all of you for your support and support.
Speaker Change: our market leadership position. And I think we feel good about how we've structured and de-risk the deal overall. But Keith, how would you reflect on the growth for the quarter? Yeah, and I would just say on that book role that we had.
Speaker Change: I think that really just speaks to our executing on our strategy to really scale our technology enabled services that we've been developing over time. And we talked about our cover 360 product where we track renters policies for the landlords.
Speaker Change: and so I think those are the types of things where we're able to invest in this business and I think that's enabling us to
from the acquisition as well as…
Speaker Change: through our property management channel, which, again, has grown for the 11th consecutive quarter at double digit, so we'll see contribution there, and, you know, we also see, as Keith said, this helps our affinity business as well. So overall, I think we've got some nice balanced growth as we look ahead for renters.
Thank you very much.
Thank you.
Our next session is coming from Tommy Mcjoynt with KBW.
Morning Tommy, nice to meet you.
Thank you very much.
Hey, good morning.
Speaker Change: A question about the mobile side and the potential impact of tariffs. It doesn't sound like
Speaker Change: You guys are expecting a significant impact there. Can you talk about why maybe the potential recording of parts and cell phones, you know, might not be impacted? And I think a lot of it has to do with your role as more of a program administrator than being on risk. Perhaps you can lay out the details on that.
Speaker Change: Yeah, I think you actually hit on it, Tommy. I think it's the way that we work with our clients and these are large players with highly developed supply chains and we compliment their supply chains.
Speaker Change: as well. So we work very closely with them. Obviously a lot of
Speaker Change: The programs are reinsured or risk-shared like you just spoke about. So I think that's what mitigates a lot of that impact. And then obviously we work very closely with them to optimize the programs for the consumer as well as for our clients. So overall I think those are the things that...
Speaker Change: You know, that you put us in a good position overall on the mobile side.
Speaker Change: Yeah, I think the other thing I would add, Tommy, is...
Speaker Change: I think about the mobile business, particularly around device protection. We've got 64 million or so.
Speaker Change: monthly subscribers, but it's monthly pay, monthly earn, so the profile of that business is different than, you know, selling a single premium contract that earns out over time, so that also helps us be a little bit more nimble with...
Speaker Change: The changes we can make, whether it's product or pricing, it can have an impact more quickly than in other lines of business.
Speaker Change: Okay, got it. And then looking at the full year guidance, you know, when I unpacked the various components there, so it doesn't sound like the enterprise-wide guidance has changed, but housing segment got a little bit better. Does that imply that on the margin, the lifestyle kind, lifestyle segment came in a little bit worse than we were expecting a few months ago, and just want to make sure if that's the case, what is the driver of that? [inaudible]
Yeah, I'd say...
Speaker Change: I think that's a fair way to interpret it. Overall, feel really good about the full year guide. We obviously increased housing from modest decline to generating growth, so we feel really good about.
Speaker Change: of that adjustment. And then to your point, lifestyle, I would say we're certainly factoring in the impact of the macroenvironment and tariff as we think about the year that wouldn't have been true.
Speaker Change: in the same way a few months ago. So I'd say that's the only difference, but if I think about the underlying financial performance of the lifestyle business.
Speaker Change: We feel really good where we came out in Q1, setting aside the dynamic world we're living in. We feel really good about the year in front of us. And even considering those factors, we're still planning to grow connected living, we're planning to grow auto, and we're going to grow housing.
Great. Thanks, Keith.
You bet.
Speaker Change: Once again, if you do have a question, you may press star 9 on your touch-tone phone at this time.
Bob Huang: Our next question is coming from Bob Huang with Morgan Stanley .
Morning, Bob. Hi, Bob.
Hi, can you guys hear me now?
Yeah, we can. Yes. Oh.
If there are any particulars,
Bob Huang: Components within the carol that is more sensitive, for example, are there like within housing is a more aluminum steel lumber or within?
Bob Huang: The Auto is a particular part. I'm just trying to see if there's anything that we should monitor from like a commodity future perspective. Okay.
Bob Huang: Yeah, so Bob, I think when we do our scenario planning, we take into account
Bob Huang: You know, the various tariffs that have been talked about in the marketplace, and so then we apply them, you know, into scenarios for each of those businesses. So I kind of went through that earlier in terms of the way we think about housing, it could. Um.
Bob Huang: It could impact a little bit in some building costs, but we think we're well positioned to navigate, you know, potential inflationary aspects from whether it's, you know, lumber, steel, those types of things.
Bob Huang: and then on auto, you know, we all were consistently monitoring parts and auto-related tariff discussions, and so I think also there by working with our clients and...
Bob Huang: The way our business is structured, we feel very good about being able to manage through the different scenarios that are being discussed today.
Did we lose Bob?
Sorry, can you hear me now? Oh, yeah, yeah.
Bob Huang: Yeah, so my second question is regarding youth car versus new car sales, right? Like, if you think about just the recent auto sales and things of that nature, obviously something that we've been talking about, you guys have mentioned, is there a way to think about whether or not there was a new car sales poll forward due to tariffs, would that have any significant impact on how we should think about the business going forward? Yeah, that's right.
Yeah, I think-
Bob Huang: You know, I don't think it has a significant impact on how we think about business going forward. I definitely think there was a pull forward.
Bob Huang: Both for new and for use, if I even look at the car sales in the month of March, they were higher than sort of the average for the quarter, so that suggests that there is a pull forward. I would expect that to probably be true in April as well.
Bob Huang: You know, I don't think it has a significant effect on how we think about the business or the year I suspect it's just a timing point where they'll be...
Bob Huang: A little bit of additional sales front loaded and then maybe a little bit of soccer sales following we'll sort of see how the environment evolves but
Bob Huang: You know, obviously it's always good to get a little more business in the door earlier in the year, but because of the nature of this business, we're earning off of a $11 billion UPR that's in force, it doesn't have a huge effect on how we think about the short term picture for auto. [inaudible]
You know, I would just add, they're...
Speaker Change: Bob, that we look at the macroeconomic environment in terms of there could be inflation aspects and consumer impact, and so on the consumer impact, we don't see that as really affecting Assurant as much in 2025 because of the
Speaker Change: Existing business and it takes time to earn through and so forth. So I think that part doesn't have as much and then we talked a lot about the flip side which is the inflationary aspects which can happen earlier and that's the part that we talked a lot about and we feel well positioned on that on that side of it.
Speaker Change: Okay, thanks. Thank you. We're really appreciate it.
Speaker Change: I think that was the last question, so I will go ahead and say thanks everybody for joining us today, and we'll look forward to the next update in August . Appreciate the time. Thank you. Thank you.