Assurant Inc. (NYSE:), a global provider of risk management solutions, reported strong second-quarter results for 2024, with significant growth in its Global Housing and Connected Living segments. The company's adjusted EBITDA and EPS have shown notable increases, with the Connected Living business benefiting from new partnerships and the Global Housing segment experiencing substantial earnings growth. Despite challenges in the Global Auto segment, Assurant remains optimistic about its full-year outlook, expecting high-single-digit growth in adjusted EBITDA and low-double-digit growth in adjusted EPS.
Key Takeaways
- Assurant's adjusted EBITDA increased by 20% year-to-date, and adjusted EPS grew by 29%.
- The Connected Living segment saw a 6% rise in adjusted EBITDA, attributed to new partnerships and programs.
- Global Housing earnings surged nearly 45% in the first half of the year, driven by new and renewed partnerships.
- Full-year 2024 projections include high-single-digit growth in adjusted EBITDA and low-double-digit growth in adjusted EPS, with Global Housing leading the growth.
- The Global Auto segment is anticipated to be flat to modestly down due to inflation and elevated GAP product losses.
- Assurant generated $142 million in segment dividends and ended the quarter with $735 million in holding company liquidity.
- The company returned $80 million to shareholders, including $40 million in share repurchases.
Company Outlook
- Assurant expects modest growth in Global Lifestyle's adjusted EBITDA for the full year, driven by Connected Living.
- Global Housing is projected to drive overall enterprise performance in 2024, with a 23% increase in adjusted EBITDA to $206 million in Q2.
- Anticipated reportable catastrophe losses from Hurricane Beryl in Q3, estimated between $30 million to $50 million.
- Corporate adjusted EBITDA loss is expected to approximate $110 million in 2024.
- Share repurchases forecasted to be on the high end of the $200 million to $300 million range for the year.
- Positive outlook for 2025, with expectations of positive year-over-year comparisons.
Bullish Highlights
- Strong performance in Global Housing and Connected Living segments, with significant growth in earnings and adjusted EBITDA.
- Successful new partnerships and programs in the Connected Living business.
- The PMC channel in Global Housing reported a 20% increase in gross written premiums due to strong client demand.
- Share repurchases are expected to be on the high end of the forecasted range.
Q&A Highlights
- Assurant discussed the impact of this year's challenges on the guidance for 2025, with expectations for improvement.
- The card benefits agreement with Chase is projected to be EBITDA positive in 2025.
- The auto business is seeing moderated loss cost trends and expected rate improvements.
- The Global Housing business has achieved a sustainable expense ratio improvement through expense management and digital enhancements.
- Investments in technology have enhanced customer experience and attracted new clients.
Assurant Inc. (AIZ) demonstrated resilience and strategic growth in the second quarter of 2024, despite some headwinds in the auto segment. With a focus on capital-efficient businesses and a strong track record, the company is poised for continued success and shareholder value creation. The next earnings call is scheduled for November after Q3.
