Assurant, Inc.

Welcome to Assurance First Quarter 2021 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 touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We ask 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 Suzanne Shepard, Senior Vice President of Industrial Relations. You may begin.

Thank you, Operator, and good morning, everyone. We look forward to discussing our first quarter 2021 results with you today. Joining me for Assurance Conference call are Alan Kohlberg, our President and Chief Executive Officer, and Richard Jajo, our Chief Financial Officer. Yesterday, after the market closed, we issued a news release announcing our results for the first quarter of 2021. The release and corresponding financial supplement are available on Assurance.com. We'll start today's call with brief remarks from Alan and Richard before moving into a Q&A session. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in yesterday's earnings release as well as in our SEC reports. During today's call, we will refer to non-GAAP financial measures, which we believe are important in evaluating the company's performance. As we continue to shift to a more fee income capital light business mix, we introduced adjusted EBITDA as part of our restated financial statement in April. This is another important financial metric for the company, reflective of our go forward global lifestyle and global housing businesses. In addition, as of January 1st, global pre-need and the related entities included in the sale are considered discontinued operations and no longer included in our continuing operations, as reflected in the earnings press release and financial supplement. For more details on these measures, the most comparable GAAP measures, and the reconciliation of the two, please refer to yesterday's news release and financial supplement. I will now turn the call over to Alice.

Thanks, Suzanne. Good morning, everyone. We're very pleased with our results for the first quarter. We delivered double-digit earnings growth driven by favorable non-catastrophe loss experience, including improved underwriting in global housing, as well as continued profitable growth in our global automotive, multifamily housing, and connected living businesses. Once again, results demonstrated the attractiveness of our market-leading specialty P&C and lifestyle offerings distributed across multiple channels. This is in addition to the compelling growth opportunities emerging across mobile, auto, and renters. Together, these businesses represent what we refer to as the connected world. In 2020, our connected world offerings represented two-thirds of our net operating income, excluding catastrophes, and in combination with our specialty P&C businesses, will enable us to continue to expand our innovative offerings and deliver a superior and seamless customer experience. generating over $1 billion of adjusted EBITDA in 2020. Our business portfolio is well-positioned to sustain above-market growth and strong cash flows over time. And as we look ahead, we are continuously investing to bring innovation to market to build a more sustainable future for all of our stakeholders. To that end, we recently published our 2021 Social Responsibility Report, highlighting the many ways we are delivering our commitment as a purpose-driven company We are continuing to advance our ESG efforts, specifically within our strategic focus areas of talent, products, and climate. Further integrating ESG within our business operations will be critical as we look to create an even more diverse, equitable, and inclusive culture that promotes innovation, enhances sustainability, and minimizes our carbon footprint for the benefit of all stakeholders. Recent notable examples include We are increasing all U.S. hourly wages to at least $15 per hour by July, which supports the financial well-being of our employees. We've launched an assessment of our carbon footprint, including our investment portfolio and supply chain, as a critical step to setting a future long-term carbon emissions reduction goal. And we've further integrated sustainability into our offerings, such as rolling out electric vehicle products globally. and extending the mobile device lifecycle through trading services. With Hyla, we recently passed a significant milestone, repurposing our 100 millionth device. This has extended the life of devices, put billions of dollars back into consumers' hands, and prevented additional e-waste from ending up in our landfills, supporting global sustainability. We are pleased with our progress and are proud of the recognitions we have received, including our inclusion in the Bloomberg Gender Equality Index and America's Best Employers for Diversity by Forbes, as well as being awarded the best place to work in several of the key markets we operate. Sustainability and innovation go hand in hand. Recently, we surpassed $100 million invested through Assurant Ventures, our venture capital arm. This quarter, several high-quality investments in our portfolio announced SPAC transactions, including Gazoo, a fully digital UK car sales company, and Smart Rent, a smart home automation provider. Given current attractive valuations, these investments have the potential to generate strong returns while also providing strategic insights that support our connected world businesses, creating value-added partnerships, and piloting new innovations. Now let me share some first quarter highlights for each of our operating segments. We continue to see strong growth in global lifestyle, increasing earnings by 7% year-over-year. Over the years, we've continuously invested in mobile capabilities, such as same-day local repair or come-to-you repair for mobile devices, which provide another opportunity to drive value for our clients and the end consumer. Most recently in connected living, we've further strengthened our product capabilities and customer experience through the acquisition of Trigold in Japan. Trigold develops and operates a mobile phone app that allows consumers to manage the lifecycle of their devices and centrally organizes digital product manuals for all connected products. Collectively, all of our investments have helped lead to 15 new client program launches since 2015. This includes partnerships with several U.S. cable providers, including Xfinity and Spectrum, as well as large mobile carriers in Japan, like KDDI and Rakuten. Recently, we've expanded our global partnership with Samsung through the launch of Samsung Care+, a smartphone protection program in Brazil and Mexico. We expect to further extend this partnership globally. We will continue to build on the strong momentum we have with our global multi-product and multi-channel strategy, bolstered by the additional investments we are making. As an example, Hyland Mobile added scale and technology capabilities to our global trade-in and upgrade business, and it's been performing even better than our initial expectations. We're now providing over 30 trade-in programs around the world. The acquisition positions us to benefit from favorable tailwinds in the global mobile market, including the upcoming 5G smartphone upgrade cycle and new client relationships. In global automotive, we continue to benefit from our scale and expertise, as we now cover over 50 million vehicles. Already this year, we've seen a significant increase in auto production versus pre-pandemic first quarter levels. In the year since acquiring AFAS, we've combined our award-winning training programs to create the Automotive Training Academy by Assurant. These expanded in-person and virtual programs will allow us to scale faster and adapt to the changing needs of dealers and automotive professionals. Within Global Financial Services, we've added a number of embedded card benefit clients recently, including the previously announced partnership with American Express. We look forward to enhancing these partnerships and building on our existing suite of products. Moving to global housing, net operating income, excluding reportable catastrophes, grew 17% as we benefited from favorable non-CAT loss experience, including improved underwriting results. Within our lender-placed business, we continue to play a vital role in supporting the mortgage industry as we track over 31 million loans. The business remains well positioned, and we expect to benefit from investments in our superior customer platform over the long term. Multifamily housing increased policies by 9% year-over-year to almost 2.5 million as we continue to grow through our affinity partnerships and PMC channel, including seven of the top 10 largest PMCs in the U.S. We've also continued to grow our sharing economy offerings, which include car sharing, on-demand delivery, and vacation rental, Over the last two years, through our partnership with market leaders and on-demand delivery, we tripled the number of deliveries we protect over 1 billion deliveries. While it is too early to gauge whether the pandemic has fundamentally changed consumer demand for these services, we're encouraged by our momentum and the potential for future products and services in the gig economy. Now let's move to our first quarter results and our 2021 outlook. Net operating income, excluding caps, grew by 13% to $182 million, and earnings per share increased 16% to $3.03, demonstrating improved results in global housing and continued momentum in global lifestyle. Given our strong performance in the first quarter and current business trends, we are increasing our full year outlook for 2021. We now expect 10% to 14% growth in operating earnings per share, excluding catastrophes, versus our initial expectation of 9% EPS growth. EPS expansion from the $9.88 in 2020 will be driven by high single-digit earnings growth, mainly from global lifestyle and a lower corporate loss. Results will also benefit from share repurchases, including the completion of our three-year $1.35 billion objective and the initial return of net proceeds from the global pre-need sale. Our increased outlook largely reflects global housing's favorable non-catastrophe loss experience in the first quarter. As such, housing's earnings are expected to be down only modestly year-over-year from what was a strong 2020. Looking at adjusted EBITDA excluding catastrophes, the first quarter generated $302 million, an increase of 15% year over year. We expect adjusted EBITDA will grow at a modestly higher rate than net operating income in 2021. Turning to capital, we ended March with $332 million of holding company liquidity after returning $80 million to shareholders through common stock dividends and buybacks during the quarter. and we expect to deliver on all of our commitments, sustaining our strong track record of capital return. In addition, throughout the year, we will continue to make strategic investments in our portfolio to position this well for sustained long-term growth. I'll now turn the call over to Richard to review first quarter results and our 2021 outlook. Richard?