Assurant, Inc.

Welcome to Assurance 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. 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 Moshear, Vice President of Investor Relations. You may begin.

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 Demings, our President and Chief Executive Officer, and Keith Meyer, our Chief Financial Officer. Yesterday, after the market closed, we issued a news release announcing our results for the first quarter 2024. The release and corresponding financial supplement are available on Assurance.com. Also on our website is a slide presentation for our webcast participants. Some of the statements made today are forward-looking. Forward-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. 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. 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. We'll start today's call with remarks before moving into Q&A. I will now turn the call over to Keith Demings.

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 in global lifestyle. Our ability to continue to drive financial performance and operational excellence has supported strong cash flow generation and a solid capital position. 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 executing for our partners and for end consumers. 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. 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 Ethisphere as one of the world's most ethical companies in 2024. Operating ethically is foundational to protecting our clients' brands across the globe, as well as our own. This recognition is a testament to the thousands of Assurant employees who champion our values every day. profitable growth, and shareholder value creation. We've continued to drive outperformance versus the broader P&C market as evidenced by our long-term results compared to the S&P composite 1500 P&C index. Since 2019, Assurant has delivered double-digit adjusted earnings growth, including and excluding CATs, outperforming the broader P&C 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. 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 for recently announced new launches such as Telstra, Australia's largest mobile carrier, where we completed the initial launch of several offerings. 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. 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. These innovative new offerings with Spectrum Mobile are the result of our longstanding 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 capabilities. 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, laptops, with nearly 40 retail locations. 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, first quarter results reflected persistent inflation impacts to 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, Investment income growth and disciplined expense management efforts are expected to be offset by continued claims inflation. 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 CATs. 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 businesses. 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. Second, as seen over the past 18 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. 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 place business provides a countercyclical 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. 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. We've continued to leverage enterprise-wide capabilities to improve our customer experience and create value for our clients. For example, we leveraged 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. 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 2024 results are trending toward the higher end of the mid-single digit outlook. We now anticipate global housing will lead our enterprise growth. In global lifestyle, our full-year outlook remains unchanged, driven by growth in connected living, which is partially offset by incremental investments to support long-term growth. 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 Meyer to review our first quarter results and 2024 outlook in further detail.