Welcome to Assurant’s First Quarter 2025 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. [Operator Instructions] It is now my pleasure to turn the floor over to Sean Moshier, Vice President of Investor Relations. You may now begin.

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. Yesterday, after the market closed, we issued a news release announcing our results for the first quarter 2025. 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. 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 Demmings.

Thanks, Sean, and good morning, everyone. I'm pleased to share that 2025 is off to a strong start. 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. 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. We have a proven track record of delivering through various economic cycles over the long term and we remain well positioned to achieve our 9th consecutive year of earnings growth. 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. And our ability to deliver exceptional customer experiences through customized data driven solutions and comprehensive wraparound services reinforces the strength of Assurant's long-term fundamentals. Last quarter, we outlined our 2025 priorities and I'm incredibly proud of our team's progress to date. 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. We've continued to make high value incremental investments to support new program launches in our pipeline and accelerate emerging growth opportunities. And we remain focused on achieving our 2025 outlook by driving operational excellence and financial performance. Next, I want to share a few segment highlights that support our attractive position. Starting with Global Lifestyle, we're laser focused on achieving our growth objectives across Connected Living and Global Automotive. In Connected Living, we continuously enhance the customer and client experience by investing in…

Thanks, Keith, and good morning, everyone. Let me begin by sharing some key highlights we saw in the first quarter. 2025 is off to a strong start with double-digit growth across our primary performance metrics, achieving mid-teens growth for adjusted EBITDA and adjusted earnings per share, both excluding catastrophes. Our first quarter performance was driven by double-digit earnings growth in Global Housing led by our lender placed business. Within Global Lifestyle, we were pleased to see improved loss experience within global automotive, as well as solid contributions from our card benefits business in connected living. Looking at capital, our holding company liquidity position remained solid at over $500 million at quarter end. Our cash generation allowed us to return over $100 million of cash to our shareholders, including $62 million of share repurchases. Through May 2nd, we've repurchased an additional $25 million of shares. 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. 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. First quarter adjusted EBITDA was down 5% compared to last year and included a $6 million impact from unfavorable foreign exchange. As a reminder, first quarter of 2024 included a $7 million one-time client contract benefit that was previously disclosed. Excluding this benefit, Global Lifestyle's underlying adjusted EBITDA was up modestly on a constant currency basis. In 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. Results benefited from a newly launched card benefits program within the financial services business where we continue…

Thank you. [Operator Instructions] Our first question is coming from Jeff Schmitt with William Blair & Company.

Morning, Jeff. Are you there?

Please press *6 on your handset to unmute your line.

Hi. Sorry about that. Can you hear me?

Yeah. Yeah. We got you, Jeff. Good morning.

Alright. Good. So in Global Lifestyle, the loss ratio is still kind of relatively high versus historical levels. 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?

Yeah. And are you speaking specifically to Auto, or are you talking more broadly to Lifestyle overall?

Well, yeah, I guess Lifestyle overall, but I guess Global Auto may may drive that down.

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 how that business continues to perform. But, when I look at Lifestyle in the quarter, came in very much in line with our expectations overall. If you look at Connected Living, there's a couple of adjustments that I would suggest you make relative to the results. We had, 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 Connected Living, normalized, we're up about $3 million in the quarter. We actually had some benefit and this will be a question we'll get today at some point. 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, a little bit softer results around trade in 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 client 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 lost performance and development relative to those rate increases?

Yeah. So, Jeff, in terms of Auto, I think we've continued to see the results stabilizing. This is two quarters in a row of increased EBITDA for that business. We've seen our loss experience in the VFC, side of the business improving quarter over quarter. And we've also seen our GAAP experience level off now as well. So I think overall that provides some encouraging trends in terms of how we see 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, pleased with the progress that's taking place so far.

Okay. Great. And then in Connected Living, could you give us an update on the size and cadence of higher investments for, I guess, new partnerships, program launches, things like that? And when do you expect that to kind of roll off this year?

Yeah. So, we talked about the $25 million that we invested in 2024. And if you'll remember, we said about $15 million was relative to new client launches and then $10 million was related to investments in our device care centers. And that would yield a full one-year payback this year embedded in our results and our outlook. As I think about the 2025 investments, we had about $3 million of incremental invest in the first quarter. And I would say we're still in that zone of a similar amount relative to the client launches. So last year was $15 million. 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 what that all relates to as we get further through the year. You saw in our prepared remarks launching a relationship with Total Wireless by Verizon. We're obviously incredibly proud and excited about the opportunity to become a device protection partner with such an important client. 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, Jeff.

Our next question is coming from John Barnidge with Piper Sandler.

Hey, John. Good morning.

Good morning, John.

Good morning. Thanks for the opportunity. Hope you're both well. 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?

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 impact certainly in Auto and Housing around parts and material. He can walk through 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. The first thing I would just say is, obviously, there's still a lot of uncertainty when it comes to the scope and the timing of tariffs and it will no doubt evolve and change over time throughout the year. We try 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. And at the end of the day, when we looked at the underlying performance in the business, a really, really strong first quarter, we believe tariffs will be manageable this year and will deliver the original guidance that we had laid out. But maybe Keith, 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?

Yes. And I think as we think about any potential impact, I think it probably is more in line with higher claims cost potentially in our Auto and in our Housing business. And the way we have approached that is in our Housing business, we have a history of navigating potential inflationary aspects. And I think one of the key drivers of our the rigor that we've developed through that process is having our ability to utilize 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 years ago, it used to be, once a year across the board. So overall, I think we're in a good position to navigate those types of impacts in Housing. And then when it comes to Auto, I think you have to kind of frame it up in terms of the actual impact to our claims. So, probably about 2/3rd of our business is more risk shared with our clients and reinsurance arrangements and so forth. So you're already at a 1/3rd of our business at that point. And then of that 1/3rd, basically, you could think about claims as being half parts and half labor. So now you're down into the mid to high teens percentage of our business that could be affected. And then even of those parts, probably half or so is imported. And so now you're talking 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 impacts 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 on new and used, I think, as we've talked about before, we're pretty well positioned across our Auto business. We've got very much balanced between new and used. It's in the range of 50-50. So should we see dynamic shift there where there maybe there's more used sales, less new sales, I think we're well positioned overall from that perspective. 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 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.

Thank you for that. My follow-up question, is on Global Housing. It's about the expense ratio in the quarter. Are you able to identify by how much that expense ratio was impacted by dealing with the catastrophe loss events that occurred in the quarter related to the wildfires that brought it to 39.1% versus 37.9% a year ago? Thank you.

Yes, it's a great question. I would say that if we sort of made adjustments to normalize, we'd be relatively flat year-over-year. If you look at the first quarter '25 we had reinsurance 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. So broadly speaking, I would say underlying expenses, as a ratio are flat year-over-year.

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? Have a good day. Thank you.

Our next question is coming from Mark Hughes with Truist.

Morning, Mark.

Please press *6.

I should be here now. Yeah. Good morning. The Total Wireless by Verizon seems pretty interesting. How many subscribers under that program? I think it the fact that you're extending your relationship or deepening your relationship with Verizon is great. How much financial impact from that program would you anticipate?

Yeah. I think the 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, you know, probably three or four years to get to its full run rate potential depending on consumer behavior, etc. So I think that's the first thing to recognize. The second thing, yeah, we're really excited. I mean, we're 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 obviously, they're a massive potential client 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. You'd mentioned on the homeowners that the shifts in voluntary were increasing demand. How is that trending now? Is there still as much pressure on homeowners that's benefiting you or is that starting to taper a little bit?

Yes, I think we're still seeing and expecting growth in our policies for our lender placed business. I think in California we're still seeing a little bit of growth. And also in the Midwest and some of the in-land Northeast as well. So, 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 to your point, the year-over-year placement rate improved pretty significantly. It's definitely slowed down as we look at the sequential view. But to Keith's point, we expect to see kind of modest growth over the balance 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.

And then on the, trade in, anything structural around trade ins, people keeping their phones 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, but I think the what stimulates a lot of that demand is the promotional activity, the competitive intensity. Saw a little bit more muted in the first quarter. I don't think it was different than we expected it to be. We'll see how that plays out. It's a pretty competitive environment today. 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 and the rest of the year, but nothing that is unusual in terms of those dynamics.

And if I could squeeze in one more on the renters book, you talked about picking up 250,000 policies. You talked about that and then maybe the, underlying growth in, in renters aside from that new customer pickup.

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 roll. We talk about 250,000 policies, about $50 million of gross written premium annually. This insurance company served a wide range of Affinity clients, so it fits in incredibly well with our Affinity business. It was acquired through reinsurance, we'll convert it to our paper over time. And I would say as we think about the contribution, 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 our market leadership position and I think we feel good about how we've structured and derisked the deal overall. But Keith, how would you reflect on the growth for the quarter?

Yes, and I would just say on that book role that we had, 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've talked about our Cover360 product where we track renters policies for the landlords. 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 be able to leverage those capabilities to drive scale where others may not see the benefit of investing the way that we have. So, these are great opportunities for us to grow. I think you'll see contributions from the acquisition as well as through our property management channel, which again has grown for the 11th consecutive quarter at double digit. So, we'll see contribution there. And 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 question is coming from Tommy McJoynt with KBW.

Morning, Tommy.

Hey. Good morning. A question about the mobile side and the potential impact of tariffs. It doesn't sound like you guys are expecting a significant impact there. Can you talk about why maybe the potential importing of parts or and cell phones 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.

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 complement their supply chains as well. So we work very closely with them. Obviously, a lot of 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 do put us in a good position overall on the mobile side.

Yeah. And I think the other thing I would add, Tommy, is think about the mobile business, particularly around device protection. We've got 64 million or so monthly subscribers, but it's monthly pay, monthly earn. So the profile of that business is different than selling a single premium contract that earns out over time. So that also helps us be a little bit more nimble with the changes we can make, whether it's product or pricing. It can have an impact more quickly than in other lines of business.

Okay. Got it. And then looking at the full year guidance, when I unpack the various subcomponents 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 that mar that on the margin, the 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?

Yeah. I'd say I guess 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 that adjustment. And then to your point, lifestyle, I would say we're certainly factoring in the impact of the macro environment in tariffs as we think about the year that wouldn't have been true 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, 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.

Our next question is coming from Bob Huang with Morgan Stanley.

Morning, Bob.

Hi. Can you guys hear me now?

Yeah. We can.

Okay. Perfect. Yeah. So, maybe another follow-up on tariffs. I know we talked about this quite a bit. Just can you maybe help us think about, if there are any particular components within the tariff that is more sensitive. For example, are there like, within Housing, is there more aluminum, steel, lumber, or within the Auto? Like, is there particular parts? Just trying to see if there's anything that we should monitor from, like, a commodity futures perspective.

Yeah. So, Bob, I think when we do our scenario planning, we take into account the various, tariffs that have been talked about in the marketplace. And so then we apply them 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 impact a little bit in some building costs, but we think we're well positioned to navigate potential inflationary aspects from whether it's lumber, steel, those types of things. And then on Auto, we're consistently monitoring parts and Auto related tariff discussions. And so, I think also there by working with our clients and 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? Maybe.

Sorry. Can you hear me now?

Yeah.

Perfect. Yes. So my second question is regarding, used 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 you guys have mentioned. Is there a way to think about, whether or not, like, there was a new car sales pulled forward due to tariffs? Would that have any significant impact on, how we should think about the business going forward?

Yeah. 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, both for new and for used. 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. 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 there'll be a little bit of additional sales front loaded and then maybe a little bit of softer sales following. We'll sort of see how the environment evolves. But 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.

I would just add there, 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 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, you know, 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.

Okay. Thank you. I really appreciate it.

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. Thanks so much. Thank you.

[Operator Closing Remarks]