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Mar 31, 2022
Assurant Q1 2022 Earnings Report
Assurant's first quarter results were led by strong performance from fee-based and capital-light offerings within Global Lifestyle and Global Automotive, while Global Housing results were weaker.
Key Takeaways
Assurant reported first quarter results with strong performance in Global Lifestyle, particularly from Connected Living and Global Automotive. While Global Housing results were weaker, the company reaffirmed its 2022 outlook for Adjusted EBITDA and Adjusted EPS, both excluding catastrophes.
GAAP net income decreased 2 percent versus prior year period, while net income per diluted share increased 7 percent
Adjusted EBITDA, excluding reportable catastrophes, was in-line with the prior year period at $302.0 million
Adjusted earnings, excluding reportable catastrophes, per diluted share, increased 17 percent to $3.80
Holding company liquidity was $738 million, including the remaining Global Preneed sale proceeds
Assurant
Assurant
Forward Guidance
In 2022, the company continues to expect 8 to 10 percent growth in Adjusted EBITDA, excluding reportable catastrophes, and 16 to 20 percent growth in Adjusted earnings, excluding reportable catastrophes, per diluted share.
Positive Outlook
- Adjusted EBITDA, excluding reportable catastrophes, to grow 8 to 10 percent, driven by growth across Global Lifestyle and Global Housing.
- Global Lifestyle Adjusted EBITDA is expected to increase by low double-digits, driven mainly by mobile in Connected Living from global expansion in existing and new clients across device protection and trade-in and upgrade programs.
- Global Automotive is expected to increase, now driven by higher investment income and business performance.
- Global Housing Adjusted EBITDA, excluding reportable catastrophes, is now expected to increase by mid-single-digits, primarily from growth in lender-placed from expense initiatives and higher average insured values, which are expected to more than offset higher claims and reinsurance costs.
- Adjusted earnings, excluding reportable catastrophes, per diluted share to increase 16 to 20 percent, driven by continued Global Lifestyle and Global Housing growth as well as share repurchases, including returning the remaining proceeds from the sale of Global Preneed.
Challenges Ahead
- Strategic investments to support new business opportunities, including in-store mobile service and repair capabilities, as well as unfavorable impacts of foreign exchange will partially offset growth in Global Lifestyle.
- Corporate and Other Adjusted EBITDA loss is expected to be approximately $105.0 million, reflecting lower net investment income as compared to 2021.
- Assurant’s consolidated effective tax rate is expected to be approximately 22 to 24 percent, which reflects the impact of the first quarter tax benefit.
- Business segment dividends to approximate three quarters of segment Adjusted EBITDA, including reportable catastrophes, which represents roughly the same historical conversion levels to the holding company. This is subject to the growth of the businesses, rating agency and regulatory capital requirements, and investment portfolio performance.
- Capital to be deployed to support business growth by funding investments and M&A, and to return capital to shareholders in the form of share repurchases and dividends, subject to Board approval and market conditions.