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Sep 30, 2022
Assurant Q3 2022 Earnings Report
Assurant's Q3 2022 financial results were reported, revealing a challenging macroeconomic environment impacted earnings.
Key Takeaways
Assurant's Q3 2022 results showed a decline in GAAP net income and adjusted EBITDA compared to the prior year, but revenue increased slightly. The company is implementing actions to simplify its business and improve expense efficiency.
GAAP net income decreased 95 percent versus prior year period.
Adjusted EBITDA, excluding reportable catastrophes, decreased 11 percent to $239.6 million.
Adjusted earnings, excluding reportable catastrophes, per diluted share, decreased 8 percent to $2.81.
Holding company liquidity was $529 million.
Assurant
Assurant
Forward Guidance
The company expects adjusted EBITDA, excluding reportable catastrophes, to be modestly down to flat, as profitable growth in Global Lifestyle is offset by a decline in Global Housing. High single-digit growth in Adjusted earnings, excluding reportable catastrophes, per diluted share, driven by share repurchases.
Positive Outlook
- Global Lifestyle Adjusted EBITDA is expected to increase high single-digits, driven mainly by mobile in Connected Living from expansion across device protection and trade-in and upgrade programs.
- Global Automotive is also expected to increase, driven by higher investment income and more favorable loss experience in select ancillary products.
- Adjusted earnings, excluding reportable catastrophes, per diluted share to increase by high single-digits, driven by share repurchases, including the return of net proceeds from the sale of Global Preneed.
- Assurant’s consolidated effective tax rate is expected to be approximately 18 to 20 percent, which reflects the impact of the first quarter tax benefit and mix of international business.
- 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.
Challenges Ahead
- Adjusted EBITDA, excluding reportable catastrophes, to be modestly down to flat compared to 2021 results, as growth in Global Lifestyle is offset by a decline in Global Housing.
- Global Lifestyle Adjusted EBITDA will be partially offset by pressure in Asia Pacific and Europe from unfavorable foreign exchange and lower program volumes.
- Global Housing Adjusted EBITDA, excluding reportable catastrophes, is expected to decrease by low- to mid-teens, primarily due to higher non-catastrophe loss experience related to elevated inflationary trends, mainly in lender-placed, as well as increased catastrophe reinsurance costs.
- The decline will be partially offset by higher average insured values and premium rates in lender-placed, along with ongoing expense initiatives.
- Corporate and Other Adjusted EBITDA loss is expected to be approximately $105.0 million, reflecting higher employee-related and technology expenses compared to the prior year.