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Sep 30, 2023
Assurant Q3 2023 Earnings Report
Significant earnings and EPS growth was driven by continued strong performance in Global Housing and growth in Global Lifestyle.
Key Takeaways
Assurant reported exceptionally strong results for Q3 2023, outperforming expectations. Global Housing's top-line momentum and improving loss experience, combined with Global Lifestyle's growing U.S. mobile business, produced significant year-over-year earnings growth.
GAAP net income increased to $190.1 million, compared to $7.3 million in Q3 2022, with net income per diluted share increasing to $3.54 versus $0.14 in the prior year period.
Adjusted EBITDA, excluding reportable catastrophes, increased to $357.1 million, compared to $239.6 million in Q3 2022.
Adjusted earnings, excluding reportable catastrophes, per diluted share, increased to $4.68, compared to $2.81 in Q3 2022.
Holding company liquidity was $491 million; $87 million was returned to shareholders via share repurchases and common stock dividends in the quarter.
Assurant
Assurant
Forward Guidance
The company now expects Adjusted EBITDA, excluding reportable catastrophes, to increase mid- to high-teens, driven by significant growth in Global Housing, partially offset by a modest decline in Global Lifestyle. Adjusted earnings, excluding reportable catastrophes, per diluted share growth rate to exceed the growth rate in Adjusted EBITDA, excluding reportable catastrophes, due to higher earnings growth, a lower effective tax rate and the impact of share repurchases.
Positive Outlook
- Adjusted EBITDA, excluding reportable catastrophes, to increase by mid- to high-teens.
- Global Housing Adjusted EBITDA, excluding reportable catastrophes, to grow significantly, driven by strong performance in Homeowners reflecting higher lender-placed net earned premiums, improving non-catastrophe loss experience including favorable prior period reserve development, and continued expense savings.
- Growth rate of Adjusted earnings, excluding reportable catastrophes, per diluted share to exceed growth in Adjusted EBITDA, excluding reportable catastrophes driven by higher earnings, a lower effective tax rate and the impact of share repurchases.
- Business segment dividends to approximate 65% of segment Adjusted EBITDA, including reportable catastrophes, which takes into account the extended restructuring plan.
- Capital deployment priorities to focus on maintaining a strong financial position, supporting business growth by funding investments and M&A, and returning capital to shareholders through common stock dividends and share repurchases, subject to Board approval.
Challenges Ahead
- Global Lifestyle Adjusted EBITDA, to decline modestly, largely driven by Global Automotive from elevated claims costs and lower contributions within Asia Pacific, including softer volumes and the impact of foreign exchange.
- Corporate and Other Adjusted EBITDA loss to be approximately $105 million as the company continues to drive expense leverage.