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Dec 31, 2022
Assurant Q4 2022 Earnings Report
Delivered strong earnings growth in Global Lifestyle and improved performance in Global Housing.
Key Takeaways
Assurant reported strong fourth quarter segment results, demonstrating a focus on driving outperformance over the long term. The company streamlined its real estate footprint and increased efficiency in its organizational structure, while strengthening the business through targeted investments.
GAAP net income decreased 45 percent to $68.1 million, compared to fourth quarter 2021 of $124.0 million.
Adjusted EBITDA increased 9 percent compared to the prior year period.
Adjusted EBITDA, excluding reportable catastrophes increased 15 percent to $296.3 million.
Adjusted earnings, excluding reportable catastrophes, per diluted share, increased 24 percent to $3.56.
Assurant
Assurant
Forward Guidance
The company expects Adjusted EBITDA, excluding reportable catastrophes, to increase by low single-digits, with results improving as the year progresses, led by improved performance in Global Housing and more modest growth in Global Lifestyle.
Positive Outlook
- Global Housing Adjusted EBITDA, excluding reportable catastrophes, is expected to grow from revised 2022 results of $417.4 million.
- Growth to be driven by improved performance in Homeowners reflecting higher lender-placed net earned premiums along with expense savings to be realized over the course of the year.
- Global Lifestyle Adjusted EBITDA, is expected to grow modestly from revised 2022 results of $809.4 million.
- Modest growth to be driven by Connected Living and Global Automotive, including contributions from new and existing client programs and expense savings realized over the course of the year.
- Corporate and Other Adjusted EBITDA loss is expected to be approximately $105 million as the company continues to drive expense leverage.
Challenges Ahead
- Higher 2023 catastrophe reinsurance program costs as well as continued elevated non-catastrophe loss experience across all lines of business, particularly in the first half of 2023, are expected to impact the segment.
- Lower contributions from international, including the impact of continued foreign exchange headwinds, are expected to pressure results particularly in the first half of 2023.
- Adjusted earnings, excluding reportable catastrophes, per diluted share growth rate is expected to be lower than Adjusted EBITDA, excluding reportable catastrophes growth due to higher depreciation expense of approximately $114 million and a higher effective tax rate of approximately 22 to 24 percent, following a $9 million benefit in 2022.
- Interest expense is expected to be approximately $110 million, in-line with 2022.
- Given market conditions, capital deployment priorities to focus on maintaining a strong financial position, supporting organic growth and paying common stock dividends, subject to Board approval.