Summary of Assurant Q4 2020 earnings call

A summary of Assurant ‘s Q4 2020 earnings conference call (February 10).

• Over 14,000 employees
• Net operating income, excluding reportable catastrophes, grew by 16% to $664 million
• Earnings per share increased 17% to $10.80
• 3 business units: Global Lifestyle (reported earnings of $88 million in the fourth quarter, down $9 million), Global Housing (net operating income for the fourth quarter totaled $61 million compared to $73 million in the fourth quarter of 2019) and Global Preneed, which Assurant is currently exploring strategic alternatives for so it can focus on Lifestyle and Housing units

Global Lifestyle

• Connected Living: Mobile subscriber base increased to 54 million; in North America and Asia Pacific added ~2.7 million subscribers last year
• Processed 7 million devices through Assurant trading facilities in 2020
• Closed the acquisition of HYLA Mobile, a Texas-based provider of smartphone software, trade-in, and upgrade services
• Expanded its 10-plus year relationship with Lowe’s home improvement with the introduction of Lowe’s TechConnect, a white label version of Pocket Geek Home product providing tech support for smart home devices

• Global Automotive: Increased the number of vehicles protected by nearly 13% to over 49 million
• With the acquisition of American Financial & Automotive Services (announced in May 2020), Assurant is leveraging its dealer training programs
• With the acquisition of EPG (announced in December 2020), it gained a footprint in servicing heavy equipment dealers and manufacturers such as Volvo and Daimler
• Global Financial Services: Partnered with a large US credit card issuer to provide admin services for certain embedded card benefits

Global Housing

• Delivered net operating income, excluding cats, of $371 million, up $71 million from 2019
• In the works: Developing a “proprietary single-source processing platform”
• In multifamily housing: Increased policies 8% since 2019 to cover over 2.4 million renters nationwide (added ~200,000 policies last year, also @avibenhutta is now a policyholder)
• In the works: Ongoing rollout of a property management solution called Cover360
• Introduced a resident portal to make renters’ insurance compliance simple and fully digital to “ultimately increase attachment rates over the long term”

Global Preneed

• Earnings were down year-over-year in light of the COVID-19 global pandemic and continued low-interest rate environment

Select comments by Alan B. Colberg, Assurant President, CEO & Director:

• “In 2020, we substantially increased our investment in digital midyear. Just not that we aren’t already strong in digital, but we see the impact of COVID, and we wanted to make sure we’re doing everything possible to drive a complete digital omnichannel experience for our customers.”
• “We’ve been investing heavily in is AI and automation, which has the benefit of driving better CX.”
• “If you look at the competitors that we’re evolving into, people in the home services market or others, they all trade on multiples of EBITDA that are in the mid-teens, and we are well below that. And so we continue to look at how do we help our investors better understand just the quality of our franchise. The 17-plus year client tenure that we mentioned earlier, the investments we’ve made to differentiate, and over time, we continue to believe our stock is attractively priced, and we’re going to work on continuing to evolve our metrics and disclosures and how we deploy capital to maximize the value for our shareholders.”
• “We’ve renewed something like 85% of our relationships over the last 2 years.”
• “And we’ve also been pruning nonstrategic risk. So a great example of that was our exit of small commercial a year or so ago.”