Assurant Q2 2025 Earnings Report

Assurant EPS Results

• Actual EPS: $5.56
• Consensus EPS: $4.43
• Beat/Miss: Beat by +$1.13
• One Year Ago EPS: $4.77

Assurant Revenue Results

• Actual Revenue: $3.16 billion
• Expected Revenue: $3.13 billion
• Beat/Miss: Beat by +$31.78 million
• YoY Revenue Growth: +8.00%

Assurant Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 8:00AM ET

Assurant (NYSE:AIZ), together with its subsidiaries, provides business services that supports, protects, and connects consumer purchases in North America, Latin America, Europe, and the Asia Pacific. The company operates through two segments: Global Lifestyle and Global Housing. The Global Lifestyle segment offers mobile device solutions, and extended service contracts and related services for consumer electronics and appliances, and credit and other insurance products; and vehicle protection, commercial equipment, and other related services. The Global Housing segment provides lender-placed homeowners, manufactured housing, and flood insurance; renters insurance and related products; and voluntary manufactured housing, and condominium and homeowners insurance products. The company was formerly known as Fortis, Inc. and changed its name to Assurant, Inc. in February 2004. Assurant, Inc. was founded in 1892 and is headquartered in Atlanta, Georgia.

Assurant Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We delivered double-digit growth in Q2 with adjusted EBITDA up 13% and adjusted EPS up 17% excluding catastrophes, and raised our full-year 2025 guidance to ~10% EPS growth and mid-high single-digit EBITDA growth.
• Positive Sentiment: Global Housing outperformed with adjusted EBITDA up 25% YTD (ex-cats), more than 700 bps of expense leverage, a new mortgage servicing partner adding ~300,000 loans in Q3, and an 11% rise in renters policies, driving an H1 combined ratio of 87%.
• Positive Sentiment: Connected Living in Global Lifestyle accelerated, adding 2.4 million protected devices (now 65 million total) and bolstering repair capabilities through acquisitions of CPR (US), iSmash (UK) and u Solutions (Japan).
• Positive Sentiment: Holdco liquidity of $518 million and Q2 upstream cash of $230 million funded $105 million returned to shareholders (including $62 million in buybacks), and share repurchase guidance was increased to $250–300 million for 2025.
• Neutral Sentiment: Ongoing investments in AI and technology—from robotics in device care centers to generative AI for loan document classification—are expected to boost efficiency and enhance customer experiences.

Presentation

[Operator]

Welcome to Assurant's second quarter twenty twenty five conference call and webcast. At this time, all participants have been placed in a listen only mode, and the floor will be open for your questions following management's prepared remarks. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. It is now my pleasure to turn the floor over to Sean Mosier, vice president of investor relations. You may begin.

[Sean Moshier, VP - IR at Assurant]

Thank you, operator, and good morning, everyone. We look forward to discussing our second quarter results with you today. Joining me for Assurant's conference call are Keith Demings, our President and Chief Executive Officer and Keith Meyer, our Chief Financial Officer. Yesterday, after the market closed, we issued an earnings release announcing our results for the second quarter twenty twenty five. The release and corresponding financial supplement are available on assurant.com.

[Sean Moshier, VP - IR at Assurant]

Also on our website is a slide presentation for our webcast participants. Some of the statements made today are forward looking. Forward looking statements are based upon our historical and current expectations and subject to risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in the earnings release, presentation and financial supplement on our website as well as in our SEC reports. During today's call, we will refer to non GAAP financial measures, which we believe are important in analyzing the company's performance.

[Sean Moshier, VP - IR at Assurant]

For more details on these measures, the most comparable GAAP measures and a reconciliation of the two, please refer to the earnings release, presentation and financial supplement on our website. We'll start today's call with remarks before moving into Q and A. I will now turn the call over to Keith Demings.

[Keith Demmings, President, CEO & Director at Assurant]

Thanks, Sean, and good morning, everyone. We delivered a very strong second quarter with double digit growth in both adjusted EBITDA and earnings per share excluding reportable catastrophes. Our results were fueled by continued outperformance in global housing and growth in global lifestyle reinforcing a strong 2025. Through the first six months, adjusted EBITDA increased by 14% and adjusted EPS rose 16%, both excluding cats. Given our year to date performance, we're meaningfully increasing Assurant's full year 2025 growth expectations.

[Keith Demmings, President, CEO & Director at Assurant]

Excluding catastrophes, we now expect full year adjusted EPS growth to approach 10%, driven by mid to high single digit growth in adjusted EBITDA. When excluding prior year reserve development, we expect to deliver double digit underlying growth for both metrics. Additionally, our significant cash generation and balanced capital allocation continue to support long term shareholder value. This year's performance reinforces our long standing track record of success, driven by our powerful business model and the dedication of our global team. By combining innovative services with our protection and specialty insurance products, we deliver differentiated value through our unique b to b to c distribution channels in attractive lifestyle and housing markets.

[Keith Demmings, President, CEO & Director at Assurant]

Our partnerships with the world's leading brands are powered by transparency, data driven protection solutions, and value added services. We've continued to be a leader in our markets by embedding technology into our client systems, enabling exceptional customer experiences, and optimizing performance. We are well positioned to achieve our ninth consecutive year of profitable growth in 2025. Our diversified business model enables us to perform consistently across a range of economic environments, often diverging from the broader industry trends. We believe this strength and resilience continue to differentiate Assurant from the broader P and C industry.

[Keith Demmings, President, CEO & Director at Assurant]

Since 2019, we've delivered a compound annual growth rate of 12% in adjusted EBITDA and 18% in adjusted EPS, both excluding reportable cats. Now let me share some specific examples of the momentum we're seeing within our Lifestyle and Housing segments. Within Global Lifestyle, adjusted EBITDA growth accelerated in the second quarter, supporting our year to date performance. Through the first six months of the year, lifestyle earnings increased 2% on a constant currency basis, which was in line with our expectations. We are well positioned to deliver growth for the full year.

[Keith Demmings, President, CEO & Director at Assurant]

In Connected Living, adjusted EBITDA increased 4% year to date on a constant currency basis. Sustained investments in our device care centers, automation and technology platforms enhance our end to end solutions across the value chain. These capabilities add scale, simplicity, and flexibility, tapping into new profit pools and accelerating growth and value creation for Assurant and our partners. This has enabled our success in growing mobile subscribers globally. Over the last year, we've added 2,400,000 devices protected, bringing our total to 65,000,000 subscribers.

[Keith Demmings, President, CEO & Director at Assurant]

Our growth is led by new client programs and the continued expansion of our partner relationships. We continue to make investments related to new products, services, and programs, which we expect to roll out in the second half of this year. Following our acquisitions of cell phone repair or CPR in The US and iSmash in The UK, we recently acquired u Solutions in Japan to expand our local walk in repair capability in the world's second largest mobile market. This acquisition strengthens our customer experience in the local market and unlocks future growth opportunities. In global automotive, earnings were up modestly, supported by year over year improvements in loss experience.

[Keith Demmings, President, CEO & Director at Assurant]

Net written premiums have increased 8% year to date achieved through rate increases over the last two years and new business wins driven by our scale and critical dealer services business. A key highlight is our recent partnership with Sioka Automotive, a fast growing automotive group with more than 50 dealerships in New Jersey and Pennsylvania. Through Assurant Vehicle Care, we deliver vehicle protection products and comprehensive dealership operational support, including in dealership training. Internationally, we recently completed the acquisition of Justato in Brazil, expanding our automotive distribution network, diversifying our product portfolio and reinforcing our presence in Latin America. Gestato's expertise aligns with our commitment to delivering excellent service and seeking continuous improvement.

[Keith Demmings, President, CEO & Director at Assurant]

The acquisition presents exciting opportunities for future growth. Beyond new business wins and our expanding presence, we're renewing relationships across distribution channels, including dealership groups, OEMs, and other affinity partners, further reinforcing our client base and market position. We're driving innovation in automotive by investing in AI technologies. These advancements are transforming key areas from enhancing dealership training to enabling seamless digital claim processing. Turning to global housing.

[Keith Demmings, President, CEO & Director at Assurant]

Following two years of exceptional growth, the segment continues to outperform in 2025. Through the first six months of the year, adjusted EBITDA was up 25% excluding reportable cats. Our business continues to benefit from multiple growth levers, including increased demand for lender placed insurance within homeowners, driven by hardening of the voluntary insurance market across The US, significant expense leverage across global housing, which has improved by over 700 basis points over the last two years, and increased scale from new business wins, including the third quarter rollout of a new mortgage servicing partner, which will add approximately 300,000 loans to our portfolio. In homeowners, we see meaningful opportunities to expand with new clients by leveraging our existing infrastructure. Ongoing technology investments further enhance efficiency as we process and digitize millions of insurance documents each year for a market leading loan tracking solution.

[Keith Demmings, President, CEO & Director at Assurant]

In renters, our tech enabled services remain a key driver of growth. Our Coverage three sixty Plus platform in the property management company or PMC channel has delivered three consecutive years of double digit premium growth. The platform continues to deliver higher penetration rates, client renewals, and new business wins. During the second quarter, we signed a top 15 PMC partner with over 100,000 units nationwide and completed multiyear renewals with two of our top four PMC partners. We've also increased our renters policies by 11% year to date, including a new renters book we added earlier this year.

[Keith Demmings, President, CEO & Director at Assurant]

Overall, our growth within housing is underpinned by our attractive combined ratios. Excluding prior year development, we've achieved a year to date combined ratio of 87% with cats. We remain on track to deliver a mid eighties combined ratio for the full year, including our full year cat assumption of $300,000,000. Innovation is deeply embedded in AssuranceDNA, and it continues to underpin our ability to generate future growth. As we look over the long term, we see significant opportunities across clients, products, geographies, including expanding offerings and increasing attachment rates with existing partners, winning new clients across the globe by executing on opportunities already in our pipeline, increasing investments in core markets, including launching new products and services across the lifestyle and housing businesses, and entering attractive adjacent sectors through new product offerings.

[Keith Demmings, President, CEO & Director at Assurant]

We're laser focused on executing on each of these opportunities as we continue to position Assurant for long term growth, creating value for our partners, end consumers and shareholders. I'll now turn it over to Keith Meyer to highlight our second quarter results and expectations for the remainder of the year.

[Keith Meier, EVP & CFO at Assurant]

Thanks, Keith, and good morning, everyone. We were very pleased with the growth in the quarter across both Global Housing and Global Lifestyle. Overall, second quarter growth was strong with adjusted EBITDA increasing 13% and adjusted earnings per share growing 17%, both excluding CATS. Our year to date performance supports the increase to our full year 2025 outlook, which I will cover shortly. Starting with capital.

[Keith Meier, EVP & CFO at Assurant]

Our holding company liquidity position at quarter end was $518,000,000 providing us with flexibility to drive future growth. Our robust cash flow is a key differentiator for Assurant. In the quarter, our businesses upstreamed over $230,000,000 of cash flow to the holding company, which allowed us to return $105,000,000 to our shareholders, including $62,000,000 of share repurchases. Through August 1, we repurchased an additional $25,000,000 of shares and have now completed $150,000,000 in repurchases so far this year. I'll now walk through our segment results in greater detail, beginning with Global Lifestyle.

[Keith Meier, EVP & CFO at Assurant]

Second quarter adjusted EBITDA increased 6% compared to last year or 7% on a constant currency basis. In Connected Living, earnings increased 9% or 11% on a constant currency basis, led by our global mobile device protection programs and modest growth in our mobile trade in programs. The strength in device protection was driven by strong subscriber growth from new mobile clients and programs that began last year. This is a prime example of our momentum given the important investments we made in 2024. Our device trading business saw improved profitability from higher volumes compared to prior year, including increased carrier promotions as well as consumer demand pull forward in the quarter.

[Keith Meier, EVP & CFO at Assurant]

Based on historical trends, we anticipate lower sequential third quarter volumes given normal seasonality and a strong second quarter. Moving to Global Auto. Adjusted EBITDA was up modestly. In line with our expectations, we were pleased to see improved loss ratios in our vehicle service contract business and stable earnings overall. We continue to benefit from previous rate increases earning through our book and improvements to our claims processes while keeping us on track to grow for the full year.

[Keith Meier, EVP & CFO at Assurant]

For Global Lifestyle, our net earned premiums, fees, and other income grew 8%, led by strong growth in connected living from mobile device protection and trade in programs as well as contributions from a new program within financial services launched late last year. Moving to Global Housing. Second quarter adjusted EBITDA was $214,000,000 which included $30,000,000 of reportable catastrophe impacts. Excluding CATS, Global Housing delivered another quarter of strong double digit growth, as adjusted EBITDA increased 18% to $244,000,000 Our homeowners business continued to benefit from favorable non catastrophe loss experience with lower claims frequencies and increases to lender placed policies in force, benefiting from pressure in the voluntary insurance market. Results also increased from higher favorable prior period reserve development, which was $34,000,000 in the quarter compared to $17,000,000 in the 2024.

[Keith Meier, EVP & CFO at Assurant]

Before moving to our 2025 outlook, I wanted to discuss Assurant's long standing focus on leveraging technology to drive innovation for our partners and end consumers. We have invested in AI and related technologies to support our clients, delivering efficiencies and improving the customer experience. We also have an effective AI framework that allows us to create, evaluate, and scale use cases across our businesses. Artificial intelligence presents a powerful opportunity to further accelerate our capabilities and creates additional value for our clients. It enables us to improve productivity, enhance decision making, and upscale our employees, delivering simpler, faster, and more consistent outcomes.

[Keith Meier, EVP & CFO at Assurant]

There are several areas throughout our businesses where we believe AI can continue to transform our operations and product offerings. In Global Lifestyle, our innovation and device care center near Nashville is increasing the use of robotics and AI to assess mobile device quality and process trade ins with greater speed and consistency. This supports higher average selling prices and better value for clients and end consumers. We are also further embedding AI into our Personal Tech pro premium tech support services, which cover connected devices and appliances. This enables us to better assist customers in navigating technical challenges and inquiries with precision and ease.

[Keith Meier, EVP & CFO at Assurant]

In housing, we recently deployed our generative AI solutions to enhance the speed and accuracy of document classification and processing across our loan tracking solutions with impressive early results. Looking ahead, technology based solutions will play a critical role in extending client tenure and expanding market share. And our technology advantages will enable us to continue to differentiate Assurant against competitors in the market. Finally, I want to share some thoughts on our increased outlook for 2025. Driven by the strength of our first half results, including outperformance within Global Housing, we now expect enterprise full year adjusted EPS growth to approach 10% and adjusted EBITDA to grow mid to high single digits, both excluding CATs.

[Keith Meier, EVP & CFO at Assurant]

This represents a meaningful increase from our initial expectation of modest growth for both metrics. To put a finer point on the strength of our outlook, excluding favorable prior year development of $63,000,000 in the 2025 and January for full year 2024, underlying growth trends are expected to deliver double digit adjusted earnings and EPS growth. We now expect strong growth in Global Housing and continue to expect growth within Global Lifestyle, where both Connected Living and Global Automotive are expected to grow. For Global Lifestyle, growth is expected to be partially offset by investments in new partnerships and programs as well as unfavorable foreign exchange. As a reminder, through the 2025, we've made approximately $5,000,000 of strategic investments and would expect roughly $10,000,000 in the second half of the year.

[Keith Meier, EVP & CFO at Assurant]

These investments are directly tied to the programs and clients we are in the process of launching or expect to launch in the near future. Within Global Housing, we expect continued policy growth in lender placed. As a reminder, our outlook does not contemplate additional prior year reserve development beyond the $63,000,000 seen in the first half of the year. We have considered and continue to monitor macroeconomic conditions within our outlook, including tariffs, inflation, foreign exchange, and interest rate levels, which may impact the pace and timing of growth. And finally, our capital objectives remain consistent given our position of strength as we focus on maintaining balance and flexibility to support new business growth while returning excess capital to shareholders.

[Keith Meier, EVP & CFO at Assurant]

From a share repurchase perspective, given our confidence in our solid capital position, increased earnings outlook and attractive share price, we now expect share repurchases for the year to be between $250,000,000 to $300,000,000 the upper end of our 2025 guidance. This is subject to M and A as well as market and other conditions. In conclusion, our year to date performance and increase in outlook for 2025 is a testament to the unique and differentiated nature of Assurant as we continue to be well positioned to grow earnings once again for the ninth consecutive year while also navigating various macroeconomic environments. With that, operator, please open the call for questions.

[Operator]

Thank you. The floor is now open for questions. If you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you'll hear your name called. Please accept, unmute your audio, and ask your question.

[Operator]

We will wait one moment to allow the queue to form.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Our first question will come from the line of Jeff Schmidt from William Blair. You may now unmute your audio and ask your question. Good morning, everyone.

[Keith Demmings, President, CEO & Director at Assurant]

Morning, Jeff.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

So when I look at the overall benefit ratio in Global Lifestyle, it's around 23 to 24%, even up a little bit, I guess, from last year.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Should we expect that to trend down as rate continues to earn through in global auto, or is this sort of a decent run rate? I mean, how should we think about the trend there?

[Keith Demmings, President, CEO & Director at Assurant]

Yeah. Maybe maybe I'll offer a couple of overarching thoughts, and then Keith can talk about the trend line. I I'd say, first of all, really pleased with the progress that you're seeing in the second quarter for Global Lifestyle overall. Certainly, Connected Living performed really well, up 11% constant currency. Auto, we're also seeing a really nice stability there.

[Keith Demmings, President, CEO & Director at Assurant]

And I think we're well positioned midway through the year, very much in line with our expectations and feel confident in the full year opportunity to grow both housing, auto, and connected living overall. But, Keith, what would you add about the benefit level?

[Keith Meier, EVP & CFO at Assurant]

Yeah. I think, Jeff, overall, there's always a little bit of a mix shift in terms of the dynamics of the deal structures with the different clients within lifestyle. The the ones that we're really focused on is in auto, and I think what we're seeing there is the encouraging point this year where we're seeing the improvement in the vehicle service contract loss experience. And so I think that is really leading us to an what we feel like is an inflection point this year for that that business, which also allows us to feel good about our growth outlook for our auto business. And I think it sets us up for a nice run over the long term for, you know, for our auto business.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Great. And then investment income from other investments was negative in the first half. What what are those investments, and what's driving the decline there?

[Keith Meier, EVP & CFO at Assurant]

Yeah. I think more than anything, Jeff, I I would just start by saying, you know, our investment portfolio really continues to perform well. I think it reflects the quality and diversity of our investments. So, you know, overall, we're up year over year and for the quarter. And when you think about investments, you know, we have things like real estate transactions that that take place during the year, so that can create a little bit of lumpiness from a quarter to quarter basis.

[Keith Meier, EVP & CFO at Assurant]

But overall, I think we're in a good position. You know, our book yields overall are up to 55.33%. You know, that's 10 basis points over the first quarter. It's also 20 basis points better than than the prior year. So so I think we're our portfolio is is performing well.

[Keith Meier, EVP & CFO at Assurant]

And so, you know, I think from an overall position, I think we're in a a good place for investment income. Overall, I think you can see us having a positive impact because of the higher average asset levels and then the positive yields in fixed income, and then that'll be offset a little bit by the the shorter term investments and and our cash investments. So I think but overall, we see investment income being up for the year.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Thank you.

[Keith Meier, EVP & CFO at Assurant]

Welcome.

[Operator]

Our next question comes from Tommy McJoint with KBW. Tommy, please unmute your audio and Hey, ask Tommy. Your

[Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Good morning, guys. Thanks for taking our questions.

[Keith Meier, EVP & CFO at Assurant]

Good morning, Tommy.

[Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Yeah. So the the first one here, just is there a way to to think about any way to quantify any pull forward in consumer activity when we think about the the number of devices that that you guys reported or the the number of protected vehicles that you guys had? Got the sense that there was a nice uplift in growth in the second quarter. Just so just trying to see if any of that was a pull forward of activity ahead of the the tariffs.

[Keith Demmings, President, CEO & Director at Assurant]

Yeah. Maybe we'll we'll break it into to two parts. I think when I look at Connected Living and in mobile in particular, you know, we probably saw a little bit of pull forward relative to trade in. There was more activity in the marketplace in general, more switching activity, more promotional work, and I think some of that was pull forward relative to tariffs. But I I do think that the bulk of the beat in Connected Living was driven by the growth in device protection.

[Keith Demmings, President, CEO & Director at Assurant]

You see the sequential growth in subscribers up 700,000, 2,400,000 year over year. That by far and away was the lion's share of the improved profitability in the quarter. Trade in certainly helped, but it wasn't the biggest driver. And then in terms of of auto, maybe I'll offer one thought, and then Keith can jump in. You know, I think when you look at the first half auto sales overall, it was a pretty strong and resilient auto market.

[Keith Demmings, President, CEO & Director at Assurant]

You know, our results kind of followed that as well. So I think retail car sales are up six or 7% year to date. You're seeing net written premiums up pretty significantly, 8% for Assurant year to date. So some of that certainly is pulled forward. I don't think the car sales will maintain at that same level in the second half, but no impact on earnings because, obviously, that earns out over multiple years. But, you know, Keith, what else might you add?

[Keith Meier, EVP & CFO at Assurant]

Yeah. I think, overall, we are pleased with the momentum that we're building on our auto side for for our our sales growth. You know, Keith mentioned the written premium's up 8%. Know, I think that's a blend of some of the rate increases that we've had over the last couple of years. I think it's also driven by some new business wins that we highlighted a little bit earlier.

[Keith Meier, EVP & CFO at Assurant]

And, you know, then I think there is a little bit of pull forward in demand in the early part of the quarter, but we also saw the the production being pretty good as we went through the quarter. I think there's a little bit more promotional activity that the dealers are driving. And I think when there's promotional activity, you know, I think that allows that allows consumers to sometimes utilize some of those promotional dollars to buy some of the the additional services like the extended service contracts. So overall, I think we like the progress we're making, and our protected vehicles are up nicely in the quarter as well. So overall, liking the momentum we see in on the auto sales side.

[Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Okay. Got it. And switching over to the housing side, I'd like to look at the expense ratio within that segment. You guys have delivered a lot of operating leverage over the past few years. That expense ratio is now running in the high 30s.

[Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Can you talk about the opportunity to gain more leverage just as that business line continues to grow across both lender placed, the voluntary market, as well as renters growth. Maybe perhaps it'd be helpful to think about, you know, what what percentage of those costs are fixed versus more variable or commission based? Any insights around the expense side of that thing?

[Keith Demmings, President, CEO & Director at Assurant]

Yeah. I think, you know, a lot of that the cost is the the operational execution. You know, not a huge part of that is gonna be commissioned. There's no commission in the lender place, which is obviously the biggest part of the housing business. And I think there is opportunity to continue to create leverage over time, and and it's coming from a couple different ways, Tommy.

[Keith Demmings, President, CEO & Director at Assurant]

One, we're seeing, obviously, growth in the underlying lender placed portfolio of the hard market. We're also seeing growth because we're actually winning and gaining more market share with new clients. Some of our clients are are onboarding new loans, etcetera. So there's there's natural growth coming through a couple of different ways. That naturally creates a lot of scale advantages, but then we're driving a tremendous amount of effort around technology, automation, driving more operational efficiency.

[Keith Demmings, President, CEO & Director at Assurant]

Keith highlighted a couple of examples of how we're thinking about that within all of the businesses. And I think all of those things together create continuous opportunity to drive that expense level down. We wanna create as much efficiency as we can. It's good for consumers. It's good for our clients.

[Keith Demmings, President, CEO & Director at Assurant]

Ultimately, it's good for getting the right rates in the marketplace, and and we're gonna continue to be as efficient as we can to to create value. But, Keith, what would you add?

[Keith Meier, EVP & CFO at Assurant]

Yeah. And I think along the lines of your question, Tommy, you know, you can think about selling and underwriting type expenses being about 20% of the overall. So that leaves us that other 80% to be able to leverage So we we do see a lot of opportunity as we, you know, as we continue to lever leverage our technology and scale.

[Keith Demmings, President, CEO & Director at Assurant]

And it's interesting. The investments that we make, they don't just make us more efficient. They make the solution set better, and it actually strengthens our competitive advantage in the marketplace, and it makes us more likely to win net new clients because we're just you know, not only are we more efficient, but we're doing it in a way that's better from a consumer perspective.

[Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)]

Thank you.

[Keith Demmings, President, CEO & Director at Assurant]

You bet.

[Keith Meier, EVP & CFO at Assurant]

You're welcome.

[Operator]

As a reminder, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your Zoom screen. Our next question comes from Mark Hughes with Truist. Mark, please go ahead with your quest

[Keith Demmings, President, CEO & Director at Assurant]

Morning.

[Mark Hughes, Analyst at Truist Securities]

Good morning. The prior year development, could you characterize where that is coming from in global housing?

[Keith Meier, EVP & CFO at Assurant]

Yeah. So I'd say it's really related to three main things, Mark. You know, I would say one is the improvements in Florida due to a lot of the regulatory changes We're also seeing some lower frequencies. And then certainly, the third thing is the inflation being lower than expected.

[Keith Meier, EVP & CFO at Assurant]

And so I think that's just where we're really just reacting to those three elements that are driving our prior, year development.

[Mark Hughes, Analyst at Truist Securities]

And then the tariffs, anything you observed so far, your your thoughts about what that might mean, going forward, and then how much cushion you might have in your second half guidance for tariff impacts?

[Keith Demmings, President, CEO & Director at Assurant]

Yes, probably at the simplest level, very limited impact in the first half of the year. That was also true specifically to the second quarter. As we looked at the outlook, we certainly included our best estimate based on the most current information, I think very manageable as we look at the balance of the year. And we are staying proactive as well as we think about inflation over time, not just with our inflation guard feature within lender placed, our ability to get rate with filed products and then our work with clients around service efficiency and rates and deal structure. So I feel like we're really well positioned.

[Keith Demmings, President, CEO & Director at Assurant]

We try to be comprehensive in in how we thought about the full year.

[Mark Hughes, Analyst at Truist Securities]

And then I you've talked about pressure in the voluntary market. And I think in earlier calls, you had maybe suggested that's helped retention that when consumers get the lender placed, they may be more likely to keep it. Do I remember that properly, and is that dynamic still in place, you know, to the same degree?

[Keith Demmings, President, CEO & Director at Assurant]

Yeah. I think we're getting, two things happening. Right? We're seeing more policies placed because consumers are struggling to find coverage and then we're keeping the policies longer and it's meaningfully increased over time and I think that's a function of the tough market and our rates have become more competitive and the product has been well received by consumers. But what else would you add Keith?

[Keith Meier, EVP & CFO at Assurant]

Yeah. I think the customers are keeping our policies probably six to twelve months longer, Mark, you know, and I think that just speaks to the things that we talked about earlier, you know, where we're driving a lot of the expense leverage that can reduce the the rates. So our our products are looking, you know, I think, more attractive and and better to consumers than they've ever been before. I think the the price that we're delivering is good, and then we're also, you know, really delivering great service to the customers when they when they have needs as well. So I think that combination is serving us well.

[Mark Hughes, Analyst at Truist Securities]

Then I'll ask, when you look at the new business pipeline for lifestyle, you've mentioned a lot of, kind of specifics, new programs, expansion of partnerships. How would you characterize the, new business pipeline now versus twelve, twenty four months ago? And are there any themes that you would highlight about what is, you know, on the, on the horizon for you?

[Keith Demmings, President, CEO & Director at Assurant]

Yeah. A couple of thoughts. I think we've had a lot of momentum really the last couple of years across the board, whether that's in connected living, in housing, in auto. I think we've seen some acceleration in the pipeline as we look forward from here. There are some things that we're actively working on.

[Keith Demmings, President, CEO & Director at Assurant]

We talked about the investments we made in the first half being around $5,000,000 to support new business growth, specifically in Connected Living. We think that'll be more like an additional 10,000,000 in the second half. Hopeful to be able to talk more in November about some of the things that we're working on. But I would say, we are very excited about some of the things that we're going to announce. And it's a nice combination of new client wins, adding additional services to expand relationships with major clients, and then also launching new products.

[Keith Demmings, President, CEO & Director at Assurant]

So it's a nice mix of activity and very, very much focused on Connected Living. But we are seeing a lot of opportunity for growth in the rest of the company as well. We talked about a big win in the auto space earlier in the discussion. The pipeline in lender places is quite strong and we've seen a lot of momentum in renters with 12 of double digit growth in the property management channel on top of a pretty significant book roll. So lots of opportunity across the board and certainly that's the priority focus for this company.

[Mark Hughes, Analyst at Truist Securities]

Thank you very much.

[Keith Demmings, President, CEO & Director at Assurant]

You bet. Thank you.

[Operator]

There are no further questions at this time. I will now hand back to management for closing remarks.

[Keith Demmings, President, CEO & Director at Assurant]

Alright. Well, thanks everybody for joining the call, and we will certainly look forward to updating you again in November. And until then, hope everybody stays safe. Thanks very much.

[Operator]

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time, and have a wonderful day.

Participants

Executives

• Sean Moshier, VP - IR
• Keith Demmings, President, CEO & Director
• Keith Meier, EVP & CFO

Analysts

• Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C
• Tommy McJoynt, Director - Equity Research at Keefe, Bruyette & Woods (KBW)
• Mark Hughes, Analyst at Truist Securities