Assurant, Inc. (NYSE:AIZ) is a premier global protection company that safeguards and services connected devices, homes, and automobiles in partnership with the world's leading brands. Through its differentiated business-to-business-to-consumer (B2B2C) model, Assurant has established itself as a standout performer in the insurance and protection services industry, delivering consistent and profitable growth.
Business Overview Assurant, Inc. was incorporated as a Delaware corporation in 2004, evolving into a premier global protection company. The company operates through two primary segments: Global Lifestyle and Global Housing. The Global Lifestyle segment offers mobile device solutions, extended service contracts, and related services for consumer electronics, appliances, and credit and other insurance products. The Global Housing segment provides lender-placed homeowners, manufactured housing, and flood insurance, as well as voluntary manufactured housing, condominium, and homeowners insurance.
Assurant's operations span North America, Latin America, Europe, and Asia Pacific. The company leverages data-driven technology solutions to provide exceptional customer experiences. Over the years, Assurant has faced various challenges, including the termination of certain retirement health benefits for employees who did not qualify for grandfathered status in 2011. In 2016, the company amended its pension, retirement health, and life benefits such that no additional benefits would be earned after February 29, 2016. Assurant has also navigated industry-wide investigations regarding business practices, including the use and marketing of certain types of insurance policies or certificates.
Despite these challenges, Assurant has achieved several milestones. In 2018, the company acquired TWG Holdings Limited, expanding its global automotive and extended service contract businesses. Assurant has been recognized multiple times as one of the World's Most Ethical Companies by Ethisphere and has received Great Place to Work® certification in the U.S. for four consecutive years.
Financial Performance Assurant has demonstrated a remarkable track record of consistent and profitable growth. Over the past five years, the company has achieved an average return on equity of over 22% and a 10-year average combined ratio of 89% in its Global Housing segment, significantly outperforming the broader property and casualty (P&C) market. In 2024, Assurant reported net income of $760.2 million, or $14.46 per diluted share, representing an 18% increase from the previous year. The company's full-year 2024 adjusted EBITDA, excluding reportable catastrophes, grew by 15% to over $1.5 billion.
For the most recent fiscal year (2024), Assurant reported annual revenue of $11.88 billion, annual net income of $760.2 million, annual operating cash flow of $1.33 billion, and annual free cash flow of $1.11 billion. In the most recent quarter (Q4 2024), the company reported revenue of $3.1 billion and net income of $201.3 million, representing year-over-year increases of 4.4% and 5%, respectively.
Assurant operates globally, with approximately 82% of its revenue coming from North America (the U.S. and Canada), 8% from Latin America, 6% from Europe, and 5% from Asia Pacific for the year ended December 31, 2024.
Segment Performance
Global Lifestyle Segment Assurant's Global Lifestyle segment has been a key driver of the company's growth, with net earned premiums, fees, and other income increasing by 5% to $8.97 billion in 2024. The segment's Adjusted EBITDA decreased by 2% to $773.4 million, primarily due to elevated claims costs in the Global Automotive business and investments in new client programs and capabilities within Connected Living. However, the company remains optimistic about the long-term outlook for the Global Automotive business and expects to see continued momentum in Connected Living, particularly in its financial services and extended service contract offerings.
The Connected Living business partners with mobile service providers, retailers, OEMs, and cable operators to provide administrative services related to mobile device protection products. This includes program design, marketing strategy, risk management, data analytics, customer support, claims handling, supply chain services, service delivery, repair, and logistics management. Assurant also sells refurbished mobile and other electronic devices to fulfill insurance and consumer needs and provides in-store, same-day device repairs through its nationwide network of repair locations.
The Global Automotive business underwrites and provides administrative services for vehicle service contracts and ancillary products covering a variety of vehicles. The company offers integrated service offerings to its clients, including program design, risk management, data analytics, customer support, claims handling, reinsurance facilitation, and performance management.
Global Housing Segment The Global Housing segment has been a standout performer for Assurant, delivering double-digit earnings growth for the second consecutive year in 2024. Adjusted EBITDA for the segment increased by 17% to $671.2 million, driven by strong policy growth in the Homeowners business, favorable prior-year reserve development, and lower reinsurance costs. The segment's 10-year average combined ratio of 89% is significantly better than the broader P&C market's average of 95%, highlighting Assurant's risk management capabilities and operational efficiency in this business.
The Global Housing segment provides lender-placed homeowners, manufactured housing, and flood insurance, as well as voluntary manufactured housing, condominium, and homeowners insurance products. This includes the Homeowners business line, as well as renters insurance and other products referred to as Renters and Other. Lender-placed insurance provides collateral protection to lenders, mortgage servicers, and investors in the event a homeowner does not maintain insurance on a mortgaged property. Assurant uses proprietary insurance-tracking administration systems to monitor client mortgage portfolios and identify properties that are uninsured, initiating the lender-placement process.
Competitive Advantages and Growth Opportunities Assurant's success is underpinned by its differentiated B2B2C business model, which has enabled the company to establish deep partnerships with leading global brands. This model, combined with the company's data-driven technology solutions and focus on customer experience, has allowed Assurant to develop a strong competitive advantage and capture growth opportunities across its Global Lifestyle and Global Housing segments.
In the Global Lifestyle segment, Assurant has secured several key client wins and renewals, including major mobile carriers in the U.S. and Japan, representing over 40 million mobile devices protected. The company's investments in new client programs, capabilities, and technology are expected to drive future growth in this segment.
Similarly, the Global Housing segment has continued to outperform, benefiting from the strength of the Homeowners and Renters businesses, as well as the rollout of technology innovations to enhance the customer experience. Assurant's increased scale and operational efficiency in this segment have contributed to its industry-leading combined ratio and return on equity.
Risks and Challenges While Assurant has demonstrated resilience through various macroeconomic environments, the company faces several risks and challenges, including exposure to catastrophe losses, regulatory changes, and competition from traditional players and new entrants in the insurance and protection services industry.
The company's Global Housing segment is particularly susceptible to catastrophe losses, which can have a significant impact on its financial results. Assurant mitigates this risk through a robust reinsurance program, but the frequency and severity of natural disasters remain a concern. For example, Assurant expects reportable catastrophes from the recent California wildfires to approach or slightly exceed their per event catastrophe reinsurance program retention of $150 million.
Additionally, the insurance industry is subject to extensive regulation, and changes in laws and regulations could affect Assurant's ability to operate or the profitability of its products and services. The company must also navigate the evolving competitive landscape, which includes traditional insurers as well as new technology-driven competitors.
Financials Assurant's financial performance has been strong, with consistent growth in key metrics. The company's net income of $760.2 million in 2024 represents an 18% increase from the previous year. Adjusted EBITDA, excluding reportable catastrophes, grew by 15% to over $1.5 billion in the same period. The Global Lifestyle segment saw a 5% increase in net earned premiums, fees, and other income to $8.97 billion, while the Global Housing segment's Adjusted EBITDA increased by 17% to $671.2 million.
Assurant has achieved 8 consecutive years of growth, with 15% adjusted EBITDA growth and 19% adjusted earnings per share growth in 2024, both excluding reportable catastrophes. The company's Global Housing segment has consistently outperformed the P&C industry, with a 10-year average combined ratio of 89% compared to the broader P&C market of 95%.
Liquidity Assurant maintains a strong liquidity position, which allows the company to meet its financial obligations and invest in growth opportunities. As of December 31, 2024, Assurant reported cash and cash equivalents of $1.81 billion. The company has a $500 million five-year senior unsecured revolving credit facility, which was fully available as of December 31, 2024.
The company's debt-to-equity ratio stood at 0.41 as of December 31, 2024, indicating a healthy balance sheet. Assurant's current ratio and quick ratio were both 1.41 as of the same date, suggesting strong short-term liquidity.
Industry Trends The mobile protection market is a large and growing global market with evolving wireless standards. The worldwide used and refurbished smartphone market is also growing, driven by the cost and availability of new devices and sustainability-conscious customers.
The U.S. new vehicle sales have shown slight improvements, while the used vehicle market is normalizing from recent elevated used vehicle prices. The commercial equipment segment continues to expand, partially mitigating challenges in the U.S. auto business. Inflation continues to have a significant impact on Assurant's Global Automotive results as parts and labor adversely affect claims costs.
Consumers are becoming increasingly connected across their mobile devices, vehicles, and homes, creating a global market for smart home devices and related services, which presents long-term opportunities for Assurant.
Outlook and Conclusion Assurant is well-positioned to continue its strong performance in 2025 and beyond. The company's 2025 outlook calls for modest growth in adjusted EBITDA and earnings per share, excluding reportable catastrophes. Excluding the significant favorable prior year reserve development in Global Housing in 2024, Assurant expects high single-digit earnings and EPS growth, both excluding catastrophes.
In the Global Lifestyle segment, growth is expected to be driven by higher contributions from Connected Living and Global Automotive, partially offset by an unfavorable impact from foreign exchange rates and incremental investments, which are expected to mute growth by a few percentage points. For the Global Housing segment, EBITDA excluding catastrophes is expected to decline modestly due to the $107 million of favorable prior year reserve development seen in 2024. Excluding this, Assurant expects strong underlying EBITDA growth driven by the Homeowners business.
For capital allocation, Assurant expects share repurchases in the range of $200 million to $300 million in 2025, subject to market conditions and M&A opportunities.
Overall, Assurant's consistent track record of profitable growth, industry-leading financial metrics, and compelling growth opportunities make it an attractive investment proposition in the insurance and protection services industry. The company's focus on innovation, customer experience, and strategic partnerships positions it well to navigate the challenges ahead and continue delivering value for its shareholders.