Assurant Inc. (NYSE:AIZ) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 08:00 am ET


Assurant Inc. (NYSE:AIZ) Q2 2020 Earnings Conference Call - Final Transcript


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Alan B. Colberg

in infection rates from COVID-19, which could lead to a significant change in consumer behavior, access to distribution channels, or impact to financial markets. While we expect earnings growth in the second half on a year-over-year basis, our outlook for the full-year assumes a decline in earnings from the first six months of this year as we anticipate more normalized claims activity across most of our businesses and make incremental investments in our digital and customer experience capabilities.

The second half of the year will also reflect lower investment income and foreign exchange headwinds, the absence of $16 million of one-time benefits, as well as typical mobile seasonality.

Looking at our balance sheet, our liquidity position remains strong. In July, we repaid the $200 million credit facility drawn in late March, which was done as a precautionary measure. Given the attractiveness of our stock and strong capital position, we expect to resume share repurchases in the third quarter and we continue to expect to reach our objective of returning $1.35 billion of capital to shareholders between 2019 and 2021. As always, this is subject to a variety of factors, including no significant deterioration of economic or market conditions.

Recent market transactions across our space further reinforced our view that our stock remains attractively priced. Earnings momentum in Global Lifestyle continues to be strong, driven in particular by Connected Living. This business had a compound annual earnings growth rate of 38% between 2015 and 2019 led by mobile.

Our installed base of customers, which represent a significant monthly recurring revenue stream continues to expand. We are now at over 53 million mobile subscribers, up 70% since 2015. We've continued to provide value to consumers in services like trading, upgrade and technology support as part of our fee-based offerings, resulting in a better ownership experience and multiple profit pools beyond device protection.

At the same time, we've continue to deepen our partnerships with market leaders to drive long-term profitable growth. We are pleased to announce that as Sprint becomes part of T-Mobile, we'll offer device protection into those new T-Mobile customers. We believe this is another example to support the long-term growth of our Connected Living business, and we are proud of our long-standing partnership with T-Mobile. In August, we also strengthened our mobile device trading capabilities in Asia Pacific through the purchase of Alegre, a leading operator in the pre-owned mobile device market. After a small initial investment in 2018, we acquired the remaining equity for $12 million.

Turning to Global Automotive, our installed base now includes over 48 million vehicles. We continue to strengthen our client partnerships by working with them to enhance the digital customer experience, offering live online dealer training and sales webinars. We will continue to use our scale and diverse distribution channels to grow the business over the long-term, especially as we look at future opportunities with the connected car.

Moving to Global Housing, our lender-placed insurance and renters businesses, both continue to contribute to our