Assurant, Inc. (AIZ) Earnings

Management highlights

- Overall Financial Performance • The company delivered its second consecutive quarter of record earnings, with Q2 2026 adjusted EBITDA up 18% and adjusted EPS up 19% (both excluding catastrophes). • Through the first half of 2026, adjusted EBITDA grew 12% and adjusted EPS grew 14% (both excluding catastrophes), putting the company on track to achieve its 10th consecutive year of profitable growth. • Since 2020, the company has delivered an 11% compound annual growth rate (CAGR) in adjusted EBITDA and a 17% CAGR in adjusted EPS (both excluding catastrophes). - Strategic and Operational Highlights • Assurant operates a durable, less cyclical B2B2C business model with long-standing embedded partnerships with leading global brands, built on operational excellence and shared outcomes. Investments in data, automation, and AI have improved operational speed, decision-making, and client/consumer support. • Connected Living expanded and deepened major partnerships: completed migration of U.S. Cellular's in-force business with T-Mobile, launched a new co-located reverse logistics facility, won new clients including Telstra, Best Buy, and Chase Card Services, and progressed a home warranty partnership with the largest U.S. brokerage. • Global Automotive secured a long-term renewal with one of its largest automotive clients, and gained traction with international OEMs and vehicle retailers to expand growth opportunities. • Global Housing launched a new lender-placed insurance partnership with Freedom Mortgage, a top-10 U.S. mortgage servicer with ~2.6 million loans, strengthening market leadership. Its Cover360 renters platform now serves 7 of the top 10 U.S. property management companies, with improving penetration rates via deeper partner integration. - Capital Allocation • End-of-quarter holding company liquidity was $911 million, providing flexibility for growth investments, share repurchases, and dividends. • In Q2 2026, the company returned $123 million to shareholders: $75 million in share repurchases and $48 million in dividends. Year-to-date through July 31, 2026, total share repurchases reached $230 million.

Guidance

- Full-year 2026 adjusted EBITDA and adjusted EPS (excluding catastrophes) are now expected to grow mid-single digits, after absorbing a $71 million headwind from lower favorable prior-year reserve development. Excluding this reserve impact, underlying growth for both metrics is expected to be ~10%. - The full-year growth outlook for Global Lifestyle was raised to low double digits, driven by continued optimization of recently launched programs, expansion with existing clients, and contributions from new capabilities that reflect returns on prior investments. - The full-year growth outlook for Global Housing was also increased, with management expecting modest earnings growth (excluding catastrophes) and solid underlying growth after accounting for lower prior-year reserve development. The 2026 outlook does not assume any incremental favorable prior-year reserve development for the remainder of the year. - 2026 share repurchase guidance was raised to the upper end of the $300 million to $350 million range, supported by stronger-than-expected first half operating performance and cash generation. - Management maintains a disciplined, balanced approach to capital allocation, retaining flexibility to pursue organic investments, attractive M&A opportunities, and additional shareholder returns.

Segment performance

Assurant operates two primary reportable segments: Global Lifestyle and Global Housing. 1. **Global Lifestyle**: - Q2 2026 adjusted EBITDA increased 21% ($43 million) year-over-year. The segment is the expected leader of full-year 2026 company growth, with a raised outlook for low double-digit full-year growth. - *Connected Living (sub-segment)*: Adjusted EBITDA grew 29% ($39 million) YoY; after adjusting for $10 million in non-run rate benefits (a client adjustment and international tax benefit), underlying growth was 22%. The global supply chain business serviced over 7 million devices, an increase of 1.8 million devices YoY driven by new reverse logistics programs. 4 million net new devices were added to protection programs across U.S. and international partnerships, with growth also supported by optimized card benefit programs in financial services. Year-to-date adjusted EBITDA growth is 24%. - *Global Automotive (sub-segment)*: Adjusted EBITDA increased 6% ($4 million) YoY, supported by expanding global partnerships in Latin America and Europe and continued improving loss experience. Year-to-date adjusted EBITDA growth is 15%. 2. **Global Housing**: - Q2 2026 adjusted EBITDA was $275 million including $12 million in reportable catastrophe losses; excluding catastrophes, adjusted EBITDA was $287 million, an 18% ($43 million) increase YoY. - Growth drivers include a lower-than-typical non-catastrophe loss ratio of 35% (driven by fewer weather events), lower catastrophe reinsurance costs from the April 2026 program placement, top-line growth in specialty products, and higher average premiums in lender-placed insurance. Total tracked lender-placed loans grew 9% to over 34 million, following the new Freedom Mortgage partnership. - The sequential quarterly placement rate decline to 2.02% was entirely driven by a client transferring a high-placement-rate loan portfolio to a non-Assurant servicer. - Year-to-date adjusted EBITDA growth (excluding catastrophes) is 7%; excluding prior-year reserve development, underlying year-to-date growth is double-digits. Management expects full-year 2026 modest earnings growth (excluding catastrophes), with solid underlying growth after accounting for lower prior-year reserve development impacts.

Risks & headwinds

No new material or material unexpected risks were explicitly highlighted during the call. Management noted that forward-looking results are inherently subject to general market and macroeconomic uncertainties that could cause actual results to differ from current expectations, with additional risk factor details available in the company's SEC filings and public earnings disclosures. The only specific operational fluctuation discussed was a one-time sequential decline in lender-placed placement driven by a third-party client portfolio transfer, which management noted did not reflect underlying business trends.

Analyst Q&A

• Q: 2026 first half results have benefited from ramping investments in new client agreements made in prior years. What is the visibility for continued momentum into 2027, and is the current growth just harvesting past investments or is there underlying ongoing momentum? /

  A: Current strong first half growth is indeed driven by scaling and optimizing investments made in 2024 and 2025. Growth is broad-based across all segments, with new wins like the Freedom Mortgage partnership in housing adding further momentum. Management continues to make new investments, has a strong pipeline of additional opportunities with existing and new clients, and feels good about sustained momentum heading into 2027, with four new connected living programs announced last quarter already contributing to forward growth.

• Q: Given the recent moderation of the hard insurance market, will lender-placed insurance see policyholders return to traditional home insurance, and what impacted this quarter's gross written premium trend? /

  A: Excluding the one-time impact of a client transferring a high-placement-rate loan portfolio to a non-Assurant servicer, underlying lender-placed placement rates are stable, up slightly year-over-year. Any impact from the moderating hard market is modestly distributed across regions, with a 2% policy decline in Florida and 1-2% growth in Texas and California, leaving overall results very steady. The quarterly gross written premium impact was entirely driven by the aforementioned portfolio transfer, and the new Freedom Mortgage partnership will more than offset this impact over the next 12 months.

• Q: Is connected living's strong first half growth tied to the global chip shortage cycle, or is it structural and sustainable? /

  A: The main drivers of strong connected living growth are broader contributions from the scaling of the supply chain business, growth in core protection programs, and maturation of the financial services business across both U.S. and international markets. Longer term, higher new device and memory costs are neutral to positive for Assurant: more expensive devices increase consumer demand for device protection, and also raise demand for the company's certified pre-owned devices, creating a favorable dynamic for the business.

• Q: Is there additional deal pipeline in lender-placed insurance, and what is reverse logistics capacity and margin profile? /

  A: Even with high existing market share, Assurant has a strong pipeline of new lender-placed opportunities. Scale has allowed heavy investment in capabilities, with major past wins (Bank of America, Freedom Mortgage) raising the bar for service and technology, improving long-term growth opportunities. The company has excess reverse logistics capacity across existing facilities in the U.S. and global key markets, so capacity is not a growth constraint. Reverse logistics is a complementary business to core device protection (the main driver of earnings) that adds incremental value to the full device lifecycle ecosystem.

• Q: With strong excess capital generation, will you exceed the $350 million 2026 share repurchase target, and what M&A are you pursuing? /

  A: The company has strong liquidity ($911 million at quarter-end) and has raised repurchase guidance to the upper end of the $300-$350 million range. Management prioritizes retaining capital flexibility to pursue organic growth investments and attractive M&A opportunities, maintains a consistent pipeline of potential acquisitions, and will remain disciplined on long-term capital allocation to maximize value.