We began 2020 armed with consumer insights that would define the year as the start of what we referred to as “The Connected Decade” — an era in which the world would experience greater connectivity across the device, the car and the home, bringing not only efficiency to consumers’ lives but also an opportunity to be more connected to one another. But no one could have predicted how the year was to evolve. The global pandemic took over the world like a catastrophic superstorm that moved with force and devastation.

From the onset of the pandemic, we put in place three principles to act as guideposts, leading our decision-making and actions. These consisted of ensuring the safety and wellbeing of our employees and their families, maintaining continuous service for our customers and supporting our communities to help mitigate the impacts of the virus. Adhering to these principles enabled us to make decisions that kept our people, customers and those communities where we work and live supported through an unprecedented time.

When it quickly became clear that it was not safe to have our people remain in the office, we moved more than 12,000 of our employees to work-from-home within two weeks — ensuring their connectivity and supporting their at-home situations. In adherence with government requirements, we continued to keep our essential workers safe while they repaired thousands of mobile phones, vital to keeping consumers connected.

We made great strides executing on our strategy in 2020, investing in our business, including select acquisitions to further expand our capabilities, and deepening our client relationships through innovative offerings, all driven by our insights around the connected consumer lifestyle.

Connectivity has become a household word across the world. Today, people not only want to be connected, they need to be connected to their work, families and friends — and to the world itself. In a year when we were all forced to be distanced, we realized our base level need to stay connected to one another.

Critical to this need for connection is our enduring commitment. Commitment represents a dedication to something important. More than any other year, I would define 2020 as a year that demonstrated our commitment as employees and as a global organization. This commitment grounded and centered us, enabling not just our perseverance during the unprecedented challenge of a global pandemic but also our continued global growth.

Committed to Long-term Profitable Growth

The dedication of our employees not only to deliver for our customers, but to innovate was an outstanding achievement that led to our businesses’ continued profitable growth: in 2020, our market-leading businesses — across Global Lifestyle and Global Housing — drove strong earnings growth for Assurant for the fourth consecutive year.

For the full year, our net operating income (NOI), excluding reportable catastrophesSee footnote 1⁽¹⁾, grew to $664 million, representing an increase of 16 percent, while net operating income per diluted share, excluding reportable catastrophesSee footnote 1⁽¹⁾, increased by 17 percent to $10.80 — ahead of our initial expectations for the year. Importantly, our business segments, combined, contributed approximately $821 million in dividends to the holding company, net of infusions and excluding amounts used for acquisitions or received from dispositions. This further demonstrated the strength and resiliency of our balance sheet. We also increased our common stock dividend for the 16th consecutive year since going public, and we returned another $455 million to shareholders via share repurchases and common stock dividends. In total, we completed 65 percent of our 2019 Investor Day objective of returning $1.35 billion by the end of 2021 — an objective we expect to achieve by year end.

Within Global Lifestyle, we increased net operating incomeSee footnote 2⁽²⁾ by 7 percent to $437 million, driven primarily by our Connected Living business where earnings increased by 14 percent. Our mobile subscriber base grew throughout the year to 54 million, by expanding both our new and existing partnerships. Between North America and Asia Pacific, we added almost 2.7 million subscribers in 2020.

We also attribute year-over-year growth in Global Lifestyle to our alignment with new mobile market partnerships, including U.S. cable providers as well as a large wireless carrier in Asia Pacific. And, we processed 7 million devices through our ever-growing Assurant trade-in capabilities.

Global Automotive continued to add scale as we partnered with our OEM, third-party administrator and national dealer clients to support over 49 million covered vehicles — a figure that has increased 13 percent since our acquisition of The Warranty Group in 2018. In addition to increasing the number of vehicles we protect, we also closed on an important deal to acquire American Financial Automotive, a provider of auto finance and insurance products and services and training programs.

Within Global Housing, we delivered net operating income, excluding catastrophesSee footnote 2⁽²⁾, of $371 million, an increase of $71 million over the previous year. Including catastrophes, our ROE for Global Housing remained strong at 15 percent for the year.

In multifamily housing we increased our policies by 8 percent over the previous year, and are now protecting over 2.4 million renters across the U.S. In addition to our strong affinity partnerships, we continue to rollout our Cover 360 platform to Property Management Company clients, which should increase attachment rates over time.

As we move forward into 2021, we will continue to prioritize investments in product innovation, further evolving customer experience, while also strengthening and promoting sustainability throughout our worldwide operations.

Committed to Our Values

But commitment is not only about our financial performance. When I signed the Purpose of a Corporation statement on behalf of Assurant back in 2019, we confirmed our commitment to serving all of our key stakeholders, starting with our employees as a key component to driving financial performance. For our people, that begins with our values. Throughout the year, as we grappled with the global pandemic, never have our values — Common Decency, Common Sense, Uncommon Thinking and Uncommon Results — been as important or as relevant as they have been this year. Our more than 14,000 employees across the world were bound together — inextricably connected — by these enduring values.

At the start of the pandemic, we announced the launch of a special COVID-19 Emergency Relief program for our employees through our Assurant Cares Employee Support (ACES) Fund. This special program was designed to assist our Assurant employees who were experiencing severe financial hardship caused by the pandemic. Spousal job loss or expenses related to childcare or eldercare during the pandemic made it hard for some to make ends meet. In addition to a $500,000 grant from the Assurant Foundation to the Assurant Cares Employee Support Fund, members of our Board and our Management Committee made contributions as did many of our employees. I am humbled by and grateful for the generosity of our people and our broader leadership team who stepped up not only to contribute to the fund, but to live our value of common decency — together.

Committed to Diversity, Equity and Inclusion

In addition to the support we gave to our employees facing financial hardship, I am equally as proud of the steps we took to further advance our long-standing commitment to being a responsible employer with a focus on diversity, equity and inclusion (DEI). This includes actions we took to foster a more diverse, equitable and inclusive environment within all of our communities.

2020 was a year marked not only by the pandemic, but by widespread social unrest. Again, our values were called to the fore. In 2020, we addressed the explosion of civil and social unrest head-on with our people and with the public. We began with communications, addressing a “No Place for Hate” message first to our employees and then to the world, reinforcing our commitment to fairness and equality and condemning the actions that led to the death of George Floyd and many others. But since words alone are not enough, we created global enterprise forums to openly discuss the challenges that continue to be faced by many related to racism and bigotry. We held our first-ever “Courageous Conversation on Race” that brought together employees at all levels to speak openly about their personal journeys.

We also expanded our supplier diversity efforts in order to provide additional opportunities to increase the level of diversity of our vendor relationships across the world — an effort that will stay in focus and continue in earnest over the coming years.

And importantly, this year, we reaffirmed our commitment to equitable pay and expect to continually review our policies and practices on a regular basis going forward. As part of Assurant’s commitment to equitable pay, we will be increasing the minimum wage for our U.S. hourly-paid employees to at least $15 an hour by July 2021.

Committed to Investing

We continue to be committed to strengthening Assurant and remain focused on sustaining above-market profitable growth. As part of our strategy, we are investing in technology and other capabilities to continuously enhance our customer experience to support our expanding global customer base. One area that grew in importance was our digital capabilities, which continue to contribute to our existing client relationships but also to winning new business opportunities. Ongoing investments were made in digital to enhance the customer experience and deliver faster and better outcomes.

We see continued future growth opportunities across our mobile, auto and renters businesses, given our ongoing belief in the convergence of connected devices, cars and homes — what we define broadly as the “connected world.”

We also looked to continue to strengthen our mobile offerings, putting us in a better position given the onset of the 5G upgrade cycle. One of our most consequential acquisitions in this regard was HYLA Mobile, a leading provider of smartphone software, trade-in and upgrade services. HYLA helped us to double our device processing volumes and expanded our customer base across both North America and Japan.

Honing our focus on the “connected world” is what drove our decision to explore strategic alternatives for Global Preneed, which we announced in the fall of 2020, to enable us to focus on opportunities in our Global Lifestyle and Housing businesses, with an emphasis on the connected consumer. On March 9, 2021, we announced the sale of Global Preneed to CUNA Mutual Group for $1.3 billion, a successful outcome for all of our stakeholders.

Looking to our future excluding our Global Preneed operations and catastrophe losses, our connected world businesses represent about 66 percent of our 2020 adjusted Global Lifestyle and Global Housing segment net operating incomeSee footnote 2⁽²⁾ — which is approximately double what it was in 2015. We believe that our commitment to focus on our lifestyle and housing businesses, with an intent to grow across the ‘connected world’, is a responsible and profitable growth path forward for Assurant.

Beyond acquisitions, importantly, we expanded some of our long-standing client relationships within Global Lifestyle and Global Housing through investments to innovate. At the end of 2020, our top clients had an average tenure of 17 years.

Within Global Housing, our investments were defined by our digital enhancements to support a better customer experience. We executed on an ongoing rollout of our property management solution, Cover 360, and introduced a newly designed resident portal, fully digitizing compliance for residents.

Committed to Success

While the global pandemic in 2020 challenged all of us in ways we would never imagine — by holding onto our values, staying focused on our strategy, and believing in and safeguarding our employees, we have continued to thrive. We are innovating, providing superior service for our customers and maintaining our strong financial position as a global leader. No matter what the new year brings, we believe our strategy to focus on and lead in the ”connected world” will enable us to drive Assurant forward to a stronger future and keep us and our stakeholders #AssurantProud.

Alan Colberg
President & Chief Executive Officer

Footnotes

1. Refer to Non-GAAP Financial Measures beginning on page 14 of this report for more information regarding non-GAAP financial measures, including reconciliations to the most directly comparable GAAP measures.
2. 2020 segment net operating income of the Global Lifestyle operating segment is equal to GAAP segment net income of $437.2 million. 2020 segment net operating income of the Global Housing operating segment is equal to GAAP segment net income of $233.8 million and also excludes reportable catastrophes of $137.2 million.
3. References to total revenue refer to net earned premiums, fees and other income.