Richard Dziadzio
Executive Vice President, Chief Financial Officer at Assurant
Thank you, Keith, and good morning, everyone. For the second quarter of 2023, adjusted EBITDA, excluding reportable catastrophes, totaled $337 million, up $59 million or 21% year-over-year. And adjusted earnings per share, excluding reportable catastrophes, totaled $4.09 for the quarter, up 26% year-over-year.
Let's start with Global Lifestyle for our segment results. This segment reported adjusted EBITDA of $197 million in the second quarter, an 11% decline year-over-year. However, prior period results included a real estate joint venture gain of $13 million, mainly impacting Global Automotive. If we exclude this prior period gain, adjusted EBITDA declined only 5% or $11 million, in line with our expectations. This decrease was primarily driven by lower results in Global Auto as continued inflationary impacts on labor and parts increased average claim severities. We also incurred increased claims cost on ancillary products, as these costs revert to more normalized levels following their post-COVID lows. The Auto earnings decline was partially offset by higher investment income from higher yields and growth in the U.S. across distribution channels.
In terms of Connected Living, excluding the prior period real estate gain and $3 million of unfavorable foreign exchange, earnings were roughly flat. In Mobile, earnings were down from soft results in Japan and Europe, as expected. As a reminder, headwinds in international earnings did not materialize until the second half of 2022.
In Japan, we continue to experience subscriber declines as our four-year protection product continues to run off. And in Europe, while we are benefiting from previous expense actions taken in the latter part of 2022 and the beginning of 2023, lower volumes have impacted year-over-year results.
U.S. mobile earnings were flat year over year as growth in North American device protection programs from carrier and cable operator clients was offset by lower mobile trade-in results. Trade-in results were impacted by lower volumes due to the timing and structure of carrier promotions and lower fee income from the previously disclosed contract change. However, higher prices on used devices partially offset the decline.
Extended service contract earnings increased as U.S. client performance improved, benefiting the rate increases implemented from several clients that began to offset the impact of higher claims costs.
Turning to net earned premium fees and other income, Lifestyle was up by $96 million or 5%. This growth was primarily driven by Global Automotive, reflecting prior period sales of vehicle service contracts. Connected Living net earned premiums fees and other income increased 1%. However, this includes an approximate $60 million negative impact from the previously disclosed mobile program contract changes, which had no impact on profitability. Excluding these contract changes, Connected Living net earned premiums, fees and other income grew by 6%.
The quarter benefited from growth in mobile subscribers in North America, excluding client runoff and higher contributions from extended service contracts. For the full year 2023, we now expect adjusted EBITDA to be down modestly for Global Lifestyle. Global Auto is expected to be down for the full year as we anticipate loss experience to remain unfavorable for several quarters and the impacts from continued normalization of loss experience for select ancillary products previously mentioned.
As Keith described, we've taken specific actions such as rate increases on new business, repair cost reduction and changes to client contract structures to help mitigate these impacts, which is why we expect an increase in profitability over time. Higher investment income has and is expected to continue to partially offset these impacts.
In Connected Living, we do expect our U.S. Connected Living business to grow modestly for the full year. As a reminder, third quarter results historically include both lower trade-in volumes and higher loss seasonality. These items typically improve in the fourth quarter. In addition, our third quarter results last year included an $11 million one-time client benefit in Connected Living.
And while Japan and Europe have stabilized, we are focused on top line growth, which has been slower to materialize than expected. Finally, we will also continue to focus on expenses while investing in growth opportunities, we have strong momentum with clients. In terms of net earned premiums, fees and other income for the full year, Lifestyle is expected to grow as growth in Global Automotive is partially offset by ongoing foreign exchange headwinds.
Moving now to Global Housing, adjusted EBITDA was $155 million, which included $13 million in reportable catastrophes from severe windstorms in the Southeast U.S. and flooding in Florida. Excluding reportable catastrophes, adjusted EBITDA more than doubled to $168 million or up $87 million from both top line growth and favorable non-cat loss experience within homeowners.
Top line growth in lender-placed came from higher average insured values and premium rates as well as more policies in force. These together accounted for approximately half of the increase in earnings. Favorable non-cat loss experience came from a $40 million year-over-year net reduction in reserves related to prior period development, and is comprised of a $28 million reserve reduction in the current quarter plus a $12 million reserve strengthening in the second quarter of '22. Excluding prior period development, non-cat loss experience increased modestly due to the increase in frequency and severity. Higher investment income also contributed to earnings growth.
Turning to our reinsurance program, we completed our 2023 catastrophe reinsurance program in June. We fared well in the market with this year's total cost increasing less than previously expected and only modestly over 2022. This increase is relatively small due to strategic actions taken, including exiting our international footprint, increasing our level of retention and adjusting our reinsurance coverage. As anticipated, our first event retention increased to $125 million from its previous level of $80 million, and the retention level reduces to $100 million for second and third events. We also increased our total program coverage to a one in 225-year probable maximum loss to further minimize our risk from extreme catastrophes.
Moving to Renters and Other, earnings increased largely due to a benefit within our NFIP flood business of $5 million. Excluding this item, results were in line with 2022. For the full year 2023, we expect Global Housing adjusted EBITDA, excluding reportable cats, to grow significantly due to strong performance in homeowners, driven by top line expansion from lender-placed.
Regarding the second half of the year, we expect ongoing momentum from a continued gradual abatement of inflation, lower seasonal losses particularly in the fourth quarter and continued revenue strength. This momentum should offset a modest increase in catastrophe reinsurance costs in the absence of both another NFIP benefit and additional favorable reserve development, which can be difficult to predict. Together, these last two items contributed $33 million to our first half results.
Moving to Corporate, the second quarter adjusted EBITDA loss was $29 million, up $4 million from lower investment income. For the full year 2023, we expect the corporate adjusted EBITDA loss to be approximately $105 million. I would also mention that the investment portfolio continues to perform well with higher interest rates improving both short and longer-term returns.
Turning to Holding Company Liquidity, we ended the quarter with $495 million. In the second quarter, dividends from our operating segments totaled $180 million. In addition to cash used for corporate and interest expenses, second quarter cash outflows included three main items -- $20 million of share repurchases, $40 million of common stock dividends and $50 million related to previous acquisitions within Global Auto.
For the full year, we expect our businesses to continue to generate meaningful cash flows, approximating 65% of segment adjusted EBITDA, including reportable catastrophes. This is consistent with our previous forecast. Cash flow expectations assume a continuation of the current economic environment, and are subject to the growth of the businesses, investment portfolio performance and rating agency and regulatory requirements.
In closing, we're quite pleased with our first half overall performance, which continues to demonstrate the strength and the diversity of our businesses, and believe we are well positioned to achieve our increased full year financial objectives.
And with that, operator, please open the call for questions.
