Keith W. Demmings
President and Chief Executive Officer at Assurant
Thanks, Suzanne, and good morning everyone. As we previewed last week, our third quarter 2022 results came in below our expectations. This reflected a more challenging macroeconomic environment and lower contributions from Global Lifestyle. Following a very strong first half of the year where we grew lifestyle adjusted EBITDA by 14% year-over-year, this quarter had more significant headwinds internationally, including unfavorable foreign-exchange, a modest uptick in claims and lower Connected Living program volumes. While disappointing our results don't change our view of the inherent growth momentum in the Lifestyle business, we believe the actions we're taking to drive additional expense savings will also better mitigate potential further deterioration in macro conditions.
Looking at Global Housing, the segment's performance was in-line with our expectations for the quarter. We're pleased with the progress we've made in not only increasing revenues through higher average insured values and rates, but also the transformation actions we've taken to simplify the business and drive future growth.
Looking at the year-to-date performance. Through the first-nine months of 2022, Assurant reported adjusted EPS of $10.05 is up 7% for last year and adjusted EBITDA of $832 million is down 4%, both excluding reportable catastrophes. As we evaluate our progress this year, we continue to believe we have a compelling strategy, strong fundamentals and momentum with clients as we continue to align with leading global brands and maintain market-leading positions across our key lines of business. For example, we announced a further multi-year extension of our long-standing partnership with T-Mobile. This important contract extension provides us with increased long-term visibility in our US Mobile business. At the same time, it gives us greater opportunity to increase repair volumes through our over 500 cell phone repair locations with the ability to leverage this capability with other US clients.
We've also made investments to support our product development around the Connected Home and we continue to engage in encouraging dialog with key clients, creating a long-term opportunity for growth. This also included supporting our largest US retail client with the expanded relationship we announced earlier this year. While macroeconomic conditions in Europe are challenging, we continue to win new opportunities and recently expanded our global partnership with Samsung to launch Samsung Care+ smartphone protection in six major European markets. We now offer this solution across three continents. This momentum combined with our partnerships with well-positioned global market leaders should help us outperform through an economic downturn.
Turning to Global Housing, we've already begun a comprehensive transformational effort to position the business for long-term success and we're pleased with our progress. Consistent with our practice of actively managing our portfolio of businesses and reviewing it for strategic fit, in addition to exiting commercial liability we're eliminating our international housing catastrophe exposure. We don't see these businesses as corridor strategy or a path to leadership positions. As we execute these changes, we're designing a new organizational structure for Global Housing to better manage our risk businesses from our capital-light oriented businesses as part of our transformational agenda and also to realize greater efficiencies.
We're finalizing our plans for implementation in 2023. As we reflect on Assurant's overall results to-date and current market conditions, we now expect 2022 adjusted EPS, excluding catastrophes, to grow high-single-digits from $12.28 last year, driven by share repurchases and Global Lifestyle growth. For the full year, we expect adjusted EBITDA excluding catastrophes will be down modestly to flat with 2021. This will be driven by high-single-digit adjusted EBITDA growth for lifestyle even with additional macro headwinds. In fact, on a constant-currency basis, we expect Global Lifestyle that finished 2022 aligned with our original Lifestyle expectations of low-double-digit growth. In Global Automotive, we still expect to outperform our initial expectations, driven by tailwinds from investment income and underlying growth in the business as we expand share with clients and add to our 54 million protected vehicles.
For 2022 we continue to believe Global Housing will decrease by low-to mid-teens, but we're pleased to see the initial improvements in our underlying results. From a capital perspective, we remain good stewards. Year-to-date, we have returned a total of $667 million of capital to shareholders, including proceeds from the sale of preneed and by year-end we expect to close two small acquisitions for a total of approximately $80 million. These deals will strengthen our position in commercial equipment with attractively priced assets and minimal integration effort.
Looking ahead, given macroeconomic volatility, we will exercise prudence in the near-term relative to capital deployment, so that we can maintain maximum flexibility to continue to support our organic growth. This doesn't change our conviction of the strong cash-flow generation of our businesses nor our view of the attractiveness of our stock, but rather is a reflection of the uncertain macro-environment. As the broader environment begins to stabilize and visibility improves, we'll evaluate capital deployment to maximize shareholder value.
Looking to 2023, we are confident in the growth of our businesses. We expect both our Global Housing and Global Lifestyle adjusted EBITDA, ex-cats, to increase year-over-year. To that end, we're taking decisive actions to mitigate headwinds while we maintain our relentless focus on growth. The Global Housing business is poised to grow in 2023 and we started to see evidence of that in the third quarter as rate increases flowed through the book. In the long-term, the business should provide downside protection if we see a further deterioration in the US economy. We believe Global Lifestyle is positioned to grow in 2023. This is based on expectations of continued strong underlying growth momentum even while factoring in lower international business volumes and increase in claims costs.
We have also started several initiatives across the enterprise to drive greater operational efficiencies and leverage our economies of scale. We're now pushing even harder to realize incremental expense savings, given the increasingly volatile market. We expect to finalize plans in the months ahead, so we can implement in 2023 and beyond. This includes optimizing our organizational structure and best aligning our talent, leveraging our global footprint to reduce labor costs where possible, continuing to review our real-estate strategy, recognizing we have an increasingly more hybrid workforce and accelerating our adoption of digital solutions.
Our digital-first strategies are yielding positive results in 2022, both in terms of delivering better customer experiences and meaningful savings. As part of our 2023 planning, we're taking steps to accelerate digital adoption and automate processes, which will further reduce cost and improve the customer experience. We're also applying the same principles to drive greater automation and self-service throughout our functional areas. With this in mind and considering how the overall business environment has changed, we are reevaluating our long-term financial objectives shared at Investor Day.
In February, we expect to share our 2023 outlook also factoring in the most recent business trends and macro-environment. This in no way changes our view on our business advantages, leadership aspirations or long-term growth potential. We continue to be well-positioned with industry-leading clients as we focus on key products and capabilities where we have market-leading advantages. We believe we have a compelling portfolio of businesses poised to outperform as we deliver on our vision to be the leading global business services provider, supporting the advancement of the connected world.
I'll now turn the call over to Richard to review the third quarter results and our revised 2022 outlook in greater detail. Richard?