Keith Demmings
President & Chief Executive Officer at Assurant
Thanks, Suzanne, and good morning, everyone. We're very pleased with the exceptionally strong results we achieved in the third quarter with adjusted EBITDA, excluding catastrophes growing nearly 50% year-over-year, or 19% on a year-to-date basis, both ahead of our expectations. Our results were largely driven by continued momentum in global housing and our steadfast focus on executing our strategy, including driving innovation, creating efficiencies, and strengthening our global partnerships. These efforts have positioned us to exceed our previous expectations of high single digit adjusted EBITDA growth excluding catastrophes. We now expect adjusted EBITDA growth of mid to high teens.
Our year-to-date performance highlights Assurant's competitive differentiators, including our advantaged global housing and global lifestyle businesses that have proven leadership positions with scale and significant cash generation. Combined, these businesses are extending Assurant's track record of strong financial performance, thanks in part to the swift actions we've taken across our global operations to improve results and strengthen the business, given broader macroeconomic headwinds.
We continue to realize benefits from the actions we announced in 2022 to simplify our business and corporate real estate and realign our organizational structure, allowing us to reinvest throughout the enterprise.
We extended our 2022 restructuring plan to include additional actions across the enterprise, as we believe further enhancing Assurant's operational efficiency will support our long-term profitable growth and value creation. We now expect total restructuring costs associated with our extended plan to be between $90 million and $95 million pretax, above our previously announced expectations of $60 million to $65 million.
Looking at our business segments, in global housing, I want to thank all of our employees who supported policyholders impacted by Hurricane Idalia and the Hawaii wildfires, as well as several other significant weather events during the quarter. Assurant plays a critical role in safeguarding our policyholders and supporting the U.S. mortgage industry.
Our global housing adjusted EBITDA, excluding cats, more than doubled year-over-year and increased 72% year-to-date, led by significant growth in our homeowners' business through top line growth and improving loss experience. Our ability to quickly execute changes, particularly in our lender placed business, has helped us gain earnings momentum from higher enforce policies, average insured values and state approved rate increases following inflation impacts in 2022. Our performance so far this year highlights global housing's compelling and uniquely positioned portfolio. Year to date, including $89 million of reportable catastrophes, our combined ratio is 82% and our annualized ROE is 29%, demonstrating strong returns and cash generation.
In our renters' business, we saw continued strength in our property management channel, where policies in force have grown double digits this year. We continue to win new clients, grow existing partnerships and release new capabilities, including our upgraded leasing agent portal and digital insurance tracking enhancements.
We're very pleased with global housing's strong performance year to date, which reflects our focused execution around streamlined product lines where we have a clear competitive advantage and scale.
Turning to global lifestyle, third quarter earnings increased 7% year-over-year or 14%, excluding a one-time client benefit within Connected Living last year. Year-to-date adjusted EBITDA, down 6% versus the same period in '22, has continued to improve throughout the year and is tracking in line with our expectations of a modest decline for the full year. Within Connected Living, we continue to support long-term growth through the development of innovative offerings for our partners.
US. Connected Living is poised for another year of solid growth, particularly within our Mobile Protection business, a testament to our breadth of innovative offerings, customer experience, expertise and deep relationships with mobile carriers and cable operators. As macroeconomic headwinds have persisted, including impacts from inflation, we've taken decisive action across our global operations to mitigate these impacts.
In Europe, expense actions have allowed us to stabilize earnings as we focus on critical opportunities to grow our top line. We also continue to invest to advance product innovation and anticipate our clients' needs as well as improved customer experience through expanded service delivery capabilities. For example, as part of the extension of our '22 plan to realize benefits and simplify our business in corporate real estate, we're consolidating our mobile device care centers into two sites in the U.S. We'll move the services currently offered in York, Pennsylvania to our existing facility in Texas. Over time, we'll be investing in a new site in Nashville where we can leverage a strong talent market and greater logistics efficiencies as we evolve with emerging clients.
Turning to our global auto business, we're beginning to see initial signs of claims improvement as a result of the decisive actions taken over the last year to improve performance. These actions included implementing rate increases on new policies across impacted clients and advancing opportunities to improve loss experience for programs where we hold the risk. We continue to monitor claims costs closely and expect improvement will be gradual over time given the way the auto business earns.
In auto, we launched Assurant Vehicle Care at over 500 dealers. Building on decades of proprietary data on cost of claims. Assurant Vehicle Care is a comprehensive new suite of vehicle protection products. It was developed to help our dealer partners optimize product design, pricing, training and sales to ultimately enhance attachment and economics. For the consumer, Assurant's Vehicle Care provides a digital experience with more vehicle coverage, flexibility and transparency.
Now, let's turn to our enterprise outlook and capital. Given our year-to-date results and our business outlook for the remainder of 2023, we now expect adjusted EBITDA to grow mid to high teens, excluding catastrophes.
Adjusted EPS growth is now expected to exceed adjusted EBITDA growth, each excluding catastrophes. This is primarily due to higher earnings growth that now more than offsets the increase in depreciation expense. From a capital perspective, we upstreamed $202 million of segment dividends during the third quarter and $493 million year to date. We ended the third quarter with $491 million of holding company liquidity consistent with the end of the second quarter.
In terms of share repurchases, during the third quarter, repurchases totaled $50 million. This brings our total repurchases to approximately $100 million for the year, including an additional $30 million of shares purchased through the end of October.
Based on our strong year-to-date results, we expect fourth quarter buybacks to accelerate from third quarter levels and to be approximately $200 million for the year, consistent with our underlying repurchase activity in 2022. We're pleased with our strong capital position, which affords us more long-term flexibility over time.
Looking to 2024, we expect a more modest level of earnings growth in global housing, excluding catastrophes, building on strong 2023 financial results, which included $40 million of favorable prior year reserve development.
In Global Lifestyle, we expect earnings growth to be led by connected living, particularly in the U.S. from the expansion of current programs, as we work to gradually improve the auto business, which we will continue to manage closely.
From a capital perspective, we're committed to maintaining flexibility through our strong balance sheet and deploying capital for share repurchases and opportunistic acquisitions to support our growth objectives. We will share our 2024 outlook in February, factoring in our fourth quarter earnings, business trends as well as the latest forecasts of the macro environment for the year.
In the near term, we're focused on achieving our 2023 objectives and setting a path for continued growth and value creation in 2024 and beyond. As we look ahead, we remain committed to execution, innovation and enhancing the customer experience for our clients and their end consumers, particularly as we look to capitalize on growth opportunities while supporting continued momentum.
Before I turn the call over to Richard to review the third quarter results and our 2023 outlook in greater detail, I want to once again thank our employees for their hard work and dedication to deliver for our clients.
Our company was recently recognized as one of Times' Best companies in the world, highlighting Assurant's strong employee satisfaction, revenue growth and sustainability efforts. Assurant was also recognized by Newsweek as one of America's greenest companies, demonstrating our commitment to and progress in operating more sustainably. The recognition was timely as we recently introduced Carbon IQ by Assurant. This offering enables clients to see the carbon impact of each device, including new and refurbished devices, and provides them with estimated CO2 emissions throughout the supply chain and lifecycle to identify opportunities for reduction. We're honored to be recognized for our outstanding culture, products and sustainability, all of which help us better serve our clients.
And now, over to Richard.
