Assurant (AIZ) to Sell Global Preneed to CUNA Mutual Group for $1.3 Billion

Assurant, Inc. (NYSE: AIZ), a leading global provider of lifestyle and housing solutions that support, protect and connect major consumer purchases, today announced it has entered into a definitive agreement to sell its prearranged funeral insurance and final expense business, Global Preneed, and related legal entities and assets to CUNA Mutual Group, a broad financial services provider, for approximately $1.3 billion in cash. As part of today’s announcement, Assurant also outlined an enhanced capital deployment plan and its outlook for 2021.

“This transaction represents a successful outcome for all of our stakeholders, including our Global Preneed employees, clients, partners, policyholders and shareholders,” said Assurant President and CEO Alan Colberg. “The sale of Global Preneed is another important milestone in our transformation of Assurant, sharpening our focus on our market-leading lifestyle and housing businesses, and better positioning our company to capitalize on future growth opportunities emerging around the connected consumer.”

Colberg added, “Building on our track record of significant capital return, we intend to deploy the majority of net proceeds for share repurchases while at the same time accelerating strategic investments to support continued growth in our connected world and specialty P&C businesses. We believe the strength of our core business, robust cash flows and our disciplined approach to capital management will continue to create significant long-term shareholder value.”

The Global Preneed sale is expected to generate approximately $1.2 billion of net proceeds at closing, which is expected to occur by the end of the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. The company intends to return 75 percent of the net proceeds to shareholders through share repurchases within one year of closing, subject to Board approval. This is in addition to returning $470 million via share repurchases and common stock dividends under the company’s existing three-year, $1.35 billion capital return plan, which is expected to be completed by the end of 2021.

The company intends to invest the remaining transaction proceeds primarily in its connected world businesses, comprising Connected Living, Global Automotive and Multifamily Housing, to support long-term profitable growth and further strengthen its competitive position.

Based in Madison, Wisconsin, CUNA Mutual Group protects nearly 30 million consumers, delivering an array of financial and insurance offerings through partners, including Assurant. CUNA Mutual Group has more than $28 billion in assets and carries an A rating from AM Best.

With the sale expected to close later this year, Assurant and CUNA Mutual Group will focus on an orderly transition. Upon closing, Global Preneed will be managed as an independent business with existing Preneed employees remaining at their current locations. Continuing their 23-year partnership, CUNA Mutual Group and Assurant also finalized a multi-year agreement to provide ongoing vehicle service contract support to their customers in connection with the transaction.

"This acquisition allows us to expand the ways we reach middle-market consumers, helping more people make financial decisions that work for them,” said Robert N. Trunzo, President and CEO, CUNA Mutual Group. "The Global Preneed business is a true strategic fit for us, further diversifying our product offerings complemented by a strong financial standing with over $7 billion in total assets. We are excited to welcome Global Preneed’s talented employees to our team and to serve even more consumers together.”

Colberg stated, “I thank every Global Preneed employee for their unwavering dedication to serving our more than two million Global Preneed policyholders. We will work closely with CUNA Mutual Group to ensure a smooth transition for our Preneed employees, clients and partners, while also continuing to deliver exceptional customer service to all policyholders through the completion of this transaction.”

Goldman Sachs & Co. LLC served as financial advisor and Debevoise & Plimpton LLP as legal advisor to Assurant. Perella Weinberg Partners served as financial advisor and Foley & Lardner LLP as legal advisor to CUNA Mutual Group.

2020 Adjusted Consolidated Results and 2021 Company Outlook

Beginning with first quarter 2021, Global Preneed and its related legal entities will be reported as discontinued operations and excluded from Assurant’s net income from continuing operations and net operating income1. As a result, 2020 net operating income, net operating income per diluted share2 and Corporate and Other net operating loss3 have been adjusted to reflect this change and show a consistent comparison of results as reflected in the table below. All net operating income and net operating income per diluted share references exclude reportable catastrophe losses.

Reported 2020 net income and net income per diluted share totaled $423.1 million and $6.99, respectively. Reported 2020 Corporate and Other segment net loss attributable to common stockholders totaled $295.9 million.

Assurant expects 2021 net operating income per diluted share, excluding catastrophe losses and Global Preneed4, to approximate 2020 reported results of $10.80. This represents an increase of approximately 9 percent from 2020 adjusted net operating income per diluted share2 of $9.88.

The increase is expected to be driven by earnings growth in Global Lifestyle, improved Corporate & Other results and share repurchases, which should offset the earnings-per-share impact of the Global Preneed divestiture. Additionally, Assurant expects:

• High single-digit earnings expansion in Global Lifestyle to be driven by Connected Living, and improved results in Global Financial Services. Global Housing net operating income to decline as non-catastrophe loss experience normalizes from very favorable 2020 levels, as well as modestly higher catastrophe reinsurance costs.

• Corporate and Other net operating loss4 for full year 2021 to decrease year-over-year to approximately $90 million, reflecting continued expense discipline, including the anticipated elimination of indirect enterprise support costs associated with Global Preneed divestiture by the end of 2021.

"With the sale of Global Preneed, we will have fully transformed Assurant into a market leader focused on supporting consumers’ connected lifestyles - across the mobile device, car and home,” concluded Colberg. “Going forward, we will have no significant life insurance liabilities remaining, substantially less interest rate sensitivity and a lower overall risk profile tied to long-tail events. This transaction positions Assurant to sustain above market profitable growth with a service-oriented, fee-based model with two-thirds of earnings in 2020 from our Connected Living, Global Automotive and Multifamily Housing businesses.”

Conference Call and Webcast Details

Assurant will host a conference call and webcast today, March 9, at 8:30 a.m. Eastern Time to discuss the transaction and 2021 outlook. The live webcast and investor presentation will be available in the Investor Relations section of Assurant’s website: https://ir.assurant.com/investor/default.aspx. An archived replay also will be available shortly after the event for those unable to listen to the live broadcast.

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