Assurant, Inc. (AIZ) Earnings Call Transcript & Summary

Welcome to Assurant Global's Preneed Sale and 2021 Outlook Conference Call and Webcast. [Operator Instructions] It's now my pleasure to turn the floor over to Suzanne Shepherd, Senior Vice President of Investor Relations. Ms. Shepherd, you may begin.

Thank you, Operator, and good morning, everyone. This morning, we issued a news release announcing the sale of Global Preneed to CUNA Mutual Group as well as our 2021 outlook for our go-forward operations. In addition to the news release, our investor presentation and Form 8-K filing are available on assurant.com. Joining me are Alan Colberg, our President and Chief Executive Officer; and Richard Dziadzio, our Chief Financial Officer. Alan and Richard will begin with prepared remarks that accompany the investor presentation before opening the discussion for Q&A. Some of the statements made today may be forward-looking, including statements about the proposed transaction, the intended use of the transaction net proceeds and financial metrics related to our 2021 outlook. Actual results may differ materially from those projected in these statements. Additional information on factors that could affect Assurant's results can be found in our SEC reports. I will now turn the call over to Alan.

Thanks, Suzanne. Good morning, everyone. This morning, we announced the signing of a definitive agreement to sell our Global Preneed business and its related legal entities and assets to CUNA Mutual Group for approximately $1.3 billion in cash. On today's call, we'll review the transaction, our expectations for use of proceeds and our 2021 financial outlook for our go-forward operations. Starting on Slide 5. We believe the sale of Global Preneed for approximately $1.3 billion represents a great outcome for Assurant and all of our stakeholders, including our shareholders as well as Global Preneed's employees, clients and over 2 million policyholders in North America. The sale was valued at 2.8x Global Preneed's adjusted book value, excluding AOCI and 27x price to GAAP earnings, a significant transaction premium for a life company. The announcement is the culmination of a robust sales process, during which we received strong interest from multiple potential buyers, a testament to Global Preneed's attractive offerings, talented employee base and compelling business strategy. We believe CUNA Mutual Group is the ideal owner to further advance Global Preneed. With 30 million customers, CUNA Mutual has more than $28 billion in assets and is highly rated by AM Best, perhaps most importantly is their strong commitment to customer excellence. And we've seen their dedication firsthand as CUNA Mutual has been a key partner in our Global Automotive business over the last 23 years. As part of the sale, we have agreed to a multiyear extension of our existing vehicle service contract partnership. We expect to complete the transaction by the end of the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. In the weeks ahead, we will establish a joint team to ensure a seamless transition upon closing for our policyholders and clients, supported by our Preneed employees, who we expect will join CUNA Mutual after closing. In the interim, we will continue to provide the same exceptional service. Turning to Slide 6. The sale of Global Preneed represents a significant milestone in the transformation of our business portfolio, which we initiated in 2015. Our journey has included the exit of our health and employee benefits businesses as well as acquisitions like the Warranty Group and HYLA Mobile. Ultimately, the completion of this transaction will give us a more cohesive portfolio and enable Assurant to further focus on our market-leading lifestyle and housing businesses and more specifically, the growth opportunities we see emerging around the connected world. We believe these businesses, consisting of Connected Living, Global Automotive and multifamily housing, represents the greatest opportunity to grow our innovative offerings and provide even more value to our clients and deliver a seamless customer experience. And together with our differentiated P&C offerings, including our countercyclical lender-placed business, we believe our business portfolio is well positioned to sustain above-market profitable growth and continue to deliver strong cash flow over time. Overall, we should be able to outperform in any economic cycle, creating significant shareholder value over the long term. We see this transaction as further positioning Assurant with a more service-oriented fee-based model as well as multiple recurring revenue streams across our Connected Living, Global Automotive and multifamily housing businesses. This will be complemented by our strong specialty P&C offerings. On an adjusted basis, excluding Global Preneed and catastrophe losses, these Connected World businesses represented 2/3 of our 2020 segment net operating income. Going forward, as the proportion of recurring revenue continues to increase, we expect that this will help achieve even greater consistency in our financial performance. Upon the close of the transaction, we will no longer have significant life insurance liabilities nor exposure to mortality risk, further advancing our shift to order a more capital-light business with a lower overall risk profile. In addition, we will have significantly less exposure to interest rate and market volatility. As we move to Slide 7, with all of this, we believe our stock remains attractively priced, when reflecting the embedded growth of our go-forward operations, superior cash flow and a unique position around the convergence of mobile, auto and home. As such, in our announcement, we also introduced an enhanced capital deployment plan, outlining our intentions for the use of the transaction's net proceeds. Adjusting for closing costs and taxes, we expect net proceeds to be approximately $1.2 billion. Consistent with the capital deployment framework, we shared at our 2019 Investor Day, we intend to return 75% of the net proceeds or approximately $900 million to shareholders. This entire capital return will be done through share repurchases. We expect to start buybacks in advance of close and complete within 1 year of closing, as always, subject to Board approval. These incremental share repurchases will be in addition to the $470 million we expect the return to shareholders through buybacks and dividends this year related to the completion of our $1.35 billion capital return objective from 2019 to 2021. Our decision to deploy a significant portion of the sale proceeds towards share repurchases reflects the attractiveness of the stock and our confidence in our company's long-term growth prospects. The remaining 25% of proceeds are expected to be deployed for disciplined investments, including acquisitions, to further bolster and support our Connected World businesses and specialty P&C offerings. We expect both our organic initiatives and any strategic acquisitions to generate attractive returns over time and to enhance our strong competitive position and sustain our track record of long-term profitable growth. Turning to Slide 8. With the defined path to Global Preneed and an expected closing by the end of the third quarter, we wanted to provide a view on 2021 for our go-forward business operations, which Richard will further detail shortly. Excluding Global Preneed and catastrophe losses, we expect 2021 operating earnings per share to increase by 9% from adjusted 2020 EPS, driven by business growth in Global Lifestyle; a lower corporate loss and share repurchases, including our enhanced capital deployment plan. This will be partially offset by lower Global Housing earnings compared to very strong 2020 results. As we previously stated, for Assurant, overall, we expect growth to be back-end weighted. We recognize that as our business evolves, it is also important to evolve our financial disclosure and metrics to align with our business mix and view of value drivers. In advance of first quarter earnings, we expect to provide updated supplemental information, including adjusted EBITDA. With the announcement of the Preneed sale, we believe it is appropriate to introduce this new and important metric as a way to measure the financial performance of our go-forward business. Adjusted EBITDA will supplement our traditional net operating income metric, providing a view of our underlying business performance. We will continue to evaluate additional metrics at the business segment level to support a deeper understanding of key drivers, especially in our evolving mobile and auto businesses. In summary, the transaction is a successful outcome for all of our stakeholders. It marks an important milestone in Assurant's transformation journey and will allow us to accelerate our strategy to focus on our market-leading lifestyle and housing businesses. Over the long term, we're confident Assurant will continue to create significant shareholder value through double-digit operating EPS growth, excluding catastrophes. This transaction will also enable us to take advantage of opportunistic investments and acquisitions to further grow our business and strengthen our competitive position. I'll now turn the call over to Richard to review our 2021 outlook in more detail. Richard?

Thanks, Alan, and good morning, everyone. We are really pleased with this transaction from all perspectives, and I'm now going to walk you through some of the details and impacts of the transaction. First, in terms of accounting, as of January 1, Preneed and the related entities will be considered discontinued operations, and as a consequence, their results will no longer be included in our continued operations. Given this change and to facilitate a like-for-like presentation this year, I want to start by outlining our 2020 adjusted operating earnings and adjusted operating earnings per share, each excluding discontinued operations and catastrophes. As outlined on Slide 9, 2020 adjusted operating earnings and operating earnings per share were $605 million and $9.88 per share, respectively. The adjustment will move $59 million from our previously reported 2020 operating earnings. This is comprised of $48 million of earnings for the Preneed segment and $10 million of other support costs associated with Preneed. These costs will be reported through corporate going forward. Moving to our 2021 outlook. As shown on the right-hand side of Slide 9, we expect to grow operating earnings per share by approximately 9% from 2020 adjusted operating earnings per share, excluding catastrophes and discontinued operations. Growth is expected to be driven by continued underlying business expansion in Global Lifestyle, particularly Connected Living and Global Financial Services, and we also expect a lower corporate loss. Operating earnings and EPS growth will be back-end weighted, given the pace of underlying business growth, certain nonrecurring items in 2020 and the acceleration of buybacks in the second half of the year. Now let's move to the 2021 outlook for each segment. Beginning with Global Lifestyle, on Slide 10, we expect to grow net operating income by high single digits from the $437 million we reported in 2020. We expect this to be led by new and expanded mobile programs continuing to ramp up throughout the year. This will include the continued transition of Sprint customers to T-mobile, as well as contributions from recent acquisitions, most notably HYLA. Looking at covered mobile devices, we anticipate increasing our 54 million mobile subscriber base by mid-single digits compared to 2020. This should be led by strong growth in North America and Asia Pacific with muted growth elsewhere. In Global Automotive, our long-term growth story remains intact. With that said, we expect earnings this year to be down modestly due to the nonrecurrence of $9 million related to onetime items that benefited us in the first half of 2020 and lower investment income. We also expect increased profitability in Global Financial Services as the business is positioned to steadily improve, driven by new partnerships and recoveries from the lower volumes and unfavorable loss experience seen in 2020. Turning to Lifestyle revenues. We anticipate the overall revenue will be relatively flat in 2021, in line with the $7.3 billion we reported in 2020. This reflects the evolving mix of business toward fee-for-service as well as the previously disclosed client contract change, which will negatively impact revenue by approximately $175 million. Regarding trading volumes for the year, we expect overall growth for 2021, which will be reflected in fee income. We believe activity will be highest in the first quarter as trading volumes have remained strong through February. However, consumer preferences for new 5G devices, corresponding carrier promotions and device availability will also play a role. Moving now to Global Housing on Slide 11, net operating income, excluding cat, is expected to be lower in 2021 compared to the $371 million we reported in 2020. In 2020, Housing benefited from a reduction in overall claims frequency, driving favorable non-cat losses across major lines of business. This contributed to very strong earnings growth, up 24% for the year. For 2021, we expect a modest increase in our non-cat loss ratio to more normalized levels as well as slightly higher cat reinsurance costs. We expect both impacts to begin in the first quarter. Growth in multifamily housing is expected to continue to be driven by affinity and P&C channels. We'll continue to invest in order to enhance our competitive position and our offerings, which will likely mute earnings growth this year. Looking ahead to the first quarter, we expect reportable catastrophe losses related to the extreme winter weather, including the deep freeze temperatures we saw in February, particularly from areas like Texas. We currently estimate between $25 million and $45 million of after-tax cat losses from these events. Overall, Global Housing continues to be a significant contributor. In addition to its strong cash flow, we continue to expect the business to generate above-market returns with ROE, including catastrophes of 17% to 20% over the long term. Turning to Slide 12. The Corporate segment reflects an adjusted net loss 2020 of $103 million, this includes the $10 million in enterprise support costs previously mentioned. In 2021, we expect the corporate net operating loss to improve to be closer to $90 million as we continue our expense discipline, this includes the expected elimination of enterprise support costs associated with Preneed by the end of this year. Throughout the enterprise, we will also continue to prioritize investments in product innovation and to further enhance the customer experience. In addition to our go-forward operating segments, we would expect our interest expense to increase to approximately $90 million due to the issuance of subordinated debt last year and our preferred dividends to decrease to $5 million as our mandatory convertible shares will convert to common shares on March 15. The sale of Global Preneed will also benefit Assurant by making us less reliant on investment income and reducing exposure to market volatility. With the sale of Preneed, our invested assets will decline by nearly half and the duration of our portfolio will decrease to just under 5 years, reducing the interest rate sensitivity of our assets by approximately 2/3. From a capital perspective, we expect segment dividends to approximate segment earnings for the full year. And finally, as Alan mentioned, in April, we plan to publish an updated financial supplement, which will reflect our historical financial results without Global Preneed. In summary, the sale of Preneed will offer a very successful outcome for all stakeholders, and we look forward to providing another update on our first quarter call. And with that, Operator, please open the call for questions.

[Operator Instructions] Our first question is coming from the line of Bose George with KBW.

Congratulations on the transaction. Actually, a couple of quick questions. Just first, in terms of the buybacks, can you just talk a little bit about the cadence of the buybacks? Is it accelerated, opportunistic or just any color there would be great?

Yes. Let me maybe start at a high level, and then Richard certainly add on to this. What we announced today is that we're going to return roughly 75% of the net proceeds via buyback, we need to close, obviously. But as we said, we'll plan to return all those proceeds within 1 year of closing. And normally, we do buybacks in kind of an orderly fashion, and we would expect to do the same here. But I don't know, Richard, anything you would add to that?

Yes. Yes, I think 2 things I'd add to it. First of all, we did confirm in our script and at the end of the year that we're still on target to return to $1.35 billion that we talked about at Investor Day. So think about $470 million, including dividends being remaining there, that would put us at about $325 million there. In addition to that, as Alan said, we'll -- once we do close and that probably will be in third quarter, we would then begin to return the $900 million. So we need to work through it. But I think we're going to continue to show, as we've talked about return to proceeds, then we will exercise -- and it's really a great outcome for everybody here.

Okay, great. That makes sense. And then just in terms of potential other strategic actions, are there other things that are possible? Is there anything that could be done on the lender-placed and to sort of -- yes, any other thoughts that you have on strategic actions that might make sense down the road?

Yes. I think we feel very well positioned after closing on the sale of Preneed. If you look at our portfolio, really, we have the Connected World growth businesses, which include multifamily housing, auto and mobile and then we have some unique specialty P&C businesses that are broadly countercyclical and generate strong cash flow. That combination gives us confidence that we're going to outperform in any kind of external macro environment. We're also seeing increasing convergence between what we do around the home and what we're doing in lifestyle. And a great example are some of the pilots we have in market now on Connected home, where we're going to protect everything that's in your house that connects to the Internet in various ways. So you might think broadly about our portfolio, I think we're in a very good place post this transaction. Certainly with the cat volatility that comes with the parts of Global Housing, we've dramatically reduced that risk to our shareholders over the last 5 or 6 years through lowering our retention now to the $80 million per event. We've also been reducing risk that we don't feel has the right risk-reward trade-off. We did that, for example, with the exit of small commercial. And we continue to put in place multiyear reinsurance to smooth out the impacts of reinsurance markets. With that said, we're going to continue to look at, are there further ways to reduce that cat exposure that ends up hitting our market, hitting our company. But ultimately, we feel really good about where we are, and our growth expectations kind of reflects that business mix going forward.

Our next question comes from the line of Brian Meredith with UBS.

Congrats on the sale. Two questions here. Just one on guidance. Could you talk a little bit about what your assumptions are with respect to the cadence of Sprint conversion? And then the second question is going to be on Global Housing, just your thoughts with respect to placement rates in your guidance?

Yes. No, Brian, I appreciate those questions. Let me start at a bit of a higher level, which is we gave a bit of an outlook on our earnings call in early February, and nothing has changed from that perspective other than we're now going to have some incremental buybacks because of the transaction on Titan. But the fundamental view we had for this year, extraordinarily strong 2020, continued good growth in the earnings of Lifestyle in '21, Housing to be down a little bit after a very strong 2020. Nothing has really changed there relative to perspective. If you look at Sprint in all of our new programs, those gradually build. Generally, as we've talked about, we started 0. And over a period of time of 3 years or so, maybe 4, if it's Japan, we'll gradually pick up those customers as they come in and get a new phone. So we see the potential that if 5G really takes off, that could make that quicker. But we're still very early days as you look at that. Broadly on the mobile subscriber count, we're expecting mid single-digit growth this year, really driven by North America and Asia Pacific. So continued building the franchise for the future even in a year where we're still working through the final innings of the COVID pandemic. So that's how to think about that. I'm sorry, the last part of your question, Brian, which was...

[indiscernible] placement rates, yes.

Placement.

You want me to jump in on that one, Alan?

You can jump in on that. Yes.

Sure. Yes, in terms of placement rates, we have seen them, I would say, plateau last year. We're not expecting any big change as we go forward this year. We've obviously talked about the REOs, the real estate owns and with the forbearance being extended, we don't really see that having a big impact on us this year. We expect at some point, that will come back up and the placement rates will turn back up. But it's really hard to forecast that at this time, which is really why when we look at overall housing, we're saying housing will be down in 2021 versus 2020 for a couple of reasons. First, the non-cat loss ratio will have a modest increase we talked about. And second, we have some increase in our reinsurance costs. But we're saying it's decreasing, but decreasing off what was really a spectacular 2020, where net operating income was up 24% last year.

Yes. And as Richard said, we're not expecting any major uptick in placement this year. We are very well positioned, if the housing market does weaken, but we're not assuming that as we're providing the outlook for '21.

[Operator Instructions] Our next question comes from the line of Mark Hughes with Truist.

The 2022, when we think about your capital management aside from this transaction, would we still be looking at it similar to what you've done in the last 3 years, free cash roughly equal to segment income and similar distribution of buybacks and other corporate purposes?

Yes. So Mark, first of all, we haven't yet provided a view on 2022. We'll certainly do that at the appropriate time later this year or early next year. But I do think, as we think about the future, you could expect we're going to continue our disciplined cash flow management, which has been a hallmark of the company. You can expect that our segment earnings will continue to be, on average, 100% available as segment dividends, which has been a hallmark of the company for many years. And if you look at underlying growth, we feel very well positioned to continue to deliver long term, the growth rate we've been delivering double-digit type growth rates. But we haven't yet provided a perspective on what we really see for 2022. The other thing I would add is we're going to continue to invest. We mentioned that in materials. It's part of continuing this growth. We've had a track record now of strong profitable growth. We'll continue to invest to ensure that, that momentum continues into the foreseeable future. So we feel well positioned. We just haven't provided an outlook yet for 2022.

How much -- you mentioned Asia Pacific and North America contributing to the growth in covered devices, how much are other geographies driving? How much is still a COVID residue?

Yes. No, it's -- and let me clarify. So Asia Pacific and North America are primary markets for mobile. So that's where the bulk of our contracts are today. With Latin America, certainly disrupted in 2020, we're beginning to see some signs of recovering in Latin America, but that's been the most impacted market from COVID. And then Europe, an important market for us, but pretty undeveloped. So we see an opportunity over the coming years to really penetrate and grow in Europe. But today, it's very fragmented. It doesn't have quite the same structure that we see in Asia Pacific and North America, but we see a lot of opportunity in the future in Europe that we can build and grow our franchise there as well.

Richard, the $10 million you mentioned in enterprise support costs, is that incorporated into your guidance that was an $80 million?

Yes, it is. I mean, essentially, it's 2 things. It's first just indirect enterprise support costs that go to Preneed today that will not leave with the sale of Preneed. And then in terms of the other entities that are being sold, there's capital in those entities that gave us the balance of the $10 million. So think about it as $6 million and $4 million. On the other hand, the indirect costs, what we've said in our script, too, is that we'll be taking those out by the end of this year. So we're not going to let any of those indirect enterprise support cost linger, I can put it that way, Mark.

Yes. Could you measure -- when you look at investment income, a little bit lower interest rates, how much impact that has on the 2021 number? Obviously, a big impact from taking out the Preneed. But aside from that, how much was lower interest rate the headwind to earnings this year?

Mark, maybe let me start in and Richard, you can answer that question directly. One of the things that this transaction will do for us is, again, fundamentally alter our risk profile. So our exposure to interest rate movements, the majority of that today is in the Preneed business. So once we close, we are much less exposed to interest rate movements. We also eliminate mortality risk and eliminate that risk among our companies. So one of the real outcomes of this transaction, in addition to allowing us to focus on housing and lifestyle is it further reduces the risk of our company. But Richard, do you want to comment directly on the question?

Yes, it will still be a headwind, but not as much as it was. If you think about the headwind that we had from investments in 2020, I'd break it down into 3 components. Really was the long-term change in interest rates that you talked about. The short-term interest rates; and real estate gains. The latter real estate gains didn't really have much in the second half of last year. Short-term investments, they reset right away. And so really, we're left with the longer term investments. So the way I think about it, by the end of the year, we had taken much of the brunt of the impact of the drop in interest rates. Our portfolios are well matched, as we've talked about. And so it's really new money coming in that gets invested in the lower interest rate environment and actually a small amount of the total amount of assets that we have in place. Think about a duration going forward of our assets of about a little under 5 years. So that will roll through over a period of time, if interest rates stayed down. Obviously, if they come back up, there won't be an issue. We'll also be looking at the pricing of products as we go forward and which of those products have some kind of interest rate in them. So overall, I would say it will still be some impact, but not as much as we felt in the past. And as Alan said, a lot of the interest rate sensitivity goes out of the company now. If we think about the longer duration of Preneed and also the lower assets being down by half, we're estimating that our interest rate sensitivity is decreasing by about 2/3. So that's a big reduction of interest rate risk going forward.

And then a final question, the renters insurance. I'm not sure if you commented on the outlook in that business, but what does top line look like there?

We haven't given a specific number for this year. If you look at last year, for example, we grew all of these 8% even in a market -- COVID definitely hit the rental market, particularly student housing. We've said over time we expect the growth rate to be high single digits, and our view hasn't fundamentally changed. That continues to be a strong growth business for us, and we would expect, over a period of time, similar kind of continued growth in that business.

And we did also say that we are investing in that business to stay very relevant in digital and omnichannel distribution. So with that additional investments we've been making, we would say that the income will be muted on that part of the business in 2021.

Yes. And this is a question, it may not be for you, maybe just for us to model. But the catastrophe load, any guidance there? Do you have updated thoughts on the appropriate catastrophe load or is that [ needed ] in our hands?

Yes. We typically think about it being around -- with the exposure that we have going into 2021, we think of it being around $60 million post-tax would be a good figure to use in kind of an average cat year.

So that's actually $1 in earnings per share?

Yes. Yes.

Our next question comes from Michael Phillips with Morgan Stanley.

First question is on the remaining part of the proceeds, the mobile and share repurchase, so I guess, the 25% or so, how do you think about prioritizing that between housing and lifestyle?

Generally, the way we think about it is Connected World versus the specialty P&C. So connected World Includes multifamily housing, which is part of housing as well as auto and mobile. You should expect the majority of our investments, the vast majority will go into the Connected World. That's where we have sustained growth. We see enormous opportunity to expand the number of services we provide per subscriber and continue to grow similar to what we've been doing. If you look at our M&A over the recent years as well as our investments, the majority is going into that world. And especially P&C, the biggest investment we've been making is in the technology infrastructure of lender-placed. You've heard us mention on earnings calls that we've been and we still are converting to what we call SSP, or single source platform. That is a really differentiated tracking system that gives us better client consumer experience and sustains our differentiation in that important market. But think of the vast majority going into the Connected World businesses.

Okay. And that actually leads to the second question kind of related. You talked a lot, Alan, about all the devices inside houses these days and how you'll be part of that, does that present opportunities for partnerships, I guess, with traditional homeowners insurance companies that are also either building something similar or if they're not, they're clearly providing the insurance for the house? So what kind of opportunities are there for you to partner with companies like that?

It's certainly something we're looking at. I mean our vision broadly around the connected home and connected department. Again, let me caveat that it's early and we're in pilots on this. But if you think about the consumer challenge of having so many different devices that are from different manufacturers and different partners, we are basically trying to solve the consumer pain point and complexity. And at the end of the day, we're going to provide the best possible outcome and experience for the consumer. We don't need to manufacture every part of that. We can include other partners. And we do that selectively today already and you would expect -- I would expect us to continue to do that with the maniacal focus on that consumer experience of managing the complexity of all these devices. We will also probably be looking at other ways to reach the consumer. And as the consumer evolves and they acquire things from different channels, we're going to follow the consumer where they go.

Our last question comes from the line of Gary Ransom with Dowling & Partners.

Most of my questions have been answered. I just really just had one more about the relationship with CUNA, the buyer? And just -- you mentioned this 20-year extension, but are there other -- can you help us understand what's going on there? And any other relationships that you might have with the buyer?

Yes. So at the end of the day, we had a very robust process here, and I feel like we got to a very strong outcome. One of the things on the margin that led us to this conclusion was the long history with CUNA Mutual. That history of 20-plus years came to us with the acquisition of the Warranty Group. And over the last 3 years, we've built and deepened on that. They're a fantastic partner for us. The alignment of values and culture, it is the overall kind of best value when we look at it. And it gives us an opportunity to continue the dialogue with CUNA on what else can we distribute through them. They have almost 30 million consumers that they service today they execute through almost 5,000 credit unions in the U.S., great opportunity to maybe drive more of our products into that channel. They also, given their strong ratings and financial position, present a very low closings, which is also important. We want to make sure that we get to a deal here that gets done, and they represent a very good combination of all that. So we're excited that they're the buyer. It really is a great outcome for our shareholders. Certainly, the value that we realized is beyond, I think, what people expected. And as we talked about, 75% of that is coming back to our shareholders. It's a great outcome for our policyholders. They're going to have a partner who's already in the life insurance business, and we'll continue to build on that. It's a great outcome for our clients, which is important. We're in a client business. And when we do things like sell something, it's important how we handle that for our clients. And then it's a great outcome for our team. We expect our entire Preneed team will move over to CUNA Mutual at closing. So putting that all together, we're excited and look for future opportunities to build our partnership with CUNA.

Is there anything actually in the works at this point to add more programs or reach more of their consumers?

Gary, it's early, right? We only landed on the final round recently. So -- but the important thing that was part of the announcement is that we've agreed to this multiyear extension of our current business, and that creates lots of opportunities for us with them. And we're always doing that with all of our partners, particularly as we add more capability into our Connected World businesses, it gives us even more that we can drive into each of our client and partner relationships.

Okay. And maybe one last little one on you. You answered the question on the cat load, but when you look at -- I think you've used that -- a similar cat load for a few years now. And actually, when you look at the past few years, catastrophes, whether it's fires or wind or freeze has all seem to be higher than it used to be. And I don't know, have -- do you have any thoughts on whether that cat load should be a little bit higher?

Yes. I think when we do our numbers or when the markets running in numbers, it is taking into account, at least, to some extent, I would say, the changes over the last year, so -- in some of the metrics that are taken into account. But in terms of the cat load that we have, it's also a function of the overall exposure and we have brought down exposures in some areas where we were getting hit high. And then secondly, we've worked on the reinsurance over the years. So if we look at the average expected loss, it would take into account a little bit of the increase. I think we've all seen over the last, I don't know, 5 years, maybe and then also just taking into account the changes we've made on the portfolio. So the $60 million is a similar number, but it's a similar number with different elements in it, I would guess, I would say, Gary.

And my thanks, our thanks to everyone for joining us this morning. Please reach out to Suzanne Shepherd or Sean Moshier with any questions on today's announcement, and we look forward to updating you on our first quarter earnings call in early May. Thanks, everyone.

Thank you. This does conclude Assurant's Global Preneed Sale and 2021 Outlook Conference Call and Webcast. We thank you for your participation. Please disconnect your lines at this time, and have a wonderful day.