Welcome to Assurant's Third Quarter 2021 conference call and webcast. At this time, all participants have been placed in a listen-only mode. And the floor will be opened for questions. Following management prepared remarks. If you would like to ask a question at that time, please press star one on your touchtone phone. Lastly, if you should require Operator assistance, please press star 0. It is now my pleasure to turn the floor over to Suzanne Shepherd, Senior Vice President of Investor Relations and Sustainability. You may begin.

Thank you, Operator, and good morning, everyone. We look forward to discussing our Third Quarter 2021 results with you today. Joining me for Assurant's conference call are Alan Colberg, our Chief Executive Officer, Keith Demmings, our President, and Richard Dziadzio, our Chief Financial Officer. Yesterday, after the market closed, we issued a news release announcing our results for the Third Quarter 2021. The released and corresponding financial supplement are available on assurant.com. We'll start today's call with remarks from Alan, Keith, and Richard before moving into a Q&A session. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in yesterday's earnings release, as well as in our SEC report. During today's call, we will refer to non-GAAP financial measures, which we believe are important in evaluating the Company's performance. For more detail on these measures, the most comparable GAAP measures, and a reconciliation of the two, please refer to yesterday's news release and financial supplement. I will now turn the call over to Alan.

Thanks, Suzanne. Good morning, everyone. Our third quarter results were strong driven by double-digit operating earnings growth in Global Lifestyle. The strength of our Global Automotive and Connected Living offerings continue to validate our long-term strategy of focusing on our higher growth, fee-based, and capital-light businesses. We continue to make progress in building a more sustainable Company for all stakeholders. During the quarter, a few key highlights included. For the first time, Assurant was awarded a bronze accreditation by EcoVadis, one of the largest sustainability ratings companies writing Assurant among the top 50% of all 75,000 participating companies. In addition, this quarter, we provided additional transparency to track our progress on our journey to build a more diverse and inclusive assurance. With the recent disclosure of our EEO one report, which provides gender, race and ethnicity data by job category for our U.S. based employees. We believe a diverse and inclusive workforce will best foster innovation, a key ingredient to sustaining our out-performance longer-term. Looking at our financial performance year-to-date, net operating income per share, excluding reportable catastrophes, was $8.75, up 12% compared to the first 9 months of last year. Net operating income and adjusted EBITDA, also excluding cats, both increased by 10% to $528 million and $862 million respectively. These results support our full-year outlook of 10% to 14% growth in net operating income per share, excluding your portable catastrophes, marking our 5th consecutive year of strong, profitable growth. Given year-to-date results and our expectations for the fourth quarter, we would expect to end the year closer to the top half of this range. We've also now completed our 3-year $1.35 billion capital return objective from our 2019 Investor Day, a quarter ahead of schedule. Following the close on the sale of Global Preneed in August, we've also…

Thank you, Alan. And good morning, everyone. On behalf of our employees, I wanted to express our sincere thanks to Alan for his leadership as CEO. I've been fortunate to have had a front row seat and a role in supporting Alan's vision and the transformation of Assurant. Importantly, he has continued to evolve the purpose of our Company to drive value for all stakeholders, customers, employees, communities, and shareholders. The impact he has had on our people and the overall culture of our Company has been exemplary. And I appreciate Alan's personal mentorship and partnership and wish him the very best in his retirement. As we build on assurance momentum over the long term, I believe our talent and innovation will be critical factors to achieving success and growth, especially as we focus more on the convergence around the connected consumer. From a talent perspective, Assurant has developed a deep and diverse bench of internal leaders. A few weeks ago, I announced our refreshed management committee effective in January, including 2 new leadership appointments illustrating our strong bench. First, Keith Meier, our current President of International, will succeed Gene Mergelmeyer as Chief Operating Officer, as Gene will be retiring at year-end. Gene 's significant contributions to Assurant over the last 30+ years, including as COO over his last 5 years, have been instrumental in creating market-leading positions, producing profitable growth, and transforming the organization. In succeeding Gene, Keith Meier brings nearly 25 years of experience at Assurant to the COO role. Since 2016 as President of Assurant International, he's driven growth across our global markets most recently with strong success in Asia-Pacific. In this new role, Keith will be focused on advancing Assurant's business strategy and market leadership positions, as well as identifying additional opportunities to deliver a superior…

Thank you, Keith. And good morning, everyone. As Alan noted, we are pleased with our third quarter performance as our results reflect strong growth across Global Lifestyle and solid earnings in Global Housing. For the quarter, we reported net operating income per share, excluding reportable catastrophes of $2.73, up 5% from the prior year period. Excluding cats, net operating income, and adjusted EBITDA for the quarter, each increased 4% to $162 million and $262 million, respectively. Now, let's move to segment results starting with Global Lifestyle. The segment reported net operating income of $124 million in the third quarter, a year-over-year increase of 16%. Growth was driven by Global Automotive and continued earnings expansion within Connected Living's mobile business. In Global Automotive, earnings increased $8 million or 21% from continued global growth in our U.S. national dealer and third-party administrator channels, including contributions from our AFAS and international OEM channels. Better loss experience in select ancillary products and higher investment income also supported earnings growth in the quarter. Connected Living earnings increased by $6 million or 9% year-over-year. The increase was primarily driven by continued mobile subscriber growth in North America and better performance in Asia-Pacific, as well as higher trade-in volumes led by contributions from our Hyla acquisition and carrier promotions. This quarter, Global Automotive and Connected Living results also included a modest one-time tax benefit that improved earnings. For the quarter, Lifestyle 's adjusted EBITDA increased 17% to $177 million. This reflects the segment's increased amortization resulting from higher deal-related intangibles for more recent transactions in mobile and Global Automotive. IT depreciation expense also increased, stemming from higher investments. As we look at revenues, Lifestyle revenues increased by $158 million or 9%. This was driven mainly by continued growth in Connected Living and Global Automotive. Within Connected Living,…

Thank you. The floor is now open for questions. . Again, we do ask that while you pose your question that you pick up your handset

new potential per device and just kind of the bottom-line profitability for those new devices relative to your $53 million in forced devices at quarter-end?

Sure. Maybe I will take that and backup for just a second. So, first thing I'd emphasize is just the strong partnership that we've had with T-Mobile for many years, which is obviously scaled significantly over time. We're extremely pleased to have reached multiyear extension. And then the migration of the Sprint customers on November 1st along with the ramping of same-unit repair inside of 500 T-Mobile stores is obviously very exciting as we look to the future. As we've discussed on previous calls, it's not uncommon for us to forgo economics when we re-contract with major clients. That's particularly true if the client scales dramatically over time, which obviously is the case

with T-Mobile. As a result of the new agreement going forward, we do expect lower per unit economics. But I would say that once we get same-unit repair fully ramped and normalize our performance, which will take some time, we do expect overall to be able to more than offset the margin pressure with the additional Sprint volume with economies of scale within the business, and obviously, with the addition of the additional in-store repair services. And we're really well-positioned as partners as we -- Company -- to see at that point in more detail. But I would emphasize, our goal, as it has been, is to deliver long-term profitable growth, to increase our market-leading positions. And really focus on long-term value creation for our investors. And we intend to maintain at this. When capital management philosophy. But also looking to invest in growth organically and certainly somewhere organic as well. But we'll come back in Investor Day and share of broader vision around the -- around the future.

Yeah, and this is Alan, though the one thing I would add to Keith's comments if you think about our Company, we've always had a great business that generates earnings. That business level that we can then upstream to the holding Company. And going back since our IPO, we've been very strong stewards have companies’ capital over the last 20 years. I think that's going to continue fully. Under Keith leadership as we go forward, I don't see any major changes in the ability to generate cash and then to manage it appropriately for shareholders.

And we do remain committed to returning the balance of the $900 million from Preneed that we've talked about previously. So, we intend for that to continue as planned and get that done within 12 months of the close of the Preneed transaction as well.

Great. Thanks, guys.

Thank you. Our next question is coming from Gary Ransom with Dowling & Partners.

Good morning.

Yes. Good morning. I also had a question on the cover devices. I mean, you -- we've had a period of a couple of years where it's been flattish in covered devices and you explain that on your prepared remarks. Now we've got essentially in one month, this 20% jump or so, and I'm, I'm just trying to think through how that might roll forward if we're -- are we getting an unusual share of it in this first step of the roll out or -- I don't know. Can you give us any color of how that might unfold going over the next the rest of this year and into next year?

Yeah. So, we migrated all of the Sprint customers effective November 1st, so all of that volume is now enrolled in Assurant's program going forward. Obviously, we'll continue to see growth through the overall partnership as T-Mobile continues to win new customers in the marketplace, and continues to add insurance to those customers' accounts. So, this does create a really interesting long-term opportunity for growth. And as we've demonstrated over many years, we continue to innovate, not just around the products, but services, capabilities, how can we invest more around delivering exceptional customer experience. And certainly, a partnership with T-Mobile that is now significantly more scaled, we believe it's going to yield more opportunities to partner together for the future. But as we've talked about, there's a trade in terms of economics between what's our per unit fee that we're going to get relative to a much larger base of customers.

Right. Okay. And is there any remaining drag from the other things you mentioned internationally where things were running off or not growing as much?

No. I think we've seen a little bit of a slowdown in growth if we're talking specifically about mobile, just as we've come out of COVID in a couple of regions, primarily Latin America, a little bit in Europe as things have opened back up. But overall, really, really strong performance in the U.S. market and the Japanese market and really do see good long-term growth for that business overall in international as we continue to scale over time.

Okay, thank you. And then the other count statistic you gave is the autos covered in the Global Automotive and that was growing very well. And again, trying to think through how that might continue forward. Is there anything that has Momentum there that we might expect to see additional growth in those numbers going forward?

Yeah. I would say that the overall industry sales on the auto side remained quite elevated as you saw our covered policies increased a lot, $4 million and 8% from last year. But I would also highlight sales production was well above pre -pandemic levels, so we're seeing really, really strong performance. We achieved almost $1.2 billion of net written premium when you look at the quarterly results. I would say that began to normalize a little bit from where we were in the first and second quarter. But it was only modestly down from Q2, up 12% over 2020, and actually up 27% over 2019. So that would certainly expect to taper off going forward because obviously constraints around supply chain that's affecting new car sales. But those constraints have been more than offset by the volume that our clients are doing on the used side of the business, which has been very dramatic and overall leading to elevated levels of sales.

Thank you. If I could squeeze in a couple of numbers questions, there were a couple of items that were mentioned that you didn't really quantify was the tax benefit that helped the numbers in Global Lifestyle and you also mentioned in housing the reinstatement premium. Are those -- can you help quantify those are all?

Hi. Good morning, Gary. It's Richard. Yeah. I mean, in terms of the tax benefit, it was about $4 million and then the reinsurance, the reinstatement premium, I think that was about $7 million.

Exactly.

And just to be clear, the $99 million of pretax cuts does not exclude that reinstatement preview, correct.

In terms of the reinstatement premium, no, it actually does. And if you look at the numbers we have, a retention of $80 million and the total cut impact for us in the quarter was $87 million. So that comes through on that for either.

I got it. Okay. Thanks very much.

Thanks, Gary.

Thank you. Our next question is from Tom Shimp from Piper Sandler

Hey, good morning, Tom.

Hi. Good morning, guys. So, I'm thinking about the roll out of your EV1 product corresponding transition to the electric vehicle. How do the attachment rates compare -- for this product compared to the internal combustion engine? There's a lot of -- there's good amount of tech in those EV cars, but they do have less moving parts. So, how do those dynamics affect the attachment rates that you're seeing?

It's a great question. It's -- I would say it's really early in terms of scaling around electric vehicles, in terms of the service contract programs. You're correct there. There are less moving parts. There's a lot of technology. Some of the parts tend to be very expensive to get repaired. So, we may see lower frequency, we may see higher severities. There's also a little less certainty in the minds of consumers around the reliability of all of the technology. So, we do expect to see strong performance over time. I would say it's really early and it will evolve as we start to see more and more EVs in market. And as we start to see our clients maturing around, not just selling electric vehicles, but attaching F&I products and services. So, this will evolve, I think, over the next few years quite dramatically.

Okay. So, inflation, it's top of mind for insurance investors right now, Assurant operates in businesses that have attracted more attention regard to inflation parts and labor costs and automotive chip shortages in mobile global housing. Housing as a risk-based business where you have inflation exposure that you can mitigate with rate but I think a lot of investors who look at Assurant are your typical insurance investor and sometimes misunderstand to the extent of which the risk in mobile and automotive is ceded off to clients and how it operates on a fee like basis. So, I think investors understand this dynamic exists, but not the degree of which. So maybe you could give us your thoughts there and how assurances is positioned in an increasingly inflationary environment.

Yeah. And maybe I'll offer a couple of comments and then I'll ask Richard because his team's done a lot of work on this question, but I think you're right. I mean, we think our risk is quite well insulated, and mitigated based on the deal structures that we have on the lifestyle side, most of the deals are reinsured or profit shared. Not all of the deals, but we've been pretty insulated in terms of seeing volatility there. And then obviously, as we look at housing, as you talked about, there are opportunities with rate increases. insured values, and then investment income will obviously be a big driver as we go forward. Richard, stunning full analysis to look at the net overall. So maybe talk about that, Richard.

Sure. Thanks, Keith. And I think you sort of bolted on the main points. When we look at it, I would say short term in this quarter, we mentioned that severities were up a little bit, probably a quarter of the whole change in a non-CAT loss ratio. Those severities are really labor and claims costs increasing there. But over the long term, I think we're -- we look at it maybe being slightly positive, at least neutral because what happens, I mean, Keith mentioned the reinsurance that we have with our clients on the fee-based side. So, there's a large sharing of profitability on that side of the business, but then on the P&C side where housing, whatever where we are taking on the claims and the risk. There's two things that would happen. Lender place, we have advert insured values would go up. So as the prices of housing goes up -- go up with inflation, we would see an increase in our premiums to the average insured value. Also, over time, we would be able to recover a large part, if not all of that, through our rate filings. So, we feel that obviously insulates us quite well. And then finally with inflation over time, we would anticipate that interest rates would increase and we would get an uptick in our investment income. So overall we're not looking at it as being any type of significant negative, anything it's neutral could be a small positive.

Okay. Thank you for your answers.

Thank you.

Thank you. Our next question. And is coming from Brian Meredith with UBS.

Hey. Good morning, Brian.

Morning, morning, morning. So, I'm just curious, in Global Housing, I know early on we were thinking maybe we'd see an increase in placement rates towards the end of this year. Obviously, forbearance kind of hurt that. Now that that's gone, what is your kind of views with respect to placement rates there? Will you -- we ever going to see a pick-up?

Yeah, I think we signaled a modest change in placement rate this quarter, mainly driven by the mix. So, I'd say it's broadly flat. I would expect -- as we look to maybe the back half of '22, we'd start to see an increase modestly in the placement rates over time, expect servicers to actively work with borrowers on loan modifications to keep the loans performing. There's so much strength generally in the housing market. Customers have positive equity in the home. So, I think a lot of that activity will delay some of the placement rate from flowing through. And certainly, same thing's true on foreclosure side as well that will affect the REO business. So probably second half of '22 would be our best estimate on when we might start to see that coming through the portfolio.

Great. And then second question, just curious, the reserve increases that happened in the quarter, what was that related to in the specialty PC?

This is Alan. Maybe let me take that one and give a little bit of history on what we're doing there. So, in specialty, we have a variety of products, things like antique auto, a little bit of the international property we right. And we also, a few years ago, started to do a couple of on-demand products related to really following the consumer as they own and rent their home in their car and trying to really build off of our experience and our own rental and the franchise that we have there. And what we're really doing today is we're ensuring. Your short-term transaction. So, think about you're renting your home, or you're using your car to make food delivery. And what we're excited about with that business, and I'll answer the question directly. Both -- it's a new distribution channel for us. If you think about, we can embed some of our capabilities around rental into a rental of a home. And then what's particularly interesting is the gig economy. And if you think about the workers who are now delivering food or using their car to provide services, it's an interesting opportunity for us to drive not that product as much as our other products, our service contracts, our mobile capabilities, our renters, insurance. So that's really been the genesis of what we're doing there. In terms of the reserve this quarter, it’s affecting really maybe, but $5 million I think was the amount and its really development on prior reported claims. So, think of it as to catch up to align with all of our future expectations. And then over the last couple of years, as we've gained experienced in this business, we've been modifying our product structures. We've increased rates and we put in place extensive reinsurance so that will never -- we don't anticipate having any significant on material losses from this business. In fact, it's been a very well-performing business for us over the last couple of years.

Got you. And I assume you would get a lot of reinsurance on it and protections on it.

We do. We've got very strong structures there and it's really for us, we are trying to do the same thing we do in Auto and Mobile generally, which is making it into administration and feed business as we manage around a consumer transaction.

Great. And then my last question, just curious, so I take a look at the Global Lifestyle, there's a lot of moving parts happening here, I guess going into fourth quarter when I think about kind of the pre -tax margin on that business and obviously the additional subs coming in at a lower revenue per sub, and then you've got the investment coming in. We think about margins in that business declining here as we look into fourth quarter in 2022,

And I think as we look at overall profits in Lifestyle and in Connected Living, we do expect to see growth in Q4 over Q4 last year and continue to see growth into 2021. We had --- as you saw, a strong third quarter for Connected Living, up significantly over last year. So, I think that continues in Q4, even with the additional investments that we need to make to really not just stand up, same-unit repair, but make sure that we're executing and delivering to a really high standard. And then as we think about 2022, yeah, we expect overall. We'll see some moderation but we still expect to see strong growth across both the Lifestyle and housing businesses.

So good solid operating income growth still, it's just maybe some pressure on margins, but its top-line growth and more than offset that. It's what I think I hear you saying, right?

Correct. Yeah. The per unit economics are going to are going to look a little lighter, but the overall economics are going to be strong.

Terrific. Thanks so much for the answers and all the best in your retirement.

Thank you.

Thank you. Our next question is coming from Michael Phillips from Morgan Stanley.

Hey, good morning, Mike (ph).

Hey. Good morning, everybody. Thanks. Good morning. Richard, when you talked about the impact in the fourth quarter from the roll out expenses from T-Mobile, I guess -- Anyway you can help us quantify that meaningful impact. And then B, is it just a 4Q or any of that extended into 1Q next year?

Yeah. Thanks for the question, Mike. In terms of quantifying it, I guess I would say we've given sort of aggregate -- an aggregate indication in terms of where we think Lifestyle is going to come in all year, and we talked about being a high single-digit. So, if you really look at last year where we came in and look at high single-digits, it will give you a pretty good view of where we think -- sorry, where we think, Lifestyle is going to come in for the full year, and part of that decrease is going to -- is based on the increase in the setting up the service and repair and investments that we're making in Connected Living broadly. So that will be in the fourth quarter. And then we would anticipate some coming in next year. So, I mean, in terms of rolling into next year, there will be some amount of big amount -- biggest amount I would say it would be in the fourth quarter of this year. We are thinking a few million and ramp up quite a bit into into the fourth quarter. So, we are talking in terms of millions here in terms of doing it.

Yeah. And I would just add. In addition to the startup costs really ramping, doing all the recruiting, the training, the hiring, and getting all the build-outs done, there is also just the ongoing evolution of the service that we're going to deliver which inevitably will change and evolve over time as we continue to work with T-Mobile to optimize that experience. So, I do expect some investments in 2022, partly supporting the rollout to completion, but also ramping execution and investing in our technology to make sure that we're delivering services seamlessly as possible. So, you definitely would expect to see some investments as we continue to shape this part of our business going forward.

Okay, that makes sense. Two more kind of quick ones, I guess then. On the labor and material costs and the severity there, talked about that quite a bit. I guess a follow-up. Richard, you said if things continue -- I think you said if things continue, obviously that could be offset in the future by higher rates over time. Does that mean you're currently pricing in for that or still kind of waiting to see how that plays out?

Some of it's currently coming through. Every year in our contracts, we get an increase what we -- what I refer to as average insured value. So that's embedded in the contracts. We look at inflation. And we do get some increase in the overall premiums from that. When I was talking about the trends over time and the rate filing, one, we can't put in a rate filing for one quarter. When we file rates, it's based on averages over a couple of years. So that's really for inflation to come in the lasting and have an impact on the non-CAT loss ratio. It would need to come -- would need to happen over time is what I was referring to there, Mike. And then we would put it in and then you get it. So, there is a lag but it would be offset over time, is what I was saying.

Okay. That makes sense. I guess last quick one. Was any impact in the quarter on your sub -- mobile sub numbers from the T-Mobile cyber -attacks like on this?

Now, I would say nothing meaningful that we're aware of or that we saw. I mean, we had -- we have a really strong base of customers and I don't think we saw anything of note that I'm aware of.

Okay. Thank you, guys.

Thank you. Our next question is coming from Mark Hughes with Truist Securities.

Good morning, Mark.

Mark.

Yes. Thank you. Good morning. Congratulations, Alan.

Thank you.

The -- can you refresh me on the revenue model for the in-store business that T-Mobile, is it kind of time and materials? Is it repair per device? Hourly reimbursement? How does that work?

It's a great question. It's -- I would think of it as fee income oriented, and getting paid for the labor that we perform. And then for -- from the management of the overall program, we don't really have risk around how the business performed from our parts and labor other than we get stated fees and we've got to manage ourselves within those levels to drive profitability. So, I think it's a really, really well-structured financial deal and our interest are very aligned. And it's very motivated around delivering an exceptional experience in the store. So, I feel really good about not just the deal that we put together but how we're working together with T-Mobile to really change the industry.

And are they going to be advertising it? How are customer is going to know that the prepare capabilities available?

Well, we obviously manage the claim process within consumers and now that's what the entire base T-Mobile subscribers. So, we'll be directing customers as appropriate to take advantage of really the best option that's available to them to get repairs done. So, I think it will be largely through our claims flow, but also through T-Mobile awareness campaigns, etc.

And then Richard, I think you all have addressed this to a degree, but any more adjectives or maybe even numbers you might throw when you're talking about 2022. Earnings expansion to continue though at more moderate levels, I think you also referred to strong growth in 2022. Anything else you want to add to that?

I wouldn't want to jump in Investor Day, and when we talk about our outlook next year, I guess I would say two things. I mean, we're -- Steve heard during the call, we're really -- we're really pleased with where we are across our set of businesses, whether it be the growth that we're seeing in Global Auto. the extension that contract, the T-Mobile, the growth other elsewhere domestically in the U.S and mobile in Japan and mobile. And also, in the housing business. You see that we do seem to be at a bottom with placement rates. Now, when the forbearance and Foreclosure period will end, it will be a slow take up. We continue to grow in multi-family housing, so we think we're well-positioned for 2022. Having said that, as Keith mentioned, we still need to continue to invest in ourselves and in our business and it's not like we're without headwinds in terms of some interest rates or inflation. But I really feel good about where we are as a business totally. And I think Alan's put us in a good position to succeed over the future under Keith's leadership.

Thank you.

Thank you. Our next question is coming from Jeff Schmitt, from William Blair.

Hey, good morning, Jeff.

Good morning. How much of the increase in fee income in Connected Living was due to highlight acquisition? Obviously, there's kind of a weak comparison to, but just curious how much of that is organic growth maybe driven by the 5G upgrade cycle versus Hyla being added to the mix

I would say Hyla's been performing exceptionally well. So, as we look at what's happened since close, trading volumes are up significantly. We've seen obviously not just demand from 5G significant client promotions where trade-ins are the main incentive being used. Increasing attach rates and just I think pent-up demand coming out of the pandemic. So, we talked about the performance of the acquisition 50% better than we modeled based on '21. So, we're thrilled with how it's going, but more than that really excited about the integration, how well that's working, our ability to protect talent, obviously a significant renewal of a major relationship with AT&T. And then as you think about the overall volumes process, we talked about 18 million devices so far this year. That compares to 14 million for full-year 2020, and that's overall, in total, combining high land assurance. So yes, high-low as a big driver of fee income, but we've also seen growth on what I would call the legacy assurance side of the trading business as well. And similar trends are happening across clients and across the market. So, it's a really strong time for trading in the global market.

Okay. Great. And then the same-day service capabilities you've touched on that quite a bit of rolling it out with T-Mobile here a few days ago it sounds like. Did -- how much of those capabilities being affected by labor shortages right now? I don't know if you touched on them, but just curious how you're managing that in the current environment.

Our team has done an incredible job. We've been working on this for many months, trying to acquire the right labor in various markets around the country. I would say our team, the recruiters that we're partnered with, some of the incentives that we've put in place to get the best talent. It's worked really well. Not to say there aren't challenges of course there are but our teams have, have partnered really well with third-parties as well as what T-Mobile to make it happen.

Okay. Great. Thank you.

Thank you. Our last question is coming from Grace Carter with Bank of America.

Hey. Good morning, Grace.

Hi. We've talked a lot about structural tailwinds or attachment rates in mobile devices, one of them being rising prices. I was wondering, in kind of this more inflationary environment that we're looking at, if you've seen any sort of tangible impact from the inflation impact on pricing, driving up attachment rates at all, and to the extent that we continue to see a bit of higher inflation, if you think that that should have any impact going forward?

Yeah, that's a great question. I would say maybe a little bit on the auto side if you think about really more of a mix shift point. So used cars tend to attach at slightly higher rates than new cars. And we've also seen obviously accelerating value on the used car side, which makes protecting the vehicle a higher likelihood. So, we have seen a little bit of a mix shift there which is benefiting the overall attach rate. I would say broadly though, pretty steady, pretty strong across the board. So, nothing that I would signal as being a really dramatic, but certainly good strong results.

Okay, thank you. And then just kind of a quick follow-up to that, we've seen attachment rates across mobile devices and cars going up over the past several years. Do you think that there is an eventual ceiling on how high attachment rates can go? I mean, what's kind of the long-term target there, I guess?

I think it varies by market, by geography. Some markets attach just based on consumer perception, consumer demand at higher levels. I definitely think we're -- we've got robust levels of attach rates broadly. I think they could still go up over time, certainly. I think awareness for the programs, the value proposition for our products continues to improve. The service delivery and the options for consumers and how much more convenient and important the services to them today than it was a few years ago. I think all of those elements can drive in a more attach rates in the future, so still some upside but really robust if I look at in mature markets. And then certainly growth opportunity in more of the emerging or more nascent markets.

Thank you and congrats to Alan.

All right, thank you Grace.

Thank you everyone for participating in today's call. In summary, we're very pleased with our year-to-date performance, and we're excited about the opportunities we have to serve our partners, our end consumers while delivering results for our shareholders. I look forward to officially taking the CEO role in January and updating you on our progress on the fourth quarter earnings call in February. We're also hard at work and anticipating Assurant 's 2022 Virtual Investor Day, which we expect to hold on March 24th and more details will be forthcoming in the weeks in months ahead. In the meantime, please reach out to Suzanne Shepherd and Gene Mergelmeyer (ph) with any follow-up questions. Thank you all. And have a great day.

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time and have a wonderful day.