ASSURANT, INC.AIZ
ASSURANT, INC. Goodwill & Intangibles Disclosure
Goodwill
The Company has assigned goodwill to its reporting units for impairment testing purposes. The Company has three reporting units consisting of two reporting units within the Global Lifestyle operating segment, Connected Living and Global Automotive, and Global Housing (whereby the reporting unit for impairment testing was at the operating segment level). In 2023, the Company reassessed its reporting units and determined that the Global Financial Services component should be aggregated with other business components within the Connected Living reporting unit because the business is managed by the same business leader and have similar economic characteristics as required by the aggregation criteria. The new combined Connected Living reporting unit meets the accounting definition of a single reporting unit.
Quantitative Impairment Testing
For the annual October 1, 2023 goodwill impairment test, the Company performed quantitative tests for all reporting units with goodwill (Connected Living, Global Automotive and Global Housing).
The following describes the various valuation methodologies used in the quantitative test which were weighted using our judgment as to which were the most representative in determining the estimated fair value of the reporting units.
A Dividend Discount Method (“DDM”) was used to value each of the reporting units based upon the present value of expected cash flows available for distribution over future periods. Cash flows were estimated for a discrete projection period
based on detailed assumptions, and a terminal value was calculated to reflect the value attributable to cash flows beyond the discrete period. Cash flows and the terminal value were then discounted using each reporting unit’s estimated cost of capital. The estimated fair value of each reporting unit represented the sum of the discounted cash flows and terminal value.
A Guideline Company Method, in which we identified a group of peer companies that have similar operations to the reporting unit, was used; however, direct peer comparisons for the reporting units were limited given the diversity of the products and services within the businesses. This method was used to value each reporting unit based upon its relative performance to peer companies, based on several measures, including price to trailing 12-month earnings, price to projected earnings, price to tangible net worth and return on equity.
While DDM and Guideline Company valuation methodologies were considered in assessing fair value, the DDM was weighted more heavily since management believes that expected cash flows are the most important factor in the valuation of a business enterprise, and also considering the lack of directly-comparable peer companies. Based on the quantitative assessment performed as of October 1, 2023, the Company concluded that the estimated fair values of the Global Lifestyle and Global Housing reporting units exceeded their respective book values and therefore determined that the assigned goodwill was not impaired.
Sharing Economy and Small Commercial Businesses Impairment
In second quarter of 2022, $7.8 million of goodwill, previously included in Global Housing, was allocated to the sharing economy and small commercial businesses which are included within non-core operations in Corporate and Other. During the fourth quarter of 2022, the Company identified impairment indicators impacting the fair value of the sharing economy and small commercial businesses, including a decline in long-term economic performance. The fair value of the sharing economy and small commercial businesses was determined using a discounted cash flow method which calculated the present value of the run-off results and considered all aspects of the business including investment assumptions. The fair value calculated in the fourth quarter of 2022 was lower than the carrying value of the run-off businesses, resulting in the pre-tax and after-tax impairment charge of the entire goodwill of $7.8 million. The goodwill impairment charge was reported separately in the consolidated statements of operations for the year ended December 31, 2022, with a corresponding reduction to goodwill in the consolidated balance sheet as of December 31, 2022.
A roll forward of goodwill by reportable segment is provided below as of and for the years indicated:
| Global Lifestyle (1) | Global Housing | Corporate and Other | Consolidated | ||||||||||||||||||||
Balance at December 31, 2021 (2) | $ | 2,192.1 | $ | 379.5 | $ | — | $ | 2,571.6 | |||||||||||||||
| Acquisitions (3) | 15.2 | 37.4 | — | 52.6 | |||||||||||||||||||
| Impairments (4) | — | — | (7.8) | (7.8) | |||||||||||||||||||
| Foreign currency translation and other (4) | (13.4) | (7.8) | 7.8 | (13.4) | |||||||||||||||||||
Balance at December 31, 2022 (2) | 2,193.9 | 409.1 | — | 2,603.0 | |||||||||||||||||||
| Transfers (5) | 92.4 | (92.4) | — | — | — | ||||||||||||||||||
| Foreign currency translation and other | 5.8 | — | — | 5.8 | |||||||||||||||||||
Balance at December 31, 2023 (2) | $ | 2,292.1 | $ | 316.7 | $ | — | $ | 2,608.8 | |||||||||||||||
(1)As of December 31, 2023, $785.2 million and $1,506.9 million of goodwill was assigned to the Connected Living and Global Automotive reporting units, respectively. As of December 31, 2022, $761.0 million and $1,432.9 million of goodwill was assigned to the Connected Living (including Global Financial Services which was aggregated with Connected Living in 2023) and Global Automotive reporting units, respectively.
(2)Consolidated goodwill reflects $1,413.7 million of accumulated impairment losses at December 31, 2023 and 2022 and $1,405.9 million of accumulated impairment losses at December 31, 2021.
(3)The change during the year ended December 31, 2022 includes goodwill from the acquisition of ALI and a less significant acquisition. Refer to Note 3 for further information.
(4)The change during the year ended December 31, 2022 includes $7.8 million of goodwill being moved from Global Housing to Corporate and Other as part of the transfer of the sharing economy and small commercial businesses, previously reported through the Company’s Global Housing segment.
(5)The change during the year ended December 31, 2023 is related to the transfer of certain specialty products, mainly the commercial equipment business, from Global Housing to Global Lifestyle, effective January 1, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 15, 2024 | Showing above |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 14, 2018 | |
| 2016 | Feb 14, 2017 | |
| 2015 | Feb 16, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.