v3.22.2.2
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
In conjunction with the transition of the Company’s CEO and chief operating decision maker on January 1, 2022, the Company changed its segment measure of profitability for its reportable segments to an Adjusted EBITDA metric, as the primary measure used for purposes of making decisions about allocating resources to the segments and assessing performance, from segment net income from continuing operations, effective as of that date. Prior period amounts have been revised to reflect the new segment measure of profitability.
Beginning with second quarter 2022, the Company changed the calculation of its segment measure of profitability, Adjusted EBITDA, to exclude certain businesses which the Company expects to fully exit, including the long-tail commercial
liability businesses in Global Housing (sharing economy and small commercial businesses), as well as certain legacy long-duration insurance policies within Global Lifestyle (collectively referred to as “non-core operations”), and present them as a reconciling item to consolidated net income from continuing operations. The non-core operations have been or are in the process of being exited by the Company, but do not qualify as held for sale or discontinued operations under GAAP accounting guidance.
As of September 30, 2022, the Company had three reportable segments: Global Lifestyle, Global Housing and Corporate and Other. The Company defines Adjusted EBITDA as net income from continuing operations, excluding net realized gains (losses) on investments and fair value changes to equity securities, COVID-19 direct and incremental expenses, loss on extinguishment of debt, non-core operations (defined above), net income (loss) attributable to non-controlling interests, interest expense, provision (benefit) for income taxes, depreciation expense, amortization of purchased intangible assets, restructuring costs related to strategic exit activities (outside of normal periodic restructuring and cost management activities), as well as other highly variable or unusual items.
All prior period amounts have been revised, which impacts both segment Adjusted EBITDA and other adjustments under reconciling items to consolidated net income from continuing operations, but does not impact consolidated net income. The sharing economy and small commercial businesses, previously reported through the Company’s Global Housing segment, generated Adjusted EBITDA of $(3.6) million and $(46.8) million for the three and nine months ended September 30, 2022, respectively, and Adjusted EBITDA of $(6.1) million and $(0.6) million for the three and nine months ended September 30, 2021, respectively. The legacy long-duration insurance policies included in non-core operations and previously reported through the Company’s Global Lifestyle segment, generated Adjusted EBITDA of $0.7 million and $1.7 million for the three and nine months ended September 30, 2022, respectively, and Adjusted EBITDA of $(2.1) million and $(2.0) million for the three and nine months ended September 30, 2021, respectively.
Segment Adjusted EBITDA was also revised for an error related to reinsurance of claims and benefits payable within the Connected Living business unit in the Global Lifestyle segment, and for other unrelated immaterial errors. See Note 2 for more information.
The following table presents segment Adjusted EBITDA with a reconciliation to net income attributable to common shareholders:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Adjusted EBITDA by segment:
Global Lifestyle$165.9 $176.3 $587.3 $546.0 
Global Housing(25.0)15.2 166.7 235.2 
Corporate and Other(24.9)(23.0)(72.0)(67.8)
Reconciling items to consolidated net income from continuing operations:
Interest expense(26.3)(27.5)(80.4)(84.7)
Depreciation expense(22.6)(18.1)(64.7)(52.4)
Amortization of purchased intangible assets(17.3)(15.7)(51.9)(50.0)
Net realized (losses) gains on investments and fair value changes to equity securities(27.4)112.1 (166.2)123.2 
COVID-19 direct and incremental expenses(1.1)(2.0)(3.6)(7.2)
Loss on extinguishment of debt— (20.7)(0.9)(20.7)
Non-core operations(2.9)(8.2)(45.1)(2.6)
Other adjustments(9.9)(0.2)(15.6)(6.3)
Total reconciling items(107.5)19.7 (428.4)(100.7)
Income from continuing operations before income tax expense8.5 188.2 253.6 612.7 
Income tax expense1.2 37.2 45.1 133.8 
Net income from continuing operations $7.3 $151.0 $208.5 $478.9 
The Company’s net earned premiums, fees and other income by segment and product are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Global Lifestyle:
Connected Living (1)$1,046.8 $1,094.1 $3,182.0 $3,221.9 
Global Automotive 943.5 867.1 2,751.5 2,535.1 
Total$1,990.3 $1,961.2 $5,933.5 $5,757.0 
Global Housing:
Lender-placed Insurance$262.2 $256.2 $801.9 $790.9 
Multifamily Housing119.9 121.7 362.0 361.2 
Specialty and Other102.0 93.2 301.9 295.5 
Total$484.1 $471.1 $1,465.8 $1,447.6 
(1)Effective January 1, 2022, the Connected Living line of business includes the previous Global Financial Services and Other line of business. Prior period amounts have been revised to reflect this change.
Net earned premiums, fees and other income for non-core operations were $17.2 million for each of the three months ended September 30, 2022 and 2021, and $44.7 million and $49.1 million for the nine months ended September 30, 2022 and 2021, respectively.
The following table presents total assets by segment:
September 30, 2022December 31, 2021
Global Lifestyle (1)$26,617.9 $26,120.9 
Global Housing (1)5,367.8 4,007.3 
Corporate and Other (2)1,260.0 3,792.4 
Segment assets $33,245.7 $33,920.6 
(1)Segment assets for Global Lifestyle and Global Housing do not include net unrealized gains (losses) on securities attributable to those segments, which are all included within Corporate and Other.
(2)Includes the assets for non-core operations of $385.0 million and $326.3 million as of September 30, 2022 and December 31, 2021, respectively.