Tiptree Inc. · NASDAQ:TIPT
Tiptree — Southwest IDEAS Investor Conference 2020
26 slides from Tiptree's conference presentation, Nov 18, 2020
Slide 1: Southwest IDEAS Investor Conference
Southwest IDEAS Investor Conference November 2020
Slide 2: Disclaimers
Disclaimers LIMITATIONS ON THE USE OF INFORMATION This presentation has been prepared by Tiptree Inc. and its consolidated subsidiaries (“Tiptree", "the Company" or "we”) solely for informational purposes, and not for the purpose of updating any information or forecast with respect to Tiptree, its s
Slide 3: Tiptree Overview
Tiptree Overview ($ in millions) Our Approach Value Focus on Oriented Profitable Financials Investment Underwriting Insurance Insurance Warranty Approach U.S. Europe Solutions Real Assets Think Like Patient Capital Owners Partner (30.8% insider ownership1) Capital allocation and investment managemen
Slide 4: Operating Performance
Operating Performance ($ in millions) Q3'20 Capital Allocation & Annual Performance Comparison Q3'20 Last Twelve Month Highlights Tiptree Invested Operating EBITDA of $90.8m, up 53.4% from Q3 2019 Equity Capital1,2 Operating EBITDA1 • Return on average invested capital (ROAIC%) of 16.5%3 Q3'20 Q3'20
Slide 5: KPIs – Underlying Operations Remain Resilient
KPIs – Underlying Operations Remain Resilient ($ in millions) Tiptree Operating EBITDA1 Insurance Premiums & Equivalents2 Quarterly Year-to-date Quarterly Year-to-date $1,176 $465 Up 84% over Up 64% over $69.9 PY, 80% $31.9 PY, 59% ex. acquisition ex. acquisition $937 $372 437 174 $787 $36.1 256 $42
Slide 6: Growing Value for Shareholders
Growing Value for Shareholders ($ in millions, except per share information) Book Value per share1 plus dividends paid Growth rates Book value per share1 Cumulative dividends paid since June 2007 Accumulated real estate & insurance purchase Inception2 5 Years accounting D&A (net of tax/NCI) $1.43 20
Slide 7: Insurance Company Overview
01 Insurance Company Overview
Slide 8: Fortegra Overview
Fortegra Overview ($ in millions) Business overview Written premiums & premium equivalents1 Program underwriter and administrator of specialty insurance and related consumer products ◼ Diversified revenue sources including underwriting, fee and investment income $1,536 ◼ Nationwide presence with exp
Slide 9: Largest Insurance and Fee-Based Programs
Largest Insurance and Fee-Based Programs Premiums & Equivalents1 Distribution Channels Products and services distributed primarily through: Warranty ◼ Independent agents ◼ Installment Lenders Solutions ◼ MGUs ◼ Auto Dealerships Insurance 35% ◼ Retail Agents ◼ Third-party administrators U.S. 62% Q3’2
Slide 10: Largest Insurance and Fee-Based Programs
Largest Insurance and Fee-Based Programs Insurance – U.S. Insurance – Europe Warranty Solutions ◼ Provide consumers protection from life events ◼ Entered in early 2019 with ability to sell ◼ Provide consumers extended coverage on that could limit a borrower’s ability to make Pan-European through Mal
Slide 11: Building on the Fortegra Foundation
Building on the Fortegra Foundation ($ in millions) 1981 - 2015 - 2019+ 2014 2018 ▪ Fortegra founded as a provider ▪ Fortegra acquired by Tiptree ▪ Global expansion with launch of monoline credit insurance of Fortegra Europe ▪ A.M. Best “A-” rating (Excellent) ▪ Expanded underwriting and ▪ Acquisiti
Slide 12: Growing Unearned Premiums and Deferred Revenues
Growing Unearned Premiums and Deferred Revenues ($ in millions) UEPR & Deferred Revenues by product Highlights Credit ◼ ~27% compounded growth rate from 2016 reflecting Warranty Light Commercial continued volume growth in single premium multi-year $1,151 programs such as credit insurance and warrant
Slide 13: Strong and Consistent Underwriting Track Record
Strong and Consistent Underwriting Track Record ($ in millions) Combined ratio1 | vs. peers Highlights 97.6% ◼ Consistent loss ratio is a function of product mix, alignment of interests and limited CAT exposure 92.9% 92.5% 92.6% 91.8% ◼ Combined ratio performance driven by efficiency through technol
Slide 14: Investment Portfolio
Investment Portfolio ($ in millions) $611 Fixed Income Diversification $514 84 Fixed Income ETFs - BBB and below - 1% 11% Cash & Equivalents - 19% $438 75 61 Other A - 12% • $527 million, AA rating investments • ~1.7 year duration $527m AA - 12% • $360 million Blackrock Managed 527 Fixed Income & Ca
Slide 15: Opportunities to drive long-term value
Opportunities to drive long-term value ($ in millions) Growth Opportunities + Fundamental principles ◼ Light commercial admitted programs and ◼ Consistent balance between risk-based E & S lines within the U.S. and fee-based revenue ◼ Warranty solutions in U.S. with a primary ◼ Maintain a combined ra
Slide 16: Tiptree Capital Overview
01 02 Tiptree Capital Overview
Slide 17: Tiptree Capital Overview
Tiptree Capital Overview ($ in millions) Overview Invested Capital1 Operating EBITDA1 ◼ Acquire or invest in diverse companies outside the insurance $199 industry with our balance sheet capital $182 $44 $149 7 49 74 ◼ Invest in businesses that meet the following criteria: ✓ Strong and experienced ma
Slide 18: Well Positioned to Deliver on Long-Term Objectives
Well Positioned to Deliver on Long-Term Objectives ($ in millions, except per share information) Operating EBITDA1 Grow insurance business ✓ Grow written premiums while maintaining underwriting standards $90.8 $53.1 $60.5 $60.9 $54.9 $63.6 ✓ Successfully launch and grow specialty E&S lines ✓ Integ
Slide 19: Appendix
Appendix 03 Non-GAAP Reconciliations • Operating EBITDA • Book Value per share • Invested and Total Capital • Insurance Underwriting Margin • Insurance Combined Ratio • Insurance Net Investments & Net Portfolio Income • Tiptree Capital IRRs
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Operating EBITDA Management uses Operating EBITDA and book value per share as measurements of operating performance which are non-GAAP measures. Management believes the use of Operating EBITDA provides supplemental information useful to investors as it is frequently used by
Slide 21: Non-GAAP Reconciliations – Operating EBITDA
Non-GAAP Reconciliations – Operating EBITDA ($ in millions) Year Ended December 31, Q3'20 LTM 2019 2018 2017 2016 2015 (1) Corporate Debt interest expense includes Secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset- N
Slide 22: Non-GAAP Reconciliations – Operating EBITDA
Non-GAAP Reconciliations – Operating EBITDA ($ in millions) Twelve Months Ended September 30, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Tiptree Tiptree Corporate Tiptree Tiptree Corporate Tiptree Tiptree Corporate Insurance Capital Expenses Total Insurance Capital Expenses Total
Slide 23: Non-GAAP Reconciliations – BVPS, Invested Capital, Total Capital
Non-GAAP Reconciliations – BVPS, Invested Capital, Total Capital ($ in millions) As of December 31, Management uses Book value per share, which is a non-GAAP financial measure. Management believes the use of this Q3'20 2019 2018 2017 2016 2015 financial measure provides supplemental information usef
Slide 24: Non-GAAP Reconciliations – Combined Ratio, Underwriting Revenues & Margin
Non-GAAP Reconciliations – Combined Ratio, Underwriting Revenues & Margin ($ in millions) Year Ended December 31, The following table provides a reconciliation between underwriting margin and pre-tax income. We Revenues: Q3'20 LTM 2019 2018 2017 2016 2015 generally limit the underwriting risk we ass
Slide 25: Tiptree Capital – Realized Investment IRR %
Tiptree Capital – Realized Investment IRR % ($ in millions) Invested Realized Category Investments Capital Investment MOIC IRR % Financials Realized: MFCA, Telos, PFG, Siena, CLO sub-notes, hedges $ 305.0 $ 598.0 2.0x 25.6% Unrealized: Reliance, Luxury, credit investment 47.5 - - - Real Assets Reali
Slide 26: TiptreeInc.
TiptreeInc.