Slide 1: Preliminary Fiscal Year 2024
CONFIDENTIAL Preliminary Fiscal Year 2024 1
Slide 2: Legal Disclaimer
CONFIDENTIAL Legal Disclaimer This disclaimer applies to this document and the verbal comments of any person presenting it. This presentation, together with any such written comments, is referred to herein as the "Presentation." Forward Looking Statements This Presentation may contain forward-lookin
Slide 3: TWFG At a Glance: 20+ Year Track Record of Independence, Innovation, and Growth
CONFIDENTIAL TWFG At a Glance: 20+ Year Track Record of Independence, Innovation, and Growth In Personal and Commercial Insurance Market Leader with Rich Heritage We are a founder-led, publicly traded Who We Are (Nasdaq: TWFG), high-growth, independent and Scaled, National Platform distribution plat
Slide 4: TWFG's Business Model Was Built to Capture a Shift Away from Captive Distribution
CONFIDENTIAL TWFG’s Business Model Was Built to Capture a Shift Away from Captive Distribution Large Share of Personal Lines Distribution Is … Reflecting a Decade-Long Shift Captured by the Independent Channel … Away from Captive Distribution Homeowners Premium Mix by Distribution (%) Auto Premium M
Slide 5: TWFG Addresses Key Pain Points Experienced By Captive and Independent Agencies
CONFIDENTIAL TWFG Addresses Key Pain Points Experienced By Captive and Independent Agencies Top Challenges Faced by Agencies Top Issues Limited product Access to carriers Changing Back-office Perpetuation choice commission inefficiencies planning structures Access to a Agency-in-a-Box Opportunity to
Slide 6: TWFG Operates in a Large and Growing Addressable Market
CONFIDENTIAL TWFG Operates in a Large and Growing Addressable Market P&C Insurance Market Exhibits Consistent Growth P&C Insurance Direct Written Premium Over Time ($Bn) 956 868 790 705 722 671 477 635 607 417 565 586 540 386 363 365 350 310 330 281 293 268 451 479 357 404 296 305 321 342 272 284 29
Slide 7: Differentiated Turnkey Solutions that Enhance and Empower Agencies
CONFIDENTIAL Differentiated Turnkey Solutions that Enhance and Empower Agencies Agency-in-a-Box Powerful, Comprehensive and Intuitive AMS Sales Support ü Personal lines comparative rater ü Dedicated account executive ü Agency dashboard with dynamic reporting ü Optional part-time or full-time service
Slide 8: Attractive MGA Offering for Agencies Who Wish to Stay Independent
CONFIDENTIAL Attractive MGA Offering for Agencies Who Wish to Stay Independent Providing Access to Insurance Carrier Relationships, MGAs and Programs Serving 2,000+ Agencies Across 40+ States Insured Insured Independent Carrier Agency Insured Insured Insured Insured Independent Program Agency Insure
Slide 9: Our Product Mix is a Function of Our Opportunistic Approach To Adding Talent
CONFIDENTIAL Our Product Mix is a Function of Our Opportunistic Approach To Adding Talent. We Do Business In Personal, Commercial, Retail, Wholesale, Programs, Admitted, & Non-Admitted Markets Business mix comprises ~78% Personal Lines Personal Lines Commercial Lines and ~22% Commercial Lines (As of
Slide 10: Illustrative Overview of Economic Model
CONFIDENTIAL Illustrative Overview of Economic Model MGA Insurance Services ~20% of total TWFG ~80% of total TWFG Revenue Revenue Two primary service offerings: Insurance Services l TWFG recognizes 100% of the commission paid by insurance carriers and remits 80% of the commission revenue to the Bran
Slide 11: Compelling Financial Profile with Strong Growth and Profitability
CONFIDENTIAL Compelling Financial Profile with Strong Growth and Profitability Strong annual results and trends Diversified & recurring revenue Above-market growth rates Balance sheet flexibility Asset-light, FCF generative Total Written Premium ($MM) Total Revenue ($MM) $1,476 $201-$203 $1,248 $172
Slide 12: Track Record of Adjusted EBITDA Growth and Margin Expansion
CONFIDENTIAL Track Record of Adjusted EBITDA Growth and Margin Expansion Adjusted EBITDA ($MM) and Adjusted EBITDA Margin (1) Drivers of Margin Trajectory 38.0 • ~80/20% revenue share model with TWFG Branches is a key 33.0 driver of margin for the Insurance Services business 28.0 $31.3 $31.5 23.0 $2
Slide 13: Consistent Double-Digit Organic Growth over Time
CONFIDENTIAL Consistent Double-Digit Organic Growth over Time Organic Revenue Growth (1) Drivers of Sustained, Double-Digit Organic Growth 25.0% 23.2% Shift away from captive distribution Client service model led by experienced agents 20.0% Diversified product offering 16.9% Agency-in-a-box 14.5% 14
Slide 14: Fragmented Market Creates Additional Growth Opportunities Going Forward
CONFIDENTIAL Fragmented Market Creates Additional Growth Opportunities Going Forward SIGNIFICANT PORTION OF U.S. AGENCIES COMING TO MARKET Acquisition Opportunity by Revenue Size "Jumbo“ Large 5% 10% 20% 66% $10MM+ 2% $2.5-$10MM < 1 year 1-3 years 3-5 years 5+ years 7% Medium-Large $1.25MM-$2.5MM 7%
Slide 15: TWFG's Scale, Balance Sheet and Disciplined Approach to Acquisitions
CONFIDENTIAL TWFG’s Scale, Balance Sheet and Disciplined Approach to Acquisitions Positions Us Well for Future Growth TWFG Has a Proven Backed By a Strong Balance Sheet Acquisition Track Record and Repeatable Playbook • Successful acquisitions across a range of specialties and geographies since ince
Slide 16: Unique Value Proposition to Agency Owners Looking for a Partner
CONFIDENTIAL Unique Value Proposition to Agency Owners Looking for a Partner LONG TERM STABILITY AND INDEPENDENCE ENTREPRENEURIAL OPPORTUNITIES ü Founder led and controlled, yet publicly listed ü Think in decades, not 3-year “flips” ü Strong alignment – potential for revenue share, referral ü Fierce
Slide 17: History of Resilience & Growth Regardless of Economic and Market Conditions
CONFIDENTIAL History of Resilience & Growth Regardless of Economic and Market Conditions Source: Company Information 20+ Year Track Record of Sustainable Growth Regardless of Economic and P&C Pricing Cycles 17
Slide 18: Proven Management Team Well Positioned to Execute on Growth
CONFIDENTIAL Proven Management Team Well Positioned to Execute on Growth Proven Ability to Execute on Growth Strategy Richard F. (“Gordy”) Bunch III Founder and CEO ü Backed by a deep bench of seasoned operators Katherine C. Nolan Janice E. Zwinggi, CPA Chief Operating Officer Chief Financial Office
Slide 19: Key Investment Highlights
CONFIDENTIAL Key Investment Highlights Business Snapshot TWFG’s Business Model Was Built to National Footprint and Scaled Capture a Secular Shift from Captive Platform Delivering Sustainable Distribution Growth Independent Direct Differentiated Solutions that Agencies 1 Enhance and Empower Agencies
Slide 20: Appendix
CONFIDENTIAL APPENDIX 20
Slide 21: Illustrative Overview of Economic Model: Insurance Services
CONFIDENTIAL Illustrative Overview of Economic Model: Insurance Services Simplified Branch Economics (Revenue Share Model) Simplified Corporate Branch Economics Insurance Services Retail Brokerage Carrier Commissions Insurance Services Brokerage Carrier Commissions In-scope (100% paid to TWFG at out
Slide 22: Illustrative Overview of Economic Model: MGA
CONFIDENTIAL Illustrative Overview of Economic Model: MGA Simplified Wholesale and Brokering Economics Simplified Underwriting Economics MGA Carrier Commissions and Fees Carrier Commissions and Fees ~100% ~100% TWFG Commission Revenue TWFG Commission Revenue TWFG Contingent TWFG Contingent Income In
Slide 23: KPI Information and Non-GAAP Reconciliations
CONFIDENTIAL KPI Information and Non-GAAP Reconciliations Reconciliation of Organic Revenue and Written Premium Organic Revenue Growth to Revenue Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Amount % of Total Amount % of Total Amount % of Total Amount % of Tot
Slide 24: KPI Information and Non-GAAP Reconciliations
CONFIDENTIAL KPI Information and Non-GAAP Reconciliations Reconciliations of Adjusted EBITDA and Reconciliation of Adjusted Free Cash Flow Adjusted EBITDA Margin to Net Income and Net Income Margin to Cash Flow from Operating Activities !"#$%&'()"*%+(,$,! 45($%&'()"*%+(,$,! !"#$%&'()"*%+(,$,! 45($
Slide 25: Income Statement and Balance Sheet Snapshot Q324
CONFIDENTIAL Income Statement and Balance Sheet Snapshot Q324 Income Statement Balance Sheet !"#quot;%&"'()*+( ."/"%&"'()0+( ! ,*,- ! ! ,*,)! !!!!!"#$%%!&'()#*!+(,%, ! !!!!!45(%!&'()#*!+(,%, ! 122"$2 ! ! !! ! -%.)%/0%$!123 ! ! ! -%.)%/0%$!123 34''"5$(622"$2 ! ! !! ! 6267 ! ! 6261 ! ! 6267 ! ! 6261 ! !"