Tiptree Inc. · NASDAQ:TIPT
Tiptree — The Fortegra Group — 2023 KBW Insurance Conference
21 slides from Tiptree's conference presentation, Sep 6, 2023
Slide 1: KBW Insurance Conference
KBW Insurance Conference RICK KAHLBAUGH, CHIEF EXECUTIVE OFFICER ABBIE TAYLOR, CHIEF OPERATING OFFICER A FORTEGRA FORTITUDE + INTEGRITY
Slide 2: Legal Disclaimers
Legal Disclaimers BASIS OF PRESENTATION AND LIMITATIONS ON THE USE OF INFORMATION – The Fortegra Group, Inc. (“Fortegra”) reports a non-controlling interest in certain operating subsidiaries that are not wholly owned. Unless otherwise noted, all information is of Fortegra on a consolidated basis bef
Slide 3: By leveraging insurance to manage uncertainty and risk
By leveraging insurance to manage uncertainty and risk, both businesses and individuals are empowered to seize bold opportunities in a rapidly evolving world.
Slide 4: A Specialty Insurer Focused on Consistency
A Specialty Insurer Focused on Consistency CONSISTENT CONSISTENT CONSISTENT Growth Risk Management Profitability Our deep market expertise We combine disciplined, quality Investments in systems, and strategic approach to underwriting with aligned technology and talent program business fuels partner
Slide 5: Strategic Evolution Into A Global Specialty Insurer
Strategic Evolution Into A Global Specialty Insurer Add fee revenue Broadly Expanded to Expanded to Program footprint through motor club licensed P&C include include expands to and premium finance companies warranty lines specialty lines Europe 1978 - 2010 2011 - 2012 2013 - 2018 2019 – 2023+ Monoli
Slide 6: Unique Insurance & Services Mix Enhances Returns
Unique Insurance & Services Mix Enhances Returns INSURANCE 69% $2,118M 7.7% Lift in Adj. ROAE (3) $3.1B Q2’23 TTM GWPPE(1) SERVICES(2) 31% $972M The mix of insurance & services creates a favorable risk profile, which leads to consistency and stability. ____________________ (1) Gross Written Premium
Slide 7: Efficient One-To-Many Distribution Model
Efficient One-To-Many Distribution Model Insurance Services 69% of GWPPE1 31% of GWPPE1 Managing General Agents2 Managing Auto Retailers General Dealerships Agents2 Lenders & Retail Brokers Financial Agencies Consumer Consumer Consumer Institutions Insured Insured Insured We leverage partners with e
Slide 8: Low Concentration of Distribution Partners
Low Concentration of Distribution Partners Distribution, by Program Size(1) Overall Fortegra Group Partner Distribution Specialty(2) Warranty(3) Partner 1, 6% Partner 2, 4% 74% 90% Q2 ‘23 TTM Partner 3, 4% < $10M GWPPE(1) Partner 4, 3% $3.1B Partner 5, 3% 16% $10M - $25M 7% Partner 6, 3% Partner 7,
Slide 9: Proven Track Record of Consistent GWPPE Growth
Proven Track Market Record Expertise ofConsistent Fuels Growth GWPPE Growth ($ in millions) CAGR 26% 2018 – Q2’23 TTM $3,091 $2,681 $2,194 $1,667 $1,297 $1,096 2018 2019 2020 2021 2022 Q2’23 TTM
Slide 10: Expertise in Underwriting Program Business
Expertise in Underwriting Program Business Case Study: Fortegra's Role in Elevating Underwriting Expertise Premia Solutions as UK's Leading Auto Warranty Partner We hire experienced Risk Alignment underwriters with a After losing their underwriter, PSL1 sought Fortegra’s following of quality Integra
Slide 11: Dedicated Resources Enhance Program Performance
Dedicated Resources Enhance Program Performance Case Study: Fortegra’s insights increase Data Science and Technology partner program size by 10% Fortegra's data science modeling refined pricing for a Use of data science AI Inspired Lead Generation professional services liability program. Together, F
Slide 12: Underwriting Expertise & Program Enhancements Lead to Consistent Combined Ratio
Underwriting Expertise & Program Enhancements Lead to Consistent Combined Ratio Historical Combined Ratios – The Fortegra Group vs. Industry Average The Fortegra Group Commercial Lines Industry (1) 99.7% 99.9% 100.0% 99.3% 98.4% 98.0% 95.9% 96.0% 94.0% 92.2% 92.4% 91.5% 92.0% 90.6% 90.7% 90.0% 88.0%
Slide 13: Conservative Balance Sheet Driven by a High-Quality Investment Portfolio
Conservative Balance Sheet Driven by a High-Quality Investment Portfolio Investment Portfolio Available for Sale Investments(3) Other Investments 8% A 19% Equities(2) 7% BBB & Below 2% NA & NR(4) $1,238M $736M 3% As of 6/30/2023 As of 6/30/2023 AAA 10% AA Cash & Bonds(1) 66% 85% We strive to match a
Slide 14: Scaling Operations to Support Global Growth
Scaling Operations to Support Global Growth Claims Management Enhancements Core system enhancements to afford even better adjudication and customer service Evaluation of commonalities across geographies and acquired businesses to drive cost efficiencies Data Science Enhancements Investments in data
Slide 15: Making Fortegra A Talent Destination of Choice
Making Fortegra A Talent Destination of Choice Attracting talent to insurance industry as a preferred career choice VISION Prioritizing Fortegra as the company of choice within the insurance industry for all levels VISION Harnessing insights to ensure a future-ready approach Executive Leadership: Ex
Slide 16: Operational and Talent Focus Contributes to Consistent Profitability
Operational and Talent Focus Proven Track Record of Growth Contributes to Consistent Profitability ($ in millions) Adjusted Net Income(1) Adjusted ROAE(1) $97 27.5% 26.1% $84 22.2% $67 15.2% $43 12.4% 12.4% $33 $31 2018 2019 2020 2021 2022 Q2’23 TTM 2018 2019 2020 2021 2022 Q2’23 TTM Disciplined und
Slide 17: Well-Positioned for Consistent, Profitable Growth
Well-Positioned for Consistent, Profitable Growth Market Expertise Deep expertise and efficient distribution in chosen markets 45+ A- Continued E&S market tailwinds (Excellent) Year History Mix of insurance and fee revenues enhances returns A.M. Best Rating Broadening P&C reach in Europe $3.1B $96.8
Slide 18: FORTEGRA
FORTEGRA FORTITUDE + INTEGRITY SEPTEMBER 2023 | PROPRIETARY & CONFIDENTIAL
Slide 19: Appendix – Adjusted Net Income, Adjusted ROAE
Appendix – Adjusted Net Income, Adjusted ROAE ($ in millions) Adjusted Net Income: We define adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various Reconciliation to Adjusted Net Income expenses that we consider to be uniq
Slide 20: Appendix – GAAP Balance Sheets
Appendix – GAAP Balance Sheets ($ in 000's) Q2 2023 FY 2022 FY 2021 Assets: Invested assets and cash $ 1,237,381 $ 1,153,853 $ 910,031 Notes receivable, net 133,322 121,319 89,788 Reinsurance receivables 1,444,795 1,176,090 880,836 Deferred acquisition costs 520,925 498,925 379,373 Goodwill 203,966
Slide 21: Appendix – GAAP Income Statements
Appendix – GAAP Income Statements ($ in 000's) Q2-2023 TTM FY 2022 FY 2021 Revenues Earned premiums, net $ 1,015,533 $ 904,765 $ 685,552 Service and administrative fees 361,405 320,720 260,525 Ceding commissions 16,338 13,880 11,784 Net investment income 19,884 12,219 17,896 Net realized gains (loss