Slide 1: Preliminary Fiscal Year 2024
C O N F I D E N T I A L 1 Preliminary Fiscal Year 2024
Slide 2: Legal Disclaimer
C O N F I D E N T I A L 2 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 f
Slide 3: TWFG At a Glance: 20+ Year Track Record of Independence, Innovation, and Growth
C O N F I D E N T I A L 3 520+ TWFG Branches (2) 23 Years Of Operating History TWFG At a Glance: 20+ Year Track Record of Independence, Innovation, and Growth In Personal and Commercial Insurance Who We Are What We Do How We Do It Why We Are Different We are a founder-led, publicly traded (Nasdaq: T
Slide 4: TWFG's Business Model Was Built to Capture a Shift Away from Captive Distribution
C O N F I D E N T I A L 4 Independent Agencies 38% Captive Agencies 35% Direct Distribution ("DTC") 26% TWFG’s Business Model Was Built to Capture a Shift Away from Captive Distribution Source: Independent Insurance Agents & Brokers of America Homeowners Premium Mix by Distribution (%) 33 33 48 35 1
Slide 5: Top Challenges Faced by Agencies: TWFG Addresses Key Pain Points
C O N F I D E N T I A L 5 Top Challenges Faced by Agencies TWFG Addresses Key Pain Points Experienced By Captive and Independent Agencies To p Is su es TW FG S ol ut io ns Perpetuation planning Opportunity to sell or transfer existing books of business enabling a smooth handover of client relationsh
Slide 6: TWFG Operates in a Large and Growing Addressable Market
C O N F I D E N T I A L 6 272 284 292 296 305 321 342 357 404 451 479 268 281 293 310 330 350 363 365 386 417 477 540 565 586 607 635 671 705 722 790 868 956 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Commercial Personal TWFG Operates in a Large and Growing Addressable Market P&C Insuran
Slide 7: Differentiated Turnkey Solutions that Enhance and Empower Agencies
C O N F I D E N T I A L 7 Differentiated Turnkey Solutions that Enhance and Empower Agencies Access to 300+ National, Regional and Local Insurance Carriers, MGAs and Programs National Platform Scaled Network Strategic Partnershipsü ü ü ü Personal lines comparative rater üAgency dashboard with dynami
Slide 8: Attractive MGA Offering for Agencies Who Wish to Stay Independent
C O N F I D E N T I A L 8 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 CarrierIndependent Agency Insured Insured Insured Insured Insured Insured Indep
Slide 9: Our Product Mix is a Function of Our Opportunistic Approach To Adding Talent
C O N F I D E N T I A L 9 Umbrella 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 Personal Lines Commercial Lines General Liability Workers’ Comp Commercial Property C
Slide 10: Illustrative Overview of Economic Model
C O N F I D E N T I A L 10 Illustrative Overview of Economic Model Insurance Services ~80% of total TWFG Revenue MGA ~20% of total TWFG Revenue Branches Commission Revenue (~80% of Total Carrier Commissions) Agency-in-a-Box Commission Revenue (~20% of Total Carrier Commissions) Branch & Other Income
Slide 11: Compelling Financial Profile with Strong Growth and Profitability
C O N F I D E N T I A L 11 Compelling Financial Profile with Strong Growth and Profitability A Growth Story Compelling Financial Profile Diversified & recurring revenue Above-market growth rates Balance sheet flexibility Asset-light, FCF generative Notes: 1. Please see “KPI Information and Non-GAAP
Slide 12: Track Record of Adjusted EBITDA Growth and Margin Expansion
C O N F I D E N T I A L 12 $27.0 $31.3 $24.1 $31.5 -2.0 3.0 8.0 13.0 18.0 23.0 28.0 33.0 38.0 2022 2023 YTD Q323 YTD Q324 Track Record of Adjusted EBITDA Growth and Margin Expansion Adjusted EBITDA Margin (1) 17.6% 18.1% Notes: 1. Please see “KPI Information and Non-GAAP Reconciliations” and “Additi
Slide 13: Consistent Double-Digit Organic Growth over Time
C O N F I D E N T I A L 13 Consistent Double-Digit Organic Growth over Time 23.2% 11.2% 14.5% 16.9% 14.5% 14.5% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2022 2023 2024 As Reported Current Methodology Organic revenue growth definition based on commission income (including renewal and new business) Shi
Slide 14: Fragmented Market Creates Additional Growth Opportunities Going Forward
C O N F I D E N T I A L 14 5% < 1 year 10% 1-3 years 20% 3-5 years 66% 5+ years ~35% of 40,000 U.S. agencies expected to be sold over the next 5 years SIGNIFICANT PORTION OF U.S. AGENCIES COMING TO MARKET • Highly fragmented market with ~40,000 independent agencies and brokerages in the U.S. as of 2
Slide 15: Scale, Balance Sheet and Disciplined Approach to Acquisitions Position Us for Growth
C O N F I D E N T I A L 15 TWFG’s Scale, Balance Sheet and Disciplined Approach to Acquisitions Positions Us Well for Future Growth Backed By a Strong Balance Sheet and Repeatable Playbook • Disciplined and selective approach to M&A: ‒ Cultural compatibility ‒ Attractive loss ratios ‒ Organic growth
Slide 16: Unique Value Proposition to Agency Owners Looking for a Partner
C O N F I D E N T I A L 16 Unique Value Proposition to Agency Owners Looking for a Partner LONG TERM STABILITY AND INDEPENDENCE ENTREPRENEURIAL OPPORTUNITIES SCALED SERVICES PLATFORM ü Founder led and controlled, yet publicly listed ü Think in decades, not 3-year “flips” ü Fiercely independent ü Low
Slide 17: History of Resilience & Growth Regardless of Economic and Market Conditions
C O N F I D E N T I A L 17 History of Resilience & Growth Regardless of Economic and Market Conditions 20+ Year Track Record of Sustainable Growth Regardless of Economic and P&C Pricing CyclesSource: Company Information
Slide 18: Proven Management Team Well Positioned to Execute on Growth
C O N F I D E N T I A L 18 Proven Management Team Well Positioned to Execute on Growth 20+ Year Track Record of Sustainable Growth Regardless of Economic and Property and Casualty Insurance Pricing Cycles Proven Ability to Execute on Growth Strategy Backed by a deep bench of seasoned operatorsü Coll
Slide 19: Key Investment Highlights
C O N F I D E N T I A L 19 Independent Agencies 38% Captive Agencies 35% Direct Distribution ("DTC")… Key Investment Highlights 1 Trusted Distribution Partner with Track Record of Innovative Solutions2 3 4 National Footprint and Scaled Platform Delivering Sustainable Growth 5 Compelling Financial Pr
Slide 20: Appendix
C O N F I D E N T I A L 20 APPENDIX
Slide 21: Illustrative Overview of Economic Model: Insurance Services
C O N F I D E N T I A L 21 Illustrative Overview of Economic Model: Insurance Services Simplified Branch Economics (Revenue Share Model) Notes: 1. TWFG retains 100% of all branch and other fee income (i.e., there is no revenue-share model with branches for fee income) 2. TWFG retains 100% of all con
Slide 22: Illustrative Overview of Economic Model: MGA
C O N F I D E N T I A L 22 Illustrative Overview of Economic Model: MGA Simplified Wholesale and Brokering Economics Simplified Underwriting Economics MGA Carrier Commissions and Fees TWFG Commission Revenue TWFG Operating Income TWFG Contingent Income TWFG Corporate Expenses ~100% Outbound Commissi
Slide 23: KPI Information and Non-GAAP Reconciliations: Written Premium
C O N F I D E N T I A L 23 KPI Information and Non-GAAP Reconciliations Written Premium Reconciliation of Organic Revenue and 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 A
Slide 24: KPI Information and Non-GAAP Reconciliations: Adjusted EBITDA and Free Cash Flow
C O N F I D E N T I A L 24 KPI Information and Non-GAAP Reconciliations Reconciliations of Adjusted EBITDA and Adjusted EBITDA Margin to Net Income and Net Income Margin Reconciliation of Adjusted Free Cash Flow to Cash Flow from Operating Activities ! !"#$%&'()"*%+(,$,! -$.)$/0$#%123! ! 45($%&'()"
Slide 25: Income Statement and Balance Sheet Snapshot Q324
C O N F I D E N T I A L 25 Income Statement and Balance Sheet Snapshot Q324 Income Statement Balance Sheet ! !!!!!"#$%%!&'()#*!+(,%,! -%.)%/0%$!123! ! !!!!!45(%!&'()#*!+(,%,! -%.)%/0%$!123! ! 6267! ! 6261! ! 6267! ! 6261! 8%9%(:%*! ! ! ! !! ! ! !"##$%%quot;&'amp;("#)'*+),-.)/'0-+.1'"2'345678'-&/'39598:'2