TIPTREE INC

Previous wording

•Tiptree reported net income of $9.1 million for the three months ended March 31, 2024, compared to a net loss of $1.1 million in the prior year period, driven by growth in insurance operations, partially offset by the increase in tax expense related to the tax deconsolidation of Fortegra from $2.3 million in 2023 to $4.5 million in 2024. Return on average equity was 8.6%, compared to (1.1)% in 2023.

Current wording

•Tiptree reported net income of $21.9 million for the six months ended June 30, 2024, compared to $4.9 million in the prior year period, driven by growth in insurance operations, partially offset by the increase in tax expense related to the tax deconsolidation of Fortegra from $5.8 million in 2023 to $10.8 million in 2024. Return on average equity was 10.3%, compared to 2.5% in 2023.

Previous wording

•Adjusted net income of $20.5 million increased from $12.6 million in 2023, driven by growth in insurance operations. Adjusted return on average equity was 19.5%, as compared to 12.6% in 2023.

Current wording

•Adjusted net income of $45.0 million increased from $30.2 million in 2023, driven by growth in insurance operations. Adjusted return on average equity was 21.1%, as compared to 15.1% in 2023.

Previous wording

•Gross written premiums and premium equivalents were $663.4 million for the three months ended March 31, 2024, an increase of $42.3 million, or 6.8%, from the prior year period as a result of growth in specialty E&S and admitted insurance lines in the U.S. and Europe.

Current wording

•Gross written premiums and premium equivalents were $1,439.5 million for the six months ended June 30, 2024, an increase of $102.3 million, or 7.6%, from the prior year period as a result of growth in E&S insurance lines in the U.S. and Europe.

Previous wording

•Net written premiums were $318.2 million for the three months ended March 31, 2024, an increase of 13.2%, consistent with growth in gross written premiums, and as a result of increased retention on Fortegra’s whole account quota share reinsurance arrangement from 30% to 40%, effective April 1, 2023.

Current wording

•Net written premiums were $684.0 million for the six months ended June 30, 2024, an increase of 13.7%, driven by growth in gross written premiums and increased retention on Fortegra’s whole account quota share reinsurance arrangement from 30% to 40%, effective April 1, 2023.

Previous wording

•Total revenues were $478.8 million, an increase of $110.3 million, or 29.9%, from 2023, driven by premium growth in specialty E&S and admitted insurance lines in the U.S. and Europe, along with growth in net investment income.

Current wording

•Total revenues were $1,008.7 million, an increase of $255.6 million, or 33.9%, from 2023, driven by premium growth in specialty E&S and admitted insurance lines in the U.S. and Europe.

Previous wording

•Combined ratio of 90.3%, driven by consistent underwriting performance and the scalability of Fortegra’s operating platform.

Current wording

•Combined ratio of 90.0%, driven by consistent underwriting performance and the scalability of Fortegra’s operating platform.

Previous wording

•Income before taxes of $36.8 million as compared to $19.4 million in 2023. Return on average equity was 22.3% in 2024 as compared to 16.7% in 2023. The increases were driven by growth in underwriting and fee revenues and increased net investment income.

Current wording

•Income before taxes of $88.1 million as compared to $49.9 million in 2023. Return on average equity was 25.8% in 2024 as compared to 20.2% in 2023, with the increases driven by growth in underwriting and fee revenues.

Previous wording

•Adjusted net income (before NCI) was $34.1 million, an increase of $11.2 million, or 48.8%, from 2023. Adjusted return on average equity was 28.3%, as compared to 26.1% in 2023.

Current wording

•Adjusted net income (before NCI) was $74.4 million, an increase of $21.4 million, or 40.3%, from 2023. Adjusted return on average equity was 29.7%, as compared to 29.6% in 2023.

Previous wording

•Fortegra’s total stockholders’ equity was $513.7 million as of March 31, 2024, compared to $452.6 million as of December 31, 2023, with the increase driven by net income during the current year period, the aggregate capital contribution from Tiptree and Warburg of $38.9 million, partially offset by an increase in the accumulated other comprehensive loss position.

Current wording

•Fortegra’s total stockholders’ equity was $549.2 million as of June 30, 2024, compared to $452.6 million as of December 31, 2023, with the increase driven by net income during the current year period, the aggregate capital contribution from Tiptree, Warburg, and Fortegra independent directors of $40.0 million, partially offset by an increase in the accumulated other comprehensive loss position.

Previous wording

•Mortgage income before taxes was $0.8 million for the three months ended March 31, 2024, as compared to loss of $2.6 million in 2023, with the increase driven by higher origination volumes and positive fair value adjustments on the mortgage servicing portfolio.

Current wording

•Mortgage income before taxes was $1.3 million for the six months ended June 30, 2024, as compared to loss of $1.3 million in 2023, with the increase driven by higher origination volumes and loan servicing fees, and positive fair value adjustments on the mortgage servicing portfolio.

Previous wording

The following is a summary of our condensed consolidated financial results for the three months ended March 31, 2024 and 2023. In addition to GAAP results, management uses the Non-GAAP measures Adjusted net income, Adjusted return on average equity and book value per share as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies.

Current wording

In addition to GAAP results, management uses the Non-GAAP measures Adjusted net income, Adjusted return on average equity and book value per share as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies.

Previous wording

For the three months ended March 31, 2024, the net income attributable to common stockholders was $9.1 million, compared to a net loss of $1.1 million in the prior year period. The increase was driven by growth in Fortegra’s underwriting and fee income, improved mortgage operations and investment gains on securities in the Company’s investment holdings, partially offset by increased investment losses on Invesque in the current year period.

Current wording

For the three months ended June 30, 2024, the net income attributable to common stockholders was $12.9 million, compared to $6.0 million in the prior year period, driven by growth in Fortegra’s underwriting and fee income. For the six months ended June 30, 2024, the net income attributable to common stockholders was $21.9 million, which increased $17.0 million, or 344.5%, compared to the prior year period, driven by growth in Fortegra’s underwriting and fee income, and improved mortgage operations.

Previous wording

Adjusted net income for the three months ended March 31, 2024 was $20.5 million, an increase of $8.0 million, or 63.5%, from the three months ended March 31, 2023, driven by growth in our insurance operations. For the three months ended March 31, 2024, adjusted return on average equity was 19.5%, as compared to 12.6% for the three months ended March 31, 2023, driven by the increase in adjusted net income.

Current wording

Adjusted net income for the three months ended June 30, 2024 was $24.4 million, an increase of $6.8 million, or 38.5%, from the three months ended June 30, 2023, driven by growth in our insurance operations. For the three months ended June 30, 2024, adjusted return on average equity was 22.7%, as compared to 17.6% for the three months ended June 30, 2023, driven by the increase in adjusted net income.

Previous wording

Total stockholders’ equity was $598.6 million as of March 31, 2024 compared to $541.6 million as of March 31, 2023, with the increase driven by comprehensive income over the trailing four quarters, partially offset by net changes in non-controlling interests and preferred dividends paid at Fortegra. In the three months ended March 31, 2024, Tiptree returned $2.2 million to stockholders through dividends paid.

Current wording

Total stockholders’ equity was $618.1 million as of June 30, 2024 compared to $546.1 million as of June 30, 2023, with the increase driven by comprehensive income over the trailing four quarters, partially offset by net changes in non-controlling interests and preferred dividends paid at Fortegra. In the six months ended June 30, 2024, Tiptree returned $4.4 million to stockholders through dividends paid.

Previous wording

Book value per share for the period ended March 31, 2024 was $11.55, an increase from book value per share of $10.91 as of March 31, 2023, driven by comprehensive income per share, partially offset by dividends paid of $0.21 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.

Current wording

Book value per share for the period ended June 30, 2024 was $11.86, an increase from book value per share of $10.94 as of June 30, 2023, driven by comprehensive income per share, partially offset by dividends paid of $0.22 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.

Previous wording

(1)Net income was $26.9 million for the three months ended March 31, 2024 compared to $14.7 million for the three months ended March 31, 2023.

Current wording

(1)Net income was $37.6 million for the three months ended June 30, 2024 compared to $21.3 million for the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, total revenues increased 29.9%, to $478.8 million, as compared to $368.4 million for the three months ended March 31, 2023. Earned premiums, net of $347.3 million increased $82.0 million, or 30.9%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $141.3 million, or 40.7% of the total, compared to $110.0 million, or 41.4% of the total, in the prior year period. As it expands to new geographies and expands product offerings, the Company works to obtain necessary licenses and intends to write this business directly upon obtaining necessary licenses. The Company views direct written and assumed business as having similar characteristics. Service and administrative fees of $110.5 million increased by 20.1% driven primarily by growth in vehicle service contract revenues. Ceding commissions of $2.7 million decreased by $0.9 million, or 24.7%. Other revenues increased by $1.7 million, or 24.6%, driven by growth in premium finance product offerings and interest income on cash and cash equivalents.

Current wording

For the three months ended June 30, 2024, total revenues increased 37.8%, to $529.9 million, as compared to $384.7 million for the three months ended June 30, 2023. Earned premiums, net of $398.5 million increased $128.7 million, or 47.7%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $159.8 million, or 40.1% of the total, compared to $110.7 million, or 41.0% of the total, in the prior year period. Included in the current period were earned premiums associated with the book-roll transaction with one of Fortegra’s MGA partners that was assumed in December 2023. As it expands to new geographies and expands product offerings, the Company works to obtain necessary licenses and intends to write this business directly upon obtaining necessary licenses. The Company views direct written and assumed business as having similar characteristics. Service and administrative fees of $105.8 million increased by 7.9% driven primarily by growth in vehicle service contract revenues. Ceding commissions of $5.1 million increased by $0.4 million, or 8.3%. Other revenues increased by $4.3 million, or 57.6%, driven by growth in premium finance product offerings and interest income on cash and cash equivalents.

Previous wording

For the three months ended March 31, 2024, 25.5% of revenues were derived from fees that were not solely dependent upon the underwriting performance of Fortegra’s insurance products, resulting in more diversified earnings. For the three months ended March 31, 2024, 80.3% of fee-based revenues were generated in non-regulated service companies, with the remainder in regulated insurance companies.

Current wording

For the three months ended June 30, 2024, 23.1% of revenues were derived from fees that were not solely dependent upon the underwriting performance of Fortegra’s insurance products, resulting in more diversified earnings. For the three months ended June 30, 2024, 77.9% of fee-based revenues were generated in non-regulated service companies, with the remainder in regulated insurance companies.

Previous wording

For the three months ended March 31, 2024, net investment income was $6.8 million as compared to $5.1 million in the prior year period, primarily driven by growth in investments and the increase in yields. Net realized and unrealized gains were $2.8 million, an improvement of $7.4 million, as compared to net realized and unrealized losses of $4.6 million in the prior year period, primarily driven by the change in fair value of certain equity and other investments carried at fair value. Unrealized losses on AFS securities impacting OCI for the three months ended March 31, 2024 were $4.8 million, driven by the increase in yields (yields and bonds prices are inversely related) and corresponding impact to the fair value of investments.

Current wording

For the three months ended June 30, 2024, net investment income was $6.4 million as compared to $9.1 million in the prior year period, a decrease of $2.7 million driven by increased cash equivalent balances for which interest income is reported in other income and increased investments expenses. Net realized and unrealized gains were $2.5 million, an improvement of $6.9 million, as compared to net realized and unrealized losses of $4.4 million in the prior year period, primarily driven by the change in fair value of certain equity and other investments carried at fair value. Unrealized losses on AFS securities impacting OCI for the three months ended June 30, 2024 were $0.9 million, driven by the increase in yields (yields and bonds prices are inversely related) and corresponding impact to the fair value of investments.

Previous wording

For the three months ended March 31, 2024, net losses and loss adjustment expenses were $175.4 million, member benefit claims were $32.3 million and commission expense was $156.9 million, as compared to $114.3 million, $27.3 million, and $146.5 million, respectively, for the three months ended March 31, 2023. The increase in net losses and loss adjustment expenses of $61.1 million, or 53.4%, was driven by growth in U.S. and European insurance lines and the shift in business mix toward commercial lines, which tend to have higher loss ratios and lower commission and expense ratios. In addition, the Company experienced unfavorable prior year development of $0.8 million for the three months ended March 31, 2024, driven by higher-than-expected claim severity in our commercial lines of business, primarily driven by one partner. The increase in member benefit claims of $4.9 million, or 18.0%, was driven by growth in vehicle service contracts and the impacts of inflation on replacement costs and labor rates. Commission expenses increased by $10.5 million, or 7.2%, generally in line with the growth in earned premiums, net and service and administrative fees, partially offset by the impact of sliding scale commissions as losses increased.

Current wording

For the three months ended June 30, 2024, net losses and loss adjustment expenses were $205.3 million, member benefit claims were $28.7 million and commission expense was $173.3 million, as compared to $115.0 million, $32.7 million, and $142.7 million, respectively, for the three months ended June 30, 2023. The increase in net losses and loss adjustment expenses of $90.2 million, or 78.4%, was driven by growth in U.S. and European insurance lines and the shift in business mix toward commercial lines, which tend to have higher loss ratios and lower commission and expense ratios. In addition, the Company experienced favorable prior year development of $1.6 million for the three months ended June 30, 2024, driven by lower-than-expected claim severity in our commercial lines of business. The decrease in member benefit claims of $4.0 million, or 12.2%, was driven by declines in auto and consumer goods claim frequencies. Commission expenses increased by $30.6 million, or 21.4%, generally in line with the growth in earned premiums, net and service and administrative fees, partially offset by the impact of sliding scale commissions as losses increased.

Previous wording

For the three months ended March 31, 2024, interest expense was $7.6 million as compared to $6.1 million for the three months ended March 31, 2023. The increase in interest expense of $1.6 million, or 25.6%, was primarily driven by the rise in short-term interest rates and increased borrowings on Fortegra’s corporate revolver and asset based debt for premium finance lines.

Current wording

For the three months ended June 30, 2024, interest expense was $7.5 million as compared to $6.6 million for the three months ended June 30, 2023. The increase in interest expense of $0.9 million, or 13.8%, was primarily driven by increased borrowings on Fortegra’s corporate revolver and asset based debt for premium finance lines.

Previous wording

For the three months ended March 31, 2024, depreciation and amortization expense was $5.1 million, including $4.0 million of intangible amortization related to purchase accounting associated with acquisitions at Fortegra from 2019 to 2023, as compared to $4.8 million, including $3.9 million of intangible amortization from purchase accounting in 2023.

Current wording

For the three months ended June 30, 2024, depreciation and amortization expense was $4.8 million, including $3.7 million of intangible amortization related to purchase accounting associated with acquisitions at Fortegra from 2019 to 2023, as compared to $5.3 million, including $3.9 million of intangible amortization from purchase accounting in 2023.

Previous wording

(1) The total gross written premiums and premium equivalents of $663.4 million and $621.2 million for the three months ended March 31, 2024 and 2023, respectively, were comprised of gross written premiums of $457.1 million and $424.9 million, plus assumed premiums of $112.7 million and $106.9 million, plus gross service and administrative fee additions of $93.6 million and $89.3 million, respectively. See Note (7) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (13) Revenue from Contracts with Customers Revenue from Contracts with Customers within the respective periods for more information.

Current wording

(1) The total gross written premiums and premium equivalents of $776.1 million and $716.1 million for the three months ended June 30, 2024 and 2023, respectively, were comprised of gross written premiums of $573.8 million and $501.3 million, plus assumed premiums of $107.9 million and $113.2 million, plus gross service and administrative fee additions of $94.4 million and $101.5 million, respectively. See Note (7) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (13) Revenue from Contracts with Customers within the respective periods for more information.

Previous wording

(2) The premium equivalents metric excludes amounts received from failure to perform vehicle service contracts held in off-balance sheet trusts and premium finance volumes as it was determined to be unlikely these amounts will be recognized as revenue. The first quarter 2023 has been been conformed resulting in a reduction of premium equivalents of $129.2 million. This change only impacted the premium equivalents metric and did not impact the Company’s condensed consolidated financial statements.

Current wording

(2) The premium equivalents metric excludes amounts received from failure to perform vehicle service contracts held in off-balance sheet trusts and premium finance volumes as it was determined to be unlikely these amounts will be recognized as revenue. The second quarter 2023 has been conformed resulting in a reduction of premium equivalents of $139.0 million. This change only impacted the premium equivalents metric and did not impact the Company’s condensed consolidated financial statements.

Previous wording

Total gross written premiums and premium equivalents for the three months ended March 31, 2024 were $663.4 million, representing an increase of $42.3 million, or 6.8%. The increase was driven by a combination of factors including expanding Fortegra’s distribution partner network, growing specialty admitted and E&S insurance lines, and increasing penetration in the vehicle service contract sector.

Current wording

Total gross written premiums and premium equivalents for the three months ended June 30, 2024 were $776.1 million, representing an increase of $60.0 million, or 8.4%. The increase was driven by a combination of factors including expanding Fortegra’s distribution partner network, and growing E&S insurance lines.

Previous wording

For the three months ended March 31, 2024, Insurance increased by $38.0 million, or 7.1%, driven by growth in specialty commercial lines, including E&S and admitted business. For the three months ended March 31, 2024, Services increased by $4.2 million, or 4.8%, driven by growth in vehicle service contracts.

Current wording

For the three months ended June 30, 2024, Insurance increased by $67.1 million, or 10.9%, driven by growth in specialty commercial lines in the E&S business. For the three months ended June 30, 2024, Services decreased by $7.1 million, or 7.0%, driven by declines in auto and consumer goods warranty contracts.

Previous wording

The growth in gross written premiums and premium equivalents, combined with higher retention in select products as of March 31, 2024, has resulted in an increase of $263.3 million, or 12.7%, in unearned premiums and deferred revenue on the condensed consolidated balance sheets as compared to March 31, 2023. As of March 31, 2024, unearned premiums and deferred revenues were $2.3 billion, as compared to $2.1 billion as of March 31, 2023.

Current wording

The growth in gross written premiums and premium equivalents, combined with higher retention in select products as of June 30, 2024, has resulted in an increase of $152.2 million, or 6.9%, in unearned premiums and deferred revenue on the condensed consolidated balance sheets as compared to June 30, 2023. As of June 30, 2024, unearned premiums and deferred revenues were $2.4 billion, as compared to $2.2 billion as of June 30, 2023.

Previous wording

Net written premiums for the three months ended March 31, 2024 were $318.2 million, representing an increase of $37.0 million, or 13.2%, consistent with growth in gross written premiums, and as a result of increased retention on Fortegra’s whole account quota share reinsurance arrangement from 30% to 40%, effective April 1, 2023. For the three months ended March 31, 2024, Net written premiums from commercial lines increased by $42.5 million, or 18.0%, driven by growth in specialty E&S and admitted business. For the three months ended March 31, 2024, net written premiums from personal lines decreased by $5.5 million, or 12.4%, driven by declines in personal credit insurance lines. Net written premiums from property and short-tail lines represented $108.4 million, or 34.1%, of the total net written premiums for the three months ended March 31, 2024 compared to $73.9 million, or 26.3%, for the prior year period. Property and short-tail net written premiums were diversified by geographic location, exposure and risk type with substantial reinsurance protection. As of March 31, 2024, the net loss to the Company in a 1-in-250 year catastrophe event represented approximately 2.8% of Fortegra’s stockholders’ equity. This reported loss includes the impact of incurred losses based on the estimated frequency and severity of potential events, reinstatements premiums, reinsurance recoveries and taxes.

Current wording

Net written premiums for the three months ended June 30, 2024 were $365.9 million, representing an increase of $45.3 million, or 14.1%, consistent with growth in gross written premiums, and as a result of increased retention on Fortegra’s whole account quota share reinsurance arrangement. For the three months ended June 30, 2024, Net written premiums from commercial lines increased by $51.0 million, or 18.5%, driven by growth in specialty E&S and admitted business. For the three months ended June 30, 2024, net written premiums from personal lines decreased by $5.7 million, or 12.7%, driven by declines in personal credit insurance lines. Net written premiums from property and short-tail lines represented $108.3 million, or 29.6%, of the total net written premiums for the three months ended June 30, 2024 compared to $100.1 million, or 31.2%, for the prior year period. Property and short-tail net written premiums were diversified by geographic location, exposure and risk type with substantial reinsurance protection. As of June 30, 2024, the net loss to the Company in a 1-in-250 year catastrophe event represented approximately 2.6% of Fortegra’s stockholders’ equity. This reported loss includes the impact of incurred losses based on the estimated frequency and severity of potential events, reinstatements premiums, reinsurance recoveries and taxes.

Previous wording

The combined ratio was 90.3% for the three months ended March 31, 2024, compared to 91.6% for the prior year period, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 77.5%, a decrease of 0.4% from the prior year period, which consists of a loss ratio of 46.3%, compared to 40.5% in the prior year period, and an acquisition ratio of 31.2%, compared to 37.4% in the prior year period. The increase in loss ratio was driven by changes in business mix, which was more than offset by the decline in acquisition ratio. The operating expense ratio decreased 0.9% percentage points to 12.8%, as compared to 13.7% in the prior year period.

Current wording

The combined ratio was 89.9% for the three months ended June 30, 2024, compared to 90.2% for the prior year period, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 78.2%, an increase of 2.3% from the prior year period, which consists of a loss ratio of 47.3%, compared to 40.8% in the prior year period, and an acquisition ratio of 30.9%, compared to 35.1% in the prior year period. The increase in loss ratio was driven by changes in business mix, which was partially offset by the decline in acquisition ratio. The operating expense ratio decreased 2.6% percentage points to 11.7%, as compared to 14.3% in the prior year period.

Previous wording

(2) Commission expense in this table is presented net of ceding fees and ceding commissions of $14.6 million and $2.7 million, respectively, as of the three months ended March 31, 2024, and $11.9 million and $3.6 million, respectively, as of the three months ended March 31, 2023.

Current wording

(2) Commission expense in this table is presented net of ceding fees and ceding commissions of $15.0 million and $5.1 million, respectively, as of the three months ended June 30, 2024, and $11.0 million and $4.7 million, respectively, as of the three months ended June 30, 2023.

Previous wording

Underwriting and fee revenues were $448.1 million for the three months ended March 31, 2024 as compared to $350.2 million for the three months ended March 31, 2023. Total underwriting and fee revenues increased $97.9 million, or 27.9%, driven by growth in all business lines. The increase in Insurance was $81.1 million, or 30.1%, driven by growth in specialty E&S and admitted insurance lines. The increase in Services was $16.8 million, or 20.7%, driven by growth in vehicle service contracts and premium finance offerings, in addition to the acquisition of Premia.

Current wording

Underwriting and fee revenues were $495.2 million for the three months ended June 30, 2024 as compared to $362.3 million for the three months ended June 30, 2023. Total underwriting and fee revenues increased $132.9 million, or 36.7%, driven by growth in all business lines. The increase in Insurance was $127.0 million, or 46.6%, driven by growth in specialty E&S and admitted insurance lines. The increase in Services was $5.9 million, or 6.6%, driven by growth in vehicle service contracts and premium finance offerings.

Previous wording

Return on average equity was 22.3% for the three months ended March 31, 2024, as compared to 16.7% for the prior year period. The increase in net income and annualized return on average equity was driven by revenue growth and improvement of the combined ratio, in addition to improvements in net investment income and net realized and unrealized gains and losses.

Current wording

Return on average equity was 28.4% for the three months ended June 30, 2024, as compared to 23.1% for the prior year period. The increase in net income and annualized return on average equity was driven by revenue growth and improvement of the combined ratio, in addition to improvements in net realized and unrealized gains and losses.

Previous wording

For the three months ended March 31, 2024, adjusted net income and adjusted return on average equity were $34.1 million and 28.3%, respectively, as compared to $22.9 million and 26.1%, respectively, for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, adjusted net income and adjusted return on average equity were $40.3 million and 29.7%, respectively, as compared to $30.1 million and 32.4%, respectively, for the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, employee compensation and benefits were $31.5 million and other expenses were $33.2 million, as compared to $24.6 million and $25.4 million, respectively, for the three months ended March 31, 2023. Employee compensation and benefits increased by $6.8 million, or 27.8%, driven by investments in human capital associated with growth in E&S, admitted and warranty lines. Other expenses increased by $7.8 million, or 30.7%, driven by a change in fair value of the Fortegra Additional Warrant liability of $4.2 million, and $3.2 million of expenses related to legal and other expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in February 2024.

Current wording

For the six months ended June 30, 2024, employee compensation and benefits were $63.0 million and other expenses were $60.7 million, as compared to $52.3 million and $49.6 million, respectively, for the six months ended June 30, 2023. Employee compensation and benefits increased by $10.7 million, or 20.4%, driven by investments in human capital associated with growth in admitted, E&S and warranty lines. Other expenses increased by $11.1 million, or 22.5%, driven by a change in fair value of the Fortegra Additional Warrant liability of $5.1 million, in addition to $3.3 million of expenses related to legal and other expenses associated with preparation of the registration statement for the withdrawn Fortegra initial public offering in February 2024.

Previous wording

Underwriting and fee margin was $100.8 million for the three months ended March 31, 2024 as compared to $77.6 million for the three months ended March 31, 2023. Total underwriting and fee margin increased $23.2 million, or 29.9%, driven by growth in Insurance and Services. Insurance grew by $17.6 million, or 34.0%, driven by revenue growth in admitted and E&S lines. Services increased by $5.6 million, or 21.7%, driven by growth in vehicle service contracts and premium finance offerings, in addition to the acquisition of Premia.

Current wording

Underwriting and fee margin was $208.8 million for the six months ended June 30, 2024 as compared to $165.1 million for the six months ended June 30, 2023. Total underwriting and fee margin increased $43.7 million, or 26.5%, driven by growth in Insurance and Services. Insurance grew by $28.4 million, or 24.4%, from growth in specialty admitted and E&S lines. Services increased by $15.3 million, or 31.4%, primarily driven by growth in vehicle service contracts and premium finance offerings, in addition to the acquisition of Premia.

Previous wording

Tiptree Capital consists of our Mortgage segment, which includes the operating results of Reliance, our mortgage business, and Tiptree Capital - Other, which consists of our other non-insurance operating businesses and investments. As of March 31, 2024, Tiptree Capital - Other includes our Invesque shares and other investments.

Current wording

Tiptree Capital consists of our Mortgage segment, which includes the operating results of Reliance, our mortgage business, and Tiptree Capital - Other, which consists of our other non-insurance operating businesses and investments.

Previous wording

For the three months ended March 31, 2024, $210.4 million of loans were funded, compared to $202.8 million for the prior year period, an increase of $7.6 million, or 3.7%, driven by the normalized mortgage interest rates compared to the prior year period. Gain on sale margins increased to 5.0% for the three months ended March 31, 2024, up approximately 20 basis points from 4.8% for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, $226.9 million of loans were funded, compared to $227.9 million for the prior year period, a decrease of $1.0 million, or 0.4%, driven by the higher mortgage interest rate environment. Gain on sale margins decreased to 4.6% for the three months ended June 30, 2024, down approximately 20 basis points from 4.8% for the three months ended June 30, 2023. For the six months ended June 30, 2024, $437.3 million of loans were funded, compared to $430.7 million for the prior year period, an increase of $6.5 million, or 1.5%, driven by the normalized mortgage interest rates compared to the prior year period. Gain on sale margins remained consistent at 4.8% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

Previous wording

Net realized and unrealized gains for the three months ended March 31, 2024 were $10.7 million, compared to $7.1 million in the prior year period, an increase of $3.6 million or 50%. The primary driver of increased gain on sale revenues was the increase in volumes and positive fair value adjustment in mortgage servicing rights of $1.2 million in 2024 compared to a negative fair value adjustment of $1.4 million in the prior year period.

Current wording

Net realized and unrealized gains for the three months ended June 30, 2024 were $10.1 million, compared to $12.1 million in the prior year period, a decrease of $2.0 million or 16.5%. Net realized and unrealized gains for the six months ended June 30, 2024 were $20.8 million, compared to $19.2 million in the prior year period, an increase of $1.6 million or 8.1% The primary driver of increased gain on sale revenues was the positive fair value adjustment in mortgage servicing rights of $1.4 million in 2024 compared to a positive fair value adjustment of $0.1 million in the prior year period.

Previous wording

Other revenue for the three months ended March 31, 2024 was $5.2 million, compared to $4.5 million in the prior year period, an increase of $0.8 million, or 17%. As of March 31, 2024, the mortgage servicing asset was $42.0 million, an increase from $40.8 million as of December 31, 2023.

Current wording

Other revenue for the three months ended June 30, 2024 was $5.7 million, compared to $4.9 million in the prior year period, an increase of $0.8 million, or 16.7%. Other revenue for the six months ended June 30, 2024 was $11.0 million, compared to $9.4 million in the prior year period, an increase of $1.6 million, or 17.0%. The increases in both periods were driven by higher loan servicing income and higher loan origination fees. As of June 30, 2024, the mortgage servicing asset was $42.1 million, an increase from $40.8 million as of December 31, 2023.

Previous wording

For the three months ended March 31, 2024, employee compensation and benefits were $9.2 million, compared to $8.2 million in the prior year period, an increase of $1.0 million or 12%, driven primarily by higher commissions on increased origination volumes.

Current wording

For the three months ended June 30, 2024, employee compensation and benefits were $9.4 million, compared to $9.7 million in the prior year period, a decrease of $0.4 million or 3.6%, and for the six months ended June 30, 2024, employee compensation and benefits were $18.6 million, compared to $18.0 million in the prior year period, an increase of $0.7 million or 3.7%, driven primarily by higher commissions on increased origination volumes.