TIPTREE INC
For the period ended Dec 31, 2024. Filed Mar 3, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 3, 2025
TIPT$17.53-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-29.
0001393726-24-000032
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-03.
0001393726-25-000028
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 255 previous paragraphs and 248 current paragraphs.
160 unchanged; 75 reworded; 12 added; 16 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•Fortegra’s total stockholders’ equity was $625.5 million as of December 31, 2024, compared to $452.6 million as of December 31, 2023, with the increase driven by growth in retained earnings and the aggregate capital contribution from Tiptree, Warburg, and Fortegra independent directors of $40.0 million during 2024.
Current report
•Mortgage income before taxes was $4.7 million for the year ended December 31, 2024, as compared to loss of $3.3 million in 2023, with the increase driven by the positive fair value adjustments in mortgage servicing rights, higher origination volumes and loan servicing fees.
Current report
For the year ended December 31, 2024, the net income attributable to common stockholders was $53.4 million, compared to $14.0 million in the prior year period, driven by growth in insurance underwriting and fee income and growth in net investment income and net realized and unrealized gains on the investment portfolio.
Current report
For the year ended December 31, 2024, employee compensation and benefits were $137.7 million and other expenses were $112.7 million, as compared to $114.3 million and $96.8 million, respectively, for the year ended December 31, 2023. Employee compensation and benefits increased by $23.4 million, or 20.5%, driven by investments in human capital associated with growth in E&S, admitted and services lines. Other expenses increased by $15.9 million, or 16.4%, driven by a change in fair value of the Fortegra Additional Warrant liability of $7.4 million, and increased marketing and information technology expenses.
Current report
Adjusted net income decreased to $0.3 million for the year ended December 31, 2024 compared to $0.9 million in 2023.
Current report
In March and April 2024, Tiptree, Warburg and Fortegra independent directors contributed $30.0 million, $9.9 million and $0.1 million, respectively, to Fortegra in exchange for common shares of Fortegra. As of December 31, 2024, Fortegra was owned approximately 79.1% by Tiptree Holdings, 17.7% by Warburg and 3.2% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and management options, and the conversion of outstanding preferred stock.
Current report
(2) Underwriting and fee margin exclude cash and cash equivalent interest income.
Current report
On February 7, 2025, we entered into the Tiptree Credit Agreement, pursuant to which Tiptree Holdings borrowed $75.0 million to, among other things, fund working capital and general corporate purposes. The principal of, and all accrued and unpaid interest on, all loans under the Tiptree Credit Agreement will mature on February 7, 2028.
Current report
On October 16, 2017, a subsidiary of Fortegra issued $125.0 million of 8.50% Fixed Rate Resetting Junior Subordinated Notes due October 2057. Substantially all of the net proceeds were used to repay the existing secured credit agreement at that time, which was terminated thereafter. Beginning on October 15, 2027, the Company may redeem the 2017 Notes at par plus accrued and unpaid interest.
Current report
On November 7, 2024, Fortegra issued $150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064 (“the 2024 Notes”). The proceeds of the 2024 Notes were used to repay outstanding indebtedness under the Company’s credit agreement, for insurance company growth capital and general corporate purposes. Beginning on November 15, 2029, the Company may redeem the 2024 Notes at par plus accrued and unpaid interest.
Current report
On June 20, 2007, a subsidiary of Fortegra issued $35.0 million of preferred trust securities due June 15, 2037. Interest is payable quarterly at an interest rate of SOFR plus 4.10% plus a spread adjustment (previously, LIBOR plus 4.10%). The Company may redeem the preferred trust securities, in whole or in part, at a price equal to the full outstanding principal amount of such preferred trust securities outstanding plus accrued and unpaid interest.
Current report
Cash provided by financing activities was $6.3 million for the year ended December 31, 2024. In 2024, the cash provided was primarily from Fortegra’s issuance of $150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064 (the “2024 Notes”), partially offset by repayments of its revolving line of credit of $130 million and the payment of common and preferred dividends.
Removed paragraphs (16)
Previous report
•Fortegra’s total stockholders’ equity was $452.6 million as of December 31, 2023, compared to $338.7 million as of December 31, 2022, with the increase driven by net income during the year as well as an improvement in the accumulated other comprehensive loss position, which was $31.1 million as of December 31, 2023, compared to $52.7 million as of December 31, 2022.
Previous report
•As of December 31, 2023, Fortegra held an outstanding balance of $130.0 million on its revolving line of credit, as compared to a balance of $46.0 million as of September 30, 2023. The increase in borrowings was primarily to fund statutory capital requirements and general corporate purposes.
Previous report
•Mortgage loss before taxes was $3.3 million for the year ended December 31, 2023, as compared to income of $0.9 million in 2022, with the decrease driven by declines in origination volumes and negative fair value adjustments on the mortgage servicing portfolio.
Previous report
For the year ended December 31, 2023, the net income attributable to common stockholders was $14.0 million, compared to a net loss of $8.3 million in the prior year period. The increase was driven by growth in Fortegra’s underwriting and fee operations, and tax expense associated with the tax deconsolidation of Fortegra of $19.1 million in 2023, compared to $33.1 million in 2022, partially offset by the gain on the sale of our vessels in 2022.
Previous report
For the year ended December 31, 2023, employee compensation and benefits were $114.3 million and other expenses were $96.8 million, as compared to $87.9 million and $78.8 million, respectively, for the year ended December 31, 2022. Employee compensation and benefits increased by $26.4 million, or 30.1%, driven by continued investment in data science, European platform expansion, and to support continued growth in the U.S. insurance business. Other expenses increased by $18.0 million, or 22.8%, driven primarily by investment in data science, technology and marketing expenses, and professional fees associated with the acquisition of Premia.
Previous report
Gross Written Premiums and Premium Equivalents(1,2)
Previous report
(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. Amounts for the years ended December 31, 2022 and 2021 have been conformed resulting in a reduction of premium equivalents of $418 million and $258 million, respectively. This change only impacted the premium equivalents metric and did not impact the Company’s financial statements, including its notes to the consolidated financial statements.
Previous report
(1)Includes $5.4 million and $15.1 million of expenses related to our Maritime transportation operations for the years ended December 31, 2023 and 2022, respectively.
Previous report
(2)Includes asset management, our formerly held for sale mortgage originator (Luxury) for the year ended December 31, 2022, as it was deconsolidated on July 1, 2022, and certain intercompany elimination transactions.
Previous report
Adjusted net income decreased to $0.9 million for the year ended December 31, 2023 compared to $13.6 million in 2022. The decrease was driven from the sale of five vessels in 2022, partially offset by interest income on cash and cash equivalents and U.S. Treasury securities recorded in other income.
Previous report
On August 16, 2022, the U.S. government enacted Public Law no. 117-169, commonly referred to as the Inflation Reduction Act, which, among other things, establishes a corporate minimum tax on book earnings and an excise tax on stock buybacks. It is not expected that this legislation will have a material financial impact on the Company or its operations.
Previous report
(2) Underwriting and fee margin exclude the cash and cash equivalent interest income. The year ended December 31, 2022 has been conformed resulting in a reduction of underwriting and fee margin of $2.5 million. This change only impacted the underwriting and fee margin metric and did not impact the Company’s consolidated financial statements, including its notes to the consolidated financial statements.
Previous report
The footnotes below correspond to the tables above, under “—Adjusted Net Income - Non-GAAP” and “—Adjusted Return on Average Equity - Non-GAAP”.
Previous report
The balance of the corporate credit facility was repaid during June 2022 as part of the WP Transaction. See Note (11) Debt, net in the notes to consolidated financial statements for details for prior periods.
Previous report
On October 21, 2022, a subsidiary of Fortegra entered into a Second Amended and Restated Credit Agreement by and among Fortegra, and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the “Fortegra Credit Agreement”). The Fortegra Credit Agreement provides for a $200.0 million revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $25.0 million for swing loans and matures on October 1, 2027.
Previous report
Cash used in financing activities was $115.2 million for the year ended December 31, 2022. In 2022, principal repayments on mortgage warehouse facilities exceeded proceeds from borrowings, which was partially offset by cash received from the WP Transaction and the exercise of warrants.
Reworded paragraphs (75)
Previous wording
•Tiptree reported net income of $14.0 million for the year ended December 31, 2023, compared to a net loss of $8.3 million in the prior year period, driven by growth in insurance operations and the decrease in tax expense related to the tax deconsolidation of Fortegra from $33.1 million in 2022 to $19.1 million in 2023, partially offset by lower mortgage and shipping revenues. Return on average equity was 3.4%, compared to (2.1)% in 2022.
Current wording
•Tiptree reported net income of $53.4 million for the year ended December 31, 2024, compared to $14.0 million in the prior year period, driven by growth in insurance operations. Return on average equity was 12.2%, compared to 3.4% in 2023.
Previous wording
•Adjusted net income of $61.9 million increased $8.9 million from $53.0 million in 2022, driven by growth in insurance operations. Adjusted return on average equity was 15.2%, as compared to 13.6% in 2022.
Current wording
•Adjusted net income of $100.1 million increased from $61.9 million in 2023, driven by growth in insurance operations. Adjusted return on average equity was 22.9%, as compared to 15.2% in 2023.
Previous wording
•Gross written premiums and premium equivalents were $2.7 billion for the year ended December 31, 2023, an increase of $484.7 million, or 21.4%, from the prior year period as a result of growth in specialty E&S and admitted insurance lines in the U.S. and Europe, along with benefits from a book-roll transaction with one of Fortegra’s MGA partners.
Current wording
•Gross written premiums and premium equivalents were $3.1 billion for the year ended December 31, 2024, an increase of $320.3 million, or 11.7%, 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 $1.3 billion for the year ended December 31, 2023, an increase of 21.2%, 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 $1.4 billion for the year ended December 31, 2024, an increase of 9.0%, 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 $1.6 billion, an increase of $344.3 million, or 27.6%, from 2022, 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 $2.0 billion, an increase of $380.6 million, or 23.9%, 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 $129.8 million as compared to $68.2 million in 2022. Return on average equity was 25.7% in 2023 as compared to 14.6% in 2022. The increases were driven by growth in underwriting and fee revenues and increased net investment income.
Current wording
•Income before taxes of $183.2 million as compared to $129.8 million in 2023. Return on average equity was 26.0% in 2024 as compared to 25.7% in 2023, with the increases driven by growth in underwriting and fee revenues.
Previous wording
•Adjusted net income (before NCI) was $115.7 million, an increase of $31.9 million, or 38.0%, from 2022. Adjusted return on average equity was 29.2%, as compared to 26.1% in 2022.
Current wording
•Adjusted net income (before NCI) was $157.0 million, an increase of $41.3 million, or 35.7%, from 2023. Adjusted return on average equity was 29.1%, as compared to 29.2% in 2023.
Previous wording
Our results of operations are affected by a variety of factors including, but not limited to, general economic conditions and GDP growth, market liquidity and volatility, consumer confidence, U.S. demographics, employment and wage growth, business confidence and investment, inflation, interest rates and spreads, the impact of the regulatory environment, and the other factors set forth in Part I, Item 1A in the Annual Report on Form 10-K. Generally, our businesses are positively affected by a healthy U.S. consumer, stable to gradually rising interest rates, stable markets and business conditions, and global growth and trade flows. Conversely, rising unemployment, volatile markets, rapidly rising interest rates, inflation, changing regulatory requirements and slowing business conditions can have a material adverse effect on our results of operations or financial condition.
Current wording
Our results of operations are affected by a variety of factors including, but not limited to, general economic conditions and GDP growth, market liquidity and volatility, consumer confidence, U.S. demographics, employment and wage growth, business confidence and investment, inflation, interest rates and spreads, the impact of the regulatory environment, and the other factors set forth in Part I, Item 1A in our Annual Report on Form 10-K. Generally, our businesses are positively affected by a healthy U.S. consumer, stable to gradually rising interest rates, stable markets and business conditions, and global growth and trade flows. Conversely, rising unemployment, volatile markets, rapidly rising interest rates, inflation, changing regulatory requirements and slowing business conditions can have a material adverse effect on our results of operations or financial condition.
Previous wording
Insurance results primarily depend on pricing, underwriting, risk retention and the accuracy of reserves, reinsurance arrangements, returns on invested assets, and policy and contract renewals and run-off. Factors affecting these items, including conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, including the current period of inflationary pressures, may have a material adverse effect on our results of operations or financial condition. Fortegra designs, markets and underwrites specialty property and casualty insurance products for select target markets or niches. The types of products Fortegra offers tend to have limited aggregation risk and limited exposure to catastrophic and residual risk. The business has historically generated significant fee-based revenues by incorporating value-add coverages and services. Underwriting risk is mitigated through a combination of reinsurance and sliding scale commission structures with agents, distribution partners and/or third-party reinsurers. To mitigate counterparty risk, Fortegra ensures its reinsurance receivables are placed with highly rated and appropriately capitalized counterparties or with our distribution partners’ captive insurance vehicles which are collateralized with highly liquid investments, cash or letters of credit. While Fortegra’s insurance operations have historically maintained a relatively stable combined ratio, initiatives to change the business mix along with these economic factors could generate different results than the business has historically experienced. In particular, rising inflation can have an impact on replacement costs associated with claims from our customers to the extent we are unable to pass the higher costs of claims through higher premiums. In addition, fluctuations of the U.S. dollar relative to other currencies, including the British pound and Euro, would have an impact on book value between periods.
Current wording
Insurance results primarily depend on pricing, underwriting, risk retention and the accuracy of reserves, reinsurance arrangements, returns on invested assets, and policy and contract renewals and run-off. Factors affecting these items, including conditions in financial markets, the global economy and the markets in which we operate, fluctuations in exchange rates, interest rates and inflation, including the current period of inflationary pressures, may have a material adverse effect on our results of operations or financial condition. Fortegra designs, markets and underwrites specialty property and casualty insurance products for select target markets or niches. The business has historically generated significant fee-based revenues by incorporating value-add coverages and services. Underwriting risk is mitigated through a combination of reinsurance and sliding scale commission structures with agents, distribution partners and/or third-party reinsurers. To mitigate counterparty risk, Fortegra ensures its reinsurance receivables are placed with highly rated and appropriately capitalized counterparties or with our distribution partners’ captive insurance vehicles which are collateralized with highly liquid investments, cash or letters of credit. While Fortegra’s insurance operations have historically maintained a relatively stable combined ratio, initiatives to change the business mix along with these economic factors could generate different results than the business has historically experienced. In particular, inflation can have an impact on replacement costs associated with claims from our customers to the extent we are unable to pass the higher costs of claims through higher premiums. In addition, fluctuations of the U.S. dollar relative to other currencies, including the British pound and Euro, would have an impact on book value between periods.
Previous wording
Fortegra’s investment portfolio includes fixed maturity securities, loans, credit investment funds, and equity securities. Many of those investments are held at fair value. In recent periods, the U.S. fixed income markets experienced a significant rise in interest rates. Rising interest rates have and could continue to impact the value of Fortegra’s fixed maturity securities, with any unrealized losses recorded in equity, and if realized, could impact our results of operations. Offsetting the impact of a rising interest rate environment, new investments in fixed rate instruments from both maturities and portfolio growth have and could continue to result in higher interest income on investments. The weighted average duration of our fixed income available for sale securities is less than three years. While our asset and liability mix is relatively matched, should we need to liquidate any of these investments before maturity to pay claims, any realized losses could materially negatively impact our results of operations. Changes in fair value for loans, credit investment funds, and equity securities in Fortegra’s investment portfolio are reported as unrealized gains or losses in revenues and can be impacted by changes in interest rates, credit risk, currency risk, or market risk, including specific company or industry factors. In addition, our equity holdings are relatively concentrated. General equity market trends, along with company and industry specific factors, can impact the fair value which can result in unrealized gains and losses affecting our results.
Current wording
Fortegra’s investment portfolio includes fixed maturity securities, loans, credit investment funds, and equity securities. Many of those investments are held at fair value. From 2021 to 2024, the U.S. fixed income markets experienced a significant rise in interest rates. Rising interest rates have and could continue to impact the value of Fortegra’s fixed maturity securities, with any unrealized losses recorded in equity, and if realized, could impact our results of operations. Offsetting the impact of a rising interest rate environment, new investments in fixed rate instruments from both maturities and portfolio growth have and could continue to result in higher net interest income on investments. The weighted average duration of our fixed income available for sale securities is less than three years. While our asset and liability mix is relatively matched, should we need to liquidate any of these investments before maturity to pay claims, any realized losses could materially negatively impact our results of operations. Changes in fair value for loans, credit investment funds, and equity securities in Fortegra’s investment portfolio are reported as unrealized gains or losses in revenues and can be impacted by changes in interest rates, credit risk, currency risk, or market risk, including specific company or industry factors. In addition, our equity holdings are relatively concentrated. General equity market trends, along with company and industry specific factors, can impact the fair value which can result in unrealized gains and losses affecting our results.
Previous wording
Rising 10-year treasury yields, and the tapering of the Federal Reserve’s purchases of mortgage-backed securities, has resulted in substantial increases in mortgage interest rates. Low mortgage interest rates driven by the Federal Reserve intervention in mortgage markets, and rising home prices in certain markets, provided tailwinds to the mortgage markets in 2020 and 2021, which benefited our mortgage operations and margins. The substantial rise in rates in recent periods resulted in a sharp reversal of those trends, with volumes and margins declining significantly. Only partially offsetting the declines in mortgage originations is an increase in the fair value of our mortgage servicing portfolio as rising rates slow prepayment speeds, with a resulting increase in servicing income. Continued rising or elevated mortgage rates could have a materially negative impact on our mortgage operations, and is likely to be only partially mitigated by the improvement in mortgage servicing revenues. A sustained period of negative profitability in the mortgage industry could also impact the availability of funding sources for our mortgage business.
Current wording
Elevated 10-year treasury yields, and the tapering of the Federal Reserve’s purchases of mortgage-backed securities, has resulted in substantial increases in mortgage interest rates. Low mortgage interest rates driven by the Federal Reserve intervention in mortgage markets, and rising home prices in certain markets, provided tailwinds to the mortgage markets in 2020 and 2021, which benefited our mortgage operations and margins. The substantial rise in rates resulted in a sharp reversal of those trends, with volumes and margins declining significantly. Only partially offsetting the declines in mortgage originations is an increase in the fair value of our mortgage servicing portfolio as rising rates slow prepayment speeds, with a resulting increase in servicing income. Continued elevated mortgage rates could have a negative impact on our mortgage operations, and is likely to be only partially mitigated by the improvement in mortgage servicing revenues. A sustained period of negative profitability in the mortgage industry could also impact the availability of funding sources for our mortgage business.
Previous wording
Rising interest rates can also impact the cost of floating interest rate debt obligations, while declining rates can decrease the cost of debt. Our secured revolving and term credit agreements, preferred trust securities and asset based revolving financing are all floating rate obligations. A continuation of rising rates could have a material impact on our costs of floating rate debt.
Current wording
Rising interest rates can also impact the cost of floating interest rate debt obligations, while declining rates can decrease the cost of debt. Our secured revolving and term credit agreements, preferred trust securities and asset based revolving financing are all floating rate obligations.
Previous wording
For the year ended December 31, 2023, revenues were $1,649.0 million, which increased $251.3 million, or 18.0%, compared to the prior year period. The changes were primarily driven by growth in earned premiums, net, and service and administrative fees in our insurance business, partially offset by lower mortgage and shipping revenues compared to the prior year periods.
Current wording
For the year ended December 31, 2024, revenues were $2.0 billion, which increased $393.8 million, or 23.9%, compared to the prior year period. The changes were primarily driven by growth in earned premiums, net and service and administrative fees, higher investment income, net realized and unrealized gains, and an increase in other income, including interest income on cash equivalents, compared to the prior year period.
Previous wording
Adjusted net income for the year ended December 31, 2023 was $61.9 million, an increase of $8.9 million, or 16.7%, from the year ended December 31, 2022, driven by growth in our insurance operations. For the year ended December 31, 2023, adjusted return on average equity was 15.2%, as compared to 13.6% for the year ended December 31, 2022, driven by the increase in adjusted net income.
Current wording
Adjusted net income for the year ended December 31, 2024 was $100.1 million, an increase of $38.1 million, or 61.6%, from the year ended December 31, 2023, driven by growth in our insurance operations. For the year ended December 31, 2024, adjusted return on average equity was 22.9%, as compared to 15.2% for the year ended December 31, 2023, driven by the increase in adjusted net income.
Previous wording
Total stockholders’ equity was $576.6 million as of December 31, 2023 compared to $533.6 million as of December 31, 2022, with the increase driven by comprehensive income, partially offset by net changes in non-controlling interests and dividends paid. In the year ended December 31, 2023, Tiptree returned $7.3 million to common stockholders through dividends paid.
Current wording
Total stockholders’ equity was $656.8 million as of December 31, 2024 compared to $576.6 million as of December 31, 2023, with the increase driven by comprehensive income, partially offset by net changes in non-controlling interests and dividends paid. In the year ended December 31, 2024, Tiptree returned $18.3 million to common stockholders through dividends paid.
Previous wording
Book value per share for the period ended December 31, 2023 was $11.34, an increase from book value per share of $10.92 as of December 31, 2022, driven by comprehensive income per share, partially offset by dividends paid of $0.20 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.
Current wording
Book value per share for the period ended December 31, 2024 was $12.29, an increase from book value per share of $11.34 as of December 31, 2023, driven by comprehensive income per share, partially offset by dividends paid of $0.49 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.
Previous wording
As of December 31, 2023, Fortegra was owned approximately 79.5% by Tiptree, 17.5% by Warburg and 3.0% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and the conversion of outstanding preferred stock. The following tables and discussion present the Insurance segment results, including non-controlling interests, for the year ended December 31, 2023 and 2022.
Current wording
As of December 31, 2024, Fortegra was owned approximately 79.1% by Tiptree, 17.7% by Warburg and 3.2% by management and directors of Fortegra, before giving effect to the exercise of outstanding warrants and the conversion of outstanding preferred stock. The following tables and discussion present the Insurance segment results, including non-controlling interests, for the years ended December 31, 2024 and 2023.
Previous wording
(1)Net income was $101.3 million for the year ended December 31, 2023 compared to $46.4 million for the year ended December 31, 2022.
Current wording
(1)Net income was $139.6 million for the year ended December 31, 2024 compared to $101.3 million for the year ended December 31, 2023.
Previous wording
For the year ended December 31, 2023, total revenues increased 27.6%, to $1,593.1 million, as compared to $1,248.8 million for the year ended December 31, 2022. Earned premiums, net of $1,127.8 million increased $223.1 million, or 24.7%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $404.7 million, or 35.9% of total earned premiums, net, compared to $310.4 million, or 34.3%, 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. For the presented periods, earned premiums, net, did not include any significant regional geographic concentrations. Service and administrative fees of $396.0 million increased by 23.5% primarily driven by growth in vehicle service contract revenues. Ceding commissions of $14.9 million increased by $1.0 million, or 7.5%, in line with growth in ceded premiums. Other revenues increased by $14.3 million, or 81.6%, driven by growth in premium finance product offerings and interest income on cash and cash equivalents.
Current wording
For the year ended December 31, 2024, total revenues increased 23.9%, to $2.0 billion, as compared to $1.6 billion for the year ended December 31, 2023. Earned premiums, net of $1.5 billion increased $344.1 million, or 30.5%, driven by growth in specialty E&S and admitted insurance lines. Earned premiums assumed from other insurance companies were $586.9 million, or 39.9% of total earned premiums, net, compared to $404.7 million, or 35.9%, 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. For the presented periods, earned premiums, net, did not include any significant regional geographic concentrations. Service and administrative fees of $405.2 million increased by 2.3% primarily driven by growth in vehicle service contract revenues. Ceding commissions of $15.4 million increased by $0.5 million, or 3.1%, in line with growth in ceded premiums. Other revenues increased by $7.8 million, or 24.6%, driven by growth in premium finance product offerings and interest income on cash and cash equivalents.
Previous wording
For the year ended December 31, 2023, 27.8% 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 year ended December 31, 2023, 81.1% of fee-based revenues were generated in non-regulated service companies, with the remainder in regulated insurance companies.
Current wording
For the year ended December 31, 2024, 23.3% 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 year ended December 31, 2024, 79.9% of fee-based revenues were generated in non-regulated service companies, with the remainder in regulated insurance companies.
Previous wording
For the year ended December 31, 2023, net investment income was $26.7 million as compared to $12.2 million in the prior year period, primarily driven by growth in investments and the increase in yields. Net realized and unrealized losses were $4.2 million, an improvement of $16.1 million, as compared to net realized and unrealized losses of $20.3 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 gains on AFS securities impacting OCI for the year ended December 31, 2023 were $19.0 million, driven by positive fair value adjustments on mortgage-backed securities and corporate bonds and other investments.
Current wording
For the year ended December 31, 2024, net investment income was $33.0 million as compared to $26.7 million in the prior year period, primarily driven by growth in investments and the increase in yields. Net realized and unrealized gains were $8.5 million, an improvement of $12.7 million, as compared to net realized and unrealized losses of $4.2 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 year ended December 31, 2024 were $1.0 million, driven by negative fair value adjustments on mortgage-backed securities and corporate bonds and other investments.
Previous wording
For the year ended December 31, 2023, net losses and loss adjustment expenses were $482.5 million, member benefit claims were $119.3 million and commission expense was $603.0 million, as compared to $361.6 million, $91.0 million, and $522.7 million, respectively, for the year ended December 31, 2022. The increase in net losses and loss adjustment expenses of $120.9 million, or 33.4%, 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 $11.2 million for the year ended December 31, 2023, primarily by a commutation agreement with a partner resulting in a reduction of policy liabilities and unpaid claims of $75.6 million relating to policies written in the 2020 and 2021 treaty years. For the year ended December 31, 2022, the Company experienced favorable prior year development of $0.9 million, primarily as a result of lower-than-expected claim severity in our commercial lines of business. For the periods presented, net losses and adjustment expenses did not include any significant catastrophic losses or regional concentration exposure. The increase in member benefit claims of $28.3 million, or 31.1%, was driven by growth in vehicle service contracts and the impacts of inflation on replacement costs and labor rates. Commission expenses increased by $80.3 million, or 15.4%, generally in line with the growth in earned premiums, net and service and administrative fees, partially offset by the impacts from sliding scale commission structures.
Current wording
For the year ended December 31, 2024, net losses and loss adjustment expenses were $722.2 million, member benefit claims were $119.0 million and commission expense was $648.8 million, as compared to $482.5 million, $119.3 million, and $603.0 million, respectively, for the year ended December 31, 2023. The increase in net losses and loss adjustment expenses of $239.7 million, or 49.7%, 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 $0.6 million for the year ended December 31, 2024, primarily as a result of lower-than-expected losses in its commercial lines of business. For the year ended December 31, 2023, the Company experienced favorable prior year development of $11.2 million, primarily driven by a commutation agreement with a partner resulting in a reduction of policy liabilities and unpaid claims of $75.6 million relating to policies written in the 2020 and 2021 treaty years. For the year ended December 31, 2024 and 2023, net losses and adjustment expenses included $47.7 million and $2.3 million of net catastrophe losses, respectively, primarily related to Hurricanes Helene and Milton. The decrease in member benefit claims of $0.3 million, or 0.2%, was driven by moderating inflation on replacement costs and labor rates. Commission expenses increased by $45.8 million, or 7.6%, generally in line with the growth in earned premiums, net and service and administrative fees, partially offset by the impacts from sliding scale commission structures.
Previous wording
For the year ended December 31, 2023, interest expense was $25.8 million as compared to $20.1 million for the year ended December 31, 2022. The increase in interest expense of $5.8 million, or 28.8%, 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 year ended December 31, 2024, interest expense was $30.2 million as compared to $25.8 million for the year ended December 31, 2023. On November 7, 2024, Fortegra issued $150.0 million of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064. The proceeds of the 2024 Notes were used to repay outstanding indebtedness under Fortegra’s credit agreement, for insurance company growth capital and general corporate purposes. The increase in interest expense of $4.4 million, or 17.1%, was primarily driven by the issuance of the new debt, the rise in short-term interest rates and increased borrowings on Fortegra’s corporate revolver and asset based debt for premium finance lines.
Previous wording
For the year ended December 31, 2023, depreciation and amortization expense was $21.4 million, including $16.9 million of intangible amortization related to purchase accounting associated with the acquisitions of Fortegra, Smart AutoCare, Sky Auto, ITC and Premia, as compared to $18.6 million, including $16.2 million of intangible amortization from purchase accounting in 2022.
Current wording
For the year ended December 31, 2024, depreciation and amortization expense was $19.9 million, including $15.4 million of intangible amortization related to purchase accounting associated with the acquisitions of Fortegra in 2014 and additional services businesses from 2019 to 2023, as compared to $21.4 million, including $16.9 million of intangible amortization from purchase accounting in 2023.
Previous wording
(1) The total gross written premiums and premium equivalents of $2,747.9 million, $2,263.1 million and $1,936.0 million for the years ended December 31, 2023, 2022 and 2021, respectively, were comprised of gross written premiums of $1,896.5 million, $1,515.1 million and $1,380.1 million, plus assumed premiums of $489.1 million, $374.3 million and $220.7 million, plus gross service and administrative fee additions of $362.3 million, $373.7 million and $335.1 million. See Note (8) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (14) Revenue from Contracts with Customers within the respective periods for more information.
Current wording
(1) The total gross written premiums and premium equivalents of $3,068.2 million, $2,747.9 million and $2,263.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, were comprised of gross written premiums of $2,194.0 million, $1,896.5 million and $1,515.1 million, plus assumed premiums of $525.5 million, $489.1 million and $374.3 million, plus gross service and administrative fee additions of $348.7 million, $362.3 million and $373.7 million. See Note (8) Reinsurance Recoverable and Prepaid Reinsurance Premiums and Note (14) Revenue from Contracts with Customers within the respective periods for more information.
Previous wording
Total gross written premiums and premium equivalents for the year ended December 31, 2023 were $2,747.9 million, representing an increase of $484.7 million, or 21.4%. The growth is 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 year ended December 31, 2024 were $3.1 billion, representing an increase of $320.3 million, or 11.7%. 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 year ended December 31, 2023, Insurance increased by $496.2 million, or 26.3%, driven by growth in specialty commercial lines, including E&S and admitted business. The year ended December 31, 2023, also benefited from a book-roll transaction of $125.1 million with one of Fortegra’s distribution partners. For the year ended December 31, 2023, Services decreased by $11.4 million, or 3.1%, driven by lower volume in consumer goods and vehicle service contracts, partially offset by the acquisition of Premia.
Current wording
For the year ended December 31, 2024, Insurance increased by $333.9 million, or 14.0%, driven by growth in specialty commercial lines, including E&S business, partially offset by decline in the personal lines. The year ended December 31, 2023, also benefited from a book-roll transaction of $125.1 million with one of Fortegra’s distribution partners. For the year ended December 31, 2024, Services decreased by $13.5 million, or 3.7%, driven by lower volume in consumer goods and vehicle service contracts, partially offset by the acquisition of Premia.
Previous wording
The combination of unearned premiums and deferred revenues on Fortegra’s balance sheet grew to $2,368.1 million, representing an increase of $361.6 million, or 18.0%, from December 31, 2022 to December 31, 2023, as a result of growth in gross written premiums and premium equivalents, primarily related to E&S and admitted insurance lines, including the book roll transaction with one of Fortegra’s MGA partners.
Current wording
The combination of unearned premiums and deferred revenues on Fortegra’s balance sheet grew to $2.5 billion, representing an increase of $93.7 million, or 4.0%, from December 31, 2023 to December 31, 2024, as a result of growth in gross written premiums and premium equivalents.
Previous wording
Net written premiums for the year ended December 31, 2023 were $1,319.9 million, representing an increase of $230.6 million, or 21.2%, driven by growth in commercial E&S lines. For the year ended December 31, 2023, commercial lines increased by $233.8 million, or 26.5%, driven by growth in specialty E&S and admitted business, including a book-roll transaction of $125.1 million with one of Fortegra’s distribution partners. For the year ended December 31, 2023, personal lines decreased by $3.2 million, or 1.6%, driven by declines in personal credit lines. Property and short-tail lines represented $411.7 million, or 31.2%, of the total net written premiums for the year ended December 31, 2023 compared to $188.1 million, or 17.3%, 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 December 31, 2023, the net loss to the Company in a 1-in-250 year catastrophe event represented approximately 2.4% 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 year ended December 31, 2024 were $1.4 billion, representing an increase of $119.0 million, or 9.0%, 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 year ended December 31, 2024, commercial lines increased by $173.1 million, or 15.5%, driven by growth in specialty E&S and admitted business. For the year ended December 31, 2024, personal lines decreased by $54.1 million, or 26.5%, driven by declines in auto and personal credit lines. Property and short-tail lines represented $488.7 million, or 34.0%, of the total net written premiums for the year ended December 31, 2024 compared to $411.7 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 December 31, 2024, the net loss to the Company in a 1-in-250 year catastrophe event represented approximately 4.2% 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 year ended December 31, 2023, compared to 90.4% for the prior year period, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 76.3%, a decrease of 0.4% from the prior year period, which consists of a loss ratio of 40.1%, compared to 37.7% in the prior year period, and an acquisition ratio of 36.2%, compared to 39.0% in the prior year period. The loss ratio increase was driven by a shift in business mix towards commercial lines and increases in repair and labor costs on vehicle service contracts. The decrease in the acquisition ratio was driven by the shift in business mix toward commercial lines and impacts from sliding scale commission structures. The operating expense ratio was 14.0%, as compared to 13.7% in the prior year period. The increase in the operating expense ratio was a result of continued investment in data science, European platform expansion, and to support continued growth in U.S. insurance lines.
Current wording
The combined ratio was 90.0% for the year ended December 31, 2024, compared to 90.3% for the prior year period, reflecting the consistent underwriting performance and scalability of the Company’s operating platform. The underwriting ratio was 77.0%, an increase of 0.7 percentage points from the prior year period, which consists of a loss ratio of 45.5%, compared to 40.1% in the prior year period, and an acquisition ratio of 31.5%, compared to 36.2% in the prior year period. The increase in loss ratio was driven by changes in business mix towards commercial lines and increases in repair and labor costs on vehicle service contracts compared to prior year period, which was partially offset by the decline in acquisition ratio as a result of swing rate commission structures. Additionally, for the year ended December 31, 2024, the loss ratio included 2.6 percentage points related to net catastrophe losses as compared to 0.2 percentage points in the prior year period. The primary catastrophic events impacting 2024 were Hurricanes Helene and Milton. The operating expense ratio was 13.0%, as compared to 14.0% in the prior year period, driven by operating efficiencies as premiums and revenues grew.
Previous wording
The below table shows underwriting and fee revenues and underwriting and fee margin by business mix for the year ended December 31, 2023 and 2022.
Current wording
The below table shows underwriting and fee revenues and underwriting and fee margin by business mix for the years ended December 31, 2024 and 2023.
Previous wording
(2) Commission expense in this table is presented net of ceding fees and ceding commissions of $44.6 million and $14.9 million, respectively, for the year ended December 31, 2023, and $40.2 million and $13.9 million, respectively, for the year ended December 31, 2022.
Current wording
(2) Commission expense in this table is presented net of ceding fees and ceding commissions of $51.2 million and $15.4 million, respectively, for the year ended December 31, 2024, and $44.6 million and $14.9 million, respectively, for the year ended December 31, 2023.
Previous wording
Underwriting and fee revenues were $1,500.0 million for the year ended December 31, 2023 as compared to $1,200.4 million for the year ended December 31, 2022. Total underwriting and fee revenues increased $299.6 million, or 25.0%, driven by growth in all business lines. The increase in insurance was $223.5 million, or 24.4%, driven by growth in specialty E&S and admitted insurance lines. The increase in services was $76.2 million, or 26.9%, driven by growth in vehicle service contracts and premium finance offerings, in addition to acquisitions of Premia in 2023 and ITC in 2022.
Current wording
Underwriting and fee revenues were $1.8 billion for the year ended December 31, 2024 as compared to $1.5 billion for the year ended December 31, 2023. Total underwriting and fee revenues increased $348.1 million, or 23.2%, driven by growth in insurance. The increase in insurance was $339.1 million, or 29.7%, driven by growth in specialty E&S and admitted insurance lines. The increase in services was $9.0 million, or 2.5%, driven by growth in vehicle service contracts and premium finance offerings.
Previous wording
Underwriting and fee margin was $354.7 million for the year ended December 31, 2023 as compared to $279.1 million for the year ended December 31, 2022. Total underwriting and fee margin increased $75.6 million, or 27.1%, driven by growth in all product lines. Insurance grew by $63.1 million, or 34.2%, driven by revenue growth in specialty E&S and admitted lines. Services increased by $12.5 million, or 13.2%, driven by growth in vehicle service contracts and the acquisition of Premia and ITC, partially offset by increased member benefit claims associated with the impacts of inflation on replacement costs and labor rates.
Current wording
Underwriting and fee margin was $424.7 million for the year ended December 31, 2024 as compared to $354.7 million for the year ended December 31, 2023. Total underwriting and fee margin increased $70.0 million, or 19.7%, driven by growth in insurance. Insurance grew by $63.7 million, or 25.7%, driven by revenue growth in specialty E&S and admitted lines. Services increased by $6.3 million, or 5.9%, driven by growth in vehicle service contracts and premium finance offerings.
Previous wording
Return on average equity was 25.7% for the year ended December 31, 2023, as compared to 14.6% for the year ended December 31, 2022. The increase in net income and annualized return on average equity was driven by revenue growth and consistent 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 26.0% for the year ended December 31, 2024, as compared to 25.7% for the year ended December 31, 2023. The increase in net income and annualized return on average equity was driven by revenue growth and consistent combined ratio, in addition to improvements in net investment income and net realized and unrealized gains and losses.
Previous wording
For the year ended December 31, 2023, adjusted net income (before NCI) and adjusted return on average equity were $115.7 million and 29.2%, respectively, as compared to $83.8 million and 26.1%, respectively, for the year ended December 31, 2022. The improvement of adjusted net income was driven by the growth in revenues and consistent combined ratio, in addition to improvements in net investment income.
Current wording
For the year ended December 31, 2024, adjusted net income (before NCI) and adjusted return on average equity were $157.0 million and 29.1%, respectively, as compared to $115.7 million and 29.2%, respectively, for the year ended December 31, 2023. The improvement of adjusted net income was driven by the growth in revenues and consistent combined ratio, in addition to improvements in net investment income.
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 December 31, 2023, 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 year ended December 31, 2023, $876.9 million of loans were funded, compared to $1,134.4 million for the prior year period, a decrease of $257.4 million, or 22.7%, driven by increase in mortgage interest rates compared to the prior year period. Gain on sale margins remained consistent at 4.7% for the year ended December 31, 2023.
Current wording
For the year ended December 31, 2024, $946.2 million of loans were funded, compared to $876.9 million for the prior year period, an increase of $69.3 million, or 7.9%, driven by decrease in mortgage interest rates compared to the prior year period. Gain on sale margins remained consistent at 4.8% for the year ended December 31, 2024.
Previous wording
Net realized and unrealized gains for the year ended December 31, 2023 were $34.2 million, compared to $51.3 million in the prior year period, a decrease of $17.1 million or 33.3%. The primary driver of decreased gain on sale revenues was the decline in volumes and negative fair value adjustment in mortgage servicing rights of $1.9 million in 2023 compared to a positive fair value adjustment of $7.0 million in the prior year period.
Current wording
Net realized and unrealized gains for the year ended December 31, 2024 were $43.0 million, compared to $34.2 million in the prior year period, an increase of $8.7 million or 25.5%. The primary driver of increased gain on sale revenues was the increase in volumes and positive fair value adjustment in mortgage servicing rights of $2.7 million in 2024 compared to a negative fair value adjustment of $1.9 million in the prior year period.
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Gross Written Premiums and Premium Equivalents(1)
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
•In December 2023, Fortegra entered into a commutation agreement with a partner resulting in a reduction of policy liabilities and unpaid claims of $75.6 million relating to policies written in the 2020 and 2021 treaty years.
Previous report — wording carried elsewhere
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.
Previous report — wording carried elsewhere
(1) See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.
Previous report — wording carried elsewhere
(1)See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.