TWFG (TWFG) investor relations material

Industry trends and market shifts

• Personal lines insurance is moving from captive to independent agency distribution, with captive agent market share dropping from 37% in 2015 to 31% in 2025, while independent agencies gain share.

• Direct-to-consumer and independent channels are expected to dominate, with the independent channel serving more complex client needs.

• Major carriers like GEICO and Progressive are expanding into the independent channel, reflecting broader industry trends.

• Captive carriers are reducing agent economics, making independent models more attractive.

• The addressable insurance market is nearing $1 trillion, with significant opportunity for further share gains.

Business model and growth strategy

• The organization operates a hybrid model: retail locations under a captive-independent structure and an MGA that wholesales to other agencies.

• The agency-in-a-box model centralizes non-revenue tasks, enabling agents to focus on growth and customer service.

• Proprietary technology integrates quoting, CRM, and agency management, enhancing efficiency and scalability.

• Double-digit organic growth has been sustained since inception, with recent quarterly revenue growth of 35% and an EBITDA margin of 29%.

• Growth is primarily organic, but disciplined M&A is used to supplement expansion, targeting cultural fit and EBITDA accretion.

Economics and financial performance

• Retail partners retain 80% of commissions, bearing their own expenses, while the company retains 20% and associated profitability.

• MGA business yields higher gross margins due to underwriting and policy fee income, with less reliance on contingent revenues.

• Corporate-owned agencies have margins in the 30%-40% range; MGA margins are higher when running proprietary programs.

• The company is targeting 15%-20% annual growth, consistently outperforming industry organic growth rates.

• Recent acquisition of a commercial MGA (APIA) is expected to increase commercial lines as a share of total business.