Tiptree (TIPT) 15th Annual Midwest IDEAS Investor Conference summary

Business overview and strategy

• Focuses on acquiring and holding small and middle-market companies with strong management, primarily in specialty insurance and investment management.

• Largest business is Fortegra, a specialty insurer acquired in 2014, which has shown dramatic growth and consistent earnings.

• Capital allocation is diversified, targeting both operational cash returns and capital appreciation, with insiders owning about a third of the company.

• Since 2014, repurchased 15 million shares (36% of 2014 year-end shares) at discounts to book value.

• Realized investments have yielded IRRs above 20% since founding in 2007.

Financial performance and capital management

• Adjusted net income for the latest 12 months was $77 million, representing an 18% return on equity.

• In 2022, $200 million was raised at Fortegra from Warburg Pincus for a 25% stake, providing strategic benefits and growth capital.

• Additional $40 million invested in Fortegra in March 2023 to support growth.

• Fortegra's trailing twelve-month adjusted net income reached $137 million, up 42% year-over-year.

• Share price is seen as undervalued relative to intrinsic value, with ongoing focus on narrowing this discount.

Specialty insurance operations (Fortegra)

• Fortegra retains just under 50% of underwritten risk, maintaining a combined ratio in the low 90s (about 10% margin).

• Differentiators include underwriting expertise, technology-driven efficiencies, and agent alignment through variable commissions and reinsurance.

• Gross written premiums have grown at a 22% CAGR since 2018, with 87% from specialty lines and 13% from service contracts.

• Focuses on niche lines such as commercial property, liability, life sciences, and hospitality, with E&S lines driving growth.

• Emphasizes diversification by product, agent, partner, risk, and geography to ensure consistent results and limit catastrophic exposure.