Tiptree’s Fortegra posts 37.5% rise in GWP in Q4’23

Holding company Tiptree has reported a 37.5% increase in gross written premiums and premium equivalents for its specialty insurance subsidiary, Fortegra, in the fourth quarter of 2023.

The gross written premiums and premium equivalents grew in Q4’23 and 21.4% for the year, driven by 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.

Net written premiums were $384.3 million for the quarter, an increase of 56.7%, and $1,319.9 million for the year, an increase of 21.2%.

The increases in both periods were consistent with the growth in gross written premiums and premium equivalents and increased retention on Fortegra’s whole account quota share reinsurance agreement from 30% to 40%, effective April 1, 2023.

The combined ratio for Fortegra in Q4 was 89.8%, in-line with the prior year’s period. Total year 2023 combined ratio was 90.3%, as compared to 90.4% in 2022, reflecting the consistent underwriting performance and scalability of the Company’s operating platform.

The revenues increased 25.4% for the quarter and 27.6% for the year driven by premium growth in specialty E&S and admitted lines, and services businesses in the U.S. and Europe, along with growth in net investment income.

Earlier in February, Fortegra announced the withdrawal of its initial public offering. In January 2024, Fortegra had announced the launch of its IPO.

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.

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, Tiptree noted.

Tiptree has reported revenues of $446.4 million for Q4’23, an increase of 20.8% from Q4’22, driven by growth in Fortegra’s specialty insurance lines.

Tiptree reported a net income of $6.9 million compared to $0.9 million in Q4’22, driven by growth in insurance business, partially offset by lower shipping income as a result of the sale of vessels in 2022.

Adjusted net income of $13.9 million increased by 43.1% from $9.7 million in Q4’22, driven by growth in our insurance operations. Annualized Adjusted return on average equity was 13.6% for the quarter, as compared to 9.9% in Q4’22.

“We are extremely pleased with our performance in the fourth quarter and full-year 2023. Our operating businesses demonstrated strong performance, resulting in an increase of revenues to $1.6 billion for the year, accompanied by an adjusted return on equity of 15.2%.” said Tiptree’s Executive Chairman, Michael Barnes.

“Notably, Fortegra, our specialty insurance business, achieved record results, with premium and premium equivalent growth of 21%, and an adjusted return on equity of 29%. We firmly believe Fortegra is strategically positioned to maintain a trajectory of consistent top-line growth and sustained underwriting profitability over the long-term,” Barnes on Fortegra business.

“Looking ahead, we see significant opportunities to expand our businesses and remain confident in the long-term outlook for the company,” Barnes concluded.

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