Holding company Tiptree has reported a substantial increase in revenues for Q1 2023, with growth driven to a large degree by the company’s global specialty insurance subsidiary, Fortegra.
Revenues increased by 17.5% to $381.6 million thanks to growth in the insurance business. This was partially offset by declines in the mortgage and shipping revenues.
Tiptree reported a net loss of $1.1 million for Q1 2023, versus $1.0 million in Q1’22.
Adjusted net income of $17.3 million increased by 11.9% from $15.5 million in Q1’22, driven by improvement in the insurance operations.
Adjusted return on average equity was 12.9% for the quarter, with the year-over-year comparison impacted by the investment in Fortegra in June 2022 from Warburg Pincus.
For the Fortegra business specifically, income before taxes for the quarter was $19.4 million, up $4.8 million. Revenues rose by 30.4% to $368.4 million driven by premium growth in specialty E&S and admitted lines, and services businesses in the U.S. and Europe.
Fortegra’s gross written premiums and premium equivalents similarly increased by 24.9% for the quarter to $750.3 million, driven by growth in U.S. specialty insurance lines and services businesses in U.S. and Europe.
Unearned premiums and deferred revenues grew to $2.1 billion, up $319.6 million, or 18.3%, from Q1’22.
The combined ratio for Fortegra in Q1 was 91.3%, compared to 90.5% for the same period in 2022, driven by consistent underwriting performance and the scalability of Fortegra’s operating platform.
Tiptree declared a dividend of $0.05 per share to stockholders of record on May 22, with a payment date of May 30.
In June 2022, Tiptree closed the previously announced $200 million strategic investment in Fortegra by Warburg Pincus. As part of the closing, $113 million of Tiptree’s corporate debt was repaid in full.
In February 2023, Fortegra acquired Premia Solutions Limited, one of the largest providers of automotive protection products in the United Kingdom, for net cash consideration of nearly $22.5 million, the company said.
