Holding company Tiptree has announced a $200 million strategic investment in its insurance subsidiary, The Fortegra Group, from Warburg Pincus, a global growth investor.
The investment will give Warburg Pincus an approximate 24% ownership in Fortegra on a fully diluted basis and is expected to close in the first quarter 2022.
Fortegra currently underwrites over $2.0 billion of gross written premiums and premium equivalents annually, focusing on specialty insurance products and warranty solutions across the US and Europe.
“Our objective has always been to build an insurance enterprise that generates exceptional returns for its investors by complementing underwriting results with fee revenue,” said Rick Kahlbaugh, the Chief Executive Officer of Fortegra.
“This transaction represents the collaboration of industry experience, capital and investment acumen that will be the catalyst to accelerate Fortegra’s growth as a global specialty insurer,” he continued. “Joining forces with Warburg Pincus is yet another chapter in the Fortegra story and together Fortegra, Tiptree and Warburg Pincus will accelerate the exceptional growth and profitability of Fortegra.”
Tiptree’s Executive Chairman Michael Barnes also commented: “This investment accomplishes many of our strategic goals including raising capital to accelerate Fortegra’s growth and recapitalizing both companies balance sheets through the repayment of indebtedness.”
“We are excited to continue working with Rick and the Fortegra team as they execute on their long-term objectives, and we look forward to a strong partnership with Dan Zilberman and the Warburg Pincus team. They bring significant expertise across many sectors, including insurance, and will be great partners in support of Fortegra’s continued success.”
Dan Zilberman, Managing Director and Head of Special Situations, Warburg Pincus, further stated: “Fortegra’s talented management team has built a world-class specialty insurance platform delivering high quality products and services to its customers worldwide. We are excited to partner with Rick Kahlbaugh and Tiptree’s experienced management team and are committed to Fortegra’s continued growth and long-term success.”
“Our investment in Fortegra underscores our commitment to partnering with innovative companies in the insurance sector. We look forward to supporting Fortegra as they continue to expand their capabilities,” added Jeff Stein, Managing Director, Warburg Pincus.
Warburg Pincus has previously made investments into re/insurers such as Aeolus Re, Arch Capital, Cox Insurance Holdings, Foundation Risk Partners, ICICI Lombard Insurance, Max Life, McGill and Partners, PetPlan, RenaissanceRe, SBI General Insurance and Watford Holdings.