Tiptree Inc (TIPT) 2024 Q2 法說會逐字稿

Greetings and welcome to Tiptree Inc. second quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Scott Mckinney, Chief Financial Officer. Thank you, Mr. Mckinney, you may begin.

您好，歡迎參加 Tiptree Inc. 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，財務長史考特‧麥金尼先生。謝謝你，麥金尼先生，你可以開始了。

Good morning, and welcome to our second quarter 2024 earnings call. Joining me today are Michael Barnes, our Executive Chairman; and Jonathan Ilany, CEO.

早上好，歡迎參加我們的 2024 年第二季財報電話會議。今天加入我的是我們的執行主席 Michael Barnes；和執行長喬納森·伊蘭尼。

Some of our comments today will contain forward-looking statements, and actual future results may differ materially. Please see our most recent SEC filings, which identify the principal risks and uncertainties that could affect future performance.

我們今天的一些評論將包含前瞻性陳述，未來的實際結果可能會存在重大差異。請參閱我們最近向 SEC 提交的文件，其中確定了可能影響未來業績的主要風險和不確定性。

In today's call, we will discuss non-GAAP financial metrics, which are described in more detail in our presentation. Reconciliations of these metrics and additional disclosures can be found in our SEC filings, the appendix to our presentation and on our website.

在今天的電話會議中，我們將討論非公認會計準則財務指標，這些指標在我們的簡報中進行了更詳細的描述。這些指標的核對和其他揭露可以在我們的 SEC 文件、我們簡報的附錄和我們的網站上找到。

With that, I will turn the call over to Michael.

這樣，我會將電話轉給麥可。

Thank you, Scott, and good morning to everyone. We are extremely pleased with Tiptree's first half results. Revenues year-to-date have increased by 33% from the prior year and our collective businesses produced a 21% adjusted return on equity.

謝謝你，斯科特，祝大家早安。我們對 Tiptree 上半年的成績非常滿意。今年迄今的收入比前一年增長了 33%，我們的集體業務調整後股本回報率達到 21%。

Our specialty insurance company, Fortegra, posted record results in the first half with revenue growth of 34% and adjusted net income growth of 40% from the prior year. Gross written premiums and equivalents were $1.4 billion, while delivering a combined ratio of 90%, demonstrating the ability to generate consistent growth and consistent underwriting performance over time.

我們的專業保險公司 Fortegra 在上半年公佈了創紀錄的業績，與前一年相比，收入增長了 34%，調整後淨利潤增長了 40%。總承保保費及等值金額為 14 億美元，綜合成本率為 90%，這表明我們有能力隨著時間的推移實現持續增長和穩定的承保業績。

As we look to the future, we remain bullish on Fortegra's growth, given the continued hard market environment and the strong level of submission activity within our specialty sectors.

展望未來，鑑於持續嚴峻的市場環境和我們專業領域內強勁的提交活動水平，我們仍然看好 Fortegra 的成長。

The investment portfolio, which is overseen by our asset management subsidiary, Tiptree Advisors, ended the quarter at $1.4 billion of investable assets. As the book of paid in premiums continues to grow, we remain focused on investments in primarily high quality liquid fixed income securities, coupled with select higher-yielding investment opportunities to enhance overall returns.

該投資組合由我們的資產管理子公司 Tiptree Advisors 監管，本季末可投資資產達 14 億美元。隨著已繳保費的持續成長，我們仍專注於主要投資於優質流動性固定收益證券，同時選擇更高收益的投資機會以提高整體回報。

Portfolio duration was just under three years at quarter's end, which gives us room to modestly extend duration given anticipated interest rate cuts in the second half of 2024 and 2025. The team at our residential mortgage origination and servicing business, Reliance, has shown resilience in navigating the challenges posed by elevated mortgage rates. In the first half, volumes increased modestly compared to prior year. And the income, along with a sustained market value of our retained servicing book led the business to profitability.

截至季末，投資組合久期略低於三年，考慮到 2024 年下半年和 2025 年預計降息，這為我們提供了適度延長久期的空間。我們的住宅抵押貸款發放和服務業務 Reliance 的團隊在應對抵押貸款利率上升帶來的挑戰方面表現出了韌性。上半年，銷售量與去年同期相比略有成長。收入以及我們保留的服務帳簿的持續市場價值使我們的業務實現了盈利。

We hold a positive outlook for the business with greater potential for future profit as mortgage rates tighten. With a strong first half of 2024, we are in a good position to sustain our growth, and we have a positive outlook for Tiptree's future. And as always, we remain committed to growing long-term shareholder value, and we'll continue to seek constructive ways to more fully reflect the intrinsic value of Tiptree's businesses in our share price.

隨著抵押貸款利率收緊，我們對未來利潤潛力更大的業務前景持樂觀態度。憑藉 2024 年上半年的強勁表現，我們處於維持成長的有利位置，並且我們對 Tiptree 的未來充滿樂觀。一如既往，我們仍然致力於增加長期股東價值，我們將繼續尋求建設性的方法，在我們的股價中更充分地反映 Tiptree 業務的內在價值。

With that, I'll turn the call over to Scott to discuss our financial results.

接下來，我會將電話轉給史考特，討論我們的財務表現。

Thank you, Michael. As you highlighted, the first half results exceeded our expectations, and we remain positive on the outlook for growth. For the quarter, Tiptree's revenues were up 35%, driven by growth in earned premiums, fee-based service revenues and increased investment gains as compared to the prior year period.

謝謝你，麥可。正如您所強調的，上半年業績超出了我們的預期，我們對成長前景保持樂觀。本季度，Tiptree 的營收成長了 35%，這得益於保費收入、收費服務收入的成長以及與去年同期相比投資收益的增加。

Consolidated net income of $12.9 million was driven by strong underwriting and investment income at our insurance business and positive contributions from our mortgage business.

1290 萬美元的綜合淨利潤得益於保險業務強勁的承保和投資收入以及抵押貸款業務的積極貢獻。

Adjusted net income for the quarter was $24.4 million, representing an increase of 39% compared to prior year. Tiptree's GAAP tax rate for the quarter was 46%. Setting aside the book tax implications of being deconsolidated from Fortegra for tax purposes, our effective tax rate was closer to 30%, the vast majority of which is deferred. Our balance sheet remains well positioned. We ended the quarter with a highly rated liquid investment portfolio, substantial cash balances and we continue to maintain a conservative position with respect to our loss reserves at the insurance company. An aggregate of $40 million of capital was contributed to Fortegra in March and April of this year to support growth with just over $30 million coming from Tiptree.

該季度調整後淨利潤為 2,440 萬美元，較上年同期成長 39%。Tiptree 本季的 GAAP 稅率為 46%。撇開因稅務目的從 Fortegra 剝離而產生的帳面稅務影響，我們的有效稅率接近 30%，其中絕大多數是遞延的。我們的資產負債表仍然處於良好狀態。本季結束時，我們擁有高度評價的流動性投資組合、大量現金餘額，我們繼續對保險公司的損失準備金保持保守立場。今年 3 月和 4 月，Fortegra 總共獲得了 4,000 萬美元的資金支持，其中來自 Tiptree 的資金略多於 3,000 萬美元。

Turning to our insurance results for the quarter, Fortegra posted record results on all fronts with written premiums, revenues and net income all high marks for the Company.

談到本季的保險業績，Fortegra 在各方面均創下了創紀錄的業績，公司的承保保費、收入和淨利潤均獲得高分。

Gross written premiums and equivalents increased 8% year-over-year to $776 million, driven by growth in specialty E&S insurance lines. Excess and Surplus Lines represented 42% or just below $330 million of total premiums and grew at a 40% rate in the quarter.

受專業 E&S 保險業務成長的推動，總承保保費及等值保費年增 8%，達到 7.76 億美元。超額和盈餘額度佔保費總額的 42%（略低於 3.3 億美元），本季成長率為 40%。

We continue to see submission growth and positive rate movement on both property and casualty lines. The pricing environment remains favorable with rate increases in excess of anticipated loss cost trending. Partially offsetting the growth in the quarter was the cancellation of certain contractual liability and Personal Lines programs. Net written premiums were $366 million, an increase of 14%, driven by overall premium growth and increased retention on both E&S and admitted P&C lines. Revenues grew by 38% to $530 million and the combined ratio improved by 30 basis points to 89.9%. As earned premium scale, we continue to see expense ratio improvement, which was down more than two points compared to last year. Fortegra's annualized adjusted return on equity was 30%, driven by revenue growth, profitable underwriting and the scalability of our technology-enabled platform.

我們繼續看到財產和意外險領域的提交量增長和積極的利率變動。定價環境仍有利，利率成長超過預期損失成本趨勢。某些合約責任和個人保險計劃的取消部分抵消了本季的成長。淨承保保費為 3.66 億美元，成長 14%，這主要得益於整體保費成長以及 E&S 和承保 P&C 險種保費保留率的增加。營收成長 38%，達到 5.3 億美元，綜合成本率提高 30 個基點，達到 89.9%。隨著賺取保費規模的擴大，我們繼續看到費用率有所改善，與去年相比下降了兩個多點。在營收成長、承保獲利和我們技術支援平台的可擴展性的推動下，Fortegra 的年化調整股本回報率為 30%。

Regarding investments, the portfolio ended the quarter at $1.4 billion, with 91% invested in a combination of high credit quality, liquid securities and cash with an average S&P rating of AA. Our embedded book yield was 4.1% at quarter end, up approximately 100 basis points from the prior year, driven by improving yields on short-duration fixed income securities and money market funds. For the first half, net investment income, when combined with interest on cash equivalents, yielded $23 million or roughly 23% increase over prior year.

在投資方面，該投資組合本季末達到 14 億美元，其中 91% 投資於高信用品質、流動性證券和現金的組合，標準普爾平均評級為 AA。在短期固定收益證券和貨幣市場基金收益率提高的推動下，我們的嵌入帳面收益率截至季末為 4.1%，比上年上升約 100 個基點。上半年，淨投資收入加上現金等價物利息，產生了 2,300 萬美元，比上年增長約 23%。

With a duration of 2.7 years and a third of the total portfolio in cash and equivalents, we believe we are well positioned to continue to increase investment income over the balance of 2024 and into 2025. Longer-term trends at Fortegra remain very favorable as the next set of charts highlight. Over the past five years of gross written premiums and equivalents have compounded at 24% annually, primarily due to organic expansion in specialty insurance and warranty premiums.

該投資期間為 2.7 年，總投資組合的三分之一為現金及等價物，我們相信，我們有能力在 2024 年餘下時間和 2025 年繼續增加投資收入。正如下一組圖表所強調的那樣，Fortegra 的長期趨勢仍然非常有利。過去五年，總承保保費及同等保費每年複合成長 24%，主要是由於專業保險和保固保費的有機擴張。

During the same period, the combined ratio has improved by 3.2 percentage points with low volatility from one quarter to the next. As the business increasingly focuses on specialty P&C lines, the mix shift has driven an increase in the loss ratio, which has been more than offset by reductions in both the acquisition ratio and of the operating expense ratio. Year to date, adjusted net income reached a new high of 74 million, marking a nearly 40% increase year over year.

同期，綜合成本率改善了3.2個百分點，且從一個季度到下一季的波動性較低。隨著業務越來越專注於專業財產險產品線，這種組合轉變導致了損失率的上升，但收購率和營運費用率的下降足以抵消損失率的上升。年初至今，調整後淨利再創新高，達7,400萬，較去年同期成長近40%。

Looking forward, the ongoing hard market conditions, coupled with the addition of new agents and distribution partners, are expected to drive Fortegra's growth. Tiptree Capital ended the quarter with $116 million of capital deployed across our mortgage origination and servicing business. Our liquid investment portfolio and cash. Pretax income for the year was $4.5 million, driven by positive contributions from our mortgage operations and realized gains on other investments.

展望未來，持續嚴峻的市場環境，加上新代理商和分銷合作夥伴的增加，預計將推動 Fortegra 的成長。Tiptree Capital 本季末在我們的抵押貸款發放和服務業務中部署了 1.16 億美元的資本。我們的流動投資組合和現金。本年度稅前收入為 450 萬美元，這得益於我們抵押貸款業務的積極貢獻以及其他投資的實現收益。

Mortgage originations for the year were $437 million, up 2% from the prior year. Contributions from the servicing portfolio in addition to proactive cost management throughout the past year have sustained our profitability despite the prevailing interest rate environment. As we look ahead, we expect origination volumes to improve given the outlook for declining mortgage rates. In April 2024, we sold our Invesque shares, crystallizing the capital loss for tax purposes, representing approximately $107 million that can be used to offset any future taxable gains.

今年抵押貸款發放 4.37 億美元，比上年增長 2%。儘管在當前的利率環境下，服務組合的貢獻以及過去一年積極主動的成本管理仍維持了我們的獲利能力。展望未來，鑑於抵押貸款利率下降的前景，我們預計貸款發放量將會改善。2024 年 4 月，我們出售了 Invesque 股票，使稅務資本損失具體化，相當於約 1.07 億美元，可用於抵消任何未來的應稅收益。

Finally, consistent with past quarters, we have included information to arrive at Tiptree's sum-of-the-parts value, which takes into account a range of values for Fortegra based on the multiple implied by Warburg investment as well as our peer earnings multiples.

最後，與過去幾個季度一致，我們納入了得出 Tiptree 的各部分總和值的信息，其中考慮了基於 Warburg 投資隱含的倍數以及我們同行盈利倍數的 Fortegra 的一系列價值。

Fortegra's adjusted net income increased to $137 million on a trailing 12 month basis. This growth, along with our holdings in Tiptree Capital, has contributed to a rise in our view of Tiptree's intrinsic value per share.

Fortegra 過去 12 個月的調整後淨利潤增至 1.37 億美元。這種成長，加上我們持有 Tiptree Capital 的股份，導致我們對 Tiptree 每股內在價值的看法上升。

With that, I'll pass the call back to Michael to wrap up our prepared remarks.

接下來，我會將電話轉給邁克爾，以結束我們準備好的演講。

Thanks, Scott. To quickly summarize, we are very pleased with the first half performance of our businesses. Fortegra continues to produce record results, both from a growth and return perspective. Reliance was profitable in a tough operating environment and is focused on opportunities to grow its volume. We are well positioned financially, and we could not be more excited about the future. And as always, we at Tiptree will continue to look for opportunities to allocate capital for long-term value creation.

謝謝，斯科特。簡而言之，我們對上半年的業務表現非常滿意。從成長和回報的角度來看，Fortegra 繼續創造創紀錄的表現。Reliance 在艱難的營運環境中實現了盈利，並專注於擴大銷售的機會。我們的財務狀況良好，我們對未來感到無比興奮。一如既往，我們 Tiptree 將繼續尋找機會分配資本以創造長期價值。

I'd now like to turn the call back over to the operator for Q&A.

我現在想將電話轉回給接線員進行問答。

Thank you. We will now be conducting a question and answer session. (Operator Instructions) We have no questions at this point of time. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。我們現在將進行問答環節。（操作員說明）目前我們沒有任何問題。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。