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Tiptree Inc   (TIPT)
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What are Tiptree Inc's Business Segments?



Insurance and Insurance Services
Tiptree’s insurance operations consist of Fortegra, a specialized insurance and insurance services company offering consumer related protection products, including credit insurance, non-standard auto insurance, warranties, service contracts, auto warranty and roadside assistance. Fortegra also offers administration services through a vertically integrated platform and provides fronting services for self-insured clients.

Fortegra’s products and related services offer protection from life events and uncertainties along with simplified steps to ease consumers’ recovery. Credit insurance and debt protection products offer consumers the option to protect a loan balance in the event of death, disability, job loss or other events that could impair the consumers’ ability to repay a debt and damage their credit. Fortegra’s non-standard auto insurance programs, administered by managing general agents (“MGAs”), focus on servicing consumers in the non-standard market. Warranty and other service contracts for mobile handsets, furniture and major appliances provide consumers protection from product failure and loss. Automotive products protect consumers from mechanical failure and provide roadside assistance when needed.

Fortegra’s products are marketed under its Fortegra, Life of the South, ProtectCELL, 4Warranty, United Motor Club, Continental Car Club, Auto Knight and Consecta brands. Through these brands, Fortegra delivers credit insurance, debt protection, warranty contracts, motor club solutions, membership plans and other services to installment loan companies, retailers, independent wireless dealers, regional banks, community banks, warranty administrators, automobile dealers, vacation ownership developers and credit unions. Fortegra’s clients then offer these products and services to their customers in conjunction with consumer transactions.

Fortegra typically structures agreements with its clients whereby they share in the economic results of the program either through retrospective commission arrangements or producer-owned reinsurance companies. Fortegra may selectively assume insurance underwriting risk to meet clients’ needs or to enhance its profitability.

Fortegra generates revenues from net earned premiums. These premiums consist of direct and assumed earned premiums generated from the direct sale of payment protection insurance policies and non-standard auto insurance policies and premiums written by another carrier for payment protection insurance policies assumed by Fortegra. In addition to ceding premiums to producer owned reinsurance companies, Fortegra elects to cede to reinsurers a significant portion of the credit and auto insurance that it underwrites for loss protection and capital management purposes. Net earned premiums are offset in-part by commission expenses and loss and loss adjustment expenses.

In addition, Fortegra generates service and administrative fee revenue for administering payment protection products and fronting arrangements on behalf of its clients and earns service and administrative fees from sales of warranty products and motor club solutions. These revenues are offset in part by commission expenses and member benefit claims. Fortegra earns ceding commissions for credit insurance that it cedes to reinsurers through coinsurance arrangements. In addition, Fortegra generates net investment income from its investment portfolio.

Mortgage Business
The operations of Luxury and Reliance include the origination, packaging and sale of mortgage loans, primarily FHA/ VA, conforming/agency and jumbo mortgage loans. The loans are typically sold shortly after origination into a liquid secondary market. Loans sold into the secondary market may be sold “servicing-retained” or “servicing-released,” referring to whether the rights to service the mortgage are retained by the originator or released to the secondary market investor at the time of sale. Luxury and Reliance currently sell all of their loans on a servicing released basis. Our mortgage business is financed using warehouse revolving credit facilities to fund mortgage loans held for sale. Revenues are generated from gain on sale of loans, net interest income and loan fee income.

Our mortgage business offers a variety of residential fixed and adjustable rate mortgage products. We currently use two production channels to originate or acquire mortgage loans: retail sales offices (commonly referred to as “retail”), and a broker channel (commonly referred to as “wholesale”). Each production channel produces similar mortgage loan products and generally applies the same underwriting standards. We leverage technology to streamline the mortgage origination process and bring service and convenience to both channels. In the wholesale channel, brokers are able to register and lock loans, check the status of the loan, and deliver documents in electronic format through the Internet. Our sales support team assists brokers in jurisdictions where our mortgage business is licensed to do business.

In the retail channel, loans are originated by mortgage loan originators employed by us. When loans are originated on a retail basis, the origination documentation is completed internally inclusive of customer disclosures and other aspects of the lending process and the funding of the transactions. In the wholesale channel, an unaffiliated bank, mortgage bank, or mortgage brokerage company completes much of the loan paperwork. All loans are underwritten on a loan-level basis to our underwriting standards.

Siena Lending Group
Siena is a commercial finance company providing financing solutions to small and medium sized U.S. companies. Siena originates, structures, underwrites and services senior secured asset-based loans for companies with sales typically between $5 million and $50 million operating across a range of industry sectors. Its core financing solutions include revolving lines of credit and term loans and typically range in size from $1 million to $25 million. Siena also has the ability to arrange significantly larger transactions that may be syndicated to others or Siena may participate in large syndications itself. Siena funds its lending practice from capital contributions by its owners as well as from a revolving credit agreement.


Siena’s loans are typically used to fund working capital needs and are secured by eligible, margined collateral, including accounts receivable, inventories, and, to a lesser extent, other long-term assets. In determining a borrowers’ ability and willingness to repay loans, Siena conducts a detailed due diligence investigation to assess financial reporting accuracy and capabilities as well as to verify the values of business assets, among other things. Siena employs third parties to conduct field exams to audit financial reporting and to appraise the value of certain types of collateral in order to estimate its liquidation value. Financing arrangements with customers also typically include substantial controls over the application of borrowers’ cash and Siena retains discretion over collateral advance rates and eligibility among other key terms and conditions.

Siena also offers a servicing platform, which provides asset-based lending solutions for community and regional banks that do not have the expertise or capacity to underwrite or service asset-based loans.

Real Estate
Tiptree’s real estate operations consist of Care, a real estate investment company focused on seniors housing.

In Triple Net Lease Properties, Care only owns the real estate and enters into a long term lease with an operator who is typically responsible for bearing operating costs, including maintenance, utilities, taxes, insurance, repairs and capital improvements. Triple Net Lease Properties are not consolidated since Care does not manage the underlying operations. For Triple Net Lease Properties operations, Care recognizes primarily rental income from the lease since substantially all expenses are passed through to the tenant. In Managed Properties, Care generally owns between 65-80% of the real estate and the operations with affiliates of the management company owning the remainder. Care therefore consolidates all of the assets, liabilities, income and expense of the Managed Properties operations in segment reporting.

Care’s seniors housing communities currently include senior apartments, independent and assisted living communities, a skilled nursing facility and memory care communities. Rent payments and services provided in these facilities are primarily paid for by the residents directly or through private insurance and are less reliant on government reimbursement programs such as Medicaid and Medicare. Care intends to continue to grow its portfolio primarily through the acquisition of seniors housing properties, utilizing investment structures such as Triple Net Lease Properties and Managed Properties. As Care acquires additional properties and expands its portfolio, it intends to further diversify its concentrations by tenant, asset class and geography within the seniors housing sector, including further investments in senior apartments, independent and assisted living communities, and memory care communities.

Asset Management
TAMCO

Tiptree’s asset management operations are conducted through TAMCO, an SEC-registered investment adviser that is primarily a holding company for Tiptree’s asset management subsidiaries, which include Telos and MCM. Telos primarily manages credit related assets. MCM currently manages portfolios of tax exempt securities for third parties and the Company. Tiptree seeks to grow its asset management operations through acquisitions and through investments in new products launched and managed by its subsidiaries.

   

Tiptree Inc Tax Rate Companies within the Property & Casualty Insurance Industry


Business Segments Q3
Revenues
(in millions $)
Q3
Income
(in millions $)
(Sep 30 2023)
%
(Profit Margin)
Total 416.51 8.87 2.13 %

Growth rates by Segment Q3
Y/Y Revenue
%
(Sep 30 2023)
Q/Q Revenue
%
Q3
Y/Y Income
%
(Sep 30 2023)
Q/Q Income
%
Total 14.59 % 2.97 % -55.79 % -25.16 %

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