Tiptree Inc.

Greetings. Welcome to the TipTree, Inc. Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Sandra Bell, Chief Financial Officer. Thank you. You may begin.

Good morning. and welcome to our fourth quarter 2021 earnings call. We are joined today by our executive chairman, Michael Barnes, and CEO, Jonathan Alani. You can find the slides that accompany this review on our investor relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business 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. In addition, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's presentation. Reconciliation of non-GAAP financial measures and other associated disclosures are contained in our SEC filings, the appendix to our presentation, and posted on our website. With that, I will turn the call over to Michael.

Good morning, everyone, and welcome to our fourth quarter earnings call. 2021 proved to be one of the best years for Tiptree since its founding in June 2007. Tiptree's share price appreciation plus dividends for the year produced a total return for shareholders of 179%. Revenues for the year increased to $1.2 billion, up 48% from the prior year. An adjusted net income increased to $64 million, up 24%, a record year for both metrics. All of Tiptree's cornerstone businesses were profitable in 2021. Under the guidance of CEO Rick Calabon and his team, our specialty insurance business, the Vertegra Group, continued to build upon its exceptional multi-year track record, producing a record adjusted return on equity of 22%, while growing top-line premiums at 32% for the year. 2021 marks the seventh year which Vertegra has been part of the Tiptree family of companies. In that time, Top line premium and equivalents have grown from just over $860 million to $2.2 billion, representing a 17% growth rate. The combined ratio has been extremely consistent at an average 91%, which improved modestly in 2021. And lastly, adjusted net income has improved to $67 million as of 2021, growing 23% per annum since our acquisition. We are quite proud of these achievements and anticipate seeing Fortegra continue this growth. In October, we announced the $200 million investment in Fortegra from Warburg Pincus, which upon closing will result in an approximate 24% ownership of the business on an as-converted basis. We believe Warburg's investment validates Fortegra's growth story and evidences Fortegra's intrinsic value. As we progress through the regulatory approval process, which we anticipate will be completed in the second quarter of this year, we are looking forward to working closely with Warburg's team of seasoned professionals and welcome their partnership in guiding Protegra's continued growth. Investments held at Tiptree Capital also performed well in 2021, with return on average equity of 22%. Our ownership of Reliance, which originates and services residential mortgages, as well as Tiptree Marine, which holds our various shipping interests, reported excellent results for the year, benefiting from favorable market conditions as global economies continued the recovery from the depths of the COVID-19 pandemic. We are constantly evaluating the best use of shareholder capital, comparing the long-term returns of potential investments in our businesses versus the gain from share repurchases. Over the past several years, in periods when our shares have traded at a clear discount, we have been very active in buying back TipTree stock. In fact, from 2014 through 2021, we repurchased a total of 15 million shares, or 36% of the shares outstanding at year-end 2014, and these were purchased at an average of a 45% discount to book. In summary, we were very pleased with Tiptree's results for 2021 and believe there is a clear path to continued growth in the coming years. With that, I'll pass it to Sandra, who will take you through the financial results in more detail.