Tiptree Inc.

Greetings and welcome to the TipTree second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott McKinney, Chief Financial Officer. Please go ahead.

Good morning, and welcome to our second quarter 2023 earnings call. Joining me today are Michael Barnes, our Executive Chairman, and Jonathan Alani, CEO. A copy of our earnings release, investor presentation, and 10Q are on our website, tiptreeinc.com. 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. During the call this morning, we will discuss non-GAAP financial measures, which are described in more detail in our presentation. Reconciliations of these 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.

Thanks, Scott, and good morning to everyone. TIPCRE completed a strong first half of 2023, led by our specialty insurance business, Protegra. which continued to build upon its history of exceptional growth by posting record results year-to-date. As we enter the second half of the year, Tiptree's balance sheet remains well capitalized with no holding company debt and substantial cash for future deployment. Tiptree's revenues for the year increased to $786 million, up 18% from the prior year, while contributing adjusted net income of $41 million. As just mentioned, Protegra posted a record first half, with gross written premiums and equivalents of $1.6 billion, up 34% from the prior year. Excess and surplus lines and services offerings were the largest contributors, and the pipeline of future growth remains strong in those sectors of the insurance markets. For the year, the Protegra team delivered a combined ratio of 91%, and an adjusted return on equity of 30%. These results are a testament to the company's strategy of disciplined specialty underwriting and maintaining a scalable cost structure focused on improving the agent experience through technology. The markets for specialty P&C risk remain favorable, driven by years of capital shortfalls, inflationary pressures, and a higher frequency of catastrophic events. Given this backdrop, we anticipate the hard market environment will extend for Tegra's expansion as it has over the past several years. For Tegra's investment portfolio grew 22%, ending the quarter with $1.2 billion of investable assets. We are continuing to invest the growing book of paid-in premiums in high-quality, shorter-duration liquid securities to take advantage of the attractive returns. Portfolio duration was just under two years at quarter end, which gives us the opportunity to modestly extend duration as we anticipate interest rate increases will flow in the near term. In TipTree Capital, we have over $200 million of capital deployed across our mortgage operations, cash, and publicly traded equities for which we take a long-term view. Our mortgage origination and servicing business experienced a modest loss for the first half of the year, but the appreciation of our servicing book and management's proactive cost controls produced positive returns in the second quarter and kept the business near break-even over the past 12 months. As mortgage rates appear to stabilize, with monetary policy nearing an inflection point, we maintain a positive outlook for our mortgage business. At Tiptree, we continue to look for opportunities to generate long-term absolute returns. Having no set holding period and the ability to take very long-term views, we believe we have a distinct competitive advantage to others seeking to allocate capital. With a strong start in 2023, we are well positioned to continue our growth and we maintain a positive outlook for the company. With that, I'll let Scott take you through the financial update.