Tiptree Financial Inc. (NASDAQ:TIPT) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 09:00 am ET


Tiptree Financial Inc. (NASDAQ:TIPT) Q3 2019 Earnings Conference Call - Final Transcript


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Greetings. Welcome to Tiptree, Inc. Third Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Sandra Bell, Chief Financial Officer. Ms. Bell, you may begin.

Sandra Bell

Good morning, and welcome to our third quarter 2019 earnings call. We are joined today by our Executive Chairman, Michael Barnes; and our CEO, Jonathan Ilany. We have posted our earnings release and presentation on our website at tiptreeinc.com. Our remarks today are qualified in their entirety by the disclaimers on Page 1 of the presentation.

This presentation supplements our SEC filings and is provided solely for information purposes. Throughout the presentation, we made forward-looking statements. Our businesses are subject to risks and uncertainties, which are outlined in our SEC filings and which could impact our expectations of future results. Except as required by securities laws, we undertake no obligation to update any forward-looking statements.

In addition, we use non-GAAP measures, which we believe provides supplemental information about our business and are useful to investors. As these measures are not GAAP, it should not be used as a substitute for GAAP disclosures. The appendix in the presentation provides a reconciliation of each of these measures to their GAAP equivalents.

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

Michael Barnes

Thank you, Sandra, and good morning to everyone. As we enter the final quarter of 2019, we are pleased with the performance of Tiptree's businesses, which have resulted in a year-to-date return to shareholders of 7% as measured by growth in book value per share and dividends paid. At a macro level, we have not changed our overall view of anticipating a slowing of global economies over the next few years. However, we remain bullish on the long-term stability and continued expansion of the US. As well as the outlook for active global trade. With this view, underlying our strategic perspective, we believe our core businesses are well positioned to benefit from these trends. Fortegra continues to expand its insurance and warranty premium growth at double-digit rates. In addition to growing organically by adding new clients and supporting our existing clients through the addition of new products and services, we also continue to search for attractive acquisitions to accelerate our growth.

Within Tiptree Capital, we continue to see shipping offering attractive opportunities based on near-term technicals and long-term fundamentals. We anticipate allocating additional capital to this sector when opportunities present themselves. Conversely, we continue to be cautious on high-yield corporate credit and believe we are near the back end of a decade-long credit recovery cycle. Given our view, we have taken active steps over this past year to significantly reduce Tiptree's overall exposure to credit.

However, also with this concern in mind, we have earmarked a portion of our capital toward what we believe will be increasing opportunities over the coming years in stressed and distressed corporate credit, particularly in the middle