Tiptree has secured a USD200 million strategic investment in its insurance subsidiary, The Fortegra Group (Fortegra) from Warburg Pincus.
The investment will give Warburg Pincus an approximate 24 per cent ownership in Fortegra on a fully diluted basis and is expected to close in the first quarter 2022. This transaction highlights the underlying intrinsic value of Fortegra to Tiptree shareholders, representing a significant milestone for the Company.
Fortegra is a rapidly growing and consistently profitable specialty insurer, underwriting over USD2.0 billion of gross written premiums and premium equivalents annually. The business underwrites and administers a variety of specialty insurance products and warranty solutions across the United States and Europe.
Fortegra’s strong financial performance in 2020 and the first half of 2021 demonstrates the growth trajectory and consistent underwriting results of the business. With the backing of Tiptree and Warburg Pincus, Fortegra enters its next phase of growth focused on the specialty admitted and E&S lines, while maintaining its historically strong underwriting principles.
Tiptree’s Executive Chairman Michael Barnes says: “This investment accomplishes many of our strategic goals including raising capital to accelerate Fortegra’s growth and recapitalising both companies balance sheets through the repayment of indebtedness.
“We are excited to continue working with Rick and the Fortegra team as they execute on their long-term objectives, and we look forward to a strong partnership with Dan Zilberman and the Warburg Pincus team. They bring significant expertise across many sectors, including insurance, and will be great partners in support of Fortegra’s continued success.
“Our objective has always been to build an insurance enterprise that generates exceptional returns for its investors by complementing underwriting results with fee revenue. This transaction represents the collaboration of industry experience, capital and investment acumen that will be the catalyst to accelerate Fortegra’s growth as a global specialty insurer. Joining forces with Warburg Pincus is yet another chapter in the Fortegra story and together Fortegra, Tiptree and Warburg Pincus will accelerate the exceptional growth and profitability of Fortegra,” says Rick Kahlbaugh, the Chief Executive Officer of Fortegra.
“Fortegra’s talented management team has built a world-class specialty insurance platform delivering high quality products and services to its customers worldwide. We are excited to partner with Rick Kahlbaugh and Tiptree’s experienced management team and are committed to Fortegra’s continued growth and long-term success,” says Dan Zilberman, Managing Director and Head of Special Situations, Warburg Pincus.
“Our investment in Fortegra underscores our commitment to partnering with innovative companies in the insurance sector. We look forward to supporting Fortegra as they continue to expand their capabilities,” adds Jeff Stein, Managing Director, Warburg Pincus.
