10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
☒	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2020

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to            

Commission File Number: 001-33549

Tiptree Inc.

(Exact name of Registrant as Specified in Its Charter)   

Maryland	38-3754322
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

299 Park Avenue	13th Floor	New York	New York	10171
(Address of Principal Executive Offices)				(Zip Code)

(Registrant’s telephone number, including area code) (212) 446-1400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
common stock, par value $0.001 per share	TIPT	NASDAQ	Capital Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes x     No   ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨                    Accelerated filer x

Non-accelerated filer ¨                    Smaller reporting company ☐

                            Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)   Yes ☐     No ☒ 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 762(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

As of June 30, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was approximately $161,281,173, based upon the closing sales price of $6.45 per share as reported on the Nasdaq Capital Market. For purposes of this calculation, all of the registrant’s directors and executive officers were deemed to be affiliates of the registrant.

As of March 8, 2021, there were 32,538,486 shares, par value $0.001, of the registrant’s common stock outstanding.

Documents Incorporated by Reference

Certain information in the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission relating to the registrant’s 2021 Annual Meeting of Stockholders is incorporated by reference into Part III.

TIPTREE INC.

Annual Report on Form 10-K

December 31, 2020

Table of Contents

ITEM	Page Number
PART I	4
Item 1. Business	8
Item 1A. Risk Factors	19
Item 1B. Unresolved Staff Comments	45
Item 2. Properties	45
Item 3. Legal Proceedings	45
Item 4. Mine Safety Disclosures	45
PART II	45
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6. Selected Financial Data	47
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	78
Item 8. Financial Statements and Supplementary Data	F- 1
Consolidated Balance Sheets for December 31, 2020 and December 31, 2019	F- 1
Consolidated Statements of Operations for the three years ended December 31, 2020, 2019 and 2018	F- 2
Consolidated Statements of Comprehensive Income (Loss) for the three years ended December 31, 2020, 2019 and 2018	F- 3
Consolidated Statement of Changes in Stockholders’ Equity for the three years ended December 31, 2020, 2019 and 2018	F- 4
Consolidated Statements of Cash Flows for the three years ended December 31, 2020, 2019 and 2018	F- 6
Notes to Consolidated Financial Statements	F- 7
(1) Organization	F- 7
(2) Summary of Significant Accounting Policies	F- 7
(3) Acquisitions	F- 18
(4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations	F- 21
(5) Segment Data	F- 23
(6) Investments	F- 25
(7) Notes and Accounts Receivable, net	F- 31
(8) Reinsurance Receivables	F- 32
(9) Goodwill and Intangible Assets, net	F- 34
(10) Derivative Financial Instruments and Hedging	F- 36
(11) Debt, net	F- 37
(12) Fair Value of Financial Instruments	F- 40
(13) Liability for Unpaid Claims and Claim Adjustment Expenses	F- 45
(14) Revenue from Contracts with Customers	F- 48
(15) Other Assets and Other Liabilities and Accrued Expenses	F- 50
(16) Other Revenue and Other Expenses	F- 50
(17) Stockholders’ Equity	F- 51
(18) Accumulated Other Comprehensive Income (Loss)	F- 54
(19) Stock Based Compensation	F- 54
(20) Income Taxes	F- 58
(21) Commitments and Contingencies	F- 61
(22) Earnings Per Share	F- 62
(23) Related Party Transactions	F- 63
(24) Summarized Quarterly Information (Unaudited)	F- 64
(25) Subsequent Events	F- 64
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	56
Item 9A. Controls and Procedures	56
Item 9B. Other Information	57
PART III	57
Item 10. Directors, Executive Officers and Corporate Governance	57
Item 11. Executive Compensation	57
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13. Certain Relationships and Related Transactions, and Director Independence	57

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TIPTREE INC.

Annual Report on Form 10-K

December 31, 2020

Table of Contents

ITEM	Page Number
Item 14. Principal Accountant Fees and Services	57
PART IV	57
Item 15. Exhibits, Financial Statement Schedules	57
Item 16. Form 10-K Summary	60
Signatures	61

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PART I

Forward-Looking Statements

Except for the historical information included and incorporated by reference in this Annual Report on Form 10-K, the information included and incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and our strategic plans and objectives. When we use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “project,” “should,” “target,” “will,” or similar expressions, we intend to identify forward-looking statements.

Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those described in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K and in our other public filings with the SEC.

The factors described herein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could affect our forward-looking statements. Consequently, our actual performance could be materially different from the results described or anticipated by our forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by the applicable law, we undertake no obligation to update any forward-looking statements.

Market and Industry Data

This Annual Report on Form 10-K includes certain market and industry data and statistics, which are based on publicly available information, industry publications and surveys, reports by market research firms and our own estimates based on our management’s knowledge of, and experience in, the insurance industry and market segments in which we compete. Third-party industry publications and forecasts generally state that the information contained therein has been obtained from sources generally believed to be reliable. In addition, certain information contained in this Form 10-K, including information relating to the proportion of new opportunities we pursue, represents management estimates. While we believe our internal estimates to be reasonable, they have not been verified by any independent sources. Such data involve risks and uncertainties and are subject to change based on various factors, including those discussed under the captions “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements and Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects. These risks are discussed more fully in Item 1A. Risk Factors herein. These risks include, but are not limited to, the following:

•A portion of our assets are illiquid or have limited liquidity, which may limit our ability to sell those assets at favorable prices or at all and creates uncertainty in connection with valuing such assets.

•Our investment in Invesque shares is subject to market volatility.

•We operate in highly competitive markets for business opportunities and personnel, which could impede our growth and negatively impact our results of operations.

•The amount of statutory capital and reserve requirements applicable to our insurance subsidiaries can increase due to factors outside of our control.

•Our insurance subsidiaries’ actual claims losses may exceed their reserves for claims, which may require them to establish additional reserves.

•Performance of our insurance subsidiaries’ investment portfolio is subject to a variety of investment risks.

•Our insurance subsidiaries could be forced to sell investments to meet their liquidity requirements.

•We may need to raise additional capital in the future or may need to refinance existing indebtedness, but there is no assurance that such capital will be available on a timely basis, on acceptable terms or at all.

•Cybersecurity attacks or information system failures could disrupt our businesses, including our insurance businesses.

•Third-party vendors our insurance subsidiaries rely upon to provide certain business and administrative services on their behalf may not perform as anticipated. These include independent financial institutions, lenders, distribution partners, agents and retailers for distribution of its products and services, and the loss of these distribution sources, or their failure to sell our insurance business’s products and services could be adverse.

•A downgrade in our insurance subsidiaries’ claims paying ability or financial strength ratings could increase policy surrenders and withdrawals, adversely affecting relationships with distributors and reducing new policy sales.

•If market conditions cause reinsurance to be more costly or unavailable, our insurance subsidiaries may be required to bear increased risks or reduce the level of their underwriting commitments.

•Our insurance subsidiaries may incur losses if reinsurers are unwilling or unable to meet their obligations under reinsurance contracts.

•New lines of business or new products and services may subject our insurance subsidiaries to additional risks.

•The effects of emerging claim and coverage issues on our insurance subsidiaries’ business are uncertain.

•Our insurance subsidiaries’ international operations expose them to investment, political and economic risks, including foreign currency and credit risk.

•Our insurance subsidiaries’ continued growth depends partly on the continued growth of their businesses’ customer base.

•Our results of operations have in the past varied quarterly and may not be indicative of our long-term prospects.

•Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity, could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims, or a combination of these effects, which, in turn, could affect our insurance subsidiaries’ growth and profitability.

•Our businesses’ risk management policies and procedures may prove to be ineffective and leave them exposed to unidentified or unanticipated risk.

•Our insurance subsidiaries may not be able to generate sufficient cash to service all of their indebtedness and may be forced to take other actions to satisfy their obligations under their indebtedness, which may not be successful.

•Restrictive covenants in the agreements governing our insurance subsidiaries’ indebtedness may restrict their ability to pursue their business strategies.

•Retentions in various lines of business and catastrophic events expose our insurance subsidiaries to potential losses.

•The exit of the United Kingdom from the European Union could adversely affect our insurance subsidiaries’ business.

•Due to the structure of some of our insurance business’s commissions, it is exposed to risks related to the creditworthiness of some of its independent agents and program partners.

•Our insurance subsidiaries may act based on inaccurate or incomplete information regarding the accounts they underwrite.

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•The insurance industry is cyclical in nature, competition is intense and our insurance business may lose clients or business as a result of consolidation within the financial services industry or otherwise.

•Any failure to protect our insurance subsidiaries’ intellectual property rights could impair their intellectual property, technology platform and brand. In addition, they may be sued for alleged infringement of their proprietary rights.

•Our insurance subsidiaries employ third-party licensed software for use in their business, and the inability to maintain these licenses, errors in the software they license or the terms of open source licenses could result in increased costs or reduced service levels, which would adversely affect their business.

•A significant decrease of the market values of our vessels could cause us to incur impairment losses.

•Our vessels may suffer damage and we may face unexpected drydocking costs.

•The operation of dry bulk vessels and product tankers has certain unique operational risks, including piracy.

•Some of our investments are made jointly with other persons or entities, which may limit our flexibility with respect to such jointly owned investments.

•Our mortgage business is significantly impacted by interest rates. Changes in prevailing interest rates or U.S. monetary policies that affect interest rates may have a detrimental effect on our mortgage business.

•Our mortgage business is highly dependent upon programs administered by GSEs, such as Fannie Mae and Freddie Mac, as well as Ginnie Mae, to generate revenues through mortgage loan sales to institutional investors. Any changes in existing U.S. government-sponsored mortgage programs could materially and adversely affect our mortgage business, financial condition and results of operations.

•We may be unable to obtain sufficient capital to meet the financing requirements of our mortgage business.

•In our mortgage business, we may sustain losses and/or be required to indemnify or repurchase loans we originated, or will originate, if, among other things, our loans fail to meet certain criteria or characteristics.

•We may be limited in the future in utilizing net operating losses incurred during prior periods to offset taxable income.

•We may leverage certain of our assets and a decline in the fair value of such assets may adversely affect our financial condition and results of operations.

•Certain of our and our subsidiaries’ assets are subject to credit risk, market risk, interest rate risk, credit spread risk, call and redemption risk and refinancing risk, and any one of these risks may materially and adversely affect the value of our assets, our results of operations and our financial condition.

•Our risk mitigation or hedging strategies could result in our experiencing significant losses.

•The values we record for certain investments and liabilities are based on estimates of fair value made by our management, which may cause our operating results to fluctuate and may not be indicative of the value we can realize on a sale.

•The accounting rules applicable to certain of our transactions are highly complex and require the application of significant judgment and assumptions by our management. In addition, changes in accounting interpretations or assumptions could impact our financial statements.

•Because we are a holding company, our ability to meet our obligations and pay dividends to stockholders will depend on distributions from our subsidiaries that may be subject to restrictions and income from assets.

•Some provisions of our charter may delay, deter or prevent takeovers and business combinations that stockholders consider in their best interests.

•Maryland takeover statutes may prevent a change of our control, which could depress our stock price.

•Our holding company structure with multiple lines of business, may adversely impact the market price of our common stock and our ability to raise equity and debt capital.

•Maintenance of our 1940 Act exemption imposes limits on our operations.

•Increasing regulatory focus on privacy issues and expanding laws could affect our various subsidiaries’ business models and expose them to increased liability.

•Our insurance subsidiaries could be adversely affected if their controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.

•Our businesses are subject to risks related to litigation and regulatory actions, including increased compliance costs.

•Our international activities increase the compliance risks associated with economic and trade sanctions imposed by the United States, the EU and other jurisdictions.

•We could be materially adversely affected by violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and anti-corruption laws in other applicable jurisdictions.

•Assessments and premium surcharges for state guaranty funds, secondary-injury funds, residual market programs and other mandatory pooling arrangements may reduce our insurance subsidiaries’ profitability.

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Note to Reader

In reading this Annual Report on Form 10-K, references to:

“1940 Act” means the Investment Company Act of 1940, as amended.

“A.M. Best” means A.M. Best Company, Inc.

“AUM” means assets under management.

“Care” means Care Investment Trust LLC.

“CFPB” means the Consumer Financial Protection Bureau.

“CLOs” means collateralized loan obligations.

“Code” means the Internal Revenue Code of 1986, as amended.

“Common Stock” or “Common Shares” means Tiptree’s Class A common stock $0.001 par value for periods prior to June 7, 2018 and thereafter the common stock $0.001 par value.

“consolidated CLOs” means, for the year ended December 31, 2015: Telos 2, Telos 4, Telos 5 and Telos 6; and for the years ended December 31, 2016 and 2017, Telos 5, Telos 6 and Telos 7. During 2017, the Company exited all consolidated CLOs.

“Corvid Peak” means collectively: Corvid Peak Holdings, L.P., Corvid Peak Capital Management, LLC, Corvid Peak GP Holdings, LLC. and Corvid Peak Holdings GP, LLC, formerly known as “Tricadia”.

“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“EBITDA” means earnings before interest, taxes, depreciation and amortization.

“EU” means European Union.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fortress” means Fortress Credit Corp., as administrative agent, collateral agent and lead arranger, and affiliates of Fortress that are lenders under the Credit Agreement among the Company, Fortress and the lenders party thereto.

“Fortegra” or “The Fortegra Group” means The Fortegra Group, LLC., formerly known as Tiptree Insurance, LLC.

“Fortegra Financial” means Fortegra Financial Corporation.

“Fortegra Warranty” mean Fortegra Warranty Holdings, LLC., formerly known as Tiptree Warranty Holdings, LLC.

“GAAP” means U.S. generally accepted accounting principles.

“GSE” means government-sponsored enterprise.

“Invesque” means Invesque Inc.

“Luxury” means Luxury Mortgage Corp.

“NAIC” means the National Association of Insurance Commissioners.

“NPL” means nonperforming residential real estate mortgage loans.

“Operating Company” means Tiptree Operating Company, LLC.

“Reliance” means Reliance First Capital, LLC.

“REO” means real estate owned.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Sky Auto” means Sky Services LLC.

“Smart AutoCare” means the following entities and their subsidiaries operating under the Smart AutoCare brand: SAC Holdings, Inc., Freedom Insurance Company, Ltd., Dealer Motor Services, Inc., Independent Dealer Group, Inc., Ownershield, Inc. and Accelerated Service Enterprise, LLC.

“TAMCO” means Tiptree Asset Management Company, LLC.

“Tax Act” means Public Law no. 115-97, commonly referred to as the Tax Cuts and Jobs Act.

“Telos” means Telos Asset Management, LLC.

“Telos 5” means Telos CLO 2014-5, Ltd.

“Telos 6” means Telos CLO 2014-6, Ltd.

“Telos 7” means Telos CLO 2016-7, Ltd.

“TFP” means Tiptree Financial Partners, L.P.

“Tiptree”, the “Company”, “we”, “its”, “us” and “our” means, unless otherwise indicated by the context, Tiptree Inc. and its consolidated subsidiaries.

“Transition Services Agreement” means the Amended and Restated Transition Services Agreement between Corvid Peak and Tiptree Inc., effective as of January 1, 2019.

“Tricadia” means collectively, Tricadia Holdings, L.P., Tricadia Capital Management, LLC., Tricadia Holdings GP, LLC, Tricadia Holdings and Tricadia GP Holdings LLC.

“VSC” means vehicle service contracts.

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Item 1. Business

OVERVIEW

Our Business

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. We classify our business as follows: the Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment. The remainder of our non-insurance operations are aggregated into Tiptree Capital - Other. Our Insurance segment consists of Fortegra, which is a leading provider of specialty insurance, warranty products and related administration services, and the Smart AutoCare brands. Insurance revenues are generated from earned premiums, net, service and administrative fees, ceding commissions and earnings on our investment portfolio. Our Mortgage segment consists of Reliance, which originates residential mortgage loans which are typically sold to secondary market investors, either servicing released or servicing retained. Mortgage revenues are generated from gain on sale of loans, net servicing income, net interest income and loan fee income. We also generate earnings from a diverse group of select investments that we refer to as Tiptree Capital - Other.

Our business is comprised of the following:

•Insurance

–Operations - We are a specialty insurance program underwriter and service provider, which focuses on niche business lines and fee-oriented services. The significant majority of our products are sold through independent agents. Our Insurance segment includes the Fortegra and the Smart AutoCare brands.

–Investments - We invest a majority of our insurance related investment assets in high quality fixed income securities to support our claims paying activities. To enhance our investment return objectives, we selectively allocate a portion of our insurance portfolio to higher yielding credit-risk assets, equities and alternative investments.

•Tiptree Capital - We also own a diverse group of investments, which includes control investments in businesses, investments in securities and other assets, all of which are managed to increase shareholder value, through a combination of current earnings and capital appreciation. We view these investment decisions as distinctly separate from our core insurance operations. We expect the investments within Tiptree Capital to change over time as we exit investments and our outlook on investment opportunities changes. Today, Tiptree Capital consists primarily of investments in shares of Invesque, maritime transportation and mortgage origination operations.

–Mortgage - as a nationwide mortgage lender, we are approved to originate and service Fannie Mae, Freddie Mac and Ginnie Mae eligible loans. We primarily originate, sell and service conventional, conforming agency and government insured residential mortgage loans originated through our retail channel.

–Other - consists primarily of investments in shares of Invesque and maritime transportation.

As of December 31, 2020, Tiptree and its consolidated subsidiaries had 1,372 employees, 32 of which were at our corporate headquarters. Corporate employees are responsible for corporate strategy, capital allocation and investment decisions, as well as all public company reporting and compliance.

Our businesses are subject to regulation as described below. The 1940 Act may limit the types and nature of businesses that we engage in and assets that we may acquire. See “Risk Factors-Risks Related to Regulatory and Legal Matters-Maintenance of our 1940 Act exemption will impose limits on our operations.”

Our Operating Principles

At Tiptree, we are continually looking for investment opportunities that fit within our operating principles and make capital allocation decisions for the most efficient deployment of our capital.

Underwrite to a Profit. Our principal strategic objective is to continue expanding Fortegra’s operations, particularly the specialty insurance and warranty businesses. Our highest priority is to maintain strong underwriting practices, with attention paid to the insurance disciplines of pricing, underwriting and claims management.

Invest for Long-term Returns. Our financial goals are to generate consistent and growing earnings and cash flow, and to enhance shareholder value as measured by growth in book value per share plus dividends. We manage Tiptree with a long-term perspective, balancing cash-flowing investments with opportunities for capital appreciation. We focus on targeting investment returns that have

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a combination of current earnings and long-term capital appreciation, understanding that temporary accounting gains and losses may vary significantly from one period to the next.

Think Like Owners. Efficient deployment of capital is our top priority. We aim to find the best use of capital to create long-term value for our shareholders. We hope to achieve this through a combination of acquisitions, investments in our existing businesses, monetization opportunities, opportunistic share repurchases and paying a consistent dividend. As of March 11, 2021, directors, officers, employees and related trusts owned 30% of the Company.

Insurance

Overview

The Fortegra Group, LLC (“Fortegra”), is an established, growing and consistently profitable specialty insurer. We purposefully focus on niche business lines and fee-oriented services, providing us with a unique combination of specialty insurance program underwriting, warranty and service contract products and related service solutions. Our vertically integrated business model creates an attractive blend of traditional underwriting revenues, investment income and unregulated fee revenues. Our differentiated approach has led to robust growth, consistent profitability and high cash flows. Our business was founded in 1981. Fortegra is headquartered in Jacksonville, Florida, and as of December 31, 2020, had 716 employees across 15 offices in four countries.

We target lines of business with a small premium-per-risk profile, which has increased our frequency exposure but has limited our severity and catastrophic risks. We believe this focus has allowed us to produce superior underwriting results through a more granular spread of risk. We use our proprietary technology to efficiently and effectively administer our business to specialty markets that we feel are underserved by larger, less agile insurers. Our underwriting expertise, strong distribution relationships and proprietary technology empower us to remain agile and take advantage of attractive opportunities in challenging market conditions.

We are an agent-driven business, employing a “one-to-many” distribution model, which allows us to leverage our high-quality partners’ brands and customer bases. We deliver our products through independent insurance agents. We also partner with agents that are embedded in consumer finance companies, online and regional big box retailers, auto dealers and other companies to deliver our products that complement the consumer transaction. We use artificial intelligence (“A.I.”) technology to create a distinct lead generation advantage for our insurance distribution partners and over the past five years have maintained a greater than 95% persistency rate, which represents the annual retention of the number of our producing agents. We align our agents’ economics with their underwriting results via risk-sharing agreements, which we believe has enabled us to better manage uncertainties and deliver more consistent profit margins. Combined with our underwriting expertise and technology-enabled administration, we provide a high-value proposition to our distribution relationships.

Products and Services

U.S. Insurance: Provides niche, specialty insurance programs distributed through managing general agents (“MGAs”), wholesale agents, retail agents and brokers. We offer an array of commercial programs with a particular focus on casualty lines. These lines include professional liability, warranty, energy, allied health, general liability, directors and officers liability, life sciences, inland marine, contractors equipment, contractors liability, student legal liability, hospitality and business owner policy. We also offer a range of personal lines programs including storage unit contents, manufactured housing, GAP, auto, credit life and disability and collateral protection products. Additionally, we offer related fee-earning, unregulated products and services, such as captive administration services, program administration and premium financing, to our U.S. Insurance customers. We are active in 50 states in the United States.

•Commercial & Personal Lines: Our program business is focused on underwriting niche commercial and personal lines insurance coverages for agents, retail agents, MGAs, brokers and other program managers that require broad licensure, an “A-” or better A.M. Best rating, and specialized knowledge and expertise to deliver our products. Our commercial lines and personal lines programs include a wide array of niche commercial and personal lines programs, including admitted and excess and surplus (“E&S”) lines programs. With each program, we grant these agents and program managers the authority to produce, underwrite and administer policies subject to our pricing and underwriting guidelines. We typically transfer a substantial portion of the underwriting risk on these programs to third-party reinsurers for which we are paid a ceding fee. We generally retain between 10-30% of the premium on a net basis.

•Credit Insurance & Collateral Protection: Our credit insurance products are designed to offer consumers and lenders protection from life events that limit a borrower’s ability to make payments on outstanding loan balances. These products offer consumers and lenders the option to protect loan balance repayment in the event of death, involuntary unemployment or disability. Our collateral protection products are designed to primarily protect the lender from losses to

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collateral pledged to secure an installment loan. In most instances, these products offer lenders the option to protect collateral from a comprehensive loss due to fire, wind, flood and theft. Additionally, if the collateral is an automobile, the coverage does protect against collision losses.

U.S. Warranty Solutions: Provides consumers with protection from certain covered losses on automobiles, mobile devices, consumer electronics, appliances and furniture in the United States. Our programs include, but are not limited to, VSCs, roadside assistance and motor clubs, GAP, automobile dent and ding repair, key replacement, cellular handset protection and brown and white good service contracts. We distribute our programs through retailers, auto dealerships and cell-phone carriers. We are active in 50 states in the United States.

Our warranty and service contract products and solutions provide consumers with coverage for specific losses to automobiles, recreation vehicles, mobile devices, consumer electronics, appliances and furniture and bedding. These products offer benefits such as replacement, service or repair coverage in the event of mechanical breakdown, accidental damage and water or spill damage. Some of our warranty and service contract products are extensions of warranty coverage provided by their original equipment manufacturers. As part of our vertically integrated offering, we provide valuable services to our distribution partners including premium financing, lead generation support, insurance sales, and business process outsourcing.

Europe Warranty Solutions: Provides consumers with protection from certain covered losses on automobiles, mobile devices, consumer electronics, appliances and furniture in the European region. We offer a variety of programs, including GAP, auto extended warranty, automobile dent and ding repair, tire and wheel protection, cellular handset protection, consumer products accidental damage and others. We distribute our programs through MGAs, retail agents and auto dealerships.

Distribution and Marketing

Our programs are marketed and sold by agents and program partners. Our program partners marketing and selling warranty solutions, collateral protection and credit insurance include financial services companies, big-box retailers, furniture stores, automobile dealerships, regional cellular service providers and mobile device service providers. Our commercial and personal lines insurance programs are marketed through a network of independent insurance agents, retailers, brokers and managing general agencies. Our warranty and service contract programs are primarily marketed and sourced through insurance intermediaries including third-party administrators (“TPAs”), insurance brokers, MGAs and agents. Our vertically integrated platform also allows us to engage and enter into direct relationships with distributors. In each case, we pay our program partners a commission-based fee (or a dealer net equivalent in the case of our service contract and protection product business). A significant portion of our commission agreements are on a retrospective commission basis. This type of arrangement allows us to adjust commissions based upon underwriting results. We believe these types of commission arrangements align the economic interests of the agent and insurer. Additionally, these arrangements deliver more consistent profit margins.

We generally target markets that are niche and specialty in nature, which we believe are underserved by competitors and have high barriers to entry. We focus on establishing quality client relationships and emphasizing customer service. This focus, along with our ability to help clients enhance revenue and reduce costs, has enabled us to develop and maintain numerous long-term client relationships.

A significant portion of our marketing partnership commission agreements are on a variable or retrospective commission basis, which allows us to adjust commissions on the basis of claims experience. Under these types of arrangements, the compensation to our marketing partners is based upon the actual losses incurred compared to premiums earned. We believe these types of contractual arrangements align their economic interests with ours, help us to better manage our risk exposure and deliver more consistent profit margins with respect to these types of arrangements.

Underwriting

Our underwriting team consists of 90 underwriting professionals as of December 31, 2020. Our underwriters are industry veterans with deep knowledge of the specialty products that they underwrite, and they have longstanding relationships with our distribution partners.

We give limited underwriting authority to our MGAs. This means that we give our MGAs quote, bind and policy issuance authority within specifically agreed underwriting guidelines. Our underwriters work with our MGA partners to develop the underwriting guidelines for each program. Exceptions to the underwriting guidelines require approval from a senior underwriter.

Technology

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Our business strategy is supported by technology in four ways: the ability to effectively serve small policies in a cost efficient manner; the ability to generate business leads that fit our risk profile using A.I.; enhancing underwriting results, improving the business and experience of our distribution partners; and the ability to grow our business and add new product lines with minimal incremental expense.

Claims Management

We organize our claims department by lines of business, with specialized teams aligned by the line of business in which they have expertise. Each claims adjuster is trained and experienced in evaluating the coverage applicable to the noticed matter and effectuating an appropriate resolution. When an insured reports a claim, it is immediately directed to the proper unit for handling.

We maintain claims disposition authority for greater than 90% of claims adjudicated within the credit and warranty programs. We maintain claims disposition authority for greater than 70% of claims adjudicated within the property and casualty programs. When necessary, the claims team has access to a panel of expert attorneys, mediators, investigators and independent adjusters who will be retained in connection with litigation or loss inspection. Our claims adjusters work closely with our underwriting team by keeping them apprised of loss trends early in a program’s development. For certain lines of business that have high frequency and low severity, we utilize TPAs to process claims. This allows our claims professionals to focus on more complex claims, and enhances the efficiency of our claims department. Our MGAs do not have claims authority and the TPAs that we use do not have underwriting authority.

Our claims are generally reported and settled quickly, resulting in consistent historical loss development patterns and limited tail risk. We have data systems that allow for the centralization of data and creation of reports, which creates a management reporting tool allowing for the identification of trends within a product, specific jurisdiction or across multiple jurisdictions.

Investments

Investment income is a significant component of our earnings. Our primary investment objectives are to maintain liquidity, to preserve capital, and to generate a stable level of investment income. We rely on our conservative underwriting practices to generate investable funds. As of December 31, 2020, the majority of our investments, or $377.1 million, was comprised of fixed maturity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income (AOCI). Also included in our investments were $34.3 million of equity securities, $7.8 million of loans, at fair value, $63.9 million of exchange traded fixed income funds, at fair value, and $125.8 million of other investments.

Our investable assets are invested in asset classes that we believe will maintain liquidity and support capital preservation while producing attractive risk-adjusted returns. Most of these securities are invested in short-duration fixed income securities that are both highly liquid and highly rated. Our fixed maturity securities totaled $589 million and include cash and cash equivalents, available for sale securities, at fair value, exchange traded funds and investment grade securities classified in other investments, had a weighted-average effective duration of 2.4 years, an average S&P rating of AA, and a book yield of 1.9% as of December 31, 2020. These securities, representing 83% of our total investments, are primarily managed by BlackRock with direction from internal asset management professionals. We internally manage credit risk assets, equities and alternative assets, which represented 17% of total investments as of December 31, 2020. We conduct monthly stress tests and use predictive analytics to manage our investments, which we believe reduces risk to our investment performance. We also maintain an investment committee that meets monthly to ensure our investment objectives remain aligned with our broader strategic and financial objectives.

Risk Management and Reinsurance

Consistent with standard industry practice for most insurance companies, we use reinsurance to manage our underwriting risk and efficiently utilize capital. For example, a significant portion of our distribution partners of credit and warranty insurance products have created captive reinsurance companies to assume the insurance risk on the products they deliver. These captive reinsurance companies are known as producer owned reinsurance companies (“PORCs”) and in most instances each PORC assumes almost all of the underwriting risk associated with the insurance products they deliver. When we use PORCs, consistent with applicable laws and insurance regulations, we act in a fronting and administrative capacity on behalf of each PORC, providing underwriting and claims management services. We receive an administration fee that compensates us for our expenses associated with underwriting and servicing the underlying policies. Because reinsurance does not relieve us of our primary liability to the policyholder, we generally require cash collateral to secure the reinsurance receivable in the event that a PORC is unable to pay the claims it has assumed. In our other commercial insurance program business, our reinsurers tend to be highly rated, well-capitalized professional third-party reinsurers. We typically contract with third-party reinsurers that have attained an “A-” or better financial strength rating

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from A.M. Best. Those reinsurers that fall below this threshold are required to post collateral on a funds held basis or with a letter of credit.

Our Competitive Strengths

Focus on Niche, Underserved Specialty Lines with Significant Fee-Based Income

We focus on specialty insurance program business and have continued to diversify our revenues. We use three distinct approaches to grow our business – we pursue and acquire agents with select books of business that we believe will maintain risk-appropriate rates; we seek agents with what we believe is distinct underwriting expertise to select specific niches in programs; and we target the lines of business we believe are overlooked by the standard markets. For example, we often target the smaller premium-per-risk lines that we believe are highly profitable, have the potential to grow and are underserved by our competitors. We believe we have a unique ability to source small programs that meet our rate, form and risk threshold through our extensive distribution network and A.I. technology. We believe our underwriting expertise, proprietary technology and deep distribution relationships allow us to serve our specialty markets and capture share. We cross-sell multiple products to our customers through the breadth of our products and solutions, including fee-based services. We believe the combination of a low limits profile, low severity products and attractive fee income provides higher underwriting margin and earnings stability for our business. While low limits and low severity constitute most of our underwritten business, we believe we are agile enough to take advantage of attractive opportunities in challenging market conditions.

Track Record of Growth, Profitable Underwriting and Strong Economic Alignment with Our Distribution Network

Consistent underwriting is a function of rate adequacy and risk selection by our specialized agents. While we regularly establish sound actuarial rates similar to our insurance peers, we believe our stringent risk selection requires unique underwriting expertise by our agents and a high degree of specialty program underwriting skillsets. After we establish relationships with our targeted agents, we further solidify our alliance by creating additional value for our distribution partners through our technology platform. We believe our A.I. algorithm and machine learning assisted underwriting drives a distinct lead generation advantage for our agents. Using A.I. technology and machine learning, we identify risks that fit into an acceptable profile, enhancing the agent’s efficiency and revenue base while allowing us to experience what we believe is a superior spread of risk and exceptional underwriting results. For the year ended December 31, 2020, our combined ratio was 91.5% and has averaged 91.6% over the past five years.

Scalable, Proprietary Technology, Which Drives Efficiency and Delivers Premium Customer Service

We provide many aspects of insurance, including admitted specialty property-casualty products, E&S line offerings, administration, premium finance and other value-added services. We have a scalable and flexible technology infrastructure, together with highly trained and knowledgeable IT personnel and consultants. These resources allow us to launch new insurance and fee for service programs and expand gross written premiums and premium equivalents volume quickly and seamlessly without significant incremental expenses. Our technology also delivers low-cost, highly automated underwriting and administration services to our program partners without substantial up front investments. This technology-enhanced platform enables us to automate core business processes, reduce our operating costs, increase our operating efficiency and secure high agent retention. We have maintained a 95% persistency rate with our insurance producing agents over the past five years. Our underwriting expertise, strong distribution relationships and proprietary technology empower us to remain agile and take advantage of attractive opportunities in challenging market conditions. Our systems also enable us to provide a high level of service to our distribution partners and customers through technology.

High-Quality, Conservative Balance Sheet with Solid Capitalization and Ratings

We maintain a high quality, S&P “AA” rated, fixed income investment portfolio. Our investment portfolio’s principal objectives are to preserve capital and surplus, to maintain appropriate liquidity for corporate requirements, to support our strong ratings and to maximize returns. We have a track record of reducing our reinsurance counterparty exposure by partnering with reinsurers that have high-grade credit quality, ensuring high-quality recoverable assets and by effectively using collateral and partnering with PORCs. Our financial strength ratings of “A-” (Excellent) (Stable Outlook) from A.M. Best and “A-” (Stable Outlook) from KBRA reflect our adherence to our core values.

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Market Opportunity

Commercial & Personal Lines

We underwrite and administer both admitted and E&S line business. We believe underwriting business across multiple industries and geographies creates a conducive environment for targeting profitable programs, supporting agents with highly specialized skillsets and focusing on overlooked business lines. Our approach facilitates participation in niche markets when the rate environment presents actionable opportunities. We believe the breadth of our underwriting capacity, services and expertise afford our agents with a platform that meets the entirety of their needs. Our risk-sharing model aligns agents’ economics to their underwriting performance, incentivizing agents to grow while maintaining strict profit margin discipline. Through long-term relationships with our agents and substantial experience in the markets we serve, we believe we operate in an advantageous position against new market entrants, who we believe would find it time-consuming and expensive to compete against or replicate our success.

Credit Insurance & Collateral Protection

We are a leading provider of credit insurance protection products in the United States and believe we are well positioned to increase our market share both organically and potentially through acquisition. We believe our capabilities and reputation have allowed us to better position ourselves competitively for new business and renewals in the marketplace. We also believe our market position, capabilities and reputation will make us a preferred acquisition partner for smaller competitors that may choose to exit the market or desire a partner with more resources.

U.S. Warranty Solutions

We believe we can significantly increase our market presence in the warranty sector. We entered the warranty market as a natural extension of our insurance products given that it possesses similar attributes and distribution channels. Our warranty market gross premiums written equivalents grew to $550.0 million in the year ended December 31, 2020, compared to $297.3 million in the year ended December 31, 2019, which represents a 85% compounded annual growth rate. We believe the demand from consumers for extended service contracts on products such as automobiles, furniture, mobile phones and electronics will continue to drive long-term growth opportunities. We believe our acquisition of Smart AutoCare, combined with Fortegra, position us as a leading provider of automobile extended service contracts.

Europe Warranty Solutions

In 2018, we expanded into Europe where we believe our existing warranty product offerings can be successfully distributed while maintaining similar levels of our existing underwriting performance.

Competition

We operate in several markets, and believe that no single company competes against us in all of our business lines. We may compete with other specialty carriers or program managers within a given program, but no specific insurers can be identified as clear competition across all of our programs. Within the United States, we compete with specialty insurers like Markel Corporation, RLI Corporation and Clear Blue Insurance Group. We also compete with larger insurance companies that may selectively underwrite specialty or credit programs like AIG and Allianz SE. Within our U.S. and European Warranty Solutions lines of business, we compete with Assurant, Securian Financial, Great American, Asurion, LLC, AmTrust Financial, SquareTrade Inc., Allianz SE, Helvetia Insurance and AXA SA. These lists are not exhaustive and are constantly evolving as we and our competitors expand program coverage.

In general, the insurance markets our programs operate in are highly competitive. The competition we face is due to a confluence of factors, including product pricing, industry knowledge and expertise, quality of customer service, effectiveness of distribution channels, technology platforms and underwriting processes, the quality of information systems, financial strength ratings, size, breadth of products offered, overall reputation, and other factors. We primarily compete by leveraging our proprietary technological innovations, decades of underwriting expertise, robust distribution relationships, data-driven marketing initiatives, our “agent-first” mentality, and best-in-class reputation.

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Regulation

We are subject to federal, state, local and foreign regulation and supervision. Our insurance subsidiaries are generally restricted by the insurance laws of their respective domiciles as to the amount of dividends they may pay without the prior approval of the respective regulatory authorities. Generally, the maximum dividend that may be paid by an insurance subsidiary during any year without prior regulatory approval is limited to a stated percentage of that subsidiary’s statutory surplus as of a certain date, or net income of the subsidiary for the preceding year.

Our U.S. insurance company subsidiaries are domiciled in several states, including Arizona, California, Delaware, Georgia, Kentucky and Louisiana. The regulation, supervision and administration by state departments of insurance relate, among other things, to: standards of solvency that must be met and maintained, restrictions on the payment of dividends, changes in control of insurance companies, the licensing of insurers and their agents and other producers, the types of insurance that may be written, privacy practices, the ability to enter and exit certain insurance markets, the nature of and limitations on investments and premium rates, or restrictions on the size of risks that may be insured under a single policy, reserves and provisions for unearned premiums, losses and other obligations, deposits of securities for the benefit of policyholders, payment of sales compensation to third parties, approval of policy forms and the regulation of market conduct, including underwriting and claims practices. As part of their routine regulatory oversight process, state insurance departments conduct periodic detailed financial examinations of the books, records, accounts and operations of insurance companies that are domiciled in their states.

Our insurance company subsidiaries are also subject to certain state regulations that define eligible investments and establish diversification requirements and concentration limits among asset classes. Failure to comply with these regulations would cause non-conforming investments to be treated as non-admitted assets in the states in which we are licensed to sell insurance policies for purposes of measuring statutory surplus and, in some instances, would require us to sell those investments. Such investment laws are generally permissive with respect to federal, state and municipal obligations, and more restrictive with respect to corporate obligations, particularly non-investment grade obligations, foreign investment, equity securities and real estate investments. Each insurance company is therefore limited by the investment laws of its state of domicile from making excessive investments in any given security (such as single issuer limitations) or in certain classes or riskier investments (such as aggregate limitation in non-investment grade bonds).

The NAIC provides model insurance laws and regulations for adoption by the states and standardized insurance industry accounting and reporting guidance. However, model insurance laws and regulations only become effective when adopted and enacted by the states, and statutory accounting and reporting principles continue to be established by individual state laws, regulations and permitted practices. The NAIC has adopted a model act with risk-based capital (“RBC”) formulas to be applied to insurance companies to measure the minimum amount of capital appropriate for an insurance company to support its overall business operations in light of its size and risk profile. State insurance regulators use RBC standards as a tool to monitor capital adequacy and to determine appropriate actions relating to insurers that show signs of weak or deteriorating conditions. The domiciliary states of our insurance company subsidiaries have adopted laws substantially similar to the NAIC’s RBC model act.

Our insurance holding company is subject to the respective state insurance holding company statutes which may require prior regulatory approval or non-disapproval of material transactions between an insurance company and an affiliate or of an acquisition of control of a domestic insurer and payments of extraordinary dividends or distributions.

Our insurance and warranty businesses are subject to U.S. federal and state regulations governing the protection of personal confidential information and data security, including the Gramm-Leach-Bliley Act, New York Department of Financial Services Cybersecurity Regulation and California Consumer Privacy Act. Our subsidiaries operating in the EU are subject to the General Data Protection Regulation, or the “GDPR,” which regulates data protection for all individuals within the EU, which became effective on May 25, 2018.

A portion of our foreign business is conducted via our insurance company in Malta. Malta is a member country of the EU, and we are active in seven countries in the EU. The EU’s executive body, the European Commission, implemented insurance directives and capital adequacy and risk management regulations. EU member countries follow the insurance directives approved by the European Commission. The insurance directives set forth a regulatory regime for the authorization and supervision of insurers, with a minimum set of rules and standards for protecting policyholders across the EU. These directives give insurers authorized in any one EU country or territory the freedom to conduct insurance business in any other EU country or territory, referred to as passporting. Procedures are in place regarding the notifications and approvals by the home state regulator for passporting. Insurers exercising this freedom continue to be regulated by their home state regulator, although the host state is entitled to impose domestic rules with which passporting insurers are required to follow for their business in the host state, in the interest of the general good. Within this context, our Malta company is authorized and supervised by the Malta Financial Services Authority (“MFSA”) and passports across EU member states.

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In addition to the regulation of authorization and distribution, the European Commission established capital adequacy and risk management regulations, called Solvency II, that apply to businesses within the EU. Solvency II includes capital requirements, risk management and corporate governance frameworks, and financial reporting requirements, which are subject to MFSA regulatory oversight.

Even though the United Kingdom exited the EU, United Kingdom insurance regulation generally follows the same insurance directives and Solvency II principles. After Brexit, United Kingdom regulators established the Temporary Permissions Regime, which permits passporting insurers to continue operating in the United Kingdom for up to three years post-Brexit. We are active in and subject to regulation in the United Kingdom. Our Malta company was passporting into the United Kingdom prior to Brexit and registered to operate under the Temporary Permissions Regime until permanent authority is granted by United Kingdom regulators. Aspects of the relationship between the United Kingdom and the EU remain to be negotiated and their relationship will continue to evolve, including with respect to the cross-border provision of products and services and related compliance requirements. Post-transition period changes to the EU and United Kingdom legal, trade and regulatory frameworks, as well as changes to United Kingdom regulatory requirements for insurers operating in that host country, could increase our compliance costs and subject us to operational challenges in the region.

Additionally, a portion of our business is also ceded to our reinsurance company subsidiary domiciled in Turks and Caicos. Our Turks and Caicos company is subject to Solvency II type of regulation by the domestic regulator.

We are also subject to federal and state laws and regulations related to the administration of insurance products on behalf of other insurers. In order for us to process and administer insurance products of other companies, we are required to maintain licenses of a third-party administrator in the states where those insurance companies operate. We are also subject to the related federal and state privacy laws and must comply with federal and state data protection and privacy laws.

Seasonality

Our financial results historically have been, and we expect to continue to be, affected by seasonal variations. Revenues may fluctuate seasonally based on consumer spending, which has historically been higher in September and December, corresponding to auto-sales events and the back-to-school and holiday seasons. Accordingly, our revenues have historically been higher in the third and fourth quarters than in the first half of the year.

Intellectual Property

We own or license a number of trademarks, patents, trade names, copyrights, service marks, trade secrets and other intellectual property rights that relate to our services and products within the various jurisdictions we operate. Although we believe that these intellectual property rights are, in the aggregate, important to our business, we also believe that our business is not materially dependent upon any particular trademark, trade name, copyright, service mark, license or other intellectual property right. Additionally, our insurance subsidiaries have entered into confidentiality agreements with their clients that impose restrictions on client use of our proprietary software and other intellectual property rights.

Employees

At December 31, 2020, Insurance employed 716 employees.

Tiptree Capital

We own a diversified group of investments across a broad spectrum of businesses and assets. These investments are owned and managed separately as Tiptree Capital, and include our Mortgage segment operations. We manage Tiptree Capital with a long term focus, balancing current cash flow and long-term value appreciation.

When assessing potential acquisitions and investments, we look for opportunities that:

•have strong and experienced management teams;

•can generate long term attractive returns, from both current earnings and capital appreciation;

•complement existing businesses or strategies; and

•have sustainable and scalable business models.

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We expect the investments within Tiptree Capital to change over time as we exit investments and reallocate capital to new investment opportunities. Though we do not have any specific sector focus, historically, the majority of our investments have occurred within four major sectors: asset management, real assets, specialty finance and credit investments.

Tiptree Capital – Mortgage Operations

Our mortgage operations are conducted through Reliance First Capital, LLC. Our mortgage business originates conventional and government one-to-four family, residential mortgage loans. The loans are typically sold in the secondary market, primarily through issuance of MBS securities guaranteed by Ginnie Mae and by whole loan sales to Fannie Mae, Freddie Mac and secondary market investors and aggregators. We sell our loans either servicing released or servicing retained. When we sell the loans servicing retained, we service those loans on behalf of the agencies. Revenues are primarily generated from gain on sale of loans, net interest income and loan fee income and loan servicing fees. The growth in our mortgage business is expected primarily to come from increased origination volume, retention of additional mortgage servicing rights, and new products.

Competition

The residential mortgage market is highly competitive. There are a large number of institutions offering these products, including many that operate on a national scale, as well as local savings banks, commercial banks, and other lenders. Many of our competitors are larger and have access to greater financial resources. In addition, many of the largest competitors are banks or are affiliated with banking institutions, the advantages of which include, but are not limited to, having access to financing with more favorable terms, including lower interest rate bank deposits as a favorable source of funding.

Regulation

We are subject to extensive regulation by federal, state and local governmental authorities, including the CFPB, the Federal Trade Commission and various state agencies that license, audit and conduct examinations. Our mortgage operations must comply with a number of federal, state and local consumer protection and privacy laws including laws that apply to loan origination, fair lending, debt collection, use of credit reports, safeguarding of non-public personally identifiable information about customers, foreclosure and claims handling, investment of and interest payments on escrow balances and escrow payment features, and mandate certain disclosures and notices to borrowers.

Employees

At December 31, 2020, our Mortgage operations had 446 employees.

Tiptree Capital - Other

Tiptree Capital - Other currently includes:

•Our share holdings of Invesque, a publicly traded real estate investment company that specializes in health care and senior living property investment throughout North America.

•Our investment holdings in the maritime transportation sector, specifically in dry bulk vessels and product tankers that transport commodities, such as coal, grains and clean petroleum products.

Competitive Strengths

The depth and breadth of experience of our management team enables us to source, structure, execute and manage the capital allocated to Tiptree Capital. In addition, in each of our investments, we benefit by partnering with experienced management teams and third-party managers, which we have hired or chosen based on their depth of experience in their respective sectors.

Competition

In the sectors in which Tiptree Capital participates, the markets are highly competitive. There are a large number of competitors offering similar products and services, including many that operate on an international scale, and which are often affiliated with major multi-national companies. Many of these organizations have substantially more personnel and greater financial and commercial resources than we do. Some of these competitors have proprietary products and distribution capabilities that may make it more difficult for us to compete with them. Some competitors also have greater name recognition, have managed their businesses for longer periods of time, have greater experience over a wider range of products or have other competitive advantages.

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Regulation

In the sectors in which Tiptree Capital participates, we are subject to extensive regulation by international, federal, state and local governmental authorities, including the SEC, the Federal Trade Commission, the EU, the UK and various state agencies. Our asset manager is registered with the SEC as an investment advisor and is subject to various federal and state laws and regulations and rules of various securities regulators and exchanges. These laws and regulations primarily are intended to protect clients and generally grant supervisory agencies broad administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws and regulations.

Our investments in maritime transportation are regulated under international conventions, classification societies, national, state and local laws and regulations in force in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration, that mandate safety and environmental protection policies. Government regulation of vessels, particularly environmental regulations, have become more stringent and may require us to incur significant capital expenditures on our vessels. Our international operations and activities also expose us to risks associated with trade and economic sanctions, prohibitions or other restrictions imposed by the United States or other governments or organizations, including the United Nations, the EU and its member countries. Under economic and trade sanctions laws, governments may seek to impose modifications to, prohibitions/restrictions on business practices and activities, and modifications to compliance programs, which may increase compliance costs, and, in the event of a violation, may subject us to fines and other penalties. In our international activities, we are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations in various jurisdictions in which we conduct business, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. We operate in countries known to present heightened risks for corruption, and our dry bulk shipping and related operations requires us to interact with government officials, including port officials, harbor masters, maritime regulators, customs officials and pilots.

Employees

At December 31, 2020, Tiptree Capital - Other’s combined operations had 210 employees.

Human Capital

At Tiptree, we strive to:

•provide employee wages that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location.

•align executives’ long-term equity compensation with stockholders’ interests by linking realizable pay with revenue production and earnings.

•ensure that annual increases and incentive compensation are based on merit, which is communicated to employees at the time of hiring and documented through their talent management process as part of the annual review procedures and upon internal transfer and/or promotion.

•ensure that all employees are eligible for health insurance, paid and unpaid leaves, and life and disability/accident coverage.

At Fortegra, we have developed an education program that assists employees in developing key skills that enable them to perform their jobs and to advance their careers. We also have a Leadership Development Program (“LDP”) that identifies new talent and prepares them for success within the organization. The program hires recent college graduates who will typically rotate through several departments over a two-year period, becoming fully immersed in the insurance company’s business. Our goal for successful LDP participants is to hire them on a full time basis upon completion of the program.

AVAILABLE INFORMATION

We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are also available free of charge on our Internet site at www.tiptreeinc.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC.

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Our Investor Relations Department can be contacted at Tiptree Inc., 299 Park Avenue, 13th Floor, New York, NY, 10171, Attn: Investor Relations, telephone: (212) 446-1400, email: IR@tiptreeinc.com.

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Item 1A. Risk Factors

    We are subject to certain risks and uncertainties in our business operations which are described below. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties that are not presently known or are currently deemed immaterial may also impair our business, results of operations and financial condition.

Risks Related to our Businesses

    A portion of our assets are illiquid or have limited liquidity, which may limit our ability to sell those assets at favorable prices or at all and creates uncertainty in connection with valuing such assets.

    Our assets include equity securities, real estate, dry-bulk vessels and product tankers, non-controlling interests in credit assets and related equity interests which may be illiquid or have limited liquidity. It may be difficult for us to dispose of assets with limited liquidity rapidly, or at favorable prices, if at all. In addition, assets with limited liquidity may be more difficult to value and may be sold at a substantial discount or experience more volatility than more liquid assets. We may not be able to dispose of assets at the carrying value reflected in our financial statements. Our results of operations and cash flows may be materially and adversely affected if our determinations regarding the fair value of our illiquid assets are materially higher than the values ultimately realized upon their disposal.

    Our investment in Invesque shares is subject to market volatility.

As of December 31, 2020, we owned 16.98 million shares, or approximately 30%, of Invesque, a real estate investment company that specializes in health care real estate and senior living property investment throughout North America. The value of our Invesque shares is reported at fair market value on a quarterly basis and fluctuates. A loss in the fair market value of our Invesque shares could have a material adverse effect on our financial condition and results of operations. To the extent we determine to sell all or a portion of our Invesque shares, there can be no assurance that we will be able to do so on a timely basis or at acceptable prices.

    We operate in highly competitive markets for business opportunities and personnel, which could impede our growth and negatively impact our results of operations.

    We operate in highly competitive markets for business opportunities in each of our areas of focus. Many of our competitors have financial, personnel and other resource advantages relative to us and may be better able to react to market conditions. These factors may place us at a competitive disadvantage in successfully competing for future business opportunities and personnel, which could impede our growth and negatively impact our business, financial condition and results of operations.

Our insurance subsidiaries face competition from other specialty insurance companies, standard insurance companies and underwriting agencies, as well as from diversified financial services companies that are larger than we are and that have greater financial, marketing, personnel and other resources than we do. Many of these competitors have more experience and market recognition than our insurance subsidiaries. In addition, it may be difficult or prohibitively expensive for our insurance subsidiaries to implement technology systems and processes that are competitive with the systems and processes of these larger companies.

In particular, competition in the insurance industry is based on many factors, including price of coverage, general reputation and perceived financial strength, relationships with brokers, terms and conditions of products offered, ratings assigned by independent rating agencies, speed of claims payment and reputation, and the experience and reputation of the members of an underwriting team in the particular lines of insurance they seek to underwrite. In recent years, the insurance industry has undergone increasing consolidation, which may further increase competition.

A number of new, proposed or potential legislative or industry developments could further increase competition in the insurance industry. These developments include:

•an increase in capital raising by companies in the industry, which could result in new entrants to the insurance markets and an excess of capital in the industry; and

•the deregulation of commercial insurance lines in certain states and the possibility of federal regulatory reform of the insurance industry, which could increase competition from standard carriers.

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Our insurance subsidiaries may not be able to continue to compete successfully in one or more insurance markets. Increased competition in these markets could result in a change in the supply and demand for insurance, affect our insurance subsidiaries’ ability to price their products at risk-adequate rates and retain existing business, or underwrite new business on favorable terms. If this increased competition limits our insurance subsidiaries’ ability to transact business, their results of operations would be adversely affected.

    We are exposed to risks associated with acquiring or divesting businesses or business operations.

    We regularly evaluate strategic acquisition opportunities for growth. Acquired companies and operations may have unforeseen operating difficulties and may require greater than expected financial and other resources. In addition, potential issues associated with acquisitions, including Smart AutoCare, could among other things, include:

•our ability to realize the full extent of the benefits, synergies or cost savings that we expect to realize as a result of the completion of an acquisition within the anticipated time frame, or at all;

•receipt of necessary consents, clearances and approvals in connection with the acquisition;

•diversion of management’s attention from other strategies and objectives;

•motivating, recruiting and retaining executives and key employees; and

•conforming and integrating financial reporting, standards, controls, procedures and policies, business cultures and compensation structures.

    If an acquisition is not successfully completed or integrated into our existing operations, our business, results of operations and financial condition could be materially adversely effected.

    We have also divested, and may in the future divest, businesses or business operations. Any divestitures may involve a number of risks, including the diversion of management’s attention, significant costs and expenses, the loss of customer relationships and cash flow, and the disruption of the affected business or business operations. Failure to timely complete or to consummate a divestiture may negatively affect the valuation of the affected business or business operations or result in restructuring charges.

We may need to raise additional capital in the future or may need to refinance existing indebtedness, but there is no assurance that such capital will be available on a timely basis, on acceptable terms or at all.

    We may need to raise additional funds or refinance our indebtedness in order to grow our business or fund our strategy or acquisitions. Additional financing may not be available in sufficient amounts, if at all, or on terms acceptable to us and may be dilutive to existing stockholders. Additionally, any securities issued to raise such funds may have rights, preferences and privileges senior to those of our existing stockholders. We also cannot predict the extent and duration of future economic and market disruptions, the impact of government interventions into the market to address these disruptions and their combined impact on our industries, businesses and our insurance subsidiaries’ investment portfolios. If adequate funds are not available on a timely basis, if at all, or on acceptable terms, our ability to expand, develop or enhance our subsidiaries’ services and products, enter new markets, consummate acquisitions or respond to competitive pressures could be materially limited.

    The amount of statutory capital and reserve requirements applicable to our insurance subsidiaries can increase due to factors outside of our control.

    Our insurance subsidiaries are subject to regulation by state and, in some cases, foreign insurance authorities with respect to statutory capital, reserve and other requirements, including statutory capital and reserve requirements established by applicable insurance regulators based on RBC and Solvency II formulas. In any particular year, these requirements may increase or decrease depending on a variety of factors, most of which are outside our control, such as the amount of statutory income or losses generated, changes in equity market levels, the value of fixed-income and equity securities in the subsidiary’s investment portfolio, changes in interest rates and foreign currency exchange rates, as well as changes to the RBC formulas used by insurance regulators. The laws of the various states in which our insurance subsidiaries operate establish insurance departments and other regulatory agencies with broad powers to preclude or temporarily suspend our insurance subsidiaries from carrying on some or all of these activities or otherwise fine or penalize our insurance subsidiaries in any jurisdiction in which we operate. Such regulation or compliance could reduce our insurance subsidiaries’ profitability or limit their growth by increasing the costs of compliance, limiting or restricting the products or services they sell, or the methods by which they sell services and products, or subject them to the possibility of regulatory actions or proceedings. Additionally, increases in the amount of additional statutory reserves that our insurance subsidiaries are required to hold could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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    Our insurance subsidiaries’ actual claims losses may exceed their reserves for claims, which may require them to establish additional reserves that may materially and adversely affect their business, results of operations and financial condition.

    Our insurance subsidiaries maintain reserves to cover their estimated ultimate exposure for claims with respect to reported claims, and incurred, but not reported, claims as of the end of each accounting period. Reserves, whether calculated under GAAP or statutory accounting principles, do not represent an exact calculation of exposure. Instead, they represent our insurance subsidiaries’ best estimates, generally involving actuarial projections, of the ultimate settlement and administration costs for a claim or group of claims, based on our assessment of facts and circumstances known at the time of calculation. The adequacy of reserves will be impacted by future trends in claims severity, frequency, judicial theories of liability and other factors. These variables are affected by external factors such as changes in the economic cycle, unemployment, inflation, judicial trends, legislative changes, as well as changes in claims handling procedures. Many of these items are not directly quantifiable, particularly on a prospective basis. Reserve estimates are refined as experience develops. Adjustments to reserves, both positive and negative, are reflected in the statement of operations of the period in which such estimates are updated. Because the establishment of reserves is an inherently uncertain process involving estimates of future losses, we can give no assurances that ultimate losses will not exceed existing claims reserves. In general, future loss development could require reserves to be increased, which could have a material adverse effect on our insurance subsidiaries’ business, results of operations and financial condition.

    Performance of our insurance subsidiaries’ investment portfolio is subject to a variety of investment risks.

Our insurance subsidiaries’ results of operations depend significantly on the performance of their investment portfolio. We manage our insurance subsidiaries’ portfolio of investments along with one or more additional advisers. Such investments are subject to general economic conditions and market risks in addition to risks inherent to particular securities and risks relating to the performance of our investment advisers.

Our primary market risk exposures are to changes in interest rates. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk.” In recent years, interest rates have been at or near historic lows. A protracted low interest rate environment would continue to place pressure on our insurance subsidiaries’ net investment income, which, in turn, would have a material adverse effect on our profitability. Future increases in interest rates could cause the values of our insurance subsidiaries’ fixed income securities portfolios to decline, with the magnitude of the decline depending on the duration of securities included in our insurance subsidiaries’ portfolio and the amount by which interest rates increase. Some fixed income securities have call or prepayment options, which create possible reinvestment risk in declining rate environments. Other fixed income securities, such as mortgage-backed and asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

The value of our insurance subsidiaries’ investment portfolio is also subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities our insurance subsidiaries’ hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed maturities may also have a significant negative effect on the market valuation of such securities.

Such factors could reduce our insurance subsidiaries’ net investment income and result in realized investment losses. Our insurance subsidiaries’ investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities our insurance subsidiaries’ hold in their portfolio does not reflect prices at which actual transactions would occur.

The performance of our insurance subsidiaries’ investments also depends heavily on our skills and those of our insurance subsidiaries’ other investment advisers, in analyzing, selecting and managing the investments. Our insurance subsidiaries’ investment policy establishes investment parameters such as maximum percentages of investment in certain types of securities and minimum levels of credit quality and is designed to manage investment risk. Achievement of our insurance subsidiaries’ investment objectives will depend, in part, on our ability and other investment advisers’ ability to provide competent, attentive and efficient services to our insurance subsidiaries’ portfolio under the terms of the respective investment management agreement and to successfully manage their investment risk. There can be no assurance that, over time, we or our insurance subsidiaries’ other investment advisers will be able to provide services on that basis or that we or they will be able to invest such assets on attractive terms or generate any investment returns for stockholders or avoid investment losses. Our insurance subsidiaries’ investment objectives may not be achieved and results may vary substantially over time. In addition, although we and our insurance

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subsidiaries’ other investment advisers seek to employ investment strategies that are not correlated with our insurance subsidiaries’ insurance and reinsurance exposures, losses in their investment portfolio may occur at the same time as underwriting losses.

Our insurance subsidiaries’ portfolio is highly dependent on the financial and managerial experience of certain investment professionals associated with our insurance subsidiaries’ investment advisers, none of whom are under any contractual obligation to our insurance subsidiaries to continue to be associated with such investment advisers. The loss of one or more of these individuals could have a material adverse effect on the performance of our insurance subsidiaries’ investment portfolio.

A shift in our insurance subsidiaries’ investment strategy could increase the riskiness of our insurance subsidiaries’ investment portfolio and the volatility of our results, which, in turn, may have a material adverse effect on our profitability.

Our insurance subsidiaries’ investment strategy has historically been largely focused on fixed income securities which are subject to less volatility but also lower returns as compared to certain other asset classes. In the future, our insurance subsidiaries’ investment strategy may include a greater focus on investments in equity securities, which are subject, among other things, to changes in value that may be attributable to market perception of a particular issuer or to general stock market fluctuations that affect all issuers. Investments in equity securities may be more volatile than investments in other asset classes such as fixed income securities. Common stocks generally subject their holders to more risks than preferred stocks and debt securities because common stockholders’ claims are subordinated to those of holders of preferred stocks and debt securities upon the bankruptcy of the issuer. An increase in the riskiness of our insurance subsidiaries’ investment portfolio could lead to volatility of our results, which, in turn, may have a material adverse effect on our profitability.

Our insurance subsidiaries could be forced to sell investments to meet their liquidity requirements.

Our insurance subsidiaries invest the premiums they receive from their insureds until they are needed to pay policyholder claims. Consequently, our insurance subsidiaries seek to manage the duration of their investment portfolio based on the duration of their losses and loss adjustment expenses reserves to ensure sufficient liquidity and avoid having to liquidate investments to fund claims. Risks such as inadequate losses and loss adjustment expenses reserves or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. Our insurance subsidiaries may not be able to sell their investments at favorable prices or at all. Sales could result in significant realized losses depending on the conditions of the general market, interest rates and credit issues with individual securities.

Cybersecurity attacks, technology breaches or failures of our or our third-party service providers’ information systems could disrupt our various business operations and could result in the loss of critical and personally identifiable information, which could result in the loss of reputation and customers, reduce profitability, subject our businesses to fines, penalties and litigation and have a material adverse effect on our business’s results of operation, financial condition and cash flows.

Tiptree’s businesses are highly dependent upon the effective operation of their information systems and those of their third-party service providers and their ability to collect, use, store, transmit, retrieve and otherwise process personally identifiable information and other data, manage significant databases and expand and upgrade their information systems. Our businesses rely on these systems for a variety of functions, including marketing and selling their products and services, performing their services, managing their operations, processing claims and applications, providing information to customers, performing actuarial analyses and maintaining financial records. Some of these systems may include or rely on third-party systems not located on their premises or under their control. The interruption or loss of their information processing capabilities, or those of their third-party service providers, through cybersecurity attacks, computer hacks, theft, malicious software, phishing, employee error, ransomware, denial-of-service attacks, viruses, worms, other malicious software programs, the loss of stored data, programming errors, the breakdown or malfunctioning of computer equipment or software systems, telecommunications failure or damage caused by weather or natural disasters, catastrophes, terrorist attacks, industrial accidents or any other significant disruptions or security breaches could harm our businesses by hampering their ability to generate revenues and could negatively affect their partner relationships, competitive position and reputation.

In addition, our business’s information systems may be vulnerable to physical or electronic intrusions, computer viruses or other attacks which could disable their information systems and their security measures may not prevent such attacks. There are numerous and evolving risks to cybersecurity and privacy from cyber threat actors, including criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance. Global cybersecurity threats can range from uncoordinated individual attempts to gain unauthorized access to our information technology (“IT”) systems and those of our business partners or third-party service providers to sophisticated and targeted measures known as advanced persistent threats. These cyber threat actors are becoming more sophisticated and coordinated in their attempts to access IT systems and data, including the IT systems of cloud providers and third parties with whom our businesses conduct or may conduct business. Although our businesses devote significant

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resources to prevent, detect, address and mitigate unwanted intrusions and other threats and protect their systems and data, whether such data is housed internally or by external third parties, such internal controls may not be adequate or successful in protecting against all security breaches and cybersecurity attacks, social-engineering attacks, computer break-ins, theft and other improper activity. Our businesses have experienced immaterial cybersecurity incidents and they and their third-party service providers will likely continue to experience cybersecurity incidents of varying degrees. Because the techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, our businesses and the third parties with whom they do business may be unable to anticipate these techniques or to implement adequate preventative measures. With the increasing frequency of cyber-related frauds to obtain inappropriate payments and other threats related to cybersecurity attacks, our businesses may find it necessary to expend resources to remediate cyber-related incidents or to enhance and strengthen their cybersecurity. Such remediation efforts may not be successful and could result in interruptions, delays or cessation of service.

Our businesses have also implemented physical, administrative and logical security systems with the intent of maintaining the physical security of their facilities and systems and protecting their and their customers’ confidential and personally identifiable information against unauthorized access through their information systems or by other electronic transmission or through misdirection, theft or loss of data. Despite such efforts, they may be subject to a breach of their security systems that results in unauthorized access to their facilities or the information they are trying to protect. Anyone who is able to circumvent their security measures or those of their third-party service providers and penetrate their information systems could access, view, misappropriate, alter, destroy, misuse or delete any information in such systems, including personally identifiable information and proprietary business information (their own or that of third parties) or compromise of their control networks or other critical systems and infrastructure, resulting in disruptions to their business operations or access to their financial reporting systems. While our businesses have implemented business contingency plans and other reasonable plans to protect their systems, sustained or repeated system failures or service denials could severely limit their ability to write and process new and renewal business, provide customer service or otherwise operate in the ordinary course of business. In addition, most states require that customers be notified if a security breach results in the disclosure of personally identifiable customer information and the trend toward general public notification of such incidents could exacerbate the harm to our companies’ business, financial condition and results of operations. Any failure, interruption or compromise of the security of our business’s information systems or those of their third-party service providers that result in inappropriate disclosure of such information could result in, among other things, significant financial losses, unfavorable publicity and damage to their reputation, governmental inquiry and oversight, difficulty in marketing their services, loss of customers, significant civil and criminal liability related to legal or regulatory violations, litigation and the incurrence of significant technical, legal and other expenses, any of which may have a material adverse effect on their business, results of operations, financial condition and cash flows.

In some cases, our businesses rely on the safeguards put in place by third parties to protect against security threats. These third parties, including vendors that provide products and services for their operations, could also be a source of security risk to them in the event of a failure or a security incident affecting such third parties’ own security systems and infrastructure. Our businesses’ network of ecosystem partners could also be a source of vulnerability to the extent their applications interface with our businesses, whether unintentionally or through a malicious backdoor. Our businesses do not review the software code included in third-party integrations in all instances.

    Our insurance business is dependent on independent financial institutions, lenders, distribution partners, agents and retailers for distribution of its products and services, and the loss of these distribution sources, or their failure to sell our insurance business’s products and services could materially and adversely affect its business, results of operations and financial condition and cash flows.

    Our insurance business is dependent on independent financial institutions, lenders, distribution partners, agents and retailers to distribute its products and services and its revenue is dependent on the level of business conducted by such distributors as well as the effectiveness of their sales efforts, each of which is beyond our insurance business’s control because such distributors typically do not have any minimum performance or sales requirements. Further, although its contracts with these distributors are typically exclusive, they can be canceled on relatively short notice. Therefore, our insurance business’s growth is dependent, in part, on its ability to identify and attract new distribution relationships and successfully integrate its information systems with those of its new distributors. The impairment of our insurance business’s distribution relationships, the loss of a significant number of its distribution relationships, the failure to establish new distribution relationships, the failure to offer increasingly competitive products, the increase in sales of competitors’ services and products by these distributors or the decline in distributors’ overall business activity or the effectiveness of their sales of our insurance business’s products could materially reduce our insurance business’s sales and revenues and have a material adverse effect on its business, results of operations, financial condition and cash flows.

    Our insurance business may lose clients or business as a result of consolidation within the financial services industry or otherwise.

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    There has been considerable consolidation in the financial services industry, driven primarily by the acquisition of small and mid-size organizations by larger entities. We expect this trend to continue. Our insurance business may lose business or suffer decreased revenues if one or more of its significant clients or distributors consolidate or align themselves with other companies. While our insurance business has not been materially affected by consolidation to date, it may be affected by industry consolidation that occurs in the future, particularly if any of its significant clients are acquired by organizations that already possess the operations, services and products that it provides.

    A downgrade in our insurance subsidiaries’ claims paying ability or financial strength ratings could increase policy surrenders and withdrawals, adversely affecting relationships with distributors and reducing new policy sales.

    Participants in the insurance industry use ratings from independent ratings agencies, such as A.M. Best and KBRA, as an important means of assessing the financial strength and quality of insurers, including their ability to pay claims. In setting its ratings, A.M. Best and KBRA perform quantitative and qualitative analyses of a company’s balance sheet strength, operating performance and business profile. A.M. Best financial strength ratings range from “A++” (Superior) to “F” for insurance companies that have been publicly placed in liquidation. KBRA’s ratings range from AAA (extremely strong) to R (under regulatory supervision).

Currently, A.M. Best has assigned a financial strength of “A-” (Excellent) (Outlook Stable) and KBRA has assigned a financial strength rating of “A–” (Outlook Stable) to our insurance subsidiaries. A.M. Best and KBRA assign ratings that are intended to provide an independent opinion of an insurance company’s ability to meet its obligations to policyholders. These analyses include comparisons to peers and industry standards as well as assessments of operating plans, philosophy and management. A.M. Best and KBRA periodically review our insurance subsidiaries’ financial strength ratings and may, at their discretion, revise downward or revoke their ratings based primarily on their analyses of our insurance subsidiaries’ balance sheet strength (including capital adequacy and loss adjustment expense reserve adequacy), operating performance and business profile. Factors that could affect such analyses include:

•if our insurance subsidiaries change their business practices from their organizational business plan in a manner that no longer supports A.M. Best’s or KBRA’s ratings;

•if unfavorable financial, regulatory or market trends affect our insurance subsidiaries, including excess market capacity;

•if our insurance subsidiaries’ losses exceed their loss reserves;

•if our insurance subsidiaries have unresolved issues with government regulators;

•if our insurance subsidiaries are unable to retain their senior management or other key personnel;

•if our insurance subsidiaries’ investment portfolio incurs significant losses; or

•if A.M. Best or KBRA alters its capital adequacy assessment methodology in a manner that would adversely affect our insurance subsidiaries’ ratings.

These and other factors could result in a downgrade of our insurance subsidiaries’ financial strength ratings. A downgrade or withdrawal of our insurance subsidiaries’ ratings could result in any of the following consequences, among others:

•causing our insurance subsidiaries’ current and future distribution partners and insureds to choose other, more highly-rated competitors;

•increasing the cost or reducing the availability of reinsurance to our insurance subsidiaries; or

•severely limiting or preventing our insurance subsidiaries from writing new and renewal insurance contracts.

In addition, in view of the earnings and capital pressures experienced by many financial institutions, including insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such institutions, will increase the frequency and scope of their credit reviews, will request additional information from the companies that they rate or will increase the capital and other requirements employed in the rating organizations’ models for maintenance of certain ratings levels. We can offer no assurance that our insurance subsidiaries’ ratings will remain at their current levels. It is possible that such reviews of our insurance subsidiaries may result in adverse ratings consequences, which could have a material adverse effect on our insurance subsidiaries’ business, results of operations, financial condition and cash flows.

If market conditions cause reinsurance to be more costly or unavailable, our insurance subsidiaries may be required to bear increased risks or reduce the level of their underwriting commitments.

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Our insurance subsidiaries’ reinsurance facilities are generally subject to annual renewal. They may not be able to maintain their current reinsurance facilities and their customers may not be able to continue to operate their captive reinsurance companies. As a result, even where highly desirable or necessary, they may not be able to obtain other reinsurance facilities in adequate amounts and at favorable rates. If our insurance subsidiaries are unable to renew their expiring facilities or to obtain or structure new reinsurance facilities, either their net exposures would increase or, if they are unwilling to bear an increase in net exposures, they may have to reduce the level of their underwriting commitments. Either of these potential developments could have a material adverse effect on their business, results of operations, financial condition and cash flows.

Our insurance subsidiaries’ failure to accurately pay claims in a timely manner could have a material adverse effect on their business, results of operations, financial condition and cash flows.

Our insurance subsidiaries must accurately and timely evaluate and pay claims that are made under their policies. Many factors affect their ability to pay claims accurately and timely, including the training and experience of their claims representatives, including their distribution partners, the effectiveness of their management, and their ability to develop or select and implement appropriate procedures and systems to support their claims functions and other factors. Their failure to pay claims accurately and timely could lead to regulatory and administrative actions or material litigation, undermine their reputation in the marketplace and have a material adverse effect on their business, financial condition, results of operations and cash flows. In addition, if our insurance subsidiaries do not manage their distribution partners effectively, or if their distribution partners are unable to effectively handle their volume of claims, their ability to handle an increasing workload could be adversely affected. In addition to potentially requiring that growth be slowed in the affected markets, our insurance subsidiaries’ business could suffer from decreased quality of claims work which, in turn, could have a material adverse effect on their operating margins.

    Our insurance subsidiaries may incur losses if reinsurers are unwilling or unable to meet their obligations under reinsurance contracts.

    Our insurance subsidiaries use reinsurance to reduce the severity and incidence of claims costs, and to provide relief with regard to certain reserves. Under these reinsurance arrangements, other insurers assume a portion of our losses and related expenses; however, we remain liable as the direct insurer on all risks reinsured. Consequently, reinsurance arrangements do not eliminate our obligation to pay claims and we assume credit risk with respect to our ability to recover amounts due from reinsurers. The inability or unwillingness of any reinsurer to meet its financial obligations could negatively affect our business, results of operations, financial condition and cash flows. As credit risk is generally a function of the economy, our insurance subsidiaries face a greater credit risk in an economic downturn. While our insurance subsidiaries attempt to manage credit risks through underwriting guidelines, collateral requirements and other oversight mechanisms, their efforts may not be successful. For example, to reduce such credit risk, our insurance subsidiaries require certain third parties to post collateral for some or all of their obligations to them. In cases where our insurance subsidiaries receive letters of credit from banks as collateral and one of their counterparties is unable to honor its obligations, our insurance subsidiaries are exposed to the credit risk of the banks that issued the letters of credit.

New lines of business or new products and services may subject our insurance subsidiaries to additional risks.

From time to time, our insurance subsidiaries may implement new lines of business or offer new products and services within existing lines of business. In addition, our insurance subsidiaries will continue to make investments in development and marketing for new products and services. There are substantial risks and uncertainties associated with these efforts. In developing and marketing new lines of business and/or new products or services, our insurance subsidiaries may invest significant time and resources. Initial timetables for the development and introduction of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. Furthermore, new lines of business and/or new product or service offerings may not gain market acceptance. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Furthermore, the burden on management and our insurance subsidiaries’ IT of introducing any new line of business and/or new product or service could have a significant impact on the effectiveness of their system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our insurance subsidiaries’ business, financial condition, results of operations and cash flows.

If our insurance subsidiaries fail to manage future growth effectively, their business, results of operations, financial condition and cash flows would be harmed.

Our insurance subsidiaries have expanded their operations significantly and anticipate that further expansion will be required in order for them to significantly grow their business. In particular, they may require additional capital, systems

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development and skilled personnel. Their growth has placed and may continue to place increasing and significant demands on their management, operational and financial systems and infrastructure and their other resources. If our insurance subsidiaries do not effectively manage their growth, the quality of their services could suffer, which could harm their business, results of operations, financial condition and cash flows. In order to manage future growth, they may need to hire, integrate and retain highly skilled and motivated employees. Our insurance subsidiaries may not be able to hire new employees quickly enough to meet their needs. If they fail to effectively manage their hiring needs and successfully integrate new hires, their efficiency and their employee morale, productivity and retention could suffer, and their business, results of operations, financial condition and cash flows could be harmed. They may also be required to continue to improve their existing systems for operational and financial management, including their reporting systems, procedures and controls. These improvements may require significant capital expenditures and place increasing demands on their management. They may not be successful in managing or expanding their operations or in maintaining adequate financial and operating systems and controls. If they do not successfully implement any required improvements in these areas, their business, results of operations, financial condition and cash flows could be harmed.

The effects of emerging claim and coverage issues on our insurance subsidiaries’ business are uncertain.

As industry practices and economic, legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may have a material adverse effect on our insurance subsidiaries’ business by either extending coverage beyond their underwriting intent or by increasing the number or size of claims. In some instances, these emerging issues may not become apparent for some time after they have issued the affected insurance policies. As a result, the full extent of liability under their insurance policies may not be known until many years after the policies are issued. In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to extend the statutes of limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on their business. The effects of these and other unforeseen emerging claim and coverage issues are difficult to predict and could harm their business and have a material adverse effect on their results of operations.

Our insurance subsidiaries’ international operations expose them to investment, political and economic risks, including foreign currency and credit risk.

Our insurance subsidiaries’ expanding international operations in the United Kingdom, continental Europe and the Asia-Pacific region, expose them to increased investment, political and economic risks, including foreign currency and credit risk. Changes in the value of the U.S. dollar relative to other currencies could have a material adverse effect on their business, results of operations, financial condition and cash flows. Their investments in non-U.S.-denominated assets are subject to fluctuations in non-U.S. securities and currency markets, and those markets can be volatile. Non-U.S. currency fluctuations also affect the value of any dividends paid by their non-U.S. subsidiaries to their parent companies in the United States.

Our businesses could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel.

The success of our businesses depend on their ability to attract and retain experienced personnel and seasoned key executives who are knowledgeable about their industry and business. The pool of talent from which they actively recruit is limited and may fluctuate based on market dynamics specific to their industry and independent of overall economic conditions. As such, higher demand for employees having the desired skills and expertise could lead to increased compensation expectations for existing and prospective personnel, making it difficult for them to retain and recruit key personnel and maintain labor costs at desired levels. Should any of their key executives cease to be employed by them, or if they are unable to retain and attract talented personnel, they may be unable to maintain their current competitive position in the specialized markets in which they operate, which could have a material adverse effect on their results of operations.

Our insurance subsidiaries’ continued growth depends in part on their ability to continue to grow their customer base.

Increasing the customer base of our insurance subsidiaries will depend, to a significant extent, on their ability to effectively expand their sales and marketing activities, as well as their partner ecosystem and other customer referral sources. They may not be able to recruit qualified sales and marketing personnel, train them to perform and achieve an acceptable level of sales production from them on a timely basis or at all. If our insurance subsidiaries are unable to maintain effective sales and marketing activities and maintain and expand their partner network, their ability to attract new customers could be harmed and their business, results of operations, financial condition and cash flows would suffer.

Our insurance subsidiaries may not be able to effectively start up or integrate new program opportunities, and they may invest in new program opportunities or initiatives that are ultimately unsuccessful.

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Our insurance subsidiaries’ ability to grow their business depends, in part, on their creation, implementation and acquisition of new insurance programs that are profitable and fit within their business model. New program launches as well as resources to integrate business acquisitions are subject to many obstacles, including ensuring they have sufficient business and systems processes, determining appropriate pricing, obtaining reinsurance, assessing opportunity costs and regulatory burdens and planning for internal infrastructure needs. If they cannot accurately assess and overcome these obstacles or they improperly implement new insurance programs, their ability to grow profitably will be impaired. Additionally, they may be unsuccessful in identifying new program opportunities, or they may be unable to develop or market new programs or initiatives in a timely or cost-effective manner. In addition, new programs or initiatives may not achieve the market penetration or price levels necessary for profitability. If they are unable to develop timely enhancements to, and new features for, their existing programs and services or if they are unable to develop new programs and services, their programs and services may become less marketable and less competitive, and their business, results of operations, financial condition and cash flows would be harmed.

If our businesses are unable to maintain a high level of service, their business, results of operations, financial condition and cash flows may be harmed.

One of the key attributes of our various businesses is providing high quality service to their partners and customers. They may be unable to sustain these levels of service, which would harm their reputation and our business. Alternatively, they may only be able to sustain high levels of service by significantly increasing their operating costs, which would materially and adversely affect their results of operations. The level of service they are able to provide depends on their personnel to a significant extent. Their personnel must be well-trained in their processes and able to handle customer calls effectively and efficiently. Any inability of their personnel to meet service level demands, whether due to absenteeism, training, turnover, disruptions at their facilities, including as a result of the COVID-19 pandemic, bad weather, power outages or other reasons, could adversely impact their business. If they are unable to maintain high levels of service performance, their reputation could suffer and their business, results of operations, financial condition and cash flows would be harmed.

Our businesses’ results of operations have in the past varied from quarter to quarter and may not be indicative of our long-term prospects.

Our businesses’ results of operations are subject to fluctuation and have historically varied from quarter to quarter. We expect their quarterly results to continue to fluctuate in the future due to a number of factors, including the general economic conditions in the markets where they operate, the frequency, occurrence or severity of catastrophic or other insured events or otherwise, fluctuating interest rates, claims exceeding their loss reserves, competition in their industry, deviations from expected renewal rates of their existing policies and contracts, adverse investment performance and the cost of reinsurance coverage.

In particular, our insurance subsidiaries seek to underwrite products and make investments to achieve favorable returns on tangible stockholders’ equity over the long term. In addition, their opportunistic nature may result in fluctuations in gross written premiums from period to period as they concentrate on underwriting contracts that they believe will generate better long-term, rather than short-term, results. Accordingly, their short-term results of operations may not be indicative of their long-term prospects.

The industries in which our businesses operate are cyclical in nature.

The financial performance of the insurance industry has historically fluctuated with periods of lower premium rates and excess underwriting capacity resulting from increased competition (a “soft market”) followed by periods of higher premium rates and reduced underwriting capacity resulting from decreased competition (a “hard market”). Our commercial & personal lines program business is exposed to these hard and soft market cycles. We seek to isolate ourselves from these trends by focusing on smaller risks with lower severities and utilizing reinsurance. Because this market cyclicality is due in large part to the actions of our insurance subsidiaries’ competitors and general economic factors, the timing or duration of changes in the market cycle is unknown. We expect these cyclical patterns will cause our insurance subsidiaries’ revenues and net income to fluctuate, which may cause their results of operations, financial condition and cash flows to be more volatile. We believe that we are currently in the second year of a hardening market.

Furthermore, adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity, could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims, or a combination of these effects, which, in turn, could affect our insurance subsidiaries’ growth and profitability. In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenue, the demand for insurance products is generally adversely affected, which directly affects their premium levels

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and profitability. Negative economic factors may also affect their ability to receive the appropriate rate for the risk they insure with their policyholders and may adversely affect the number of policies they can write, and their opportunities to underwrite profitable business. In an economic downturn, our insurance subsidiaries’ customers may have less need for insurance coverage, cancel existing insurance policies, modify their coverage or not renew the policies. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments. These outcomes would reduce their underwriting profit to the extent these factors are not reflected in the rates they charge.

The financial performance of the mortgage segment largely depends on the health of the U.S. residential real estate industry, which is seasonal, cyclical, and affected by changes in general economic conditions beyond our control. Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or the lack of it, changes in household debt levels, and increased unemployment or stagnant or declining wages affect our clients’ income and thus their ability and willingness to make loan payments. National or global events including, but not limited to the COVID-19 pandemic, affect all such macroeconomic conditions. Weak or a significant deterioration in economic conditions reduce the amount of disposable income consumers have, which in turn reduces consumer spending and the willingness of qualified potential clients to take out loans. As a result, such economic factors affect loan origination volume.

    The dry bulk and product tanker shipping industry is cyclical with high volatility in charter hire rates and profitability. The degree of charter hire rate volatility among different types of dry bulk vessels and product tankers has varied widely. Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for the major commodities carried by dry bulk vessels internationally and for oil, oil products and chemicals carried by product tankers. Demand is a function of world economic conditions and the consequent requirement for commodities, oil and oil products, production and consumption patterns, as well as events, which interrupt production, trade routes, and consumption. The factors affecting the supply of and demand for vessels are outside of our control and are unpredictable. We may not be able to employ our vessels at charter rates as favorable to us as historical rates or operate our vessels profitably. Significant declines in dry bulk or product tanker charter rates could adversely affect our revenues and profitability.

If our insurance subsidiaries are not able to maintain and enhance their brand, their business and results of operations will be harmed. Damage to their reputation and negative publicity could have a material adverse effect on their business, results of operations, financial condition and cash flows.

We believe that maintaining and enhancing our insurance subsidiaries’ brand identity is critical to their relationships with their existing customers and partners and to their ability to attract new customers and partners. They also intend to grow their brand awareness among consumers and potential program partners in order to further expand their reach and attract new customers and program partners. The promotion of their brand in these and other ways may require them to make substantial investments and it is anticipated that, as their market becomes increasingly competitive, these branding initiatives may become increasingly difficult and expensive. Our insurance subsidiaries’ brand promotion activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses they incur and their results of operations could be harmed. If they do not successfully maintain and enhance their brand, their business may not grow and they could lose their relationships with customers or partners, which would harm their business, results of operations, financial condition and cash flows.

Our insurance subsidiaries may be adversely affected by negative publicity relating to brand and activities. For instance, if their brand receives negative publicity, the number of customers visiting their platforms could decrease, and their cost of acquiring customers could increase as a result of a reduction in the number of consumers coming from their direct customer acquisition channel.

Our businesses’ risk management policies and procedures may prove to be ineffective and leave them exposed to unidentified or unanticipated risk, which could adversely affect their business, results of operations, financial condition or cash flows.

Our businesses have developed and continue to develop enterprise-wide risk management policies and procedures to mitigate risk and loss to which they are exposed. There are, however, inherent limitations to risk management strategies because there may exist, or develop in the future, risks that they have not appropriately anticipated or identified. If their risk management policies and procedures are ineffective, they may suffer unexpected losses and could be materially adversely affected. As their business changes and the markets in which they operate evolve, their risk management framework may not evolve at the same pace as those changes. As a result, there is a risk that new products or new business strategies may present risks that are not appropriately identified, monitored or managed. In times of market stress, unanticipated market movements or unanticipated claims experience, the effectiveness of their risk management strategies may be limited, resulting in losses to them. In addition, there can

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be no assurance that they can effectively review and monitor all risks or that all of their employees will follow their risk management policies and procedures.

Moreover, state legislatures and regulators have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to insurers and within mortgage originators that may pose risk to borrowers. Our insurance and mortgage subsidiaries operate within an enterprise risk management (“ERM”) framework designed to assess and monitor their risks. However, there can be no assurance that they can effectively review and monitor all risks, or that all of their employees will operate within the ERM framework or that their ERM framework will result in their accurately identifying all risks and accurately limiting their exposures based on our businesses’ assessments.

Our insurance subsidiaries may not be able to generate sufficient cash to service all of their indebtedness and may be forced to take other actions to satisfy their obligations under their indebtedness, which may not be successful.

Our insurance subsidiaries’ ability to make scheduled payments on or refinance their debt obligations depends on their financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond their control. They may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on their indebtedness.

If their cash flows and capital resources are insufficient to fund their debt service obligations, they could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, or to dispose of material assets or operations, alter their dividend policy, seek additional debt or equity capital or restructure or refinance their indebtedness. They may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow them to meet their scheduled debt service obligations. The instruments that will govern their indebtedness may restrict their ability to dispose of assets and may restrict the use of proceeds from those dispositions and may also restrict their ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. They may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations when due.

Our insurance subsidiaries’ inability to generate sufficient cash flows to satisfy their debt obligations, or to refinance their indebtedness on commercially reasonable terms or at all, may materially adversely affect their business, results of operations, financial condition and cash flows.

Restrictive covenants in the agreements governing our insurance subsidiaries’ indebtedness may restrict their ability to pursue their business strategies.

The agreements governing our insurance subsidiaries’ indebtedness contain a number of restrictive covenants that impose significant operating and financial restrictions on them and may limit their ability to pursue their business strategies or undertake actions that may be in their best interests. The agreements governing their indebtedness include covenants restricting, among other things, their ability to:

•incur or guarantee additional debt;

•incur liens;

•complete mergers, consolidations and dissolutions;

•enter into transactions with affiliates;

•pay dividends or other distributions;

•sell certain of their assets that have been pledged as collateral; and

•undergo a change in control.

A breach of the covenants under the indenture that governs our insurance subsidiaries’ 8.50% Fixed Rate Resetting Junior Subordinated Notes due in October 2057 (the “Notes”) and Amended and Restated Credit Agreement dated as of August 4, 2020 among Fortegra Financial Corporation (“FFC”) and Lots Intermediate Co., as Borrowers, Fifth Third Bank, National Association, as Administrative Agent and Issuing Lender, Citizens Bank, N.A., as Syndication Agent, and First Horizon Bank, Keybank National Association and Synovus Bank as Co-Documentation Agents could result in an event of default. Such default may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In the event our insurance subsidiaries’ lenders or noteholders accelerate the repayment of their indebtedness, they and their subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, they may be:

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•unable to raise additional debt or equity financing to operate during general economic or business downturns; or

•unable to compete effectively or to take advantage of new business opportunities.

These restrictions may affect their ability to grow in accordance with their strategy. In addition, their financial results, substantial indebtedness and credit ratings could materially adversely affect the availability and terms of future financing.

Retentions in various lines of business expose our insurance subsidiaries to potential losses.

Our insurance subsidiaries retain risk for their own account on business underwritten by their insurance subsidiaries. The determination to reduce the amount of reinsurance they purchase, or not to purchase reinsurance for a particular risk, customer segment or category is based on a variety of factors, including market conditions, pricing, availability of reinsurance, their capital levels and their loss history. Such determinations increase their financial exposure to losses associated with such risks, customer segments or categories and, in the event of significant losses associated with such risks, customer segments or categories, could have a material adverse effect on their business, results of operations, financial condition and cash flows.

The exit of the United Kingdom from the European Union could adversely affect our insurance subsidiaries’ business.

The United Kingdom ceased to be a part of the European Union on December 31, 2020 (which is commonly referred to as “Brexit”). Aspects of the relationship between the United Kingdom and the European Union remain to be negotiated and their relationship will continue to evolve, including with respect to the cross-border provision of products and services and related compliance requirements. The effects of Brexit on our insurance subsidiaries’ business will depend on the manner in which it is implemented and any other relevant agreements between the United Kingdom and the European Union, among other factors. The Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom established the Temporary Permissions Regime, which creates a three year post-Brexit period where companies can continue to operate until their permanent establishment is authorized in the United Kingdom. Fortegra’s Malta based insurance subsidiary registered for the Temporary Permissions Regime and entered into it on December 31, 2020. Because our insurance subsidiaries conduct business in both the United Kingdom and the European Union and because they rely on their Malta insurance subsidiary’s ability to conduct business in the United Kingdom, they face risks associated with the potential uncertainty and disruptions relating to Brexit, including the risk of additional regulatory and other costs and challenges and/or limitations on their ability to sell particular products and services. As a result, the ongoing uncertainty surrounding Brexit could have a material adverse effect on their business (including their European growth plans), results of operations, financial condition and cash flows.

    Due to the structure of some of our insurance business’s commissions, it is exposed to risks related to the creditworthiness of some of its independent agents and program partners.

    Our insurance business is subject to the credit risk of some of the independent agents and program partners with which it contracts to sell its products and services. Our insurance business typically advances commissions as part of its product offerings. These advances are a percentage of the premiums charged. If our insurance business over-advances such commissions, the agents and program partners may not be able to fulfill their payback obligations, which could have a material adverse effect on our insurance business’s results of operations and financial condition.

Failure of our insurance subsidiaries’ distribution partners to properly market, underwrite or administer policies could adversely affect our insurance subsidiaries.

The marketing, underwriting, claims administration and other administration of policies in connection with our insurance subsidiaries’ issuing carrier services are the responsibility of their distribution partners. Any failure by them to properly handle these functions could result in liability to our insurance subsidiaries. Even though their distribution partners may be required to compensate them for any such liability, there are risks that they do not pay them because such partners become insolvent or otherwise. Any such failures could create regulatory issues or harm our insurance subsidiaries’ reputation, which could have a material adverse effect on their business, results of operations, financial condition and cash flows.

Third-party vendors our businesses rely upon to provide certain business and administrative services on their behalf may not perform as anticipated, which could have an adverse effect on their business, results of operations, financial condition and cash flows.

Our businesses have taken action to reduce coordination costs and take advantage of economies of scale by transitioning multiple functions and services to third-party providers. They periodically negotiate provisions and renewals of these relationships, and there can be no assurance that such terms will remain acceptable to us or such third parties. If such third-party providers

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experience disruptions or do not perform as anticipated, or our businesses experience problems with a transition to a third-party provider, they may experience operational difficulties, an inability to meet obligations (including policyholder obligations), a loss of business and increased costs, or suffer other negative consequences, all of which may have a material adverse effect on their business, results of operations, liquidity and cash flows.

Our insurance subsidiaries may act based on inaccurate or incomplete information regarding the accounts they underwrite.

Our insurance subsidiaries rely on information provided by insureds or their representatives when underwriting insurance policies. While they may make inquiries to validate or supplement the information provided, they may make underwriting decisions based on incorrect or incomplete information. It is possible that they will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that they insure because of their reliance on inadequate or inaccurate information.

Any failure to protect or enforce our insurance subsidiaries’ intellectual property rights could impair their intellectual property, technology platform and brand. In addition, they may be sued by third parties for alleged infringement of their proprietary rights.

Our insurance subsidiaries’ success and ability to compete depend in part on their intellectual property, which includes their rights in their technology platform and their brand. Our insurance subsidiaries primarily rely on a combination of copyright, trade secret and trademark laws and confidentiality agreements, procedures and contractual provisions with their employees, customers, service providers, partners and other third parties to protect their proprietary or confidential information and intellectual property rights. However, the steps they take to protect their intellectual property may be inadequate and despite their efforts to protect their proprietary rights and intellectual property, unauthorized parties may attempt to copy aspects of their solutions or to obtain and use information that they regard as proprietary, and third parties may attempt to independently develop similar technology. Policing unauthorized use of their technology and intellectual property rights may be difficult and may not be effective. Litigation brought to protect and enforce their intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of their intellectual property. Additionally, their efforts to enforce their intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability and scope of their intellectual property rights. Our insurance subsidiaries’ failure to secure, protect, defend and enforce their intellectual property rights could adversely affect their brand and adversely affect their business.

Our insurance subsidiaries’ success also depends in part on them not infringing, misappropriating or otherwise violating the intellectual property rights of others. Their competitors and other third parties may own or claim to own intellectual property relating to our insurance subsidiaries’ industry and, in the future, may claim that our insurance subsidiaries are infringing, misappropriating or otherwise violating their intellectual property rights, and our insurance subsidiaries may be found to be infringing on such rights. The outcome of any claims or litigation, regardless of the merits, is inherently uncertain. The disposition of any such claims, whether through settlement or licensing discussions or litigation, could cause our insurance subsidiaries to incur significant expenses and, if successfully asserted against them, could require that they pay substantial damages or ongoing royalty payments, prevent them from offering certain of their products and services, require them to change their technology or business practices or require that they comply with other unfavorable terms. Even if our insurance subsidiaries were to prevail in such a dispute, any litigation could be costly and time-consuming, divert the attention of their management and key personnel from their business operations and materially adversely affect their business, financial condition and results of operations.

Our businesses employ third-party licensed software for use in their business, and the inability to maintain these licenses, errors in the software they license or the terms of open source licenses could result in increased costs or reduced service levels, which would adversely affect their business.

Our businesses rely on certain third-party software obtained under licenses from other companies and anticipate that they will continue to rely on such third-party software in the future. Although they believe that there are commercially reasonable alternatives to the third-party software they currently license, this may not always be the case, or it may be difficult or costly to replace their existing third-party software. In addition, integration of new third-party software may require significant work and require substantial investment of their time and resources. Our businesses’ use of additional or alternative third-party software would require them to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively impact their respective business.

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Additionally, some of the software powering our businesses’ technology systems incorporates software covered by open source licenses. The terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that the licenses could be construed in a manner that imposes unanticipated conditions or restrictions on their ability to operate their systems. In the event that portions of their proprietary software are determined to be subject to an open source license, they could be required to publicly release the affected portions of their source code or re-engineer all or a portion of their technology systems, each of which could reduce or eliminate the value of their technology systems. Such risk could be difficult or impossible to eliminate and could adversely affect our businesses’ results of operations, financial condition and cash flows.

    A significant decrease of the market values of our vessels could cause us to incur an impairment loss.

    We review our vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of the vessels may not be recoverable. Such indicators include declines in the fair market value of vessels, decreases in market charter rates, vessel sale and purchase considerations, fleet utilization, vessels’ useful lives, scrap values, regulatory changes in the dry bulk and product tanker shipping industry or changes in business plans or overall market conditions that may adversely affect cash flows. We may be required to record an impairment charge with respect to our vessels and any such impairment charge may have a material adverse effect on our business, financial condition and results of operations.

    Our vessels may suffer damage and we may face unexpected drydocking costs.

    If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. The loss of earnings while a vessel is being repaired and repositioned, as well as the actual cost of these repairs not covered by our insurance, would decrease our earnings and available cash. While we carry insurance on our vessels, that insurance may not be sufficient to cover all or any of the costs or losses for damages to our vessels and we may have to pay drydocking costs not covered by our insurance.

    The operation of dry bulk vessels and product tankers has certain unique operational risks.

    With a dry bulk vessel, the cargo itself and its interaction with the vessel may create operational risks. By their nature, dry bulk cargoes are often heavy, dense and easily shifted, and they may react badly to water exposure. In addition, dry bulk vessels are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach while at sea. Breaches of a dry bulk vessel’s hull may lead to the flooding of the vessel’s holds. If a dry bulk vessel suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of a vessel. If we do not adequately maintain our vessels, we may be unable to prevent these events.

    In addition, the operation of product tankers has unique operational risks associated with the transportation of oil and chemical products. An oil or chemical spill may cause significant environmental damage, and the associated costs could exceed the insurance coverage available to us. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil or chemicals transported in tankers. The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.

    Acts of piracy on ocean-going vessels occur and may increase in frequency.

    Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide has generally decreased since 2013, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in the Sulu Sea and the Gulf of Guinea, with dry bulk vessels and tankers particularly vulnerable to such attacks. Acts of piracy could result in harm or danger to the crews that man our vessels.

    If these piracy attacks occur in regions in which our vessels are deployed that insurers characterized as “war risk” zones or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including the employment of onboard security guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold payment until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and is therefore entitled to cancel the charter. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In

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addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and earnings.

    Some of our investments are made jointly with other persons or entities, which may limit our flexibility with respect to such jointly owned investments and could, thereby, have a material adverse effect on our business, results of operations and financial condition and our ability to sell these investments.

    Some of our current investments are, and future investments may be, made jointly with other persons or entities when circumstances warrant the use of such structures and we may continue to do so in the future. Our participation in such joint investments is subject to the risks that:

•we could experience an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources on resolving such impasses or potential disputes;

•our partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments;

•our partners might become bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as partners, which may require us to infuse our own capital into such venture(s) on behalf of the partner(s) despite other competing uses for such capital;

•our partners may have competing interests in our markets that could create conflict of interest issues;

•any sale or other disposition of our interest in such a venture may require consents which we may not be able to obtain;

•such transactions may also trigger other contractual rights held by a partner, lender or other third-party depending on how the transaction is structured; and

•there may be disagreements as to whether consents and/or approvals are required in connection with the consummation of a particular transaction with a partner, lender and/or other third-party, or whether such transaction triggers other contractual rights held by a partner, lender and/or other third-party, and in either case, those disagreements may result in litigation.

    Our mortgage business is significantly impacted by interest rates. Changes in prevailing interest rates or U.S. monetary policies that affect interest rates may have a detrimental effect on our mortgage business.

    Changes in interest rates and the level of interest rates are key drivers that impact the volatility of our mortgage loan originations. Due to the unprecedented events surrounding the COVID-19 pandemic along with the associated severe market dislocation, there is an increased degree of uncertainty and unpredictability concerning current interest rates, future interest rates and potential negative interest rates. The historically low interest rate environment over the last several years has created strong demand for mortgages. Increases in interest rates could result in us having lower revenue or profitability. The overwhelming majority of our mortgage loan originations have historically been refinancing existing homeowner’s mortgage loans. With rates at or near historically low levels, we have been able to continue to grow our mortgage loan originations by focusing on refinances. With rising interest rates, we may not be able to continue to do so in the future.

With regard to the portion of our mortgage business that is centered on refinancing existing mortgages, we generally note that the refinance market experiences more significant fluctuations than the purchase market as a result of interest rate changes. Long-term residential mortgage interest rates have been at or near record lows for an extended period, but they may increase in the future. As interest rates rise, refinancing generally becomes a smaller portion of the market as fewer consumers are interested in refinancing their mortgages. With regard to our purchase mortgage loan business, higher interest rates may also reduce demand for purchase mortgages as home ownership becomes more expensive. This could adversely affect our mortgage business’s revenues or require our mortgage business to increase marketing expenditures in an attempt to increase or maintain its volume of mortgages. Decreases in interest rates can also adversely affect our mortgage business’s financial condition, the value of its mortgage servicing rights (“MSRs”) portfolio, and its results of operations. With sustained low interest rates, as we have been experiencing, refinancing transactions decline over time, as many clients and potential clients have already taken advantage of the low interest rates.

Changes in interest rates are also a key driver of the performance of our servicing business, particularly because our mortgage business’s portfolio is composed primarily of MSRs related to high-quality loans, the values of which are highly sensitive to changes in interest rates. Historically, the value of MSRs has increased when interest rates rise as higher interest rates lead to decreased prepayment rates, and has decreased when interest rates decline as lower interest rates lead to increased prepayment rates. As a result, decreases in interest rates could have a detrimental effect on our mortgage business.

Borrowings under some of our mortgage business’s finance and warehouse facilities are at variable rates of interest, which also expose us to interest rate risk. If interest rates increase, our mortgage business’s debt service obligations on certain of its

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variable-rate indebtedness will increase even though the amount borrowed remains the same, and net income and cash flows, including cash available for servicing indebtedness, will correspondingly decrease. Our mortgage business currently has entered into, and in the future may continue to enter into, interest rate swaps that involve the exchange of floating for fixed-rate interest payments to reduce interest rate volatility. However, our mortgage business may not maintain interest rate swaps with respect to all of its variable-rate indebtedness, and any such swaps may not fully mitigate its interest rate risk, may prove disadvantageous, or may create additional risks.

In addition, our mortgage business is materially affected by the monetary policies of the U.S. government and its agencies. Our mortgage business is particularly affected by the policies of the U.S. Federal Reserve, which influence interest rates and impact the size of the loan origination market. In 2017, the U.S. Federal Reserve ended its quantitative easing program and started its balance sheet reduction plan. The U.S. Federal Reserve's balance sheet consists of U.S. Treasuries and mortgage backed securities (“MBS”) issued by Fannie Mae, Freddie Mac and Ginnie Mae. To shrink its balance sheet prior to the COVID-19 pandemic, the U.S. Federal Reserve had slowed the pace of MBS purchases to a point at which natural runoff exceeded new purchases, resulting in a net reduction. Recently, in response to the COVID-19 pandemic, state and federal authorities have taken several actions to provide relief to those negatively affected by COVID-19, such as the CARES Act and the Federal Reserve's support of the financial markets. In particular, U.S. Federal Reserve announced programs to increase its purchase of certain MBS products in response to the COVID-19 pandemic's effect on the U.S. economy, and the market for MBS in particular. The results of this recent policy change by the U.S. Federal Reserve are unknown at this time, as is its duration, but could affect the liquidity of MBS in the future.

    Our mortgage business’s MSRs are highly volatile assets with continually changing values, and these changes in value, or inaccuracies in estimates of their value, could adversely affect our mortgage business’s financial condition and results of operations.

    The value of our mortgage business’s MSRs is based on the cash flows projected to result from the servicing of the related mortgage loans and continually fluctuates due to a number of factors. These factors include changes in interest rates; historically, the value of MSRs has increased when interest rates rise as higher interest rates lead to decreased prepayment rates, and has decreased when interest rates decline as lower interest rates lead to increased prepayment rates and refinancings. Other market conditions also affect the number of loans that are refinanced and thus no longer result in cash flows, and the number of loans that become delinquent.

Our mortgage business uses two external valuation firms to fair value its MSR assets. These valuation firms utilize market participant data and actual MSR market trades to value our MSRs for purposes of financial reporting, These models are complex and use asset-specific collateral data and market inputs for interest and discount rates. In addition, the modeling requirements of MSRs are complex because of the high number of variables that drive cash flows associated with MSRs, and because of the complexity involved with anticipating such variables over the life of the MSR. Even if the general accuracy of their valuation models is validated, valuations are highly dependent upon the reasonableness of their assumptions and the results of the models. If loan delinquencies or prepayment speeds are higher than anticipated or other factors perform worse than modeled, the recorded value of certain of their MSRs may decrease, which could adversely affect their business and financial condition.

Our mortgage business is highly dependent upon programs administered by GSEs, such as Fannie Mae and Freddie Mac, as well as Ginnie Mae, to generate revenues through mortgage loan sales to institutional investors. Any changes in existing U.S. government-sponsored mortgage programs could materially and adversely affect our mortgage business, financial condition and results of operations.

    There is uncertainty regarding the future of Fannie Mae and Freddie Mac, including with respect to how long they will continue to be in existence, the extent of their roles in the market and what forms they will have. The future roles of Fannie Mae and Freddie Mac could be reduced or eliminated and the nature of their guarantees could be limited or eliminated relative to historical measurements. The elimination or modification of the traditional roles of Fannie Mae or Freddie Mac could adversely affect our mortgage business, financial condition and results of operations. Furthermore, any discontinuation of, or significant reduction in, the operation of these GSEs and Ginnie Mae, or any significant adverse change in the level of activity of these agencies in the primary or secondary mortgage markets or in the underwriting criteria of these agencies could materially and adversely affect our business, financial condition and results of operations.

    We may be unable to obtain sufficient capital to meet the financing requirements of our mortgage business.

    We fund substantially all of the loans which we originate through borrowings under warehouse financing and repurchase facilities. Our borrowings are in turn repaid with the proceeds we receive from selling such loans through whole loan sales.  As we expand our operations, we will require increased financing.

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    There can be no assurance that such financing will be available on terms reasonably satisfactory to us or at all.  An event of default, an adverse action by a regulatory authority or a general deterioration in the economy that constricts the availability of credit-similar to the market conditions experienced in recent years-may increase our cost of funds and make it difficult for us to obtain new, or retain existing, warehouse financing facilities. If we fail to maintain, renew or obtain adequate funding under these warehouse financing facilities or other financing arrangements, or there is a substantial reduction in the size of or increase in the cost of such facilities, we would have to curtail our mortgage loan production activities, which could have a material adverse effect on our business, financial condition and operating results in our mortgage business.

If the value of the collateral underlying certain of our mortgage business’s loan funding facilities decreases, they could be required to satisfy a margin call, and an unanticipated margin call could have a material adverse effect on their liquidity.

Certain of our mortgage business’s loan funding, early buy-out facilities, and MSR-backed facilities are subject to margin calls based on the lender's opinion of the value of the loan collateral securing such financing and certain of their hedges related to newly originated mortgages are also subject to margin calls. A margin call would require our mortgage business to repay a portion of the outstanding borrowings. A large, unanticipated margin call could have a material adverse effect on their liquidity.

    In our mortgage business, we may sustain losses and/or be required to indemnify or repurchase loans we originated, or will originate, if, among other things, our loans fail to meet certain criteria or characteristics.

    The contracts with purchasers of our whole loans contain provisions that require us to indemnify or repurchase the related loans under certain circumstances. While our contracts vary, they contain provisions that require us to repurchase loans if:

•our representations and warranties concerning loan quality and loan circumstances are inaccurate, including representations concerning the licensing of a mortgage broker;

•we fail to secure adequate mortgage insurance within a certain period after closing;

•a mortgage insurance provider denies coverage; or

•we fail to comply, at the individual loan level or otherwise, with regulatory requirements in the current dynamic regulatory environment.

    We maintain reserves that we believe are appropriate to cover potential loan repurchase or indemnification losses, but there can be no assurance that such reserves will, in fact, be sufficient to cover future repurchase and indemnification claims. If we are required to indemnify or repurchase loans that we originate and sell that result in losses that exceed our reserve, this could adversely affect our business, financial condition and results of operations.

    Furthermore, in the ordinary course of our mortgage business, we are subject to claims made against us by borrowers and private investors arising from, among other things, losses that are claimed to have been incurred as a result of alleged breaches of fiduciary obligations, misrepresentations, errors and omissions of our employees, officers and agents (including our appraisers), incomplete documentation and our failure to comply with various laws and regulations applicable to our business.

    In addition, should the mortgage loans we originate sustain higher levels of delinquencies and/or defaults, we may lose the ability to originate and/or sell FHA loans, or to do so profitably and investors to whom we currently sell our mortgage loans may refuse to continue to do business with us, or may reduce the prices they are willing to purchase our mortgage loans and it may be difficult or impossible to sell any of our mortgage loans in the future. Any of the foregoing risks could adversely affect our business, financial condition and results of operations in our mortgage business.    

    We may be limited in the future in utilizing net operating losses incurred during prior periods to offset taxable income.

    We previously incurred net operating losses. In the event that we experience an “ownership change” within the meaning of Section 382 of the Code, our ability to use those net operating losses to offset taxable income could be subject to an annual limitation. The annual limitation would be equal to a percentage of our equity value at the time the ownership change occurred. In general, such an “ownership change” would occur if the percentage of our stock owned by one or more 5% stockholders (including certain groups or persons acting in concert) were to increase by 50 percentage points during any three-year period. All stockholders that own less than 5% of our stock are treated as a single 5% stockholder. In addition, the Treasury Regulations under Section 382 of the Code contain additional rules the effect of which is to make it more likely that an ownership change could be deemed to occur. Accordingly, our ability to use prior net operating losses to offset future taxable income would be subject to a limitation if we experience an ownership change.

    We may leverage certain of our assets and a decline in the fair value of such assets may adversely affect our financial condition and results of operations.

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    We leverage certain of our assets, including through borrowings, generally through warehouse credit facilities, secured loans, securitizations and other borrowings. A rapid decline in the fair value of our leveraged assets may adversely affect us. Lenders may require us to post additional collateral to support the borrowing. If we cannot post the additional collateral, we may have to rapidly liquidate assets, which we may be unable to do on favorable terms or at all. Even after liquidating assets, we may still be unable to post the required collateral, further harming our liquidity and subjecting us to liability to lenders for the declines in the fair values of the collateral. A reduction in credit availability may adversely affect our business, financial condition and results of operations.

    Certain of our and our subsidiaries’ assets are subject to credit risk, market risk, interest rate risk, credit spread risk, call and redemption risk and refinancing risk, and any one of these risks may materially and adversely affect the value of our assets, our results of operations and our financial condition.

    Some of our assets, including our direct investments, are subject to credit risk, market risk, interest rate risk, credit spread risk, call and redemption risk and refinancing risk.

    Credit risk is the risk that the obligor will be unable to pay scheduled principal and/or interest payments. Defaults by third parties in the payment or performance of their obligations could reduce our income and realized gains or result in the recognition of losses. The fair value of our assets may be materially and adversely affected by increases in interest rates, downgrades in our direct investments and by other factors that may result in the recognition of other-than-temporary impairments. Each of these events may cause us to reduce the fair value of our assets.

    Interest rate risk is the risk that general interest rates will rise or that the risk spread used in our financings will increase. Although interest rates have been at historically low levels for the last several years, a period of sharply rising interest rates could have an adverse impact on our business by negatively impacting demand for mortgages and increasing our cost of borrowing to finance operations.

    In addition, in July 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced its intent to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021. Due to the uncertainty surrounding the future of LIBOR, it is expected that a transition away from the use of LIBOR to alternative benchmark rates will occur by the end of 2021. We have exposure to LIBOR–based contracts within certain of our finance receivables and loans primarily related to commercial automotive loans, corporate finance loans, and mortgage loans, as well as certain investment securities, derivative contracts, and trust preferred securities, among other arrangements. The discontinuation of LIBOR or LIBOR–based rates will present risks to our business.    

    Market risk is the risk that one or more markets to which the assets relate will decline in value, including the possibility that such markets will deteriorate sharply and unpredictably, which will likely impair the market value of the related instruments.

    Credit spread risk is the risk that the market value of fixed income investments will change in response to changes in perceived or actual credit risk beyond changes that would be attributable to changes, if any, in interest rates.

    Call and redemption risk is the risk that fixed income investments will be called or redeemed prior to maturity at a time when yields on other debt instruments in which the call or redemption proceeds could be invested are lower than the yield on the called or redeemed investments.

    Refinancing risk is the risk that we will be unable to refinance some or all of our indebtedness or that any refinancing will not be on terms as favorable as those of our existing indebtedness, which could increase our funding costs, limit our ability to borrow, or result in a sale of the leveraged asset on disadvantageous terms.

    Any one of the risks described above may materially and adversely affect the value of our assets, our results of operations and our financial condition.

    Our risk mitigation or hedging strategies could result in our experiencing significant losses that may materially adversely affect us.

    We may pursue risk mitigation and hedging strategies to seek to reduce our exposure to losses from adverse credit events, interest rate changes, market risk and other risks. These strategies may include short Treasury positions, interest rate swaps, foreign exchange derivatives, credit derivatives, freight forward agreements, fuel oil swaps and other derivative hedging instruments. Since we account for derivatives at fair market value, changes in fair market value are reflected in net income other than derivative

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hedging instruments which are reflected in accumulated other comprehensive income in stockholders’ equity. Some of these strategies could result in our experiencing significant losses that may materially adversely affect our business, financial condition and results of operations.

    The values we record for certain investments and liabilities are based on estimates of fair value made by our management, which may cause our operating results to fluctuate and may not be indicative of the value we can realize on a sale.

    Some of our investments and liabilities are not actively traded and the fair value of such investments and liabilities are not readily determinable. Each of these carrying values is based on an estimate of fair value by our management. Management reports the estimated fair value of these investments and liabilities quarterly, which may cause our quarterly operating results to fluctuate. Therefore, our past quarterly results may not be indicative of our performance in future quarters. In addition, because such valuations are inherently uncertain, in some cases based on internal models and unobservable inputs, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these investments and liabilities existed. As such, we may be unable to realize the carrying value upon a sale of these investments or liabilities.

    The accounting rules applicable to certain of our transactions are highly complex and require the application of significant judgment and assumptions by our management. In addition, changes in accounting interpretations or assumptions could impact our financial statements.

    Accounting rules for consolidations, income taxes, business acquisitions, transfers of financial assets and other aspects of our operations are highly complex and require the application of judgment and assumptions by our management. In addition, changes in accounting rules, interpretations or assumptions could materially impact the presentation, disclosure and usability of our financial statements. For more information see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates”.

Changes in accounting practices and future pronouncements may materially affect our reported financial results.

Developments in accounting practices may require us to incur considerable additional expenses to comply with new rules, particularly if we are required to prepare information relating to prior periods for comparative purposes or to otherwise apply the new requirements retroactively. The impact of changes in current accounting practices and future pronouncements cannot be predicted but may affect the calculation of net income, stockholders’ equity and other relevant financial statement line items.

Our insurance subsidiaries are required are required to comply with Statutory Accounting Principles (“SAP”). SAP and various components of SAP are subject to constant review by the NAIC and its task forces and committees, as well as state insurance departments, in an effort to address emerging issues and otherwise improve financial reporting. Various proposals are pending before committees and task forces of the NAIC, some of which, if enacted, could have negative effects on insurance industry participants. The NAIC continuously examines existing laws and regulations. Whether or in what form such reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect us is unknown.

    Catastrophic events could significantly impact the Company’s business.

    Unforeseen or catastrophic events, such as severe weather, natural disasters, pandemic, cybersecurity attacks, acts of war or terrorism and other adverse external events could have a significant impact on the Company’s ability to conduct business. Although the Company and its subsidiaries have established disaster recovery plans, there is no guarantee that such plans will allow the Company and its subsidiaries to operate without disruption if such an event was to occur and the occurrence of any such event could have a material adverse effect on the Company’s business, which, in turn, could have a material adverse effect on the Company’s financial condition and results of operations.

The global spread of the coronavirus (COVID-19) has created significant market volatility and uncertainty and economic disruption. In addition, the impact of COVID-19 and measures to prevent its spread have caused, and may continue to cause, substantial disruption to distribution channels, auto dealer partners and contract counterparties, and may limit our access to capital and customers through self-isolation, travel limitations, business restrictions, margin calls, and otherwise. While the re-opening of the US and global economies began in the second quarter of 2020, a resurgence of the virus has either slowed or in some cases resulted in a roll back of the re-opening of some businesses. As a result, it is currently unclear as to how much and when these economies will recover in the near term. Some ports used in our shipping business may adopt measures in reaction to COVID-19 that delay our ability to operate our vessels efficiently. Our investment in Invesque, which operates in the senior housing, medical office and skilled nursing industry, is reported at fair market value on a quarterly basis and has been and could continue to be

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materially negatively affected by the market decline in equity securities in these industry sectors. Invesque’s business may be adversely affected by the impact of COVID-19 on occupancy rates and the operations of Invesque and its tenants and operators. Though many of our employees are able to work remotely, the impact on the economy as a result of COVID-19 has nevertheless negatively affected many of our customers and channels through which we sell our products and services, which could result in significant declines in sales. In addition, operating remotely may slow or otherwise limit our ability to add new products and customers. Further, actions of regulators and other governmental authorities may delay or limit our ability to exercise remedies under our policies or loans in the event of defaults or cancellations. These effects, individually or in the aggregate, could materially adversely impact our businesses, financial condition, operating results, liquidity and cash flows and such adverse impacts may be material to our results of operations and liquidity position. Any of the foregoing factors, or other cascading effects of the COVID-19 pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our sales and damage the Company’s results of operations and its liquidity position, possibly to a significant degree. The duration of any such impacts cannot be predicted at this time.

Whether or to what extent damage that may be caused by natural events, such as wildfires, severe tropical storms and hurricanes, will affect our insurance subsidiaries’ ability to write new insurance policies and reinsurance contracts is unknown, but, to the extent our insurance subsidiaries’ policies are concentrated in the specific geographic areas in which these events occur, any increase in frequency and severity of such events and the total amount of our loss exposure in the impacted areas of such events may adversely affect their business, financial condition and results of operations. In addition, although our insurance subsidiaries have historically had limited exposure to catastrophic risk, claims from catastrophe events could reduce their earnings and cause substantial volatility in their business, financial condition and results of operations for any period. Assessing the risk of loss and damage associated with natural and catastrophic events remains a challenge and might adversely affect their business, results of operations, financial condition and cash flows.

U.S. insurers are required by state and federal law to offer coverage for acts of terrorism in certain commercial lines. The Terrorism Risk Insurance Act, as extended by the Terrorism Risk Insurance Program Reauthorization Act of 2015 (“TRIPRA”) requires commercial property and casualty (“P&C”) insurance companies to offer coverage for acts of terrorism, whether foreign or domestic, and established a federal assistance program through the end of 2020 to help cover claims related to future terrorism-related losses. The likelihood and impact of any terrorist act is unpredictable, and the ultimate impact on our insurance subsidiaries would depend upon the nature, extent, location and timing of such an act. Although our insurance subsidiaries reinsure a portion of the terrorism risk they retain under TRIPRA, such terrorism reinsurance does not provide full coverage for an act stemming from nuclear, biological or chemical terrorism. To the extent an act of terrorism, whether a domestic or foreign act, is certified by the Secretary of Treasury, our insurance subsidiaries may be covered under TRIPRA of their losses for certain P&C lines of insurance. However, any such coverage would be subject to a mandatory deductible based on 20% of earned premium for the prior year for the covered 2020 of commercial P&C insurance.

Risks Related to our Structure

    Because we are a holding company, our ability to meet our obligations and pay dividends to stockholders will depend on distributions from our subsidiaries that may be subject to restrictions and income from assets.

    We are a holding company and do not have any significant operations of our own, other than our principal investments. Our ability to meet our obligations will depend on distributions from our subsidiaries and income from assets. The amount of dividends and other distributions that our subsidiaries may distribute to us may be subject to restrictions imposed by state law, restrictions that may be imposed by state regulators and restrictions imposed by the terms of any current or future indebtedness that these subsidiaries may incur. Such restrictions would also affect our ability to pay dividends to stockholders, if and when we choose to do so.

    Our insurance business’s Junior Subordinated Notes due 2057 and $200 million revolving credit facility restrict dividends to us based on the leverage ratio of our insurance business and its subsidiaries. Additionally, our regulated insurance company subsidiaries are required to satisfy minimum capital and surplus requirements according to the laws and regulations of the states in which they operate, which regulate the amount of dividends and distributions we receive from them. In general, dividends in excess of prescribed limits are deemed “extraordinary” and require insurance regulatory approval. Ordinary dividends, for which no regulatory approval is generally required, are limited to amounts determined by a formula, which varies by state. Some states have an additional stipulation that dividends may only be paid out of earned surplus. States also regulate transactions between our insurance company subsidiaries and us or our other subsidiaries, such as those relating to compensation for shared services, and in some instances, require prior approval of such transactions within the holding company structure. If insurance regulators determine that payment of an ordinary dividend or any other payments by our insurance company subsidiaries to us or our other subsidiaries (such as payments for employee or other services) would be adverse to policyholders or creditors, the regulators may block or otherwise restrict such payments that would otherwise be permitted without prior approval. In addition, there could be future

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regulatory actions restricting the ability of our insurance company subsidiaries to pay dividends or share services. The primary factor in determining the amount of capital available for potential dividends is the level of capital needed to maintain desired financial strength ratings from rating agencies for our insurance company subsidiaries. Given recent economic events that have affected the insurance industry, both regulators and rating agencies could become more conservative in their methodology and criteria, including increasing capital requirements for our insurance company subsidiaries which, in turn, could negatively affect our capital resources.

    Some provisions of our charter may delay, deter or prevent takeovers and business combinations that stockholders consider in their best interests.

    Our charter restricts any person that owns 9.8% or more of our capital stock, other than stockholders approved by applicable state insurance regulators, from voting in excess of 9.8% of our voting securities. This provision is intended to satisfy the requirements of applicable state regulators in connection with insurance laws and regulations that prohibit any person from acquiring control of a regulated insurance company without the prior approval of the insurance regulators. In addition, our charter provides for the classification of our board of directors into three classes, one of which is to be elected each year. Our charter also generally only permits stockholders to act without a meeting by unanimous consent. These provisions may delay, deter or prevent takeovers and business combinations that stockholders consider in their best interests.

    Maryland takeover statutes may prevent a change of our control, which could depress our stock price.

    Maryland law provides that “control shares” of a corporation acquired in a “control share acquisition” will have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter under the Maryland Control Share Acquisition Act. “Control shares” means voting shares of stock that, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: one-tenth or more but less than one-third; one-third or more but less than a majority; or a majority or more of all voting power. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.

    Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which such stockholder became an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities.

    Our bylaws contain a provision exempting from the control share statute any and all acquisitions by any person of our shares of stock. Our board of directors has also adopted a resolution which provides that any business combination between us and any other person is exempted from the provisions of the business combination statute, provided that the business combination is first approved by the board of directors. However, our board of directors may amend or eliminate this provision in our bylaws regarding the control share statute or amend or repeal this resolution regarding the business combination statute. If our board takes such action in the future, the control share and business combination statutes may prevent or discourage others from trying to acquire control of us and increase the difficulty of consummating any offer, including potential acquisitions that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.

    Our holding company structure with multiple lines of business, may adversely impact the market price of our common stock and our ability to raise equity and debt capital.

    Tiptree holds and manages multiple lines of business. Analysts, investors and lenders may have difficulty analyzing and valuing a company with multiple lines of business, which could adversely impact the market price of our common stock and our ability to raise equity and debt capital at a holding company level. Moreover, our management is required to make decisions regarding the allocation of capital among the different lines of business, and such decisions could materially and adversely affect our business or one or more of our lines of business.

Risks Related to Regulatory and Legal Matters

    Maintenance of our 1940 Act exemption imposes limits on our operations.

    We conduct our operations so that we are not required to register as an investment company under the 1940 Act. Therefore, we must limit the types and nature of businesses in which we engage and assets that we acquire. We monitor our compliance with the 1940 Act on an ongoing basis and may be compelled to take or refrain from taking actions, to acquire

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additional income or loss generating assets or to forgo opportunities that might otherwise be beneficial or advisable, including, but not limited to selling assets that are considered to be investment securities or forgoing the sale of assets that are not investment securities, in order to ensure that we (or a subsidiary) may continue to rely on the applicable exceptions or exemptions. These limitations on our freedom of action could have a material adverse effect on our financial condition and results of operations.

    If we fail to maintain an exemption, exception or other exclusion from registration as an investment company, we could, among other things, be required to substantially change the manner in which we conduct our operations either to avoid being required to register as an investment company or to register as an investment company. If we were required to register as an investment company under the 1940 Act, we would become subject to substantial regulation with respect to, among other things, our capital structure (including our ability to use leverage), management, operations, transactions with affiliated persons (as defined in the 1940 Act), portfolio composition, including restrictions with respect to diversification and industry concentration, and our financial condition and results of operations may be adversely affected. If we did not register despite being required to do so, criminal and civil actions could be brought against us, our contracts would be unenforceable unless a court were to require enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

    A change in law, regulation or regulatory enforcement applicable to insurance products could adversely affect our financial condition and results of operations.

    A change in state or U.S. federal tax laws could materially affect our insurance businesses. For example, tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”), which was signed into law on December 22, 2017, fundamentally overhauled the U.S. tax system by, among other significant changes, reducing the U.S. corporate income tax rate to 21%. In the context of the taxation of U.S. P&C insurance companies such as our insurance companies, the TCJA also modified the loss reserve discounting rules and the proration rules that apply to reduce reserve deductions to reflect the lower corporate income tax rate, which could have an adverse impact on our insurance subsidiaries. It is possible that other legislation could be introduced and enacted by the current Congress or future Congresses that could have an adverse impact on our insurance subsidiaries. Additional regulations or pronouncements interpreting or clarifying provisions of the TCJA have been and will continue to be issued, and such regulations or pronouncements may be different from our insurance subsidiaries’ interpretation and thus adversely affect their results. If, when or in what form such regulations or pronouncements may be provided or finalized, whether such guidance will have a retroactive effect or such regulations’ or pronouncements’ potential impact on our insurance subsidiaries is unknown.

Currently, our insurance business does not collect sales or other related taxes on its services. Whether sales of our insurance business’s services are subject to state sales and use taxes is uncertain, due in part to the nature of its services and the relationships through which its services are offered, as well as changing state laws and interpretations of those laws. One or more states may seek to impose sales or use tax or other tax collection obligations on our insurance business, whether based on sales by our insurance business or its resellers or clients, including for past sales. A successful assertion that our insurance business should be collecting sales or other related taxes on its services could result in substantial tax liabilities for past sales, discourage customers from purchasing its services, discourage clients from offering or billing for its services, or otherwise cause material harm to its business, financial condition and results of operations.

    With regard to our insurance business’s payment protection products and financing of VSCs, there are federal and state laws and regulations that govern the disclosures related to the sales of those products. Our insurance business’s ability to offer and administer these products on behalf of their distribution partners is dependent upon their continued ability to sell such products. To the extent that federal or state laws or regulations change to restrict or prohibit the sale of these products, our insurance business’s revenues would be adversely affected. For example, the CFPB’s enforcement actions have resulted in large refunds and civil penalties against financial institutions in connection with their marketing of payment protection and other products. Due to such regulatory actions, some lenders may reduce their sales and marketing of payment protection and other ancillary products, which may adversely affect our insurance business’s revenues. The full impact of the CFPB’s oversight is unpredictable and continues to evolve. With respect to the P&C insurance policies our insurance business underwrites, federal legislative proposals regarding national catastrophe insurance, if adopted, could reduce the business need for some of the related products that our insurance business provides.

Increasing regulatory focus on privacy issues and expanding laws could affect our various subsidiaries’ business model and expose them to increased liability.

Some of our subsidiaries collect, use, store, transmit, retrieve, retain and otherwise process confidential and personally identifiable information in their information systems in and across multiple jurisdictions, and they are subject to a variety of confidentiality obligations and privacy, data protection and information security laws, regulations, orders and industry standards in the jurisdictions in which they do business. The regulatory environment surrounding information security, data privacy and

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cybersecurity is evolving and increasingly demanding. A number of our subsidiaries are subject to numerous U.S. federal and state laws and non-U.S. regulations governing the protection of personally identifiable and confidential information of their customers and employees. On October 24, 2017, the NAIC adopted an Insurance Data Security Model Law, which requires licensed insurance entities to comply with detailed information security requirements. The NAIC model law has been adopted by certain states and is under consideration by others. It is not yet known whether or not, and to what extent, states legislatures or insurance regulators where our insurance subsidiaries operate will enact the Insurance Data Security Model Law in whole or in part, or in a modified form. Such enactments, especially if inconsistent between states or with existing laws and regulations, could raise compliance costs or increase the risk of noncompliance, and noncompliance could subject our insurance subsidiaries to regulatory enforcement actions and penalties, as well as reputational harm. Any such events could potentially have an adverse impact on our insurance subsidiaries’ business, results of operations, financial condition and cash flows.

Our insurance and mortgage subsidiaries are subject to the privacy regulations of the Gramm-Leach-Bliley Act of 1999 (the “Gramm-Leach-Bliley Act”), along with its implementing regulations, which restricts certain collection, processing, storage, use and disclosure of personal information, requires notice to individuals of privacy practices, provides individuals with certain rights to prevent the use and disclosure of certain nonpublic or otherwise legally protected information and imposes requirements for the safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines. In addition, on March 1, 2017, new cybersecurity rules took effect for financial institutions, insurers and certain other companies, like our insurance and mortgage subsidiaries, supervised by the NY Department of Financial Services (the “NY DFS Cybersecurity Regulation”). The NY DFS Cybersecurity Regulation imposes significant new regulatory burdens intended to protect the confidentiality, integrity and availability of information systems. Our insurance and mortgage subsidiaries also have contractual obligations to protect confidential and personally identifiable information we obtain from third parties. These obligations generally require them, in accordance with applicable laws, to protect such information to the same extent that they protect their own such information.

Many states in which our insurance and mortgage subsidiaries operate have laws that protect the privacy and security of sensitive and personal information. Certain current or proposed state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to sensitive and personal information than federal, international or other state laws, and such laws may differ from each other, which may complicate compliance efforts. For example, certain of our insurance and mortgage businesses are subject to the California Consumer Privacy Act of 2018 (“CCPA”), which among other things, requires companies covered by the legislation to provide new disclosures to California consumers and afford such consumers new rights of access and deletion of personal information. Additionally, when it becomes effective on January 1, 2023, our insurance subsidiaries will be subject to the California Privacy Rights Act (“CPRA”), which will significantly expand consumers’ rights under the CCPA. Internationally, many jurisdictions have established their own data security and privacy legal framework with which our insurance subsidiaries operating in such jurisdictions, or their customers, may need to comply, including, but not limited to, the European Union, or EU. The EU has adopted the General Data Protection Regulation, or the GDPR, which contains numerous requirements, robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.

Because the interpretation and application of many privacy and data protection laws along with contractually imposed industry standards are uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our insurance subsidiaries’ existing data management practices or the features of their services and platform capabilities. Any failure or perceived failure by our insurance subsidiaries, or any third parties with which they do business, to comply with their posted privacy policies, changing consumer expectations, evolving laws, rules and regulations, industry standards, or contractual obligations to which they or such third parties are or may become subject, may result in actions or other claims against our insurance subsidiaries by governmental entities or private actors, the expenditure of substantial costs, time and other resources or the incurrence of significant fines, penalties or other liabilities. In addition, any such action, particularly to the extent our insurance subsidiaries were found to be guilty of violations or otherwise liable for damages, would damage their reputation and adversely affect their business, financial condition and results of operations.

    Compliance with existing and new regulations affecting our business in regulated industries may increase costs and limit our ability to pursue business opportunities.

    We are subject to extensive laws and regulations administered and enforced by a number of different federal and state governmental authorities in the industries in which we operate. Regulation of such industries may increase. In the past, there has been significant legislation affecting financial services and insurance, including the Dodd-Frank Act. In addition, we are subject to regulations governing the protection of personal confidential information and data security including the Gramm-Leach-Bliley Act, the GDPR, the NY DFS Cybersecurity Regulation and the CCPA. Accordingly, the impact that any new laws and regulations will have on us is unknown. The costs to comply with these laws and regulations may be substantial and could have a significant negative impact on us and limit our ability to pursue business opportunities. We can give no assurances that with changes to laws and regulations, our businesses can continue to be conducted in each jurisdiction in the manner as we have in the past.

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    Our insurance subsidiaries are subject to regulation by state and, in some cases, foreign insurance authorities with respect to statutory capital, reserve and other requirements, including statutory capital and reserve requirements established by applicable insurance regulators based on RBC and Solvency II formulas. In any particular year, these requirements may increase or decrease depending on a variety of factors, most of which are outside our insurance subsidiaries’ control, such as the amount of statutory income or losses generated, changes in equity market levels, the value of fixed-income and equity securities in our investment portfolio, changes in interest rates and foreign currency exchange rates, as well as changes to the RBC formulas used by insurance regulators. The laws of the various states in which our insurance businesses operate establish insurance departments and other regulatory agencies with broad powers to preclude or temporarily suspend our insurance subsidiaries from carrying on some or all of their activities or otherwise fine or penalize them in any jurisdiction in which they operate. Such regulation or compliance could reduce our insurance businesses’ profitability or limit their growth by increasing the costs of compliance, limiting or restricting the products or services they sell, or the methods by which they sell their services and products, or subjecting their business to the possibility of regulatory actions or proceedings. Additionally, increases in the amount of additional statutory reserves that our insurance subsidiaries are required to hold could have a material adverse effect on their business, results of operations, financial condition and cash flows.

    While the CFPB does not have direct jurisdiction over insurance products, it is possible that regulatory actions taken by the CFPB may affect the sales practices related to these products and thereby potentially affect our insurance business or the clients that it serves. In 2017, the CFPB issued rules under its unfair, deceptive and abusive acts and practices rulemaking authority relating to consumer installment loans, among other things. Such CFPB rules regarding consumer installment loans could adversely impact our insurance business’s volume of insurance products and services and cost structure. Due to such regulatory actions, some lenders may reduce their sales and marketing of payment protection and other ancillary products, which may adversely affect our insurance business’s revenues.

    Due to the highly regulated nature of the residential mortgage industry, our mortgage subsidiaries are required to comply with a wide array of federal, state and local laws and regulations that regulate licensing, allowable fees and loan terms, permissible servicing and debt collection practices, limitations on forced-placed insurance, special consumer protections in connection with default and foreclosure, and protection of confidential, nonpublic consumer information. These laws and regulations are constantly changing and the volume of new or modified laws and regulations has increased in recent years as states and local cities and counties continue to enact laws that either restrict or impose additional obligations in connection with certain loan origination, acquisition and servicing activities in those cities and counties. These laws and regulations are complex and vary greatly among different states and localities, and in some cases, these laws are in conflict with each other or with U.S. federal law. A failure by us or our servicers to comply with applicable laws or regulations could subject our mortgage business and/or our mortgage servicers to lawsuits or governmental actions, which could result in the loss or suspension of our licenses in the applicable jurisdictions where such violations occur and/or monetary fines or changes in our mortgage operations. If we were to determine to change servicers, there is no assurance that we could find servicers that satisfy our requirements or with whom we could enter into agreements on satisfactory terms. Any of these outcomes could materially and adversely affect our mortgage business.

    Our dry bulk shipping and product tanker business and the operation of our vessels are regulated under international conventions, classification societies, national, state and local laws and regulations in force in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration, that mandate safety and environmental protection policies. Government regulation of vessels, particularly environmental regulations, have become more stringent and may require us to incur significant capital expenditures on our vessels.

    For example, various jurisdictions have regulated management of ballast waters to prevent the introduction of non-indigenous species that are considered invasive which requires us to make changes to the ballast water management plans we currently have in place and to install new equipment on board our vessels. Various jurisdictions have also regulated or are considering the further regulation of greenhouse gases from vessels and emissions of sulfur and nitrogen oxides, which may increase the cost of new vessels and require retrofitting equipment on existing vessels. Effective January 1, 2020, the International Maritime Organization (“IMO”) imposed the IMO 2020 Regulations which require all ships to burn fuel with a maximum sulfur content of 0.5%, which is a significant reduction from the previous threshold of 3.5%. Commencing January 1, 2020, ships are required to remove sulfur from emissions through the use of scrubbers or other emission control equipment, or purchase marine fuel with 0.5% sulfur content, which has led to increased demand for this type of fuel compared to the price we would have paid had the IMO 2020 Regulations not been adopted. Substantially all of the vessels chartered by us do not have scrubbers, which means we are required to purchase low sulfur fuel for our vessels. Our vessels began operating on 0.5% low sulfur fuel in compliance with the IMO 2020 Regulations. As a result of the IMO 2020 Regulations and any future regulations with which we must comply, we may incur substantial additional operating costs.

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    These requirements can also affect the resale prices or useful lives of our vessels or require reductions in cargo capacity, ship modifications or operational changes or restrictions. Failure to comply with these requirements could lead to decreased availability of, or more costly insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup obligations and claims for natural resource, personal injury and property damages in the event that there is a release of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations. Violations of, or liabilities under, environmental regulations can result in substantial penalties, fines and other sanctions, including, in certain instances, seizure or detention of our vessels. In addition, we are subject to the risk that we, our affiliated entities, or our or their respective officers, directors, shore employees, crew on board and agents may take actions determined to be in violation of such environmental regulations and laws and our environmental policies. Any such actual or alleged environmental laws regulations and policies violation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/or criminal penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Events of this nature could have a material adverse effect on our business, financial condition and results of operations.

The CFPB continues to be active in its monitoring of the loan origination and servicing sectors, and its recently issued rules increase our regulatory compliance burden and associated costs.

Our mortgage business is subject to the regulatory, supervisory and examination authority of the CFPB, which has oversight of federal and state non-depository lending and servicing institutions, including residential mortgage originators and loan servicers. The CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage lenders and servicers, including the Truth in Lending Act (“TILA”), the Real Estate Settlement Procedures Act and the Fair Debt Collections Practices Act. The CFPB has issued a number of regulations under the Dodd-Frank Act relating to loan origination and servicing activities, including ability to repay and "Qualified Mortgage" standards and other origination standards and practices.

The CFPB’s examinations have increased, and will likely continue to increase, our mortgage business’s administrative and compliance costs. They could also greatly influence the availability and cost of residential mortgage credit and increase servicing costs and risks. These increased costs of compliance, the effect of these rules on the lending industry and loan servicing, and any failure in our mortgage business’s ability to comply with the new rules by their effective dates, could be detrimental to their business. The CFPB also issued guidelines on sending examiners to banks and other institutions that service and/or originate mortgages to assess whether consumers' interests are protected.

The CFPB also has broad enforcement powers, and can order, among other things, rescission or reformation of contracts, the refund of moneys or the return of real property, restitution, disgorgement or compensation for unjust enrichment, the payment of damages or other monetary relief, public notifications regarding violations, limits on activities or functions, remediation of practices, external compliance monitoring and civil money penalties. The CFPB has been active in investigations and enforcement actions and, when necessary, has issued civil money penalties to parties the CFPB determines has violated the laws and regulations it enforces. Our mortgage business’s failure to comply with the federal consumer protection laws, rules and regulations to which they are subject, whether actual or alleged, could expose them to enforcement actions or potential litigation liabilities.

The mortgage lending sector is currently relying for a significant portion of the mortgages originated on a temporary CFPB regulation, commonly called the "QM Patch," which permits mortgage lenders to comply with the CFPB's ability to repay requirements by relying on the fact that the mortgage is eligible for sale to Fannie Mae or Freddie Mac. Reliance on the QM Patch has become widespread due to the operational complexity and practical inability for many mortgage lenders to rely on other ways to show compliance with the ability to repay regulations. The QM Patch was scheduled to expire on January 10, 2021, or sooner if Fannie Mae and Freddie Mac exited FHFA conservatorship. Pursuant to a series of rules issued by the CFPB on October 20, 2020 and December 10, 2020, the QM Patch will expire July 1, 2021, and lenders will be required to comply with a new definition regarding what constitutes a "qualified mortgage" to receive safe-harbor treatment under the ability to repay requirements of TILA. While these final rules will give greater protections for certain loans made to borrowers with higher debt-to-income ratios, or loans where borrowers demonstrate a good repayment history, they also create additional compliance burdens and remove some of the legal certainties afforded to lenders under the QM Patch. Thus, our mortgage business may experience heightened compliance and legal risks associated with implementing these new underwriting obligations.

Our insurance subsidiaries could be adversely affected if their controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.

Our insurance business is highly dependent on the ability of our insurance subsidiaries to engage on a daily basis in a large number of insurance underwriting, claim processing and investment activities, many of which are highly complex. These

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activities often are subject to internal guidelines and policies, as well as legal and regulatory standards, including those related to privacy, anti-corruption, anti-bribery and global finance and insurance (“F&I”) matters. The continued expansion into new products and geographic markets has brought about additional requirements. A control system, no matter how well designed and operated, can provide only reasonable assurance that the control system’s objectives will be met. If our insurance subsidiaries’ controls are not effective, it could lead to financial loss, unanticipated risk exposure (including underwriting, credit and investment risk) or damage to their reputation.

    Our businesses are subject to risks related to litigation and regulatory actions.

    Over the last several years, businesses in many areas of the financial services industry have been subject to increasing amounts of regulatory scrutiny. In addition, there has been an increase in litigation involving firms in the financial services industry and public companies generally, some of which have involved new types of legal claims, particularly in the insurance industry. We may be materially and adversely affected by judgments, settlements, fines, penalties, unanticipated costs or other effects of legal and administrative proceedings now pending or that may be instituted in the future, including from investigations by regulatory bodies or administrative agencies. An adverse outcome of any investigation by, or other inquiries from, any such bodies or agencies also could result in non-monetary penalties or sanctions, loss of licenses or approvals, changes in personnel, increased review and scrutiny of us by our clients, counterparties, regulatory authorities, potential litigants, the media and others, any of which could have a material adverse effect on us.

We are involved in various litigation matters from time to time. For example, we are a defendant in Mullins v. Southern Financial Life Insurance Co., a class action lawsuit alleging violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud. This and other such matters can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses. Our insurance and indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. If we are unsuccessful in our defense in these litigation matters, or any other legal proceeding, we may be forced to pay damages or fines, enter into consent decrees or change our business practices, any of which could have a material adverse effect our business, results of operations, financial condition or cash flows.

    Our international activities increase the compliance risks associated with economic and trade sanctions imposed by the United States, the EU and other jurisdictions.

    Our international operations and activities expose us to risks associated with trade and economic sanctions, prohibitions or other restrictions imposed by the United States or other governments or organizations, including the United Nations, the EU and its member countries. Under economic and trade sanctions laws, governments may seek to impose modifications to, prohibitions/restrictions on business practices and activities, and modifications to compliance programs, which may increase compliance costs, and, in the event of a violation, may subject us to fines and other penalties.

    We could be materially adversely affected by violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and anti-corruption laws in other applicable jurisdictions.

    We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations in various jurisdictions in which we conduct business, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. We operate in countries known to present heightened risks for corruption and our dry bulk shipping and product tankers and related operations requires us to interact with government officials, including port officials, harbor masters, maritime regulators, customs officials and pilots.

    Non-compliance with anti-corruption, anti-bribery or anti-money laundering laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation.

Assessments and premium surcharges for state guaranty funds, secondary-injury funds, residual market programs and other mandatory pooling arrangements may reduce our insurance subsidiaries’ profitability.

Most states require insurance companies licensed to do business in their state to participate in guaranty funds, which require the insurance companies to bear a portion of the unfunded obligations of impaired, insolvent or failed insurance companies. These obligations are funded by assessments, which are expected to continue in the future. State guaranty associations levy assessments, up to prescribed limits, on all member insurance companies in the state based on their proportionate share of premiums written in the lines of business in which the impaired, insolvent or failed insurance companies are engaged. Accordingly,

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the assessments levied on our insurance subsidiaries may increase as they increase their written premiums. These funds are supported by either assessments or premium surcharges based on incurred losses.

In addition, as a condition to conducting business in some states, insurance companies are required to participate in residual market programs to provide insurance to those who cannot procure coverage from an insurance carrier on a negotiated basis. Insurance companies generally can fulfill their residual market obligations by, among other things, participating in a reinsurance pool where the results of all policies provided through the pool are shared by the participating insurance companies. Although our insurance subsidiaries price their insurance to account for their potential obligations under these pooling arrangements, they may not be able to accurately estimate their liability for these obligations. Accordingly, mandatory pooling arrangements may cause a decrease in their profits. Further, the impairment, insolvency or failure of other insurance companies in these pooling arrangements would likely increase the liability for other members in the pool. The effect of assessments and premium surcharges or increases in such assessments or surcharges could reduce our insurance subsidiaries’ profitability in any given period or limit the ability to grow their business.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive office is located at 299 Park Avenue, 13th Floor, New York, New York 10171. We and our subsidiaries lease properties throughout the United States and Europe, all of which are used as administrative offices. We believe that the terms of the leases at each of our subsidiaries are sufficient to meet our present needs and we do not anticipate any difficulty in securing additional space, as needed, on acceptable terms.

As of December 31, 2020, the Company owned 3 single family properties in our insurance segment consisting of REO properties resulting from our investments in non-performing residential mortgage loans.

Item 3. Legal Proceedings

Our legal proceedings are discussed under the heading “Litigation” in Note (21) — Commitments and Contingencies in the Notes to the consolidated financial statements in this report.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Tiptree’s common stock is traded on the Nasdaq Capital Market under the ticker symbol “TIPT”.

Holders

As of December 31, 2020, there were 58 common stockholders of record. This number does not include beneficial owners whose shares are held by nominees in street name.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Share repurchase activity for the three months ended December 31, 2020 was as follows:

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Period	Purchaser	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
October 1, 2020 to October 31, 2020	Tiptree Inc.	—	$	—	—
November 1, 2020 to November 30, 2020	Tiptree Inc.	210,763	$	5.31	210,763
December 1, 2020 to December 31, 2020: Open Market Purchases	Tiptree Inc.	446,936	$	5.23	446,936
	Total	657,699	$	5.26	657,699	$	16,571

(1)On November 2, 2020, the Board of Directors of Tiptree (“Board”) authorized Tiptree’s Executive Committee to repurchase up to $20 million of its outstanding common stock in the aggregate from time to time.

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Item 6. Selected Financial Data

The following tables set forth our consolidated selected financial data for the periods and as of the dates indicated and are derived from our audited Consolidated Financial Statements. The following consolidated financial data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in Item 7 of this Form 10-K and the consolidated financial statements and related notes included in Item 8 of this Form 10-K. All amounts pertaining to our results of operations and financial condition are presented on a continuing operations basis. All acquisitions by Tiptree during the five years ended December 31, 2020 are included in results of operations since their respective dates of acquisition.

Consolidated Statement of Operations Data:
(in thousands, except shares and per share amounts)	2020		2019		2018(1)		2017(1)		2016(1)
Total revenues	$	810,301	$	772,728	$	625,826	$	581,798	$	506,423
Total expenses	849,153		743,589		645,622		595,585		477,537
Net income (loss) attributable to consolidated CLOs (2)	—		—		—		10,457		20,254
Income (loss) before taxes	(38,852)		29,139		(19,796)		(3,330)		49,140
Less: provision (benefit) for income taxes	(13,627)		9,017		(5,909)		(12,562)		12,515
Net income (loss) from continuing operations	(25,225)		20,122		(13,887)		9,232		36,625
Net income (loss) from discontinued operations	—		—		43,770		(3,998)		(4,287)
Net income (loss)	(25,225)		20,122		29,883		5,234		32,338
Less: net income (loss) attributable to non-controlling interests	3,933		1,761		5,950		1,630		7,018
Net income (loss) attributable to common stockholders	$	(29,158)	$	18,361	$	23,933	$	3,604	$	25,320
Net income (loss) per common share:
Basic, continuing operations, net	$	(0.86)	$	0.52	$	(0.38)	$	0.22	$	0.88
Basic, discontinued operations, net	—		—		1.07		(0.10)		(0.09)
Basic earnings per share	(0.86)		0.52		0.69		0.12		0.79
Diluted, continuing operations, net	(0.86)		0.50		(0.38)		0.21		0.86
Diluted, discontinued operations, net	—		—		1.07		(0.10)		(0.08)
Diluted earnings per share	$	(0.86)	$	0.50	$	0.69	$	0.11	$	0.78
Weighted average number of Common Shares:
Basic	33,859,775		34,578,292		34,715,852		29,134,190		31,721,449
Diluted	33,859,775		34,578,292		34,715,852		37,306,632		31,766,674
Cash dividends paid per common share	$	0.160	$	0.155	$	0.135	$	0.120	$	0.100
Consolidated Balance Sheet Data: (in thousands)	2020		2019		2018		2017		2016
Total assets (3)	$	2,995,760	$	2,198,286	$	1,864,918	$	1,989,742	$	2,890,050
Debt, net (4)	366,246		374,454		354,083		346,081		554,870
Total stockholders’ equity	373,538		411,415		399,259		396,774		390,144
Total Tiptree Inc. stockholders’ equity	356,144		398,062		387,101		300,077		293,431

(1)    Care revenues of $6.5 million, $76.0 million and $60.7 million and net income (loss) of $43.8 million, $(4.0) million and $(4.3) million for the years ended December 31, 2018, 2017 and 2016, respectively, are included in Net income (loss) from discontinued operations, net.

(2)    During 2017, the Company exited all consolidated CLOs. The operations of the CLOs were consolidated in the results of the Company through the redemption date.

(3)    Total assets on December 31, 2016 includes $989.5 million of assets held by consolidated CLO entities.

(4)    Excludes debt of discontinued operations.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis of Financial Conditions and Results of Operations is presented in this section as follows:

•Overview

•Results of Operations

•Non-GAAP Measures and Reconciliations

•Liquidity and Capital Resources

•Critical Accounting Policies and Estimates

•Off-Balance Sheet Arrangements

OVERVIEW

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Our principal operating subsidiary and primary source of earnings, Fortegra, along with its subsidiaries, is a leading provider of specialty insurance, underwriting warranty and service contract products and related service solutions. We also generate earnings from a diverse group of select investments that we refer to as Tiptree Capital, which includes our Mortgage segment and our other, non-insurance businesses and assets. We evaluate our performance primarily by the comparison of our shareholders’ long-term total return on capital, as measured by Adjusted Net Income, Adjusted EBITDA and growth in book value per share plus dividends.

Our 2020 highlights include:

Overall:

•Net loss of $29.2 million was driven by unrealized losses on equities, primarily our holding of Invesque, partially offset by growth in insurance underwriting operations and growth in volume and margins in our mortgage business.

•Adjusted net income was up 86.4% to $51.4 million, from $27.6 million in 2019, driven by improvement in insurance and mortgage operations. Adjusted return on average equity was 13.1%, as compared to 6.8% in 2019.

•Book value per share of $10.90 as of December 31, 2020, when combined with dividends paid, decreased 4.0% from the prior year, driven by a combination of net losses, partially offset by share repurchases during the year.

•In 2020, 2019 and 2018, we purchased and retired 2,384,286, 1,472,730 and 2,177,235 shares of our common stock, respectively, for $37.1 million in aggregate, at an average 42% discount to book value.

•Cash and cash equivalents of $136.9 million as of December 31, 2020, of which $80.0 million resides outside our statutory insurance subsidiaries.

Insurance:

•Total revenues grew 8.8% to $691.1 million, from $635.1 million in 2019, driven primarily from growth in commercial, warranty and niche personal lines programs.

•Earned premiums, net, service and administrative fees and ceding commissions grew a combined 11.6% to a total of $686.0 million in 2020, from $615.0 million in 2019, driven by the same factors that drove overall revenue growth.

•Income before taxes of $26.9 million decreased 27.2% as compared to $37.0 million in 2019, primarily driven by net realized and unrealized losses on investments as compared to gains in the prior year. Return on average equity was 8.1% in 2020 as compared to 10.7% in 2019.

•Adjusted net income increased 32.4% to $43.4 million, as compared to $32.8 million in 2019. Adjusted return on average equity was 15.2%, as compared to 12.3% in 2019 driven by the same growth factors that impacted revenues.

•The combined ratio improved to 91.5%, as compared to 92.4% in 2019, driven by the shift in business mix toward warranty and commercial programs.

•Gross written premiums and premium equivalents were $1,666.9 million for the year ended December 31, 2020, as compared to $1,297.0 million for the year ended December 31, 2019, up 28.5% as a result of growth in commercial and warranty programs, including from the acquisition of Smart AutoCare described below.

•As of December 31, 2020, total cash and cash equivalents combined with total investments were $712.9 million, as compared to $565.9 million as of December 31, 2019. As of December 31, 2020, 82.6% of the portfolio invested in high-credit quality fixed income securities with an average S&P rating of AA and a weighted average duration of 2.4 years.

•In January 2020, we acquired Smart AutoCare, a rapidly growing vehicle warranty and service contract administrator in the United States which contributed approximately $248.8 million of gross written premiums and

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premium equivalents for the year ended December 31, 2020. The acquisition expanded our warranty distribution channels and dramatically increased our presence in the auto warranty sector.

•On December 31, 2020, we acquired Sky Auto for approximately $25 million of cash consideration to further expand our presence in the auto warranty sector. The acquisition supplements our distribution with direct marketing capabilities.

Mortgage:

•Income before taxes of $31.1 million in 2020, as compared to $3.0 million in 2019, driven by growth in volumes and margins as interest rates dropped and home prices increased in 2020.

•Adjusted net income improved for the year ended December 31, 2020 by $24.6 million, driven by the same factors that impacted net income.

•Return on average equity of 50.9% and adjusted return on average equity of 60.5% in 2020, as compared to 7.1% and 12.0%, respectively, in 2019.

Key Trends:

Our results of operations are affected by a variety of factors including, but not limited to, general economic conditions and GDP growth, market liquidity and volatility, consumer confidence, U.S. demographics, employment and wage growth, business confidence and investment, inflation, interest rates and spreads, the impact of the regulatory environment, and the other factors set forth in Part I, Item 1A in this Form 10-K. Generally, our businesses are positively affected by a healthy U.S. consumer, stable to gradually rising interest rates, stable markets and business conditions, and global growth and trade flows. Conversely, rising unemployment, volatile markets, rapidly rising interest rates, changing regulatory requirements and slowing business conditions can have a material adverse effect on our results of operations or financial condition.

Our insurance business generally focuses on products which have low severity but high frequency loss experiences and are short duration. As a result, the business has historically generated significant fee-based revenues. In general, the types of products we offer tend to have limited aggregation risk and, thus, limited exposure to catastrophic and residual risk. We mitigate our underwriting risk through a combination of reinsurance and retrospective commission structures with our distribution partners and/or third-party reinsurers. To mitigate counterparty risk, we ensure our distribution partners’ captive reinsurance entities are over-collateralized with highly liquid investments, primarily cash and cash equivalents. Our insurance results primarily depend on our pricing, underwriting, risk retention and the accuracy of reserves, reinsurance arrangements, returns on invested assets, and policy and contract renewals and run-off. While our insurance operations have historically maintained a relatively stable combined ratio which support steady earnings, our initiatives to change our business mix along with economic factors could generate different results than we have historically experienced. We believe there will continue to be growth opportunities to expand our warranty and specialty programs insurance business model to other niche products and markets.

During 2020, the world has been impacted by the spread of the novel coronavirus (COVID-19). In March 2020, the World Health Organization deemed the outbreak of COVID-19 to be a pandemic, creating significant volatility, unpredictability and economic disruption. The markets the Company serves in the United States, UK and Europe have been impacted by weakened economic conditions, temporary business closures, shelter in place rules from governing bodies, reduced consumer spending and job losses, among other impacts of the COVID-19 pandemic. In response, the Company has taken various measures to ensure the availability of our products and services to our customers, the functioning of our critical support systems and steps to ensure the safety and security of our employees. The effects of COVID-19 were not significant to the Company’s operating businesses’ results for the year ended December 31, 2020. It is not possible to reliably estimate the length and severity of the developments related to the COVID-19 pandemic and the impact on the financial results and condition of the Company and its operating subsidiaries in future periods.

Our insurance investment portfolio primarily serves as a source to pay claims and secondarily as a source of income for our operations. Our investments include fixed maturity securities, loans, credit investment funds, and equity securities. Many of our investments are held at fair value. Changes in fair value for loans, credit investment funds, and equity securities are reported quarterly as unrealized gains or losses in revenues and can be impacted by changes in interest rates, credit risk, or market risk, including specific company or industry factors. Our equity holdings are relatively concentrated. General equity market trends, along with company and industry specific factors, can impact the fair value of our holdings and can result in unrealized gains and losses affecting our results.

Common shares of Invesque represent a significant asset on our consolidated balance sheet, both as part of our insurance investment portfolio and separately in Tiptree Capital. Our investment in Invesque, which operates in the seniors housing and

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skilled nursing industries, is carried on our balance sheet at fair value. During 2020, the decline in Invesque’s stock price had a material impact on the carrying value of our investment. In response to the uncertainty in the industry, Invesque announced in early April that it was suspending dividends to conserve liquidity until the impact of COVID-19 on occupancy rates and its operations is better known. While Invesque has announced that they are continuing to collect rents on its properties at approximately 94% of contractual obligations through September 2020, any changes in their operations or ability to collect rents could continue to have a significant impact on their stock price and delay any potential restoration of their dividend. Decreases in the fair value of Invesque’s common stock and changes to its dividend payout levels had a significant impact on our results of operations, and could continue to do so should Invesque’s operations continue to be negatively affected as a result of the pandemic.

The maritime transportation industry is highly competitive and fragmented. Demand for shipping capacity is a function of global economic conditions and the related demand for commodities, production and consumption patterns, and affected by events which interrupt production, trade routes, and consumption. The COVID-19 pandemic significantly impacted economic activity in China, the United States, Europe, and across developing markets, reducing demand for oil and other commodities. The sharp reduction in demand negatively affected charter rates for dry-bulk commodities, other than grains, in the first half of the year. The oversupply in oil markets initially led to significant demand for floating storage, increasing charter rates for product tankers. Both of these trends began to reverse in the second half of the year, with rates for dry bulk vessels improving and rates for product tankers softening. The shipping industry is cyclical with high volatility in charter hire rates and profitability, which can change rapidly. General global economic conditions, along with company and industry specific factors, are expected to continue to impact the fair value of our vessels and associated operating results.

Our business can also be impacted in various ways by changes in interest rates, which can result in fluctuations in the fair value of our investments, revenues associated with floating rate investments, volume and revenues in our mortgage business and interest expense associated with floating rate debt used to fund many of our operations. Certain of our investments are LIBOR based, which has resulted in lower investment income during this period of extended low rates. However, low mortgage rates due to the Federal Reserve intervention in mortgage markets, combined with limitations on operating capacity in the mortgage industry due to the COVID-19 pandemic, and rising home prices in certain markets, has resulted in a combination of higher mortgage volumes and margins, which has been a benefit to our mortgage operations. The current low interest rate environment also benefits our interest cost on debt, although our corporate debt facility with Fortress is subject to a LIBOR floor, which limits further declines in our interest cost at the corporate level. There can be no assurance that these positive trends will continue, the reversal of which could have a materially negative impact to our results of operations, and which may only be partially mitigated by the benefit to our LIBOR based investments.

A discussion of our performance for the year ended December 31, 2020 compared to the year ended December 31, 2019 and for the year ended December 31, 2019 compared to the year ended December 31, 2018 appears below.

RESULTS OF OPERATIONS

The following is a summary of our consolidated financial results for the year ended December 31, 2020, 2019 and 2018. In addition to GAAP results, management uses the Non-GAAP measures Adjusted net income, Adjusted return on average equity, Adjusted EBITDA and book value per share as measurements of operating performance. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and comparison among companies. Management uses Adjusted net income and adjusted return on average equity as part of its capital allocation process and to assess comparative returns on invested capital. Adjusted EBITDA is also used in determining incentive compensation for the Company’s executive officers. Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting. The Company defines Adjusted EBITDA as GAAP net income of the Company plus corporate interest expense, plus income taxes, plus depreciation and amortization expense, less the effects of purchase accounting, plus non-cash fair value adjustments, plus significant non-recurring expenses, and plus unrealized gains (losses) on available for sale securities that are reported in other comprehensive income. Adjusted net income, Adjusted return on average equity and Adjusted EBITDA are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income. See “Non-GAAP Reconciliations” for a reconciliation of these measures to their GAAP equivalents.

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Selected Key Metrics

($ in thousands, except per share information)	For the Year Ended December 31,
GAAP:	2020			2019			2018
Total revenues	$	810,301		$	772,728		$	625,826
Net income (loss) attributable to common stockholders	$	(29,158)		$	18,361		$	23,933
Diluted earnings per share	$	(0.86)		$	0.50		$	0.69
Cash dividends paid per common share	$	0.160		$	0.155		$	0.135
Return on average equity	(6.4)		%	5.0		%	7.5		%
Non-GAAP: (1)
Adjusted net income	$	51,431		$	27,598		$	22,283
Adjusted return on average equity	13.1		%	6.8		%	5.6		%
Adjusted EBITDA	$	4,541		$	68,085		$	26,659
Book value per share	$	10.90		$	11.52		$	10.79

(1)    For information relating to Adjusted net income, Adjusted return on average equity, Adjusted EBITDA and book value per share, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations.”

Revenues

For the year ended December 31, 2020, revenues were $810.3 million, which increased $37.6 million, or 4.9% compared to the prior year, primarily due to a combination of growth in commercial and warranty programs in our insurance business and revenues associated with our mortgage business. Offsetting these increases were net realized and unrealized losses of $83.6 million for the year ended December 31, 2020, on Invesque and other equity securities.

For the year ended December 31, 2019, revenues were $772.7 million, which increased $146.9 million, or 23.5%, over 2018. The increase was primarily driven by growth in earned premiums and service and administrative fees in our Insurance business, lower unrealized losses on Invesque, improvements in mortgage results, the inclusion of a full year of revenue from shipping operations, and the gain on sale of our CLO asset management business.

The combination of unearned premiums and deferred revenues on the balance sheet grew by $410.4 million, or 48.3%, from December 31, 2019 to December 31, 2020 as a result of increased gross written premiums and premium equivalents, primarily in commercial and warranty programs, and the acquisition of Smart AutoCare.

The table below provides a break down between net realized and unrealized gains and losses from Invesque and other securities which impacted our consolidated results on a pre-tax basis. Many of our investments are carried at fair value and marked to market through unrealized gains and losses. As a result, we expect our earnings relating to these investments to be relatively volatile between periods. Our fixed income securities are primarily marked to market through AOCI in stockholders’ equity and do not impact net realized and unrealized gains and losses until they are sold.

($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Net realized and unrealized gains (losses)(1)	$	(1,817)	$	12,189	$	(9,167)
Net realized and unrealized gains (losses) - Invesque	$	(81,813)	$	(1,200)	$	(20,739)
Discontinued operations (Care)(2)	$	—	$	—	$	57,484

(1)    Excludes Invesque and Mortgage realized and unrealized gains and losses. The year ended December 31, 2019 includes a $7.6 million gain on sale of our CLO business.

(2)    Represents Care for the year ended December 31, 2018 including a $56.9 million pre-tax gain on sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

Net Income (Loss) Attributable to common stockholders

For the year ended December 31, 2020, net loss available to common stockholders was $29.2 million, a decrease of $47.5 million from net income of $18.4 million in 2019. The decrease for the year ended December 31, 2020 was primarily driven by the same factors that impacted revenues in the respective periods.

For the year ended December 31, 2019, net income available to common stockholders was $18.4 million, a decrease of $5.6 million from 2018. The decrease was primarily driven by income from discontinued operations of $43.8 million in 2018, which included the gain on sale of Care. This non-recurring gain was offset by improved insurance operating performance, the realized gain on the sale of our CLO management business, and increased realized and unrealized gains on investments in 2019.

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Adjusted net income & Adjusted return on average equity - Non-GAAP

Adjusted net income for the year ended December 31, 2020 was $51.4 million, an increase of $23.8 million from 2019. The 2020 Adjusted return on average equity was 13.1%, as compared to 6.8% in 2019, with the increase in both metrics driven by improved performance in our insurance and mortgage operations.

Adjusted net income for the year ended December 31, 2019 was $27.6 million, an increase of $5.3 million from 2018. The 2019 Adjusted return on average equity was 6.8% as compared to 5.6% in 2018, with the increase in both metrics driven by improvements in insurance and mortgage operations, combined with the inclusion of a full year of maritime transportation operations.

Adjusted EBITDA - Non-GAAP

Adjusted EBITDA for the year ended December 31, 2020 was $4.5 million, a decrease of $63.5 million from 2019, which was substantially driven by unrealized losses on Invesque and other equity securities.

Adjusted EBITDA for the year ended December 31, 2019 was $68.1 million, an increase of $57.6 million from 2018. The key drivers of the increase in the year ended December 31, 2019 were the same factors that drove improved performance in Adjusted net income plus lower unrealized losses on investments in the insurance portfolio and on Invesque and the gain on sale of our CLO management business. See “— Non-GAAP Reconciliations” for a reconciliation to GAAP net income.

Book Value per share - Non-GAAP

Total stockholders’ equity was $373.5 million as of December 31, 2020 compared to $411.4 million as of December 31, 2019. In 2020, Tiptree returned $19.3 million to shareholders through share repurchases and dividends paid. Book value per share for the period ended December 31, 2020 was $10.90, a decrease from book value per share of $11.52 as of December 31, 2019. The key drivers of the reduction from the prior year were losses per share and dividends paid of $0.160 per share. The decrease was partially offset by the purchase of 2,384,286 million shares at an average 43% discount to book value.

Total stockholders’ equity was $411.4 million as of December 31, 2019 compared to $399.3 million as of December 31, 2018. The increase was primarily driven by net income, offset by share repurchases and dividends paid. In 2019, Tiptree returned $14.4 million to shareholders through share repurchases and dividends paid. Book value per share for the year ended December 31, 2019 was $11.52, an increase from book value per share of $10.79 as of December 31, 2018. The key drivers of the period-over-period impact were earnings per share and the purchase of 1.5 million shares at an average 45% discount to book value. Those increases were offset by dividends paid of $0.155 per share and officer compensation share issuances.

Results by Segment

We classify our business into two reportable segments, Insurance and Mortgage, with the remainder of our operations aggregated into Tiptree Capital - Other. Corporate activities include holding company interest expense, corporate employee compensation and benefits, and other expenses, including, but not limited to, public company expenses. For the year ended December 31, 2020, Mortgage has been broken out of Tiptree Capital as a reportable segment because for the year ended December 31, 2020 it met the quantitative threshold for disclosure. Prior year segments have been conformed to the current year presentation.

The following table presents the components of total income (loss) before taxes.

Income (loss) before taxes

($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Insurance	$	26,948	$	37,030	$	14,172
Mortgage	31,102		2,959		335
Tiptree Capital - other	(61,242)		23,391		(4,059)
Corporate	(35,660)		(34,241)		(30,244)
Income (loss) before taxes from continuing operations	$	(38,852)	$	29,139	$	(19,796)
Income (loss) before taxes from discontinued operations	$	—	$	—	$	57,484

Adjusted net income - Non-GAAP (1)

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($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Insurance	$	43,423	$	32,806	$	31,271
Mortgage	28,578		3,929		(53)
Tiptree Capital - other	4,497		14,083		12,068
Corporate	(25,067)		(23,220)		(21,003)
Adjusted net income (1)	$	51,431	$	27,598	$	22,283

(1)    For further information relating to Adjusted net income, including a reconciliation to GAAP income (loss) before taxes, see “—Non-GAAP Reconciliations.”

Insurance

Our principal operating subsidiary, Fortegra, is a specialty insurance program underwriter and service provider, which focuses on niche business mixes and fee-oriented services. Our combination of specialty insurance underwriting, warranty and service contract products, and related service solutions delivered through a vertically integrated business model creates a blend of traditional underwriting revenues, investment income and unregulated fee revenues. We are an agent-driven business model, distributing our products through independent insurance agents, consumer finance companies, online retailers, auto dealers, and regional big box retailers to deliver products that complement the consumer transaction.

The following tables present the Insurance segment results for the year ended December 31, 2020 and 2019.

Results of Operations - 2020 Compared to 2019

($ in thousands)	For the Year Ended December 31,
	2020			2019			Change		% Change
Revenues:
Earned premiums, net	$	477,991		$	499,108		$	(21,117)	(4.2)	%
Service and administrative fees	186,973			106,239			80,734		76.0	%
Ceding commissions	21,101			9,608			11,493		119.6	%
Net investment income	9,916			8,667			1,249		14.4	%
Net realized and unrealized gains (losses)	(11,944)			6,896			(18,840)		NM%
Other revenue	7,024			4,567			2,457		53.8	%
Total revenues	$	691,061		$	635,085		$	55,976	8.8	%
Expenses:
Net losses and loss adjustment expenses	178,248			151,009			27,239		18.0	%
Member benefit claims	58,650			19,672			38,978		198.1	%
Commission expense	280,210			303,057			(22,847)		(7.5)	%
Employee compensation and benefits	65,089			49,789			15,300		30.7	%
Interest expense	15,487			14,766			721		4.9	%
Depreciation and amortization	10,835			9,105			1,730		19.0	%
Other expenses	55,594			50,657			4,937		9.7	%
Total expenses	$	664,113		$	598,055		$	66,058	11.0	%
Income (loss) before taxes (1)	$	26,948		$	37,030		$	(10,082)	(27.2)	%
Key Performance Metrics:
Gross written premiums and premium equivalents	$	1,666,942		$	1,297,042		$	369,900	28.5	%
Return on average equity	8.1		%	10.7		%
Underwriting ratio	74.6		%	76.5		%
Combined ratio	91.5		%	92.4		%
Non-GAAP Financial Measures (2):
Adjusted net income	$	43,423		$	32,806		$	10,617	32.4	%
Adjusted return on average equity	15.2		%	12.3		%

(1)    Net income was $22,821 and $27,160 for the years ended December 31, 2020 and 2019, respectively.

(2)    See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues

Earned Premiums, net

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Earned premiums, net represent the earned portion of our gross written premiums, less the earned portion that is ceded to third-party reinsurers under our reinsurance agreements, as well as the earned portion of our assumed premiums. Our insurance policies generally have a term of six months to seven years depending on the underlying product and premiums are earned pro rata over the term of the policy. At the end of each reporting period, premiums written but not earned are classified as unearned premiums and are earned in subsequent periods over the remaining term of the policy.

Service and Administrative Fees

Service and administrative fees represent the earned portion of our gross written premiums and premium equivalents, which is generated from non-insurance programs including warranty service contracts, motor club programs and other services offered as part of our vertically integrated product offerings. Such fees are typically positively correlated with transaction volume and are recognized as revenue when realized and earned. At the end of each reporting period, gross written premiums and premium equivalents written for service contracts not earned are classified as deferred revenue, which are earned in subsequent periods over the remaining term of the policy.

Ceding Commissions and Other Revenue

Ceding commissions and other revenue consists of commissions earned on policies written on behalf of third-party insurance companies with no exposure to the insured risk and certain fees earned in conjunction with underwriting policies. Other revenue also includes the interest income earned on our premium finance product offering.

Net Investment Income

We earn investment income on our portfolio of invested assets. Our invested assets are primarily comprised of fixed maturity securities, and may also include cash and cash equivalents and equity securities. The principal factors that influence net investment income are the size of our investment portfolio, the yield on that portfolio and expenses due to external investment managers.

Net Realized and Unrealized Gains (Losses)

Net realized and unrealized gains (losses) on investments are a function of the difference between the amount received by us on the sale of a security and the security’s cost-basis, as well as any “other-than-temporary” impairments and allowances for credit losses which are recognized in earnings. In addition, we carry our equity securities at fair value with unrealized gains and losses included in this line.

Revenues - 2020 compared to 2019

For the year ended December 31, 2020, total revenues increased 8.8%, to $691.1 million, as compared to $635.1 million for the year ended December 31, 2019. Earned premiums, net of $478.0 million decreased $21.1 million, or 4.2%, driven by increased ceding of credit insurance and collateral protection premiums, and increased credit insurance cancellations driven by COVID-19 stimulus payments to consumers. This was partially offset by growth in commercial, warranty insurance and niche personal lines programs. Service and administration fees of $187.0 million increased by 76.0% driven by our acquisition of Smart AutoCare and growth in warranty insurance revenues. Excluding Smart AutoCare, service and administrative fees increased by 11.7% driven by growth in our other warranty programs. Ceding commissions of $21.1 million increased by $11.5 million, or 119.6%, driven by growth in commercial lines and higher fees associated with the increase in ceded premiums in credit insurance and collateral protection programs. Other revenues increased by $2.5 million, or 53.8%, driven by growth in our premium and warranty finance programs.

For the year ended December 31, 2020, 31.1% of our revenues were derived from fees that are not solely dependent upon the underwriting performance of our insurance products, resulting in more diversified and consistent earnings. For the year ended December 31, 2020, 79.3% of our fee-based revenues were generated in non-regulated service companies, with the remainder in our regulated insurance companies.

For the year ended December 31, 2020, net investment income was $9.9 million driven by interest income on fixed income securities and dividends on equity securities. Net realized and unrealized losses were $11.9 million, a decline of $18.8

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million, driven by realized and unrealized losses on equity securities in the 2020 period, as compared to gains on equity securities and other investments in the 2019 period.

Expenses

Underwriting and fee expenses under insurance and warranty service contracts include losses and loss adjustment expenses, member benefit claims and commissions expense.

Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses represent actual insurance claims paid, changes in unpaid claim reserves, net of amounts ceded and the costs of administering claims for insurance lines. Incurred claims are impacted by loss frequency, which is a measure of the number of claims per unit of insured exposure, and loss severity, which is based on the average size of claims. Loss occurrences in our insurance products are characterized by low severity and high frequency. Factors affecting loss frequency and loss severity include the volume of underwritten contracts, changes in claims reporting patterns, claims settlement patterns, judicial decisions, economic conditions, morbidity patterns and the attitudes of claimants towards settlements, and original pricing of the product for purposes of the loss ratio in relation to loss emergence over time. Losses and loss adjustment expenses are based on an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods.

Member Benefit Claims

Member benefit claims represent the costs of services and replacement devices incurred in warranty and motor club service contracts. Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products. Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company. Claims are recognized as expense when incurred.

Commission Expense

Commission expenses reflect commissions we pay retail agents, program administrators and managing general underwriters, net of ceding commissions we receive on business ceded under certain reinsurance contracts. In addition, commission expenses include premium-related taxes. Commission expenses related to each policy we write are deferred and amortized to expense in proportion to the premium earned over the policy life.

Commission expense is incurred on most product lines, the majority of which are retrospective commissions paid to agents, distributors and retailers selling our products, including credit insurance policies, warranty service contracts and motor club memberships. When claims increase, in most cases our distribution partners bear the risk through a reduction in their retrospective commissions. Commission rates are, in many cases, set by state regulators, such as in credit and collateral protection programs and are also impacted by market conditions and the retention levels of our distribution partners.

Operating and Other Expenses

Operating and other expenses represent the general and administrative expenses of our insurance operations including employee compensation and benefits and other expenses, including, technology costs, office rent, and professional services fees, such as legal, accounting and actuarial services.

Interest Expense

Interest expense consists primarily of interest expense on our corporate revolving debt, our Notes, our preferred trust securities due June 15, 2037 (“Preferred Trust Securities”) and asset-based debt for our premium finance and warranty service contract financing, which is non-recourse to Fortegra.

Depreciation and Amortization

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Depreciation expense is primarily associated with furniture, fixtures and equipment. Amortization expense is primarily associated with purchase accounting amortization including values associated with acquired customer relationships, trade names and internally developed software and technology.

Expenses – 2020 compared to 2019

For the year ended December 31, 2020, net losses and loss adjustment expenses were $178.2 million, member benefit claims were $58.7 million and commission expense was $280.2 million, as compared to $151.0 million, $19.7 million and $303.1 million, respectively, for the year ended December 31, 2019. The increases in net losses and loss adjustment expenses of $27.2 million, or 18.0%, and member benefit claims of $39.0 million, or 198.1%, were driven by growth in our U.S. Insurance business and the acquisition of Smart AutoCare. Commission expense declined by $22.8 million, or 7.5%, driven by a decline in retrospective commission payments, largely offsetting the increase in net losses and loss adjustment expense.

For the year ended December 31, 2020, employee compensation and benefits were $65.1 million and other expenses were $55.6 million, as compared to $49.8 million and $50.7 million, respectively, for the year ended December 31, 2019. Employee compensation and benefits increased by $15.3 million, or 30.7% driven by the acquisition of Smart AutoCare and investments in human capital associated with our growth objectives in admitted, E&S and warranty programs. Other expenses increased by $4.9 million, or 9.7%, driven by increases in acquisition related expenses, and premium taxes, which grew in line with premiums. Included in other expenses were $3.4 million and $2.0 million for the years ended December 31, 2020 and 2019, respectively, related to non-recurring professional fees associated with investment banking and legal expenses for our acquisitions of Smart AutoCare and Sky Auto.

For the year ended December 31, 2020, interest expense was $15.5 million as compared to $14.8 million for the year ended December 31, 2019. The increase in interest expense of $0.7 million, or 4.9%, was driven by higher outstanding asset-based debt for our premium and warranty finance programs, partially offset by decreases in LIBOR over 2020.

For the year ended December 31, 2020, depreciation and amortization expense was $10.8 million, including $9.2 million of intangible amortization related to purchase accounting associated with the acquisitions of both Smart AutoCare and Fortegra, as compared to $9.1 million and $7.5 million of intangible amortization from purchase accounting related to Fortegra, respectively, for 2019.

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The following tables present the Insurance segment results for the year ended December 31, 2019 and 2018.

Results of Operations - 2019 Compared to 2018

($ in thousands)	For the Year Ended December 31,
	2019			2018			Change		% Change
Revenues:
Earned premiums, net	$	499,108		$	427,837		$	71,271	16.7	%
Service and administrative fees	106,239			102,315			3,924		3.8	%
Ceding commissions	9,608			9,651			(43)		(0.4)	%
Net investment income	8,667			13,876			(5,209)		(37.5)	%
Net realized and unrealized gains (losses)	6,896			(11,664)			18,560		NM%
Other revenue	4,567			2,571			1,996		77.6	%
Total revenues	$	635,085		$	544,586		$	90,499	16.6	%
Expenses:
Net losses and loss adjustment expenses	151,009			134,852			16,157		12.0	%
Member benefit claims	19,672			17,243			2,429		14.1	%
Commission expense	303,057			262,460			40,597		15.5	%
Employee compensation and benefits	49,789			45,536			4,253		9.3	%
Interest expense	14,766			18,202			(3,436)		(18.9)	%
Depreciation and amortization	9,105			10,779			(1,674)		(15.5)	%
Other expenses	50,657			41,342			9,315		22.5	%
Total expenses	$	598,055		$	530,414		$	67,641	12.8	%
Income (loss) before taxes (1)	$	37,030		$	14,172		$	22,858	161.3	%
Key Performance Metrics:
Gross written premiums and premium equivalents	$	1,297,042		$	1,096,464		$	200,578	18.3	%
Return on average equity	10.7		%	4.0		%
Underwriting ratio	76.5		%	76.4		%
Combined ratio	92.4		%	92.2		%
Non-GAAP Financial Measures (2):
Adjusted net income	$	32,806		$	31,271		$	1,535	4.9	%
Adjusted return on average equity	12.3		%	12.3		%

(1)    Net income was $27,160 and $9,600 for the year ended December 31, 2019 and 2018, respectively.

(2)    See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues

For the year ended December 31, 2019, total revenues increased 16.6%, to $635.1 million, as compared to $544.6 million for the year ended December 31, 2018. Earned premiums, net, increased $71.3 million, or 16.7%, driven by growth in commercial, warranty and collateral protection programs. Service and administration fees increased by 3.8% driven by growth in warranty programs.

For the year ended December 31, 2019, 19.4% of our revenues were derived from fees that are not solely dependent upon the underwriting performance of our insurance products, resulting in more diversified and consistent earnings. For the year ended December 31, 2019, 77.7% of our fee-based revenues were generated in non-regulated service companies, with the remainder in our regulated insurance companies.

Revenues attributable to investing activities consisted of $8.7 million of investment income and $6.9 million of net realized and unrealized gains for the year ended December 31, 2019, as compared to $13.9 million of investment income and $11.7 million of net realized and unrealized losses, respectively, for the year ended December 31, 2018. The decrease in investment income of $5.2 million, or 37.5%, was driven by lower interest rates and higher than average cash balances, partially offset by higher average balance of investments during the year ended December 31, 2019. The improvement in net realized and unrealized gains and losses period over period was driven by current period gains on equity securities as compared to losses in 2018.

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Expenses

For the year ended December 31, 2019, net losses and loss adjustment expenses and member benefit claims, totaled $170.7 million, as compared to $152.1 million for the year ended December 31, 2018. The increase was driven by growth in our U.S. Insurance block of business including increases in commercial, collateral protection and warranty programs. Commission expense grew by $40.6 million, or 15.5%, driven by the same growth factors that impacted net losses and loss adjustment expense and member benefit claims.

For the year ended December 31, 2019, employee compensation and benefits were $49.8 million and other expenses were $50.7 million, as compared to $45.5 million and $41.3 million, respectively, for the year ended December 31, 2018. Employee compensation and benefits increased by $4.3 million, or 9.3% driven by investments in human capital associated with our growth objectives in commercial and warranty programs. Other expenses increased by $9.3 million, or 22.5%, driven by increases in premium taxes, which grew in line with premiums.

For the year ended December 31, 2019, interest expense was $14.8 million, as compared to $18.2 million for the year ended December 31, 2018. The decrease in interest expense was driven primarily by decreases in LIBOR over 2019.

For the year ended December 31, 2019, depreciation and amortization expense was $9.1 million, including $7.5 million of intangible amortization related to purchase accounting associated with the acquisition of Fortegra, as compared to $10.8 million and $9.1 million of intangible amortization, respectively, for 2018.

Key Performance Metrics

We discuss certain key performance metrics, described below, which provide useful information about our business and the operational factors underlying our financial performance.

Gross Written Premiums and Premium Equivalents

Gross written premiums and premium equivalents represent total gross written premiums from insurance policies and warranty service contracts issued, as well as premium finance volumes during a reporting period. They represent the volume of insurance policies written or assumed and warranty service contracts issued during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. Gross written premiums is a volume measure commonly used in the insurance industry to compare sales performance by period. Premium equivalents are used to compare sales performance of warranty service and administrative contract volumes to gross written premiums. Investors also use these measures to compare sales growth among comparable companies, while management uses these measures to evaluate the relative performance of various sales channels.

The below table shows gross written premiums and premium equivalents by business mix for the years ended December 31, 2020, 2019 and 2018.

	Year Ended December 31,
($ in thousands)	Gross Written Premiums and Premium Equivalents
	2020		2019		2018
U.S. Insurance	$	1,063,743	$	965,544	$	886,793
U.S. Warranty Solutions	549,983		297,289		208,854
Europe Warranty Solutions	53,216		34,209		817
Total	$	1,666,942	$	1,297,042	$	1,096,464

Total gross written premiums and premium equivalents for the year ended December 31, 2020 were $1.7 billion as compared to $1.3 billion in 2019. For the year ended December 31, 2020, U.S. Insurance increased by $98.2 million, or 10.2%, driven by growth in commercial, warranty insurance and niche personal lines, which were partially offset by increased cancellations from the impact of increased stimulus related to COVID-19 in credit insurance and collateral protection programs. Our E&S insurance subsidiary, Fortegra Specialty Insurance Company, was formed October 1, 2020, and we believe our E&S lines will drive significant growth. For the year ended December 31, 2020, U.S. Warranty Solutions increased by $252.7 million, or 85.0%, driven primarily by the acquisition of Smart AutoCare and growth in premium and warranty finance volumes. Europe Warranty Solutions increased by $19.0 million, or 55.6% driven by growth in auto and consumer goods warranty programs.

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Fortegra has continued to expand product lines to increase gross written premiums and premium equivalents, including the acquisitions of Smart AutoCare (January 2020) and Sky Auto (December 2020). We believe the continued growth in warranty and admitted and E&S commercial programs, in addition to the acquisition of Smart AutoCare and Sky Auto, will result in increased gross written premiums and premium equivalents, and therefore growth in unearned premiums and deferred revenues on the balance sheet.

The growth in gross written premiums and premium equivalents, combined with higher retention in select products, has resulted in an increase of $410.4 million, or 48.3%, in unearned premiums and deferred revenue on the balance sheet. As of December 31, 2020, unearned premiums and deferred revenues were $1,259.7 million, as compared to $849.3 million as of December 31, 2019.

Total gross written premiums and premium equivalents for the year ended December 31, 2019 were $1.3 billion as compared to $1.1 billion in 2018. U.S. Insurance programs increased by $78.7 million for the year ended December 31, 2019, or 8.9%, driven by growth in commercial, warranty insurance and collateral protection lines. U.S. Warranty Solutions increased by $88.4 million for the year ended December 31, 2019, or 42.3%, driven primarily by growth in auto warranty and premium and warranty finance volumes. Europe Warranty Solutions increased by $33.4 million, as we expanded into Europe in 2019.

The growth in gross written premiums and premium equivalents, combined with higher retention in select products, has resulted in an increase of $175.7 million, or 26.1%, in unearned premiums and deferred revenue on the balance sheet. As of December 31, 2019, unearned premiums and deferred revenues were $849.3 million, as compared to $673.6 million as of December 31, 2018.

Combined Ratio, Underwriting Ratio and Expense Ratio

Combined ratio is an operating measure, which equals the sum of the underwriting ratio and the expense ratio. Underwriting ratio is the ratio of the GAAP line items net losses and loss adjustment expenses, member benefit claims and commission expense to earned premiums, net, service and administrative fees and ceding commissions and other revenue. Expense ratio is the ratio of the GAAP line items employee compensation and benefits and other underwriting, general and administrative expenses to earned premiums, net, service and administrative fees and ceding commissions and other revenue.

A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss. These ratios are commonly used in the insurance industry as a measure of underwriting profitability, excluding earnings on the insurance portfolio. Investors commonly use these measures to compare underwriting performance among companies separate from the performance of the investment portfolio. Management uses these measures to compare the profitability of various products we underwrite as well as profitability among programs of our various agents and sales channels.

Our focus on underwriting expertise, A.I. driven lead generation, and technology-enhanced administration improves productivity, lowers administrative costs and results in agent relationships sustained over the long term.

The combined ratio was 91.5% for the year ended December 31, 2020, which consisted of an underwriting ratio of 74.6% and an expense ratio of 16.9%, as compared to 92.4%, 76.5% and 15.9%, respectively, for the year ended December 31, 2019. The improvement in the combined ratio and underwriting ratio year over year is primarily due to the shift in business mix as the result of the growth in commercial and warranty programs, while the increase in the expense ratio is primarily driven by the impact of purchase accounting on the recognition of revenues and expenses associated with our acquisition of Smart AutoCare. The combined ratio for December 31, 2019 was 92.4% compared to 92.2% for 2018, reflecting the consistency of our underwriting profitability from period to period.

Return on Average Equity

Return on average equity is expressed as the ratio of net income to average stockholders’ equity during the period. Management uses this ratio as a measure of the on-going performance of the totality of the Company’s operations.

Return on average equity was 8.1% for the year ended December 31, 2020, as compared to 10.7%, for the year ended December 31, 2019, with the decline driven by realized and unrealized losses in the 2020 period, as compared to realized and unrealized gains in the 2019 period, partially offset by improvement in revenues associated with underwriting activities.

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Return on average equity was 10.7% for the year ended December 31, 2019, as compared to 4.0%, for the year ended December 31, 2018, with the improvement driven by realized and unrealized gains in the 2019 period, as compared to realized and unrealized losses in the 2018 period, combined with overall improvement in underwriting operations.

Non-GAAP Financial Measures

Underwriting and Fee Revenues and Underwriting and Fee Margin - Non-GAAP(1)

In order to better explain to investors the underwriting performance of the Company’s programs and the respective retentions between the Company and its agents and reinsurance partners, we use the non-GAAP metrics – underwriting and fee revenues and underwriting and fee margin. We generally manage our exposure to the risks we underwrite using both reinsurance (e.g., quota share and excess of loss) and retrospective commission agreements with our agents (e.g., commissions paid are adjusted based on the actual underlying losses incurred), which mitigate our risk. Period-over-period comparisons of revenues and expenses are often impacted by the agents and their PORC’s choice as to their risk retention appetite, specifically earned premiums, net, service and administration fees, ceding commissions, and other revenue, all components of revenue, and losses and loss adjustment expenses, member benefit claims, and commissions paid to our agents and reinsurers. Generally, when losses are incurred, the risk which is retained by our agents and reinsurers is reflected in a reduction in commissions paid.

Underwriting and fee revenues represents total revenues excluding net investment income, net realized and unrealized gains (losses). See “—Non-GAAP Reconciliations” for a reconciliation of underwriting and fee revenues to total revenues in accordance with GAAP.

Underwriting and fee margin represents income before taxes excluding net investment income, net realized and unrealized gains (losses), employee compensation and benefits, other expenses, interest expense and depreciation and amortization. We deliver our products and services on a vertically integrated basis to our agents. As such, underwriting and fee margin exclude general and administrative expenses, interest income, depreciation and amortization and other corporate expenses, including income taxes, as these corporate expenses support our vertically integrated delivery model and are not specifically supporting any individual business line. See “—Non-GAAP Reconciliations” for a reconciliation of underwriting and fee margin to total revenues in accordance with GAAP.

The below table shows underwriting and fee revenues and underwriting and fee margin by business mix for the years ended December 31, 2020, 2019 and 2018.

	Year Ended December 31,
($ in thousands)	Underwriting and Fee Revenues (1)						Underwriting and Fee Margin (1)
	2020		2019		2018		2020		2019		2018
U.S. Insurance	$	499,712	$	519,086	$	448,453	$	98,842	$	99,025	$	79,898
U.S. Warranty Solutions	170,726		93,598		93,672		69,642		43,945		47,684
Europe Warranty Solutions	22,651		6,834		233		7,497		2,808		219
Total	$	693,089	$	619,518	$	542,358	$	175,981	$	145,778	$	127,801

(1)    For further information relating to the Company’s underwriting and fee revenues and underwriting and fee margin, including a reconciliation to GAAP financials, see “—Non-GAAP Reconciliations.”

Underwriting and fee revenues were $693.1 million for the year ended December 31, 2020, as compared to $619.5 million, for the year ended December 31, 2019. Of the total underwriting and fee revenues for the year ended December 31, 2020, the drivers by business mix were U.S. Insurance $499.7 million, U.S. Warranty Solutions $170.7 million and Europe Warranty Solutions $22.7 million, as compared to $519.1 million, $93.6 million and $6.8 million, respectively, for the year ended December 31, 2019. Total underwriting and fee revenues were up $73.6 million, or 11.9% driven by growth in U.S. and Europe Warranty Solutions, partially offset by a decline in U.S. Insurance. The decrease in U.S. Insurance was $19.4 million, or 3.7%, driven by increased ceded premiums and increased cancellations from the impacts of increased stimulus related to COVID-19 in our credit insurance and collateral protection programs. This was partially offset by growth in commercial, warranty insurance and niche personal lines programs. The increase in U.S. Warranty Solutions was $77.1 million, or 82.4%, driven by the acquisition of Smart AutoCare and growth in auto, consumer goods, and premium and warranty finance programs. Europe Warranty Solutions increased by $15.8 million, or 231.4%, driven by growth in auto and consumer goods

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warranty programs.

Underwriting and fee margin was $176.0 million for the year ended December 31, 2020 as compared to $145.8 million for the year ended December 31, 2019. Total underwriting and fee margin was up $30.2 million, or 20.7%, driven by growth in U.S. and Europe Warranty Solutions. U.S. Insurance was flat to prior year as the growth in commercial, warranty insurance, and niche personal lines offset the impacts of COVID-19 on our credit insurance and collateral protection lines. U.S. Warranty Solutions increased by $25.7 million, or 58.5%, driven by the acquisition of Smart AutoCare and growth in auto, consumer goods, and premium and warranty finance programs. Europe Warranty Solutions increased by $4.7 million, or 167.0%, driven by growth in auto and consumer goods warranty programs in those markets.

Underwriting and fee revenues were $619.5 million for the year ended December 31, 2019, as compared to $542.4 million for the year ended December 31, 2018. Total underwriting and fee revenues were up $77.1 million, or 14.2% driven by growth in U.S. Insurance and Europe Warranty Solutions.

Underwriting and fee margin was $145.8 million for the year ended December 31, 2019 as compared to $127.8 million for the year ended December 31, 2018. Total underwriting and fee margin was up $17.9 million, or 14.0%, in 2019 as compared to 2018, driven by growth in U.S. Insurance and Europe Warranty Solutions.

Adjusted Net Income and Adjusted Return on Average Equity

Adjusted net income represents income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses), and intangibles amortization associated with purchase accounting.

Adjusted return on average equity represents adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

Management uses both these measures for executive compensation and as a measure of the on-going performance of our operations. See “—Non-GAAP Reconciliations” for a reconciliation of adjusted net income and adjusted return on average equity to income before taxes and adjusted return on average equity.

For the year ended December 31, 2020, adjusted net income and adjusted return on average equity were $43.4 million and 15.2%, respectively, as compared to $32.8 million and 12.3%, respectively, for the year ended December 31, 2019. The improvement in both of these metrics was driven by the growth in commercial, warranty and niche personal lines.

For the year ended December 31, 2019, adjusted net income and adjusted return on average equity were $32.8 million and 12.3%, respectively, as compared to $31.3 million and 12.3%, respectively, for the year ended December 31, 2018. The stability in both of these metrics demonstrates our ability to continue to underwrite our programs profitably. See “—Non-GAAP Reconciliations” for a reconciliation of adjusted net income and adjusted return on average equity to income before taxes and adjusted return on average equity.

Net Investment Income and Net Realized and Unrealized Gains (Losses) on Investments

Our insurance investment portfolio includes investments held in statutory insurance companies and in unregulated entities. The portfolios held in statutory insurance companies are subject to different regulatory considerations, including with respect to types of assets, concentration limits, affiliate transactions and the use of leverage. Our investment strategy is designed to achieve attractive risk-adjusted returns across select asset classes, sectors and geographies while maintaining adequate liquidity to meet our claims payment obligations. As such, volatility from realized and unrealized gains and losses may impact period-over-period performance. Unrealized gains and losses on equity securities and loans held at fair value impact current period net income, while unrealized gains and losses on Available for Sale (“AFS”) securities impact AOCI.

Our net investment income includes interest and dividends, net of investment expenses, on our invested assets. We report net realized and unrealized gains and losses on our investments separately from our net investment income.

For the year ended December 31, 2020, net investment income was $9.9 million driven by interest income on fixed income securities and dividends on equity securities. Net realized and unrealized losses were $11.9 million, a decline of $18.8

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million, driven by realized and unrealized losses on equity securities in the 2020 period (primarily Invesque), as compared to gains on equity securities and other investments in the 2019 period.

For the year ended December 31, 2019, net investment income was $8.7 million driven by interest income on fixed income securities and dividends on equity securities. Net realized and unrealized gains were $6.9 million, an increase of $18.6 million, driven by realized and unrealized gains on equity securities and other investments carried at fair value in the 2019 period, as compared to losses on equity securities and other investments in the 2018 period.

Tiptree Capital

Tiptree Capital consists of our Mortgage segment, which includes the operating results of Reliance, our mortgage business, and Tiptree Capital - Other, which consists of our other non-insurance operating businesses and investments. As of December 31, 2020, Tiptree Capital - Other includes our Invesque shares, maritime transportation operations, and the mortgage operations of Luxury, which is held for sale.

Mortgage

Through our Mortgage operating subsidiary, Reliance, we originate, sell, securitize and service one-to-four-family, residential mortgage loans, comprised of conforming mortgage loans, Federal Housing Administration (“FHA”), Veterans Administration (“VA”), United States Department of Agriculture (“USDA”), and to a lesser extent, non-agency jumbo prime.

We are an approved seller/servicer for Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”). The Company is also an approved issuer and servicer for Government National Mortgage Association (“GNMA” or “Ginnie Mae”). The Company originates residential mortgage loans through its retail distribution channel (directly to consumers), with branches in 37 states as of the year ended December 31, 2020.

The following tables present the Mortgage segment results for the year ended December 31, 2020, 2019 and 2018.

Results of Operations

($ in thousands)	For the Year Ended December 31,
	2020			2019			2018
Revenues:
Net realized and unrealized gains (losses)	$	96,590		$	53,815		$	42,397
Other revenue	15,575			12,306			9,227
Total revenues	$	112,165		$	66,121		$	51,624
Expenses:
Employee compensation and benefits	58,226			42,411			34,765
Interest expense	1,188			1,790			1,260
Depreciation and amortization	956			809			544
Other expenses	20,693			18,152			14,720
Total expenses	$	81,063		$	63,162		$	51,289
Income (loss) before taxes	$	31,102		$	2,959		$	335
Key Performance Metrics:
Return on average equity	50.9		%	7.1		%	1.4		%
Non-GAAP Financial Measures (1):
Adjusted net income	$	28,578		$	3,929		$	(53)
Adjusted return on average equity	60.5		%	12.0		%	(0.2)		%

(1)    See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues

Net Realized and Unrealized Gains (Losses)

Net realized and unrealized gains (losses) include gains on sale of mortgage loans and the fair value adjustment in mortgage servicing rights. Gains on the sale of mortgage loans represent the difference between the selling price and carrying value of loans sold and are recognized upon settlement. Such gains also include the changes in fair value of loans held for sale and

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loan-related hedges and derivatives. We transfer the risk of loss or default to the loan purchaser, however, in some cases we are required to indemnify purchasers for losses related to non-compliance with borrowers’ creditworthiness and collateral requirements. Because of this, we recognize gains on sale net of required indemnification and premium recapture reserves. The fair value adjustment on mortgage servicing rights represents fair value adjustments considering estimated prepayments and other factors associated with changes in interest rates, plus actual run-off in the servicing portfolio. We report these adjustments separate from servicing income and servicing expense.

Other Revenue

Other revenue includes loan origination fees, interest income, and mortgage servicing income. Loan origination fees are earned as mortgage loans are funded. Servicing fees are earned over the life of the loan. Interest income includes interest earned on loans held for sale and interest income on bank balances and short-term investments.

Revenues – 2020 as compared to 2019 and 2019 as compared to 2018

For the year ended December 31, 2020, we funded $1,658.1 million of loans, compared to $1,142.6 million for 2019, an increase of $515.5 million, or 45.1%. The increase in origination volumes is primarily attributed to the lower interest rate environment and rising home prices in 2020 compared to 2019. Gain on sale margins also increased to 6.32% for the year ended December 31, 2020, up 165 basis points from 4.67% for the year ended December 31, 2019.

For the year ended December 31, 2019, we funded $1,142.6 million of loans, compared to $918.0 million for 2018, an increase of $224.6 million or 24.5%. The increase in volumes was partly offset by gain on sale margins, which decreased to 4.67% for the year ended December 31, 2019 from 4.86% for the year ended December 31, 2018.

Net realized and unrealized gains (losses) for the year ended December 31, 2020 were $96.6 million, compared to $53.8 million for 2019, an increase of $42.8 million or 79.5%. The primary drivers of increased gains on sale were increases in origination volumes and gains on sale margins, partially offset by negative fair value adjustments in our mortgage servicing rights of $4.0 million as interest rates declined.

Net realized and unrealized gains (losses) for the year ended December 31, 2019 were $53.8 million, compared to $42.4 million for 2018, an increase of $11.4 million or 26.9%. The increase was driven primarily by increased mortgage origination volumes, partially offset by negative fair value adjustments in our mortgage servicing rights of $2.1 million.

Other revenue for the year ended December 31, 2020 was $15.6 million, compared to $12.3 million for 2019, an increase of $3.3 million or 26.8% driven by increased loan origination volumes and servicing fees. Other revenue for the year ended December 31, 2019 was $12.3 million, compared to $9.2 million for 2018. The increase of $3.1 million or 33.7% was also due to by increased loan origination volumes and servicing fees.

Expenses

Employee Compensation and Benefits

Employee compensation and benefits includes salaries, commissions, benefits, bonuses, other incentive compensation and related taxes for employees. Commissions expense for sales staff generally varies with loan origination volumes.

Interest Expense

Interest expense represents borrowing costs under our warehouse and other credit facilities used primarily to fund loan originations. Amortization of deferred financing costs, including commitment fees, is included in interest expense.

Depreciation and Amortization

Depreciation expense is mainly associated with furniture, fixtures and equipment while amortization expense is primarily associated with a trade name and internally developed software.

Other Expenses

Other expenses include loan origination expenses, namely, leads, appraisals, credit reporting and licensing fees, general and administrative expenses, including office rent, insurance, legal, consulting and payroll processing expenses, and servicing expense.

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Expenses – 2020 as compared to 2019 and 2019 as compared to 2018

For the year ended December 31, 2020, employee compensation and benefits was $58.2 million, compared to $42.4 million in 2019, an increase of $15.8 million or 37.3%. This increase was driven primarily by increased commissions on higher origination volumes, in addition to increased incentive compensation. Employee compensation and benefits was $42.4 million for the year ended December 31, 2019 compared to $34.8 million in 2018, an increase of $7.6 million or 21.8%. Higher origination volumes contributed to higher commissions and incentive compensation expense in 2019.

For the year ended December 31, 2020, interest expense was $1.2 million compared to $1.8 million in 2019, a decrease of $0.6 million or 33.3%. This is due to the reduced interest rate environment decreasing our cost of funds, partially offset by higher loan volumes. For the year ended December 31, 2019, interest expense was $1.8 million compared to $1.3 million in 2018, an increase of $0.5 million. The increase in interest expense was due to a higher debt balance associated with funding growth in loan originations.

For the year ended December 31, 2020, depreciation and amortization expense was $1.0 million compared to $0.8 million for 2019, up $0.2 million, due to purchases of fixed assets. For the year ended December 31, 2019, depreciation and amortization expense was $0.8 million compared to $0.5 million for 2018, up $0.3 million due to purchases of fixed assets and the deployment of a new company-wide phone system.

For the year ended December 31, 2020, other expenses were $20.7 million compared to $18.2 million in 2019. The $2.5 million increase was driven by increased loan origination expenses, including marketing costs and rent. Other expenses for the year ended December 31, 2019 were $18.2 million compared to $14.7 million in 2018 with the increase driven by higher loan origination expenses, including marketing costs, increased rent and office expenses.

Income (loss) before taxes

Income before taxes for the year ended December 31, 2020 was $31.1 million, compared to $3.0 million in 2019. The primary driver of the increase was the increase in revenue noted above, partially offset by higher compensation and other costs associated with the improved financial performance

Income before taxes for the year ended December 31, 2019 was $3.0 million, compared to $0.3 million in 2018. The primary driver of the increase was the increase in revenue noted above, offset by higher compensation and other costs associated with higher mortgage originations.

Tiptree Capital - Other

The following tables present a summary of Tiptree Capital - Other results for the year ended December 31, 2020, 2019 and 2018.

Results of Operations

	Year Ended December 31,
($ in thousands)	Total revenue						Income (loss) before taxes
	2020		2019		2018		2020		2019		2018
Senior living (Invesque)	$	(65,123)	$	9,140	$	(7,910)	$	(65,123)	$	9,140	$	(7,910)
Maritime transportation	22,697		16,591		3,811		1,493		1,610		(2,888)
Other (1)	49,501		45,791		33,715		2,388		12,641		6,739
Total	$	7,075	$	71,522	$	29,616	$	(61,242)	$	23,391	$	(4,059)

(1)    Includes our held for sale mortgage originator (Luxury), asset management, and certain intercompany elimination transactions.

Revenues

Tiptree Capital - Other earns revenues from the following sources: net interest income; revenues on our held for sale mortgage originator; asset management fees from CLOs under management (prior to the sale of our Telos asset management business which occurred on April 26, 2019); distributions and realized and unrealized gains on the Company’s investment holdings (primarily Invesque); and charter revenue from vessels within our maritime transportation operations.

Revenues for the year ended December 31, 2020 were $7.1 million, compared to $71.5 million for 2019. The primary driver of revenues for the year ended December 31, 2020 were unrealized losses of $67.7 million on Invesque and the suspension of its monthly dividend payment, offset by a full year of tanker operations in our maritime transportation business and growth in mortgage gain on sale revenues in our held for sale mortgage originator.

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Revenues for the year ended December 31, 2019 were $71.5 million, an increase of $41.9 million, primarily driven by a full year of dry-bulk shipping operations and an overall increase in charter rates in our maritime transportation business, lower unrealized losses on our investment in Invesque, and the gain on sale of our CLO business. For the year ended December 31, 2019, we received $10.1 million of dividends from Invesque and incurred $1.0 million of unrealized losses compared to $9.2 million of dividends and $17.1 million of unrealized losses in the 2018 period.

Income (loss) before taxes

The loss before taxes from Tiptree Capital - Other for the year ended December 31, 2020 was $61.2 million, compared to income of $23.4 million in 2019. The primary drivers of the decrease were unrealized losses and discontinued dividend income on our investment in Invesque. Non-recurrence of the gain on sale of the management contracts and related assets for the CLOs managed in our asset management business in the 2019 period also drove the 2020 decline in income before taxes.

Income (loss) before taxes from continuing operations for the year ended December 31, 2019 was $23.4 million, compared to a loss of $4.1 million in the 2018 period. The primary driver of improvement in income (loss) before taxes was the gain on sale of the management contracts and related assets for the CLOs managed in our asset management business and lower unrealized losses on Invesque. Income (loss) before taxes from our maritime transportation operations improved by $3.9 million primarily driven by a full year of dry-bulk operations, an overall increase in charter rates, and non-recurring start-up expenses impacting the 2018 period.

Results from Discontinued Operations

Discontinued operations include the results from Care, previously reported in the Senior Living segment. In the year ended

December 31, 2018, income (loss) before taxes was $57.5 million, which included a $56.9 million gain on sale of Care.

Adjusted net income - Non-GAAP(1)

($ in thousands)	Year Ended December 31,
	2020		2019		2018
Senior living (Invesque) (1)	$	2,001	$	8,004	$	7,129
Maritime transportation	2,291		1,695		(1,519)
Other	205		4,384		6,458
Total	$	4,497	$	14,083	$	12,068

(1)    See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Adjusted net income decreased to $4.5 million for the year ended December 31, 2020 compared to $14.1 million in 2019. The key driver of the decrease was the dividend income on our investment in Invesque was discontinued in April 2020. Adjusted net income increased to $14.1 million for the year ended December 31, 2019 compared to $12.1 million in 2018. The key driver of the adjusted net income increases was a full year of operations in our maritime transportation business, partially offset by the management fees due to the sale of our CLO business. See “— Non-GAAP Reconciliations” for a reconciliation to GAAP net income.

Corporate

The following tables present a summary of corporate results for the year ended December 31, 2020, 2019 and 2018.

Results of Operations

($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Employee compensation and benefits	$	7,718	$	6,542	$	7,248
Employee incentive compensation expense	7,477		9,323		7,471
Interest expense	10,016		6,292		5,011
Depreciation and amortization	807		652		248
Other expenses	9,642		11,432		10,266
Total expenses	$	35,660	$	34,241	$	30,244

Corporate expenses include expenses of the holding company for interest expense, employee compensation and benefits, and public company and other expenses. Corporate employee compensation and benefits includes the expense of management,

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legal and accounting staff. Other expenses primarily consisted of audit and professional fees, insurance, office rent and other related expenses.

Employee compensation and benefits, including incentive compensation expense, was $15.2 million for the year ended December 31, 2020 compared to $15.9 million for 2019, driven primarily by a reduction in employee incentive compensation. Interest expense for the year ended December 31, 2020 was $10.0 million, up from $6.3 million in 2019, driven by a higher average outstanding balance during the 2020 periods associated with our acquisition of Smart AutoCare in January 2020. As of December 31, 2020, the outstanding borrowing was $120.3 million, compared to $68.2 million at December 31, 2019.

Employee compensation and benefits, including incentive compensation expense, increased $1.2 million for the year ended December 31, 2019 compared to 2018, driven primarily by employee incentive compensation. Interest expense for the year ended December 31, 2019 was $6.3 million, an increase of $1.3 million, driven by higher LIBOR rates during 2019. As of December 31, 2019, the outstanding borrowing was $68.2 million, compared to $72.1 million at December 31, 2018.

Provision for Income Taxes

Provision for income taxes - Total Operations

The total benefit for income taxes of $13.6 million for the year ended December 31, 2020, total provision for income taxes of $9.0 million for the year ended December 31, 2019 and total provision for income taxes of $7.8 million for the year ended December 31, 2018 are reflected as components of net income (loss).

For the year ended December 31, 2020, the Company’s effective tax rate was equal to 35.1%. The effective rate for the year ended December 31, 2020 was higher than the U.S. federal statutory income tax rate of 21.0%, primarily from the impact of expected refunds arising from the CARES Act. For the year ended December 31, 2019, the Company’s effective tax rate was equal to 31.0%. The effective rate for the year ended December 31, 2019 was higher than the U.S. federal statutory income tax rate of 21%, primarily from the impact of the non-recurring return-to-provision, as well as ongoing state and foreign taxes. For the year ended December 31, 2018, the Company’s effective tax rate was equal to 20.6%. The effective rate for the year ended December 31, 2018 was lower than the statutory rate of 21.0% primarily due to the dividends received deduction and other discrete items.

On March 27, 2020, the CARES Act was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses. During the year ended December 31, 2020, the Company recorded a $7.3 million benefit for income taxes related to the ability to carry back net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $16.8 million and increase to our current receivable of $24.1 million. The Company continues to assess the potential tax impacts of this legislation on its financial position and results of operations.

Provision for income taxes - Continuing Operations

The Company had a benefit for income taxes from continuing operations of $13.6 million for the year ended December 31, 2020, provision for income taxes from continuing operations of $9.0 million for the year ended December 31, 2019, and a benefit for income taxes from continuing operations of $5.9 million for the year ended December 31, 2018.

The effective tax rate on income from continuing operations was equal to 35.1% for the year ended December 31, 2020, 31.0% for the year ended December 31, 2019, and 29.9% for the year ended December 31, 2018. Differences from the U.S. federal statutory income tax rate for the year ended December 31, 2020 are primarily from the impact of expected refunds arising from the CARES Act. Differences from the U.S. federal statutory income tax rate for the year ended December 31, 2019 are due to the impact of the non-recurring return-to-provision, as well as ongoing state and foreign taxes. Differences from the U.S. federal statutory income tax rate for the year ended December 31, 2018 are due to the dividends received deduction and other discrete items.

Balance Sheet Information

Tiptree’s total assets were $2,995.8 million as of December 31, 2020, compared to $2,198.3 million as of December 31, 2019. The $797.5 million increase in assets is primarily attributable to the growth in our Insurance segment, in particular the acquisition of Smart AutoCare.

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Total stockholders’ equity was $373.5 million as of December 31, 2020, compared to $411.4 million as of December 31, 2019, primarily driven by the year to date net loss, stock repurchases and dividends. As of December 31, 2020, there were 32,682,462 shares of common stock outstanding, as compared to 34,562,553 as of December 31, 2019.

The following table is a summary of certain balance sheet information:

	As of December 31, 2020
			Tiptree Capital
($ in thousands)	Insurance		Mortgage		Other		Corporate		Total
Total assets	$	2,452,798	$	217,138	$	302,068	$	23,756	$	2,995,760
Corporate debt	$	160,000	$	—	$	—	$	120,313	$	280,313
Asset based debt	27,510		55,994		15,800		—		99,304
Tiptree Inc. stockholders’ equity	$	288,799	$	55,448	$	102,048	$	(90,151)	$	356,144
Non-controlling interests - Other	8,910		5,013		3,471		—		17,394
Total stockholders’ equity	$	297,709	$	60,461	$	105,519	$	(90,151)	$	373,538

NON-GAAP MEASURES AND RECONCILIATIONS

Non-GAAP Reconciliations

In addition to GAAP results, management uses the non-GAAP financial measures underwriting and fee revenues and underwriting and fee margin in order to better explain to investors the underwriting performance of the Company’s programs and the respective retentions between the Company and its agents and reinsurance partners. We also use the non-GAAP financial measures adjusted net income, adjusted return on average equity and Adjusted EBITDA as measures of operating performance and as part of our resource and capital allocation process, to assess comparative returns on invested capital. Adjusted EBITDA is also used in determining incentive compensation for the Company’s executive officers. Management believes these measures provide supplemental information useful to investors as they are frequently used by the financial community to analyze financial performance and to compare relative performance among comparable companies. Adjusted net income, adjusted return on average equity, Adjusted EBITDA, underwriting and fee revenues and underwriting and fee margin are not measurements of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for earned premiums, net income or any other measure derived in accordance with GAAP.

Underwriting and Fee Revenues and Underwriting and Fee Margin — Non-GAAP (Insurance only)

The following tables present program specific revenue and expenses by business mix. We generally manage our exposure to the underwriting risk we assume using both reinsurance (e.g., quota share and excess of loss) and retrospective commission agreements with our partners (e.g., commissions paid are adjusted based on the actual underlying losses incurred), which mitigate our risk. Period-over-period comparisons of revenues and expenses are often impacted by the PORCs and distribution partners’ choice as to whether to retain risk, specifically service and administration fees and ceding commissions, both components of revenue, and policy and contract benefits and commissions paid to our partners and reinsurers. Generally, when losses are incurred, the risk which is retained by our partners and reinsurers is reflected in a reduction in commissions paid. In order to better explain to investors the underwriting performance of the Company’s programs and the respective retentions between the Company and its agents and reinsurance partners, we use the non-GAAP metrics underwriting and fee revenues and underwriting and fee margin.

Underwriting and Fee Revenues — Non-GAAP

We define underwriting and fee revenues as total revenues from our Insurance segment excluding net investment income and net realized and unrealized gains (losses). Underwriting and fee revenues represents revenues generated by our underwriting and fee-based operations and allows us to evaluate our underwriting performance without regard to investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting and fee revenues should not be viewed as a substitute for total revenues calculated in accordance with GAAP, and other companies may define underwriting and fee revenues differently.

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($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Total revenues	$	691,061	$	635,085	$	544,586
Less: Net investment income	(9,916)		(8,667)		(13,876)
Less: Net realized and unrealized gains (losses)	11,944		(6,896)		11,664
Underwriting and fee revenues	$	693,089	$	619,522	$	542,374

Underwriting and Fee Margin — Non-GAAP

We define underwriting and fee margin as income before taxes from our Insurance segment, excluding net investment income, net realized and unrealized gains (losses), employee compensation and benefits, other expenses, interest expense and depreciation and amortization. Underwriting and fee margin represents the underwriting performance of our underwriting and fee-based programs. As such, underwriting and fee margin excludes general administrative expenses, interest expense, depreciation and amortization and other corporate expenses as those expenses support the vertically integrated business model and not any individual component of our business mix. We use this metric as we believe it gives our management and other users of our financial information useful insight into the specific performance of our underlying underwriting and fee program. Underwriting and fee income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define underwriting and fee margin differently.

($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Income (loss) before income taxes	$	26,948	$	37,030	$	14,172
Less: Net investment income	(9,916)		(8,667)		(13,876)
Less: Net realized and unrealized gains (losses)	11,944		(6,896)		11,664
Plus: Depreciation and amortization	10,835		9,105		10,779
Plus: Interest expense	15,487		14,766		18,202
Plus: Employee compensation and benefits	65,089		49,789		45,536
Plus: Other expenses	55,594		50,657		41,342
Underwriting and fee margin	$	175,981	$	145,784	$	127,819

Adjusted Net Income — Non-GAAP

We define adjusted net income as income before taxes, less provision (benefit) for income taxes, and excluding the after-tax impact of various expenses that we consider to be unique and non-recurring in nature, including merger and acquisition related expenses, stock-based compensation, net realized and unrealized gains (losses) and intangibles amortization associated with purchase accounting. We use adjusted net income as an internal operating performance measure in the management of business as part of our capital allocation process. We believe adjusted net income provides useful supplemental information to investors as it is frequently used by the financial community to analyze financial performance between periods and for comparison among companies. Adjusted net income should not be viewed as a substitute for income before taxes calculated in accordance with GAAP, and other companies may define adjusted net income differently.

We present adjustments for amortization associated with acquired intangible assets. The intangible assets were recorded as part of purchase accounting in connection with Tiptree’s acquisition of FFC in 2014, Defend in 2019, and Smart AutoCare and Sky Auto in 2020. The intangible assets acquired contribute to overall revenue generation, and the respective purchase accounting adjustments will continue to occur in future periods until such intangible assets are fully amortized in accordance with the respective amortization periods required by GAAP.

Adjusted Return on Average Equity — Non-GAAP

We define adjusted return on average equity as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “—Adjusted Net Income—Non GAAP” above. We use adjusted return on average equity as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted return on average equity should not be viewed as a substitute for return on average equity calculated in accordance with GAAP, and other companies may define adjusted return on average equity differently.

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	Year Ended December 31, 2020
				Tiptree Capital
($ in thousands)	Insurance			Mortgage			Other			Corporate Expenses		Total
Income (loss) before taxes	$	26,948		$	31,102		$	(61,242)		$	(35,660)	$	(38,852)
Less: Income tax (benefit) expense	(3,725)			(7,066)			13,624			10,794		13,627
Less: Net realized and unrealized gains (losses)(1)	13,804			4,018			67,668			—		85,490
Plus: Intangibles amortization (2)	9,213			—			—			—		9,213
Plus: Stock-based compensation expense	2,287			2,482			174			3,172		8,115
Plus: Non-recurring expenses	3,418			—			624			758		4,800
Plus: Non-cash fair value adjustments	—			—			(2,141)			—		(2,141)
Less: Tax on adjustments	(8,522)			(1,958)			(14,210)			(4,131)		(28,821)
Adjusted net income	$	43,423		$	28,578		$	4,497		$	(25,067)	$	51,431
Adjusted net income	$	43,423		$	28,578		$	4,497		$	(25,067)	$	51,431
Average stockholders’ equity	285,760			47,202			138,606			(79,092)		392,476
Adjusted return on average equity	15.2		%	60.5		%	3.2		%	NM%		13.1		%

	Year Ended December 31, 2019
				Tiptree Capital
($ in thousands)	Insurance			Mortgage			Other			Corporate Expenses		Total
Income (loss) before taxes	$	37,030		$	2,959		$	23,391		$	(34,241)	$	29,139
Less: Income tax (benefit) expense	(8,455)			(640)			(4,457)			4,535		(9,017)
Less: Net realized and unrealized gains (losses)(3)	(6,896)			2,056			(6,148)			—		(10,988)
Plus: Intangibles amortization (2)	7,510			—			—			—		7,510
Plus: Stock-based compensation expense	2,891			170			—			3,299		6,360
Plus: Non-recurring expenses	1,975			—			202			2,079		4,256
Plus: Non-cash fair value adjustments	—			—			(153)			—		(153)
Less: Tax on adjustments	(1,249)			(616)			1,248			1,108		491
Adjusted net income	$	32,806		$	3,929		$	14,083		$	(23,220)	$	27,598
Adjusted net income	$	32,806		$	3,929		$	14,083		$	(23,220)	$	27,598
Average stockholders’ equity	266,397			32,785			161,133			(54,978)		405,337
Adjusted return on average equity	12.3		%	12.0		%	8.7		%	NM%		6.8		%

	Year Ended December 31, 2018
				Tiptree Capital
($ in thousands)	Insurance			Mortgage			Other			Corporate Expenses		Total
Income (loss) before taxes from continuing operations	$	14,172		$	335		$	(4,059)		$	(30,244)	$	(19,796)
Income (loss) before taxes from discontinued operations(4)	—			—			57,484			—		57,484
Less: Income tax (benefit) expense	(4,054)			118			(13,241)			9,372		(7,805)
Less: Net realized and unrealized gains (losses)	11,664			(528)			18,771			—		29,907
Plus: Intangibles amortization (2)	9,077			—			—			—		9,077
Plus: Stock-based compensation expense	3,458			152			—			3,049		6,659
Plus: Non-recurring expenses	2,559			—			1,179			(1,380)		2,358
Plus: Non-cash fair value adjustments	—			—			(56,293)			—		(56,293)
Less: Tax on adjustments	(5,605)			(130)			8,227			(1,800)		692
Adjusted net income	$	31,271		$	(53)		$	12,068		$	(21,003)	$	22,283
Adjusted net income	$	31,271		$	(53)		$	12,068		$	(21,003)	$	22,283
Average stockholders’ equity	253,244			31,483			114,529			(1,238)		398,018
Adjusted return on average equity	12.3		%	(0.2)		%	10.5		%	NM%		5.6		%

___________________________

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The footnotes below correspond to the tables above, under “—Adjusted Net Income - Non-GAAP and “—Adjusted Return on Average Equity - Non-GAAP”.

Notes
(1)	For the year ended December 31, 2020, included $1,860 of incentive fees paid with respect to specific unrealized and realized gains that are added-back to Adjusted net income.
(2)	Specifically associated with acquisition purchase accounting. See Note (3) Acquisitions.
(3)	For the year ended December 31, 2019, includes $7,598 gain on sale of our CLO management business.
(4)	Includes discontinued operations related to Care. For more information, see Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

Adjusted EBITDA - Non-GAAP

The Company defines Adjusted EBITDA as GAAP net income of the Company plus corporate interest expense, plus income taxes, plus depreciation and amortization expense, less the effects of purchase accounting, plus non-cash fair value adjustments, plus significant non-recurring expenses, and plus unrealized gains (losses) on available for sale securities reported in other comprehensive income. Adjusted EBITDA is used to determine incentive compensation for the Company’s executive officers. Adjusted EBITDA is not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative or substitute for GAAP net income.

($ in thousands)	For the Year Ended December 31,
	2020		2019		2018
Net income (loss) attributable to common stockholders	$	(29,158)	$	18,361	$	23,933
Add: net (loss) income attributable to non-controlling interests	3,933		1,761		5,950
Less: net income from discontinued operations	—		—		43,770
Income (loss) from continuing operations	$	(25,225)	$	20,122	$	(13,887)
Corporate debt related interest expense(1)	23,322		19,754		18,162
Consolidated provision (benefit) for income taxes	(13,627)		9,017		(5,909)
Depreciation and amortization(2)	17,268		13,083		11,614
Non-cash fair value adjustments(3)	(7,122)		(3,156)		(391)
Non-recurring expenses(4)	4,800		4,257		2,358
Unrealized gains (losses) on AFS securities	5,125		5,008		(2,100)
Adjusted EBITDA from continuing operations	$	4,541	$	68,085	$	9,847
Income (loss) from discontinued operations	$	—	$	—	$	43,770
Consolidated provision (benefit) for income taxes	—		—		13,714
Non-cash fair value adjustments (3)	—		—		(40,672)
Adjusted EBITDA from discontinued operations	$	—	$	—	$	16,812
Total Adjusted EBITDA	$	4,541	$	68,085	$	26,659

_______________________________

Notes
(1)	Corporate debt interest expense includes interest expense from secured corporate credit agreements, junior subordinated notes and preferred trust securities. Interest expense associated with asset-specific debt is not added-back for Adjusted EBITDA.
(2)	Represents total depreciation and amortization expense less purchase accounting amortization related adjustments at our insurance companies. Following the purchase accounting adjustments, current period expenses associated with deferred costs were more favorably stated and current period income associated with deferred revenues were less favorably stated. Thus, the purchase accounting effect related to our insurance companies increased EBITDA above what the historical basis of accounting would have generated.
(3)	For our maritime transportation operations, depreciation and amortization is deducted as a reduction in the value of the vessel. For our insurance operations, depreciation and amortization on senior living real estate that is within net investment income is added back to Adjusted EBITDA. For Care (Discontinued Operations), the reduction in EBITDA is related to accumulated depreciation and amortization, and certain operating expenses, which were previously included in Adjusted EBITDA in prior periods.
(4)	Acquisition, start-up and disposition costs, including debt extinguishment, legal, taxes, banker fees and other costs.

Book Value per share - Non-GAAP

Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders’ equity and total shares outstanding, net of treasury shares.

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($ in thousands, except per share information)	As of December 31,
	2020		2019		2018
Total stockholders’ equity	$	373,538	$	411,415	$	399,259
Less: Non-controlling interests	17,394		13,353		12,158
Total stockholders’ equity, net of non-controlling interests	$	356,144	$	398,062	$	387,101
Total common shares outstanding	32,682		34,563		35,870
Book value per share	$	10.90	$	11.52	$	10.79

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are unrestricted cash, cash equivalents and other liquid investments and distributions from operating subsidiaries, including income from our investment portfolio and sales of assets and investments. We intend to use our cash resources to continue to fund our operations and grow our businesses. We may seek additional sources of cash to fund acquisitions or investments. These additional sources of cash may take the form of debt or equity and may be at the parent, subsidiary or asset level. We are a holding company and our liquidity needs are primarily for interest payments on the Fortress credit facility, compensation, professional fees, office rent and insurance costs. In February 2020, we refinanced our existing facility with Fortress, extending the maturity to February 2025 and increasing the principal amount to $125 million, generating approximately $53 million of cash after repaying the existing facility and expenses. A portion of those funds were invested in Insurance to fund our warranty business, with the remainder used to provide additional liquidity.

Our subsidiaries’ ability to generate sufficient net income and cash flows to make cash distributions will be subject to numerous business and other factors, including restrictions contained in our subsidiaries’ financing agreements, regulatory restrictions, availability of sufficient funds at such subsidiaries, general economic and business conditions, tax considerations, strategic plans, financial results and other factors such as target capital ratios and ratio levels anticipated by rating agencies to maintain or improve current ratings. In April 2020, Invesque suspended its dividend to conserve liquidity until the impact of COVID-19 on occupancy rates and its operations is better known. The suspension has negatively impacted our cash flow. However, we expect our cash and cash equivalents and distributions from operating subsidiaries, our subsidiaries’ access to financing, and sales of investments to be adequate to fund our operations for at least the next 12 months.

As of December 31, 2020, cash and cash equivalents, excluding restricted cash, were $136.9 million, compared to $133.1 million at December 31, 2019, an increase of $3.8 million primarily as a result of increased gross written premiums and premium equivalents, including our acquisition of Smart AutoCare.

Our mortgage business relies on short term uncommitted sources of financing as a part of their normal course of operations. To date, we have been able to obtain and renew uncommitted warehouse credit facilities. If we were not able to obtain financing, then we may need to draw on other sources of liquidity to fund our mortgage business. See Note (11) Debt, net in the notes to consolidated financial statements, for additional information regarding our mortgage warehouse borrowings.

We believe that our cash flow from operations will provide us with sufficient capital to continue to grow our business and fund interest on the outstanding debt, capital expenditures and other general corporate needs over the next several years. As we continue to expand our business, including by any acquisitions we may make, we may, in the future, require additional working capital for increased costs.

For purposes of determining enterprise value and Adjusted EBITDA, we consider corporate credit agreements and preferred trust securities, which we refer to as corporate debt, as corporate financing and associated interest expense is added back. The below table outlines this amount by debt outstanding and interest expense at the insurance company and corporate level.

Corporate Debt

($ in thousands)	Corporate Debt Outstanding as of December 31,						Interest Expense for the year ended December 31,
	2020		2019		2018		2020		2019		2018
Insurance	$	160,000	$	185,000	$	160,000	$	13,305	$	13,390	$	13,149
Corporate	120,313		68,210		72,090		10,017		6,292		5,013
Total	$	280,313	$	253,210	$	232,090	$	23,322	$	19,682	$	18,100

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As of December 31, 2020, our $125 million credit facility with Fortress carries a rate of LIBOR (with a minimum LIBOR rate of 1.00%), plus a margin of 6.75% per annum. We are required to make quarterly principal payments of approximately $1.56 million. See Note (11) Debt, net in the notes to consolidated financial statements for details.

On August 4, 2020, Fortegra entered into an Amended and Restated Credit Agreement by and among Fortegra and its wholly-owned subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the “Fortegra Credit Agreement”). The Fortegra Credit Agreement provides for a $200.0 million revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $17.5 million for swing loans, and matures on August 4, 2023.

Consolidated Comparison of Cash Flows

($ in thousands)	For the Year Ended December 31,
Total cash provided by (used in):	2020		2019		2018
Net cash (used in) provided by:
Operating activities	$	140,169	$	23,742	$	57,724
Investing activities	(123,491)		(8,327)		(109,107)
Financing activities	31,749		36,928		(2,003)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	48,427	$	52,343	$	(53,386)

Operating Activities

Cash provided by operating activities was $140.2 million for the year ended December 31, 2020. In 2020, the primary sources of cash from operating activities included proceeds from mortgage loans outpacing originations and growth in unearned premiums and net deferred revenues, partially offset by increases in notes and accounts receivable and reinsurance receivables from our insurance operations.

Cash provided by operating activities was $23.7 million for the year ended December 31, 2019. In 2019, the primary sources of cash from operating activities included consolidated net income (excluding unrealized gains and losses), increases in unearned premiums, reinsurance payables, and deferred revenues, offset by increases in notes and accounts receivable and reinsurance receivables related to growth in our insurance operations.

Cash provided by operating activities was $57.7 million for the year ended December 31, 2018. In 2018, the primary sources of cash from operating activities included consolidated net income (excluding unrealized gains and losses), increases in unearned premiums, reinsurance payables, deferred revenues and policy liabilities and unpaid claims in our insurance segment and proceeds from mortgage loans outpacing originations, offset by increases in reinsurance receivables, deferred acquisition costs and notes and account receivable in our insurance segment.

Investing Activities

Cash used in investing activities was $123.5 million for the year ended December 31, 2020. In 2020, the primary use of cash from investing activities was the purchase of investments outpacing proceeds from the sales of investments in our insurance investment portfolio, and the issuance of notes receivable outpacing proceeds.

Cash used in investing activities was $8.3 million for the year ended December 31, 2019. In 2019, the primary use of cash from investing activities was the issuance of notes receivables outpacing proceeds. This was offset by proceeds associated with a contingent earn-out from our sale of Care, proceeds from the sale of our Telos business, and sales and maturities of investments in excess of purchases in our insurance investment portfolio.

Cash used in investing activities was $109.1 million for the year ended December 31, 2018. In 2018, the primary uses of cash were purchases of investments exceeding proceeds from sales and maturities of investments in our insurance investment portfolio, and investments in vessels within our maritime transportation, offset by proceeds from the sale of Care and proceeds from the prepayment of a seller note in connection with the sale of our commercial lending business.

Financing Activities

Cash provided by financing activities was $31.7 million for the year ended December 31, 2020. In 2020, proceeds from borrowings outpaced principal repayments, which was partially offset by the repurchase of $13.9 million of the Company’s

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common stock and the payment of $5.6 million in dividends.

Cash provided by financing activities was $36.9 million for the year ended December 31, 2019. In 2019, our new borrowings from various debt arrangements exceeded our principal repayments primarily due to increased borrowings on our mortgage warehouse facilities due to increased volume in our mortgage business, increased borrowing on our secured corporate credit agreement in our insurance business to support growth, and a vessel backed term loan, offset by the repayment of asset based borrowings in our credit loan fund, held within our insurance investment portfolio. Net cash provided by increased borrowings under our debt facilities was offset by the repurchase of $9.1 million of the Company’s common stock and the payment of $5.5 million in dividends.

Cash used in financing activities was $2.0 million for the year ended December 31, 2018. In 2018, the uses of cash from financing activities were the repurchase of $14.1 million of the Company’s common stock and the payment of $4.8 million in dividends, offset by net new borrowings under our debt facilities, including borrowings from our secured corporate credit agreement and net new borrowings on residential mortgage warehouse borrowings, partially offset by principal repayments on asset based revolving financing in our insurance portfolio.

Contractual Obligations

The table below summarizes consolidated contractual obligations by period for payments that are due as of December 31, 2020:

($ in thousands)	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Corporate debt, including interest (1)	$	27,675	$	53,877	$	134,320	$	196,941	$	412,813
Asset based debt	58,940		33,073		9,618		—		101,631
Total debt (2)	$	86,615	$	86,950	$	143,938	$	196,941	$	514,444
Operating lease obligations (3)	8,665		14,789		11,621		16,091		51,166
Total	$	95,280	$	101,739	$	155,559	$	213,032	$	565,610

(1)    Estimated interest obligation calculated for corporate debt as the outstanding borrowing balance is fixed. The junior subordinated notes have an option to redeem 10 years from the issue date.

(2)    See Note (11) Debt, net, in the accompanying consolidated financial statements for additional information.

(3)    Minimum rental obligation for office leases. The total rent expense for the year ended December 31, 2020, 2019 and 2018 was $7.4 million, $8.6 million and $7.5 million, respectively.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s significant accounting policies are described in Note (2) Summary of Significant Accounting Policies. As disclosed in Note (2), the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates.

The Company believes that the following discussion addresses the Company’s most critical accounting policies, which are those that are most important to the portrayal of the Company’s financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Fair Value Option

In addition to the financial instruments that the Company is required to measure at fair value, the Company has elected to make an irrevocable election to utilize fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in Net realized and unrealized gains (losses) within the consolidated statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

Impairment

Vessels, net

Vessels are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable. Potential impairment indicators are primarily based upon a comparison of the

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market value of a vessel to its carrying value. Market values are based upon quoted prices from industry-recognized sources. The Company evaluates market quotes of vessels for reasonableness by comparison to available market transactions or internal valuation models. An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

Goodwill and Intangible Assets, net

The initial measurement of goodwill and intangibles requires judgment concerning estimates of the fair value of the acquired assets and liabilities. Goodwill and indefinite-lived intangible assets are not amortized but subject to tests for impairment annually or if events or circumstances indicate it is more likely than not they may be impaired. Finite-lived intangible assets are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. At both December 31, 2020 and December 31, 2019, we had two reporting units for goodwill impairment testing, of which the fair value substantially exceeded carrying value as of that date. See Note (9) Goodwill and Intangible Assets, net.

Available for Sale Securities, at Fair Value (AFS)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time. AFS securities include those debt securities that management may sell as part of its asset/liability management strategy or in response to changes in interest rates, resultant prepayment risk or other factors. AFS securities are held at fair value on the consolidated balance sheet with changes in fair value including non-credit related losses, net of related tax effects, recorded in the AOCI component of stockholders’ equity in the period of change. Upon the disposition of an AFS security, the Company reclassifies the gain or loss on the security from AOCI to net realized and unrealized gains (losses) on the consolidated statements of operations.

For AFS securities, the Company reviews its securities portfolio for impairment and determines if impairment is related to credit loss or non-credit loss. In making the assessment of whether a loss is from credit or other factors, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost basis, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

Subsequent activity related to the credit loss component (e.g. write-offs, recoveries) is recognized as part of the allowance for credit losses on AFS securities. For AFS securities which have an expectation of zero risk nonpayment of the amortized cost basis (e.g. U.S. Treasury securities or agency securities), the expected credit loss is zero.

Reserves

Unpaid claims are reserve estimates that are established in accordance with GAAP using generally accepted actuarial methods. Credit life and accidental death and destruction (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR) claims. Credit disability unpaid claims reserves also include continuing claim reserves for open disability claims. For all other Fortegra product lines, unpaid claims reserves are bulk reserves and are entirely IBNR. The Company uses a number of algorithms in establishing its unpaid claims reserves. These algorithms are used to calculate unpaid claims as a function of paid losses, earned premium, target loss ratios, in-force amounts, unearned premium reserves, industry recognized morbidity tables or a combination of these factors.

In arriving at the unpaid claims reserves, the Company conducts an actuarial analysis on a basis gross of reinsurance. The same estimates used as a basis in calculating the gross unpaid claims reserves are then used as the basis for calculating the net unpaid claims reserves, which take into account the impact of reinsurance. Anticipated future loss development patterns form a key assumption underlying these analyses. Our claims are generally reported and settled quickly, resulting in consistent historical loss development patterns. From the anticipated loss development patterns, a variety of actuarial loss projection techniques are employed, such as the chain ladder method, the Bornhuetter-Ferguson method and expected loss ratio method.

The unpaid claims reserves represent the Company’s best estimates, generally involving actuarial projections at a given time. Actual claim costs are dependent upon a number of complex factors such as changes in doctrines of legal liabilities and damage awards. These factors are not directly quantifiable, particularly on a prospective basis. The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related liabilities based on our actual experience. The Company has not made any changes to its methodologies for determining unpaid claims reserves in the periods presented.

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During the year ended December 31, 2020, the Company experienced an increase in prior year development of $5.4 million primarily as a result of higher than expected claim frequency from business written by a small group of producers of our personal and commercial lines of business. The underlying cause of this development was the result of a subset of risk where the loss ratio pegs used in our year end actuarial determination was low given the ultimate frequency that emerged.

During the year ended December 31, 2019, the Company experienced an increase in prior year development of $5.2 million primarily in our non-standard auto business. The underlying cause of this development was higher than expected claim frequency.

Management considers the prior year development for each of the two years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses. Earned premiums, net in 2020 were $478.0 million and net losses and loss adjustment expenses were $178.2 million, which resulted to a loss ratio of 37.2%. Without the $5.4 million prior year development, the calendar year loss ratio would have been approximately 1% lower, and for comparison the 2019 and 2018 loss ratio were 30.3% and 31.5%, respectively. In general, the Company's loss ratio results have been predictable and consistent over time.

We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

Deferred Acquisition Costs

The Company defers certain costs of acquiring new and renewal insurance policies, and other products as follows:

Insurance policy related deferred acquisition costs are limited to direct costs that resulted from successful contract transactions and would not have been incurred by the Company’s insurance company subsidiaries had the transactions not occurred. These capitalized costs are amortized as the related premium is earned.

Other deferred acquisition costs are limited to prepaid direct costs, typically commissions and contract transaction fees, that resulted from successful contract transactions and would not have been incurred by the Company had the transactions not occurred. These capitalized costs are amortized as the related service and administrative fees are earned.

The Company evaluates whether all deferred acquisition costs are recoverable at year-end, and considers investment income in the recoverability analysis for insurance policy related deferred acquisition costs. As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2020, 2019 and 2018.

Revenue Recognition

The Company earns revenues from a variety of sources:

Earned Premiums, net

Net earned premium is from direct and assumed earned premium consisting of revenue generated from the direct sale of insurance policies by the Company’s distributors and premiums written for insurance policies by another carrier and assumed by the Company. Whether direct or assumed, the premium is earned over the life of the respective policy using methods appropriate to the pattern of losses for the type of business. Methods used include the Rule of 78's, pro rata, and other actuarial methods. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available. Direct and assumed premiums are offset by premiums ceded to the Company's reinsurers, including PORCs, earned in the same manner. The amount ceded is proportional to the amount of risk assumed by the reinsurer.

Service and Administrative Fees

The Company earns service and administrative fees from a variety of activities. Such fees are typically positively correlated

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with transaction volume and are recognized as revenue as they become both realized and earned. Revenues from contracts with customers were $163.6 million, $89.0 million and $76.8 million for the years ended December 31, 2020, 2019 and 2018, respectively, and include warranty service contracts, motor clubs, other service and administrative fees, vessel related revenue and management fee income. See Note (14) Revenue from Contracts with Customers for more detailed disclosure regarding these revenues.

 Service Fees. Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Collateral tracking fee income is recognized when the service is performed and billed. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable. During the years ended December 31, 2020, 2019 and 2018, the Company did not incur a loss with respect to a specific significant service fee contract.

Administrative Fees. Administrative fee revenue includes the administration of premium associated with our producers and their PORCs. In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Ceding Commissions

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part, underwriting performance and investment returns experienced by the assuming companies. As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy. The adjustment is calculated by adding the earned premium and investment income from the assets held in trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in earnings in the period that includes the enactment date. Additionally, taxing jurisdictions could retroactively disagree with our tax treatment of certain items, and some historical transactions have income tax effects going forward. Accounting guidance requires these future effects to be evaluated using current laws, rules and regulations, each of which can change at any time and in an unpredictable manner.

The Company establishes valuation allowances for deferred tax assets when, in its judgment, it concludes that it is more likely than not that the deferred tax assets will not be realized. These judgments are based on projections of future income, including tax-planning strategies, by individual tax jurisdictions. Changes in economic conditions and the competitive environment may impact the accuracy of the Company’s projections. On a quarterly basis, the Company assesses the likelihood that its deferred tax assets will be realized and determines if adjustments to the Company’s valuation allowance is appropriate.

Significant Accounting Policies Related to Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Revenue Recognition

Rental Revenue (Care)

Rental revenue from residents in managed properties are recognized monthly as services are provided, as lease periods for residents are short-term in nature. The Company recognizes rental revenue from triple net lease properties on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time

76

pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight-line rent if the renewals are not reasonably assured. The Company commences rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease.

Recently Issued Accounting Standards

For a discussion of recently issued accounting standards, see Note (2) Summary of Significant Accounting Policies, in the accompanying consolidated financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

In the normal course of business, we enter into various off-balance sheet arrangements including entering into derivative financial instruments and hedging transactions, operating leases and sponsoring and owning interests in consolidated and non-consolidated variable interest entities.

Further disclosure on our off-balance sheet arrangements as of December 31, 2020 is presented in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Notes to Consolidated Financial Statements” of this filing as follows:

•Note (10) Derivative Financial Instruments and Hedging

•Note (21) Commitments and Contingencies

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to interest rate risk related to borrowings in various businesses. These risks result primarily from changes in LIBOR rates and the spread over LIBOR rates related to the credit risks of our businesses.

For fixed rate debt, interest rate fluctuations generally affect the fair value of our liabilities, but do not impact our earnings. Therefore, interest rate risk does not have a significant impact on our fixed rate debt obligations until such obligations mature or until we elect to prepay and refinance such obligations. If interest rates have risen at the time our fixed rate debt matures or is refinanced, our future earnings could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of maturity or refinancing may lower our overall interest expense. As of December 31, 2020, the Company had $125 million of general purpose fixed rate debt outstanding maturing in 2057.

For general purpose floating rate debt, interest rate fluctuations primarily affect interest expense and cash flows. If market interest rates rise, our earnings could be adversely affected by an increase in interest expense. In contrast, lower interest rates may reduce our interest expense and improve our earnings, except to the extent that our borrowings are subject to interest rate floors. The floating interest rate risk of asset based financing is generally offset as the financing and the purchased financial asset are generally subject to the same interest rate risk. For floating rate risk of other asset based financing such as borrowings to finance acquisitions of real estate, we generally hedge our exposure to the variability of the benchmark index with an interest rate swap.

As of December 31, 2020, we had $120.3 million of general purpose floating rate debt with a weighted average rate of 7.8%. A 100 basis point change in interest rates would increase interest expense by $1.2 million and decrease interest rate expense by $0.0 million (including the effect of applicable minimum interest rates) on an annualized basis. As of December 31, 2019, we had $68.2 million of general purpose floating rate debt with a weighted average rate of 7.2%. A 100 basis point change in interest rates would increase interest expense by $0.5 million and decrease interest rate expense by $0.2 million (including the effect of applicable minimum interest rates) on an annualized basis.

Our consolidated results include investments in bonds, loans or other interest bearing instruments. The fair values of such investments fluctuate in response to changes in market interest rates. Increases and decreases in interest rates generally translate into decreases and increases in fair values of these instruments. Some of these investments bear a floating rate of interest which subjects the Company to cash flow risk based upon changes in the underlying interest rate index. As noted above in the discussion of risks related to floating rate borrowings, the Company mitigates a significant amount of our floating rate risk by matching the funding of such investments with borrowings based upon the same interest rate index. Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions.

As of December 31, 2020, we had $510 million invested in interest bearing instruments, which represents 63% of the total investments portfolio. The estimated effects of a hypothetical increase in interest rates of 100 bps would result in a decrease to the fair value of the portfolio by $14.2 million. As of December 31, 2019, we had $385 million invested in interest bearing instruments, which represents 52% of the total investments portfolio. The estimated effects of a hypothetical increase in interest rates of 100 bps would result in a decrease to the fair value of the portfolio by $8.2 million.

78

Credit Risk

We are exposed to credit risk in the form of available for sale securities, investments in loans, and other investments as follows:

($ in thousands)	As of December 31,
	2020		2019
Available for sale securities, at fair value (1)
Obligations of state and political subdivisions	$	44,350	$	46,338
Corporate securities	94,941		51,231
Asset backed securities	36,192		44,018
Certificates of deposit	1,355		896
Obligations of foreign governments	3,992		1,119
Loans, at fair value(2)
Corporate loans	7,795		9,787
Non-performing loans	—		387
Other investments(3)
Corporate bonds, at fair value	105,777		20,705
Debentures	17,703		15,423
Other	802		6,956
Total	$	312,907	$	196,860

(1)    The Company also holds investments in U.S. Treasury securities and obligations of U.S. government authorities and agencies of $196.3 million and $191.6 million as of December 31, 2020 and 2019, respectively. These investments do not represent a credit risk and are excluded.

(2)    The Company also holds investments in mortgage loans held for sale of $82.9 million and $95.7 million as of December 31, 2020 and 2019, respectively. These investments do not represent a credit risk and are excluded.

(3)    The Company also holds other investments of $95.4 million and $94.4 million as of December 31, 2020 and 2019, respectively, primarily comprised of vessels. These investments do not represent a credit risk and are excluded.

Credit risk within the Company’s investments represents the exposure to the adverse changes in the creditworthiness of individual investment holdings, issuers, groups of issuers, industries, and countries. As of December 31, 2020 and 2019, 62% and 72%, respectively, of the investments subject to credit risk had investment grade ratings. A widening of credit spreads by 100 bps for the investments subject to credit risk would result in a decrease of $5.9 million and $5.0 million to the fair value of the portfolio as of December 31, 2020 and 2019, respectively.

In addition, our mortgage business also underwrites mortgage loans for the purpose of selling them into the secondary market. Due to the relatively short holding period, the credit risk associated with mortgage loans held for sale is not expected to be significant.

See Note (6) Investments to the consolidated financial statements for more information regarding our investments in loans by type.

Market Risk

We are primarily exposed to market risk related to the following investments:

($ in thousands)	As of December 31, 2020						As of December 31, 2019
	Insurance		Tiptree Capital - Other		Total		Insurance		Tiptree Capital - Other		Total
Invesque	$	5,370	$	25,708	$	31,078	$	19,376	$	92,562	$	111,938
Fixed income exchange traded fund	63,875		—		63,875		25,039		—		25,039
Other equity securities	28,885		—		28,885		18,401		—		18,401
Total equity securities	$	98,130	$	25,708	$	123,838	$	62,816	$	92,562	$	155,378

A 10% increase or decrease in the fair value of such investments would result in $12.3 million and $15.5 million of unrealized gains and losses as of December 31, 2020 and 2019, respectively.

As of December 31, 2020 and 2019, we owned 17.0 million and 16.6 million shares of common stock, respectively, or approximately 31%, of Invesque, a real estate investment company that specializes in health care real estate and senior living property investment throughout North America. The value of our Invesque shares is reported at fair market value on a quarterly basis and fluctuates. Invesque historically paid monthly dividends until April 2020, when dividends were

79

discontinued. A loss in the fair market value of our Invesque shares or a reduction or discontinuation in the dividends paid on our Invesque shares could have a material adverse effect on our financial condition and results of operations. Until August 2019, the Company’s investment in Invesque was subject to certain contractual and functional sale restrictions. As of December 31, 2020 and 2019, the fair value of the Invesque shares was based on the market price.

See “Risk Factors — Risks Related to our Business - Our investment in Invesque shares is subject to market volatility and the risk that Invesque changes its dividend policy”.

Counterparty Risk

We are subject to counterparty risk to the extent that we engage in derivative activities for hedging or other purposes. As of December 31, 2020 and 2019, the total fair value of derivative assets subject to counterparty risk, including the effect of any legal right of offset, totaled $11.5 million and $7.5 million, respectively. We generally manage our counterparty risk to derivative counterparties by entering into contracts with counterparties of high credit quality.

Total reinsurance receivables were $728.0 million and $539.8 million as of December 31, 2020 and 2019, respectively. Of those amounts, $442.2 million and $309.0 million, respectively, related to contracts with third-party captives in which we hold collateral or receive letters of credit in excess of the reinsurance receivables. The remainder is held with high quality reinsurers, substantially all of which have a rating of A or better by A.M. Best. As of December 31, 2020, 4 counterparties constituted more than 10% of the uncollateralized reinsurance receivable exposure, ranging from 10% to 16%, with ratings ranging from A- to A+.

We were also exposed to counterparty risk of approximately $131.8 million and $105.4 million as of December 31, 2020 and 2019, respectively, related to our retrospective commission arrangements; associated risks are offset by the Company’s contractual ability to withhold future commissions against the retrospective balances. In addition, we are exposed to counterparty risk of approximately $62.1 million and $42.2 million as of December 31, 2020 and 2019, respectively, related to our premium financing business. The risk associated with such arrangements is mitigated by the fact that we have the contractual ability to cancel the insurance policy and have premiums refunded to us by the insurer in the event of a counterparty default.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F- 2
Consolidated Balance Sheets as of December 31, 2020 and 2019	F- 1
Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018	F- 2
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018	F- 3
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018	F- 4
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018	F- 6
Notes to Consolidated Financial Statements	F- 7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tiptree Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Tiptree Inc. and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 11, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Policy liabilities and unpaid claims – Refer to Notes 2 and 13 to the financial statements

Critical Audit Matter Description

Policy liabilities and unpaid claims include claims in the normal course of settlement and reserve estimates. The Company estimates policy liabilities and unpaid claims reserves by applying a variety of generally accepted actuarial methods to historical loss development patterns, which require numerous assumptions and significant judgment.

We identified policy liabilities and unpaid claims as a critical audit matter because of the significant estimates and assumptions management make in forecasting ultimate losses. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate management’s selection of various assumptions in determining unpaid claims reserves.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to policy liabilities and unpaid claims included the following, among others:

•We tested the design and operating effectiveness of controls over policy liabilities and unpaid claims, including those related to the estimation and management’s review of the estimates as well as the selection of underlying assumptions.

•We tested the design and operating effectiveness of controls over the completeness and accuracy of the premium and claim data utilized by management and their third-party actuaries.

•We evaluated the methods and assumptions used by the Company to estimate the policy liabilities and unpaid claims reserve through the following procedures:

◦With assistance from our actuarial specialists, we developed an independent expected range of policy liabilities and unpaid claims based on historical and industry claim development factors.

◦With assistance from our actuarial specialists, we performed retrospective procedures comparing actual loss development with expected loss development to assess the reasonableness of assumption used, including consideration of potential bias, in the estimation of policy liabilities and unpaid claims.

◦We tested the underlying data that served as the basis for the actuarial analysis, including historical claims data, to test that the inputs to the actuarial estimates were complete and accurate.

/s/ Deloitte & Touche LLP

New York, New York

March 11, 2021

We have served as the Company's auditor since 2017.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Tiptree Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Tiptree Inc. and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated March 11, 2021 expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control Over Financial Reporting (“Management’s Report”), management excluded from its assessment the internal control over financial reporting at Smart AutoCare as the business was acquired on January 3, 2020. Smart AutoCare constitutes 12% of total assets and 9% of total revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2020. Accordingly, our audit did not include the internal control over financial reporting at Smart AutoCare.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

New York, New York

March 11, 2021

TIPTREE INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share data)

	As of
	December 31, 2020		December 31, 2019
Assets:
Investments:
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	335,192
Loans, at fair value	90,732		108,894
Equity securities	123,838		155,378
Other investments	219,701		137,472
Total investments	811,404		736,936
Cash and cash equivalents	136,920		133,117
Restricted cash	58,355		11,473
Notes and accounts receivable, net	370,452		286,968
Reinsurance receivables	728,009		539,833
Deferred acquisition costs	229,430		166,493
Goodwill	179,236		99,147
Intangible assets, net	138,215		47,974
Other assets	162,034		68,510
Assets held for sale	181,705		107,835
Total assets	$	2,995,760	$	2,198,286
Liabilities and Stockholders’ Equity
Liabilities:
Debt, net	$	366,246	$	374,454
Unearned premiums	860,690		754,993
Policy liabilities and unpaid claims	233,438		144,384
Deferred revenue	399,211		94,601
Reinsurance payable	224,660		143,869
Other liabilities and accrued expenses	362,865		172,140
Liabilities held for sale	175,112		102,430
Total liabilities	$	2,622,222	$	1,786,871
Stockholders’ Equity:
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—	$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 32,682,462 and 34,562,553 shares issued and outstanding, respectively	33		35
Additional paid-in capital	315,014		326,140
Accumulated other comprehensive income (loss), net of tax	5,674		1,698
Retained earnings	35,423		70,189
Total Tiptree Inc. stockholders’ equity	356,144		398,062
Non-controlling interests	17,394		13,353
Total stockholders’ equity	373,538		411,415
Total liabilities and stockholders’ equity	$	2,995,760	$	2,198,286

See accompanying notes to consolidated financial statements.

F-1

TIPTREE INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share data)

	For the Year Ended December 31,
	2020		2019		2018
Revenues:
Earned premiums, net	$	477,991	$	499,108	$	427,837
Service and administrative fees	186,973		106,239		102,315
Ceding commissions	21,101		9,608		9,651
Net investment income	9,916		14,017		19,179
Net realized and unrealized gains (losses)	62,410		83,868		28,782
Other revenue	51,910		59,888		38,062
Total revenues	810,301		772,728		625,826
Expenses:
Policy and contract benefits	236,898		170,681		152,095
Commission expense	280,210		303,057		262,460
Employee compensation and benefits	172,737		129,479		113,557
Interest expense	32,582		27,059		27,013
Depreciation and amortization	17,578		13,569		12,596
Other expenses	109,148		99,744		77,901
Total expenses	849,153		743,589		645,622
Income (loss) before taxes	(38,852)		29,139		(19,796)
Less: provision (benefit) for income taxes	(13,627)		9,017		(5,909)
Net income (loss) from continuing operations	(25,225)		20,122		(13,887)
Discontinued operations:
Income (loss) before taxes from discontinued operations	—		—		624
Gain on sale of discontinued operations	—		—		56,860
Less: Provision (benefit) for income taxes	—		—		13,714
Net income (loss) from discontinued operations	—		—		43,770
Net income (loss)	(25,225)		20,122		29,883
Less: net income (loss) attributable to non-controlling interests - TFP	—		—		5,500
Less: net income (loss) attributable to non-controlling interests	3,933		1,761		450
Net income (loss) attributable to common stockholders	$	(29,158)	$	18,361	$	23,933
Net income (loss) per common share:
Basic, continuing operations, net	$	(0.86)	$	0.52	$	(0.38)
Basic, discontinued operations, net	—		—		1.07
Basic earnings per share	$	(0.86)	$	0.52	$	0.69
Diluted, continuing operations, net	(0.86)		0.50		(0.38)
Diluted, discontinued operations, net	—		—		1.07
Diluted earnings per share	$	(0.86)	$	0.50	$	0.69
Weighted average number of common shares:
Basic	33,859,775		34,578,292		34,715,852
Diluted	33,859,775		34,578,292		34,715,852
Dividends declared per common share	$	0.16	$	0.16	$	0.14

See accompanying notes to consolidated financial statements.

F-2

TIPTREE INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

	For the Year Ended December 31,
	2020		2019		2018
Net income (loss)	$	(25,225)	$	20,122	$	29,883
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on available for sale securities:
Unrealized holding gains (losses) arising during the period	5,653		6,320		(2,919)
Related (provision) benefit for income taxes	(1,289)		(1,409)		662
Reclassification of (gains) losses included in net income	(528)		(1,312)		819
Related (provision) benefit for income taxes	113		280		(171)
Unrealized gains (losses) on available for sale securities, net of tax	3,949		3,879		(1,609)
Interest rate swaps (cash flow hedges):
Unrealized gains (losses) on interest rate swaps	—		—		1,111
Related (provision) benefit for income taxes	—		—		(276)
Reclassification of (gains) losses included in net income (1)	—		—		(3,845)
Related (provision) benefit for income taxes	—		—		936
Unrealized (losses) gains on interest rate swaps from cash flow hedges, net of tax	—		—		(2,074)
Other comprehensive income (loss), net of tax	3,949		3,879		(3,683)
Comprehensive income (loss)	(21,276)		24,001		26,200
Less: Comprehensive income (loss) attributable to non-controlling interests - TFP	—		—		5,278
Less: Comprehensive income (loss) attributable to non-controlling interests	3,948		1,785		13
Comprehensive income (loss) attributable to common stockholders	$	(25,224)	$	22,216	$	20,909

(1) Deconsolidated as part of the sale of Care. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

See accompanying notes to consolidated financial statements.

F-3

TIPTREE INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except shares)

	Number of Shares		Par Value				Additional paid in capital		Accumulated other comprehensive income (loss)		Retained earnings		Shares held by subsidiaries						Total stockholders’ equity to Tiptree Inc.		Non-controlling interests - TFP		Non-controlling interests - Other		Total stockholders' equity
	Common stock	Class B	Common stock		Class B								Common stock	Common stock Amount		Class B Shares	Class B Amount
Balance at December 31, 2017	35,003,004	8,049,029	$	35	$	8	$	295,582	$	966	$	38,079	(5,197,551)	$	(34,585)	(8,049,029)	$	(8)	$	300,077	$	77,494	$	19,203	$	396,774
Amortization of share-based incentive compensation	—	—	—		—		2,465		—		—		—	—		—	—		2,465		—		3,889		6,354
Vesting of share-based incentive compensation	31,527	—	—		—		(907)		—		—		161,574	1,050		—	—		143		—		—		143
Shares purchased under stock purchase plan	(2,177,235)	—	(2)		—		(14,109)		—		—		—	—		—	—		(14,111)		—		—		(14,111)
Reorganization merger (1) (2)	8,049,029	(8,049,029)	8		(8)		82,523		(341)		—		—	—		8,049,029	8		82,190		(82,190)		—		—
Cancellation of treasury shares	(5,035,977)	—	(5)		—		(33,530)		—		—		5,035,977	33,535		—	—		—		—		—		—
Non-controlling interest contributions	—	—	—		—		—		—		—		—	—		—	—		—		—		3,150		3,150
Non-controlling interest distributions	—	—	—		—		—		—		—		—	—		—	—		—		(241)		—		(241)
Net change in non-controlling interest	—	—	—		—		(132)		—		—		—	—		—	—		(132)		—		(14,097)		(14,229)
Dividends declared	—	—	—		—		—		—		(4,781)		—	—		—	—		(4,781)		—		—		(4,781)
Other comprehensive income, net of tax	—	—	—		—		—		(2,683)		—		—	—		—	—		(2,683)		(563)		(437)		(3,683)
Net income (loss)	—	—	—		—		—		—		23,933		—	—		—	—		23,933		5,500		450		29,883
Balance at December 31, 2018	35,870,348	—	$	36	$	—	$	331,892	$	(2,058)	$	57,231	—	$	—	—	$	—	$	387,101	$	—	$	12,158	$	399,259

(1)    Includes the exchange of 424,399 units of TFP for 1,187,468 shares of common stock.

(2)    On April 10, 2018, the Company completed a reorganization merger whereby TFP merged with and into the Company with the Company continuing as the surviving company (Reorganization Merger). After the Reorganization Merger, TFP ceased to exist and the Company owned 100% of Operating Company. See Note (17) Stockholders’ Equity for more information.

See accompanying notes to consolidated financial statements.

F-4

TIPTREE INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except shares)

	Common stock
	Number of shares	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Total Tiptree Inc. stockholders’ equity		Non-controlling interests		Total stockholders' equity
Balance at December 31, 2018	35,870,348	$	36	$	331,892	$	(2,058)	$	57,231	$	387,101	$	12,158	$	399,259
Adoption of accounting standard (3)	—	—		—		(99)		99		—		—		—
Amortization of share-based incentive compensation	—	—		3,145		—		—		3,145		2,917		6,062
Vesting of share-based incentive compensation (4)	164,935	—		187		—		—		187		(2,483)		(2,296)
Shares purchased under stock purchase plan	(1,472,730)	(1)		(9,084)		—		—		(9,085)		—		(9,085)
Non-controlling interest contributions	—	—		—		—		—		—		61		61
Non-controlling interest distributions (5)	—	—		—		—		—		—		(3,585)		(3,585)
Net change in non-controlling interest	—	—		—		—		—		—		2,500		2,500
Dividends declared	—	—		—		—		(5,502)		(5,502)		—		(5,502)
Other comprehensive income (loss), net of tax	—	—		—		3,855		—		3,855		24		3,879
Net income (loss)	—	—		—		—		18,361		18,361		1,761		20,122
Balance at December 31, 2019	34,562,553	$	35	$	326,140	$	1,698	$	70,189	$	398,062	$	13,353	$	411,415
Adoption of accounting standard (3)	—	—		—		42		(42)		—		—		—
Amortization of share-based incentive compensation	—	—		3,441		—		—		3,441		4,130		7,571
Vesting of share-based incentive compensation (4)	504,195	—		100		—		—		100		(2,223)		(2,123)
Shares purchased under stock purchase plan	(2,384,286)	(2)		(13,887)		—		—		(13,889)		—		(13,889)
Non-controlling interest distributions (5)	—	—		(645)		—		—		(645)		(1,389)		(2,034)
Net change in non-controlling interest	—	—		(135)		—		—		(135)		(425)		(560)
Dividends declared	—	—		—		—		(5,566)		(5,566)		—		(5,566)
Other comprehensive income (loss), net of tax	—	—		—		3,934		—		3,934		15		3,949
Net income (loss)	—	—		—		—		(29,158)		(29,158)		3,933		(25,225)
Balance at December 31, 2020	32,682,462	$	33	$	315,014	$	5,674	$	35,423	$	356,144	$	17,394	$	373,538

(3)    Amounts reclassified due to adoption of ASU 2018-02. See Note (2) Summary of Significant Accounting Policies.

(4)    Includes subsidiary RSU exchanges. See Note (19) Stock Based Compensation.

(5)    Amounts reclassified due to adoption of ASU 2016-13. See Note (2) Summary of Significant Accounting Policies.

See accompanying notes to consolidated financial statements.

F-5

TIPTREE INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
Operating Activities:	2020		2019		2018
Net income (loss) attributable to common stockholders	$	(29,158)	$	18,361	$	23,933
Net income (loss) attributable to non-controlling interests - TFP	—		—		5,500
Net income (loss) attributable to non-controlling interests	3,933		1,761		450
Net income (loss)	(25,225)		20,122		29,883
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Net realized and unrealized (gains) losses	(62,410)		(83,868)		(28,782)
Net (gain) loss on sale of businesses	4,428		(7,598)		(56,860)
Non-cash compensation expense	8,117		6,363		6,657
Amortization/accretion of premiums and discounts	2,229		1,161		1,029
Depreciation and amortization expense	17,578		13,569		12,596
Non-cash lease expense	7,374		7,568		—
Deferred provision (benefit) for income taxes	10,733		6,815		4,011
Amortization of deferred financing costs	1,015		714		934
Other	(333)		1,381		671
Changes in operating assets and liabilities:
Mortgage loans originated for sale	(3,064,003)		(2,048,228)		(1,533,365)
Proceeds from the sale of mortgage loans originated for sale	3,152,104		2,043,097		1,590,546
(Increase) decrease in notes and accounts receivable	(48,527)		(33,085)		(35,256)
(Increase) decrease in reinsurance receivables	(116,839)		(119,482)		(67,384)
(Increase) decrease in deferred acquisition costs	(62,937)		3,570		(22,901)
(Increase) decrease in other assets	(22,417)		269		(12,400)
Increase (decrease) in unearned premiums	105,697		155,549		95,998
Increase (decrease) in policy liabilities and unpaid claims	33,968		12,773		19,608
Increase (decrease) in deferred revenue	122,042		16,397		19,009
Increase (decrease) in reinsurance payable	53,716		26,272		27,043
Increase (decrease) in other liabilities and accrued expenses	23,859		383		6,687
Net cash provided by (used in) operating activities	140,169		23,742		57,724
Investing Activities:
Purchases of investments	(1,494,688)		(389,206)		(327,617)
Proceeds from sales and maturities of investments	1,400,229		394,331		190,942
Proceeds from the sale of real estate	2,981		11,857		17,705
Purchases of property, plant and equipment	(6,694)		(8,519)		(3,749)
Proceeds from the sale of businesses	500		18,329		15,709
Proceeds from notes receivable	41,582		36,690		29,234
Issuance of notes receivable	(62,088)		(67,176)		(31,331)
Business and asset acquisitions, net of cash, restricted cash and deposits (1)	(5,313)		(4,633)		—
Net cash provided by (used in) investing activities	(123,491)		(8,327)		(109,107)
Financing Activities:
Dividends paid	(5,566)		(5,502)		(4,781)
Non-controlling interest contributions	—		61		3,150
Non-controlling interest distributions	(2,134)		(3,585)		(241)
Payment of debt issuance costs	(4,571)		(586)		(1,143)
Proceeds from borrowings and mortgage notes payable	3,379,688		2,237,329		1,632,469
Principal paydowns of borrowings and mortgage notes payable	(3,321,779)		(2,181,704)		(1,617,346)
Repurchases of common stock	(13,889)		(9,085)		(14,111)
Net cash provided by (used in) financing activities	31,749		36,928		(2,003)
Net increase (decrease) in cash, cash equivalents and restricted cash	48,427		52,343		(53,386)
Cash, cash equivalents and restricted cash – beginning of period	144,590		96,524		142,237
Cash, cash equivalents and restricted cash – beginning of period - held for sale	7,137		2,860		10,533
Cash, cash equivalents and restricted cash – end of period	200,154		151,727		99,384
Less: Reclassification of cash to assets held for sale	4,879		7,137		2,860
Cash, cash equivalents and restricted cash – end of period	$	195,275	$	144,590	$	96,524
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest expense	$	29,538	$	26,224	$	25,976
Cash (received) paid during the period for income taxes	$	1,066	$	3,301	$	(5,088)
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Right of use asset obtained in exchange for lease liability	$	9,989	$	33,558	$	—
Equity securities acquired as part of a dividend reinvestment plan	$	953	$	—	$	—
Acquired real estate properties through, or in lieu of, foreclosure of the related loan	$	—	$	2,596	$	7,367
Acquisition of non-controlling interest	$	—	$	2,500	$	82,190
Equity securities acquired through the sale of a subsidiary and asset sales	$	—	$	—	$	135,675
Cancellation of treasury shares	$	—	$	—	$	33,535
	As of December 31,
Reconciliation of cash, cash equivalents and restricted cash	2020		2019		2018
Cash and cash equivalents	$	136,920	$	133,117	$	86,003
Restricted cash	58,355		11,473		10,521
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	195,275	$	144,590	$	96,524

(1)    Changes in balance sheet balances due to acquisitions have been netted down in the respective line items. See Note (3) Acquisitions for additional information.

See accompanying notes to consolidated financial statements.

F-6

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(1) Organization

Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into two reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.

(2) Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of Tiptree have been prepared in accordance with GAAP and include the accounts of the Company and its subsidiaries. The consolidated financial statements are presented in U.S. dollars, the main operating currency of the Company.

Non-controlling interests on the consolidated balance sheets represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Tiptree. Accounts and transactions between consolidated entities have been

eliminated.

Reclassifications

As a result of changes in presentation, certain prior year amounts have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. Management makes estimates and assumptions that include, but are not limited to, the determination of the following significant items:

•Fair value of financial assets and liabilities, including, but not limited to, securities, loans and derivatives

•Value of acquired assets and liabilities;

•Carrying value of goodwill and other intangibles, including estimated amortization period and useful lives;

•Vessel valuations, residual value of vessels and the useful lives of vessels;

•Reserves for unpaid losses and loss adjustment expenses, estimated future claims and losses, potential litigation and other claims;

•Deferred acquisition costs and value of business acquired (VOBA);

•The realization of deferred tax assets, and recognition and measurement of uncertain tax positions;

•Revenue recognition including, but not limited to, the timing and amount of insurance premiums, service and administration fees, and loan origination fees; and

•Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements

Although these and other estimates and assumptions are based on the best available estimates, actual results could differ materially from management’s estimates.

Business Combination Accounting

The Company accounts for business combinations by applying the acquisition method of accounting. The acquisition method requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at fair value as of the closing date of the acquisition. The net assets acquired may consist of tangible and intangible assets and the

F-7

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

excess of purchase price over the fair value of identifiable net assets acquired, or goodwill. The determination of estimated useful lives and the allocation of the purchase price to the intangible assets requires significant judgment and affects the amount of future amortization and possible impairment charges. Contingent consideration, if any, is measured at fair value on the date of acquisition. The fair value of any contingent consideration liability is remeasured at each reporting date with any change recorded in other expense in the consolidated statements of operations. Acquisition and transaction costs are expensed as incurred.

In certain instances, the Company may acquire less than 100% ownership of an entity, resulting in the recording of a non-controlling interest. The measurement of assets and liabilities acquired and non-controlling interest is initially established at a preliminary estimate of fair value, which may be adjusted during the measurement period, primarily due to the results of valuation studies applicable to the business combination.

Acquisitions that do not meet the criteria for the acquisition method of accounting are accounted for as acquisitions of assets.

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

The results of operations of a business that has either been disposed of or are classified as held for sale are reported in discontinued operations if the disposal of the business represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The Company carries assets and liabilities held for sale at the lower of carrying value on the date the asset is initially classified as held for sale or fair value less costs to sell. At the time of reclassification to held for sale, the Company ceases the recording of depreciation and amortization on assets transferred.

Accounting policies specific to our dispositions, assets and liabilities held for sale and discontinued operations are described in more detail in (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels, from highest to lowest, are defined as follows:

•Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 – Significant inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. The types of financial assets and liabilities carried at Level 2 are valued based on one or more of the following:

a) Quoted prices for similar assets or liabilities in active markets;

b) Quoted prices for identical or similar assets or liabilities in nonactive markets;

c) Pricing models whose inputs are observable for substantially the full term of the asset or liability;

d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

•Level 3 – Significant inputs that are unobservable inputs for the asset or liability, including the Company’s own data and assumptions that are used in pricing the asset or liability.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy. In certain cases, the inputs used to measure fair value may fall into

F-8

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Tiptree’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the investment. From time to time, Tiptree’s assets and liabilities will transfer between one level to another level. It is Tiptree’s policy to recognize transfers between different levels at the end of each reporting period.

Tiptree utilizes both observable and unobservable inputs in its valuation methodologies. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. For broker quotes, quotes are obtained from sources recognized to be market participants. Unobservable inputs may include expected cash flow streams, default rates, supply and demand considerations and market volatility.

Fair Value Option

In addition to the financial instruments that the Company is required to measure at fair value, the Company has elected to make an irrevocable election to utilize fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in Net realized and unrealized gains (losses) within the consolidated statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

Derivative Financial Instruments and Hedging

From time to time, derivative instruments are used in the overall strategy to manage exposure to market risks primarily related to fluctuations in interest rates. As a matter of policy, derivatives are not used for speculative purposes. Derivative instruments are measured at fair value on a recurring basis and are included in other investments or other liabilities and accrued expenses on the consolidated balance sheets.

Derivative Instruments Designated as Cash Flow Hedging Instruments

The Company uses cash flow hedges to reduce the exposure to variability of cash flows from floating rate borrowings. If a derivative instrument meets certain cash flow hedge accounting criteria, it is recorded on the consolidated balance sheet at its fair value, as either an asset or a liability, with offsetting changes in fair value recognized in AOCI. The effective portion of the changes in fair value of derivatives are reported in AOCI and amounts previously recorded in AOCI are recognized in earnings in the period in which the hedged transaction affects earnings. Any ineffective portions of the change in fair value of the derivative are recognized in current earnings.

Stock Based Compensation

The Company accounts for equity‑based compensation issued to employees, directors, and affiliates of the Company using the current fair value based methodology.

The Company initially measures the cost of restricted stock unit (RSUs) and restricted stock awards at fair value on the date of grant and subsequently recognizes the cost of such awards over the vesting period using the straight-line method. The compensation costs are charged to expense over the vesting period with a corresponding credit to additional paid-in capital.

Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. Compensation cost is recognized over the required service period, generally defined as the vesting period.

Grants of subsidiary RSUs exchangeable into common stock of the Company are accounted for as equity based upon their expected settlement method. The Company recognizes the cost of such awards over the vesting period using the straight-line method and uses the graded-vesting method to recognize compensation expense for the performance vesting RSUs. Compensation expense will be recognized to the extent that it is probable that the performance condition will be achieved. The Company reassesses the probability of satisfaction of the performance condition for the performance vesting RSUs for each reporting period.

F-9

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Income Taxes

Deferred tax assets and liabilities are determined using the asset and liability method. Under this method, deferred tax assets and liabilities are established for future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to reverse. A valuation allowance is established when necessary to reduce a deferred tax asset to the amount expected to be realized. Several of the Company’s subsidiaries file state tax returns on a standalone basis. Two of our subsidiaries file federal and state tax returns on a stand alone basis, one of which is held for sale. These U.S. federal and state income tax returns, when filed, will be subject to examination by the Internal Revenue Service and state departments of revenue. See Note (20) Income Taxes.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority. The Company’s provision or benefit for income taxes is adjusted accordingly for tax positions not deemed to meet the more likely than not threshold. The Company’s policy is to account for interest as a component of interest expense and penalties as a component of other expenses.

Earnings Per Share

The Company presents both basic and diluted earnings per Common Share in its consolidated financial statements and footnotes thereto. Basic earnings per Common Share (Basic EPS) excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding, which includes vested RSUs, for the period. Diluted earnings per Common Share (Diluted EPS) reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares where such exercise or conversion would result in a lower earnings per share amount.

The Company calculates EPS using the two-class method, which is an earnings allocation formula that determines EPS for common shares and participating securities. Unvested RSUs contain non-forfeitable rights to distributions or distribution equivalents (whether paid or unpaid) and are participating securities that are included in the computation of EPS using the two-class method. Accordingly, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive distributions. The participating securities do not have a contractual obligation to absorb losses and are only allocated in periods where there is income from continuing operations.

See Note (22) Earnings Per Share, for EPS computations.

Investments

The Company records all investment transactions on a trade‑date basis. Realized gains (losses) are determined using the specific-identification method. The Company classifies its investments in debt securities as available for sale or held-to-maturity based on the Company’s intent and ability to hold the debt security to maturity. The Company did not have any held-to-maturity securities at December 31, 2020 and 2019.

Available for Sale Securities, at Fair Value (AFS)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time. AFS securities include those debt securities that management may sell as part of its asset/liability management strategy or in response to changes in interest rates, resultant prepayment risk or other factors. AFS securities are held at fair value on the consolidated balance sheet with changes in fair value including non-credit related losses, net of related tax effects, recorded in the AOCI component of stockholders’ equity in the period of change. Upon the disposition of an AFS security, the Company reclassifies the gain or loss on the security from AOCI to net realized and unrealized gains (losses) on the consolidated statements of operations.

For AFS securities, the Company reviews its securities portfolio for impairment and determines if impairment is related to credit loss or non-credit loss. In making the assessment of whether a loss is from credit or other factors, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating

F-10

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

agency, and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost basis, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

Subsequent activity related to the credit loss component (e.g. write-offs, recoveries) is recognized as part of the allowance for credit losses on AFS securities. For AFS securities which have an expectation of zero risk nonpayment of the amortized cost basis (e.g. U.S. Treasury securities or agency securities), the expected credit loss is zero.

Loans, at Fair Value

Loans, at fair value is substantially comprised of (i) corporate loans, (ii) non-performing residential loans (NPLs) and (iii) loans originated by the Company’s mortgage finance business. Changes in their fair value are reported within net realized and unrealized gains (losses) in our consolidated statements of operations.

Corporate Loans

Corporate loans are comprised of a diversified portfolio of middle market leveraged loans which are carried at fair value. In general, the fair value of leveraged loans is obtained from an independent pricing service which provides coverage of secondary market participants. The values represent a composite of mark-to-market bid/offer prices. In certain circumstances, the Company will make its own determination of fair value of leveraged loans based on internal models and other unobservable inputs.

Non-Performing Residential Loans (NPLs)

The Company has purchased portfolios of NPLs which consist of residential mortgage loans. Such loans are carried at fair value, which is measured on an individual loan basis. We seek to either (i) convert such loans into real estate owned property (REO) through foreclosure or another resolution process that can then be sold, or (ii) modify and resell them at higher prices if circumstances warrant.

The Company has elected the fair value option for NPLs as we have concluded that fair value timely reflects the results of our investment performance. As substantially all of our loans were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. We primarily utilize the local broker price opinion (BPO) but also consider any other comparable home sales or other market data, as considered necessary, in estimating a property’s fair value. For further discussion on the observable and unobservable inputs to the model and determination of fair value of NPLs, see Note (12) Fair Value of Financial Instruments.

Certain NPLs are loans that are delinquent on obligated payments of principal and interest. Certain other NPLs are making some payments, generally as a result of a modification or a workout plan.

The fair value of NPLs are determined using a discounted cash flow model. As such, both the changes in fair value and the net periodic cash flows related to NPLs are recorded in net realized and unrealized gains (losses) in the consolidated statements of operations.

The Company does not hold any NPLs as of December 31, 2020.

Mortgage Loans Held for Sale

Mortgage loans held for sale represent loans originated and held until sold to secondary market investors. Such loans are typically warehoused for a period after origination or purchase before sale into the secondary market. Loans are sold either servicing released, or in select instances, servicing retained into the secondary loan market. The Company has elected to measure all mortgage loans held for sale at fair value. These loans are considered sold when the Company surrenders control to the purchaser. The gains or losses on sales of such loans, net of any accrual for standard representations and warranties, are reported in operating results as a component of net realized and unrealized gains (losses) in the consolidated statements of operations in the period when the sale occurs.

F-11

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Equity Securities

Equity securities are investments consisting of equity securities that are purchased principally for the purpose of selling them in the near term. Changes in fair value are recorded in net realized and unrealized gains (losses) on investments on the consolidated statements of operations in the period of change.

Other Investments

Foreclosed Residential Real Estate Property (REO)

NPLs are reclassified to REO once the Company has obtained legal title to the property upon completion of a foreclosure sale or the borrower has conveyed all interest in the property to satisfy that loan through completion of a deed in lieu of foreclosure. Because the Company elected the fair value option for NPLs, upon recognition as REO, the property fair value is estimated using market values and, if the property meets held-for-sale criteria, it is initially recorded at fair value less costs to sell as its new cost basis. Subsequently, the property is carried at (i) the fair value of the asset minus the estimated costs to sell the asset or (ii) the initial REO value, whichever is lower. Adjustments to the carrying value of REOs are recorded in net realized and unrealized gains (losses).

Vessels, net

Investments in vessels, net are carried at cost (inclusive of capitalized acquisition costs, where applicable) less accumulated depreciation. Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are expensed as incurred. Vessels acquired are recognized at their fair value as of the date of the acquisition.

Depreciation is computed using the straight-line method over the vessel’s estimated remaining useful life, after considering the estimated salvage value. A vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

Vessels are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable. Potential impairment indicators are primarily based upon a comparison of the market value of a vessel to its carrying value. Market values are based upon quoted prices from industry-recognized sources. The Company evaluates market quotes of vessels for reasonableness by comparison to available market transactions or internal valuation models. An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

The Company’s estimate of future revenue is based upon time charter equivalent (TCE) rates using current market rates. The Company uses average historical rates for periods beyond those for which rates are available. Estimated cash flows are net of brokerage and address commissions, vessel operating expenses, and estimated costs of drydocking and include an inflation factor, as appropriate. The projected undiscounted future cash flows are comprised of the net of these inflows and outflows, plus an estimated salvage value.

As of December 31, 2020, the undiscounted future cash flows were higher than the carrying amount of each of the vessels in the Company’s fleet and, as such, no loss on impairment was recognized.

Cash and Cash Equivalents

The Company considers all highly liquid investments of sufficient credit quality purchased with an initial maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of U.S. denominated cash on hand, cash held in banks and investments in money market funds.

Restricted Cash

The Company’s restricted cash primarily consists of cash for unremitted premiums received from agents and insurers, fiduciary cash for reinsurers and pledged assets for the protection of policy holders in various state jurisdictions. Restricted cash also includes cash posted as collateral under credit facilities to maintain borrowing base sufficiency, borrower escrow

F-12

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

funds for taxes, insurance, rate-lock fees and servicing related escrow funds and collateral on warehouse borrowings.

Notes and Accounts Receivable, Net

Notes Receivable, Net

The Company’s notes receivable, net includes receivables related to the insurance business for its premium financing programs.

The Company accrues interest income on its notes receivable based on the contractual terms of the respective note. The Company monitors all notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected. In addition to allowances for bad debt for specific notes receivable, a general provision for bad debt is estimated for the Company’s notes receivable based on history. Account balances are generally charged against the allowance when the Company believes it is probable that the note receivable will not be recovered and has exhausted its contractual and legal remedies.

Generally, receivables overdue more than 120 days are written off when the Company determines it has exhausted reasonable collection efforts and remedies, see Note (7) Notes and Accounts Receivable, net.

Accounts and Premiums Receivable, Net

Accounts and premiums receivable, net are primarily trade receivables from the insurance business that are carried at their approximate fair value. Accounts and premiums receivable from the Company’s insurance business consist primarily of advance commissions and agents' balances in course of collection and billed but not collected policy premiums, presented net of the allowance for doubtful accounts. For policy premiums that have been billed but not collected, the Company records a receivable on its consolidated balance sheets for the full amount of the premium billed, with a corresponding liability, net of its commission, to insurance carriers. The Company earns interest on the premium cash during the period of time between receipt of the funds and payment of these funds to insurance carriers. The Company maintains an allowance for doubtful accounts based on an estimate of uncollectible accounts.

Retrospective commissions receivable, Trust receivables and Other receivables

Retrospective commissions receivable, trust receivables and other receivables are primarily trade receivables from the insurance business that are carried net of allowance at their approximate fair value.

Reinsurance Receivables

Through the insurance business, the Company has various reinsurance agreements in place whereby the amount of risk in excess of its retention goals is reinsured by unrelated domestic and foreign insurance companies. The Company is required to pay losses even if a reinsurer fails to meet its obligations under the applicable reinsurance agreement. Reinsurance receivables include amounts related to paid benefits, unpaid benefits and prepaid reinsurance premiums. Reinsurance receivables are based upon estimates and are reported on the consolidated balance sheets separately as assets, as reinsurance does not relieve the Company of its legal liability to policyholders. Management continually monitors the financial condition and agency ratings of the Company’s reinsurers and believes that the reinsurance receivables accrued are collectible. Balances recoverable from reinsurers and amounts ceded to reinsurers relating to the unexpired portion of reinsured policies are presented as assets. Experience refunds from reinsurers are recognized based on the underwriting experience of the underlying contracts.

Deferred Acquisition Costs

The Company defers certain costs of acquiring new and renewal insurance policies and other products as follows within the Company’s insurance business. Amortization of deferred acquisition costs was $265,781, $287,834 and $246,330 for the years ended December 31, 2020, 2019 and 2018, respectively.

Insurance policy related deferred acquisition costs are limited to direct costs that resulted from successful contract transactions and would not have been incurred by the Company’s insurance company subsidiaries had the transactions not

F-13

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

occurred. These capitalized costs are amortized as the related premium is earned.

Other deferred acquisition costs are limited to prepaid direct costs, typically commissions and contract transaction fees, that resulted from successful contract transactions and would not have been incurred by the Company had the transactions not occurred. These capitalized costs are amortized as the related service and administrative fees are earned.

The Company evaluates whether all deferred acquisition costs are recoverable at year-end, and considers investment income in the recoverability analysis for insurance policy related deferred acquisition costs. As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2020, 2019 and 2018.

Goodwill and Intangible Assets, net

The initial measurement of goodwill and intangibles requires judgment concerning estimates of the fair value of the acquired assets and liabilities. Goodwill and indefinite-lived intangible assets are not amortized but subject to tests for impairment annually or if events or circumstances indicate it is more likely than not they may be impaired. Finite-lived intangible assets are amortized over their estimated useful lives principally using a pattern of economic benefit for customer relationships and a straight-line method for other intangible assets. Finite-lived intangible assets are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The Company carries intangible assets, which represent customer and agent relationships, trade names, insurance licenses (certificates of authority granted by individual state departments of insurance), the value of in-force insurance policies acquired, software acquired or internally developed and fishing licenses. Management has deemed the insurance licenses to have an indefinite useful life. Costs incurred to renew or maintain insurance licenses are recorded as operating costs in the period in which they arise. See Note (9) Goodwill and Intangible Assets, net.

Other Assets

Other assets primarily consist of right of use assets, prepaid expenses, and furniture, fixtures and equipment, net. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Debt, net

Debt is carried on the consolidated balance sheets at an amount equal to the unpaid principal balance, net of any remaining unamortized discount or premium and direct and any incremental costs attributable to issuance. Discounts, premiums and direct and incremental costs are amortized as a component of interest expense in the consolidated statements of operations over the life of the debt. See Note (11) Debt, net.

Unearned Premiums

Premiums written are earned over the life of the respective policy using the Rule of 78's, pro rata, or other actuarial methods as appropriate for the type of business. Unearned premiums represent the portion of premiums that will be earned in the future. A premium deficiency reserve is recorded if anticipated losses, loss adjustment expenses, deferred acquisition costs and policy maintenance costs exceed the recorded unearned premium reserve and anticipated investment income. As of December 31, 2020 and 2019, no deficiency reserves were recorded.

Policy Liabilities and Unpaid Claims

Policyholder account balances relate to investment-type individual annuity contracts in the accumulation phase. Policyholder account balances are carried at accumulated account values, which consist of deposits received, plus interest credited, less withdrawals and assessments. Minimum guaranteed interest credited to these contracts ranges from 3.0% to 4.0%.

The Company’s claims are generally reported and settled quickly, resulting in consistent historical loss development patterns. The Company’s actuaries apply a variety of generally accepted actuarial methods to the historical loss development patterns, to derive cumulative development factors. These cumulative development factors are applied to reported losses for each accident quarter to compute ultimate losses. The indicated required reserve is the difference between the ultimate losses and the reported losses. The actuarial methods used include but are not limited to the chain ladder method, the Bornhuetter-Ferguson method, and the expected loss ratio method. The actuarial analyses are performed on a basis gross of ceded

F-14

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

reinsurance, and the resulting factors and estimates are then used in calculating the net loss reserves which take into account the impact of reinsurance. The Company has not made any changes to its methodologies for determining claim reserves in the periods presented.

Credit life and accidental death and dismemberment (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR). Credit disability unpaid claims reserves also include continuing claim reserves for open disability claims. For all other product lines, unpaid claims reserves include case reserves for reported claims and bulk reserves for IBNR claims. The Company uses a number of algorithms in establishing its unpaid claims reserves. These algorithms are used to calculate unpaid claims as a function of paid losses, earned premium, reported incurred losses, target loss ratios, and in-force amounts or a combination of these factors.

Anticipated future loss development patterns form a key assumption underlying these analyses. Generally, unpaid claims reserves, and associated incurred losses, are impacted by loss frequency, which is the measure of the number of claims per unit of insured exposure, and loss severity, which is based on the average size of claims. Factors affecting loss frequency and loss severity may include changes in claims reporting patterns, claims settlement patterns, judicial decisions, legislation, economic conditions, morbidity patterns and the attitudes of claimants towards settlements.

The unpaid claims reserves represent the Company’s best estimates at a given time, based on the projections and analyses discussed above. Actual claim costs are dependent upon a number of complex factors such as changes in doctrines of legal liabilities and damage awards. These factors are not directly quantifiable, particularly on a prospective basis. The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related liabilities based on our actual experience. The Company has not made any changes to its methodologies for determining unpaid claims reserves in the periods presented.

In accordance with applicable statutory insurance company regulations, the Company’s recorded unpaid claims reserves are evaluated by appointed independent third-party actuaries, who perform this function in compliance with the Standards of Practice and Codes of Conduct of the American Academy of Actuaries. The independent actuaries perform their actuarial analyses annually and prepare opinions, statements, and reports documenting their determinations. For December 31, 2020 and 2019, our appointed independent third-party actuaries found the Company’s reserves to be adequate.

Deferred Revenue

Deferred revenues represent the portion of income that will be earned in the future attributable to motor club memberships, mobile device protection plans, and other non-insurance service contracts that are earned over the respective contract periods using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. A deficiency reserve would be recorded if anticipated contract benefits, deferred acquisition costs and contract service costs exceed the recorded deferred revenues and anticipated investment income. As of December 31, 2020 and 2019 no deficiency reserves were recorded.

Other Liabilities and Accrued Expenses

Other liabilities and accrued expenses primarily consist of lease liabilities, accounts payable and accrued expenses, deferred tax liabilities, net, securities sold, not yet purchased, commissions payable and accrued interest payable. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Revenue Recognition

The Company earns revenues from a variety of sources:

Earned Premiums, Net

Net earned premium is from direct and assumed earned premium consisting of revenue generated from the direct sale of insurance policies by the Company’s distributors and premiums written for insurance policies by another carrier and assumed by the Company. Whether direct or assumed, the premium is earned over the life of the respective policy using methods appropriate to the pattern of losses for the type of business. Methods used include the Rule of 78's, pro rata, and other actuarial methods. Management selects the appropriate method based on available information, and periodically reviews the

F-15

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

selections as additional information becomes available. Direct and assumed premiums are offset by premiums ceded to the Company’s reinsurers, including producer owned reinsurance companies (PORCs), earned in the same manner. The amount ceded is proportional to the amount of risk assumed by the reinsurer.

Service and Administrative Fees

The Company earns service and administrative fees from a variety of activities. Such fees are typically positively correlated with transaction volume and are recognized as revenue as they become both realized and earned.

Service Fees. Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Collateral tracking fee income is recognized when the service is performed and billed. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable. During the years ended December 31, 2020, 2019 and 2018, respectively, the Company did not incur a loss with respect to a specific significant service fee contract.

Administrative Fees. Administrative fee revenue includes the administration of premium associated with our producers and their PORCs. In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Ceding Commissions

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part, underwriting performance and investment returns experienced by the assuming companies. As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy. The adjustment is calculated by adding the earned premium and investment income from the assets held in trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

Vessel Related Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date. Vessel related revenue is recorded in other investment income as a part of other revenue.

Policy and Contract Benefits

Member Benefit Claims

Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products. Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company. Claims are recognized as expense when incurred.

Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses represent losses and related claim adjudication and processing costs on insurance

F-16

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

contract claims, net of amounts ceded. Net losses include actual claims paid and the change in unpaid claim reserves.

Commissions Payable and Expense

Commissions are paid to distributors and retailers selling credit insurance policies, motor club memberships, mobile device protection, and warranty service contracts, and are generally deferred and expensed in proportion to the earning of related revenue. Credit insurance commission rates, in many instances, are set by state regulators and are also impacted by market conditions. In certain instances, credit insurance commissions are subject to retrospective adjustment based on the profitability of the related policies. Under these retrospective commission arrangements, the producer of the credit insurance policies receives a retrospective commission if the premium generated by that producer in the accounting period exceeds the costs associated with those policies, which includes the Company’s administrative fees, claims, reserves, and premium taxes. The Company analyzes the retrospective commission calculation periodically for each producer and, based on the analysis associated with each such producer, the Company records a liability for any positive net retrospective commission earned and due to the producer or, conversely, records a receivable, net of allowance, for amounts due from such producer for instances where the net result of the retrospective commission calculation is negative. Commissions payable are included in other liabilities and accrued expenses.

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

Standard	Description	Adoption Date	Impact on Financial Statements
2016-13 Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	Topic 326 amended guidance on reporting credit losses for assets held on an amortized cost basis and AFS debt securities. For assets held on an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in previous GAAP and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For AFS debt securities, credit losses should be measured in a manner similar to previous GAAP; however, Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. Changes in the allowance account are recorded in the period of change as a credit loss expense or reversal of credit loss expense. The measurement of credit losses is not impacted, except that credit losses recognized are limited to the amount by which fair value is below amortized cost.	January 1, 2020	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.
2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this update require additions, modifications and elimination to the fair value measurement disclosure. The objective of these disclosure requirements is to provide users of financial statements with information about assets and liabilities measured at fair value:     (a) The valuation techniques and inputs that a reporting entity uses to arrive at its measures of fair value, including judgments and assumptions that the entity makes, (b) The uncertainty in the fair value measurements as of the reporting date, and (c) How changes in fair value measurements affect an entity’s performance and cash flows.	January 1, 2020	The retrospective adoption of this standard resulted in additional disclosures related to inputs of Level 3 investments. This adoption resulted in no material impact to the Company’s consolidated financial statements. See Note (12) Fair Value of Financial Instruments.
2018-02 Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The amendments in this update allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this update affect any entity that is required to apply the provisions of Topic 220 and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.	January 1, 2019	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

F-17

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Standard	Description	Adoption Date	Impact on Financial Statements
2016-02 Leases (Topic 842)	This new standard introduced a new lessee model that brings substantially all leases onto the balance sheet. In addition, while the new guidance retains most of the principles of the previous existing lessor model in GAAP, it aligns many of those principles with ASC 606, Revenue From Contracts With Customers.	January 1, 2019	The adoption of this guidance (practical expedient) resulted in the Company recognizing a right of use asset of $32,052 as part of other assets and a lease liability of $33,558 as part of other liabilities and accrued expenses in the consolidated balance sheets, as well as de-recognizing the liability for deferred rent that was required under the previous guidance for its operating lease agreements at January 1, 2019.
2014-09 Revenue from Contracts with Customers (Topic 606)	This ASU outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes previous revenue recognition guidance, including industry-specific guidance.	January 1, 2018	The Company has chosen the modified-retrospective method of adopting Topic 606, and has assessed these contracts and concluded that changes in accounting and revenue recognition upon adoption of Topic 606 were not material to the Company’s financial position as of January 1, 2018, and did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements, Not Yet Adopted

Standard	Description	Adoption Date	Impact on Financial Statements
2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods.	For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period.	The Company is currently evaluating the effect on its consolidated financial statements.
2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this update provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met.	The standard is effective for all entities as of March 12, 2020, through December 31, 2022. The Company is evaluating their option to adopt the guidance when it is applicable.	The Company is currently evaluating the effect on its consolidated financial statements.

(3) Acquisitions

Acquisition of Sky Auto

On December 31, 2020, a subsidiary in our insurance business acquired all of the equity interests in Sky Auto for total net cash consideration of approximately $25,200. Sky Auto markets vehicle service contracts to consumers within the United States.

Identifiable assets acquired were primarily made up of goodwill and intangible assets. Management’s preliminary allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of approximately

F-18

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

$20,000 and $5,340. It is expected that the tax basis in goodwill and intangible assets will be similar to the GAAP values provided above. See Note (9) Goodwill and Intangible Assets, net.

Acquisition of Smart AutoCare

On January 3, 2020, a subsidiary of the Company acquired (the Acquisition) all of the equity interests of Accelerated Service Enterprise LLC., SAC Holdings Inc., Dealer Motor Services, Inc., Independent Dealer Group, Inc., Ownershield, Inc., Freedom Insurance Company, Ltd. (Freedom), SAC Admin, Inc., SAC Insurance Company, Inc., Smart AutoCare, Inc. and Smart AutoCare Administration Solutions, Inc. (together Smart AutoCare), pursuant to the Equity Interest Purchase Agreement (the Purchase Agreement) between Fortegra Warranty Holdings, LLC. (Buyer) and Peter Masi (Seller), dated as of December 16, 2019. Concurrent with the Acquisition, Freedom terminated reinsurance agreements with affiliates of Seller (the Commutation Transaction).

Tiptree paid Seller $111,804, net of working capital true-ups, in cash at closing, $8,250 of which will be held in an escrow account for 18 months to satisfy indemnity claims. Simultaneously, pursuant to the Commutation Transaction, affiliates of Seller paid Freedom $102,000 in cash. The Purchase Agreement also provides for an earn out of up to $50,000 in cash based on Smart AutoCare achieving specified performance metrics measured on the 3-year and 5-year anniversary of closing (Reserve Based Earn-Out Amount) and an additional earn out of up to $30,000 payable in cash or Tiptree common stock based on Smart AutoCare achieving other certain specified performance metrics measured on the 4-year and 5-year anniversary of closing (Profits Based Earn-Out Amount). In addition, the purchase price will be subject to a true-up following the 5-year anniversary of the closing (Underwriting Profitability True-Up) based on the adequacy of certain legacy reserves, offset by certain earnings on new business. Fortegra Warranty may hold back all or a portion of any Reserve Based Earn-Out Amounts until final determination of the legacy reserves used to calculate the Underwriting Profitability True-Up if in Tiptree’s reasonable opinion such amount may be needed to offset a deficiency in such legacy reserves. In addition, if the deficiency in the legacy reserves used to calculate the Underwriting Profitability True-Up is greater than the aggregate amount owing to Seller for the Reserve-Based Earn-Out Amount and Profits-Based Earn-Out Amount, Seller shall pay Tiptree an amount equal to the lesser of such difference and $10,000.

Smart AutoCare’s results are included in the Company’s Insurance segment. The financial results of Smart AutoCare have been included in the Company’s results as of the acquisition date. For the period from the Acquisition until December 31, 2020, Smart AutoCare total revenue was $70,022 and the loss before taxes was $226.

The fair value of assets acquired and liabilities assumed represent the allocation as our evaluation of facts and circumstances available as of the acquisition date. The allocation of the purchase price to the intangible assets is based on fair value estimates and have been reviewed by management. The allocation of the purchase price has been finalized and all measurement period adjustments have been recorded.

Management’s allocation of the purchase price to the net assets acquired resulted in the recording of finite-lived intangible assets valued at $93,700, with an estimated amortization period of 5 to 13.5 years. It is expected that the tax basis in intangible assets will be similar to the GAAP values provided above. The residual amount of the purchase price after the allocation to net assets acquired and identifiable intangibles of $60,346 has been allocated to goodwill. This goodwill is included in the Insurance segment. It is expected that $21,127 of this goodwill will be tax deductible over a 15 year period.

F-19

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following table presents the determination of the acquisition date fair value amounts for the identifiable assets acquired, liabilities assumed, and goodwill recorded in connection with the Acquisition, in accordance with the acquisition method of accounting:

	As of January 3, 2020
Assets:
Investments:
Available for sale securities, at fair value	$	110
Total investments	110
Cash and cash equivalents	120,934
Restricted cash	764
Notes and accounts receivable, net	6,214
Reinsurance receivables	71,337
Intangible assets, net	93,700
Other assets	34,053
Total assets	$	327,112
Liabilities:
Policy liabilities and unpaid claims	$	55,151
Deferred revenue	182,568
Reinsurance payable	27,075
Other liabilities and accrued expenses	10,860
Total liabilities	275,654
Net assets acquired	51,458
Goodwill	60,346
	$	111,804
Acquisition costs	$	3,539

Supplemental pro forma results of operations have not been presented for the Acquisition as they are not material in relation to the Company’s reported results.

The following table shows the values recorded by the Company, as of the acquisition date, for finite-lived intangible assets and the range of their estimated amortization period:

Intangible Assets	Weighted Average Amortization Period (in Years)	Value as of acquisition date
Customer relationships	7.2	$	86,000
Software licensing	5.0	600
Trade names	13.5	7,100
Total acquired finite-lived intangible assets	7.7	$	93,700

On July 1, 2019, a subsidiary in our insurance business acquired a majority interest in Ingenasys, Ltd., the parent holding company of Defend Insurance Group (Defend), for total net cash consideration of approximately $4,600. Defend is an automotive finance and insurance provider and insurance administrator operating in the Czech Republic, Poland, Hungary, Slovakia, and the UK. Identifiable assets acquired were primarily made up of goodwill and intangible assets. See Note (9) Goodwill and Intangible Assets, net.

F-20

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Dispositions

On April 26, 2019, the Company completed the sale of the management contracts and related assets for the CLOs managed by Telos Asset Management, LLC (Telos). The pre-tax gain on sale for the year ended December 31, 2019 was $7,598, which is included in other revenue. See (16) Other Revenue and Other Expenses. The sale did not meet the requirements to be classified as a discontinued operation.

The sale agreement also contains a provision which provides for contingent consideration if the Telos business achieves specific performance metrics. This contingent consideration represents a gain contingency, and the Company will not recognize any additional gain unless such consideration is realized.

On February 1, 2018, the Company completed the sale of Care, as well as two senior living properties held in our insurance business, to Invesque Inc. (Invesque). The pre-tax comprehensive income on the sale was approximately $54,860, which consists of $56,860 gain on sale of a subsidiary, $1,845 of realized gain on the sale of the insurance properties, offset by the reclassification of an interest rate swap from AOCI of $3,845. The gain on sale of a subsidiary includes $10,676 of earnout consideration recognized in December 2018 as a result of a portfolio disposition by Invesque.

Total consideration received for the sale of Care was $150,741, including approximately 16.6 million shares of Invesque, resulting in an ownership of approximately 34% of the acquiring company at the time of sale. The Company has elected to apply the fair value option to the investment in Invesque. As such, these shares are held at fair value within equity securities.

When the Company entered into a purchase agreement on November 16, 2017 to sell Care, the Company concluded that the sale met the requirements to be classified as a discontinued operation. As a result, the Company reclassified the income and expenses attributable to Care to net income (loss) from discontinued operations through the completion of the sale.

Assets and Liabilities Held for Sale

The Company has entered into a definitive agreement to sell Luxury, and it is classified as held for sale at December 31, 2020 and December 31, 2019. The agreement did not meet the requirements to be classified as a discontinued operation. The following table presents detail of Luxury’s assets and liabilities held for sale in the consolidated balance sheets for the following periods:

	As of
	December 31, 2020		December 31, 2019
Assets:
Investments:
Loans, at fair value	$	164,802	$	98,272
Other investments	4,345		1,019
Total investments	169,147		99,291
Cash and cash equivalents	4,870		7,137
Restricted cash	9		—
Notes and accounts receivable, net	1,760		238
Other assets	5,919		1,169
Assets held for sale	$	181,705	$	107,835
Liabilities:
Debt, net	$	162,072	$	97,822
Other liabilities and accrued expenses (1)	13,040		4,608
Liabilities held for sale	$	175,112	$	102,430

(1)    Includes deferred tax liabilities of $939 as of December 31, 2020.

During the year ended December 31, 2020, the Company recorded an impairment of $4,428 related to assets and liabilities held for sale. See Note (16) Other Revenue and Other Expenses. No impairment related to assets and liabilities held for sale was recorded for the years ended December 31, 2019 or 2018.

F-21

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Luxury has a total borrowing capacity at December 31, 2020 of $214,000. As of December 31, 2020 and 2019, a total of $162,072 and $97,822, respectively, was outstanding under such financing agreements.

Discontinued Operations

The following table presents detail of Care’s revenues and expenses of discontinued operations in the consolidated statements of operations for the following periods:

	Year Ended December 31,
	2020		2019		2018
Revenues:
Rental and related revenue	$	—	$	—	$	6,476
Other revenue	—		—		149
Total revenues	—		—		6,625
Expenses:
Employee compensation and benefits	—		—		2,788
Interest expense	—		—		1,252
Other expenses	—		—		1,961
Total expenses	—		—		6,001
Net income (loss) before taxes from discontinued operations	—		—		624
Gain on sale of discontinued operations	—		—		56,860
Less: provision (benefit) for income taxes	—		—		13,714
Net income (loss) from discontinued operations	$	—	$	—	$	43,770

The following table presents a summary of cash flows related to discontinued operations included in the consolidated statements of cash flows for the following periods:

	Year Ended December 31,
	2020		2019		2018
Net cash provided by (used in):
Operating activities	$	—	$	—	$	(2,095)
Investing activities	—		—		(592)
Financing activities	—		—		(123)
Net cash flows provided by discontinued operations	$	—	$	—	$	(2,810)

Significant Accounting Policies Related to Dispositions and Discontinued Operations

Except as noted below, Care and our CLO management business adhered to the Significant Accounting Policies as described in Note (2) Summary of Significant Accounting Policies.

Investments

Revenue Recognition

Rental and Related Revenue

Rental revenue from residents in properties owned by Care but managed by a management company pursuant to a management agreement (Managed Properties) were recognized monthly as services were provided, as lease periods for residents were short-term in nature. The Company recognized rental revenue from triple net leases on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis was more representative of the time pattern in which the use benefit was derived from the leased property. Renewal options in leases with rental terms that were higher than those in the primary term were excluded from the calculation of straight-line rent if the renewals were not reasonably assured. The Company commenced rental revenue recognition when the tenant took control of the leased space. The Company recognized lease termination payments as a component of rental revenue in the period received, provided that there were no further obligations under the lease. Revenue related to rental revenue was primarily attributable to services provided to the occupants of our senior living properties.

F-22

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Management Fee Income

The Company earned management and incentive fees from the CLOs it managed. These management fees were paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Management fees typically consisted of fees based on the amount of assets held in the CLOs. Management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed. Management fee income is recorded in other revenue.

(5) Segment Data

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Tiptree’s principal operating subsidiary, The Fortegra Group, LLC (Fortegra), along with its subsidiaries, is a leading provider of specialty insurance underwriting, warranty and service contract products and related service solutions. Based on the ASC 280 quantitative analysis performed as of December 31, 2020, our reportable segments are Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.

Our reportable segments’ income or loss is reported before income taxes and non-controlling interests. Segment results incorporate the revenues and expenses of these subsidiaries since they commenced operations or were acquired. For the year ended December 31, 2020, Mortgage has been broken out of Tiptree Capital as a reportable segment since it meets the quantitative threshold for disclosure. Prior year segments have been conformed to the current year presentation. Intercompany transactions are eliminated.

Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment are as follows:

Insurance operations are conducted through Fortegra, which includes Fortegra Financial Corporation and Fortegra Warranty. Fortegra underwrites and administers specialty insurance programs and products, and is a leading provider of credit and asset protection products and administration services. Fortegra’s programs are provided across a diverse range of products and services including credit protection insurance, warranty and service contract products, premium finance, and niche personal and commercial lines of insurance. On January 3, 2020, Fortegra Warranty acquired Smart AutoCare, a vehicle warranty solutions provider in the United States. On December 31, 2020, Fortegra acquired Sky Auto, a vehicle service contract marketer within the United States. See Note (3) Acquisitions.

Tiptree Capital:

Mortgage operations are conducted through Reliance. The Company’s mortgage origination business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and GNMA.

Other includes our asset management, mortgage operations of Luxury, shipping operations, and other investments (including our Invesque shares).

F-23

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

	Year Ended December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	691,061	$	112,165	$	7,075	$	810,301
Total expenses	(664,113)		(81,063)		(68,317)		(813,493)
Corporate expenses	—		—		—		(35,660)
Income (loss) before taxes	$	26,948	$	31,102	$	(61,242)	$	(38,852)
Less: provision (benefit) for income taxes							(13,627)
Net income (loss)							$	(25,225)
Less: net income (loss) attributable to non-controlling interests							3,933
Net income (loss) attributable to common stockholders							$	(29,158)

	Year Ended December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	635,085	$	66,121	$	71,522	$	772,728
Total expenses	(598,055)		(63,162)		(48,131)		(709,348)
Corporate expenses	—		—		—		(34,241)
Income (loss) before taxes	$	37,030	$	2,959	$	23,391	$	29,139
Less: provision (benefit) for income taxes							9,017
Net income (loss)							$	20,122
Less: net income (loss) attributable to non-controlling interests							1,761
Net income (loss) attributable to common stockholders							$	18,361

	Year Ended December 31, 2018
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	544,586	$	51,624	$	29,616	$	625,826
Total expenses	(530,414)		(51,289)		(33,675)		(615,378)
Corporate expenses	—		—		—		(30,244)
Income (loss) before taxes from continuing operations	$	14,172	$	335	$	(4,059)	$	(19,796)
Less: provision (benefit) for income taxes							(5,909)
Net income (loss) from discontinued operations							43,770
Net income (loss)							$	29,883
Less: net income (loss) attributable to non-controlling interests							5,950
Net income (loss) attributable to Common Stockholders							$	23,933

The Company conducts its operations primarily in the U.S. with less than 6% of total revenues generated overseas for the years ended December 31, 2020, 2019 and 2018.

The following table presents the reportable segments and Tiptree Capital - Other assets for the following periods:

	As of December 31, 2020										As of December 31, 2019
			Tiptree Capital										Tiptree Capital
	Insurance		Mortgage		Other		Corporate		Total		Insurance		Mortgage		Other		Corporate		Total
Total assets	$	2,452,798	$	217,138	$	302,068	$	23,756	$	2,995,760	$	1,730,636	$	154,589	$	297,009	$	16,052	$	2,198,286

F-24

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(6) Investments

The following table presents the Company's investments related to insurance operations (Insurance) and investments from other Tiptree investing activities (Tiptree Capital), measured at fair value as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	—	$	—	$	377,133
Loans, at fair value	7,795		82,937		—		90,732
Equity securities	98,130		—		25,708		123,838
Other investments	125,833		9,439		84,429		219,701
Total investments	$	608,891	$	92,376	$	110,137	$	811,404

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	335,192	$	—	$	—	$	335,192
Loans, at fair value	10,174		98,720		—		108,894
Equity securities	62,816		—		92,562		155,378
Other investments	42,452		7,490		87,530		137,472
Total investments	$	450,634	$	106,210	$	180,092	$	736,936

F-25

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Available for Sale Securities, at fair value, net of allowance for credit losses

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2020 and December 31, 2019 are held by subsidiaries in the insurance business. The following tables present the Company's investments in AFS securities:

	As of December 31, 2020
	Amortized cost		Allowance for Credit Losses(1)		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	191,116	$	—	$	5,245	$	(58)	$	196,303
Obligations of state and political subdivisions	42,583		—		1,768		(1)		44,350
Corporate securities	92,761		—		2,181		(1)		94,941
Asset backed securities	37,975		—		316		(2,099)		36,192
Certificates of deposit	1,355		—		—		—		1,355
Obligations of foreign governments	3,961		—		31		—		3,992
Total	$	369,751	$	—	$	9,541	$	(2,159)	$	377,133
(1) - Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statements of operations (as a credit loss on AFS securities). Amount excludes unrealized losses relating to non-credit factors.
			As of December 31, 2019
			Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	189,596	$	2,138	$	(144)	$	191,590
Obligations of state and political subdivisions			45,249		1,104		(15)		46,338
Corporate securities			50,514		719		(2)		51,231
Asset backed securities			45,634		89		(1,705)		44,018
Certificates of deposit			896		—		—		896
Obligations of foreign governments			1,099		20		—		1,119
Total			$	332,988	$	4,070	$	(1,866)	$	335,192

The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of
	December 31, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	30,306	$	30,602	$	9,584	$	9,602
Due after one year through five years	149,378		153,406		130,223		131,952
Due after five years through ten years	26,621		27,479		19,508		20,125
Due after ten years	125,471		129,454		128,039		129,495
Asset backed securities	37,975		36,192		45,634		44,018
Total	$	369,751	$	377,133	$	332,988	$	335,192

F-26

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following tables present the gross unrealized losses on AFS securities by length of time that individual AFS securities have been in a continuous unrealized loss position for less than twelve months, and twelve months or greater and do not have an allowance for credit losses:

	As of December 31, 2020
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,323	$	(58)	41	$	2	$	—	2
Obligations of state and political subdivisions	379		(1)		5	—		—		—
Corporate securities	901		(1)		3	—		—		—
Asset backed securities	—		—		—	18,927		(2,099)		9
Total	$	16,603	$	(60)	49	$	18,929	$	(2,099)	11
	As of December 31, 2019
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	31,416	$	(132)	75	$	3,888	$	(12)	38
Obligations of state and political subdivisions	3,774		(15)		20	—		—		—
Corporate securities	2,820		(2)		12	742		—		7
Asset backed securities	3,878		(11)		17	19,480		(1,694)		11
Total	$	41,888	$	(160)	124	$	24,110	$	(1,706)	56

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2020 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2020:

	Obligations of state and political subdivisions		Corporate securities		Asset backed securities		Total
Increase in the allowance for the initial adoption of ASU 2016-13	$	(1)	$	(50)	$	(2)	$	(53)
Reduction in credit losses due to AFS securities sold during the year	—		3		—		3
Recoveries of amounts previously written off during the year	1		47		2		50
Ending balance of the allowance for credit losses on AFS securities	$	—	$	—	$	—	$	—

The Company applies a discounted cash flow model, based on assumptions and model outputs provided by an investment management company, in determining its lifetime expected credit losses on AFS securities. This includes determining the present value of expected future cash flows discounted at the book yield of the security.

The table below presents the amount of credit losses (gains from recoveries) on AFS securities recorded by the Company for the following period:

	Year Ended December 31, 2020
Credit losses (gains from recoveries) on AFS securities	$	(53)

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company cannot remove or replace investments in

F-27

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

regulatory deposit accounts without prior approval of the contractual party or regulatory authority, as applicable. The following table presents the Company's restricted investments included in the Company's AFS securities:

	As of
	December 31, 2020		December 31, 2019
Fair value of restricted investments in trust pursuant to reinsurance agreements	$	44,349	$	33,478
Fair value of restricted investments for special deposits required by state insurance departments	9,447		6,275
Total fair value of restricted investments	$	53,796	$	39,753

The following table presents additional information on the Company’s AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Purchases of AFS securities	$	158,357	$	253,415	$	192,288
Proceeds from maturities, calls and prepayments of AFS securities	$	84,923	$	36,459	$	30,089
Gains (losses) realized on maturities, calls and prepayments of AFS securities	$	—	$	—	$	(30)
Gross proceeds from sales of AFS securities	$	35,603	$	170,495	$	56,191

The following table presents the gross realized gains and gross realized losses from sales and or redemptions of AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Gross realized gains	$	594	$	1,558	$	50
Gross realized (losses)	(66)		(246)		(839)
Total net realized gains (losses) from investment sales and redemptions	528		1,312		(789)

Loans, at fair value

The following table presents the Company’s investments in loans measured at fair value and the Company’s investments in loans measured at fair value pledged as collateral:

	As of December 31, 2020								As of December 31, 2019
	Fair value		Unpaid principal balance (UPB)		Fair value exceeds / (below) UPB		Pledged as Collateral		Fair value		Unpaid principal balance (UPB)		Fair value exceeds / (below) UPB		Pledged as Collateral
Insurance:
Corporate loans (1)	$	7,795	$	12,281	$	(4,486)	$	—	$	9,787	$	12,006	$	(2,219)	$	—
Non-performing loans (2)	—		—		—		—		387		409		(22)		—
Mortgage:
Mortgage loans held for sale (3)	82,937		78,590		4,347		81,630		98,720		95,680		3,040		98,086
Total loans, at fair value	$	90,732	$	90,871	$	(139)	$	81,630	$	108,894	$	108,095	$	799	$	98,086

(1)    The cost basis of Corporate loans was approximately $11,282 and $11,969 at December 31, 2020 and December 31, 2019, respectively.

(2)    The cost basis of NPLs was approximately $282 at December 31, 2019, respectively. The are no NPLs as of December 31, 2020.

(3)    As of December 31, 2020 and December 31, 2019, there were two mortgage loans held for sale and one mortgage loan held for sale that were 90 days or more past due, respectively, with a fair value of $534 and $198, respectively.

F-28

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Equity securities

Equity securities represents the carrying amount of the Company's basis in equity investments. Included within the equity securities balance are 17.0 million shares of Invesque as of December 31, 2020, and 16.6 million as of December 31, 2019, for which the Company has elected to apply the fair value option. The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

	As of December 31, 2020
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	5,370	$	111,491	$	25,708	$	134,830	$	31,078
Fixed income exchange traded fund	62,438		63,875		—		—		62,438		63,875
Other equity securities	38,069		28,885		—		—		38,069		28,885
Total equity securities	$	123,846	$	98,130	$	111,491	$	25,708	$	235,337	$	123,838

	As of December 31, 2019
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,188	$	19,376	$	110,688	$	92,562	$	133,876	$	111,938
Fixed income exchange traded fund	25,256		25,039		—		—		25,256		25,039
Other equity securities	35,889		18,401		—		—		35,889		18,401
Total equity securities	$	84,333	$	62,816	$	110,688	$	92,562	$	195,021	$	155,378

Other investments

The following table contains information regarding the Company’s other investments as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	105,777	$	—	$	—	$	105,777
Vessels, net (2)	—		—		83,028		83,028
Debentures	17,703		—		—		17,703
Other	2,353		9,439		1,401		13,193
Total other investments	$	125,833	$	9,439	$	84,429	$	219,701

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	20,705	$	—	$	—	$	20,705
Vessels, net (2)	—		—		85,991		85,991
Debentures	15,423		—		—		15,423
Other	6,324		7,490		1,539		15,353
Total other investments	$	42,452	$	7,490	$	87,530	$	137,472

(1)    The cost basis of corporate bonds was $97,284 and $20,146 as of December 31, 2020 and December 31, 2019, respectively.

(2)     Net of accumulated depreciation of $8,372 and $3,817 as of December 31, 2020 and December 31, 2019, respectively.

F-29

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Net Investment Income - Insurance

Net investment income represents investment income and expense from investments related to insurance operations as disclosed within net investment income on the consolidated statements of operations. The following table presents the components of net investment income by source of income:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
AFS securities	$	7,685	$	8,404	$	6,560
Loans, at fair value	801		3,284		10,809
Other investments	4,245		1,218		1,350
Dividends from equity securities	1,482		2,813		2,092
Other	8		—		97
Subtotal	14,221		15,719		20,908
Less: investment expenses	4,305		1,702		1,729
Net investment income	$	9,916	$	14,017	$	19,179

Other Investment Income - Tiptree Capital

Other investment income represents other revenue from other Tiptree non-insurance activities as disclosed within other revenue on the consolidated statements of operations, see Note (16) Other Revenue and Other Expenses. The following tables present the components of other investment income by type:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
Loans, at fair value (1)	$	5,617	$	6,206	$	4,343
Other	—		269		175
Dividends from equity securities	2,533		10,132		9,224
Loan fee income	17,900		12,631		7,827
Vessel related revenue	22,697		16,747		3,972
Other investment income	$	48,747	$	45,985	$	25,541

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

F-30

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Net realized and unrealized gains (losses)

The following table presents the components of net realized and unrealized gains (losses) recorded on the consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (OCI), and as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment financial assets and liabilities are included below:

	For the Year Ended December 31,
	2020		2019		2018
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$	528	$	1,312	$	(819)
Gains from recoveries (credit losses) on AFS securities	53		—		—
Net realized gains (losses) on loans	(945)		2,100		2,071
Net realized gains (losses) on equity securities	(24,586)		947		2,721
Net realized gain on corporate bonds	7,299		39		1,627
Other	2,511		279		—
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	101,411		52,617		44,509
Other:
Net realized gains (losses) on loans (1)	35,753		23,403		16,638
Other	—		(260)		(2,084)
Total net realized gains (losses)	122,024		80,437		64,663
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans	(1,461)		(3,899)		(4,730)
Net unrealized gains (losses) on equity securities held at period end	(22,793)		7,621		(9,815)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	17,290		(807)		(2,291)
Other	10,162		(697)		(428)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	1,270		840		134
Other	(6,093)		357		(2,246)
Other:
Net change in unrealized gains (losses) on loans (1)	2,185		983		60
Net unrealized gains (losses) on equity securities held at period end	(67,656)		(992)		(17,134)
Other	7,482		25		569
Total net unrealized gains (losses)	(59,614)		3,431		(35,881)
Total net realized and unrealized gains (losses)	$	62,410	$	83,868	$	28,782

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

(7) Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

	As of December 31,
	2020		2019
Notes receivable, net - premium financing program	$	62,075	$	42,192
Accounts and premiums receivable, net	95,269		50,712
Retrospective commissions receivable	131,760		105,387
Trust receivables	54,393		63,925
Other receivables	26,955		24,752
Total notes and accounts receivable, net	$	370,452	$	286,968

F-31

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following table presents the total valuation allowance and bad debt expense for the following periods:

	Valuation allowance				Bad Debt Expense
	As of December 31,				For the Year Ended December 31,
	2020		2019		2020		2019		2018
Notes receivable, net - premium financing program (1)	$	101	$	95	$	223	$	175	$	195
Accounts and premiums receivable, net	$	169	$	109	$	28	$	36	$	39

(1)    As of December 31, 2020 and December 31, 2019, there were $215 and $93 in balances classified as 90 days plus past due, respectively.

(8) Reinsurance Receivables

The following table presents the effect of reinsurance on premiums written and earned by our insurance business for the following periods:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
As of December 31, 2020
Life insurance in force	$	5,153,151	$	2,985,196	$	—	$	2,167,955
For the Year Ended December 31, 2020
Premiums written:
Life insurance	$	69,704	$	39,761	$	1,550	$	31,493	4.9	%
Accident and health insurance	117,235		78,233		12,696		51,698		24.6	%
Property and liability insurance	825,845		509,818		144,332		460,359		31.4	%
Total premiums written	1,012,784		627,812		158,578		543,550		29.2	%
Premiums earned:
Life insurance	68,637		37,194		1,437		32,880		4.4	%
Accident and health insurance	118,183		78,365		11,599		51,417		22.6	%
Property and liability insurance	691,310		405,469		107,853		393,694		27.4	%
Total premiums earned	$	878,130	$	521,028	$	120,889	$	477,991	25.3	%
As of December 31, 2019
Life insurance in force	$	5,176,056	$	2,884,009	$	—	$	2,292,047
For the Year Ended December 31, 2019
Premiums written:
Life insurance	$	75,060	$	40,555	$	1,692	$	36,197	4.7	%
Accident and health insurance	133,514		87,447		3,201		49,268		6.5	%
Property and liability insurance	709,515		350,093		92,246		451,668		20.4	%
Total premiums written	918,089		478,095		97,139		537,133		18.1	%
Premiums earned:
Life insurance	68,282		35,929		1,607		33,960		4.7	%
Accident and health insurance	123,182		82,660		3,165		43,687		7.2	%
Property and liability insurance	597,852		242,180		65,789		421,461		15.6	%
Total premiums earned	$	789,316	$	360,769	$	70,561	$	499,108	14.1	%
As of December 31, 2018
Life insurance in force	$	4,846,303	$	2,662,173	$	—	$	2,184,130
For the Year ended December 31, 2018
Premiums written:
Life insurance	$	69,516	$	38,239	$	1,874	$	33,151	5.7	%
Accident and health insurance	126,951		85,136		3,229		45,044		7.2	%
Property and liability insurance	616,135		277,856		50,346		388,625		13.0	%
Total premiums written	812,602		401,231		55,449		466,820		11.9	%

F-32

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
Premiums earned:
Life insurance	64,346		32,865		1,766		33,247		5.3	%
Accident and health insurance	118,482		80,258		3,262		41,486		7.9	%
Property and liability insurance	552,792		231,093		31,405		353,104		8.9	%
Total premiums earned	$	735,620	$	344,216	$	36,433	$	427,837	8.5	%

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
For the Year Ended December 31, 2020
Losses and LAE Incurred
Life insurance	$	46,268	$	27,292	$	645	$	19,621	3.3	%
Accident and health insurance	18,354		15,715		7,032		9,671		72.7	%
Property and liability insurance	282,906		182,115		48,165		148,956		32.3	%
Total losses and LAE incurred	347,528		225,122		55,842		178,248		31.3	%
	Member benefit claims (1)						58,650
	Total policy and contract benefits						$	236,898
For the Year Ended December 31, 2019
Losses and LAE Incurred
Life insurance	$	38,306	$	22,607	$	443	$	16,142	2.7	%
Accident and health insurance	18,832		15,022		362		4,172		8.7	%
Property and liability insurance	225,200		147,290		52,785		130,695		40.4	%
Total losses and LAE incurred	282,338		184,919		53,590		151,009		35.5	%
	Member benefit claims (1)						19,672
	Total policy and contract benefits						$	170,681
For the Year ended December 31, 2018
Losses and LAE Incurred
Life insurance	$	36,488	$	21,037	$	886	$	16,337	5.4	%
Accident and health insurance	18,986		15,666		686		4,006		17.1	%
Property and liability insurance	227,512		141,184		28,181		114,509		24.6	%
Total losses and LAE incurred	282,986		177,887		29,753		134,852		22.1	%
	Member benefit claims (1)						17,243
	Total policy and contract benefits						$	152,095

(1)    Member benefit claims are not covered by reinsurance.

The following table presents the components of the reinsurance receivables:

F-33

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	As of
	December 31, 2020		December 31, 2019
Prepaid reinsurance premiums:
Life insurance (1)	$	70,066	$	72,675
Accident and health insurance (1)	66,261		66,393
Property and liability insurance (2)	423,868		286,411
Total	560,195		425,479
Ceded claim reserves:
Life insurance	4,133		3,350
Accident and health insurance	11,118		11,065
Property and liability insurance	98,092		74,384
Total ceded claim reserves recoverable	113,343		88,799
Other reinsurance settlements recoverable	54,471		25,555
Reinsurance receivables	$	728,009	$	539,833

(1)    Including policyholder account balances ceded.

(2)    Includes amounts from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

The following table presents the aggregate amount included in reinsurance receivables that is comprised of the three largest receivable balances from non-affiliated reinsurers:

	As of
	December 31, 2020
Total of the three largest receivable balances from non-affiliated reinsurers	$	164,857

As of December 31, 2020, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were: MFI Insurance Company, LTD (A. M. Best Rating: Not rated), Frandisco Property and Casualty Company (A. M. Best Rating: Not rated) and Canada Life International Reinsurance (Barbados) Corporation (A. M. Best Rating: Not rated).The related receivables of these reinsurers are collateralized by assets on hand, assets held in trust accounts and letters of credit. As of December 31, 2020, the Company does not believe there is a risk of loss due to the concentration of credit risk in the reinsurance program given the collateralization.

(9) Goodwill and Intangible Assets, net

The following table presents identifiable finite and indefinite-lived intangible assets, accumulated amortization, and goodwill by operating segment and/or reporting unit, as appropriate:

	As of December 31, 2020						As of December 31, 2019
	Insurance		Other		Total		Insurance		Other		Total
Customer relationships	$	143,300	$	—	$	143,300	$	53,500	$	—	$	53,500
Accumulated amortization	(32,263)		—		(32,263)		(24,318)		—		(24,318)
Trade names	14,750		800		15,550		6,750		800		7,550
Accumulated amortization	(4,382)		(440)		(4,822)		(3,273)		(360)		(3,633)
Software licensing	9,300		640		9,940		8,500		640		9,140
Accumulated amortization	(8,650)		(503)		(9,153)		(8,500)		(411)		(8,911)
Insurance policies and contracts acquired	36,500		—		36,500		36,500		—		36,500
Accumulated amortization	(36,238)		—		(36,238)		(36,115)		—		(36,115)
Insurance licensing agreements(1)	13,761		—		13,761		14,261		—		14,261
Other	640		1,000		1,640		—		—		—
Intangible assets, net	136,718		1,497		138,215		47,305		669		47,974
Goodwill	177,528		1,708		179,236		97,439		1,708		99,147
Total goodwill and intangible assets, net	$	314,246	$	3,205	$	317,451	$	144,744	$	2,377	$	147,121

(1)    Represents intangible assets with an indefinite useful life. Impairment tests are performed at least annually on these assets.

F-34

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Goodwill

The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:

	Insurance		Other(1)		Total
Balance at December 31, 2018	$	89,854	$	1,708	$	91,562
Goodwill acquired (2)	7,585		—		7,585
Balance at December 31, 2019	97,439		1,708		99,147
Goodwill acquired (2)	84,476		—		84,476
Purchase accounting adjustments (3)	(4,387)		—		(4,387)
Balance at December 31, 2020	$	177,528	$	1,708	$	179,236
Accumulated impairments	$	—	$	699	$	699

(1)    Other is primarily comprised of Mortgage.

(2)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of acquisitions in our insurance business as of July 1, 2019 and January 3, 2020.

The Company conducts annual impairment tests of its goodwill as of October 1. For the years ended December 31, 2020, 2019 and 2018, no impairments were recorded on the Company’s goodwill.

Intangible Assets, net

The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:

	Insurance		Other		Total
Balance at December 31, 2018	$	51,281	$	840	$	52,121
Intangible assets acquired (1)	3,750		—		3,750
Less: amortization expense	(7,726)		(171)		(7,897)
Balance at December 31, 2019	$	47,305	$	669	$	47,974
Intangible assets acquired (1) (2)	99,040		1,000		100,040
Purchase accounting adjustment (3)	(300)		—		(300)
Less: amortization expense	(9,327)		(172)		(9,499)
Balance at December 31, 2020	$	136,718	$	1,497	$	138,215

(1)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(2)    The addition to Other relates to a fishing license acquired by our shipping operations.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of an acquisition in our insurance business as of July 1, 2019.

The following table presents the amortization expense on finite-lived intangible assets for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Amortization expense on intangible assets	$	9,499	$	7,897	$	9,729

For the years ended December 31, 2020, 2019 and 2018, no impairments were recorded on the Company’s intangible assets.

The following table presents the amortization expense on finite-lived intangible assets for the next five years and thereafter by operating segment and/or reporting unit, as appropriate:

F-35

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	As of December 31, 2020
	Insurance		Other(1)		Total
2021	$	12,951	$	170	$	13,121
2022	14,459		127		14,586
2023	14,198		80		14,278
2024	12,811		80		12,891
2025	11,101		40		11,141
2026 and thereafter	57,437		—		57,437
Total	$	122,957	$	497	$	123,454

(1)    Other is primarily comprised of Mortgage.

(10) Derivative Financial Instruments and Hedging

The Company utilizes derivative financial instruments as part of its overall investment and hedging activities. Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment. The Company’s derivative activities are primarily classified by underlying credit risk and interest rate risk. In addition, the Company is also subject to additional counterparty risk should its counterparties fail to meet the contract terms. The derivative financial instruments are reported in other investments. Derivative liabilities are reported within other liabilities and accrued expenses.

Derivatives, at fair value

Interest Rate Lock Commitments

The Company enters into interest rate lock commitments (IRLCs) with customers in connection with its mortgage banking activities to fund residential mortgage loans with certain terms at specified times in the future. IRLCs that relate to the origination of mortgage loans that will be classified as held-for-sale are considered derivative instruments under applicable accounting guidance. As such, these IRLCs are recorded at fair value with changes in fair value typically resulting in recognition of a gain when the Company enters into IRLCs. In estimating the fair value of an IRLC, the Company assigns a probability that the loan commitment will be exercised and the loan will be funded (“pull through”). The fair value of the commitments is derived from the fair value of related mortgage loans, net of estimated costs to complete. Outstanding IRLCs expose the Company to the risk that the price of the loans underlying the commitments might decline from inception of the rate lock to funding of the loan. To manage this risk, the Company utilizes forward delivery contracts and to be announced (TBA) mortgage backed securities to economically hedge the risk of potential changes in the value of the loans that would result from the commitments.

Forward Delivery Contracts and TBA Mortgage Backed Securities

The Company enters into forward delivery contracts with loan aggregators and other investors as one of the tools to manage the interest rate risk associated with IRLCs and loans held for sale. In addition, the Company enters into TBA mortgage backed securities which facilitate hedging and funding by allowing the Company to prearrange prices for mortgages that are in the process of originating. The Company utilizes these hedging instruments for Agency (Fannie Mae and Freddie Mac) and FHA/VA (Ginnie Mae) eligible IRLCs.

The following table presents the gross notional and fair value amounts of derivatives (on a gross basis) categorized by underlying risk:

	As of December 31, 2020						As of December 31, 2019
	Notional values		Asset derivatives		Liability derivatives		Notional values		Asset derivatives		Liability derivatives
Interest rate lock commitments	$	219,929	$	9,207	$	—	$	279,048	$	7,336	$	—
Forward delivery contracts	35,979		—		22		87,773		36		—
TBA mortgage backed securities	291,000		232		1,508		235,000		118		428
Other	3,058		2,090		560		10,360		—		3,330
Total	$	549,966	$	11,529	$	2,090	$	612,181	$	7,490	$	3,758

F-36

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(11) Debt, net

The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs.

		Stated interest rate or range of rates		Maximum borrowing capacity as of		As of
Debt Type	Stated maturity date			December 31, 2020		December 31, 2020		December 31, 2019
Corporate debt
Secured revolving credit agreements	August 2023	LIBOR +	2.25%	$	200,000	$	—	$	25,000
Secured term credit agreements	February 2025	LIBOR +	6.75%	120,313		120,313		68,210
Preferred trust securities	June 2037	LIBOR +	4.10%	35,000		35,000		35,000
Junior subordinated notes	October 2057	8.50%		125,000		125,000		125,000
Total corporate debt						280,313		253,210
Asset based debt (1)
Asset based revolving financing	October 2023	LIBOR +	2.75%	75,000		27,510		21,576
Residential mortgage warehouse borrowings (2)	April 2021 -	LIBOR +	2.00%	110,000		55,994		90,673
	August 2021	to LIBOR +	3.00%
Vessel backed term loan	November 2024	LIBOR +	4.75%	15,800		15,800		18,000
Total asset based debt						99,304		130,249
Total debt, face value						379,617		383,459
Unamortized discount, net						(2,035)		(198)
Unamortized deferred financing costs						(11,336)		(8,807)
Total debt, net						$	366,246	$	374,454

(1)    Asset based debt is generally recourse only to specific assets and related cash flows.

(2)    The weighted average coupon rate for residential mortgage warehouse borrowings was 2.75% and 3.83% at December 31, 2020 and December 31, 2019, respectively.

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Interest expense - corporate debt	$	23,322	$	19,682	$	18,162
Interest expense - asset based debt	9,260		7,377		8,851
Interest expense on debt	$	32,582	$	27,059	$	27,013

The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:

	As of
	December 31, 2020
2021	$	64,444
2022	8,450
2023	35,960
2024	15,450
2025	95,313
2026 and thereafter	160,000
Total	$	379,617

The following narrative is a summary of certain terms of our debt agreements for the period ended December 31, 2020:

Corporate Debt

Secured Revolving Credit Agreements

As of December 31, 2020 and December 31, 2019, a total of $0 and $25,000, respectively, was outstanding under the revolving line of credit in our insurance business.

F-37

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

On August 4, 2020, Fortegra entered into an Amended and Restated Credit Agreement by and among Fortegra Financial and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the Fortegra Credit Agreement). The Fortegra Credit Agreement provides for a $200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $17,500 for swing loans and matures on August 4, 2023. The Fortegra Credit Agreement replaced the $30,000 revolving line of credit with the Fifth Third Bank (the “Working Capital Facility”).

As of December 31, 2019, the Company had the Working Capital Facility of $30,000, which provided for a $30,000 accordion feature. The Working Capital Facility had a maturity date of April 28, 2020 and an interest rate of 30-day LIBOR rate plus 1.20%. On December 30, 2019, the Working Capital Facility was amended, adding the ability to issue up to $75,000 in standby letters of credit (“SBLCs”), and applying an aggregate maximum of $75,000 for the combined values of outstanding debt and issued SBLCs. The Working Capital Facility contained terms and conditions typical for a transaction of this type.

Secured Term Credit Agreement

On February 21, 2020, the Operating Company borrowed $125,000 under a new credit agreement (Credit Agreement) with Fortress Credit Corp. (Fortress). The proceeds were used to repay the Company’s prior credit agreement with Fortress, with a balance of $68,210 as of December 31, 2019, and for working capital and general corporate purposes. Pursuant to an Amendment, Assumption and Consent Agreement, dated July 17, 2020 by and among Tiptree, certain of its subsidiaries and Fortress, Tiptree Holdings LLC (Tiptree Holdings) became the borrower under the Credit Agreement, dated as of February 21, 2020, by and among Tiptree, certain of its subsidiaries and Fortress. The Credit Agreement will mature on February 21, 2025, with principal amounts of the loans to be repaid in consecutive quarterly installments. Loans under the Credit Agreement bear interest at a variable rate per annum equal to LIBOR (with a minimum LIBOR rate of 1.00%), plus a margin of 6.75% per annum. The obligations under the Credit Agreement are secured by liens on substantially all of the assets of Tiptree Holdings and guaranteed by the Company and Tiptree Holdings’ direct wholly owned first tier subsidiaries (Guarantors).

The Credit Agreement contains various customary affirmative and negative covenants of the Company, Tiptree Holdings and the other Guarantors (subject to customary exceptions), including, but not limited to, limitations on indebtedness, liens, investments and acquisitions, negative pledges, junior payments, conduct of business, transactions with affiliates, dispositions of assets, prepayment of certain indebtedness and limits on guarantees by subsidiaries of Tiptree Holdings’ and the Guarantors’ indebtedness. The Credit Agreement also contains a financial covenant which limits corporate leverage as defined by its Corporate Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement also contains customary mandatory repayment provisions (subject to customary exceptions) and requires that net cash proceeds from the sale by Tiptree and certain of its subsidiaries of capital stock of Invesque be applied to prepay loans until the outstanding principal amount of loans is $62,500, with remaining proceeds subject to reinvestment rights. Prepayments, whether mandatory or voluntary, reduce future scheduled amortization payments in the order they come due. The Credit Agreement also requires the payment of a prepayment fee upon a repricing transaction or equity issuance consummated after the closing date, or the sale of Fortegra, or any of its material subsidiaries. As of December 31, 2020, a total of $120,313 was outstanding under this agreement.

Junior Subordinated Notes

A subsidiary in our insurance business issued $125,000 of 8.50% Fixed Rate Resetting Junior Subordinated Notes due October 2057. Substantially all of the net proceeds were used to repay the existing secured credit agreement, which was terminated thereafter. The notes are unsecured obligations of the subsidiary and rank in right of payment and upon liquidation, junior to all of the subsidiary’s current and future senior indebtedness. The notes are not obligations of or guaranteed by any subsidiaries of the subsidiary, or any other Tiptree entities. So long as no event of default has occurred and is continuing, all or part of the interest payments on the notes can be deferred on one or more occasions for up to five consecutive years per deferral period. This credit agreement contains customary financial covenants that require, among other items, maximum leverage and limitations on restricted payments under certain circumstances.

F-38

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Preferred Trust Securities

A subsidiary in our insurance business has $35,000 of preferred trust securities due June 15, 2037. Interest is payable quarterly at an interest rate of LIBOR plus 4.10%. The Company may redeem the preferred trust securities, in whole or in part, at a price equal to the full outstanding principal amount of such preferred trust securities outstanding plus accrued and unpaid interest.

Asset Based Debt

Asset Backed Revolving Financing

As of December 31, 2019, a total of $9,840 was outstanding under the borrowing related to our premium finance business in our insurance business. During April 2019, the maturity date of this borrowing was extended to April 2021 with a new rate of LIBOR plus 2.40%. On December 30, 2019, the maximum borrowing capacity of this borrowing was reduced from $25,000 to $13,000. This agreement was replaced on October 16, 2020 with a new agreement, described below.

On August 5, 2019, a subsidiary in our insurance business entered into a $15,000 revolving line of credit agreement related to our warranty service contract finance business. The borrowing has a maturity date of April 28, 2021 and a rate of LIBOR plus 2.40%. On December 30, 2019, the maximum borrowing capacity of this borrowing was increased from $15,000 to $27,000. As of December 31, 2019, a total of $11,736 was outstanding under the borrowing. This agreement was replaced on October 16, 2020 with a new agreement, described below.

On October 16, 2020, subsidiaries in our insurance business entered into a three year $75,000 secured credit agreement which replaced the individual agreements in our premium finance and warranty service contract finance businesses. The borrowers can select from various borrowing and rate options under the agreement, as well the option to convert certain borrowings to term loans, if no default or event of default exists. The agreement extends up to $20,000 for our premium finance business and up to $55,000 for our warranty service contract finance business, and is secured by substantially all of the assets of the borrowers. The obligations under the agreement are non-recourse to Fortegra and its subsidiaries (other than borrowers and their subsidiaries). As of December 31, 2020, a total of $27,510 was outstanding under the borrowing.

Residential Mortgage Warehouse Borrowings

In April 2020, a subsidiary in our mortgage business renewed a $60,000 warehouse line of credit, extending the maturity date to April 2021 and establishing a LIBOR floor of 1.0%. Additionally, during March 2020, another warehouse line maturing in August 2020 temporarily raised the maximum borrowing capacity to $65,000, returning to a maximum borrowing capacity of $50,000 in May 2020 and establishing a LIBOR floor of 0.50%. In August 2020, the $50,000 warehouse line of credit was extended to August 2021, and established a LIBOR floor of 0.50% to 1.00%. As of December 31, 2020 and December 31, 2019, a total of $55,994 and $90,673, respectively, was outstanding under such financing agreements.

Vessel Backed Term Loan

On November 28, 2019, subsidiaries in our shipping business entered into a $18,000 term loan facility. Amounts borrowed under the facility are not allowed to be reborrowed. The borrowing has a maturity date of November 28, 2024 and a rate of LIBOR plus 4.75%, with quarterly principal payments of $550. This facility is secured by liens on 2.00 of our vessels as well as the assets of the borrowing entities and their parent guarantor. This credit agreement contains customary financial covenants that require, among other items, minimum liquidity, positive working capital, minimum required security coverage ratio of 150%, and the existence of a maintenance reserve account funded on a quarterly basis prior to anticipated scheduled drydocking costs. As of December 31, 2020, a total of $15,800 was outstanding under the borrowing.

As of December 31, 2020, the Company is in compliance with the representations and covenants for outstanding borrowings or has obtained waivers for any events of non-compliance.

F-39

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(12) Fair Value of Financial Instruments

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible to measure a financial instrument’s fair value. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability, and are affected by the type of product, whether the product is traded on an active exchange or in the secondary market, as well as current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is estimated by applying the hierarchy discussed in Note (2) Summary of Significant Accounting Policies which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.

The Company’s fair value measurements are based primarily on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable financial instruments. Sources of inputs to the market approach include third-party pricing services, independent broker quotations and pricing matrices. Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values. Further, management has a process in place to review all changes in fair value that occurred during each measurement period. Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.

The Company utilizes observable and unobservable inputs within its valuation methodologies. Observable inputs may include: benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. Broker quotes are obtained from sources recognized to be market participants. Unobservable inputs may include: expected cash flow streams, default rates, supply and demand considerations and market volatility.

Available for Sale Securities, at fair value

The fair values of available for sale securities are based on prices provided by an independent pricing service and a third-party investment manager. The Company obtains an understanding of the methods, models and inputs used by the independent pricing service and the third-party investment manager by analyzing the investment manager-provided pricing report.

The following details the methods and assumptions used to estimate the fair value of each class of AFS securities and the applicable level each security falls within the fair value hierarchy:

U.S Treasury Securities, Obligations of U.S. Government Authorities and Agencies, Obligations of State and Political Subdivisions, Corporate Securities, Asset Backed Securities, and Obligations of Foreign Governments: Fair values were obtained from an independent pricing service and a third-party investment manager. The prices provided by the independent pricing service and third-party investment manager are based on quoted market prices, when available, non-binding broker quotes, or matrix pricing and fall under Level 2 or Level 3 in the fair value hierarchy.

Certificates of Deposit: The estimated fair value of certificates of deposit approximate carrying value and fall under Level 1 of the fair value hierarchy.

Equity Securities

The fair values of publicly traded common and preferred equity securities and exchange traded funds (“ETFs”) are obtained from market value quotations provided by an independent pricing service and fall under Level 1 in the fair value hierarchy. The fair values of non-publicly traded common and preferred stocks are based on prices obtained from an independent pricing service using unobservable inputs and fall under Level 3 in the fair value hierarchy.

F-40

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Loans, at fair value

Corporate Loans: These loans are comprised of a diversified portfolio of middle market and broadly syndicated leveraged loans and are generally classified under either Level 2 or Level 3 in the fair value hierarchy. To determine fair value, the Company uses quoted prices which include those provided from pricing vendors, where available. We perform internal price verification procedures to ensure that the prices and quotes provided from the independent pricing vendors are reasonable. Such verification procedures include comparison of pricing sources and analysis of variances among pricing sources. The Company has evaluated each loan’s respective liquidity and has additionally performed valuation benchmarking. The key characteristics which were evaluated as part of this determination were liquidity ratings, price changes to index benchmarks, depth of quotes, credit ratings and industry trends.

Mortgage Loans Held for Sale: Mortgage loans held for sale are generally classified under Level 2 in the fair value hierarchy and fair value is based upon forward sales contracts with third-party investors, including estimated loan costs.

Derivative Assets and Liabilities

Derivatives are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage backed securities. The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position. Our mortgage origination subsidiaries issue IRLCs to their customers, which are carried at estimated fair value on the Company’s consolidated balance sheet. The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption. The fair values of these commitments generally fall under Level 3 in the fair value hierarchy. Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors. For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates. The fair values of TBA mortgage backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures monthly.

Securities Sold, Not Yet Purchased

Securities sold, not yet purchased are generally classified under Level 1 or Level 2 in the fair value hierarchy, based on the leveling of the securities sold short, and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures to ensure that the prices provided are reasonable.

Mortgage Servicing Rights

Mortgage servicing rights are classified under Level 3 in the fair value hierarchy and fair value is provided by a third-party valuation service. Various observable and unobservable inputs are used to determine fair value, including discount rate, cost to service and weighted average prepayment speed.

The following tables present the Company’s fair value hierarchies for financial assets and liabilities, measured on a recurring basis:

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	196,303	$	—	$	196,303
Obligations of state and political subdivisions	—		44,350		—		44,350

F-41

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Obligations of foreign governments	—		3,992		—		3,992
Certificates of deposit	1,355		—		—		1,355
Asset backed securities	—		35,334		858		36,192
Corporate securities	—		94,941		—		94,941
Total available for sale securities, at fair value	1,355		374,920		858		377,133
Loans, at fair value:
Corporate loans	—		—		7,795		7,795
Mortgage loans held for sale	—		82,937		—		82,937
Total loans, at fair value	—		82,937		7,795		90,732
Equity securities:
Invesque	31,078		—		—		31,078
Fixed income exchange traded fund	63,875		—		—		63,875
Other equity securities	28,850		—		35		28,885
Total equity securities	123,803		—		35		123,838
Other investments, at fair value:
Corporate bonds	—		105,777		—		105,777
Derivative assets	2,090		232		9,207		11,529
CLOs	—		—		802		802
Total other investments, at fair value	2,090		106,009		10,009		118,108
Mortgage servicing rights (1)	—		—		14,758		14,758
Total	$	127,248	$	563,866	$	33,455	$	724,569
Liabilities:
Derivative liabilities (2)	$	—	$	2,090	$	—	$	2,090
Securities sold, not yet purchased (2)	16,479		30,158		—		46,637
Contingent consideration payable (2)	—		—		200		200
Total	$	16,479	$	32,248	$	200	$	48,927

(1)    Included in other assets.

(2)    Included in other liabilities and accrued expenses.

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	191,590	$	—	$	191,590
Obligations of state and political subdivisions	—		46,338		—		46,338
Obligations of foreign governments	—		1,119		—		1,119
Certificates of deposit	896		—		—		896
Asset backed securities	—		42,833		1,185		44,018
Corporate securities	—		51,231		—		51,231
Total available for sale securities, at fair value	896		333,111		1,185		335,192
Loans, at fair value:
Corporate loans	—		—		9,787		9,787
Mortgage loans held for sale	—		98,720		—		98,720
Non-performing loans	—		—		387		387

F-42

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Total loans, at fair value	—		98,720		10,174		108,894
Equity securities:
Invesque	111,938		—		—		111,938
Fixed income exchange traded fund	25,039		—		—		25,039
Other equity securities	18,158		—		243		18,401
Total equity securities	155,135		—		243		155,378
Other investments, at fair value:
Corporate bonds	—		20,705		—		20,705
Derivative assets	—		154		7,336		7,490
CLOs	—		—		4,768		4,768
Total other investments, at fair value	—		20,859		12,104		32,963
Mortgage servicing rights (1)	—		—		8,764		8,764
Total	$	156,031	$	452,690	$	32,470	$	641,191
Liabilities:
Derivative liabilities (2)	$	—	$	3,758	$	—	$	3,758
Total	$	—	$	3,758	$	—	$	3,758
(1) Included in other assets. (2) Included in other liabilities and accrued expenses.

The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:    

	For the Year Ended December 31,
	2020 (1)		2019 (1)
Balance at January 1,	$	32,470	$	152,845
Net realized and unrealized gains or losses included in:
Earnings	2,253		1,901
OCI	(329)		(323)
Origination of IRLCs	120,267		77,082
Purchases	3,862		153
Sales	(6,672)		(123,497)
Issuances	—		111
Conversions to real estate owned	—		(2,596)
Conversions to mortgage loans held for sale	(118,396)		(73,206)
Balance at December 31,	$	33,455	$	32,470
Changes in unrealized gains (losses) included in earnings related to assets still held at period end	$	(7,978)	$	(1,884)
Changes in unrealized gains (losses) included in OCI related to assets still held at period end	$	(329)	$	(323)

(1)    Transfers between Level 2 and 3 were a result of subjecting third-party pricing on assets to various liquidity, depth, bid-ask spread and benchmarking criteria as well as assessing the availability of observable inputs affecting their fair valuation.

F-43

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following table presents the range and weighted average (WA) used to develop significant unobservable inputs for the fair value measurements of Level 3 assets and liabilities.

	As of December 31,						As of December 31,
Assets	2020		2019		Valuation technique	Unobservable input(s) (1)	2020					2019
	Fair Value						Range				WA	Range			WA
IRLCs	$	9,207	$	7,336	Internal model	Pull through rate	50%	to	95%		68%	50%	to	95%	61%
Mortgage servicing rights	14,758		8,764		External model	Discount rate	10%	to	13%		11%	10%	to	13%	11%
						Cost to service	$75	to	$90		$82	$75	to	$90	$86
						Prepayment speed	8%	to	60%		22%	7%	to	50%	18%
Total	$	23,965	$	16,100
Liabilities
Contingent consideration payable - Smart AutoCare	$	200	$	—	Cash Flow Model	Forecast Cash EBITDA	$20,000	to	$	30,000	N/A	N/A
					Actuarial Analysis	Assumed Claim Liabilities	$55,000				$55,000	N/A
Total	$	200	$	—

(1)    Unobservable inputs were weighted by the relative fair value of the instruments.

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value and their respective levels within the fair value hierarchy:

	As of December 31, 2020					As of December 31, 2019
	Level within fair value hierarchy	Fair value		Carrying value		Level within fair value hierarchy	Fair value		Carrying value
Assets:
Debentures (1)	2	$	17,703	$	17,703	2	$	15,423	$	15,423
Notes receivable, net	2	62,075		62,075		2	42,192		42,192
Total assets		$	79,778	$	79,778		$	57,615	$	57,615
Liabilities:
Debt, net	3	$	392,951	$	377,582	3	$	396,699	$	383,261
Total liabilities		$	392,951	$	377,582		$	396,699	$	383,261

(1)    Included in other investments.

Debentures: Since interest rates on debentures are at current market rates for similar credit risks, the carrying amount approximates fair value. These values are net of allowance for doubtful accounts.

Notes Receivable, net: To the extent that carrying amounts differ from fair value, fair value is determined based on contractual cash flows discounted at market rates for similar credits. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Debt: The carrying value, which approximates fair value of LIBOR based debt, represents the total debt balance at face value excluding the unamortized discount. The fair value of the Junior subordinated notes is determined based on dealer quotes. Categorized under Level 3 in the fair value hierarchy.

Additionally, the following financial assets and liabilities on the consolidated balance sheets are not carried at fair value, but whose carrying amounts approximate their fair value:

Cash and Cash Equivalents: The carrying amounts of cash and cash equivalents are carried at cost which approximates fair value. Categorized under Level 1 in the fair value hierarchy.

F-44

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Accounts and Premiums Receivable, net, Retrospective Commissions Receivable and Other Receivables: The carrying amounts approximate fair value since no interest rate is charged on these short duration assets. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Due from Brokers, Dealers, and Trustees and Due to Brokers, Dealers and Trustees: The carrying amounts are included in other assets and other liabilities and accrued expenses and approximate their fair value due to their short term nature. Categorized under Level 2 in the fair value hierarchy.

(13) Liability for Unpaid Claims and Claim Adjustment Expenses

The following tables present undiscounted information about incurred and paid claims development as of December 31, 2020 and 2019, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. This information is presented in the aggregate for all short duration contracts, due to the commonality of claims characteristics. The tables reflect five years of information because historically approximately 95% of incurred losses have been paid within five years of the accident period.

Roll forward of Claim Liability

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:

	For the Year Ended December 31,
	2020		2019
Policy liabilities and unpaid claims balance as of January 1,	$	144,384	$	131,611
Less: liabilities of policy-holder account balances, gross	(11,589)		(13,659)
Less: non-insurance warranty benefit claim liabilities	(85)		(94)
Gross liabilities for unpaid losses and loss adjustment expenses	132,710		117,858
Less: reinsurance recoverable on unpaid losses - short duration	(88,599)		(90,016)
Less: other lines, gross	(230)		(227)
Net balance as of January 1, short duration	43,881		27,615
Incurred (short duration) related to:
Current year	172,007		144,925
Prior years	5,443		5,169
Total incurred	177,450		150,094
Paid (short duration) related to:
Current year	127,721		122,348
Prior years	9,665		11,480
Total paid	137,386		133,828
Net balance as of December 31, short duration	83,945		43,881
Plus: reinsurance recoverable on unpaid losses - short duration	113,163		88,599
Plus: other lines, gross	247		230
Gross liabilities for unpaid losses and loss adjustment expenses	197,355		132,710
Plus: liabilities of policy-holder account balances, gross	5,419		11,589
Plus: non-insurance warranty benefit claim liabilities (1)	30,664		85
Policy liabilities and unpaid claims balance as of December 31,	$	233,438	$	144,384

(1)    Primarily relates to Smart AutoCare which was acquired on January 3, 2020. See Note (3) Acquisitions for more information.

F-45

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:

	For the Year Ended December 31,
	2020		2019		2018
Short duration incurred	$	177,450	$	150,094	$	131,861
Other lines incurred	27		184		124
Unallocated loss adjustment expenses	771		731		2,867
Total losses incurred	$	178,248	$	151,009	$	134,852

During the year ended December 31, 2020, the Company experienced an increase in prior year development of $5,443 primarily as a result of higher than expected claim frequency from business written by a small group of producers of our personal and commercial lines of business. The underlying cause of this development was the result of a subset of risk where the loss ratio pegs used in our year end actuarial determination was low given the ultimate frequency that emerged.

During the year ended December 31, 2019, the Company experienced an increase in prior year development of $5,169 primarily in our non-standard auto business. The underlying cause of this development was higher than expected claim frequency.

Management considers the prior year development for each of the two years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses. We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

Incurred and Paid Development

The following table presents information about incurred and paid loss development and average claim duration as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated count of unreported claims. The number of claims is measured by claim event. The Company considers a claim that does not result in a liability as a claim closed without payment.            

F-46

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2020
	For the Years Ended December 31,										Total of IBNR Liabilities Plus Expected Development of Reported Claims		Cumulative Number of Reported Claims
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	$	84,178	$	87,290	$	87,993	$	88,615	$	89,629	$	17	257
2017			103,306		104,898		105,601		105,787		$	96	326
2018					129,352		133,225		133,158		$	2,366	399
2019							144,925		149,166		$	15,572	403
2020									172,007		$	52,734	328
							Total		$	649,747
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	62,989		$	84,185	$	86,531	$	88,482	$	88,976
2017			84,493		102,620		105,075		105,852
2018					105,740		112,619		114,490
2019							122,348		128,787
2020									127,721
							Total		$	565,826
All outstanding liabilities before 2016, net of reinsurance									24
Liabilities for loss and loss adjustment expenses, net of reinsurance									$	83,945

Duration

The following table presents supplementary information about average historical claims duration as of December 31, 2020 for short duration contracts:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years	1	2	3	4	5
Short duration	77.2%	12.6%	2.1%	1.5%	0.6%

F-47

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Reconciliation of Reserves to Balance Sheet

The following table presents a reconciliation of net outstanding liabilities for unpaid loss and loss adjustment expenses of short-duration contracts to the consolidated balance sheets value of policy liabilities and unpaid claims:

	As of
	December 31, 2020
Net outstanding liabilities:
Short duration	$	83,945
Insurance lines other than short duration	67
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance	84,012
Reinsurance recoverable on unpaid losses and loss adjustment expenses:
Short duration	113,163
Other insurance lines	180
Total reinsurance recoverable on unpaid losses and loss adjustment expenses	113,343
Total gross liability for unpaid losses and loss adjustment expenses	197,355
Liabilities of policy-holder account balances, gross	5,419
Non-insurance warranty benefit claim liabilities	30,664
Total policy liabilities and unpaid claims	$	233,438

(14) Revenue from Contracts with Customers

The Company’s revenues from insurance and warranty operations are primarily accounted for under Financial Services-Insurance (Topic 944) that are not within the scope of Revenue for Contracts with Customers (Topic 606). The Company’s remaining revenues that are within the scope of Topic 606 are primarily comprised of revenues from contracts with customers for monthly membership dues for motor clubs, monthly administration fees for services provided for premiums, claims and reinsurance processing revenues, vehicle service contracts and warranty coverage revenues for household goods and appliances (collectively, remaining contracts).

The following table presents the disaggregated amounts of revenue from contracts with customers by product type for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Motor club revenue	$	36,159	$	36,076	$	32,242
Warranty coverage revenue	98,574		27,597		26,058
Vessel related revenue	22,697		16,747		3,972
Management fee income	—		1,267		6,694
Other	6,127		7,317		7,840
Revenue from contracts with customers	$	163,557	$	89,004	$	76,806

Service and Administrative Fees

Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable.

Administrative fee revenue includes the administration of premium associated with our producers and their producer owned reinsurance companies (PORCs). In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the

F-48

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Information on Remaining Performance Obligations

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2020.

Contract Balances

The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.

Charter Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on the straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date.

Management Fees

The Company earned management fee income in the form of base management fees and incentive fees from the CLOs it managed. These base management fees were billed as the services were provided and paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Base management fees typically consisted of fees based on the amount of assets held in the CLOs. Base management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed.

The following table presents the activity in the significant deferred assets and liabilities related to revenue from contracts with customers for the following period:

	January 1, 2020						December 31, 2020
	Beginning balance		Additions		Amortizations		Ending balance
Deferred acquisition costs
Motor club revenue	$	13,700	$	27,014	$	27,633	$	13,081
Warranty coverage revenue	1,027		58,906		11,199		48,734
Total	$	14,727	$	85,920	$	38,832	$	61,815

Deferred revenue
Motor club revenue	$	17,910	$	35,218	$	36,159	$	16,969
Warranty coverage revenue (1)	49,368		405,537		106,514		$	348,391
Total	$	67,278	$	440,755	$	142,673	$	365,360

(1)    Additions include $182,568 from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

Write-offs were not material for any period presented.

F-49

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(15) Other Assets and Other Liabilities and Accrued Expenses

Other Assets

The following table presents the components of other assets as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Right of use asset - Operating leases (1)	$	27,291	$	23,832
Furniture, fixtures and equipment, net	15,798		12,305
Income tax receivable	19,513		817
Mortgage servicing rights	14,758		8,764
Prepaid expenses	8,159		8,461
Loans eligible for repurchase	70,593		6,733
Other	5,922		7,598
Total other assets	$	162,034	$	68,510

(1)    See Note (21) Commitments and Contingencies for additional information.

The following table presents the depreciation expense related to furniture, fixtures and equipment for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Depreciation expense related to furniture, fixtures and equipment	$	3,257	$	2,753	$	1,984

Other Liabilities and Accrued Expenses

The following table presents the components of other liabilities and accrued expenses as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Accounts payable and accrued expenses	$	106,142	$	68,829
Operating lease liability (1)	32,914		29,491
Deferred tax liabilities, net	24,183		32,306
Securities sold, not yet purchased	46,637		—
Due to brokers	45,047		1,140
Loans eligible for repurchase liability	70,593		6,733
Commissions payable	18,678		9,179
Other	18,671		24,462
Total other liabilities and accrued expenses	$	362,865	$	172,140

(1)    See Note (21) Commitments and Contingencies for additional information.

(16) Other Revenue and Other Expenses

Other Revenue

The following table presents the components of other revenue as reported in the consolidated statement of operations. Other revenue is primarily generated by Tiptree Capital’s non-insurance activities except as noted in the footnote to the table.

	For the Year Ended December 31,
	2020		2019		2018
Other investment income (1)	$	48,747	$	45,985	$	25,541
Gain (loss) on sale of businesses (2)	(4,428)		7,598		—
Management fee income	—		1,267		6,694
Other (3)	7,591		5,038		5,827
Total other revenue	$	51,910	$	59,888	$	38,062

(1)    See Note (6) Investments for the components of Other investment income.

F-50

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(2)    Related to the impairment of Luxury for the year ended December 31, 2020, and the sale of Telos for the year ended December 31, 2019. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

(3)    Includes $7,025, $4,566 and $2,554 for the year ended December 31, 2020, 2019 and 2018, respectively, related to Insurance.

Other Expenses

The following table presents the components of other expenses as reported in the consolidated statement of operations:

	For the Year Ended December 31,
	2020		2019		2018
Professional fees	$	20,711	$	20,820	$	15,216
General and administrative	22,295		18,563		16,218
Premium taxes	15,824		15,205		14,026
Mortgage origination expenses	14,603		12,200		8,857
Rent and related	14,074		12,642		11,114
Operating expenses from vessels	13,210		9,781		3,777
Loss on extinguishment of debt	353		1,241		428
Other	8,078		9,292		8,265
Total other expenses	$	109,148	$	99,744	$	77,901

(17) Stockholders’ Equity

Stock Repurchases

On November 2, 2020, the Board of Directors authorized the Company to make repurchases of up to $20,000 of shares of the Company’s outstanding common stock in the aggregate, at the discretion of the Company's Executive Committee. The shares purchased during the first, second and third quarters of 2020 were purchased under a previous authorization. The following table presents the Company’s stock repurchase activity and remaining authorization.

	For the Year Ended December 31, 2020
	Number of shares purchased	Average price per share
Share repurchase plan	1,884,286	$	5.51
Block repurchase	500,000	7.00
Total	2,384,286	$	5.82
Remaining repurchase authorization		$	16,571

Dividends

The Company declared cash dividends per share for the following periods presented below:

	Dividends per share for the
	For the Year Ended December 31,
	2020		2019		2018
First quarter	$	0.04	$	0.04	$	0.035
Second quarter	0.04		0.04		0.035
Third quarter	0.04		0.04		0.035
Fourth quarter(1)	0.04		0.04		0.035
Total cash dividends declared	$	0.16	$	0.16	$	0.140

(1)    See Note (25) Subsequent Events for when dividend was declared.

Reorganization Merger

On April 10, 2018, the Company completed a reorganization merger whereby TFP merged with and into the Company with the Company continuing as the surviving company (Reorganization Merger). After the Reorganization Merger, TFP ceased to

F-51

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

exist and the Company owned 100% of Operating Company. As a result of the merger, the balance of Non-controlling interest - TFP as of the merger date was allocated to Additional paid-in capital and Accumulated other comprehensive income (loss), as detailed in the consolidated statement of changes in stockholders’ equity.

In connection with the Reorganization Merger, each TFP limited partner other than Tiptree received 2.798 shares of Class A common stock for each partnership unit, 6,861,561 Class A common shares were issued, and all outstanding Class B common stock was canceled. Outstanding warrants to acquire 652,500 shares of Class A common stock at an exercise price of $11.33 per share owned by TFP were canceled. In addition, warrants to acquire 103,994 shares of Class A common stock at an exercise price of $11.33 were issued to partners of TFP other than Tiptree, and expired unexercised on December 31, 2018. Warrants to acquire 805,986 TFP LP units at $21.232 per unit were canceled and Tiptree issued warrants for 2,255,149 Tiptree shares of Class A common stock at an exercise price of $7.59 per share to holders of the canceled TFP warrants.

On April 16, 2018, the Company canceled 5,035,977 shares of Class A common stock held by a subsidiary of the Company,

which had no effect on total Tiptree Inc. stockholders’ equity.

At the 2018 Annual Meeting of Stockholders of the Company held on June 6, 2018, the Company’s stockholders approved an

amendment and restatement (the Amendment) to the Fourth Articles of Amendment and Restatement of the Company (as amended by the Amendment, the Fifth A&R Charter) to remove all references to the Company’s Class B common stock as well as other ministerial changes, including changing the name of our Class A common stock to Common Stock. The Amendment was filed with the State Department of Assessments and Taxation of Maryland on June 7, 2018.

Statutory Reporting and Insurance Company Subsidiaries Dividend Restrictions

The Company’s U.S. insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles (SAP) prescribed or permitted by the insurance departments of their states of domicile. Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (the NAIC) as well as state laws, regulations and administrative rules.

Statutory Capital, Surplus and Net Income

The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required by regulatory authorities, including the NAIC; their capital and surplus levels exceeded respective minimum requirements as of December 31, 2020 and December 31, 2019.

	As of December 31,
	2020		2019
Combined statutory capital and surplus of the Company's insurance company subsidiaries	$	202,710	$	134,179
Required minimum statutory capital and surplus	$	64,950	$	17,950

Under the National Association of Insurance Commissioners Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's U.S. domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of December 31, 2020.

The following table presents the statutory net income of the Company’s U.S. domiciled statutory insurance companies for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income of statutory insurance companies	$	19,647	$	8,444	$	13,986

The Company also has a foreign insurance subsidiary that is not subject to SAP. The statutory capital and surplus amounts and statutory net income presented above do not include the foreign insurance subsidiary in accordance with SAP.

F-52

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Statutory Dividends

The Company’s U.S. domiciled insurance company subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance department of the applicable state of domicile. The Company eliminates all dividends from its subsidiaries in the consolidated financial statements. The following table presents the dividends paid to the Company by its U.S domiciled insurance company subsidiaries and the combined amount available for ordinary dividends of the Company's U.S. domiciled insurance company subsidiaries for the following periods:

	For the Year Ended December 31,
	2020		2019
Ordinary dividends	$	—	$	9,001
Extraordinary dividends	—		1,188
Total dividends	$	—	$	10,189
	As of
	December 31, 2020		December 31, 2019
Amount available for ordinary dividends of the Company's insurance company subsidiaries	$	13,418	$	4,527

At December 31, 2020, the maximum amount of dividends that our U.S. domiciled regulated insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately $13,418. The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.

F-53

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(18) Accumulated Other Comprehensive Income (Loss)

The following table presents the activity in accumulated other comprehensive income (loss) (AOCI), net of tax, for the following periods:

	Unrealized gains (losses) on						Amount attributable to non-controlling interests
	Available for sale securities		Interest rate swaps		Total AOCI (loss)		TFP		Other		Total AOCI (loss) to Tiptree Inc.
Balance at December 31, 2017	$	(460)	$	2,074	$	1,614	$	(222)	$	(426)	$	966
Other comprehensive income (losses) before reclassifications	(2,257)		835		(1,422)		61		211		(1,150)
Amounts reclassified from AOCI	648		—		648		—		—		648
Reclassification of AOCI - interest rate swaps (1)	—		(2,909)		(2,909)		502		226		(2,181)
Reorganization merger	—		—		—		(341)		—		(341)
Period change	(1,609)		(2,074)		(3,683)		222		437		(3,024)
Balance at December 31, 2018	$	(2,069)	$	—	$	(2,069)	$	—	$	11	$	(2,058)
Other comprehensive income (losses) before reclassifications	4,911		—		4,911		—		(24)		4,887
Amounts reclassified from AOCI	(1,032)		—		(1,032)		—		—		(1,032)
Period change	3,879		—		3,879		—		(24)		3,855
Adoption of accounting standard (1)	(99)		—		(99)				—		(99)
Balance at December 31, 2019	$	1,711	$	—	$	1,711	$	—	$	(13)	$	1,698
Other comprehensive income (losses) before reclassifications	4,364		—		4,364		—		(15)		4,349
Amounts reclassified from AOCI	(415)		—		(415)		—		—		(415)
Period change	3,949		—		3,949		—		(15)		3,934
Adoption of accounting standard (1)	42		—		42		—		—		42
Balance at December 31, 2020	$	5,702	$	—	$	5,702	$	—	$	(28)	$	5,674

(1)    Due to adoption of 2018-02 and 2016-13, respectively. See Note (2) Summary of Significant Accounting Policies.

The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the consolidated statement of operations for the following periods:

	For the Year Ended December 31,						Affected line item in consolidated statements of operations
Components of AOCI	2020		2019		2018
Unrealized gains (losses) on available for sale securities	$	528	$	1,312	$	(819)	Net realized and unrealized gains (losses)
Related tax (expense) benefit	(113)		(280)		171		Provision for income tax
Net of tax	$	415	$	1,032	$	(648)
Reclassification of AOCI - interest rate swaps (1)	$	—	$	—	$	3,845	Gain on sale of discontinued operations
Related tax (expense) benefit	—		—		(936)		Provision for income tax
Net of tax	$	—	$	—	$	2,909

(1)    Relates to the sale of Care. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

(19) Stock Based Compensation

Equity Plans

2017 Omnibus Incentive Plan

The Company adopted the Tiptree 2017 Omnibus Incentive Plan (2017 Equity Plan) on June 6, 2017, which permits the grant of restricted stock units (RSUs), stock, and stock options up to a maximum of 6,100,000 shares of common stock. The general purpose of the 2017 Equity Plan is to attract, motivate and retain selected employees and directors for the Company and its subsidiaries, to provide them with incentives and rewards for performance and to better align their interests with the

F-54

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

interests of the Company’s stockholders. Unless otherwise extended, the 2017 Equity Plan terminates automatically on June 6, 2027. The table below summarizes changes to the issuances under the Company’s 2017 Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

2017 Equity Plan	Number of shares (1)
Available for issuance as of December 31, 2017	6,017,012
RSU and option awards granted	(558,034)
Forfeited	15,236
Available for issuance as of December 31, 2018	5,474,214
RSU and option awards granted	(702,264)
Forfeited	8,318
Subsidiary exchanged shares	(14,405)
Available for issuance as of December 31, 2019	4,765,863
RSU, stock and option awards granted	(977,446)
Available for issuance as of December 31, 2020	3,788,417

(1)    Excludes awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock.

Restricted Stock Units and Stock Awards

Tiptree Corporate Incentive Plans

The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price. Generally, the Tiptree RSUs vest and become non-forfeitable with respect to one-third of Tiptree shares granted on each of the one, two and three year anniversaries of the date of the grant, and expensed using the straight-line method over the requisite service period.

Stock Awards - Directors’ Compensation

The Company values the stock awards at their issuance-date fair value as measured by Tiptree’s common stock price. Upon issuance, the awards are deemed to be granted and immediately vested.

The following table presents changes to the issuances of RSUs and stock awards under the 2017 Equity Plan for the periods indicated:

	Number of shares issuable	Weighted average grant date fair value
Unvested units as of December 31, 2017	598,882	$	6.48
Granted	315,371	5.95
Vested	(222,387)	6.39
Forfeited	(15,236)	6.04
Unvested units as of December 31, 2018	676,630	$	6.27
Granted	476,449	6.25
Vested	(186,152)	6.44
Forfeited	(8,318)	6.10
Unvested units as of December 31, 2019	958,609	$	6.23
Granted	552,169	7.04
Vested	(557,633)	6.54
Unvested units as of December 31, 2020	953,145	$	6.52

F-55

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following tables present the detail of the granted and vested RSUs and stock awards for the periods indicated:

	For the Year Ended December 31,				For the Year Ended December 31,
Granted	2020	2019	2018	Vested	2020	2019	2018
Directors	82,912	48,076	46,572	Directors	82,912	48,076	46,572
Employees (1)	469,257	428,373	268,799	Employees	474,721	138,076	175,815
Total Granted	552,169	476,449	315,371	Total Vested	557,633	186,152	222,387
				Taxes	(53,438)	(35,622)	(29,286)
				Exchanged	—	14,405	—
				Net Vested	504,195	164,935	193,101

(1)    Includes 256,619, 307,148 and 147,467 shares that vest ratably over three years and 212,638, 112,907 and 121,332 shares that cliff vest in February 2023, 2022 and 2021, respectively, for the years ended December 31, 2020, 2019 and 2018, respectively.

Subsidiary Incentive Plans

Certain of the Company’s subsidiaries have established incentive plans under which they are authorized to issue equity of those subsidiaries to certain of their employees. Such awards are accounted for as equity. These awards are subject to performance-vesting criteria based on the performance of the subsidiary (performance vesting awards) and time-vesting subject to continued employment (time vesting awards). Following the service period, such vested awards may be exchanged at fair market value, at the option of the holder, for Tiptree common stock under the 2017 Equity Plan. The service period for certain grants has been achieved and those vested subsidiary awards are currently eligible for exchange. The Company has the option, but not the obligation to settle the exchange right in cash.

The following table presents changes to the issuances of subsidiary awards under the subsidiary incentive plans for the periods indicated:

	Grant date fair value of equity shares issuable
Unvested balance as of December 31, 2017	$	8,792
Granted	1,113
Vested	(1,771)
Performance assumption adjustment	576
Unvested balance as of December 31, 2018	$	8,710
Granted	—
Vested	(4,991)
Performance assumption adjustment	560
Unvested balance as of December 31, 2019	$	4,279
Granted	1,108
Vested	(4,237)
Performance assumption adjustment	3,155
Unvested balance as of December 31, 2020	$	4,305

The net vested and unvested balance of subsidiary awards (assuming full vesting) translates to an aggregate of 2,954,566 which are eligible for exchange as of December 31, 2020.

F-56

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

Stock Option Awards

Tiptree Corporate Incentive Plans

Option awards have been granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant. The option awards have a 10-year term and are subject the recipient’s continuous service, a market requirement, and vest one third on each of the three, four, and five year anniversaries of the grant date. The market requirement is a book value per share target that can be met at any time before the option expires and it only needs to be met once for the option to remain exercisable for the remainder of its term. If the service condition is met, the full amount of the compensation expense will be recognized over the appropriate vesting period whether the market requirement is met or not. The options granted after 2017 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date. Book value targets for grants in 2020, 2019, 2018, 2017 and 2016 are $11.52, $10.79, $9.97, $10.14 and $8.96, respectively.

The fair value option grants are estimated on the date of grant using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved. Historical volatility was computed based on historical daily returns of the Company’s stock between the grant date and July 1, 2013, the date of the business combination through which Tiptree became a public company. The valuation is done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date. The current quarterly dividend rates in effect as of the date of the grant are used to calculate a spot dividend yield as of the date of grant for use in the model.

The following table presents the assumptions used to estimate the fair values of the stock options granted for the following periods:

	Year Ended December 31,
Valuation Input	2020		2019
	Assumption	Average	Assumption	Average
Historical volatility	27.60%	N/A	27.69%	N/A
Risk-free rate	1.51%	N/A	2.62%	N/A
Dividend yield	2.20%	N/A	2.21%	N/A
Expected term (years)		7.0		6.5

The following table presents the Company's stock option activity for the current period:

	Options outstanding	Weighted average exercise price (in dollars per stock option)		Weighted average grant date value (in dollars per stock option)		Options exercisable
Balance, December 31, 2017	821,864	$	6.36	$	2.82	—
Granted	242,663	5.85		1.88		—
Balance, December 31, 2018	1,064,527	$	6.24	$	2.61	—
Granted	225,815	6.26		1.69		—
Balance, December 31, 2019	1,290,342	$	6.24	$	2.45	—
Granted	425,277	7.25		1.83		—
Balance, December 31, 2020	1,715,619	$	6.49	$	2.29	—
Weighted average remaining contractual term at December 31, 2020 (in years)	7.1

Stock Based Compensation Expense

The following table presents total stock based compensation expense and the related income tax benefit recognized on the consolidated statements of operations:

F-57

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	Year Ended December 31,
	2020		2019		2018
Employee compensation and benefits	$	7,571	$	6,062	$	6,354
Director compensation	546		301		303
Income tax benefit	(1,705)		(1,374)		(1,438)
Net stock based compensation expense	$	6,412	$	4,989	$	5,219

Additional information on total non-vested stock based compensation is as follows:

	As of
	December 31, 2020
	Stock options		Restricted stock awards and RSUs
Unrecognized compensation cost related to non-vested awards	$	521	$	4,551
Weighted - average recognition period (in years)	1.27		1.43

(20) Income Taxes

The following table presents the Company’s provision (benefit) for income taxes reflected as a component of income (loss):

	Year Ended December 31,
	2020		2019		2018
Current provision (benefit) for income taxes:
Federal	$	(26,273)	$	991	$	(9,650)
State	1,692		386		(1,182)
Foreign	221		825		754
Total current provision (benefit) for income taxes	(24,360)		2,202		(10,078)
Deferred provision (benefit) for income taxes:
Federal	10,415		6,502		4,110
State	697		335		59
Foreign	(379)		(22)		—
Total deferred provision (benefit) for income taxes	10,733		6,815		4,169
Total provision (benefit) for income taxes from continuing operations	$	(13,627)	$	9,017	$	(5,909)
Provision (benefit) for income taxes from discontinued operations	—		—		13,714
Total provision (benefit) for income taxes	$	(13,627)	$	9,017	$	7,805

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses. During the year ended December 31, 2020, the Company recorded a $7,293 tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $16,795 and an increase to our current receivable of $24,088. The Company continues to assess the potential tax impacts of this legislation on its financial position and results of operations.

The U.S. federal rate is before the consideration of rate reconciling items. A reconciliation of the expected federal provision (benefit) for income taxes on income from continuing operations using the federal statutory income tax rate to the actual provision (benefit) for income taxes and resulting effective income tax rate is as follows for the periods indicated below:

F-58

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

	Year Ended December 31,
	2020			2019			2018
Income (loss) before income taxes from continuing operations	$	(38,852)		$	29,139		$	(19,796)
Federal statutory income tax rate	21.0		%	21.0		%	21.0		%
Expected federal provision (benefit) for income taxes at the federal statutory income tax rate	(8,159)			6,119			(4,157)
Effect of state provision (benefit) for income taxes, net of federal benefit	1,929			549			(471)
Effect of CARES Act refund claims	(7,293)			—			—
Effect of foreign operations	(938)			440			1,053
Effect of permanent differences	62			(30)			170
Effect of dividends received deduction	(26)			(29)			(1,534)
Effect of return-to-accrual	330			1,524			(404)
Effect of other items	468			444			(566)
Tax (benefit) on income from continuing operations	$	(13,627)		$	9,017		$	(5,909)
Effective tax rate	35.1		%	31.0		%	29.9		%

For the year ended December 31, 2020, the Company’s effective tax rate on income from continuing operations was equal to 35.1%. The effective tax rate for the year ended December 31, 2020 is higher than the U.S. statutory income tax rate of 21.0% primarily from the impact of expected refunds arising from the CARES Act.

For the year ended December 31, 2019, the Company’s effective tax rate on income from continuing operations was equal to 31%. The effective tax rate for the year ended December 31, 2019 is higher than the U.S. statutory income tax rate of 21.0% primarily due to the non-recurring return-to-provision, as well as ongoing state and foreign taxes.

For the year ended December 31, 2018, the Company’s effective tax rate on losses from continuing operations was equal to 29.9%. The effective tax rate for the year ended December 31, 2018 is higher than the U.S. statutory income tax rate of 21.0% primarily due to the dividends received deduction, offset by the effect of foreign operations.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	26,404	$	17,384
Unrealized losses	25,527		4,242
Accrued expenses	3,560		5,470
Unearned premiums	25,626		14,189
Deferred revenue	7,042		6,301
Other deferred tax assets	7,091		5,720
Total deferred tax assets	95,250		53,306
Less: Valuation allowance	(6,871)		(4,961)
Total net deferred tax assets	88,379		48,345
Deferred tax liabilities:
Property	2,697		1,554
Unrealized gains	17,968		6,005
Other deferred tax liabilities	4,057		3,370
Deferred acquisition cost	47,061		35,066
Advanced commissions	30,977		25,392
Intangibles	10,741		9,264
Total deferred tax liabilities	113,501		80,651
Net deferred tax liability (1)	$	25,122	$	32,306
(1) Includes $939 classified as held for sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

F-59

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

As of January 2016, Tiptree has established a U.S. federal consolidated income tax group and as such files on a consolidated basis, with certain exceptions such as a Fortegra life insurance company and Luxury. Tiptree consolidated, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations. Additionally, as needed the Company will take all necessary steps to comply with any income tax withholding requirements.

As of December 31, 2020, the Company had total U.S. Federal net operating loss carryforwards (NOLs) of $70,803 arising from continuing operations. The following table presents the U.S. Federal NOLs by tax year of expiration:

	As of December 31, 2020
Tax Year of Expiration
2026	$	86
2027	124
2028	—
2029	166
2030	17
2031	—
2032	—
2033	—
2034	1,893
2035	562
2036	39,862
2037	1,766
2038	—
Indefinite	26,327
Total	$	70,803

In addition to the U.S. Federal NOL, Tiptree and its subsidiaries have NOLs in various state jurisdictions totaling $11,446 as of December 31, 2020. Valuation allowances have been established for various state deferred tax assets of $6,871, which are primarily state NOLs, since management has concluded it is more likely than not they will expire unutilized based on existing positive and negative evidence. Management believes it is more likely than not the remaining NOLs and deferred tax assets will be utilized prior to their expiration dates.

As of December 31, 2020, the consolidated valuation allowance for Tiptree was $6,871. In 2020, the Company recorded a net increase in its valuation allowances equal to $1,910, compared to a net increase in its valuation allowance of $1,869 in 2019.

As of December 31, 2020, the Company had no material unrecognized tax benefits or accrued interest and penalties. This is consistent with the tax years ending December 31, 2019 and December 31, 2018. Federal tax years 2017 and onward are open for examination as of December 31, 2020.

F-60

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(21) Commitments and Contingencies

Operating Leases

All leases are office space leases and are classified as operating leases that expire through 2031. Some of our office leases include the option to extend for up to 5 years or less at management’s discretion. Such extension options were not included in the measurement of the lease liability. Below is a summary of our right of use asset and lease liability as of December 31, 2020:

	As of
	December 31, 2020
Right of use asset - Operating leases	$	27,291
Operating lease liability	$	32,914
Weighted-average remaining lease term (years)	6.9
Weighted-average discount rate (1)	7.4		%

(1)    Discount rate was determined by applying available market rates to lease obligations based upon their term.

As of December 31, 2020, the approximate aggregate minimum future lease payments required for our lease liability over the remaining lease periods are as follows:

	December 31, 2020
2021	$	8,665
2022	7,740
2023	7,049
2024	6,176
2025	5,445
2026 and thereafter	16,091
Total minimum payments	51,166
Less: liabilities held for sale	(887)
Less: present value adjustment	(17,365)
Total	$	32,914

The following table presents rent expense for the Company’s office leases recorded on the consolidated statements of operations for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Rent expense for office leases (1)	$	7,374	$	8,612	$	7,519

(1) Includes lease expense of $509 and $385 for the years ended December 31, 2020 and 2019, respectively, for assets held for sale.

Litigation

The Company is a defendant in Mullins v. Southern Financial Life Insurance Co., which was filed in February 2006, in the Pike Circuit Court, in the Commonwealth of Kentucky. A class was certified in June 2010. At issue is the duration or term of coverage under certain disability and life credit insurance policies. The action alleges violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud and seeks compensatory and punitive damages, attorney fees and interest. To date, the court has not awarded sanctions in connection with Plaintiffs’ April 2012 Motion for Sanctions. In January 2015, the trial court issued an Order denying the Company’s motion to decertify the class, which was upheld on appeal. Following a February 2017 hearing, the court denied the Company’s Motion for Summary Judgment as to certain disability insurance policies. In January 2018, the court vacated its November 2017 order granting Company’s Motion for Summary Judgment as to the life certificates at issue with leave to refile. No trial or additional hearings are currently

F-61

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

scheduled.

The Company considers such litigation customary in the insurance industry. In management's opinion, based on information available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. At this time, the Company cannot estimate a range of loss that is reasonably possible.

The Company and its subsidiaries are parties to other legal proceedings in the ordinary course of business. Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company does not believe that these proceedings, either individually or in the aggregate, are likely to have a material adverse effect on the Company’s financial position.

(22) Earnings Per Share

The Company calculates basic net income per share of common stock (common share) based on the weighted average number of common shares outstanding, which includes vested corporate RSUs. Unvested corporate RSUs have a non-forfeitable right to participate in dividends declared and paid on the Company’s common stock on an as vested basis and are therefore considered a participating security. The Company calculates basic earnings per share using the “two-class” method under which the income available to common stockholders is allocated to the unvested corporate RSUs.

Diluted net income attributable to common stockholders includes the effect of unvested subsidiaries’ RSUs, when dilutive. The assumed exercise of all potentially dilutive instruments are included in the diluted net income per common share calculation, if dilutive.

F-62

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

The following table presents a reconciliation of basic and diluted net income per common share for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income (loss) from continuing operations	$	(25,225)	$	20,122	$	(13,887)
Less:
Net income (loss) attributable to non-controlling interests	3,933		1,761		(612)
Net income allocated to participating securities	—		472		—
Net income (loss) attributable to common stockholders	(29,158)		17,889		(13,275)
Net income (loss) from discontinued operations	—		—		43,770
Less:
Net income (loss) from discontinued operations attributable to non-controlling interests	—		—		6,562
Net income (loss) from discontinued operations attributable to common stockholders	—		—		37,208
Net income (loss) attributable to common shares - basic	$	(29,158)	$	17,889	$	23,933
Effect of Dilutive Securities:
Securities of subsidiaries	—		(723)		—
Net income (loss) attributable to common shares - diluted	$	(29,158)	$	17,166	$	23,933
Weighted average number of shares of common stock outstanding - basic	33,859,775		34,578,292		34,715,852
Weighted average number of incremental shares of common stock issuable from exchangeable interests and contingent considerations	—		—		—
Weighted average number of shares of common stock outstanding - diluted	33,859,775		34,578,292		34,715,852
Basic:
Net income (loss) from continuing operations	$	(0.86)	$	0.52	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Basic net income (loss) attributable to common shares	$	(0.86)	$	0.52	$	0.69
Diluted:
Net income (loss) from continuing operations	$	(0.86)	$	0.50	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Diluted net income (loss) attributable to common shares	$	(0.86)	$	0.50	$	0.69

(23) Related Party Transactions

Corvid Peak is a related party of the Company because Corvid Peak is deemed to be controlled by Michael Barnes, the Company’s Executive Chairman. Tiptree agreed to invest $75,000 to seed new investment funds to be managed by Corvid Peak, which was completely funded in the first quarter of 2020. The Company will pay Corvid Peak an annual management fee of 1.25% of the net asset value of invested capital and an incentive fee equal to 20% of the net profits, subject to a conventional high water mark. The Company incurred $2,792 and $1,006 of management and incentive fees to Corvid Peak for the year ended December 31, 2020 and 2019, respectively.

Pursuant to the Transition Services Agreement, Tiptree and Corvid Peak have mutually agreed to provide certain services to one another. Payments under the Transition Services Agreement in the year ended December 31, 2020 and 2019 were not material.

Pursuant to the Emeritus Agreement, Tiptree agreed to provide Mr. Inayatullah, a greater than 5% stockholder of the Company, office space and support services, and reimburse Mr. Inayatullah for a portion of benefit expenses in exchange for advice and other consulting services as requested by the Company’s Executive Committee. Transactions related to the Emeritus Agreement in the year ended December 31, 2020 were not material.

F-63

TIPTREE INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2020

(in thousands, except share data)

(24) Summarized Quarterly Information (Unaudited)

	2020
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	129,671	$	199,194	$	224,041	$	257,395
Total expenses	211,422		194,760		210,144		232,827
Income (loss) before taxes	(81,751)		4,434		13,897		24,568
Less: provision (benefit) for income taxes	(21,181)		(5)		(844)		8,403
Net income (loss)	(60,570)		4,439		14,741		16,165
Less: net income (loss) attributable to non-controlling interests	(563)		623		1,978		1,895
Net income (loss) attributable to common stockholders	$	(60,007)	$	3,816	$	12,763	$	14,270
Net (loss) income per Common Share:
Basic earnings per share	$	(1.74)	$	0.11	$	0.37	$	0.42
Diluted earnings per share	$	(1.74)	$	0.10	$	0.35	$	0.40
Weighted average number of Common Shares:
Basic	34,566,330		33,984,195		33,684,301		33,213,307
Diluted	34,566,330		33,984,195		33,684,301		33,213,307

	2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	183,903	$	191,072	$	189,185	$	208,568
Total expenses	178,748		175,367		190,783		198,691
Income (loss) before taxes	5,155		15,705		(1,598)		9,877
Less: provision (benefit) for income taxes	854		3,501		(649)		5,311
Net income (loss)	4,301		12,204		(949)		4,566
Less: net income (loss) attributable to non-controlling interests	376		458		508		419
Net income (loss) attributable to common stockholders	$	3,925	$	11,746	$	(1,457)	$	4,147
Net (loss) income per Common Share:
Basic earnings per share	$	0.11	$	0.33	$	(0.04)	$	0.12
Diluted earnings per share	$	0.11	$	0.32	$	(0.04)	$	0.11
Weighted average number of Common Shares:
Basic	34,673,054		34,527,230		34,552,171		34,562,219
Diluted	34,673,054		34,527,230		34,552,171		34,578,357

(25) Subsequent Events

On March 9, 2021, the Company’s board of directors declared a quarterly cash dividend of $0.04 per share to holders of common stock with a record date of March 22 2021, and a payment date of March 29, 2021.

F-64

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

(a)     Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Executive Chairman, Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act) as of December 31, 2020. Based upon that evaluation, the Company’s Executive Chairman, Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2020.

For the year ended December 31, 2020, the Company’s management excluded the Smart AutoCare business acquired on January 3, 2020 (within the Insurance segment) from its evaluation of internal control over financial reporting. The total revenues and total assets for Smart AutoCare for the period January 3, 2020 through December 31, 2020 and as of December 31, 2020, were approximately $70 million and $349 million, respectively, which represent 9% and 12% of the Company’s total consolidated revenues and total consolidated assets for this period, respectively.

The Company is committed to maintaining a strong internal control environment which is accompanied by management’s ongoing focus on processes and related controls to achieve accurate and reliable financial reporting. However, all systems of internal control, no matter how well designed, have inherent limitations. Therefore, even those systems deemed to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of the effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

(b)     Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. The Company conducted an evaluation of the effectiveness of its internal control over financial reporting based upon the framework established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are made only in accordance with the authorization of management and the Board of Directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

If the Company identifies any material weaknesses, the COSO Framework does not allow the Company to conclude that our internal control over financial reporting is effective. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

Based upon its assessment, management concluded that the Company’s internal control over financial reporting as of December 31, 2020 was effective using the COSO Framework.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm that audited the Company’s consolidated financial statements as of and for the year ended December 31, 2020, as stated in their report, included in Item 8 of this Form 10-K, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020.

(c)     Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information concerning our executive officers is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Information with respect to our directors and the nomination process is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Information regarding our audit committee and our audit committee financial experts is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Information required by Item 405 of Regulation S-K is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Item 11. Executive Compensation

Information with respect to executive compensation is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information with respect to security ownership of certain beneficial owners and management is incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information with respect to such contractual relationships and independence is incorporated herein by reference to the information in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

Item 14. Principal Accountant Fees and Services

Information with respect to principal accounting fees and services and pre-approval policies are incorporated herein by reference to information included in the Proxy Statement for the Company’s 2021 Annual Meeting of Stockholders.

PART IV

Item 15. Exhibits, Financial Statement Schedules

The following documents are filed as a part of this Form 10-K:
(a)(1) All Financial Statements
Index to Financial Statements:	Page
Consolidated Balance Sheet as of December 31, 2020 and 2019	F- 1
Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018	F- 2
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018	F- 3
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018	F- 5
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018	F- 6
Notes to Consolidated Financial Statements	F- 7

(a)(2) Financial Statement Schedules

Schedule II—“Financial Information of Registrant”, is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the financial statements and notes thereto contained in Item 8—“Financial Statements and Supplementary Data.”

The financial statements of Invesque Inc. required by Rule 3-09 of Regulation S-X will be provided as Exhibits 99.1 and 99.2 to this report.

All other financial statements and financial statement schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instruction, are not material or are not applicable and, therefore, have been omitted.

(a)(3) Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated April 9, 2018, by and among Tiptree Financial Partners, L.P. and Tiptree Inc. (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on April 10, 2018 and herein incorporated by reference).
3.1	Fifth Articles of Amendment and Restatement of the Registrant, effective June 6, 2018 (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on June 7, 2018 and herein incorporated by reference).
3.2	Fourth Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on January 4, 2017 and herein incorporated by reference).
3.3	Articles Supplementary of the Registrant, dated December 29, 2014 (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on December 29, 2014 and herein incorporated by reference).
4.1	Form of Certificate of Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-A/A (File No. 001-33549), filed on June 7, 2018 and herein incorporated by reference.
4.2	Form of Warrant to Purchase Common Stock (Expiring June 30, 2022) (previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on April 10, 2018 and herein incorporated by reference).
4.3	Description of the Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934 (previously filed as Exhibit 4.3 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference).

Exhibit No.	Description
10.1	Registrant’s 2017 Omnibus Incentive Plan (previously filed as Exhibit 10.1 to the Registrant’s Form S-8 Registration Statement (File No. 333-218827), filed on June 19, 2017 and herein incorporated by reference).**
10.2	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2017 Omnibus Incentive Plan (previously filed as Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference)**
10.3	Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (annual vesting) (previously filed as Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference). **
10.4	Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (cliff vesting) (previously filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 14, 2018 and herein incorporated by reference). **
10.5	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (previously filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference) .**
10.6	Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (annual vesting) (previously filed as Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference).**
10.7	Form of Restricted Stock Unit Agreement under the Registrant’s 2017 Omnibus Incentive Plan (for 2020 and beyond) (cliff vesting) (previously filed as Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference).**
10.8	Form of Indemnification Agreement (previously filed as Exhibit 10.9 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.9	Amended and Restated Transition Services Agreement between Tricadia Holdings, L.P. and Tiptree Inc., dated as of February 15, 2019 (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on April 22, 2019 and herein incorporated by reference).
10.10	Credit Agreement, dated as of February 21, 2020, between Tiptree Inc., Tiptree Operating Company, LLC, Fortress Credit Corp. as Administrative Agent, Collateral Agent and Lead Arranger, and the lenders party thereto. (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed February 21, 2020 and herein incorporated by reference).
10.11	Amended and Restated Credit Agreement, dated as of August 4, 2020 by and among Fortegra Financial Corporation (“Fortegra”) and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed August 5, 2020 and herein incorporated by reference).
10.12	Credit Agreement, dated as of October 16, 2020 by and among South Bay Financial Corporation, South Bay Funding LLC, the lenders from time to time party thereto and Fifth Third Bank, National Association as the administrative agent (previously filed as Exhibit 10.1 to Form 8-K (File No. 001-33549), filed October 21, 2020 and herein incorporated by reference).
10.13	Equity Interest Purchase Agreement, dated December 16, 2019, by and among Tiptree Warranty Holdings, LLC and Peter Masi (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on December 17, 2019 and herein incorporated by reference).
10.14	Amendment to Partner Emeritus Agreement, effective January 1, 2021, by and between Tiptree Inc. and Arif Inayatullah (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on January 4, 2021 and herein incorporated by reference).
21.1	Subsidiaries of the Registrant (filed herewith).
23.1	Consent of Independent Registered Public Accounting Firm (filed herewith).
23.2	Consent of KPMG LLP, Independent Auditors of Invesque Inc. (filed herewith).
23.3	Consent of KPMG LLP, Independent Auditors of Invesque Inc. (filed herewith).
31.1	Certification of Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Exhibit No.	Description
31.2	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.3	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Executive Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.3	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
99.1	Consolidated Financial Statements of Invesque Inc. as at December 31, 2020 and 2019 (filed herewith).
99.2	Consolidated Financial Statements of Invesque Inc. as at December 31, 2018 and 2017 (previously filed as Exhibit 99.2 to the Registrant’s Annual Report on Form 10-K (File No. 001-33549), filed on March 12, 2020 and herein incorporated by reference).
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
104	Cover page from Tiptree Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, formatted in iXBRL (included in Exhibit 101).

* Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets (audited) for December 31, 2020 and December 31, 2019, (ii) the Consolidated Statements of Operations (audited) for the years ended December 31, 2020, 2019 and 2018, (iii) the Consolidated Statements of Comprehensive Income (Loss) (audited) for the years ended December 31, 2020, 2019 and 2018, (iv) the Consolidated Statements of Changes in Stockholders’ Equity (audited) for the years ended December 31, 2020, 2019 and 2018, (v) the Consolidated Statements of Cash Flows (audited) for the years ended December 31, 2020, 2019 and 2018 and (vi) the Notes to the Consolidated Financial Statements (audited).

** Denotes a management contract or compensatory plan, contract or arrangement.

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Tiptree Inc. has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Tiptree Inc.
Date:	March 11, 2021	By:/s/ Jonathan Ilany
		Jonathan Ilany
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Jonathan Ilany Jonathan Ilany	Chief Executive Officer and Director (Principal Executive Officer)	March 11, 2021
/s/ Sandra Bell Sandra Bell	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 11, 2021
/s/ Michael G. Barnes Michael G. Barnes	Executive Chairman and Director	March 11, 2021
/s/ Paul M. Friedman Paul M. Friedman	Director	March 11, 2021
/s/ Lesley Goldwasser Lesley Goldwasser	Director	March 11, 2021
/s/ Bradley E. Smith Bradley E. Smith	Director	March 11, 2021
/s/ Dominique Mielle Dominique Mielle	Director	March 11, 2021

Schedule II — Condensed Financial Information of Registrant

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Revenues
Interest income (1)	$	223	$	—	$	137
Other revenue	232		—		10
Total revenues	455		—		147
Expenses
Employee compensation and benefits	15,195		—		—
Interest expense	4,681		—		—
Professional fees	4,476		—		—
Rent and facilities	2,094		—		—
General and administrative	1,259		—		—
Depreciation and amortization	807		—		—
Loss on extinguishment of debt	353		—		—
Other expenses	1,513		3		30
Total expenses	30,378		3		30
Equity in earnings (losses) of subsidiaries, net of tax (2)	(24,855)		18,364		(13,392)
Income (loss) before taxes	(54,778)		18,361		(13,275)
Less: provision (benefit) for income taxes	(25,620)		—		—
Net income (loss)	(29,158)		18,361		(13,275)
Discontinued operations:
Income from discontinued operations, net of tax and non-controlling interest	—		—		414
Gain on sale of discontinued operations, net of tax and non-controlling interest	—		—		36,794
Discontinued operations, net of tax and non-controlling interest	—		—		37,208
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933

(1)    Eliminated in consolidation for the period ending December 31, 2018 only.

(2)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED BALANCE SHEETS
(All amounts in thousands, except share data)	As of December 31,
	2020		2019
Assets
Investment in subsidiaries (1)	$	337,951	$	397,395
Cash and cash equivalents	712		87
Notes and accounts receivable, net	2,622		—
Intercompany receivables, net (1)	—		—
Income taxes receivable	15,590		—
Deferred tax assets	44,161		—
Other assets	15,332		580
Total assets	$	416,368	$	398,062
Liabilities and Stockholders’ Equity
Liabilities
Deferred tax liabilities	$	23,889	$	—
Operating lease liability	12,241		—
Intercompany payables, net (1)	9,861		—
Accrued expenses	7,490		—
Other liabilities	6,743		—
Total liabilities	$	60,224	$	—
Stockholders' Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—	$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 32,682,462 and 34,562,553 shares issued and outstanding, respectively	33		35
Additional paid-in capital	315,014		326,140
Accumulated other comprehensive income (loss), net of tax	5,674		1,698
Retained earnings	35,423		70,189
Total stockholders’ equity	356,144		398,062
Total liabilities and stockholders' equity	$	416,368	$	398,062

(1)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Operating Activities:
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries(1)	24,855		(18,364)		(23,816)
Depreciation expense	807		—		—
Deferred provision (benefit) for income taxes	(15,815)		—		—
Non-cash lease expense	1,660		—		—
Non-cash compensation expense	3,110		—		—
Amortization of deferred financing costs	172		—		—
Changes in operating assets and liabilities
Changes in other operating assets and liabilities	1,264		(583)		4,772
Net cash provided by (used in) operating activities	(13,105)		(586)		4,889
Investing Activities:
Asset acquisitions due to merger with Operating Co.	488		—		—
Net cash flows provided by (used in) provided by investing activities	488		—		—
Financing Activities:
Distributions from subsidiaries (1)	35,092		14,587		—
Dividends paid	(5,565)		(5,502)		(4,781)
Repurchases of common stock	(13,889)		(9,085)		—
Subsidiary RSU exchanges	(2,034)		—		—
Vesting of share-based incentive compensation	(362)		—		—
Net cash provided by (used in) financing activities	13,242		—		(4,781)
Net increase (decrease) in cash and cash equivalents	625		(586)		108
Cash and cash equivalents at beginning of period	87		673		565
Cash and cash equivalents at end of period	$	712	$	87	$	673
Cash (received) paid for income taxes	$	(166)	$	2,168	$	(5,915)

(1)    Eliminated in consolidation.

Note 1. Basis of Presentation

Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into two reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.

Pursuant to the terms discussed in Note—(11) Debt, net in the notes to consolidated financial statements, a secured corporate credit agreement of a subsidiary of Tiptree restricts that subsidiary’s ability to pay or make any dividend or distribution to Tiptree Inc. In addition, certain other subsidiaries’ activities are regulated, or subject to specific restriction on transfers as a result of financing arrangements. As a result of these restrictions, these condensed financial statements of the Registrant have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company's subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company's consolidated net assets as of December 31, 2020.

For the periods ending December 31, 2019 and 2018, the Company was a holding company without any operations of its own. On July 17, 2020, Operating Company merged into Tiptree, with Tiptree as the surviving entity (the Reorganization). In connection with the Reorganization, Operating Company contributed substantially all of its assets to Caroline Holdings LLC, a wholly owned subsidiary of Operating Company, which was renamed Tiptree Holdings LLC. Prior to the Reorganization, the Company was allocated itemized expenses of $2,000 related to operating as a public company from Operating Company for the six months ended June 30, 2020.

These condensed financial statements have been prepared on a "parent-only" basis. Under a parent-only presentation, the Parent Company's investments in subsidiaries are presented under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying condensed financial information should be read in conjunction with the Tiptree Inc. consolidated financial statements and related Notes thereto.

Note 2. Dividends Received

The Company received distributions of $35,092, $14,587 and $4,781 for the years ended December 31, 2020, 2019 and 2018, respectively. 

EX-21.1

EXHIBIT 21.1

Subsidiaries of Tiptree Inc.

Name(1)	Jurisdiction of Incorporation or Organization
4Warranty Corporation	Florida
Accelerated Service Enterprise, LLC	New Jersey
Fortegra Financial Corporation	Delaware
Freedom Insurance Company, Ltd. (fka LOTS Reassurance Company)	Turks & Caicos Islands, BWI
Independent Dealer Group, Inc.	New Jersey
Insurance Company of the South	Georgia
Life of the South Insurance Company	Georgia
LOTSolutions, Inc.	Georgia
Luxury Mortgage Corp.	Delaware (67.5% owned)
Lyndon Southern Insurance Company	Delaware
Ownershield, Inc.	Texas
Reliance First Capital, LLC	Delaware (91.75% owned)
Response Indemnity Company of California	California
Southern Financial Life Insurance Company	Kentucky (85% owned)
Tiptree Direct Holdings LLC	Delaware
Tiptree Holdings LLC (fka Caroline Holdings LLC)	Delaware
United Motor Club of America, Inc.	Kentucky

(1) As of December 31, 2020. Subsidiaries are 100% owned unless otherwise noted.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-226710 on Form S-3, and Registration Statement Nos. 333-192501 and 333-218827 on Form S-8 of our reports dated March 11, 2021, relating to the consolidated financial statements and financial statement schedule of Tiptree Inc. and subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2020.

/s/ Deloitte & Touche LLP

New York, New York

March 11, 2021

EX-23.2

EXHIBIT 23.2

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto, ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Invesque Inc.,

We consent to the inclusion in the annual report on Form 10-K for the year ended December 31, 2020 of Tiptree Inc. of our independent auditors' report dated March 11, 2021 on the consolidated statement of financial position of Invesque Inc. as of December 31, 2020, the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity, and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information (the consolidated financial statements).

Our independent auditors' report on the consolidated financial statements refers the fact that the accompanying consolidated statement of financial position of Invesque Inc. as of December 31, 2019, and the related statements of income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year then ended were not audited, reviewed, or compiled by us, and, accordingly, we do not express an opinion or any other form of assurance on them.

We also consent to the incorporation by reference of such report in the following registration statements of Tiptree Inc.:

1.Registration Statement - Form S-3 - File No. 333-226710

2.Registration Statement - Form S-8 - File No. 333-218827

3.Registration Statement - Form S-8 - File No. 333-192501

/s/ KPMG LLP

Chartered Professional Accountants, Licensed Public Accountants

March 11, 2021

Toronto, Canada

KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG Canada provides services to KPMG LLP.

EX-23.3

EXHIBIT 23.3

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto, ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Invesque Inc.,

We consent to the inclusion in the annual report on Form 10-K for the year ended December 31, 2020 of Tiptree Inc. of our independent auditors' report dated March 13, 2019 on the consolidated statement of financial position of Invesque Inc. as of December 31, 2018, the related consolidated statements of income and comprehensive income, changes in shareholders' equity, and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information (the consolidated financial statements).

Our independent auditors' report on the consolidated financial statements refers the fact that we have previously audited, in accordance with Canadian generally accepted auditing standards, the financial statements of Invesque Inc. as at and for the year ended December 31, 2017, in respect of which we expressed an unmodified audit opinion, and that in our opinion, the summarized comparative information presented of and for the year ended December 31, 2017 is consistent, in all material respects, with the audited financial statements from which it has been derived.

We also consent to the incorporation by reference of such report in the following registration statements of Tiptree Inc.:

1.Registration Statement - Form S-3 - File No. 333-226710

2.Registration Statement - Form S-8 - File No. 333-218827

3.Registration Statement - Form S-8 - File No. 333-192501

/s/ KPMG LLP

Chartered Professional Accountants, Licensed Public Accountants

March 11, 2021

Toronto, Canada

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated

with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Michael Barnes, certify that:

1. I have reviewed this Annual Report on Form 10-K of Tiptree Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 11, 2021	/s/ Michael Barnes
		Michael Barnes
		Executive Chairman

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Jonathan Ilany, certify that:

1. I have reviewed this Annual Report on Form 10-K of Tiptree Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 11, 2021	/s/ Jonathan Ilany
		Jonathan Ilany
		Chief Executive Officer

EX-31.3

EXHIBIT 31.3

CERTIFICATIONS

I, Sandra Bell, certify that:

1. I have reviewed this Annual Report on Form 10-K of Tiptree Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 11, 2021	/s/ Sandra Bell
		Sandra Bell
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Tiptree Inc. (the “Company”) on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Barnes, the Executive Chairman of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Barnes

Michael Barnes

Executive Chairman

Date: March 11, 2021

EX-32.2

EXHIBIT 32.2

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Tiptree Inc. (the “Company”) on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jonathan Ilany, the Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jonathan Ilany

Jonathan Ilany

Chief Executive Officer

Date: March 11, 2021

EX-32.3

EXHIBIT 32.3

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

    In connection with the Annual Report of Tiptree Inc. (the “Company”) on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sandra Bell, the Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Sandra Bell

Sandra Bell

Chief Financial Officer

Date: March 11, 2021

EX-99.1

EXHIBIT 99.1

Consolidated Financial Statements

            (Expressed in U.S. dollars)

            INVESQUE INC.

            Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

KPMG LLP

Bay Adelaide Centre

333 Bay Street, Suite 4600

Toronto ON M5H 2S5

Canada

Tel 416-777-8500

Fax 416-777-8818

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of Invesque Inc.,

We have audited the accompanying consolidated financial statements of lnvesque Inc. and its subsidiaries, which comprise the consolidated statement of financial position as of December 31, 2020, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

© 2020 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms

affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Page 2

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of lnvesque Inc. and its subsidiaries as of December 31, 2020 and their consolidated financial performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Summarized Comparative Information

The accompanying consolidated statement of financial position of Invesque Inc. as of December 31, 2019, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity, and cash flows for the year then ended were not audited, reviewed, or compiled by us and, accordingly, we do not express an opinion or any other form of assurance on them.

/s/ KPMG LLP

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

March 11, 2021

INVESQUE INC.

Consolidated Statements of Financial Position

(Expressed in thousands of U.S. dollars)

		December 31, 2020		December 31, 2019
				(Adjusted - note 3)
Assets				Unaudited
Current assets:
	Cash	$	34,133	$	11,838
	Tenant and other receivables	14,934		6,937
	Property tax receivables	12,754		11,020
	Loans receivable (note 4)	1,799		4,249
	Assets held for sale (note 7)	2,144		12,201
	Other (note 5)	9,069		6,184
		74,833		52,429
Non-current assets:
	Loans receivable (note 4)	16,904		37,405
	Derivative instruments (note 11)	4,814		64
	Investment in joint ventures (note 8)	65,258		107,994
	Investment properties (note 6)	882,019		969,634
	Property, plant and equipment, net (note 7)	451,825		459,942
	Other non-current assets (note 5)	2,771		3,270
		1,423,591		1,578,309
Total assets		$	1,498,424	$	1,630,738
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities	$	17,715	$	18,885
	Accrued real estate taxes	14,518		13,066
	Dividends payable	—		3,354
	Credit facilities (note 9)	10,000		14,569
	Mortgages payable (note 10)	30,622		43,024
	Derivative instruments (note 11)	491		—
	Other current liabilities (note 14)	4,975		3,015
		78,321		95,913
Non-current liabilities:
	Credit facilities (note 9)	650,596		632,390
	Mortgages payable (note 10)	268,842		232,443
	Convertible debentures (note 12)	92,411		91,049
	Commonwealth preferred unit liability (note 13)	65,797		63,654
	Derivative instruments (note 11)	28,478		7,966
	Deferred tax liability (note 24)	—		6,944
	Other non-current liabilities (note 14)	16,241		16,736
	Non-controlling interest liability	4,409		3,499
		1,126,774		1,054,681
Total liabilities		1,205,095		1,150,594
Shareholders' equity:
	Common share capital (note 16)	509,203		504,561
	Equity settled deferred shares	2,328		733
	Preferred share capital (note 16)	85,389		85,389
	Contributed surplus	400		400
	Equity component of convertible instruments	3,764		3,764
	Cumulative deficit	(309,032)		(114,908)
	Accumulated other comprehensive income	1,277		205
Total shareholders' equity		293,329		480,144
Commitments and contingencies (notes 7 and 25)
Subsequent events (note 9)
Total liabilities and shareholders' equity		$	1,498,424	$	1,630,738

See accompanying notes to consolidated financial statements.

1

INVESQUE INC.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars, except per share amounts)

		Year ended December 31, 2020		Year ended December 31, 2019
Revenue:				Unaudited
	Rental (note 18)	$	90,112	$	103,198
	Resident rental and related revenue (note 18)	120,407		38,467
	Lease revenue from joint ventures (note 8)	3,118		3,024
	Other revenue	3,750		3,718
		217,387		148,407
Other income (note 1)		3,415		—
Expenses (income):
	Direct property operating expenses (note 19)	95,505		33,533
	Depreciation and amortization expense	48,569		14,440
	Finance costs from operations (note 20)	49,801		41,633
	Real estate tax expense	13,488		15,844
	General and administrative expenses (note 21)	20,539		18,092
	Transaction costs for business combination	170		5,898
	Diligence costs for transactions not pursued	—		633
	Allowance for credit losses on loans and interest receivable (note 20)	23,546		1,003
	Change in non-controlling interest liability (note 20)	316		504
	Change in fair value of investment properties - IFRIC 21	(57)		29
	Change in fair value of investment properties (note 6)	100,388		6,046
	Change in fair value of financial instruments (note 20)	19,084		9,379
	Change in fair value of contingent consideration (note 20)	5,510		—
	Loss on sale of property, plant and equipment (note 7)	162		—
		377,021		147,034
Loss from joint ventures (note 8)		(34,729)		(6,799)
Loss before income taxes		(190,948)		(5,426)
Income tax recovery:
	Deferred (note 24)	6,944		67
Net loss		$	(184,004)	$	(5,359)
Other comprehensive income :
Items to be reclassified to net income in subsequent periods
	Unrealized gain on translation of foreign operations	1,072		3,294
Total comprehensive loss		$	(182,932)	$	(2,065)
Loss per share (note 17):
	Basic and diluted	$	(3.30)	$	(0.10)

See accompanying notes to consolidated financial statements.

2

INVESQUE INC.

Consolidated Statements of Changes in Shareholders' Equity

(Expressed in thousands of U.S. dollars)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Common share capital		Equity settled deferred shares		Preferred share capital		Contributed surplus		Equity component of convertible instruments		Cumulative deficit		Accumulated other comprehensive income (loss)		Total
Balance, January 1, 2020	$	504,561	$	733	$	85,389	$	400	$	3,764	$	(114,908)	$	205	$	480,144
Net loss	—		—		—		—		—		(184,004)		—		(184,004)
Other comprehensive loss	—		—		—		—		—		—		1,072		1,072
Common shares issued, net of issuance costs (note 16)	1,078		—		—		—		—		—		—		1,078
Common shares issued under the Company's dividend reinvestment plan (note 16)	3,498		—		—		—		—		—		—		3,498
Dividends declared on common shares	—		—		—		—		—		(10,120)		—		(10,120)
Common shares purchased under NCIB (note 16)	(148)		—		—		—		—		—		—		(148)
Amortization of equity settled deferred shares (note 22)	—		1,809		—		—		—		—		—		1,809
Common shares issued for equity settled deferred share (note 16 and 22)	214		(214)		—		—		—		—		—		—
Balance, December 31, 2020	$	509,203	$	2,328	$	85,389	$	400	$	3,764	$	(309,032)	$	1,277	$	293,329

	Common share capital		Equity settled deferred shares		Preferred share capital		Contributed surplus		Equity component of convertible instruments		Cumulative deficit		Accumulated other comprehensive income (loss)		Total
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Balance, January 1, 2019	$	493,165	$	—	$	71,106	$	400	$	1,671	$	(69,785)	$	(3,089)	$	493,468
Net income	—		—		—		—		—		(5,359)		—		(5,359)
Other comprehensive income	—		—		—		—		—		—		3,294		3,294
Common shares issued, net of issuance costs (note 16)	4,878		—		—		—		—		—		—		4,878
Preferred shares issued, net of issuance costs (note 16)	—		—		14,283		—		—		—		—		14,283
Equity component of Commonwealth preferred units	—				—		—		2,093		—		—		2,093
Common shares issued under the Company's dividend reinvestment plan	7,023		—		—		—		—		—		—		7,023
Dividends declared on common shares	—		—		—		—		—		(39,764)		—		(39,764)
Common Shares purchased under NCIB (note 16)	(530)		—		—		—		—		—		—		(530)
Amortization of equity settled deferred shares (note 22)	—		733		—		—		—		—		—		733
Common shares issued through conversion of convertible debentures (note 16)	25		—		—		—		—		—		—		25
Balance, December 31, 2019	$	504,561	$	733	$	85,389	$	400	$	3,764	$	(114,908)	$	205	$	480,144

3

INVESQUE INC.

Consolidated Statements of Changes in Shareholders' Equity

(Expressed in thousands of U.S. dollars)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

See accompanying notes to consolidated financial statements.

4

INVESQUE INC.

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

Year ended December 31, 2020 with comparative information for year ended December 31, 2019

			Year ended December 31, 2020		Year ended December 31, 2019
					(Adjusted - note 3)
Cash flows from operating activities:					Unaudited
	Net loss		$	(184,004)	$	(5,359)
	Items not involving cash:
		Fair value adjustment of investment properties (note 6)	100,388		6,046
		Fair value adjustment of financial instruments (note 20)	19,084		9,379
		Depreciation and amortization expense (note 7)	48,569		14,440
		Allowance for credit losses on loans and interest receivable (note 20)	23,546		1,003
		Straight-line rent (note 18)	(6,394)		(8,964)
		Amortization of tenant inducements (note 18)	385		158
		Finance costs from operations (note 20)	49,801		41,633
		Change in non-controlling interest liability (note 20)	316		504
		Change in fair value of contingent consideration (note 7)	5,510		—
		Loss on sale of property, plant and equipment (note 7)	162		—
		Loss from joint ventures (note 8)	34,729		6,799
		Deferred income tax (note 24)	(6,944)		(67)
	Interest paid		(49,712)		(39,411)
	Interest income received		1,056		694
	Change in non-cash operating working capital:
		Tenant and other receivables	(12,344)		(16,066)
		Accounts payable and accrued liabilities	(835)		268
		Unearned revenue	1,257		(227)
		Other assets	(2,150)		702
		Other liabilities	1,308		3,390
		Accrued real estate taxes	1,362		1,248
	Net cash provided by operating activities		$	25,090	$	16,170
Cash flows from financing activities:
	Proceeds from credit facilities (note 15)		$	33,000	$	370,350
	Payments on credit facilities (note 15)		(21,250)		(63,990)
	Debt issuance costs paid (note 15)		(1,599)		(3,206)
	Proceeds from mortgages payable (note 15)		16,682		39,489
	Payments of mortgages payable (note 15)		(22,487)		(45,594)
	Proceeds from settlement of interest rate swap		—		104
	Dividends paid to common shareholders		(9,976)		(32,509)
	Payment for repurchase of common shares		(148)		(530)
	Proceeds from issuance of preferred share capital		—		14,550
	Cash provided by (used in) financing activities		$	(5,778)	$	278,664
Cash flows from investing activities:
	Additions to investment properties		$	(8,390)	$	(93,002)
	Dispositions of investment properties		—		9,887
	Additions to property, plant and equipment		(11,269)		(235,433)
	Dispositions of property, plant and equipment		15,563		—
	Acquisition of interest in joint venture (note 7)		(476)		—
	Disposition of interest in joint venture		1,447		—
	Cash balance acquired in business combination (note 7)		2,081		—
	Distributions from joint ventures		3,803		5,897
	Contributions to joint ventures		(1,855)		(14,391)
	Distributions to non-controlling interest partners		(534)		(152)
	Proceeds from income support agreement		63		283
	Payments to previous owner of Care		—		(9,676)
	Issuance of loans receivable		—		(1,222)
	Repayment of loans receivable		4,105		4,835
	Proceeds from sale of interest in assets to joint venture partner		—		23,000
	Earnout payment pursuant to Commonwealth purchase agreement		(1,555)		—
	Cash provided by (used in) investing activities		$	2,983	$	(309,974)
Increase (decrease) in cash and cash equivalents			22,295		(15,140)
Cash and cash equivalents, beginning of period			11,838		26,978
Cash and cash equivalents, end of period			$	34,133	$	11,838

See accompanying notes to consolidated financial statements.

5

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Invesque Inc. (the "Company") was incorporated on May 31, 2007 under the Business Corporations Act (Ontario). Effective April 4, 2016, the Company changed its name from "Kingsway Arms Retirement Residences Inc." to "Mainstreet Health Investments Inc." and continued under the laws of the Province of British Columbia. Effective January 3, 2018, the Company changed its name from "Mainstreet Health Investments Inc." to "Invesque Inc.". The Company's registered office is 2500 - 700 W Georgia Street, Vancouver, British Columbia V7Y 1B3.

The Company currently owns a portfolio of North American income generating properties across the health care spectrum. The Company's portfolio includes investments in independent living, assisted living, memory care, skilled nursing, transitional care and medical office properties, which are operated primarily under long-term leases and joint venture arrangements with operating partners. The Company's portfolio also includes investments in owner occupied seniors housing properties in which Invesque owns the real estate and provides management services through its subsidiary management company, Commonwealth Senior Living.

At December 31, 2020, the Company owns interests in a portfolio of 122 health care and senior living properties comprised of 69 consolidated investment properties, 36 consolidated owner occupied properties, interests in 16 properties held through joint arrangements, and one property held for sale.

1.Basis of preparation:

(a)    Liquidity Assessment

A novel strain of coronavirus causing the disease known as COVID-19 has spread throughout the world, including across the United States and Canada, causing the World Health Organization to declare the COVID-19 outbreak a pandemic in March 2020. In an attempt to contain the spread and impact of the pandemic, authorities throughout the United States and Canada have implemented measures such as travel bans and restrictions, stay-at-home orders, social distancing guidelines and limitations on other business activity. The pandemic has resulted in a significant economic downturn in the United States, Canada and globally, and has also led to disruptions and volatility in capital markets. These trends are likely to continue into 2021 and potentially beyond.

The pandemic has had an impact on results and operations of the Company, including decreased occupancy, delays in collections from tenants, and increased operating expenses. The Company announced on April 10, 2020 that it suspended the dividend for all common shares beginning from April 1, 2020 until further notice.

The Company expects that the pandemic could continue to have a negative effect on its results of operations, financial position and cash flows, particularly if negative economic and public health conditions in the United States and Canada persist for a significant period of time. The ultimate impact of the pandemic on the Company's financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence. This includes, among other factors, the duration and severity of the pandemic as well as negative economic conditions arising therefrom, the impact of the pandemic on occupancy rates in the Company's communities, the volume of COVID-19 patients cared for across the portfolio, and the impact of government actions on the seniors housing industry and broader economy, including through existing and future stimulus efforts. The impact of COVID-19 has been partially offset to date by certain government stimulus programs which have helped to offset COVID-19 related expenses and compensate for lost revenues, but the Company is not able to provide assurance that such programs may continue to be available in the future. For the year ended December 31, 2020, the Company recognized $3,415 of other income related to government grants funded through programs designed to assist seniors housing operators who have experienced both lost revenue and increased expenses during the COVID-19 pandemic. For the year ended December

6

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

31, 2020, the Company recognized $1,294 of income from joint ventures related to the Company's share of government grants recognized at the joint venture properties for COVID-19 pandemic relief.

Liquidity risk is the risk that an entity is unable to fund its assets or meet its obligations as they come due. Liquidity risk is managed in part through cash forecasting (note 1(f) and note 28). While there are uncertainties in assessing future liquidity requirements under normal operating conditions, the stressed conditions caused by COVID-19 have introduced increased uncertainties. The Company monitors forecasts of liquidity requirements to ensure it has the ability to meet operational needs by maintaining sufficient availability of the combination of cash and credit facility capacity, and to ensure the Company will meet its financial covenants related to debt agreements. Such forecasting involves a significant degree of judgment which takes into consideration current and projected macroeconomic conditions, the Company's cash collection efforts, debt financing and refinancing plans, and covenant compliance required under the terms of debt agreements. There is a risk that such liquidity forecasts may not be achieved and that currently available debt financing may no longer be available to the Company at terms and conditions that are favorable, or at all.

As a result of the events and conditions associated with COVID-19, the Company has amended certain terms of various financing arrangements having conducted an assessment of its liquidity. The Company believes that it has sufficient available liquidity to meet its minimum obligations as they come due and to comply with financial covenants in its credit facilities, as amended, for a period of at least 12 months from December 31, 2020. Further, the Company has assessed that there are no material uncertainties related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. In making this significant judgment, the Company has prepared a cash flow forecast with the most significant assumptions in the preparation of such forecast being the ability of its most significant tenant, Symcare, to meet its projected rental obligations to the Company and the continued availability of financing.

In response to a severe downside scenario, management has the ability to take the following mitigating actions to reduce costs, optimize the Company's cash flow and preserve liquidity:

(i)utilizing available cash to pay down debts,

(ii)sell certain properties and use the proceeds to buy down debt,

(iii)exercise the Company's right to convert its convertible debentures into common shares,

(iv)satisfying the $10,000 Magnetar Facility (defined below) through the issuance of common shares,

(v)reducing non-essential capital expenditures.

(b) Statement of compliance:

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").

These consolidated financial statements were approved by the Board of Directors of the Company and authorized for issuance on March 11, 2021.

7

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

(c)     Basis of measurement:

These consolidated financial statements have been prepared on a historical cost basis, except for investment properties, derivative financial instruments, deferred shares and loan commitment liability, which are measured at fair value through profit and loss ("FVTPL").

(d)    Principles of consolidation:

(i)Transactions eliminated on consolidation:

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as of December 31, 2020, including Invesque International Holdings Inc., Invesque US Holdings Inc., Invesque Holdings, LP, Foxhound Holdings, LLC and project specific limited partnerships. All intercompany transactions and balances are eliminated on consolidation.

(ii)Joint arrangements:

A joint venture is a joint arrangement, whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

A joint operation is a joint arrangement, whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement.

These consolidated financial statements include the Company's proportionate share of each of the assets, liabilities, revenue and expenses of joint operations on a line-by-line basis. Joint ventures are included in the Company's consolidated financial statements as investments using the equity method, whereby the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the net assets. The Company's share of joint venture profit or loss is included in the consolidated statements of income (loss) and comprehensive income (loss).

(e)    Functional and presentation currency:

The consolidated financial statements are presented in U.S. dollars, which is the functional and presentational currency of the Company.

Assets and liabilities of operations having a functional currency other than the U.S. dollar are translated at the rate of exchange at the consolidated statement of financial position dates. Revenue and expenses are translated at average rates for the year, unless exchange rates fluctuated significantly during the year, in which case the exchange rates at the dates of the transaction are used. Gains or losses on translating a foreign operation are included in other comprehensive income ("OCI") as a component of equity.

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transactions. Foreign currency denominated monetary assets and liabilities are translated using the prevailing rate of exchange at the consolidated statement of financial position dates. Gains and losses on translation of monetary items

8

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

are recognized as general and administrative expenses in the consolidated statements of income (loss) and comprehensive income (loss).

(f)    Use of estimation and uncertainty:

The preparation of the Company's consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending December 31, 2020 are as follows:

(i)Investment properties:

The significant assumptions used when determining the fair value of investment properties in use are capitalization rates and stabilized future cash flows. The capitalization rate applied is reflective of the characteristics, location and market of each investment property. The stabilized future cash flows of each investment property are based upon rental income from current leases and assumptions about market rent from future leases reflecting current conditions, less future cash outflows relating to such current and future leases.

Management determines fair value internally utilizing internal financial information, external market data and capitalization rates provided by independent industry experts. As part of Management’s internal valuation program, the Company also considers external valuations performed by independent national real estate valuation firms for a cross-section of properties that represent different geographical locations across the Company’s portfolio and updates, as deemed necessary, the valuation models to reflect current market data.

(ii)Accounting for convertible debentures:

On issuance, management estimates the allocation of the debt and equity components of convertible debentures. The liability allocation is based upon the fair value of a similar liability that does not have an equity conversion option and the residual is allocated to the equity component.

(iii)Accounting for Commonwealth preferred unit liability:

Management estimates the allocation of the debt and equity components of Commonwealth preferred unit liability. The liability allocation is based upon the fair value of a similar liability that does not have an equity conversion option and the residual is allocated to the equity component.

(iv)Loans receivable:

9

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

In determining the amount of expected credit losses, the entity's significant assumptions include the assessment of probability of default and loss given default. The determination takes into account different factors and varies by nature of investment.

The Company considers reasonable and supportable information that is relevant and available without undue cost or effort. Management considers past events, current market conditions and reasonable forward-looking supportable information about future economic conditions. In assessing information about possible future economic conditions, management utilized multiple economic scenarios including a base case, which represents the most probable outcome and is consistent with management's view of the financial asset. In considering the lifetime of a loan, the contractual period of the loan, including prepayment, extension and other options is generally used.

The estimation of expected credit losses also includes assumptions about local real estate market conditions, availability and terms of financing, underlying value of the security and various other factors. These assumptions are limited by the availability of reliable comparable market data, economic uncertainty and the uncertainty of future events.

(v)Impairment of property, plant and equipment:

The Company makes a determination at each reporting date if any events have occurred that would indicate property, plant and equipment may be impaired. If impairment indicators exist, management estimates the assets' recoverable amount in order to determine whether an impairment loss should be recognized.

(vi)Other:

Estimates are also made in the determination of the fair value of financial instruments and include assumptions and estimates regarding future interest rates, the relative creditworthiness of the Company to its counterparties, the credit risk of the Company's counterparties, the estimated future cash flows and discount rates.

(g)    Critical judgments:

Judgments made in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

(i)Accounting for leases as lessor:

The Company uses judgment regarding the present value of lease payments, the fair value of assets and the determination of the lease term in assessing the classification of its leases as operating leases, in particular with long-term leases in single operator properties. The Company has determined that all of its leases are operating leases.

(ii)Accounting for acquisitions:

10

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Management must assess whether an acquisition should be accounted for as an asset purchase or business combination. This assessment impacts the accounting treatment of transaction costs, the allocation of the costs associated with the acquisition and whether or not goodwill should be recognized.

(iii)Componentization of property, plant and equipment:

The Company uses judgment regarding the value allocated to various components of property, plant and equipment upon acquisition.

(iv)Loans receivable:

The Company uses significant judgment in the evaluation of changes in credit risk to determine the staging of the loans receivable. These judgments include changes in circumstances that may cause future assessments of credit risk to be materially different from current assessments, which would require an increase or decrease in the allowance for ECLs.

(v)Liquidity:

Assessing whether events or conditions represent the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern, including the estimation of future cash flows

11

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

2.Significant accounting policies:

(a)Cash and cash equivalents:

Cash and cash equivalents consists of cash on hand and highly liquid marketable investments with an original maturity of 90 days or less at their date of purchase and are stated at cost, which approximates fair value. As at December 31, 2020 and 2019, there were no cash equivalents.

(b)Investment properties:

Investment properties consist of investment properties in use and investment properties under development. Investment properties are held to earn rental income or for capital appreciation or both, but not for sale in the ordinary course of business. On acquisition, investment properties are initially recorded at cost, including transaction costs. Subsequent to initial recognition, the Company uses the fair value model to account for investment properties under International Accounting Standard ("IAS") 40, Investment Property. Under the fair value model, investment properties are recorded at fair value, which is determined based on available market evidence, at the statement of financial position date. Related fair value gains and losses are recorded in income and comprehensive income for the period in the period in which they arise.

Subsequent capital expenditures are added to the carrying value of the investment properties only when it is probable that future economic benefits will flow to the property and the cost can be measured reliably.

Properties under development include those properties, or components thereof, that will undergo activities that will take a substantial period of time to prepare the properties for their intended use as income properties. Borrowing costs related to development properties are capitalized to the costs of the projects. Properties under development are also adjusted to fair value at each consolidated statement of financial position date with fair value adjustments recognized in income.

Investment property is classified as held for sale when the property is available for immediate sale in its present condition subject only to terms that are usual and customary for the sale of investment properties, its sale is highly probable and expected to be completed with one year. Investment property is derecognized when it has been disposed of or permanently withdrawn from use and no future economic benefit is expected from its disposal.

(c)Property, plant, and equipment:

Property, plant, and equipment includes land; buildings; and furniture, fixtures and equipment ("FFE"), which are measured at cost less accumulated depreciation and accumulated impairment losses.

Significant parts of the buildings are accounted for as separate components of the property, based on management's judgment of what components constitute a significant cost in relation to the total cost of an asset and whether these components have similar or dissimilar patterns of consumption and useful lives for purposes of calculating depreciation and amortization. Significant components include structure, roof, electrical/HVAC systems, windows and doors, and exterior landscaping. The cost of replacing a major component of a building is recognized in the carrying amount of the building if it is probable that the future economic benefits embodied within the component will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognized. The costs of ongoing repairs and maintenance of the properties are recognized in profit or loss as incurred.

12

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Depreciation is recorded in profit or loss on a straight-line basis over the useful lives of the assets. Estimated useful lives were determined based on current facts and past experience, and take into consideration the anticipated physical life of the asset and current and forecasted demand. The rates and methods used are reviewed annually at year end to ensure they continue to be appropriate, and are also reviewed in conjunction with impairment testing. The following are the estimated maximum useful lives of existing property, plant, and equipment:

Components:
	Building - Structure	39 years
	Building - Roof	25 years
	Building - Electrical/HVAC systems	25 years
	Building - Windows and doors	15 years
	Building - Exterior landscaping	15 years
	Furniture, fixtures, and equipment	5 years

Gains/losses on disposition of property, plant, and equipment are recognized in profit or loss in accordance with the requirements for determining when a performance obligation is satisfied under IFRS 15, Revenue from Contracts with Customers ("IFRS 15").

The value associated with in-place resident contracts, which represents the avoided cost of originating the acquired resident contracts plus the value of the avoided loss of net resident revenue over the estimated lease-up period of the acquired property, is amortized over the expected term of the resident occupancy. Resident contracts are recorded as a component of buildings.

(d)Impairment of property, plant, and equipment:

The carrying amount of the Company's property, plant, and equipment is assessed at each reporting date to determine if any events have occurred that would indicate the assets may be impaired. If any such indication exists, then the asset's recoverable amount is estimated and an impairment loss is recognized immediately in profit or loss for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount of an asset is the higher of (a) fair value less costs to sell, and (b) value in use. The determination of recoverable amounts can be significantly impacted by estimates related to current market valuations, current and future economic conditions in the geographical markets of the assets, and management's strategic plans within each of its markets.

(e)Assets held for sale:

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Assets, or disposal groups comprising assets and liabilities, are categorized as held-for-sale where the asset or disposal group is available for sale in its present condition, and the sale is highly probable. For this purpose, a sale is highly probable if management is committed to a plan to achieve the sale; there is an active program to dispose of the assets of the disposal group; the asset or disposal group is being actively marketed at a reasonable price; the sale is anticipated to be completed within one year from the date of classification; and it is unlikely there will be changes to the plan. Immediately before classification as held-for-sale, the assets, or components of the disposal group are remeasured in accordance with the Company’s accounting policies, and are subsequently measured at the lower of their carrying amount and fair value less costs of disposal. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss until the completion of sale.

(f)Fair value measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i)    in the principal market for the asset or liability; or

(ii)    in the absence of a principal market, in the most advantageous market for the asset or liability.

    The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability assuming that market participants act in their economic best interests.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

        Level 1 - quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - valuation techniques for which the lowest level input that is significant to the fair value measurement is not observable.

14

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

For assets and liabilities that are recognized in the consolidated financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

(g)Financial instruments:

Financial instruments are generally measured at fair value on initial recognition. The classification and measurement of financial assets consists of the following categories: (i) measured at amortized cost, (ii) FVTPL, or (iii) fair value through other comprehensive income (''FVTOCI''). Financial assets classified at amortized cost are measured using the effective interest method. Financial assets classified as FVTPL are measured at fair value with gains and losses recognized in the consolidated statements of income (loss) and comprehensive income (loss). Financial assets classified as FVTOCI are measured at fair value with gains or losses recognized through other comprehensive income (loss), except for gains and losses pertaining to impairment or foreign exchange recognized through profit or loss.

The classification and measurement of financial liabilities consists of the following categories: (i) measured at amortized cost and (ii) FVTPL. Financial liabilities classified at amortized cost are measured using the effective interest method. Financial liabilities classified as FVTPL are measured at fair value with changes in fair value attributable to changes in the credit risk of the liability presented in other comprehensive income, and the remaining amount of change in fair value presented in the consolidated statements of income (loss) and comprehensive income (loss).

The following summarizes the Company's classification of financial instruments:

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Financial assets and liabilities	Measurement
Cash	Amortized cost
Restricted cash	Amortized cost
Tenant and other receivables	Amortized cost
Security deposits and costs related to future acquisitions	Amortized cost
Income support receivable	Amortized cost
Escrow deposits held by lender	Amortized cost
Bond assets	Amortized cost
Loans receivable	Amortized cost/FVTPL
Derivative instruments	FVTPL
Accounts payable and accrued liabilities	Amortized cost
Accrued real estate taxes	Amortized cost
Dividends payable	Amortized cost
Security deposits received from tenants	Amortized cost
Escrows collected from tenants	Amortized cost
Loan commitment liability	FVTPL
Exchangeable Units liability	Amortized cost
Contingent consideration liabilities	FVTPL
Mortgages payable	Amortized cost
Credit facilities	Amortized cost
Convertible debentures	Amortized cost
Commonwealth preferred unit liability	Amortized cost

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognizes a financial liability when, and only when, the Company’s obligations are discharged, canceled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized through profit or loss.

The Company adopted the practical expedient to determine expected credit losses ("ECL") on tenant and other receivables using a provision matrix based on historical credit loss experiences adjusted for current and forecasted future economic conditions to estimate lifetime ECL. Impairment losses are recorded in the consolidated statements of income (loss) and comprehensive income (loss) with the carrying amount of the financial asset or group of financial assets reduced through the use of impairment allowance accounts.

Transaction costs other than those related to financial instruments classified as FVTPL, which are expensed as incurred, are capitalized to the carrying amount of the instrument and amortized using the effective interest method. These costs include discounts or premiums relating to assumed debt, fees and commissions paid to agents, brokers, advisers, lenders and insurers, transfer taxes and duties.

The effective interest method is a method of calculating the amortized cost of a financial asset or liability and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly

16

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

discounts estimated future cash payments through the expected life of the financial asset or liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Financial assets and financial liabilities are offset and the net amount presented in the consolidated statements of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

a.Convertible debentures:

The convertible debentures are compound financial instruments as they contain both a liability and an equity component.

At the date of issuance, the liability component of convertible debentures is recognized at its estimated fair value of a similar liability that does not have an equity conversion option and the residual is allocated to the equity component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the convertible debenture is measured at amortized cost using the effective interest rate method. The equity component is not remeasured subsequent to initial recognition and will be transferred to share capital when the conversion option is exercised, or, if unexercised, at maturity. Interest, losses and gains relating to the financial liability are recognized in income and comprehensive income.

b.Commonwealth preferred unit liability

The Commonwealth preferred unit liability is a compound financial instrument as it contains both a liability and an equity component.

At the date of issuance, the liability component of Commonwealth preferred unit liability is recognized at its estimated fair value of a similar liability that does not have an equity conversion option and the residual is allocated to the equity component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the Commonwealth preferred unit liability is measured at amortized cost using the effective interest rate method. The equity component is not remeasured subsequent to initial recognition and will be transferred to share capital when the conversion option is exercised, or, if unexercised, at maturity. Interest, losses and gains relating to the financial liability are recognized in income and comprehensive income.

c.Impairment of financial assets:

The Company recognizes loss allowances for ECL on financial assets measured at amortized cost, unfunded loan commitments and financial guarantee contracts. The Company applies a three-stage approach to measure allowance for credit losses. The loss allowance for performing loans which have not experienced a significant increase in credit risk since initial recognition (Stage 1) is equal to twelve months of expected credit losses. The loss allowance for loans which have experienced a significant increase in credit risk since initial recognition (Stage 2) or are credit impaired (Stage 3) equals lifetime expected credit losses.

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The determination of a significant increase in credit risk takes into account different factors and varies by nature of investment. The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due or certain criteria are met which are specific to the individual borrower based on judgment. The Company considers a financial asset to be credit impaired when the borrower is more than 90 days past due and when there is objective evidence that there has been a deterioration of credit quality to the extent the Company no longer has reasonable assurance as to the timely collection of the full amount of principal and interest or when the Company has commenced enforcement remedies available to it under its contractual agreements.

Measurement of ECL's

Loss allowances for ECLs are probability-weighted estimates of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive) and incorporate significant assumptions including the probability of default as well as the estimated loss given default. ECLs are discounted at the effective interest rate of the financial asset.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considering when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

The determination of ECLs of a collateralized impaired loan reflects the expected realization of the underlying security, net of expected costs and any amounts legally required to be paid to the borrower.

When determining the allowance for ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. Management considers past events, current market conditions and reasonable forward-looking supportable information about future economic conditions. In assessing information about possible future economic conditions, management utilized multiple economic scenarios including a base case, which represents the most probable outcome and is consistent with management's view of the financial asset. In considering the lifetime of a loan, the contractual period of the loan, including prepayment, extension and other options is generally used.

The estimation of ECLs also includes assumptions about local real estate market conditions, availability and terms of financing, underlying value of the security and various other factors. These assumptions are limited by the availability of reliable comparable market data, economic uncertainty and the uncertainty of future events. Accordingly, by their nature, estimates of impairment are subjective and may not necessarily be comparable to the actual outcome. Should the underlying assumptions change, the estimated future cash flows could vary.

d.Derivative instruments:

The Company uses derivative financial instruments to manage interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related.

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Derivative financial instruments, including embedded derivatives that must be separately accounted for, are initially valued at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized immediately in income and comprehensive income.

(h)Non-controlling interest liability

The Company records third-party interests in the net assets of consolidated entities which do not qualify to be classified as equity as non-controlling interest liabilities. Such interests are initially recognized at fair value and are subsequently measured at amortized cost, with any changes recorded as change in non-controlling interest liability in the consolidated statements of income (loss) and comprehensive income (loss).

(i)Revenue recognition:

The Company accounts for its leases as operating leases given that it has retained substantially all of the risk and benefits of ownership

a.Lease revenue from third party operators and commercial tenants:

The Company earns revenue from tenants from various sources consisting of rent earned under lease agreements, property tax and operating cost recoveries and other incidental income. Revenue from lease components is recognized on a straight-line basis over the lease term and includes the recovery of property taxes and insurance. Revenue recognition commences when a tenant has the right to use the premises and is recognized pursuant to the terms of the lease agreement. Payments are due at the beginning of each month and any payments made in advance of scheduled due dates are deferred.

Revenue related to the services component of the Company’s leases is accounted for in accordance with IFRS 15. These services consist primarily of utilities, cleaning and property maintenance costs for which the revenue is recognized over time, typically as the costs are incurred, which is when the services are provided.

b.Resident Leases

The Company charges for the rental of accommodation and care services provided to residents. Base rent amounts are allocated to lease components based on relative stand-alone selling prices. The stand-alone selling prices of the rental component is determined using an adjusted market assessment approach and the stand-alone selling price of the care services components are determined using both adjusted market assessment and expected cost plus a margin approaches.

Revenue from rental components is recognized on a straight-line basis over the lease term. Revenue recognition commences when a resident has the right to use the property and revenue is recognized pursuant to the terms of the lease agreement. Payments are due at the beginning of each month and any payments made in advance of scheduled due dates are deferred.

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Revenue related to the care service components of the Company’s leases is accounted for in accordance with IFRS 15. These services consist primarily of the provision of meals, nursing services, housekeeping and laundry services, programs, amenities and the recovery of utilities and property maintenance costs and are recognized over time, typically on a monthly basis, which is when the services are provided. Payments are due at the beginning of each month and any payments made in advance of scheduled due dates are recorded as contract liabilities.

c.Lease revenue from joint ventures:

The Company earns revenue under lease arrangements with operating entities which are jointly owned with Autumnwood Lifestyles Inc. ("Autumnwood") (note 8). The leases are accounted for as operating leases and lease revenue is recognized on a straight-line basis over the term of the underlying leases.

(j)Government grants

Government grants that become receivable as compensation for lost revenue and increased expenses are recognized when there is reasonable assurance that the entity will comply with the conditions attached to them and the grants will be received. The grants are recorded as other income in the consolidated statements of income (loss) and comprehensive income (loss).

(k)Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company uses the definition of a lease in IFRS 16.

a.As a lessee:

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term and is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate, which was a weighted average rate of 7.5%.

The lease liability is measured at amortized costs using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents the right-of-use assets in property, plant and equipment and lease liabilities are recorded separately on the balance sheet as "lease obligations".

b.Short-term leases and leases of low value assets:

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. the Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

c.As a lessor:

At inception or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. The Company has determined that when it acts as a lessor, its leases do not transfer substantially all of the risks and rewards incidental to ownership of the underlying assets and as a result they are classified as operating leases.

If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the contract.

The Company recognizes lease payments received under operating leases as income on straight-line basis over the lease term.

(l)Employee benefits:

d.Short-term benefits:

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Short-term employee benefit obligations, including vacation and bonus payments, are measured on an undiscounted basis and are expensed as the related service is provided. Liabilities are recognized for the amounts expected to be paid within 12 months as the Company has an obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. Short-term employee benefits are recorded in accounts payable and other liabilities.

e.Share-based payment plans:

The Company maintains a Deferred Share Incentive Plan (note 22) for its employees and directors. Cash-settled shares are fair-valued and changes in the amount payable are recognized through profit or loss with a corresponding change in liabilities. The awards are fair-valued on the basis of the share price at each reporting period and at the settlement date and the change in fair value on the amortized share-based compensation expense is recognized as compensation expense.

Equity-settled shares are amortized as share-based compensation expense with a corresponding change in equity. The awards are valued based on the grant date fair value.

(m)Levies:

In accordance with IFRS Interpretations Committee ("IFRIC") 21, Levies ("IFRIC 21"), for its properties located in the United States, the Company recognizes the full amount of annual property tax liabilities at the point in time when the realty tax obligation is imposed. For properties located in Canada, property tax liabilities are recognized on a monthly basis.

(n)Income taxes:

Income tax expense comprises current and deferred tax. Tax is recognized in profit or loss except to the extent it relates to a business combination, or items recognized directly in equity or other comprehensive income.

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustments to tax payable or receivable in respect of previous years. It is measured using rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

(i)Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

(ii)Temporary differences related to investments in subsidiaries and associates to the extent that the Company is able to control the timing of reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

(iii)Taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable income will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amounts of its assets and liabilities.

    Deferred tax assets and liabilities are offset only if certain criteria are met.

Judgement is required to assess the interpretation of tax legislation when recognizing and measuring current and deferred tax assets and liabilities. The impact of different interpretations and applications could potentially be material. The Company recognizes a tax benefit from an uncertain tax position when it is probable that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. If it is not probable that the uncertain tax treatment will be accepted, the tax uncertainty is measured based on the most likely amount of expected value, depending on whichever method better predicts the resolution of the uncertainty.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Management's estimate of future taxable profits and the recognition of deferred tax assets are reviewed at each reporting date and deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(o)IFRS amendments adopted in 2020:

(i)IFRS 3 Business Combinations

On October 22, 2018, the IASB issued amendments to IFRS 3, Business Combinations ("IFRS 3") that seek to clarify whether a transaction is to be accounted for as an asset acquisition or a business combination. The amendments apply to businesses acquired in annual reporting periods beginning on or after January 1, 2020. The amendments include an election to use a concentration test. This is a simplified assessment that results in an asset acquisition if substantially all of the fair value of the gross assets is concentrated in a single identifiable asset or a group of similar identifiable assets. If a preparer chooses not to apply the concentration test, or the test is failed, then the assessment focuses on the existence of a substantive process. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

(p)IFRS standards and amendments issued but not yet effective:

(i)Application of Interest Rate Benchmark Reform ("IBOR")

In August 2020, the IASB issued IBOR Reform and the Effects on Financial Reporting – Phase II (amendments to IFRS 9, IFRS 7, IAS 39 – Financial Instruments: Recognition and Measurement ("IAS 39"),

23

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

IFRS 4 – Insurance Contracts ("IFRS 4") and IFRS 16 – Leases ("IFRS 16")). The objective of the second phase of the IASB's project was to assist entities in providing useful information about the effects of the transition to alternative benchmark rates and support preparers in applying the requirements of the IFRS Standards when changes are made to contractual cash flows or hedging relationships as a result of the transition to an alternative benchmark interest rate. The amendments affect the basis for determining the contractual cash flows as a result of benchmark interest rate reform, hedge accounting and disclosures.

The amendments are effective for annual periods beginning on or after January 1, 2021 with early application permitted and include retrospective application with reinstatement of hedge relationships. The Company is currently in the process of assessing the impact of adopting the amendments in Phase II on its consolidated financial statements.

(ii)Amendments to IAS 1, Presentation of financial statements

On January 23, 2020, the IASB issued amendments to IAS 1, Presentation of financial statements (“IAS 1”) to clarify the classification of liabilities as current or non-current. The amendments are effective for annual periods beginning on or after January 1, 2023. Early adoption is permitted.

For the purposes of non-current classification, the amendments removed the requirement for a right to defer settlement or roll over of a liability for at least twelve months to be unconditional. Instead, such a right must have substance and exist at the end of the reporting period.

The Company intends to adopt the amendments in its consolidated financial statements beginning on January 1, 2023, when the standard becomes effective.

3. Prior Year Adjustment:

During the year ended December 31, 2020, management determined that certain amounts previously recognized as loans receivable should have been classified as an investment in joint ventures and that amounts previously recognized as other receivables should have been classified as loans receivable. As a result the consolidated financial statements have been adjusted as at December 31, 2019 to correct for this immaterial error as follows:

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INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2019		Adjustment		December 31, 2019
	(As reported)				(As adjusted)
	Unaudited		Unaudited		Unaudited
Statement of Financial Position
Tenant and other receivables	$	7,073	$	(136)	$	6,937
Loans receivable - current	4,113		136		4,249
Loans receivable - non-current	44,789		(7,384)		37,405
Other non-current assets	4,559		(1,289)		3,270
Investment in joint ventures	99,321		8,673		107,994

	Year ended December 31, 2019		Adjustment		Year ended December 31, 2019
	(As reported)				(As adjusted)
	Unaudited		Unaudited		Unaudited
Statement of Cash Flows
Issuance of loans receivable	$	(13,116)	$	11,894	$	(1,222)
Contributions to joint ventures	(2,497)		(11,894)		(14,391)

25

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

4.Loans receivable:

Loans receivable issued as at December 31, 2020 and December 31, 2019 are detailed in the table below:

26

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Debtor	Loan Type	December 31, 2020		December 31, 2019 (Adjusted note 3)		Issued Date	Maturity Date (1)	Current Interest Rate		PIK Interest Rate
				Unaudited
MS-SW Mezzanine Fund, LLC	Mezzanine loan	$	—	$	1,267	September 1, 2016	September 1, 2020	10.5	%	4.0	%
Mainstreet Investment Company, LLC	Interest-only loan	3,932		3,932		December 22, 2016	December 22, 2018	8.5	%	1.5	%
Autumnwood Lifestyles Inc.	Revolving credit facility	1,178		1,155		November 1, 2016	October 31, 2018 (3)	8.0	%	—	%
Symcare ML, LLC	Loan receivable	7,295		7,295		October 20, 2017	December 31, 2033	5.0	%	—	%
Premier Senior Living, LLC (6)	Loan receivable	725		700		August 16, 2013 (2)	August 16, 2025	9.4	%	—	%
Ellipsis Real Estate Partners	Loan receivable	951		951		May 4, 2018	May 4, 2028	—	%	10.0	%
Ellipsis Real Estate Partners	Loan receivable	1,338		1,341		September 14, 2018	September 14, 2028	—	%	10.0	%
Symcare ML, LLC	Loan receivable	15,000		13,530		December 26, 2018	December 31, 2033	5.0	%	5.0	%
YAL Borrower LLC	Interest-only loan	—		1,000		December 31, 2018	December 30, 2020	5.0	%	—	%
YAL Borrower LLC	Loan receivable	—		2,000		December 31, 2018	December 30, 2020	5.0	%	—	%
Hillcrest Millard, LLC	Loan receivable	503		480		January 1, 2019	January 1, 2028	—	%	5.0	%
Hillcrest Firethorn, LLC	Loan receivable	472		449		January 1, 2019	November 1, 2027	—	%	5.0	%
Bridgemoor Transitional Care Operations, LLC (5)	Loan receivable	1,872		1,738		June 5, 2019	June 5, 2035	—	%	—	%
MOC Webster, LLC	Loan receivable	576		189		June 5, 2019	June 5, 2035	—	%	—	%
RHS Propco Mooresville, LLC	Loan receivable	5,000		5,000		June 28, 2019	July 1, 2024	8.5	%	—	%
Memory Care America LLC	Loan receivable	1,198		1,526		July 31, 2019	January 1, 2024	8.5	%	—	%
Ellipsis Real Estate Partners LLC (9)	Mezzanine loan	474		1,223		October 25, 2019	October 1, 2022	2.5	%	7.5	%
Blue Bell Senior Holdings, LLC (7)	Loan receivable	490		—		February 21, 2020	March 1, 2024	5.9	%	—	%
PSL Care GP LLC	Loan receivable	450		—		May 6, 2020	(8)	3.5	%	—	%
Accrued current and long term interest		3,122		1,425
Allowance for losses on loans receivable		(28,241)		(5,915)
Carrying value of loans recorded at amortized cost		$	16,335	$	39,286
Javelina Ventures, LLC	Loan receivable - FVTPL	2,368		2,368		December 31, 2018	(4)	—	%	5.0	%
Carrying value of loans receivable		18,703		41,654
Less current portion		1,799		4,249
Long-term portion		$	16,904	$	37,405
(1) Mezzanine loans are due at the time of sale of the property if sale occurs earlier than the stated maturity date.
(2) Loan assumed through acquisition on February 1, 2018. Loan was originally issued by Care PSL Holdings LLC on August 16, 2013.
(3) Maturity date is the later of October 31, 2018 or the completion of the expansion projects at the Marina Point and Red Oak Facilities. The projects are not yet complete.
(4) The repayment of this loan is pursuant to Javelina Ventures Operating Agreement in which net available cash from operations will be used to repay the principal and accrued interest on this loan.
(5) This loan was issued to MOC Fort Worth, LLC; MOC Round Rock, LLC; MOC San Antonio II, LLC; MOC Webster, LLC; and Bridgemoor Transitional Care Operations, LLC.
(6) This loan was issued to Park Terrace Operating, LLC; Seneca Lake Terrace Operating, LLC; and Premier Senior Living, LLC.
(7) Maturity date is the earlier of March 1, 2024, the date that the existing debt secured by the property is refinanced, or upon termination of the management agreement.
(8) No stated maturity date for loan receivable. Principal of loan is repaid when distributions are made from the Phoenix JV(note 7).
(9) This loan was funded for the development of a memory care facility in Wyoming, MI.

27

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

$27,641 of the loans outstanding and $2,438 of the accrued current and long term interest as at December 31, 2020 in the table above are made to current tenant operators. Of these amounts, $23,964 has been reserved as uncollectible.

On March 26, 2018, a subsidiary of the Company entered into a loan agreement with the tenant operator of the Symphony Portfolio ("Symcare") for a principal amount of $3,659 with provisions for an additional $2,000 line of credit. The loan earns 5.00% annual interest, of which a portion is payable at a current pay rate on a monthly basis ("Current Interest"), with the remaining portion of interest accruing until the earlier of the loan's maturity or prepayment ("PIK Interest"). The maturity date of the loan is June 30, 2019. On June 29, 2018, the loan was amended to extend the line of credit to $2,122. On July 31, 2018, the loan was amended to increase the total borrowing capacity to $6,401. On August 31, 2018, the loan was amended to increase the total borrowing capacity to $7,522. On June 21, 2019 the loan was amended and the maturity date was extended to December 31, 2033.

On December 26, 2018, a subsidiary of the Company entered into a loan agreement with Symcare with a total capacity of $15,000 and a maturity date of January 1, 2033. As at December 31, 2020, Symcare had drawn $15,000 on this loan (December 31, 2019 - $13,530). The loan earned 10% interest accruing to the balance of the loan through December 1, 2019. Through and including December 1, 2022, half of the interest will accrue to the loan balance with the remaining portion payable at a current pay rate on a monthly basis. Commencing January 1, 2023 the full amount of monthly interest payments shall be paid each month.

On July 31, 2019, the Company entered into a new loan with MCA Memory Care America, LLC ("MCA") in the amount of $2,934. The loan balance represented outstanding rents owed, the remaining balance of a previously issued loan receivable and outstanding interest thereon. Through December 31, 2020, the Company has received repayment on this loan receivable of $1,868 consistent with the terms outlined in the loan agreement.

On July 17, 2020, the Company received $750 as repayment of a portion of the principal of the mezzanine loan to Ellipsis Real Estate Partners LLC. On the same date, the loan was amended and the annual interest rate was reduced to 10%.

Loans receivable and associated allowance for losses on loans receivable accounted for at amortized cost as at December 31, 2020 are as follows:

	Stage 1		Stage 2		Stage 3		Total
Loans receivable, net of loan fees	$	11,079	$	1,186	$	32,311	$	44,576
Allowance for losses on loans receivable	(127)		(236)		(27,878)		(28,241)
Loans receivable, net of allowances	$	10,952	$	950	$	4,433	$	16,335

Loans receivable and associated allowance for losses on loans receivable accounted for at amortized cost as at December 31, 2019 are as follows:

	Stage 1		Stage 2		Stage 3		Total
	Unaudited		Unaudited		Unaudited		Unaudited
Loans receivable, net of loan fees	$	38,476	$	—	$	6,725	$	45,201
Allowance for losses on loans receivable	(421)		—		(5,494)		(5,915)
Loans receivable, net of allowances	$	38,055	$	—	$	1,231	$	39,286

28

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The changes in the gross loans receivable balance during the period ended December 31, 2020 are shown in the following table:

29

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Stage 1		Stage 2		Stage 3		Total
Total loans receivable as at December 31, 2018 - Unaudited	$	27,173	$	1,556	$	11,893	$	40,622
Loans receivable
Transfer to/(from)
Stage 1	(300)		—		300		—
Stage 2	—		(1,556)		1,556		—
Stage 3	—		—		—		—
	$	26,873	$	—	$	13,749	$	40,622
Issuances	16,633		—		2,824		19,457
Repayments	(3,282)		—		(1,500)		(4,782)
Non-cash settlement	(1,748)		—		(2,913)		(4,661)
Write off of loans receivable	—		—		(5,435)		(5,435)
Total loans receivable as at December 31, 2019 - Unaudited	$	38,476	$	—	$	6,725	$	45,201
Loans receivable
Transfer to/(from)
Stage 1	(25,052)		25,052		—		—
Stage 2	—		(23,897)		23,897		—
Stage 3	—		—		—		—
	$	13,424	$	1,155	$	30,622	$	45,201
Issuances	1,431		—		3,280		4,711
Repayments	(3,776)		—		(329)		(4,105)
Currency Translation	—		31		—		31
Write off of loans receivable	—		—		(1,262)		(1,262)
Total loans receivable as at December 31, 2020	$	11,079	$	1,186	$	32,311	$	44,576

The changes in the allowance for credit losses during the period ended December 31, 2020 are shown in the following table:

30

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Stage 1		Stage 2		Stage 3		Total
Total allowance for credit losses as at December 31, 2018 - Unaudited	$	293	$	78	$	9,970	$	10,341
Allowance for credit losses
Remeasurement	—		—		998		998
Transfer to/(from)
Stage 1	(3)		—		3		—
Stage 2	—		(76)		76		—
Stage 3	—		—		—		—
Total allowance for credit losses - Unaudited	$	290	$	2	$	11,047	$	11,339
Issuances	181		—		—		181
Repayments/settlements	(50)		(2)		(1,952)		(2,004)
Write off of loan receivable and allowance	—		—		(3,601)		(3,601)
Total allowance for credit losses as at December 31, 2019 - Unaudited	$	421	$	—	$	5,494	$	5,915
Allowance for credit losses
Remeasurement	—		226		23,452		23,678
Transfer to/(from)
Stage 1	(269)		269		—		—
Stage 2	—		(259)		259		—
Stage 3	—		—		—		—
	$	152	$	236	$	29,205	$	29,593
Issuances	13		—		—		13
Repayments	(38)		—		(65)		(103)
Write off of loan receivable and allowance	—		—		(1,262)		(1,262)
Total allowance for credit losses as at December 31, 2020	$	127	$	236	$	27,878	$	28,241

For the year ended December 31, 2020, a loss of $23,546 (year ended December 31, 2019 - $1,003) was recorded in the consolidated statements of income (loss) and comprehensive income (loss).

31

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

5.Other assets:

Other assets are as follows:

	December 31, 2020		December 31, 2019
			(Adjusted - note 3)
			Unaudited
Prepaid expense	$	2,330	$	1,906
Security deposits and costs related to future acquisitions	682		159
Escrow deposits held by lenders	5,251		3,038
Right-of-use assets	1,889		2,199
Bond assets	881		1,071
Other	807		1,081
	$	11,840	$	9,454
Current	$	9,069	$	6,184
Non-current	2,771		3,270
	$	11,840	$	9,454

Escrow deposits held by lenders includes amounts held for use in payment of real estate taxes, property insurance and replacement reserves.

32

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

6.Investment properties:

	Number of Properties	Amount
Balance, December 31, 2018 - Unaudited	80	$	1,115,530
Acquisitions of income properties	7	89,421
Sale of income property	(1)	(14,991)
Acquisition of control over a property previously owned through a joint venture	1	13,082
Contribution of investment properties to joint venture (note 8)	(8)	(161,047)
Transfer to property, plant and equipment (note 7)	(10)	(100,232)
Capital expenditures	—	1,934
Capital expenditures related to investment property under development	—	7,188
Increase in straight-line rents	—	8,964
Fair value adjustment	—	(6,046)
Tenant inducements	—	8,337
Amortization of tenant inducements	—	(158)
Translation of foreign operations	—	7,652
Balance, December 31, 2019 - Unaudited	69	$	969,634
Acquisitions of income properties	1	8,202
Transfer to property, plant and equipment (note 7)	(1)	(9,869)
Capital expenditures	—	668
Capital expenditures related to investment property under development	—	4,323
Increase in straight-line rents	—	6,394
Fair value adjustment	—	(100,388)
Amortization of tenant inducements	—	(385)
Translation of foreign operations	—	3,440
Balance, December 31, 2020	69	$	882,019
Investment properties in use		$	863,658
Property under development		18,361
Balance, December 31, 2020		$	882,019

At December 31, 2020, the Company used an internal valuation process to value its investment properties. Third party appraisers are engaged to prepare valuations on a portion of the portfolio annually such that one third of the portfolio is valued externally each year, and every property in the portfolio is valued externally at least once every five years. Management considers the external valuations for a cross-section of properties that represent different geographical locations across the Company's portfolio and updates, as deemed necessary, the valuation models to reflect current market data.

Acquired investment properties are initially measured at cost, including directly attributable acquisition costs, when the transactions are deemed to be asset acquisitions. Acquisition costs related to business combinations are expensed in the period incurred. Subsequent to initial recognition, investment properties are measured at fair value, determined based on available market evidence. The Company uses alternative valuation methods such as the direct capitalized income approach

33

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

or discounted cash flow projections (Level 3 inputs). The fair value of investment properties reflects rental income from current leases and assumptions about rental income from future leases in light of current market conditions. When a loan is arranged with a tenant at a below market rate, the estimated fair value of the discount is recognized as a tenant inducement at the time the loan commitment is made.

Capital expenditures include costs related to expansion projects at two buildings in Canada that are jointly owned. The Company has committed to fund its share of the projects as the expansions are completed.

On April 1, 2019, the Company exchanged its majority ownership interest in the operations of a property previously owned through a joint venture located in Lansdale, PA for the partner's minority ownership interest in the real estate of the property resulting in the acquisition of control over the real estate. The transaction resulted in the consolidation of investment property of $13,082 and assumption of mortgages payable of $9,743. On October 1, 2019, the Company acquired the operations pursuant to the transaction described below. As of the date of the acquisition of the property's operations it met the criteria of owner occupied property, and its corresponding assets were reclassified as property, plant and equipment.

On June 29, 2019, the Company entered an agreement with Greenfield Senior Living ("Greenfield") whereby the Company has acquired 100% of Greenfield's interests in 13 properties in which the Company previously had an ownership interest. Ten of these properties were previously triple-net leased to Greenfield and the Company has acquired Greenfield's interest in the operations at each property. Three of these properties were previously held in a joint arrangement in which the Company owned an 80% interest in both the real estate and the operations of each property. As of the date of each property's transition, it met the criteria of owner occupied property, and its corresponding assets were reclassified as property, plant and equipment.

On May 6, 2020, the Company contributed a previously triple-net leased property to a subsidiary partially owned by Phoenix Senior Living (note 7).

The Company is also continuing to review market capitalization, discount and terminal capitalization rates as well as its future cash flow projections and the valuation of its properties in light of the COVID-19 pandemic. The carrying value for the Company’s investment properties reflects its best estimate for the highest and best use as at December 31, 2020. It is not possible to forecast with certainty the duration and full scope of the economic impact of COVID-19 and other consequential changes it will have on the Company’s business and operations, both in the short term and in the long term. In a long term scenario, certain aspects of the Company’s business and operations that could potentially be impacted include rental income, occupancy, turnover, future demand, and market rents, which all ultimately impact the underlying valuation of investment properties.

Th following table summarizes the significant unobservable inputs in determining fair value:

Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurements
Capitalization rates	There is an inverse relationship between the capitalization rates and the fair value; in other words, the higher the capitalization rate, the lower the estimated fair value.
Stabilized future cash flows	There is a direct relationship between the stabilized future cash flows and the fair value; in other words, the higher the stabilized future cash flows, the higher the estimated fair value.

34

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The capitalization rates used in determining fair value of investment properties measured as at December 31, 2020 and December 31, 2019 are set out in the following table:

	December 31, 2020	December 31, 2019
		Unaudited
Capitalization rate - range	5.85% - 9.00%	6.50% - 8.75%
Capitalization rate - weighted average	8.06%	7.89%

The fair value of investment properties is most sensitive to changes in capitalization rates and stabilized future cash flows. Changes in the capitalization rates and stabilized future cash flows would result in the following changes in the fair value of the Company's investment properties:

	December 31, 2020		December 31, 2019
			Unaudited
Investment property valued using direct capitalization income approach	$	617,931	$	793,724
Investment property valued using discounted cash flow projection	$	139,727	$	162,501
Investment property valued using other methods	$	124,361	$	13,409
Capitalization rate:
25-basis point increase	$	(18,727)	$	(24,519)
25-basis point decrease	$	19,945	$	26,146

In addition, a 1% increase in stabilized future cash flows would result in a portfolio fair value increase of $6,179. A 1% decrease in stabilized future cash flows would result in a portfolio fair value decrease of $6,179. A 1% increase in stabilized future cash flows coupled with a 0.25% decrease in capitalization rates would result in a portfolio fair value increase of

35

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

$26,324. A 1% decrease in stabilized future cash flows coupled with a 0.25% increase in capitalization rates would result in a portfolio fair value decrease of $24,719.

(a) Asset acquisitions - year ended December 31, 2020

	Rogers, AR
Number of consolidated properties acquired:	1
Net assets acquired:
Investment properties	$	8,202
Working capital balances	50
	$	8,252
Consideration paid/funded:
Cash	3,399
Proceeds from mortgage payable, net of fees	4,853
	$	8,252

On November 17, 2020, The Company acquired a memory care facility leased to an operator located in Rogers, AR for a contractual purchase price of $8,150 plus transaction costs. The Company entered into a new mortgage secured by the property to fund $4,920 of the purchase price and funded the remainder of the purchase with cash on hand.

(b) Asset acquisitions and dispositions - year ended December 31, 2019 - Unaudited

36

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Allen, TX		Symcare Properties		Mooresville, IN		Constant Care		Total
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Number of consolidated properties acquired (disposed):	1		3		(1)		3		6
Net assets acquired (disposed):
Investment properties	$	8,136	$	51,323	$	(14,991)	$	29,962	$	74,430
Working capital balances	—		(586)		104		—		(482)
	$	8,136	$	50,737	$	(14,887)	$	29,962	$	73,948
Consideration paid/funded (received):
Cash	2,445		46,937		(9,887)		25,613		65,108
Proceeds from mortgage payable, net of fees	5,591		—		—		—		5,591
Deposit applied against purchase price	100		—		—		—		100
Common shares issued	—		3,800		—		—		3,800
Loans issued to buyer	—		—		(5,000)		—		(5,000)
Issuance of Exchangeable Units	—		—		—		2,049		2,049
Repayment of loan receivable principal and accrued interest	—		—		—		2,300		2,300
	$	8,136	$	50,737	$	(14,887)	$	29,962	$	73,948

i)On January 16, 2019, the Company acquired a memory care facility leased to an operator located in Allen, TX for a contractual purchase price of $8,100 plus transaction costs. The Company entered into a new mortgage secured by the property to fund $5,693 of the purchase price and funded the remainder of the purchase with cash on hand.

ii)On March 15, 2019, the Company acquired a skilled nursing property located in Oswego, IL from Symcare for a contractual purchase price of $22,000 plus transaction costs funded with cash on hand. The original master lease with the Symcare operator was amended to include this new building.

iii)On April 30, 2019, the Company acquired two skilled nursing properties located in Chicago, IL and Glendale, WI from Symcare for a total contractual purchase price of $30,000 plus transaction costs. The transaction was funded by the issuance of 555,556 common shares and cash on hand. The original master lease with the Symcare operator was amended to include these new buildings.

iv)On June 28, 2019, the Company sold its interest in a property located in Mooresville, IN for total consideration of $15,000, less transaction costs. The consideration was paid in the form of cash and a $5,000 loan receivable issued to the buyer of the property. The loan receivable earns annual interest of 8.5% and matures on July 1, 2024.

v)On August 30, 2019, the Company purchased three memory care facilities located in Fishers, IN; Greenwood, IN; and Zionsville, IN for a total contractual purchase price of $30,786, plus transaction costs. The transaction was funded by the repayment of $2,300 of outstanding loans receivable principal and accrued interest, issuance of $2,049

37

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

in Class B LP units with the right to exchange units into common shares of the Company at the option of the unit holder ("Exchangeable Units"), and cash on hand.

38

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

7.Property, plant and equipment, net:

(a) Property, plant and equipment, net:

Property, plant and equipment consists of the following as at December 31, 2020 and 2019:

	Land		Buildings		Furniture, fixtures and equipment		Properties under development		Total
Cost
Balance, December 31, 2018 - Unaudited	$	—	$	—	$	585	$	—	$	585
Additions through business combinations - Commonwealth	18,034		321,491		5,221		893		345,639
Additions through business combinations - Greenfield	5,024		28,228		3,178		—		36,430
Additions through settlement of loans receivable	2,500		—		—		—		2,500
Additions	—		640		591		44		1,275
Transfers from investment property	6,004		93,782		446		—		100,232
Assets transferred to held for sale	(3,560)		(8,183)		(458)		—		(12,201)
Balance, December 31, 2019 - Unaudited	$	28,002	$	435,958	$	9,563	$	937	$	474,460
Additions	—		2,584		2,216		6,469		11,269
Disposals	—		—		(63)		—		(63)
Transfers to joint venture	(316)		(11,336)		(226)		—		(11,878)
Transfer from investment property	488		9,182		199		—		9,869
Acquisition of Royal JV	1,232		23,184		607		—		25,023
Acquisition of Fayetteville	524		9,843		505		—		10,872
Acquisition of Albany operations	—		—		259		—		259
Sale of Tampa	(143)		(2,707)		(29)		—		(2,879)
Asset transferred to held for sale	(960)		(1,420)		(188)		—		(2,568)
Balance, December 31, 2020	$	28,827	$	465,288	$	12,843	$	7,406	$	514,364
Accumulated depreciation
Balance, December 31, 2018 - Unaudited	—		—		78		—		78
Depreciation and amortization	—		13,930		510				14,440
Balance, December 31, 2019 - Unaudited	$	—	$	13,930	$	588	$	—	$	14,518
Depreciation and amortization	—		46,322		2,247		—		48,569
Disposals	—		—		(3)		—		(3)
Transfers to joint venture	—		(111)		(10)		—		(121)
Asset transferred to held for sale	—		(397)		(27)		—		(424)
Balance, December 31, 2020	$	—	$	59,744	$	2,795	$	—	$	62,539
Property, plant and equipment, net balance, December 31, 2019 - Unaudited	$	28,002	$	422,028	$	8,975	$	937	$	459,942
Property, plant and equipment, net balance, December, 2020	$	28,827	$	405,544	$	10,048	$	7,406	$	451,825

39

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

(b) Acquisitions - year ended December 31, 2020

	Royal		Fayetteville		Albany operations		Total
Properties	5		1		—		6
Property, plant and equipment	$	25,023	$	10,872	$	259	$	36,154
Cash balance acquired	1,388		625		68		2,081
Working capital balances	(147)		(101)		(327)		(575)
Mortgages assumed	(22,822)		(6,848)		—		(29,670)
	$	3,442	$	4,548	$	—	$	7,990
Consideration paid:
Fair value of previously held interest	3,442		4,072		—		7,514
Cash paid	—		476		—		476
	$	3,442	$	4,548	$	—	$	7,990

On May 6, 2020 the Company acquired 100% of Royal Senior Living’s ("Royal") interest in five joint venture properties in which the Company already had a majority ownership interest ("Royal JV"). Simultaneous with this transaction, management of four of these properties was transitioned to Phoenix Senior Living (“Phoenix") and combined with two assets in the Company’s portfolio already managed by Phoenix. On May 6, 2020 the Company acquired the minority partner's interest in one of these properties, Fayetteville, for $476.

The Company owns a controlling 90% interest in the entity that owns and operates the six assets, and as a result they have been consolidated following this transaction. The Company received total consideration of $1,126 from Phoenix for their buy-in to the entity, of which $650 was received in cash and $476 in a note to an affiliate of Phoenix for the remaining portion of their 10% ownership in the entity. $26 of the note has been repaid as of December 31, 2020.

(c) Dispositions and transfers - year ended December 31, 2020

40

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Arlington Sale		Glassboro to Joint Venture		Tampa Sale		Total
Properties	(1)		(1)		(1)		(3)
Property, plant and equipment	$	(12,201)	$	(11,757)	$	(2,879)	$	(26,837)
Working capital balances	67		(57)		(121)		(111)
	$	(12,134)	$	(11,814)	$	(3,000)	$	(26,948)
Consideration paid (received):
Equity contributed to joint venture	—		(3,016)		—		(3,016)
Gain (loss) on sale of property	(221)		103		—		(118)
Note issued to joint venture partner	—		(490)		—		(490)
Repayment/contribution of mortgages payable	(8,000)		(8,411)		—		(16,411)
Cash proceeds received, net	(3,913)		—		(3,000)		(6,913)
	$	(12,134)	$	(11,814)	$	(3,000)	$	(26,948)

On February 28, 2020, the Company sold a seniors housing property located in Arlington, TX for a sale price of $12,450 before closing costs. This property was previously recorded as held for sale. The consideration was paid in the form of an $8,000 repayment of the mortgage secured by the property and $3,900 of cash.

On February 21, 2020, the Company entered into a joint venture agreement with the operator Heritage Senior Living ("Heritage") for a property in Glassboro, NJ. Heritage operates the property pursuant to a management agreement. The Company sold 10% of its interest in the property and operations for $490, satisfied through a promissory note earning 5.91% annual interest. The promissory note matures at the earlier of March 1, 2024, the date that the existing debt secured by the property is refinanced, or upon termination of the management agreement.

The remaining asset in the former five property Royal JV, a seniors housing community in Tampa, FL, was non-strategic for the Company, and was sold to a third party on May 11, 2020 for $3,290 less transaction costs.

(d) Acquisitions - the year ending December 31, 2019 - Unaudited

The following table summarizes the allocation of the purchase price to each major category of assets acquired and liabilities assumed at the date of acquisition and the major categories of consideration transferred for acquisitions which were accounted for as business combinations under IFRS 3. The Company finalized the purchase price during the three months ended March 31, 2020.

41

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Commonwealth Tranche I		Commonwealth Tranche II		Greenfield Transition		Total
	Unaudited		Unaudited		Unaudited		Unaudited
Properties Acquired	17		3		13		33
Property, plant and equipment	$	286,695	$	58,051	$	36,430	$	381,176
Construction in progress	893		—		—		893
Assumption of mortgages payable	(9,523)		(34,475)		(22,522)		(66,520)
Prepayment embedded derivatives	—		2,991		—		2,991
Mark to market debt adjustments	(278)		(5,867)		—		(6,145)
Working capital balances	(2,964)		1,010		559		(1,395)
Previous interest in joint venture	—		—		(9,863)		(9,863)
	$	274,823	$	21,710	$	4,604	$	301,137
Consideration paid:
Issuance of preferred units	53,587		12,093		—		65,680
Proceeds from Commonwealth Facility	174,069		—		—		174,069
Satisfaction of rent receivable	—		—		1,522		1,522
Cash on hand	47,167		9,617		3,082		59,866
	$	274,823	$	21,710	$	4,604	$	301,137

On August 1, 2019, a wholly owned subsidiary of the Company closed on the first tranche of the purchase of Commonwealth Senior Living, LLC ("Commonwealth"). The first tranche of the acquisition includes 17 private pay seniors housing properties in addition to the Commonwealth management company (collectively, "Commonwealth Tranche I"). The Commonwealth management company operates all 17 properties purchased.

The total contractual purchase price for Commonwealth Tranche I was $285,357 for property, plant and equipment and $893 for construction in progress related to development projects ongoing at certain properties in the portfolio, subject to working capital adjustments and transaction costs. The acquisition was funded through $176,000 in new debt secured by 16 of the properties, the assumption of $9,523 in debt secured by one of the properties, the issuance of $53,587 of preferred interests in the Company's acquiring subsidiary entity and cash on hand.

On December 23, 2019, a wholly owned subsidiary of the Company closed on the second tranche of the purchase of Commonwealth which included the acquisition of 3 private pay seniors housing properties (collectively, "Commonwealth Tranche II"). The 3 properties are operated by the Commonwealth management company. The total contractual purchase price of Commonwealth Tranche II was $55,000. The acquisition was funded through the assumption of $34,475 in debt secured by the properties, the issuance of $12,093 of preferred interests in the Company's acquiring subsidiary entity and cash on hand. For the year ended December 31, 2019, the consolidated statements of income (loss) and comprehensive income (loss) includes transaction costs of $4,556 related to the acquisition of Commonwealth.

For the year ended December 31, 2019, the Commonwealth portfolio has contributed revenue of $29,180 and net loss of $12,092. Had the acquisition of the Commonwealth portfolio taken place on January 1, 2019, revenue for the

42

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Company for the year ended December 31, 2019 would have been $199,220 and net loss for the Company would have been $19,409.

Pursuant to the Commonwealth purchase agreement, the Company may be required to fund one or more earnout payments relating to six communities that had not yet reached stabilization at the time of acquisition by the Company. These earnout payments are only payable in the event specific occupancy and earnings before interest, income taxes, depreciation, amortization and rent ("EBITDAR") thresholds have been satisfied, and must be met prior to the third anniversary of closing at which time the earnout payment obligation will cease to exist. The earnout payments, when funded, will consist of a combination of cash and additional preferred interests. At this time, given the performance of one of the six communities, the Company has recorded an expense related to the increase in the fair value of contingent consideration in the consolidated statements of income (loss) and comprehensive income (loss) in the amount of $3,256, which was paid through the issuance of $1,701 of Commonwealth preferred units and $1,555 of cash on hand. The Company has recorded a liability of $2,254 in the financial statements associated with this commitment relating to the remaining five communities based on the weighted average probably of earnout payments owed using estimated future results at the properties.

On June 29, 2019, the Company entered into an agreement with Greenfield Senior Living ("Greenfield") whereby the Company would acquire 100% of Greenfield's interests in 13 properties in which the Company already has an ownership interest ("Greenfield Transition"). Ten of these properties were previously triple-net leased to Greenfield and the Company acquired Greenfield's interest in the operations at each property. The remaining three properties were previously held in a joint venture and were managed by Greenfield.

On September 3, 2019, three properties that were previously triple-net leased to Greenfield transitioned operations to a subsidiary of the Company. During October of 2019, seven properties that were previously triple-net leased to Greenfield transitioned operations. As of the date of these transitions, the assets were determined to be owner occupied property, and the corresponding assets are classified as property, plant and equipment.

On August 2, 2019, a property that was previously held in a joint venture and managed by Greenfield transitioned operations to the management of Commonwealth, a subsidiary of the Company. On October 1, 2019, a property that was previously held in a joint venture and managed by Greenfield transitioned operations to the management of Commonwealth. As of the date of this transition, the assets were determined to be owner occupied property, and the corresponding assets are classified as property, plant and equipment.

As of December 31, 2019, the Company completed the Greenfield Transition and acquired Greenfield's ownership interest in 13 properties which included Greenfield's 100% interest in operations at 10 properties as well as Greenfield's 20% interest in both the real estate and operations at 3 additional properties. The Company previously owned the real estate of the 10 properties in which it acquired operations and had leased the properties to Greenfield under a triple net lease. The Company previously owned 80% of the other 3 properties and accounted for its interests in these as investments in joint ventures (note 8). Upon completion of this transaction, the Company owns a 100% interest in both the real estate and operations of the 3 properties. Since these acquisitions were completed in steps, the Company remeasured its original interests to fair value. The total contractual purchase price of the Greenfield Transition was $4,708 which was funded through satisfaction of outstanding rent receivable of $1,522 owed by Greenfield and cash on hand. For the year ended December 31, 2019, the consolidated statements of income (loss) and comprehensive income (loss) includes transaction costs of $1,342 related to the Greenfield Transition.

43

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

For the year ended December 31, 2019, the Greenfield transitioned ownership has contributed revenue of $6,542 and net loss of $942. Had the Greenfield transition taken place on January 1, 2019, revenue for the Company for the year ended December 31, 2019 would have been $165,186 and net loss for the Company would have been $8,403.

(e) Assets held for sale

The following table summarizes the significant assets held for sale on December 31, 2020 and 2019:

		December 31, 2020		December 31, 2019
				Unaudited
Assets:
	Property, plant and equipment, net	$	2,144	$	12,201
		$	2,144	$	12,201

On November 27, 2019, the Company entered into a definitive agreement to sell a seniors housing property located in Arlington, TX. This property was the remaining property from the joint venture with Greenfield that transitioned full ownership to a subsidiary of the Company and still remained under the operations of Greenfield. The sale price was $12,450 before closing costs and was settled in cash. On February 28, 2020 the transaction was completed.

In June 2020 the Company ceased operations in and listed for sale a property located in Richmond, VA. The Company has successfully transitioned all residents from this property into new locations in order to prepare the building for sale. The assets are classified as held for sale on the consolidated statement of financial position at December 31, 2020.

44

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

8.Joint arrangements:

As at December 31, 2020, the following are the Company's joint arrangements:

Joint arrangement	Number of properties	Location	Company ownership		Consolidation type
Invesque-Autumnwood Landlord	4	Canada	50	%	Joint operation (1)
Invesque-Autumnwood Operator	—	Canada	50	%	Joint venture (2)
Calamar	2	United States	75	%	Joint venture (3)
Heritage JV	3	United States	80	%	Joint venture (3)
Heritage Newtown	1	United States	80	%	Joint venture (3)
Heritage Harleysville	1	United States	90	%	Joint venture (3)
Heritage Glassboro	1	United States	90	%	Joint venture (3)
Jaguarundi	8	United States	61	%	Joint venture (4)

(1) The Company directly holds its interest in the real estate joint operation.

(2) These joint venture arrangements have been structured through separate legal entities and lease the properties from the joint operation landlord.

(3) These joint venture arrangements have been structured through separate legal entities. The joint venture owns an interest in separate legal entities which own the real estate and operations.

(4) The joint venture owns an interest in separate legal entities which own the real estate and leases the properties to third party operators.

The Company has entered into a number of joint arrangements for the purpose of jointly owning and operating certain of its seniors housing investments as detailed in the table above.

On April 1, 2019, the Company exchanged its majority ownership interest in the operations of a property previously owned through a joint venture located in Lansdale, PA for the partner's minority ownership interest in the real estate of the property resulting in the acquisition of control over the real estate.

During the year ended December 31, 2019, the Company acquired the joint venture partner's ownership of the three properties previously held in the Greenfield JV. Through the Greenfield Transition transaction, the wholly owned assets were determined to be owner occupied property, and the corresponding assets are classified as property, plant and equipment.

The Company and Autumnwood each owns a 50% direct beneficial interest in the real estate assets of the Invesque-Autumnwood Landlord entity and are jointly obligated for the related mortgages for a portfolio of four properties which are accounted for as joint operations and are accounted for under the proportionate consolidation method. The Company's 50% interest in the operations of these properties is held through separate legal entities (collectively referred to as "Invesque-Autumnwood Operators"), which under IFRS 11, Joint arrangements, are accounted for as joint ventures using the equity method. Invesque-Autumnwood Operators have leased the real estate from the landlords under their respective lease agreements. These leases are for three-year periods, with six automatic renewals every third anniversary for a total of 21 years. The Company's share of the landlords' lease receipts, $3,118 for the year ended December 31, 2020 (year ended December 31, 2019 - $3,024), is reported as lease revenue from joint ventures. Invesque-Autumnwood Operators lease expense is included in the share of income from joint ventures in the consolidated statements of income (loss) and comprehensive income (loss).

45

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The Company has an interest in eight seniors housing and care properties in the United States in which it also owns an interest in the operations at those properties through joint arrangements. In these joint arrangements, the Company owns an interest in the real estate and operations through separate legal entities at each of the properties and has management agreements in place to provide for the day to day operations resulting in joint control of the interests. Each of these joint arrangements are accounted for as joint ventures using the equity method and the Company's share of net income is included in income from joint ventures in the consolidated statements of income (loss) and comprehensive income (loss).

On June 5, 2019, the Company contributed eight investment properties to Jaguarundi Ventures, LP, a joint venture formed with Magnetar Financial LLC (collectively, "Magnetar"), a related party. The Company received $23,000 from its joint venture partner in the arrangement in exchange for a 39.49% interest in the joint venture. The properties contributed had an investment property value of $161,047 and total mortgage indebtedness of $102,692. The Company provides a guarantee on the outstanding mortgage balances of the joint venture in exchange for a fee equal to 15 basis points on the amount guaranteed. The Company earns an asset management fee of 25 basis points based on gross asset value. For the year ended December 31, 2020, the Company has earned guaranty fees of $60 (year ended December 31, 2019 - $39) and management fees of $403 (year ended December 31, 2019 - $229) from Jaguarundi Ventures included in other revenue in the consolidated statements of income (loss) and comprehensive income (loss).

On May 6, 2020 the Company acquired 100% of Royal Senior Living’s ("Royal") interest in five joint venture properties in which the Company already had a majority ownership interest ("Royal JV") (Note 7).

In addition to the five-asset Royal joint venture referenced above, the Company also had a single-asset joint venture with Royal which owned a seniors housing community in Eatonton, GA ("Royal Eatonton"). Royal purchased the Company’s 65% ownership interest in the community on May 6, 2020. Cash proceeds to the Company for this sale were $1,447. Following this transaction, the Company and Royal no longer have any shared interests in joint arrangements.

The following tables summarize the information about the Company's investment in joint ventures, which have been accounted for under the equity method:

	Year ended December 31, 2020		Year ended December 31, 2019
			(Adjusted - note 3)
			Unaudited
Cash contributions to joint ventures	$	1,855	$	14,391
Distributions received from joint ventures	$	3,803	$	5,897

46

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020				December 31, 2019
	Net assets		Company share of net assets		Net assets		Company share of net assets
					(Adjusted - note 3)		(Adjusted - note 3)
					Unaudited		Unaudited
Cash	$	5,480	$	4,152	$	8,288	$	5,959
Tenant and other receivables	3,204		1,765		5,192		3,374
Other	923		839		1,032		793
Current assets	9,607		6,756		14,512		10,126
Investment properties	292,526		204,399		361,970		256,945
Property, plant and equipment, net	26,317		19,044		26,878		19,567
Loans receivable	3,885		55		13,978		9,010
Other non-current assets	481		362		1,107		927
Total assets	$	332,816	$	230,616	$	418,445	$	296,575
Accounts payable and accrued liabilities	$	6,753	$	4,787	$	7,578	$	5,441
Unearned revenue	712		585		724		560
Mortgages payable - current	25,332		17,311		29,424		21,207
Current liabilities	32,797		22,683		37,726		27,208
Mortgages payable - non-current	187,120		135,298		217,627		156,853
Loan commitment liability	416		252		2,359		1,478
Derivative instruments	7,249		5,615		2,627		2,012
Other non-current liabilities	2,286		1,510		1,702		1,030
Total liabilities	$	229,868	$	165,358	$	262,041	$	188,581
Net assets	$	102,948	$	65,258	$	156,404	$	107,994

Loan commitment liability represents the fair value of commitments made by the Company to issue loans at rates below market value.

47

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Year ended December 31, 2020				Year ended December 31, 2019
	Net income (loss)		Company share of net income (loss)		Net income (loss)		Company share of net income (loss)
					Unaudited		Unaudited
Revenue	$	65,249	$	40,457	$	78,954	$	52,564
Other income	1,582		1,294		—		—
Property operating expense	(43,259)		(25,536)		(56,013)		(36,097)
Depreciation expense	(724)		(546)		(1,326)		(995)
Finance costs	(9,294)		(6,591)		(10,762)		(8,048)
Real estate tax expense	(1,609)		(974)		(1,021)		(618)
General and administrative expenses	(3,272)		(1,974)		(515)		(352)
Allowance for credit losses on loans and interest receivable	(14,800)		(11,957)		—		—
Change in fair value of financial instruments	(4,622)		(3,603)		(3,010)		(2,465)
Change in fair value of investment properties	(33,830)		(25,299)		(16,272)		(10,788)
Net loss, prior to distributions to owners	$	(44,579)	$	(34,729)	$	(9,965)	$	(6,799)

Related party transactions occur between the Company and its joint ventures. These related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to between the parties. Except as disclosed elsewhere in these consolidated financial statements, the related party balances are included in accounts payable, other receivables, loans receivable, and lease revenue from joint ventures.

The following table summarizes information about the gross balance of mortgages payable at the joint ventures:

	December 31, 2020			December 31, 2019
				Unaudited
Mortgages at fixed rates:
Mortgages (principal) (1)	$	170,814		$	163,307
Interest rates	3.99% to 4.98%			3.99% to 4.98%
Weighted average interest rate	4.30		%	4.33		%
Mortgages at variable rates:
Mortgages (principal)	$	42,635		$	84,745
Interest rates	LIBOR plus 2.40% to LIBOR plus 3.00%			LIBOR plus 2.40% to LIBOR plus 3.00%
Weighted average interest rate	3.88		%	4.56		%
Blended weighted average rate	4.22		%	4.41		%
(1) Includes $114,589 of variable rate mortgages that are fixed with interest rate swaps.

48

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The following tables summarize the information about the Company's investment in Jaguarundi Ventures, LP, which have been accounted for under the equity method and included in tables above. Jaguarundi Ventures, LP is shown separately below due to significance of the interest in the joint venture. The joint venture was formed on June 5, 2019. During the year ended December 31, 2020, the Company has made cash contributions of $1,428 to Jaguarundi Ventures, LP (year ended December 31, 2019 - $11,894). During the year ended December 31, 2020, the Company has not received any distributions from Jaguarundi Ventures, LP (year ended December 31, 2019 - NIL).

	December 31, 2020				December 31, 2019
	Net assets		Company share of net assets		Net assets		Company share of net assets
					(Adjusted - note 3)		(Adjusted - note 3)
					Unaudited		Unaudited
Cash	$	1,658	$	1,003	$	3,936	$	2,382
Tenant and other receivables	1,602		969		1,620		980
Other	110		68		—		—
Current assets	3,370		2,040		5,556		3,362
Investment properties	143,785		86,999		162,660		98,420
Loans receivable	—		—		10,120		8,972
Total assets	$	147,155	$	89,039	$	178,336	$	110,754
Accounts payable and accrued liabilities	$	1,918	$	1,160	$	2,154	$	1,303
Unearned revenue	—		—		82		50
Mortgages payable - current	15,227		9,214		2,122		1,284
Current liabilities	17,145		10,374		4,358		2,637
Mortgages payable - non-current	84,149		50,916		99,542		60,229
Loan commitment liability	416		252		2,359		1,428
Derivative instruments	1,602		969		659		399
Other non-current liabilities	1,700		1,029		1,700		1,029
Total liabilities	$	105,012	$	63,540	$	108,618	$	65,722
Net assets	$	42,143	$	25,499	$	69,718	$	45,032

The Company provides a guarantee on the outstanding mortgage balances of the Jaguarundi Ventures, LP in exchange for a fee equal to 15 basis points on the amount guaranteed. As of December 31, 2020, the outstanding mortgages balance of Jaguarundi Ventures, LP is $99,376. As of December 31, 2020, the value of the properties that collateralize the mortgages is $143,785 and is sufficient to support the mortgage values.

49

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Year ended December 31, 2020				Year ended December 31, 2019
	Net income (loss)		Company share of net income (loss)		Net income (loss)		Company share of net income (loss)
					Unaudited		Unaudited
Revenue	$	14,423	$	8,638	$	8,417	$	5,048
Finance costs	(3,859)		(2,182)		(2,847)		(1,723)
Real estate tax expense	(1,609)		(974)		(1,021)		(618)
General and administrative expenses	(3,318)		(2,008)		(515)		(352)
Allowance for credit losses on loans and interest receivable	(14,800)		(11,956)		—		—
Change in fair value of financial instruments	(942)		(570)		(126)		(76)
Change in fair value of investment properties	(19,294)		(11,585)		(5,621)		(4,219)
Net loss, prior to distributions to owners	$	(29,399)	$	(20,637)	$	(1,713)	$	(1,940)

50

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

9.Credit facilities:

The credit facilities are recorded net of loan fees, which are capitalized when paid, and amortized into finance cost over the terms of the related loans using the effective interest rate method.

	December 31, 2020		Borrowing rate at December 31, 2020		December 31, 2019		Borrowing rate at December 31, 2019
					Unaudited		Unaudited
Credit Facility Term (1)	$	200,000	4.66	%	$	200,000	4.51	%
Credit Facility Revolver (3)	190,500		3.58	%	173,750		4.43	%
MOB Facility USD denominated portion	21,286		2.34	%	21,286		3.96	%
MOB Facility CAD denominated portion (1) (2)	66,904		4.32	%	65,589		4.32	%
Magnetar Facility	10,000		9.00	%	15,000		8.50	%
Commonwealth Facility (1)	176,000		3.84	%	176,000		3.84	%
Finance costs, net	(4,094)		—		(4,666)		—
Carrying value	$	660,596	4.09	%	$	646,959	4.36	%
Less current portion	10,000				14,569
Long-term portion	$	650,596			$	632,390
(1) This facility is fixed with an interest rate swap.
(2) This facility is denominated in Canadian dollars with a principal amount of CAD$85,202.
(3) $75,000 of this facility is fixed with interest rate swaps.

On December 20, 2018 the Company entered into an agreement for an unsecured credit facility (the "Credit Facility") with a $400,000 capacity. The Credit Facility is comprised of a $200,000 term loan and a $200,000 revolving line of credit. The term loan has a maturity date of December 20, 2023, while the revolving line of credit has a maturity date of December 20, 2022, with a one year extension option, subject to lender approval. The Credit Facility bears interest at a rate of LIBOR plus an applicable margin based on the Company's consolidated leverage ratio, with an option to use a rate based on Base Rate, as defined in the agreement, plus an applicable margin.

The borrowing capacity of the Credit Facility is based on the undepreciated book value of an unencumbered pool of assets. Per the agreement, the Company's leverage could not exceed 62.5% through December 31, 2019, reducing to 60% thereafter. The agreement also provides for the Company's leverage to increase to 65% for two quarters following any material acquisition (the "surge period"). Per the agreement, the fixed charge ratio shall not be less than 1.75 to 1.0. On November 7, 2019, the Company amended the terms of the Credit Facility to extend the surge provision period following a material acquisition for both the maximum consolidated total leverage ratio covenant and unencumbered pool leverage covenant. The maximum consolidated total leverage ratio covenant can increase to 65% for four quarters starting with the third quarter of 2019. The unencumbered pool leverage ratio may increase to 65% for two quarters starting with the third quarter of 2019, reducing to 62.5% for two quarters after that, and reducing back to 60% thereafter. The Company's acquisition of Commonwealth is considered a material acquisition under the terms of the Credit Facility.

On November 4, 2020, the Company entered into an agreement to modify the Credit Facility, in which the facility will be permanently converted to a facility secured by pledges of equity in the special purposes entities which own the properties making up a borrowing base. The minimum fixed charge coverage ratio covenant will permanently decrease from 1.75 to 1.60. Per the agreement, the Company will be granted a surge period effective with the quarterly reporting period ended

51

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

September 30, 2020 through June 30, 2021. During the surge period, the consolidated leverage ratio covenant will be increased from 60% to 65%, the advance rate will increase from 60% to 65% of the borrowing base, the applicable margin for LIBOR loans will increase 15 basis points, and the implied interest rate used to calculate the debt service coverage amount will decrease from 6.0% to 5.75%.

The table below shows the applicable margins at each leverage ratio during the surge period, which includes a 15 basis point increase:

Level	Consolidated Leverage Ratio	Applicable Margin for Revolving Credit LIBOR Loans		Applicable Margin for LIBOR Loans that are Term Loans
1	Less than 40%	1.75	%	1.70	%
2	Equal to or greater than 40% but less than 45%	1.90	%	1.85	%
3	Equal to or greater than 45% but less than 50%	2.05	%	2.00	%
4	Equal to or greater than 50% but less than 55%	2.20	%	2.15	%
5	Equal to or greater than 55% but less than 60%	2.35	%	2.30	%
6	Equal to or greater than 60% but less than 65%	2.60	%	2.55	%

On May 1, 2018, a wholly owned subsidiary of the Company entered into a secured credit facility ("MOB Facility") for the purpose of funding the acquisition of 14 medical office buildings. The facility has maximum commitment amounts of CAD$90,060, with a borrowing rate of the BA Rate plus 220 basis points, and a US Dollar commitment of $22,515, with a borrowing rate of LIBOR plus 220 basis points. The facility provides for interest-only payments through its maturity date of May 1, 2023. Per the terms of the agreement, CAD$4,858 and USD$1,228 are reserved for the construction of tenant improvements and the payment of leasing commissions for leases entered into after the closing of the transaction. On May 1, 2018, in conjunction with the acquisition, the Company drew CAD$85,202 and USD$16,647. The facility also included an allocation of USD$4,460 for the acquisition of an additional medical office property in Williamsville, New York. On June 28, 2018, the Company amended the terms of the agreement to increase the borrowing capacity for the Williamsville, New York property to USD$6,572. The company drew a total of USD$6,572 in conjunction with the closing of the Williamsville asset on July 9, 2018. On December 31, 2018, the Company repaid USD$1,933 on the facility. On September 21, 2020, the Company entered into an amendment to the MOB Facility that reset certain loan covenant levels. Pursuant to the terms of the amendment, during a test period beginning June 30, 2020, the Company's debt yield covenant level was reduced to 5.75% (which increases to 8.00% at December 31, 2021).

On July 26, 2019, the Company entered into a credit agreement with Magnetar for a principal amount of $30,000, annual interest rate of 8.5%, and an initial maturity of one year with a one year extension option. On December 5, 2019, the Company repaid $15,000 on the facility. On June 5, 2020, the Company gave notice of intent to exercise the one year extension option and per the Magnetar Facility credit agreement the interest rate increased to 9.0%. On June 16, 2020, the Company repaid $5,000 on the Magnetar Facility.

On August 1, 2019, a wholly owned subsidiary of the Company entered into a secured credit facility ("Commonwealth Facility") for the purpose of funding the acquisition of Commonwealth Tranche I. The $176,000 new debt secured by 16 properties has a maturity date of August 1, 2024, with 2 available extension options. It bears interest at a rate of LIBOR plus 215 basis points. The agreement also provides for an accordion feature that would extend the capacity of the loan by an additional $50,000 subject to certain terms and conditions provided for in the agreement. Pursuant to the terms of the Commonwealth Facility, the Company is required to maintain a debt yield of 8.0% (which increases to 8.75% at September 30, 2021) as well as a Debt Service Coverage Ratio of 1.25.

52

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

On January 17, 2020, the Company entered into an amendment to the Commonwealth Facility that established a $10,000 capital improvements holdback ("Holdback"). The Holdback provides funding to the Company for reimbursement of capital improvements made to the properties encumbered by the Commonwealth Facility. The amendment allows the Company to be reimbursed for 65% of capital improvement costs incurred. On January 26, 2021, the Company drew $4,453 from the Holdback for reimbursement of expenses incurred for adding additional units to the Abingdon, South Boston and Front Royal properties.

Future principal repayments of the credit facilities are as follows:

	Aggregate principal payments
2021	$	10,000
2022	190,500
2023	288,190
2024	176,000
2025	—
Thereafter	—
Total	$	664,690

53

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

10.    Mortgages payable:

Mortgages payable consist of the following as at December 31, 2020:

	December 31, 2020		December 31, 2019
			Unaudited
Mortgages payable	$	296,881	$	275,083
Mark-to-market adjustment, net	4,958		2,297
Finance costs, net	(2,375)		(1,913)
Carrying value	$	299,464	$	275,467
Less current portion	30,622		43,024
Long-term portion	$	268,842	$	232,443

Mortgages payable are collateralized by investment properties and property, plant and equipment with a value of $461,200 at December 31, 2020. Maturity dates on mortgages payable range from 2021 to 2054, and the weighted average years to maturity is 7.93 years at December 31, 2020.

Future principal payments on the mortgages payable as at December 31, 2020 are as follows:

	Regular principal payments		Principal due on maturity		Total principal payments		% of total principal payments
2021	$	6,417	$	24,205	$	30,622	10	%
2022	6,396		27,369		33,765		11	%
2023	5,478		83,435		88,913		30	%
2024	3,831		20,698		24,529		8	%
2025	2,637		27,441		30,078		10	%
Thereafter	47,678		41,296		88,974		31	%
	$	72,437	$	224,444	$	296,881	100	%

54

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020			December 31, 2019
				Unaudited
Mortgages at fixed rates:
Mortgages (principal) (1)	$	240,429		$	241,451
Interest rates	2.55% to 6.15%			2.55% to 6.96%
Weighted average interest rate	4.33		%	4.76		%
Mortgages at variable rates:
Mortgages (principal)	$	56,452		$	33,632
Interest rates	LIBOR plus 2.45% to LIBOR plus 2.75% with a 1% LIBOR Floor			LIBOR plus 3.20% to Canada Prime Rate plus 1.25%
Weighted average interest rate	3.53		%	5.02		%
Blended weighted average rate	4.18		%	4.79		%
(1) Includes $67,069 of variable rate mortgages that are fixed with interest rate swaps.

55

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

11.Derivative financial instruments:

(a) Derivative swaps:

Derivative swaps as at December 31, 2020 are detailed in the table below:

					Asset (liability) balance				Income (loss) for the years ended
Swap	Maturity date	Fixed rate	Notional amount		December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
							Unaudited				Unaudited
Credit Facility Term	December 19, 2023	LIBOR fixed at 2.11%	$	200,000	$	(11,945)	$	(4,466)	$	(7,479)	$	(5,655)
Credit Facility Revolver	January 2, 2024	LIBOR fixed at 2.57%	25,000		(1,860)		(1,019)		(841)		(856)
Credit Facility Revolver	December 1, 2022	LIBOR fixed at 2.11%	50,000		(1,996)		(861)		(1,135)		(861)
Leawood Swap (3)	March 15, 2024	Interest rate fixed at 4.55%	13,136		—		—		—		(407)
Topeka Swap (3)	March 15, 2024	Interest rate fixed at 4.55%	12,477		—		—		—		(387)
Red Oak Swap (1)	January 18, 2021	Interest rate fixed at 3.77%	4,105		(13)		(27)		16		(10)
Park Terrace Swap	December 18, 2020	LIBOR fixed at 2.42%	—		—		—		—		(4)
Seneca Lake Swap	December 18, 2020	LIBOR fixed at 2.42%	—		—		—		—		(4)
Winchester Swap	November 1, 2021	Interest rate fixed at 4.54%	6,327		(76)		(2)		(74)		(159)
Calhoun Swap	May 31, 2019	LIBOR fixed at 1.75%	—		—		—		—		(3)
MOB Facility Swap (2)	May 1, 2023	Banker's Acceptance fixed at 2.12%	66,904		(2,561)		(276)		(2,127)		(127)
Grand Brook Swap	October 2, 2021	Interest rate fixed at 5.98%	15,429		(402)		(475)		73		(130)
Commonwealth Swap	August 1, 2024	LIBOR fixed at 1.69%	176,000		(9,375)		(840)		(8,535)		(840)
Constant Care Swap	October 1, 2022	Interest rate fixed at 4.21%	26,972		(641)		64		(705)		64
Oak Ridge Swap	April 1, 2022	LIBOR fixed at 0.66%	14,236		(100)		—		(100)		—
		Carrying value			$	(28,969)	$	(7,902)	$	(20,907)	$	(9,379)
	Less current portion				(491)		—
	Long term portion				$	(28,478)	$	(7,902)
		Derivative instruments (Asset)			$	—	$	64
		Derivative instruments (Liability)			(28,969)		(7,966)
					$	(28,969)	$	(7,902)
1) The swap has a notional amount of CAD$5,228.
2) The swap is for a fixed amount of CAD$85,202.
3) These properties were contributed to a joint venture on June 5, 2019.

56

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

57

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

(b) Prepayment embedded derivatives:

Certain mortgages payable contain prepayment options that represent embedded derivatives that require bifurcation from the host contract. The prepayment options are measured at fair value, with changes in the fair value being recognized as change in fair value of financial instruments in the consolidated statements of income (loss) and comprehensive income (loss).

The fair value of the prepayment embedded derivatives has been determined using a LIBOR based interest rate swap options ("swaptions") as a proxy. The swaptions were structured to mirror the financial conventions of the respective loans, including payment periods, accrual basis, principal amortization, prepayment dates and prepayment premiums. The swaptions were structured as fixed receiver with a strike rate set on market as of the date of the loan agreement with exercise premiums to match the underlying loans plus a cost of refinancing upon exercise. The resulting swaption price would represent a proxy for the value of the prepayment rights embedded in the underlying loans. The fair values determined are based on significant other observable inputs (Level 2). As at December 31, 2020, the prepayment embedded derivative assets have a fair value of $4,814 (2019 - NIL). For the year ended December 31, 2020, a fair value gain of $1,823 (year ended December 31, 2019 - NIL), was recorded in the consolidated statements of income (loss) and comprehensive income (loss).

12.Convertible debentures:

(a) 2016 Convertible Debentures

On December 16, 2016, the Company issued $45,000 aggregate principal amount of convertible unsecured subordinated debentures (the "2016 Convertible Debentures"). The 2016 Convertible Debentures are due on January 31, 2022 and bear interest at an annual rate of 5.00% payable semi-annually in arrears on July 31 and January 31 of each year.

The 2016 Convertible Debentures are convertible into common shares of the Company at the option of the holder at a conversion price of $11.00 per common share at any time prior to the earlier of January 31, 2022 and the last business day immediately preceding the date specified by the Company for redemption. On or after January 31, 2020 and prior to January 31, 2021, the 2016 Convertible Debentures may be redeemed by the Company in whole or in part at a price equal to the principal amount thereof plus accrued and unpaid interest provided that the volume weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 consecutive trading days preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. On or after January 31, 2021, and prior to the maturity date, the 2016 Convertible Debentures may be redeemed by the Company in whole at any time or in part from time to time, at a price equal to the principal amount thereof plus accrued interest.

Upon redemption or maturity, the Company may satisfy its obligations with respect to the convertible debentures in cash or the issuance of common shares based on 95% of the Current Market Price on the Redemption Date or Maturity Date, respectively.

As at December 31, 2020, the 2016 Convertible Debentures are comprised of the following:

58

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020		December 31, 2019
			Unaudited
Issued	$	44,975	$	44,975
Issue costs, net of amortization and accretion of equity component	802		45
Equity component, excluding issue costs and taxes	(1,648)		(1,648)
2016 Convertible Debentures	$	44,129	$	43,372

Interest costs related to the 2016 Convertible Debentures are recorded in financing costs using the effective interest rate method.

On May 6, 2019, $25 of 2016 Convertible Debentures were converted into 2,272 common shares.

(b) 2018 Convertible Debentures

On August 24, 2018, the Company issued $50,000 aggregate principal amount of convertible unsecured subordinated debentures (the "2018 Convertible Debentures"). The 2018 Convertible Debentures are due on September 30, 2023 and bear interest at an annual rate of 6.00% payable semi-annually in arrears on March 31 and September 30 of each year commencing on March 31, 2019.

The 2018 Convertible Debentures are convertible into common shares of the Company at the option of the holder at a conversion price of $10.70 per common share. The debentures will not be redeemable prior to September 30, 2021. On or after September 30, 2021, and prior to September 30, 2022, the 2018 Convertible Debentures may be redeemed in whole or in part from time to time at the Company’s option, at a price equal to their principal amount plus accrued and unpaid interest, provided that the volume weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 consecutive trading days preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. On or after September 30, 2022, and prior to the maturity date, the 2018 Convertible Debentures may be redeemed by the Company, in whole at any time or in part from time to time, at a price equal to the principal amount thereof plus accrued and unpaid interest.

Upon redemption or maturity, the Company may satisfy its obligations with respect to the convertible debentures in cash or the issuance of common shares based on 95% of the Current Market Price on the Redemption Date or Maturity Date, respectively.

As at December 31, 2020, the 2018 Convertible Debentures are comprised of the following:

	December 31, 2020		December 31, 2019
			Unaudited
Issued	$	50,000	$	50,000
Issue costs, net of amortization and accretion of equity component	(982)		(1,587)
Equity component, excluding issue costs and taxes	(736)		(736)
2018 Convertible Debentures	$	48,282	$	47,677

59

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Interest costs related to the 2018 Convertible Debentures are recorded in financing costs using the effective interest rate method.

13.Commonwealth preferred unit liability:

On August 1, 2019, the Company issued $53,587 in preferred interests of the acquiring subsidiary to fund the purchase of Commonwealth Tranche I. The preferred interests are exchangeable by holders into common shares of the Company at a fixed exchange price of $9.75 per common share. The preferred interests have an initial dividend rate of 6.50% per annum, with annual escalators beginning August 1, 2023, and a liquidation value equal to their unreturned initial capital contribution and any accrued and unpaid dividends. These dividends are included in finance costs from operations in the consolidated statements of income and comprehensive income. Under certain circumstances, the Company will have the right to redeem the preferred interests at its discretion for an amount specified in the operating agreement.

On December 23, 2019, the Company issued $12,093 in preferred interests of the acquiring subsidiary to fund the purchase of the Commonwealth Tranche II.

On October 1, 2020, the Company issued $1,701 in preferred interests to fund the earnout payment pursuant to the Commonwealth purchase agreement (note 7).

As at December 31, 2020 the Commonwealth preferred unit liability is comprised of the following:

	December 31, 2020		December 31, 2019
			Unaudited
Issued	$	67,381	$	65,680
Equity component, net of accretion	(1,584)		(2,026)
Commonwealth preferred unit liability	$	65,797	$	63,654

14.Other liabilities:

Other liabilities are as follows:

60

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020		December 31, 2019
			Unaudited
Deferred shares liability (note 22)	$	875	$	2,597
Security deposits received from tenants	8,576		8,573
Escrows collected from tenant	1,816		944
Unearned revenue	2,674		1,426
Liability to previous owner of Care	126		632
Lease liability	1,890		2,199
Loan commitment liability (note 25)	115		979
Exchangeable units liability	2,049		2,049
Earnout payable (note 7 and 25)	2,254		—
Other	841		352
	$	21,216	$	19,751
Current	$	4,975	$	3,015
Non-current	16,241		16,736
	$	21,216	$	19,751

Loan commitment liability represents the fair value of commitments made by the Company to issue loans at rates below market value.

On August 30, 2019, the Company issued 327,869 Class B LP units with the right to exchange units into common shares at the option of the unit holder ("Exchangeable Units"). The shares were issued to fund $2,049 of the consideration paid for the three purchased properties located in Indiana. The Exchangeable Units are entitled to receive distributions equal to those provided to common share holders. These distributions are included in finance costs from operations in the consolidated statement of income (loss) and comprehensive income (loss).

61

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

15.    Reconciliation of changes in liabilities arising from financing activities:

	Credit facilities		Mortgages payable		Convertible debentures		Commonwealth preferred unit liability		Total
Balance, December 31, 2018 - Unaudited	$	338,140	$	303,330	$	89,745	$	—	$	731,215
Proceeds from financing	370,350		39,489		—		—		409,839
Repayments	(63,990)		(40,635)		—		—		(104,625)
Scheduled principal payments	—		(4,959)		—		—		(4,959)
Mortgages contributed to joint venture (note 8)	—		(102,692)		—		—		(102,692)
Mortgages assumed on acquisition of control over properties previously owned through a joint venture	—		32,265		—		—		32,265
Mortgages assumed through acquisition of property, plant, and equipment (note 7)	—		47,152		—		—		47,152
Commonwealth preferred units issued	—		—		—		65,680		65,680
Equity component of Commonwealth preferred unit liability	—		—		—		(2,093)		(2,093)
Financing costs paid	(1,952)		(979)		—		—		(2,931)
Amortizing of financing costs and mark to market adjustments	1,311		1,259		1,329		67		3,966
Changes in foreign currency rates	3,100		1,237		—		—		4,337
Conversion of convertible debentures into common shares	—		—		(25)		—		(25)
Balance, December 31, 2019 - Unaudited	$	646,959	$	275,467	$	91,049	$	63,654	$	1,077,129
Proceeds from financing	33,000		16,682		—		—		49,682
Repayments	(21,250)		(17,375)		—		—		(38,625)
Scheduled principal payments	—		(5,112)		—		—		(5,112)
Mortgage contributed to joint venture (note 7)	—		(8,411)		—		—		(8,411)
Mortgages assumed from joint venture (note 7)	—		29,670		—		—		29,670
Mortgages assumed through acquisition of investment property (note 6)	—		4,853		—		—		4,853
Commonwealth preferred units issued (note 7)	—		—		—		1,701		1,701
Mark to market adjustments made to mortgages assumed through acquisition of property, plant and equipment	—		2,991		—		—		2,991
Financing costs paid	(996)		(603)		—		—		(1,599)
Amortizing of financing costs, mark to market adjustments, and accretion of equity components	1,577		337		1,362		442		3,718
Changes in foreign currency rates	1,306		965		—		—		2,271
Balance, December 31, 2020	$	660,596	$	299,464	$	92,411	$	65,797	$	1,118,268

62

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

63

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

16.Share capital:

(a) Common shares:

The following number and value of common shares were issued and outstanding as at December 31, 2020:

	Common shares	Carrying value
Balance, December 31, 2018 - Unaudited	52,933,851	$	493,165
Issued as consideration for acquisition of Symcare properties	555,556	3,800
Issued on settlement of Deferred Share Incentive Plan	150,912	1,078
Issued pursuant to the Company's dividend reinvestment plan	1,070,518	7,023
Shares acquired under NCIB	(79,627)	(530)
Issued through conversion of convertible debentures	2,272	25
Balance, December 31, 2019 - Unaudited	54,633,482	$	504,561
Issued on settlement of Deferred Share Incentive Plan	335,709	1,078
Issued on settlement of equity settled Deferred Shares	31,203	214
Issued pursuant to the Company's dividend reinvestment plan	931,602	3,498
Shares acquired under NCIB	(54,500)	(148)
Balance, December 31, 2020	55,877,496	$	509,203

(i)On November 15, 2019 the Toronto Stock Exchange ("TSX") approved the Company's notice of intention to renew its normal course issuer bid ("NCIB") for a portion of its common shares. Pursuant to the notice, the Company is authorized to acquire up to a maximum of 2,723,835 of its common shares, or approximately 5% of the Company’s 54,476,694 outstanding common shares as of November 1, 2019, for cancellation over the following 12 months. Purchases under the NCIB will be made through the facilities of the TSX or through a Canadian alternative trading system and in accordance with applicable regulatory requirements at a price per share equal to the market at the time of acquisition. The number of shares that can be purchased pursuant to the NCIB is subject to a daily maximum of 10,927 shares, subject to the Company’s ability to make one block purchase of shares per calendar week that exceeds such limits. Any shares purchased under the NCIB will be canceled upon purchase. During the year ended December 31, 2020, the Company acquired 54,500 shares.

(ii)For the year ended December 31, 2020, the Company declared dividends payable on common shares of $10,120 (2019 - $39,764). Of the $10,120 dividends declared in the year ended December 31, 2020, $2,868 was satisfied in the form of shares issued through the dividend reinvestment plan (2019 - $7,687).

(iii)On April 10, 2020, the Company announced the suspension of its dividend for all common shareholders from April 1, 2020 until further notice.

(b) Preferred shares:

The following number and value of preferred shares were issued and outstanding as at December 31, 2020:

64

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Preferred shares	Carrying value
Balance, December 31, 2018 - Unaudited	7,560,137	$	71,106
Issued Series 4 preferred shares	1,538,461	14,283
Balance, December 31, 2019 and December 31, 2020	9,098,598	$	85,389

The Company entered into subscription agreements in 2017 and 2018 in respect of the issuance of class A convertible preferred shares ("Preferred Shares") to certain funds managed by Magnetar, a significant shareholder of the Company, funded in 3 series. The purpose of the transaction was to raise proceeds to be used for the repayment of debt, general working capital purposes and to fund future acquisitions. The Company issued 7,560,137 preferred shares for aggregate gross proceeds of $71,500.

The Preferred Shares issued during series 1, 2, and 3 are non-voting and are initially convertible into common shares of the Company on a one-for-one basis at the option of the holder based on an initial liquidation preference and a conversion price of $9.75. The Preferred Shares were issued at a price per share equal to the initial liquidation preference of $9.75, subject to a 3% discount. Following issuance, the liquidation preference of the Preferred Shares will accrete at a rate of 5.65% per annum, compounded quarterly, increasing the number of common shares into which each Preferred Share is convertible at the fixed rate, and is subject to further adjustments in certain circumstances. In certain circumstances, the Company may redeem the Preferred Shares for an amount equal to their liquidation preference and may also require the conversion of the Preferred Shares. If the Preferred Shares are redeemed or mandatorily converted in the first year following issuance, the liquidation preference of such shares will include a 4% premium to the initial liquidation preference. This premium will be reduced by 1% per year in respect of redemptions or mandatory conversions in the second, third or fourth years following issuance.

On July 23, 2019, the Company entered into subscription agreements in respect of the issuance of Class A convertible preferred shares to Magnetar for aggregate gross proceeds of $14,550. On August 27, 2019 the fourth series funded resulted in the issuance of 1,538,461 Class A Series 4 Preferred Shares.

The Series 4 Preferred Shares will be convertible into common shares at a conversion price of $9.75. The other terms of the Series 4 Preferred Shares will be substantially similar to the terms of the Company's Class A convertible preferred shares that are currently outstanding, except that the liquidation preference of the Series 4 Preferred Shares will accrete at a rate of 9.80% for the first 24 months following the issuance of the Series 4 Preferred Shares and 12.25% thereafter; the prepayment penalty on liquidation, mandatory conversion and redemption will be 1% of the initial liquidation amount if the applicable event occurs within the first six months after issuance and 0.5% of the initial liquidation amount if the applicable event occurs between 6 months and one year following the issuance; and the Series 4 Preferred Shares will contain a limitation on converting to common shares, without prior approval of the Toronto Stock Exchange, if such conversion would result in the issuance of common shares equal to or exceeding 10% of the common shares outstanding on the date the Series 4 Preferred Shares are issued. 

As at December 31, 2020, the preferred shares are convertible into 10,654,257 common shares of the Company.

65

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

17.Earnings (loss) per share:

Basic income per share is calculated using the weighted average number of shares outstanding during the period. The calculation of diluted income per share, is calculated using the "if-converted" method and to the extent the conversion is dilutive, assumes all convertible securities have been converted at the beginning of the period, or at the time of issuance, if later, and any charges or returns on the convertible securities, on an after-tax basis, are removed from net earnings. The outstanding convertible debentures, unvested deferred shares, exchangeable units, preferred shares and Commonwealth preferred units, if exercised, would be anti-dilutive to net income per share. Accordingly their potential exercise has been ignored in calculating the diluted net income per share.

The following table reconciles the numerator and denominator of the basic and diluted earnings per share computation:

Net loss:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Net loss for basic and diluted net loss per share	$	(184,004)	$	(5,359)

Denominator for basic and diluted net loss per share:

	Year ended December 31, 2020	Year ended December 31, 2019
		Unaudited
Weighted average number of shares, including fully vested deferred shares: Basic and diluted	55,699,307	53,989,904

Net loss per share:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Basic and diluted	$	(3.30)	$	(0.10)

66

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

18.Revenue:

(a) Rental Revenue:

Rental revenue consists of the following:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Contractual rental revenue	$	68,436	$	75,950
Straight-line rent adjustments	6,394		8,964
Amortization of tenant inducements	(385)		(158)
Property tax recoveries	12,705		15,243
Revenue from services - CAM recoveries (1)	2,962		3,199
	$	90,112	$	103,198
(1) Represents property services element in accordance with IFRS 15

The Company is scheduled to receive rental income from operators of its seniors housing and care properties under the provisions of long term non-cancellable operating leases, generally with lease terms of 10 to 15 years, with provisions for lease extensions at the option of the tenants. These leases are triple-net and include renewal options and rent escalation clauses.

The Company is also scheduled to receive rental income from tenants of the medical office building portfolio. These leases include provisions for recovery of real estate taxes, insurance and costs associated with common area maintenance ("CAM").

The tenant Symcare operates a portfolio of 15 properties and pays rent pursuant to a master lease. For the year ended December 31, 2020, rental revenue from this tenant comprised approximately 43% (year ended December 31, 2019 - 38%), of the Company's consolidated rental revenue for the period.

Future minimum rentals to be received as of December 31, 2020 are as follows:

Less than 1 year	$	69,031
Between 1 and 5 years	272,230
More than 5 years	514,544
	$	855,805

Future minimum rentals in the above table attributable to Symcare represent approximately 50% of the total.

(b) Resident rental and related revenue:

67

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Resident revenue	$	56,250	$	16,210
Service revenue (1)	64,157		22,257
	$	120,407	$	38,467
(1) Represents property services element in accordance with IFRS 15

19.Direct property operating expenses:

Direct property operating expenses consist of the following:

	Year ended December 31, 2020						Year ended December 31, 2019
	Owner occupied properties		Medical office buildings		Total		Owner occupied properties		Medical office buildings		Total
							Unaudited		Unaudited		Unaudited
Repairs and maintenance	$	2,436	$	1,649	$	4,085	$	763	$	1,539	$	2,302
Utilities	3,709		1,381		5,090		1,163		1,369		2,532
Property management fees	—		536		536		—		574		574
Compensation and benefits	59,279		—		59,279		19,226		—		19,226
Other services and supplies	6,680		994		7,674		2,562		1,022		3,584
Real estate taxes	2,272		—		2,272		715		—		715
Other	15,668		901		16,569		3,782		818		4,600
	$	90,044	$	5,461	$	95,505	$	28,211	$	5,322	$	33,533

68

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

20.Finance costs:

Finance costs consist of the following:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Interest expense on credit facilities	$	20,496	$	22,665
Interest expense on mortgages payable	11,121		11,922
Interest expense on convertible debentures	5,248		5,249
Distributions on exchangeable units	62		80
Dividends on Commonwealth preferred units	4,376		1,475
Amortization and accretion expense	3,997		3,882
Interest rate swap payments (receipts)	7,747		(86)
Write-off of deferred financing costs from refinancing	67		82
Amortization of mark-to-market debt adjustments	(330)		25
Interest income from loans receivable (note 4)	(2,983)		(3,661)
Finance costs from operations	$	49,801	$	41,633
Allowance for credit losses on loans and interest receivable (note 4)	23,546		1,003
Change in non-controlling interest liability	316		504
Change in fair value of financial instruments (note 11)	19,084		9,379
Change in fair value of contingent consideration (note 7)	5,510		—
Total finance costs	$	98,257	$	52,519

69

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

21.General and administrative:

General and administrative costs consist of the following:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Compensation and benefits	$	11,432	$	9,067
Asset management and administrative fees	235		499
Professional fees	3,474		3,090
Deferred share compensation expense	1,066		2,653
Bad debt expense	1,838		—
Other	2,494		2,783
	$	20,539	$	18,092

For the year ended December 31, 2020, $6,699 (year ended December 31, 2019 - $2,843) of general and administrative costs were incurred at the Commonwealth management company. For the year ended December 31, 2020, the Company has incurred severance expense of $394 (year ended December 31, 2019 - NIL).

22.Deferred share incentive plan:

On May 25, 2016, the shareholders of the Company voted on and approved a deferred share incentive plan (the "Deferred Share Incentive Plan").

Each director of the Company is given the right to participate in the Deferred Share Incentive Plan. Directors who elect to participate shall receive a portion of their fees earned for service on the Board (the "Elected Amount") in the form of deferred shares in lieu of cash ("Individual Contributed Deferred Shares"). In addition, the Deferred Share Incentive Plan provides that the Company shall match 100% of the elected amount for each director such that the aggregate number of deferred shares issued to each such director annually shall be equal in value to two times the elected amount for such director ("Company Contributed Deferred Shares").

Under the Deferred Share Incentive Plan, deferred shares may be granted from time to time to participants in the Deferred Share Incentive Plan at the discretion of the Board of Directors or the Compensation, Governance and Nominating Committee ("Discretionary Deferred Shares")

Wherever cash dividends are paid on the common shares, additional deferred shares are credited to the participant's account. The number of such additional deferred shares is calculated by multiplying the aggregate number of deferred shares held on the relevant dividend record date by the amount of the dividend paid by the Company on each common share, and dividing the result by the market value of the common shares on the dividend date.

Individual Contributed Deferred Shares vest immediately upon grant. Company Contributed Deferred Shares, which are granted only to directors, generally vest in three equal installments on the first three anniversary dates of the grant.

Discretionary Deferred Shares may also be granted to participants and, where vesting is not specified in connection with the grant, such Discretionary Deferred Shares will vest on the second anniversary of the date of grant.

70

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

Additional deferred shares credited to a participant's account in connection with cash dividends vest on the same schedule as their corresponding Deferred Shares and are considered issued on the same date as the deferred shares in respect of which they were credited.

At the meeting of shareholders held on May 16, 2018, shareholders approved an amendment to the Deferred Share Incentive Plan to increase the maximum number of common shares available for issuance under the Deferred Share Incentive Plan to 4,000,000.

At December 31, 2020, the number of deferred shares granted and outstanding and vested are as follows:

	Granted/ Outstanding	Fully Vested
As at December 31, 2018 - Unaudited	375,279	92,244
Discretionary Deferred Shares granted	621,917	95,526
Individual Contributed Deferred Shares (vested immediately)	41,289	41,289
Company Contributed Deferred Shares	28,995	30,039
Shares forfeited	(18,842)	—
Shares issued upon vesting of deferred shares	(150,912)	(150,912)
As at December 31, 2019 - Unaudited	897,726	108,186
Discretionary Deferred Shares	257,955	335,595
Equity Settled Deferred Shares	375,733	34,998
Individual Contributed Deferred Shares (vested immediately)	78,648	78,648
Company Contributed Deferred Shares	78,648	24,718
Shares issued upon vesting of deferred shares	(366,912)	(366,912)
Shares settled for cash pursuant to the plan terms	(4,255)	(4,255)
As at December 31, 2020	1,317,543	210,978

For the year ended December 31, 2020, the expense recognized in the consolidated statements of income (loss) and comprehensive income (loss) related to deferred shares was $1,066 (year ended December 31, 2019 - $2,653). A deferred share liability of $875 (2019 - $2,597) is included in other non-current liabilities in the consolidated statements of financial position as at December 31, 2020.

On January 24, 2020, the Company granted 344,310 deferred shares that are considered to be equity settled, as the participants of this grant have waived their rights to receive settlement in cash pursuant to the plan. During the year ended December 31, 2020, the Company amortized $1,809 (year ended December 31, 2019 - $733) of equity settled deferred shares.

The table above includes dividends granted during the year ended December 31, 2020 of 64,266 shares (2019 - 72,585 shares).

23.Related party transactions:

Related party transactions in addition to those disclosed elsewhere in these consolidated financial statements are as follows:

71

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The Company entered into subscription agreements in 2017, 2018 and 2019 in respect of the issuance of class A convertible preferred shares to certain funds managed by Magnetar, a significant shareholder of the Company, funded in multiple series. The purpose of the transaction was to raise proceeds to be used for the repayment of debt, general working capital purposes and to fund future acquisitions. The Company issued 9,098,598 preferred shares for aggregate gross proceeds of $86,050.

On June 5, 2019, the Company formed a joint venture, Jaguarundi Ventures, LP, with Magnetar. The Company contributed 8 properties to a newly formed joint venture and received $23,000 from Magnetar in exchange for a 39.49% interest in the joint venture.

On July 26, 2019, the Company entered into a credit agreement with Magnetar for a principal amount of $30,000, annual interest rate of 8.5%, and an initial maturity of one year with a one year extension option. On December 5, 2019, the Company repaid $15,000 on the facility. On June 5, 2020, the Company gave notice of intent to exercise the one year extension option and per the credit agreement the interest rate will increase to 9.0%. On June 16, 2020, the Company repaid $5,000 on the facility.

24.Income taxes:

The income tax recovery in the consolidated statements of income (loss) and comprehensive income (loss) differs from that expected by applying the combined federal, provincial and state income tax rates of 26.5% (2019 - 26.5%). The differences for the years ended December 31, 2020 and 2019 are as follows:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Net loss before income taxes	$	(190,948)	$	(5,426)
Income tax recovery at Canadian tax rate	(50,601)		(1,438)
Non-deductible expenses	5,211		1,443
Difference in tax rate in foreign jurisdiction	(2,038)		(19)
Unrecognized tax losses	40,484		(53)
Income tax recovery	$	(6,944)	$	(67)

The Company has certain subsidiaries in the United States and Canada that are subject to tax on their taxable income. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below.

72

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020		December 31, 2019
			Unaudited
Deferred tax assets:
Tax losses	$	26,759	$	19,756
Financing costs	281		952
Derivative instruments	5,126		2,378
Other	10,762		2,703
	$	42,928	$	25,789
Deferred tax liabilities:
Investment properties and property, plant and equipment	517		30,691
Convertible debentures	216		343
Other	1,699		1,699
Deferred tax liabilities	$	2,432	$	32,733
Deferred tax assets not recognized	$	(40,496)	$	—
Net deferred tax liability	$	—	$	(6,944)

The gross movement in deferred tax is as follows:

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Deferred tax liability, beginning balance	$	(6,944)	$	(7,011)
Deferred tax recovery	6,944		67
Deferred tax liability, ending balance	$	—	$	(6,944)

At December 31, 2020, U.S. subsidiaries had accumulated net operating losses available for carryforward for U.S. income tax purposes of $73,629 (2019 - $51,965). The pre-2020 accumulated net operating losses of $51,965 will expire in 2038. The state net operating losses will expire in 2029. The Company and its Canadian subsidiary have losses in Canada for income tax purposes amounting to $24,385 that expire between 2036 and 2039. The Company has non-capital losses amounting to $98,014 at December 31, 2020 (2019 - $2,129) for which no deferred tax asset has been recognized as it is not probable that future taxable profits will be available against which the Company can use the benefits therefrom.

25.Commitments and contingencies:

Pursuant to the Chesterton lease agreement and satisfaction of certain conditions, the tenant has an option prior to the end of the fifth year of the lease to increase rent to a level supported by certain metrics as identified in the lease agreement. In consideration for the exercise of such option, the Company is required to pay the tenant an amount equal to the capitalized value of the rent increase using a pre-determined capitalization rate. If such option is exercised, the tenant's rent is also increased by an amount equal to the consideration paid multiplied by the capitalization rate. The Company has not recorded any balance in the consolidated financial statements associated with this commitment.

73

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

There are risks which arise from the joint arrangements, including the willingness of the other partners to contribute or withdraw funds and a change in creditworthiness of the partner. As a result, there may be a requirement by the Company to contribute cash into the operating partnerships.

On December 31, 2018, the Company entered into an operating agreement with Javelina Ventures, LLC in which the Company will share in 5% of the net available cash flows from operations. Concurrently, the Company entered into an agreement to guarantee a total of $5,000 of the mortgages on the properties operated by Javelina Ventures, LLC. The Company earns an annual guaranty fee of $225 until the loans have been repaid or the guaranty is released. The Company has not recorded any balance in the financial statements associated with this commitment.

On June 5, 2019, the Company entered into agreements to fund future loans to tenants of the Jaguarundi Ventures, LP joint venture. On October 1, 2019, the Company amended the agreements to increase the future loan commitments to the tenants. On February 18, 2020, the Company amended the agreements to further increase the future loan commitments to the tenants. As at December 31, 2020, the Company is committed to fund an additional $380 pursuant to these agreements. The Company has recorded an associated loan commitment liability representing the fair value of these commitments, which were made at interest rates below market value. The Company provides a guarantee on the outstanding mortgage balances of the Jaguarundi Ventures, LP in exchange for a fee equal to 15 basis points on the amount guaranteed (note 8). As of December 31, 2020, the value of the properties that collateralize the mortgages is $143,785 and is sufficient to support the mortgage values.

Pursuant to the Commonwealth purchase agreement, the Company may be required to fund one or more earnout payments relating to six communities that had not yet reached stabilization at the time of acquisition by the Company. These earnout payments are only payable in the event specific occupancy and EBITDAR thresholds have been satisfied, and must be met prior to the third anniversary of closing at which time the earnout payment obligation will cease to exist. The earnout payments, when funded, will consist of a combination of cash and additional preferred interests. At this time, given the performance of one of the six communities, the Company has recorded an expense related to the increase in the fair value of contingent consideration in the amount of $3,256, which was paid through the issuance of $1,701 of Commonwealth preferred units and $1,555 of cash on hand. The Company has recorded a liability of $2,254 in the financial statements associated with this commitment relating to the remaining five communities based on the weighted average probably of earnout payments owed using estimated future results at the properties.

On May 6, 2020, the Company entered into a limited partnership agreement with the operator Phoenix. Pursuant to this agreement, if the management agreement with Phoenix is terminated without cause, Phoenix has the right to cause the Company to purchase all of its interest in the partnership. The Company has not recorded any balance in the consolidated financial statements associated with this commitment.

26.Capital management:

The Company's objectives when managing capital are to ensure sufficient liquidity to pursue its organic growth combined with strategic acquisitions, and to maintain a flexible capital structure that optimizes the cost of capital at acceptable risk and preserves the ability to meet financial obligations.

The capital of the Company consists of mortgages payable, the credit facilities, convertible debentures, Commonwealth preferred unit liability, preferred shares and common shares.

74

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The Company sets the amount of capital in proportion to risk and manages the capital structure and makes adjustments to it in light of changes to economic conditions and the risk characteristics of the underlying assets, as well as with consideration of externally imposed capital requirements. In managing its capital structure, the Company monitors performance throughout the period to ensure working capital requirements are funded from operations, available cash on deposit and available financing. The Company may make changes to its capital structure in order to support the broader corporate strategy or in light of economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the Company may issue equity or new debt, issue new debt with different characteristics to replace existing debt, or reduce the amount of existing debt.

The real estate industry is capital-intensive by nature. As a result, debt capital is an important aspect in managing the business. In addition, financial leverage is used to enhance terms from purchased real estate. The Company actively monitors debt maturities and available debt financing options.

Under the terms of the Company's credit facilities, the Company is required to meet certain financial and non-financial covenants that are customary for the nature and phase of the Company's current business structure.

75

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

27.Fair value measurement:

The fair value hierarchy of assets and liabilities measured at fair value on a recurring basis in the consolidated statements of financial position is as follows:

	December 31, 2020						December 31, 2019
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
							Unaudited		Unaudited		Unaudited
Derivative asset	$	—	$	4,814	$	—	$	—	$	64	$	—
Investment properties	—		—		882,019		—		—		969,634
Loans receivable	—		—		2,368		—		—		2,368
Loan commitment liability	—		115		—		—		979		—
Derivative liability	—		28,969		—		—		7,966		—
Deferred share liability	—		875		—		—		2,597		—

    For the assets and liabilities measured at fair value as at December 31, 2020, there were no transfers between Level 1, Level 2 and Level 3 levels during the period. For changes in fair value measurements of investment properties included in Level 3 of the fair value hierarchy, refer to note 6 for details. The fair values of the derivative instruments represents estimates at a specific point in time using financial models, based on interest rates that reflect current market conditions, the credit quality of counterparties and interest rate curves. Fair value measurements of derivative instruments were estimated using Level 2 inputs. Fair value of deferred share liability represents the value of the units if converted using the market price of the Company's common shares.

Fair value of financial instruments:

The carrying amounts and fair values of financial instruments as shown in the consolidated statements of financial position are shown in the table below. The table below excludes cash, restricted cash, tenant and other receivables, security deposits and costs related to future acquisitions, income support receivable, escrow deposits held by lenders, accounts payable and accrued liabilities, accrued real estate taxes, construction payable, liabilities to previous owner of Care, escrows collected from tenant, and dividend payable, as the carrying amounts of these assets and liabilities are a reasonable approximation of fair value due to their short term nature. The table also excludes security deposits received from tenants as the carrying amount is a reasonable approximation of fair value.

76

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	December 31, 2020				December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
					Unaudited		Unaudited
Financial assets:
Loans receivable	$	18,703	$	18,768	$	48,902	$	48,947
Derivative instruments	4,814		4,814		64		64
Bond assets	881		881		1,071		1,071
Financial liabilities:
Mortgages payable	299,464		301,839		275,467		275,083
Credit facilities	660,596		664,690		646,959		651,625
Derivative instruments	28,969		28,969		7,966		7,966
Convertible debentures	92,411		58,784		91,049		86,441
Commonwealth preferred unit liability	65,797		65,797		63,654		63,654
Loan commitment liability	115		115		979		979
Exchangeable Units liability	2,049		600		2,049		2,207

Fair value represents management's estimates of the fair market value at a given point in time, which may not reflect fair value in the future. These calculations are subjective and require estimation, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The following summarizes the significant methods and assumptions used in estimating the fair values of financial instruments reflected in the table above.

a.Loans receivable

The fair value of loans receivable is determined by the discounted cash flow method using applicable inputs such as prevailing interest rates, contractual rates and discounts. Fair value measurements of these instruments were estimated using Level 3 inputs. The carrying values of short term loans generally approximate their fair values.

b.Derivative instruments

The fair values of the derivative instruments represents estimates at a specific point in time using financial models, based on interest rates that reflect current market conditions, the credit quality of counterparties and interest rate curves. Fair value measurements of derivative instruments were estimated using Level 2 inputs.

c.Bond assets

The fair value of bond assets is determined by the discounted cash flow method using applicable inputs such as discount rates and fixed payment schedules. Fair value measurements of these instruments were estimated using Level 3 inputs. The carrying values of bond assets approximate their fair values.

d.Mortgages payable and credit facility

77

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The fair values of these instruments are estimates made at a specific point in time, based on relevant market information. These estimates are based on quoted market prices for the same or similar issues or on the current rates offered to the Company for similar financial instruments subject to similar risk and maturities. Fair value measurements of these instruments were estimated using Level 2 inputs. The carrying values of short-term and variable rate debt generally approximate their fair values.

e.Convertible debentures

The Company determined the fair value of the convertible debentures using quoted market prices which are considered Level 1 inputs.

f.Commonwealth preferred unit liability

The fair value of the Commonwealth preferred unit liability is determined by the discounted cash flow method using applicable inputs such as market interest rates and contractual rates. Fair value measurements of these instruments were estimated using Level 3 inputs.

g. Loan commitment liability

The fair value of the loan commitment liability is determined by the discounted cash flow method using applicable inputs such as market interest rates and contractual rates. Fair value measurements of these instruments were estimated using Level 3 inputs.

h.Exchangeable Unit liability

The Company determined the fair value of the Exchangeable Unit liability using quoted market prices of the Company's common shares which are considered Level 2 inputs.

78

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

28. Financial risk management:

The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance.

Management has updated its risk management policies and strategies for the current risks due to COVID-19.

(i)Market risk

Foreign currency risk:

Foreign exchange risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. A portion of the Company's operations are located in Canada, resulting in the Company being subject to foreign currency fluctuations which may impact its financial position and results. In order to mitigate the risk, the Company's borrowings on Canadian assets are also denominated in Canadian dollars to act as a natural hedge. In addition, Canadian dollar revenue was predominantly naturally hedged by Canadian dollar expenditures such as corporate professional fees, interest expense and administrative expenditures.

Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk on loans receivable because all of the loans earn interest at fixed rates.

The Company is exposed to interest rate risk on the credit facilities and certain mortgages payable, which bear interest at variable rates. To manage interest rate risk, the Company entered into swap agreements which effectively fixes interest on a portion of its variable rate debt. It may also enter into additional derivative financial instruments from time to time to mitigate interest rate risk. At December 31, 2020, 81.7% of our interest was of fixed rate, including the impact of in-place swaps. To limit exposure to the risk of higher interest rates at renewal, the Company spreads the maturities of its fixed-rate, long-term debt over time.

The Company's remaining financial instruments have no exposure to interest rate risk due to their short-term nature.

At December 31, 2020, the Company's interest-bearing financial instruments were as follows:

	Carrying Amount
	December 31, 2020		December 31, 2019
			Unaudited
Fixed-rate financial liabilities	$	861,053	$	860,650
Variable-rate financial liabilities	$	191,418	$	152,825

79

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

As at December 31, 2020, an increase/decrease of 100-basis-points in interest rates, assuming all other variables are constant, would result in a $1,927 (2019 - $1,537) change in the Company's finance costs over the next twelve months.

(ii)Credit risk:

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. The Company is exposed to credit risk on all financial assets and its exposure is generally limited to the carrying amount on the consolidated statement of financial position. The Company is exposed to credit risk arising from the possibility that a borrower may be unable to fulfill their contractual obligations. In the event that borrowers are not able to meet commitments, the Company could suffer a loss of either interest or principal or both. The Company actively manages its affairs to minimize its credit risk through careful selection and assessment of its credit parties and collateral based on knowledge obtained through means such as due diligence carried out in respect of leasing transactions to new operators. Despite these measures the Company increased its allowance for credit losses on loans and interest receivable due to the effects that the COVID-19 pandemic has had on borrowers' cash flows. The Company also manages credit risk related to its cash balances by selection of reputable banking institutions.

(iii)Liquidity risk:

The Company’s principal liquidity needs arise from working capital requirements, debt servicing and repayment obligations, planned funding of property improvements, leasing costs, and property development and acquisition funding requirements.

Liquidity risk arises from the possibility of not having sufficient debt, cash and equity capital available to the Company to fund its growth program and refinance or meet its payment obligations as they arise.

The Company is subject to the liquidity risk that it will not be able to meet its financial obligations as they come due. Although a portion of the cash flow generated by the investment properties is devoted to servicing outstanding debt and the convertible debentures, there can be no assurance that the Company will continue to generate sufficient cash flow from operations to meet interest payments and principal repayment obligations upon an applicable maturity date. If the Company is unable to meet principal or interest repayment obligations, it could be required to renegotiate such payments, issue additional equity or debt, or obtain other financing. The failure to make or renegotiate interest or principal payments, issue additional equity or debt, or obtain other financing could have a material effect on the Company's financial condition and results of operations. The Company manages its liquidity risk through cash and debt management. The Company plans to address scheduled interest payments through operating cash flows and significant principal maturities through a combination of debt and equity financing.

80

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The following are the contractual maturities of the Company's financial liabilities as at December 31, 2020, including expected interest payments where applicable:

81

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Total			2021			2022			2023			2024			2025			Thereafter
Credit facilities principal	$	664,690		$	10,000		$	190,500		$	288,190		$	176,000		$	—		$	—
Mortgages payable principal	296,881			30,622			33,765			88,913			24,529			30,078			88,974
Convertible debentures principal	94,975			—			44,975			50,000			—			—			—
Commonwealth preferred unit liability principal (1)	67,381			—			—			—			67,381			—			—
Total principal	1,123,927			40,622			269,240			427,103			267,910			30,078			88,974
Percentage of total	100.0		%	3.6		%	24.0		%	38.0		%	23.8		%	2.7		%	7.9		%
Credit facilities interest	76,740			27,126			25,941			16,896			6,777						—
Mortgages payable interest	78,386			11,672			10,316			8,110			5,264			4,615			38,409
Convertible debentures interest	12,373			5,249			4,124			3,000			—			—			—
Commonwealth preferred unit liability interest	17,157			4,404			4,404			4,574			3,775						—
Accounts payable and accrued liabilities	17,715			17,715			—			—			—			—			—
Accrued real estate taxes	14,518			14,518			—			—			—			—			—
Other current liabilities	4,975			4,975			—			—			—			—			—
Other non-current liabilities	16,241			2,481			2,086			535			386			126			10,627
Loan commitments	380			380			—			—			—			—			—
Total other commitments	238,485			88,520			46,871			33,115			16,202			4,741			49,036
Total commitments	$	1,362,412		$	129,142		$	316,111		$	460,218		$	284,112		$	34,819		$	138,010
(1) The liability has no stated maturity date. It is the Company's expectation that the liability will be repaid in 2024.

29. Key management personnel compensation:

The remuneration of key management personnel of the Company for years ended December 31, 2020 and 2019 is set forth in the table below.

	Year ended December 31, 2020		Year ended December 31, 2019
			Unaudited
Officers and directors compensation	$	2,111	$	2,684
Share based compensation	2,909		2,490
	$	5,020	$	5,174

30. Segments:

82

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The Company’s current portfolio includes investments in assisted living, independent living, memory care, transitional care, long-term care, and medical office properties. The Company's senior housing and care investments in assisted living, independent living, memory care, transitional care and long-term care share similar characteristics and are generally leased to operators on a long-term, triple-net lease basis. In some instances the Company has an interest in both the property and operations in joint ventures and joint arrangements with the operating partner at the facility. The Company considers these investments to be one reportable operating segment. The Company has investments in 15 medical office buildings ("Medical office buildings"). This multi-tenant medical office portfolio has different characteristics that are evaluated by management, and is considered to be a separate reportable operating segment. Through the acquisition of Commonwealth and the transition of the Greenfield assets, the Company has investments in 36 properties and a management company that operates 29 of those properties ("owner occupied property"). Management considers this another reportable operating segment.

The following tables show net income (loss) by reportable segment for the years ended December 31, 2020 and 2019:

83

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Year ended December 31, 2020
	Seniors housing and care investment properties		Owner occupied properties		Medical office buildings		Corporate/other		Total
Rental revenue	$	77,457	$	—	$	12,655	$	—	$	90,112
Resident rental and related revenue	—		120,407		—		—		120,407
Lease revenue from joint ventures	3,118		—		—		—		3,118
Other revenue	—		1,769		1,114		867		3,750
Other income	—		3,415		—		—		3,415
Direct property operating expenses	—		(90,044)		(5,461)		—		(95,505)
Depreciation and amortization expense	—		(48,476)		—		(93)		(48,569)
Finance cost from operations	(22,810)		(17,484)		(3,646)		(5,861)		(49,801)
Real estate tax expense	(11,389)		—		(2,099)		—		(13,488)
General and administrative expenses	(1,992)		(6,699)		(307)		(11,541)		(20,539)
Transaction costs for business combination	—		(34)		—		(136)		(170)
Allowance for credit losses on loans and interest receivable	(518)		—		—		(23,028)		(23,546)
Changes in non-controlling interest liability	(168)		(148)		—		—		(316)
Change in fair value of investment properties - IFRIC 21	57		—		—		—		57
Change in fair value of investment properties	(78,648)		—		(21,740)		—		(100,388)
Change in fair value of financial instruments	(690)		(6,712)		(2,127)		(9,555)		(19,084)
Change in fair value of contingent consideration	—		—		—		(5,510)		(5,510)
Loss on sale of property, plant and equipment	—		58		—		(220)		(162)
Loss from joint ventures	(34,729)		—		—		—		(34,729)
Income tax recovery	—		—		—		6,944		6,944
Net loss	$	(70,312)	$	(43,948)	$	(21,611)	$	(48,133)	$	(184,004)
Expenditures for non-current assets:
Acquisition of properties	$	8,202	$	36,154	$	—	$	—	$	44,356
Capital additions	4,360		11,269		631		—		16,260

84

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	Year ended December 31, 2019
	Seniors housing and care investment properties		Owner occupied properties		Medical office buildings		Corporate/other		Total
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Rental revenue	$	89,944	$	—	$	13,254	$	—	$	103,198
Resident renal and related revenue	—		38,467		—		—		38,467
Lease revenue from joint ventures	3,024		—		—		—		3,024
Other income	14		874		1,792		1,038		3,718
Direct property operating expenses	—		(28,211)		(5,322)		—		(33,533)
Depreciation and amortization expense	—		(14,349)		—		(91)		(14,440)
Finance cost from operations	(26,593)		(5,836)		(4,066)		(5,138)		(41,633)
Real estate tax expense	(13,637)		—		(2,207)		—		(15,844)
General and administrative expenses	(420)		(2,843)		(535)		(14,294)		(18,092)
Transaction costs for business combination	—		—		—		(5,898)		(5,898)
Diligence costs for transactions not pursued	—		—		—		(633)		(633)
Allowance for credit losses on loans and interest receivable	(55)		—		—		(948)		(1,003)
Changes in non-controlling interest liability	(378)		(126)		—		—		(504)
Change in fair value of investment properties - IFRIC 21	(29)		—		—		—		(29)
Change in fair value of investment properties	(1,179)		—		(4,867)		—		(6,046)
Change in fair value of financial instruments	(1,040)		(840)		(127)		(7,372)		(9,379)
Loss from joint ventures	(6,799)		—		—		—		(6,799)
Income tax recovery	—		—		—		67		67
Net loss	$	42,852	$	(12,864)	$	(2,078)	$	(33,269)	$	(5,359)
Expenditures for non-current assets:
Acquisition of properties	$	89,421	$	347,870	$	—	$	—	$	437,291
Capital additions	7,546		1,275		1,576		—		10,397

85

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

The following tables show assets and liabilities by reportable segment as at December 31, 2020 and 2019:

	As at December 31, 2020
	Seniors housing and care investment properties		Owner occupied properties		Medical office buildings		Corporate/other		Total
Investment properties	$	759,628	$	—	$	122,391	$	—	$	882,019
Property, plant and equipment, net	—		448,912		—		2,913		451,825
Investment in joint ventures	65,258		—		—		—		65,258
Loans receivable	6,669		—		—		12,034		18,703
Other assets	24,014		27,464		6,712		22,429		80,619
Total assets	$	855,569	$	476,376	$	129,103	$	37,376	$	1,498,424
Mortgages payable	$	158,715	$	140,749	$	—	$	—	$	299,464
Credit facilities	388,715		174,465		87,416		10,000		660,596
Convertible debentures	—		—		—		92,411		92,411
Commonwealth preferred unit liability	—		65,797		—		—		65,797
Non-controlling interest liability	3,373		1,036		—		—		4,409
Other liabilities	25,897		24,302		4,964		27,255		82,418
Total liabilities	$	576,700	$	406,349	$	92,380	$	129,666	$	1,205,095

86

INVESQUE INC.

Notes to Consolidated Financial Statements

(Expressed in thousands of U.S. dollars unless otherwise noted, except share and per share amounts)

Year ended December 31, 2020 with comparative information for the year ended December 31, 2019

	As at December 31, 2019
	Seniors housing and care investment properties		Owner occupied properties		Medical office buildings		Corporate/other		Total
	Unaudited		Unaudited		Unaudited		Unaudited		Unaudited
Investment properties	$	828,150	$	—	$	141,484	$	—	$	969,634
Property, plant and equipment, net	—		456,936		—		3,006		459,942
Investment in joint ventures	107,994		—		—		—		107,994
Loans receivable	9,759		—		—		31,895		41,654
Other assets	18,141		24,381		1,726		7,266		51,514
Total assets	$	964,044	$	481,317	$	143,210	$	42,167	$	1,630,738
Mortgages payable	$	151,279	$	124,188	$	—	$	—	$	275,467
Credit facilities	386,778		174,230		85,951		—		646,959
Convertible debentures	—		—		—		91,049		91,049
Commonwealth preferred unit liability	—		63,654		—		—		63,654
Non-controlling interest liability	3,376		123		—		—		3,499
Other liabilities	25,875		12,839		2,465		28,787		69,966
Total liabilities	$	567,308	$	375,034	$	88,416	$	119,836	$	1,150,594

In measuring performance, the Company does not distinguish or group its properties on a geographical basis. Management has applied judgment by aggregating its properties into four reportable segments for disclosure purposes. The Company's Chief Executive Officer is the chief decision maker and regularly reviews performance on an individual property basis and on the basis of the Company's reportable operating segments.

At December 31, 2020, $1,246,928 of the Company's non-current assets, excluding financial instruments, are located in the United States (2019 - $1,371,173) and $154,945 are located in Canada (2019 - $162,283). During the year ended December 31, 2020, the Company generated $202,508, (year ended December 31, 2019 - $133,104), of its revenues, excluding other revenue, from properties located in the United States and $11,129 (year ended December 31, 2019 - $11,585) of its revenues from properties located in Canada.

87

XML

Cover Page - USD ($)	12 Months Ended
	Dec. 31, 2020	Mar. 08, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity File Number	001-33549
Entity Registrant Name	Tiptree Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	38-3754322
Entity Address, Address Line One	299 Park Avenue
Entity Address, Address Line Two	13th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10171
City Area Code	212
Local Phone Number	446-1400
Title of 12(b) Security	common stock, par value $0.001 per share
Trading Symbol	TIPT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	true
Entity Public Float			$ 161,281,173
Entity Common Stock, Shares Outstanding		32,538,486
Entity Central Index Key	0001393726
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Annual Report	true
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets:
Available for sale securities, at fair value, net of allowance for credit losses	$ 377,133	$ 335,192
Loans, at fair value	90,732	108,894
Equity securities	123,838	155,378
Other investments	219,701	137,472
Total investments	811,404	736,936
Cash and cash equivalents	136,920	133,117
Restricted cash	58,355	11,473
Notes and accounts receivable, net	370,452	286,968
Reinsurance receivables	728,009	539,833
Deferred acquisition costs	229,430	166,493
Goodwill	179,236	99,147
Intangible assets, net	138,215	47,974
Other assets	162,034	68,510
Assets held for sale	181,705	107,835
Total assets	2,995,760	2,198,286
Liabilities:
Debt, net	366,246	374,454
Unearned premiums	860,690	754,993
Policy liabilities and unpaid claims	233,438	144,384
Deferred revenue	399,211	94,601
Reinsurance payable	224,660	143,869
Other liabilities and accrued expenses	362,865	172,140
Liabilities held for sale	175,112	102,430
Total liabilities	2,622,222	1,786,871
Stockholders’ Equity:
Common stock	33	35
Additional paid-in capital	315,014	326,140
Accumulated other comprehensive income (loss), net of tax	5,674	1,698
Retained earnings	35,423	70,189
Total Tiptree Inc. stockholders’ equity	356,144	398,062
Total stockholders’ equity	373,538	411,415
Total liabilities and stockholders’ equity	2,995,760	2,198,286
Noncontrolling interests - other
Stockholders’ Equity:
Non-controlling interests	$ 17,394	$ 13,353

XML

Consolidated Balance Sheet (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	32,682,462	34,562,553
Common stock, shares outstanding	32,682,462	34,562,553

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Earned premiums, net	$ 477,991	$ 499,108	$ 427,837
Service and administrative fees	186,973	106,239	102,315
Ceding commissions	21,101	9,608	9,651
Net investment income	9,916	14,017	19,179
Net realized and unrealized gains (losses)	62,410	83,868	28,782
Other revenue	51,910	59,888	38,062
Total revenues	810,301	772,728	625,826
Expenses:
Policy and contract benefits	236,898	170,681	152,095
Commission expense	280,210	303,057	262,460
Employee compensation and benefits	172,737	129,479	113,557
Interest expense	32,582	27,059	27,013
Depreciation and amortization	17,578	13,569	12,596
Other expenses	109,148	99,744	77,901
Total expenses	849,153	743,589	645,622
Income (loss) before taxes	(38,852)	29,139	(19,796)
Less: provision (benefit) for income taxes	(13,627)	9,017	(5,909)
Net income (loss) from continuing operations	(25,225)	20,122	(13,887)
Discontinued operations:
Income (loss) before taxes from discontinued operations	0	0	624
Gain on sale of discontinued operations	0	0	56,860
Less: Provision (benefit) for income taxes	0	0	13,714
Net income (loss) from discontinued operations	0	0	43,770
Net income (loss)	(25,225)	20,122	29,883
Less: net income (loss) attributable to non-controlling interests		(1,761)	(5,950)
Net income (loss) attributable to common stockholders	$ (29,158)	$ 18,361	$ 23,933
Net income (loss) per common share:
Basic, continuing operations, net (in usd per share)	$ (0.86)	$ 0.52	$ (0.38)
Basic, discontinued operation, net (in usd per share)	0	0	1.07
Basic earnings per share (in usd per share)	(0.86)	0.52	0.69
Diluted, continuing operations, net (in usd per share)	(0.86)	0.50	(0.38)
Diluted, discontinued operations, net (in usd per share)	0	0	1.07
Diluted earnings per share (in usd per share)	$ (0.86)	$ 0.50	$ 0.69
Weighted average number of Common Shares:
Basic (in shares)			34,715,852
Diluted (in shares)	33,859,775	34,578,292	34,715,852
Dividends declared per common share	$ 0.16	$ 0.16	$ 0.140
Tiptree Financial Partners, L.P.
Discontinued operations:
Less: net income (loss) attributable to non-controlling interests	$ 0	$ 0	$ (5,500)
Noncontrolling interests - other
Discontinued operations:
Less: net income (loss) attributable to non-controlling interests	$ (3,933)	$ (1,761)	$ (450)

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net income (loss)		$ (25,225)	$ 20,122	$ 29,883
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) arising during the period		5,653	6,320	(2,919)
Related (provision) benefit for income taxes		(1,289)	(1,409)	662
Reclassification of (gains) losses included in net income		(528)	(1,312)	819
Related (provision) benefit for income taxes		113	280	(171)
Unrealized gains (losses) on available for sale securities, net of tax		3,949	3,879	(1,609)
Unrealized gains (losses) on interest rate swaps		0	0	1,111
Related (provision) benefit for income taxes		0	0	(276)
Reclassification of (gains) losses included in net income	[1]	0	0	(3,845)
Related (provision) benefit for income taxes		0	0	936
Unrealized (losses) gains on interest rate swaps from cash flow hedges, net of tax		0	0	(2,074)
Other comprehensive income (loss), net of tax		3,949	3,879	(3,683)
Comprehensive income (loss)		(21,276)	24,001	26,200
Comprehensive income (loss) attributable to common stockholders		(25,224)	22,216	20,909
Noncontrolling interest | Tiptree Financial Partners, L.P.
Other comprehensive income (loss), net of tax:
Less: comprehensive (loss) income attributable to non-controlling interests		0	0	5,278
Noncontrolling interest | Noncontrolling interests - other
Other comprehensive income (loss), net of tax:
Less: comprehensive (loss) income attributable to non-controlling interests		$ 3,948	$ 1,785	$ 13

[1] (1) Deconsolidated as part of the sale of Care. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

XML

Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands		Total	Common stock	Accumulated other comprehensive income (loss)	Tiptree	Noncontrolling interests - other	Noncontrolling interests - other Noncontrolling interest	Tiptree Financial Partners, L.P.	Tiptree Financial Partners, L.P. Common stock	Tiptree Financial Partners, L.P. Noncontrolling interest	Tiptree Common stock	Tiptree Common stock Common Class B		Tiptree Common stock Common stock		Tiptree Additional paid-in capital	Tiptree Accumulated other comprehensive income (loss)	Tiptree Retained earnings	Subsidiaries Common stock Common Class B		Subsidiaries Common stock Common stock	Cumulative Effect, Period of Adoption, Adjustment Tiptree Accumulated other comprehensive income (loss)	[3]	Cumulative Effect, Period of Adoption, Adjustment Tiptree Retained earnings	[3]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard		$ 396,774										$ 8		$ 35		$ 295,582	$ 966	$ 38,079	$ (8)		$ (34,585)
Non-controlling interests							$ 19,203			$ 77,494
Total stockholders’ equity, beginning of period, amount at Dec. 31, 2017		396,774										8		35		295,582	966	38,079	(8)		(34,585)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard		399,259									$ 36	$ 8		$ 36		331,892	(2,058)	57,231	$ (8)		$ (34,585)
Common stock, shares, Beginning Balance (in shares) at Dec. 31, 2017												8,049,029		35,003,004					8,049,029		5,197,551
Total stockholders’ equity to Tiptree Financial Inc. at Dec. 31, 2017					$ 300,077
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Amortization of share-based incentive compensation		6,354			2,465		3,889									2,465
Vesting of share-based incentive compensation (in shares)														31,527							161,574
Vesting of share-based incentive compensation		143			143											907					$ 1,050
Shares purchased under stock purchase plan		(14,111)			(14,111)									$ (2)		(14,109)
Shares purchased under stock purchase plan (in shares)												(8,049,029)	[1],[2]	(2,177,235)
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests	[1],[2]				82,190					(82,190)		$ (8)		$ 8		82,523	(341)		$ (8)
Stock Issued During Period, Shares, Other			(1,187,468)											8,049,029	[1],[2]				8,049,029	[1],[2]
Cancellation of treasury shares														$ 5		33,530					$ 33,535
Treasury Stock, Shares, Retired														5,035,977							5,035,977
Non-controlling interest contributions		3,150					3,150
Non-controlling interest distributions		(241)								241
Noncontrolling Interest, Period Increase (Decrease)		(14,229)			132		(14,097)									132
Dividends declared		(4,781)			(4,781)													(4,781)
Other comprehensive income, net of tax					(2,683)												(2,683)
Other comprehensive income, net of tax							(437)			(563)
Other comprehensive income (loss), net of tax		(3,683)		$ (3,683)
Net income attributable to shareholders		23,933			23,933
Net income (loss) attributable to non-controlling interests		5,950				$ 450	450	$ 5,500		5,500
Net income		29,883
Total stockholders’ equity, end of period, amount at Dec. 31, 2018		399,259									$ 36			$ 36		331,892	(2,058)	57,231
Total stockholders’ equity to Tiptree Financial Inc. at Dec. 31, 2018					387,101
Common stock, shares, Ending Balance (in shares) at Dec. 31, 2018											35,870,348			35,870,348
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard		399,259									$ 36			$ 36		331,892	(2,058)	57,231
Non-controlling interests							12,158			0
Units of partnership interest									424,399
Adoption of accounting standard		411,415									$ 35			$ 36		326,140	1,698	70,189				$ 42		$ (42)
Amortization of share-based incentive compensation		6,062			3,145		2,917									3,145
Vesting of share-based incentive compensation (in shares)	[4]										164,935
Vesting of share-based incentive compensation	[4]	2,296			187		2,483									187
Shares purchased under stock purchase plan		(9,085)			(9,085)						$ (1)					(9,084)
Shares purchased under stock purchase plan (in shares)											(1,472,730)
Non-controlling interest contributions		61					61
Non-controlling interest distributions	[5]	(3,585)					(3,585)
Noncontrolling Interest, Period Increase (Decrease)		2,500					2,500
Dividends declared		(5,502)			(5,502)													(5,502)
Other comprehensive income, net of tax					3,855												3,855
Other comprehensive income, net of tax							24
Other comprehensive income (loss), net of tax		3,879		3,879
Net income attributable to shareholders		18,361			18,361
Net income (loss) attributable to non-controlling interests		1,761				1,761		0		0
Net income		20,122
Total stockholders’ equity, end of period, amount at Dec. 31, 2019		411,415									$ 35					326,140	1,698	70,189				42		(42)
Total stockholders’ equity to Tiptree Financial Inc. at Dec. 31, 2019		398,062			398,062
Common stock, shares, Ending Balance (in shares) at Dec. 31, 2019											34,562,553
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard		411,415									$ 35					326,140	1,698	70,189				42		(42)
Non-controlling interests						13,353	13,353
Adoption of accounting standard		373,538									$ 33					315,014	5,674	35,423				$ 42		$ (42)
Amortization of share-based incentive compensation		7,571			3,441		4,130									3,441
Vesting of share-based incentive compensation (in shares)	[4]										504,195
Vesting of share-based incentive compensation	[4]	2,123			100		2,223									100
Shares purchased under stock purchase plan		(13,889)			(13,889)						$ (2)					(13,887)
Shares purchased under stock purchase plan (in shares)			(2,384,286)								(2,384,286)
Non-controlling interest distributions	[5]	(2,034)			(645)		(1,389)									(645)
Noncontrolling Interest, Period Increase (Decrease)		(560)			135		(425)									135
Dividends declared		(5,566)			(5,566)													(5,566)
Other comprehensive income, net of tax					3,934												3,934
Other comprehensive income, net of tax							15
Other comprehensive income (loss), net of tax		3,949		$ 3,949
Net income attributable to shareholders		(29,158)			(29,158)
Net income (loss) attributable to non-controlling interests						3,933		$ 0		$ 0
Net income		(25,225)
Total stockholders’ equity, end of period, amount at Dec. 31, 2020		373,538									$ 33					315,014	5,674	35,423
Total stockholders’ equity to Tiptree Financial Inc. at Dec. 31, 2020		356,144			$ 356,144
Common stock, shares, Ending Balance (in shares) at Dec. 31, 2020											32,682,462
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard		$ 373,538									$ 33					$ 315,014	$ 5,674	$ 35,423
Non-controlling interests						$ 17,394	$ 17,394

[1] Includes the exchange of 424,399 units of TFP for 1,187,468 shares of common stock.

[2] On April 10, 2018, the Company completed a reorganization merger whereby TFP merged with and into the Company with the Company continuing as the surviving company (Reorganization Merger). After the Reorganization Merger, TFP ceased to exist and the Company owned 100% of Operating Company. See Note (17) Stockholders’ Equity for more information.

[3] Amounts reclassified due to adoption of ASU 2018-02. See Note (2) Summary of Significant Accounting Policies

[4] Includes subsidiary RSU exchanges. See Note (19) Stock Based Compensation.

[5] Amounts reclassified due to adoption of ASU 2016-13. See Note (2) Summary of Significant Accounting Policies.

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Consolidated Statements of Cash Flow $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)		Dec. 31, 2019 USD ($)		Dec. 31, 2018 USD ($)
Operating Activities:
Net income (loss) attributable to common stockholders	$ (29,158)		$ 18,361		$ 23,933
Net income (loss) attributable to non-controlling interests			1,761		5,950
Net income (loss)	(25,225)		20,122		29,883
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Net realized and unrealized (gains) losses	(62,410)		(83,868)		(28,782)
Net (gain) loss on sale of businesses	4,428		(7,598)		(56,860)
Non-cash compensation expense	8,117		6,363		6,657
Amortization/accretion of premiums and discounts	2,229		1,161		1,029
Depreciation and amortization expense	17,578		13,569		12,596
Non-cash lease expense	7,374		7,568		0
Deferred provision (benefit) for income taxes	10,733		6,815		4,011
Amortization of deferred financing costs	1,015		714		934
Other Operating Activities, Cash Flow Statement	(333)		1,381		671
Mortgage loans originated for sale	(3,064,003)		(2,048,228)		(1,533,365)
Proceeds from the sale of mortgage loans originated for sale	3,152,104		2,043,097		1,590,546
(Increase) decrease in notes and accounts receivable	(48,527)		(33,085)		(35,256)
(Increase) decrease in reinsurance receivables	(116,839)		(119,482)		(67,384)
(Increase) decrease in deferred acquisition costs	(62,937)		3,570		(22,901)
(Increase) decrease in other assets	(22,417)		269		(12,400)
Increase (decrease) in unearned premiums	105,697		155,549		95,998
Increase (decrease) in policy liabilities and unpaid claims	33,968		12,773		19,608
Increase (decrease) in deferred revenue	122,042		16,397		19,009
Increase (decrease) in reinsurance payable	53,716		26,272		27,043
Increase (decrease) in other liabilities and accrued expenses	23,859		383		6,687
Net cash provided by (used in) operating activities	140,169		23,742		57,724
Investing Activities:
Purchases of investments	(1,494,688)		(389,206)		(327,617)
Proceeds from sales and maturities of investments	1,400,229		394,331		190,942
Proceeds from the sale of real estate	2,981		11,857		17,705
Purchases of property, plant and equipment	(6,694)		(8,519)		(3,749)
Proceeds from the sale of businesses	500		18,329		15,709
Proceeds from notes receivable	41,582		36,690		29,234
Issuance of notes receivable	(62,088)		(67,176)		(31,331)
Business and asset acquisitions, net of cash, restricted cash and deposits	(5,313)	[1]	(4,633)	[1]	0	[1]
Net cash provided by (used in) investing activities	(123,491)		(8,327)		(109,107)
Financing Activities:
Dividends paid	(5,566)		(5,502)		(4,781)
Non-controlling interest contributions	0		61		3,150
Non-controlling interest distributions	(2,134)		(3,585)		(241)
Payment of debt issuance costs	(4,571)		(586)		(1,143)
Proceeds from borrowings and mortgage notes payable	3,379,688		2,237,329		1,632,469
Principal paydowns of borrowings and mortgage notes payable	(3,321,779)		(2,181,704)		(1,617,346)
Repurchases of common stock	(13,889)		(9,085)		(14,111)
Net cash provided by (used in) financing activities	31,749		36,928		(2,003)
Net increase (decrease) in cash, cash equivalents and restricted cash	48,427		52,343		(53,386)
Cash, cash equivalents and restricted cash – beginning of period	144,590		96,524		142,237
Cash, cash equivalents and restricted cash – beginning of period - held for sale	7,137		2,860		10,533
Cash, cash equivalents and restricted cash – end of period	200,154		151,727		99,384
Less: Reclassification of cash to assets held for sale	4,879		7,137		2,860
Cash, cash equivalents and restricted cash – end of period	195,275		144,590		96,524
Supplemental Cash Flow Information [Abstract]
Interest Paid, Excluding Capitalized Interest, Operating Activities	29,538		26,224		25,976
Income Taxes Paid, Net	1,066		3,301		(5,088)
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Right of use asset obtained in exchange for lease liability	9,989		33,558		0
Equity Securities Acquired Through a Dividend Reinvestment Plan	953		0		0
Acquired real estate properties through, or in lieu of, foreclosure of the related loan	0		2,596		7,367
Noncash or Part Noncash Acquisition, Acquisition of Non-Controlling Interest	0		2,500		82,190
Noncash or Part Noncash Acquisition, Investments Acquired	0		0		135,675
Noncash or Part Noncash Acquisition, Cancellation Of Treasury Shares [Line Items]	0		0		33,535
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	136,920		133,117		86,003
Restricted cash	58,355		11,473		10,521
Tiptree Financial Partners, L.P.
Operating Activities:
Net income (loss) attributable to non-controlling interests	0		0		5,500
Noncontrolling interests - other
Operating Activities:
Net income (loss) attributable to non-controlling interests	3,933		1,761		450
Noncontrolling interest | Tiptree Financial Partners, L.P.
Operating Activities:
Net income (loss) attributable to non-controlling interests	$ 0		$ 0		5,500
Noncontrolling interest | Noncontrolling interests - other
Operating Activities:
Net income (loss) attributable to non-controlling interests					$ 450

[1] (1)    Changes in balance sheet balances due to acquisitions have been netted down in the respective line items. See Note (3) Acquisitions for additional information.

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Organization	12 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into two reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of Tiptree have been prepared in accordance with GAAP and include the accounts of the Company and its subsidiaries. The consolidated financial statements are presented in U.S. dollars, the main operating currency of the Company.

Non-controlling interests on the consolidated balance sheets represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Tiptree. Accounts and transactions between consolidated entities have been

eliminated.

Reclassifications

As a result of changes in presentation, certain prior year amounts have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. Management makes estimates and assumptions that include, but are not limited to, the determination of the following significant items:

•Fair value of financial assets and liabilities, including, but not limited to, securities, loans and derivatives

•Value of acquired assets and liabilities;

•Carrying value of goodwill and other intangibles, including estimated amortization period and useful lives;

•Vessel valuations, residual value of vessels and the useful lives of vessels;

•Reserves for unpaid losses and loss adjustment expenses, estimated future claims and losses, potential litigation and other claims;

•Deferred acquisition costs and value of business acquired (VOBA);

•The realization of deferred tax assets, and recognition and measurement of uncertain tax positions;

•Revenue recognition including, but not limited to, the timing and amount of insurance premiums, service and administration fees, and loan origination fees; and

•Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements

Although these and other estimates and assumptions are based on the best available estimates, actual results could differ materially from management’s estimates.

Business Combination Accounting

The Company accounts for business combinations by applying the acquisition method of accounting. The acquisition method requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at fair value as of the closing date of the acquisition. The net assets acquired may consist of tangible and intangible assets and the

excess of purchase price over the fair value of identifiable net assets acquired, or goodwill. The determination of estimated useful lives and the allocation of the purchase price to the intangible assets requires significant judgment and affects the amount of future amortization and possible impairment charges. Contingent consideration, if any, is measured at fair value on the date of acquisition. The fair value of any contingent consideration liability is remeasured at each reporting date with any change recorded in other expense in the consolidated statements of operations. Acquisition and transaction costs are expensed as incurred.

In certain instances, the Company may acquire less than 100% ownership of an entity, resulting in the recording of a non-controlling interest. The measurement of assets and liabilities acquired and non-controlling interest is initially established at a preliminary estimate of fair value, which may be adjusted during the measurement period, primarily due to the results of valuation studies applicable to the business combination.

Acquisitions that do not meet the criteria for the acquisition method of accounting are accounted for as acquisitions of assets.

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

The results of operations of a business that has either been disposed of or are classified as held for sale are reported in discontinued operations if the disposal of the business represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The Company carries assets and liabilities held for sale at the lower of carrying value on the date the asset is initially classified as held for sale or fair value less costs to sell. At the time of reclassification to held for sale, the Company ceases the recording of depreciation and amortization on assets transferred.

Accounting policies specific to our dispositions, assets and liabilities held for sale and discontinued operations are described in more detail in (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels, from highest to lowest, are defined as follows:

•Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 – Significant inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. The types of financial assets and liabilities carried at Level 2 are valued based on one or more of the following:

a) Quoted prices for similar assets or liabilities in active markets;

b) Quoted prices for identical or similar assets or liabilities in nonactive markets;

c) Pricing models whose inputs are observable for substantially the full term of the asset or liability;

d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

•Level 3 – Significant inputs that are unobservable inputs for the asset or liability, including the Company’s own data and assumptions that are used in pricing the asset or liability.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy. In certain cases, the inputs used to measure fair value may fall into

different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Tiptree’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the investment. From time to time, Tiptree’s assets and liabilities will transfer between one level to another level. It is Tiptree’s policy to recognize transfers between different levels at the end of each reporting period.

Tiptree utilizes both observable and unobservable inputs in its valuation methodologies. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. For broker quotes, quotes are obtained from sources recognized to be market participants. Unobservable inputs may include expected cash flow streams, default rates, supply and demand considerations and market volatility.

Fair Value Option

In addition to the financial instruments that the Company is required to measure at fair value, the Company has elected to make an irrevocable election to utilize fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in Net realized and unrealized gains (losses) within the consolidated statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

Derivative Financial Instruments and Hedging

From time to time, derivative instruments are used in the overall strategy to manage exposure to market risks primarily related to fluctuations in interest rates. As a matter of policy, derivatives are not used for speculative purposes. Derivative instruments are measured at fair value on a recurring basis and are included in other investments or other liabilities and accrued expenses on the consolidated balance sheets.

Derivative Instruments Designated as Cash Flow Hedging Instruments

The Company uses cash flow hedges to reduce the exposure to variability of cash flows from floating rate borrowings. If a derivative instrument meets certain cash flow hedge accounting criteria, it is recorded on the consolidated balance sheet at its fair value, as either an asset or a liability, with offsetting changes in fair value recognized in AOCI. The effective portion of the changes in fair value of derivatives are reported in AOCI and amounts previously recorded in AOCI are recognized in earnings in the period in which the hedged transaction affects earnings. Any ineffective portions of the change in fair value of the derivative are recognized in current earnings.

Stock Based Compensation

The Company accounts for equity‑based compensation issued to employees, directors, and affiliates of the Company using the current fair value based methodology.

The Company initially measures the cost of restricted stock unit (RSUs) and restricted stock awards at fair value on the date of grant and subsequently recognizes the cost of such awards over the vesting period using the straight-line method. The compensation costs are charged to expense over the vesting period with a corresponding credit to additional paid-in capital.

Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. Compensation cost is recognized over the required service period, generally defined as the vesting period.

Grants of subsidiary RSUs exchangeable into common stock of the Company are accounted for as equity based upon their expected settlement method. The Company recognizes the cost of such awards over the vesting period using the straight-line method and uses the graded-vesting method to recognize compensation expense for the performance vesting RSUs. Compensation expense will be recognized to the extent that it is probable that the performance condition will be achieved. The Company reassesses the probability of satisfaction of the performance condition for the performance vesting RSUs for each reporting period.

Income Taxes

Deferred tax assets and liabilities are determined using the asset and liability method. Under this method, deferred tax assets and liabilities are established for future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to reverse. A valuation allowance is established when necessary to reduce a deferred tax asset to the amount expected to be realized. Several of the Company’s subsidiaries file state tax returns on a standalone basis. Two of our subsidiaries file federal and state tax returns on a stand alone basis, one of which is held for sale. These U.S. federal and state income tax returns, when filed, will be subject to examination by the Internal Revenue Service and state departments of revenue. See Note (20) Income Taxes.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority. The Company’s provision or benefit for income taxes is adjusted accordingly for tax positions not deemed to meet the more likely than not threshold. The Company’s policy is to account for interest as a component of interest expense and penalties as a component of other expenses.

Earnings Per Share

The Company presents both basic and diluted earnings per Common Share in its consolidated financial statements and footnotes thereto. Basic earnings per Common Share (Basic EPS) excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding, which includes vested RSUs, for the period. Diluted earnings per Common Share (Diluted EPS) reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares where such exercise or conversion would result in a lower earnings per share amount.

The Company calculates EPS using the two-class method, which is an earnings allocation formula that determines EPS for common shares and participating securities. Unvested RSUs contain non-forfeitable rights to distributions or distribution equivalents (whether paid or unpaid) and are participating securities that are included in the computation of EPS using the two-class method. Accordingly, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive distributions. The participating securities do not have a contractual obligation to absorb losses and are only allocated in periods where there is income from continuing operations.

See Note (22) Earnings Per Share, for EPS computations.

Investments

The Company records all investment transactions on a trade‑date basis. Realized gains (losses) are determined using the specific-identification method. The Company classifies its investments in debt securities as available for sale or held-to-maturity based on the Company’s intent and ability to hold the debt security to maturity. The Company did not have any held-to-maturity securities at December 31, 2020 and 2019.

Available for Sale Securities, at Fair Value (AFS)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time. AFS securities include those debt securities that management may sell as part of its asset/liability management strategy or in response to changes in interest rates, resultant prepayment risk or other factors. AFS securities are held at fair value on the consolidated balance sheet with changes in fair value including non-credit related losses, net of related tax effects, recorded in the AOCI component of stockholders’ equity in the period of change. Upon the disposition of an AFS security, the Company reclassifies the gain or loss on the security from AOCI to net realized and unrealized gains (losses) on the consolidated statements of operations.

For AFS securities, the Company reviews its securities portfolio for impairment and determines if impairment is related to credit loss or non-credit loss. In making the assessment of whether a loss is from credit or other factors, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating

agency, and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost basis, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

Subsequent activity related to the credit loss component (e.g. write-offs, recoveries) is recognized as part of the allowance for credit losses on AFS securities. For AFS securities which have an expectation of zero risk nonpayment of the amortized cost basis (e.g. U.S. Treasury securities or agency securities), the expected credit loss is zero.

Loans, at Fair Value

Loans, at fair value is substantially comprised of (i) corporate loans, (ii) non-performing residential loans (NPLs) and (iii) loans originated by the Company’s mortgage finance business. Changes in their fair value are reported within net realized and unrealized gains (losses) in our consolidated statements of operations.

Corporate Loans

Corporate loans are comprised of a diversified portfolio of middle market leveraged loans which are carried at fair value. In general, the fair value of leveraged loans is obtained from an independent pricing service which provides coverage of secondary market participants. The values represent a composite of mark-to-market bid/offer prices. In certain circumstances, the Company will make its own determination of fair value of leveraged loans based on internal models and other unobservable inputs.

Non-Performing Residential Loans (NPLs)

The Company has purchased portfolios of NPLs which consist of residential mortgage loans. Such loans are carried at fair value, which is measured on an individual loan basis. We seek to either (i) convert such loans into real estate owned property (REO) through foreclosure or another resolution process that can then be sold, or (ii) modify and resell them at higher prices if circumstances warrant.

The Company has elected the fair value option for NPLs as we have concluded that fair value timely reflects the results of our investment performance. As substantially all of our loans were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. We primarily utilize the local broker price opinion (BPO) but also consider any other comparable home sales or other market data, as considered necessary, in estimating a property’s fair value. For further discussion on the observable and unobservable inputs to the model and determination of fair value of NPLs, see Note (12) Fair Value of Financial Instruments.

Certain NPLs are loans that are delinquent on obligated payments of principal and interest. Certain other NPLs are making some payments, generally as a result of a modification or a workout plan.

The fair value of NPLs are determined using a discounted cash flow model. As such, both the changes in fair value and the net periodic cash flows related to NPLs are recorded in net realized and unrealized gains (losses) in the consolidated statements of operations.

The Company does not hold any NPLs as of December 31, 2020.

Mortgage Loans Held for Sale

Mortgage loans held for sale represent loans originated and held until sold to secondary market investors. Such loans are typically warehoused for a period after origination or purchase before sale into the secondary market. Loans are sold either servicing released, or in select instances, servicing retained into the secondary loan market. The Company has elected to measure all mortgage loans held for sale at fair value. These loans are considered sold when the Company surrenders control to the purchaser. The gains or losses on sales of such loans, net of any accrual for standard representations and warranties, are reported in operating results as a component of net realized and unrealized gains (losses) in the consolidated statements of operations in the period when the sale occurs.

Equity Securities

Equity securities are investments consisting of equity securities that are purchased principally for the purpose of selling them in the near term. Changes in fair value are recorded in net realized and unrealized gains (losses) on investments on the consolidated statements of operations in the period of change.

Other Investments

Foreclosed Residential Real Estate Property (REO)

NPLs are reclassified to REO once the Company has obtained legal title to the property upon completion of a foreclosure sale or the borrower has conveyed all interest in the property to satisfy that loan through completion of a deed in lieu of foreclosure. Because the Company elected the fair value option for NPLs, upon recognition as REO, the property fair value is estimated using market values and, if the property meets held-for-sale criteria, it is initially recorded at fair value less costs to sell as its new cost basis. Subsequently, the property is carried at (i) the fair value of the asset minus the estimated costs to sell the asset or (ii) the initial REO value, whichever is lower. Adjustments to the carrying value of REOs are recorded in net realized and unrealized gains (losses).

Vessels, net

Investments in vessels, net are carried at cost (inclusive of capitalized acquisition costs, where applicable) less accumulated depreciation. Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are expensed as incurred. Vessels acquired are recognized at their fair value as of the date of the acquisition.

Depreciation is computed using the straight-line method over the vessel’s estimated remaining useful life, after considering the estimated salvage value. A vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

Vessels are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable. Potential impairment indicators are primarily based upon a comparison of the market value of a vessel to its carrying value. Market values are based upon quoted prices from industry-recognized sources. The Company evaluates market quotes of vessels for reasonableness by comparison to available market transactions or internal valuation models. An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

The Company’s estimate of future revenue is based upon time charter equivalent (TCE) rates using current market rates. The Company uses average historical rates for periods beyond those for which rates are available. Estimated cash flows are net of brokerage and address commissions, vessel operating expenses, and estimated costs of drydocking and include an inflation factor, as appropriate. The projected undiscounted future cash flows are comprised of the net of these inflows and outflows, plus an estimated salvage value.

As of December 31, 2020, the undiscounted future cash flows were higher than the carrying amount of each of the vessels in the Company’s fleet and, as such, no loss on impairment was recognized.

Cash and Cash Equivalents

The Company considers all highly liquid investments of sufficient credit quality purchased with an initial maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of U.S. denominated cash on hand, cash held in banks and investments in money market funds.

Restricted Cash

The Company’s restricted cash primarily consists of cash for unremitted premiums received from agents and insurers, fiduciary cash for reinsurers and pledged assets for the protection of policy holders in various state jurisdictions. Restricted cash also includes cash posted as collateral under credit facilities to maintain borrowing base sufficiency, borrower escrow

funds for taxes, insurance, rate-lock fees and servicing related escrow funds and collateral on warehouse borrowings.

Notes and Accounts Receivable, Net

Notes Receivable, Net

The Company’s notes receivable, net includes receivables related to the insurance business for its premium financing programs.

The Company accrues interest income on its notes receivable based on the contractual terms of the respective note. The Company monitors all notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected. In addition to allowances for bad debt for specific notes receivable, a general provision for bad debt is estimated for the Company’s notes receivable based on history. Account balances are generally charged against the allowance when the Company believes it is probable that the note receivable will not be recovered and has exhausted its contractual and legal remedies.

Generally, receivables overdue more than 120 days are written off when the Company determines it has exhausted reasonable collection efforts and remedies, see Note (7) Notes and Accounts Receivable, net.

Accounts and Premiums Receivable, Net

Accounts and premiums receivable, net are primarily trade receivables from the insurance business that are carried at their approximate fair value. Accounts and premiums receivable from the Company’s insurance business consist primarily of advance commissions and agents' balances in course of collection and billed but not collected policy premiums, presented net of the allowance for doubtful accounts. For policy premiums that have been billed but not collected, the Company records a receivable on its consolidated balance sheets for the full amount of the premium billed, with a corresponding liability, net of its commission, to insurance carriers. The Company earns interest on the premium cash during the period of time between receipt of the funds and payment of these funds to insurance carriers. The Company maintains an allowance for doubtful accounts based on an estimate of uncollectible accounts.

Retrospective commissions receivable, Trust receivables and Other receivables

Retrospective commissions receivable, trust receivables and other receivables are primarily trade receivables from the insurance business that are carried net of allowance at their approximate fair value.

Reinsurance Receivables

Through the insurance business, the Company has various reinsurance agreements in place whereby the amount of risk in excess of its retention goals is reinsured by unrelated domestic and foreign insurance companies. The Company is required to pay losses even if a reinsurer fails to meet its obligations under the applicable reinsurance agreement. Reinsurance receivables include amounts related to paid benefits, unpaid benefits and prepaid reinsurance premiums. Reinsurance receivables are based upon estimates and are reported on the consolidated balance sheets separately as assets, as reinsurance does not relieve the Company of its legal liability to policyholders. Management continually monitors the financial condition and agency ratings of the Company’s reinsurers and believes that the reinsurance receivables accrued are collectible. Balances recoverable from reinsurers and amounts ceded to reinsurers relating to the unexpired portion of reinsured policies are presented as assets. Experience refunds from reinsurers are recognized based on the underwriting experience of the underlying contracts.

Deferred Acquisition Costs

The Company defers certain costs of acquiring new and renewal insurance policies and other products as follows within the Company’s insurance business. Amortization of deferred acquisition costs was $265,781, $287,834 and $246,330 for the years ended December 31, 2020, 2019 and 2018, respectively.

Insurance policy related deferred acquisition costs are limited to direct costs that resulted from successful contract transactions and would not have been incurred by the Company’s insurance company subsidiaries had the transactions not

occurred. These capitalized costs are amortized as the related premium is earned.

Other deferred acquisition costs are limited to prepaid direct costs, typically commissions and contract transaction fees, that resulted from successful contract transactions and would not have been incurred by the Company had the transactions not occurred. These capitalized costs are amortized as the related service and administrative fees are earned.

The Company evaluates whether all deferred acquisition costs are recoverable at year-end, and considers investment income in the recoverability analysis for insurance policy related deferred acquisition costs. As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2020, 2019 and 2018.

Goodwill and Intangible Assets, net

The initial measurement of goodwill and intangibles requires judgment concerning estimates of the fair value of the acquired assets and liabilities. Goodwill and indefinite-lived intangible assets are not amortized but subject to tests for impairment annually or if events or circumstances indicate it is more likely than not they may be impaired. Finite-lived intangible assets are amortized over their estimated useful lives principally using a pattern of economic benefit for customer relationships and a straight-line method for other intangible assets. Finite-lived intangible assets are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The Company carries intangible assets, which represent customer and agent relationships, trade names, insurance licenses (certificates of authority granted by individual state departments of insurance), the value of in-force insurance policies acquired, software acquired or internally developed and fishing licenses. Management has deemed the insurance licenses to have an indefinite useful life. Costs incurred to renew or maintain insurance licenses are recorded as operating costs in the period in which they arise. See Note (9) Goodwill and Intangible Assets, net.

Other Assets

Other assets primarily consist of right of use assets, prepaid expenses, and furniture, fixtures and equipment, net. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Debt, net

Debt is carried on the consolidated balance sheets at an amount equal to the unpaid principal balance, net of any remaining unamortized discount or premium and direct and any incremental costs attributable to issuance. Discounts, premiums and direct and incremental costs are amortized as a component of interest expense in the consolidated statements of operations over the life of the debt. See Note (11) Debt, net.

Unearned Premiums

Premiums written are earned over the life of the respective policy using the Rule of 78's, pro rata, or other actuarial methods as appropriate for the type of business. Unearned premiums represent the portion of premiums that will be earned in the future. A premium deficiency reserve is recorded if anticipated losses, loss adjustment expenses, deferred acquisition costs and policy maintenance costs exceed the recorded unearned premium reserve and anticipated investment income. As of December 31, 2020 and 2019, no deficiency reserves were recorded.

Policy Liabilities and Unpaid Claims

Policyholder account balances relate to investment-type individual annuity contracts in the accumulation phase. Policyholder account balances are carried at accumulated account values, which consist of deposits received, plus interest credited, less withdrawals and assessments. Minimum guaranteed interest credited to these contracts ranges from 3.0% to 4.0%.

The Company’s claims are generally reported and settled quickly, resulting in consistent historical loss development patterns. The Company’s actuaries apply a variety of generally accepted actuarial methods to the historical loss development patterns, to derive cumulative development factors. These cumulative development factors are applied to reported losses for each accident quarter to compute ultimate losses. The indicated required reserve is the difference between the ultimate losses and the reported losses. The actuarial methods used include but are not limited to the chain ladder method, the Bornhuetter-Ferguson method, and the expected loss ratio method. The actuarial analyses are performed on a basis gross of ceded

reinsurance, and the resulting factors and estimates are then used in calculating the net loss reserves which take into account the impact of reinsurance. The Company has not made any changes to its methodologies for determining claim reserves in the periods presented.

Credit life and accidental death and dismemberment (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR). Credit disability unpaid claims reserves also include continuing claim reserves for open disability claims. For all other product lines, unpaid claims reserves include case reserves for reported claims and bulk reserves for IBNR claims. The Company uses a number of algorithms in establishing its unpaid claims reserves. These algorithms are used to calculate unpaid claims as a function of paid losses, earned premium, reported incurred losses, target loss ratios, and in-force amounts or a combination of these factors.

Anticipated future loss development patterns form a key assumption underlying these analyses. Generally, unpaid claims reserves, and associated incurred losses, are impacted by loss frequency, which is the measure of the number of claims per unit of insured exposure, and loss severity, which is based on the average size of claims. Factors affecting loss frequency and loss severity may include changes in claims reporting patterns, claims settlement patterns, judicial decisions, legislation, economic conditions, morbidity patterns and the attitudes of claimants towards settlements.

The unpaid claims reserves represent the Company’s best estimates at a given time, based on the projections and analyses discussed above. Actual claim costs are dependent upon a number of complex factors such as changes in doctrines of legal liabilities and damage awards. These factors are not directly quantifiable, particularly on a prospective basis. The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related liabilities based on our actual experience. The Company has not made any changes to its methodologies for determining unpaid claims reserves in the periods presented.

In accordance with applicable statutory insurance company regulations, the Company’s recorded unpaid claims reserves are evaluated by appointed independent third-party actuaries, who perform this function in compliance with the Standards of Practice and Codes of Conduct of the American Academy of Actuaries. The independent actuaries perform their actuarial analyses annually and prepare opinions, statements, and reports documenting their determinations. For December 31, 2020 and 2019, our appointed independent third-party actuaries found the Company’s reserves to be adequate.

Deferred Revenue

Deferred revenues represent the portion of income that will be earned in the future attributable to motor club memberships, mobile device protection plans, and other non-insurance service contracts that are earned over the respective contract periods using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. A deficiency reserve would be recorded if anticipated contract benefits, deferred acquisition costs and contract service costs exceed the recorded deferred revenues and anticipated investment income. As of December 31, 2020 and 2019 no deficiency reserves were recorded.

Other Liabilities and Accrued Expenses

Other liabilities and accrued expenses primarily consist of lease liabilities, accounts payable and accrued expenses, deferred tax liabilities, net, securities sold, not yet purchased, commissions payable and accrued interest payable. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Revenue Recognition

The Company earns revenues from a variety of sources:

Earned Premiums, Net

Net earned premium is from direct and assumed earned premium consisting of revenue generated from the direct sale of insurance policies by the Company’s distributors and premiums written for insurance policies by another carrier and assumed by the Company. Whether direct or assumed, the premium is earned over the life of the respective policy using methods appropriate to the pattern of losses for the type of business. Methods used include the Rule of 78's, pro rata, and other actuarial methods. Management selects the appropriate method based on available information, and periodically reviews the

selections as additional information becomes available. Direct and assumed premiums are offset by premiums ceded to the Company’s reinsurers, including producer owned reinsurance companies (PORCs), earned in the same manner. The amount ceded is proportional to the amount of risk assumed by the reinsurer.

Service and Administrative Fees

The Company earns service and administrative fees from a variety of activities. Such fees are typically positively correlated with transaction volume and are recognized as revenue as they become both realized and earned.

Service Fees. Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Collateral tracking fee income is recognized when the service is performed and billed. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable. During the years ended December 31, 2020, 2019 and 2018, respectively, the Company did not incur a loss with respect to a specific significant service fee contract.

Administrative Fees. Administrative fee revenue includes the administration of premium associated with our producers and their PORCs. In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Ceding Commissions

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part, underwriting performance and investment returns experienced by the assuming companies. As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy. The adjustment is calculated by adding the earned premium and investment income from the assets held in trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

Vessel Related Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date. Vessel related revenue is recorded in other investment income as a part of other revenue.

Policy and Contract Benefits

Member Benefit Claims

Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products. Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company. Claims are recognized as expense when incurred.

Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses represent losses and related claim adjudication and processing costs on insurance

contract claims, net of amounts ceded. Net losses include actual claims paid and the change in unpaid claim reserves.

Commissions Payable and Expense

Commissions are paid to distributors and retailers selling credit insurance policies, motor club memberships, mobile device protection, and warranty service contracts, and are generally deferred and expensed in proportion to the earning of related revenue. Credit insurance commission rates, in many instances, are set by state regulators and are also impacted by market conditions. In certain instances, credit insurance commissions are subject to retrospective adjustment based on the profitability of the related policies. Under these retrospective commission arrangements, the producer of the credit insurance policies receives a retrospective commission if the premium generated by that producer in the accounting period exceeds the costs associated with those policies, which includes the Company’s administrative fees, claims, reserves, and premium taxes. The Company analyzes the retrospective commission calculation periodically for each producer and, based on the analysis associated with each such producer, the Company records a liability for any positive net retrospective commission earned and due to the producer or, conversely, records a receivable, net of allowance, for amounts due from such producer for instances where the net result of the retrospective commission calculation is negative. Commissions payable are included in other liabilities and accrued expenses.

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

Standard	Description	Adoption Date	Impact on Financial Statements
2016-13 Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	Topic 326 amended guidance on reporting credit losses for assets held on an amortized cost basis and AFS debt securities. For assets held on an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in previous GAAP and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For AFS debt securities, credit losses should be measured in a manner similar to previous GAAP; however, Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. Changes in the allowance account are recorded in the period of change as a credit loss expense or reversal of credit loss expense. The measurement of credit losses is not impacted, except that credit losses recognized are limited to the amount by which fair value is below amortized cost.	January 1, 2020	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.
2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this update require additions, modifications and elimination to the fair value measurement disclosure. The objective of these disclosure requirements is to provide users of financial statements with information about assets and liabilities measured at fair value:     (a) The valuation techniques and inputs that a reporting entity uses to arrive at its measures of fair value, including judgments and assumptions that the entity makes, (b) The uncertainty in the fair value measurements as of the reporting date, and (c) How changes in fair value measurements affect an entity’s performance and cash flows.	January 1, 2020	The retrospective adoption of this standard resulted in additional disclosures related to inputs of Level 3 investments. This adoption resulted in no material impact to the Company’s consolidated financial statements. See Note (12) Fair Value of Financial Instruments.
2018-02 Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The amendments in this update allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this update affect any entity that is required to apply the provisions of Topic 220 and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.	January 1, 2019	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

Standard	Description	Adoption Date	Impact on Financial Statements
2016-02 Leases (Topic 842)	This new standard introduced a new lessee model that brings substantially all leases onto the balance sheet. In addition, while the new guidance retains most of the principles of the previous existing lessor model in GAAP, it aligns many of those principles with ASC 606, Revenue From Contracts With Customers.	January 1, 2019	The adoption of this guidance (practical expedient) resulted in the Company recognizing a right of use asset of $32,052 as part of other assets and a lease liability of $33,558 as part of other liabilities and accrued expenses in the consolidated balance sheets, as well as de-recognizing the liability for deferred rent that was required under the previous guidance for its operating lease agreements at January 1, 2019.
2014-09 Revenue from Contracts with Customers (Topic 606)	This ASU outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes previous revenue recognition guidance, including industry-specific guidance.	January 1, 2018	The Company has chosen the modified-retrospective method of adopting Topic 606, and has assessed these contracts and concluded that changes in accounting and revenue recognition upon adoption of Topic 606 were not material to the Company’s financial position as of January 1, 2018, and did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements, Not Yet Adopted

Standard	Description	Adoption Date	Impact on Financial Statements
2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods.	For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period.	The Company is currently evaluating the effect on its consolidated financial statements.
2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this update provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met.	The standard is effective for all entities as of March 12, 2020, through December 31, 2022. The Company is evaluating their option to adopt the guidance when it is applicable.	The Company is currently evaluating the effect on its consolidated financial statements.

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Acquisitions

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Business Combination Disclosure

Acquisitions

Acquisition of Sky Auto

On December 31, 2020, a subsidiary in our insurance business acquired all of the equity interests in Sky Auto for total net cash consideration of approximately $25,200. Sky Auto markets vehicle service contracts to consumers within the United States.

Identifiable assets acquired were primarily made up of goodwill and intangible assets. Management’s preliminary allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of approximately

$20,000 and $5,340. It is expected that the tax basis in goodwill and intangible assets will be similar to the GAAP values provided above. See Note (9) Goodwill and Intangible Assets, net.

Acquisition of Smart AutoCare

On January 3, 2020, a subsidiary of the Company acquired (the Acquisition) all of the equity interests of Accelerated Service Enterprise LLC., SAC Holdings Inc., Dealer Motor Services, Inc., Independent Dealer Group, Inc., Ownershield, Inc., Freedom Insurance Company, Ltd. (Freedom), SAC Admin, Inc., SAC Insurance Company, Inc., Smart AutoCare, Inc. and Smart AutoCare Administration Solutions, Inc. (together Smart AutoCare), pursuant to the Equity Interest Purchase Agreement (the Purchase Agreement) between Fortegra Warranty Holdings, LLC. (Buyer) and Peter Masi (Seller), dated as of December 16, 2019. Concurrent with the Acquisition, Freedom terminated reinsurance agreements with affiliates of Seller (the Commutation Transaction).

Tiptree paid Seller $111,804, net of working capital true-ups, in cash at closing, $8,250 of which will be held in an escrow account for 18 months to satisfy indemnity claims. Simultaneously, pursuant to the Commutation Transaction, affiliates of Seller paid Freedom $102,000 in cash. The Purchase Agreement also provides for an earn out of up to $50,000 in cash based on Smart AutoCare achieving specified performance metrics measured on the 3-year and 5-year anniversary of closing (Reserve Based Earn-Out Amount) and an additional earn out of up to $30,000 payable in cash or Tiptree common stock based on Smart AutoCare achieving other certain specified performance metrics measured on the 4-year and 5-year anniversary of closing (Profits Based Earn-Out Amount). In addition, the purchase price will be subject to a true-up following the 5-year anniversary of the closing (Underwriting Profitability True-Up) based on the adequacy of certain legacy reserves, offset by certain earnings on new business. Fortegra Warranty may hold back all or a portion of any Reserve Based Earn-Out Amounts until final determination of the legacy reserves used to calculate the Underwriting Profitability True-Up if in Tiptree’s reasonable opinion such amount may be needed to offset a deficiency in such legacy reserves. In addition, if the deficiency in the legacy reserves used to calculate the Underwriting Profitability True-Up is greater than the aggregate amount owing to Seller for the Reserve-Based Earn-Out Amount and Profits-Based Earn-Out Amount, Seller shall pay Tiptree an amount equal to the lesser of such difference and $10,000.

Smart AutoCare’s results are included in the Company’s Insurance segment. The financial results of Smart AutoCare have been included in the Company’s results as of the acquisition date. For the period from the Acquisition until December 31, 2020, Smart AutoCare total revenue was $70,022 and the loss before taxes was $226.

The fair value of assets acquired and liabilities assumed represent the allocation as our evaluation of facts and circumstances available as of the acquisition date. The allocation of the purchase price to the intangible assets is based on fair value estimates and have been reviewed by management. The allocation of the purchase price has been finalized and all measurement period adjustments have been recorded.

Management’s allocation of the purchase price to the net assets acquired resulted in the recording of finite-lived intangible assets valued at $93,700, with an estimated amortization period of 5 to 13.5 years. It is expected that the tax basis in intangible assets will be similar to the GAAP values provided above. The residual amount of the purchase price after the allocation to net assets acquired and identifiable intangibles of $60,346 has been allocated to goodwill. This goodwill is included in the Insurance segment. It is expected that $21,127 of this goodwill will be tax deductible over a 15 year period.

The following table presents the determination of the acquisition date fair value amounts for the identifiable assets acquired, liabilities assumed, and goodwill recorded in connection with the Acquisition, in accordance with the acquisition method of accounting:

	As of January 3, 2020
Assets:
Investments:
Available for sale securities, at fair value	$	110
Total investments	110
Cash and cash equivalents	120,934
Restricted cash	764
Notes and accounts receivable, net	6,214
Reinsurance receivables	71,337
Intangible assets, net	93,700
Other assets	34,053
Total assets	$	327,112
Liabilities:
Policy liabilities and unpaid claims	$	55,151
Deferred revenue	182,568
Reinsurance payable	27,075
Other liabilities and accrued expenses	10,860
Total liabilities	275,654
Net assets acquired	51,458
Goodwill	60,346
	$	111,804
Acquisition costs	$	3,539

Supplemental pro forma results of operations have not been presented for the Acquisition as they are not material in relation to the Company’s reported results.

The following table shows the values recorded by the Company, as of the acquisition date, for finite-lived intangible assets and the range of their estimated amortization period:

Intangible Assets	Weighted Average Amortization Period (in Years)	Value as of acquisition date
Customer relationships	7.2	$	86,000
Software licensing	5.0	600
Trade names	13.5	7,100
Total acquired finite-lived intangible assets	7.7	$	93,700

On July 1, 2019, a subsidiary in our insurance business acquired a majority interest in Ingenasys, Ltd., the parent holding company of Defend Insurance Group (Defend), for total net cash consideration of approximately $4,600. Defend is an automotive finance and insurance provider and insurance administrator operating in the Czech Republic, Poland, Hungary, Slovakia, and the UK. Identifiable assets acquired were primarily made up of goodwill and intangible assets. See Note (9) Goodwill and Intangible Assets, net.

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Dispositions, Assets Held for Sale and Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Dispositions

On April 26, 2019, the Company completed the sale of the management contracts and related assets for the CLOs managed by Telos Asset Management, LLC (Telos). The pre-tax gain on sale for the year ended December 31, 2019 was $7,598, which is included in other revenue. See (16) Other Revenue and Other Expenses. The sale did not meet the requirements to be classified as a discontinued operation.

The sale agreement also contains a provision which provides for contingent consideration if the Telos business achieves specific performance metrics. This contingent consideration represents a gain contingency, and the Company will not recognize any additional gain unless such consideration is realized.

On February 1, 2018, the Company completed the sale of Care, as well as two senior living properties held in our insurance business, to Invesque Inc. (Invesque). The pre-tax comprehensive income on the sale was approximately $54,860, which consists of $56,860 gain on sale of a subsidiary, $1,845 of realized gain on the sale of the insurance properties, offset by the reclassification of an interest rate swap from AOCI of $3,845. The gain on sale of a subsidiary includes $10,676 of earnout consideration recognized in December 2018 as a result of a portfolio disposition by Invesque.

Total consideration received for the sale of Care was $150,741, including approximately 16.6 million shares of Invesque, resulting in an ownership of approximately 34% of the acquiring company at the time of sale. The Company has elected to apply the fair value option to the investment in Invesque. As such, these shares are held at fair value within equity securities.

When the Company entered into a purchase agreement on November 16, 2017 to sell Care, the Company concluded that the sale met the requirements to be classified as a discontinued operation. As a result, the Company reclassified the income and expenses attributable to Care to net income (loss) from discontinued operations through the completion of the sale.

Assets and Liabilities Held for Sale

The Company has entered into a definitive agreement to sell Luxury, and it is classified as held for sale at December 31, 2020 and December 31, 2019. The agreement did not meet the requirements to be classified as a discontinued operation. The following table presents detail of Luxury’s assets and liabilities held for sale in the consolidated balance sheets for the following periods:

	As of
	December 31, 2020		December 31, 2019
Assets:
Investments:
Loans, at fair value	$	164,802	$	98,272
Other investments	4,345		1,019
Total investments	169,147		99,291
Cash and cash equivalents	4,870		7,137
Restricted cash	9		—
Notes and accounts receivable, net	1,760		238
Other assets	5,919		1,169
Assets held for sale	$	181,705	$	107,835
Liabilities:
Debt, net	$	162,072	$	97,822
Other liabilities and accrued expenses (1)	13,040		4,608
Liabilities held for sale	$	175,112	$	102,430

(1)    Includes deferred tax liabilities of $939 as of December 31, 2020.

During the year ended December 31, 2020, the Company recorded an impairment of $4,428 related to assets and liabilities held for sale. See Note (16) Other Revenue and Other Expenses. No impairment related to assets and liabilities held for sale was recorded for the years ended December 31, 2019 or 2018.

Luxury has a total borrowing capacity at December 31, 2020 of $214,000. As of December 31, 2020 and 2019, a total of $162,072 and $97,822, respectively, was outstanding under such financing agreements.

Discontinued Operations

The following table presents detail of Care’s revenues and expenses of discontinued operations in the consolidated statements of operations for the following periods:

	Year Ended December 31,
	2020		2019		2018
Revenues:
Rental and related revenue	$	—	$	—	$	6,476
Other revenue	—		—		149
Total revenues	—		—		6,625
Expenses:
Employee compensation and benefits	—		—		2,788
Interest expense	—		—		1,252
Other expenses	—		—		1,961
Total expenses	—		—		6,001
Net income (loss) before taxes from discontinued operations	—		—		624
Gain on sale of discontinued operations	—		—		56,860
Less: provision (benefit) for income taxes	—		—		13,714
Net income (loss) from discontinued operations	$	—	$	—	$	43,770

The following table presents a summary of cash flows related to discontinued operations included in the consolidated statements of cash flows for the following periods:

	Year Ended December 31,
	2020		2019		2018
Net cash provided by (used in):
Operating activities	$	—	$	—	$	(2,095)
Investing activities	—		—		(592)
Financing activities	—		—		(123)
Net cash flows provided by discontinued operations	$	—	$	—	$	(2,810)

Significant Accounting Policies Related to Dispositions and Discontinued Operations

Except as noted below, Care and our CLO management business adhered to the Significant Accounting Policies as described in Note (2) Summary of Significant Accounting Policies.

Investments

Revenue Recognition

Rental and Related Revenue

Rental revenue from residents in properties owned by Care but managed by a management company pursuant to a management agreement (Managed Properties) were recognized monthly as services were provided, as lease periods for residents were short-term in nature. The Company recognized rental revenue from triple net leases on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis was more representative of the time pattern in which the use benefit was derived from the leased property. Renewal options in leases with rental terms that were higher than those in the primary term were excluded from the calculation of straight-line rent if the renewals were not reasonably assured. The Company commenced rental revenue recognition when the tenant took control of the leased space. The Company recognized lease termination payments as a component of rental revenue in the period received, provided that there were no further obligations under the lease. Revenue related to rental revenue was primarily attributable to services provided to the occupants of our senior living properties.

Management Fee Income

The Company earned management and incentive fees from the CLOs it managed. These management fees were paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Management fees typically consisted of fees based on the amount of assets held in the CLOs. Management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed. Management fee income is recorded in other revenue.

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Operating Segment Data

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Operating Segment Data

Segment Data

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Tiptree’s principal operating subsidiary, The Fortegra Group, LLC (Fortegra), along with its subsidiaries, is a leading provider of specialty insurance underwriting, warranty and service contract products and related service solutions. Based on the ASC 280 quantitative analysis performed as of December 31, 2020, our reportable segments are Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.

Our reportable segments’ income or loss is reported before income taxes and non-controlling interests. Segment results incorporate the revenues and expenses of these subsidiaries since they commenced operations or were acquired. For the year ended December 31, 2020, Mortgage has been broken out of Tiptree Capital as a reportable segment since it meets the quantitative threshold for disclosure. Prior year segments have been conformed to the current year presentation. Intercompany transactions are eliminated.

Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment are as follows:

Insurance operations are conducted through Fortegra, which includes Fortegra Financial Corporation and Fortegra Warranty. Fortegra underwrites and administers specialty insurance programs and products, and is a leading provider of credit and asset protection products and administration services. Fortegra’s programs are provided across a diverse range of products and services including credit protection insurance, warranty and service contract products, premium finance, and niche personal and commercial lines of insurance. On January 3, 2020, Fortegra Warranty acquired Smart AutoCare, a vehicle warranty solutions provider in the United States. On December 31, 2020, Fortegra acquired Sky Auto, a vehicle service contract marketer within the United States. See Note (3) Acquisitions.

Tiptree Capital:

Mortgage operations are conducted through Reliance. The Company’s mortgage origination business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and GNMA.

Other includes our asset management, mortgage operations of Luxury, shipping operations, and other investments (including our Invesque shares).

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

	Year Ended December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	691,061	$	112,165	$	7,075	$	810,301
Total expenses	(664,113)		(81,063)		(68,317)		(813,493)
Corporate expenses	—		—		—		(35,660)
Income (loss) before taxes	$	26,948	$	31,102	$	(61,242)	$	(38,852)
Less: provision (benefit) for income taxes							(13,627)
Net income (loss)							$	(25,225)
Less: net income (loss) attributable to non-controlling interests							3,933
Net income (loss) attributable to common stockholders							$	(29,158)

	Year Ended December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	635,085	$	66,121	$	71,522	$	772,728
Total expenses	(598,055)		(63,162)		(48,131)		(709,348)
Corporate expenses	—		—		—		(34,241)
Income (loss) before taxes	$	37,030	$	2,959	$	23,391	$	29,139
Less: provision (benefit) for income taxes							9,017
Net income (loss)							$	20,122
Less: net income (loss) attributable to non-controlling interests							1,761
Net income (loss) attributable to common stockholders							$	18,361

	Year Ended December 31, 2018
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	544,586	$	51,624	$	29,616	$	625,826
Total expenses	(530,414)		(51,289)		(33,675)		(615,378)
Corporate expenses	—		—		—		(30,244)
Income (loss) before taxes from continuing operations	$	14,172	$	335	$	(4,059)	$	(19,796)
Less: provision (benefit) for income taxes							(5,909)
Net income (loss) from discontinued operations							43,770
Net income (loss)							$	29,883
Less: net income (loss) attributable to non-controlling interests							5,950
Net income (loss) attributable to Common Stockholders							$	23,933

The Company conducts its operations primarily in the U.S. with less than 6% of total revenues generated overseas for the years ended December 31, 2020, 2019 and 2018.

The following table presents the reportable segments and Tiptree Capital - Other assets for the following periods:

	As of December 31, 2020										As of December 31, 2019
			Tiptree Capital										Tiptree Capital
	Insurance		Mortgage		Other		Corporate		Total		Insurance		Mortgage		Other		Corporate		Total
Total assets	$	2,452,798	$	217,138	$	302,068	$	23,756	$	2,995,760	$	1,730,636	$	154,589	$	297,009	$	16,052	$	2,198,286

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Investments

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The following table presents the Company's investments related to insurance operations (Insurance) and investments from other Tiptree investing activities (Tiptree Capital), measured at fair value as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	—	$	—	$	377,133
Loans, at fair value	7,795		82,937		—		90,732
Equity securities	98,130		—		25,708		123,838
Other investments	125,833		9,439		84,429		219,701
Total investments	$	608,891	$	92,376	$	110,137	$	811,404

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	335,192	$	—	$	—	$	335,192
Loans, at fair value	10,174		98,720		—		108,894
Equity securities	62,816		—		92,562		155,378
Other investments	42,452		7,490		87,530		137,472
Total investments	$	450,634	$	106,210	$	180,092	$	736,936

Available for Sale Securities, at fair value, net of allowance for credit losses

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2020 and December 31, 2019 are held by subsidiaries in the insurance business. The following tables present the Company's investments in AFS securities:

	As of December 31, 2020
	Amortized cost		Allowance for Credit Losses(1)		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	191,116	$	—	$	5,245	$	(58)	$	196,303
Obligations of state and political subdivisions	42,583		—		1,768		(1)		44,350
Corporate securities	92,761		—		2,181		(1)		94,941
Asset backed securities	37,975		—		316		(2,099)		36,192
Certificates of deposit	1,355		—		—		—		1,355
Obligations of foreign governments	3,961		—		31		—		3,992
Total	$	369,751	$	—	$	9,541	$	(2,159)	$	377,133
(1) - Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statements of operations (as a credit loss on AFS securities). Amount excludes unrealized losses relating to non-credit factors.
			As of December 31, 2019
			Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	189,596	$	2,138	$	(144)	$	191,590
Obligations of state and political subdivisions			45,249		1,104		(15)		46,338
Corporate securities			50,514		719		(2)		51,231
Asset backed securities			45,634		89		(1,705)		44,018
Certificates of deposit			896		—		—		896
Obligations of foreign governments			1,099		20		—		1,119
Total			$	332,988	$	4,070	$	(1,866)	$	335,192

The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of
	December 31, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	30,306	$	30,602	$	9,584	$	9,602
Due after one year through five years	149,378		153,406		130,223		131,952
Due after five years through ten years	26,621		27,479		19,508		20,125
Due after ten years	125,471		129,454		128,039		129,495
Asset backed securities	37,975		36,192		45,634		44,018
Total	$	369,751	$	377,133	$	332,988	$	335,192

The following tables present the gross unrealized losses on AFS securities by length of time that individual AFS securities have been in a continuous unrealized loss position for less than twelve months, and twelve months or greater and do not have an allowance for credit losses:

	As of December 31, 2020
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,323	$	(58)	41	$	2	$	—	2
Obligations of state and political subdivisions	379		(1)		5	—		—		—
Corporate securities	901		(1)		3	—		—		—
Asset backed securities	—		—		—	18,927		(2,099)		9
Total	$	16,603	$	(60)	49	$	18,929	$	(2,099)	11
	As of December 31, 2019
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	31,416	$	(132)	75	$	3,888	$	(12)	38
Obligations of state and political subdivisions	3,774		(15)		20	—		—		—
Corporate securities	2,820		(2)		12	742		—		7
Asset backed securities	3,878		(11)		17	19,480		(1,694)		11
Total	$	41,888	$	(160)	124	$	24,110	$	(1,706)	56

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2020 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2020:

	Obligations of state and political subdivisions		Corporate securities		Asset backed securities		Total
Increase in the allowance for the initial adoption of ASU 2016-13	$	(1)	$	(50)	$	(2)	$	(53)
Reduction in credit losses due to AFS securities sold during the year	—		3		—		3
Recoveries of amounts previously written off during the year	1		47		2		50
Ending balance of the allowance for credit losses on AFS securities	$	—	$	—	$	—	$	—

The Company applies a discounted cash flow model, based on assumptions and model outputs provided by an investment management company, in determining its lifetime expected credit losses on AFS securities. This includes determining the present value of expected future cash flows discounted at the book yield of the security.

The table below presents the amount of credit losses (gains from recoveries) on AFS securities recorded by the Company for the following period:

	Year Ended December 31, 2020
Credit losses (gains from recoveries) on AFS securities	$	(53)

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company cannot remove or replace investments in

regulatory deposit accounts without prior approval of the contractual party or regulatory authority, as applicable. The following table presents the Company's restricted investments included in the Company's AFS securities:

	As of
	December 31, 2020		December 31, 2019
Fair value of restricted investments in trust pursuant to reinsurance agreements	$	44,349	$	33,478
Fair value of restricted investments for special deposits required by state insurance departments	9,447		6,275
Total fair value of restricted investments	$	53,796	$	39,753

The following table presents additional information on the Company’s AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Purchases of AFS securities	$	158,357	$	253,415	$	192,288
Proceeds from maturities, calls and prepayments of AFS securities	$	84,923	$	36,459	$	30,089
Gains (losses) realized on maturities, calls and prepayments of AFS securities	$	—	$	—	$	(30)
Gross proceeds from sales of AFS securities	$	35,603	$	170,495	$	56,191

Equity securities

Equity securities represents the carrying amount of the Company's basis in equity investments. Included within the equity securities balance are 17.0 million shares of Invesque as of December 31, 2020, and 16.6 million as of December 31, 2019, for which the Company has elected to apply the fair value option. The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

	As of December 31, 2020
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	5,370	$	111,491	$	25,708	$	134,830	$	31,078
Fixed income exchange traded fund	62,438		63,875		—		—		62,438		63,875
Other equity securities	38,069		28,885		—		—		38,069		28,885
Total equity securities	$	123,846	$	98,130	$	111,491	$	25,708	$	235,337	$	123,838

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Loans, at fair value

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Loans, at fair value

Loans, at fair value

The following table presents the Company’s investments in loans measured at fair value and the Company’s investments in loans measured at fair value pledged as collateral:

	As of December 31, 2020								As of December 31, 2019
	Fair value		Unpaid principal balance (UPB)		Fair value exceeds / (below) UPB		Pledged as Collateral		Fair value		Unpaid principal balance (UPB)		Fair value exceeds / (below) UPB		Pledged as Collateral
Insurance:
Corporate loans (1)	$	7,795	$	12,281	$	(4,486)	$	—	$	9,787	$	12,006	$	(2,219)	$	—
Non-performing loans (2)	—		—		—		—		387		409		(22)		—
Mortgage:
Mortgage loans held for sale (3)	82,937		78,590		4,347		81,630		98,720		95,680		3,040		98,086
Total loans, at fair value	$	90,732	$	90,871	$	(139)	$	81,630	$	108,894	$	108,095	$	799	$	98,086

(1)    The cost basis of Corporate loans was approximately $11,282 and $11,969 at December 31, 2020 and December 31, 2019, respectively.

(2)    The cost basis of NPLs was approximately $282 at December 31, 2019, respectively. The are no NPLs as of December 31, 2020.

(3)    As of December 31, 2020 and December 31, 2019, there were two mortgage loans held for sale and one mortgage loan held for sale that were 90 days or more past due, respectively, with a fair value of $534 and $198, respectively.

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Equity Securities

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The following table presents the Company's investments related to insurance operations (Insurance) and investments from other Tiptree investing activities (Tiptree Capital), measured at fair value as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	—	$	—	$	377,133
Loans, at fair value	7,795		82,937		—		90,732
Equity securities	98,130		—		25,708		123,838
Other investments	125,833		9,439		84,429		219,701
Total investments	$	608,891	$	92,376	$	110,137	$	811,404

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	335,192	$	—	$	—	$	335,192
Loans, at fair value	10,174		98,720		—		108,894
Equity securities	62,816		—		92,562		155,378
Other investments	42,452		7,490		87,530		137,472
Total investments	$	450,634	$	106,210	$	180,092	$	736,936

Available for Sale Securities, at fair value, net of allowance for credit losses

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2020 and December 31, 2019 are held by subsidiaries in the insurance business. The following tables present the Company's investments in AFS securities:

	As of December 31, 2020
	Amortized cost		Allowance for Credit Losses(1)		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	191,116	$	—	$	5,245	$	(58)	$	196,303
Obligations of state and political subdivisions	42,583		—		1,768		(1)		44,350
Corporate securities	92,761		—		2,181		(1)		94,941
Asset backed securities	37,975		—		316		(2,099)		36,192
Certificates of deposit	1,355		—		—		—		1,355
Obligations of foreign governments	3,961		—		31		—		3,992
Total	$	369,751	$	—	$	9,541	$	(2,159)	$	377,133
(1) - Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statements of operations (as a credit loss on AFS securities). Amount excludes unrealized losses relating to non-credit factors.
			As of December 31, 2019
			Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	189,596	$	2,138	$	(144)	$	191,590
Obligations of state and political subdivisions			45,249		1,104		(15)		46,338
Corporate securities			50,514		719		(2)		51,231
Asset backed securities			45,634		89		(1,705)		44,018
Certificates of deposit			896		—		—		896
Obligations of foreign governments			1,099		20		—		1,119
Total			$	332,988	$	4,070	$	(1,866)	$	335,192

The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of
	December 31, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	30,306	$	30,602	$	9,584	$	9,602
Due after one year through five years	149,378		153,406		130,223		131,952
Due after five years through ten years	26,621		27,479		19,508		20,125
Due after ten years	125,471		129,454		128,039		129,495
Asset backed securities	37,975		36,192		45,634		44,018
Total	$	369,751	$	377,133	$	332,988	$	335,192

The following tables present the gross unrealized losses on AFS securities by length of time that individual AFS securities have been in a continuous unrealized loss position for less than twelve months, and twelve months or greater and do not have an allowance for credit losses:

	As of December 31, 2020
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,323	$	(58)	41	$	2	$	—	2
Obligations of state and political subdivisions	379		(1)		5	—		—		—
Corporate securities	901		(1)		3	—		—		—
Asset backed securities	—		—		—	18,927		(2,099)		9
Total	$	16,603	$	(60)	49	$	18,929	$	(2,099)	11
	As of December 31, 2019
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	31,416	$	(132)	75	$	3,888	$	(12)	38
Obligations of state and political subdivisions	3,774		(15)		20	—		—		—
Corporate securities	2,820		(2)		12	742		—		7
Asset backed securities	3,878		(11)		17	19,480		(1,694)		11
Total	$	41,888	$	(160)	124	$	24,110	$	(1,706)	56

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2020 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2020:

	Obligations of state and political subdivisions		Corporate securities		Asset backed securities		Total
Increase in the allowance for the initial adoption of ASU 2016-13	$	(1)	$	(50)	$	(2)	$	(53)
Reduction in credit losses due to AFS securities sold during the year	—		3		—		3
Recoveries of amounts previously written off during the year	1		47		2		50
Ending balance of the allowance for credit losses on AFS securities	$	—	$	—	$	—	$	—

The Company applies a discounted cash flow model, based on assumptions and model outputs provided by an investment management company, in determining its lifetime expected credit losses on AFS securities. This includes determining the present value of expected future cash flows discounted at the book yield of the security.

The table below presents the amount of credit losses (gains from recoveries) on AFS securities recorded by the Company for the following period:

	Year Ended December 31, 2020
Credit losses (gains from recoveries) on AFS securities	$	(53)

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company cannot remove or replace investments in

regulatory deposit accounts without prior approval of the contractual party or regulatory authority, as applicable. The following table presents the Company's restricted investments included in the Company's AFS securities:

	As of
	December 31, 2020		December 31, 2019
Fair value of restricted investments in trust pursuant to reinsurance agreements	$	44,349	$	33,478
Fair value of restricted investments for special deposits required by state insurance departments	9,447		6,275
Total fair value of restricted investments	$	53,796	$	39,753

The following table presents additional information on the Company’s AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Purchases of AFS securities	$	158,357	$	253,415	$	192,288
Proceeds from maturities, calls and prepayments of AFS securities	$	84,923	$	36,459	$	30,089
Gains (losses) realized on maturities, calls and prepayments of AFS securities	$	—	$	—	$	(30)
Gross proceeds from sales of AFS securities	$	35,603	$	170,495	$	56,191

Equity securities

Equity securities represents the carrying amount of the Company's basis in equity investments. Included within the equity securities balance are 17.0 million shares of Invesque as of December 31, 2020, and 16.6 million as of December 31, 2019, for which the Company has elected to apply the fair value option. The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

	As of December 31, 2020
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	5,370	$	111,491	$	25,708	$	134,830	$	31,078
Fixed income exchange traded fund	62,438		63,875		—		—		62,438		63,875
Other equity securities	38,069		28,885		—		—		38,069		28,885
Total equity securities	$	123,846	$	98,130	$	111,491	$	25,708	$	235,337	$	123,838

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Other Investments

12 Months Ended

Dec. 31, 2020

Other Investments [Abstract]

Other Investments

Other investments

The following table contains information regarding the Company’s other investments as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	105,777	$	—	$	—	$	105,777
Vessels, net (2)	—		—		83,028		83,028
Debentures	17,703		—		—		17,703
Other	2,353		9,439		1,401		13,193
Total other investments	$	125,833	$	9,439	$	84,429	$	219,701

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	20,705	$	—	$	—	$	20,705
Vessels, net (2)	—		—		85,991		85,991
Debentures	15,423		—		—		15,423
Other	6,324		7,490		1,539		15,353
Total other investments	$	42,452	$	7,490	$	87,530	$	137,472

(1)    The cost basis of corporate bonds was $97,284 and $20,146 as of December 31, 2020 and December 31, 2019, respectively.

(2)     Net of accumulated depreciation of $8,372 and $3,817 as of December 31, 2020 and December 31, 2019, respectively.

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Investment Income and Net Realized and Unrealized Gains and Losses

12 Months Ended

Dec. 31, 2020

Income Statement [Abstract]

Investment Income

Net Investment Income - Insurance

Net investment income represents investment income and expense from investments related to insurance operations as disclosed within net investment income on the consolidated statements of operations. The following table presents the components of net investment income by source of income:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
AFS securities	$	7,685	$	8,404	$	6,560
Loans, at fair value	801		3,284		10,809
Other investments	4,245		1,218		1,350
Dividends from equity securities	1,482		2,813		2,092
Other	8		—		97
Subtotal	14,221		15,719		20,908
Less: investment expenses	4,305		1,702		1,729
Net investment income	$	9,916	$	14,017	$	19,179

Other Investment Income - Tiptree Capital

Other investment income represents other revenue from other Tiptree non-insurance activities as disclosed within other revenue on the consolidated statements of operations, see Note (16) Other Revenue and Other Expenses. The following tables present the components of other investment income by type:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
Loans, at fair value (1)	$	5,617	$	6,206	$	4,343
Other	—		269		175
Dividends from equity securities	2,533		10,132		9,224
Loan fee income	17,900		12,631		7,827
Vessel related revenue	22,697		16,747		3,972
Other investment income	$	48,747	$	45,985	$	25,541

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Net realized and unrealized gains (losses)

The following table presents the components of net realized and unrealized gains (losses) recorded on the consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (OCI), and as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment financial assets and liabilities are included below:

	For the Year Ended December 31,
	2020		2019		2018
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$	528	$	1,312	$	(819)
Gains from recoveries (credit losses) on AFS securities	53		—		—
Net realized gains (losses) on loans	(945)		2,100		2,071
Net realized gains (losses) on equity securities	(24,586)		947		2,721
Net realized gain on corporate bonds	7,299		39		1,627
Other	2,511		279		—
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	101,411		52,617		44,509
Other:
Net realized gains (losses) on loans (1)	35,753		23,403		16,638
Other	—		(260)		(2,084)
Total net realized gains (losses)	122,024		80,437		64,663
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans	(1,461)		(3,899)		(4,730)
Net unrealized gains (losses) on equity securities held at period end	(22,793)		7,621		(9,815)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	17,290		(807)		(2,291)
Other	10,162		(697)		(428)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	1,270		840		134
Other	(6,093)		357		(2,246)
Other:
Net change in unrealized gains (losses) on loans (1)	2,185		983		60
Net unrealized gains (losses) on equity securities held at period end	(67,656)		(992)		(17,134)
Other	7,482		25		569
Total net unrealized gains (losses)	(59,614)		3,431		(35,881)
Total net realized and unrealized gains (losses)	$	62,410	$	83,868	$	28,782

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Notes and Accounts Receivable, net

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Notes and Accounts Receivable, net

Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

	As of December 31,
	2020		2019
Notes receivable, net - premium financing program	$	62,075	$	42,192
Accounts and premiums receivable, net	95,269		50,712
Retrospective commissions receivable	131,760		105,387
Trust receivables	54,393		63,925
Other receivables	26,955		24,752
Total notes and accounts receivable, net	$	370,452	$	286,968

The following table presents the total valuation allowance and bad debt expense for the following periods:

	Valuation allowance				Bad Debt Expense
	As of December 31,				For the Year Ended December 31,
	2020		2019		2020		2019		2018
Notes receivable, net - premium financing program (1)	$	101	$	95	$	223	$	175	$	195
Accounts and premiums receivable, net	$	169	$	109	$	28	$	36	$	39

(1)    As of December 31, 2020 and December 31, 2019, there were $215 and $93 in balances classified as 90 days plus past due, respectively.

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Reinsurance Receivables

12 Months Ended

Dec. 31, 2020

Reinsurance Disclosures [Abstract]

Reinsurance Receivables

Reinsurance Receivables

The following table presents the effect of reinsurance on premiums written and earned by our insurance business for the following periods:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
As of December 31, 2020
Life insurance in force	$	5,153,151	$	2,985,196	$	—	$	2,167,955
For the Year Ended December 31, 2020
Premiums written:
Life insurance	$	69,704	$	39,761	$	1,550	$	31,493	4.9	%
Accident and health insurance	117,235		78,233		12,696		51,698		24.6	%
Property and liability insurance	825,845		509,818		144,332		460,359		31.4	%
Total premiums written	1,012,784		627,812		158,578		543,550		29.2	%
Premiums earned:
Life insurance	68,637		37,194		1,437		32,880		4.4	%
Accident and health insurance	118,183		78,365		11,599		51,417		22.6	%
Property and liability insurance	691,310		405,469		107,853		393,694		27.4	%
Total premiums earned	$	878,130	$	521,028	$	120,889	$	477,991	25.3	%
As of December 31, 2019
Life insurance in force	$	5,176,056	$	2,884,009	$	—	$	2,292,047
For the Year Ended December 31, 2019
Premiums written:
Life insurance	$	75,060	$	40,555	$	1,692	$	36,197	4.7	%
Accident and health insurance	133,514		87,447		3,201		49,268		6.5	%
Property and liability insurance	709,515		350,093		92,246		451,668		20.4	%
Total premiums written	918,089		478,095		97,139		537,133		18.1	%
Premiums earned:
Life insurance	68,282		35,929		1,607		33,960		4.7	%
Accident and health insurance	123,182		82,660		3,165		43,687		7.2	%
Property and liability insurance	597,852		242,180		65,789		421,461		15.6	%
Total premiums earned	$	789,316	$	360,769	$	70,561	$	499,108	14.1	%
As of December 31, 2018
Life insurance in force	$	4,846,303	$	2,662,173	$	—	$	2,184,130
For the Year ended December 31, 2018
Premiums written:
Life insurance	$	69,516	$	38,239	$	1,874	$	33,151	5.7	%
Accident and health insurance	126,951		85,136		3,229		45,044		7.2	%
Property and liability insurance	616,135		277,856		50,346		388,625		13.0	%
Total premiums written	812,602		401,231		55,449		466,820		11.9	%

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
Premiums earned:
Life insurance	64,346		32,865		1,766		33,247		5.3	%
Accident and health insurance	118,482		80,258		3,262		41,486		7.9	%
Property and liability insurance	552,792		231,093		31,405		353,104		8.9	%
Total premiums earned	$	735,620	$	344,216	$	36,433	$	427,837	8.5	%

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
For the Year Ended December 31, 2020
Losses and LAE Incurred
Life insurance	$	46,268	$	27,292	$	645	$	19,621	3.3	%
Accident and health insurance	18,354		15,715		7,032		9,671		72.7	%
Property and liability insurance	282,906		182,115		48,165		148,956		32.3	%
Total losses and LAE incurred	347,528		225,122		55,842		178,248		31.3	%
	Member benefit claims (1)						58,650
	Total policy and contract benefits						$	236,898
For the Year Ended December 31, 2019
Losses and LAE Incurred
Life insurance	$	38,306	$	22,607	$	443	$	16,142	2.7	%
Accident and health insurance	18,832		15,022		362		4,172		8.7	%
Property and liability insurance	225,200		147,290		52,785		130,695		40.4	%
Total losses and LAE incurred	282,338		184,919		53,590		151,009		35.5	%
	Member benefit claims (1)						19,672
	Total policy and contract benefits						$	170,681
For the Year ended December 31, 2018
Losses and LAE Incurred
Life insurance	$	36,488	$	21,037	$	886	$	16,337	5.4	%
Accident and health insurance	18,986		15,666		686		4,006		17.1	%
Property and liability insurance	227,512		141,184		28,181		114,509		24.6	%
Total losses and LAE incurred	282,986		177,887		29,753		134,852		22.1	%
	Member benefit claims (1)						17,243
	Total policy and contract benefits						$	152,095

(1)    Member benefit claims are not covered by reinsurance.

The following table presents the components of the reinsurance receivables:

	As of
	December 31, 2020		December 31, 2019
Prepaid reinsurance premiums:
Life insurance (1)	$	70,066	$	72,675
Accident and health insurance (1)	66,261		66,393
Property and liability insurance (2)	423,868		286,411
Total	560,195		425,479
Ceded claim reserves:
Life insurance	4,133		3,350
Accident and health insurance	11,118		11,065
Property and liability insurance	98,092		74,384
Total ceded claim reserves recoverable	113,343		88,799
Other reinsurance settlements recoverable	54,471		25,555
Reinsurance receivables	$	728,009	$	539,833

(1)    Including policyholder account balances ceded.

(2)    Includes amounts from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

The following table presents the aggregate amount included in reinsurance receivables that is comprised of the three largest receivable balances from non-affiliated reinsurers:

	As of
	December 31, 2020
Total of the three largest receivable balances from non-affiliated reinsurers	$	164,857

As of December 31, 2020, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were: MFI Insurance Company, LTD (A. M. Best Rating: Not rated), Frandisco Property and Casualty Company (A. M. Best Rating: Not rated) and Canada Life International Reinsurance (Barbados) Corporation (A. M. Best Rating: Not rated).The related receivables of these reinsurers are collateralized by assets on hand, assets held in trust accounts and letters of credit. As of December 31, 2020, the Company does not believe there is a risk of loss due to the concentration of credit risk in the reinsurance program given the collateralization.

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Goodwill and Intangible Assets, net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, net

Goodwill and Intangible Assets, net

The following table presents identifiable finite and indefinite-lived intangible assets, accumulated amortization, and goodwill by operating segment and/or reporting unit, as appropriate:

	As of December 31, 2020						As of December 31, 2019
	Insurance		Other		Total		Insurance		Other		Total
Customer relationships	$	143,300	$	—	$	143,300	$	53,500	$	—	$	53,500
Accumulated amortization	(32,263)		—		(32,263)		(24,318)		—		(24,318)
Trade names	14,750		800		15,550		6,750		800		7,550
Accumulated amortization	(4,382)		(440)		(4,822)		(3,273)		(360)		(3,633)
Software licensing	9,300		640		9,940		8,500		640		9,140
Accumulated amortization	(8,650)		(503)		(9,153)		(8,500)		(411)		(8,911)
Insurance policies and contracts acquired	36,500		—		36,500		36,500		—		36,500
Accumulated amortization	(36,238)		—		(36,238)		(36,115)		—		(36,115)
Insurance licensing agreements(1)	13,761		—		13,761		14,261		—		14,261
Other	640		1,000		1,640		—		—		—
Intangible assets, net	136,718		1,497		138,215		47,305		669		47,974
Goodwill	177,528		1,708		179,236		97,439		1,708		99,147
Total goodwill and intangible assets, net	$	314,246	$	3,205	$	317,451	$	144,744	$	2,377	$	147,121

(1)    Represents intangible assets with an indefinite useful life. Impairment tests are performed at least annually on these assets.

Goodwill

The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:

	Insurance		Other(1)		Total
Balance at December 31, 2018	$	89,854	$	1,708	$	91,562
Goodwill acquired (2)	7,585		—		7,585
Balance at December 31, 2019	97,439		1,708		99,147
Goodwill acquired (2)	84,476		—		84,476
Purchase accounting adjustments (3)	(4,387)		—		(4,387)
Balance at December 31, 2020	$	177,528	$	1,708	$	179,236
Accumulated impairments	$	—	$	699	$	699

(1)    Other is primarily comprised of Mortgage.

(2)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of acquisitions in our insurance business as of July 1, 2019 and January 3, 2020.

The Company conducts annual impairment tests of its goodwill as of October 1. For the years ended December 31, 2020, 2019 and 2018, no impairments were recorded on the Company’s goodwill.

Intangible Assets, net

The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:

	Insurance		Other		Total
Balance at December 31, 2018	$	51,281	$	840	$	52,121
Intangible assets acquired (1)	3,750		—		3,750
Less: amortization expense	(7,726)		(171)		(7,897)
Balance at December 31, 2019	$	47,305	$	669	$	47,974
Intangible assets acquired (1) (2)	99,040		1,000		100,040
Purchase accounting adjustment (3)	(300)		—		(300)
Less: amortization expense	(9,327)		(172)		(9,499)
Balance at December 31, 2020	$	136,718	$	1,497	$	138,215

(1)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(2)    The addition to Other relates to a fishing license acquired by our shipping operations.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of an acquisition in our insurance business as of July 1, 2019.

The following table presents the amortization expense on finite-lived intangible assets for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Amortization expense on intangible assets	$	9,499	$	7,897	$	9,729

For the years ended December 31, 2020, 2019 and 2018, no impairments were recorded on the Company’s intangible assets.

The following table presents the amortization expense on finite-lived intangible assets for the next five years and thereafter by operating segment and/or reporting unit, as appropriate:

	As of December 31, 2020
	Insurance		Other(1)		Total
2021	$	12,951	$	170	$	13,121
2022	14,459		127		14,586
2023	14,198		80		14,278
2024	12,811		80		12,891
2025	11,101		40		11,141
2026 and thereafter	57,437		—		57,437
Total	$	122,957	$	497	$	123,454

(1)    Other is primarily comprised of Mortgage.

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Derivative Financial Instruments and Hedging

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging

Derivative Financial Instruments and Hedging

The Company utilizes derivative financial instruments as part of its overall investment and hedging activities. Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment. The Company’s derivative activities are primarily classified by underlying credit risk and interest rate risk. In addition, the Company is also subject to additional counterparty risk should its counterparties fail to meet the contract terms. The derivative financial instruments are reported in other investments. Derivative liabilities are reported within other liabilities and accrued expenses.

Derivatives, at fair value

Interest Rate Lock Commitments

The Company enters into interest rate lock commitments (IRLCs) with customers in connection with its mortgage banking activities to fund residential mortgage loans with certain terms at specified times in the future. IRLCs that relate to the origination of mortgage loans that will be classified as held-for-sale are considered derivative instruments under applicable accounting guidance. As such, these IRLCs are recorded at fair value with changes in fair value typically resulting in recognition of a gain when the Company enters into IRLCs. In estimating the fair value of an IRLC, the Company assigns a probability that the loan commitment will be exercised and the loan will be funded (“pull through”). The fair value of the commitments is derived from the fair value of related mortgage loans, net of estimated costs to complete. Outstanding IRLCs expose the Company to the risk that the price of the loans underlying the commitments might decline from inception of the rate lock to funding of the loan. To manage this risk, the Company utilizes forward delivery contracts and to be announced (TBA) mortgage backed securities to economically hedge the risk of potential changes in the value of the loans that would result from the commitments.

Forward Delivery Contracts and TBA Mortgage Backed Securities

The Company enters into forward delivery contracts with loan aggregators and other investors as one of the tools to manage the interest rate risk associated with IRLCs and loans held for sale. In addition, the Company enters into TBA mortgage backed securities which facilitate hedging and funding by allowing the Company to prearrange prices for mortgages that are in the process of originating. The Company utilizes these hedging instruments for Agency (Fannie Mae and Freddie Mac) and FHA/VA (Ginnie Mae) eligible IRLCs.

The following table presents the gross notional and fair value amounts of derivatives (on a gross basis) categorized by underlying risk:

	As of December 31, 2020						As of December 31, 2019
	Notional values		Asset derivatives		Liability derivatives		Notional values		Asset derivatives		Liability derivatives
Interest rate lock commitments	$	219,929	$	9,207	$	—	$	279,048	$	7,336	$	—
Forward delivery contracts	35,979		—		22		87,773		36		—
TBA mortgage backed securities	291,000		232		1,508		235,000		118		428
Other	3,058		2,090		560		10,360		—		3,330
Total	$	549,966	$	11,529	$	2,090	$	612,181	$	7,490	$	3,758

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Debt, net

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt, Net

Debt, net

The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs.

		Stated interest rate or range of rates		Maximum borrowing capacity as of		As of
Debt Type	Stated maturity date			December 31, 2020		December 31, 2020		December 31, 2019
Corporate debt
Secured revolving credit agreements	August 2023	LIBOR +	2.25%	$	200,000	$	—	$	25,000
Secured term credit agreements	February 2025	LIBOR +	6.75%	120,313		120,313		68,210
Preferred trust securities	June 2037	LIBOR +	4.10%	35,000		35,000		35,000
Junior subordinated notes	October 2057	8.50%		125,000		125,000		125,000
Total corporate debt						280,313		253,210
Asset based debt (1)
Asset based revolving financing	October 2023	LIBOR +	2.75%	75,000		27,510		21,576
Residential mortgage warehouse borrowings (2)	April 2021 -	LIBOR +	2.00%	110,000		55,994		90,673
	August 2021	to LIBOR +	3.00%
Vessel backed term loan	November 2024	LIBOR +	4.75%	15,800		15,800		18,000
Total asset based debt						99,304		130,249
Total debt, face value						379,617		383,459
Unamortized discount, net						(2,035)		(198)
Unamortized deferred financing costs						(11,336)		(8,807)
Total debt, net						$	366,246	$	374,454

(1)    Asset based debt is generally recourse only to specific assets and related cash flows.

(2)    The weighted average coupon rate for residential mortgage warehouse borrowings was 2.75% and 3.83% at December 31, 2020 and December 31, 2019, respectively.

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Interest expense - corporate debt	$	23,322	$	19,682	$	18,162
Interest expense - asset based debt	9,260		7,377		8,851
Interest expense on debt	$	32,582	$	27,059	$	27,013

The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:

	As of
	December 31, 2020
2021	$	64,444
2022	8,450
2023	35,960
2024	15,450
2025	95,313
2026 and thereafter	160,000
Total	$	379,617

The following narrative is a summary of certain terms of our debt agreements for the period ended December 31, 2020:

Corporate Debt

Secured Revolving Credit Agreements

As of December 31, 2020 and December 31, 2019, a total of $0 and $25,000, respectively, was outstanding under the revolving line of credit in our insurance business.

On August 4, 2020, Fortegra entered into an Amended and Restated Credit Agreement by and among Fortegra Financial and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the Fortegra Credit Agreement). The Fortegra Credit Agreement provides for a $200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $17,500 for swing loans and matures on August 4, 2023. The Fortegra Credit Agreement replaced the $30,000 revolving line of credit with the Fifth Third Bank (the “Working Capital Facility”).

As of December 31, 2019, the Company had the Working Capital Facility of $30,000, which provided for a $30,000 accordion feature. The Working Capital Facility had a maturity date of April 28, 2020 and an interest rate of 30-day LIBOR rate plus 1.20%. On December 30, 2019, the Working Capital Facility was amended, adding the ability to issue up to $75,000 in standby letters of credit (“SBLCs”), and applying an aggregate maximum of $75,000 for the combined values of outstanding debt and issued SBLCs. The Working Capital Facility contained terms and conditions typical for a transaction of this type.

Secured Term Credit Agreement

On February 21, 2020, the Operating Company borrowed $125,000 under a new credit agreement (Credit Agreement) with Fortress Credit Corp. (Fortress). The proceeds were used to repay the Company’s prior credit agreement with Fortress, with a balance of $68,210 as of December 31, 2019, and for working capital and general corporate purposes. Pursuant to an Amendment, Assumption and Consent Agreement, dated July 17, 2020 by and among Tiptree, certain of its subsidiaries and Fortress, Tiptree Holdings LLC (Tiptree Holdings) became the borrower under the Credit Agreement, dated as of February 21, 2020, by and among Tiptree, certain of its subsidiaries and Fortress. The Credit Agreement will mature on February 21, 2025, with principal amounts of the loans to be repaid in consecutive quarterly installments. Loans under the Credit Agreement bear interest at a variable rate per annum equal to LIBOR (with a minimum LIBOR rate of 1.00%), plus a margin of 6.75% per annum. The obligations under the Credit Agreement are secured by liens on substantially all of the assets of Tiptree Holdings and guaranteed by the Company and Tiptree Holdings’ direct wholly owned first tier subsidiaries (Guarantors).

The Credit Agreement contains various customary affirmative and negative covenants of the Company, Tiptree Holdings and the other Guarantors (subject to customary exceptions), including, but not limited to, limitations on indebtedness, liens, investments and acquisitions, negative pledges, junior payments, conduct of business, transactions with affiliates, dispositions of assets, prepayment of certain indebtedness and limits on guarantees by subsidiaries of Tiptree Holdings’ and the Guarantors’ indebtedness. The Credit Agreement also contains a financial covenant which limits corporate leverage as defined by its Corporate Leverage Ratio (as defined in the Credit Agreement).

The Credit Agreement also contains customary mandatory repayment provisions (subject to customary exceptions) and requires that net cash proceeds from the sale by Tiptree and certain of its subsidiaries of capital stock of Invesque be applied to prepay loans until the outstanding principal amount of loans is $62,500, with remaining proceeds subject to reinvestment rights. Prepayments, whether mandatory or voluntary, reduce future scheduled amortization payments in the order they come due. The Credit Agreement also requires the payment of a prepayment fee upon a repricing transaction or equity issuance consummated after the closing date, or the sale of Fortegra, or any of its material subsidiaries. As of December 31, 2020, a total of $120,313 was outstanding under this agreement.

Junior Subordinated Notes

A subsidiary in our insurance business issued $125,000 of 8.50% Fixed Rate Resetting Junior Subordinated Notes due October 2057. Substantially all of the net proceeds were used to repay the existing secured credit agreement, which was terminated thereafter. The notes are unsecured obligations of the subsidiary and rank in right of payment and upon liquidation, junior to all of the subsidiary’s current and future senior indebtedness. The notes are not obligations of or guaranteed by any subsidiaries of the subsidiary, or any other Tiptree entities. So long as no event of default has occurred and is continuing, all or part of the interest payments on the notes can be deferred on one or more occasions for up to five consecutive years per deferral period. This credit agreement contains customary financial covenants that require, among other items, maximum leverage and limitations on restricted payments under certain circumstances.

Preferred Trust Securities

A subsidiary in our insurance business has $35,000 of preferred trust securities due June 15, 2037. Interest is payable quarterly at an interest rate of LIBOR plus 4.10%. The Company may redeem the preferred trust securities, in whole or in part, at a price equal to the full outstanding principal amount of such preferred trust securities outstanding plus accrued and unpaid interest.

Asset Based Debt

Asset Backed Revolving Financing

As of December 31, 2019, a total of $9,840 was outstanding under the borrowing related to our premium finance business in our insurance business. During April 2019, the maturity date of this borrowing was extended to April 2021 with a new rate of LIBOR plus 2.40%. On December 30, 2019, the maximum borrowing capacity of this borrowing was reduced from $25,000 to $13,000. This agreement was replaced on October 16, 2020 with a new agreement, described below.

On August 5, 2019, a subsidiary in our insurance business entered into a $15,000 revolving line of credit agreement related to our warranty service contract finance business. The borrowing has a maturity date of April 28, 2021 and a rate of LIBOR plus 2.40%. On December 30, 2019, the maximum borrowing capacity of this borrowing was increased from $15,000 to $27,000. As of December 31, 2019, a total of $11,736 was outstanding under the borrowing. This agreement was replaced on October 16, 2020 with a new agreement, described below.

On October 16, 2020, subsidiaries in our insurance business entered into a three year $75,000 secured credit agreement which replaced the individual agreements in our premium finance and warranty service contract finance businesses. The borrowers can select from various borrowing and rate options under the agreement, as well the option to convert certain borrowings to term loans, if no default or event of default exists. The agreement extends up to $20,000 for our premium finance business and up to $55,000 for our warranty service contract finance business, and is secured by substantially all of the assets of the borrowers. The obligations under the agreement are non-recourse to Fortegra and its subsidiaries (other than borrowers and their subsidiaries). As of December 31, 2020, a total of $27,510 was outstanding under the borrowing.

Residential Mortgage Warehouse Borrowings

In April 2020, a subsidiary in our mortgage business renewed a $60,000 warehouse line of credit, extending the maturity date to April 2021 and establishing a LIBOR floor of 1.0%. Additionally, during March 2020, another warehouse line maturing in August 2020 temporarily raised the maximum borrowing capacity to $65,000, returning to a maximum borrowing capacity of $50,000 in May 2020 and establishing a LIBOR floor of 0.50%. In August 2020, the $50,000 warehouse line of credit was extended to August 2021, and established a LIBOR floor of 0.50% to 1.00%. As of December 31, 2020 and December 31, 2019, a total of $55,994 and $90,673, respectively, was outstanding under such financing agreements.

Vessel Backed Term Loan

On November 28, 2019, subsidiaries in our shipping business entered into a $18,000 term loan facility. Amounts borrowed under the facility are not allowed to be reborrowed. The borrowing has a maturity date of November 28, 2024 and a rate of LIBOR plus 4.75%, with quarterly principal payments of $550. This facility is secured by liens on 2.00 of our vessels as well as the assets of the borrowing entities and their parent guarantor. This credit agreement contains customary financial covenants that require, among other items, minimum liquidity, positive working capital, minimum required security coverage ratio of 150%, and the existence of a maintenance reserve account funded on a quarterly basis prior to anticipated scheduled drydocking costs. As of December 31, 2020, a total of $15,800 was outstanding under the borrowing.

As of December 31, 2020, the Company is in compliance with the representations and covenants for outstanding borrowings or has obtained waivers for any events of non-compliance.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible to measure a financial instrument’s fair value. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability, and are affected by the type of product, whether the product is traded on an active exchange or in the secondary market, as well as current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is estimated by applying the hierarchy discussed in Note (2) Summary of Significant Accounting Policies which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.

The Company’s fair value measurements are based primarily on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable financial instruments. Sources of inputs to the market approach include third-party pricing services, independent broker quotations and pricing matrices. Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values. Further, management has a process in place to review all changes in fair value that occurred during each measurement period. Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.

The Company utilizes observable and unobservable inputs within its valuation methodologies. Observable inputs may include: benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. Broker quotes are obtained from sources recognized to be market participants. Unobservable inputs may include: expected cash flow streams, default rates, supply and demand considerations and market volatility.

Available for Sale Securities, at fair value

The fair values of available for sale securities are based on prices provided by an independent pricing service and a third-party investment manager. The Company obtains an understanding of the methods, models and inputs used by the independent pricing service and the third-party investment manager by analyzing the investment manager-provided pricing report.

The following details the methods and assumptions used to estimate the fair value of each class of AFS securities and the applicable level each security falls within the fair value hierarchy:

U.S Treasury Securities, Obligations of U.S. Government Authorities and Agencies, Obligations of State and Political Subdivisions, Corporate Securities, Asset Backed Securities, and Obligations of Foreign Governments: Fair values were obtained from an independent pricing service and a third-party investment manager. The prices provided by the independent pricing service and third-party investment manager are based on quoted market prices, when available, non-binding broker quotes, or matrix pricing and fall under Level 2 or Level 3 in the fair value hierarchy.

Certificates of Deposit: The estimated fair value of certificates of deposit approximate carrying value and fall under Level 1 of the fair value hierarchy.

Equity Securities

The fair values of publicly traded common and preferred equity securities and exchange traded funds (“ETFs”) are obtained from market value quotations provided by an independent pricing service and fall under Level 1 in the fair value hierarchy. The fair values of non-publicly traded common and preferred stocks are based on prices obtained from an independent pricing service using unobservable inputs and fall under Level 3 in the fair value hierarchy.

Loans, at fair value

Corporate Loans: These loans are comprised of a diversified portfolio of middle market and broadly syndicated leveraged loans and are generally classified under either Level 2 or Level 3 in the fair value hierarchy. To determine fair value, the Company uses quoted prices which include those provided from pricing vendors, where available. We perform internal price verification procedures to ensure that the prices and quotes provided from the independent pricing vendors are reasonable. Such verification procedures include comparison of pricing sources and analysis of variances among pricing sources. The Company has evaluated each loan’s respective liquidity and has additionally performed valuation benchmarking. The key characteristics which were evaluated as part of this determination were liquidity ratings, price changes to index benchmarks, depth of quotes, credit ratings and industry trends.

Mortgage Loans Held for Sale: Mortgage loans held for sale are generally classified under Level 2 in the fair value hierarchy and fair value is based upon forward sales contracts with third-party investors, including estimated loan costs.

Derivative Assets and Liabilities

Derivatives are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage backed securities. The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position. Our mortgage origination subsidiaries issue IRLCs to their customers, which are carried at estimated fair value on the Company’s consolidated balance sheet. The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption. The fair values of these commitments generally fall under Level 3 in the fair value hierarchy. Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors. For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates. The fair values of TBA mortgage backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures monthly.

Securities Sold, Not Yet Purchased

Securities sold, not yet purchased are generally classified under Level 1 or Level 2 in the fair value hierarchy, based on the leveling of the securities sold short, and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures to ensure that the prices provided are reasonable.

Mortgage Servicing Rights

Mortgage servicing rights are classified under Level 3 in the fair value hierarchy and fair value is provided by a third-party valuation service. Various observable and unobservable inputs are used to determine fair value, including discount rate, cost to service and weighted average prepayment speed.

The following tables present the Company’s fair value hierarchies for financial assets and liabilities, measured on a recurring basis:

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	196,303	$	—	$	196,303
Obligations of state and political subdivisions	—		44,350		—		44,350

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Obligations of foreign governments	—		3,992		—		3,992
Certificates of deposit	1,355		—		—		1,355
Asset backed securities	—		35,334		858		36,192
Corporate securities	—		94,941		—		94,941
Total available for sale securities, at fair value	1,355		374,920		858		377,133
Loans, at fair value:
Corporate loans	—		—		7,795		7,795
Mortgage loans held for sale	—		82,937		—		82,937
Total loans, at fair value	—		82,937		7,795		90,732
Equity securities:
Invesque	31,078		—		—		31,078
Fixed income exchange traded fund	63,875		—		—		63,875
Other equity securities	28,850		—		35		28,885
Total equity securities	123,803		—		35		123,838
Other investments, at fair value:
Corporate bonds	—		105,777		—		105,777
Derivative assets	2,090		232		9,207		11,529
CLOs	—		—		802		802
Total other investments, at fair value	2,090		106,009		10,009		118,108
Mortgage servicing rights (1)	—		—		14,758		14,758
Total	$	127,248	$	563,866	$	33,455	$	724,569
Liabilities:
Derivative liabilities (2)	$	—	$	2,090	$	—	$	2,090
Securities sold, not yet purchased (2)	16,479		30,158		—		46,637
Contingent consideration payable (2)	—		—		200		200
Total	$	16,479	$	32,248	$	200	$	48,927

(1)    Included in other assets.

(2)    Included in other liabilities and accrued expenses.

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	191,590	$	—	$	191,590
Obligations of state and political subdivisions	—		46,338		—		46,338
Obligations of foreign governments	—		1,119		—		1,119
Certificates of deposit	896		—		—		896
Asset backed securities	—		42,833		1,185		44,018
Corporate securities	—		51,231		—		51,231
Total available for sale securities, at fair value	896		333,111		1,185		335,192
Loans, at fair value:
Corporate loans	—		—		9,787		9,787
Mortgage loans held for sale	—		98,720		—		98,720
Non-performing loans	—		—		387		387

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Total loans, at fair value	—		98,720		10,174		108,894
Equity securities:
Invesque	111,938		—		—		111,938
Fixed income exchange traded fund	25,039		—		—		25,039
Other equity securities	18,158		—		243		18,401
Total equity securities	155,135		—		243		155,378
Other investments, at fair value:
Corporate bonds	—		20,705		—		20,705
Derivative assets	—		154		7,336		7,490
CLOs	—		—		4,768		4,768
Total other investments, at fair value	—		20,859		12,104		32,963
Mortgage servicing rights (1)	—		—		8,764		8,764
Total	$	156,031	$	452,690	$	32,470	$	641,191
Liabilities:
Derivative liabilities (2)	$	—	$	3,758	$	—	$	3,758
Total	$	—	$	3,758	$	—	$	3,758
(1) Included in other assets. (2) Included in other liabilities and accrued expenses.

The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:    

	For the Year Ended December 31,
	2020 (1)		2019 (1)
Balance at January 1,	$	32,470	$	152,845
Net realized and unrealized gains or losses included in:
Earnings	2,253		1,901
OCI	(329)		(323)
Origination of IRLCs	120,267		77,082
Purchases	3,862		153
Sales	(6,672)		(123,497)
Issuances	—		111
Conversions to real estate owned	—		(2,596)
Conversions to mortgage loans held for sale	(118,396)		(73,206)
Balance at December 31,	$	33,455	$	32,470
Changes in unrealized gains (losses) included in earnings related to assets still held at period end	$	(7,978)	$	(1,884)
Changes in unrealized gains (losses) included in OCI related to assets still held at period end	$	(329)	$	(323)

(1)    Transfers between Level 2 and 3 were a result of subjecting third-party pricing on assets to various liquidity, depth, bid-ask spread and benchmarking criteria as well as assessing the availability of observable inputs affecting their fair valuation.

The following table presents the range and weighted average (WA) used to develop significant unobservable inputs for the fair value measurements of Level 3 assets and liabilities.

	As of December 31,						As of December 31,
Assets	2020		2019		Valuation technique	Unobservable input(s) (1)	2020					2019
	Fair Value						Range				WA	Range			WA
IRLCs	$	9,207	$	7,336	Internal model	Pull through rate	50%	to	95%		68%	50%	to	95%	61%
Mortgage servicing rights	14,758		8,764		External model	Discount rate	10%	to	13%		11%	10%	to	13%	11%
						Cost to service	$75	to	$90		$82	$75	to	$90	$86
						Prepayment speed	8%	to	60%		22%	7%	to	50%	18%
Total	$	23,965	$	16,100
Liabilities
Contingent consideration payable - Smart AutoCare	$	200	$	—	Cash Flow Model	Forecast Cash EBITDA	$20,000	to	$	30,000	N/A	N/A
					Actuarial Analysis	Assumed Claim Liabilities	$55,000				$55,000	N/A
Total	$	200	$	—

(1)    Unobservable inputs were weighted by the relative fair value of the instruments.

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value and their respective levels within the fair value hierarchy:

	As of December 31, 2020					As of December 31, 2019
	Level within fair value hierarchy	Fair value		Carrying value		Level within fair value hierarchy	Fair value		Carrying value
Assets:
Debentures (1)	2	$	17,703	$	17,703	2	$	15,423	$	15,423
Notes receivable, net	2	62,075		62,075		2	42,192		42,192
Total assets		$	79,778	$	79,778		$	57,615	$	57,615
Liabilities:
Debt, net	3	$	392,951	$	377,582	3	$	396,699	$	383,261
Total liabilities		$	392,951	$	377,582		$	396,699	$	383,261

(1)    Included in other investments.

Debentures: Since interest rates on debentures are at current market rates for similar credit risks, the carrying amount approximates fair value. These values are net of allowance for doubtful accounts.

Notes Receivable, net: To the extent that carrying amounts differ from fair value, fair value is determined based on contractual cash flows discounted at market rates for similar credits. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Debt: The carrying value, which approximates fair value of LIBOR based debt, represents the total debt balance at face value excluding the unamortized discount. The fair value of the Junior subordinated notes is determined based on dealer quotes. Categorized under Level 3 in the fair value hierarchy.

Additionally, the following financial assets and liabilities on the consolidated balance sheets are not carried at fair value, but whose carrying amounts approximate their fair value:

Cash and Cash Equivalents: The carrying amounts of cash and cash equivalents are carried at cost which approximates fair value. Categorized under Level 1 in the fair value hierarchy.

Accounts and Premiums Receivable, net, Retrospective Commissions Receivable and Other Receivables: The carrying amounts approximate fair value since no interest rate is charged on these short duration assets. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Due from Brokers, Dealers, and Trustees and Due to Brokers, Dealers and Trustees: The carrying amounts are included in other assets and other liabilities and accrued expenses and approximate their fair value due to their short term nature. Categorized under Level 2 in the fair value hierarchy.

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Liability for Unpaid Claims and Claim Adjustment Expenses

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Liability for Unpaid Claims and Claim Adjustment Expenses

Liability for Unpaid Claims and Claim Adjustment Expenses

The following tables present undiscounted information about incurred and paid claims development as of December 31, 2020 and 2019, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. This information is presented in the aggregate for all short duration contracts, due to the commonality of claims characteristics. The tables reflect five years of information because historically approximately 95% of incurred losses have been paid within five years of the accident period.

Roll forward of Claim Liability

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:

	For the Year Ended December 31,
	2020		2019
Policy liabilities and unpaid claims balance as of January 1,	$	144,384	$	131,611
Less: liabilities of policy-holder account balances, gross	(11,589)		(13,659)
Less: non-insurance warranty benefit claim liabilities	(85)		(94)
Gross liabilities for unpaid losses and loss adjustment expenses	132,710		117,858
Less: reinsurance recoverable on unpaid losses - short duration	(88,599)		(90,016)
Less: other lines, gross	(230)		(227)
Net balance as of January 1, short duration	43,881		27,615
Incurred (short duration) related to:
Current year	172,007		144,925
Prior years	5,443		5,169
Total incurred	177,450		150,094
Paid (short duration) related to:
Current year	127,721		122,348
Prior years	9,665		11,480
Total paid	137,386		133,828
Net balance as of December 31, short duration	83,945		43,881
Plus: reinsurance recoverable on unpaid losses - short duration	113,163		88,599
Plus: other lines, gross	247		230
Gross liabilities for unpaid losses and loss adjustment expenses	197,355		132,710
Plus: liabilities of policy-holder account balances, gross	5,419		11,589
Plus: non-insurance warranty benefit claim liabilities (1)	30,664		85
Policy liabilities and unpaid claims balance as of December 31,	$	233,438	$	144,384

(1)    Primarily relates to Smart AutoCare which was acquired on January 3, 2020. See Note (3) Acquisitions for more information.

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:

	For the Year Ended December 31,
	2020		2019		2018
Short duration incurred	$	177,450	$	150,094	$	131,861
Other lines incurred	27		184		124
Unallocated loss adjustment expenses	771		731		2,867
Total losses incurred	$	178,248	$	151,009	$	134,852

During the year ended December 31, 2020, the Company experienced an increase in prior year development of $5,443 primarily as a result of higher than expected claim frequency from business written by a small group of producers of our personal and commercial lines of business. The underlying cause of this development was the result of a subset of risk where the loss ratio pegs used in our year end actuarial determination was low given the ultimate frequency that emerged.

During the year ended December 31, 2019, the Company experienced an increase in prior year development of $5,169 primarily in our non-standard auto business. The underlying cause of this development was higher than expected claim frequency.

Management considers the prior year development for each of the two years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses. We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represents the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

Incurred and Paid Development

The following table presents information about incurred and paid loss development and average claim duration as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated count of unreported claims. The number of claims is measured by claim event. The Company considers a claim that does not result in a liability as a claim closed without payment.            

Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2020
	For the Years Ended December 31,										Total of IBNR Liabilities Plus Expected Development of Reported Claims		Cumulative Number of Reported Claims
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	$	84,178	$	87,290	$	87,993	$	88,615	$	89,629	$	17	257
2017			103,306		104,898		105,601		105,787		$	96	326
2018					129,352		133,225		133,158		$	2,366	399
2019							144,925		149,166		$	15,572	403
2020									172,007		$	52,734	328
							Total		$	649,747
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	62,989		$	84,185	$	86,531	$	88,482	$	88,976
2017			84,493		102,620		105,075		105,852
2018					105,740		112,619		114,490
2019							122,348		128,787
2020									127,721
							Total		$	565,826
All outstanding liabilities before 2016, net of reinsurance									24
Liabilities for loss and loss adjustment expenses, net of reinsurance									$	83,945

Duration

The following table presents supplementary information about average historical claims duration as of December 31, 2020 for short duration contracts:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years	1	2	3	4	5
Short duration	77.2%	12.6%	2.1%	1.5%	0.6%

Reconciliation of Reserves to Balance Sheet

The following table presents a reconciliation of net outstanding liabilities for unpaid loss and loss adjustment expenses of short-duration contracts to the consolidated balance sheets value of policy liabilities and unpaid claims:

	As of
	December 31, 2020
Net outstanding liabilities:
Short duration	$	83,945
Insurance lines other than short duration	67
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance	84,012
Reinsurance recoverable on unpaid losses and loss adjustment expenses:
Short duration	113,163
Other insurance lines	180
Total reinsurance recoverable on unpaid losses and loss adjustment expenses	113,343
Total gross liability for unpaid losses and loss adjustment expenses	197,355
Liabilities of policy-holder account balances, gross	5,419
Non-insurance warranty benefit claim liabilities	30,664
Total policy liabilities and unpaid claims	$	233,438

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Revenue From Contracts with Customers

12 Months Ended

Dec. 31, 2020

Revenue Recognition [Abstract]

Revenue From Contracts with Customers

Revenue from Contracts with Customers

The Company’s revenues from insurance and warranty operations are primarily accounted for under Financial Services-Insurance (Topic 944) that are not within the scope of Revenue for Contracts with Customers (Topic 606). The Company’s remaining revenues that are within the scope of Topic 606 are primarily comprised of revenues from contracts with customers for monthly membership dues for motor clubs, monthly administration fees for services provided for premiums, claims and reinsurance processing revenues, vehicle service contracts and warranty coverage revenues for household goods and appliances (collectively, remaining contracts).

The following table presents the disaggregated amounts of revenue from contracts with customers by product type for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Motor club revenue	$	36,159	$	36,076	$	32,242
Warranty coverage revenue	98,574		27,597		26,058
Vessel related revenue	22,697		16,747		3,972
Management fee income	—		1,267		6,694
Other	6,127		7,317		7,840
Revenue from contracts with customers	$	163,557	$	89,004	$	76,806

Service and Administrative Fees

Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable.

Administrative fee revenue includes the administration of premium associated with our producers and their producer owned reinsurance companies (PORCs). In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the

appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Information on Remaining Performance Obligations

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2020.

Contract Balances

The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.

Charter Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on the straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date.

Management Fees

The Company earned management fee income in the form of base management fees and incentive fees from the CLOs it managed. These base management fees were billed as the services were provided and paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Base management fees typically consisted of fees based on the amount of assets held in the CLOs. Base management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed.

The following table presents the activity in the significant deferred assets and liabilities related to revenue from contracts with customers for the following period:

	January 1, 2020						December 31, 2020
	Beginning balance		Additions		Amortizations		Ending balance
Deferred acquisition costs
Motor club revenue	$	13,700	$	27,014	$	27,633	$	13,081
Warranty coverage revenue	1,027		58,906		11,199		48,734
Total	$	14,727	$	85,920	$	38,832	$	61,815

Deferred revenue
Motor club revenue	$	17,910	$	35,218	$	36,159	$	16,969
Warranty coverage revenue (1)	49,368		405,537		106,514		$	348,391
Total	$	67,278	$	440,755	$	142,673	$	365,360

(1)    Additions include $182,568 from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

Write-offs were not material for any period presented.

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Other Assets and Other Liabilities and Accrued Expenses

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets and Other Liabilities and Accrued Expenses

Other Assets and Other Liabilities and Accrued Expenses

Other Assets

The following table presents the components of other assets as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Right of use asset - Operating leases (1)	$	27,291	$	23,832
Furniture, fixtures and equipment, net	15,798		12,305
Income tax receivable	19,513		817
Mortgage servicing rights	14,758		8,764
Prepaid expenses	8,159		8,461
Loans eligible for repurchase	70,593		6,733
Other	5,922		7,598
Total other assets	$	162,034	$	68,510

(1)    See Note (21) Commitments and Contingencies for additional information.

The following table presents the depreciation expense related to furniture, fixtures and equipment for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Depreciation expense related to furniture, fixtures and equipment	$	3,257	$	2,753	$	1,984

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Other Liabilities and Accrued Expenses

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Liabilities and Accrued Expenses

Other Liabilities and Accrued Expenses

The following table presents the components of other liabilities and accrued expenses as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Accounts payable and accrued expenses	$	106,142	$	68,829
Operating lease liability (1)	32,914		29,491
Deferred tax liabilities, net	24,183		32,306
Securities sold, not yet purchased	46,637		—
Due to brokers	45,047		1,140
Loans eligible for repurchase liability	70,593		6,733
Commissions payable	18,678		9,179
Other	18,671		24,462
Total other liabilities and accrued expenses	$	362,865	$	172,140

(1)    See Note (21) Commitments and Contingencies for additional information.

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Other Revenue, Other Expenses and Other Income

12 Months Ended

Dec. 31, 2020

Other Income and Expenses [Abstract]

Other Revenue, Other Expenses and Other Income

Other Revenue and Other Expenses

Other Revenue

The following table presents the components of other revenue as reported in the consolidated statement of operations. Other revenue is primarily generated by Tiptree Capital’s non-insurance activities except as noted in the footnote to the table.

	For the Year Ended December 31,
	2020		2019		2018
Other investment income (1)	$	48,747	$	45,985	$	25,541
Gain (loss) on sale of businesses (2)	(4,428)		7,598		—
Management fee income	—		1,267		6,694
Other (3)	7,591		5,038		5,827
Total other revenue	$	51,910	$	59,888	$	38,062

(1)    See Note (6) Investments for the components of Other investment income.

(2)    Related to the impairment of Luxury for the year ended December 31, 2020, and the sale of Telos for the year ended December 31, 2019. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

(3)    Includes $7,025, $4,566 and $2,554 for the year ended December 31, 2020, 2019 and 2018, respectively, related to Insurance.

Other Expenses

The following table presents the components of other expenses as reported in the consolidated statement of operations:

	For the Year Ended December 31,
	2020		2019		2018
Professional fees	$	20,711	$	20,820	$	15,216
General and administrative	22,295		18,563		16,218
Premium taxes	15,824		15,205		14,026
Mortgage origination expenses	14,603		12,200		8,857
Rent and related	14,074		12,642		11,114
Operating expenses from vessels	13,210		9,781		3,777
Loss on extinguishment of debt	353		1,241		428
Other	8,078		9,292		8,265
Total other expenses	$	109,148	$	99,744	$	77,901

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Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock Repurchases

On November 2, 2020, the Board of Directors authorized the Company to make repurchases of up to $20,000 of shares of the Company’s outstanding common stock in the aggregate, at the discretion of the Company's Executive Committee. The shares purchased during the first, second and third quarters of 2020 were purchased under a previous authorization. The following table presents the Company’s stock repurchase activity and remaining authorization.

	For the Year Ended December 31, 2020
	Number of shares purchased	Average price per share
Share repurchase plan	1,884,286	$	5.51
Block repurchase	500,000	7.00
Total	2,384,286	$	5.82
Remaining repurchase authorization		$	16,571

Dividends

The Company declared cash dividends per share for the following periods presented below:

	Dividends per share for the
	For the Year Ended December 31,
	2020		2019		2018
First quarter	$	0.04	$	0.04	$	0.035
Second quarter	0.04		0.04		0.035
Third quarter	0.04		0.04		0.035
Fourth quarter(1)	0.04		0.04		0.035
Total cash dividends declared	$	0.16	$	0.16	$	0.140

(1)    See Note (25) Subsequent Events for when dividend was declared.

Reorganization Merger

On April 10, 2018, the Company completed a reorganization merger whereby TFP merged with and into the Company with the Company continuing as the surviving company (Reorganization Merger). After the Reorganization Merger, TFP ceased to

exist and the Company owned 100% of Operating Company. As a result of the merger, the balance of Non-controlling interest - TFP as of the merger date was allocated to Additional paid-in capital and Accumulated other comprehensive income (loss), as detailed in the consolidated statement of changes in stockholders’ equity.

In connection with the Reorganization Merger, each TFP limited partner other than Tiptree received 2.798 shares of Class A common stock for each partnership unit, 6,861,561 Class A common shares were issued, and all outstanding Class B common stock was canceled. Outstanding warrants to acquire 652,500 shares of Class A common stock at an exercise price of $11.33 per share owned by TFP were canceled. In addition, warrants to acquire 103,994 shares of Class A common stock at an exercise price of $11.33 were issued to partners of TFP other than Tiptree, and expired unexercised on December 31, 2018. Warrants to acquire 805,986 TFP LP units at $21.232 per unit were canceled and Tiptree issued warrants for 2,255,149 Tiptree shares of Class A common stock at an exercise price of $7.59 per share to holders of the canceled TFP warrants.

On April 16, 2018, the Company canceled 5,035,977 shares of Class A common stock held by a subsidiary of the Company,

which had no effect on total Tiptree Inc. stockholders’ equity.

At the 2018 Annual Meeting of Stockholders of the Company held on June 6, 2018, the Company’s stockholders approved an

amendment and restatement (the Amendment) to the Fourth Articles of Amendment and Restatement of the Company (as amended by the Amendment, the Fifth A&R Charter) to remove all references to the Company’s Class B common stock as well as other ministerial changes, including changing the name of our Class A common stock to Common Stock. The Amendment was filed with the State Department of Assessments and Taxation of Maryland on June 7, 2018.

Statutory Reporting and Insurance Company Subsidiaries Dividend Restrictions

The Company’s U.S. insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles (SAP) prescribed or permitted by the insurance departments of their states of domicile. Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (the NAIC) as well as state laws, regulations and administrative rules.

Statutory Capital, Surplus and Net Income

The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required by regulatory authorities, including the NAIC; their capital and surplus levels exceeded respective minimum requirements as of December 31, 2020 and December 31, 2019.

	As of December 31,
	2020		2019
Combined statutory capital and surplus of the Company's insurance company subsidiaries	$	202,710	$	134,179
Required minimum statutory capital and surplus	$	64,950	$	17,950

Under the National Association of Insurance Commissioners Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's U.S. domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of December 31, 2020.

The following table presents the statutory net income of the Company’s U.S. domiciled statutory insurance companies for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income of statutory insurance companies	$	19,647	$	8,444	$	13,986

The Company also has a foreign insurance subsidiary that is not subject to SAP. The statutory capital and surplus amounts and statutory net income presented above do not include the foreign insurance subsidiary in accordance with SAP.

Statutory Dividends

The Company’s U.S. domiciled insurance company subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance department of the applicable state of domicile. The Company eliminates all dividends from its subsidiaries in the consolidated financial statements. The following table presents the dividends paid to the Company by its U.S domiciled insurance company subsidiaries and the combined amount available for ordinary dividends of the Company's U.S. domiciled insurance company subsidiaries for the following periods:

	For the Year Ended December 31,
	2020		2019
Ordinary dividends	$	—	$	9,001
Extraordinary dividends	—		1,188
Total dividends	$	—	$	10,189
	As of
	December 31, 2020		December 31, 2019
Amount available for ordinary dividends of the Company's insurance company subsidiaries	$	13,418	$	4,527

At December 31, 2020, the maximum amount of dividends that our U.S. domiciled regulated insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately $13,418. The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.

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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following table presents the activity in accumulated other comprehensive income (loss) (AOCI), net of tax, for the following periods:

	Unrealized gains (losses) on						Amount attributable to non-controlling interests
	Available for sale securities		Interest rate swaps		Total AOCI (loss)		TFP		Other		Total AOCI (loss) to Tiptree Inc.
Balance at December 31, 2017	$	(460)	$	2,074	$	1,614	$	(222)	$	(426)	$	966
Other comprehensive income (losses) before reclassifications	(2,257)		835		(1,422)		61		211		(1,150)
Amounts reclassified from AOCI	648		—		648		—		—		648
Reclassification of AOCI - interest rate swaps (1)	—		(2,909)		(2,909)		502		226		(2,181)
Reorganization merger	—		—		—		(341)		—		(341)
Period change	(1,609)		(2,074)		(3,683)		222		437		(3,024)
Balance at December 31, 2018	$	(2,069)	$	—	$	(2,069)	$	—	$	11	$	(2,058)
Other comprehensive income (losses) before reclassifications	4,911		—		4,911		—		(24)		4,887
Amounts reclassified from AOCI	(1,032)		—		(1,032)		—		—		(1,032)
Period change	3,879		—		3,879		—		(24)		3,855
Adoption of accounting standard (1)	(99)		—		(99)				—		(99)
Balance at December 31, 2019	$	1,711	$	—	$	1,711	$	—	$	(13)	$	1,698
Other comprehensive income (losses) before reclassifications	4,364		—		4,364		—		(15)		4,349
Amounts reclassified from AOCI	(415)		—		(415)		—		—		(415)
Period change	3,949		—		3,949		—		(15)		3,934
Adoption of accounting standard (1)	42		—		42		—		—		42
Balance at December 31, 2020	$	5,702	$	—	$	5,702	$	—	$	(28)	$	5,674

(1)    Due to adoption of 2018-02 and 2016-13, respectively. See Note (2) Summary of Significant Accounting Policies.

The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the consolidated statement of operations for the following periods:

	For the Year Ended December 31,						Affected line item in consolidated statements of operations
Components of AOCI	2020		2019		2018
Unrealized gains (losses) on available for sale securities	$	528	$	1,312	$	(819)	Net realized and unrealized gains (losses)
Related tax (expense) benefit	(113)		(280)		171		Provision for income tax
Net of tax	$	415	$	1,032	$	(648)
Reclassification of AOCI - interest rate swaps (1)	$	—	$	—	$	3,845	Gain on sale of discontinued operations
Related tax (expense) benefit	—		—		(936)		Provision for income tax
Net of tax	$	—	$	—	$	2,909

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Stock Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Based Compensation

Stock Based Compensation

Equity Plans

2017 Omnibus Incentive Plan

The Company adopted the Tiptree 2017 Omnibus Incentive Plan (2017 Equity Plan) on June 6, 2017, which permits the grant of restricted stock units (RSUs), stock, and stock options up to a maximum of 6,100,000 shares of common stock. The general purpose of the 2017 Equity Plan is to attract, motivate and retain selected employees and directors for the Company and its subsidiaries, to provide them with incentives and rewards for performance and to better align their interests with the

interests of the Company’s stockholders. Unless otherwise extended, the 2017 Equity Plan terminates automatically on June 6, 2027. The table below summarizes changes to the issuances under the Company’s 2017 Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

2017 Equity Plan	Number of shares (1)
Available for issuance as of December 31, 2017	6,017,012
RSU and option awards granted	(558,034)
Forfeited	15,236
Available for issuance as of December 31, 2018	5,474,214
RSU and option awards granted	(702,264)
Forfeited	8,318
Subsidiary exchanged shares	(14,405)
Available for issuance as of December 31, 2019	4,765,863
RSU, stock and option awards granted	(977,446)
Available for issuance as of December 31, 2020	3,788,417

(1)    Excludes awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock.

Restricted Stock Units and Stock Awards

Tiptree Corporate Incentive Plans

The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price. Generally, the Tiptree RSUs vest and become non-forfeitable with respect to one-third of Tiptree shares granted on each of the one, two and three year anniversaries of the date of the grant, and expensed using the straight-line method over the requisite service period.

Stock Awards - Directors’ Compensation

The Company values the stock awards at their issuance-date fair value as measured by Tiptree’s common stock price. Upon issuance, the awards are deemed to be granted and immediately vested.

The following table presents changes to the issuances of RSUs and stock awards under the 2017 Equity Plan for the periods indicated:

	Number of shares issuable	Weighted average grant date fair value
Unvested units as of December 31, 2017	598,882	$	6.48
Granted	315,371	5.95
Vested	(222,387)	6.39
Forfeited	(15,236)	6.04
Unvested units as of December 31, 2018	676,630	$	6.27
Granted	476,449	6.25
Vested	(186,152)	6.44
Forfeited	(8,318)	6.10
Unvested units as of December 31, 2019	958,609	$	6.23
Granted	552,169	7.04
Vested	(557,633)	6.54
Unvested units as of December 31, 2020	953,145	$	6.52

The following tables present the detail of the granted and vested RSUs and stock awards for the periods indicated:

	For the Year Ended December 31,				For the Year Ended December 31,
Granted	2020	2019	2018	Vested	2020	2019	2018
Directors	82,912	48,076	46,572	Directors	82,912	48,076	46,572
Employees (1)	469,257	428,373	268,799	Employees	474,721	138,076	175,815
Total Granted	552,169	476,449	315,371	Total Vested	557,633	186,152	222,387
				Taxes	(53,438)	(35,622)	(29,286)
				Exchanged	—	14,405	—
				Net Vested	504,195	164,935	193,101

(1)    Includes 256,619, 307,148 and 147,467 shares that vest ratably over three years and 212,638, 112,907 and 121,332 shares that cliff vest in February 2023, 2022 and 2021, respectively, for the years ended December 31, 2020, 2019 and 2018, respectively.

Subsidiary Incentive Plans

Certain of the Company’s subsidiaries have established incentive plans under which they are authorized to issue equity of those subsidiaries to certain of their employees. Such awards are accounted for as equity. These awards are subject to performance-vesting criteria based on the performance of the subsidiary (performance vesting awards) and time-vesting subject to continued employment (time vesting awards). Following the service period, such vested awards may be exchanged at fair market value, at the option of the holder, for Tiptree common stock under the 2017 Equity Plan. The service period for certain grants has been achieved and those vested subsidiary awards are currently eligible for exchange. The Company has the option, but not the obligation to settle the exchange right in cash.

The following table presents changes to the issuances of subsidiary awards under the subsidiary incentive plans for the periods indicated:

	Grant date fair value of equity shares issuable
Unvested balance as of December 31, 2017	$	8,792
Granted	1,113
Vested	(1,771)
Performance assumption adjustment	576
Unvested balance as of December 31, 2018	$	8,710
Granted	—
Vested	(4,991)
Performance assumption adjustment	560
Unvested balance as of December 31, 2019	$	4,279
Granted	1,108
Vested	(4,237)
Performance assumption adjustment	3,155
Unvested balance as of December 31, 2020	$	4,305

The net vested and unvested balance of subsidiary awards (assuming full vesting) translates to an aggregate of 2,954,566 which are eligible for exchange as of December 31, 2020.

Stock Option Awards

Tiptree Corporate Incentive Plans

Option awards have been granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant. The option awards have a 10-year term and are subject the recipient’s continuous service, a market requirement, and vest one third on each of the three, four, and five year anniversaries of the grant date. The market requirement is a book value per share target that can be met at any time before the option expires and it only needs to be met once for the option to remain exercisable for the remainder of its term. If the service condition is met, the full amount of the compensation expense will be recognized over the appropriate vesting period whether the market requirement is met or not. The options granted after 2017 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date. Book value targets for grants in 2020, 2019, 2018, 2017 and 2016 are $11.52, $10.79, $9.97, $10.14 and $8.96, respectively.

The fair value option grants are estimated on the date of grant using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved. Historical volatility was computed based on historical daily returns of the Company’s stock between the grant date and July 1, 2013, the date of the business combination through which Tiptree became a public company. The valuation is done under a risk-neutral framework using the 10-year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date. The current quarterly dividend rates in effect as of the date of the grant are used to calculate a spot dividend yield as of the date of grant for use in the model.

The following table presents the assumptions used to estimate the fair values of the stock options granted for the following periods:

	Year Ended December 31,
Valuation Input	2020		2019
	Assumption	Average	Assumption	Average
Historical volatility	27.60%	N/A	27.69%	N/A
Risk-free rate	1.51%	N/A	2.62%	N/A
Dividend yield	2.20%	N/A	2.21%	N/A
Expected term (years)		7.0		6.5

The following table presents the Company's stock option activity for the current period:

	Options outstanding	Weighted average exercise price (in dollars per stock option)		Weighted average grant date value (in dollars per stock option)		Options exercisable
Balance, December 31, 2017	821,864	$	6.36	$	2.82	—
Granted	242,663	5.85		1.88		—
Balance, December 31, 2018	1,064,527	$	6.24	$	2.61	—
Granted	225,815	6.26		1.69		—
Balance, December 31, 2019	1,290,342	$	6.24	$	2.45	—
Granted	425,277	7.25		1.83		—
Balance, December 31, 2020	1,715,619	$	6.49	$	2.29	—
Weighted average remaining contractual term at December 31, 2020 (in years)	7.1

Stock Based Compensation Expense

The following table presents total stock based compensation expense and the related income tax benefit recognized on the consolidated statements of operations:

	Year Ended December 31,
	2020		2019		2018
Employee compensation and benefits	$	7,571	$	6,062	$	6,354
Director compensation	546		301		303
Income tax benefit	(1,705)		(1,374)		(1,438)
Net stock based compensation expense	$	6,412	$	4,989	$	5,219

Additional information on total non-vested stock based compensation is as follows:

	As of
	December 31, 2020
	Stock options		Restricted stock awards and RSUs
Unrecognized compensation cost related to non-vested awards	$	521	$	4,551
Weighted - average recognition period (in years)	1.27		1.43

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents the Company’s provision (benefit) for income taxes reflected as a component of income (loss):

	Year Ended December 31,
	2020		2019		2018
Current provision (benefit) for income taxes:
Federal	$	(26,273)	$	991	$	(9,650)
State	1,692		386		(1,182)
Foreign	221		825		754
Total current provision (benefit) for income taxes	(24,360)		2,202		(10,078)
Deferred provision (benefit) for income taxes:
Federal	10,415		6,502		4,110
State	697		335		59
Foreign	(379)		(22)		—
Total deferred provision (benefit) for income taxes	10,733		6,815		4,169
Total provision (benefit) for income taxes from continuing operations	$	(13,627)	$	9,017	$	(5,909)
Provision (benefit) for income taxes from discontinued operations	—		—		13,714
Total provision (benefit) for income taxes	$	(13,627)	$	9,017	$	7,805

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses. During the year ended December 31, 2020, the Company recorded a $7,293 tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $16,795 and an increase to our current receivable of $24,088. The Company continues to assess the potential tax impacts of this legislation on its financial position and results of operations.

The U.S. federal rate is before the consideration of rate reconciling items. A reconciliation of the expected federal provision (benefit) for income taxes on income from continuing operations using the federal statutory income tax rate to the actual provision (benefit) for income taxes and resulting effective income tax rate is as follows for the periods indicated below:

	Year Ended December 31,
	2020			2019			2018
Income (loss) before income taxes from continuing operations	$	(38,852)		$	29,139		$	(19,796)
Federal statutory income tax rate	21.0		%	21.0		%	21.0		%
Expected federal provision (benefit) for income taxes at the federal statutory income tax rate	(8,159)			6,119			(4,157)
Effect of state provision (benefit) for income taxes, net of federal benefit	1,929			549			(471)
Effect of CARES Act refund claims	(7,293)			—			—
Effect of foreign operations	(938)			440			1,053
Effect of permanent differences	62			(30)			170
Effect of dividends received deduction	(26)			(29)			(1,534)
Effect of return-to-accrual	330			1,524			(404)
Effect of other items	468			444			(566)
Tax (benefit) on income from continuing operations	$	(13,627)		$	9,017		$	(5,909)
Effective tax rate	35.1		%	31.0		%	29.9		%

For the year ended December 31, 2020, the Company’s effective tax rate on income from continuing operations was equal to 35.1%. The effective tax rate for the year ended December 31, 2020 is higher than the U.S. statutory income tax rate of 21.0% primarily from the impact of expected refunds arising from the CARES Act.

For the year ended December 31, 2019, the Company’s effective tax rate on income from continuing operations was equal to 31%. The effective tax rate for the year ended December 31, 2019 is higher than the U.S. statutory income tax rate of 21.0% primarily due to the non-recurring return-to-provision, as well as ongoing state and foreign taxes.

For the year ended December 31, 2018, the Company’s effective tax rate on losses from continuing operations was equal to 29.9%. The effective tax rate for the year ended December 31, 2018 is higher than the U.S. statutory income tax rate of 21.0% primarily due to the dividends received deduction, offset by the effect of foreign operations.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	26,404	$	17,384
Unrealized losses	25,527		4,242
Accrued expenses	3,560		5,470
Unearned premiums	25,626		14,189
Deferred revenue	7,042		6,301
Other deferred tax assets	7,091		5,720
Total deferred tax assets	95,250		53,306
Less: Valuation allowance	(6,871)		(4,961)
Total net deferred tax assets	88,379		48,345
Deferred tax liabilities:
Property	2,697		1,554
Unrealized gains	17,968		6,005
Other deferred tax liabilities	4,057		3,370
Deferred acquisition cost	47,061		35,066
Advanced commissions	30,977		25,392
Intangibles	10,741		9,264
Total deferred tax liabilities	113,501		80,651
Net deferred tax liability (1)	$	25,122	$	32,306
(1) Includes $939 classified as held for sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

As of January 2016, Tiptree has established a U.S. federal consolidated income tax group and as such files on a consolidated basis, with certain exceptions such as a Fortegra life insurance company and Luxury. Tiptree consolidated, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations. Additionally, as needed the Company will take all necessary steps to comply with any income tax withholding requirements.

As of December 31, 2020, the Company had total U.S. Federal net operating loss carryforwards (NOLs) of $70,803 arising from continuing operations. The following table presents the U.S. Federal NOLs by tax year of expiration:

	As of December 31, 2020
Tax Year of Expiration
2026	$	86
2027	124
2028	—
2029	166
2030	17
2031	—
2032	—
2033	—
2034	1,893
2035	562
2036	39,862
2037	1,766
2038	—
Indefinite	26,327
Total	$	70,803

In addition to the U.S. Federal NOL, Tiptree and its subsidiaries have NOLs in various state jurisdictions totaling $11,446 as of December 31, 2020. Valuation allowances have been established for various state deferred tax assets of $6,871, which are primarily state NOLs, since management has concluded it is more likely than not they will expire unutilized based on existing positive and negative evidence. Management believes it is more likely than not the remaining NOLs and deferred tax assets will be utilized prior to their expiration dates.

As of December 31, 2020, the consolidated valuation allowance for Tiptree was $6,871. In 2020, the Company recorded a net increase in its valuation allowances equal to $1,910, compared to a net increase in its valuation allowance of $1,869 in 2019.

As of December 31, 2020, the Company had no material unrecognized tax benefits or accrued interest and penalties. This is consistent with the tax years ending December 31, 2019 and December 31, 2018. Federal tax years 2017 and onward are open for examination as of December 31, 2020.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

All leases are office space leases and are classified as operating leases that expire through 2031. Some of our office leases include the option to extend for up to 5 years or less at management’s discretion. Such extension options were not included in the measurement of the lease liability. Below is a summary of our right of use asset and lease liability as of December 31, 2020:

	As of
	December 31, 2020
Right of use asset - Operating leases	$	27,291
Operating lease liability	$	32,914
Weighted-average remaining lease term (years)	6.9
Weighted-average discount rate (1)	7.4		%

(1)    Discount rate was determined by applying available market rates to lease obligations based upon their term.

As of December 31, 2020, the approximate aggregate minimum future lease payments required for our lease liability over the remaining lease periods are as follows:

	December 31, 2020
2021	$	8,665
2022	7,740
2023	7,049
2024	6,176
2025	5,445
2026 and thereafter	16,091
Total minimum payments	51,166
Less: liabilities held for sale	(887)
Less: present value adjustment	(17,365)
Total	$	32,914

The following table presents rent expense for the Company’s office leases recorded on the consolidated statements of operations for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Rent expense for office leases (1)	$	7,374	$	8,612	$	7,519

(1) Includes lease expense of $509 and $385 for the years ended December 31, 2020 and 2019, respectively, for assets held for sale.

Litigation

The Company is a defendant in Mullins v. Southern Financial Life Insurance Co., which was filed in February 2006, in the Pike Circuit Court, in the Commonwealth of Kentucky. A class was certified in June 2010. At issue is the duration or term of coverage under certain disability and life credit insurance policies. The action alleges violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud and seeks compensatory and punitive damages, attorney fees and interest. To date, the court has not awarded sanctions in connection with Plaintiffs’ April 2012 Motion for Sanctions. In January 2015, the trial court issued an Order denying the Company’s motion to decertify the class, which was upheld on appeal. Following a February 2017 hearing, the court denied the Company’s Motion for Summary Judgment as to certain disability insurance policies. In January 2018, the court vacated its November 2017 order granting Company’s Motion for Summary Judgment as to the life certificates at issue with leave to refile. No trial or additional hearings are currently

scheduled.

The Company considers such litigation customary in the insurance industry. In management's opinion, based on information available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. At this time, the Company cannot estimate a range of loss that is reasonably possible.

The Company and its subsidiaries are parties to other legal proceedings in the ordinary course of business. Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company does not believe that these proceedings, either individually or in the aggregate, are likely to have a material adverse effect on the Company’s financial position.

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Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company calculates basic net income per share of common stock (common share) based on the weighted average number of common shares outstanding, which includes vested corporate RSUs. Unvested corporate RSUs have a non-forfeitable right to participate in dividends declared and paid on the Company’s common stock on an as vested basis and are therefore considered a participating security. The Company calculates basic earnings per share using the “two-class” method under which the income available to common stockholders is allocated to the unvested corporate RSUs.

Diluted net income attributable to common stockholders includes the effect of unvested subsidiaries’ RSUs, when dilutive. The assumed exercise of all potentially dilutive instruments are included in the diluted net income per common share calculation, if dilutive.

The following table presents a reconciliation of basic and diluted net income per common share for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income (loss) from continuing operations	$	(25,225)	$	20,122	$	(13,887)
Less:
Net income (loss) attributable to non-controlling interests	3,933		1,761		(612)
Net income allocated to participating securities	—		472		—
Net income (loss) attributable to common stockholders	(29,158)		17,889		(13,275)
Net income (loss) from discontinued operations	—		—		43,770
Less:
Net income (loss) from discontinued operations attributable to non-controlling interests	—		—		6,562
Net income (loss) from discontinued operations attributable to common stockholders	—		—		37,208
Net income (loss) attributable to common shares - basic	$	(29,158)	$	17,889	$	23,933
Effect of Dilutive Securities:
Securities of subsidiaries	—		(723)		—
Net income (loss) attributable to common shares - diluted	$	(29,158)	$	17,166	$	23,933
Weighted average number of shares of common stock outstanding - basic	33,859,775		34,578,292		34,715,852
Weighted average number of incremental shares of common stock issuable from exchangeable interests and contingent considerations	—		—		—
Weighted average number of shares of common stock outstanding - diluted	33,859,775		34,578,292		34,715,852
Basic:
Net income (loss) from continuing operations	$	(0.86)	$	0.52	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Basic net income (loss) attributable to common shares	$	(0.86)	$	0.52	$	0.69
Diluted:
Net income (loss) from continuing operations	$	(0.86)	$	0.50	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Diluted net income (loss) attributable to common shares	$	(0.86)	$	0.50	$	0.69

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Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Corvid Peak is a related party of the Company because Corvid Peak is deemed to be controlled by Michael Barnes, the Company’s Executive Chairman. Tiptree agreed to invest $75,000 to seed new investment funds to be managed by Corvid Peak, which was completely funded in the first quarter of 2020. The Company will pay Corvid Peak an annual management fee of 1.25% of the net asset value of invested capital and an incentive fee equal to 20% of the net profits, subject to a conventional high water mark. The Company incurred $2,792 and $1,006 of management and incentive fees to Corvid Peak for the year ended December 31, 2020 and 2019, respectively.

Pursuant to the Transition Services Agreement, Tiptree and Corvid Peak have mutually agreed to provide certain services to one another. Payments under the Transition Services Agreement in the year ended December 31, 2020 and 2019 were not material.

Pursuant to the Emeritus Agreement, Tiptree agreed to provide Mr. Inayatullah, a greater than 5% stockholder of the Company, office space and support services, and reimburse Mr. Inayatullah for a portion of benefit expenses in exchange for advice and other consulting services as requested by the Company’s Executive Committee. Transactions related to the Emeritus Agreement in the year ended December 31, 2020 were not material.

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Subsequent Events	12 Months Ended
	Dec. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn March 9, 2021, the Company’s board of directors declared a quarterly cash dividend of $0.04 per share to holders of common stock with a record date of March 22 2021, and a payment date of March 29, 2021.

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Summarized Quarterly Information (Unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Summarized Quarterly Information (Unaudited)

Summarized Quarterly Information (Unaudited)

	2020
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	129,671	$	199,194	$	224,041	$	257,395
Total expenses	211,422		194,760		210,144		232,827
Income (loss) before taxes	(81,751)		4,434		13,897		24,568
Less: provision (benefit) for income taxes	(21,181)		(5)		(844)		8,403
Net income (loss)	(60,570)		4,439		14,741		16,165
Less: net income (loss) attributable to non-controlling interests	(563)		623		1,978		1,895
Net income (loss) attributable to common stockholders	$	(60,007)	$	3,816	$	12,763	$	14,270
Net (loss) income per Common Share:
Basic earnings per share	$	(1.74)	$	0.11	$	0.37	$	0.42
Diluted earnings per share	$	(1.74)	$	0.10	$	0.35	$	0.40
Weighted average number of Common Shares:
Basic	34,566,330		33,984,195		33,684,301		33,213,307
Diluted	34,566,330		33,984,195		33,684,301		33,213,307

	2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	183,903	$	191,072	$	189,185	$	208,568
Total expenses	178,748		175,367		190,783		198,691
Income (loss) before taxes	5,155		15,705		(1,598)		9,877
Less: provision (benefit) for income taxes	854		3,501		(649)		5,311
Net income (loss)	4,301		12,204		(949)		4,566
Less: net income (loss) attributable to non-controlling interests	376		458		508		419
Net income (loss) attributable to common stockholders	$	3,925	$	11,746	$	(1,457)	$	4,147
Net (loss) income per Common Share:
Basic earnings per share	$	0.11	$	0.33	$	(0.04)	$	0.12
Diluted earnings per share	$	0.11	$	0.32	$	(0.04)	$	0.11
Weighted average number of Common Shares:
Basic	34,673,054		34,527,230		34,552,171		34,562,219
Diluted	34,673,054		34,527,230		34,552,171		34,578,357

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Schedule II- Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure

Schedule II — Condensed Financial Information of Registrant

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Revenues
Interest income (1)	$	223	$	—	$	137
Other revenue	232		—		10
Total revenues	455		—		147
Expenses
Employee compensation and benefits	15,195		—		—
Interest expense	4,681		—		—
Professional fees	4,476		—		—
Rent and facilities	2,094		—		—
General and administrative	1,259		—		—
Depreciation and amortization	807		—		—
Loss on extinguishment of debt	353		—		—
Other expenses	1,513		3		30
Total expenses	30,378		3		30
Equity in earnings (losses) of subsidiaries, net of tax (2)	(24,855)		18,364		(13,392)
Income (loss) before taxes	(54,778)		18,361		(13,275)
Less: provision (benefit) for income taxes	(25,620)		—		—
Net income (loss)	(29,158)		18,361		(13,275)
Discontinued operations:
Income from discontinued operations, net of tax and non-controlling interest	—		—		414
Gain on sale of discontinued operations, net of tax and non-controlling interest	—		—		36,794
Discontinued operations, net of tax and non-controlling interest	—		—		37,208
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933

(1)    Eliminated in consolidation for the period ending December 31, 2018 only.

(2)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED BALANCE SHEETS
(All amounts in thousands, except share data)	As of December 31,
	2020		2019
Assets
Investment in subsidiaries (1)	$	337,951	$	397,395
Cash and cash equivalents	712		87
Notes and accounts receivable, net	2,622		—
Intercompany receivables, net (1)	—		—
Income taxes receivable	15,590		—
Deferred tax assets	44,161		—
Other assets	15,332		580
Total assets	$	416,368	$	398,062
Liabilities and Stockholders’ Equity
Liabilities
Deferred tax liabilities	$	23,889	$	—
Operating lease liability	12,241		—
Intercompany payables, net (1)	9,861		—
Accrued expenses	7,490		—
Other liabilities	6,743		—
Total liabilities	$	60,224	$	—
Stockholders' Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—	$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 32,682,462 and 34,562,553 shares issued and outstanding, respectively	33		35
Additional paid-in capital	315,014		326,140
Accumulated other comprehensive income (loss), net of tax	5,674		1,698
Retained earnings	35,423		70,189
Total stockholders’ equity	356,144		398,062
Total liabilities and stockholders' equity	$	416,368	$	398,062

(1)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Operating Activities:
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries(1)	24,855		(18,364)		(23,816)
Depreciation expense	807		—		—
Deferred provision (benefit) for income taxes	(15,815)		—		—
Non-cash lease expense	1,660		—		—
Non-cash compensation expense	3,110		—		—
Amortization of deferred financing costs	172		—		—
Changes in operating assets and liabilities
Changes in other operating assets and liabilities	1,264		(583)		4,772
Net cash provided by (used in) operating activities	(13,105)		(586)		4,889
Investing Activities:
Asset acquisitions due to merger with Operating Co.	488		—		—
Net cash flows provided by (used in) provided by investing activities	488		—		—
Financing Activities:
Distributions from subsidiaries (1)	35,092		14,587		—
Dividends paid	(5,565)		(5,502)		(4,781)
Repurchases of common stock	(13,889)		(9,085)		—
Subsidiary RSU exchanges	(2,034)		—		—
Vesting of share-based incentive compensation	(362)		—		—
Net cash provided by (used in) financing activities	13,242		—		(4,781)
Net increase (decrease) in cash and cash equivalents	625		(586)		108
Cash and cash equivalents at beginning of period	87		673		565
Cash and cash equivalents at end of period	$	712	$	87	$	673
Cash (received) paid for income taxes	$	(166)	$	2,168	$	(5,915)

(1)    Eliminated in consolidation.

Note 1. Basis of Presentation

Tiptree Inc. (together with its consolidated subsidiaries, collectively, Tiptree, the Company, or we) is a Maryland Corporation that was incorporated on March 19, 2007. Tiptree’s common stock trades on the Nasdaq Capital Market under the symbol “TIPT”. Tiptree is a holding company that combines specialty insurance operations with investment management capabilities. We allocate our capital across our insurance operations and other investments. We classify our business into two reportable segments: Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable segments and other business activities, as Tiptree Capital.

Pursuant to the terms discussed in Note—(11) Debt, net in the notes to consolidated financial statements, a secured corporate credit agreement of a subsidiary of Tiptree restricts that subsidiary’s ability to pay or make any dividend or distribution to Tiptree Inc. In addition, certain other subsidiaries’ activities are regulated, or subject to specific restriction on transfers as a result of financing arrangements. As a result of these restrictions, these condensed financial statements of the Registrant have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company's subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company's consolidated net assets as of December 31, 2020.

For the periods ending December 31, 2019 and 2018, the Company was a holding company without any operations of its own. On July 17, 2020, Operating Company merged into Tiptree, with Tiptree as the surviving entity (the Reorganization). In connection with the Reorganization, Operating Company contributed substantially all of its assets to Caroline Holdings LLC, a wholly owned subsidiary of Operating Company, which was renamed Tiptree Holdings LLC. Prior to the Reorganization, the Company was allocated itemized expenses of $2,000 related to operating as a public company from Operating Company for the six months ended June 30, 2020.

These condensed financial statements have been prepared on a "parent-only" basis. Under a parent-only presentation, the Parent Company's investments in subsidiaries are presented under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying condensed financial information should be read in conjunction with the Tiptree Inc. consolidated financial statements and related Notes thereto.

Note 2. Dividends Received

The Company received distributions of $35,092, $14,587 and $4,781 for the years ended December 31, 2020, 2019 and 2018, respectively.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Accounting

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of Tiptree have been prepared in accordance with GAAP and include the accounts of the Company and its subsidiaries. The consolidated financial statements are presented in U.S. dollars, the main operating currency of the Company.

Non-controlling interests on the consolidated balance sheets represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Tiptree. Accounts and transactions between consolidated entities have been

eliminated.

Reclassification, Comparability Adjustment [Policy Text Block]

As a result of changes in presentation, certain prior year amounts have been reclassified to conform to the current presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. Management makes estimates and assumptions that include, but are not limited to, the determination of the following significant items:

•Fair value of financial assets and liabilities, including, but not limited to, securities, loans and derivatives

•Value of acquired assets and liabilities;

•Carrying value of goodwill and other intangibles, including estimated amortization period and useful lives;

•Vessel valuations, residual value of vessels and the useful lives of vessels;

•Reserves for unpaid losses and loss adjustment expenses, estimated future claims and losses, potential litigation and other claims;

•Deferred acquisition costs and value of business acquired (VOBA);

•The realization of deferred tax assets, and recognition and measurement of uncertain tax positions;

•Revenue recognition including, but not limited to, the timing and amount of insurance premiums, service and administration fees, and loan origination fees; and

•Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements

Although these and other estimates and assumptions are based on the best available estimates, actual results could differ materially from management’s estimates.

Business Combinations

Business Combination Accounting

The Company accounts for business combinations by applying the acquisition method of accounting. The acquisition method requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at fair value as of the closing date of the acquisition. The net assets acquired may consist of tangible and intangible assets and the

excess of purchase price over the fair value of identifiable net assets acquired, or goodwill. The determination of estimated useful lives and the allocation of the purchase price to the intangible assets requires significant judgment and affects the amount of future amortization and possible impairment charges. Contingent consideration, if any, is measured at fair value on the date of acquisition. The fair value of any contingent consideration liability is remeasured at each reporting date with any change recorded in other expense in the consolidated statements of operations. Acquisition and transaction costs are expensed as incurred.

In certain instances, the Company may acquire less than 100% ownership of an entity, resulting in the recording of a non-controlling interest. The measurement of assets and liabilities acquired and non-controlling interest is initially established at a preliminary estimate of fair value, which may be adjusted during the measurement period, primarily due to the results of valuation studies applicable to the business combination.

Acquisitions that do not meet the criteria for the acquisition method of accounting are accounted for as acquisitions of assets.

Discontinued Operations

Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

The results of operations of a business that has either been disposed of or are classified as held for sale are reported in discontinued operations if the disposal of the business represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The Company carries assets and liabilities held for sale at the lower of carrying value on the date the asset is initially classified as held for sale or fair value less costs to sell. At the time of reclassification to held for sale, the Company ceases the recording of depreciation and amortization on assets transferred.

Accounting policies specific to our dispositions, assets and liabilities held for sale and discontinued operations are described in more detail in (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

Significant Accounting Policies Related to Dispositions and Discontinued Operations

Except as noted below, Care and our CLO management business adhered to the Significant Accounting Policies as described in Note (2) Summary of Significant Accounting Policies.

Investments

Revenue Recognition

Rental and Related Revenue

Rental revenue from residents in properties owned by Care but managed by a management company pursuant to a management agreement (Managed Properties) were recognized monthly as services were provided, as lease periods for residents were short-term in nature. The Company recognized rental revenue from triple net leases on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis was more representative of the time pattern in which the use benefit was derived from the leased property. Renewal options in leases with rental terms that were higher than those in the primary term were excluded from the calculation of straight-line rent if the renewals were not reasonably assured. The Company commenced rental revenue recognition when the tenant took control of the leased space. The Company recognized lease termination payments as a component of rental revenue in the period received, provided that there were no further obligations under the lease. Revenue related to rental revenue was primarily attributable to services provided to the occupants of our senior living properties.

Management Fee Income

The Company earned management and incentive fees from the CLOs it managed. These management fees were paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Management fees typically consisted of fees based on the amount of assets held in the CLOs. Management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed. Management fee income is recorded in other revenue.

Fair Value Measurement

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels, from highest to lowest, are defined as follows:

•Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 – Significant inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. The types of financial assets and liabilities carried at Level 2 are valued based on one or more of the following:

a) Quoted prices for similar assets or liabilities in active markets;

b) Quoted prices for identical or similar assets or liabilities in nonactive markets;

c) Pricing models whose inputs are observable for substantially the full term of the asset or liability;

d) Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

•Level 3 – Significant inputs that are unobservable inputs for the asset or liability, including the Company’s own data and assumptions that are used in pricing the asset or liability.

The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is traded on an active exchange or in the secondary market, and the current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy. In certain cases, the inputs used to measure fair value may fall into

different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Tiptree’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and the consideration of factors specific to the investment. From time to time, Tiptree’s assets and liabilities will transfer between one level to another level. It is Tiptree’s policy to recognize transfers between different levels at the end of each reporting period.

Tiptree utilizes both observable and unobservable inputs in its valuation methodologies. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. For broker quotes, quotes are obtained from sources recognized to be market participants. Unobservable inputs may include expected cash flow streams, default rates, supply and demand considerations and market volatility.

Fair Value Option

In addition to the financial instruments that the Company is required to measure at fair value, the Company has elected to make an irrevocable election to utilize fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in Net realized and unrealized gains (losses) within the consolidated statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected.

Fair Value of Financial Instruments

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs to the extent possible to measure a financial instrument’s fair value. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability, and are affected by the type of product, whether the product is traded on an active exchange or in the secondary market, as well as current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is estimated by applying the hierarchy discussed in Note (2) Summary of Significant Accounting Policies which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized within Level 3 of the fair value hierarchy.

The Company’s fair value measurements are based primarily on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable financial instruments. Sources of inputs to the market approach include third-party pricing services, independent broker quotations and pricing matrices. Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values. Further, management has a process in place to review all changes in fair value that occurred during each measurement period. Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.

The Company utilizes observable and unobservable inputs within its valuation methodologies. Observable inputs may include: benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. In addition, specific issuer information and other market data is used. Broker quotes are obtained from sources recognized to be market participants. Unobservable inputs may include: expected cash flow streams, default rates, supply and demand considerations and market volatility.

Available for Sale Securities, at fair value

The fair values of available for sale securities are based on prices provided by an independent pricing service and a third-party investment manager. The Company obtains an understanding of the methods, models and inputs used by the independent pricing service and the third-party investment manager by analyzing the investment manager-provided pricing report.

The following details the methods and assumptions used to estimate the fair value of each class of AFS securities and the applicable level each security falls within the fair value hierarchy:

U.S Treasury Securities, Obligations of U.S. Government Authorities and Agencies, Obligations of State and Political Subdivisions, Corporate Securities, Asset Backed Securities, and Obligations of Foreign Governments: Fair values were obtained from an independent pricing service and a third-party investment manager. The prices provided by the independent pricing service and third-party investment manager are based on quoted market prices, when available, non-binding broker quotes, or matrix pricing and fall under Level 2 or Level 3 in the fair value hierarchy.

Certificates of Deposit: The estimated fair value of certificates of deposit approximate carrying value and fall under Level 1 of the fair value hierarchy.

Equity Securities

The fair values of publicly traded common and preferred equity securities and exchange traded funds (“ETFs”) are obtained from market value quotations provided by an independent pricing service and fall under Level 1 in the fair value hierarchy. The fair values of non-publicly traded common and preferred stocks are based on prices obtained from an independent pricing service using unobservable inputs and fall under Level 3 in the fair value hierarchy.

Loans, at fair value

Corporate Loans: These loans are comprised of a diversified portfolio of middle market and broadly syndicated leveraged loans and are generally classified under either Level 2 or Level 3 in the fair value hierarchy. To determine fair value, the Company uses quoted prices which include those provided from pricing vendors, where available. We perform internal price verification procedures to ensure that the prices and quotes provided from the independent pricing vendors are reasonable. Such verification procedures include comparison of pricing sources and analysis of variances among pricing sources. The Company has evaluated each loan’s respective liquidity and has additionally performed valuation benchmarking. The key characteristics which were evaluated as part of this determination were liquidity ratings, price changes to index benchmarks, depth of quotes, credit ratings and industry trends.

Mortgage Loans Held for Sale: Mortgage loans held for sale are generally classified under Level 2 in the fair value hierarchy and fair value is based upon forward sales contracts with third-party investors, including estimated loan costs.

Derivative Assets and Liabilities

Derivatives are primarily comprised of IRLCs, forward delivery contracts and TBA mortgage backed securities. The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position. Our mortgage origination subsidiaries issue IRLCs to their customers, which are carried at estimated fair value on the Company’s consolidated balance sheet. The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption. The fair values of these commitments generally fall under Level 3 in the fair value hierarchy. Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors. For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates. The fair values of TBA mortgage backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures monthly.

Securities Sold, Not Yet Purchased

Securities sold, not yet purchased are generally classified under Level 1 or Level 2 in the fair value hierarchy, based on the leveling of the securities sold short, and fair value is provided by a third-party investment manager, based on quoted market prices. We perform internal price verification procedures to ensure that the prices provided are reasonable.

Mortgage Servicing Rights

Mortgage servicing rights are classified under Level 3 in the fair value hierarchy and fair value is provided by a third-party valuation service. Various observable and unobservable inputs are used to determine fair value, including discount rate, cost to service and weighted average prepayment speed.

Debentures: Since interest rates on debentures are at current market rates for similar credit risks, the carrying amount approximates fair value. These values are net of allowance for doubtful accounts.

Notes Receivable, net: To the extent that carrying amounts differ from fair value, fair value is determined based on contractual cash flows discounted at market rates for similar credits. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Debt: The carrying value, which approximates fair value of LIBOR based debt, represents the total debt balance at face value excluding the unamortized discount. The fair value of the Junior subordinated notes is determined based on dealer quotes. Categorized under Level 3 in the fair value hierarchy.

Additionally, the following financial assets and liabilities on the consolidated balance sheets are not carried at fair value, but whose carrying amounts approximate their fair value:

Cash and Cash Equivalents: The carrying amounts of cash and cash equivalents are carried at cost which approximates fair value. Categorized under Level 1 in the fair value hierarchy.

Accounts and Premiums Receivable, net, Retrospective Commissions Receivable and Other Receivables: The carrying amounts approximate fair value since no interest rate is charged on these short duration assets. Categorized under Level 2 in the fair value hierarchy. See Note (7) Notes and Accounts Receivable, net.

Due from Brokers, Dealers, and Trustees and Due to Brokers, Dealers and Trustees: The carrying amounts are included in other assets and other liabilities and accrued expenses and approximate their fair value due to their short term nature. Categorized under Level 2 in the fair value hierarchy.

Derivatives

Derivative Financial Instruments and Hedging

From time to time, derivative instruments are used in the overall strategy to manage exposure to market risks primarily related to fluctuations in interest rates. As a matter of policy, derivatives are not used for speculative purposes. Derivative instruments are measured at fair value on a recurring basis and are included in other investments or other liabilities and accrued expenses on the consolidated balance sheets.

Derivative Instruments Designated as Cash Flow Hedging Instruments

The Company uses cash flow hedges to reduce the exposure to variability of cash flows from floating rate borrowings. If a derivative instrument meets certain cash flow hedge accounting criteria, it is recorded on the consolidated balance sheet at its fair value, as either an asset or a liability, with offsetting changes in fair value recognized in AOCI. The effective portion of the changes in fair value of derivatives are reported in AOCI and amounts previously recorded in AOCI are recognized in earnings in the period in which the hedged transaction affects earnings. Any ineffective portions of the change in fair value of the derivative are recognized in current earnings.

The Company utilizes derivative financial instruments as part of its overall investment and hedging activities. Derivative contracts are subject to additional risk that can result in a loss of all or part of an investment. The Company’s derivative activities are primarily classified by underlying credit risk and interest rate risk. In addition, the Company is also subject to additional counterparty risk should its counterparties fail to meet the contract terms. The derivative financial instruments are reported in other investments. Derivative liabilities are reported within other liabilities and accrued expenses.

Derivatives, at fair value

Interest Rate Lock Commitments

The Company enters into interest rate lock commitments (IRLCs) with customers in connection with its mortgage banking activities to fund residential mortgage loans with certain terms at specified times in the future. IRLCs that relate to the origination of mortgage loans that will be classified as held-for-sale are considered derivative instruments under applicable accounting guidance. As such, these IRLCs are recorded at fair value with changes in fair value typically resulting in recognition of a gain when the Company enters into IRLCs. In estimating the fair value of an IRLC, the Company assigns a probability that the loan commitment will be exercised and the loan will be funded (“pull through”). The fair value of the commitments is derived from the fair value of related mortgage loans, net of estimated costs to complete. Outstanding IRLCs expose the Company to the risk that the price of the loans underlying the commitments might decline from inception of the rate lock to funding of the loan. To manage this risk, the Company utilizes forward delivery contracts and to be announced (TBA) mortgage backed securities to economically hedge the risk of potential changes in the value of the loans that would result from the commitments.

Forward Delivery Contracts and TBA Mortgage Backed Securities

The Company enters into forward delivery contracts with loan aggregators and other investors as one of the tools to manage the interest rate risk associated with IRLCs and loans held for sale. In addition, the Company enters into TBA mortgage backed securities which facilitate hedging and funding by allowing the Company to prearrange prices for mortgages that are in the process of originating. The Company utilizes these hedging instruments for Agency (Fannie Mae and Freddie Mac) and FHA/VA (Ginnie Mae) eligible IRLCs.

Share-based Payment Arrangement

Stock Based Compensation

The Company accounts for equity‑based compensation issued to employees, directors, and affiliates of the Company using the current fair value based methodology.

The Company initially measures the cost of restricted stock unit (RSUs) and restricted stock awards at fair value on the date of grant and subsequently recognizes the cost of such awards over the vesting period using the straight-line method. The compensation costs are charged to expense over the vesting period with a corresponding credit to additional paid-in capital.

Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. Compensation cost is recognized over the required service period, generally defined as the vesting period.

Grants of subsidiary RSUs exchangeable into common stock of the Company are accounted for as equity based upon their expected settlement method. The Company recognizes the cost of such awards over the vesting period using the straight-line method and uses the graded-vesting method to recognize compensation expense for the performance vesting RSUs. Compensation expense will be recognized to the extent that it is probable that the performance condition will be achieved. The Company reassesses the probability of satisfaction of the performance condition for the performance vesting RSUs for each reporting period.

Income Tax

Income Taxes

Deferred tax assets and liabilities are determined using the asset and liability method. Under this method, deferred tax assets and liabilities are established for future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to reverse. A valuation allowance is established when necessary to reduce a deferred tax asset to the amount expected to be realized. Several of the Company’s subsidiaries file state tax returns on a standalone basis. Two of our subsidiaries file federal and state tax returns on a stand alone basis, one of which is held for sale. These U.S. federal and state income tax returns, when filed, will be subject to examination by the Internal Revenue Service and state departments of revenue. See Note (20) Income Taxes.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its tax returns to determine whether the tax positions are “more likely than not” of being sustained by the applicable tax authority. The Company’s provision or benefit for income taxes is adjusted accordingly for tax positions not deemed to meet the more likely than not threshold. The Company’s policy is to account for interest as a component of interest expense and penalties as a component of other expenses.

Earnings Per Share

Earnings Per Share

The Company presents both basic and diluted earnings per Common Share in its consolidated financial statements and footnotes thereto. Basic earnings per Common Share (Basic EPS) excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding, which includes vested RSUs, for the period. Diluted earnings per Common Share (Diluted EPS) reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares where such exercise or conversion would result in a lower earnings per share amount.

The Company calculates EPS using the two-class method, which is an earnings allocation formula that determines EPS for common shares and participating securities. Unvested RSUs contain non-forfeitable rights to distributions or distribution equivalents (whether paid or unpaid) and are participating securities that are included in the computation of EPS using the two-class method. Accordingly, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive distributions. The participating securities do not have a contractual obligation to absorb losses and are only allocated in periods where there is income from continuing operations.

See Note (22) Earnings Per Share, for EPS computations.

The Company calculates basic net income per share of common stock (common share) based on the weighted average number of common shares outstanding, which includes vested corporate RSUs. Unvested corporate RSUs have a non-forfeitable right to participate in dividends declared and paid on the Company’s common stock on an as vested basis and are therefore considered a participating security. The Company calculates basic earnings per share using the “two-class” method under which the income available to common stockholders is allocated to the unvested corporate RSUs.

Diluted net income attributable to common stockholders includes the effect of unvested subsidiaries’ RSUs, when dilutive. The assumed exercise of all potentially dilutive instruments are included in the diluted net income per common share calculation, if dilutive.

Investments

InvestmentsThe Company records all investment transactions on a trade‑date basis. Realized gains (losses) are determined using the specific-identification method. The Company classifies its investments in debt securities as available for sale or held-to-maturity based on the Company’s intent and ability to hold the debt security to maturity. The Company did not have any held-to-maturity securities at December 31, 2020 and 2019.

Available for Sale Securities, at Fair Value (AFS)

Available for Sale Securities, at Fair Value (AFS)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time. AFS securities include those debt securities that management may sell as part of its asset/liability management strategy or in response to changes in interest rates, resultant prepayment risk or other factors. AFS securities are held at fair value on the consolidated balance sheet with changes in fair value including non-credit related losses, net of related tax effects, recorded in the AOCI component of stockholders’ equity in the period of change. Upon the disposition of an AFS security, the Company reclassifies the gain or loss on the security from AOCI to net realized and unrealized gains (losses) on the consolidated statements of operations.

For AFS securities, the Company reviews its securities portfolio for impairment and determines if impairment is related to credit loss or non-credit loss. In making the assessment of whether a loss is from credit or other factors, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating

agency, and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows is less than the amortized cost basis, a credit loss exists and an allowance is created, limited by the amount that the fair value is less than the amortized cost basis.

Subsequent activity related to the credit loss component (e.g. write-offs, recoveries) is recognized as part of the allowance for credit losses on AFS securities. For AFS securities which have an expectation of zero risk nonpayment of the amortized cost basis (e.g. U.S. Treasury securities or agency securities), the expected credit loss is zero.

Loans at Fair Value

Loans, at Fair Value

Loans, at fair value is substantially comprised of (i) corporate loans, (ii) non-performing residential loans (NPLs) and (iii) loans originated by the Company’s mortgage finance business. Changes in their fair value are reported within net realized and unrealized gains (losses) in our consolidated statements of operations.

Corporate Loans

Corporate loans are comprised of a diversified portfolio of middle market leveraged loans which are carried at fair value. In general, the fair value of leveraged loans is obtained from an independent pricing service which provides coverage of secondary market participants. The values represent a composite of mark-to-market bid/offer prices. In certain circumstances, the Company will make its own determination of fair value of leveraged loans based on internal models and other unobservable inputs.

Nonperforming Loan and Lease and Mortgage Loans Held for Sale

Non-Performing Residential Loans (NPLs)

The Company has purchased portfolios of NPLs which consist of residential mortgage loans. Such loans are carried at fair value, which is measured on an individual loan basis. We seek to either (i) convert such loans into real estate owned property (REO) through foreclosure or another resolution process that can then be sold, or (ii) modify and resell them at higher prices if circumstances warrant.

The Company has elected the fair value option for NPLs as we have concluded that fair value timely reflects the results of our investment performance. As substantially all of our loans were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. We primarily utilize the local broker price opinion (BPO) but also consider any other comparable home sales or other market data, as considered necessary, in estimating a property’s fair value. For further discussion on the observable and unobservable inputs to the model and determination of fair value of NPLs, see Note (12) Fair Value of Financial Instruments.

Certain NPLs are loans that are delinquent on obligated payments of principal and interest. Certain other NPLs are making some payments, generally as a result of a modification or a workout plan.

The fair value of NPLs are determined using a discounted cash flow model. As such, both the changes in fair value and the net periodic cash flows related to NPLs are recorded in net realized and unrealized gains (losses) in the consolidated statements of operations.

The Company does not hold any NPLs as of December 31, 2020.

Mortgage Loans Held for Sale

Mortgage loans held for sale represent loans originated and held until sold to secondary market investors. Such loans are typically warehoused for a period after origination or purchase before sale into the secondary market. Loans are sold either servicing released, or in select instances, servicing retained into the secondary loan market. The Company has elected to measure all mortgage loans held for sale at fair value. These loans are considered sold when the Company surrenders control to the purchaser. The gains or losses on sales of such loans, net of any accrual for standard representations and warranties, are reported in operating results as a component of net realized and unrealized gains (losses) in the consolidated statements of operations in the period when the sale occurs.

Equity Securities

Equity Securities

Equity securities are investments consisting of equity securities that are purchased principally for the purpose of selling them in the near term. Changes in fair value are recorded in net realized and unrealized gains (losses) on investments on the consolidated statements of operations in the period of change.

Foreclosed Residential Real Estate Property (REO)

Foreclosed Residential Real Estate Property (REO)

NPLs are reclassified to REO once the Company has obtained legal title to the property upon completion of a foreclosure sale or the borrower has conveyed all interest in the property to satisfy that loan through completion of a deed in lieu of foreclosure. Because the Company elected the fair value option for NPLs, upon recognition as REO, the property fair value is estimated using market values and, if the property meets held-for-sale criteria, it is initially recorded at fair value less costs to sell as its new cost basis. Subsequently, the property is carried at (i) the fair value of the asset minus the estimated costs to sell the asset or (ii) the initial REO value, whichever is lower. Adjustments to the carrying value of REOs are recorded in net realized and unrealized gains (losses).

Vessels, net

Vessels, net

Investments in vessels, net are carried at cost (inclusive of capitalized acquisition costs, where applicable) less accumulated depreciation. Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are expensed as incurred. Vessels acquired are recognized at their fair value as of the date of the acquisition.

Depreciation is computed using the straight-line method over the vessel’s estimated remaining useful life, after considering the estimated salvage value. A vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Vessels are depreciated from the date of their acquisition through their remaining estimated useful life.

Vessels are reviewed for potential impairment when events or changes in circumstances indicate that the carrying amount of a particular vessel may not be fully recoverable. Potential impairment indicators are primarily based upon a comparison of the market value of a vessel to its carrying value. Market values are based upon quoted prices from industry-recognized sources. The Company evaluates market quotes of vessels for reasonableness by comparison to available market transactions or internal valuation models. An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

The Company’s estimate of future revenue is based upon time charter equivalent (TCE) rates using current market rates. The Company uses average historical rates for periods beyond those for which rates are available. Estimated cash flows are net of brokerage and address commissions, vessel operating expenses, and estimated costs of drydocking and include an inflation factor, as appropriate. The projected undiscounted future cash flows are comprised of the net of these inflows and outflows, plus an estimated salvage value.

As of December 31, 2020, the undiscounted future cash flows were higher than the carrying amount of each of the vessels in the Company’s fleet and, as such, no loss on impairment was recognized.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments of sufficient credit quality purchased with an initial maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of U.S. denominated cash on hand, cash held in banks and investments in money market funds.

Restricted Cash

The Company’s restricted cash primarily consists of cash for unremitted premiums received from agents and insurers, fiduciary cash for reinsurers and pledged assets for the protection of policy holders in various state jurisdictions. Restricted cash also includes cash posted as collateral under credit facilities to maintain borrowing base sufficiency, borrower escrow

funds for taxes, insurance, rate-lock fees and servicing related escrow funds and collateral on warehouse borrowings.

Notes and Accounts Receivable, Net

Notes and Accounts Receivable, Net

Notes Receivable, Net

The Company’s notes receivable, net includes receivables related to the insurance business for its premium financing programs.

The Company accrues interest income on its notes receivable based on the contractual terms of the respective note. The Company monitors all notes receivable for delinquency and provides for estimated losses for specific receivables that are not likely to be collected. In addition to allowances for bad debt for specific notes receivable, a general provision for bad debt is estimated for the Company’s notes receivable based on history. Account balances are generally charged against the allowance when the Company believes it is probable that the note receivable will not be recovered and has exhausted its contractual and legal remedies.

Generally, receivables overdue more than 120 days are written off when the Company determines it has exhausted reasonable collection efforts and remedies, see Note (7) Notes and Accounts Receivable, net.

Accounts and Premium Receivable, Net

Accounts and Premiums Receivable, Net

Accounts and premiums receivable, net are primarily trade receivables from the insurance business that are carried at their approximate fair value. Accounts and premiums receivable from the Company’s insurance business consist primarily of advance commissions and agents' balances in course of collection and billed but not collected policy premiums, presented net of the allowance for doubtful accounts. For policy premiums that have been billed but not collected, the Company records a receivable on its consolidated balance sheets for the full amount of the premium billed, with a corresponding liability, net of its commission, to insurance carriers. The Company earns interest on the premium cash during the period of time between receipt of the funds and payment of these funds to insurance carriers. The Company maintains an allowance for doubtful accounts based on an estimate of uncollectible accounts.

Retrospective commissions receivable, Trust receivables and Other receivables

Retrospective commissions receivable, trust receivables and other receivables are primarily trade receivables from the insurance business that are carried net of allowance at their approximate fair value.

Reinsurance Receivables

Reinsurance Receivables

Through the insurance business, the Company has various reinsurance agreements in place whereby the amount of risk in excess of its retention goals is reinsured by unrelated domestic and foreign insurance companies. The Company is required to pay losses even if a reinsurer fails to meet its obligations under the applicable reinsurance agreement. Reinsurance receivables include amounts related to paid benefits, unpaid benefits and prepaid reinsurance premiums. Reinsurance receivables are based upon estimates and are reported on the consolidated balance sheets separately as assets, as reinsurance does not relieve the Company of its legal liability to policyholders. Management continually monitors the financial condition and agency ratings of the Company’s reinsurers and believes that the reinsurance receivables accrued are collectible. Balances recoverable from reinsurers and amounts ceded to reinsurers relating to the unexpired portion of reinsured policies are presented as assets. Experience refunds from reinsurers are recognized based on the underwriting experience of the underlying contracts.

Deferred Acquisition Costs

Deferred Acquisition Costs

The Company defers certain costs of acquiring new and renewal insurance policies and other products as follows within the Company’s insurance business. Amortization of deferred acquisition costs was $265,781, $287,834 and $246,330 for the years ended December 31, 2020, 2019 and 2018, respectively.

Insurance policy related deferred acquisition costs are limited to direct costs that resulted from successful contract transactions and would not have been incurred by the Company’s insurance company subsidiaries had the transactions not

occurred. These capitalized costs are amortized as the related premium is earned.

Other deferred acquisition costs are limited to prepaid direct costs, typically commissions and contract transaction fees, that resulted from successful contract transactions and would not have been incurred by the Company had the transactions not occurred. These capitalized costs are amortized as the related service and administrative fees are earned.

The Company evaluates whether all deferred acquisition costs are recoverable at year-end, and considers investment income in the recoverability analysis for insurance policy related deferred acquisition costs. As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2020, 2019 and 2018.

Goodwill and Intangible Assets, net

Goodwill and Intangible Assets, net

The initial measurement of goodwill and intangibles requires judgment concerning estimates of the fair value of the acquired assets and liabilities. Goodwill and indefinite-lived intangible assets are not amortized but subject to tests for impairment annually or if events or circumstances indicate it is more likely than not they may be impaired. Finite-lived intangible assets are amortized over their estimated useful lives principally using a pattern of economic benefit for customer relationships and a straight-line method for other intangible assets. Finite-lived intangible assets are subject to impairment if events or circumstances indicate a possible inability to realize the carrying amount. The Company carries intangible assets, which represent customer and agent relationships, trade names, insurance licenses (certificates of authority granted by individual state departments of insurance), the value of in-force insurance policies acquired, software acquired or internally developed and fishing licenses. Management has deemed the insurance licenses to have an indefinite useful life. Costs incurred to renew or maintain insurance licenses are recorded as operating costs in the period in which they arise. See Note (9) Goodwill and Intangible Assets, net.

Other Assets

Other Assets

Other assets primarily consist of right of use assets, prepaid expenses, and furniture, fixtures and equipment, net. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Debt

Debt, netDebt is carried on the consolidated balance sheets at an amount equal to the unpaid principal balance, net of any remaining unamortized discount or premium and direct and any incremental costs attributable to issuance. Discounts, premiums and direct and incremental costs are amortized as a component of interest expense in the consolidated statements of operations over the life of the debt. See Note (11) Debt, net.

Unearned Premiums

Unearned Premiums

Premiums written are earned over the life of the respective policy using the Rule of 78's, pro rata, or other actuarial methods as appropriate for the type of business. Unearned premiums represent the portion of premiums that will be earned in the future. A premium deficiency reserve is recorded if anticipated losses, loss adjustment expenses, deferred acquisition costs and policy maintenance costs exceed the recorded unearned premium reserve and anticipated investment income. As of December 31, 2020 and 2019, no deficiency reserves were recorded.

Policy Liabilities and Unpaid Claims

Policy Liabilities and Unpaid Claims

Policyholder account balances relate to investment-type individual annuity contracts in the accumulation phase. Policyholder account balances are carried at accumulated account values, which consist of deposits received, plus interest credited, less withdrawals and assessments. Minimum guaranteed interest credited to these contracts ranges from 3.0% to 4.0%.

The Company’s claims are generally reported and settled quickly, resulting in consistent historical loss development patterns. The Company’s actuaries apply a variety of generally accepted actuarial methods to the historical loss development patterns, to derive cumulative development factors. These cumulative development factors are applied to reported losses for each accident quarter to compute ultimate losses. The indicated required reserve is the difference between the ultimate losses and the reported losses. The actuarial methods used include but are not limited to the chain ladder method, the Bornhuetter-Ferguson method, and the expected loss ratio method. The actuarial analyses are performed on a basis gross of ceded

reinsurance, and the resulting factors and estimates are then used in calculating the net loss reserves which take into account the impact of reinsurance. The Company has not made any changes to its methodologies for determining claim reserves in the periods presented.

Credit life and accidental death and dismemberment (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR). Credit disability unpaid claims reserves also include continuing claim reserves for open disability claims. For all other product lines, unpaid claims reserves include case reserves for reported claims and bulk reserves for IBNR claims. The Company uses a number of algorithms in establishing its unpaid claims reserves. These algorithms are used to calculate unpaid claims as a function of paid losses, earned premium, reported incurred losses, target loss ratios, and in-force amounts or a combination of these factors.

Anticipated future loss development patterns form a key assumption underlying these analyses. Generally, unpaid claims reserves, and associated incurred losses, are impacted by loss frequency, which is the measure of the number of claims per unit of insured exposure, and loss severity, which is based on the average size of claims. Factors affecting loss frequency and loss severity may include changes in claims reporting patterns, claims settlement patterns, judicial decisions, legislation, economic conditions, morbidity patterns and the attitudes of claimants towards settlements.

The unpaid claims reserves represent the Company’s best estimates at a given time, based on the projections and analyses discussed above. Actual claim costs are dependent upon a number of complex factors such as changes in doctrines of legal liabilities and damage awards. These factors are not directly quantifiable, particularly on a prospective basis. The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related liabilities based on our actual experience. The Company has not made any changes to its methodologies for determining unpaid claims reserves in the periods presented.

In accordance with applicable statutory insurance company regulations, the Company’s recorded unpaid claims reserves are evaluated by appointed independent third-party actuaries, who perform this function in compliance with the Standards of Practice and Codes of Conduct of the American Academy of Actuaries. The independent actuaries perform their actuarial analyses annually and prepare opinions, statements, and reports documenting their determinations. For December 31, 2020 and 2019, our appointed independent third-party actuaries found the Company’s reserves to be adequate.

Revenue Recognition

Deferred Revenue

Deferred revenues represent the portion of income that will be earned in the future attributable to motor club memberships, mobile device protection plans, and other non-insurance service contracts that are earned over the respective contract periods using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. A deficiency reserve would be recorded if anticipated contract benefits, deferred acquisition costs and contract service costs exceed the recorded deferred revenues and anticipated investment income. As of December 31, 2020 and 2019 no deficiency reserves were recorded.

Revenue Recognition

The Company earns revenues from a variety of sources:

Earned Premiums, Net

Net earned premium is from direct and assumed earned premium consisting of revenue generated from the direct sale of insurance policies by the Company’s distributors and premiums written for insurance policies by another carrier and assumed by the Company. Whether direct or assumed, the premium is earned over the life of the respective policy using methods appropriate to the pattern of losses for the type of business. Methods used include the Rule of 78's, pro rata, and other actuarial methods. Management selects the appropriate method based on available information, and periodically reviews the

selections as additional information becomes available. Direct and assumed premiums are offset by premiums ceded to the Company’s reinsurers, including producer owned reinsurance companies (PORCs), earned in the same manner. The amount ceded is proportional to the amount of risk assumed by the reinsurer.

Service and Administrative Fees

The Company earns service and administrative fees from a variety of activities. Such fees are typically positively correlated with transaction volume and are recognized as revenue as they become both realized and earned.

Service Fees. Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Collateral tracking fee income is recognized when the service is performed and billed. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable. During the years ended December 31, 2020, 2019 and 2018, respectively, the Company did not incur a loss with respect to a specific significant service fee contract.

Administrative Fees. Administrative fee revenue includes the administration of premium associated with our producers and their PORCs. In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Ceding Commissions

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part, underwriting performance and investment returns experienced by the assuming companies. As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy. The adjustment is calculated by adding the earned premium and investment income from the assets held in trust for the Company’s benefit less earned commissions, incurred claims and the reinsurer's fee for the coverage.

Vessel Related Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date. Vessel related revenue is recorded in other investment income as a part of other revenue.

Service and Administrative Fees

Service fee revenue is recognized as the services are performed. These services include fulfillment, software development, and claims handling for our customers. Management reviews the financial results under each significant contract on a monthly basis. Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable.

Administrative fee revenue includes the administration of premium associated with our producers and their producer owned reinsurance companies (PORCs). In addition, we also earn fee revenue from debt cancellation programs, motor club programs, and warranty programs. Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract. Management selects the

appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Information on Remaining Performance Obligations

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2020.

Contract Balances

The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.

Charter Revenue

The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate. Charter revenues are recognized as earned on the straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date.

Management Fees

The Company earned management fee income in the form of base management fees and incentive fees from the CLOs it managed. These base management fees were billed as the services were provided and paid periodically in accordance with the terms of the individual management agreements for as long as the Company managed the funds. Base management fees typically consisted of fees based on the amount of assets held in the CLOs. Base management fees were recognized as revenue when earned. The Company did not recognize incentive fees until all contractual contingencies were removed.

Other Liabilities and Accrued Expenses

Other Liabilities and Accrued Expenses

Other liabilities and accrued expenses primarily consist of lease liabilities, accounts payable and accrued expenses, deferred tax liabilities, net, securities sold, not yet purchased, commissions payable and accrued interest payable. See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

Member Benefit Claims

Member Benefit Claims

Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products. Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company. Claims are recognized as expense when incurred.

Net Losses and Loss Adjustment Expenses

Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses represent losses and related claim adjudication and processing costs on insurance

contract claims, net of amounts ceded. Net losses include actual claims paid and the change in unpaid claim reserves.

Commissions Payable and Expense

Commissions Payable and ExpenseCommissions are paid to distributors and retailers selling credit insurance policies, motor club memberships, mobile device protection, and warranty service contracts, and are generally deferred and expensed in proportion to the earning of related revenue. Credit insurance commission rates, in many instances, are set by state regulators and are also impacted by market conditions. In certain instances, credit insurance commissions are subject to retrospective adjustment based on the profitability of the related policies. Under these retrospective commission arrangements, the producer of the credit insurance policies receives a retrospective commission if the premium generated by that producer in the accounting period exceeds the costs associated with those policies, which includes the Company’s administrative fees, claims, reserves, and premium taxes. The Company analyzes the retrospective commission calculation periodically for each producer and, based on the analysis associated with each such producer, the Company records a liability for any positive net retrospective commission earned and due to the producer or, conversely, records a receivable, net of allowance, for amounts due from such producer for instances where the net result of the retrospective commission calculation is negative. Commissions payable are included in other liabilities and accrued expenses.

Recent Accounting Standards

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

Standard	Description	Adoption Date	Impact on Financial Statements
2016-13 Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	Topic 326 amended guidance on reporting credit losses for assets held on an amortized cost basis and AFS debt securities. For assets held on an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in previous GAAP and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For AFS debt securities, credit losses should be measured in a manner similar to previous GAAP; however, Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. Changes in the allowance account are recorded in the period of change as a credit loss expense or reversal of credit loss expense. The measurement of credit losses is not impacted, except that credit losses recognized are limited to the amount by which fair value is below amortized cost.	January 1, 2020	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.
2018-13 Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this update require additions, modifications and elimination to the fair value measurement disclosure. The objective of these disclosure requirements is to provide users of financial statements with information about assets and liabilities measured at fair value:     (a) The valuation techniques and inputs that a reporting entity uses to arrive at its measures of fair value, including judgments and assumptions that the entity makes, (b) The uncertainty in the fair value measurements as of the reporting date, and (c) How changes in fair value measurements affect an entity’s performance and cash flows.	January 1, 2020	The retrospective adoption of this standard resulted in additional disclosures related to inputs of Level 3 investments. This adoption resulted in no material impact to the Company’s consolidated financial statements. See Note (12) Fair Value of Financial Instruments.
2018-02 Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The amendments in this update allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this update affect any entity that is required to apply the provisions of Topic 220 and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.	January 1, 2019	The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

Standard	Description	Adoption Date	Impact on Financial Statements
2016-02 Leases (Topic 842)	This new standard introduced a new lessee model that brings substantially all leases onto the balance sheet. In addition, while the new guidance retains most of the principles of the previous existing lessor model in GAAP, it aligns many of those principles with ASC 606, Revenue From Contracts With Customers.	January 1, 2019	The adoption of this guidance (practical expedient) resulted in the Company recognizing a right of use asset of $32,052 as part of other assets and a lease liability of $33,558 as part of other liabilities and accrued expenses in the consolidated balance sheets, as well as de-recognizing the liability for deferred rent that was required under the previous guidance for its operating lease agreements at January 1, 2019.
2014-09 Revenue from Contracts with Customers (Topic 606)	This ASU outlined a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes previous revenue recognition guidance, including industry-specific guidance.	January 1, 2018	The Company has chosen the modified-retrospective method of adopting Topic 606, and has assessed these contracts and concluded that changes in accounting and revenue recognition upon adoption of Topic 606 were not material to the Company’s financial position as of January 1, 2018, and did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements, Not Yet Adopted

Standard	Description	Adoption Date	Impact on Financial Statements
2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods.	For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period.	The Company is currently evaluating the effect on its consolidated financial statements.
2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this update provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met.	The standard is effective for all entities as of March 12, 2020, through December 31, 2022. The Company is evaluating their option to adopt the guidance when it is applicable.	The Company is currently evaluating the effect on its consolidated financial statements.

Segment Reporting

Tiptree is a holding company that allocates capital across a broad spectrum of businesses, assets and other investments. Tiptree’s principal operating subsidiary, The Fortegra Group, LLC (Fortegra), along with its subsidiaries, is a leading provider of specialty insurance underwriting, warranty and service contract products and related service solutions. Based on the ASC 280 quantitative analysis performed as of December 31, 2020, our reportable segments are Insurance and Mortgage. We refer to our non-insurance operations, assets and other investments, which is comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital. Corporate activities include holding company interest expense, employee compensation and benefits, and other expenses.

Our reportable segments’ income or loss is reported before income taxes and non-controlling interests. Segment results incorporate the revenues and expenses of these subsidiaries since they commenced operations or were acquired. For the year ended December 31, 2020, Mortgage has been broken out of Tiptree Capital as a reportable segment since it meets the quantitative threshold for disclosure. Prior year segments have been conformed to the current year presentation. Intercompany transactions are eliminated.

Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment are as follows:

Insurance operations are conducted through Fortegra, which includes Fortegra Financial Corporation and Fortegra Warranty. Fortegra underwrites and administers specialty insurance programs and products, and is a leading provider of credit and asset protection products and administration services. Fortegra’s programs are provided across a diverse range of products and services including credit protection insurance, warranty and service contract products, premium finance, and niche personal and commercial lines of insurance. On January 3, 2020, Fortegra Warranty acquired Smart AutoCare, a vehicle warranty solutions provider in the United States. On December 31, 2020, Fortegra acquired Sky Auto, a vehicle service contract marketer within the United States. See Note (3) Acquisitions.

Tiptree Capital:

Mortgage operations are conducted through Reliance. The Company’s mortgage origination business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and GNMA.

Other includes our asset management, mortgage operations of Luxury, shipping operations, and other investments (including our Invesque shares).

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table presents the determination of the acquisition date fair value amounts for the identifiable assets acquired, liabilities assumed, and goodwill recorded in connection with the Acquisition, in accordance with the acquisition method of accounting:

	As of January 3, 2020
Assets:
Investments:
Available for sale securities, at fair value	$	110
Total investments	110
Cash and cash equivalents	120,934
Restricted cash	764
Notes and accounts receivable, net	6,214
Reinsurance receivables	71,337
Intangible assets, net	93,700
Other assets	34,053
Total assets	$	327,112
Liabilities:
Policy liabilities and unpaid claims	$	55,151
Deferred revenue	182,568
Reinsurance payable	27,075
Other liabilities and accrued expenses	10,860
Total liabilities	275,654
Net assets acquired	51,458
Goodwill	60,346
	$	111,804
Acquisition costs	$	3,539

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The following table shows the values recorded by the Company, as of the acquisition date, for finite-lived intangible assets and the range of their estimated amortization period:

Intangible Assets	Weighted Average Amortization Period (in Years)	Value as of acquisition date
Customer relationships	7.2	$	86,000
Software licensing	5.0	600
Trade names	13.5	7,100
Total acquired finite-lived intangible assets	7.7	$	93,700

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Dispositions, Assets Held for Sale and Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Assets and Liabilities Held for Sale

The following table presents detail of Luxury’s assets and liabilities held for sale in the consolidated balance sheets for the following periods:

	As of
	December 31, 2020		December 31, 2019
Assets:
Investments:
Loans, at fair value	$	164,802	$	98,272
Other investments	4,345		1,019
Total investments	169,147		99,291
Cash and cash equivalents	4,870		7,137
Restricted cash	9		—
Notes and accounts receivable, net	1,760		238
Other assets	5,919		1,169
Assets held for sale	$	181,705	$	107,835
Liabilities:
Debt, net	$	162,072	$	97,822
Other liabilities and accrued expenses (1)	13,040		4,608
Liabilities held for sale	$	175,112	$	102,430

(1)    Includes deferred tax liabilities of $939 as of December 31, 2020.

The following table presents detail of Care’s revenues and expenses of discontinued operations in the consolidated statements of operations for the following periods:

	Year Ended December 31,
	2020		2019		2018
Revenues:
Rental and related revenue	$	—	$	—	$	6,476
Other revenue	—		—		149
Total revenues	—		—		6,625
Expenses:
Employee compensation and benefits	—		—		2,788
Interest expense	—		—		1,252
Other expenses	—		—		1,961
Total expenses	—		—		6,001
Net income (loss) before taxes from discontinued operations	—		—		624
Gain on sale of discontinued operations	—		—		56,860
Less: provision (benefit) for income taxes	—		—		13,714
Net income (loss) from discontinued operations	$	—	$	—	$	43,770

The following table presents a summary of cash flows related to discontinued operations included in the consolidated statements of cash flows for the following periods:

	Year Ended December 31,
	2020		2019		2018
Net cash provided by (used in):
Operating activities	$	—	$	—	$	(2,095)
Investing activities	—		—		(592)
Financing activities	—		—		(123)
Net cash flows provided by discontinued operations	$	—	$	—	$	(2,810)

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Operating Segment Data (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Schedule of Components of Revenue, Expense, pre-tax Income (loss), and Segment Assets for Each Operating Segment

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

	Year Ended December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	691,061	$	112,165	$	7,075	$	810,301
Total expenses	(664,113)		(81,063)		(68,317)		(813,493)
Corporate expenses	—		—		—		(35,660)
Income (loss) before taxes	$	26,948	$	31,102	$	(61,242)	$	(38,852)
Less: provision (benefit) for income taxes							(13,627)
Net income (loss)							$	(25,225)
Less: net income (loss) attributable to non-controlling interests							3,933
Net income (loss) attributable to common stockholders							$	(29,158)

	Year Ended December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	635,085	$	66,121	$	71,522	$	772,728
Total expenses	(598,055)		(63,162)		(48,131)		(709,348)
Corporate expenses	—		—		—		(34,241)
Income (loss) before taxes	$	37,030	$	2,959	$	23,391	$	29,139
Less: provision (benefit) for income taxes							9,017
Net income (loss)							$	20,122
Less: net income (loss) attributable to non-controlling interests							1,761
Net income (loss) attributable to common stockholders							$	18,361

	Year Ended December 31, 2018
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	544,586	$	51,624	$	29,616	$	625,826
Total expenses	(530,414)		(51,289)		(33,675)		(615,378)
Corporate expenses	—		—		—		(30,244)
Income (loss) before taxes from continuing operations	$	14,172	$	335	$	(4,059)	$	(19,796)
Less: provision (benefit) for income taxes							(5,909)
Net income (loss) from discontinued operations							43,770
Net income (loss)							$	29,883
Less: net income (loss) attributable to non-controlling interests							5,950
Net income (loss) attributable to Common Stockholders							$	23,933

The Company conducts its operations primarily in the U.S. with less than 6% of total revenues generated overseas for the years ended December 31, 2020, 2019 and 2018.

The following table presents the reportable segments and Tiptree Capital - Other assets for the following periods:

	As of December 31, 2020										As of December 31, 2019
			Tiptree Capital										Tiptree Capital
	Insurance		Mortgage		Other		Corporate		Total		Insurance		Mortgage		Other		Corporate		Total
Total assets	$	2,452,798	$	217,138	$	302,068	$	23,756	$	2,995,760	$	1,730,636	$	154,589	$	297,009	$	16,052	$	2,198,286

The following table presents the Company's investments related to insurance operations (Insurance) and investments from other Tiptree investing activities (Tiptree Capital), measured at fair value as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	—	$	—	$	377,133
Loans, at fair value	7,795		82,937		—		90,732
Equity securities	98,130		—		25,708		123,838
Other investments	125,833		9,439		84,429		219,701
Total investments	$	608,891	$	92,376	$	110,137	$	811,404

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	335,192	$	—	$	—	$	335,192
Loans, at fair value	10,174		98,720		—		108,894
Equity securities	62,816		—		92,562		155,378
Other investments	42,452		7,490		87,530		137,472
Total investments	$	450,634	$	106,210	$	180,092	$	736,936

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Investments (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of Investments by Operating Segment and/or Reporting Unit

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

	Year Ended December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	691,061	$	112,165	$	7,075	$	810,301
Total expenses	(664,113)		(81,063)		(68,317)		(813,493)
Corporate expenses	—		—		—		(35,660)
Income (loss) before taxes	$	26,948	$	31,102	$	(61,242)	$	(38,852)
Less: provision (benefit) for income taxes							(13,627)
Net income (loss)							$	(25,225)
Less: net income (loss) attributable to non-controlling interests							3,933
Net income (loss) attributable to common stockholders							$	(29,158)

	Year Ended December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	635,085	$	66,121	$	71,522	$	772,728
Total expenses	(598,055)		(63,162)		(48,131)		(709,348)
Corporate expenses	—		—		—		(34,241)
Income (loss) before taxes	$	37,030	$	2,959	$	23,391	$	29,139
Less: provision (benefit) for income taxes							9,017
Net income (loss)							$	20,122
Less: net income (loss) attributable to non-controlling interests							1,761
Net income (loss) attributable to common stockholders							$	18,361

	Year Ended December 31, 2018
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Total revenues	$	544,586	$	51,624	$	29,616	$	625,826
Total expenses	(530,414)		(51,289)		(33,675)		(615,378)
Corporate expenses	—		—		—		(30,244)
Income (loss) before taxes from continuing operations	$	14,172	$	335	$	(4,059)	$	(19,796)
Less: provision (benefit) for income taxes							(5,909)
Net income (loss) from discontinued operations							43,770
Net income (loss)							$	29,883
Less: net income (loss) attributable to non-controlling interests							5,950
Net income (loss) attributable to Common Stockholders							$	23,933

The Company conducts its operations primarily in the U.S. with less than 6% of total revenues generated overseas for the years ended December 31, 2020, 2019 and 2018.

The following table presents the reportable segments and Tiptree Capital - Other assets for the following periods:

	As of December 31, 2020										As of December 31, 2019
			Tiptree Capital										Tiptree Capital
	Insurance		Mortgage		Other		Corporate		Total		Insurance		Mortgage		Other		Corporate		Total
Total assets	$	2,452,798	$	217,138	$	302,068	$	23,756	$	2,995,760	$	1,730,636	$	154,589	$	297,009	$	16,052	$	2,198,286

The following table presents the Company's investments related to insurance operations (Insurance) and investments from other Tiptree investing activities (Tiptree Capital), measured at fair value as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	377,133	$	—	$	—	$	377,133
Loans, at fair value	7,795		82,937		—		90,732
Equity securities	98,130		—		25,708		123,838
Other investments	125,833		9,439		84,429		219,701
Total investments	$	608,891	$	92,376	$	110,137	$	811,404

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	335,192	$	—	$	—	$	335,192
Loans, at fair value	10,174		98,720		—		108,894
Equity securities	62,816		—		92,562		155,378
Other investments	42,452		7,490		87,530		137,472
Total investments	$	450,634	$	106,210	$	180,092	$	736,936

Schedule of available-for-sale securities

The following tables present the Company's investments in AFS securities:

	As of December 31, 2020
	Amortized cost		Allowance for Credit Losses(1)		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	191,116	$	—	$	5,245	$	(58)	$	196,303
Obligations of state and political subdivisions	42,583		—		1,768		(1)		44,350
Corporate securities	92,761		—		2,181		(1)		94,941
Asset backed securities	37,975		—		316		(2,099)		36,192
Certificates of deposit	1,355		—		—		—		1,355
Obligations of foreign governments	3,961		—		31		—		3,992
Total	$	369,751	$	—	$	9,541	$	(2,159)	$	377,133
(1) - Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statements of operations (as a credit loss on AFS securities). Amount excludes unrealized losses relating to non-credit factors.
			As of December 31, 2019
			Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury securities and obligations of U.S. government authorities and agencies			$	189,596	$	2,138	$	(144)	$	191,590
Obligations of state and political subdivisions			45,249		1,104		(15)		46,338
Corporate securities			50,514		719		(2)		51,231
Asset backed securities			45,634		89		(1,705)		44,018
Certificates of deposit			896		—		—		896
Obligations of foreign governments			1,099		20		—		1,119
Total			$	332,988	$	4,070	$	(1,866)	$	335,192

Schedule of amortized cost and fair value by contractual maturity date

The amortized cost and fair values of AFS securities, by contractual maturity date, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	As of
	December 31, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	30,306	$	30,602	$	9,584	$	9,602
Due after one year through five years	149,378		153,406		130,223		131,952
Due after five years through ten years	26,621		27,479		19,508		20,125
Due after ten years	125,471		129,454		128,039		129,495
Asset backed securities	37,975		36,192		45,634		44,018
Total	$	369,751	$	377,133	$	332,988	$	335,192

Schedule of available-for-sale securities, continuous unrealized loss position

The following tables present the gross unrealized losses on AFS securities by length of time that individual AFS securities have been in a continuous unrealized loss position for less than twelve months, and twelve months or greater and do not have an allowance for credit losses:

	As of December 31, 2020
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,323	$	(58)	41	$	2	$	—	2
Obligations of state and political subdivisions	379		(1)		5	—		—		—
Corporate securities	901		(1)		3	—		—		—
Asset backed securities	—		—		—	18,927		(2,099)		9
Total	$	16,603	$	(60)	49	$	18,929	$	(2,099)	11
	As of December 31, 2019
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities	Fair value		Gross unrealized losses		# of Securities
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	31,416	$	(132)	75	$	3,888	$	(12)	38
Obligations of state and political subdivisions	3,774		(15)		20	—		—		—
Corporate securities	2,820		(2)		12	742		—		7
Asset backed securities	3,878		(11)		17	19,480		(1,694)		11
Total	$	41,888	$	(160)	124	$	24,110	$	(1,706)	56

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2020 until full recovery of their amortized cost basis.

Rollfoward Activity in the Allowance for Credit Losses for AFS Securities

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2020:

	Obligations of state and political subdivisions		Corporate securities		Asset backed securities		Total
Increase in the allowance for the initial adoption of ASU 2016-13	$	(1)	$	(50)	$	(2)	$	(53)
Reduction in credit losses due to AFS securities sold during the year	—		3		—		3
Recoveries of amounts previously written off during the year	1		47		2		50
Ending balance of the allowance for credit losses on AFS securities	$	—	$	—	$	—	$	—

The Company applies a discounted cash flow model, based on assumptions and model outputs provided by an investment management company, in determining its lifetime expected credit losses on AFS securities. This includes determining the present value of expected future cash flows discounted at the book yield of the security.

The table below presents the amount of credit losses (gains from recoveries) on AFS securities recorded by the Company for the following period:

	Year Ended December 31, 2020
Credit losses (gains from recoveries) on AFS securities	$	(53)

Restricted Investments

The following table presents the Company's restricted investments included in the Company's AFS securities:

	As of
	December 31, 2020		December 31, 2019
Fair value of restricted investments in trust pursuant to reinsurance agreements	$	44,349	$	33,478
Fair value of restricted investments for special deposits required by state insurance departments	9,447		6,275
Total fair value of restricted investments	$	53,796	$	39,753

Available-for-sale Securities additional information

The following table presents additional information on the Company’s AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Purchases of AFS securities	$	158,357	$	253,415	$	192,288
Proceeds from maturities, calls and prepayments of AFS securities	$	84,923	$	36,459	$	30,089
Gains (losses) realized on maturities, calls and prepayments of AFS securities	$	—	$	—	$	(30)
Gross proceeds from sales of AFS securities	$	35,603	$	170,495	$	56,191

The following table presents the gross realized gains and gross realized losses from sales and or redemptions of AFS securities:

	For the Year Ended December 31,
	2020		2019		2018
Gross realized gains	$	594	$	1,558	$	50
Gross realized (losses)	(66)		(246)		(839)
Total net realized gains (losses) from investment sales and redemptions	528		1,312		(789)

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Loans, at fair value (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Schedule of Investments in Loans Measured at Fair Value

The following table presents the total notes and accounts receivable, net:

	As of December 31,
	2020		2019
Notes receivable, net - premium financing program	$	62,075	$	42,192
Accounts and premiums receivable, net	95,269		50,712
Retrospective commissions receivable	131,760		105,387
Trust receivables	54,393		63,925
Other receivables	26,955		24,752
Total notes and accounts receivable, net	$	370,452	$	286,968

The following table presents the total valuation allowance and bad debt expense for the following periods:

	Valuation allowance				Bad Debt Expense
	As of December 31,				For the Year Ended December 31,
	2020		2019		2020		2019		2018
Notes receivable, net - premium financing program (1)	$	101	$	95	$	223	$	175	$	195
Accounts and premiums receivable, net	$	169	$	109	$	28	$	36	$	39

(1)    As of December 31, 2020 and December 31, 2019, there were $215 and $93 in balances classified as 90 days plus past due, respectively.

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Equity Securities (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Debt Securities, Trading, and Equity Securities, FV-NI [Table Text Block]

The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

	As of December 31, 2020
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	5,370	$	111,491	$	25,708	$	134,830	$	31,078
Fixed income exchange traded fund	62,438		63,875		—		—		62,438		63,875
Other equity securities	38,069		28,885		—		—		38,069		28,885
Total equity securities	$	123,846	$	98,130	$	111,491	$	25,708	$	235,337	$	123,838

	As of December 31, 2019
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,188	$	19,376	$	110,688	$	92,562	$	133,876	$	111,938
Fixed income exchange traded fund	25,256		25,039		—		—		25,256		25,039
Other equity securities	35,889		18,401		—		—		35,889		18,401
Total equity securities	$	84,333	$	62,816	$	110,688	$	92,562	$	195,021	$	155,378

Net realized and unrealized gain (losses)

The following table presents the components of net realized and unrealized gains (losses) recorded on the consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (OCI), and as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment financial assets and liabilities are included below:

	For the Year Ended December 31,
	2020		2019		2018
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$	528	$	1,312	$	(819)
Gains from recoveries (credit losses) on AFS securities	53		—		—
Net realized gains (losses) on loans	(945)		2,100		2,071
Net realized gains (losses) on equity securities	(24,586)		947		2,721
Net realized gain on corporate bonds	7,299		39		1,627
Other	2,511		279		—
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	101,411		52,617		44,509
Other:
Net realized gains (losses) on loans (1)	35,753		23,403		16,638
Other	—		(260)		(2,084)
Total net realized gains (losses)	122,024		80,437		64,663
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans	(1,461)		(3,899)		(4,730)
Net unrealized gains (losses) on equity securities held at period end	(22,793)		7,621		(9,815)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	17,290		(807)		(2,291)
Other	10,162		(697)		(428)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	1,270		840		134
Other	(6,093)		357		(2,246)
Other:
Net change in unrealized gains (losses) on loans (1)	2,185		983		60
Net unrealized gains (losses) on equity securities held at period end	(67,656)		(992)		(17,134)
Other	7,482		25		569
Total net unrealized gains (losses)	(59,614)		3,431		(35,881)
Total net realized and unrealized gains (losses)	$	62,410	$	83,868	$	28,782

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

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Other Investments (Tables)

12 Months Ended

Dec. 31, 2020

Other Investments [Abstract]

Investment Holdings, Other than Securities

Other investments

The following table contains information regarding the Company’s other investments as of the following periods:

	As of December 31, 2020
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	105,777	$	—	$	—	$	105,777
Vessels, net (2)	—		—		83,028		83,028
Debentures	17,703		—		—		17,703
Other	2,353		9,439		1,401		13,193
Total other investments	$	125,833	$	9,439	$	84,429	$	219,701

	As of December 31, 2019
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	20,705	$	—	$	—	$	20,705
Vessels, net (2)	—		—		85,991		85,991
Debentures	15,423		—		—		15,423
Other	6,324		7,490		1,539		15,353
Total other investments	$	42,452	$	7,490	$	87,530	$	137,472

(1)    The cost basis of corporate bonds was $97,284 and $20,146 as of December 31, 2020 and December 31, 2019, respectively.

(2)     Net of accumulated depreciation of $8,372 and $3,817 as of December 31, 2020 and December 31, 2019, respectively.

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Investment Income and Net Realized and Unrealized Gains and Losses (Tables)

12 Months Ended

Dec. 31, 2020

Income Statement [Abstract]

Investment Income

The following table presents the components of net investment income by source of income:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
AFS securities	$	7,685	$	8,404	$	6,560
Loans, at fair value	801		3,284		10,809
Other investments	4,245		1,218		1,350
Dividends from equity securities	1,482		2,813		2,092
Other	8		—		97
Subtotal	14,221		15,719		20,908
Less: investment expenses	4,305		1,702		1,729
Net investment income	$	9,916	$	14,017	$	19,179

Other Investment Income - Tiptree Capital

Other investment income represents other revenue from other Tiptree non-insurance activities as disclosed within other revenue on the consolidated statements of operations, see Note (16) Other Revenue and Other Expenses. The following tables present the components of other investment income by type:

	For the Year Ended December 31,
	2020		2019		2018
Interest:
Loans, at fair value (1)	$	5,617	$	6,206	$	4,343
Other	—		269		175
Dividends from equity securities	2,533		10,132		9,224
Loan fee income	17,900		12,631		7,827
Vessel related revenue	22,697		16,747		3,972
Other investment income	$	48,747	$	45,985	$	25,541

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Net realized and unrealized gain (losses)

The following table presents the components of net realized and unrealized gains (losses) recorded on the consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (OCI), and as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment financial assets and liabilities are included below:

	For the Year Ended December 31,
	2020		2019		2018
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$	528	$	1,312	$	(819)
Gains from recoveries (credit losses) on AFS securities	53		—		—
Net realized gains (losses) on loans	(945)		2,100		2,071
Net realized gains (losses) on equity securities	(24,586)		947		2,721
Net realized gain on corporate bonds	7,299		39		1,627
Other	2,511		279		—
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	101,411		52,617		44,509
Other:
Net realized gains (losses) on loans (1)	35,753		23,403		16,638
Other	—		(260)		(2,084)
Total net realized gains (losses)	122,024		80,437		64,663
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans	(1,461)		(3,899)		(4,730)
Net unrealized gains (losses) on equity securities held at period end	(22,793)		7,621		(9,815)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	17,290		(807)		(2,291)
Other	10,162		(697)		(428)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	1,270		840		134
Other	(6,093)		357		(2,246)
Other:
Net change in unrealized gains (losses) on loans (1)	2,185		983		60
Net unrealized gains (losses) on equity securities held at period end	(67,656)		(992)		(17,134)
Other	7,482		25		569
Total net unrealized gains (losses)	(59,614)		3,431		(35,881)
Total net realized and unrealized gains (losses)	$	62,410	$	83,868	$	28,782

(1)    Primarily relates to Loans, at fair value classified as Held for Sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

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Notes and Accounts Receivable, net (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Schedule of Notes and Accounts Receivable

The following table presents the total notes and accounts receivable, net:

	As of December 31,
	2020		2019
Notes receivable, net - premium financing program	$	62,075	$	42,192
Accounts and premiums receivable, net	95,269		50,712
Retrospective commissions receivable	131,760		105,387
Trust receivables	54,393		63,925
Other receivables	26,955		24,752
Total notes and accounts receivable, net	$	370,452	$	286,968

The following table presents the total valuation allowance and bad debt expense for the following periods:

	Valuation allowance				Bad Debt Expense
	As of December 31,				For the Year Ended December 31,
	2020		2019		2020		2019		2018
Notes receivable, net - premium financing program (1)	$	101	$	95	$	223	$	175	$	195
Accounts and premiums receivable, net	$	169	$	109	$	28	$	36	$	39

(1)    As of December 31, 2020 and December 31, 2019, there were $215 and $93 in balances classified as 90 days plus past due, respectively.

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Reinsurance Receivables (Tables)

12 Months Ended

Dec. 31, 2020

Reinsurance Disclosures [Abstract]

Effects of Reinsurance

The following table presents the effect of reinsurance on premiums written and earned by our insurance business for the following periods:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
As of December 31, 2020
Life insurance in force	$	5,153,151	$	2,985,196	$	—	$	2,167,955
For the Year Ended December 31, 2020
Premiums written:
Life insurance	$	69,704	$	39,761	$	1,550	$	31,493	4.9	%
Accident and health insurance	117,235		78,233		12,696		51,698		24.6	%
Property and liability insurance	825,845		509,818		144,332		460,359		31.4	%
Total premiums written	1,012,784		627,812		158,578		543,550		29.2	%
Premiums earned:
Life insurance	68,637		37,194		1,437		32,880		4.4	%
Accident and health insurance	118,183		78,365		11,599		51,417		22.6	%
Property and liability insurance	691,310		405,469		107,853		393,694		27.4	%
Total premiums earned	$	878,130	$	521,028	$	120,889	$	477,991	25.3	%
As of December 31, 2019
Life insurance in force	$	5,176,056	$	2,884,009	$	—	$	2,292,047
For the Year Ended December 31, 2019
Premiums written:
Life insurance	$	75,060	$	40,555	$	1,692	$	36,197	4.7	%
Accident and health insurance	133,514		87,447		3,201		49,268		6.5	%
Property and liability insurance	709,515		350,093		92,246		451,668		20.4	%
Total premiums written	918,089		478,095		97,139		537,133		18.1	%
Premiums earned:
Life insurance	68,282		35,929		1,607		33,960		4.7	%
Accident and health insurance	123,182		82,660		3,165		43,687		7.2	%
Property and liability insurance	597,852		242,180		65,789		421,461		15.6	%
Total premiums earned	$	789,316	$	360,769	$	70,561	$	499,108	14.1	%
As of December 31, 2018
Life insurance in force	$	4,846,303	$	2,662,173	$	—	$	2,184,130
For the Year ended December 31, 2018
Premiums written:
Life insurance	$	69,516	$	38,239	$	1,874	$	33,151	5.7	%
Accident and health insurance	126,951		85,136		3,229		45,044		7.2	%
Property and liability insurance	616,135		277,856		50,346		388,625		13.0	%
Total premiums written	812,602		401,231		55,449		466,820		11.9	%

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
Premiums earned:
Life insurance	64,346		32,865		1,766		33,247		5.3	%
Accident and health insurance	118,482		80,258		3,262		41,486		7.9	%
Property and liability insurance	552,792		231,093		31,405		353,104		8.9	%
Total premiums earned	$	735,620	$	344,216	$	36,433	$	427,837	8.5	%

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

	Direct amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount - assumed to net
For the Year Ended December 31, 2020
Losses and LAE Incurred
Life insurance	$	46,268	$	27,292	$	645	$	19,621	3.3	%
Accident and health insurance	18,354		15,715		7,032		9,671		72.7	%
Property and liability insurance	282,906		182,115		48,165		148,956		32.3	%
Total losses and LAE incurred	347,528		225,122		55,842		178,248		31.3	%
	Member benefit claims (1)						58,650
	Total policy and contract benefits						$	236,898
For the Year Ended December 31, 2019
Losses and LAE Incurred
Life insurance	$	38,306	$	22,607	$	443	$	16,142	2.7	%
Accident and health insurance	18,832		15,022		362		4,172		8.7	%
Property and liability insurance	225,200		147,290		52,785		130,695		40.4	%
Total losses and LAE incurred	282,338		184,919		53,590		151,009		35.5	%
	Member benefit claims (1)						19,672
	Total policy and contract benefits						$	170,681
For the Year ended December 31, 2018
Losses and LAE Incurred
Life insurance	$	36,488	$	21,037	$	886	$	16,337	5.4	%
Accident and health insurance	18,986		15,666		686		4,006		17.1	%
Property and liability insurance	227,512		141,184		28,181		114,509		24.6	%
Total losses and LAE incurred	282,986		177,887		29,753		134,852		22.1	%
	Member benefit claims (1)						17,243
	Total policy and contract benefits						$	152,095

(1)    Member benefit claims are not covered by reinsurance.

The following table presents the components of the reinsurance receivables:

	As of
	December 31, 2020		December 31, 2019
Prepaid reinsurance premiums:
Life insurance (1)	$	70,066	$	72,675
Accident and health insurance (1)	66,261		66,393
Property and liability insurance (2)	423,868		286,411
Total	560,195		425,479
Ceded claim reserves:
Life insurance	4,133		3,350
Accident and health insurance	11,118		11,065
Property and liability insurance	98,092		74,384
Total ceded claim reserves recoverable	113,343		88,799
Other reinsurance settlements recoverable	54,471		25,555
Reinsurance receivables	$	728,009	$	539,833

(1)    Including policyholder account balances ceded.

(2)    Includes amounts from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

Components of Reinsurance Receivable

The following table presents the aggregate amount included in reinsurance receivables that is comprised of the three largest receivable balances from non-affiliated reinsurers:

	As of
	December 31, 2020
Total of the three largest receivable balances from non-affiliated reinsurers	$	164,857

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Goodwill and Intangible Assets, net (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The following table presents identifiable finite and indefinite-lived intangible assets, accumulated amortization, and goodwill by operating segment and/or reporting unit, as appropriate:

	As of December 31, 2020						As of December 31, 2019
	Insurance		Other		Total		Insurance		Other		Total
Customer relationships	$	143,300	$	—	$	143,300	$	53,500	$	—	$	53,500
Accumulated amortization	(32,263)		—		(32,263)		(24,318)		—		(24,318)
Trade names	14,750		800		15,550		6,750		800		7,550
Accumulated amortization	(4,382)		(440)		(4,822)		(3,273)		(360)		(3,633)
Software licensing	9,300		640		9,940		8,500		640		9,140
Accumulated amortization	(8,650)		(503)		(9,153)		(8,500)		(411)		(8,911)
Insurance policies and contracts acquired	36,500		—		36,500		36,500		—		36,500
Accumulated amortization	(36,238)		—		(36,238)		(36,115)		—		(36,115)
Insurance licensing agreements(1)	13,761		—		13,761		14,261		—		14,261
Other	640		1,000		1,640		—		—		—
Intangible assets, net	136,718		1,497		138,215		47,305		669		47,974
Goodwill	177,528		1,708		179,236		97,439		1,708		99,147
Total goodwill and intangible assets, net	$	314,246	$	3,205	$	317,451	$	144,744	$	2,377	$	147,121

(1)    Represents intangible assets with an indefinite useful life. Impairment tests are performed at least annually on these assets.

Schedule of Goodwill

Goodwill

The following table presents the activity in goodwill, by operating segment and/or reporting unit, as appropriate, and includes the adjustments made to the balance of goodwill to reflect the effect of the final valuation adjustments made for acquisitions, as well as the reduction to any goodwill attributable to impairment related charges:

	Insurance		Other(1)		Total
Balance at December 31, 2018	$	89,854	$	1,708	$	91,562
Goodwill acquired (2)	7,585		—		7,585
Balance at December 31, 2019	97,439		1,708		99,147
Goodwill acquired (2)	84,476		—		84,476
Purchase accounting adjustments (3)	(4,387)		—		(4,387)
Balance at December 31, 2020	$	177,528	$	1,708	$	179,236
Accumulated impairments	$	—	$	699	$	699

(1)    Other is primarily comprised of Mortgage.

(2)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of acquisitions in our insurance business as of July 1, 2019 and January 3, 2020.

Schedule of identifiable intangible assets

Intangible Assets, net

The following table presents the activity, by operating segment and/or reporting unit, as appropriate, in finite and indefinite-lived other intangible assets and includes the adjustments made to the balance to reflect the effect of any final valuation adjustments made for acquisitions, as well as any reduction attributable to impairment-related charges:

	Insurance		Other		Total
Balance at December 31, 2018	$	51,281	$	840	$	52,121
Intangible assets acquired (1)	3,750		—		3,750
Less: amortization expense	(7,726)		(171)		(7,897)
Balance at December 31, 2019	$	47,305	$	669	$	47,974
Intangible assets acquired (1) (2)	99,040		1,000		100,040
Purchase accounting adjustment (3)	(300)		—		(300)
Less: amortization expense	(9,327)		(172)		(9,499)
Balance at December 31, 2020	$	136,718	$	1,497	$	138,215

(1)    Relates to acquisitions in respective years. See Note (3) Acquisitions.

(2)    The addition to Other relates to a fishing license acquired by our shipping operations.

(3)    Relates to adjustments during the measurement period as permitted under ASC 805 for the final valuation of an acquisition in our insurance business as of July 1, 2019.

Finite-lived Intangible Assets Amortization Expense

The following table presents the amortization expense on finite-lived intangible assets for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Amortization expense on intangible assets	$	9,499	$	7,897	$	9,729

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table presents the amortization expense on finite-lived intangible assets for the next five years and thereafter by operating segment and/or reporting unit, as appropriate:

	As of December 31, 2020
	Insurance		Other(1)		Total
2021	$	12,951	$	170	$	13,121
2022	14,459		127		14,586
2023	14,198		80		14,278
2024	12,811		80		12,891
2025	11,101		40		11,141
2026 and thereafter	57,437		—		57,437
Total	$	122,957	$	497	$	123,454

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Derivative Financial Instruments and Hedging (Tables)

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Gross Notional and Fair Value of Derivatives

The following table presents the gross notional and fair value amounts of derivatives (on a gross basis) categorized by underlying risk:

	As of December 31, 2020						As of December 31, 2019
	Notional values		Asset derivatives		Liability derivatives		Notional values		Asset derivatives		Liability derivatives
Interest rate lock commitments	$	219,929	$	9,207	$	—	$	279,048	$	7,336	$	—
Forward delivery contracts	35,979		—		22		87,773		36		—
TBA mortgage backed securities	291,000		232		1,508		235,000		118		428
Other	3,058		2,090		560		10,360		—		3,330
Total	$	549,966	$	11,529	$	2,090	$	612,181	$	7,490	$	3,758

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Debt, net (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Debt

The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs.

		Stated interest rate or range of rates		Maximum borrowing capacity as of		As of
Debt Type	Stated maturity date			December 31, 2020		December 31, 2020		December 31, 2019
Corporate debt
Secured revolving credit agreements	August 2023	LIBOR +	2.25%	$	200,000	$	—	$	25,000
Secured term credit agreements	February 2025	LIBOR +	6.75%	120,313		120,313		68,210
Preferred trust securities	June 2037	LIBOR +	4.10%	35,000		35,000		35,000
Junior subordinated notes	October 2057	8.50%		125,000		125,000		125,000
Total corporate debt						280,313		253,210
Asset based debt (1)
Asset based revolving financing	October 2023	LIBOR +	2.75%	75,000		27,510		21,576
Residential mortgage warehouse borrowings (2)	April 2021 -	LIBOR +	2.00%	110,000		55,994		90,673
	August 2021	to LIBOR +	3.00%
Vessel backed term loan	November 2024	LIBOR +	4.75%	15,800		15,800		18,000
Total asset based debt						99,304		130,249
Total debt, face value						379,617		383,459
Unamortized discount, net						(2,035)		(198)
Unamortized deferred financing costs						(11,336)		(8,807)
Total debt, net						$	366,246	$	374,454

(1)    Asset based debt is generally recourse only to specific assets and related cash flows.

(2)    The weighted average coupon rate for residential mortgage warehouse borrowings was 2.75% and 3.83% at December 31, 2020 and December 31, 2019, respectively.

Schedule of Interest Expense Incurred on Debt

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Interest expense - corporate debt	$	23,322	$	19,682	$	18,162
Interest expense - asset based debt	9,260		7,377		8,851
Interest expense on debt	$	32,582	$	27,059	$	27,013

Schedule of Maturities of Long-term Debt

The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:

	As of
	December 31, 2020
2021	$	64,444
2022	8,450
2023	35,960
2024	15,450
2025	95,313
2026 and thereafter	160,000
Total	$	379,617

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of fair values and carrying values of assets and liabilities and the fair value level(s) associated with them

The following tables present the Company’s fair value hierarchies for financial assets and liabilities, measured on a recurring basis:

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	196,303	$	—	$	196,303
Obligations of state and political subdivisions	—		44,350		—		44,350

	As of December 31, 2020
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Obligations of foreign governments	—		3,992		—		3,992
Certificates of deposit	1,355		—		—		1,355
Asset backed securities	—		35,334		858		36,192
Corporate securities	—		94,941		—		94,941
Total available for sale securities, at fair value	1,355		374,920		858		377,133
Loans, at fair value:
Corporate loans	—		—		7,795		7,795
Mortgage loans held for sale	—		82,937		—		82,937
Total loans, at fair value	—		82,937		7,795		90,732
Equity securities:
Invesque	31,078		—		—		31,078
Fixed income exchange traded fund	63,875		—		—		63,875
Other equity securities	28,850		—		35		28,885
Total equity securities	123,803		—		35		123,838
Other investments, at fair value:
Corporate bonds	—		105,777		—		105,777
Derivative assets	2,090		232		9,207		11,529
CLOs	—		—		802		802
Total other investments, at fair value	2,090		106,009		10,009		118,108
Mortgage servicing rights (1)	—		—		14,758		14,758
Total	$	127,248	$	563,866	$	33,455	$	724,569
Liabilities:
Derivative liabilities (2)	$	—	$	2,090	$	—	$	2,090
Securities sold, not yet purchased (2)	16,479		30,158		—		46,637
Contingent consideration payable (2)	—		—		200		200
Total	$	16,479	$	32,248	$	200	$	48,927

(1)    Included in other assets.

(2)    Included in other liabilities and accrued expenses.

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Assets:
Available for sale securities, at fair value:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	—	$	191,590	$	—	$	191,590
Obligations of state and political subdivisions	—		46,338		—		46,338
Obligations of foreign governments	—		1,119		—		1,119
Certificates of deposit	896		—		—		896
Asset backed securities	—		42,833		1,185		44,018
Corporate securities	—		51,231		—		51,231
Total available for sale securities, at fair value	896		333,111		1,185		335,192
Loans, at fair value:
Corporate loans	—		—		9,787		9,787
Mortgage loans held for sale	—		98,720		—		98,720
Non-performing loans	—		—		387		387

	As of December 31, 2019
	Quoted prices in active markets Level 1		Other significant observable inputs Level 2		Significant unobservable inputs Level 3		Fair value
Total loans, at fair value	—		98,720		10,174		108,894
Equity securities:
Invesque	111,938		—		—		111,938
Fixed income exchange traded fund	25,039		—		—		25,039
Other equity securities	18,158		—		243		18,401
Total equity securities	155,135		—		243		155,378
Other investments, at fair value:
Corporate bonds	—		20,705		—		20,705
Derivative assets	—		154		7,336		7,490
CLOs	—		—		4,768		4,768
Total other investments, at fair value	—		20,859		12,104		32,963
Mortgage servicing rights (1)	—		—		8,764		8,764
Total	$	156,031	$	452,690	$	32,470	$	641,191
Liabilities:
Derivative liabilities (2)	$	—	$	3,758	$	—	$	3,758
Total	$	—	$	3,758	$	—	$	3,758
(1) Included in other assets. (2) Included in other liabilities and accrued expenses.

Schedule of additional information about assets that are measured at fair value on a recurring basis for which the company utilized Level 3 inputs to determine fair value

The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:    

	For the Year Ended December 31,
	2020 (1)		2019 (1)
Balance at January 1,	$	32,470	$	152,845
Net realized and unrealized gains or losses included in:
Earnings	2,253		1,901
OCI	(329)		(323)
Origination of IRLCs	120,267		77,082
Purchases	3,862		153
Sales	(6,672)		(123,497)
Issuances	—		111
Conversions to real estate owned	—		(2,596)
Conversions to mortgage loans held for sale	(118,396)		(73,206)
Balance at December 31,	$	33,455	$	32,470
Changes in unrealized gains (losses) included in earnings related to assets still held at period end	$	(7,978)	$	(1,884)
Changes in unrealized gains (losses) included in OCI related to assets still held at period end	$	(329)	$	(323)

(1)    Transfers between Level 2 and 3 were a result of subjecting third-party pricing on assets to various liquidity, depth, bid-ask spread and benchmarking criteria as well as assessing the availability of observable inputs affecting their fair valuation.

Schedule of quantitative information of Level 3 significant unobservable inputs used in fair valuation of liabilities

The following table presents the range and weighted average (WA) used to develop significant unobservable inputs for the fair value measurements of Level 3 assets and liabilities.

	As of December 31,						As of December 31,
Assets	2020		2019		Valuation technique	Unobservable input(s) (1)	2020					2019
	Fair Value						Range				WA	Range			WA
IRLCs	$	9,207	$	7,336	Internal model	Pull through rate	50%	to	95%		68%	50%	to	95%	61%
Mortgage servicing rights	14,758		8,764		External model	Discount rate	10%	to	13%		11%	10%	to	13%	11%
						Cost to service	$75	to	$90		$82	$75	to	$90	$86
						Prepayment speed	8%	to	60%		22%	7%	to	50%	18%
Total	$	23,965	$	16,100
Liabilities
Contingent consideration payable - Smart AutoCare	$	200	$	—	Cash Flow Model	Forecast Cash EBITDA	$20,000	to	$	30,000	N/A	N/A
					Actuarial Analysis	Assumed Claim Liabilities	$55,000				$55,000	N/A
Total	$	200	$	—

(1)    Unobservable inputs were weighted by the relative fair value of the instruments.

Schedule of fair values and carrying values of financial assets and liabilities, and fair value hierarchy

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value and their respective levels within the fair value hierarchy:

	As of December 31, 2020					As of December 31, 2019
	Level within fair value hierarchy	Fair value		Carrying value		Level within fair value hierarchy	Fair value		Carrying value
Assets:
Debentures (1)	2	$	17,703	$	17,703	2	$	15,423	$	15,423
Notes receivable, net	2	62,075		62,075		2	42,192		42,192
Total assets		$	79,778	$	79,778		$	57,615	$	57,615
Liabilities:
Debt, net	3	$	392,951	$	377,582	3	$	396,699	$	383,261
Total liabilities		$	392,951	$	377,582		$	396,699	$	383,261

(1)    Included in other investments.

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Liability for Unpaid Claims and Claim Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Insurance [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

Roll forward of Claim Liability

The following table presents the activity in the net liability for unpaid losses and allocated loss adjustment expenses of short duration contracts for the following periods:

	For the Year Ended December 31,
	2020		2019
Policy liabilities and unpaid claims balance as of January 1,	$	144,384	$	131,611
Less: liabilities of policy-holder account balances, gross	(11,589)		(13,659)
Less: non-insurance warranty benefit claim liabilities	(85)		(94)
Gross liabilities for unpaid losses and loss adjustment expenses	132,710		117,858
Less: reinsurance recoverable on unpaid losses - short duration	(88,599)		(90,016)
Less: other lines, gross	(230)		(227)
Net balance as of January 1, short duration	43,881		27,615
Incurred (short duration) related to:
Current year	172,007		144,925
Prior years	5,443		5,169
Total incurred	177,450		150,094
Paid (short duration) related to:
Current year	127,721		122,348
Prior years	9,665		11,480
Total paid	137,386		133,828
Net balance as of December 31, short duration	83,945		43,881
Plus: reinsurance recoverable on unpaid losses - short duration	113,163		88,599
Plus: other lines, gross	247		230
Gross liabilities for unpaid losses and loss adjustment expenses	197,355		132,710
Plus: liabilities of policy-holder account balances, gross	5,419		11,589
Plus: non-insurance warranty benefit claim liabilities (1)	30,664		85
Policy liabilities and unpaid claims balance as of December 31,	$	233,438	$	144,384

(1)    Primarily relates to Smart AutoCare which was acquired on January 3, 2020. See Note (3) Acquisitions for more information.

Reconciliation of Short Duration Contracts to Total Losses Incurred

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:

	For the Year Ended December 31,
	2020		2019		2018
Short duration incurred	$	177,450	$	150,094	$	131,861
Other lines incurred	27		184		124
Unallocated loss adjustment expenses	771		731		2,867
Total losses incurred	$	178,248	$	151,009	$	134,852

Short-duration Insurance Contracts, Claims Development

Incurred and Paid Development

The following table presents information about incurred and paid loss development and average claim duration as of December 31, 2020, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. The cumulative number of reported claims represents open claims, claims closed with payment, and claims closed without payment. It does not include an estimated count of unreported claims. The number of claims is measured by claim event. The Company considers a claim that does not result in a liability as a claim closed without payment.            

Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance											As of December 31, 2020
	For the Years Ended December 31,										Total of IBNR Liabilities Plus Expected Development of Reported Claims		Cumulative Number of Reported Claims
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	$	84,178	$	87,290	$	87,993	$	88,615	$	89,629	$	17	257
2017			103,306		104,898		105,601		105,787		$	96	326
2018					129,352		133,225		133,158		$	2,366	399
2019							144,925		149,166		$	15,572	403
2020									172,007		$	52,734	328
							Total		$	649,747
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
Accident Year	2016 (Unaudited)		2017 (Unaudited)		2018 (Unaudited)		2019 (Unaudited)		2020
2016	62,989		$	84,185	$	86,531	$	88,482	$	88,976
2017			84,493		102,620		105,075		105,852
2018					105,740		112,619		114,490
2019							122,348		128,787
2020									127,721
							Total		$	565,826
All outstanding liabilities before 2016, net of reinsurance									24
Liabilities for loss and loss adjustment expenses, net of reinsurance									$	83,945

Short-duration Insurance Contracts, Schedule of Historical Claims Duration

The following table presents supplementary information about average historical claims duration as of December 31, 2020 for short duration contracts:

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (Unaudited)
Years	1	2	3	4	5
Short duration	77.2%	12.6%	2.1%	1.5%	0.6%

Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability

The following table presents a reconciliation of net outstanding liabilities for unpaid loss and loss adjustment expenses of short-duration contracts to the consolidated balance sheets value of policy liabilities and unpaid claims:

	As of
	December 31, 2020
Net outstanding liabilities:
Short duration	$	83,945
Insurance lines other than short duration	67
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance	84,012
Reinsurance recoverable on unpaid losses and loss adjustment expenses:
Short duration	113,163
Other insurance lines	180
Total reinsurance recoverable on unpaid losses and loss adjustment expenses	113,343
Total gross liability for unpaid losses and loss adjustment expenses	197,355
Liabilities of policy-holder account balances, gross	5,419
Non-insurance warranty benefit claim liabilities	30,664
Total policy liabilities and unpaid claims	$	233,438

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Revenue From Contracts with Customers (Tables)

12 Months Ended

Dec. 31, 2020

Revenue Recognition [Abstract]

Disaggregation of Revenue from Contracts with Customers by Product Type

The following table presents the disaggregated amounts of revenue from contracts with customers by product type for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Motor club revenue	$	36,159	$	36,076	$	32,242
Warranty coverage revenue	98,574		27,597		26,058
Vessel related revenue	22,697		16,747		3,972
Management fee income	—		1,267		6,694
Other	6,127		7,317		7,840
Revenue from contracts with customers	$	163,557	$	89,004	$	76,806

Schedule of Activity in Deferred Assets and Liabilities Related to Revenue from Contracts with Customers

The following table presents the activity in the significant deferred assets and liabilities related to revenue from contracts with customers for the following period:

	January 1, 2020						December 31, 2020
	Beginning balance		Additions		Amortizations		Ending balance
Deferred acquisition costs
Motor club revenue	$	13,700	$	27,014	$	27,633	$	13,081
Warranty coverage revenue	1,027		58,906		11,199		48,734
Total	$	14,727	$	85,920	$	38,832	$	61,815

Deferred revenue
Motor club revenue	$	17,910	$	35,218	$	36,159	$	16,969
Warranty coverage revenue (1)	49,368		405,537		106,514		$	348,391
Total	$	67,278	$	440,755	$	142,673	$	365,360

(1)    Additions include $182,568 from the acquired balance sheet of Smart AutoCare. See Note (3) Acquisitions.

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Other Assets and Other Liabilities and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other Assets

The following table presents the components of other assets as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Right of use asset - Operating leases (1)	$	27,291	$	23,832
Furniture, fixtures and equipment, net	15,798		12,305
Income tax receivable	19,513		817
Mortgage servicing rights	14,758		8,764
Prepaid expenses	8,159		8,461
Loans eligible for repurchase	70,593		6,733
Other	5,922		7,598
Total other assets	$	162,034	$	68,510

(1)    See Note (21) Commitments and Contingencies for additional information.

Schedule of Depreciation Expense

The following table presents the depreciation expense related to furniture, fixtures and equipment for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Depreciation expense related to furniture, fixtures and equipment	$	3,257	$	2,753	$	1,984

Other Expenses

The following table presents the components of other expenses as reported in the consolidated statement of operations:

	For the Year Ended December 31,
	2020		2019		2018
Professional fees	$	20,711	$	20,820	$	15,216
General and administrative	22,295		18,563		16,218
Premium taxes	15,824		15,205		14,026
Mortgage origination expenses	14,603		12,200		8,857
Rent and related	14,074		12,642		11,114
Operating expenses from vessels	13,210		9,781		3,777
Loss on extinguishment of debt	353		1,241		428
Other	8,078		9,292		8,265
Total other expenses	$	109,148	$	99,744	$	77,901

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Other Liabilities and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Other Liabilities Disclosure [Abstract]

Components of Other Liabilities and Accrued Expenses

Other Liabilities and Accrued Expenses

The following table presents the components of other liabilities and accrued expenses as reported in the consolidated balance sheets:

	As of December 31,
	2020		2019
Accounts payable and accrued expenses	$	106,142	$	68,829
Operating lease liability (1)	32,914		29,491
Deferred tax liabilities, net	24,183		32,306
Securities sold, not yet purchased	46,637		—
Due to brokers	45,047		1,140
Loans eligible for repurchase liability	70,593		6,733
Commissions payable	18,678		9,179
Other	18,671		24,462
Total other liabilities and accrued expenses	$	362,865	$	172,140

(1)    See Note (21) Commitments and Contingencies for additional information.

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Other Revenue, Other Expenses and Other Income (Tables)

12 Months Ended

Dec. 31, 2020

Other Income and Expenses [Abstract]

Schedule of Components of Other Revenue

Other Revenue

The following table presents the components of other revenue as reported in the consolidated statement of operations. Other revenue is primarily generated by Tiptree Capital’s non-insurance activities except as noted in the footnote to the table.

	For the Year Ended December 31,
	2020		2019		2018
Other investment income (1)	$	48,747	$	45,985	$	25,541
Gain (loss) on sale of businesses (2)	(4,428)		7,598		—
Management fee income	—		1,267		6,694
Other (3)	7,591		5,038		5,827
Total other revenue	$	51,910	$	59,888	$	38,062

(1)    See Note (6) Investments for the components of Other investment income.

(2)    Related to the impairment of Luxury for the year ended December 31, 2020, and the sale of Telos for the year ended December 31, 2019. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations. (3)    Includes $7,025, $4,566 and $2,554 for the year ended December 31, 2020, 2019 and 2018, respectively, related to Insurance.

Schedule of Components of Other Expenses

The following table presents the depreciation expense related to furniture, fixtures and equipment for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Depreciation expense related to furniture, fixtures and equipment	$	3,257	$	2,753	$	1,984

Other Expenses

The following table presents the components of other expenses as reported in the consolidated statement of operations:

	For the Year Ended December 31,
	2020		2019		2018
Professional fees	$	20,711	$	20,820	$	15,216
General and administrative	22,295		18,563		16,218
Premium taxes	15,824		15,205		14,026
Mortgage origination expenses	14,603		12,200		8,857
Rent and related	14,074		12,642		11,114
Operating expenses from vessels	13,210		9,781		3,777
Loss on extinguishment of debt	353		1,241		428
Other	8,078		9,292		8,265
Total other expenses	$	109,148	$	99,744	$	77,901

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Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Shares Repurchased

The following table presents the Company’s stock repurchase activity and remaining authorization.

	For the Year Ended December 31, 2020
	Number of shares purchased	Average price per share
Share repurchase plan	1,884,286	$	5.51
Block repurchase	500,000	7.00
Total	2,384,286	$	5.82
Remaining repurchase authorization		$	16,571

Dividends Declared

Dividends

The Company declared cash dividends per share for the following periods presented below:

	Dividends per share for the
	For the Year Ended December 31,
	2020		2019		2018
First quarter	$	0.04	$	0.04	$	0.035
Second quarter	0.04		0.04		0.035
Third quarter	0.04		0.04		0.035
Fourth quarter(1)	0.04		0.04		0.035
Total cash dividends declared	$	0.16	$	0.16	$	0.140

(1)    See Note (25) Subsequent Events for when dividend was declared.

Statutory Accounting Practices Disclosure

Statutory Capital, Surplus and Net Income

The Company’s insurance company subsidiaries must maintain minimum amounts of statutory capital and surplus as required by regulatory authorities, including the NAIC; their capital and surplus levels exceeded respective minimum requirements as of December 31, 2020 and December 31, 2019.

	As of December 31,
	2020		2019
Combined statutory capital and surplus of the Company's insurance company subsidiaries	$	202,710	$	134,179
Required minimum statutory capital and surplus	$	64,950	$	17,950

Under the National Association of Insurance Commissioners Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's U.S. domiciled insurance company subsidiaries' RBC levels, as calculated in accordance with the NAIC’s RBC instructions, exceeded all RBC thresholds as of December 31, 2020.

The following table presents the statutory net income of the Company’s U.S. domiciled statutory insurance companies for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income of statutory insurance companies	$	19,647	$	8,444	$	13,986

The Company also has a foreign insurance subsidiary that is not subject to SAP. The statutory capital and surplus amounts and statutory net income presented above do not include the foreign insurance subsidiary in accordance with SAP.

Statutory Dividends

The Company’s U.S. domiciled insurance company subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance department of the applicable state of domicile. The Company eliminates all dividends from its subsidiaries in the consolidated financial statements. The following table presents the dividends paid to the Company by its U.S domiciled insurance company subsidiaries and the combined amount available for ordinary dividends of the Company's U.S. domiciled insurance company subsidiaries for the following periods:

	For the Year Ended December 31,
	2020		2019
Ordinary dividends	$	—	$	9,001
Extraordinary dividends	—		1,188
Total dividends	$	—	$	10,189
	As of
	December 31, 2020		December 31, 2019
Amount available for ordinary dividends of the Company's insurance company subsidiaries	$	13,418	$	4,527

At December 31, 2020, the maximum amount of dividends that our U.S. domiciled regulated insurance company subsidiaries could pay under applicable laws and regulations without regulatory approval was approximately $13,418. The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents the activity in accumulated other comprehensive income (loss) (AOCI), net of tax, for the following periods:

	Unrealized gains (losses) on						Amount attributable to non-controlling interests
	Available for sale securities		Interest rate swaps		Total AOCI (loss)		TFP		Other		Total AOCI (loss) to Tiptree Inc.
Balance at December 31, 2017	$	(460)	$	2,074	$	1,614	$	(222)	$	(426)	$	966
Other comprehensive income (losses) before reclassifications	(2,257)		835		(1,422)		61		211		(1,150)
Amounts reclassified from AOCI	648		—		648		—		—		648
Reclassification of AOCI - interest rate swaps (1)	—		(2,909)		(2,909)		502		226		(2,181)
Reorganization merger	—		—		—		(341)		—		(341)
Period change	(1,609)		(2,074)		(3,683)		222		437		(3,024)
Balance at December 31, 2018	$	(2,069)	$	—	$	(2,069)	$	—	$	11	$	(2,058)
Other comprehensive income (losses) before reclassifications	4,911		—		4,911		—		(24)		4,887
Amounts reclassified from AOCI	(1,032)		—		(1,032)		—		—		(1,032)
Period change	3,879		—		3,879		—		(24)		3,855
Adoption of accounting standard (1)	(99)		—		(99)				—		(99)
Balance at December 31, 2019	$	1,711	$	—	$	1,711	$	—	$	(13)	$	1,698
Other comprehensive income (losses) before reclassifications	4,364		—		4,364		—		(15)		4,349
Amounts reclassified from AOCI	(415)		—		(415)		—		—		(415)
Period change	3,949		—		3,949		—		(15)		3,934
Adoption of accounting standard (1)	42		—		42		—		—		42
Balance at December 31, 2020	$	5,702	$	—	$	5,702	$	—	$	(28)	$	5,674

(1)    Due to adoption of 2018-02 and 2016-13, respectively. See Note (2) Summary of Significant Accounting Policies.

Reclassification out of Accumulated Other Comprehensive Income

The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the consolidated statement of operations for the following periods:

	For the Year Ended December 31,						Affected line item in consolidated statements of operations
Components of AOCI	2020		2019		2018
Unrealized gains (losses) on available for sale securities	$	528	$	1,312	$	(819)	Net realized and unrealized gains (losses)
Related tax (expense) benefit	(113)		(280)		171		Provision for income tax
Net of tax	$	415	$	1,032	$	(648)
Reclassification of AOCI - interest rate swaps (1)	$	—	$	—	$	3,845	Gain on sale of discontinued operations
Related tax (expense) benefit	—		—		(936)		Provision for income tax
Net of tax	$	—	$	—	$	2,909

(1)    Relates to the sale of Care. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations.

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Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Summary of Changes to Issuances under 2017 Equity Plan

The table below summarizes changes to the issuances under the Company’s 2017 Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

2017 Equity Plan	Number of shares (1)
Available for issuance as of December 31, 2017	6,017,012
RSU and option awards granted	(558,034)
Forfeited	15,236
Available for issuance as of December 31, 2018	5,474,214
RSU and option awards granted	(702,264)
Forfeited	8,318
Subsidiary exchanged shares	(14,405)
Available for issuance as of December 31, 2019	4,765,863
RSU, stock and option awards granted	(977,446)
Available for issuance as of December 31, 2020	3,788,417

(1)    Excludes awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock.

Summary of Changes to Issuances of RSUs under the 2017 Equity Plan

The following table presents changes to the issuances of RSUs and stock awards under the 2017 Equity Plan for the periods indicated:

	Number of shares issuable	Weighted average grant date fair value
Unvested units as of December 31, 2017	598,882	$	6.48
Granted	315,371	5.95
Vested	(222,387)	6.39
Forfeited	(15,236)	6.04
Unvested units as of December 31, 2018	676,630	$	6.27
Granted	476,449	6.25
Vested	(186,152)	6.44
Forfeited	(8,318)	6.10
Unvested units as of December 31, 2019	958,609	$	6.23
Granted	552,169	7.04
Vested	(557,633)	6.54
Unvested units as of December 31, 2020	953,145	$	6.52

The following tables present the detail of the granted and vested RSUs and stock awards for the periods indicated:

	For the Year Ended December 31,				For the Year Ended December 31,
Granted	2020	2019	2018	Vested	2020	2019	2018
Directors	82,912	48,076	46,572	Directors	82,912	48,076	46,572
Employees (1)	469,257	428,373	268,799	Employees	474,721	138,076	175,815
Total Granted	552,169	476,449	315,371	Total Vested	557,633	186,152	222,387
				Taxes	(53,438)	(35,622)	(29,286)
				Exchanged	—	14,405	—
				Net Vested	504,195	164,935	193,101

(1)    Includes 256,619, 307,148 and 147,467 shares that vest ratably over three years and 212,638, 112,907 and 121,332 shares that cliff vest in February 2023, 2022 and 2021, respectively, for the years ended December 31, 2020, 2019 and 2018, respectively.

The following table presents the Company's stock option activity for the current period:

	Options outstanding	Weighted average exercise price (in dollars per stock option)		Weighted average grant date value (in dollars per stock option)		Options exercisable
Balance, December 31, 2017	821,864	$	6.36	$	2.82	—
Granted	242,663	5.85		1.88		—
Balance, December 31, 2018	1,064,527	$	6.24	$	2.61	—
Granted	225,815	6.26		1.69		—
Balance, December 31, 2019	1,290,342	$	6.24	$	2.45	—
Granted	425,277	7.25		1.83		—
Balance, December 31, 2020	1,715,619	$	6.49	$	2.29	—
Weighted average remaining contractual term at December 31, 2020 (in years)	7.1

Summary of Changes to Issuances of Subsidiary RSU's under Subsidiary Incentive Plan

The following table presents changes to the issuances of subsidiary awards under the subsidiary incentive plans for the periods indicated:

	Grant date fair value of equity shares issuable
Unvested balance as of December 31, 2017	$	8,792
Granted	1,113
Vested	(1,771)
Performance assumption adjustment	576
Unvested balance as of December 31, 2018	$	8,710
Granted	—
Vested	(4,991)
Performance assumption adjustment	560
Unvested balance as of December 31, 2019	$	4,279
Granted	1,108
Vested	(4,237)
Performance assumption adjustment	3,155
Unvested balance as of December 31, 2020	$	4,305

Schedule of Assumptions Used to Estimate the Fair Values of the Stock Options Granted

The following table presents the assumptions used to estimate the fair values of the stock options granted for the following periods:

	Year Ended December 31,
Valuation Input	2020		2019
	Assumption	Average	Assumption	Average
Historical volatility	27.60%	N/A	27.69%	N/A
Risk-free rate	1.51%	N/A	2.62%	N/A
Dividend yield	2.20%	N/A	2.21%	N/A
Expected term (years)		7.0		6.5

Schedule of Stock-based Compensation Expense and Related Income Tax Benefit

Stock Based Compensation Expense

The following table presents total stock based compensation expense and the related income tax benefit recognized on the consolidated statements of operations:

	Year Ended December 31,
	2020		2019		2018
Employee compensation and benefits	$	7,571	$	6,062	$	6,354
Director compensation	546		301		303
Income tax benefit	(1,705)		(1,374)		(1,438)
Net stock based compensation expense	$	6,412	$	4,989	$	5,219

Schedule of Additional Information on Total Non-vested Stock-based Compensation

Additional information on total non-vested stock based compensation is as follows:

	As of
	December 31, 2020
	Stock options		Restricted stock awards and RSUs
Unrecognized compensation cost related to non-vested awards	$	521	$	4,551
Weighted - average recognition period (in years)	1.27		1.43

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The following table presents the Company’s provision (benefit) for income taxes reflected as a component of income (loss):

	Year Ended December 31,
	2020		2019		2018
Current provision (benefit) for income taxes:
Federal	$	(26,273)	$	991	$	(9,650)
State	1,692		386		(1,182)
Foreign	221		825		754
Total current provision (benefit) for income taxes	(24,360)		2,202		(10,078)
Deferred provision (benefit) for income taxes:
Federal	10,415		6,502		4,110
State	697		335		59
Foreign	(379)		(22)		—
Total deferred provision (benefit) for income taxes	10,733		6,815		4,169
Total provision (benefit) for income taxes from continuing operations	$	(13,627)	$	9,017	$	(5,909)
Provision (benefit) for income taxes from discontinued operations	—		—		13,714
Total provision (benefit) for income taxes	$	(13,627)	$	9,017	$	7,805

Schedule of Effective Income Tax Rate Reconciliation

The U.S. federal rate is before the consideration of rate reconciling items. A reconciliation of the expected federal provision (benefit) for income taxes on income from continuing operations using the federal statutory income tax rate to the actual provision (benefit) for income taxes and resulting effective income tax rate is as follows for the periods indicated below:

	Year Ended December 31,
	2020			2019			2018
Income (loss) before income taxes from continuing operations	$	(38,852)		$	29,139		$	(19,796)
Federal statutory income tax rate	21.0		%	21.0		%	21.0		%
Expected federal provision (benefit) for income taxes at the federal statutory income tax rate	(8,159)			6,119			(4,157)
Effect of state provision (benefit) for income taxes, net of federal benefit	1,929			549			(471)
Effect of CARES Act refund claims	(7,293)			—			—
Effect of foreign operations	(938)			440			1,053
Effect of permanent differences	62			(30)			170
Effect of dividends received deduction	(26)			(29)			(1,534)
Effect of return-to-accrual	330			1,524			(404)
Effect of other items	468			444			(566)
Tax (benefit) on income from continuing operations	$	(13,627)		$	9,017		$	(5,909)
Effective tax rate	35.1		%	31.0		%	29.9		%

Schedule of Deferred Tax Assets and Liabilities

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	26,404	$	17,384
Unrealized losses	25,527		4,242
Accrued expenses	3,560		5,470
Unearned premiums	25,626		14,189
Deferred revenue	7,042		6,301
Other deferred tax assets	7,091		5,720
Total deferred tax assets	95,250		53,306
Less: Valuation allowance	(6,871)		(4,961)
Total net deferred tax assets	88,379		48,345
Deferred tax liabilities:
Property	2,697		1,554
Unrealized gains	17,968		6,005
Other deferred tax liabilities	4,057		3,370
Deferred acquisition cost	47,061		35,066
Advanced commissions	30,977		25,392
Intangibles	10,741		9,264
Total deferred tax liabilities	113,501		80,651
Net deferred tax liability (1)	$	25,122	$	32,306
(1) Includes $939 classified as held for sale. See Note (4) Dispositions, Assets and Liabilities Held for Sale and Discontinued Operations

Summary of Operating Loss Carryforwards

As of December 31, 2020, the Company had total U.S. Federal net operating loss carryforwards (NOLs) of $70,803 arising from continuing operations. The following table presents the U.S. Federal NOLs by tax year of expiration:

	As of December 31, 2020
Tax Year of Expiration
2026	$	86
2027	124
2028	—
2029	166
2030	17
2031	—
2032	—
2033	—
2034	1,893
2035	562
2036	39,862
2037	1,766
2038	—
Indefinite	26,327
Total	$	70,803

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Lessee, Operating Lease, Disclosure [Table Text Block]

Below is a summary of our right of use asset and lease liability as of December 31, 2020:

	As of
	December 31, 2020
Right of use asset - Operating leases	$	27,291
Operating lease liability	$	32,914
Weighted-average remaining lease term (years)	6.9
Weighted-average discount rate (1)	7.4		%

(1)    Discount rate was determined by applying available market rates to lease obligations based upon their term.

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

As of December 31, 2020, the approximate aggregate minimum future lease payments required for our lease liability over the remaining lease periods are as follows:

	December 31, 2020
2021	$	8,665
2022	7,740
2023	7,049
2024	6,176
2025	5,445
2026 and thereafter	16,091
Total minimum payments	51,166
Less: liabilities held for sale	(887)
Less: present value adjustment	(17,365)
Total	$	32,914

Schedule of rent expense for the Company’s office leases

The following table presents rent expense for the Company’s office leases recorded on the consolidated statements of operations for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Rent expense for office leases (1)	$	7,374	$	8,612	$	7,519

(1) Includes lease expense of $509 and $385 for the years ended December 31, 2020 and 2019, respectively, for assets held for sale.

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Schedule of reconciliation of basic and diluted net income per common share

The following table presents a reconciliation of basic and diluted net income per common share for the following periods:

	For the Year Ended December 31,
	2020		2019		2018
Net income (loss) from continuing operations	$	(25,225)	$	20,122	$	(13,887)
Less:
Net income (loss) attributable to non-controlling interests	3,933		1,761		(612)
Net income allocated to participating securities	—		472		—
Net income (loss) attributable to common stockholders	(29,158)		17,889		(13,275)
Net income (loss) from discontinued operations	—		—		43,770
Less:
Net income (loss) from discontinued operations attributable to non-controlling interests	—		—		6,562
Net income (loss) from discontinued operations attributable to common stockholders	—		—		37,208
Net income (loss) attributable to common shares - basic	$	(29,158)	$	17,889	$	23,933
Effect of Dilutive Securities:
Securities of subsidiaries	—		(723)		—
Net income (loss) attributable to common shares - diluted	$	(29,158)	$	17,166	$	23,933
Weighted average number of shares of common stock outstanding - basic	33,859,775		34,578,292		34,715,852
Weighted average number of incremental shares of common stock issuable from exchangeable interests and contingent considerations	—		—		—
Weighted average number of shares of common stock outstanding - diluted	33,859,775		34,578,292		34,715,852
Basic:
Net income (loss) from continuing operations	$	(0.86)	$	0.52	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Basic net income (loss) attributable to common shares	$	(0.86)	$	0.52	$	0.69
Diluted:
Net income (loss) from continuing operations	$	(0.86)	$	0.50	$	(0.38)
Net income (loss) from discontinued operations	—		—		1.07
Diluted net income (loss) attributable to common shares	$	(0.86)	$	0.50	$	0.69

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Summarized Quarterly Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Summarized Quarterly Information (Unaudited)

	2020
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	129,671	$	199,194	$	224,041	$	257,395
Total expenses	211,422		194,760		210,144		232,827
Income (loss) before taxes	(81,751)		4,434		13,897		24,568
Less: provision (benefit) for income taxes	(21,181)		(5)		(844)		8,403
Net income (loss)	(60,570)		4,439		14,741		16,165
Less: net income (loss) attributable to non-controlling interests	(563)		623		1,978		1,895
Net income (loss) attributable to common stockholders	$	(60,007)	$	3,816	$	12,763	$	14,270
Net (loss) income per Common Share:
Basic earnings per share	$	(1.74)	$	0.11	$	0.37	$	0.42
Diluted earnings per share	$	(1.74)	$	0.10	$	0.35	$	0.40
Weighted average number of Common Shares:
Basic	34,566,330		33,984,195		33,684,301		33,213,307
Diluted	34,566,330		33,984,195		33,684,301		33,213,307

	2019
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Total revenues	$	183,903	$	191,072	$	189,185	$	208,568
Total expenses	178,748		175,367		190,783		198,691
Income (loss) before taxes	5,155		15,705		(1,598)		9,877
Less: provision (benefit) for income taxes	854		3,501		(649)		5,311
Net income (loss)	4,301		12,204		(949)		4,566
Less: net income (loss) attributable to non-controlling interests	376		458		508		419
Net income (loss) attributable to common stockholders	$	3,925	$	11,746	$	(1,457)	$	4,147
Net (loss) income per Common Share:
Basic earnings per share	$	0.11	$	0.33	$	(0.04)	$	0.12
Diluted earnings per share	$	0.11	$	0.32	$	(0.04)	$	0.11
Weighted average number of Common Shares:
Basic	34,673,054		34,527,230		34,552,171		34,562,219
Diluted	34,673,054		34,527,230		34,552,171		34,578,357

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Schedule II- Condensed Financial Information of Registrant (Tables)

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Statements

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF INCOME
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Revenues
Interest income (1)	$	223	$	—	$	137
Other revenue	232		—		10
Total revenues	455		—		147
Expenses
Employee compensation and benefits	15,195		—		—
Interest expense	4,681		—		—
Professional fees	4,476		—		—
Rent and facilities	2,094		—		—
General and administrative	1,259		—		—
Depreciation and amortization	807		—		—
Loss on extinguishment of debt	353		—		—
Other expenses	1,513		3		30
Total expenses	30,378		3		30
Equity in earnings (losses) of subsidiaries, net of tax (2)	(24,855)		18,364		(13,392)
Income (loss) before taxes	(54,778)		18,361		(13,275)
Less: provision (benefit) for income taxes	(25,620)		—		—
Net income (loss)	(29,158)		18,361		(13,275)
Discontinued operations:
Income from discontinued operations, net of tax and non-controlling interest	—		—		414
Gain on sale of discontinued operations, net of tax and non-controlling interest	—		—		36,794
Discontinued operations, net of tax and non-controlling interest	—		—		37,208
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933

(1)    Eliminated in consolidation for the period ending December 31, 2018 only.

(2)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED BALANCE SHEETS
(All amounts in thousands, except share data)	As of December 31,
	2020		2019
Assets
Investment in subsidiaries (1)	$	337,951	$	397,395
Cash and cash equivalents	712		87
Notes and accounts receivable, net	2,622		—
Intercompany receivables, net (1)	—		—
Income taxes receivable	15,590		—
Deferred tax assets	44,161		—
Other assets	15,332		580
Total assets	$	416,368	$	398,062
Liabilities and Stockholders’ Equity
Liabilities
Deferred tax liabilities	$	23,889	$	—
Operating lease liability	12,241		—
Intercompany payables, net (1)	9,861		—
Accrued expenses	7,490		—
Other liabilities	6,743		—
Total liabilities	$	60,224	$	—
Stockholders' Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	$	—	$	—
Common stock: $0.001 par value, 200,000,000 shares authorized, 32,682,462 and 34,562,553 shares issued and outstanding, respectively	33		35
Additional paid-in capital	315,014		326,140
Accumulated other comprehensive income (loss), net of tax	5,674		1,698
Retained earnings	35,423		70,189
Total stockholders’ equity	356,144		398,062
Total liabilities and stockholders' equity	$	416,368	$	398,062

(1)    Eliminated in consolidation.

TIPTREE INC.
PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS
(All amounts in thousands)	Year Ended December 31,
	2020		2019		2018
Operating Activities:
Net income (loss) attributable to Tiptree Inc. common stockholders	$	(29,158)	$	18,361	$	23,933
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries(1)	24,855		(18,364)		(23,816)
Depreciation expense	807		—		—
Deferred provision (benefit) for income taxes	(15,815)		—		—
Non-cash lease expense	1,660		—		—
Non-cash compensation expense	3,110		—		—
Amortization of deferred financing costs	172		—		—
Changes in operating assets and liabilities
Changes in other operating assets and liabilities	1,264		(583)		4,772
Net cash provided by (used in) operating activities	(13,105)		(586)		4,889
Investing Activities:
Asset acquisitions due to merger with Operating Co.	488		—		—
Net cash flows provided by (used in) provided by investing activities	488		—		—
Financing Activities:
Distributions from subsidiaries (1)	35,092		14,587		—
Dividends paid	(5,565)		(5,502)		(4,781)
Repurchases of common stock	(13,889)		(9,085)		—
Subsidiary RSU exchanges	(2,034)		—		—
Vesting of share-based incentive compensation	(362)		—		—
Net cash provided by (used in) financing activities	13,242		—		(4,781)
Net increase (decrease) in cash and cash equivalents	625		(586)		108
Cash and cash equivalents at beginning of period	87		673		565
Cash and cash equivalents at end of period	$	712	$	87	$	673
Cash (received) paid for income taxes	$	(166)	$	2,168	$	(5,915)

(1)    Eliminated in consolidation.

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Organization - Narrative (Details)	12 Months Ended
	Dec. 31, 2020
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of reportable segments	2

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liability for Future Policy Benefit, Activity [Line Items]
Amortizations	$ 265,781	$ 287,834	$ 246,330
Deferred Acquisition Costs, Write off of unrecoverable costs, Insurance Policy Related	0	0	0
Deferred Acquisition Costs, Write off of unrecoverable costs, Non-insurance Policy Related	0	0	0
Loss on Contracts	0	0	$ 0
Unearned Premiums - Deferred revenues, deficiency reserve	0	$ 0
Vessel related revenue
Liability for Future Policy Benefit, Activity [Line Items]
Asset impairment charges	$ 0
Minimum
Liability for Future Policy Benefit, Activity [Line Items]
Liability for policyholder contract deposits, interest rate	3.00%
Maximum
Liability for Future Policy Benefit, Activity [Line Items]
Liability for policyholder contract deposits, interest rate	4.00%

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Summary of Significant Accounting Policies - Recent Accounting Standards (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right-of-use asset	$ 27,291	$ 23,832
Other Assets
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right-of-use asset	27,291		$ 32,052
Other Liabilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease liability	$ 32,914	$ 29,491	$ 33,558

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Acquisitions - Narrative (Details) - USD ($) $ in Thousands				12 Months Ended
	Dec. 31, 2020	Jan. 03, 2020	Jul. 01, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross		$ 111,804
Business Combination, Escrow Deposit		$ 8,250
Business Combination, Escrow Deposit, Holding Period		18 months
Business Combination, Consideration Transferred		$ 102,000
Business Combination, Contingent Consideration, Possible Reserve Earn Out Receivable		10,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual				$ 70,022
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual				226
Intangible assets, net	$ 138,215	93,700		138,215	$ 47,974	$ 52,121
Goodwill	179,236			179,236	99,147	91,562
Goodwill, Acquired During Period		60,346		84,476	7,585
Finite-lived Intangible Assets Acquired				100,040	3,750
Gain on sale of discontinued operations				0	0	56,860
Unrealized gains (losses) on interest rate swaps				0	0	1,111
Acquisition, goodwill, expected tax deductible amount		$ 21,127
Sky Services, LLC [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	25,200
Goodwill, Acquired During Period	20,000
Finite-lived Intangible Assets Acquired	5,340
Defend Insurance Group [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross			$ 4,600
Minimum
Business Acquisition [Line Items]
Finite-Lived Intangible Asset, Useful Life		5 years
Maximum
Business Acquisition [Line Items]
Finite-Lived Intangible Assets, Remaining Amortization Period		13 years 6 months
Acquisition, goodwill, expected tax deductible, amortization period		15 years
Tiptree Insurance
Business Acquisition [Line Items]
Intangible assets, net	136,718			136,718	47,305	51,281
Goodwill	$ 177,528			177,528	97,439	$ 89,854
Goodwill, Acquired During Period				84,476	7,585
Finite-lived Intangible Assets Acquired				$ 99,040	$ 3,750
Contingent Consideration, Possible Earnout Amount, Cash
Business Acquisition [Line Items]
Contingent consideration payable		$ 50,000
Contingent Consideration, Possible Earnout Amount, Common Stock
Business Acquisition [Line Items]
Contingent consideration payable		$ 30,000
Third Anniversary of Business Combination | Contingent Consideration, Possible Earnout Amount, Cash
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Measurement Anniversary		3 years
Fourth Anniversary of Business Combination | Contingent Consideration, Possible Earnout Amount, Common Stock
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Measurement Anniversary		4 years
Fifth Anniversary of Business Combination | Contingent Consideration, Possible Earnout Amount, Cash
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Measurement Anniversary		5 years
Fifth Anniversary of Business Combination | Contingent Consideration, Possible Earnout Amount, Common Stock
Business Acquisition [Line Items]
Business Combination, Contingent Consideration, Measurement Anniversary		5 years
Business Combination, Contingent Consideration, True-up Anniversary		5 years

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Acquisitions - Schedule of Business Combination, Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 03, 2020	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses	$ 377,133		$ 335,192
Total investments	811,404		736,936
Cash and cash equivalents	136,920		133,117	$ 86,003
Restricted cash	58,355	$ 764	11,473	10,521
Notes and accounts receivable, net	370,452		286,968
Reinsurance receivables	728,009		539,833
Deferred acquisition costs	229,430		166,493
Goodwill	179,236		99,147	91,562
Intangible assets, net	138,215	93,700	47,974	52,121
Other assets	162,034		68,510
Total assets	2,995,760		2,198,286
Policy liabilities and unpaid claims	233,438		144,384	$ 131,611
Deferred revenue	399,211		94,601
Reinsurance payable	224,660		143,869
Other liabilities and accrued expenses	362,865		172,140
Total liabilities	$ 2,622,222		$ 1,786,871
Smart AutoCare
Business Acquisition [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses		110
Total investments		110
Cash and cash equivalents		120,934
Notes and accounts receivable, net		6,214
Reinsurance receivables		71,337
Goodwill		60,346
Intangible assets, net		93,700
Other assets		34,053
Total assets		327,112
Policy liabilities and unpaid claims		55,151
Deferred revenue		182,568
Reinsurance payable		27,075
Other liabilities and accrued expenses		10,860
Total liabilities		275,654
Goodwill		51,458
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net		111,804
Acquisition costs		$ 3,539

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Acquisitions - Schedule of Finite-lived Intangible Assets and Range of Estimated Amortization Periods (Details) - USD ($) $ in Thousands	Jan. 03, 2020	Dec. 31, 2020	Dec. 31, 2019
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Value as of acquisition date		$ 143,300	$ 53,500
Software licensing
Acquired Finite-Lived Intangible Assets [Line Items]
Value as of acquisition date		9,940	9,140
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Value as of acquisition date		$ 15,550	$ 7,550
Smart AutoCare
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	7 years 8 months 12 days
Value as of acquisition date	$ 93,700
Smart AutoCare | Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	7 years 2 months 12 days
Value as of acquisition date	$ 86,000
Smart AutoCare | Software licensing
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	5 years
Value as of acquisition date	$ 600
Smart AutoCare | Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	13 years 6 months
Value as of acquisition date	$ 7,100

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Dispositions, Assets Held for Sale and Discontinued Operations - Narrative (Details) $ in Thousands		12 Months Ended
	Feb. 01, 2018 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on Disposition of Assets			$ 7,598	$ 0
Gain on sale of discontinued operations		$ 0	0	56,860
Unrealized gains (losses) on interest rate swaps		0	0	1,111
Impairment of Long-Lived Assets to be Disposed of			0	0
Debt, net		366,246	374,454
Luxury Disposition | Warehouse Agreement Borrowings
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		214,000
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of discontinued operations		0	0	56,860
Discontinued Operations | Care Disposition
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of Real Estate Properties	2
Other Comprehensive Income (Loss), before Tax				54,860
Gain on sale of discontinued operations				56,860
Gains (Losses) on Sales of Investment Real Estate				1,845
Disposal Group, Including Discontinued Operation, Gain Contingency Receivable from Sale, Recorded Amount				10,676
Disposal Group, Including Discontinued Operation, Consideration	$ 150,741
Discontinued Operations | Care Disposition | Invesque Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Consideration, Shares Received | shares	16,600,000
Noncash or Part Noncash Acquisition, Interest Acquired	34.00%
Discontinued Operations | Care Disposition | Interest Rate Swap
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Unrealized gains (losses) on interest rate swaps				$ 3,845
Held for sale | Luxury Disposition
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment of Long-Lived Assets to be Disposed of		4,428
Debt, net		$ 162,072	$ 97,822

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Dispositions, Assets Held for Sale and Discontinued Operations - Assets and Liabilities Held for Sale and Discontinued Operations-Revenue and Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jan. 03, 2020
Disposal Group, Including Discontinued Operation, Assets [Abstract]
Loans, at fair value	$ 90,732	$ 108,894
Other investments	219,701	137,472
Total investments	811,404	736,936
Cash and cash equivalents	4,879	7,137	$ 2,860
Restricted cash	58,355	11,473	10,521	$ 764
Other assets	162,034	68,510
Assets held for sale	181,705	107,835
Disposal Group, Including Discontinued Operation, Liabilities [Abstract]
Debt, net	366,246	374,454
Liabilities held for sale	175,112	102,430
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Other revenue	51,910	59,888	38,062
Employee compensation and benefits	172,737	129,479	113,557
Income (loss) before taxes from discontinued operations	0	0	624
Gain on sale of discontinued operations	0	0	56,860
Net income (loss) from discontinued operations	0	0	43,770
Held for sale | Luxury Disposition
Disposal Group, Including Discontinued Operation, Assets [Abstract]
Loans, at fair value	164,802	98,272
Other investments	4,345	1,019
Total investments	169,147	99,291
Cash and cash equivalents	4,870	7,137
Restricted cash	9	0
Notes and accounts receivable, net	1,760	238
Other assets	5,919	1,169
Assets held for sale	181,705	107,835
Disposal Group, Including Discontinued Operation, Liabilities [Abstract]
Debt, net	162,072	97,822
Other liabilities and accrued expenses	13,040	4,608
Liabilities held for sale	175,112	102,430
Deferred tax liabilities	939
Discontinued Operations
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Rental and related revenue	0	0	6,476
Other revenue	0	0	149
Total revenues	0	0	6,625
Employee compensation and benefits	0	0	2,788
Interest expense	0	0	1,252
Other expenses	0	0	1,961
Total expenses	0	0	6,001
Income (loss) before taxes from discontinued operations	0	0	624
Gain on sale of discontinued operations	0	0	56,860
Less: provision (benefit) for income taxes	0	0	13,714
Net income (loss) from discontinued operations	$ 0	$ 0	$ 43,770

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Dispositions, Assets Held for Sale and Discontinued Operations - Cash Flow Statement (Details) - Discontinued Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating activities	$ 0	$ 0	$ (2,095)
Investing activities	0	0	(592)
Financing activities	0	0	(123)
Net cash flows provided by discontinued operations	$ 0	$ 0	$ (2,810)

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Operating Segment Data - Schedule of Segment Results (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of reportable segments									2
Segment Reporting Information, Operating Income (Loss) [Abstract]
Total revenues	$ 257,395	$ 224,041	$ 199,194	$ 129,671	$ 208,568	$ 189,185	$ 191,072	$ 183,903	$ 810,301	$ 772,728	$ 625,826
Total expenses									(813,493)	(709,348)	(615,378)
Corporate expenses									(35,660)	(34,241)	(30,244)
Income (loss) before taxes	24,568	13,897	4,434	(81,751)	9,877	(1,598)	15,705	5,155	(38,852)	29,139	(19,796)
Less: provision (benefit) for income taxes	8,403	(844)	(5)	(21,181)	5,311	(649)	3,501	854	(13,627)	9,017	(5,909)
Net income (loss)	16,165	14,741	4,439	(60,570)	4,566	(949)	12,204	4,301	(25,225)	20,122	29,883
Less: net (loss) income attributable to non-controlling interests	1,895	1,978	623	(563)	419	508	458	376		1,761	5,950
Net income (loss) attributable to common stockholders	$ 14,270	$ 12,763	$ 3,816	$ (60,007)	$ 4,147	$ (1,457)	$ 11,746	$ 3,925	(29,158)	18,361	23,933
Net realized and unrealized gains (losses)									62,410	83,868	28,782
Other investment income									51,910	59,888	38,062
Gain (Loss) on Disposition of Business									(4,428)	7,598	56,860
Management Fee Income									163,557	89,004	76,806
Other									$ 7,591	$ 5,038	$ 5,827
Revenues, Non-United States Sources									6.00%	6.00%	6.00%
Tiptree Insurance
Segment Reporting Information, Operating Income (Loss) [Abstract]
Total revenues									$ 691,061	$ 635,085	$ 544,586
Total expenses									(664,113)	(598,055)	(530,414)
Corporate expenses									0	0	0
Income (loss) before taxes									26,948	37,030	14,172
Other									7,025	4,566	2,554
Tiptree Capital
Segment Reporting Information, Operating Income (Loss) [Abstract]
Total revenues									112,165	66,121	51,624
Total expenses									(81,063)	(63,162)	(51,289)
Corporate expenses									0	0	0
Income (loss) before taxes									31,102	2,959	335
Other investment income									48,747	45,985	25,541
Tiptree Capital - other
Segment Reporting Information, Operating Income (Loss) [Abstract]
Total revenues									7,075	71,522	29,616
Total expenses									(68,317)	(48,131)	(33,675)
Corporate expenses									0	0	0
Income (loss) before taxes									$ (61,242)	$ 23,391	$ (4,059)

XML

Operating Segment Data - Schedule of Segment Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Total assets	$ 2,995,760	$ 2,198,286
Tiptree Insurance
Segment Reporting Information [Line Items]
Total assets	2,452,798	1,730,636
Tiptree Capital
Segment Reporting Information [Line Items]
Total assets	217,138	154,589
Corporate and Other
Segment Reporting Information [Line Items]
Total assets	23,756	16,052
Tiptree Capital - other
Segment Reporting Information [Line Items]
Total assets	$ 302,068	$ 297,009

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Investments - Schedule of Investments by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses	$ 377,133	$ 335,192
Loans, at fair value	90,732	108,894
Equity securities	123,838	155,378
Other investments	219,701	137,472
Total investments	811,404	736,936
Tiptree Insurance
Segment Reporting Information [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses	377,133	335,192
Loans, at fair value	7,795	10,174
Equity securities	98,130	62,816
Other investments	125,833	42,452
Total investments	608,891	450,634
Tiptree Capital
Segment Reporting Information [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses	0	0
Loans, at fair value	82,937	98,720
Equity securities	0	0
Other investments	9,439	7,490
Total investments	92,376	106,210
Tiptree Capital - other
Segment Reporting Information [Line Items]
Available for sale securities, at fair value, net of allowance for credit losses	0	0
Loans, at fair value	0	0
Equity securities	25,708	92,562
Other investments	84,429	87,530
Total investments	$ 110,137	$ 180,092

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Investments - Schedule of Available-for-sale Securities, at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 369,751	$ 332,988
Allowance for Credit Losses	0	53
Gross unrealized gains	9,541	4,070
Gross unrealized losses	(2,159)	(1,866)
Fair value	377,133	335,192
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	191,116	189,596
Allowance for Credit Losses	0
Gross unrealized gains	5,245	2,138
Gross unrealized losses	(58)	(144)
Fair value	196,303	191,590
Obligations of state and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	42,583	45,249
Allowance for Credit Losses	0	1
Gross unrealized gains	1,768	1,104
Gross unrealized losses	(1)	(15)
Fair value	44,350	46,338
Corporate securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	92,761	50,514
Allowance for Credit Losses	0	50
Gross unrealized gains	2,181	719
Gross unrealized losses	(1)	(2)
Fair value	94,941	51,231
Asset backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	37,975	45,634
Allowance for Credit Losses	0	2
Gross unrealized gains	316	89
Gross unrealized losses	(2,099)	(1,705)
Fair value	36,192	44,018
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,355	896
Allowance for Credit Losses	0
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Fair value	1,355	896
Obligations of foreign governments
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	3,961	1,099
Allowance for Credit Losses	0
Gross unrealized gains	31	20
Gross unrealized losses	0	0
Fair value	$ 3,992	$ 1,119

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Investments - Schedule of Amortized Cost and Fair Value by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Amortized Cost
Due in one year or less	$ 30,306	$ 9,584
Due after one year through five years	149,378	130,223
Due after five years through ten years	26,621	19,508
Due after ten years	125,471	128,039
Asset-backed securities	37,975	45,634
Amortized Cost	369,751	332,988
Fair Value
Due in one year or less	30,602	9,602
Due after one year through five years	153,406	131,952
Due after five years through ten years	27,479	20,125
Due after ten years	129,454	129,495
Asset-backed securities	36,192	44,018
Fair Value	$ 377,133	$ 335,192

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Investments - Schedule of Available-for-sale Securities in Continuous Unrealized Loss Position (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Securities, Available-for-sale [Line Items]
Less than or equal to One Year, Fair value	$ 16,603	$ 41,888
Less than or equal to One Year, Gross unrealized losses	$ 60	$ 160
Less than or Equal to One Year, Number of Securities	49	124
More Than One Year, Fair value	$ 18,929	$ 24,110
More than One Year, Gross unrealized loss	$ 2,099	$ 1,706
More than One Year, Number of securities	11	56
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Debt Securities, Available-for-sale [Line Items]
Less than or equal to One Year, Fair value	$ 15,323	$ 31,416
Less than or equal to One Year, Gross unrealized losses	$ 58	$ 132
Less than or Equal to One Year, Number of Securities	41	75
More Than One Year, Fair value	$ 2	$ 3,888
More than One Year, Gross unrealized loss	$ 0	$ 12
More than One Year, Number of securities	2	38
Obligations of state and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Less than or equal to One Year, Fair value	$ 379	$ 3,774
Less than or equal to One Year, Gross unrealized losses	$ 1	$ 15
Less than or Equal to One Year, Number of Securities	5	20
More Than One Year, Fair value	$ 0	$ 0
More than One Year, Gross unrealized loss	$ 0	$ 0
More than One Year, Number of securities	0	0
Corporate securities
Debt Securities, Available-for-sale [Line Items]
Less than or equal to One Year, Fair value	$ 901	$ 2,820
Less than or equal to One Year, Gross unrealized losses	$ 1	$ 2
Less than or Equal to One Year, Number of Securities	3	12
More Than One Year, Fair value	$ 0	$ 742
More than One Year, Gross unrealized loss	$ 0	$ 0
More than One Year, Number of securities	0	7
Asset backed securities
Debt Securities, Available-for-sale [Line Items]
Less than or equal to One Year, Fair value	$ 0	$ 3,878
Less than or equal to One Year, Gross unrealized losses	$ 0	$ 11
Less than or Equal to One Year, Number of Securities	0	17
More Than One Year, Fair value	$ 18,927	$ 19,480
More than One Year, Gross unrealized loss	$ 2,099	$ 1,694
More than One Year, Number of securities	9	11

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Investments -Schedule of the Allowance for Credit Losses (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward]
Increase in the allowance for the initial adoption of ASU 2016-13	$ 53
Reduction in credit losses due to AFS securities sold during the year	3
Recoveries of amounts previously written off during the year	50
Ending balance of the allowance for credit losses on AFS securities	0
Credit losses (gains from recoveries) on AFS securities	53
Obligations of state and political subdivisions
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward]
Increase in the allowance for the initial adoption of ASU 2016-13	1
Reduction in credit losses due to AFS securities sold during the year	0
Recoveries of amounts previously written off during the year	1
Ending balance of the allowance for credit losses on AFS securities	0
Corporate securities
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward]
Increase in the allowance for the initial adoption of ASU 2016-13	50
Reduction in credit losses due to AFS securities sold during the year	3
Recoveries of amounts previously written off during the year	47
Ending balance of the allowance for credit losses on AFS securities	0
Asset backed securities
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward]
Increase in the allowance for the initial adoption of ASU 2016-13	2
Reduction in credit losses due to AFS securities sold during the year	0
Recoveries of amounts previously written off during the year	2
Ending balance of the allowance for credit losses on AFS securities	$ 0

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Investments - Schedule of Restricted Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]
Fair value of restricted investments for special deposits required by state insurance departments	$ 9,447	$ 6,275
Fair value of restricted investments in trust pursuant to reinsurance agreements	44,349	33,478
Total fair value of restricted investments	$ 53,796	$ 39,753

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Investments - Schedule of Available for Sale Investment Purchases, Proceeds and Gains & Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Purchases of AFS securities	$ 158,357	$ 253,415	$ 192,288
Proceeds from maturities, calls and prepayments of AFS securities	84,923	36,459	30,089
Gross proceeds from sales of AFS securities	35,603	170,495	56,191
Gains (losses) realized on sales of AFS securities	528	1,312	(789)
Gains (losses) realized on maturities, calls and prepayments of AFS securities	0	0	(30)
Debt Securities, Available-for-sale, Realized Gain	594	1,558	50
Debt Securities, Available-for-sale, Realized Loss	$ (66)	$ (246)	$ (839)

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Loans, at fair value - Schedule of the Company's Investment in Loans Measured at Fair Value (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, at fair value	$ 90,732	$ 108,894
Unpaid principal balance (UPB)	90,871	108,095
Fair value exceeds / (below) UPB	(139)	799
Loans Pledged as Collateral	$ 81,630	98,086
Non-performing loans
Financing Receivable, Recorded Investment, Aging [Abstract]
Cost Basis of NPLs		$ 282
Financing Receivables, Equal to Greater than 90 Days Past Due | Mortgage Loans Held for Sale
Financing Receivable, Recorded Investment, Aging [Abstract]
Financing Receivable, Number of Loans Past Due	2	1
Financing Receivable, Past Due	$ 534	$ 198
Tiptree Insurance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, at fair value	7,795	10,174
Tiptree Insurance | Corporate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, at fair value	7,795	9,787
Unpaid principal balance (UPB)	12,281	12,006
Fair value exceeds / (below) UPB	(4,486)	(2,219)
Loans Pledged as Collateral	0	0
Financing Receivable, Recorded Investment, Aging [Abstract]
Cost Basis of NPLs	11,282	11,969
Tiptree Insurance | Non-performing loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, at fair value	0	387
Unpaid principal balance (UPB)	0	409
Fair value exceeds / (below) UPB	0	(22)
Loans Pledged as Collateral	0	0
Tiptree Capital
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, at fair value	82,937	98,720
Tiptree Capital | Mortgage Loans Held for Sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans held for sale (3)	82,937	98,720
Unpaid principal balance (UPB)	78,590	95,680
Fair value exceeds / (below) UPB	4,347	3,040
Loans Pledged as Collateral	$ 81,630	$ 98,086

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Equity Securities (Details) - USD ($) $ in Thousands, shares in Millions	Dec. 31, 2020	Dec. 31, 2019
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	$ 123,838	$ 155,378
Equity Securities, FV-NI, Cost	235,337	195,021
Tiptree Insurance
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	98,130	62,816
Equity Securities, FV-NI, Cost	123,846	84,333
Tiptree Capital
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	0	0
Tiptree Capital - other
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	25,708	92,562
Equity Securities, FV-NI, Cost	$ 111,491	$ 110,688
Invesque Inc.
Debt and Equity Securities, FV-NI [Line Items]
Equity securities, shares held	17.0	16.6
Equity securities	$ 31,078	$ 111,938
Equity Securities, FV-NI, Cost	134,830	133,876
Invesque Inc. | Tiptree Insurance
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	5,370	19,376
Equity Securities, FV-NI, Cost	23,339	23,188
Invesque Inc. | Tiptree Capital - other
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	25,708	92,562
Equity Securities, FV-NI, Cost	111,491	110,688
Other equity securities
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	28,885	18,401
Equity Securities, FV-NI, Cost	38,069	35,889
Other equity securities | Tiptree Insurance
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	28,885	18,401
Equity Securities, FV-NI, Cost	38,069	35,889
Other equity securities | Tiptree Capital - other
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	0	0
Equity Securities, FV-NI, Cost	0	0
Exchange Traded Funds
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	63,875	25,039
Equity Securities, FV-NI, Cost	62,438	25,256
Exchange Traded Funds | Tiptree Insurance
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	63,875	25,039
Equity Securities, FV-NI, Cost	62,438	25,256
Exchange Traded Funds | Tiptree Capital - other
Debt and Equity Securities, FV-NI [Line Items]
Equity securities	0	0
Equity Securities, FV-NI, Cost	$ 0	$ 0

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Other Investments - Schedule of Other Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investment Holdings, Other than Securities [Line Items]
Other investments	$ 219,701	$ 137,472
Tiptree Insurance
Investment Holdings, Other than Securities [Line Items]
Other investments	125,833	42,452
Tiptree Capital
Investment Holdings, Other than Securities [Line Items]
Other investments	9,439	7,490
Tiptree Capital - other
Investment Holdings, Other than Securities [Line Items]
Other investments	84,429	87,530
Vessels
Investment Holdings, Other than Securities [Line Items]
Other investments	83,028	85,991
Vessels | Tiptree Insurance
Investment Holdings, Other than Securities [Line Items]
Other investments	0	0
Accumulated Depreciation, Vessels	8,372	3,817
Vessels | Tiptree Capital
Investment Holdings, Other than Securities [Line Items]
Other investments	0	0
Vessels | Tiptree Capital - other
Investment Holdings, Other than Securities [Line Items]
Other investments	83,028	85,991
Corporate bonds, at fair value
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	105,777	20,705
Corporate bonds, at fair value | Tiptree Insurance
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	105,777	20,705
Investment Owned, at Cost	97,284	20,146
Corporate bonds, at fair value | Tiptree Capital
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	0	0
Corporate bonds, at fair value | Tiptree Capital - other
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	0	0
Other Investments
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	13,193	15,353
Other Investments | Tiptree Insurance
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	2,353	6,324
Other Investments | Tiptree Capital
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	9,439	7,490
Other Investments | Tiptree Capital - other
Investment Holdings, Other than Securities [Line Items]
Other, at Fair Value	1,401	1,539
Debentures
Investment Holdings, Other than Securities [Line Items]
Other investments	17,703	15,423
Debentures | Tiptree Insurance
Investment Holdings, Other than Securities [Line Items]
Other investments	17,703	15,423
Debentures | Tiptree Capital
Investment Holdings, Other than Securities [Line Items]
Other investments	0	0
Debentures | Tiptree Capital - other
Investment Holdings, Other than Securities [Line Items]
Other investments	$ 0	$ 0

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Investment Income and Net Realized and Unrealized Gains and Losses - Schedule of Net Investment Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net investment income	$ 9,916	$ 14,017	$ 19,179
Other revenue	51,910	59,888	38,062
Revenue from contracts with customers	163,557	89,004	76,806
Tiptree Insurance
Total investment income	14,221	15,719	20,908
Less: investment expenses	4,305	1,702	1,729
Net investment income	9,916	14,017	19,179
Tiptree Insurance | Available for sale securities, at fair value
Investment income, gross	7,685	8,404	6,560
Tiptree Insurance | Loans, at fair value
Investment income, gross	801	3,284	10,809
Tiptree Insurance | Other Investments
Investment income, gross	4,245	1,218	1,350
Tiptree Insurance | Equity securities
Investment income, gross	1,482	2,813	2,092
Tiptree Insurance | Real Estate Investment
Investment income, gross	8	0	97
Tiptree Capital
Other revenue	48,747	45,985	25,541
Tiptree Capital | Loans, at fair value
Other revenue	5,617	6,206	4,343
Tiptree Capital | Other Investments
Other revenue	0	269	175
Tiptree Capital | Equity securities
Other revenue	2,533	10,132	9,224
Loan fee income | Tiptree Capital | Loans, at fair value
Other revenue	$ 17,900	$ 12,631	$ 7,827

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Investment Income and Net Realized and Unrealized Gains and Losses - Schedule of Net Realized and Unrealized Gains (Losses) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Net realized gains (losses)	$ 122,024	$ 80,437	$ 64,663
Debt Securities, Available-for-sale, Allowance for Credit Loss, Not Previously Recorded	53	0	0
Net unrealized gains (losses)	(59,614)	3,431	(35,881)
Net realized and unrealized gains (losses)	62,410	83,868	28,782
Available for sale securities, at fair value | Tiptree Insurance
Segment Reporting Information [Line Items]
Net realized gains (losses)	528	1,312	(819)
Corporate Loans | Tiptree Insurance
Segment Reporting Information [Line Items]
Net realized gains (losses)	(945)	2,100	2,071
Net unrealized gains (losses)	(1,461)	(3,899)	(4,730)
Corporate Loans | Tiptree Capital
Segment Reporting Information [Line Items]
Net realized gains (losses)	101,411	52,617	44,509
Net unrealized gains (losses)	1,270	840	134
Corporate Loans | Tiptree Capital - other
Segment Reporting Information [Line Items]
Net realized gains (losses)	35,753	23,403	16,638
Net unrealized gains (losses)	2,185	983	60
Equity securities | Tiptree Insurance
Segment Reporting Information [Line Items]
Net realized gains (losses)	(24,586)	947	2,721
Net unrealized gains (losses)	(22,793)	7,621	(9,815)
Equity securities | Tiptree Capital - other
Segment Reporting Information [Line Items]
Net unrealized gains (losses)	(67,656)	(992)	(17,134)
Other Investments | Tiptree Insurance
Segment Reporting Information [Line Items]
Net realized gains (losses)	2,511	279	0
Net unrealized gains (losses)	10,162	(697)	(428)
Other Investments | Tiptree Capital
Segment Reporting Information [Line Items]
Net unrealized gains (losses)	(6,093)	357	(2,246)
Other Investments | Tiptree Capital - other
Segment Reporting Information [Line Items]
Net realized gains (losses)	0	(260)	(2,084)
Net unrealized gains (losses)	7,482	25	569
Other Corporate Bonds | Tiptree Insurance
Segment Reporting Information [Line Items]
Net realized gains (losses)	7,299	39	1,627
Equity securities | Equity securities | Tiptree Insurance
Segment Reporting Information [Line Items]
Net unrealized gains (losses)	$ 17,290	$ (807)	$ (2,291)

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Notes and Accounts Receivable, net -Schedule of Notes and Accounts Receivable, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable, net - premium financing program (1)	$ 62,075	$ 42,192
Accounts and premiums receivable, net	95,269	50,712
Retrospective commissions receivable	131,760	105,387
Trust receivables	54,393	63,925
Other Receivables	26,955	24,752
Total	370,452	286,968
Financing Receivable, Allowance for Credit Loss	101	95
Financing Receivable, Credit Loss, Expense (Reversal)	223	175	$ 195
Accounts Receivable, Allowance for Credit Loss	169	109
Bad debt expense	28	36	$ 39
Financing Receivables, Equal to Greater than 90 Days Past Due
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, 90 Days or More Past Due, Still Accruing	$ 215	$ 93

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Reinsurance Receivables - Schedule of Direct, Assumed and Ceded (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Premiums Written, Net [Abstract]
Direct amount	$ 1,012,784	$ 918,089	$ 812,602
Ceded to other companies	627,812	478,095	401,231
Assumed from other companies	158,578	97,139	55,449
Net amount	$ 543,550	$ 537,133	$ 466,820
Percentage of amount - assumed to net	29.20%	18.10%	11.90%
Premiums Earned, Net [Abstract]
Direct amount	$ 878,130	$ 789,316	$ 735,620
Ceded to other companies	(521,028)	(360,769)	(344,216)
Assumed from other companies	120,889	70,561	36,433
Net amount	$ 477,991	$ 499,108	$ 427,837
Percentage of amount - assumed to net	25.30%	14.10%	8.50%
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Net	$ 2,167,955	$ 2,292,047	$ 2,184,130
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Assumed	0	0	0
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Ceded	2,985,196	2,884,009	2,662,173
SEC Schedule, 12-17, Insurance Companies, Reinsurance, Life Insurance in Force, Gross	5,153,151	5,176,056	4,846,303
Life Insurance
Premiums Written, Net [Abstract]
Direct amount	69,704	75,060	69,516
Ceded to other companies	39,761	40,555	38,239
Assumed from other companies	1,550	1,692	1,874
Net amount	$ 31,493	$ 36,197	$ 33,151
Percentage of amount - assumed to net	4.90%	4.70%	5.70%
Premiums Earned, Net [Abstract]
Direct amount	$ 68,637	$ 68,282	$ 64,346
Ceded to other companies	(37,194)	(35,929)	(32,865)
Assumed from other companies	1,437	1,607	1,766
Net amount	$ 32,880	$ 33,960	$ 33,247
Percentage of amount - assumed to net	4.40%	4.70%	5.30%
Accident and Health Insurance
Premiums Written, Net [Abstract]
Direct amount	$ 117,235	$ 133,514	$ 126,951
Ceded to other companies	78,233	87,447	85,136
Assumed from other companies	12,696	3,201	3,229
Net amount	$ 51,698	$ 49,268	$ 45,044
Percentage of amount - assumed to net	24.60%	6.50%	7.20%
Premiums Earned, Net [Abstract]
Direct amount	$ 118,183	$ 123,182	$ 118,482
Ceded to other companies	(78,365)	(82,660)	(80,258)
Assumed from other companies	11,599	3,165	3,262
Net amount	$ 51,417	$ 43,687	$ 41,486
Percentage of amount - assumed to net	22.60%	7.20%	7.90%
Property and Liability Insurance
Premiums Written, Net [Abstract]
Direct amount	$ 825,845	$ 709,515	$ 616,135
Ceded to other companies	509,818	350,093	277,856
Assumed from other companies	144,332	92,246	50,346
Net amount	$ 460,359	$ 451,668	$ 388,625
Percentage of amount - assumed to net	31.40%	20.40%	13.00%
Premiums Earned, Net [Abstract]
Direct amount	$ 691,310	$ 597,852	$ 552,792
Ceded to other companies	(405,469)	(242,180)	(231,093)
Assumed from other companies	107,853	65,789	31,405
Net amount	$ 393,694	$ 421,461	$ 353,104
Percentage of amount - assumed to net	27.40%	15.60%	8.90%

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Reinsurance Receivables - Schedule of Losses and LAE Incurred (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Effects of Reinsurance [Line Items]
Direct amount	$ 347,528	$ 282,338	$ 282,986
Ceded to other companies	(225,122)	(184,919)	(177,887)
Assumed from other companies	55,842	53,590	29,753
Net	178,248	151,009	134,852
Member benefit claims (1)	58,650	19,672	17,243
Total policy and contract benefits	$ 236,898	$ 170,681	$ 152,095
Losses Incurred, Percentage Assumed to Net	31.30%	35.50%	22.10%
Life Insurance
Effects of Reinsurance [Line Items]
Direct amount	$ 46,268	$ 38,306	$ 36,488
Ceded to other companies	(27,292)	(22,607)	(21,037)
Assumed from other companies	645	443	886
Net	$ 19,621	$ 16,142	$ 16,337
Losses Incurred, Percentage Assumed to Net	3.30%	2.70%	5.40%
Accident and Health Insurance
Effects of Reinsurance [Line Items]
Direct amount	$ 18,354	$ 18,832	$ 18,986
Ceded to other companies	(15,715)	(15,022)	(15,666)
Assumed from other companies	7,032	362	686
Net	$ 9,671	$ 4,172	$ 4,006
Losses Incurred, Percentage Assumed to Net	72.70%	8.70%	17.10%
Property and Liability Insurance
Effects of Reinsurance [Line Items]
Direct amount	$ 282,906	$ 225,200	$ 227,512
Ceded to other companies	(182,115)	(147,290)	(141,184)
Assumed from other companies	48,165	52,785	28,181
Net	$ 148,956	$ 130,695	$ 114,509
Losses Incurred, Percentage Assumed to Net	32.30%	40.40%	24.60%

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Reinsurance Receivables - Schedule of the Components of Reinsurance Receivables (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 03, 2020	Dec. 31, 2019
Effects of Reinsurance [Line Items]
Reinsurance receivables	$ 728,009		$ 539,833
Prepaid reinsurance premiums:	560,195		425,479
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	113,343
Life (1)
Effects of Reinsurance [Line Items]
Prepaid reinsurance premiums:	70,066		72,675
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	4,133		3,350
Accident and health (1)
Effects of Reinsurance [Line Items]
Prepaid reinsurance premiums:	66,261		66,393
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	11,118		11,065
Property (2)
Effects of Reinsurance [Line Items]
Prepaid reinsurance premiums:	423,868		286,411
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	98,092		74,384
Total ceded claim reserves recoverable
Effects of Reinsurance [Line Items]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	113,343		88,799
Other reinsurance settlements recoverable
Effects of Reinsurance [Line Items]
Other reinsurance settlements recoverable	$ 54,471		$ 25,555
Smart AutoCare
Effects of Reinsurance [Line Items]
Reinsurance receivables		$ 71,337

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Reinsurance Receivables - Schedule of Reinsurance Receivables - Aggregrate of Three Largest Reinsurers (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Concentration Risk [Line Items]
Total of the three largest receivable balances from non-affiliated reinsurers	$ 728,009	$ 539,833
Customer Concentration Risk
Concentration Risk [Line Items]
Total of the three largest receivable balances from non-affiliated reinsurers	$ 164,857

XML

Goodwill and Intangible Assets, net - Schedule of Identifiable Finite and Indefinite-Lived Intangible Assets, Accumulated Amortization and Goodwill by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 03, 2020	Dec. 31, 2019	Dec. 31, 2018
Schedule of Intangible Assets, Net [Line Items]
Intangible assets, net	$ 138,215	$ 93,700	$ 47,974	$ 52,121
Goodwill	179,236		99,147	91,562
Total	317,451		147,121
Insurance licensing agreements(1)
Schedule of Intangible Assets, Net [Line Items]
Insurance licensing agreements(1)	13,761		14,261
Customer relationships
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	143,300		53,500
Accumulated amortization	(32,263)		(24,318)
Trade names
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	15,550		7,550
Accumulated amortization	(4,822)		(3,633)
Software licensing
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	9,940		9,140
Accumulated amortization	(9,153)		(8,911)
Insurance policies and contracts acquired
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	36,500		36,500
Accumulated amortization	(36,238)		(36,115)
Other Intangible Assets
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	1,640		0
Tiptree Insurance
Schedule of Intangible Assets, Net [Line Items]
Intangible assets, net	136,718		47,305	51,281
Goodwill	177,528		97,439	89,854
Total	314,246		144,744
Tiptree Insurance | Insurance licensing agreements(1)
Schedule of Intangible Assets, Net [Line Items]
Insurance licensing agreements(1)	13,761		14,261
Tiptree Insurance | Customer relationships
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	143,300		53,500
Accumulated amortization	(32,263)		(24,318)
Tiptree Insurance | Trade names
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	14,750		6,750
Accumulated amortization	(4,382)		(3,273)
Tiptree Insurance | Software licensing
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	9,300		8,500
Accumulated amortization	(8,650)		(8,500)
Tiptree Insurance | Insurance policies and contracts acquired
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	36,500		36,500
Accumulated amortization	(36,238)		(36,115)
Tiptree Insurance | Other Intangible Assets
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	640		0
Other Segments
Schedule of Intangible Assets, Net [Line Items]
Intangible assets, net	1,497		669	840
Goodwill	1,708		1,708	$ 1,708
Total	3,205		2,377
Other Segments | Insurance licensing agreements(1)
Schedule of Intangible Assets, Net [Line Items]
Insurance licensing agreements(1)	0		0
Other Segments | Customer relationships
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	0		0
Accumulated amortization	0		0
Other Segments | Trade names
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	800		800
Accumulated amortization	(440)		(360)
Other Segments | Software licensing
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	640		640
Accumulated amortization	(503)		(411)
Other Segments | Insurance policies and contracts acquired
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	0		0
Accumulated amortization	0		0
Other Segments | Other Intangible Assets
Schedule of Intangible Assets, Net [Line Items]
Finite-Lived Intangible Assets, Gross	$ 1,000		$ 0

XML

Goodwill and Intangible Assets, net - Schedule of Goodwill Rollforward (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 03, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill [Roll Forward]
Balance, beginning of period		$ 99,147	$ 91,562
Goodwill, Acquired During Period	$ 60,346	84,476	7,585
Balance, end of period		179,236	99,147	$ 91,562
Goodwill, Impaired, Accumulated Impairment Loss [Abstract]
Accumulated impairments		699
Goodwill, Impaired [Abstract]
Impairment of goodwill		0	0	0
Impairment of Intangible Assets (Excluding Goodwill)		0	0	0
Goodwill, Purchase Accounting Adjustments		(4,387)
Other Segments
Goodwill [Roll Forward]
Balance, beginning of period		1,708	1,708
Goodwill, Acquired During Period		0	0
Balance, end of period		1,708	1,708	1,708
Goodwill, Impaired, Accumulated Impairment Loss [Abstract]
Accumulated impairments		699
Goodwill, Impaired [Abstract]
Goodwill, Purchase Accounting Adjustments		0
Tiptree Insurance
Goodwill [Roll Forward]
Balance, beginning of period		97,439	89,854
Goodwill, Acquired During Period		84,476	7,585
Balance, end of period		177,528	$ 97,439	$ 89,854
Goodwill, Impaired, Accumulated Impairment Loss [Abstract]
Accumulated impairments		0
Goodwill, Impaired [Abstract]
Goodwill, Purchase Accounting Adjustments		$ (4,387)

XML

Goodwill and Intangible Assets, net - Schedule of Intangible Assets, Net Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Finite-lived Intangible Assets [Roll Forward]
Balance, Beginning of Period	$ 47,974	$ 52,121
Finite-lived Intangible Assets Acquired	100,040	3,750
Finite-Lived Intangible Assets, Purchase Accounting Adjustments	(300)
Less: amortization expense	(9,499)	(7,897)	$ (9,729)
Balance, End of Period	138,215	47,974	52,121
Impairment of Intangible Assets (Excluding Goodwill) [Abstract]
Impairment of Intangible Assets (Excluding Goodwill)	0	0	0
Tiptree Insurance
Finite-lived Intangible Assets [Roll Forward]
Balance, Beginning of Period	47,305	51,281
Finite-lived Intangible Assets Acquired	99,040	3,750
Finite-Lived Intangible Assets, Purchase Accounting Adjustments	(300)
Less: amortization expense	(9,327)	(7,726)
Balance, End of Period	136,718	47,305	51,281
Other Segments
Finite-lived Intangible Assets [Roll Forward]
Balance, Beginning of Period	669	840
Finite-lived Intangible Assets Acquired	1,000	0
Finite-Lived Intangible Assets, Purchase Accounting Adjustments	0
Less: amortization expense	(172)	(171)
Balance, End of Period	$ 1,497	$ 669	$ 840

XML

Goodwill and Intangible Assets, net - Schedule of Amortization Expense on Intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense on intangible assets	$ 9,499	$ 7,897	$ 9,729

XML

Goodwill and Intangible Assets, net - Schedule of Future Amortization Expense on Intangibles by Segment (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Finite-Lived Intangible Assets [Line Items]
2021	$ 13,121
2022	14,586
2023	14,278
2024	12,891
2025	11,141
2026 and thereafter	57,437
Total	123,454
Tiptree Insurance
Finite-Lived Intangible Assets [Line Items]
2021	12,951
2022	14,459
2023	14,198
2024	12,811
2025	11,101
2026 and thereafter	57,437
Total	122,957
Other Segments
Finite-Lived Intangible Assets [Line Items]
2021	170
2022	127
2023	80
2024	80
2025	40
2026 and thereafter	0
Total	$ 497

XML

Derivative Financial Instruments and Hedging - Schedule of Gross Notional and Fair Value Amounts of Derivatives (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Derivative [Line Items]
Notional values	$ 549,966	$ 612,181
Asset derivatives	11,529	7,490
Liability derivatives	2,090	3,758
Interest rate lock commitments
Derivative [Line Items]
Notional values	219,929	279,048
Asset derivatives	9,207	7,336
Liability derivatives	0	0
Forward delivery contracts
Derivative [Line Items]
Notional values	35,979	87,773
Asset derivatives	0	36
Liability derivatives	22	0
TBA mortgage backed securities
Derivative [Line Items]
Notional values	291,000	235,000
Asset derivatives	232	118
Liability derivatives	1,508	428
Other Contract
Derivative [Line Items]
Notional values	3,058	10,360
Asset derivatives	2,090	0
Liability derivatives	$ 560	$ 3,330

XML

Debt, net - Schedule of Debt Obligations, Net of Discounts and Deferred Financing Costs (Details) - USD ($) $ in Thousands			1 Months Ended		12 Months Ended
	Apr. 06, 2020	Feb. 21, 2020	Aug. 31, 2020	May 31, 2020	Dec. 31, 2020	Oct. 16, 2020	Aug. 01, 2020	Jul. 01, 2020	Mar. 23, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt					$ 379,617					$ 383,459
Unamortized discount, net					(2,035)					(198)
Unamortized deferred financing costs					(11,336)					(8,807)
Debt, net					366,246					374,454
Asset based revolving financing
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					200,000
Long-term debt					0					25,000
Secured term credit agreements
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					120,313
Long-term debt		$ 62,500			120,313					68,210
Junior subordinated notes
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					125,000
Long-term debt					125,000					125,000
Preferred trust securities
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					35,000
Long-term debt					35,000					35,000
Total corporate debt
Debt Instrument [Line Items]
Long-term debt					280,313					$ 253,210
Residential mortgage warehouse borrowings
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity	$ 60,000				$ 110,000		$ 50,000	$ 50,000	$ 65,000
Weighted average interest rate					2.75%					3.83%
Vessel backed term loan
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					$ 15,800
Total asset based debt
Debt Instrument [Line Items]
Long-term debt					$ 99,304					$ 130,249
Minimum | Secured term credit agreements | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		1.00%
Minimum | Residential mortgage warehouse borrowings | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%		0.50%	0.50%	2.00%
Maximum | Asset based revolving financing | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate					2.25%
Maximum | Secured term credit agreements | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate		6.75%			6.75%
Maximum | Junior subordinated notes
Debt Instrument [Line Items]
Stated interest rate, percentage					8.50%
Maximum | Preferred trust securities
Debt Instrument [Line Items]
Basis spread on variable rate					4.10%
Stated interest rate, percentage					4.10%
Maximum | Residential mortgage warehouse borrowings | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate			1.00%		3.00%
Maximum | Vessel backed term loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate					4.75%
Asset Backed Term Loan - Vessels | Vessel backed term loan
Debt Instrument [Line Items]
Long-term debt					$ 15,800					18,000
Asset Backed Revolving Line of Credit | Asset based revolving financing
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					75,000	$ 75,000
Long-term debt					$ 27,510					$ 21,576
Asset Backed Revolving Line of Credit | Maximum | Asset based revolving financing | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate					2.75%

XML

Debt, net - Schedule of Interest Expense Incurred on Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Interest expense on debt	$ 32,582	$ 27,059	$ 27,013
Interest expense - corporate debt
Debt Instrument [Line Items]
Interest expense on debt	23,322	19,682	18,162
Interest expense - asset based debt
Debt Instrument [Line Items]
Interest expense on debt	$ 9,260	$ 7,377	$ 8,851

XML

Debt, net - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
2021	$ 64,444
2022	8,450
2023	35,960
2024	15,450
2025	95,313
2026 and thereafter	160,000
Total	$ 379,617	$ 383,459

XML

Debt, net - Narrative (Details) $ in Thousands			1 Months Ended		12 Months Ended
	Apr. 06, 2020 USD ($) Rate	Feb. 21, 2020 USD ($) Rate	Aug. 31, 2020 Rate	May 31, 2020 Rate	Dec. 31, 2020 USD ($) Rate	Dec. 31, 2019 USD ($) Rate	Dec. 31, 2018 USD ($)	Dec. 30, 2020 USD ($)	Oct. 16, 2020 USD ($)	Sep. 30, 2020 USD ($)	Aug. 04, 2020 USD ($)	Aug. 01, 2020 USD ($)	Jul. 01, 2020 USD ($)	Mar. 23, 2020 USD ($)	Dec. 30, 2019 USD ($)	Aug. 05, 2019 USD ($)
Debt Instrument [Line Items]
Long-term debt					$ 379,617	$ 383,459
Borrowings					3,379,688	2,237,329	$ 1,632,469
Secured term credit agreements
Debt Instrument [Line Items]
Long-term debt		$ 62,500			120,313	68,210
Debt instrument, maximum borrowing capacity					120,313
Borrowings		$ 125,000
Asset-based revolving facility
Debt Instrument [Line Items]
Long-term debt					0	25,000
Debt instrument, maximum borrowing capacity					200,000
Residential mortgage warehouse borrowings
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity	$ 60,000				110,000							$ 50,000	$ 50,000	$ 65,000
Junior subordinated notes
Debt Instrument [Line Items]
Long-term debt					125,000	125,000
Debt instrument, maximum borrowing capacity					$ 125,000
Potential deferred interest periods					5 years
Preferred trust securities
Debt Instrument [Line Items]
Long-term debt					$ 35,000	35,000
Debt instrument, maximum borrowing capacity					35,000
Vessel backed term loan
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity					15,800
Corporate and Other | Secured term credit agreements
Debt Instrument [Line Items]
Long-term debt						68,210
Tiptree Insurance | Secured term credit agreements
Debt Instrument [Line Items]
Debt instrument, maximum borrowing capacity						30,000									$ 75,000
Debt instrument, accordion feature						30,000
Debt instrument, stand by letters of credit															$ 75,000
Tiptree Insurance | Asset-based revolving facility
Debt Instrument [Line Items]
Long-term debt					0	25,000
Debt instrument, maximum borrowing capacity										$ 30,000	$ 200,000
Sub-limit of swing loans included within the Credit Agreement											$ 17,500
Warehouse Agreement Borrowings | Residential mortgage warehouse borrowings
Debt Instrument [Line Items]
Long-term debt					55,994	90,673
Asset Backed Revolving Line of Credit | Asset-based revolving facility
Debt Instrument [Line Items]
Long-term debt					27,510	21,576
Debt instrument, maximum borrowing capacity					75,000				$ 75,000
Debt term									3 years
Asset Backed Revolving Line of Credit | Asset-based revolving facility | Premium Finance [Member]
Debt Instrument [Line Items]
Long-term debt						9,840
Debt instrument, maximum borrowing capacity					13,000			$ 25,000	$ 20,000
Asset Backed Revolving Line of Credit | Asset-based revolving facility | Warranty Service Contract Finance Business [Member]
Debt Instrument [Line Items]
Long-term debt						11,736
Debt instrument, maximum borrowing capacity					27,000			$ 15,000	$ 55,000							$ 15,000
Asset Backed Term Loan - Vessels | Vessel backed term loan
Debt Instrument [Line Items]
Long-term debt					15,800	$ 18,000
Debt periodic principal payments					$ 550
Number of liens					2
Minimum | Asset Backed Term Loan - Vessels | Vessel backed term loan
Debt Instrument [Line Items]
Debt covenant ratio					150.00%
Maximum | Junior subordinated notes
Debt Instrument [Line Items]
Stated interest rate, percentage | Rate					8.50%
Maximum | Preferred trust securities
Debt Instrument [Line Items]
Basis spread on variable rate | Rate					4.10%
Stated interest rate, percentage | Rate					4.10%
LIBOR | Minimum | Secured term credit agreements
Debt Instrument [Line Items]
Basis spread on variable rate | Rate		1.00%
LIBOR | Minimum | Residential mortgage warehouse borrowings
Debt Instrument [Line Items]
Basis spread on variable rate | Rate	1.00%		0.50%	0.50%	2.00%
LIBOR | Maximum | Secured term credit agreements
Debt Instrument [Line Items]
Basis spread on variable rate | Rate		6.75%			6.75%
LIBOR | Maximum | Asset-based revolving facility
Debt Instrument [Line Items]
Basis spread on variable rate | Rate					2.25%
LIBOR | Maximum | Residential mortgage warehouse borrowings
Debt Instrument [Line Items]
Basis spread on variable rate | Rate			1.00%		3.00%
LIBOR | Maximum | Vessel backed term loan
Debt Instrument [Line Items]
Basis spread on variable rate | Rate					4.75%
LIBOR | Maximum | Tiptree Insurance | Secured term credit agreements
Debt Instrument [Line Items]
Basis spread on variable rate						1.20%
LIBOR | Maximum | Asset Backed Revolving Line of Credit | Asset-based revolving facility
Debt Instrument [Line Items]
Basis spread on variable rate | Rate					2.75%
LIBOR | Maximum | Asset Backed Revolving Line of Credit | Asset-based revolving facility | Premium Finance [Member]
Debt Instrument [Line Items]
Basis spread on variable rate | Rate						2.40%
LIBOR | Maximum | Asset Backed Revolving Line of Credit | Asset-based revolving facility | Warranty Service Contract Finance Business [Member]
Debt Instrument [Line Items]
Basis spread on variable rate | Rate						2.40%

XML

Fair Value of Financial Instruments - Schedule of Fair Value Hierarchies for Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value	$ 90,732	$ 108,894
Equity securities	123,838	155,378
Asset derivatives	11,529	7,490
Total other investments, at fair value	219,701	137,472
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	2,090	3,758
Securities sold, not yet purchased	46,637	0
Other equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	28,885	18,401
Exchange Traded Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	63,875	25,039
Invesque Inc.
Assets, Fair Value Disclosure [Abstract]
Equity securities	31,078	111,938
Significant unobservable inputs Level 3
Assets, Fair Value Disclosure [Abstract]
Mortgage servicing rights (included in other assets)	14,758	8,764
Total assets	23,965	16,100
Liabilities, Fair Value Disclosure [Abstract]
Contingent consideration payable	200	0
Recurring | Quoted prices in active markets Level 1
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	1,355	896
Loans, at fair value	0	0
Asset derivatives	2,090	0
Total other investments, at fair value	2,090	0
Mortgage servicing rights (included in other assets)	0	0
Total assets	127,248	156,031
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	0	0
Securities sold, not yet purchased	16,479
Contingent consideration payable	0
Total liabilities	16,479	0
Recurring | Quoted prices in active markets Level 1 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Obligations of state and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Obligations of foreign governments
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Certificates of deposit
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	1,355	896
Recurring | Quoted prices in active markets Level 1 | Asset backed securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Corporate securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Corporate Loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value	0	0
Recurring | Quoted prices in active markets Level 1 | Mortgage Loans Held for Sale
Assets, Fair Value Disclosure [Abstract]
Mortgage loans held for sale	0	0
Recurring | Quoted prices in active markets Level 1 | Non-performing loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value		0
Recurring | Quoted prices in active markets Level 1 | Equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	123,803	155,135
Recurring | Quoted prices in active markets Level 1 | Equity securities | Other equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	28,850	18,158
Recurring | Quoted prices in active markets Level 1 | Equity securities | Exchange Traded Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	63,875	25,039
Recurring | Quoted prices in active markets Level 1 | Equity securities | Invesque Inc.
Assets, Fair Value Disclosure [Abstract]
Equity securities	31,078	111,938
Recurring | Quoted prices in active markets Level 1 | Corporate bonds
Assets, Fair Value Disclosure [Abstract]
Corporate bonds	0	0
Recurring | Quoted prices in active markets Level 1 | CLOs
Assets, Fair Value Disclosure [Abstract]
CLOs	0	0
Recurring | Other significant observable inputs Level 2
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	374,920	333,111
Loans, at fair value	82,937	98,720
Asset derivatives	232	154
Total other investments, at fair value	106,009	20,859
Mortgage servicing rights (included in other assets)	0	0
Total assets	563,866	452,690
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	2,090	3,758
Securities sold, not yet purchased	30,158
Contingent consideration payable	0
Total liabilities	32,248	3,758
Recurring | Other significant observable inputs Level 2 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	196,303	191,590
Recurring | Other significant observable inputs Level 2 | Obligations of state and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	44,350	46,338
Recurring | Other significant observable inputs Level 2 | Obligations of foreign governments
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	3,992	1,119
Recurring | Other significant observable inputs Level 2 | Certificates of deposit
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Other significant observable inputs Level 2 | Asset backed securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	35,334	42,833
Recurring | Other significant observable inputs Level 2 | Corporate securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	94,941	51,231
Recurring | Other significant observable inputs Level 2 | Corporate Loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value	0	0
Recurring | Other significant observable inputs Level 2 | Mortgage Loans Held for Sale
Assets, Fair Value Disclosure [Abstract]
Mortgage loans held for sale	82,937	98,720
Recurring | Other significant observable inputs Level 2 | Non-performing loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value		0
Recurring | Other significant observable inputs Level 2 | Equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Other significant observable inputs Level 2 | Equity securities | Other equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Other significant observable inputs Level 2 | Equity securities | Exchange Traded Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Other significant observable inputs Level 2 | Equity securities | Invesque Inc.
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Other significant observable inputs Level 2 | Corporate bonds
Assets, Fair Value Disclosure [Abstract]
Corporate bonds	105,777	20,705
Recurring | Other significant observable inputs Level 2 | CLOs
Assets, Fair Value Disclosure [Abstract]
CLOs	0	0
Recurring | Significant unobservable inputs Level 3
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	858	1,185
Loans, at fair value	7,795	10,174
Asset derivatives	9,207	7,336
Total other investments, at fair value	10,009	12,104
Mortgage servicing rights (included in other assets)	14,758	8,764
Total assets	33,455	32,470
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	0	0
Securities sold, not yet purchased	0
Contingent consideration payable	200
Total liabilities	200	0
Recurring | Significant unobservable inputs Level 3 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Significant unobservable inputs Level 3 | Obligations of state and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Significant unobservable inputs Level 3 | Obligations of foreign governments
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Significant unobservable inputs Level 3 | Certificates of deposit
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Significant unobservable inputs Level 3 | Asset backed securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	858	1,185
Recurring | Significant unobservable inputs Level 3 | Corporate securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	0	0
Recurring | Significant unobservable inputs Level 3 | Corporate Loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value	7,795	9,787
Recurring | Significant unobservable inputs Level 3 | Mortgage Loans Held for Sale
Assets, Fair Value Disclosure [Abstract]
Mortgage loans held for sale	0	0
Recurring | Significant unobservable inputs Level 3 | Non-performing loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value		387
Recurring | Significant unobservable inputs Level 3 | Equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	35	243
Recurring | Significant unobservable inputs Level 3 | Equity securities | Other equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	35	243
Recurring | Significant unobservable inputs Level 3 | Equity securities | Exchange Traded Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Significant unobservable inputs Level 3 | Equity securities | Invesque Inc.
Assets, Fair Value Disclosure [Abstract]
Equity securities	0	0
Recurring | Significant unobservable inputs Level 3 | Corporate bonds
Assets, Fair Value Disclosure [Abstract]
Corporate bonds	0	0
Recurring | Significant unobservable inputs Level 3 | CLOs
Assets, Fair Value Disclosure [Abstract]
CLOs	802	4,768
Fair Value | Other significant observable inputs Level 2
Assets, Fair Value Disclosure [Abstract]
Total assets	79,778	57,615
Fair Value | Significant unobservable inputs Level 3
Liabilities, Fair Value Disclosure [Abstract]
Total liabilities	392,951	396,699
Fair Value | Recurring
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	377,133	335,192
Loans, at fair value	90,732	108,894
Asset derivatives	11,529	7,490
Total other investments, at fair value	118,108	32,963
Mortgage servicing rights (included in other assets)	14,758	8,764
Total assets	724,569	641,191
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	2,090	3,758
Securities sold, not yet purchased	46,637
Contingent consideration payable	200
Total liabilities	48,927	3,758
Fair Value | Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	196,303	191,590
Fair Value | Recurring | Obligations of state and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	44,350	46,338
Fair Value | Recurring | Obligations of foreign governments
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	3,992	1,119
Fair Value | Recurring | Certificates of deposit
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	1,355	896
Fair Value | Recurring | Asset backed securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	36,192	44,018
Fair Value | Recurring | Corporate securities
Assets, Fair Value Disclosure [Abstract]
Available for sale securities, at fair value	94,941	51,231
Fair Value | Recurring | Corporate Loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value	7,795	9,787
Fair Value | Recurring | Mortgage Loans Held for Sale
Assets, Fair Value Disclosure [Abstract]
Mortgage loans held for sale	82,937	98,720
Fair Value | Recurring | Non-performing loans
Assets, Fair Value Disclosure [Abstract]
Loans, at fair value		387
Fair Value | Recurring | Equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	123,838	155,378
Fair Value | Recurring | Equity securities | Other equity securities
Assets, Fair Value Disclosure [Abstract]
Equity securities	28,885	18,401
Fair Value | Recurring | Equity securities | Exchange Traded Funds
Assets, Fair Value Disclosure [Abstract]
Equity securities	63,875	25,039
Fair Value | Recurring | Equity securities | Invesque Inc.
Assets, Fair Value Disclosure [Abstract]
Equity securities	31,078	111,938
Fair Value | Recurring | Corporate bonds
Assets, Fair Value Disclosure [Abstract]
Corporate bonds	105,777	20,705
Fair Value | Recurring | CLOs
Assets, Fair Value Disclosure [Abstract]
CLOs	$ 802	$ 4,768

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Fair Value of Financial Instruments - Schedule of Level 3 Rollforward, Assets Measured on Recurring Basis Utilizing Level 3 Inputs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at January 1,	$ 32,470	$ 152,845
Net realized gains/(losses)	2,253	1,901
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	(329)	(323)
Issuances	0	111
Sales	(6,672)	(123,497)
Balance at December 31,	33,455	32,470
Fair Value, Asset, Recurring Basis, Still Held, Unrealized Gain (Loss)	(7,978)	(1,884)
Fair Value, Asset, Recurring Basis, Still Held, Unrealized Gain (Loss), OCI	(329)	(323)
Other real estate
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Transfer adjustments (out of) Level 3	0	(2,596)
Conversion to mortgage held for sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Transfer adjustments (out of) Level 3	(118,396)	(73,206)
Interest rate lock commitments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Issuances	120,267	77,082
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases	$ 3,862	$ 153

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Fair Value of Financial Instruments - Schedule of Significant Inputs used in the Valuation of Level 3 Assets (Details) $ in Thousands	Dec. 31, 2020 USD ($) Rate	Dec. 31, 2019 USD ($) Rate
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Derivative assets	$ 11,529	$ 7,490
Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Mortgage servicing rights	14,758	8,764
Total	23,965	16,100
Contingent consideration payable	200	0
Fair Value, Inputs, Level 3 | Interest rate lock commitments
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Derivative assets	$ 9,207	$ 7,336
Pull through Rate [Member] | Fair Value, Inputs, Level 3 | Interest rate lock commitments | Internal Model | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Assumptions, Pull Through Rate | Rate	0.50	0.50
Pull through Rate [Member] | Fair Value, Inputs, Level 3 | Interest rate lock commitments | Internal Model | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Assumptions, Pull Through Rate | Rate	0.95	0.95
Pull through Rate [Member] | Fair Value, Inputs, Level 3 | Interest rate lock commitments | Internal Model | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Assumptions, Pull Through Rate | Rate	0.68	0.61
Measurement Input, Discount Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.10	0.10
Measurement Input, Discount Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.13	0.13
Measurement Input, Discount Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.11	0.18
Measurement Input, Cost to Service [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input	75	75
Measurement Input, Cost to Service [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input	90	90
Measurement Input, Cost to Service [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input	82	0.11
Measurement Input, Prepayment Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.08	0.07
Measurement Input, Prepayment Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.60	0.50
Measurement Input, Prepayment Rate [Member] | Fair Value, Inputs, Level 3 | Residential Mortgage | External Model [Member] | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Servicing asset, measurement input | Rate	0.22	86
Contingent Consideration, Possible Earnout Amount, Cash | Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Contingent consideration payable	$ 200	$ 0
Contingent Consideration, Possible Earnout Amount, Cash | Measurement Input, EBITDA Multiple [Member] | Fair Value, Inputs, Level 3 | Valuation Technique, Discounted Cash Flow [Member] | Minimum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Contingent consideration payable	20,000
Contingent Consideration, Possible Earnout Amount, Cash | Measurement Input, EBITDA Multiple [Member] | Fair Value, Inputs, Level 3 | Valuation Technique, Discounted Cash Flow [Member] | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Contingent consideration payable	30,000
Contingent Consideration, Possible Earnout Amount, Cash | Assumed Claim LIabilities [Member] | Fair Value, Inputs, Level 3 | Actuarial Analysis [Member] | Maximum
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Contingent consideration payable	55,000
Contingent Consideration, Possible Earnout Amount, Cash | Assumed Claim LIabilities [Member] | Fair Value, Inputs, Level 3 | Actuarial Analysis [Member] | Weighted Average
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Contingent consideration payable	$ 55,000

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Fair Value of Financial Instruments - Schedule of Fair Values and Carrying Values of Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets, Fair Value Disclosure [Abstract]
Notes receivable, net	$ 62,075	$ 42,192
Fair Value, Inputs, Level 2 | Fair Value
Assets, Fair Value Disclosure [Abstract]
Total assets	79,778	57,615
Fair Value, Inputs, Level 2 | Carrying value
Assets, Fair Value Disclosure [Abstract]
Total assets	79,778	57,615
Fair Value, Inputs, Level 3
Assets, Fair Value Disclosure [Abstract]
Total assets	23,965	16,100
Fair Value, Inputs, Level 3 | Fair Value
Liabilities, Fair Value Disclosure [Abstract]
Debt, net	392,951	396,699
Total liabilities	392,951	396,699
Fair Value, Inputs, Level 3 | Carrying value
Liabilities, Fair Value Disclosure [Abstract]
Debt, net	377,582	383,261
Total liabilities	377,582	383,261
Debentures | Fair Value, Inputs, Level 2 | Fair Value
Assets, Fair Value Disclosure [Abstract]
Notes receivable, net	17,703	15,423
Debentures | Fair Value, Inputs, Level 2 | Carrying value
Assets, Fair Value Disclosure [Abstract]
Notes receivable, net	17,703	15,423
Notes Receivable | Fair Value, Inputs, Level 2
Assets, Fair Value Disclosure [Abstract]
Notes receivable, net	$ 62,075	$ 42,192

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Liability for Unpaid Claims and Claim Adjustment Expenses - Rollforward of Claims Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Policy liabilities and unpaid claims balance as of January 1,	$ 144,384	$ 131,611
Less: liabilities of policy-holder account balances, gross	(11,589)	(13,659)
Less: non-insurance warranty benefit claim liabilities	(85)	(94)
Gross liabilities for unpaid losses and loss adjustment expenses	132,710	117,858
Net balance as of January 1, short duration	43,881	27,615
Incurred (short duration) related to:
Current year	172,007	144,925
Prior years	5,443	5,169
Total incurred	177,450	150,094	$ 131,861
Paid (short duration) related to:
Current year	127,721	122,348
Prior years	9,665	11,480
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid	137,386	133,828
Net balance as of December 31, short duration	84,012	43,881	27,615
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	(113,343)
Gross liabilities for unpaid losses and loss adjustment expenses	197,355	132,710	117,858
Plus: liabilities of policy-holder account balances, gross	(5,419)	(11,589)	(13,659)
Plus: non-insurance warranty benefit claim liabilities (1)	(30,664)	(85)	(94)
Policy liabilities and unpaid claims balance as of December 31,	$ 233,438	144,384	131,611
Short-duration Insurance Contracts, Historical Claims Duration, Percentage of Full Payout	95.00%
Short-duration Insurance Contracts, Historical Claims Duration, Percentage of Full Payout, Period	5 years
Other Short-duration Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	$ (88,599)	(90,016)
Net balance as of January 1, short duration	43,881
Paid (short duration) related to:
Net balance as of December 31, short duration	83,945	43,881
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	(113,163)	(88,599)	(90,016)
Other Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	(230)	(227)
Paid (short duration) related to:
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	$ (247)	$ (230)	$ (227)

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Liability for Unpaid Claims and Claim Adjustment Expenses - Schedule Showing the Reconciliation of Short Duration Contracts to Total Losses Incurred (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Insurance [Abstract]
Short duration incurred	$ 177,450	$ 150,094	$ 131,861
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims, Other Lines	27	184	124
Unallocated loss adjustment expenses	771	731	2,867
Net	$ 178,248	$ 151,009	$ 134,852

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Liability for Unpaid Claims and Claim Adjustment Expenses -Schedule of Incurred and Paid Development (Details) unit in Thousands, $ in Thousands	Dec. 31, 2020 USD ($) unit	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 649,747
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	565,826
All outstanding liabilities before 2016, net of reinsurance	24
Liabilities for loss and loss adjustment expenses, net of reinsurance	84,012	$ 43,881	$ 27,615
Other Short-duration Insurance Product Line
Claims Development [Line Items]
Liabilities for loss and loss adjustment expenses, net of reinsurance	83,945	43,881
Accident Year 2016
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	89,629	88,615	87,993	$ 87,290	$ 84,178
Total of IBNR Liabilities Plus Expected Development of Reported Claims	$ 17
Cumulative Number of Reported Claims | unit	257
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 88,976	88,482	86,531	84,185	$ 62,989
Accident Year 2017
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	105,787	105,601	104,898	103,306
Total of IBNR Liabilities Plus Expected Development of Reported Claims	$ 96
Cumulative Number of Reported Claims | unit	326
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 105,852	105,075	102,620	$ 84,493
Accident Year 2018
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	133,158	133,225	129,352
Total of IBNR Liabilities Plus Expected Development of Reported Claims	$ 2,366
Cumulative Number of Reported Claims | unit	399
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 114,490	112,619	$ 105,740
Accident Year 2019
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	149,166	144,925
Total of IBNR Liabilities Plus Expected Development of Reported Claims	$ 15,572
Cumulative Number of Reported Claims | unit	403
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 128,787	$ 122,348
Accident Year 2020
Claims Development [Line Items]
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	172,007
Total of IBNR Liabilities Plus Expected Development of Reported Claims	$ 52,734
Cumulative Number of Reported Claims | unit	328
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 127,721

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Liability for Unpaid Claims and Claim Adjustment Expenses- Historical Claims Duration (Details)	Dec. 31, 2020
Insurance [Abstract]
Short-duration Insurance Contracts, Historical Claims Duration, Year One	77.20%
Short-duration Insurance Contracts, Historical Claims Duration, Year Two	12.60%
Short-duration Insurance Contracts, Historical Claims Duration, Year Three	2.10%
Short-duration Insurance Contracts, Historical Claims Duration, Year Four	1.50%
Short-duration Insurance Contracts, Historical Claims Duration, Year Five	0.60%

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Liability for Unpaid Claims and Claim Adjustment Expenses- Reconciliation of Reserves to Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for loss and loss adjustment expenses, net of reinsurance	$ 84,012	$ 43,881	$ 27,615
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	113,343
Liability for Claims and Claims Adjustment Expense	197,355	132,710	117,858
Other Policyholder Funds	5,419	11,589	13,659
Non-insurance warranty benefit claim liabilities	30,664	85	94
Policy liabilities and unpaid claims	233,438	144,384	131,611
Other Short-duration Insurance Product Line
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Liabilities for loss and loss adjustment expenses, net of reinsurance	83,945	43,881
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	113,163	88,599	90,016
Long-Duration Insurance, Other
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	67
Long-Duration Insurance, Other | Ceded
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	180
Other Insurance Product Line
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Reinsurance Recoverable for Unpaid Claims and Claims Adjustments	$ 247	$ 230	$ 227

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Revenue From Contracts with Customers - Schedule of Disaggregated Revenue From Contracts With Customers By Product Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue from External Customer [Line Items]
Revenue from contracts with customers	$ 163,557	$ 89,004	$ 76,806
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	195,275	144,590	96,524	$ 142,237
Motor club revenue
Revenue from External Customer [Line Items]
Revenue from contracts with customers	36,159	36,076	32,242
Warranty coverage revenue
Revenue from External Customer [Line Items]
Revenue from contracts with customers	98,574	27,597	26,058
Vessel related revenue
Revenue from External Customer [Line Items]
Revenue from contracts with customers	22,697	16,747	3,972
Management fee income
Revenue from External Customer [Line Items]
Revenue from contracts with customers	0	1,267	6,694
Other
Revenue from External Customer [Line Items]
Revenue from contracts with customers	$ 6,127	$ 7,317	$ 7,840

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Revenue From Contracts with Customers - Schedule of Deferred Assets Related to Revenue From Contracts with Customers (Rollforward) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Table of Deferred Assets Related to Revenue From Contracts with Customers [Roll Forward]
Deferred acquisition costs, beginning balance	$ 166,493
Amortizations	265,781	$ 287,834	$ 246,330
Deferred acquisition costs, ending balance	229,430	166,493
Customer Contracts
Table of Deferred Assets Related to Revenue From Contracts with Customers [Roll Forward]
Deferred acquisition costs, beginning balance	14,727
Additions	85,920
Amortizations	38,832
Deferred acquisition costs, ending balance	61,815	14,727
Customer Contracts | Motor club revenue
Table of Deferred Assets Related to Revenue From Contracts with Customers [Roll Forward]
Deferred acquisition costs, beginning balance	13,700
Additions	27,014
Amortizations	27,633
Deferred acquisition costs, ending balance	13,081	13,700
Customer Contracts | Warranty coverage revenue
Table of Deferred Assets Related to Revenue From Contracts with Customers [Roll Forward]
Deferred acquisition costs, beginning balance	1,027
Additions	58,906
Amortizations	11,199
Deferred acquisition costs, ending balance	$ 48,734	$ 1,027

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Revenue From Contracts with Customers - Schedule of Deferred Revenue Liabilities From Contracts with Customers (Rollforward) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Rollforward
Deferred Revenue, Beginning Balance	$ 94,601
Deferred Revenue, Ending Balance	399,211
Customer Contracts
Rollforward
Deferred Revenue, Beginning Balance	67,278
Deferred Revenue, Additions	440,755
Deferred Revenue, Revenue Recognized	142,673
Deferred Revenue, Ending Balance	365,360
Customer Contracts | Motor club revenue
Rollforward
Deferred Revenue, Beginning Balance	17,910
Deferred Revenue, Additions	35,218
Deferred Revenue, Revenue Recognized	36,159
Deferred Revenue, Ending Balance	16,969
Customer Contracts | Warranty coverage revenue
Rollforward
Deferred Revenue, Beginning Balance	49,368
Deferred Revenue, Additions	405,537
Deferred Revenue, Revenue Recognized	106,514
Deferred Revenue, Ending Balance	$ 348,391

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Other Assets and Other Liabilities and Accrued Expenses - Schedule of Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Right of use asset - Operating leases (1)	$ 27,291	$ 23,832
Furniture, fixtures and equipment, net	15,798	12,305
Income taxes receivable	19,513	817
Prepaid expenses	8,159	8,461
Assets Sold under Agreements to Repurchase, Market Value	70,593	6,733
Other	5,922	7,598
Total other assets	$ 162,034	$ 68,510

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Other Assets and Other Liabilities and Accrued Expenses - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Depreciation expense related to furniture, fixtures and equipment	$ 3,257	$ 2,753	$ 1,984

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Other Liabilities and Accrued Expenses - Schedule of Other Liabilities and Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
Other Liabilities Disclosure [Abstract]
Accounts payable and accrued expenses	$ 106,142	$ 68,829
Deferred tax liabilities, net	24,183	32,306
Securities sold, not yet purchased	46,637	0
Due to brokers	45,047	1,140
Assets Sold under Agreements to Repurchase, Repurchase Liability	70,593	6,733
Commissions payable	18,678	9,179
Other	18,671	24,462
Total other liabilities and accrued expenses	362,865	172,140
Other Liabilities
Other Liabilities Disclosure [Abstract]
Operating lease liability	32,914	29,491	$ 33,558
Operating lease liability	$ 32,914	$ 29,491	$ 33,558

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Other Revenue, Other Expenses and Other Income - Schedule of Other Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other revenue	$ 51,910	$ 59,888	$ 38,062
Management Fee Income	163,557	89,004	76,806
Other	7,591	5,038	5,827
Gain (Loss) on Disposition of Assets		7,598	0
Tiptree Capital
Other revenue	48,747	45,985	25,541
Tiptree Insurance
Other	7,025	4,566	2,554
Management fee income
Management Fee Income	$ 0	$ 1,267	$ 6,694

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Other Revenue, Other Expenses and Other Income - Schedule of Other Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other Income and Expenses [Abstract]
Professional fees	$ 20,711	$ 20,820	$ 15,216
General and administrative	22,295	18,563	16,218
Premium taxes	15,824	15,205	14,026
Mortgage origination expenses	14,603	12,200	8,857
Rent and related	14,074	12,642	11,114
Charter expenses from vessels	13,210	9,781	3,777
Loss on extinguishment of debt	353	1,241	428
Other	8,078	9,292	8,265
Total other expenses	$ 109,148	$ 99,744	$ 77,901

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Stockholders' Equity - Schedule of Share Repurchases (Details) - Common stock - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	May 02, 2019
Stock repurchase program, authorized amount		$ 20,000
Stock Repurchased and Retired During Period, Shares	2,384,286
Average price per share	$ 5.82
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 16,571
Share repurchase program
Stock Repurchased and Retired During Period, Shares	1,884,286
Average price per share	$ 5.51
Block repurchase program
Stock Repurchased and Retired During Period, Shares	500,000
Average price per share	$ 7.00

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Stockholders' Equity - Schedule of Declared Cash Dividends Per Share (Details) - $ / shares	3 Months Ended										12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Dividends declared per common share	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.035	$ 0.035	$ 0.035	$ 0.035	$ 0.16	$ 0.16	$ 0.140

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Stockholders' Equity - Reorganization Merger (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Apr. 10, 2018	Dec. 31, 2018	May 02, 2019	Apr. 16, 2018
Common Class A
Partnership Units', Conversion Rate	279.80%
Stock Issued During Period, Shares, Other	6,861,561
Warrants, Canceled	652,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 7.59
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	2,255,149
Treasury Stock, Shares Canceled				5,035,977
Common Class A | Tiptree Operating Company, LLC [Member] | Tiptree Operating Company, LLC [Member]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	100.00%
Common Class A | Tiptree Financial Partners, L.P.
Warrants, Canceled	805,986
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 11.33
Class of Warrant or Right, Exercise Price of Warrants or Rights, Canceled	$ 21.232
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	103,994
Common stock
Stock Issued During Period, Shares, Other		1,187,468
Stock repurchase program, authorized amount			$ 20,000

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Stockholders' Equity - Schedule of Statutory Insurance - Statutory capital, surplus, net income and dividends (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments [Abstract]
Statutory Accounting Practices, Statutory Capital and Surplus, Balance	$ 202,710	$ 134,179
Statutory Accounting Practices, Statutory Capital and Surplus Required	64,950	17,950
Statutory Accounting Practices, Statutory Net Income Amount	19,647	8,444	$ 13,986
Statutory Accounting Practices, Dividends Paid not needing the Approval of Regulatory Agency	0	9,001
Statutory Accounting Practices, Dividends Paid with Approval of Regulatory Agency	0	1,188
Statutory Accounting Practices, Dividends Paid, Total	0	10,189
Amount available for ordinary dividends of the Company's insurance company subsidiaries	$ 13,418	$ 4,527

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Accumulated Other Comprehensive Income (Loss) - Schedule of Activity in AOCI (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 1,698
Period change	3,949	$ 3,879	$ (3,683)
Ending balance	5,674	1,698
Unrealized gains (losses) on Available for sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	1,711	(2,069)	(460)
Other comprehensive gain (loss) before reclassification	4,364	4,911	(2,257)
Amounts reclassified from AOCI	(415)	(1,032)	648
Period change	3,949	3,879	(1,609)
Ending balance	5,702	1,711	(2,069)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	0	0	2,074
Other comprehensive gain (loss) before reclassification	0	0	835
Amounts reclassified from AOCI	0	0	0
Period change	0	0	(2,074)
Ending balance	0	0	0
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Care Disposition
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI			2,909
Total AOCI
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	1,711	(2,069)	1,614
Other comprehensive gain (loss) before reclassification	4,364	4,911	(1,422)
Amounts reclassified from AOCI	(415)	(1,032)	648
Period change	3,949	3,879	(3,683)
Ending balance	5,702	1,711	(2,069)
Total AOCI | Care Disposition
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI			(2,909)
Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	1,698	(2,058)	966
Other comprehensive gain (loss) before reclassification	4,349	4,887	(1,150)
Amounts reclassified from AOCI	(415)	(1,032)	648
Reclassification from Accumulated Other Comprehensive Income Due To Reorganization, Current Period, Net of Tax			341
Period change	3,934	3,855	(3,024)
Ending balance	5,674	1,698	(2,058)
Accumulated other comprehensive income (loss) | Care Disposition
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI			(2,181)
Noncontrolling interests - other | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(13)	11	(426)
Other comprehensive gain (loss) before reclassification	(15)	(24)	211
Amounts reclassified from AOCI	0	0	0
Period change	(15)	(24)	437
Ending balance	(28)	(13)	11
Noncontrolling interests - other | Noncontrolling interest | Care Disposition
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI			226
Noncontrolling interest - TFP | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	0	0	(222)
Other comprehensive gain (loss) before reclassification	0	0	61
Amounts reclassified from AOCI	0	0	0
Reclassification from Accumulated Other Comprehensive Income Due To Reorganization, Current Period, Net of Tax			341
Period change	0	0	222
Ending balance	0	0	0
Noncontrolling interest - TFP | Noncontrolling interest | Care Disposition
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI			$ 502
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Unrealized gains (losses) on Available for sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect		(99)
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect		0
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Total AOCI
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect		(99)
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect		(99)
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling interests - other | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect		0
Accounting Standards Update 2018-02 | Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling interest - TFP | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect
Accounting Standards Update 2016-13 | Unrealized gains (losses) on Available for sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	(42)
Accounting Standards Update 2016-13 | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	0
Accounting Standards Update 2016-13 | Total AOCI
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	(42)
Accounting Standards Update 2016-13 | Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	(42)
Accounting Standards Update 2016-13 | Noncontrolling interests - other | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	0
Accounting Standards Update 2016-13 | Noncontrolling interest - TFP | Noncontrolling interest
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Amounts reclassified from AOCI	$ 0

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Accumulated Other Comprehensive Income (Loss) - Schedule of Reclassifications Out of AOCI into Net Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Related tax (expense) benefit	$ (8,403)	$ 844	$ 5	$ 21,181	$ (5,311)	$ 649	$ (3,501)	$ (854)	$ 13,627	$ (9,017)	$ 5,909
Net income (loss) from continuing operations									(25,225)	20,122	(13,887)
Gain on sale of discontinued operations									0	0	56,860
Unrealized gains (losses) on Available for sale securities | Amount reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on available for sale securities									528	1,312	(819)
Related tax (expense) benefit									(113)	(280)	171
Net income (loss) from continuing operations									415	1,032	(648)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | Amount reclassified from AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Related tax (expense) benefit									0	0	936
Net income (loss) from continuing operations									0	0	2,909
Gain on sale of discontinued operations									$ 0	$ 0	$ 3,845

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Stock Based Compensation - Summary of Changes to Equity Plan Rollforward (Details) - Tiptree Inc. 2017 Omnibus Incentive Plan - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jun. 06, 2017
Stock Compensation Plan
Options outstanding
Available for issuance, beginning of period	4,765,863	5,474,214	6,017,012
RSU and option awards granted	(977,446)	(702,264)	(558,034)
Forfeited		8,318	15,236
Exchanged		(14,405)
Available for issuance, end of period	3,788,417	4,765,863	5,474,214
Common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				6,100,000

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Stock Based Compensation - Summary of Changes to Restricted Stock Units and Restricted Stock Rollforward (Details) - Restricted Stock Units (RSUs) - $ / shares	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
RSU’s and restricted stock vesting - first tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage		33.33%
Weighted average grant date fair value
Award vesting period		1 year
RSU’s and restricted stock vesting - second tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage		33.33%
Weighted average grant date fair value
Award vesting period		2 years
RSU’s and restricted stock vesting - third tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage		33.33%
Weighted average grant date fair value
Award vesting period		3 years
Common stock | Tiptree Inc. 2017 Omnibus Incentive Plan
Number of shares issuable [Roll Forward]
Unvested units, beginning of period		958,609	676,630	598,882
Granted	552,169	552,169	476,449	315,371
Vested	(557,633)	(557,633)	(186,152)	(222,387)
Forfeited			8,318	15,236
Unvested units, end of period	953,145	953,145	958,609	676,630
Weighted average grant date fair value
Unvested units, beginning of period		$ 6.23	$ 6.27	$ 6.48
Granted		7.04	6.25	5.95
Vested		6.54	6.44	6.39
Forfeited			6.10	6.04
Unvested units, end of period	$ 6.52	$ 6.52	$ 6.23	$ 6.27

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Stock Based Compensation - Schedule of Granted and Vested RSUs (Details) - Tiptree Inc. 2017 Omnibus Incentive Plan - Restricted Stock Units (RSUs) - shares	3 Months Ended	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	552,169	552,169	476,449	315,371
Vested	(557,633)	(557,633)	(186,152)	(222,387)
Taxes	(53,438)		(35,622)	(29,286)
Exchanged	0		14,405	0
Net Vested	504,195		164,935	193,101
Director | Common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	82,912		48,076	46,572
Vested	(82,912)		(48,076)	(46,572)
Employees | Three year vesting period, Starting February 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		256,619	307,148	147,467
Award vesting period		3 years
Employees | Cliff Vest February 2023 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		212,638
Employees | Cliff Vest February 2022 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted			112,907
Employees | Cliff Vest February 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted				121,332
Employees | Common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	469,257		428,373	268,799
Vested	(474,721)		(138,076)	(175,815)

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Stock Based Compensation - Schedule of RSUs under the Subsidiary Incentive Plans Rollforward (Details) - Subsidiary Incentive Plan - Restricted Stock Units (RSUs) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested balance, beginning of period	$ 4,279	$ 8,710	$ 8,792
Granted	1,108	0	1,113
Vested	(4,237)	(4,991)	(1,771)
Performance assumption adjustment	3,155	560	576
Unvested balance, end of period	$ 4,305	$ 4,279	$ 8,710
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Vested Shares, If Converted	2,954,566

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Stock Based Compensation - Schedule of Stock Options Valuation Assumptions (Details) - Employee Stock Option - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Book Value Target, Amount Per Share	$ 11.52	$ 10.79	$ 9.97	$ 10.14	$ 8.96
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Historical volatility	27.60%	27.69%
Risk-free rate	1.51%	2.62%
Dividend yield	2.20%	2.21%
Expected term (years)	7 years	6 years 6 months
RSU’s and restricted stock vesting - first tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	33.33%
Award vesting period	3 years
RSU’s and restricted stock vesting - second tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	33.33%
Award vesting period	4 years
RSU’s and restricted stock vesting - third tranche
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	33.33%
Award vesting period	5 years

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Stock Based Compensation - Schedule of Stock Option Activity Rollforward (Details) - Employee Stock Option - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Options outstanding
Balance, beginning of period	1,290,342	1,064,527	821,864
Granted	425,277	225,815	242,663
Balance, end of period	1,715,619	1,290,342	1,064,527
Weighted average exercise price (in dollars per stock option)
Balance, beginning of period	$ 6.24	$ 6.24	$ 6.36
Granted	7.25	6.26	5.85
Balance, end of period	6.49	6.24	6.24
Weighted average grant date value (in dollars per stock option)
Balance, beginning of period	2.45	2.61	2.82
Granted	1.83	1.69	1.88
Balance, end of period	$ 2.29	$ 2.45	$ 2.61
Options Exercisable
Balance, beginning of period	0	0	0
Granted	0	0	0
Balance, end of period	0	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average remaining contractual term at December 31, 2020 (in years)	7 years 1 month 6 days

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Stock Based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Income tax benefit	$ (1,705)	$ (1,374)	$ (1,438)
Net stock based compensation expense	6,412	4,989	5,219
Employee compensation and benefits
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Employee compensation and benefits	7,571	6,062	6,354
Other Expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Employee compensation and benefits	$ 546	$ 301	$ 303

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Stock Based Compensation - Unrecognized Compensation Costs Related to Non-vested Awards (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested awards, stock options	$ 521
Weighted - average recognition period (in years)	1 year 3 months 7 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested awards, restricted stock awards and RSU's	$ 4,551
Weighted - average recognition period (in years)	1 year 5 months 4 days

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Income Taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 8,403	$ (844)	$ (5)	$ (21,181)	$ 5,311	$ (649)	$ 3,501	$ 854	$ (13,627)	$ 9,017	$ (5,909)
Effective Income Tax Rate Reconciliation, Percent									35.10%	31.00%	29.90%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent									21.00%	21.00%	21.00%
Tax benefit from CARES Act provision									$ 7,293
Increase (Decrease) in Deferred Income Taxes									16,795
Increase (Decrease) in Income Taxes Receivable									24,088
Less: Provision (benefit) for income taxes									0	$ 0	$ 13,714
Income Tax Expense (Benefit), Continuing Operations, Discontinued Operations									(13,627)	9,017	7,805
Current Federal Tax Expense (Benefit)									(26,273)	991	(9,650)
Current State and Local Tax Expense (Benefit)									1,692	386	(1,182)
Current Foreign Tax Expense (Benefit)									221	825	754
Current Federal, State and Local, Tax Expense (Benefit)									(24,360)	2,202	(10,078)
Deferred Federal Income Tax Expense (Benefit)									10,415	6,502	4,110
Deferred State and Local Income Tax Expense (Benefit)									697	335	59
Deferred Foreign Income Tax Expense (Benefit)									(379)	(22)	0
Deferred Income Tax Expense (Benefit)									$ 10,733	$ 6,815	$ 4,169

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Schedule of Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent									21.00%	21.00%	21.00%
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount									$ (8,159)	$ 6,119	$ (4,157)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount									1,929	549	(471)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount									(7,293)	0	0
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount									(938)	440	1,053
Effective Income Tax Rate Reconciliation, Effect of Permanent Differences, Amount									62	(30)	170
Effective Income Tax Rate Reconciliation, Deduction, Dividends, Amount									(26)	(29)	(1,534)
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount									330	1,524	(404)
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount									468	444	(566)
Less: provision (benefit) for income taxes	$ 8,403	$ (844)	$ (5)	$ (21,181)	$ 5,311	$ (649)	$ 3,501	$ 854	$ (13,627)	$ 9,017	$ (5,909)
Effective Income Tax Rate Reconciliation, Percent									35.10%	31.00%	29.90%
Income (loss) before taxes	$ 24,568	$ 13,897	$ 4,434	$ (81,751)	$ 9,877	$ (1,598)	$ 15,705	$ 5,155	$ (38,852)	$ 29,139	$ (19,796)

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Schedule of Deferred tax assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Operating Loss Carryforwards	$ 26,404	$ 17,384
Deferred Tax Assets, Unrealized Losses on Trading Securities	25,527	4,242
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Accrued Liabilities	3,560	5,470
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Unearned Premiums Reserve	25,626	14,189
Deferred Tax Assets, Deferred Income	7,042	6,301
Deferred Tax Assets, Other	7,091	5,720
Deferred tax assets	95,250	53,306
Deferred Tax Assets, Valuation Allowance	(6,871)	(4,961)
Deferred Tax Assets, Net of Valuation Allowance	88,379	48,345
Deferred Tax Liabilities, Property, Plant and Equipment	2,697	1,554
Deferred Tax Liabilities, Unrealized Gains on Trading Securities	17,968	6,005
Deferred Tax Liabilities, Other	4,057	3,370
Deferred Tax Liabilities, Deferred Expense, Deferred Policy Acquisition Cost	47,061	35,066
Deferred Tax Liabilities, Deferred Expense	30,977	25,392
Deferred Tax Liabilities, Intangible Assets	10,741	9,264
Deferred tax liabilities	113,501	80,651
Other Liabilities
Income Tax Disclosure [Abstract]
Deferred Income Tax Liabilities, Net	25,122	32,306
Deferred Income Tax Liabilities, Net	$ 25,122	$ 32,306

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Schedule of Net Operating Loss Carryforwards (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Valuation allowance	$ 6,871	$ 4,961
Increase, valuation allowance	1,910	$ 1,869
Domestic Tax Authority
Income Tax Disclosure [Abstract]
Operating loss carryforwards	70,803
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	70,803
Domestic Tax Authority | Future Tax Year 2026
Income Tax Disclosure [Abstract]
Operating loss carryforwards	86
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	86
Domestic Tax Authority | Future Tax Year 2027
Income Tax Disclosure [Abstract]
Operating loss carryforwards	124
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	124
Domestic Tax Authority | Future Tax Year 2028
Income Tax Disclosure [Abstract]
Operating loss carryforwards	0
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	0
Domestic Tax Authority | Future Tax Year 2029
Income Tax Disclosure [Abstract]
Operating loss carryforwards	166
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	166
Domestic Tax Authority | Future Tax Year 2030
Income Tax Disclosure [Abstract]
Operating loss carryforwards	17
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	17
Domestic Tax Authority | Future Tax Year 2031
Income Tax Disclosure [Abstract]
Operating loss carryforwards	0
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	0
Domestic Tax Authority | Future Tax Year 2032
Income Tax Disclosure [Abstract]
Operating loss carryforwards	0
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	0
Domestic Tax Authority | Future Tax Year 2033
Income Tax Disclosure [Abstract]
Operating loss carryforwards	0
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	0
Domestic Tax Authority | Future Tax Year 2034
Income Tax Disclosure [Abstract]
Operating loss carryforwards	1,893
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	1,893
Domestic Tax Authority | Future Tax Year 2035
Income Tax Disclosure [Abstract]
Operating loss carryforwards	562
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	562
Domestic Tax Authority | Future Tax Year 2036
Income Tax Disclosure [Abstract]
Operating loss carryforwards	39,862
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	39,862
Domestic Tax Authority | Future Tax Year 2037
Income Tax Disclosure [Abstract]
Operating loss carryforwards	1,766
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	1,766
Domestic Tax Authority | Future Tax Year 2038
Income Tax Disclosure [Abstract]
Operating loss carryforwards	0
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	0
Domestic Tax Authority | Future Tax Year Indefinite
Income Tax Disclosure [Abstract]
Operating loss carryforwards	26,327
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	26,327
State and Local Jurisdiction
Income Tax Disclosure [Abstract]
Operating loss carryforwards	11,446
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	11,446
Valuation allowance	$ 6,871
Internal Revenue Service (IRS) | Minimum
Operating Loss Carryforwards [Line Items]
Open tax year	2017

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Commitments and Contingencies - Summary Operating Lease Information (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating lease, renewal term	5 years
Operating lease, right-of-use asset	$ 27,291	$ 23,832
Weighted-average remaining lease term (years)	6 years 10 months 24 days
Weighted-average discount rate (1)	7.40%
Right of use asset - Operating leases (1)	$ 27,291	23,832
Other Assets
Commitments and Contingencies Disclosure [Abstract]
Operating lease, right-of-use asset	27,291		$ 32,052
Right of use asset - Operating leases (1)	27,291		32,052
Other Liabilities
Commitments and Contingencies Disclosure [Abstract]
Operating lease liability	32,914	29,491	33,558
Operating lease liability	$ 32,914	$ 29,491	$ 33,558

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Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021	$ 8,665
2022	7,740
2023	7,049
2024	6,176
2025	5,445
2026 and thereafter	16,091
Total minimum payments	51,166
Less: present value adjustment	(17,365)
Luxury Disposition | Held for sale
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Less: liabilities held for sale	$ (887)

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Commitments and Contingencies - Rent Expense for the Company's Office Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Rent expense for office leases	$ 7,374	$ 8,612	$ 7,519
Held for sale | Luxury Disposition
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Rent expense for office leases	$ 509	$ 385

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Earnings Per Share - Reconciliation of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss) from continuing operations									$ (25,225)	$ 20,122	$ (13,887)
Net income from continuing operations attributable to non-controlling interests									3,933	1,761	(612)
Net income allocated to participating securities									0	472	0
Securities of subsidiaries									$ 0	$ (723)	$ 0
Weighted average number of shares of common stock outstanding - basic	33,213,307	33,684,301	33,984,195	34,566,330	34,562,219	34,552,171	34,527,230	34,673,054			34,715,852
Weighted average number of shares of common stock outstanding - diluted	33,213,307	33,684,301	33,984,195	34,566,330	34,578,357	34,552,171	34,527,230	34,673,054	33,859,775	34,578,292	34,715,852
Basic earnings per share	$ 0.42	$ 0.37	$ 0.11	$ (1.74)	$ 0.12	$ (0.04)	$ 0.33	$ 0.11	$ (0.86)	$ 0.52	$ 0.69
Diluted earnings per share (in usd per share)	$ 0.40	$ 0.35	$ 0.10	$ (1.74)	$ 0.11	$ (0.04)	$ 0.32	$ 0.11	(0.86)	0.50	0.69
Basic, continuing operations, net (in usd per share)									(0.86)	0.52	(0.38)
Basic, discontinued operation, net (in usd per share)									0	0	1.07
Diluted, continuing operations, net (in usd per share)									(0.86)	0.50	(0.38)
Diluted, discontinued operations, net (in usd per share)									$ 0	$ 0	$ 1.07
Income from discontinued operations, net of tax and non-controlling interest									$ 0	$ 0	$ 43,770
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Noncontrolling Interest									0	0	6,562
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent									0	0	37,208
Net Income (Loss) Available to Common Stockholders, Basic									(29,158)	17,889	23,933
Common stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss) attributable to common stockholders									(29,158)	17,889	(13,275)
Net income (loss) attributable to common shares - diluted									$ (29,158)	$ 17,166	$ 23,933
Weighted average number of shares of common stock outstanding - basic									33,859,775	34,578,292	34,715,852
Weighted average number of incremental shares of common stock issuable from exchangeable interests and contingent considerations									0	0	0
Weighted average number of shares of common stock outstanding - diluted									33,859,775	34,578,292	34,715,852

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Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Feb. 15, 2019
Related Party Transaction [Line Items]
Related party, greater than 5% shareholder	5.00%
Corvid Peak | Strategic Combination Agreement
Related Party Transaction [Line Items]
Investment in funds to be managed			$ 75,000
Management fee based on net asset value of invested capital			1.25%
Management fee based on percent of net profits			20.00%
Investment Income, Investment Expense	$ 2,792	$ 1,006

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Subsequent Events (Details) - $ / shares		3 Months Ended										12 Months Ended
	Mar. 09, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Subsequent Event [Line Items]
Dividends declared per share (in usd per share)		$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.04	$ 0.035	$ 0.035	$ 0.035	$ 0.035	$ 0.16	$ 0.16	$ 0.140
Subsequent Event | Common stock
Subsequent Event [Line Items]
Dividends declared per share (in usd per share)	$ 0.04

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Summarized Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 257,395	$ 224,041	$ 199,194	$ 129,671	$ 208,568	$ 189,185	$ 191,072	$ 183,903	$ 810,301	$ 772,728	$ 625,826
Total expenses	232,827	210,144	194,760	211,422	198,691	190,783	175,367	178,748	849,153	743,589	645,622
Income (loss) before taxes	24,568	13,897	4,434	(81,751)	9,877	(1,598)	15,705	5,155	(38,852)	29,139	(19,796)
Less: provision (benefit) for income taxes	8,403	(844)	(5)	(21,181)	5,311	(649)	3,501	854	(13,627)	9,017	(5,909)
Net income (loss)	16,165	14,741	4,439	(60,570)	4,566	(949)	12,204	4,301	(25,225)	20,122	29,883
Net income (loss) attributable to non-controlling interests	1,895	1,978	623	(563)	419	508	458	376		1,761	5,950
Net income (loss) attributable to common stockholders	$ 14,270	$ 12,763	$ 3,816	$ (60,007)	$ 4,147	$ (1,457)	$ 11,746	$ 3,925	$ (29,158)	$ 18,361	$ 23,933
Basic earnings per share	$ 0.42	$ 0.37	$ 0.11	$ (1.74)	$ 0.12	$ (0.04)	$ 0.33	$ 0.11	$ (0.86)	$ 0.52	$ 0.69
Diluted earnings per share (in usd per share)	$ 0.40	$ 0.35	$ 0.10	$ (1.74)	$ 0.11	$ (0.04)	$ 0.32	$ 0.11	$ (0.86)	$ 0.50	$ 0.69
Basic (in shares)	33,213,307	33,684,301	33,984,195	34,566,330	34,562,219	34,552,171	34,527,230	34,673,054			34,715,852
Diluted (in shares)	33,213,307	33,684,301	33,984,195	34,566,330	34,578,357	34,552,171	34,527,230	34,673,054	33,859,775	34,578,292	34,715,852

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Schedule II- Condensed Financial Information of Registrant (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Condensed Income Statements, Captions [Line Items]
Total revenues	$ 257,395	$ 224,041	$ 199,194	$ 129,671	$ 208,568	$ 189,185	$ 191,072	$ 183,903		$ 810,301	$ 772,728	$ 625,826
Employee compensation and benefits										172,737	129,479	113,557
Interest expense										32,582	27,059	27,013
Professional fees										20,711	20,820	15,216
Rent and related										14,074	12,642	11,114
General and administrative										22,295	18,563	16,218
Depreciation and amortization expense										17,578	13,569	12,596
Loss on extinguishment of debt										353	1,241	428
Other expenses										8,078	9,292	8,265
Total expenses	232,827	210,144	194,760	211,422	198,691	190,783	175,367	178,748		849,153	743,589	645,622
Income (loss) before taxes	24,568	13,897	4,434	(81,751)	9,877	(1,598)	15,705	5,155		(38,852)	29,139	(19,796)
Less: provision (benefit) for income taxes	8,403	(844)	(5)	(21,181)	5,311	(649)	3,501	854		(13,627)	9,017	(5,909)
Net income (loss) from continuing operations										(25,225)	20,122	(13,887)
Income from discontinued operations, net of tax and non-controlling interest										0	0	43,770
Net income (loss) attributable to common stockholders	14,270	12,763	3,816	(60,007)	4,147	(1,457)	11,746	3,925		(29,158)	18,361	23,933
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	136,920				133,117					136,920	133,117	86,003
Notes and accounts receivable, net	370,452				286,968					370,452	286,968
Income taxes receivable	19,513				817					19,513	817
Deferred tax assets	95,250				53,306					95,250	53,306
Other assets	162,034				68,510					162,034	68,510
Total assets	2,995,760				2,198,286					2,995,760	2,198,286
Deferred tax liabilities	113,501				80,651					113,501	80,651
Other liabilities	362,865				172,140					362,865	172,140
Total liabilities	2,622,222				1,786,871					2,622,222	1,786,871
Common stock	33				35					33	35
Additional paid-in capital	315,014				326,140					315,014	326,140
Accumulated other comprehensive income (loss), net of tax	5,674				1,698					5,674	1,698
Retained earnings	35,423				70,189					35,423	70,189
Stockholders' Equity Attributable to Parent	356,144				398,062					356,144	398,062
Liabilities and Equity	2,995,760				2,198,286					2,995,760	2,198,286
Condensed Cash Flow Statements, Captions [Line Items]
Net income (loss) attributable to common stockholders	14,270	$ 12,763	$ 3,816	(60,007)	4,147	$ (1,457)	$ 11,746	3,925		(29,158)	18,361	23,933
Deferred provision (benefit) for income taxes										10,733	6,815	4,011
Non-cash lease expense										7,374	7,568	0
Non-cash compensation expense										8,117	6,363	6,657
Amortization of deferred financing costs										1,015	714	934
Changes in other operating assets and liabilities										(333)	1,381	671
Net cash provided by (used in) operating activities										140,169	23,742	57,724
Net cash provided by (used in) investing activities										(123,491)	(8,327)	(109,107)
Dividends paid										(5,566)	(5,502)	(4,781)
Repurchases of common stock										(13,889)	(9,085)	(14,111)
Net cash provided by (used in) financing activities										31,749	36,928	(2,003)
Net increase (decrease) in cash, cash equivalents and restricted cash										48,427	52,343	(53,386)
Cash, cash equivalents and restricted cash – beginning of period				144,590				96,524	$ 144,590	144,590	96,524	142,237
Cash, cash equivalents and restricted cash – end of period	195,275				144,590					195,275	144,590	96,524
Cash (received) paid for income taxes										1,066	3,301	(5,088)
Parent Company
Condensed Income Statements, Captions [Line Items]
Interest Income, Operating										223	0	137
Other Income										232	0	10
Total revenues										455	0	147
Employee compensation and benefits										15,195	0	0
Interest expense										4,681	0	0
Professional fees										4,476	0	0
Rent and related										2,094	0	0
General and administrative										1,259	0	0
Depreciation and amortization expense										807	0	0
Loss on extinguishment of debt										353	0	0
Other expenses										1,513	3	30
Total expenses										30,378	3	30
Equity in earnings (losses) of subsidiaries, net of tax										(24,855)	18,364	(13,392)
Income (loss) before taxes										(54,778)	18,361	(13,275)
Less: provision (benefit) for income taxes										(25,620)	0	0
Net income (loss) from continuing operations										(29,158)	18,361	(13,275)
Income from discontinued operations, net of tax and non-controlling interest										0	0	414
Gain on sale of discontinued operations, net of tax and non-controlling interest										0	0	36,794
Discontinued operations, net of tax and non-controlling interest										0	0	37,208
Net income (loss) attributable to common stockholders										(29,158)	18,361	23,933
Distributions from subsidiaries										35,092	14,587	4,781
Other expenses									2,000
Condensed Balance Sheet Statements, Captions [Line Items]
Investment in subsidiaries	337,951				397,395					337,951	397,395
Cash and cash equivalents	712				87					712	87
Notes and accounts receivable, net	2,622				0					2,622	0
Intercompany receivables, net	0				0					0	0
Income taxes receivable	15,590				0					15,590	0
Deferred tax assets	44,161				0					44,161	0
Other assets	15,332				580					15,332	580
Total assets	416,368				398,062					416,368	398,062
Deferred tax liabilities	23,889				0					23,889	0
Operating lease liability	12,241				0					12,241	0
Intercompany payables, net	9,861				0					9,861	0
Accrued expenses	7,490				0					7,490	0
Other liabilities	6,743				0					6,743	0
Total liabilities	60,224				0					60,224	0
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding	0				0					0	0
Common stock	33				35					33	35
Additional paid-in capital	315,014				326,140					315,014	326,140
Accumulated other comprehensive income (loss), net of tax	5,674				1,698					5,674	1,698
Retained earnings	35,423				70,189					35,423	70,189
Stockholders' Equity Attributable to Parent	356,144				398,062					356,144	398,062
Liabilities and Equity	416,368				398,062					416,368	398,062
Condensed Cash Flow Statements, Captions [Line Items]
Net income (loss) attributable to common stockholders										(29,158)	18,361	23,933
Equity in earnings of subsidiaries										24,855	(18,364)	(23,816)
Depreciation expense										807	0	0
Deferred provision (benefit) for income taxes										(15,815)	0	0
Non-cash lease expense										1,660	0	0
Non-cash compensation expense										3,110	0	0
Amortization of deferred financing costs										172	0	0
Changes in other operating assets and liabilities										1,264	(583)	4,772
Net cash provided by (used in) operating activities										(13,105)	(586)	4,889
Asset acquisitions due to merger with Operating Co.										488	0	0
Net cash provided by (used in) investing activities										488	0	0
Distributions from subsidiaries										35,092	14,587	4,781
Dividends paid										(5,565)	(5,502)	(4,781)
Repurchases of common stock										(13,889)	(9,085)	0
Subsidiary RSU exchanges										(2,034)	0	0
Vesting of share-based incentive compensation										(362)	0	0
Net cash provided by (used in) financing activities										13,242	0	(4,781)
Net increase (decrease) in cash, cash equivalents and restricted cash										625	(586)	108
Cash, cash equivalents and restricted cash – beginning of period				$ 87				$ 673	87	87	673	565
Cash, cash equivalents and restricted cash – end of period	$ 712				$ 87					712	87	673
Cash (received) paid for income taxes										(166)	2,168	(5,915)
Condensed Financial Statements, Captions [Line Items]
Other expenses									$ 2,000
Distributions from subsidiaries										$ 35,092	$ 14,587	$ 4,781

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Label	Element	Value
Parent [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | AOCI Attributable to Parent [Member]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect	us-gaap_TaxCutsAndJobsActOf2017ReclassificationFromAociToRetainedEarningsTaxEffect	$ (99,000)
Parent [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect	us-gaap_TaxCutsAndJobsActOf2017ReclassificationFromAociToRetainedEarningsTaxEffect	$ 99,000

[1] Amounts reclassified due to adoption of ASU 2018-02. See Note (2) Summary of Significant Accounting Policies