Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The following table presents the Company's investments related to insurance operations and other Tiptree investing activities, measured at fair value as of the following periods:

	As of September 30, 2023
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	669,566	$	—	$	31,672	$	701,238
Loans, at fair value	13,888		62,087		—		75,975
Equity securities	26,291		—		37,165		63,456
Other investments	86,290		4,081		2,464		92,835
Total investments	$	796,035	$	66,168	$	71,301	$	933,504

	As of December 31, 2022
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Available for sale securities, at fair value, net of allowance for credit losses	$	611,980	$	—	$	—	$	611,980
Loans, at fair value	14,312		50,531		—		64,843
Equity securities	72,992		—		12,784		85,776
Other investments	66,163		4,038		2,824		73,025
Total investments	$	765,447	$	54,569	$	15,608	$	835,624

Available for Sale Securities, at fair value

A majority of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of September 30, 2023 and December 31, 2022 are held by subsidiaries in the insurance segment. The following tables present the Company's investments in AFS securities:

	As of September 30, 2023
	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	$	487,001	$	—	$	448	$	(40,654)	$	446,795
Obligations of state and political subdivisions	49,889		(1)		—		(4,780)		45,108
Corporate securities	191,425		(331)		—		(13,299)		177,795
Asset backed securities	32,054		(14)		—		(3,832)		28,208
Certificates of deposit	1,724		—		—		—		1,724
Obligations of foreign governments	1,806		—		—		(199)		1,608
Total	$	763,899	$	(346)	$	448	$	(62,764)	$	701,238

	As of December 31, 2022
	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	$	417,278	$	—	$	844	$	(36,062)	$	382,060
Obligations of state and political subdivisions	54,390		(3)		4		(4,937)		49,454
Corporate securities	176,187		(183)		1		(14,006)		161,999
Asset backed securities	19,596		(1)		—		(4,246)		15,349
Certificates of deposit	756		—		—		—		756
Obligations of foreign governments	2,629		(3)		—		(264)		2,362
Total	$	670,836	$	(190)	$	849	$	(59,515)	$	611,980

(1) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in net realized and unrealized gains (losses) as a credit loss on AFS securities. Amount excludes unrealized losses relating to non-credit factors.

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
	September 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	243,795	$	242,412	$	52,265	$	51,315
Due after one year through five years	239,551		220,569		300,767		280,965
Due after five years through ten years	38,350		34,686		54,419		49,465
Due after ten years	210,149		175,363		243,789		214,887
Asset backed securities	32,054		28,208		19,596		15,348
Total	$	763,899	$	701,238	$	670,836	$	611,980

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 September 30, 2023
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities(1)	Fair value		Gross unrealized losses		# of Securities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	205,524	$	(12,178)	448	$	136,938	$	(28,476)	464
Obligations of state and political subdivisions	1,304		(91)		29	43,802		(4,689)		158
Corporate securities	167,158		(12,649)		1,053	10,637		(650)		52
Asset backed securities	2,102		(317)		29	26,107		(3,515)		153
Obligations of foreign governments	—		—		1	1,607		(199)		7
Total	$	376,088	$	(25,235)	1,560	$	219,091	$	(37,529)	834

	As of December 31, 2022
	Less Than or Equal to One Year					More Than One Year
	Fair value		Gross unrealized losses		# of Securities(1)	Fair value		Gross unrealized losses		# of Securities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	164,593	$	(9,357)	354	$	186,591	$	(26,705)	385
Obligations of state and political subdivisions	25,507		(1,076)		97	20,219		(3,861)		78
Corporate securities	45,016		(1,446)		176	114,683		(12,560)		417
Asset backed securities	10,298		(3,642)		46	5,051		(604)		34
Obligations of foreign governments	309		(1)		1	2,054		(263)		8
Total	$	245,723	$	(15,522)	674	$	328,598	$	(43,993)	922

(1)    Presented in whole numbers.

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 September 30, 2023 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 September 30, 2023:

	Obligations of state and political subdivisions		Corporate securities		Asset backed securities		Obligations of foreign governments		Total
Balance at December 31, 2021	$	—	$	(241)	$	—	$	(4)	$	(245)
(Increase) in allowance for credit losses	(3)		(109)		(1)		—		(113)
Gains from recoveries of amounts previously written off	—		70		—		2		72
Balance at September 30, 2022	$	(3)	$	(280)	$	(1)	$	(2)	$	(286)
Balance at December 31, 2022	$	(3)	$	(183)	$	(1)	$	(3)	$	(190)
(Increase) in allowance for credit losses	—		(287)		(14)		—		(301)
Gains from recoveries of amounts previously written off	2		139		1		3		145
Balance at September 30, 2023	$	(1)	$	(331)	$	(14)	$	—	$	(346)

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 gains from recoveries (credit losses) on AFS securities recorded by the Company for the following period:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023	2022
Net gains from recoveries (credit losses) on AFS securities	$	(50)	$	35	(156)	(41)

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
	September 30, 2023		December 31, 2022
Fair value of restricted investments in trust pursuant to reinsurance agreements	$	48,092	$	34,386
Fair value of restricted investments for special deposits required by state insurance departments	16,681		16,816
Total fair value of restricted investments	$	64,773	$	51,202

The following table presents additional information on the Company’s AFS securities:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Purchases of AFS securities	$	146,512	$	12,395	$	449,165	$	138,738
Proceeds from maturities, calls and prepayments of AFS securities	$	231,101	$	13,689	$	319,100	$	51,328
Gross proceeds from sales of AFS securities	$	2,578	$	—	$	42,536	$	16,970

The following table presents the gross realized gains and gross realized losses from sales and redemptions of AFS securities:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Gross realized gains	$	80	$	—	$	80	$	74
Gross realized (losses)	(78)		—		(3,034)		(184)
Total net realized gains (losses) from investment sales and redemptions	$	2	$	—	$	(2,954)	$	(110)

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 September 30, 2023								As of December 31, 2022
	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)	$	13,888	$	17,118	$	(3,230)	$	—	$	14,312	$	16,032	$	(1,720)	$	—
Mortgage:
Mortgage loans held for sale (2)	62,087		61,392		695		61,376		50,531		49,361		1,170		50,113
Total loans, at fair value	$	75,975	$	78,510	$	(2,535)	$	61,376	$	64,843	$	65,393	$	(550)	$	50,113

(1)    The cost basis of Corporate loans was approximately $17,118 and $16,032 at September 30, 2023 and December 31, 2022, respectively.

(2)    As of September 30, 2023, there were three mortgage loans held for sale that were 90 days or more past due. As of December 31, 2022, there were no mortgage loans held for sale that were 90 days or more past due.

Equity Securities

Equity securities consist mainly of publicly traded common and preferred stocks and fixed income exchange traded funds. Included within the equity securities balance are 17.0 million shares of Invesque as of September 30, 2023 and December 31, 2022, 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 and Tiptree Capital as of the following periods:

	As of September 30, 2023
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	1,174	$	111,491	$	5,619	$	134,830	$	6,793
Fixed income exchange traded funds	1,339		1,291		—		—		1,339		1,291
Other equity securities	25,749		23,826		29,941		31,546		55,690		55,372
Total equity securities	$	50,427	$	26,291	$	141,432	$	37,165	$	191,859	$	63,456

	As of December 31, 2022
	Insurance				Tiptree Capital - Other				Total
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Invesque	$	23,339	$	2,670	$	111,491	$	12,784	$	134,830	$	15,454
Fixed income exchange traded funds	56,263		56,256		—		—		56,263		56,256
Other equity securities	15,773		14,066		—		—		15,773		14,066
Total equity securities	$	95,375	$	72,992	$	111,491	$	12,784	$	206,866	$	85,776

Other Investments

The following table contains information regarding the Company’s other investments as of the following periods:

	As of September 30, 2023
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	62,929	$	—	$	—	$	62,929
Debentures	23,234		—		—		23,234
Other	127		4,081		2,464		6,672
Total other investments	$	86,290	$	4,081	$	2,464	$	92,835

	As of December 31, 2022
			Tiptree Capital
	Insurance		Mortgage		Other		Total
Corporate bonds, at fair value (1)	$	42,080	$	—	$	—	$	42,080
Debentures	23,853		—		—		23,853
Other	230		4,038		2,824		7,092
Total other investments	$	66,163	$	4,038	$	2,824	$	73,025

(1)    The cost basis of corporate bonds was $64,656 and $45,630 as of September 30, 2023 and December 31, 2022, respectively.

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 condensed consolidated statements of operations. The following table presents the components of net investment income by source of income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest:
AFS securities	$	5,255	$	3,094	$	16,863	$	7,955
Loans, at fair value	168		173		422		514
Other investments	1,758		1,382		5,837		4,240
Dividends from equity securities	39		212		1,339		883
Subtotal	7,220		4,861		24,461		13,592
Less: investment expenses	1,804		1,229		4,848		3,428
Net investment income	$	5,416	$	3,632	$	19,613	$	10,164

Other Investment Income - Tiptree Capital

Other investment income represents revenue from non-insurance activities as disclosed within other revenue on the condensed consolidated statements of operations, see Note (15) Other Revenue and Other Expenses. The following tables present the components of other investment income by type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest income from Loans, at fair value (1)	$	826	$	766	$	2,213	$	4,652
Loan fee income (1)	4,193		3,998		12,186		14,494
Other	1,072		7,829		2,458		28,337
Other investment income	$	6,091	$	12,593	$	16,857	$	47,483

(1)    Includes income related to Loans at fair value classified as Held for Sale for the periods prior to July 1, 2022.

Net Realized and Unrealized Gains (Losses)

The following table presents the components of net realized and unrealized gains (losses) recorded on the condensed consolidated statements of operations. Net unrealized gains (losses) on AFS securities are included within other comprehensive income (loss) (“OCI”), net of tax, and, as such, are not included in this table. Net realized and unrealized gains (losses) on non-investment related financial assets and liabilities are included below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net realized gains (losses)
Insurance:
Reclass of unrealized gains (losses) on AFS securities from OCI	$	2	$	—	$	(2,954)	$	(110)
Net gains from recoveries (credit losses) on AFS securities	(50)		35		(156)		(41)
Net realized gains (losses) on loans	(2,902)		(1,241)		(2,900)		(1,617)
Net realized gains (losses) on equity securities	(1,076)		(1,639)		(1,923)		(4,104)
Net realized gains (losses) on corporate bonds	(695)		(2,937)		(1,919)		(3,049)
Other	1,089		3,951		335		(2,612)
Tiptree Capital
Mortgage:
Net realized gains (losses) on loans	8,848		11,902		29,680		32,475
Other	1,971		663		2,107		13,376
Other:
Net realized gains (losses) on loans (1)	—		—		—		24,403
Net realized gains on vessel sales	—		14,099		—		21,217

Other	—		—		—		762
Total net realized gains (losses)	$	7,187	$	24,833	$	22,270	$	80,700
Net unrealized gains (losses)
Insurance:
Net change in unrealized gains (losses) on loans	$	2,563	$	(783)	$	(1,510)	$	(467)
Net unrealized gains (losses) on equity securities held at period end	(3,844)		(452)		(2,537)		(5,087)
Reclass of unrealized (gains) losses from prior periods for equity securities sold	410		(1)		(7)		(953)
Other	2,887		(3,316)		2,969		(5,112)
Tiptree Capital
Mortgage:
Net change in unrealized gains (losses) on loans	(287)		(2,104)		(476)		(4,005)
Other	(834)		385		(2,365)		2,866
Other:
Net change in unrealized gains (losses) on loans (1)	—		—		—		(4,513)
Net unrealized gains (losses) on equity securities held at period end	(6,624)		(1,405)		(5,561)		(12,924)
Other	(1)		2		(324)		(455)
Total net unrealized gains (losses)	(5,730)		(7,674)		(9,811)		(30,650)
Total net realized and unrealized gains (losses)	$	1,457	$	17,159	$	12,459	$	50,050

(1)    Relates to Loans, at fair value classified as Held for Sale for the periods prior to July 1, 2022.