Segment Results

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Results

The Company conducts business through three business segments: (i) Payment Protection; (ii) BPO; and (iii) Brokerage. The revenue for each segment is presented below to reflect the operating characteristics of the segment. The Company allocates certain revenues and expenses to the segments. These items consist primarily of corporate-related income, transaction related costs, executive stock compensation and other overhead expenses. Segment assets are not presented to the Company's chief operating decision maker for operational decision-making and therefore are not disclosed in the accompanying table.

The Company measures the profitability of its business segments with the allocation of Corporate revenues and expenses and without taking into account amortization, depreciation, interest expense and income taxes. The Company refers to this financial performance measure as "segment EBITDA" (earnings before interest, taxes, depreciation and amortization). The Company's financial measure of segment EBITDA meets the definition of a Non-GAAP financial measure and is not a recognized term under U.S. GAAP, nor is it an alternative to the U.S. GAAP financial measures presented in this Form 10-Q. The Non-GAAP financial measure in this Form 10-Q should be used in addition to, but not as a substitute for, the U.S. GAAP financial measures presented elsewhere in this Form 10-Q. The Company believes that this Non-GAAP financial measure provides useful information to management, analysts and investors regarding financial and business trends relating to the Company's results of operations and financial condition. The variability of the Company's segment EBITDA is significantly affected by segment net revenues because a large portion of the Company's operating expenses are fixed. The Company's industry peers may also provide similar supplemental Non-GAAP financial measures, although they may not use the same or comparable terminology and may not make identical adjustments. 

The following table presents the Company's business segment results:

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Segment Net Revenue
Payment Protection
Service and administrative fees	$	45,248		$	17,519		$	122,016		$	52,281
Ceding commission	8,732			11,122			22,852			25,396
Net investment income	771			744			2,432			2,219
Net realized investment gains	756			(16		)	2,043			(6		)
Other income (1)	177			52			929			172
Net earned premium	34,105			33,893			100,928			97,770
Net losses and loss adjustment expenses	(9,957		)	(11,430		)	(31,096		)	(32,272		)
Member benefit claims	(13,834		)	(1,157		)	(34,624		)	(3,558		)
Commissions	(43,175		)	(33,377		)	(120,148		)	(96,647		)
Total Payment Protection Net Revenue	22,823			17,350			65,332			45,355
BPO	3,717			4,951			11,900			13,565
Brokerage
Brokerage commissions and fees	8,789			8,411			28,411			27,295
Service and administrative fees	274			428			1,107			1,349
Total Brokerage	9,063			8,839			29,518			28,644
Total segment net revenue	35,603			31,140			106,750			87,564
Operating Expenses
Payment Protection	15,833			9,563			44,805			26,205
BPO	2,370			3,836			8,706			10,320
Brokerage	7,296			7,268			22,016			21,577
Total operating expenses	25,499			20,667			75,527			58,102
EBITDA
Payment Protection	6,990			7,787			20,527			19,150
BPO	1,347			1,115			3,194			3,245
Brokerage	1,767			1,571			7,502			7,067
Total EBITDA	10,104			10,473			31,223			29,462
Depreciation and Amortization
Payment Protection	1,736			863			5,145			2,577
BPO	845			494			2,512			1,495
Brokerage	667			641			2,004			2,287
Total depreciation and amortization	3,248			1,998			9,661			6,359
Interest Expense
Payment Protection	1,022			1,359			3,044			3,342
BPO	176			294			528			820
Brokerage	303			372			917			1,105
Total interest expense	1,501			2,025			4,489			5,267
Income before income taxes and non-controlling interests
Payment Protection	4,232			5,565			12,338			13,231
BPO	326			327			154			930
Brokerage	797			558			4,581			3,675
Total income before income taxes and non-controlling interests	5,355			6,450			17,073			17,836
Income taxes	2,268			2,397			6,048			6,392
Less: net (loss) income attributable to non-controlling interests	(135		)	29			868			62
Net income	$	3,222		$	4,024		$	10,157		$	11,382

(1) - Includes the $402 gain on sale of subsidiary for the nine months ended September 30, 2013.

The following table reconciles segment information to the Company's Consolidated Statements of Income and provides a summary of other key financial information for each segment:

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Segment Net Revenue
Payment Protection (1)	$	22,823	$	17,350	$	65,332	$	45,355
BPO	3,717		4,951		11,900		13,565
Brokerage	9,063		8,839		29,518		28,644
Segment net revenues	35,603		31,140		106,750		87,564
Net losses and loss adjustment expenses	9,957		11,430		31,096		32,272
Member benefit claims	13,834		1,157		34,624		3,558
Commissions	43,175		33,377		120,148		96,647
Total segment revenue	102,569		77,104		292,618		220,041
Operating Expenses
Payment Protection	15,833		9,563		44,805		26,205
BPO	2,370		3,836		8,706		10,320
Brokerage	7,296		7,268		22,016		21,577
Total operating expenses	25,499		20,667		75,527		58,102
Net losses and loss adjustment expenses	9,957		11,430		31,096		32,272
Member benefit claims	13,834		1,157		34,624		3,558
Commissions	43,175		33,377		120,148		96,647
Total operating expenses before depreciation, amortization and interest expense	92,465		66,631		261,395		190,579
EBITDA
Payment Protection	6,990		7,787		20,527		19,150
BPO	1,347		1,115		3,194		3,245
Brokerage	1,767		1,571		7,502		7,067
Total EBITDA	10,104		10,473		31,223		29,462
Depreciation and Amortization
Payment Protection	1,736		863		5,145		2,577
BPO	845		494		2,512		1,495
Brokerage	667		641		2,004		2,287
Total depreciation and amortization	3,248		1,998		9,661		6,359
Interest Expense
Payment Protection	1,022		1,359		3,044		3,342
BPO	176		294		528		820
Brokerage	303		372		917		1,105
Total interest expense	1,501		2,025		4,489		5,267
Income before income taxes and non-controlling interests
Payment Protection	4,232		5,565		12,338		13,231
BPO	326		327		154		930
Brokerage	797		558		4,581		3,675

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income
	For the Three Months Ended					For the Nine Months Ended
Total income before income taxes and non-controlling interests	5,355			6,450		17,073		17,836
Income taxes	2,268			2,397		6,048		6,392
Less: net (loss) income attributable to non-controlling interests	(135		)	29		868		62
Net income	$	3,222		$	4,024	$	10,157	$	11,382

(1) - Includes the $402 gain on sale of subsidiary for the nine months ended September 30, 2013.