Company: TIPT
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0001393726-25-000028
Chunk: 128

Company: TIPTREE INC.
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7A
Chunk 128
---
 respectively. 

Foreign Currency Exchange Rate Risk

We have foreign currency exchange rate risk associated with certain assets and liabilities related to our foreign operations. At December 31, 2024 and 2023, 88% and 93%, respectively of our invested assets were denominated in United States (U.S.) 

80

Dollars. At that date, the largest foreign currency denominated asset balances were fixed income securities denominated in British Pound Sterling and Euros reported within available for sale securities, at fair value. At December 31, 2024 and 2023, 87% and 92%, respectively, of our insurance subsidiary’s combined unpaid premiums and deferred revenue were denominated in U.S. Dollars. 

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, 2024 and 2023, the total fair value of derivative assets subject to counterparty risk, including the effect of any legal right of offset, totaled $3.1 million and $4.0 million, respectively. We generally manage our counterparty risk to derivative counterparties by entering into contracts with counterparties of high credit quality.

Total reinsurance recoverables and prepaid reinsurance premiums were $2,039.1 million and $1,854.4 million of December 31, 2024 and 2023, respectively. Of those amounts, $835.3 million and $870.5 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, 2024, the non-affiliated reinsurers from whom our insurance business has the largest reinsurance receivable balances represented $220.4 million, or 10.8% of the total, and included: Allianz Global Risks US Insurance Company (AM Best Rating: A+ rated), Allianz Reinsurance America, Inc. (AM Best Rating: A+ rated), and Ferian Re, LTD (AM Best Rating: Not Rated). Receivable balances from authorized reinsurers, such as the Allianz companies noted above, do not require collateral based on the authorized status of the parties. Receivable balances from unauthorized reinsurers are collateralized by assets on hand, assets