2021 Annual Report

FINANCIAL HIGHLIGHTS

For the full year, net income of $63 million, or $1.49 per share reflects significant growth in premium and sustained profitability across our North American entities. The increase in net income was significant, growing by 93%, as US net income rose 66% and Canadian growth and underwriting profitability generated a doubling in premium and net income. Book value per share rose to $8.70, a 23% increase over 2020, supported by earnings and unrealized gains from investment performance.

Specialty P&C operations delivered strong performance in 2021, with $1.6 billion in gross premiums written, a 69% increase following a doubling in premium from 2019 to 2020. Premium growth was led by maturation of programs and new business in our fronting platform and supported by expansion of all primary lines in Canada. Importantly, net income within each insurance platform grew materially, benefitting from growth in premiums, maturation in earned fee income, strong underwriting performance, and growing investment income. In the context of significant topline growth, expansion of our capital base, and uncertain operating environments, we generated an impressive 19% retuon equity.

Our balance sheet is conservatively managed and growing. With $359 million in equity and a debt to capital ratio of 17%, we are well-positioned to fund continued growth.

COVID-19

Despite a rise in cases around the world from the Omicron variant, we are hopeful that expanded vaccination efforts and improved global immunity will lead to an acceleration in economic reopening.

Our team continues to navigate the shifting environment well. Productivity has been strong through this period and our results reflect that. As the jurisdictions in which we operate reopen, our focus has turned to returning to the office, ensuring that staff are re-integrated safely, and that the advantages of in-person interactions are enjoyed again.

Premium growth and claims have yet to observe a material change related to COVID-19, although the ultimate impact of the pandemic and related shutdowns is not yet clear, and we maintain increased reserving levels in certain instances to reflect this uncertainty.

INSURANCE OPERATIONS

In Canada, we achieved a combined ratio of 81%, which coupled with investment income drove a historic 30% retuon equity. The expansion of fronting initiatives broadened our touchpoints with distribution partners and enhanced our product offering, as well as supported growth in established lines. Hard markets and expansion of distribution relationships drove a scaling of our Corporate Insurance practice, in the context of strong underwriting. Risk Solutions' extension of our US-style fronting was more successful than hoped; alongside a growing warranty practice, the group now generates attractive fee‑based earnings to complement a strong heritage of profitable underwriting income in Canada.

We have made important progress in our US Surety platform, adding experienced team members in local offices in Connecticut, Denver and Philadelphia. We are excited at the potential of this platform, expanding a product line where we have demonstrated expertise in a geography with promising infrastructure tailwinds.

Momentum in the Excess and Surplus markets continued this year, along with broader adoption of our fronting structure as a means of accessing capacity. Success in onboarding new programs, and maturation of existing programs allowed us to achieve a benchmark $1 billion of premium in the year. The fee-based nature of the platform sustained profitability through another capital injection - funded through our debt issuance - and generated a 14% ROE. The potential of accessing admitted markets remains exciting. Despite the current market driving opportunities to Excess and Surplus lines, we wrote $62 million in admitted premiums in the year, mitigated by slower approvals by state regulators and the longer ramp times of admitted programs.

As the market normalizes, we expect to see increased submission volume in the admitted space. Our newly achieved size IX rating from AM Best, which ranks our platform as one of the most significant fronting participants in the US, is expected to support our trajectory in the years to come.

LETTER TO OUR SHAREHOLDERS

CLOSING

We remain cautious in navigating the unwinding of COVID-19's impacts and are focused on balancing profitability and growth. For us, that means vigilance in underwriting, especially on new products and industries that could be affected through an uneven reopening. We are proactively monitoring government support programs to anticipate the impact of their normalization - we hope to position our surety platforms to benefit from infrastructure spending in Canada and the United States. In US fronting, increased reinsurance capacity and competition means that we must defend operational metrics and reiterate our value proposition with partners.

We are proud of our accomplishments over the past year, and we are optimistic for the years ahead. As we begin 2022, I would like to thank our employees, partners and shareholders for their continued support. As we continue to grow and mature, we look forward to demonstrating progress on our way to building

a leading international specialty insurance provider of scale.

Sincerely,

David Clare

Cautionary Statement Regarding Forward-Looking Statements and Information

This letter to shareholders contains "forward-looking information" within the meaning of Canadian provincial securities laws and "forward-looking statements" within the meaning of applicable Canadian securities regulations. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Company and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and include words such as "expects," "likely," "anticipates," "plans," "believes," "estimates," "seeks," "intends," "targets," "projects," "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may," "will," "should," "would" and "could".

Although we believe that our anticipated future results, performance or achievements expressed or implied by the forward- looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may cause the actual results, performance or achievements of our Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward- looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: developments related to COVID-19, including the impact of COVID-19 on the economy and global financial markets; the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business; the behaviour of financial markets, including fluctuations in interest and foreign exchange rates; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including dispositions; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the ability to appropriately manage human capital; the effect of applying future accounting changes; business competition; operational and reputational risks; technological change; changes in government regulation and legislation within the countries in which we operate; governmental investigations; litigation; changes in tax laws; changes in capital requirements; changes in reinsurance arrangements; ability to collect amounts owed; catastrophic events, such as earthquakes, hurricanes or pandemics; the possible impact of international conflicts and other developments including terrorist acts and cyberterrorism; and other risks and factors detailed from time to time in our documents filed with securities regulators in Canada.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward- looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

LETTER TO OUR SHAREHOLDERS