A Growing Specialty Insurer
A Growing Specialty Insurer
A Growing Specialty Insurer
• Canadian specialty lines franchise operating for 16 years
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Diversified |
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US hybrid fronting platform participating in the admitted and non-admitted ('E&S') markets |
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Specialty Platform |
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• Earnings supported by an attractive mix of underwriting income and recurring fee-based and investment income |
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• Conservative Debt-to-capital1 below our internal target (20%) and capital in excess of regulatory requirements in subsidiaries |
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Strong Balance Sheet |
• Issuer rating of BBB (DBRS); Financial Strength ratings of A (low) (DBRS) and A- (AM Best) at operating subsidiaries |
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20% consolidated 2022 Adj. ROE1 (ROE: 6%); 5-year average 85% combined ratio1, 2 in |
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and Profitability |
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increasing profitability from US subsidiary reaching a 14% 2022 Adj. ROE3 (ROE: -12%) |
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• Conservative approach to reserving; consistent history of favourable prior year claims development |
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• 5-year GPW CAGR of 75%2 (38%2, 4 in |
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Growth |
• Growth supported by expanding distribution relationships in existing lines of business and growth of our hybrid fronting |
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Opportunities |
model in |
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• Proven access to capital (raised |
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• High quality investment portfolio comprised primarily of cash (34%), government bonds (7%), and corporate fixed |
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income (43%) |
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Conservative Risk |
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Conservative underwriting culture; limited retention in US and 5-year average loss ratio of 22%1, 2 in |
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Management |
• Disciplined reinsurance strategy; deep relationships with high-quality counterparties - 83% of reinsurance recoverable |
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are with rated reinsurers, the remaining 17% from unrated reinsurers with appropriate collateral |
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• Strong enterprise risk management infrastructure in place |
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Experienced |
• Management team with a diversity of skills, and strong relationships with regulators and distribution partners; senior |
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Management |
management directly owns ~6% of shares outstanding |
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& Board of Directors |
• Board of Directors comprised of seasoned executives with strong experience across financial services |
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Specialty Insurer Targeting Mid-teens ROEs and Growth in Book Value |
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Note: All figures in C$ million unless otherwise stated. |
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1 This is a supplementary financial measure. Refer to Q4 2022 MD&A, Section 10, Operating Metrics table for its composition. To access MD&A, see |
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website or SEDAR at www.sedar.com. 2 As of December 31st, 2022. |
3 Adjusted figures exclude impact of Write Down on Reinsurance Recoverable in Q4 2022. 4 5-year CAGR in
Company Overview
Trisura Group Ltd. (TSX: TSU) is a specialty insurer operating in the surety, risk solutions, corporate insurance and fronting market segmentsTrisura operates in niche markets, relying on specialized underwriting knowledge and structuring expertise to offer commercial products and services not provided by most insurers- Components of
Trisura were founded and incubated withinBrookfield Asset Management ; Canadian specialty insurance in 2006 and US fronting in 2017 prior to spin-out
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US |
- 16-yearoperating history in surety, risk solutions and corporate insurance segments; strong track record of profitable underwriting
- 2022 GPW:
$731 million - 2022 Net Income:
$55 million , 30% ROE - DBRS Rating: A (Low)
- A.M. Best Rating: A- (Excellent) Size 9
Key Performance Metrics
- Hybrid fronting business that works with distribution partners and cedes majority of risk to reinsurance markets
- 2022 GPW:
$1.7 billion - 2022 Adj. Net Income1:
$34 million (Net Income: -30 million), 14% Adj.
ROE1 (ROE: -12%) - DBRS Rating: A (Low)
- A.M. Best Rating: A- (Excellent) Size 9
$1.4 billion2 Market Cap
Q4/22
Book Value
Adj. Net Income3
(Net Income:
20%
Adj. ROE (ROE: 6%)
13.4%
Q4/22
+58% Since
Year-end 2020
+35% Y/Y
+56% Y/Y
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+34% Y/Y |
1pts Y/Y |
-4pts Y/Y |
Established Canadian Specialty Platform and Growing US Fronting Business
Note: All figures in C$ million unless otherwise stated.
- Adjusted figures exclude impact of Write Down on Reinsurance Recoverable in Q4 2022.
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2 As at March 20th, 2023. |
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- This is a supplementary financial measure. Refer to Q4 2022 MD&A, Section 10, Operating Metrics table for its composition. To access MD&A, see
Trisura's website or SEDAR at www.sedar.com.
Key Achievements
Share Price Performance1 and GPW Growth ($ millions)
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TSX Financials |
S&P/TSX |
Consolidated LTM GPW |
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388%
22%
Key Achievements
- June -
December 2017 : Completed spin-off from Brookfield, developed public company infrastructure and US capabilities - May -
December 2018 : Enhanced corporate governance and risk management functions through dedicated board committees and personnel December 2018 : Finalized internalization of investment function across all three subsidiariesSeptember 2019 : Completed inaugural equity raise of$58 million November 2019 : Closed the acquisition of 21stCentury Preferred Insurance Company , providing access to admitted markets in the USMay 2020 : Completed$68 million equity raise and increased capacity on revolving credit facility to$50 million - June -
July 2021 : Completed$75 million senior unsecured notes offering and executed a four-for-one common share split
January -April 2022 : Advanced various Environmental, Social & Governance initiatives, including the implementation of a Sustainability Linked Loan and - Responsible Investment Policy, and enhanced related disclosure within the Management Information Circular and Management Discussion and Analysis
July 2022 : Completed$150 million equity raiseSeptember 2022 : Closed the acquisition ofSovereign Insurance's surety business inCanada
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Note: All figures in C$ million unless otherwise stated. |
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Cumulative share price performance measured from close of business December 31st, 2017. |
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'Current' as at March 20th, 2023. |
Strategic Priorities
- Expand North American insurance market share through enhanced distribution and capacity relationships
- Build fronting model of scale in US and Canadian markets
Growth
- Grow Admitted business and obtain
US Treasury listing - Evaluate strategic partnerships and inorganic growth
- Demonstrate the value of specialty focus through strong loss ratio and underwriting margin outperformance
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Profitability |
• Leverage fixed cost base and technology to gain scale, demonstrating sustainable mid-teens ROE |
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• Diversify earnings to produce stable returns |
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• Maintain and improve ratings and appropriate regulatory capital |
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Risk & Capital |
• Synchronize risk management across the platform |
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Management |
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• Optimize capital allocation, reflecting appropriate capitalization for insurance, credit and market risks |
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• Enhance yield and increase allocation to alternatives; maintain appropriate risk profile and improve diversification |
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Investments / |
• Develop track record of execution, expand shareholder base and distribution partners |
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Capital Markets |
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• Strengthen access to capital and enhance ability to fund growth |
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Centralized Corporate Function Providing Support for Operating Subsidiaries to Grow
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