Trisura Investor Presentation – August 2022
A Growing Specialty Insurer
A Growing Specialty Insurer
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Diversified |
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Canadian specialty lines franchise operating for 16 years 
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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: 1) underwriting income; and, 2) fee-based and investment income |
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Strong Balance Sheet
and Profitability
- Conservative Debt-to-capital1 below our internal target (20%)2 and capital in excess of regulatory requirements in subsidiaries
- Issuer rating of BBB (DBRS); Financial Strength ratings of A (low) (DBRS) and A- (AM Best) at operating subsidiaries
- Consistent profitability: 19% consolidated LTM Q2/22 ROE1; 5-year average 86% combined ratio1, 3 in
Canada and 32% LTM Q2/22 ROE; increasing profitability from US subsidiary reaching a 14% LTM Q2/22 ROE - Conservative approach to reserving; consistent history of favourable prior year claims development
Growth
Opportunities
- 5-yearGPW CAGR of 66%3 (35%3, 4 in
Canada , 165%3, 4 CAGR in US) - Growth supported by expanding distribution relationships in existing lines of business and growth of our hybrid fronting model in
Canada and US - Proven access to capital (raised
$276 million in equity &$75 million in debt) and reinsurance relationships to support growth
Conservative Risk
Management
- High quality investment portfolio comprised primarily of cash (38%), government bonds (6%), and corporate fixed income (38%)
- Conservative underwriting culture; limited retention in US and 5-year average loss ratio of 23%1, 3 in
Canada - Disciplined reinsurance strategy; deep relationships with high-quality counterparties
- Strong enterprise risk management infrastructure in place
Experienced
Management
& Board of Directors
- Management team with a diversity of skills, and strong relationships with regulators and distribution partners; senior management directly owns ~6% of shares outstanding
- Board of Directors comprised of seasoned executives with strong experience across financial services
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Specialty Insurer Targeting Mid-teens ROEs and Growth in Book Value |
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Note: All figures in C$ million unless otherwise stated. |
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This is a supplementary financial measure. Refer to Q2 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. |
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Pro-forma the |
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
- 16-yearoperating history in surety, risk solutions and corporate insurance segments; strong track record of profitable underwriting
- LTM Q2/22 GPW:
$670 million - LTM Q2/22 Net Income:
$50 million , 32% ROE - DBRS Rating: A (Low)
- A.M. Best Rating: A- (Excellent) Size 9
Key Performance Metrics
US
- Hybrid fronting business that works with distribution partners and cedes majority of risk to reinsurance markets
- LTM Q2/22 GPW:
$1.3 billion - LTM Q2/22 Net Income:
$29 million , 14% ROE - DBRS Rating: A (Low)
- A.M. Best Rating: A- (Excellent) Size 9
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$1.6 billion1 |
$501 million2 |
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19% |
17.3%2 |
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Q2/22 |
LTM Q2/22 |
LTM Q2/22 |
Return |
Q2/22 |
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Market Cap |
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Book Value |
GPW |
Net Income |
on Equity |
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+76% Since |
+8% Y/Y |
+64% Y/Y |
+26% Y/Y |
+1pts Y/Y |
+4pts Y/Y |
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Year-end 2020 |
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Established Canadian Specialty Platform and Growing US Fronting Business |
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Note: All figures in C$ million unless otherwise stated. |
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As at July 26th, 2022 |
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Pro-forma the |
Key Achievements
Share Price Performance1 and GPW Growth ($ millions)
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TSX Financials |
S&P/TSX |
Consolidated LTM GPW |
445%
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17% |
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14% |
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Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1' 22 Q2' 22 Current2
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$150 million equity raise
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Note: All figures in C$ 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 July 26th, 2022. |
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 |
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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
Centralized Corporate Function Providing Support for Operating Subsidiaries to Grow
4
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