Trisura Group Ltd T.TSU

Alternate Symbol(s): TRRSF

Financial Services Insurance - Property & Casualty

Trisura Group Ltd. is a specialty insurance provider. The Company is engaged in operating in surety, risk solutions, corporate insurance, and fronting business lines of the market. It has investments in subsidiaries through which it conducts insurance and reinsurance operations. Those operations are primarily in Canada (Trisura Canada) and the United States (Trisura US). Its segments include the operations of Trisura Canada, comprising surety business underwritten in both Canada and the United States, and risk solutions, fronting and corporate insurance products primarily underwritten in Canada and Trisura US, which provides specialty fronting insurance solutions underwritten in the United States. The main products offered by its surety business line are contract surety bonds, commercial surety bonds, developer surety bonds, and new home warranty insurance. Its contract surety bonds, such as performance and labor and material payment bonds, are primarily for the construction industry.

TSX:TSU - Post by User

Trisura Group Ltd

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon Aug 11, 2023 12:19pm

80 Views

Post# 35584045

TD

Maintain their $56.0 target. GLTA

Trisura Group Ltd.

(TSU-T) C$32.81

Q2/23: Strong Underlying Results and U.S. Surety Acquisition Event

Trisura reported Q2/23 results and is hosting a conference call this morning at 9:00 a.m. (webcast).

Impact: POSITIVE

Trisura reported operating EPS of $0.56 vs. our estimate/consensus of $0.50 (prior to releasing preliminary results of $0.53-$0.56 last week). Note that operating EPS excludes gains/losses on the run-off U.S. program ($5.3mm after-tax gain this quarter). The EPS beat was spread across multiple line items including much stronger-than-expected underwriting revenue, higher investment income, and a lower-than-expected loss ratio. Operating ROE (TTM) was strong at 19.2%.

Alongside the earnings release, TSU announced a U.S. Surety acquisition of a Treasury-listed platform that is expected to expand distribution relationships and enhance TSU's offering for its recently launched U.S. Surety business. Recall, TSU executed a Surety acquisition in Canada last year and is a major player in the Canadian Surety market.

Gross premiums written (GPW) of $802mm were up 21% q/q and 37% y/y and were well above our forecast of $729mm, mostly driven by higher-than-expected premiums in the U.S. and strong growth in Canadian fronting and Surety.

U.S.: GPW were up $78mm sequentially; the second-highest q/q growth in the segment's history. On a year-over-year basis, premium growth was a strong 25%. Note that while this is down from the 41% growth last quarter and ~70% y/y growth rate (on average) over the prior four quarters, it is approaching what the company considers to be a more sustainable long-term growth rate of ~20% (and significantly above industry growth rates). This reflects the maturation of existing programs and new program additions. Included in GPW was $61mm of admitted premiums ($53mm LQ and $44mm LY). The fronting operational ratio (a key profitability metric) was sub-80% for the first time since Q1/22 and improved six- points from last quarter.
Canada: Top-line growth remained solid, with premiums up 24% y/y. Canadian fronting continues to experience good momentum with premiums up 41% y/y, and we saw strong growth in Surety reflecting contribution from the nascent U.S. platform and the Sovereign acquisition as well as organic growth. The combined ratio was up 2-3 points vs. LQ and LY but remains healthy at 82.9%.