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.

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Trisura Group Ltd

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Post by retiredcfon Aug 02, 2024 10:05am

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Post# 36160599

RBC

Can't believe that someone sold their shares for $39 this morning. Kudos to the purchaser. GLTA

August 1, 2024

Trisura Group Ltd.
Q2 First Glance, Growth remained strong

TSX: TSU | CAD 44.60 | Outperform | Price Target CAD 52.00

Sentiment: Neutral

Trisura reported Q2/24 operating EPS of $0.65 vs. $0.56 in Q2/23, which trailed our $0.67 estimate but matched the consensus expectation. The modest shortfall versus our estimate was mostly in the US segment and driven by lower than modeled earned premium and net investment income.

Initial thoughts: Trisura's premium growth remained strong across both segments during the June quarter as the company is seeing strong growth across the board (particularly in Canada where growth was +30%). The U.S. segment's variance to our estimate was more retention driven (earned premiums) along with net investment income. The Canada combined ratio was a bit higher than the recent run rate (albeit expense ratio driven) and fairly in line ex that impact. The company will hold a conference call tomorrow morning at 9AM ET. We expect key areas of focus on the Q2 call to include the growth outlook for 2H24, views on the fronting business, color on the U.S. marketplace, and Canadian profitability.

Canada Segment: Overall operating income for the Canada segment totaled $18.4 mm vs. $16.1 million last year, which was shy of our $19.9 million assumption was 89.8% vs $82.9%, which was above recent quarters and our 84.7% assumption. The big variance there was on the expense ratio (at 70.2% vs. in the mid 60s in recent quarters) but that included a few one-time type items. The loss ratio in the Canada segment was 19.6%, in line with our 19.5% assumption. Gross written premiums grew +30.5% y/y to $314.4 mm vs. $240.8 million last year (RBC estimate was +22.0%) while net written premiums increased +27.8% y/y to $153.5 mm (RBC estimate was +22.4%).

U.S. segment: Overall operating income for the U.S. segment totaled $10.4 mm vs. $11.1 million last year, which compared with our $14.0 million assumption. The U.S. fronting operational ratio was 85.5%, consistent with our assumption. Gross written premiums grew 14.4% y/y to $641.7 mm vs. $560.9 million last year (RBC estimate was +8.0%) while net written premiums were far better than expected at $76.8 mm vs. $17.8 million (RBC estimate was +2.3%). Net earned premium in the U.S. segment was $49.6 million vs. our $57.6 million assumption. Fee income in the U.S. segment totaled $20.2 million, close to our $21.2 million assumption.

Other: Book value per share rose 4.8% sequentially to end Q2 at $14.56/share. Overall companywide net investment income grew to $16.9 million from $11.9 million (RBC assumption was $19.3 million), reflecting higher reinvestment yields. The Corporate & Other segment produced a loss of around ($0.6) million, which compares to our $(1.4) million loss assumption