Believing the P&C insurance industry is “well positioned” for 2022, Scotia Capital analyst Jaeme Gloyn said Trisura Group Ltd. remains at the top of his pecking order after hosting a U.S. marketing tour with CEO David Clare last week, citing “a rapid growth outlook and valuation upside.”

“We gained increased confidence in our rapid growth and profitability outlook: i) TSU has significantly de-risked earnings; ii) brokers and fronting hold the key to persistent rapid Canadian growth; iii) secular trends in the U.S. MGA market support continued rapid growth south of the border; iv) growth initiatives such as expansion into admitted lines and U.S. Surety lines are advancing nicely; and v) the recent equity raise strongly positions TSU to execute on all these growth drivers,” he said in a research note.

Mr. Gloyn reiterated an “outperform” recommendation and $62 target for Trisura shares. The current average is $55.34.

“Our target valuation premium reflects i) our view TSU will execute on our robust revenue/earnings growth forecasts, ii) premium valuations in the insurance peer group, and iii) premium valuations ascribed to specialty lines focused companies delivering consistent double-digit ROE/EPS growth,” the analyst said. “We reiterate that significant valuation upside remains as i) the U.S. fronting platform continues to prove out its industry-leading growth trajectory and expands its share of TSU profitability and ii) Canada maintains strong momentum as market share gains, new products and persistent hard markets support equally impressive growth and even stronger profitability. The company’s recent equity raise reaffirms our confidence in the rapid growth outlook.”