Trisura Group Ltd. · TSX:TSU
Trisura — Q1 2024 Earnings Presentation
30 slides from Trisura's earnings presentation, May 3, 2024
Slide 1: A Growing and Profitable Specialty Insurer
A Growing and Profitable Specialty Insurer Investor Day – June 3, 2024
Slide 2: Agenda
Agenda 1 Who We Are 2 Where We Have Come From 3 Where We Are Going 4 Why Trisura 5 Appendix 1
Slide 3: Who We Are
Who We Are ✓ Company Overview ✓ What is Specialty Insurance
Slide 4: A growing and profitable North American specialty insurance group
A growing and profitable North American specialty insurance group Canada United States 1 Primary Insurance: Program Insurance: 1 $439M 2023 GPW1 $2B 2023 GPW1 (Surety, Warranty, and (E&S and Admitted) Corporate Insurance) 2 Fronting: Primary Insurance: 2 $469M 2023 GPW1 $25M 2023 GPW1 (Property and
Slide 5: Specialty insurance relies on niche underwriting and structuring expertise
Specialty insurance relies on niche underwriting and structuring expertise Difficult to Underwrite: Classes of business that require deep, differentiated expertise ✓ to underwrite, administer and service Complex to Structure: Structures that balance the needs of our distribution and capital ✓ partne
Slide 6: Where We Have Come From
Where We Have Come From ✓ Progress on Key Metrics ✓ Evolution of Earnings Composition
Slide 7: Growth in gross premium written has maintained early momentum
Growth in gross premium written has maintained early momentum $2,971 +65% 69% CAGR 31% $147 2017 2023 Canada US Note: All figures in C$ million unless otherwise stated. 6
Slide 8: Specialty focus has driven strong net underwriting income alongside growth
Specialty focus has driven strong net underwriting income alongside growth… Net Underwriting Income1: Consolidated Combined Ratio2: 3 96% $99.3 3 (13%) 83% +74% CAGR $3.6 2017 2023 2017 2023 Note: All figures in C$ million unless otherwise stated. 1 This is a non-IFRS financial measure. Refer to Q4
Slide 9: Growing net income and industry-leading ROE
…which has supported growing net income and industry-leading ROE… Operating Net Income1: Operating ROE2: $110.2 20% +82% +17% CAGR 3 3% 3 $3.0 2017 2023 2017 2023 Note: All figures in C$ million unless otherwise stated. 1 This is a non-IFRS financial measure. Refer to Q4 2023 MD&A, Section 10 for de
Slide 10: Significant growth in book value
…as well as significant growth in book value Book Value: Debt-to-Capital1: 19% $662 (9%) 10% +32% Q1/18 Q1/24 CAGR Book Value Per Share1: $13.89 $124 +20% CAGR $4.67 Q1/18 Q1/24 Q1/18 Q1/24 Note: All figures in C$ million except for per share measures, unless otherwise stated. 1 This is supplementar
Slide 11: Higher interest rates and a growing portfolio support investment income
Higher interest rates and a growing portfolio support investment income 1 5%+ new investment yields 2 Extending duration to lock in yields Net Investment Income: Net Investment Yield2: $51.7 3 4.8% +62% +2.1% CAGR 1 2.7% 1 $12.2 2020 2023 2020 2023 Note: All figures in C$ million except otherwise st
Slide 12: Strong underwriting income enhanced by growing fee and investment income
Strong underwriting income enhanced by growing fee and investment income 2023 Operating ROE Corp, Other Operating Underwriting1 Fee-Based2 Investment3 and Tax 4 ROE 10% 8% 9% (7%) 20% 1 Represents Net Underwriting Income from Surety, Warranty and Corporate Insurance. 2 Represents Net Underwriting In
Slide 13: Shares have outperformed the market
As a result, shares have outperformed the market Total Return: December 2017 – May 20241 Trisura +525% TSX Financials +60% TSX +66% S&P 500 +119% 1 As at May 30, 2024. 12
Slide 14: Where We Are Going
Where We Are Going ✓ Track Record of Building Businesses ✓ Industry and Macro Tailwinds ✓ Strategic Roadmap and Key Metrics
Slide 15: Demonstrable track record of building businesses
Demonstrable track record of building businesses 2006 2017 2018 2019 2020 2021 2022 2023 GPW Canadian Primary1 $439M US Program (E&S) $1.7B US Program (Admitted) $372M Canadian $469M Fronting US Surety $25M US Corporate NMF Insurance Note: All figures in C$ unless otherwise stated. 1 Includes Canadi
Slide 16: Growth in specialty and MGA markets has outpaced P&C
Growth in specialty and MGA markets has outpaced P&C Canada 2017 – 2022 CAGR1 2022 Market Size1 Specialty +13.2% $8.5B P&C +7.8% $89.5B US 2017 – 2022 CAGR1 2022 Market Size1 MGA +10.5% US$70.8B E&S +19.0% US$75.5B P&C +6.4% US$876.1B Note: All figures in C$ million, unless otherwise stated. 1 Sourc
Slide 17: Specialty focus expected to perform across cycles
Specialty focus expected to perform across cycles Hard Market Soft Market Capacity: Scarce Abundant Pricing: Increasing Decreasing Terms and Conditions: Tightening Loosening Increased Rates Reinsurance Capacity Improved T&C Fronting/Program Fee Impact/Navigation for Trisura: E&S Premium Admitted Pre
Slide 18: Strong growth and operating environment in niche specialty lines
Strong growth and operating environment in niche specialty lines • Remains a highly competitive line of business Surety • Stable interest rates and economic environment is supportive • Trisura continues to pursue growing market share in Canada and US • Price dynamic is balancing following strength t
Slide 19: Proven profitability enhanced by growing scale
Proven profitability enhanced by growing scale Diversify and scale earnings to generate stable returns Underwriting Fees Investment Income Consistent loss ratio Stable fee on growing, Optimize risk-adjusted yield outperformance diversified book of programs Leverage cost base to drive operating lever
Slide 20: Growth expected to continue with expansion across North America
Growth expected to continue with expansion across North America - Grow relevance with key distribution partners Distribution - Expand presence with larger brokers - Expand proven platforms to new geographies Organic Primary (US Surety, US Corporate Insurance) - Lead development of Canadian market Fr
Slide 21: The opportunity to grow profitably in US Surety is significant
The opportunity to grow profitably in US Surety is significant North American Surety Expansion Surety Market Opportunity ✓ Deep expertise in Canadian Surety market • Fourth largest Canadian Surety (11% share) US • GPW growth1: 20% Canada +13x ~US$10B3 • Loss ratio2: 15% ~$1B3 ✓ Leverage Canadian und
Slide 22: How we will measure our performance over the next 5 years
How we will measure our performance over the next 5 years Key Metrics Revenue Growth Mid to high teens (~15%+) Operating ROE Mid to high teens (~15%+) BVPS Growth Mid to high teens (~15%+) Targeting $1 billion in book value by end of 2027 21
Slide 23: Why Trisura
Why Trisura ✓ Why Partner With Us ✓ Why Invest In Us
Slide 24: Why Partner With Us
Why Partner With Us ✓ Exceptional Service: Responsive, collaborative and solutions-oriented ✓ Specialized Focus: Defined appetite and empowered workforce ✓ Underwriting Expertise: Track record of profitable performance Stability and Depth of Leadership: Led by underwriters with decades of experience
Slide 25: Why Invest In Us
Why Invest In Us ✓ Rare: Pure-play diversified specialty platform ✓ Stable: Strong capital position and risk management ✓ Margin Outperformance: Performance culture, supporting industry-leading profitability ✓ Growth: Significant, de-risked growth levers ✓ Experience: Long-tenured management and boa
Slide 26: Appendix
Appendix ✓ Risk Management ✓ Fronting/Programs ✓ Reconciliation of Operating Net Income and Operating ROE
Slide 27: Disciplined risk management governed by board and management level oversight
Disciplined risk management governed by board and management level oversight - Oversight of risk management and internal control systems and Group Board of Directors policies - Board level risk committee comprised of mostly independent Group Risk Committee directors Canada US - Oversee and challenge
Slide 28: Fronting/Programs connect premiums with aligned, reliable and unconflicted capital
Fronting/Programs connect premiums with aligned, reliable and unconflicted capital Fronting/Programs Value Add: Capacity Providers MGA Reinsurer Claims Premium Fee Licenses Trisura Rating MGA Diligence Claims Premium Infrastructure Niche Underwriting Unconflicted Capital Monitoring Distribution Part
Slide 29: Reconciliation of 2017 operating net income and operating ROE
Reconciliation of 2017 operating net income and operating ROE 2017 Net Income (0.3) Adjustments Impact of share based compensation 0.4 Net loss (income) from life annuity (2.1) Change in minority interests 5.1 Tax impact of above items (0.1) Operating Net Income 3.0 LTM Average Equity 96.2 Operating
Slide 30: Notice to recipients
Notice to recipients Trisura Group Ltd. (“Trisura”) is not making any offer or invitation of any kind by communication of this document to the recipient and under no circumstances is it to be construed as a prospectus or an advertisement. Except where otherwise indicated herein, the information prov