Trisura Group Ltd. · TSX:TSU
Trisura — Q1 2023 Earnings Presentation
28 slides from Trisura's earnings presentation, May 12, 2023
Slide 1: A Growing and Profitable Specialty Insurer
A Growing and Profitable Specialty Insurer Investor Day – June 1, 2023
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 ✓ What is Fronting
Slide 4: Pure-play North American specialty commercial insurance group
Pure-play North American specialty commercial insurance group Canada United States 1 Primary Insurance: Fronting: 1 $378mln 2022 GPW $1.7bln 2022 GPW (Surety, Warranty, and (E&S and Admitted) Corporate Insurance) 2 Fronting: Primary Insurance: 2 $339mln 2022 GPW $14mln 2022 GPW (Property and Casualt
Slide 5: Specialty relies on niche underwriting and structuring expertise
Specialty relies on niche underwriting and structuring expertise Classes of business that require differentiated expertise to underwrite, ✓ administer and service Complex structures that balance needs of our partners with risk retention ✓ and appropriate use of reinsurance, including fronting, warra
Slide 6: Fronting connects premiums with aligned, reliable and unconflicted capital
Fronting connects premiums with aligned, reliable and unconflicted capital Fronting Value Add: Capacity Providers Fronting Fee MGA Reinsurer Claims Premium Licenses Trisura Rating MGA Diligence Claims Premium Infrastructure Niche Underwriting Unconflicted Capital Monitoring Distribution Partners Ali
Slide 7: Where We Have Come From
Where We Have Come From ✓ Important Milestones ✓ Progress on Key Metrics ✓ Evolution of Earnings Composition
Slide 8: Setting the foundation, honing focus and establishing North American presence
Setting the foundation, honing focus and establishing North American presence 2017 2018 2019 - Present • Spin-out from BAM • US Begins Writing Premium • Inaugural Equity Raise • US Licensed • Internalized Investment Function • US Admitted Licenses • US Rated • US Surety • Canadian Fronting • Inaugur
Slide 9: Growth in gross premium written has maintained early momentum
Growth in gross premium written1 has maintained early momentum $2,433 +75% 70% CAGR $147 30% 2017 2022 Canada US Note: All figures in C$ million unless otherwise stated. 1 This is a non-IFRS financial measure. Refer to Q1 2023 MD&A, Section 10 for details. To access MD&A, see Trisura’s website or SE
Slide 10: 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% $85.6 (16%) 3 +89% 80% CAGR $3.6 2017 2022 2017 2022 Note: All figures in C$ million unless otherwise stated. 1 This is a non-IFRS financial measure. Refer to Q4
Slide 11: Net income growth and industry-leading ROE
…which has supported net income growth and industry-leading ROE… Operating Net Income1: Operating ROE2: $83.0 20% +94% +17% CAGR 3 3% 3 $3.0 2017 2022 2017 2022 Note: All figures in C$ million unless otherwise stated. 1 This is a non-IFRS financial measure. Refer to Q4 2022 MD&A, Section 10 for deta
Slide 12: Significant growth in book value
…and significant growth in book value Book Value: Debt-to-Capital1: 2 $494 20% (7%) 2 13% +32% CAGR 2017 2022 Book Value Per Share1: 2 $122 $10.78 +19% CAGR $4.59 2017 2022 2017 2022 Note: All figures in C$ million except for per share measures, unless otherwise stated. 1 This is supplementary finan
Slide 13: Heritage of underwriting income enhanced by growing fee & investment income
Heritage of underwriting income enhanced by growing fee & investment income 2022 Operating ROE Corp, Other Operating Underwriting1 Fee-Based2 Investment3 & Tax 4 ROE 10% 11% 6% (7%) 20% 1 Represents Net Underwriting Income from Surety, Risk Solutions (excluding Canadian Fronting) and Corporate Insur
Slide 14: Shares have outperformed the market
As a result, shares have outperformed the market Total Return: December 2017 – May 20231 Trisura +423% TSX Financials +35% TSX +44% S&P 500 +73% 1 As at May 30, 2023. 13
Slide 15: Where We Are Going
Where We Are Going ✓ Industry & Macro Tailwinds ✓ Strategic Roadmap ✓ Key Metrics & Risk Management
Slide 16: Growth in specialty & MGA markets has outpaced P&C
Growth in specialty & MGA markets has outpaced P&C Canada 2016 – 2021 CAGR1 Specialty2 +11.1% P&C +6.9% US 2016 – 2021 CAGR1 E&S +16.0% MGA +9.3% P&C +5.4% 1 Source: MSA Research, SNL Financial, A.M. Best. 2 Refer to Q4 2022 MD&A, Section 6, Outlook and Strategy for additional detail. 15
Slide 17: Mix of primary and fronting platforms perform across cycles
Mix of primary and fronting platforms 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 Fee Impacts for Trisura: E&S Premium Admitted Premium Opt
Slide 18: Higher interest rates and growing portfolio support investment income
Higher interest rates and growing portfolio support investment income Net Investment Income: Net Investment Yield1: $25.2 3.6% 2.7% +0.9% +44% CAGR 2020 2022 2 $12.2 Average Bank of Canada 3 Year: 2.9% +2.4% 0.5% 2020 2022 2020 2022 Note: All figures in C$ million except otherwise stated. 1 This is
Slide 19: Proven profitability enhanced by growing scale
Proven profitability enhanced by growing scale Diversify 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 fixed cost base to drive operating leverage
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: How will we measure our performance over the next 5 years
How will we 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 20
Slide 22: Disciplined risk management governed by board & management level oversight
Disciplined risk management governed by board & 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 Audit & Risk - Oversee an
Slide 23: Why Trisura
Why Trisura ✓ Why Partner With Us ✓ Why Invest In Us
Slide 24: Why Partner With Us
Why Partner With Us ✓ Collaborative, solutions-oriented approach to service ✓ Dedicated and specialized focus – defined appetite and empowered workforce ✓ Decades of experience at senior management level ✓ Responsiveness, nimbleness, creativity ✓ Size, rating, licenses 23
Slide 25: Why Invest In Us
Why Invest In Us ✓ Pure-play diversified specialty platform ✓ Strong capital position and risk management ✓ Industry-leading profitability ✓ Significant growth levers ✓ Experienced management & board of directors 24
Slide 26: Appendix
Appendix ✓ Reconciliation of Operating Net Income & Operating ROE
Slide 27: Reconciliation of 2017 Operating Net Income & Operating ROE
Reconciliation of 2017 Operating Net Income & 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 R
Slide 28: 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