Trisura Group (TSU) Q3 2024 earnings summary

Executive summary

• Insurance revenue grew 10.5% year-over-year in Q3, with strong performance in U.S. Surety, Canadian Fronting, and Trisura Specialty, and book value per share increased 24% to $15.64.

• Operating ROE reached 19%, supported by growth, strong earnings, and increased investment income.

• U.S. Surety premiums reached $36.5 million in the quarter, ahead of schedule, and U.S. Corporate Insurance is ramping up regulatory and operational infrastructure.

• Exited U.S. programs contributed to claims pressure in prior periods, but are not expected to recur, and core portfolio growth remains robust.

• Achieved strong Q3 2024 performance with operating net income of $33.2M, up 4.7% year-over-year, and EPS of $0.74, driven by growth in Trisura Specialty, US Programs, and higher net investment income.

Financial highlights

• Net income for Q3 2024 was $36.1M, up 143.2% from Q3 2023, which included run-off program costs.

• Insurance revenue was $807.6M for Q3 and $2.3B year-to-date, up 10.5% and 14% year-over-year, respectively.

• Operating EPS was $0.68 for Q3 and $2.01 year-to-date; reported EPS was $0.74 for Q3 and $2.05 year-to-date, up 1.5% and 11.7% year-over-year.

• Book value per share rose 24% year-over-year to $15.64 at September 30, 2024.

• Net investment income increased 20.4% year-over-year, benefiting from higher risk-adjusted yields.

Outlook and guidance

• Expect a return to quarterly growth in U.S. Programs later next year as the impact of non-renewals lapses.

• Targeting a low 80s Fronting Operational Ratio in the medium term, though higher retention may increase the ratio.

• U.S. Corporate Insurance premiums anticipated to begin contributing later next year as regulatory build-out completes.

• Management remains optimistic, citing a growing pipeline of opportunities and continued expansion with distribution partners.

• Strong growth in US Surety and ongoing maturation of US Programs expected to support future performance.