TORONTO, Feb. 08, 2024 (GLOBE NEWSWIRE) — Trisura Group Ltd. (“Trisura” or “Trisura Group”) (TSX:TSU), a leading specialty insurance provider, today announced financial results for the fourth quarter and year ended December 31, 2023.
David Clare, President and CEO of Trisura, stated, “Trisura ended the year with strong operational performance. Operating net income of $25.9 million in the quarter, or $0.54 per share, was achieved through measured growth, profitable underwriting and enhanced investment income – supporting annual operating net income of over $110 million. Quarterly Net income of $11.3 million, or $0.23 per share, was impacted by the run-off of a US program, partially offset by unrealized gains in the investment portfolio.
Maturation of our business and continued expansion with distribution partners drove insurance revenue growth of 26.7% in the quarter and 38.4% for the full year. In Canada, Q4 combined ratio of 85.8% was strong and contributed to an 81.1% full year combined ratio. Our US fronting platform has substantially navigated the run-off associated with the Q4 2022 write down. We have further rationalized our US program portfolio, which impacted fourth quarter results, though sets a firm foundation for profitability ahead.
Net investment income grew 71.0% in the quarter, reaching $16.2 million through higher yields and an increased size of the investment portfolio.
Growth, strong earnings, and gains on the investment portfolio lifted book value to over $619 million. Our business remains well-capitalized, supported by surplus capital, a $50 million revolving credit facility, a 10.8% debt-to-capital ratio and a conservatively positioned investment portfolio.”
Financial Highlights
Insurance revenue growth of 26.7% in Q4 2023 reflected sustained momentum across North America.
Net income of $11.3 million in the quarter was higher than Q4 2022 as a result of a write down on reinsurance recoverables in Q4 2022. Operating net income(1) of $25.9 million in the quarter grew 10.0% compared to Q4 2022, driven by growth in core operations(2), strong underwriting performance in Canada and increased investment income.
EPS of $0.23 in Q4 2023 compared to ($0.87) in Q4 2022. Operating EPS(3) of $0.54 for the quarter compared to $0.50 in the prior year.
Book value per share(4) of $13.02 increased 21.0% from December 31, 2022, primarily the result of earnings in the Canadian operations, higher investment income and the equity raise in Q3 2023.
ROE(4) of 12.2% compared to 6.5% in Q4 2022, re-approaching our mid-teens target despite the costs of run-off this year. Operating ROE(5) of 20.0% demonstrates the strength and potential of the platform.
Amounts in C$ millions
Q4 2023
Q4 2022
Variance
2023
2022
Variance
Insurance revenue
755.0
595.7
26.7%
2,789.2
2,014.9
38.4%
Net income
11.3
(40.7
)
(127.8%)
66.9
27.8
140.8%
Operating net income(1)
25.9
23.5
10.0%
110.2
83.3
32.4%
EPS – diluted, $
0.23
(0.87
)
(126.4%)
1.42
0.63
125.4%
Operating EPS – diluted, $(3)
0.54
0.50
8.0%
2.34
1.88
24.5%
Book value per share, $(4)
13.02
10.76
21.0%
13.02
10.76
21.0%
Debt-to-Capital ratio(4)(11)
10.8
%
13.2
%
(2.4pts)
10.8
%
13.2
%
(2.4pts)
ROE(4)
12.2
%
6.5
%
5.7pts
12.2
%
6.5
%
5.7pts
Operating ROE(5)
20.0
%
19.6
%
0.4pts
20.0
%
19.6
%
0.4pts
Combined ratio – Canada
85.8
%
83.4
%
2.4pts
81.1
%
80.7
%
0.4pts
Fronting operational ratio – US(4)
143.0
%
242.8
%
(99.8pts)
109.6
%
128.3
%
(18.7pts)
Fronting operational ratio excluding certain non-recurring items – US(6)
106.0
%
83.2
%
22.8pts
90.3
%
80.5
%
9.8pts
Insurance Operations
Insurance revenue in Canada of $227.4 million in the quarter increased by 31.9% compared to Q4 2022, reflecting increased market share, expansion of distribution relationships, expanding fronting and growth of US Surety. Strong underwriting contributed to a Combined ratio of 85.8%, a ROE of 29.1% and Operating ROE of 29.2% in Q4 2023.
Insurance revenue in the US of $527.5 million in the quarter increased by 24.6%, compared to Q4 2022, reflecting favourable market conditions and maturation of existing programs. Fee income(7) of $22.2 million in the quarter increased by 14.5% compared to Q4 2022. Net loss of $8.9 million was the result of costs related to the run-off. Operating net income of $5.8 million supported a 13.6% Operating ROE.
Capital
The Minimum Capital Test ratio(8) of our regulated Canadian subsidiary was 251% as at December 31, 2023 (233% as at December 31, 2022), which comfortably exceeded regulatory requirements(9) of 150%.
As at December 31, 2023, the Risk-Based Capital of the regulated insurance companies of Trisura US are expected to be in excess of the various company action levels of the states in which they are licensed.
Consolidated debt-to-capital ratio of 10.8% as at December 31, 2023 is below our long-term target of 20.0%.
Investments
Net investment income rose 71.0% in the quarter compared to Q4 2022. The portfolio benefited from higher risk-adjusted yields, increased capital generated from strong operational performance and recent equity raises.
Corporate Development
On February 7, 2024, Trisura received regulatory approval for its previously announced acquisition of a Treasury-listed US surety company.
Earnings Conference Call
Trisura will host its Fourth Quarter Earnings Conference Call to review financial results at 9:00a.m. ET on Friday, February 9th, 2024.
To listen to the call via live audio webcast, please follow the link below:
https://edge.media-server.com/mmc/p/z27khy8h
A replay of the call will be available through the link above.
About Trisura Group
Trisura Group Ltd. is a specialty insurance provider operating in the Surety, Risk Solutions, Corporate Insurance, and Fronting business lines of the market. Trisura has investments in wholly owned subsidiaries through which it conducts insurance and reinsurance operations. Those operations are primarily in Canada (“Trisura Canada”) and the United States (“Trisura US”). Trisura Group Ltd. is listed on the Toronto Stock Exchange under the symbol “TSU”.
Further information is available at http://www.trisura.com. Important information may be disseminated exclusively via the website; investors should consult the site to access this information. Details regarding the operations of Trisura Group Ltd. Are also set forth in regulatory filings. A copy of the filings may be obtained on Trisura Group’s SEDAR+ profile at www.sedarplus.ca.
For more information, please contact:
Name: Bryan Sinclair
Tel: 416 607 2135
Email: bryan.sinclair@trisura.com
Trisura Group Ltd.
Consolidated Statements of Financial Position
As at December 31, 2023 and December 31, 2022
(in thousands of Canadian dollars, except as otherwise noted)
As at
December 31, 2023
December 31, 2022
Cash and cash equivalents
604,016
406,368
Investments
890,157
765,375
Other assets
53,712
61,852
Reinsurance contract assets
2,003,589
1,527,799
Capital assets and intangible assets
16,657
19,529
Deferred tax assets
16,314
17,942
Total assets
3,584,445
2,798,865
Insurance contract liabilities
2,769,951
2,165,103
Other liabilities
120,065
65,111
Loan payable
75,000
75,000
Total liabilities
2,965,016
2,305,214
Shareholders’ equity
619,429
493,651
Total liabilities and shareholders’ equity
3,584,445
2,798,865
Trisura Group Ltd.
Consolidated Statements of Comprehensive Income
For the three and twelve months ended December 31
(in thousands of Canadian dollars, except as otherwise noted)
Q4 2023
Q4 2022
2023
2022
Insurance revenue
754,953
595,742
2,789,187
2,014,915
Insurance service expenses
(615,167
)
(474,120
)
(2,245,246
)
(1,742,601
)
Net expense from reinsurance contracts assets
(135,627
)
(175,384
)
(458,606
)
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