Earnings call transcript: Trisura Group Q1 2025 sees EPS miss, stock dips

Trisura Group Ltd (TSU) reported its Q1 2025 earnings, showing an earnings per share (EPS) of $0.70, slightly below the forecasted $0.7361. The company’s revenue reached $779.61 million. Following the announcement, Trisura’s stock fell 2.8% in after-hours trading, closing at $37.84, reflecting investor concerns over the earnings miss. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, despite two analysts recently revising their earnings expectations downward. The company maintains a strong financial health score of 3.23 out of 5, rated as "GREAT" by InvestingPro’s comprehensive assessment system. Despite the dip, the company reported a robust 24% growth in book value per share and a strong operating return on equity (ROE) of 18%.

Key Takeaways

• Trisura’s EPS of $0.70 missed the forecast of $0.7361.
• Revenue stood at $779.61 million, with net insurance revenue growing by 12.8%.
• Stock price dropped by 2.8% in after-hours trading.
• Book value per share increased by 24% to $17.16.
• Operating ROE was strong at 18%.

Company Performance

Trisura Group Ltd demonstrated a mixed performance in Q1 2025. While the company achieved a 2.9% year-over-year growth in operating EPS and a substantial increase in book value per share, it failed to meet EPS expectations. The company’s strategic expansion in the U.S. surety market and the growth of its primary lines and surety segment were notable highlights. However, the slight reduction in gross premiums written (GPW) to $711 million indicated some headwinds.

Financial Highlights

• Revenue: $779.61 million
• EPS: $0.70, 2.9% year-over-year growth
• Gross Premiums Written: $711 million
• Net Insurance Revenue: $172 million, 12.8% growth
• Combined Ratio: 82.7%
• Operating ROE: 18%
• Book Value Per Share: $17.16, 24% growth
• Debt to Capital Ratio: 10.7%

Earnings vs. Forecast

Trisura’s actual EPS of $0.70 was below the forecast of $0.7361, marking a shortfall of approximately 5%. This miss reflects a deviation from expectations, though the company’s year-over-year improvements in other financial metrics provided some balance.

Market Reaction

Following the earnings announcement, Trisura’s stock price experienced a 2.8% decline in after-hours trading, closing at $37.84. This movement places the stock closer to its 52-week low of $30.77, indicating a cautious investor sentiment amid the earnings miss.

Outlook & Guidance

Looking forward, Trisura anticipates continued premium growth, a robust operating ROE, and an increase in book value per share exceeding 15% for 2025. The company aims for a $1 billion book value by the end of 2027, driven by potential expansion of its U.S. surety balance sheet and organic growth initiatives. InvestingPro data reveals the company’s five-year revenue CAGR of 87%, supporting management’s ambitious growth targets. Want deeper insights? Access Trisura’s comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ top stocks, featuring expert analysis and actionable intelligence.

Executive Commentary

CEO David Claire emphasized the company’s disciplined approach to building a specialty insurer of scale in North America. He highlighted the strength of Trisura’s capital base, with a debt to capital ratio of 10.7%, and reiterated the company’s focus on leveraging its insurance operations as a GDP-levered business.

Risks and Challenges

• Competitive pressures in corporate insurance markets.
• Potential softening in certain insurance lines.
• Macroeconomic uncertainties affecting insurance demand.
• Execution risks in U.S. market expansion.
• Regulatory changes impacting insurance operations.

Q&A

During the earnings call, analysts focused on the progress of Trisura’s U.S. surety expansion, the growth trajectory of its warranty business, and potential M&A opportunities. Management addressed these queries by highlighting strategic hiring plans and the exploration of leverage deployment for U.S. growth.

Full transcript - Trisura Group Ltd (TSU) Q1 2025:

Conference Call Operator: Good morning. Welcome to the TriSura Group Limited’s First Quarter twenty twenty five Earnings Conference Call. On the call today are David Claire, Chief Executive Officer and David Scotland, Chief Financial Officer. David Claire will begin by providing a business and strategic update followed by David Scotland, who will discuss financial results for the period. At this time, all participants are in a listen only mode.

Following formal comments, lines will be open for analyst questions. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, you may press 11 again. I’d like to remind participants that in today’s comments, including in responding to questions and in discussing new initiatives related to financial and operating performance, forward looking statements may be made, including forward looking statements within the meaning of applicable Canadian and US securities laws. These statements reflect predictions of future events and trends and do not relate to historic events.

They are subject to known and unknown risk and future events, and results may differ materially from such statements. For further information on these risks and their potential impacts, please see TriSure’s filings with securities regulators. Thank you. I’ll now turn the call over to David Claire.

David Claire, Chief Executive Officer, TriSura Group Limited: Thank you, operator. Good morning, everyone, and welcome. We continue to see the benefits of our focused strategy in specialty insurance, and we started the year strong. Underwriting and structuring in niche segments drove profitability and growth in Q1. Momentum in our primary lines, surety, corporate insurance and warranty continued growing 28% with particular strength in surety, growing 38% as we expand in The U.

S. And build out our Canadian practice. Our portfolio of ongoing U. S. Programs grew 17 showing the continued potential of the core platform.

Net insurance revenue, which is similar to net premiums earned increased 13% and importantly, our combined ratio was a strong 82.7% with profitability across all segments. Book value per share grew 24% to a record $17.16 equity exceeded $819,000,000 continuing our track record of capital generation. Our Canadian surety platform continues to perform supported by an established market presence and building momentum from our team focused on larger limit bonding. We see continued growth in our larger practice, contract surety, as we acknowledge an expected slower developer environment. In The U.

S, our surety platform is gaining traction. We hold 33 state licenses plus Washington DC, up from a handful last year. This quarter marks an inflection point. U. S.

Surety is contributing to profitability with comparable combined ratio to our Canadian practice. We’re seeing increasing broker engagement and submission volume, which gives us confidence in the scalability of the platform. Corporate Insurance sustained momentum in the quarter and despite competitive conditions continued to demonstrate growth alongside profitable underwriting. U. Programs show the benefit of actions taken last year and our ongoing program portfolio grew 17% while achieving a 76% combined ratio, supporting expectations for continued growth and profitability.

Exited lines had no material impact in the quarter. Investment income rose 9% to $18,200,000 Our 1,600,000,000 portfolio remains conservatively positioned with 96% of bond holdings rated investment grade. We continue to benefit from higher reinvestment yields in The U. Where rates and corporate spreads have increased. The surety market remains competitive with significant opportunity for us in U.

S. Expansion as well as continued growth in Canada accessing larger bonding opportunities. We see balancing and in some cases softening trends in corporate insurance but are confident in our ability to grow profitably through the cycle. In The U. S, excess and surplus markets continue to expand growing faster again last year than the traditional markets.

We see firmness in casualty lines and some rationalization in property depending on both region and line. Sophisticated MGAs are increasingly central to distribution and Trishur is well positioned to support leaders in this industry. Our structured model with disciplined retention and strong reinsurance support enables us to participate with scale and selectivity. While we’re optimistic about the business, we’re mindful of the broader backdrop. Trade policy and geopolitical volatility have introduced uncertainty.

These factors can influence capital markets, executive sentiment and rate expectations. It is important to remember our insurance products are non discretionary and we operate within countries, not across borders. Trishore’s conservative balance sheet and increasingly diversified platform help us navigate. Our approach grounded in underwriting discipline, capital efficiency and a long term view gives us flexibility in volatile conditions and the ability to move decisively when opportunities emerge. Our capital base is stronger than ever with a 10.7% debt to capital ratio.

This provides capacity for established organic opportunities and flexibility to consider other initiatives. Our strategy remains to focus on growing profitably in primary lines, scaling U. S. Infrastructure and building a larger program portfolio that balances fee income and underwriting results. We continue to deepen our bench and broaden our capabilities.

The formal launch of our treasury listed surety balance sheet last month was a milestone in our U. S. Surety ambition. We are growing meaningfully in areas we have proven expertise, deepening relationship with distribution partners and building on a foundation that supports sustainable profitability. Our optimism for 2025 has reinforced our expectations for premium growth, operating ROE and book value per share growth in excess of 15% with significant progress made towards our goal of $1,000,000,000 in book value by the end of twenty twenty seven.

We’re building a specialty insurer of scale in North America that requires discipline, adaptability and a measured approach to risk, all of which the team is demonstrating. We are grateful for the support of our partners, shareholders and employees and look forward to what lies ahead. With that, I’ll turn it over to David Scotland for a detailed review of financial results.

David Scotland, Chief Financial Officer, TriSura Group Limited: Thanks, David. I’ll now provide a walk through of financial results for the quarter. Operating EPS, which reflects core performance from the business, was $0.70 a share for the quarter, reflecting growth of 2.9% over the prior year. This contributed to operating ROE on a rolling twelve month basis of 18% for Q1 twenty twenty five, which exceeded our mid teens target. GPW was $711,000,000 for the quarter, reflecting a slight reduction over the prior year, primarily as a result of non renewed U.

S. Programs in 2024, which was offset by growth in primary lines. Traceura’s primary lines grew by 28% in the quarter, which are the lines where the profit margin on GPW is the highest. Net insurance revenue, which approximates net premiums earned, was $172,000,000 for the quarter, reflecting growth of 12.8% over the prior year. The combined ratio for the group was 82.7% in the quarter, which was slightly higher than the prior year, primarily as a result of a higher loss ratio from Tresura Specialty, which reflected a more normalized result from our surety operations compared to a particularly low Q1 twenty twenty four.

The loss ratio from US programs decreased for the period, reflecting prudent reserving action taken in 2024. The expense ratio was slightly higher than the prior year as a result of shift in the mix of business towards Tresura Specialty, which has a higher expense ratio. Underwriting income for the quarter was greater than the prior year as a result of growth in the business and foreign exchange movement, offset by a slightly higher combined ratio. Net investment income of $18,000,000 increased by 8.6% in the quarter as a result of an increase in the size of the investment portfolio. Our operating effective tax rate was 25.4 for the quarter, reflecting the composition of taxable income between Canada and The U.

S. Overall, operating income was $34,200,000 in the quarter, which was greater than the prior year as a result of growth in the business, offset by a slightly higher combined ratio. Non operating results consisted primarily of net losses associated with share based compensation hedging and ECL adjustment, as well as market yield adjustment, compared to the prior year when non operating results were positive consisting of larger unrealized gains. Exited lines have had an immaterial impact to net income in the quarter. Earnings per share contributed to a 4.4% increase in book value for the quarter, resulting in a book value per share of $17.16 at 03/31/2025.

Book value per share also increased as a result of unrealized gains on the investment portfolio as positive movement in the fixed income portfolio through other comprehensive income positively impacted book value. Book value has grown at an average rate of 26% over the past five years. Book value at 03/31/2025, was CAD820 million, which is greater than the prior year end as a result of positive net income in the period as well as unrealized gains on the investment portfolio. As of March 31, debt to capital was 10.7%, which was lower than the year end as a result of significant increase in book value. The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements.

David, I’ll now turn things back over to you.

David Claire, Chief Executive Officer, TriSura Group Limited: Thanks, Dave. Operator, we’d now take questions.

Conference Call Operator: Thank you. Our first question comes from the line of Doug Young of Desjardins. Your line is open, Doug.

Doug Young, Analyst, Desjardins: Hi, good morning. Maybe, David, can you further just flesh out how things are going in The U. S. Surety expansion? Maybe if you can give a little detail around net earned premium for that U.

S. Surety business. And I think the combined ratio, you say it was in line with Canada, so it’s in that 80% range. Do I have that right? Is that sustainable?

And I know you’re in 33 states now and expansion is going you know, well. How long does it take to get into them all? So there’s a bunch of things in there, but maybe you can just kinda take a moment and just flush out a little bit more detail around that expansion.

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah. I think, Doug, the the expansion of The US has been going well and I think candidly a little bit better than we had hoped. If we look at some of the big milestones of that practice in the last couple of months, Obviously getting into a zone where combined ratio and premiums have scaled to the same level, I should say on a combined ratio basis as Canada is a big milestone, right? This platform is now contributing profitably to the overall platform and we haven’t yet scaled into a full infrastructure in The US. So still lots of potential for the platform to grow.

I don’t have at hand net premiums earned splits but I can say from a premium basis, we’re approaching about 40% of surety premiums coming from The US. So there’s a lot of opportunity there to continue scaling that practice. If you think about the licenses, we started with very few licenses to getting up to 33 now. That was in about a year is a great progression. We obviously want to see all 50.

The big states, the largest states in The US will be the longest ones to achieve but the most significant ones from a premium standpoint. So those ones we’d look towards achieving at the end of the year but I think we’ve got a good pathway established and an expectation to achieve those pretty soon.

Doug Young, Analyst, Desjardins: And is it, if I recall, is it The US surety markets four times the size of Canada or something, correct me if I’m wrong, is that how we should be thinking about Canada versus The US for your business?

David Claire, Chief Executive Officer, TriSura Group Limited: It’s much larger than that, Doug. The US surety environment would be maybe 10 times, maybe a little bit larger than that compared to the Canadian environment. So it’s it’s significant. For for context, the largest surety writers in The US would write more premium than the entire Canadian market.

Mario, Analyst: Yeah. Okay. A little off on that. Sorry.

Doug Young, Analyst, Desjardins: Maybe second is you talked about moving up market in Canada Surety. You mentioned it in your prepared remarks. Can you kind of maybe flesh out a little bit more about how that expansion is going?

David Claire, Chief Executive Officer, TriSura Group Limited: It’s this is an area we’re quite excited about historically. Trishora has participated in, I’ll say the small and medium sized contractor space and a big part of the market is larger bonding opportunities that we just haven’t played in previously. We’ve built up a team now that has the capabilities to adjudicate, underwrite these types of bonds as well as the relationships in this space and we’ve now supplemented that with obviously a much larger balance sheet. And so the combination of those two factors we think puts us in pretty good positioning to participate in this market. It’s early days but we’re seeing good momentum in that space and anticipate sort of in the next year or so that’s going to be a larger component of our business.

Doug Young, Analyst, Desjardins: Okay. And then just one question I often get is, you know, how economically sensitive your business is and it’s a bit different than a Definitive or an Intact and the businesses that come to mind, Assurity and D and O, and maybe you can provide a little bit of context around what you’re seeing in the current environment and what are some of the leading indicators that you’re looking at in terms of what would drive loss ratios for these businesses and I think some of them are obvious but maybe if you can flush that a little bit out.

David Claire, Chief Executive Officer, TriSura Group Limited: Yes, it’s important to note our lines are generally commercial lines so driving on a bit different factors than personal. But insurance at its core is a GDP levered business. So if we take our if we take a step back and look at some of the environment that we’re in, if any of these actions meaningfully slow economic growth or GDP expansion, that will have a knock on effect on premium growth in the industry. Now if you go through our lines of business, you think about the most economically sensitive or pro cyclical industry, surety would be that space. Generally contractors in our portfolio have about an eighteen month backlog of work and so what you have from sensitivity perspective is is concern around economic recessions or slowdowns that start to approach or exceed that length of time, right?

Your experience in claims in the surety environment really depends on contractor solvency. That solvency is usually healthy as long as there’s a backlog of work. If we look broader across our portfolio, say corporate insurance, that type of environment obviously is sensitive to business activity. So both solvencies and activity in the corporate space and we are generally focused on navigating that space conservatively. So we wouldn’t say that this environment at this stage has changed much of what we’re seeing on the front lines but obviously as I mentioned in my comments, the extent some of these actions change broader direction or trajectory of the environment, there’s a knock on effect to the overall insurance industry.

Doug Young, Analyst, Desjardins: Okay. And then just lastly, yeah, on the M and A front, any and I know it’s not just fine businesses, but it’s team lift outs and whatnot. Any big team lift outs this quarter? There’s a deal in Canada warranty business recently. You know, I I I would assume that’s something that you would look at in that particular segment, but any update in terms of what you’re seeing, on the M and A side?

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah. I I would qualify some of our expansion into the larger bonding space as a version of some of those things you’re referencing. We haven’t done anything beyond that but we have continued to talk to and look at hiring around the industry and around our company as a way to strategically expand. From an inorganic perspective, we’ve continued to evaluate opportunities but obviously haven’t seen anything actionable. Our priority Doug continues to be, we have a lot of organic opportunities that that we think we we can and should prioritize.

We’ll supplement those around the edges with some of these actions that you’re talking about. Right? Expanding bench strength, adding capabilities through strategic hires and in the right circumstance considering inorganic expansion.

Doug Young, Analyst, Desjardins: Appreciate your time. Thank you. Thanks, Doug.

Conference Call Operator: Thank you. Our next question comes from the line of Tom MacKinnon of BMO Capital. Please go ahead, Tom.

Tom MacKinnon, Analyst, BMO Capital: Yes, thanks. Two questions. First is if you can tell us what the book yield is on your investment portfolio and maybe something on the duration of that and what it’s largely composed of? And the second is with respect to your warranty business, what are you seeing here in terms of any kind of tariff implications there? Maybe how much of that warranty business would be kind of auto related?

Thanks.

David Claire, Chief Executive Officer, TriSura Group Limited: Thanks, Tom. Book yield on the portfolio across our entire North American portfolio is about 4.25%. Duration of fixed income portfolio is about four years and might be a little lower in Canada and maybe a little higher in The US. If we talk about warranty, this has been an interesting line. We’ve seen a lot of momentum in the warranty practice in the last few quarters.

Very, very strong growth on the top line specifically in this quarter but not something we haven’t seen in the past. I would highlight we’ve had a few wins on launching new programs with some of our partners. So there’s a bit of market share growth in the warranty line. What is interesting is the auto sector is probably one of the ones most directly impacted by tariffs and so to the extent those tariffs are put in place, I question whether or not there’s an impact on auto demand. We have seen very, very strong growth in the warranty practice in this quarter.

It’s tough to say whether or not that’s related to a pull forward of demand or whether that’s an impact of our broader market share but that’s an area where certainly premiums will be impacted by tariffs in the short term.

Tom MacKinnon, Analyst, BMO Capital: How much of the warranty portfolio is auto related?

David Claire, Chief Executive Officer, TriSura Group Limited: The majority of it. Okay. Thanks.

Conference Call Operator: Thank you. Our next question comes from the line of Nick Priebe of CIBC. Please go ahead, Nick.

Nick Priebe, Analyst, CIBC: Okay. Thanks. Just on the pickup in top line growth for corporate insurance, I just wanted to confirm that wouldn’t have been related in any way to The U. S. Expansion, right?

The expectation there is that that’ll start to come online in a more meaningful way kind of in the second half of this year?

David Claire, Chief Executive Officer, TriSura Group Limited: That’s right, Nick. So this is just sort of expansion of our practice in Canada. We’re not seeing meaningful contribution from US corporate insurance yet.

Nick Priebe, Analyst, CIBC: Got it. Okay. And then just on The US programs business, I think in normal course, there can be some natural churn in the mix of programs. And I recognize that more of the growth today is coming from the expansion of existing programs. But what does the balance look like between the pipeline for new program additions and any potential nonrenewals?

Like, how how is that kind of shaking shaping up for the balance of the year?

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah. Our pipeline is pretty strong right now. So we’re evaluating and have launched a number of new programs in recent quarters. I wouldn’t say we are seeing anything out of the normal course in terms of normal churn of the portfolio. It’s a relatively mature portfolio and a lot of the actions that we took last year were sort of the more material ones.

So I don’t think anything to highlight there outside of the norm. That portfolio in the pipeline continues to strengthen and it will be a function of sort of the reinsurance markets and the opportunities that we see by line of business that determines where we lean in.

Nick Priebe, Analyst, CIBC: Got it. Okay. And then just one last one on, I guess, program concentration in US fronting. Can you just remind me what, you know, the largest program would represent as a rough proportion of the overall premium base?

David Claire, Chief Executive Officer, TriSura Group Limited: It’d be high single digits.

Nick Priebe, Analyst, CIBC: Okay. All right. That’s perfect. All right. Thanks very much.

Conference Call Operator: Thank you. Our next question comes from the line of Stephen Boland of Raymond James. Please go ahead, Stephen.

Stephen Boland, Analyst, Raymond James: Thank you. Good morning, guys. Just in the Canadian fronting, the mention of competition, can you just, you know, kind of describe, is this traditional commercial players here in Canada? Is it like who who where’s the new competition coming from?

David Claire, Chief Executive Officer, TriSura Group Limited: Thanks, Steven. Yeah. You’ve highlighted an interesting nuance. Fronting top line can be quite lumpy, but we acknowledge this quarter that certainly competitive factors and market conditions can feed into that as well. So if you think about the lines of business we write in Canadian fronting, they’re generally more commoditized P and C lines than what we would access in say surety or corporate insurance.

So those can be moved around by market trends and competitive factors. If you think about competitive nuances, the return of Lloyd’s to the Canadian market can impact this around the edges as well as sort of pricing trends more broadly. So that one is a tough one. Will acknowledge the model. It can be relatively lumpy depending on timing and depending on individual program nuances.

But what we focused on and what you should really monitor is the bottom line contribution from that line of business.

Stephen Boland, Analyst, Raymond James: I mean, have you obviously with Lloyd’s, it the MGAs that are going, looking for programs and or is it the reinsurers that are kind of moving the focus around? Like, I know you source from both you know, the the the origination, like the MGAs, but you also get referrals from from reinsurers. So is it is it happening on both sides or and and how do you counter that, I guess, is, you know, to to get the growth going back in the positive direction?

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah. I would say our pipeline to to to address the second part of your question first, our pipeline is still pretty attractive. In Canadian fronting, we’re evaluating the number of transactions, a number of partners in the space. So I don’t think anything is changing on that narrative. On the first part, I think you may be conflating a few other nuances.

This is a space that generally is driven by foreign capacity interest in the Canadian environment and that capacity can be originated through a range of distribution partners. So that can include MGAs, it can include brokers, it can include other forms of distribution. But what I would say is is generally those markets across all of those categories is just experiencing more competition. So there’s more people interested in running the business. You may or may not win that business any year.

So that’s really what we’re referencing on competitive nuances. We just wanna say this environment, there are more people interested in writing that business. And so around the edges that can drive a little bit of volatility in top line.

Stephen Boland, Analyst, Raymond James: Okay, maybe just my second one then is just on The US, the fronting, is there more competition popping in there as well? It seems like some of the traditional insurers are kind of doing both, like as you call your primary underwriting as well as fronting. Have you seen that start to come into the market?

David Claire, Chief Executive Officer, TriSura Group Limited: No, I would say we saw a lot of new competition in that US programs line in 2021, ’20 ’20 ’2, ’20 ’20 ’3, but we have not seen those new entrants in the last couple of years. So that market is maturing pretty quickly. Think estimates of market size in that sort of structure is approaching about $20,000,000,000 So there’s a good market share of that overall MGA originated premium space but still lots of of room to grow. I think as we look out in the future for the next couple years, the business models that will win in in that environment tend to be or I would expect to be those with larger balance sheets and more diversified models and and we we certainly fit into that category. Thanks very much.

Conference Call Operator: Thank you. Our next question comes from the line of Jay McGloyn of NBF. Please go ahead, Jay.

Jay McGloyn, Analyst, NBF: Yeah, thanks. Just wanted to get some refresh perspectives, I guess, on the leverage. So debt to capital has been running kind of low double digits now for a couple of years, and that’s well below the target of 20%. So I just wanted to kind of dig in on what conditions or what other factors or what you’re waiting for or looking for before deploying a little bit more leverage into the business at this stage.

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah, thanks, Jim. It’s a good question. We sort of have record capacity right now. We could probably deploy $107,000,000 in capacity before getting up to that 20% threshold that you referenced. There’s a couple things we are looking for, I should say waiting for in deploying that capacity.

Obviously the flexibility of that capacity is just gives us confidence and opportunity to lean in to volatility in environments like we’re seeing right now. The other item I’m suspecting that might be a more immediate use is as we expand our US surety operation, we’ll want to expand the size of that balance sheet. So the size of your balance sheet in the surety market matters a lot for the types of opportunities you can get. We’ve just formally launched our treasury listed balance sheet in The US and it has about 60,000,000 in it. I’d like to see that growing as we continue to build out that US practice and I know our distribution partners want to see that larger as well.

So once we see that inflection point of the right licenses coming on board, the right momentum in the market, a use you could see us consider is dropping some more capital into that balance sheet to enhance or encourage the opportunities we’re seeing in The U. S. Surety market. Beyond that, obviously we’ve got in the longer term some opportunities to build that U. S.

Corporate insurance practice. Very similar nuances around the surety market that I referenced. And then around the edges to the extent we see inorganic opportunities be they book rollovers other versions of capability bolt ons that flexibility is nice to have.

Doug Young, Analyst, Desjardins: Great. Thank you.

Conference Call Operator: Thanks, Jim. Thank you. As there are no further questions in queue, I would now like to turn the conference back to actually, we do have a question. One moment. Our next question comes from the line of

Please go ahead, Mario.

Mario, Analyst: Good morning. David, could you speak to the this ongoing shift into the E and S space from admitted and whether you think this there could be some changing dynamics? And if so, if this does start to slow, I appreciate that the company is in the admitted space as well. But are there any meaningful profitability differences between the two space? So if we were to see the shift back into admitted, it would then necessarily lead to a different profit dynamic.

Can you speak to that first?

David Claire, Chief Executive Officer, TriSura Group Limited: Yeah, so if we talk about the profit dynamics of admitted versus D and S in our model, they are not different. We would expect very similar economics for our platform and our approach between ENS lines and admitted lines. We see that today, we have both ENS lines and admitted lines in our practice. So there’s not a lot of difference between the two. I think the types of lines you see or at least have historically seen be served by excess and surplus markets versus admitted markets is changing and this has been a secular shift I would say over the past five or six years.

Those E and S markets have very, very significantly expanded and they’ve grown substantially faster than the admitted markets over that period of time. I think what you’re referencing now is a little bit of plateauing or a normalization of the growth rates in the excess and surplus markets. But from an industry standpoint, there are a lot of observers who expect that trend of E and S momentum to continue. As risks get more complex, as the industry tackles tougher problems to solve through insurance, that excess and surplus market is well served to navigate it. It’s also a little bit more flexible in how insurers set rate, how they navigate regulatory environments.

So that excess and surplus space is one that we think anyways is permanently larger than it has been historically. I think your observation that at some stage depending on the cycle and depending on the environment, you can see premiums shift between those two markets. We certainly built our practice anticipating some long term trend of a mix of admitted and excess and surplus markets. We were probably early on that build as the submission volume has disproportionately been in the excess and surplus space. But to the extent that shifts back into the admitted markets, we would be well placed to navigate it and wouldn’t expect a difference really in profitability.

Mario, Analyst: Okay. That’s helpful. And then going to the exited lines in The US now. So last quarter, there were net claims of about $41,000,000 and a portion of that, I presume, maybe a meaningful amount of that was essentially the reserve build. And this quarter, we see net claims of about $5,600,000 What I’m trying to understand is the extent to which the reserve build last quarter was utilized this quarter.

And the reason I ask it, I want to be comfortable that there’s plenty of reserve left in this business to absorb net claims over, let’s call the next two or three quarters. Is two or three quarters the right timeframe where we’d see this exited lines essentially leave the business?

David Claire, Chief Executive Officer, TriSura Group Limited: I would say at a high level Mario, we’re not expecting material changes in those reserve builds. We didn’t have a material change in that reserve figure this quarter and the goal here is to establish an approach that doesn’t see meaningful impact quarter to quarter for these. So so you shouldn’t you shouldn’t take the posture of in two or three quarters, there’s going to be a change or a a different experience in those exited lines. The the approach really is we’re attempting to establish the level of reserves that reflects that liability in the long term. So the duration of these is probably a little bit longer than two to three quarters but the approach has been to reflect that in the reserving.

Thank you.

Conference Call Operator: Thank you. I would now like to turn the conference back to David Claire for closing remarks. Sir?

David Claire, Chief Executive Officer, TriSura Group Limited: Thank you very much and thank you to everyone for joining. As always, if you have any further questions, don’t hesitate to reach out and we look forward to seeing everyone at our Investor Day in June. Thank you.

Conference Call Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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