Earnings call transcript: Trisura Group Q2 2025 results show revenue growth

Trisura Group Ltd reported its Q2 2025 earnings, revealing a complex mix of financial achievements and challenges. The company posted an earnings per share (EPS) of $0.69, falling short of the expected $0.7397, a negative surprise of 6.72%. However, revenue reached $900.38 million, surpassing the forecast of $878.73 million, a surprise of 2.46%. According to InvestingPro analysis, Trisura currently appears undervalued, with a "GOOD" overall financial health score. Despite the EPS miss, the stock price rose by 1.69% to $41.36, reflecting investor optimism fueled by strong revenue performance and strategic growth initiatives.

Key Takeaways

• Revenue exceeded expectations with a 2.46% positive surprise.
• EPS fell short of forecasts by 6.72%, raising concerns about operational efficiency.
• Stock price increased by 1.69%, indicating positive investor sentiment.
• Strong growth in net insurance revenue and expansion in US markets.
• Continued focus on specialty lines and profitable niche markets.

Company Performance

Trisura Group demonstrated robust performance in Q2 2025, with significant year-over-year improvements. Operating EPS grew by 6.2%, and net insurance revenue increased by 18%, highlighting effective business strategies. The company maintained a strong operating return on equity (ROE) of 17.8%, surpassing its mid-teens target. However, the EPS miss against forecasts suggests challenges in meeting market expectations.

Financial Highlights

• Revenue: $900.38 million, up from forecasts and reflecting a positive surprise.
• Earnings per share: $0.69, a 6.2% increase year-over-year but below expectations.
• Gross premiums written: $900 million.
• Combined ratio: 85.6%, indicating efficient operations.
• Book value: $843 million, a 21% growth.

Earnings vs. Forecast

Trisura’s Q2 earnings per share of $0.69 missed the forecast of $0.7397, resulting in a negative surprise of 6.72%. This deviation may concern investors despite the strong revenue performance, as it suggests potential cost management or operational challenges.

Market Reaction

Following the earnings announcement, Trisura’s stock price increased by 1.69% to $41.36. This positive movement, despite the EPS miss, indicates investor confidence in the company’s strategic direction and revenue growth. The stock has demonstrated strong momentum with a 23% return over the past six months and trades near its 52-week high of $33.70, showcasing resilience in market conditions. InvestingPro data reveals the stock maintains a moderate beta of 0.65, suggesting lower volatility compared to the broader market.

Outlook & Guidance

Trisura is targeting a $1 billion book value by 2027, with expectations of maintaining a combined ratio in the mid-80s for the full year. The company plans to continue expanding its US surety and corporate insurance platforms, with potential future capital injections to support growth.

Executive Commentary

CEO David Claire emphasized the company’s strategic focus, stating, "We continue to believe we are building a unique platform and attractive niche markets." He also highlighted the importance of underwriting profitably in niche areas, reinforcing the company’s commitment to sustainable growth.

Risks and Challenges

• Softening conditions in commercial insurance markets could impact profitability.
• The EPS miss raises concerns about cost management and operational efficiency.
• Potential need for further capital injections into US markets may strain resources.
• Market saturation and macroeconomic pressures could affect future growth.

Q&A

During the earnings call, analysts inquired about the company’s strategy in response to market softening and its approach to expanding the US surety balance sheet. Executives addressed growth in warranty and US programs, emphasizing the importance of maintaining a diverse and profitable portfolio.

Full transcript - Trisura Group Ltd (TSU) Q2 2025:

Conference Call Operator: Good morning. Welcome to Tresura Group Limited Second 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. Following formal comments, lines will be opened for analyst questions.

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 U. S. Securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They’re subject to known and unknown risks, and future events and results may differ materially from such statements.

For further information on these risks and their potential impacts, please see TriShura’s filings with securities regulators. To ask a question during the Q and A session, you’ll need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded.

Thank you. I’ll now turn the call over to David Claire.

David Claire, Chief Executive Officer, Tresura Group Limited: Thank you, operator. Good morning, everyone, and welcome. We delivered another strong quarter in Q2 with exciting momentum across primary lines and continued expansion of the infrastructure we have been building over the last several years. Operating ROE was 18%, book value grew 21% to a new record $843,000,000 and operating net income was 33,300,000.0 up 6% from last year. Surety was particularly strong.

Gross premiums written grew 61% as both the Canadian and US platforms continued to scale. Importantly, surety underwriting income grew over a 150%, demonstrating the potential of a growing North American footprint. We continue to demonstrate strength in warranty, which grew premiums 39% as we expand relationships with our partners, and auto purchasing activity was sustained. Our primary lines, surety, warranty, and corporate insurance, grew by more than 35%. This is striking growth in some of our most established and profitable lines, positioned for continued momentum as we expand our reach.

Our progress in surety continued with small yet promising contribution from new larger limit Canadian bonding, growth in core portfolio, and continued momentum in our US distribution relationships. In The US, our programs business was stable. While gross premiums written declined due to previously discussed nonrenewals, our ongoing portfolio grew 12, and admitted business now contributes more than a $160,000,000 of premium, a record quarter. Momentum in program additions year to date has been promising as we see strong submissions and reinsurance support. We continue to observe softness in Canadian fronting where competition is elevated, though we are encouraged by the continued build of our pipeline.

Investment portfolio increased to $1,600,000,000 generating $18,900,000 in interest and dividend income, up 12% over last year. Lower interest rates and tightening credit spreads in the quarter supported gains on fixed income, and equity and preferred shares performed well. Our posture remains conservative. We have yet to deploy significantly into equities and don’t expect to change that in the near term. Yields in The US remain attractive, which when combined with uncertain macroeconomic conditions and healthy equity valuations inform our posture.

We injected US $40,000,000 into our US surety balance sheet to support growth and infrastructure, which increases the size of bonds that we can issue and should signal our confidence and excitement in this platform. This reflects an efficient funding of growth initiatives through a combination of internal capital and revolver drawings compared to historically financing growth with equity. Our business continues to evolve. We have achieved outsized growth in surety and warranty and improved quality in our programs portfolio. The relative contribution of primary lines is increasing.

That evolution is important and consistent with the historic long term drivers of Tresura’s success. Market conditions vary by line and by geography. In Canada, we see softening conditions in corporate insurance in certain fronted lines, while in The US, reinsurance capacity is returning, particularly in the property space. Casualty remains firm, and we encourage and expect discipline from our partners and our underwriters. We are pleased with our performance this quarter and encouraged by the momentum in primary lines, particularly surety and warranty.

Our focus remains on growing our specialty platform profitably, and we are well armed through a strong capital base, experienced underwriting talent, and increasingly sophisticated infrastructure. We continue to believe we are building a unique platform and attractive niche markets with experienced and proven operators. This will allow us to replicate our success as we scale. Before I hand it off, I’d like to thank those who joined us at our recent Investor Day. The engagement and feedback has been strong, and we appreciate the opportunity to share our strategy in greater depth.

I’ll turn it over to David Scotland for a detailed walkthrough of our financials.

David Scotland, Chief Financial Officer, Tresura Group Limited: Thanks, David. I’ll now provide a walkthrough of financial results for the quarter. Operating EPS, which reflects core performance from the business, was $0.69 for the quarter, reflecting growth of 6.2% over the prior year. This contributed to operating ROE on a rolling twelve month basis of 17.8% at Q2 twenty twenty five, which exceeded our mid teens target. GBW was $900,000,000 for the quarter, reflecting a reduction over the prior year, primarily as a result of nonrenewed U.

Programs in 2024, which was offset by growth in primary lines. Gross premiums written grew by 9% excluding premiums from our exited lines, and TraySure’s primary lines grew by 35% in the quarter, which aligns with the highest profit margin on GPW. Net insurance revenue, which approximates net premium earned, was a 195,000,000 for the quarter, reflecting growth of 18% over the prior year. The combined ratio for the group was 85.6% in the quarter, which was slightly higher than the prior year. The loss ratio in the quarter was slightly higher in both tertiary specialty and US programs in the prior year, but within our range of expectations.

The expense ratio for the quarter was lower than the prior year for tertiary as a result of improved operational leverage and was slightly higher for US programs. On a consolidated basis, the expense ratio was slightly higher than the prior year as a result of a shift in business mix towards Tresura Specialty, which has a higher expense ratio than our US programs business but a lower loss ratio. Ratio. Underwriting income for the quarter was greater than the prior year, primarily as a result of growth in the business. Net investment income of $18,900,000 increased by 11% in the quarter as a result of an increase in the size of the investment portfolio, driven by new cash deployment.

Our operating effective tax rate was 25.3% for the quarter, reflecting the composition of taxable income between Canada and The US. Overall, operating net income was CAD33 million for the quarter, which was greater than the prior year as a result of growth in underwriting and investment income. Non operating results in the quarter consisted primarily of net gains associated with unrealized gains on the investment portfolio compared to the prior year when non operating results were negative as a result of certain non recurring items. Exited lines had an immaterial impact to net income in the quarter. Strong earnings per share contributed to a 7.2% increase in book value for the year to date, resulting in book value per share of $17.63 at 06/30/2025.

Book value per share also increased as a result of unrealized gains through other comprehensive income due to favorable movement in our fixed income portfolio. This was partially offset by foreign exchange movement in the quarter associated with the weakening US dollar against the Canadian currency. Book value has grown at an average of 21.9% for the past five years, ending the second quarter at $843,000,000 We are on track to achieve our book value target of $1,000,000,000 by the 2027. During the quarter, we drew down on our revolving credit facility to further capitalize our growing U. S.

Surety balance sheet. This increased our debt to capital ratio to 13.8% at 06/30/2025, which was higher than at 12/31/2024, but still well under our conservative leverage target of 20%. The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements and to support and to support our robust organic growth. David, I’ll now turn things back over to you.

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

Conference Call Operator: As a reminder, if you’d like to ask a question at this time, please press 11 on your telephone and wait for your name to be announced. Our first question comes from Doug Young with Desjardins Capital Markets.

Doug Young, Analyst, Desjardins Capital Markets: Hi, good morning. So I’m getting more questions about softening market conditions in the commercial market. And David, I know you kind of talked a bit about it in your opening remarks, but I’m hoping you can kind of flesh out this a little bit more about what you’re seeing and maybe your top four commercial businesses in Canada and within The US program. And more as well, just put it in the context of whether you’ve really benefited from a hardening cycle in the last two, three years, like we would have seen, potentially from some of your larger competitors that benefited materially from hardening conditions in the auto or in the property side. So I know a lot in there, but maybe you just can give us a little bit of context.

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. It it it’s important to segregate, Doug, the areas that that we participate in maybe versus the broader commentary on the market. The the first thing I would say about Tricera is is we’re definitively within specialty lines in the commercial areas that we operate. So so generally, you should expect that through a cycle, we are delivering and expecting, better than industry average combined ratios. So the first thing to understand is those expectations don’t change in a hard or soft market.

Now that being said, if we take a step back and we look at broader trends across across the industry, there are examples and there are areas where you’re seeing, I’ll say competitive pressures come into the market. Some of these areas have been markets where we have seen very, very strong pricing trends for the last three or four years. And so some of that is normalization of those trends. I would segregate this cycle versus previous cycles. We seem to have much more ability or much more delineation as an industry between industry line.

So for example, in The US right now, casualty remains a relatively firm part of the market where we’re seeing some loosening in the property space. I think that can apply generally in Canada as well. Certain lines and certain pieces of the market are seeing more pressures versus others. Our business is not generally exposed to the personal line space, so you’re not going to see a lot of those trends driving the direction of our business. The other item to really differentiate treasurer versus some other participants is we’re disproportionately exposed or concentrated in the surety space, which again, doesn’t really follow the same market cycles.

So those hard market cycles we talked about in the last three or four years, surety has not benefited from that. Right? We’ve been navigating the surety market that is been relatively consistent in its approach to to pricing and competition. So there’s a lot there, but but what I would say at a really high level is, the market in general, the PNC space is starting to transition. The specialty areas that we participate in, we continue to believe will have an outsized and attractive profitability profile.

Doug Young, Analyst, Desjardins Capital Markets: So maybe just to wrap, like, doesn’t seem like you’re too worried. I mean, if I go back in time, there’s been some pretty wild swings and cycles. You know, the cycle has been going on for quite some time. It doesn’t feel like you’re all that concerned about what you’re seeing in the marketplace.

David Claire, Chief Executive Officer, Tresura Group Limited: I I think we we’re pragmatic. We expect underwriting profit and rationality from both market participants, but our own, underwriters. We built Trishura, for the last fifteen, nineteen years in Canada. Most of that time was a soft market. So we’re we’re very familiar with navigating markets, be they hard or soft.

Our priority, is less so following a cycle, but but underwriting profitably in niche areas we think are attractive.

Doug Young, Analyst, Desjardins Capital Markets: Okay. And then just hearing a lot more about competitive pressures in The US fronting side from some of your competitors. Anything worth kind of flushing out on on that side in terms of of what you’re seeing and and your strategy on The US program business?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. We haven’t. For example, in US programs, if you talk to us in 2021 or 2022, there were a lot of new entrants in the space. So there was a lot of conversation and interest in the competitive landscape. I would say for the last couple years, we’ve seen a real trickle or, slowdown in new entrants into the market.

If we segment that that part of the space, there still is quite a healthy amount of momentum in the E and S markets in The US. I would say we still believe that there’s a secular trend of growth in the MGA community in The US. So those two trends continue to support what we view as an attractive operating environment for for our model in The US. I wouldn’t say that we’ve changed our approach over the last couple years, and I would say that this year in particular, we’ve actually seen pretty good strength in pipeline and opportunities to write new business. So it is always competitive in every line of business that we play in, but nothing this year has has really changed our access to or navigation of the market.

Doug Young, Analyst, Desjardins Capital Markets: And I think you’ve grown faster or you’ve had a bit of a shift more towards the admitted versus the NS market and just maybe you can talk a little bit about what’s driving that and really what what does that mean?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah, it’s interesting. Submissions have continued to favor ENS markets over admitted, but the admitted lines that we do have have experienced a nice slow trajectory of growth. So it generally takes a bit longer to get an admitted program up and running, but they they can access and grow, over a long period of time, a a broader set of of premiums. So you’re starting to see some of the investments we made over the last three or four years in having an infrastructure that serves both an ENS and an admitted flat platform payout here. So I wouldn’t say it’s yet of a shift in submissions or or market, but it it does show somewhat the benefits of having a platform that can skate across both markets.

Doug Young, Analyst, Desjardins Capital Markets: Okay. And then just lastly, I’m gonna ask you this every quarter, but I’m gonna do it again is, you know, on the prior year reserve development, you guys don’t give that quarterly. Can you talk about what you’re seeing prior year result reserve development wise in Canada and then in The US specifically and the ongoing concern versus not the exited lines?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. We we’ll we’ll certainly disclose this as we usually do on an annual basis as per our practice, but but I would say we’re not seeing anything significant to highlight from a prior year reserve development. Pretty consistent trends in Canada and and a lot more, I would say, sophistication around our reserving processes in The US, which we expect drives much less volatility in the future.

Doug Young, Analyst, Desjardins Capital Markets: Appreciate the color. Thank you.

Conference Call Operator: Our next question comes from Tom MacKinnon with BMO Capital.

Tom MacKinnon, Analyst, BMO Capital Markets: Yeah. Thanks. Good morning. Question just with respect to expenses. Corporate operating expenses first quarter they were $1,400,000 probably because of some elevated filing costs.

Thought that might have been more seasonal but it seems to be maintaining around that level in the second quarter. Are there how should we be thinking about these corporate operating expenses going forward? And while you’re at that, maybe the expense ratio in Tricera specialty, how should we be thinking about that going forward as well as you continue to build out some of your U. S. Surety and your U.

S. Corporate within that segment too? Thanks.

David Claire, Chief Executive Officer, Tresura Group Limited: Thanks, Tom. I think on corporate expenses, it’s probably fair to have an approximate run rate around our our q two levels. So probably, I I would model that around $1,200,000 or so a quarter. You’ve seen a bit of an expansion in the size of the entity and and some shifting of expenses around the vehicle. So that will take us probably to about 1,200,000.0 or so run rate at at corporate expenses.

I think I think from a a broader perspective, when we talk about the expense ratio in Trisha specialty, it is important to note that that q two tends to be a little bit higher from both an expense and combined ratio perspective, just given some of the seasonality in our surety platform. I would expect that that over time and in the full year, we’re still achieving about a mid eighties combined ratio. You’ve got a little bit of marginal impact from corporate insurance this year. So, we’ve got some investments that we’re making in The US expansion of that business around the edges that that pushes it up slightly, but I don’t think anything that would change our long term expectations here for specialties combined or expense ratios.

Tom MacKinnon, Analyst, BMO Capital Markets: And the debt costs increase, I assume that’s you’ve drawn on the line, Have you what are the purposes for that? And is that really putting money into The US? Is that what does that mean in terms of your US expansion in surety and corporate and whatnot there?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. That’s a good catch, Tom. We we did draw down on the revolver to help us expand our US surety operations. So we’ve now increased the size of our US surety balance sheet to a $100,000,000 US, which is a critical level or a critical benchmark for us to get by. We think this demonstrates both to the market and to our stakeholders some of the excitement we have about the potential of that platform.

The other thing I do like to highlight is this is an example of Tresor being able to fund growth initiatives with internal capital, so a combination of our own internal generated capital and some revolver capacity here has funded an internal initiative, when historically we would have been accessing markets to drive those those expansions. So I think this is actually a great story of of us benefiting from a more sophisticated capital structure and leaning into what we we view as a really exciting opportunity in The US.

Tom MacKinnon, Analyst, BMO Capital Markets: And do you envision putting more in? How we should be thinking about this interest expense going forward?

David Claire, Chief Executive Officer, Tresura Group Limited: In the near term, so in the next three or four quarters probably not any significant change there, but we’ll adjudicate that with how quickly we see expansion in The US.

Tom MacKinnon, Analyst, BMO Capital Markets: Okay, thanks.

Conference Call Operator: Our next question comes from Stephen Boland with Raymond James.

Stephen Boland, Analyst, Raymond James: Good morning. Dave, can you just follow on about that capital injection into The U. S. Surety? Is The U.

S. Surety like a separate subsidiary that you have to basically post more capital, or, maybe just a little bit of the technicals on that, if you if you wouldn’t mind.

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. I appreciate that, Steve. That’s a it’s just a good question because there are some nuances here from a regulated perspective that that inform some of the navigation here. What we set up in The US is effectively separate balance sheets for separate pieces of our business. And we’ve created a vehicle, for our US surety, operation that has a separate balance sheet which is separately regulated and separately tracked.

One of the most important nuances of that entity is that we have a treasury listing and the treasury listing size informs the size of bonds that you can participate on. That is a direct correlation to the amount of capital that you have in your surety dedicated balance sheet. So what you’re hearing from us here in increasing the size of that, surety specific balance sheet, relates directly to those regulated entities. So this is a bit of a nuance of operating insurance companies everywhere, but specifically in The US and specifically in surety, we wanna make sure that we’re showing people that we’ve got a dedicated amount of capital, for our surety platform.

Stephen Boland, Analyst, Raymond James: Okay, that makes sense. And maybe just on the Canadian fronting, you know, the premiums continue to come down year over year. Is this obviously, you you’ve talked in the past about competitiveness. Is this your you know, is this a choice of you walking away from programs that you don’t think are being priced appropriately? Maybe just a little bit more on on Canadian fronting, please.

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. I I would say, first and foremost, we do expect, and we have some confidence that towards the latter half of the year, you’re gonna see a bit of improvement in those in those levels of of premium growth. So there’s a lot of lumpiness in this top line and fronting, which we talked about in the past, but we do see we do see some some improvement there coming forward for q three and q four. That being said, what we’re seeing in the market is not unsurprising. There’s some competition around these types of lines.

You want your partners to be operating rationally and not chasing the market down aggressively. So what we’ve seen here in some reductions in premium is a combined result here of both some seasonality and some lumpiness, but also people acting responsibly. Right? You don’t want to be writing business, if the premiums or the pricing doesn’t make sense. So reducing some size here, could reflect some of that.

It could reflect some reduced pricing and and there’s always a nuance in especially the Canadian fronting line of of lumpiness. So if I take a step back, what we really care about in that fronting line is how consistent and how attractive is the net underwriting income coming off of that. And given what we’ve seen in the pipeline for new business here and some of the programs we’ve added towards the end of q two, we still feel pretty confident that this is a great contributor to the overall business.

Stephen Boland, Analyst, Raymond James: Okay, that’s all I have. Thanks very much.

David Claire, Chief Executive Officer, Tresura Group Limited: Thanks, Steven.

Conference Call Operator: Our next question comes from Bart Jarski with RBC Capital Markets.

Bart Jarski, Analyst, RBC Capital Markets: Great. Thanks for taking the questions. I wanted to ask around the leverage ratio, David. So I know you guys are targeting 20% and you’re at 14% this quarter. But what are your thoughts longer term about maybe increasing that leverage target to take advantage some of these exciting opportunities that you’re seeing?

Like, we’ve seen peers go to 25%, sometimes up to 30% on M and A and not suggesting go to 30, but can you shed some light on your thought around that leverage target longer term?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. I I think you’ve seen precedents in the market, and we would have a lot of appetite for stretching that target for the right opportunity. So we’ve talked about 20% since we came out to the public markets, informed by a few things, including our size and a relative posture of conservatism. As we’ve gotten larger, as we’ve gotten more sophisticated, and certainly as we’ve evaluated more opportunities, there is and can be opportunity to stretch that for the right opportunities, you’re seeing us, let’s say more appropriately level or lever the entity for some of the organic opportunities that we have, I think you’ll continue to see us fund opportunities with a more market normal leverage ratio as we see those rise in the future.

Bart Jarski, Analyst, RBC Capital Markets: Very helpful, thanks. And then just to follow-up on warranty, so really strong growth this quarter, you know, up 40%, Maybe help us understand some of the drivers there with was it US, Canada both and, sustainability of that going forward? Thanks.

David Claire, Chief Executive Officer, Tresura Group Limited: We’ve been, very happy with, some of the growth we’ve seen in warranty. It’s important to to note, we only operate in Canada in the warranty sector, so all of this is is Canadian growth. Part of this is is just expansion of our relationships with existing partners. We’ve seen a relatively strong pipeline of opportunities from the groups that we’re already working with. So that’s nice to see in driving the growth.

It’s it’s familiar partners. It’s familiar products that are driving things here. We’ve have seen some return or some success of auto sales in the first half of the year. I wouldn’t say that we expect 40% growth every quarter, but certainly it’s shaping up to be a strong year in warranty.

Bart Jarski, Analyst, RBC Capital Markets: Okay. Thanks. And then just a quick follow-up on that on The US longer term opportunity, like, any sense of timing as to when, you know, you will port that business south of the border and expect to write premiums there?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. I think if you look at the precedents we have expanding our core lines of business, we’ve taken surety to The US. We’ve taken corporate insurance to The US now and are building that out. I think it’s it’s always been in our vision board, I’ll say, to figure out if we can participate in that US warranty market. I think finding the right approach and the right partner is something we think about a lot.

At this stage, we don’t have any concrete plans in the timeline of that expansion, but it’s certainly something we think about and talk about a lot internally.

Bart Jarski, Analyst, RBC Capital Markets: Great. That’s it for me. Thanks.

David Claire, Chief Executive Officer, Tresura Group Limited: Thanks, Bart.

Conference Call Operator: Our next question comes from Jamie Gloin with National Bank Financial.

Jamie Gloin, Analyst, National Bank Financial: Yes, thanks. Just first on The U. S. Surety balance sheet and the $100,000,000 level. Is this like the threshold to get you into a very large snack bracket?

Or is there is it kind of like fronting where there’s like another size rating to get to that can even increase that further? Or is this does this give you the runway for, like, the next, let’s say, five years at a 100,000,000 plus? Or do you need to jump to another balance sheet level, say, a couple years or maybe in a year to to further increase where you can play?

David Claire, Chief Executive Officer, Tresura Group Limited: A $100,000,000 or $10,000,000 treasury listing is attractive in The US markets, but without taking away from some of the progress we’ve made, bigger is always better in the surety space. The types of partners and counterparties and projects that you can participate on opens up as you get to a larger and larger entity. So there’s a lot of exciting opportunities we gain access to at this level. As we continue to expand, I I would expect that we continue to drop capital into that surety vehicle, and that will continue to expand our our potential presence in the market. So it’s without taking away some of the excitement of getting to this level, there’s always more we can do here.

Jamie Gloin, Analyst, National Bank Financial: Yeah. I guess if I if I ask it differently, like, what percentage of the 30 market in The US does this give you access to, today, I guess? Is that is that something you can share?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah, I probably couldn’t give you exact numbers right now, but we would be definitively a small and mid sized participant in The US market. And if you make that same analogy that we’ve made in the Canadian market, I would would port that over to say that The US is a significantly larger market with significantly larger participants than Canada. So at this stage, we are not accessing a significant part of that market. I can certainly try to size that for you more specifically offline.

Jamie Gloin, Analyst, National Bank Financial: Yeah. Thanks. And then in terms of US surety, I’m sorry if I missed this in disclosures, but 80,000,000 in premiums written this quarter for surety as a whole, Is it $50.50 now? Is US a bigger part of, of the surety platform? Where does it sit?

David Claire, Chief Executive Officer, Tresura Group Limited: It’s not quite, fifty fifty. US is is a little bit smaller than, than the Canadian platform, but they’re getting closer.

Jamie Gloin, Analyst, National Bank Financial: Got it. And last one on surety, you know, with the growth obviously very strong. Can you break down how much of that is is unit growth and and new business relationships, versus pricing?

David Claire, Chief Executive Officer, Tresura Group Limited: There’s not much of this growth is being driven by, pricing. It’s, it’s mostly, expansion of our distribution relationships and and volume growth. Surety has been a relatively consistent market for the last five or six years from a pricing standpoint. So all the growth that you’re seeing is a success of the team in in going out there and winning business.

Jamie Gloin, Analyst, National Bank Financial: K. Great. Congrats on that work there. Shifting to The U. S.

Programs, core growth 12% year over year, really solid growth number. Can you talk through what’s driving that growth, new programs, pricing improvements? And with that new program’s commentary, are you shifting away from some other programs? Of talk through some of those dynamics in The US side.

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. The The US is returning a little bit to some of the themes we had a couple years ago. A lot of the growth that you’re seeing in that core portfolio is growth of existing programs. So this relates to the comments I I made in speaking with Doug. The market in the E and S space is still pretty healthy, and and that MGA community is is being successful in expanding their share.

So some of what you’re seeing there is is growth in existing programs. We’ve had some new program ads this year. They take some time, to contribute meaningfully, but you do have some, some contribution from those new programs. So it’s that core portfolio is is sort of demonstrative of some of the attractive trends that we saw in this space and continue to see in this space over the last three or four years. It’s it’s a mix of partners we’ve known for a while and some additions around the edges.

I wouldn’t say pricing is driving things materially, although we do see casualty being relatively firm. So that’s a a mild tailwind as well.

Jamie Gloin, Analyst, National Bank Financial: Yeah. And, you know, and and speaking about the the mix, the product mix here, I mean, like, property is where you ran into, let’s say, some challenges in in the past. I I would assume property is not a a big exposure anymore to the treasury US platform. Maybe you can you know, of highlight some of the some of those exposures. Like where does it sit today?

I would imagine that the portfolio is fairly well positioned in this current environment of softness on specialty and E and S property?

David Claire, Chief Executive Officer, Tresura Group Limited: Yeah. I I wouldn’t say we we have any aversion to the property market specifically. Where we have sensitivity is is concentrated cat exposures. And so our our property book today is about 25 to 30% of the overall book in, in The US, 70 ish percent or so is is casualty. And so we feel pretty good about that positioning.

The property programs that we do have today are are relatively well diversified, and we tend to stay away from, what I’ll qualify as highly sensitive zones. So concentrated cat risk, southeast dedicated state wind exposed, lines. We’re not participating in those areas. Where you see us play is is generally the, more diversified pieces of that, that property market. And we think that 25 to 30% mix is a healthy one for us to have, especially now as you see the reinsurance markets coming back in that space, it makes things a little bit more predictable for us to navigate.

If you take a step back, things that are mixed more broadly in both E and S and admitted or property versus casualty, I think you’ll likely see a pretty consistent mix in the business in the near term. So that sixty five thirty five or seventy thirty casualty property is a good spot to be in right now. It gives us some of the tailwinds of the casualty space that you’re seeing in the pricing environment. It gives us some opportunity to opportunistically look at the property space. And then we’ve got the rails of infrastructure to skate between admitted and E and S if our partners would like to adjudicate programs in either of those markets.

Jamie Gloin, Analyst, National Bank Financial: Okay thanks I’ll turn it over.

Bart Jarski, Analyst, RBC Capital Markets: Thanks Jim.

Conference Call Operator: That concludes today’s question and answer session. I’d like to turn the call back to David Claire for closing remarks.

David Claire, Chief Executive Officer, Tresura Group Limited: Thanks very much. Thank you, everyone, for joining. And as and as always, if you have any other questions, don’t hesitate, to reach out. Thank you.

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

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