Earnings call transcript: Trisura Group Q3 2025 misses forecasts amid growth

Trisura Group Limited reported its third-quarter 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.71 compared to the forecasted $0.778, marking an 8.74% miss. Revenue came in at $776.48 million, falling short of the expected $846.64 million by 8.29%. Despite these misses, the stock showed a slight increase of 0.08% in the market, closing at $36.98.

Key Takeaways

• Trisura's EPS and revenue fell short of expectations, missing forecasts by over 8%.
• Despite the earnings miss, the company's stock price increased marginally by 0.08%.
• Strong performance in the surety and warranty segments with significant growth.
• Continued expansion in the U.S. market, especially in surety and corporate insurance.
• Positive investment income growth and a solid operating return on equity.

Company Performance

Trisura Group Limited demonstrated robust operational performance in Q3 2025, with a 4.4% increase in operating EPS year-over-year and an operating ROE of 18%, surpassing its mid-teens target. The company saw a 24% year-over-year growth in investment income and maintained a debt-to-capital ratio of 13%, well below its 20% target. The book value per share increased by 15% year-to-date, reflecting strong financial health.

Financial Highlights

• Revenue: $776.48 million, down from the forecast of $846.64 million.
• Earnings per share: $0.71, compared to the forecast of $0.778.
• Gross premiums written: CAD 853 million, an 11% increase.
• Net insurance revenue: CAD 197 million, a 6.4% rise.
• Combined ratio: 86%.
• Operating net income: $34.4 million.

Earnings vs. Forecast

Trisura's actual EPS of $0.71 fell short of the forecasted $0.778, resulting in an 8.74% negative surprise. Similarly, the revenue of $776.48 million missed expectations by 8.29%. This marks a deviation from the company's historical trend of meeting or exceeding forecasts, indicating potential challenges in the current market environment.

Market Reaction

Despite the earnings miss, Trisura's stock price experienced a slight increase of 0.08%, closing at $36.98. The stock remains within its 52-week range, with a high of $44.99 and a low of $30.77. The marginal increase suggests that investors may be focusing on the company's long-term growth prospects and expansion efforts in the U.S. market.

Outlook & Guidance

Trisura expects continued growth in its surety platform, projecting mid-teens growth in Q4 2025. The U.S. programs are anticipated to grow in the low single digits. The company is targeting a book value of CAD 1 billion by the end of 2027, driven by its focus on expanding primary lines and seizing growth opportunities in the U.S. market.

Executive Commentary

CEO David Clare emphasized the company's strategic focus, stating, "Primary lines continue to drive our performance." He highlighted efforts to expand into larger limit bonding spaces and stressed the importance of balancing capital preservation with yield optimization in the investment portfolio.

Risks and Challenges

• Potential for continued earnings and revenue misses if market conditions remain challenging.
• Increased expense ratio due to changes in the primary lines mix.
• Dependence on U.S. market expansion for future growth.
• Fluctuations in the reinsurance market could impact profitability.
• Macroeconomic pressures and industry competition may affect future performance.

Q&A

During the earnings call, analysts inquired about infrastructure investment opportunities and the company's strategy for its investment portfolio. Trisura also addressed the impact of market cycles on specialty lines and detailed growth prospects in the warranty segment and U.S. programs business.

Full transcript - Trisura Group Ltd (TSU) Q3 2025:

Conference Operator: Good morning. Welcome to Trisura Group Limited's third quarter 2025 earnings conference call. On the call today are David Clare, Chief Executive Officer, and David Scotland, Chief Financial Officer. David Clare 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 open 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 Trisura's filings with securities regulators. To ask a question during the Q&A session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. Thank you. I'll now turn the call over to David Clare.

David Clare, Chief Executive Officer, Trisura Group Limited: Thank you, Operator. Good morning, everyone, and welcome. Q3 was another strong quarter for Trisura, underscoring our consistency and the growing opportunities across our platform. Our high teams operate in ROE and mid-80s combined ratio reflects continued underwriting discipline. Book value per share rose to CAD 18.90, up more than 20% year over year, supported by both profitability and strong investment returns. Primary lines, our surety, warranty, and corporate insurance lines, remain the foundation of our business, growing net insurance revenue 16% this quarter. Surety delivered another exceptional quarter, with net insurance revenue up 25% year over year. Although premium declined relative to Q3 2023 due to timing nuances of premium onboarding in the U.S., growth year to date is 22%, and we expect the return to maintain growth in surety in Q4 of this year.

Activity tied to infrastructure investment, manufacturing expansion, and data center construction across North America continues to accelerate. These sectors are expected to provide multi-year tailwinds for contract bonding demand. Our contractor business is strong, and our U.S. platform continues to grow in scale and credibility with national brokers while expanding licensing with the recent addition of Texas in October. Warranty growth has been significant, at 38% growth in written premium, driven by strong relationships with program partners and sustained demand in auto sales. We've been successful in expanding our share with our partners, driving a step up in our market presence. Although we expect growth to return to the mid-teens level in the future, our platform has scaled meaningfully. Corporate insurance was able to grow at a measured pace despite competitive pressure, with our selective underwriting and pricing discipline preserving margins.

We continued to invest in our expansion into the U.S., which impacted net underwriting income in the quarter by almost $2 million. This phase of build-out is expected to yield a practice of comparable size to our Canadian business in time, a precedent established by our successful build-out in U.S. surety. Canadian front-end saw an expected decline in premium due to continued competition, though underwriting income improved through lower claims and enhanced efficiency. We expect the same in Q4 and are evaluating a strong pipeline of opportunities for 2026. U.S. programs returned to growth, with gross written premiums up 18% in the quarter and admitted business reaching a record $179 million, a 22% increase. Increased capacity has improved reinsurance appetite and terms, setting up a constructive environment for growth.

The quarter was particularly strong, with several new programs contributing to growth, and we anticipate continued growth in Q4, albeit in the mid-single digits. Investment income continues to be a key driver of earnings growth. Our portfolio and investment income reached new records, with $1.8 billion in assets and $20 million of investment income, up 24% year over year. That reflects portfolio expansion as well as prudent active management. Higher interest income, combined with disciplined duration and credit positioning, leaves us well placed in today's environment. Investment contribution will continue to support earnings and book value growth into 2026. Conditions remain supportive for our strategy. Our focus on niche specialty lines experiences market trends differently than broad or commoditized lines. Reinsurance capacity has improved, and this is a tailwind for our programs business as partners seek access to stable and strategic capacity.

The potential for large-scale investment in infrastructure, clean energy, and data center construction across North America continues to expand the addressable market for surety. These trends, combined with the depth of our underwriting talent and expanding broker relationships, position Trisura to benefit from secular growth. At the same time, we remain focused on cost discipline and operating leverage. Our expense ratio reflects both a shift towards primary lines, which have higher commissions, and the investment phase we're in. We expect efficiencies to emerge as our platform continues to mature. This has been demonstrated through the build-out of our U.S. surety platform, which contributes meaningfully to top and bottom line. Year to date, U.S. surety is over 40% of our surety premiums and operates at a combined ratio approach in our Canadian business. Q3 reinforces our ability to execute profitably while positioning for growth.

Primary lines continue to drive our performance, and U.S. programs are benefiting from improved market conditions. Investment income remains a significant contributor to earnings quality and book value growth. As we look ahead, Trisura is well positioned to compound book value through underwriting discipline, balanced capital deployment, and continued expansion in markets where we have proven expertise. With that, I'll turn it over to David Scotland for a detailed review of our financials.

David Scotland, Chief Financial Officer, Trisura Group Limited: Thanks, David. I'll now provide a walkthrough of our financial results for the quarter. Operating EPS, which reflects our core performance from the business, was $0.71 per share for the quarter, reflecting growth of 4.4% over the prior year. This contributed to operating ROE on a rolling 12-month basis of 18% at Q3 2025, which exceeded our mid-teens target. Gross premiums written was CAD 853 million for the quarter, an 11% increase year over year, reflecting continued growth across the portfolio. U.S. programs returned to growth in the quarter, posting an 18% increase in gross premiums written. Net insurance revenue, which approximates net premiums earned, was CAD 197 million for the quarter, reflecting growth of 6.4% over the prior year. Growth was driven by continued expansion in our primary lines, which increased by 16%.

The combined ratio for the group was 86% for the quarter, which was slightly higher than the prior year. The loss ratio for the quarter was slightly higher in Trisura Specialty and slightly lower in U.S. programs than the prior year. Both remained within our range of expectations. On a consolidated basis, the expense ratio was slightly higher than the prior year, primarily as a result of the shift in the mix of business towards Trisura Specialty, which has a higher expense ratio than our U.S. programs business but a lower loss ratio. Underwriting income in the quarter was modestly lower than the prior year as a result of a slightly higher combined ratio, offset by growth in the business.

Net investment income of $20 million increased by 23.8% for the quarter as a result of an increase in the size of the investment portfolio, driven by new cash deployment, even as the broader interest rate environment continued to trend lower. Our operating effective tax rate was 24.3% for the quarter, reflecting the composition of taxable income between Canada and the U.S. and consistent with previous quarters. Overall, operating net income was $34.4 million for the quarter, which was greater than the prior year as a result of consistently profitable underwriting and growing net investment income. Non-operating results in the quarter and prior year consisted primarily of net gains associated with unrealized gains on the investment portfolio. Exit lines had an immaterial impact to net income in the quarter.

Strong EPS contributed to a 15% increase in book value for the year-to-date period, resulting in a book value per share of CAD 18.90 at September 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 partly offset for the year-to-date period by FX movement associated with a weakening $U.S. dollar against the Canadian currency. Book value has grown at an average rate of 26% over the past five years, ending the third quarter with over CAD 900 million of equity. We are well on track to achieve our book value target of CAD 1 billion by the end of 2027. Earlier this year, 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% at September 30, 2025, which was higher than December 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 continue to support our robust organic growth. David, I'll now turn things back over to you.

David Clare, Chief Executive Officer, Trisura Group Limited: Thanks, David. Operator, we would now take questions.

Conference Operator: As a reminder, if you'd like to ask a question at this time, please press star one one on your touchstone phone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Bart Jarsky with RBC Capital Markets.

Bart Jarsky, Analyst, RBC Capital Markets: Great. Thanks, and good morning. I wanted to ask David around your commentary with the data center build-out, the infrastructure announcement. We had the Canadian budget recently passed as well. Would love to get your thoughts on how meaningful this opportunity could be for your surety business on both sides of the border.

David Clare, Chief Executive Officer, Trisura Group Limited: Thanks, Bart. At this stage, it's tough to size these opportunities. What we do know is these types of commitments, if we talk about Canada first, for nation-building projects, for large-scale infrastructure, generally fit the types of projects that require bonding. That bonding need, to the extent it's significant, would benefit the entire surety industry. We've made a concerted effort over the past year to expand our practice into some of that larger limit bonding space. At this stage, we're very happy to see the commitments, although the rubber's going to hit the road when we start seeing what those commitments actually mean for projects. In the U.S., I think everyone has seen the level of commitment and activity around both manufacturing, data centers, and infrastructure spending as well.

I think all of those things are positive for demand at a high level for the surety industry. It's worth noting for us as Trisura, it's unlikely we'll be participating with the large general contractors who would navigate those projects. We do participate in the subcontractor space. To the extent these types of projects lift that demand, we would be expected to participate in those types of activities.

Bart Jarsky, Analyst, RBC Capital Markets: Great. Thanks. Very helpful. Just on the investment income, I mean, it was strong this quarter, up 24% year over year, but even year to date, it's still pretty strong at 14% over year. How should we be thinking about that in terms of sort of the durability of that and its contribution to book value growth kind of as we go into 2026 and 2027? I'm sensing there's a bit of a shift there in terms of its growth power, but wanted to understand that a bit better.

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. I appreciate you pointing this out, Bart. It's something that we're excited about, and it's a very natural consequence of the proportion of our growth coming from these primary lines. As you think about the big drivers of our growth, given the magnitude of expansion in lines like net premium earned, there's a faster recycling or more significant contribution from those lines of growth into the investment portfolio. Something we track very closely is obviously the level of net premiums earned growth in the organization. That translates relatively quickly into contribution into the investment portfolio. Given the nature of our portfolio as a majority investment-grade bond portfolio, we have fairly high confidence that that is a very durable contribution and new base for investment income going forward.

For us, we always like to see predictable earnings, and that portfolio's significant growth over the last three or four years has just positioned us in a lot better spot than we've been previously.

Bart Jarsky, Analyst, RBC Capital Markets: Great. Very helpful. Thanks.

Conference Operator: Our next question comes from Doug Young with Desjardins Capital Markets.

Doug Young, Analyst, Desjardins Capital Markets: Good morning. Just sticking, David, with the investment income side. Obviously, quid pro quo from that line. As you mentioned, you tend to be more conservative in the investments that you make. Any plans to push a little bit more for yield duration, take on a little bit more risk within the portfolio, or is it just steady under the current kind of strategy?

David Clare, Chief Executive Officer, Trisura Group Limited: Our priority in the investment portfolio is both capital preservation and optimizing for yield. We try to do that opportunistically, Doug. What you have seen around the edges is some active management around both duration and credit quality. For us, the focus here is not changing materially the composition of the portfolio, but reflecting opportunities, for example, if there is better term premium than there has been historically. You are not going to see us meaningfully change the composition of the portfolio, but around the edges, if we can add yield through an expansion of duration appetite or shifting asset allocations between investment-grade credit, we will likely do that. What we have not done year to date, and we have not done really recently in the last couple of years, is meaningfully change things like equity allocations.

The portfolio gives us a lot of confidence in its durability, and the team's done a good job of defending yields as we've seen what I'd call a transitioning environment.

Doug Young, Analyst, Desjardins Capital Markets: Okay. Perfect. Lots of discussions. We've been having lots of discussions around the softening of the P&C insurance cycle. I know you and I have talked a bit about this, and you've talked a little bit about it in your prepared remarks. To the extent that reinsurance pricing or the cycle does pull back, can you elaborate maybe a little bit on how that impacts Trisura and maybe just actually how it could potentially benefit you if reinsurance pricing in of itself does pull back a bit?

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. This is a question we get a lot, and it's worth level-setting before we get into the discussion that given our niche and specialty focus, the broad themes that people talk about and reference around cycle trends generally hit our business or impact our business differently than more commoditized lines. So surety, for example, would be outside of typical market cycles. We've talked a little bit in the past about corporate insurance, which is, I'll say, a competitive environment right now, but the team is doing a great job of growing that business in that environment and maintaining the types of margins we expect. I think your comment around the programs business and the impact of reinsurance is likely underappreciated at Trisura. We tend to benefit when reinsurance markets are more available, when reinsurance markets' capacity increases.

That makes it a better operating environment for an entity that consumes a significant amount of reinsurance. Our U.S. programs division is an entity that utilizes a lot of reinsurance. You saw this quarter that we were able to grow more meaningfully in that line than we have in other quarters. Part of that is lapping sort of that exited lines period, but part of that is our ability to launch new programs this year that fit our risk appetite. A good component of that is the return of capacity to those reinsurance markets. At a high level, at Trisura, something that can be a benefit, that market cycle. In those specialty lines, it is something that we generally expect to be a less direct impact than more commoditized lines.

Doug Young, Analyst, Desjardins Capital Markets: Okay. And then just lastly, in the U.S. program business, as you said, gross recent premiums grew this quarter and was above us. I mean, how many new—can you just kind of walk through how many new programs were added this quarter? I do not think they are all producing premiums yet. I think there will be a bit of a layering in of that. Maybe you can correct me if I am wrong. Retention rates, if you can kind of paint the picture for us, how all of those things should impact gross revenue premium, net premium earned over the year or two years or so. Thanks.

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. I can provide the program number on a year-to-date basis. We've added eight or nine new programs in that space this year. A few of those programs started producing premium in Q3, which has helped us step up a little bit. As you're thinking about modeling the business, I think the best way to think about it is that retention component will be likely in the low teens range. It's going to bounce around by quarter, as you've seen this year. Your loss ratio is likely in the low 70s on a full-year basis. Your expense is anywhere between 10-11. The combined ratio of that business, you should think about in the low 80s on a full-year basis.

That trend in that business, what we see kind of going forward, likely in Q4 is growth, but probably at a lower rate than what we saw this quarter, and then a good opportunity to continue expanding in 2026.

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

Conference Operator: As a reminder, if you'd like to ask a question at this time, please press star one one on your touchstone phone. Our next question comes from Jamie Gloin with National Bank of Canada.

Jamie Gloin, Analyst, National Bank of Canada: Yes. Thanks. Just on the surety side, I was wondering if you could—and apologies if I missed this—if you could break down the performance of Surety Canada versus Surety U.S.

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. James, the combined ratios of these two are pretty comparable. So on a profitability perspective, I think you should expect, and to the extent you model this, those businesses are contributing relatively equally on a profitability standpoint. Premiums-wise, year to date, the U.S. business has contributed, I'll say, just over 40% of the premiums for our surety platform across North America. So it's becoming more significant, but our Canadian business is still larger.

Jamie Gloin, Analyst, National Bank of Canada: Okay. The trends in that premium growth?

David Clare, Chief Executive Officer, Trisura Group Limited: I would say on a percentage basis, our U.S. business is growing faster right now, although we do have some great momentum in the contract space in Canada. The market opportunity for both is compelling, although the absolute size of the U.S. market is still quite a bit larger than the Canadian market.

Jamie Gloin, Analyst, National Bank of Canada: Yeah. Of course. In terms of looking into the upcoming quarter, do you have any visibility on how that has performed?

David Clare, Chief Executive Officer, Trisura Group Limited: The surety platform?

Jamie Gloin, Analyst, National Bank of Canada: Yes, please.

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. I would say you should expect a return to growth in the surety platform in Q4. Certainly, we would expect something in the mid-teens level of growth from a top-line perspective. It sort of highlights the nuances of Q3 just on a comparative basis, but we've got confidence that that returns to growth in Q4. From a loss ratio perspective, I think you should model this as per usual. Think about kind of a 20% or low 20s% loss ratio for that business.

Jamie Gloin, Analyst, National Bank of Canada: Okay. Good. Shifting elsewhere in specialty, maybe you can kind of sprinkle these comments around the other lines. Noticed clearly an uptick in loss ratios or combined ratios across corporate insurance and warranty. Could you talk about maybe some of those drivers that are leading to that uptick? Is it something that we're at a higher level here looking forward, or is there something a little bit more unique in the quarter?

David Clare, Chief Executive Officer, Trisura Group Limited: Yeah. The quarter had a few nuances that are worth highlighting, so appreciate the question. Warranty as a platform, you should think about running about a 90% combined ratio. The big difference quarter over quarter this year is really that Q3 of 2024 was a significantly low quarter from a combined ratio perspective. However, if you look year to date for warranty in both 2024 and 2025, you are pretty comparable. You are pretty close between those two, which is generally the level that we expect this to run in the long term. I think the growth in warranty is something we referenced a bit in our opening remarks. It has been spectacular. We have to congratulate the team and our partners in their success there.

We do expect that growth comes from these high 30s levels, likely down to the mid-teens levels in the near term, but it's a great new base level for the business. Corporate insurance, I think you should model this business on a loss ratio basis in the low 30s. That's generally what we expect in the long term. We had a very strong quarter last year in corporate insurance. You had something in the high 20s from a loss ratio standpoint. I think more important this quarter in driving what I'll call net underwriting income or profitability, there's a pretty significant investment in the expansion into our U.S. business. That impact on NUI for corporate insurance is probably approaching $2 million in the quarter. If you back out that type of investment, the results look pretty comparable to our long-term expectations for that corporate insurance line.

Jamie Gloin, Analyst, National Bank of Canada: Sorry, just to dig in on that corporate insurance loss ratio, low 30s, historical trend here has been maybe more like high 20s. Is the U.S. platform driving some of that shift, or is there something else?

David Clare, Chief Executive Officer, Trisura Group Limited: No. Low 30s is pretty normal. I mean, we had some very strong years recently as we were expanding the Canadian business. The U.S. is not material enough at this stage to really move around loss ratios. I think what you're seeing here is just a return to kind of long-term averages in Canada.

Jamie Gloin, Analyst, National Bank of Canada: Okay. Great. And then last one for me, just on the warranty growth side of it, I believe it's coming from new merchant wins as opposed to, let's say, auto sales growth, which has been somewhat tepid. Perhaps you can sort of outline some of the factors that are leading to those wins and broader distribution.

David Clare, Chief Executive Officer, Trisura Group Limited: You're absolutely right, James. I wouldn't qualify the growth in warranty as a result of a booming auto sales environment. This is wins or expansion of relationships within our partnerships. I would say the factors here or the drivers of this expansion is candidly just strong relationships. We've had a number of these partners for a long time. In the last 12 to 18 months, we've been successful in moving some business from competitors to our own platform, which you're seeing the uplift of through the year as we onboard those programs. It's candidly just a testament to the length of time we've been in the business and the strength of those relationships. Nothing spectacular, no change in risk appetite, no change in real product offering, just a consistent focus in the business on building with people that we know.

Jamie Gloin, Analyst, National Bank of Canada: Okay. Thank you.

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

Tom MacKinnon, Analyst, BMO Capital: Yeah. Thanks. Good morning. A bit more of a broader question just with respect to the programs business. Kind of thoughts as to where you kind of want to see better growth. Do you see better growth in specialty versus programs? Keeping with programs, is this something that you are—what do you think would be the bigger growth driver of Trisura overall? Just with respect to programs, what are you seeing in terms of retention here, maybe fees as a percentage of ceding commissions, just trends generally in that marketplace that you might want to view as being positive or negative or opportunities to capitalize on? Thanks.

David Clare, Chief Executive Officer, Trisura Group Limited: Thanks, Tom. I think from a growth perspective, there's quite a lot of opportunity right now in the primary lines. You're seeing more significant growth in those lines as we candidly expand into the U.S. You're coming off a lower base in some of these lines to drive a higher percentage growth in things like U.S. surety. We would expect in time U.S. corporate insurance adds to that. We do still have quite a strong expectation for growth in our Canadian platform, although the maturity of those lines makes that percentage look a bit different than the U.S. I think there is an expectation for continued growth in our U.S. programs business. That's likely on a percentage basis, not as significant as growth in some of our primary lines. I would make that comment for the Canadian printing business as well.

There's clearly some competitive factors there that are limiting top-line expansion. It means that we expect a relatively consistent and attractive contribution from both of those lines. In U.S. programs, retention you should think about in that low teens level. It's going to bounce around by quarter, but modeling it over the full year at 12% should be fair. Fronting fees or fees as a percentage of ceded premium, about that 5% range, maybe high 4%, should be pretty consistent with what we've done in the past and will be consistent with what we're seeing both on new programs and existing programs.

Tom MacKinnon, Analyst, BMO Capital: What opportunities do you see in programs overall? What particular programs are you seeing better growth in, and which ones would you not be as excited about?

David Clare, Chief Executive Officer, Trisura Group Limited: Right now, we see continued excitement around the MGA industry in the U.S. Most groups, be they single MGAs or groups of larger MGAs, are continuing to exhibit very entrepreneurial behavior, more sophisticated platforms, strong abilities to retain and attract good people. It means that there is quite a bit of opportunity expected to continue in that market. I would say for us, we try to target a mix of portfolio business. It is about 70% casualty and 30% property. The difference this year, I would say, is that we see a more supportive reinsurance environment, especially in property. The opportunities that we have onboarded this year have been a mix of both property and casualty, but it is the first time in a couple of years that we have had both appetite and the types of support we expect to lean back into that property space.

The mix of business is, I'll say, pretty consistent to our overall segmentation of business. The backdrop for both E&S, MGA demand, and support in the reinsurance seems to be either consistent or improving.

Tom MacKinnon, Analyst, BMO Capital: Okay. That's good. Thanks.

Conference Operator: As a reminder, if you'd like to ask a question at this time, please press star 11 on your touchstone phone. Our next question comes from Steven Boland with Raymond James.

Steven Boland, Analyst, Raymond James: Thanks. Just one question. In the MD&A, it does talk about a higher expense ratio in the U.S. that you're investing in the business. I'm just wondering if you can give a little bit more specifics on that, and is that will be ongoing this quarter and even into 2026?

David Clare, Chief Executive Officer, Trisura Group Limited: Thanks, Steven. We have not made a lot of, I'll call it de novo or new investments specifically this quarter in the U.S., but we made a number of them at the end of last year and the beginning of this year. You're seeing some of those investments just play through the year. I would not expect significant change in that line or that expectation going forward. We are simply building the business and preparing that platform for growth, candidly in both programs and primary lines. You should not expect a meaningful change in the absolute dollar figures there. The trajectory likely flattens out over the next year or so. We have made a number of investments that we talked about a lot in Q4 of last year and maybe referencing Q1 of this year that we just think helps us set up for a durable platform in the long term.

Steven Boland, Analyst, Raymond James: Okay. Actually, I will sneak in one. You're comfortable with the capital position in the U.S.? You have to move some capital down there, do you think, over the next 12 months, or you're set for the next little while?

David Clare, Chief Executive Officer, Trisura Group Limited: No. We're very comfortable with our capital position across the organization. Despite having a bit of growth this quarter that was maybe ahead of expectation in programs, we're very well funded there. I think the area to think about us injecting capital in in time will continue to be that surety balance sheet in the U.S. As we continue to see momentum in that platform, we want to continue to get bigger there.

Steven Boland, Analyst, Raymond James: Okay. Thanks very much.

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

David Clare, Chief Executive Officer, Trisura Group Limited: Thank you very much, everyone, for joining today. As always, do not hesitate to reach out if you would like to speak through anything further. Thank you, operator, and thank you, everyone.

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

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