Trisura Group reveals fourth quarter and 2022 annual results

Trisura Group Ltd. (Trisura), a leading specialty insurance provider, today announced its financial results for the fourth quarter and year ended December 31, 2022.

David Clare, President and CEO of Trisura, stated, “Despite strong adjusted earnings and operating performance, results in the quarter were impacted by a one-time $64.4 million write down (tax effected) of reinsurance recoverables in our US fronting business, resulting in a consolidated quarterly loss of $40.3 million or ($0.86) per share. Adjusted quarterly net income which provides a normalized view of performance, was $23.7 million or $0.51 per share.

Notwithstanding the impact of this write down, Trisura is a larger, more diversified entity than at any stage in our history. We believe firmly that this is an isolated event, and are confident in our ability to scale the platform profitably in the long term.

Operating performance was strong in the quarter. Premium growth, Canadian underwriting and investment income were exceptional. Interest and dividend income rose 102.3% in the quarter. Expansion of market share and maturation of our platform resulted in premium growth of 37.2% in the quarter and 55.7% for the year.

Our capital demonstrated resilience, with a debt to capital ratio of 13.4% supported by $483 million in equity capital, $50 million in undrawn revolver capacity and a conservatively positioned investment portfolio.”

Insurance operations

• GPW in Canada increased by 13.9% in the quarter and 29.7% for the full year. Strong underwriting performance across all lines contributed to a combined ratio of 83.5% in the quarter and 81.9% for the full year, as well as an ROE of 30.2% in Q4 2022.
• GPW in the US of $446.8 million in the quarter, increased by 52.3%, compared to $293.3 million in Q4 2021, and fee income of $19.4 million in the quarter increased by 62.5% compared to $11.9 million in Q4 2021. Full year GPW of $1.7 billion rose 70.3% compared to 2021, the result of maturing and new programs. Net loss of ($53.3) million in the quarter and ($29.9) million for the full year was driven by the write down on reinsurance recoverables and drove a negative ROE. Excluding the write down income in the quarter was $11.1 million and $34.4 million for the year with a 14.3% ROE.

Capital

• The Minimum Capital Test ratio of its regulated Canadian subsidiary was 233% as at December 31, 2022 (229% as at December 31, 2021), which comfortably exceeded regulatory requirements of 150%.
• The Risk-Based Capital of the regulated insurance companies of Trisura US are expected to be in excess of the various Company Action Levels of the states in which they are licensed. Calculations are finalized as statutory returns are completed.
• Consolidated debt-to-capital ratio of 13.4% as at December 31, 2022 is below our long-term target of 20.0%.

Investments

• Interest and dividend income rose 102.3% in the quarter compared to Q4 2021 and 57.5% for the full year compared to 2021. The portfolio benefited from higher yields and increased capital generated from strong operational performance and the equity raise.

Governance

• Adopted an Environmental, Social and Governance policy and we are working to providing enhanced disclosure on these initiatives.