Trisura Group Ltd. (“Trisura” or “Trisura Group”) (TSX: TSU), a
leading specialty insurance provider, today announced financial
results for the second quarter of 2024.
David Clare, President and CEO of Trisura,
stated, “Q2 demonstrated strong performance with Operating net
income of $31.3 million, or $0.65 per share, driven by growth,
increased earnings from our US Programs platform and higher Net
investment income.
Insurance revenue growth of 16.2% was
significant, with continued momentum across our business. Our US
and Canadian platforms demonstrated disciplined underwriting,
supporting growing net income and a 19.6% operating ROE.
Net investment income grew 42.0% over Q2 2023,
reaching $16.9 million as we benefited from higher yields and a
larger investment portfolio.
Growth, strong earnings, and foreign exchange
gains lifted book value to over $695 million. In the quarter, we
added capital to our new surety balance sheet in the US and
continued the process of expanding licenses and rate fillings for
US Surety and Corporate Insurance. With a larger capital base,
greater financial flexibility following an increase in our
revolving credit facility and ample opportunities to grow, we
remain optimistic for the years ahead.”Financial
Highlights
- Insurance
revenue growth of 16.2% in Q2 2024 reflected sustained momentum
across North America.
- Net income of
$27.1 million in the quarter was comparable to Q2 2023 as Q2 2023
included certain one-time gains. Operating net income(1) of $31.3
million in the quarter grew 20.1% compared to Q2 2023, driven by
growth in core operations(2), growing earnings from US Programs and
higher Net investment income.
- EPS of $0.56 in
Q2 2024 was comparable to $0.57 in Q2 2023, as a result of growth
in the business, which was offset by one-time gains in Q2 2023.
Operating EPS(3) of $0.65 for the quarter compared to $0.56 in the
prior year, demonstrating the profitability of core operations
through continued growth, despite an increase in shares
outstanding.
- Book value per
share(4) of $14.56 increased 26.3% from June 30, 2023,
primarily the result of earnings from our Canadian platform, higher
Net investment income and the equity raise in Q3 2023.
- ROE(4) of 14.4%
compared to 4.9% in Q2 2023, demonstrating a return to our
mid-teens target despite the impact of the run-off program in 2023.
Operating ROE(5) of 19.6% continued to demonstrate the strength and
potential of the core platform.
Amounts in C$ millions |
Q2 2024 |
Q2 2023 |
Variance |
Q2 2024 YTD |
Q2 2023 YTD |
Variance |
Insurance revenue |
772.2 |
|
664.4 |
|
16.2 |
% |
1,516.5 |
|
1,303.5 |
|
16.3 |
% |
Net
income |
27.1 |
|
26.8 |
|
1.2 |
% |
63.6 |
|
40.8 |
|
55.9 |
% |
Operating
net income(1) |
31.3 |
|
26.0 |
|
20.1 |
% |
64.4 |
|
52.6 |
|
22.5 |
% |
EPS –
diluted, $ |
0.56 |
|
0.57 |
|
(1.8 |
%) |
1.31 |
|
0.87 |
|
50.6 |
% |
Operating
EPS – diluted, $(3) |
0.65 |
|
0.56 |
|
16.1 |
% |
1.33 |
|
1.13 |
|
17.7 |
% |
Book
value per share, $(4) |
14.56 |
|
11.53 |
|
26.3 |
% |
14.56 |
|
11.53 |
|
26.3 |
% |
Debt-to-Capital ratio(4) |
12.4 |
% |
12.4 |
% |
0.0pts |
12.4 |
% |
12.4 |
% |
0.0pts |
ROE(4) |
14.4 |
% |
4.9 |
% |
9.5pts |
14.4 |
% |
4.9 |
% |
9.5pts |
Operating
ROE(5) |
19.6 |
% |
19.2 |
% |
0.4pts |
19.6 |
% |
19.2 |
% |
0.4pts |
Operating
combined ratio - Trisura Specialty(6) |
87.5 |
% |
82.8 |
% |
4.7pts |
84.8 |
% |
81.8 |
% |
3.0pts |
Fronting operational ratio excluding certain non-recurring items –
Trisura US Programs(7) |
85.5 |
% |
79.9 |
% |
5.6pts |
85.2 |
% |
83.0 |
% |
2.2pts |
Insurance Operations
- Insurance
revenue from Trisura Specialty (previously referred to as Trisura
Canada) of $238.5 million increased by 21.3% compared to Q2 2023,
reflecting increased market share, expansion of distribution and
fronting relationships, and growth of US Surety. Strong
underwriting contributed to a loss ratio of 19.6%, a ROE of 28.4%
and Operating ROE of 27.5% in Q2 2024.
- Insurance
revenue from US Programs (previously referred to as Trisura US) of
$533.7 million in the quarter increased by 14.1%, compared to Q2
2023, reflecting favourable market conditions and maturation of
existing programs. Fee income(8) of $22.1 million in the quarter
increased by 16.7% compared to Q2 2023. Operating net income of
$13.5 million grew 20.9% and supported a 14.9% Operating ROE.
- Fronting
operational ratio increased as a result of a slightly higher loss
ratio and higher program retention which increases the fronting
operational ratio despite higher profitability.
Capital
- The Minimum
Capital Test ratio(9) of our regulated Canadian subsidiary was 267%
as at June 30, 2024 (251% as at December 31, 2023), which
comfortably exceeded regulatory requirements(10) of 150%.
- As at December
31, 2023, the Risk-Based Capital(11) of the regulated US insurance
companies were in excess of the various company action levels of
the states in which they are licensed.
- Consolidated
debt-to-capital ratio of 12.4% as at June 30, 2024 is below
our long-term target of 20.0%.
Investments
- Net investment
income rose 42.0% in the quarter compared to Q2 2023. The portfolio
benefited from higher risk-adjusted yields, increased capital
generated from strong operational performance and recent equity
raises.
Governance
- Appointed Sacha Haque to the
Company’s Board of Directors.
Earnings Conference Call
Trisura will host its Second Quarter Earnings
Conference Call to review financial results at 9:00a.m. ET on
Friday, August 2nd, 2024.
To listen to the call via live audio webcast,
please follow the link below:
https://edge.media-server.com/mmc/p/veywvknt
A replay of the call will be available through the link
above.
About Trisura Group
Trisura Group Ltd. is a specialty insurance
provider operating in the Surety, Risk Solutions, Corporate
Insurance, and Fronting business lines of the market. Trisura has
investments in wholly owned subsidiaries through which it conducts
insurance and reinsurance operations. Those operations are
primarily in Canada and the United States. Trisura Group Ltd. Is
listed on the Toronto Stock Exchange under the symbol “TSU”.
Further information is available at
http://www.trisura.com. Important information may be disseminated
exclusively via the website. Investors should consult the site to
access this information. Details regarding the operations of
Trisura Group Ltd. are also set forth in regulatory filings. A copy
of the filings may be obtained on Trisura Group’s SEDAR+ profile at
www.sedarplus.ca.
For more information, please contact:Name: Bryan
SinclairTel: 416 607 2135Email:
bryan.sinclair@trisura.com
Trisura Group Ltd.Condensed Interim
Consolidated Statements of Financial PositionAs at
June 30, 2024 and December 31, 2023(in
thousands of Canadian dollars, except as otherwise
noted) |
As at |
June 30, 2024 |
December 31, 2023 |
Cash and cash equivalents |
405,590 |
604,016 |
Investments |
1,087,756 |
890,157 |
Other
assets |
32,539 |
53,712 |
Reinsurance contract assets |
2,329,410 |
2,003,589 |
Capital
assets and intangible assets |
29,496 |
16,657 |
Deferred tax assets |
34,602 |
16,314 |
Total assets |
3,919,393 |
3,584,445 |
Insurance contract liabilities |
2,978,858 |
2,769,951 |
Other
liabilities |
147,081 |
120,065 |
Loan payable |
98,268 |
75,000 |
Total liabilities |
3,224,207 |
2,965,016 |
Shareholders' equity |
695,186 |
619,429 |
Total liabilities and shareholders' equity |
3,919,393 |
3,584,445 |
Trisura Group Ltd.Condensed Interim
Consolidated Statements of Comprehensive IncomeFor
the three and six months ended June 30(in
thousands of Canadian dollars, except as otherwise
noted) |
|
Q2 2024 |
Q2 2023 |
Q2 2024 YTD |
Q2 2023 YTD |
Insurance revenue |
772,249 |
|
664,420 |
|
1,516,515 |
|
1,303,520 |
|
Insurance
service expenses |
(582,657 |
) |
(567,217 |
) |
(1,163,597 |
) |
(1,067,660 |
) |
Net expense from reinsurance contracts assets |
(158,187 |
) |
(57,491 |
) |
(286,065 |
) |
(179,433 |
) |
Insurance service result |
31,405 |
|
39,712 |
|
66,853 |
|
56,427 |
|
Operating insurance service result
(12) |
34,621 |
|
33,083 |
|
73,783 |
|
64,489 |
|
Net investment income |
16,902 |
|
11,899 |
|
33,655 |
|
21,970 |
|
Net gains
(losses) |
462 |
|
(6,867 |
) |
12,738 |
|
(9,082 |
) |
Net credit impairment (losses) reversals |
(150 |
) |
376 |
|
(1,980 |
) |
227 |
|
Total investment income |
17,214 |
|
5,408 |
|
44,413 |
|
13,115 |
|
Finance expenses from insurance contracts |
(5,493 |
) |
(10 |
) |
(42,151 |
) |
(36,638 |
) |
Finance income (expenses) from reinsurance contracts |
3,894 |
|
(277 |
) |
36,694 |
|
31,625 |
|
Net insurance finance expenses |
(1,599 |
) |
(287 |
) |
(5,457 |
) |
(5,013 |
) |
Net financial result |
15,615 |
|
5,121 |
|
38,956 |
|
8,102 |
|
Net insurance and financial result |
47,020 |
|
44,833 |
|
105,809 |
|
64,529 |
|
Other income |
837 |
|
902 |
|
6,182 |
|
6,080 |
|
Other
operating expenses |
(10,060 |
) |
(10,075 |
) |
(25,072 |
) |
(15,507 |
) |
Other finance costs |
(711 |
) |
(601 |
) |
(1,325 |
) |
(1,201 |
) |
Income before income taxes |
37,086 |
|
35,059 |
|
85,594 |
|
53,901 |
|
Income tax expense |
(9,945 |
) |
(8,252 |
) |
(22,020 |
) |
(13,118 |
) |
Net income |
27,141 |
|
26,807 |
|
63,574 |
|
40,783 |
|
Operating net income |
31,253 |
|
26,032 |
|
64,441 |
|
52,602 |
|
Other comprehensive income (loss) |
3,370 |
|
(9,871 |
) |
12,309 |
|
(3,950 |
) |
Comprehensive income |
30,511 |
|
16,936 |
|
75,883 |
|
36,833 |
|
Trisura Group Ltd.Condensed Interim
Consolidated Statements of Cash FlowsFor the three
and six months ended June 30(in thousands of
Canadian dollars, except as otherwise noted) |
|
Q2 2024 |
Q2 2023 |
Q2 2024 YTD |
Q2 2023 |
Net income |
27,141 |
|
26,807 |
|
63,574 |
|
40,783 |
|
Non-cash
items |
770 |
|
3,001 |
|
(5,614 |
) |
8,233 |
|
Change in
working capital |
(245,619 |
) |
(35,293 |
) |
(85,549 |
) |
(36,339 |
) |
Realized
losses |
393 |
|
196 |
|
723 |
|
441 |
|
Income
taxes paid |
(9,620 |
) |
(3,836 |
) |
(13,676 |
) |
(7,673 |
) |
Interest paid |
(1,179 |
) |
(1,112 |
) |
(1,294 |
) |
(1,239 |
) |
Net cash (used in) from operating activities |
(228,114 |
) |
(10,237 |
) |
(41,836 |
) |
4,206 |
|
Proceeds on disposal of investments |
86,391 |
|
21,378 |
|
124,759 |
|
52,979 |
|
Purchases
of investments |
(112,680 |
) |
(45,781 |
) |
(292,316 |
) |
(125,768 |
) |
Acquisition of subsidiary |
- |
|
- |
|
(15,015 |
) |
- |
|
Net purchases of capital and intangible assets |
(1,966 |
) |
(230 |
) |
(2,498 |
) |
(407 |
) |
Net cash used in investing activities |
(28,255 |
) |
(24,633 |
) |
(185,070 |
) |
(73,196 |
) |
Shares issued |
1,244 |
|
- |
|
2,579 |
|
711 |
|
Shares
purchased under Restricted Share Units plan |
(126 |
) |
(801 |
) |
(3,202 |
) |
(1,670 |
) |
Loans
received |
23,268 |
|
- |
|
23,268 |
|
- |
|
Lease payments |
(544 |
) |
(510 |
) |
(1,130 |
) |
(1,022 |
) |
Net cash from (used in) financing activities |
23,842 |
|
(1,311 |
) |
21,515 |
|
(1,981 |
) |
Net decrease in cash and cash equivalents, during the
period |
(232,527 |
) |
(36,181 |
) |
(205,391 |
) |
(70,971 |
) |
Cash and
cash equivalents, beginning of period |
636,186 |
|
368,210 |
|
604,016 |
|
406,367 |
|
Currency translation |
1,931 |
|
8,796 |
|
6,965 |
|
5,429 |
|
Cash and cash equivalents, end of period |
405,590 |
|
340,825 |
|
405,590 |
|
340,825 |
|
Non-IFRS Financial Measures and other Financial
Measures
Table 1 – Reconciliation of reported Net
income to Operating net
income(4): reflect Net
income, adjusted for certain items to normalize earnings to core
operations in order to reflect our North American specialty
operations.
|
Q2 2024 |
Q2 2023 |
Q2 2024 YTD |
Q2 2023 YTD |
Net income |
27,141 |
|
26,807 |
|
63,574 |
|
40,783 |
|
Adjustments: |
|
|
|
|
Non-recurring items |
3,874 |
|
(6,629 |
) |
7,588 |
|
8,062 |
|
Impact of share based compensation |
393 |
|
1,815 |
|
3,316 |
|
(1,555 |
) |
Impact of movement in yield curve within Finance income from
insurance and reinsurance contracts |
(23 |
) |
(2,314 |
) |
(459 |
) |
(144 |
) |
Net (gains) losses |
(462 |
) |
6,867 |
|
(12,738 |
) |
9,082 |
|
Net credit impairment losses (reversals) |
150 |
|
(376 |
) |
1,980 |
|
(227 |
) |
Tax impact of above items, and other tax adjustments |
180 |
|
(138 |
) |
1,180 |
|
(3,399 |
) |
Operating net income |
31,253 |
|
26,032 |
|
64,441 |
|
52,602 |
|
Table 2 –
ROE(4) and Operating
ROE(5): a measure of the Company’s use of
equity.
|
Q2 2024 |
Q2 2023 |
LTM net income |
89,732 |
|
24,297 |
|
LTM average equity |
622,991 |
|
497,777 |
|
ROE |
14.4 |
% |
4.9 |
% |
Operating LTM net income(5) |
122,040 |
|
95,629 |
|
LTM average equity |
622,991 |
|
497,777 |
|
Operating LTM ROE |
19.6 |
% |
19.2 |
% |
Table 3 – Reconciliation of Average
equity(13) to LTM average
equity: LTM average equity is used in calculating
Operating ROE.
|
Q2 2024 |
Q2 2023 |
Average equity |
612,433 |
448,341 |
Adjustments: days in quarter proration |
10,558 |
49,436 |
LTM average equity |
622,991 |
497,777 |
Footnotes
(1) See section on Non-IFRS financial measures
table 10.2.1 in Q2 2024 MD&A for details on composition.
Operating net income is a non-IFRS financial measure. Non-IFRS
financial measures are not standardized financial measures under
the financial reporting framework used to prepare the financial
statements of the Company to which the measure relates and might
not be comparable to similar financial measures disclosed by other
companies. Details and an explanation of how it provides useful
information to an investor can be found in the Q2 2024 MD&A,
Section 10, Operating Metrics table.
(2) See Section 10, Operating Metrics in Q2 2024
MD&A for the definition of Operating Net Income, and for
further explanation of “core operations”.
(3) This is a non-IFRS ratio. Non-IFRS ratios
are not standardized under the financial reporting framework used
to prepare the financial statements of the Company to which the
ratio relates and might not be comparable to similar ratios
disclosed by other companies. Details on composition and an
explanation of how it provides useful information to an investor
can be found in the Q2 2024 MD&A, Section 10, table 10.2.
(4) This is a supplementary financial measure.
Refer to Q2 2024 MD&A, Section 10, Operating Metrics table for
its composition.
(5) This is a non-IFRS ratio. See table 10.4 in
Q2 2024 MD&A for details on composition, as well as each
non-IFRS financial measure used as a component of ratio, and an
explanation of how it provides useful information to an
investor.
(6) This is a non-IFRS ratio. Refer to Q2 2024
MD&A, Section 10, Operating Metrics table for its composition.
Operating combined ratio excludes the impact of certain items to
normalize results in order to reflect our Trisura Specialty
operations.
(7) This is a non-IFRS ratio and excludes the
impact of the 2023 run-off program.
(8) This is a non-IFRS financial measure. See
table 10.5.4 in Q2 2024 MD&A for details on composition.
(9) This measure is calculated in accordance
with the Office of the Superintendent of Financial Institutions
Canada’s (OSFI’s) Guideline A, Minimum Capital Test.
(10) This target is in accordance with OSFI’s
Guideline A-4, Regulatory Capital and Internal Capital Targets.
(11) This measure is calculated in accordance with the National
Association of Insurance Commissioners, Risk Based Capital for
Insurers Model Act.
(12) This is a non-IFRS financial measure. Refer Q2 2024
MD&A, Section 10, Operating Metrics table for details on its
composition and an explanation of how it provides useful
information to an investor.
(13) Average equity is calculated as the sum of
opening equity and closing equity over the last twelve months,
divided by two.
Cautionary Statement Regarding
Forward-Looking Statements and Information
Note: This news release contains
“forward-looking information” within the meaning of Canadian
provincial securities laws and “forward-looking statements” within
the meaning of applicable Canadian securities legislation.
Forward-looking statements include statements that are predictive
in nature, depend upon or refer to future events or conditions,
include statements regarding operations, business, financial
condition, expected financial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives,
strategies and outlook of our Company and its subsidiaries, as well
as the outlook for North American and international economies for
the current fiscal year and subsequent periods, and include words
such as “expects,” “likely,” “anticipates,” “plans,” “believes,”
“estimates,” “seeks,” “intends,” “targets,” “projects,”
“forecasts”, “potential” or negative versions thereof and other
similar expressions, or future or conditional verbs such as “may,”
“will,” “should,” “would” and “could”.
Although we believe that our anticipated future
results, performance or achievements expressed or implied by the
forward-looking statements and information are based upon
reasonable assumptions and expectations, the reader should not
place undue reliance on forward-looking statements and information
because they involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control, which may
cause the actual results, performance or achievements of our
Company to differ materially from anticipated future results,
performance or achievement expressed or implied by such
forward-looking statements and information.
Factors that could cause actual results to
differ materially from those contemplated or implied by
forward-looking statements include, but are not limited to: the
impact or unanticipated impact of general economic, political and
market factors in the countries in which we do business; the
behaviour of financial markets, including fluctuations in interest
and foreign exchange rates; global equity and capital markets and
the availability of equity and debt financing and refinancing
within these markets; insurance risks including pricing risk,
concentration risk and exposure to large losses, and risks
associated with estimates of loss reserves; strategic actions
including dispositions; the ability to complete and effectively
integrate acquisitions into existing operations and the ability to
attain expected benefits; changes in accounting policies and
methods used to report financial condition (including uncertainties
associated with critical accounting assumptions and estimates); the
ability to appropriately manage human capital; the effect of
applying future accounting changes; business competition;
operational and reputational risks; technological change; changes
in government regulation and legislation within the countries in
which we operate; governmental investigations; litigation; changes
in tax laws; changes in capital requirements; changes in
reinsurance arrangements and availability and cost of reinsurance;
ability to collect amounts owed; catastrophic events, such as
earthquakes, hurricanes or pandemics; the possible impact of
international conflicts and other developments including terrorist
acts and cyberterrorism; risks associated with reliance on
distribution partners, capacity providers and program
administrators; third party risks; risk that models used to manage
the business do not function as expected; climate change risk; risk
of economic downturn; risk of inflation; risks relating to
cyber-security; risks relating to credit ratings; and other risks
and factors detailed from time to time in our documents filed with
securities regulators in Canada.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. When
relying on our forward-looking statements and information,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. Except as
required by law, our Company undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether written or oral, that may be as a result of new
information, future events or otherwise.
Cautionary Non-IFRS and Other Financial
Measures
Reported results conform to generally accepted
accounting principles (GAAP), in accordance with IFRS. In addition
to reported results, our Company also presents certain financial
measures, including non-IFRS financial measures that are
historical, non-IFRS ratios, and supplementary financial measures,
to assess results. Non-IFRS financial measures, such as operating
net income, are utilized to assess the Company’s overall
performance. To arrive at operating results, our Company adjusts
for certain items to normalize earnings to core operations, in
order to reflect our North American specialty operations. Non-IFRS
ratios include a non-IFRS financial measure as one or more of its
components. Examples of non-IFRS ratios include operating diluted
earnings per share and operating ROE. The Company believes that
non-IFRS financial measures and non-IFRS ratios provide the reader
with an enhanced understanding of our results and related trends
and increase transparency and clarity into the core results of the
business. Non-IFRS financial measures and non-IFRS ratios are not
standardized terms under IFRS and, therefore, may not be comparable
to similar terms used by other companies. Supplementary financial
measures depict the Company’s financial performance and position,
and are explained in this document where they first appear, and
incorporates information by reference to our Company’s current
MD&A, for the three and six months ended June 30, 2024. To
access MD&A, see Trisura’s website or SEDAR+ at
www.sedarplus.ca. These measures are pursuant to National
Instrument 52-112 Non-GAAP and Other Financial Measures
Disclosure.
Trisura (TSX:TSU)
過去 株価チャート
から 8 2024 まで 9 2024
Trisura (TSX:TSU)
過去 株価チャート
から 9 2023 まで 9 2024