Mr. Greg Morrison reports
TRISURA GROUP REPORTS 2018 SECOND QUARTER RESULTS
Trisura Group Ltd. has released its financial results for the second quarter of 2018.
Greg Morrison, chief executive officer of Trisura, stated: "Our Canadian business continues to demonstrate strong top-line growth and profitable underwriting. We are very pleased with the progress of our U.S. business, which received significant support from our distribution partners and the international reinsurance markets, resulting in gross premiums written of over $7-million in the second quarter of 2018, alongside an attractive pipeline of future opportunities. We look forward to continuing to develop across all business lines in the second half of the year."
Continued strong premium growth in Trisura's Canadian specialty P&C business, increasing gross premiums written by 18 per cent in both Q2 and YTD (year to date), driven by risk solutions and corporate insurance;
Significant progress of Trisura's U.S. platform, with $7.6-million of gross written premium;
Profitable underwriting in Trisura's Canadian business, producing a combined ratio of 92.5 per cent for second quarter of 2018 versus 83.5 per cent in Q2 2017 (and 88.3 per cent compared with 85.5 per cent on a YTD comparison) and driving a trailing-12-month return on equity (ROE) of 13.2 per cent in Canada;
- Consolidated net income of $1.0-million compared with net income of $1.8-million in Q2 2017. Q2 2018 was impacted by higher claims activity in Trisura's Canadian specialty P&C business and costs of building out the company's U.S. platform;
Basic and diluted earnings per share (EPS) of 14 cents for the quarter and 42 cents on a year-to-date basis;
Book value per share of $19.13, a 5.2-per-cent increase over past 12 months;
A.M. Best reaffirmed the financial strength rating of A minus (excellent) of Trisura Guarantee Insurance with stable outlook and increased the financial size category of Trisura Specialty's A minus (excellent) rating from VI to VII.
(in millions of Canadian dollars, except per-share amounts and as noted)
Q2 2018 Q2 2017 2018 YTD 2017 YTD
Gross premiums written $ 58.7 $ 43.3 $ 93.5 $ 72.0
Net premiums written 30.4 27.0 54.3 46.4
Net underwriting income 0.0 1.4 1.2 2.9
Net investment income 2.1 1.6 4.0 2.3
Net income (loss) 1.0 1.8 2.8 (2.3)
EPS -- basic and diluted ($) 0.14 0.05* 0.42 0.05*
Book value per share ($) 19.13 18.18 19.13 18.18
Debt-to-capital ratio 19.0% 22.3% 19.0% 22.3%
ROE trailing 12 months 4.1% NA 4.1% NA
Combined ratio -- Canadian specialty P&C 92.5% 83.5% 88.3% 85.5%
Canadian specialty P&C ROE --
trailing 12 months 13.2% 8.6% 13.2% 8.6%
* Following spinoff from Brookfield Asset Management Inc. on June 22, 2017.
Variance is not meaningful.
NA means not applicable.
Over $7-million of gross premiums written by Trisura's new U.S. specialty P&C business;
Trisura's Canadian specialty P&C business generated underwriting profits with a combined ratio of 92.5 per cent compared with 83.5 per cent in Q2 2017, with the increase mainly due to lower favourable prior-year claims development in Q2 2018.
The minimum capital test (MCT) ratio of Trisura's Canadian subsidiary was 227 per cent as at June 30, 2018 (242 per cent as at March 31, 2018), which comfortably exceeds regulatory requirements of 150 per cent. The reduction in MCT was due to a short-term collateral charge which is anticipated to reverse in Q3 2018.
The capital and surplus in Trisura's U.S. subsidiary of $65.1-million as at June 30, 2018, are well in excess of the $19.8-million minimum capital requirements of the Oklahoma Insurance Department.
- Trisura's international subsidiary had capital of $27.9-million as at June 30, 2018, which was well in excess of its regulatory capital requirement of $200,000.
Th consolidated-debt-to-capital ratio of 19.0 per cent as at June 30, 2018, is below Trisura's long-term target maximum of 20 per cent.
Net investment income of $2.1-million compared with $1.6-million in Q2 2017. Interest and dividend income was slightly higher in Q2 2018, as Trisura continued to benefit from the deployed U.S. portfolio. In Canada, investment income reflected a realized gain from the rebalancing of Trisura's preferred share portfolio.
Trisura continued to develop its in-house investment management capabilities, including implementation of portfolio administration systems.
About Trisura Group
Trisura is an international specialty insurance holding company operating in the surety, risk solutions, corporate insurance and reinsurance segments of the market. Trisura has three principal regulated subsidiaries: Trisura Guarantee Insurance Company in Canada; Trisura Specialty Insurance Company in the United States; and Trisura International Insurance Ltd. in Barbados. Trisura is listed on the Toronto Stock Exchange under the symbol TSU.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of Canadian dollars)
Q2 2018 Q2 2017 2018 YTD 2017 YTD
Gross premiums written $ 58,661 $ 43,336 $ 93,485 $ 71,951
Net premiums written 30,378 26,968 54,289 46,434
Net premiums earned 21,291 19,948 40,545 37,577
Fee income 403 128 3,679 3,057
Total underwriting revenue 21,694 20,076 44,224 40,634
Net claims (4,196) (3,072) (8,899) (7,337)
Net commissions (7,448) (6,256) (15,045) (12,888)
Premium taxes (1,126) (1,093) (2,062) (1,990)
Operating expenses (8,884) (8,227) (17,005) (15,562)
Net claims and expenses (21,654) (18,648) (43,011) (37,777)
Net underwriting income 40 1,428 1,213 2,857
Net investment income 2,079 1,593 3,989 2,337
Foreign exchange (losses) gains (207) 130 (324) 115
Interest expense (235) (263) (466) (539)
Change in minority interests - - - (5,158)
Income (loss) before income taxes 1,677 2,888 4,412 (388)
Income tax expense (693) (1,128) (1,565) (1,887)
Net income (loss) 984 1,760 2,847 (2,275)
Other comprehensive income (loss) 1,942 (3,436) 2,244 (2,671)
Comprehensive income (loss) 2,926 (1,676) 5,091 (4,946)
We seek Safe Harbor.
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