Q1 2026 Trisura Group Ltd Earnings Call

May 8, 2026

Speaker #1: Good morning. Welcome to Trisura Group Limited. First quarter 2026 earnings conference call. On the call today are David Clare, Chief Executive Officer; and David Scotland, Chief Financial Officer.

Operator: Good morning. Welcome to Trisura Group Ltd. Q1 2026 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 US securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements.

Operator: Good morning. Welcome to Trisura Group Ltd Q1 2026 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 US securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements.

Speaker #1: David Clare, we'll 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.

Speaker #1: 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 US securities law.

Speaker #1: These statements reflect predictions of future events and trends and do not relate to historic events. They are subject to known and unknown risks, and future events and results may differ materially from such statements.

Speaker #1: For further information, on these risks and their potential impacts, please see Trisura's filings with this securities regulators. To ask a question, please press star 11 on your telephone.

Operator: For further information on these risks and their potential impacts, please see Trisura's filings with the securities regulators. To ask a question, please press star one one on your telephone. Thank you. I'll now turn the call over to David Clare.

Speaker #1: Thank you. I'll now turn the call over to David Clare.

Speaker #2: Thank you, Daniel. Good morning, everyone, and welcome. We had a strong start to the year, extending consistent execution and momentum for 2025, underpinned by quality underwriting and a customer-focused approach.

David Clare: Thank you, Daniel. Good morning, everyone, and welcome. We had a strong start to the year, extending consistent execution and momentum for 2025, underpinned by quality underwriting and a customer-focused approach. This was our best Q1 operating net earnings in our history, demonstrative of our ability to grow profitably through expansion. Underwriting performance was robust, with an 84% combined ratio and book value per share growth over 16%, approaching CAD 20 per share. Our evolution continues, writing proportionally more primary lines business with attractive, durable margins as we expand in both established and de novo segments. Primary lines, Surety, Corporate Insurance, and Warranty remain our foundation, growing 13% in the quarter. Surety grew 14% on a constant currency basis, with success in Canadian contract Surety and continued momentum in our US expansion.

Speaker #2: This is our best Q1 operating net earnings in our history, demonstrative of our ability to grow profitably through expansion. Underwriting performance was robust, with an 84% combined ratio and book value per share growth over 16%, approaching $20 per share.

Speaker #2: Our evolution continues, writing proportionally more primary lines business with attractive, durable margins as we expanded both established and de novo segments. Primary lines, surety, corporate insurance, and warranty remain our foundation, growing 13% in the quarter.

Speaker #2: Surety grew 14% on a constant currency basis, with success in Canadian contract surety and continued momentum in our US expansion. We made meaningful progress in our US licensing, receiving approvals in five states, including Florida most recently, one of the most active construction and infrastructure markets in the US.

David Clare: We made meaningful progress in our US licensing, receiving approvals in 5 states, including Florida most recently, one of the most active construction and infrastructure markets in the US. We continue to pursue 5 remaining state licenses and expect our expanding footprint to support growth. Corporate Insurance demonstrated consistent growth and improved profitability despite a softer market, with GPW increasing over 5% and underwriting income nearly doubling, supported by a strong loss ratio and improved operational leverage in our US practice. Progress in US Corporate Insurance follows the approach proven in Surety, expanding in areas we know well and attracting experienced talent supported by a centralized head office. We are seeing signs of momentum, with Q1 premiums in US Corporate Insurance exceeding full year 2025. While still early stage, this platform is expected to contribute meaningfully to profitability and scale over time.

Speaker #2: We continue to pursue five remaining state licenses and expect our expanding footprint to support growth. Corporate insurance demonstrated consistent growth and improved profitability despite a softer market.

Speaker #2: With GPW increasing over 5% and underwriting income nearly doubling, supported by a strong loss ratio and improved operational leverage in our US practice. Progress in US corporate insurance follows the approach proven in surety, expanding in areas we know well and attracting experienced talent, supported by a centralized head office.

Speaker #2: We are seeing signs of momentum, with Q1 premiums in US corporate insurance exceeding full year 2025. While still early stage, this platform is expected to contribute meaningfully to profitability and scale over time.

Speaker #2: Warranty net insurance revenue increased 19%, reflecting the maturation and expansion of existing programs, after a strong 2025. U.S. program premium growth of 11% and net insurance revenues growth of 37% were strong, reflecting contributions from existing and new programs, as well as the backdrop of a more supportive reinsurance market.

David Clare: Warranty net insurance revenue increased 19%, reflecting the maturation and expansion of existing programs after a strong 2025. US program premium growth of 11% and net insurance revenues growth of 37% were strong, reflecting contributions from existing and new programs, as well as the backdrop of a more supportive reinsurance market. We achieved an 80% combined ratio, benefiting from consistent performance and continued investment in infrastructure. Our scale, permanent capital, and diversification increasingly position Trisura as a preferred long-term partner for strong, profitability-focused MGAs. Canadian fronting underwriting income was steady at about CAD 5 million, despite pressure from a softening market. We expect decreased premium this year in Canadian fronting but remain committed to the line and its potential to contribute to growth and profitability over the long term.

Speaker #2: We achieved an 80% combined ratio, benefiting from consistent performance and continued investment in infrastructure. Our scale, permanent capital, and diversification increasingly position Trisura as a preferred long-term partner for strong, profitability-focused MGAs.

Speaker #2: Canadian front-end underwriting income was steady at about $5 million. Despite pressure from a softening market, we expect decreased premium this year in Canadian front-end but remain committed to the line and its potential to contribute to growth and profitability over the long term.

Speaker #2: We continue to onboard new partners selectively, building a pipeline that we expect will increasingly support GPW over the coming quarters. Investment income grew 16.5% to $21.2 million in the quarter, driven by ongoing contributions to the portfolio and mitigated by some seasonality and FX impacts.

David Clare: We continue to onboard new partners selectively, building a pipeline that we expect will increasingly support GPW over the coming quarters. Investment income grew 16.5% to CAD 21.2 million in the quarter, driven by ongoing contributions to the portfolio and mitigated by some seasonality and FX impacts. Defending yield and positioning the portfolio constructively through a period of elevated volatility was a key focus in the quarter. The portfolio remains conservatively positioned, ready to take advantage of market dislocation as attractive opportunities arise. The completion of our CAD 200 million senior unsecured notes offering in March was a meaningful milestone. It represents our largest capital raise to date and refinanced existing indebtedness, extending our maturity profile and strengthened the balance sheet in preparation for future investment. This was executed well by the team despite geopolitical volatility.

Speaker #2: Defending yield and positioning the portfolio constructively through a period of elevated volatility was a key focus in the quarter. The portfolio remains conservatively positioned, ready to take advantage of market dislocation as attractive opportunities arise.

Speaker #2: The completion of our $200 million senior unsecured notes offering in March was a meaningful milestone. It represents our largest capital raise to date and refinanced existing indebtedness, extending our maturity profile and strengthened the balance sheet in preparation for future investment.

Speaker #2: This was executed well by the team, despite geopolitical volatility. Trisura has scaled meaningfully, and we believe the opportunity ahead is significant. We remain committed to the pursuit of profitable growth through expansion of our primary lines and curation of a diverse, high-quality portfolio of programs in front of business.

David Clare: Trisura has scaled meaningfully, and we believe the opportunity ahead is significant. We remain committed to the pursuit of profitable growth through expansion of our primary lines and curation of a diverse, high-quality portfolio of programs and fronted business. Above average underwriting profitability, combined with enhanced investment income, is expected to drive consistent increases in shareholders' equity. Expansion into the US builds on two decades of disciplined underwriting. As the platform matures, we expect them to equal or exceed the earnings contribution of their Canadian counterparts. The significance and profitability of our US Surety platform and early momentum realized in US Corporate Insurance this quarter lends credibility to the attractiveness of our geographic expansion. As we navigate the balance of 2025, our operating priorities remain consistent, scaling profitably in primary lines, expanding deliberately in the US, and maintaining the discipline that has underpinned our track record.

Speaker #2: Above average underwriting profitability, combined with enhanced investment income, is expected to drive consistent increases in shareholders' equity. Expansion into the US builds on two decades of disciplined underwriting.

Speaker #2: As the platform matures, we expect them to equal or exceed the earnings contribution of their Canadian counterparts. The significance and profitability of our U.S. surety platform, and early momentum realized in U.S. corporate insurance this quarter, lends credibility to the attractiveness of our geographic expansion.

Speaker #2: As we navigate the balance of 2025, our operating priorities remain consistent: scaling profitably in primary lines, expanding deliberately in the US, and maintaining the discipline that is underpinned our track record.

Speaker #2: The structural tailwinds supporting surety remain intact, and we are confident in our ability to replicate our success in corporate insurance. Primary lines continue to grow at attractive margins and investment income is adding meaningfully to earnings quality and predictability.

David Clare: The structural tailwinds supporting Surety remain intact, and we are confident in our ability to replicate our success in Corporate Insurance. Primary lines continue to grow at attractive margins and investment income is adding meaningfully to earnings quality and predictability. Volatility creates opportunities to demonstrate consistent insurance appetite, invest opportunistically and strengthen our reputation. With the strongest capital base in our history and a platform that continues to scale, we are optimistic about the years ahead. With that, I'd like to turn it over to David Scotland for a more detailed review of financial results.

Speaker #2: Volatility creates opportunities to demonstrate consistent insurance appetite, invest opportunistically, and strengthen our reputation. With the strongest capital base in our history and a platform that continues to scale, we are optimistic about the years ahead.

Speaker #2: With that, I'd like to turn it over to David Scotland for a more detailed review of financial results.

David Scotland: Thanks, David. I'll now provide a walkthrough of financial results for the quarter. Operating EPS was CAD 0.78 per share for the quarter, up 11%, contributing to strong Operating ROE of 17%, comfortably above our mid-teens target. Gross premiums written was CAD 730 million for the quarter, reflecting continued disciplined growth. US programs grew by 11% in the quarter, demonstrating continued growth, while Surety delivered strong growth of 13.8% in the quarter. Surety performance reflects ongoing strength in Canada and continued momentum in our US platform, supported by distribution expansion and additional state licensing. During the quarter, we advanced our US build-out, reaching 45 licensed states in our Treasury-listed entity, with recent additions including Illinois, Pennsylvania, Georgia, Florida, and Washington State.

Speaker #1: Thanks, David. I'll now provide a walkthrough of financial results for the quarter. Operating EPS was 78 cents per share for the quarter, up 11%, contributing to strong operating return and equity of 17%, comfortably above our mid-teens target.

Speaker #1: Gross premiums written was $730 million for the quarter, reflecting continued disciplined growth. US programs grew by 11% in the quarter, demonstrating continued growth while surety delivered strong growth of 13.8% in the quarter.

Speaker #1: Surety performance reflects ongoing strength in Canada and continued momentum in our US platform, supported by distribution expansion and additional state licensing. During the quarter, we advanced our US buildout, reaching $45 licensed states and our treasury-listed entity, with recent additions including Illinois, Pennsylvania, Georgia, Florida, and Washington State.

Speaker #1: We continue to see strong partner engagement and are progressing towards scale, with Trisura ranked among the top 30 U.S. surety writers. We expect to support this growth with continued, measured capital deployment into the platform over time.

David Scotland: We continue to see strong partner engagement and are progressing towards scale, with Trisura ranked among the top 30 US surety writers. We expect to support this growth with continued measured capital deployment into the platform over time. Net insurance revenue, broadly consistent with net premiums earned, was CAD 193 million for the quarter, reflecting solid growth of 12% over the prior year. This disciplined approach to growth is reflected in strong underwriting performance, with a combined ratio of 84% in the quarter. The loss ratio in the quarter remained solid within our expectations. The increase compared to the prior year reflects a particularly strong Q1 2025 in US programs. The expense ratio was consistent with the prior year and within our expectations for the quarter. Underwriting income increased modestly in the quarter, reflecting business growth partially offset by a slightly higher loss ratio.

Speaker #1: Net insurance revenue broadly consistent with net premiums earned was $193 million for the quarter, reflecting solid growth of 12% over the prior year. This disciplined approach to growth is reflected in strong underwriting performance with a combined ratio of 84% in the quarter.

Speaker #1: The loss ratio in the quarter remained solid, within our expectations. The increase compared to the prior year reflects a particularly strong Q1, 2025, in US programs.

Speaker #1: The expense ratio was consistent with the prior year and within our expectations for the quarter. Underwriting income increased modestly in the quarter, reflecting business growth, partially offset by slightly higher loss ratio.

Speaker #1: Underwriting performance continues to support our mid-teens operating ROE objectives. Net investment income of $21.2 million increased by 16% in the quarter, driven by new cash deployment to the investment portfolio.

David Scotland: Underwriting performance continues to support our mid-teens operating ROE objectives. Net investment income of CAD 21.2 million increased by 16% in the quarter, driven by new cash deployment to the investment portfolio. Our operating effective tax rate was 23% for the quarter, reflecting the composition of taxable income between Canada and the United States. Overall, operating net income was CAD 37.9 million for the quarter, reflecting consistently profitable underwriting and growing net investment income. Non-operating results in the quarter primarily consisted of favorable movement in the yield curve in the period, partially offset by unrealized losses on the investment portfolio. Exited lines had an immaterial impact to net income for the quarter. Strong earnings per share contributed to a 2.6% increase in book value for the quarter, resulting in a book value per share of CAD 19.91 at 31 March.

Speaker #1: Our operating effective tax rate was 23% for the quarter, reflecting the composition of taxable income between Canada and the United States. Overall, operating net income was $37.9 million for the quarter, reflecting consistently profitable underwriting and growing net investment income.

Speaker #1: Non-operating results in the quarter primarily consisted of favorable movement in the yield curve in the period, partially offset by unrealized losses on the investment portfolio.

Speaker #1: Exit lines had an immaterial impact to net income for the quarter. Strong earnings per share contributed to a 2.6% increase in book value for the quarter, resulting in a book value per share of $19.91 at March 31st.

Speaker #1: This was partly offset by unrealized losses booked through other comprehensive income on the fixed income portfolio, driven by higher interest rates. Book value has grown at an average rate of 26% over the past five years, ending the quarter just under $950 million.

David Scotland: This was partly offset by unrealized losses booked through other comprehensive income on the fixed income portfolio, driven by higher interest rates. Book value has grown at an average rate of 26% over the past five years, ending the quarter just under CAD 950 million. We are well on track to achieve our book value target of CAD 1 billion by the end of 2027. We successfully completed a CAD 200 million Senior unsecured notes offering in March, our largest issuance to date and a meaningful step in the evolution of our capital structure. The issuance was well supported by the market and executed on attractive terms, enhancing financial flexibility while maintaining a conservative debt-to-capital ratio of 17%, well below our target of 25%. The company remains well capitalized with capacity to meet regulatory requirements and support growth.

Speaker #1: We are well on track to achieve our book value target of $1 billion by the end of 2027. We successfully completed a $200 million senior unsecured notes offering in March, our largest issuance to date and a meaningful step in the evolution of our capital structure.

Speaker #1: The issuance was well supported by the market and executed on attractive terms, enhancing financial flexibility while maintaining a conservative debt-to-capital ratio of 17%, well below our target of 25%.

Speaker #1: The company remains well capitalized, with capacity to meet regulatory requirements and support growth. As we progressed through 2026, our diversified specialty platform, disciplined underwriting approach, and strong capital position enhanced by our recent debt issuance provide a solid foundation for continued profitable growth.

David Scotland: As we progress through 2026, our diversified specialty platform, disciplined underwriting approach, and strong capital position, enhanced by our recent debt issuance, provide a solid foundation for continued profitable growth. David, I'll now turn things back over to you.

Speaker #1: David, I'll now turn things back over to you.

Speaker #2: Thanks, Dave. Operator, we would now take questions.

David Clare: Thanks, Dave. Operator, we will now take questions.

Speaker #3: As a reminder, to ask a question, please press star 11 on your telephone. And wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: In the interest of time, we ask that you please limit yourself to one question and one follow-up. You may rejoin the queue with any additional questions. Please stand by while we compile the Q&A roster. Our first question comes from Doug Young with Desjardins. Your line is open.

Speaker #3: In the interest of time, we ask that you please limit yourself to one question and one follow-up. You may rejoin the queue with any additional questions.

Speaker #3: Please stand by while we compile the Q&A roster. Our first question comes from Doug Young with Day Garden. Your line is open.

Doug Young: Hi, good morning. David Clare, can you quantify or maybe talk about the level of US Surety written premium this quarter and put the growth in perspective as of the quarter, but also as you talked about, you received five new state licenses. I'm hoping you can kinda just maybe talk or put in perspective what level of premiums like we could or should expect over the coming year or few years, or just some context as to what those five new states and Florida sounds like in particular could mean for the business.

Speaker #4: Hi. Good morning. Dave, can you quantify or maybe talk about the level of US surety written premium this quarter and put the growth in perspective as of the quarter, but also as you talked about your received five new state licenses, and hoping you can kind of just maybe talk or put in perspective what level of premiums we could or should expect over the coming year or few years, or just some context as to what that what those five new states in Florida sounds like in particular could mean for the business.

Speaker #2: Thanks, Doug. Our mix of business in surety on a North American basis is pretty consistent with recent quarters. So about that 55% Canadian/45% US split, that growth over the last year has grown faster in the US than Canada, and we can provide maybe some more detailed comments to that in the coming quarters.

David Clare: Thanks, Doug. Our mix of business in Surety on a North American basis is pretty consistent with recent quarters, about that 55% Canadian, 45% US split. That growth over the last year has grown faster in the US than Canada. We can provide maybe some more detailed comment to that in the coming quarters. If we think about the states that we've brought on, you're right, Florida's a very significant one, the others are not insignificant as well. I think our guidance at this stage or expectation for premium growth through this year is not changing meaningfully. That mid-teens expectation for growth, I think is still a good anchor for you to think of. Our confidence in that level and potentially outperforming that level is increasing.

Speaker #2: If we think about the states that we've brought on, you're right. Florida's a very significant one, although the others are not insignificant as well.

Speaker #2: I think our guidance at this stage, our expectation for premium growth through this year is not changing meaningfully. That mid-teens expectation for growth, I think, is still a good anchor for you to think of.

Speaker #2: Our confidence in that level and potentially outperforming that level is increasing, although I'd like to see how the businesses perform as we onboard our capabilities in those states.

David Clare: Although I'd like to see how the businesses perform as we onboard our capabilities in those states. For now, I'd stick with the mid-teens expectation for growth. As we work through the rest of the year, we'll see how the platform navigates our launches into these states.

Speaker #2: For now, I'd stick with the mid-teens expectation for growth. And as we work through the rest of the year, we'll see how the platform navigates our launches into these states.

Speaker #4: And just to follow up on that, is the profitability or the underwriting profit that we see in surety, is it pretty evenly split between Canada and the US as well?

Doug Young: Just to follow up on that, is the profitability or the underwriting profit, you know, that we see in Surety, is it pretty evenly split between Canada and the US as well?

Speaker #2: The combined ratio is in both entities very comparable. So the profitability is following that similar proportional breakdown.

David Clare: The combined ratios in both entities are very comparable. The profitability is following that similar proportional breakdown.

Speaker #4: Okay. And then just second, on the US corporate insurance, it sounds like we're at that J-curve point where growth should quite accelerate quite a bit.

Doug Young: Okay. Then just second, on the US Corporate Insurance, it sounds like we're at that J-curve point where growth should quite, you know, accelerate quite a bit. You know, you've done a lot of the hard work, got the license, got the broker relationships, I believe. You can correct me if I'm wrong. Can you put what this, you know, what the growth could be in perspective? You know, we typically think of when you launch something, it takes 2 to 3 or sorry, 3 to 5 years to kind of reach underwriting profit. You did it faster in Surety.

Speaker #4: You've done a lot of the hard work, got the license, got the broker relationships. I believe you can correct me if I'm wrong, but can you put what this what the growth could be in perspective and we typically think of when you launch something, it takes two to three or, sorry, three to five years to kind of reach underwriting profit.

Speaker #4: You did it faster in surety. Maybe you can kind of give context as to what your expectation would be for that US corporate insurance business, because I do think it's still you can correct me if I'm wrong, a bit of a drag on underwriting profit currently.

Doug Young: Maybe you can kind of give context as to what your expectation would be for that US Corporate Insurance business, because I do think it's still, you can correct me if I'm wrong, a bit of a drag on underwriting profit currently.

David Clare: You're right. On your last point, there is still a drag from our build of that US Corporate Insurance business. That's likely expected for the next couple quarters, although I will acknowledge the underwriting profitability was quite a bit stronger in Corporate Insurance as a whole, partly because that drag has improved somewhat. I would say in total, our Corporate Insurance growth, we still expect as an overall unit to be in that sort of low, high single to low teens level for the year. Part of that is gonna benefit from some onboarding of new growth in that US Corporate Insurance platform.

Speaker #2: You're right. So on your last point, there is still a drag from our build of that US corporate insurance business. That's likely expected for the next couple of quarters.

Speaker #2: Although I will acknowledge the underwriting profitability was quite a bit stronger in corporate insurance as a whole, partly because that drag has improved somewhat.

Speaker #2: I would say, in total, our corporate insurance growth—we still expect, as an overall unit, to be in that sort of high single to low teens level for the year.

Speaker #2: Part of that is going to benefit from some onboarding of new growth in that US corporate insurance platform. At this stage, it's tough to talk about exactly what that timing is, but I can say the momentum that we saw in Q1 was meaningfully improved over last year.

David Clare: At this stage, it's tough to talk about exactly what that timing is, but I can say the momentum that we saw in Q1 was meaningfully improved over last year. I think we talked about this in our comments, but the Q1 of this year meaningfully exceeded our full year 2025 premiums in US Corporate Insurance. That build-out that you're referencing, that 3 to 5 year build-out for this platform to sort of reach our expectations from a profitability and premium perspective, it's certainly having some good momentum right now, which is the same theme we saw on the build-out of our US Surety platform.

Speaker #2: I think we talked about this in our comments, but the first quarter of this year, meaningfully exceeded our full year 2025 premiums in US corporate insurance.

Speaker #2: So that build-out that you're referencing, that three to five-year build-out for this platform to sort of reach our expectations from a profitability and premium perspective, it certainly having some good momentum right now, which is the same theme we saw on the build-out of our US surety platform.

Doug Young: Just a follow-up, like where are you seeing most of the momentum in the US Corporate? Is there a particular region, a particular kind of, segment of the market?

Speaker #4: And then just a follow-up: where are you seeing most of the momentum in the US corporate? Is there a particular region, a particular kind of segment of the market?

Doug Young: Just a follow-up, like where are you seeing most of the momentum in the US Corporate? Is there a particular region, a particular kind of, segment of the market?

Speaker #2: Yeah, it is a little bit regional. It's a little bit dependent on where we get our licenses where our people are from. So our base at this stage in the corporate insurance market is in the Northeast of the US.

David Clare: Yeah, it is a little bit regional. It's a little bit dependent on where we get our licenses, where our people are from. Our base at this stage in the Corporate Insurance market is in the Northeast of the US. Our licenses and our rate filings differ a little bit by state and by product. There's a little bit of nuance here, Doug, as you're onboarding the practices infrastructure, where you get your first licenses and first ratings and first products filed is obviously where you're getting the most momentum. A little bit of that's concentrated right now in the early areas that we received that infrastructure. I expect that will start to spread in the same way that most business does in the US by population and business concentration.

Speaker #2: Our licenses and our rate filings differ a little bit by state and by product. So there's a little bit of nuance here, Doug, as you're onboarding the practices infrastructure where you get your first licenses and first ratings and first products filed is obviously where you're getting the most momentum.

Speaker #2: So a little bit of that's concentrated right now in the early areas that we received that infrastructure. I expect that will start to spread in the same way that most business does in the U.S.

Speaker #2: By population and business concentration, so at this stage, there's a little bit of focus and concentration in that Northeast area. I expect that starts to balance as we add both people and season some of the licenses and filings that we've navigated.

David Clare: At this stage, there's a little bit of focus and concentration in that Northeast area. I expect that starts to balance as we add both people and season some of the licenses and filings that we've navigated.

Speaker #4: I appreciate the color. Thank you.

Doug Young: Appreciate the color. Thank you.

Operator: Thank you. Our next question comes from Stephen Boland with Raymond James. Your line is open.

Speaker #3: Thank you. Our next question comes from Steven Bolen with Raymond James. Your line is open.

Stephen Boland [Managing Director and Equity Analyst: Morning. Just one question actually. Dave, just, you know, when we look at the MGA industry, you know, it's grown materially over the I guess in response to the hard market conditions over, you know, 6, 8 years. As the buzz around, you know, softer environment is coming into play, what do you think happens to the MGA industry? Is there a compression that we should expect? I guess, 2, when you look at your partners in the MGA world, how comfortable are you with rate adequacy? Do you have to step up your audit functions? I'm just trying to get an idea if anything is gonna change with the coming, you know, softer markets.

Speaker #5: Good morning. Just one question, actually. Did just when we look at the MGA industry, it's grown materially over the, I guess, in response to the hard market conditions over six, eight years.

Stephen Boland: Morning. Just one question actually. Dave, just, you know, when we look at the MGA industry, you know, it's grown materially over the I guess in response to the hard market conditions over, you know, 6, 8 years. As the buzz around, you know, softer environment is coming into play, what do you think happens to the MGA industry? Is there a compression that we should expect? I guess, 2, when you look at your partners in the MGA world, how comfortable are you with rate adequacy? Do you have to step up your audit functions? I'm just trying to get an idea if anything is gonna change with the coming, you know, softer markets.

Speaker #5: As the buzz around softer environment is coming into play, what do you think happens to the MGA industry? Is there a compression that we should expect?

Speaker #5: And I guess, too, when you look at your partners in the MGA world, how comfortable are you with rate adequacy? Do you have to step up your audit functions?

Speaker #5: I'm just trying to get an idea if anything is going to change with the coming softer markets.

Speaker #2: Thanks, Steven. On your first point, I would say as a general rule, the MGA community, the market is made up of very entrepreneurial group of professionals.

David Clare: Thanks, Stephen. On your first point, I would say as a general rule, the MGA community, the market is made up of very entrepreneurial group of professionals. I would say that the caliber and quality of the talent and professionals in this space over the last 5 to 10 years has meaningfully stepped up. I think this industry, despite following similar cycles to the broader insurance industry, is in a more significant position on a relative basis than it has been historically. We generally as a Trisura entity partner with groups we feel have specialized underwriting or distribution expertise. Certainly there's gonna be marginal impacts from cycle trends around the edges, we really are trying to focus on groups we think have a differentiated approach to either underwriting or distribution.

Speaker #2: And I would say that the caliber and quality of the talent and professionals in this space over the last five to ten years has meaningfully stepped up.

Speaker #2: So, I think this industry, despite following similar cycles to the broader insurance industry, is in a more significant position on a relative basis than it has been historically.

Speaker #2: We generally, as a Treasurer entity, partner with groups we feel have specialized underwriting or distribution expertise. And certainly, there's going to be marginal impacts from cycle trends around the edges.

Speaker #2: But we really are trying to focus on groups we think have a differentiated approach to either underwriting or distribution. Most of our groups are very substantial and significant players in the markets that they navigate.

David Clare: Most of our groups are very substantial and significant players in the markets that they navigate. I think it's fair to say this industry and this space is expected, at least on our end, to continue some growth. That rate of growth is probably different than it has been over the last couple of years, but we've got a lot of confidence in the quality of the partners that we're working with and the ability of this industry to continue navigating now that it's stepped up its overall proportion. On your underwriting question, I think we've been fairly demonstrative in our focus on underwriting quality and sustainability of loss ratios.

Speaker #2: So, I think it's fair to say this industry and this space is expected, at least on our end, to continue some growth. That rate of growth is probably different than it has been over the last couple of years, but we've got a lot of confidence in the quality of the partners that we're working with.

Speaker #2: And the ability of this industry to continue navigating now that it's stepped up its overall proportion. On your underwriting question, I think we've been fairly demonstrative in our focus on underwriting quality and sustainability of loss ratios.

Speaker #2: I don't think I would highlight anything different today than the actions that we've consistently taken over the last few years in monitoring and requiring strong underwriting performance from our partners.

David Clare: I don't think I would highlight anything different today than the actions that we've consistently taken over the last few years in monitoring and requiring strong underwriting performance from our partners. I think the nuances that you're talking about at high level differ very significantly line by line. The patterns and, let's say underwriting trends from a pricing perspective are very different in property than casualty today. It really depends on which part of the market, which part of the country, which business lines you're writing, and we very much focus in a detailed way on all of those differences.

Speaker #2: I think the nuances that you're talking about at a high level differ very significantly line by line. So the patterns and let's say underwriting trends from a pricing perspective are very different in property than casualty today.

Speaker #2: It really depends on which part of the market, which part of the country, which business lines you're writing, and we very much focus in a detailed way on all of those differences.

Speaker #5: Okay, that's all I had. Thanks very much.

Stephen Boland [Managing Director and Equity Analyst: Okay. That's all I had. Thanks very much.

Stephen Boland: Okay. That's all I had. Thanks very much.

Speaker #3: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Again, that is star 11 to ask a question.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from Bart Dziarski with RBC Capital Markets. Your line is open.

Speaker #3: Our next question comes from Bart Ziarski with RBC Capital Markets. Your line is open.

Speaker #4: Great, thanks. And good morning, everyone. I wanted to start with the $200 million senior unsecured notes offering. So congrats on getting that done. And maybe you could just highlight for us what does that do for the business in terms of deploying it, and then a reminder on the capital structure.

Bart Dziarski: Great, thanks, and good morning, everyone. I wanted to start with the CAD 200 million senior unsecured notes offering. Congrats on getting that done. Maybe you could just highlight for us, you know, what does that do for the business in terms of deploying it, and then a reminder on the capital structure. You'll be at 17% leverage, or you are at 17% leverage. Like, what are you guys targeting kind of over time? Thanks.

Speaker #4: So you'll be at 17% leverage or you are at 17% leverage. What do you guys targeting kind of over time? Thanks.

Speaker #2: Thanks, Bart. This was actually a great milestone for us. So this is our largest capital raise in our history. It was our first index eligible bond, a very strong offering, navigated by a team.

David Clare: Thanks, Bart Dziarski. This was actually a great milestone for us. This is our largest capital raise in our history. It was our first index-eligible bond, a very strong offering, navigated by his team. First and foremost, I think is a marker of how far we've come as a company, how much more significant the vehicle is in its capital raising capabilities. So I do thank you for noting that. This is a nice de-risking for us of future growth opportunities. And the biggest use or most immediate use for this will obviously be continued investment in our US Treasury-listed platform. As we've seen these licenses continue to come on board, the trajectory and the premium expectations for that US Surety platform continue to grow.

David Clare: Thanks, Dziarski. This was actually a great milestone for us. This is our largest capital raise in our history. It was our first index-eligible bond, a very strong offering, navigated by his team. First and foremost, I think is a marker of how far we've come as a company, how much more significant the vehicle is in its capital raising capabilities. So I do thank you for noting that. This is a nice de-risking for us of future growth opportunities. And the biggest use or most immediate use for this will obviously be continued investment in our US Treasury-listed platform. As we've seen these licenses continue to come on board, the trajectory and the premium expectations for that US Surety platform continue to grow.

Speaker #2: So first and foremost, I think is a marker of how far we've come as a company. How much more significant the vehicle is in its capital raising capabilities.

Speaker #2: So I do thank you for noting that. This is a nice de-risking for us of future growth opportunities. And the biggest use or most immediate use for this will obviously be continued investment in our US Treasury-listed platform.

Speaker #2: As we've seen these licenses continue to come on board, the trajectory and the premium expectations for that US surety platform continue to grow. The expectation and the need for more capital in that vehicle also continue to grow.

David Clare: The expectation and the need for more capital in that vehicle also continues to grow. We've now effectively de-risked and internally funded, I'll say, going forward, the capital for that platform. We are still pretty conservatively leveraged. As you know, 17% is about our debt-to-capital right now. We've got appetite to take that up to about 25% in the fullness of time. Still some, I'll say, conservative foster on the leverage side as we look at, I think prudently building out the platform.

Speaker #2: And we've now effectively de-risked and internally funded, I'll say, now going forward, the capital for that platform. We are still pretty conservatively leveraged, as you know, at 17% is about our debt-to-capital right now.

Speaker #2: We've got appetite to take that up to about 25% in the fullness of time. So still some I'll say conservative posture on the leverage side, as we look at I think prudently building out the platform.

Speaker #4: Okay, great. Thanks. And then on the Canadian fronting, so the premium slowdown there and you had called kind of for the expectation this year to premiums declining.

Bart Dziarski: Okay, great. Thanks. On the Canadian fronting, you know, the premium slowed down there, you had called kind of for the expectation this year to premiums declining. Could you maybe just unpack a bit more? Like, what are you guys seeing on the competitive front? Is it new entrants? Is it accelerating? Are people writing silly policies? Like, just help us understand what's driving that Canadian fronting industry dynamic.

Speaker #4: Could you maybe just unpack a bit more? What are you guys seeing on the competitive front? Is it new entrants? Is it accelerating? Are people writing silly policies?

Speaker #4: Just help us understand what's driving that Canadian fronting industry dynamic.

Speaker #2: Yeah, it's less so new entrants in this market or different models companies adopting our approach. It's more so traditional players jumping back into the market in a significant way.

David Clare: It's less so new entrants in this market or different models, companies adopting our approach. It's more so traditional players jumping back into the market in a significant way, and that would include players like Lloyd's and traditional P&C players coming back into the market in a real way. Our focus is always on profitability, on appropriate underwriting. We and our partners as we see that both rate softening and increased competition, see opportunities to, I think allow that business to price itself out of our appetite. I don't think there's any real change here in terms of the types of people that are participating in the market. There's just more appetite in that market to write business more aggressively than we've seen in years past.

Speaker #2: And that would include players like Lloyd's and traditional P&C players coming back into the market in a real way. So our focus is always on profitability, on appropriate underwriting.

Speaker #2: And we and our partners, as we see that both rate softening and increased competition, see opportunities to, I think, allow that business to price itself out of our appetite.

Speaker #2: So I don't think there's any real change here in terms of the types of people that are participating in the market. There's just more appetite in that market to write business more aggressively.

Speaker #2: Then we've seen in years past. I will say we still have a relatively healthy pipeline and as recently as the last couple of months, our onboarding new relationships in this space.

David Clare: I will say, we still have a relatively healthy pipeline and as recently as the last couple of months are onboarding new relationships in this space. There's still, I think, appetite and avenue to continue growing this business. We're just setting out sort of a pragmatic expectation that in what we're seeing right now, it's likely that fronting premium is a bit lower than 2025 this year.

Speaker #2: So there's still, I think, appetite and avenue to continue growing this business. We're just setting out sort of a pragmatic expectation that, in what we're seeing right now, it's likely that that fronting premium is a bit lower this year than in 2025.

Speaker #4: Great. Thanks for taking the questions, Dave.

Bart Dziarski: Great. Thanks for taking the question, Dave.

Speaker #3: Thank you. I'm currently showing no more questions in queue at this time. As a reminder, to ask a question, please press star 11 on your telephone keypad.

Operator: Thank you. I'm currently showing no more questions in queue at this time. As a reminder, to ask a question, please press star one one on your telephone keypad. Again, that is star one one to ask a question. Our next question comes from Tom MacKinnon with BMO Capital. Your line is open.

Speaker #3: Again, that is star 11 to ask a question. And our next question comes from Thomas McKinnon with BMO Capital. Your line is open.

Speaker #6: Yeah, thanks. I jumped on the call late here, so sorry if this question was asked. But in US programs, maybe just the outlook there, some of the stamping data is out April.

Tom MacKinnon: Yeah, thanks. I jumped on the call late here, so sorry if this question was asked. In US programs, maybe just the outlook there. Some of the stamping data is out. April slowed a little bit. Maybe you can talk about outlook for growth in both the existing programs as you've got some new partners and you're growing more in the admitted market as well. How is that profitability with respect to that? What are the plans there? Thanks.

Thomas MacKinnon: Yeah, thanks. I jumped on the call late here, so sorry if this question was asked. In US programs, maybe just the outlook there. Some of the stamping data is out. April slowed a little bit. Maybe you can talk about outlook for growth in both the existing programs as you've got some new partners and you're growing more in the admitted market as well. How is that profitability with respect to that? What are the plans there? Thanks.

Speaker #6: Slowed a little bit maybe you can talk about outlook for growth and both the existing programs have. Got some new partners and you're growing more in the admitted market as well.

Speaker #6: And how is that profitability with respect to that and what are the plans there? Thanks.

Speaker #2: Thanks, Tom. Maybe I'll take a few of these out of order. You did highlight some of the admitted growth in the platform. Some of the new programs that we onboarded last year actually were in that admitted space.

David Clare: Thanks, Tom. Maybe I'll take a few of these out of order. You did highlight some of the admitted growth in the platform. Some of the new programs that we onboarded last year actually were in that admitted space, we are seeing some of our highest premium production out of the admitted programs proportionally this quarter. It is nice to see that platform expand. It is worth noting for people on the call that our platform does span both E&S and admitted programs. Increasingly, we've got a more proportionate mix between those two. The growth outlook for this platform, I think we talked about it at the beginning of the year, being kind of mid to high single digits for the full year.

Speaker #2: And so we are seeing some of our highest premium production out of the admitted programs proportionally this quarter. So it is nice to see that platform expand.

Speaker #2: It is worth noting for people on the call that our platform does span both ENS and admitted programs. And increasingly, we've got a more proportionate mix.

Speaker #2: Between those two. The growth for this platform, I think we talked about at the beginning of the year, being kind of mid to high single digits for the full year.

Speaker #2: On a constant currency basis, we're above that this quarter. So I think there's some indication here that the accommodative or more let's say positive tone in the reinsurance market is driving a few more opportunities for us.

David Clare: On a constant currency basis, we're above that this quarter. I think there's some indication here that the accommodative or more, let's say, positive tone in the reinsurance market is driving a few more opportunities for us. I think it's obviously a much larger platform than a few years ago, so the platform scale is a bit more significant. Those percentage growth rates are a bit, a bit less than they've been historically, but still a great outlook for this business and one we're quite excited about. I think what people often don't understand about our business is that in the insurance space, often people assume that a hard or soft market is inherently positive or negative. One, because our business is much more specially focused than most, we navigate these markets a bit differently.

Speaker #2: I think it's obviously a much larger platform than a few years ago. So, the platform's scale is a bit more significant. Those percentage growth rates are a bit less than they've been historically, but still a great outlook for this business and one we're quite excited about.

Speaker #2: I think what people often don't understand about our business is that in the insurance space, often people assume that a hard or soft market is inherently positive or negative.

Speaker #2: One, because our business is much more specially focused than most, we navigate these markets a bit differently. And two, because we're a fairly large purchaser of reinsurance, as reinsurance markets get more accommodative, that can be a positive nuance for us.

David Clare: Two, because we're a fairly large purchaser of reinsurance, as reinsurance markets get more accommodative, that can be a positive nuance for us, and that's what you're seeing a little bit in that US program space. The outlook remains pretty consistent. I think a great start to the year, and most importantly, in this platform, a very strong combined ratio right alongside our expectations. I think you'll continue to see that type of trajectory for the business for the next few quarters.

Speaker #2: And that's where you're seeing a little bit in that US program space. So the outlook remains pretty consistent. I think a great start to the year and most importantly, in this platform, a very, very strong combined ratio right alongside our expectations.

Speaker #2: I think you'll continue to see that type of trajectory for the business for the next few quarters.

Tom MacKinnon: Retention was different in the quarter than I think your 10 to 15 guide. Was that addressed in an earlier question? Maybe you can just flesh that out. Sorry.

Speaker #6: And retention was different in the quarter than, I think, your 10 to 15 guide? Was that addressed in an earlier question—maybe you can just flesh that out?

Thomas MacKinnon: Retention was different in the quarter than I think your 10 to 15 guide. Was that addressed in an earlier question? Maybe you can just flesh that out. Sorry.

Speaker #6: Sorry.

Speaker #2: No, it wasn't, Tom. So it's a good question. There's a bit of nuance quarter to quarter in retention that can be impacted by the timing of reinsurance purchases, which, as you know, can reduce or impact net premiums earned.

David Clare: No, it wasn't, Tom, it's a good question. There, there's a bit of nuance quarter to quarter in retention that can be impacted by the timing of reinsurance purchases, which as you know, can reduce or impact net premiums earned levels. What you're seeing this quarter is no real change from a an average quota share percentage retention, but some nuances on the calculation of that figure. I think there's probably an opportunity for us to talk about this on a trailing 12-month average going forward, which will be a lot more consistent for people rather than quarter to quarter. No signal for you to take out of the lower retention this quarter, just really nuances and timing of some of the tactical reinsurance purchases.

Speaker #2: Levels. So what you're seeing this quarter is no real change. From an average quota share percentage retention, but some nuances on the calculation. Of that figure, I think there's probably an opportunity for us to talk about this on a trailing 12-month average going forward, which will be a lot more consistent for people rather than quarter to quarter.

Speaker #2: So, no signal for you to take out of the lower retention this quarter—just really nuances and timing of some of the tactical reinsurance purchases.

Speaker #6: Okay, thanks.

Tom MacKinnon: Okay. Thanks.

Thomas MacKinnon: Okay. Thanks.

Speaker #3: Thank you. I’m showing no further questions at this time. I would now like to turn it back to David Claire for closing remarks.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to David Clare for closing remarks.

Speaker #2: Thank you very much, operator. And thank you to everyone for joining today. As always, if you have any further questions, don't hesitate to reach out.

David Clare: Thank you very much, operator, and thank you to everyone for joining today. As always, if you have any further questions, don't hesitate to reach out, and we look forward to talking to you all soon.

Speaker #2: And we look forward to talking to you all soon.

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