Trisura Group Reports Third Quarter 2017 Results

11/10/17 04:30 PM EST

TORONTO, Nov. 10, 2017 (GLOBE NEWSWIRE) -- Trisura Group Ltd. (“Trisura” or “Trisura Group”) (TSX:TSU) today announced financial results for the quarter ended September 30, 2017.

"Trisura had an excellent quarter with strong premium growth in our existing business. We achieved a major operational objective when our US entity, Trisura Specialty Insurance Company, received an A- (Excellent) rating from A.M. Best.  Trisura Specialty Insurance Company is now actively pursuing new business opportunities and we believe the business is being well-received in the market.” said Greg Morrison, CEO of Trisura. 

Third Quarter 2017 Financial Results

Q3 2017 Highlights

  • Strong growth in Q3 in both gross and net premiums written, increasing 14.2% and 16.5% respectively compared to same period in 2016 driven by increased activity in our Risk Solutions and Surety business lines at Trisura Guarantee Insurance Company (“Trisura Guarantee”).
  • Consistently strong underwriting results at Trisura Guarantee with net underwriting income of C$2.1 million in Q3 compared to C$1.5 million in the prior year period. 
  • Combined ratio of 91.2% at Trisura Guarantee.
  • Net income of C$2.0 million compared to a net loss of C$1.5 million in the prior year period, as a result of growth in net income of Trisura Guarantee. 
  • Foreign exchange losses related to strengthening of the Canadian dollar against the US dollar led to negative variance in comprehensive (loss) income in Q3 compared to the same quarter of 2016.
  • Began marketing our fronting company services in the U.S. after Trisura Specialty Insurance Company received its A- (Excellent) rating from A.M. Best.
  • Strong capital position consistent with planned business development particularly in the US which will enable us to reduce our debt-to-capital ratio to 20% before year-end 2017.


C$ 000 Q3 2017 Q3 2016 $ variance
Gross premiums written 36,123   31,631   4,492  
Net premiums written 26,742   22,964   3,778  
Net underwriting income - P&C business 2,132   1,478   654  
Combined Ratio - P&C Business 91.2%   93.1%   (1.9%)  
Net underwriting income (loss) 1,228   (3,165)   4,393  
Net investment income 2,067   1,818   249  
Net income (loss) 2,010   (1,547)   3,557  
Comprehensive (loss) income (955)   4,078   (5,033)  
Earnings per common share, basic and diluted, $ 0.35   n/a    
Book value per share $ 18.02   n/a    

  Note: P&C Business reflects Trisura Guarantee operations only.

Capital

  • The minimum capital test (“MCT”) ratio of Trisura Guarantee was 265% as at September 30, 2017 (272% as at December 31, 2016), which comfortably exceeds regulatory requirements of 150%.
     
  • Trisura Specialty Insurance Company’s capital and surplus of C$56.2 million as at September 30, 2017 was well in excess of the C$18.7 million minimum capital requirements of the Oklahoma Insurance Department.
     
  • Trisura International Insurance Company had capital of C$25.2 million as at September 30, 2017 which was well in excess of its regulatory capital requirement of C$0.2 million.
     
  • Trisura Group had a debt-to-capital ratio of 22.2% as at September 30, 2017 (32.5% as at December 31, 2016). We anticipate reducing the debt-to-capital ratio to 20% by year-end 2017.

Investments

  • Trisura’s net investment income in Q3 2017 was C$2.1 million compared to C$1.8 million in Q3 2016.  Investment income is driven primarily from interest and dividend income on a highly-rated portfolio.

Corporate Development

  • Trisura Specialty Insurance Company received an A- (Excellent) rating from A.M. Best.
  • The Company recently announced the transition of RSA’s $6 million block of contract and commercial surety business in Canada to Trisura’s Canadian subsidiary, Trisura Guarantee. This business allows us to further strengthen our position in the Canadian marketplace as a market leader in the small to mid-size contractor space.

About Trisura Group

Trisura Group Ltd. is a leading international specialty insurance provider operating in the surety, risk solutions, corporate insurance and reinsurance segments of the market. Trisura has three principal regulated insurance subsidiaries: Trisura Guarantee Insurance Company, Trisura International Insurance Company and Trisura Specialty Insurance Company. Trisura Group is listed on the Toronto Stock Exchange under the symbol "TSU".

Further information is available at http://www.trisura.com/group. Important information may be disseminated exclusively via the website; investors should consult the site to access this information. Details regarding the operations of Trisura are also set forth in regulatory filings. A copy of the filings may be obtained on Trisura’s SEDAR profile at www.sedar.com.

For more information, please contact:
Name: David Clare
Tel: 647-503-6516
Email: dclare@pvii.ca 

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 regulations. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Trisura Group, 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,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts” 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 Trisura Group 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 behavior 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; 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; ability to collect amounts owed; catastrophic events, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments including terrorist acts and cyber terrorism; and other risks and factors detailed from time to time in our documents filed with the 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, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, Trisura Group 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.

 
Trisura Group Ltd.
Consolidated Statements of Financial Position
Unaudited
As at September 30, 2017 and December 31, 2016
     
C$ 000, As at 30-Sep-17 31-Dec-16
  Cash and cash equivalents 156,321 122,096
  Investments 201,036 194,393
  Premiums and accounts receivable and other assets 22,205 22,069
  Deferred acquisition costs 37,777 30,985
  Recoverable from reinsurers 56,231 47,120
  Fixed and intangible assets 1,865 2,116
  Deferred tax assets 748 622
Total assets 476,183 419,401
       
  Accounts payable, accrued and other liabilities 17,767 25,434
  Reinsurance premiums payable 14,250 13,461
  Unearned premiums 108,339 90,612
  Unearned reinsurance commissions 6,670 4,928
  Unpaid claims and loss adjustment expenses 173,309 163,970
  Loan payable 29,900 34,100
  Minority interests 21,200 16,008
Total liabilities 371,435 348,513
Shareholders' equity 104,748 70,888
Total liabilities and shareholders' equity 476,183 419,401


Trisura Group Ltd.
Consolidated Statements of Operating Results
Unaudited
For the three-month and six-month periods ended September 30
         
C$ 000 Q3 2017 Q3 2016 Q3 2017 YTD Q3 2016 YTD
  Gross premiums written 36,123   31,631   108,074   91,559  
  Net premiums written 26,742   22,964   73,176   65,227  
  Net premiums earned 21,990   20,186   59,567   53,664  
  Fee income 216   105   3,273   3,151  
Total underwriting revenue 22,206   20,291   62,840   56,815  
  Net claims 5,129   8,904   12,466   23,164  
  Net commissions 6,799   6,249   19,687   17,964  
  Premium taxes 1,246   1,033   3,236   2,629  
  Operating expenses 7,804   7,270   23,366   17,742  
Net claims and expenses 20,978   23,456   58,755   61,499  
Net underwriting income (loss) 1,228   (3,165 ) 4,085   (4,684 )
  Net investment income 2,067   1,818   4,404   9,849  
  Foreign exchange gains (losses) (253 ) (227 ) (138 ) (405 )
  Interest expense (273 ) (329 ) (812 ) (329 )
  Change in minority interests 2   3   (5,156 ) (157 )
Income (loss) before income taxes 2,771   (1,900 ) 2,383   4,274  
  Income tax expense (761 ) 353   (2,648 ) (1,407 )
Net income (loss) 2,010   (1,547 ) (265 ) 2,867  
Other comprehensive (loss) income (2,965 ) 5,625   (5,636 ) 1,157  
Comprehensive (loss) income (955 ) 4,078   (5,901 ) 4,024  


Trisura Group Ltd.
Consolidated Statements of Cash Flows
Unaudited
For the three-month and six-month periods ended September 30
         
C$ 000 Q3 2017 Q3 2016 Q3 2017 YTD Q3 2016 YTD
Net income (loss) from operating activities 2,010   (1,547 ) (265 ) 2,867  
Non-cash items to be deducted:        
  Depreciation and amortization 244   127   534   398  
  Unrealized gains (losses) 629   (176 ) 675   (669 )
  Impairment loss on AFS investment -   3,701   -   3,701  
  Change in minority interests (2 ) (3 ) 5,156   157  
Change in working capital operating items 12,070   12,157   20,722   11,053  
Realized (losses) on AFS investments (340 ) (803 ) (704 ) (1,843 )
Income taxes paid (968 ) -   (6,123 ) (1,797 )
Interest paid (286 ) (329 ) (810 ) (333 )
Net cash from operating activities 13,357   13,127   19,185   13,534  
Proceeds on disposal of investments 554   3,167   20,386   34,670  
Purchases of investments (12,202 ) (13,025 ) (131,864 ) (31,915 )
Net purchases of capital and intangible assets (38 ) (44 ) (145 ) (843 )
Net cash (used in) investing activities (11,686 ) (9,902 ) (111,623 ) 1,912  
Dividends paid -   (16,060 ) -   (17,703 )
Shares issued -   -   140,270   -  
Shares redeemed -   (19,000 ) -   (21,000 )
Repayment of notes payable -   (34 ) (355 ) (308 )
Loans received -   35,000   -   35,000  
Repayment of loans payable (500 ) 41   (4,200 ) (6,600 )
Net cash (used in) financing activities (500 ) (53 ) 135,715   (10,611 )
Net increase in cash 1,171   3,172   43,277   4,835  
Cash at beginning of the period 160,344   97,508   122,096   101,388  
Currency translation (5,194 ) 1,308   (9,052 ) (4,235 )
Cash at the end of the period 156,321   101,988   156,321   101,988