Trisura Group TSE: TSU said second-quarter operating earnings per share rose 10% to CAD 0.76, supported by profitable underwriting and higher investment income, as the specialty insurer surpassed CAD 1 billion in book value ahead of its previously stated 2027 target.
Chief Executive Officer David Clare said book value per share increased more than 20% year over year to more than CAD 21. The company reported a consolidated combined ratio of 84.9%, with underwriting performance led by its primary-lines businesses, including Surety, Corporate Insurance and Warranty.
“We achieved a significant milestone, surpassing CAD 1 billion in book value, reaching our 2027 target ahead of schedule,” Clare said, attributing the result to disciplined underwriting and growing investment returns.
Primary lines drive underwriting performance
Net insurance revenue increased 1% in the quarter. Chief Financial Officer David Scotland said growth of 6.6% in primary lines was partly offset by a contraction in Canadian Fronting, while year-over-year comparisons in Surety were affected by an unusually strong prior-year quarter related to new distribution relationships.
Primary lines represented more than two-thirds of net premiums written over the past 12 months, Scotland said. The company expects primary lines to deliver mid-teens growth in net insurance revenue for the full year, with Surety comparisons expected to normalize over the remainder of 2026.
- Surety underwriting income rose 44%, supported by a 17% loss ratio.
- Corporate Insurance underwriting income increased 60% as premium growth accelerated.
- Warranty net insurance revenue rose 19%, reflecting earned-premium effects from stronger gross premiums written in prior periods.
- U.S. Programs recorded an 80% combined ratio.
- Canadian Fronting underwriting income was about CAD 5 million, modestly above the prior-year quarter.
Clare said Warranty’s business mix is expected to result in a somewhat higher combined ratio than historic levels for the rest of the year. He also said elevated claims on selected Warranty programs are expected to normalize.
Canadian Fronting faces a softening market and increased competition, and Trisura expects lower premium in the business this year. Still, Clare said the company remains committed to the line, has continued adding partners and expects its pipeline to support premiums in coming quarters.
U.S. expansion continues
Trisura added CAD 50 million of capital to its U.S. Surety balance sheet during the quarter. The company said the added capital supports underwriting as its licensing footprint expands, including recently obtained licenses in California, Minnesota and Hawaii.
Clare told analysts that California licensing was received sooner than expected, though rate filings are still underway and the direct impact from the state is not expected until sometime next year. With 48 licenses, he characterized the U.S. Surety operation as a “very fully licensed platform.”
About 45% of Trisura’s Surety premium in 2026 is expected to come from the U.S. platform, Scotland said. The company is ranked among the top 30 U.S. Surety writers and continues to see engagement from distribution partners. Clare said the U.S. Surety balance sheet has CAD 150 million dedicated to the business.
In Canada, the company said investments in Surety capabilities have generated greater submission activity for larger-limit contract Surety opportunities. Clare said the company has seen a “stepped function change” in the types of submissions it receives after working for roughly 18 months to establish credentials in the larger-limit market.
He said potential infrastructure spending commitments by Canadian governments could benefit the larger end of the Surety market in coming years.
Trisura also said its U.S. Corporate Insurance platform continued to gain momentum. Clare said second-quarter premium exceeded the first quarter, while June was the operation’s largest month to date. The build-out has required regulatory rate filings and product-development work across multiple product lines, he said, but much of that work is now complete.
The company appointed Derek Stafford as North American leader of Corporate Insurance to lead growth and expansion of underwriting appetite across the region.
Investment income and capital position
Net investment income increased 18% to CAD 22 million, driven by new cash deployment to the investment portfolio. Scotland said investment income is becoming a more meaningful contributor to earnings as Trisura expands, adding diversification alongside underwriting results.
Operating net income rose 10.7% to CAD 36.8 million, and operating return on equity was 16.7%, above the company’s mid-teens target. The operating effective tax rate was 24.7%, reflecting the mix of taxable income between Canada and the U.S.
Book value has grown at an average annual rate of 26% over the last five years, according to Scotland. The company’s debt-to-capital ratio stood at 16.5%, below its long-term 25% target.
Addressing analysts’ questions about capital deployment and returns, Clare said Trisura’s priority is profitable growth, while maintaining at least a mid-teens return on equity. He said some capital is currently underutilized from a premium-writing perspective, particularly as the company supports its U.S. expansion, but management views investments in growth platforms as beneficial over the longer term.
“Profitable growth is our priority,” Clare said.
The company also said artificial-intelligence pilot programs across underwriting, actuarial and Surety have shown adoption and efficiency gains, while retaining human oversight. Trisura is working toward broader deployment of those initiatives.
About Trisura Group (TSE:TSU)
Trisura Group Ltd is a Canadian based company engages in the provision of specialty insurance. The company's operations currently include specialty property and casualty insurance (Surety, Risk Solutions, and Corporate Insurance business lines), underwritten predominantly in Canada. The operating business segments are Trisura Guarantee, Trisura Specialty, and Trisura International. The Trisura Guarantee segment generates maximum revenue, which offers Surety, Risk Solutions and Corporate Insurance products underwritten in Canada as well as the operations of Trisura Warranty.
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