Trisura Group Ltd.

Good morning and welcome to Tricera Group's Limited Third Quarter 2022 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 quarter. 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 the Canadian and U.S. 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. For further information on these risks and their potential impacts, please see Treasurer's Filings with Securities Regulators. And as a reminder, to ask a question during the Q&A session, you will need to press star 1-1 on your telephone keypad. Thank you. I'll now turn the call over to David Clare.

Thank you. Good morning, everyone, and welcome. Our business extended its track record of performance in the third quarter, growing premiums 59% compared to Q3 2021 and supporting a 20% return on equity through continued investment in infrastructure. Momentum has sustained as we scale an increasingly diversified specialty insurance platform. Results, again, were particularly strong in Canada, with 24% premium growth in the quarter, supported by profitable underwriting. U.S. premiums stepped up significantly and reached a new record, increasing 79% over the third quarter of 2021. In Canada, disciplined underwriting produced strong profitability, while fronting drove increasingly diverse earnings. We have observed standout growth in earnings from Risk Solutions, the largest contributor to Canadian underwriting income in the quarter. The favorable market in corporate lines in Canada and E&S lines in the U.S. continued in the quarter, although we see a reduced pace of increases versus last year. Mid-teens growth in the top line in corporate insurance was driven by expansion of programs and sustained momentum with distribution partners, as well as a healthy but mitigating rate environment. Similar top-line growth in surety benefited from tailwinds in established lines and expansion of our U.S. practice. Importantly, loss ratio of 17% improved year-over-year, driven by profitable underwriting across all lines. We are proud of our combined ratio in the quarter of 83%, but did not beat a spectacular level set in Q3 2021 of 79%. The Canadian platform posted a striking 31% return on equity and grew net income 9% over the prior year. It's important to note that Canadian results in Q3 2021 were exceptionally strong, with single-digit loss ratio insured in that period. With the extension of our U.S. front-end expertise in Canada, Our Canadian entity now generates attractive fee-based earnings to complement a heritage of profitable underwriting income. U.S. fronting bound a quarterly record of $466 million in Q3 2022. Maturation of existing program strove top line supplemented by onboarding of new programs. U.S. fronting generated $18 million in fees and recorded $41 million of deferred fee income, indicative of future fronting fees to be earned. Loss ratio in the quarter increased slightly due to an evolving business mix, while fronting operational ratio increased to 83% as a result of an increase in reinsurance purchases in the quarter and a shift in mix of business as a larger share of net underwriting income was generated from businesses with a higher retention ratio. It is important to note that our U.S. earnings lag premium production as fees are earned, and we expect higher reinsurance costs to sustain in the fourth quarter. Near-term results will be comparable to this quarter, and we expect to experience the benefit of premium growth in earnings in 2023 and beyond. On a last 12 months basis, the US produced a 14% return on equity in line with prior year result as a result of the corresponding growth in infrastructure over the period and capital contributions. Although we wrote $52 million in admitted premiums in the quarter, the market continued to drive opportunities to access and surplus lines. As discussed in our last call, the strength of our growth catalyzed the capital raised in the quarter. We take the responsibility of deploying capital on our investors' behalf seriously, and we have made early strides in deploying over half the capital raised into securities that attract yields in support of significant premium growth. Interest and dividend income increased 54% over Q3 2021, the result of larger portfolio and increasing investment yields. The continued increases in interest rates drove unrealized losses in our fixed income portfolios, though the impact was mitigated through a short duration posture and favorable foreign exchange. We are fortunate to have a significant and consistent flow of capital to invest, enhanced by the maturation of our existing short-duration portfolio of investments. Prevailing bond yields are even more accretive to portfolio yields than last quarter, meaning we are improving our base of interest and dividend income on a risk-adjusted basis for years to come. At the end of the quarter, we close the acquisition of Sovereign General's Canadian Surety business. We are excited to welcome a number of new employees to our organization as a result of the transaction and look forward to continuing to grow our presence and surety in North America. Although relatively small, this is a great example of the types of inorganic opportunities we are keen to pursue, expansion of practices we know through structures we have experience navigating. This quarter, our results do not reflect the signs of a potential recession, but we are alert and remain committed to our underwriting and structuring standards. as well as conservative reserving. It is our hope that volatility will provide opportunities to win business and strengthen our reputation. We continue to plan for growth, and with a renewed capital base and comparatively greater scale, we feel cautiously optimistic for the years ahead. As we continue to grow, we strive to increase the proportion of our businesses' drive from recurring or fee-based earning sources. With that, I'd like to turn it over to David Scotland for a more detailed review of financial results.

Thanks, David. I'll now provide a brief walkthrough of some financial results for the quarter. Gross return premiums was $644 million for the quarter, which reflects growth of 59% over Q3 2021. Net claims expense in the quarter was greater than the prior year, primarily as a result of growth in the business. We experienced a claims recovery in 2021 associated with our life annuity reserves, which has since been nobated and which reduced claims expense in that quarter. Net commissions expense increased by 64% in the quarter, reflecting growth in the business in both the Canadian and U.S. operations, as well as a shift in business mix towards certain lines of higher commissions. Operating expense in the quarter grew by 49% over Q3 2021, reflecting growth in both the Canadian and U.S. operations. Net underwriting income in Canada for Q3 was greater than the prior year as a result of growth in the business. The underwriting income in the U.S. for Q3 2022 was greater than Q3 2021 as a result of growth in the business, but mitigated by reinsurance purchases in the quarter. In Q3 2022, the combined ratio in Canada was 83%, and the front-end operational ratio in the U.S. was also 83%. With the innovation of the Life Annuity Reserve in Q4 2021, we are now able to calculate a meaningful combined ratio on a consolidated basis. In Q3 2022, the combined ratio was 82%. Net investment income in the quarter was greater in Q3 2022 than Q3 2021 as a result of an increase in interest and dividend income. The increase was primarily related to an increase in the size of the investment portfolio, but also benefited from higher yields. Net investment income in 2021 was negatively impacted as a result of movement in the investment supporting the life annuity reserves, which was offset by corresponding movement in claims expense in that quarter. Net gains were $3.7 million in the quarter, primarily as a result of realized gains on investments exposed during the period and foreign exchange movements, which were both greater than Q3 2021. Income tax expense was approximately the same in Q3 2022 compared to Q3 2021 as a result of a tax adjustment in Q3 2021, which elevated tax expense in that period. Net income for the group was $23.7 million in the quarter, which was greater than Q3 2021 as a result of growth in the business and strong underwriting. Diluted earnings per share was $0.51 a share in Q3 2022, which was greater than Q3 2021. Consolidated ROE on a rolling 12-month basis was 19.9% at the end of Q3 2022, which was approximately the same as the rolling 12-month ROE at the end of Q3 2021. Assets year-to-date grew by $1.2 billion. Cash in the period increased as a result of the equity offering in the quarter and certain proceeds of which were used to pay down the revolving credit facility. Investments have increased as a result of the equity offering, though were offset by unrealized losses incurred in the period. Premiums and accounts receivable and other assets has grown as a result of growth in GPW, particularly in the U.S. over the most recent quarter. Recoverable from reinsurers have increased primarily as a result of growth in the U.S.-fronted business, as well as certain fronted programs in Canada, where claims liabilities are largely offset by expected recoveries from the reinsurers to whom we see the business. Liabilities in the year-to-date period grew by $998 million, primarily as a result of growth in unearned premiums and unpaid claims and loss adjustment expense, which have grown as a result of growth in both Canada and the U.S. As discussed, growth in these balances is largely offset by growth in reinsurance recoverables. Accounts payable, accrued, and other liabilities have decreased in the period as a result of settlement of assets from the novation in 2021, as well as a number of large payments in the period. Equity is greater than the prior year end, reflecting the impact of the equity offering and growth in net income, offset by a reduction in other comprehensive income. Other comprehensive income decreased in 2022, primarily as a result of unrealized losses on the bond portfolio due to rising interest rates. Though in Q3, this was mitigated by a strengthening of the US dollar, which drove higher Canadian dollar valuations of capital we hold outside of Canada. Book value per share was $11.47 at September 30, 2022, and is greater than September 30, 2021, as a result of the equity offering, as well as profit generated year-to-date and mitigated by unrealized losses on the investment portfolio in the quarter. As of September 30, 2022, debt-to-capital was 12.5%, which was lower than at June 30, 2022, as a result of the equity offering. The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements. David, I'll now turn things back over to you.

Thank you, David. Operator would now take questions.

Thank you. And as a reminder, ladies and gentlemen, to ask a question, you will need to press star 1-1. Please stand by while we compile the Q&A roster. And our first question coming from the line of Nicholas from CIBC, .

OK, thanks. Good morning. Some of the US insurers have suggested that professional liability lines like DNO have become increasingly competitive lately. Are you seeing any evidence of that on the Canadian side of the border in your corporate insurance segment?

Hi, Nick. Many of the comments that you're referencing would apply to a broader, more commoditized D&O market than where we play in the Canadian space. I will say our comments about rate in Canada would certainly indicate that rate increases are mitigating versus years past, but our focus in the market in corporate insurance in Canada is a little bit more nuanced and specialized than sort of the broader or larger market trends would imply in the U.S., Certainly, I would agree that the hardening market or hard market that we've seen in the last couple of years is mitigating, but I wouldn't necessarily apply those exact trends in the U.S. B&O market to our Canadian corporate insurance lines.

Okay, that's helpful. And how do you feel about rate adequacy more broadly across the various lines that you participated in the U.S.? You know, just in the context of elevated inflation on the property side and social inflation with casualty. Do you feel that rate increases on balance are still keeping pace with lost cost trends?

That's a great question, Nick. We've seen a lot of discussion on this in the industry, and certainly we see a continued healthy environment in the ENS lines that we participate in. I think the ultimate answer will depend a little bit on the line of business that we're referencing. Certainly we have seen healthy rate increases and healthy rate environments continue both in the quarter and for the year-to-date period in the lines that we participate in. I think that we have confidence in the rate adequacy that we're seeing at this stage, but it is an environment that is moving very quickly. So I'd hesitate to put too much prediction out there, but certainly we feel very strongly about the business that we're putting on in this environment.

Okay, okay, fair enough. And last one for me before I pass the line. The structure of the surety acquisition was interesting, being done on a renewal rights basis. Do you see many other opportunities to acquire renewal rights on subscale portfolios like the sovereign business out there, or are these types of transactions essentially few and far between?

These types of transactions are rare. Now, that being said, this is our third iteration or third version of a transaction like this. who do have a bit of a track record of finding them successfully. I don't want to imply that there's a bunch out there waiting for us to transact upon. Certainly, if we can find them, we will pursue them and sort of compete for them appropriately, but they're tough to find. We're very happy and excited to have been able to close that sovereign transaction. I think it's a great example of our team finding opportunities to continue growing in this environment and a great way for us to find some new team members at the same time.

Okay, very good. That's it for me. I'll pass the line. Thank you. Thanks, Nick.

Thank you. One moment for our next question. Our next question coming from the line of Jeff Fenwick with Comarch. The line is open.

Hi. Good morning, everyone. So David, I just wanted to start with the US business here and noting the program count does continue to build. Obviously, you had a very big step up in volume through the mid part of the year. Maybe just give us a bit of color on that base of programs you have today. Are you still continuing to maybe churn through some of them and seeing some performance stronger than others? And maybe just a broader comment on the MGA market in general, and are you seeing behavior there just continuing to be rational and the quality of business they're generating remaining very strong?

Yeah, we continue to see higher than industry level growth in that MGA channel. And I would say we also continue to see increasing sophistication of the MGA space in general in the US. That's an environment and a set of partners that... we feel very strongly about. Certainly our group of partners we're very happy with and very committed to. I would say from a program cadence perspective, you're seeing net additions of our programs quarter over quarter, but we continue to optimize or rationalize our portfolio. We haven't seen any rationalizations of the portfolio as a result of specific performance concerns this quarter. Most of the rationalizations or net program reductions that we saw in this quarter like last quarter were simply programs that were just not up to scale. So relatively small programs that just didn't meet our expectations for premium. So we're very happy with how the portfolio is performing at this stage and would expect to continue to see that through 2023.

And to your point on the cadence of ads, so you think obviously there's been a huge rate of growth here, but still a lot of capacity to add from your perspective in terms of areas where you want to write and be active?

Yeah, I would say our expectation sort of a program adds is pretty consistent year over year. The one difference now for us may be that we have an ability to target a little bit larger programs in 2023. So hopefully we have success in going out there and finding a little bit bigger partners as we've gotten both a larger capital base and a larger AIM best size rating.

And then you've been working on building an admitted lines presence in the US. And I know it's been a long journey to get all the licensing in place and some other regulatory stuff that you need to begin to push there. So where are you in that process? And how are you feeling in terms of that area heading into 2023?

Yeah, the admitted lines has been a bit slower to grow in our practice than certainly we anticipated when we first set up the entity. That's as a result of disproportionate strength in the E&S market, which, as we've discussed, we're very happy to both support and see. I would say our position continues to be that the investment in the infrastructure of the admitted platform will serve us well in the long term. Eventually, we would expect the market to balance at some stage. Whether that balance is at a higher proportional E&S rate than it started is sort of up in the air right now, but we do think at some stage it will serve both us and our partners to have a very mature and sophisticated admitted presence. And that's what we've been building up over the past couple of years now. So we feel very good about that presence today, despite it being a little bit smaller than we hoped from a premium standpoint at this stage.

Okay, great. That's all I had. Thank you.

Thanks, John.

Thank you. One moment for our next question. And our next question coming from the lineup, Marcel,

I just want to follow up on the acquisition front. This was your first one in a little while. Just curious, is it sure that you'd be focusing on specifically for these tokens, or could we see it across different lines that you guys operate in?

Hey, Marcel. No, it wouldn't be limited to surety. I would say my comments in the preamble to this call would align with the fact that we like business lines we have familiarity with. That includes surety, but it also includes a broader set of opportunities. So there certainly would be appetite on our side to pursue things beyond the surety landscape, although we were very fortunate in this quarter to be able to find something within that surety space. So The short answer to your question is there's a broader appetite to the extent it fits within those characteristics of both business and partnerships that we're familiar with.

Okay, great. And then just another one on surety, actually. In the past, you've referenced that you're operating a 12- to 18-month backlog. So even if we do head into a slower environment, growth should still remain pretty good there. Just curious on that backlog, is this a committed backlog or could this dry up pretty quickly if we do enter the solar environment?

Yeah, it's tough to tell Marcel because the backlog generally is pretty solid from a 12 to 18 month perspective. So the work that they are completing usually is related to infrastructure construction, which has a longer time horizon than, say, traditional single-family home residential. These are contractors that are working in the infrastructure space, not generally shorter-duration projects. So that backlog should be pretty solid. Now, the environment that we're in right now is uncertain on how and when a recession, if that does come, manifests itself. So I'd struggle a little bit to predict how our contractors um backlogs behave in that environment but i would have pretty good confidence that the projects that are started and that are underway um those would continue regardless of the economic environment and um and we'd certainly evaluate things as as that evolves okay all right thank you for that that's it for me thanks marshall thank you one moment for our next question

Our next question coming from the line of Jamie Glowin. Your line is open.

Yes, good morning. Hey, Jim. First question, just with a couple of months under your belt at this point, I'm curious to learn how the At Bay program is developing and progressing, and are you seeing progress uh, results that would be in line or better than maybe what you were expecting when, uh, when you were initially launched that, uh, that program.

Yeah, I would say we're very happy with that partnership. We're, we're very impressed with the professionalism and the quality of the team, um, at, at bay. And certainly the, um, the momentum that we're seeing in their success in, in binding premiums has been, been positive and certainly aligned with our internal expectations of, of the program at this stage. So, we're very excited and happy for that partnership.

And to follow up on that, when you were answering Jeff's earlier question about program ads in the market today, what are you seeing in terms of pipeline on that relationship side and the ability to access some larger clients and just trying to get a sense as to what you're seeing. Is that pipeline bigger today than what it was a couple quarters ago? Are you seeing a lot more larger size clients than a couple of quarters ago? How has that evolved?

No, I would say it's fairly consistent in terms of the split of both volume and size of submissions that we're receiving. On average, since we started the business back in 2018, we've obviously seen a little bit of a change in the submission flow, both in terms of size and business line. But in the last couple of quarters, it's been fairly consistent, which is to say it's been a healthy pipeline that we're sort of excited to pursue.

Okay, great. Also wanted to follow up on the surety question from the previous line of questioning just around it looks like growth and premiums are going to be fairly stable here near term. I'm wondering within the context of this current environment, have you made any changes to your underwriting standards or criteria? Is there any tightening up as we think about credit tightening? as you're looking at some new contractors or even your existing pool of contractors, what's been the shift or any changes on that front to maintain profitability in that book?

Yeah, I would say this is a constantly evolving process. There's no one set of hard and fast underwriting rules that we follow. Our underwriters are pretty experienced in adjudicating and evaluating the contractors that we work with. So that process does change in the context of the job that's being evaluated in the context of the contractor, in the context of the economic environment. So I don't want to imply that we are necessarily tightening up standards today versus in the past, because frankly, we're always quite detailed and diligent about how we're underwriting. We haven't seen, I would say, a change in the quality of our partners at this stage in the economic cycle, but we're certainly very aware of the headlines that Everyone today is reading in the market.

Okay, great. If I think about the Canadian business as a whole, you know, historically speaking, this would be like a high, mid to high 80s combined ratio business, generally speaking. You know, obviously, we can swing around a little bit, but generally mid to high 80s. With fronting now becoming a much larger piece of the equation, is it safer or is it more likely to think about this business as being low 80s or maybe even like 80 flats or below as fronting continues to gain scale? How are you guys thinking about the profitability of that business longer term, like let's say 2023, 2024, as opposed to just over the next couple of quarters?

Yeah, I think, Jamie, you've identified an interesting trend, which is that the fronting platform has been accretive to our operational results in Canada. Now, that being said, I would be at this stage a bit reticent to start to put out a forecast of how significantly that can change our sort of talked about or long-term average combined ratios. There is going to be a little bit of evolution here as we evolved the business. That being said, we've certainly seen the benefit of that in the last couple of quarters, but that benefit has also come alongside very strong performance in the surety and corporate insurance lines. So until we see kind of those long-term averages level out, I'm going to stay consistent with the guidance that we've talked about on combined ratio, but understand that as this business evolves, there are sort of evolving proportions of contribution to our net underwriting income and therefore our combined ratio.

Okay, great. I'll re-queue. Thank you. Thanks.

Thank you. And as a reminder, ladies and gentlemen, to ask a question, you will need to press star 11. One moment for our next question. Now, next question coming from the line of Tom McKinnon with BMO. Your line is open.

Yeah, thanks. Good morning. Two questions. One with respect to the tax rate was a little bit lower in the quarter. I think you can kind of run more like 20 operating tax rate around 26 ish percent. It was maybe 22. How should we be thinking about that going forward? What may have caused that lower rate in the quarter? And then I have a follow-up with respect to the U S operations. Thanks.

Yeah, I might, I might pass that tax question over to Dave Scotland.

Yeah, hi, Tom. We had some adjustments, sort of one-time adjustments in the quarter, sort of a book-to-tax adjustment, which you can sort of see in the rate rec. So I would say that our tax rate in the quarter was a little lower than what we would expect it to be on a go-forward basis.

And how should we be thinking about the tax rate then on a go-forward basis? 25, 26 range? um actually even a bit lower than that right because the rate in the us is 21 and ours is 26 so you know roughly proportionate to where the income is generated but yeah somewhere in between those two okay that's great thanks and then just looking at the uh um the fronting operational uh ratio in the us and i understand there it was elevated to some extent just on additional kind of internal spend but uh um I'm wondering if you can give some color as to how we should be thinking about that ratio going forward and how those spends will be trending and how that translates into improving operational leverage, if you will, in the U.S.

We've seen pretty substantial growth in the U.S., especially in Q2 and Q3 of this year. both as a reflection of and anticipation of that growth, we've been investing a bit in that platform. So you've seen a little bit of an increase in operational expenses for the U.S. as we've built out a bigger infrastructure platform and hired to support that higher premium level. Alongside that, you've also seen us purchase some reinsurance to protect our balance sheet and establish the risk corridors that we're comfortable with. you're seeing those impacts or those investments elevate that front-end operational ratio specifically in Q3. You've got a low 80s front-end operational ratio. I would expect that those same trends impact the front-end operational ratio in Q4, so you'll likely see a low 80s front-end operational ratio in Q4. Now, that being said, we would anticipate, given the earnings pattern of fees, the premium that we've been putting on, you'd start to see that mitigate through 2023. So we think about that long-term average target for fronting operational ratio, hopefully being in the mid 70s, and you'd hopefully see that accrete over 2023 back down to that level. And certainly that's something we'll keep both you and our investors very up to speed with in our comments.

Okay, thanks for that.

Thank you. One moment please for our next question. Our next question coming from the line of Marcel McClain with TD Securities. Your line is open.

Sorry, my question was around the fronting operational ratio and the reinsurance purchase, but you just covered it. Thank you. Thanks, Marcel.

Thank you. One moment for our next question in queue. And our next question coming from the line of Stephen Bolin with Raymond James. Your line is open.

Morning. Just want to make sure I heard your comments right about Q4 for the U.S. business, that the profitability should be similar or the net underwriting income should be similar. Is that what you stated?

Yeah, so I was just speaking directly to front-end operation ratio. There's going to be some impacts on net underwriting income based on growth in the business, but on a ratio perspective, I would expect that – that certainly that front-end operational ratio looks a lot like Q3.

Okay. And maybe a longer-term question on the U.S. business because, you know, we've both seen the robust kind of premium growth. I mean, what is your, I would say, two- or three-year vision for this business? Is it, you know, I mean, obviously you're getting admitted. You're still doing good business in the ENS. But, you know, is this, you know, you're going to probably be, what, 1.6% 1.7 billion maybe in premium this year. Is this a $5 billion business in three years kind of thing? What's your longer-term vision for the U.S. business?

It's a great question, Stephen, because frankly this industry and this business has grown faster than we originally planned for, and that's been a factor of a few secular tailwinds in the market, both higher growth in the MGA community, higher growth in the ENS lines in the U.S., so we're certainly very happy to see that. The other factor that has impacted this is the higher proportion of fronting companies supplying capacity to the MGA community, and we would certainly hope and anticipate that all those trends continue. As you referenced, the other factor that really hasn't contributed at this stage is the admitted platform or the admitted premiums that we would hope to produce. So I would certainly say that our growth rates from a mathematical perspective will likely mitigate, just given the size of the platform today versus historical. But we would be targeting 20% levels of growth on an annual basis going forward, acknowledging that that macro environment still feels fairly uncertain at this stage, but that we also have these secular tailwinds that are specific to our both business model and the areas of the market that we play in. That's all for me. Thanks, guys. Thank you.

And I'm sure we have a follow-up question. One moment, please. Follow-up question from Jamie Glenn with NBF. Your line is open.

Yep. Thanks. I just wanted to actually first just make sure I heard the last answer correctly, targeting at least 20% annual growth going forward. given the secular tarot wins like the MGA market, ENS growth rates, things like that. Did I get that right? Yeah, that's fair, Jim. Okay, great. And then I did want to follow up on the U.S. surety business. It looks like it was called out in this MD&A as contributing to surety growth. Has it reached a level where it's let's say, break even? Or can you discuss how much it is contributing at this point and what you're seeing from growth in the U.S. Shirty platform with your recent ads in various states and growing that business?

Yeah, at this stage, it's still relatively small. We see $2 to $3 million a quarter coming from the U.S. Shirty platform, although I would say it's not yet break even on sort of a fully costed basis. It is improving rapidly. and that's a business that we think has a lot of potential, a lot of runway to grow. So at this stage, still a bit of an investment period for that U.S. surety platform, but the team has done a great job in carving out a presence for relatively nascent operation in the U.S., and we think there's a lot of runway to grow there. Now, that being said, U.S. surety is a very competitive market, and that's an area that we likely won't see the type of rapid rise you'd see in business lines like fronting, but we do think it will be a very impactful contributor to the business over the long term.

Okay, great. And just in terms of that $2 million to $3 million per quarter, is that really coming from, let's say, one of the offices you added at the beginning, or are you seeing this come from all of the offices set up, or maybe a little bit of color around how your investments are driving the top line?

Yeah, we're happy to say it's a good mix of contribution from both current and new offices. The teams and the people that we're hiring have done a really great job of bringing on business, what we believe is good business, in a relatively quick way. Obviously, the earlier offices have a few more people in them. They're contributing proportionally more of the business, but new offices are not slouching in terms of their contribution, which is great to see.

Okay, that's amazing. Thanks very much, guys. Thank you.

Thank you. And as a reminder, ladies and gentlemen, to ask a question, please press star 1-1. All right, and I see no further questions in queue. I will now turn the call back over to Mr. David Clare for any closing remarks.

Thank you very much, operator, and thank you, everyone, for dialing in. We'll talk to you next quarter.

Ladies and gentlemen, that's the conference for today. Thank you for your participation. You may now disconnect. Good day.