Trisura Group Ltd.

Good morning. Welcome to Trishura Group Limited's second quarter 2024 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 U.S. securities law. These statements reflect predictions of future events and trends and do not relate to historic events. They're 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. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. Thank you. I'll now turn the call over to David Clare.

Thank you, Operator. Good morning, everyone, and welcome. Treasurer maintained momentum in Q2. Insurance revenue grew 16% in the second quarter, and we reported a 20% operating return on equity. Growth, strong earnings, positive investment performance, and foreign exchange gains lifted book value to over $695 million. Effective this quarter, we have refined the naming convention for our operating segments. What was previously referred to as Tresure Canada has been renamed Tresure Specialty and includes U.S.-generated business in the surety and corporate insurance lines. Tresure U.S. has been renamed Tresure U.S. Programs, acknowledging the range of structures in that segment. There have been no changes to what is operationally reflected in the two reporting segments. In Trishura specialty, each line of business contributed to growth over the prior year. Canadian fronting and surety led the way, growing 33% and 19% respectively. Canadian fronting grew as a result of a more mature platform and continued growth of certain fronting relationships, while surety growth was driven by increased market share, expansion in the US, and increased construction values. Warranty grew 13% as we expanded programs with existing partners. Corporate insurance growth was muted at 2% over the prior year due to continued expansion of distribution relationships despite balancing market conditions. Strong growth in specialty was complemented by consistently profitable underwriting with a loss ratio of 19.6% in the period, in line with the prior year. We observed a slightly higher expense ratio as a result of startup costs related to U.S. corporate insurance and insurity, some non-recurring costs from changes in reinsurance structures, and a shift in business mix towards fronting, which carries a higher expense ratio. This drove a higher combined ratio of 89.8% versus recent history. On an operating basis, combined ratio was 87.5% in the period. The combination of growing and profitable underwriting with enhanced investment income, which grew 73%, supported a 14% increase in operating net income and a 28% operating return on equity. U.S. programs' insurance revenue grew 14% to $534 million as programs matured. Q2 is historically our highest premium quarter of the year, and we continue to expect full-year growth to be lower than previous years. Our admitted capabilities continue to grow as we generated $105 million in admitted insurance revenue in the quarter. The market continues to drive opportunities to excess and surplus lines, and we are well-positioned to capture business in both segments. US programs generated $22 million in fees, a 17% increase, and recorded $45 million of deferred fee income, indicative of future fees to be earned and a new record for our platform. Operating results in the quarter were strong and demonstrate progress made on improved profitability. Our loss ratio and front-end operational ratio rose to 68% and 85.5% respectively. Front-end operational ratio increased as a result of a slightly higher loss ratio and higher program retention, which increases the front-end operational ratio despite higher profitability. I should note that when retention increases, front-end operational ratio may increase, despite consistent expectations for profitability. Growth and greater investment income contributed to a 21% increase in operating net income and supported a 15% operating return on equity. On an annualized basis, the U.S. program's operating ROE was 18% for the first half of the year. We observed healthy, albeit stabilizing pricing trends across most lines and continue to expect hardening trends in certain lines to balance, although not reverse in the year. This will be informed by the state of the reinsurance market, as well as economic and interest rate trends, and we feel well-equipped to navigate this environment. Our pipeline of programs under consideration continues to grow. Net investment income grew 42% as a result of a larger portfolio and higher yields. We maintain a more defensive and higher quality portfolio than almost any time in our history. We have continued to extend duration, redeploying short duration securities and cash into longer duration instruments. Our goal is to secure current yields for years to come. We have observed rate reductions in Canada and anticipate the U.S. to follow this year. In the quarter, we added capital to our new surety balance sheet in the US and continued the process of expanding licenses and rate filings for US surety and corporate insurance. We expanded financial flexibility following an increase in our revolving credit facility to $75 million. We remain well capitalized across all entities and continue to evaluate both organic and inorganic opportunities. On June 3rd, we hosted our annual general meeting and second annual Investor Day. As part of the Investor Day, we hosted fireside chats with the specialty and U.S. programs management teams, providing the opportunity for investors to meet a broader group of Tricia or team members. For those who may have missed it, there was a replay available on our investor webpage. At our June AGM, Sasha Hawk was appointed to our board of directors. Ms. Hawk has enjoyed a long and successful career in the financial services industry and brings legal expertise to our board. We are excited to benefit from her contributions. We remain committed to specialized underwriting as well as conservative reserving. We are planning for growth and with a capital base approaching $700 million in greater scale, we feel optimistic for the years ahead. With that, I'd like to turn the call over to David Scotland for a more detailed review of financial results.

Thanks, David. I'll now provide a walkthrough of financial results for the quarter. Insurance revenue was $772 million for the quarter and $1.5 billion year-to-date, reflecting growth of 16% over the prior year. Insurance service expense, which consists of amortization of insurance acquisition cash flows such as commissions, claims, and other operating costs, increased in the quarter and year-to-date periods. primarily as a result of growth in the business, leading to an increase in volume of claims and commission expense. Net expense from reinsurance contracts, which includes both premium paid to reinsurers as well as recoveries from reinsurers, increased in the quarter and year to date as a result of growth in the business, which has led to more reinsurance ceded, particularly from U.S. programs. Operating insurance service results and treasurer specialty for the quarter was lower than the prior year as a result of a higher loss ratio. Operating insurance service result was greater for the year-to-date period as a result of growth in the business and continued strong underwriting profitability. Operating insurance service result for U.S. programs for the quarter and year-to-date periods was greater than the prior year, primarily as a result of growth in the business. The operating combined ratio of tertiary specialty was 87.5% for the quarter and 84.8% for the year-to-date period, which is greater than the prior year as a result of a slightly higher loss ratio and higher expense ratio. with the higher expense ratio being driven by startup costs associated with U.S. corporate insurance and a shift in business mix towards fronting. For U.S. programs, the fronting operational ratio, excluding non-recurring items, was 85.5% for the quarter and 85.2% for the year-to-date periods as a result of a higher loss ratio and an increase in retained business, which generates a higher fronting operational ratio. Net investment income increased by 42% in the quarter and 53% year-to-date as a result of an increase in the size of the investment portfolio, but also benefiting from higher risk-adjusted yields. Net gains from investments was $460,000 for the quarter and $12 million for the year-to-date period, primarily as a result of unrealized gains on equity investments held at fair value through profit and loss under IFRS 9, as well as foreign exchange gains as a result of strengthening of the U.S. dollar in the period. Other operating expense, excluding the impact of share-based compensation, which is mitigated through a hedging program, increased by 17% for the quarter and 27% for the year-to-date period, reflecting growth in the business. Net income for the group was $27 million for the quarter and $63 million year-to-date. Operating net income, which adjusts for certain items to reflect income from core operations and excludes the impact of non-recurring items, including the runoff business, was $31.3 million for the quarter and $64.4 million year to date, which is greater than the prior year for both periods as a result of growth in the business, continued strong underwriting performance in Canada, improved profitability in U.S. programs, and growth in net investment income. EPS was $0.56 in the quarter, which was approximately the same as the prior year as a result of the impact of the runoff in 2023, which impacted Q2 2023 positively. EPS for the year-to-date period was $1.31, which is greater than the prior year as a result of growth in the business. Operating EPS, which reflects core operations and excludes the impact of non-recurring items and unrealized gains, was $0.65 for the quarter and $1.33 year-to-date, reflecting growth of 16% and 17.7% respectively over the prior year. Consolidated ROE on a rolling 12-month basis was 14.4% at Q2 2024, which improved over the prior year due to improved profitability from U.S. programs. Operating EPS, which was approximately the same as the prior year, at 19.6%, was approximately the same as the prior year. Equity at June 30th, 2024 was $695 million, which is greater than the prior year end as a result of positive net income in the period, as well as unrealized gains on the investment portfolio and an increase in the US dollar. Book value per share was 14.56 at June 30th, 2024, and is greater than December 31st, 2023 as a result of profit generated from insurance and investment income in the period, unrealized gains on the investment portfolio and foreign exchange gains. At June 30th, debt to capital was 12.4%, which is greater than that December 31st, 2023, as a result of additional borrowing from the revolving credit facility in the period. 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.