Trisura Group Ltd.

Good morning. Welcome to Tresura Group Limited's third 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 treacherous filings with the securities regulators. At this time, all participants are in a listen-only mode. To ask a question during the question and answer session, you will need to press star 1-1 on your telephone. You will 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. Pressure continued its track record of performance in Q3. Insurance revenue grew 11%, and we posted a 19% operating return on equity. Growth, strong earnings, and increased investment income lifted book value to almost $750 million, a 24% increase over Q3 2023. In treasury specialty, we saw particular strength in our charity practice, the benefit of new distribution relationships in the U.S., and an exciting proof point of the potential of this platform. We continue to invest in the expansion of our recently acquired treasury listed companies and anticipate the benefit of these investments to grow in the coming years. Canadian fronting grew as a more mature platform and continued growth of existing relationships drove top line. We observed slower, although continued, growth in warranty as expanded programs and an improving auto environment sustained premiums. As highlighted last quarter, corporate insurance is experiencing balancing market conditions in Canada, and we remain committed to responsibly growing our existing book. We are excited about the potential of U.S. corporate insurance expansion to accelerate growth. Growth in specialty was complemented by consistently profitable underwriting with a loss ratio of just below 19%. in line with expectations and impacted slightly by changes in discount rates in the quarter. We continue to experience a slightly higher expense ratio as a result of startup costs associated with U.S. practices and proportionally more premiums generated through fronted structures. Underwriting discipline drove a strong combined ratio of 85.6%, albeit higher than a striking comparative year. The combination of growing and profitable underwriting and enhanced investment income, which grew 45%, supported a 3% increase in operating net income and a 25% operating return on equity. U.S. program insurance revenue grew 7% to $546 million due to maturation of existing programs. And premiums declined slightly as the impact of non-renewing a few programs earlier in the year was fully experienced in quarter. Excluding the impact of non-renewals, our core portfolio continued to grow in excess of 20%. Combined with a healthy pipeline of opportunities and continued momentum in the access and surplus and programs markets, we expect a return to quarterly growth later next year. Admitted capabilities continue to grow, and we generated $126 million in admitted insurance revenue in the quarter. Operating loss ratio and fronting operational ratio rose to 75% and 87%, respectively. A slightly higher loss ratio and a higher program retention drove the increase. We observed some impact from discounting on the loss ratio in the quarter, but also normal quarterly claims volatility. We reiterate our target of a low 80s front-end operational ratio in the median term, but I should note that as we increase retention, front-end operational ratio may increase, despite consistent expectations for profitability. Growth and an increase in investment income contributed to a 12% increase in operating net income and supported a 15% operating ROE. We have seen healthy 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. We have navigated reinsurance renewal consistently this year, and our pipeline of programs under consideration continues to grow. Consolidated net investment income grew 20% as a result of a larger portfolio. 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 insurance. We expect relatively consistent levels in investment income for the coming quarters as operating cash normalizes, offset by growth in the underlying portfolio. We are encouraged to see strong growth in U.S. surety, with $36 million in premium written in the quarter as our relationships expanded. We continue the process of expanding licenses and rate filings for both U.S. surety and U.S. corporate insurance. We remain committed to specialized underwriting, as well as conservative reserving. We are planning for growth, and with a capital base approaching $750 million in greater scale, we feel optimistic for the year 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. Consolidated ROE on a rolling 12-month basis was 16.7% at Q3 2024, which improved over the prior year due to improved profitability from U.S. programs and demonstrates a return to our mid-teen target, despite the impact of the runoff program in 2023. Operating ROE was 19%, exceeding our mid-teens target. Insurance revenue was $807 million for the quarter and $2.3 billion year-to-date, reflecting growth of 10% and 14% respectively over the prior year. The operating combined ratio of Trishura's specialty was strong at 85% for the quarter and 85% for the year-to-date period. This is greater than the prior year as a result of an exceptionally low loss ratio in 2023. and a higher expense ratio in 2024, with the higher expense ratio being driven by startup costs associated with U.S. corporate insurance and a shift in the business mix towards fronting. For U.S. programs, the fronting operational ratio adjusted for core operations was 87% for the quarter and 85% for the year-to-date period, as a result of a higher operating loss ratio in Q3 and increase in retained business for the year-to-date period, which generated a higher FOR, as well as continued investment in internal infrastructure. Operating Insurance Service Result in Trishura Specialty for the Quarter was lower than the prior year as a result of a higher loss ratio, though this is in comparison to an exceptionally low loss ratio in 2023, as well as higher costs associated with the startup of U.S. Corporate Insurance. 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. Offering an insurance service result for U.S. programs for the quarter and year-to-date period was greater than the prior year, primarily as a result of growth in the business. Net investment income for the quarter of $16 million increased by 20% over the prior year and 40% year-to-date as a result of an increase in the size of the investment portfolio, but also benefited from higher risk-adjusted yields. Net gains from investments were particularly strong, with $11 million for the quarter and $24 million for the year-to-date period, primarily as a result of unrealized gains on equity and fixed income investments held under for value-to-profit loss under IFRS 9. Other operating expense, excluding the impact of share-based compensation, which is mitigated through a hedging program, increased by 10% for the quarter and 21% for the year-to-date period, reflecting growth in the business. Our effective tax rate for the quarter was 24% and 25% for the year-to-date period, reflecting the composition of taxable income between Canada and the U.S. Overall, net income for the group was $36 million for the quarter and $100 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, was $33 million for the quarter and $98 million year-to-date. which was greater than the prior year for both periods as a result of growth in the business, continued strong underwriting performance in Canada, growing profitable business in US programs and growth in net investment income. Earning per share was 74 cents in the quarter and $2.05 for the year to date period, which is greater than the prior year as a result of growth in the business, higher net gains, higher net investment income and the impact of the runoff in 2023. Operating EPS, which reflects was $0.68 for the quarter and $2.01 year-to-date, reflecting growth of 1.5% and 11.7%, respectively, over the prior year. Compared to the prior year, growth has muted as a result of an exceptionally low loss ratio at Trey Sheriff's Specialty in 2023, particularly in Q3, as well as the impact of a higher number of shares outstanding in 2024. EPS contributed to a 24% increase in book value per share over the prior year, resulting in a book value per share of $15.64 at September 30th, 2024. Book value per share also increased as a result of unrealized gains on the investment portfolio and foreign exchange gains. Equity at September 30th was $747 million and is greater than the prior year end as a result of positive net income for the period as well as unrealized gains in the investment portfolio and an increase in value of the U.S. dollar. As at September 30th, debt-to-capital ratio was 11.6%, which is greater than December 31st, 2023, as a result of some 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.