Trisura Group Aktie

Good morning. Welcome to Trisura Group Limited Second Quarter 2026 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 Trisura's filings with securities regulators. [Operator Instructions] 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. In Q2, we extended the consistent execution and momentum of recent quarters. We achieved a significant milestone, surpassing $1 billion in book value, reaching our 2027 target ahead of schedule, underscored by disciplined, profitable underwriting and strong growth in investment returns. Underwriting performance was robust with a combined ratio below 85%, driving double-digit growth in earnings, while book value per share grew more than 20%, reaching over $21 per share. Our evolution continues as we write proportionally more primary lines business with attractive durable margins as we expand in both established and emerging platforms. Primary lines, Surety, Corporate Insurance and Warranty remain our foundation, growing 7% in the quarter. Surety underwriting income rose 44%, supported by a strong loss ratio of 17%. Growth continued across key segments.

In Canada, investments made in new capabilities are bearing fruit, demonstrated by increased submission activity and larger limit contract surety opportunities. While in the U.S., we injected further capital in our treasury-listed balance sheet to support underwriting across a more widely licensed platform. We added licenses in California, Minnesota and Hawaii and look forward to building our presence. Corporate Insurance delivered solid growth and higher underwriting income with premium accelerating and underwriting income up 60%. Our U.S. team is gaining traction, supported by adept navigation of a competitive market in Canada, where we continue to grow. Progress in U.S. Corporate Insurance follows our Surety playbook, expanding in areas we know and attracting experienced talent, supported by a centralized head office. While still early, this platform is expected to contribute meaningfully to profitability and scale over time.

Warranty net insurance revenue increased 19%, reflecting the earned premium impact of stronger GPW in prior periods. Business mix is expected to drive a slightly higher than historic combined ratio for the remainder of the year, while elevated claims experienced on select programs are expected to normalize. Our consistent approach in U.S. Programs has resulted in a strong contribution to our results. We achieved an 80% combined ratio, benefiting from steady performance and continued investment in infrastructure. Our scale, permanent capital and diversification differentiate Trisura as a preferred partner for strong profitability-focused MGAs. We have seen several recent opportunities to expand relationships in the U.S. to our Canadian platform, a unique advantage of our North American posture.

Canadian Fronting underwriting income was steady at about $5 million, modestly higher than Q2 2025 despite pressure from softening market and increased competition. We expect decreased premium this year in Canadian Fronting but remain committed to the line and its potential to grow profitably over the long term. We have continued to onboard new partners, building a pipeline that we expect will support premium over the coming quarters. Trisura has scaled meaningfully and we believe the opportunity ahead is significant. We remain committed to the pursuit of profitable growth through expansion of our primary lines and curation of a diverse, high-quality portfolio of programs in Fronting business. Above-average underwriting profitability, combined with enhanced investment income is expected to drive consistent increases in shareholders' equity. We are celebrating our 20th year at Trisura and it is striking to achieve our goal of $1 billion in equity on that anniversary.

Decades of underwriting experience underpin our continued expansion in both Canada and the U.S. And as our U.S. platforms mature, we expect them to equal or exceed the earnings contribution of their Canadian counterparts. We continue to invest in our future, attracting senior management talent to our organization. This includes our new North American leader of Corporate Insurance, Derek Spafford, who joined us to spearhead growth and expansion of appetite across North America. The opportunity to build our U.S. presence and expand our share in Canada is significant. We are looking forward to the years ahead.

Our AI pilot programs have shown strong adoption and promising results in multiple areas of the organization. Proof-of-concept initiatives in underwriting, actuarial and surety are demonstrating efficiency gains with human oversight maintained throughout. We continue to build on this momentum as we work towards broader rollout. Our goals are clear: scaling profitably in primary lines, expanding deliberately in the U.S. and maintaining discipline that has underpinned our track record. The structural tailwinds supporting surety remain intact as our practice establishes a larger presence across North America. Our U.S. Corporate Insurance platform is gaining traction. Q2 exceeded Q1 premium with momentum building. Primary lines continue to grow at attractive margins and investment income is adding meaningfully to the quality and predictability of earnings.

We believe we are well equipped to navigate cycles. The backdrop for surety is constructive. And despite softening trends in corporate insurance, our specialty approach continues to generate opportunities to grow profitably. We are significant consumers of reinsurance and increasingly supportive markets create opportunities to optimize reinsurance programs, build partnerships and expand our impact. Trisura's increasingly diversified earnings base, strong capital position, collaborative culture and investment in technology and talent position us well for the next phase of growth.

With that, I'd like to turn it over to David Scotland for a detailed review of financial results.

Thanks, David. I'll now provide a walk-through of financial results for the quarter as well as provide some additional perspective on our evolving mix of business and our capital position. The second quarter represented another profitable quarter for Trisura and reflected continued progress in the evolution of our platform. Operating earnings per share was $0.76 for the quarter, up 10%, contributing to a solid operating return on equity of 16.7%, comfortably above our mid-teens target. Underwriting results were strong, net investment income continued to increase and book value per share grew further in the quarter, up 20% year-over-year. While reported top line growth was mixed, we believe the underlying momentum of the business remains healthy.

Our primary lines businesses continue to generate attractive growth and underwriting profitability, while competitive conditions in Canadian Fronting and timing-related factors in Surety drove a modest decline in premium for the quarter. Net insurance revenue increased by 1%, reflecting the continued growth in primary lines of 6.6%, partially offset by contraction in Canadian Fronting. In addition, year-over-year premium comparisons in Surety were affected by an unusually strong prior year quarter that benefited from timing effects related to new distribution relationships. We are encouraged by the continued momentum in primary lines, which represent more than 2/3 of net premiums written over the last 12 months, comprising Surety, Corporate Insurance and Warranty. These businesses represent the historic foundation of Trisura and continue to be central to our long-term growth strategy and profitability.

The mix of premiums continues to shift towards businesses that generate more profitability per dollar of premium and where we are investing the most for future growth. We expect our primary lines to achieve mid-teens growth in net insurance revenue for the full year. The unusually strong Surety comparison that affected the second quarter is expected to normalize over the balance of the year and we remain encouraged by opportunities in corporate insurance. Canadian Fronting pressured premium growth in the quarter. However, we continue to believe Fronting offers attractive long-term opportunities and maintain a healthy pipeline. Our Surety business continues to benefit from momentum in both Canada and the U.S. Approximately 45% of our Surety premium in 2026 is expected to be generated from our U.S. platform and we continue to see strong partner engagement with Trisura ranked among the top 30 U.S. Surety writers.

During the quarter, we contributed an additional USD 50 million in capital to our treasury-listed balance sheet, building on the momentum of recent state licensing additions, including California, positioning the platform for further expansion. Given the size of the market opportunity, we expect to continue supporting the platform through disciplined and measured capital deployment over time. Importantly, the economics of our U.S. Surety business are broadly consistent with those of our Canadian platform. While business mix differs modestly, returns remain attractive and we continue to see significant opportunity for profitable growth. Corporate Insurance also continued to make progress in the quarter. While still relatively small, our U.S. Corporate Insurance platform continues to build scale and we remain encouraged by its trajectory. We expect it to increasingly contribute to underwriting income and grow its relevance to our top line.

Turning to profitability. Our underwriting performance remained strong in the quarter with a consolidated combined ratio of 84.9%. The loss ratio in the quarter remained solid and within our expectations with modest decrease from prior year, reflecting a lower loss ratio in Surety and U.S. Programs. The expense ratio was consistent with the prior year and within expectations for the quarter. Underwriting income increased in the quarter, reflecting business growth and strong contributions from Surety and Corporate Insurance. We are pleased with the quality of the business being written across the portfolio and our underwriting performance continues to support our mid-teens operating ROE objective.

Net investment income of $22 million increased by 18% in the quarter, driven by new cash deployment to the investment portfolio. Investment income is becoming an increasingly meaningful contributor to earnings as the business scales and provides additional diversification alongside our underwriting results. Our operating effective tax rate was 24.7% in the quarter, resulting from the composition of taxable income between Canada and the U.S. Overall, operating net income for the quarter grew 10.7% to $36.8 million, reflecting consistent profitable underwriting and growing net investment income. Nonoperating results in the quarter primarily consisted of unrealized gains on the investment portfolio. Exit lines had an immaterial impact to net income in the quarter.

Turning to capital. David highlighted earlier that our book value exceeded $1 billion during the quarter, achieving the objective we had previously established for the end of 2027, more than 1 year ahead of schedule. We are pleased with that achievement and view it as a reflection of the continued compounding of the business through profitable underwriting, disciplined capital allocation and consistent execution over time. Book value has grown at an average rate of 26% for the last 5 years. As the organization scales, a larger capital base provides increasing flexibility to support organic growth initiatives, particularly across our U.S. primary lines, while creating additional opportunities to deploy capital in a disciplined manner.

Our balance sheet remains conservatively positioned with debt-to-capital ratio of 16.5%, well below our long-term target of 25%, providing meaningful financial flexibility. The company remains well capitalized and with capacity to meet regulatory requirements and support growth. As we progress through 2026, we believe our diversified specialty platform, strong capital and 20-year track record of disciplined underwriting position us well for the opportunities ahead. We remain focused on deploying capital thoughtfully, growing profitably and compounding long-term shareholder value.

David, I'll now turn things back over to you.

Thanks, Dave. Operator, we'll now take questions.

[Operator Instructions] Our first question comes from Doug Young with Desjardins.

Just going to the -- so yes, you dropped USD 50 million into the U.S. sub. It sounds like in the comments here, you're fairly bullish on the outlook for the U.S. Surety and just the corporate build beyond what you've achieved already. So maybe just hoping you can dig a little bit into what drove the capital injection and what you're expecting in both of these 2 U.S. markets over the coming year? And if you have any examples of wins you could throw out, that would be helpful as well.

Thanks, Doug. I think it's fair to say we are encouraged and excited by the trajectory of that U.S. business. A couple of factors drove the decision to increase capital or inject capital into that Surety balance sheet specifically. First and foremost, we are seeing good momentum on the expansion of our licenses, which just builds the infrastructure backbone of our practice. The types of opportunities that we are eligible for in the market can be directly tied to the amount of capital in the balance sheet that we have in that U.S. Surety platform. So in some ways, what we're doing is balancing the opportunity and pipeline that we see with the types of credentials we want the team to have out in the market. The more capital that we have in that balance sheet, the more opportunities candidly, we can see.

And so the balance is making sure that we are funding that balance sheet responsibly and giving the team a good pipeline of opportunities to go out and pursue. I think as we talked about and as Dave referenced, we are seeing quite a good pipeline of opportunities for the remainder of the year. Dave reiterated our expectation that our full year mid-teens premium growth target for that Surety platform is still intact, which will drive a healthy amount of growth in the latter half of the year. Anecdotally, examples of wins or premiums coming on, it's very typical. There's nothing dramatic happening across the platform but a very typical build and execution by the team of going out and winning business day-to-day and hand-to-hand with the brokers that we work with. I think the build of our licenses is going to support that going forward and we're excited to see that progress.

Perfect. And then -- yes, I think it's been a little while since you kind of embarked on going upmarket in Canada. And it sounds like you're gaining some momentum, sorry, in the surety market by going upmarket in the surety market. Can you talk -- I think you've got some new distribution partners. Can you talk a bit about the momentum that you're seeing on that side and the opportunity about -- from going upmarket in Canada in the surety side?

Yes. This is an exciting development for Trisura. It's been probably 18 months or so since we started talking about this initiative to grow into that larger limit space. It does take a while to credentialize yourself in the market and earn those opportunities. But what we're seeing very definitively this year is a step function change in the types of submissions we're receiving. So opportunities to compete for business on that larger limit space. I think from an update perspective or from a progress perspective, we're very happy to see that development and it's justifying and credentializing the investments we made in the team. The outlook for the surety industry in Canada is kind of exciting right now. There's a lot of commitments being made at the federal level and some other government levels for infrastructure spend. We think in the next few years, those likely disproportionately benefit that larger end of the market. And so we're keen to build our presence there.

And then last one for me, just on -- obviously, the softening going on in the corporate side. Can you talk a bit about what you're seeing? Because you were able to grow in the corporate insurance and part of that, I would assume is in the U.S. but it seems like you were able even to grow in the Canadian corporate insurance market despite the softening environment. Can you talk a bit about what you're seeing there? And any signs that you're starting to see maybe more rational activity in the corporate market and potential kind of prices kind of stabilizing and potentially going up?

I would say in our part of the market, Doug, which tends to be the more specialized risks in that corporate insurance market, you see a little bit less dramatic moves in prices. Certainly, we see competitive pressure in the market. But the moves that you see, let's say, in the commoditized or broad P&C market are not as material in that specialty line space. So that's the first thing that I would say. I think you're right that our ability to grow in this line is a combination of a really strong opportunity and trajectory in our U.S. platform. And that opportunity is market agnostic. We're simply building share in a market that we know and are excited to build. It's being supported by pretty strong execution of our Canadian team in the specialty line space.

So I wouldn't say this is a function of a change in trajectory of the market or a change in the pricing environment of the market. What you're seeing here is a bit of a benefit of the specialty focus that the team has that is now being amplified by just more scale in the U.S. I mean, anecdotally, I think you and I have talked about this in the past, Q1 was our biggest quarter previously for that U.S. Surety -- or U.S. Corporate Insurance platform. Q2 exceeded that. June was our biggest month yet in that practice, so the momentum is building. So it's a unique position that Trisura has because not only are we building sort of within our expertise in the Canadian specialty market, we've got an opportunity to replicate that geographically, which is, I'll say, less impacted by the timing nuances of any cycle.

Our next question comes from Bart Dziarski with RBC Capital Markets.

Just sticking with surety, congrats on the California license. I think now you're fully licensed at least in the major states. So could you talk us through about the ramp time in that state specifically? And then maybe more broadly, like now that you have licenses in pretty much all states, like does that change conversations on the ground with clients?

Thanks, Bart. I think, first off, we are very excited to have received California and this is maybe a bit ahead of where we expected. You are smart to ask about the ramp-up and the rollout. Post receiving our license, there's a process that we go through to file our rates, which is happening right now. That can be a few months of process. So I expect you're not really going to see the direct impact from California until sometime next year but it does change the conversation, right? This is a real catalyst for us to go out and talk to our distribution partners. You've now lapped a few months, if not quarters, of having some of those larger licenses in places like Florida and Texas.

And as you say, at 48 licenses, we would view this as a very fully licensed platform, which is why you see the confidence for us in putting capital into the entity. We continue to bring on new brokerage partners and we continue to bring on new opportunities in that surety space. These are just great points of conversation to increase excitement in that part of the market. We think that surety opportunity in the U.S. remains very, very significant. And now finally, we can hopefully stop talking about licenses in which states we're waiting on each month and focus on building the business.

Got it. Super helpful. And then maybe zooming out a bit a bit more strategically, like as you focus on primary lines and you're seeing longer-term attractive growth opportunities there, how should we think about the strategic fit, if you will, of the U.S. Programs and Canadian Fronting businesses to your business over the medium to long term?

I think these practices continue to be really great avenues for us to show up in the market in a different way and provide solutions to our partners. So one of the reasons we focused on and have built the business in the way that we have is, there's a complementary mix of business across these platforms. We're able to touch brokers in different ways in Canada with our Canadian Fronting practice. We're able to provide solutions to a really broad swath of the market in the U.S. One of the reasons you hear us highlighting and talking about primary lines maybe disproportionately in the last couple of quarters is we like to remind people that the majority of the business and the historic success of the business has come from there.

It doesn't in any way reduce the excitement or importance we have of these other lines of business. But we should highlight sort of the majority of the growth profitability, people and capital continue to be in those primary lines. We're building what I would say is a more durable, more exciting platform now that has really great components of market participation across now Surety, Corporate Insurance, Warranty, supplemented by these diverse platforms in Canadian Fronting and U.S. Programs. As you can see, when these programs or when these parts of the business run well and stably, they are really great contributors to not only the bottom line but our presence and narrative in the market.

Our next question comes from Tom MacKinnon with BMO Capital.

Just following on a little bit on that conversation certainly with respect to Canadian Fronting. I mean, it's kind of not primary but it is a good contributor to underwriting income. It does -- it contributes more than Warranty and Corporate Insurance. So like how should we be thinking about the underwriting income that you do get from that? I would add that it augments -- it jumps around in terms of its top line capabilities but it certainly is a good contributor to your underwriting income. So maybe you can talk about the outlook, 2 things here. What do you see for net insurance revenue going forward for this -- for Canadian Fronting? And more importantly, how -- do you think the combined ratio will sort of stay at this 77% level that we've -- that we're seeing in the second quarter despite what you've noted as being probably a bit more competitive marketplace?

Thanks, Tom. I appreciate the question. I think it's important to note that despite maybe some top line volatility in Canadian Fronting, we remain very committed to that line and expect quite a few opportunities to come out of that. Anecdotally, we continue to onboard new opportunities in this space. You've actually seen us nuance or adjust retention across the Canadian Fronting portfolio, which is why you see maybe a bit better underwriting income. I think pragmatically, if you look to the rest of the year, some of that pressure in gross premium written may pressure underwriting income. But I don't expect in the long term that trend to continue.

I think the amount of opportunities, the amount of touch points that we have in the market here, it's going to continue to be a platform that adds to that underwriting income. I think the comparison you make to something like a Corporate Insurance or Warranty specifically in the quarter, those types of comparisons may evolve over time. I mean Corporate Insurance is growing its net underwriting income by about 60% this quarter. So I think that trajectory will continue. But I don't in any way want to imply that a reduction in top line in Canadian Fronting reduces our excitement for the trajectory and potential of that business over time.

Our next question comes from Jeff Fenwick with ATB Cormark Capital Markets.

I wanted to start off asking about the growth in the corporate lines in the U.S. And maybe you could speak to what are the primary gating factors there around that growth ramp. Surety was certainly a very heavy lift. It seems like it's a little more straightforward with respect to your corporate lines practice. Is it about building broker relationships primarily? Is there some time and effort around administrative side of things? Where -- or is it more just about taking a cautious approach as you build that footprint? Like help us understand that.

Sure. It's funny, Jeff. Sadly and I hate to say this, Surety from a licensing and build perspective was almost a bit simpler than Corporate Insurance because what we're doing in Corporate Insurance is across multiple product lines. So the licensing from a state licensing perspective, we've achieved quite a wide set of licensing given the history and infrastructure we have in our U.S. balance sheet. But what we don't have and what you've seen us building over the last few years is our rate filings and our process there. So a lot of that product development work is getting done. In many cases, it's a lot more complete today than it was last year and that's why you're seeing the momentum build in that practice. As you say, once that product development work gets behind us, it becomes a process of building relationships with brokers, bringing on sort of the right broker relationships to build in the long term.

And all this is tempered candidly by sort of a cautious approach in building a business. Anytime we're building something, especially in a new geography or a new space, the first couple of years, we are not pressuring people to chase premium. We want to make sure that we build things profitably. So I know it's probably not the answer you expected that this was a more complex build than surety. But given the number of products we offer there, there's a lot of regulatory filing to get through on the product development side. We, for the most part, are through most of that. There's a few more products we'd like to get out there and now can focus on building that broker relationship and the onboarding of premium.

Helpful. And then you did cite calling out surpassing that $1 billion mark in terms of total book value of the business. And we've spoken in the past about improving your ratings, improving your size category and sometimes that's by segment or sometimes that's by regional balance sheet. But is there -- are there opportunities here to open a wider set of clientele as you gain this kind of scale?

Yes. I think any time, Jeff, that we see the business increasing in relevance and scale, there's opportunities for us to do more. The formal hurdles that you talked about in terms of rating or size category, those are going to continue being impactful and important. I think the next significant one in the U.S. is USD 750 million will bump us up another size category. So you're starting to approach that. The other area where this is more impactful maybe strategically or internally at Trisura, is this increased amount of capital and balance sheet size allows us to expand the business in exciting ways, right?

We're talking about optimizing retention across the portfolios. We're talking about larger limit opportunities in Surety. We're talking about moving upmarket in Corporate Insurance. None of that is really possible at the smaller balance sheet side. And so not only is it exciting from a let's say, a milestone or a mark in the sand for us to pass that $1 billion mark, it's a tangible demonstration of the more significant size of the entity, which is now being expressed through broader product offerings, being able to show up in a more significant way in the markets that we play. So it's a great narrative and great story for Trisura. And candidly, we're just so proud of the team for achieving this as far ahead of target as they have.

Our next question comes from Mario Mendonca with TD Securities.

Help me reconcile 2 comments you made in your opening remarks. You suggested that the appropriate ROE or the target ROE is something in the mid-teens. Reconcile that with the idea that you're approaching 17% today with a balance sheet that I think you've offered consistently is that you're overcapitalized right now. You've prefunded particularly the balance sheet, the Surety balance sheet. So if you're approaching 17% today but you're sitting on a lot of excess capital or excess premium capacity, why wouldn't the sort of long-term expected ROE for this company be something in the high teens, if not like 20%?

Mario, I think it's a great question and it talks a lot to sort of timing and time frame of when those ROEs are achieved. I think you've highlighted a really interesting lever for us to pull on this platform in that a good amount of capital today is what I'll call under premium. And if that capital was to earn the type of returns that we've demonstrated and deployed capital across the rest of the platform, there's quite an accretive impact on that ROE, which you've seen us achieve in the past, right? As you referenced, we've been in the high teens before on an ROE basis.

I think what you're hearing from us is a pragmatic and conservative view of the path to building to what that level of ROE could be in that in the intervening years, we need to make sure that we're investing for that build. So what you're highlighting, I think, is the North Star of the management team here and everyone who works to build Trisura, which is we want to increase and optimize that level of ROE. To do that in the short term, we think making these investments are going to drive a little bit of dilution to that ROE, which in the long term, as you say, should drive something a bit better.

So when I think about these -- there's 2 competing interests that you set at your desk, David and think about this company, I can see sort of 2 competing interests for you. One would be let's drive the ROE higher as you grow the premiums into the capital base. The second would be just continue to add a bunch more capital to grow the business over the long term. So you've got those 2 competing interests. The question is this, over the next, say, 3 years, which one wins out, continuing to add more capital to fuel long-term growth or sort of harvest this capital and drive the ROE higher? My impression from listening to you over the last year or 2 is you're predisposed to growing this business. Is that right?

I think it's fair, Mario. Our historic posture in Trisura has always been to pursue growth and grow the platform. And candidly, what surprised me in the time that I've been here has been the magnitude of opportunities that we've been able to pursue, which the impact of pursuing those opportunities obviously delays or nuances the types of ROEs that you achieve. So I would always rather be in a scenario where we've got exciting opportunities to invest in than a scenario where I'm optimizing in a perfect way ROE because I haven't got great things to invest in. My hope and my expectation for this platform is that the building component of the nascent platforms that we've invested in is generally behind us. So if you think about Corporate Insurance or Surety, both of those platforms have a lot of the infrastructure established already. So that investment phase seems to be behind us.

The question is, what's the opportunity set that we have in front of us from a premium standpoint? And what's the efficient frontier of prefunding that opportunity set and optimizing ROE? That's always the balance that we're trying to strike as capital allocators. I'm always going to want to pursue growth for the long-term sort of expansion of this business, which, to your point, prioritizes a bit of that ROE dilution. But we've been very fortunate through this investment phase, through this growth, we've actually been achieving very, very strong ROE. So I don't want to imply in any way that pursuing this growth negates or dilutes what is an attractive ROE. I think the nuance around the edges is optimizing it for now, means in the long term, we make investments today that pay off in a few years.

So bottom line, growth is the priority with the proviso the ROE always stays at least mid-teens. That's maybe a nice simple way to think of it.

That's it. Profitable growth is our priority.

Our next question comes from Jaeme Gloyn with NBCCM.

Just wanted to clarify or just get a clear picture on the U.S. balance sheet. Can you -- with the latest drop in, what is the level of the U.S. Surety balance sheet? Also, what is the level of the U.S. corporate balance sheet? And then what are the next thresholds that would get you into a different snack bracket in terms of your -- the markets that you want to compete in?

So the U.S. balance sheet today is USD 150 million dedicated to Surety. The Corporate Insurance practice actually writes or benefits from the established programs balance sheet. So we don't separate that one out. Candidly, every dollar or every dollar of capital that we drop into that U.S. Surety balance sheet just gives us more opportunity to write in that U.S. entity. There's no set thresholds formally in the marketplace. I think what you're going to see, Jaeme, is as our opportunities from a premium perspective increase, we're going to keep investing and dropping capital into that platform.

Really importantly, from my perspective, the accretion or dilution of that drop-down in capital going forward starts to get better for us because as you can see, most of the capital that we've dropped into this entity has been either internally generated or leverage capacity, which drives a lot better return on that capital in time as it earns. So there's no set target from a balance sheet size perspective of that U.S. Surety entity. I will just say and I'm sure some of the guys on my Surety team are listening, the bigger, the better, in time as long as we can justify the premium. And we think that we have a lot of that capital now either in-house or at levers that we can pull very, very quickly.

Yes. Okay. Understood on that. Second question would just be on the -- let's go on the investment income, healthy growth this quarter. Maybe you can talk about what the outlook for that investment income line is going forward? How the yields look? Is there more opportunity to continue to optimize that as the balance sheet in both the specialty business and the U.S. businesses grow?

It's been a great story watching the growth in that investment income line and the contribution to earnings. I think we're fortunate in that we, as a North American platform are benefiting from some relatively more attractive yields in the U.S. market than Canada. So we still continue to think that despite our, I'll say, relatively high level of book yields, deployed yields are still very attractive right now. I think outlook for this investment income line continues to be pretty exciting, mostly because the majority of our growth is coming from these primary lines, which tends to contribute more directly to the investment income portfolio.

Outside of those types of trends, the only item I would highlight is we are probably disproportionately allocated to an investment-grade bond portfolio. I think our allocations to things like equities, alternatives or non-fixed income is quite low versus most. So the only discussion or change you could see in the future is at what stage would it be appropriate to normalize that? And if we did, could we expect a better set of returns? That's a discussion that we approach very, very cautiously because as we've sort of demonstrated, the types of returns that we can achieve with this conservative portfolio with where yields are right now are quite strong.

That concludes today's question-and-answer session. I'd like to turn the call back to David Clare for closing remarks.

Thank you very much, everyone, for joining today and thank you for many of what I know our team are on joining the call today. We're very, very proud to be celebrating both our 20th anniversary and this milestone of $1 billion and we're looking forward to continuing to progress and evolve with you. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome, everyone. It is now 10:00 a.m. and time to begin the Annual Meeting of Shareholders of Trisura Group Limited. My name is George Myhal, and as Chair of the Board, it is my pleasure to Chair today's meeting. On behalf of the Board and management, I would like to extend a warm welcome to everyone attending through the online live stream broadcast today.

We are pleased to host the meeting online, accessible to all our shareholders to participate, submit questions and vote. I will now call the meeting to order and would ask TSX Trust Company by its representatives to act as scrutineers.

I will also ask Joanna Grossman to act as Secretary of today's meeting. And it is now my pleasure to introduce the members of management on the call. First, David Clare, President and CEO of Trisura Group; and secondly, David Scotland, Chief Financial Officer of Trisura Group.

As outlined in our management information circular, there are 3 items of business to be considered today. First, to receive the consolidated financial statements of the company for the fiscal year ended December 31, 2025; second, to elect directors who will serve until the next Annual Meeting of Shareholders; and third, to appoint the external auditor and authorize the directors to set their remuneration.

In connection with the business to be dealt with today, only registered shareholders who held shares in their name as of April 10, 2026, the record date of this meeting, or validly appointed proxy holders are entitled to vote at this meeting.

We will conduct the votes on the matters before us by poll. Once the poll is opened, registered shareholders and proxy holders will be able to vote through the webcast portal. Please refer to the instructions on the left-hand side of the webcast page. Polling will be open for all resolutions at the same time. This will allow you to choose to vote on each resolution immediately. If you voted in advance of the meeting and do not wish to revoke your previously submitted proxies, then you do not need to do anything.

There will be an opportunity to ask questions on each resolution in turn. Again, please refer to the instructions on the left side of the webcast page for information on voting and how to ask a question. I would note that those joining online as a guest will not be able to vote or ask questions.

Once discussion on all items of business has concluded, I will give you time to enter your votes and then declare the voting closed on all resolutions. In the unlikely event of serious technical failure that prevents the meeting from continuing, the meeting will be rescheduled. I now declare the polls open on all resolutions.

I am advised that the notice calling this meeting and the management information circular were disseminated to voting shareholders in accordance with all applicable laws. I have asked the Secretary of the meeting to keep a copy of the notice and proof of mailing with the minutes of this meeting. Based on the scrutineers' preliminary report on attendance, the secretary has confirmed that in accordance with the company's bylaws, there is a quorum present. I, therefore, declare the meeting properly constituted for the transaction of business for which it has been called.

Now turning to the first item of formal business. I will table the company's 2025 annual report to shareholders, which includes the company's consolidated financial statements for the fiscal year ended December 31, 2025, together with the external auditor's report. Copies of our annual report have been mailed to shareholders who have requested it and are also available on our website.

The second item of business at our meeting today is to elect directors who will serve until our next Annual Meeting of Shareholders. I would like to take this moment to thank Robert Taylor for his years of service on the Board of Trisura Group. Following Mr. Taylor's retirement on April 1, 2026, the Board appointed Chris Sekine to fill the vacancy. Mr. Sekine is standing for election by shareholders for the first time today. So it is my pleasure to introduce the 9 director nominees standing for election this year. These are Paul Gallagher, Sacha Haque, Barton Hedges, Anik Lanthier, Janice Madon, George Myhal, Chris Sekine, Lilia Sham and David Clare. All nominees are current directors of the company.

Information on all 9 director nominees is set out in our management information circular, which was posted on our website for shareholder review and available from the company upon request. I am pleased to report that based on the proxies received by management in advance of the meeting, each director nominee received votes in favor of their election from over 95% of votes cast. I now nominate for election as directors the 9 nominees named in the management information circular dated May 12, 2025.

This item of business is now before the meeting for questions. Okay. Hearing none, based on the votes cast, I declare that all 9 nominees have been duly elected as directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

That brings us to the third item of business today, which is the appointment of the company's external auditor and authorizing the directors to set their remuneration. As stated in the management information circular, the Audit Committee of our Board has recommended to shareholders that Deloitte LLP be reappointed as the company's external auditor. I now move that Deloitte LLP be appointed the external auditor of the company until the next annual meeting and that the directors be authorized to set their remuneration. This resolution is now before the meeting.

Okay. The appointment of auditor requires the favorable vote of at least a majority of the votes cast by shareholders present or represented by proxy at this meeting. Management has received proxies representing approximately 73% of the company's common shares. These proxies direct me to vote approximately 99.93% of those common shares in favor of the resolution. On that basis, I declare the resolution carried.

For those who have not voted on all the resolutions, please do so now as I will close the polls on all resolutions in 30 seconds. Thank you.

[Voting]

Okay. Thank you for casting your votes on these matters. The polls are now closed. The final voting results will be available after the meeting and posted to SEDAR at www.sedarplus.ca. As there is no other business, I declare the meeting terminated. That completes today's meeting. On behalf of the Board and management, I would like to thank everyone for attending and for your continued support of Trisura. The webcast will now end. Thank you.

All right. Thanks, Steph, and good morning, everyone, and thank you all for joining our fireside chat this morning with Trisura President and CEO, David Clare. We relaunched research coverage of Trisura at CIBC a few months ago, and we're excited to have the opportunity today to dig into what I think is a very interesting business at a particularly interesting point in time. We'll take a closer look at from both a company-specific perspective and a macro perspective. And before we get started, just a reminder that if you do have any questions, please send them to me over e-mail and I can work them into our conversation.

David, thank you for joining us this morning.

Thanks very much, Scott. Happy to be here.

Great. Let's kick off the conversation with the Q1 results. Another solid quarter. LTM operating ROE of 17%, book value per share growth of 16.5%, with 6% gross premium growth and an 84% combined ratio. So from your perspective, what parts of the business stood out in the quarter?

I think from my perspective, what was so nice about Q1 is the continuation of the trends we've been talking about highlighting now for 4 or 5 quarters. I think it's very nice to see a quarter where you saw a contribution from a whole bunch of pieces of the business, not any one individual item driving things disproportionately, and really importantly, I think progress, both quantitatively and qualitatively, on the types of strategic initiatives that we're really excited about.

So I know you mentioned some of the growth in book value, but net insurance revenue growth of about 13%, driven by really strong expansion of our practices in surety, both in Canada and the U.S. This has been something we've been talking about now 5 and 6 years. And the progress in this business, especially recently, has been substantial. I think if we combine that with some of the momentum that we've had in licensing and built the infrastructure of the business in the U.S. as well as some of the changes we've made in the team capabilities in Canada, it's just a really nice setup for that business.

It came through a little bit on the call, and I'm not sure if people on this call listen to our conference calls, but we also talked a little bit about qualitative progress in our corporate insurance business in the U.S. So as a reminder, we've been taking really successful practices in Canada, replicating those practices in the U.S. Surety is the first version of that. And corporate insurance is one now that over the last, let's say, 1 year, 1.5 years, we've been building out a practice in the U.S.

This quarter, so Q1 of 2026, we wrote more premiums in that quarter than the entire year of 2025 in our U.S. corporate insurance practice. So you're starting to see that inflection in, let's say, momentum in our U.S. corporate insurance practice, still small dollars, still small premium, but really nice to see that change in trajectory in the business.

I think beyond that, I know some of these points you're going to talk on later, we've had a real step-up in, I'll say, the quality and mix of our earnings. So investment income has increased 16% on a reported basis, about 19% on a constant currency basis. That's just really constant predictable income that is supporting the business, and it's meaningfully larger than it used to be.

And finally, a point I think you'll highlight later on, but we are really proud to get through our largest capital raise to date in the quarter. So we raised about $200 million in investment-grade bonds. This our first index-eligible bond, I think, firing on all cylinders for that first quarter.

Yes, it seems like the momentum is all pushing in the right direction across all the pieces of the business. So really good to see. As you mentioned, there's a lot to dig in there, and we will do that over the course of the call. But let's start with the last item you touched on there, the $200 million of the senior unsecured notes offering.

After you refinance the existing notes and pay down the revolver, I think that leaves you with roughly $75 million of incremental liquidity, and it takes debt-to-capital up to 17%. So wondering if you could maybe discuss the offering itself and then dig into how you expect to use those additional funds and finish with sort of what the ultimate ceiling or comfort level is for leverage in the business?

Yes. This was a really nice milestone for us as is growing, let's say, maturing company in the capital markets. Our first debt raise back in 2021 was relatively small, non-index-eligible not -- also not that widely distributed. This offering was very much the opposite of that. So a $200 million benchmark index-eligible size, really, really strong demand on the offering.

So I think we were well in excess of 3x oversubscribed for the offering. Candidly, it just shows the magnitude of change in scale and size of the business, presence in the capital markets, an ability for us to fund our growth initiatives more accretively than we have historically. I think you mentioned, we've taken our debt to capital from about 13% to 17%. We still think that's conservative and likely below long-term potential for the business. We've got a stated debt-to-equity target of 25%. So the business has a lot of runway from a leverage perspective to continue funding before we reach that level.

Most of the net proceeds of this business will be earmarked for our surety platform in the U.S. I think you can expect us in the next month here before the end of Q2 to be dropping about USD 50 million into our Treasury-listed platform in the States, reflective, I think, of our confidence in the growth trajectory of that business and the potential for that platform to meaningfully scale over the next couple of years.

Okay. That is a great segue because I do want to talk about the U.S. surety business. And I think we can start just by talking about the growth runway and what the balance sheet can support in terms of premium growth and how you think about underwriting leverage in the U.S. surety business.

Yes. underwriting leverage, it's a really great place to start in these businesses. It's very simple in the surety space. Underwriting leverage is relatively straightforward. It's between 1 and 1.5x premiums-to-capital. So today, we have about just over USD 100 million in our dedicated U.S. balance sheet. That means you can write USD 100 million to USD 150 million in premium. We're going to drop another $50 million into that platform, so you can lever that up conservatively 1:1. And as you mature the platform, as you grow you can move that a little bit closer to, let's say, 1.3, 1.4x.

So there's a lot of runway for us here. And candidly, one of the things you see, as we strategically invest in this surety platform, is we're prefunding that growth, right? The platform today is not fully levered. So we're not at that 1.5x, let's say, premiums-to-capital leverage in that surety business. But there's a real benefit for us in the market strategically of signaling that the entity is going to get bigger.

So the types of premium, the types of relationships that you have in the surety market, types of opportunities you see are directly correlated with the size of your balance sheet, besides your treasury listing. So for us, there's real benefit here of proactively signaling to the market and investing in this platform, let's say, a little bit ahead of the premiums that are coming online.

For investors, what that should signal for you is the confidence that we have in building this platform. And then for our broker partners, for our frontline underwriters, for our partners in the market, it signals to them that there is real commitment in this business. It allows us, candidly, to go after a much, much larger market in Canada. So one of the questions I get a lot is what's the market opportunity in the U.S.? And in about 5 years, we're about a 27th ranked player in the U.S. markets. That's just under a 1% market share. The U.S. markets are about 10x the size of the Canadian market. And so in Canadian dollars, it's about $13 billion in opportunity. In the U.S., there's a long runway for us in that market.

Yes. I mean, clearly, the growth there has been impressive already. And I think the question that comes up to me is, has that exceeded your expectations in terms of timeline to get there? And then even with what you've done so far, I'm curious what the drivers of that growth have been to get to where you are to be the 27th ranked surety underwriter.

Yes. I think candidly, if I was to show you, let's say, the plans for the business in 2020 when we first started talking about this, we are ahead of plan in terms of premium production. It's interesting, that success I would credit to the team, the types of people that have joined us and helped us build the business in the last 5 years. We've seen success in the marketplace for that team, taking, let's say, the Trisura way, that broker-focused, service-focused orientation, that boots-on-the-ground approach of the business. We've had success in building that out.

We've had some good success in bringing on strong distribution partners. So that's driven us to maybe outperform a little bit our premium expectations. The business in the last 5 years has been a bit ahead of our expectations despite, I would say, taking longer than we anticipated to actually license and build the infrastructure of the platform. So that's a really nice narrative, if I can call it, nice about taking longer than we hope.

It's a nice narrative that the team was able to perform, produce premium, build a business, maybe without all the tools that most of our competitors have, which is a fully 50-state-licensed big platform. You saw us talk a little bit in the quarter, but the progress we've made on licensing, getting those big 5 states onboarded and building up sort of our presence across the U.S., that's just going to build momentum in this practice.

Right. And if we stick on licensing, I mean, you said you added 5 new licenses in Q1. Just for investors to understand, what is the -- how long is the process typically to get these licenses? And how quickly can you ramp up once you do get a license in a given state?

Every license, every state is different, and this is the joy of operating in the U.S. Each state has a different insurance department. Each state has a different licensing process. Some states are very simple. In some cases, it's a number of months, a matter of months, 2 to 3 months before you get your license. Some states, the more attractive, more popular states take a long time. And so at the short end, right, when we first acquired our Treasury-listed shell in the U.S., we were low single digits in terms of licensing. That was about 2 years ago.

In that 2-year period, we've expanded that licenses down to, I think, 46 or 47 licenses. So there's a real expansion of our presence in the U.S. Those longer states are the ones that we started talking about recently, right, those really attractive, large entities, large places like Florida, Pennsylvania, Illinois, those bigger states. The longest one we think will be California, but we've got relative confidence that starts to arrive in the next couple of quarters.

A better question, which is the one you asked, is what's the trajectory of growth in that business after you get that license. And again, that depends state by state. But what's really exciting for us is we've been talking about this now with our brokers and with our partners for many years. And many of them are very excited to do business with us in these new states. It depends a little bit on the state as to how quickly you start ramping up. But I would say within a 12-month period, you start to see real contribution from those states as you build up.

It depends a little bit on what your staffing model looks like. Do you have people in the state? Do you have boots on the ground in that state? What's the type of projects that are navigated? This is the beauty of surety. It is a very local product, and having people in those markets matters a lot. And so we see, for example, in some areas like Illinois, where we have a Chicago office, that license and that trajectory is very quick, where you've got something where -- in Florida, where we don't have an office yet, but we'd look to open one up soon, is maybe a bit longer trajectory of contribution.

And is the goal to eventually have boots on the ground in every state? Or is there sort of less -- is that maybe a less efficient way across the entire country?

No, it would be inefficient for us to have boots on ground in every state, but you do cover, let's say, regions of the U.S. from hubs. So you can have something in the Northeast, you can have certainly something in the Southwest, maybe something in the Southeast, Central as well. So we have offices today Connecticut -- Stamford, Connecticut, Chicago, Denver. I think you will see us likely have an office at some stage on the West Coast. So there's natural areas of focus where you're going to cover a number of states, multiple states from one part of the country.

Makes sense. And then just to finish up on the licensing, can you just remind us -- I think, you're US -- there's 5 outstanding, and roughly timeline, I think you obviously mentioned California there, but is there any -- when are you hoping to get and be fully 50 state-licensed?

Yes. I think there's always -- I think by the end of the year, we would expect to have, let's say, commercially the licenses that we need to really pursue the business. There's always 1 or 2 that take longer. But I think if we get those large states, which many of them we have achieved now, Texas, Florida, Illinois, Pennsylvania, New York, you add California to that and you've commercially got, I think, the type of offering that you need. This is one of the reasons you see us talking so openly about dropping more capital into the business?

Right. I do want to stick on just on the U.S. here just because I do think it's a big growth engine. I think there's some interest from why here about the competitive landscape in the U.S. surety business. I think it's maybe a little harder to get because it's sometimes a smaller part of some of these larger businesses, of the publicly traded companies at least. So I was hoping maybe you could give us sort of a quick competitive overview of what the U.S. surety business is like, whether that's key players, what their strengths are and maybe how you look to compete against them as you look out margin.

Yeah. So U.S. surety and surety in general is a very attractive part of the market, right? Most large commercial players would have a surety practice that's underneath the broader piece of the business. They often don't talk about it directly because it's a small part of their overall business, but many familiar names, to everyone on this call, participate in this industry.

So if you think about the U.S., top 5 players account for about 42% of the market. So there's a concentration at the top and then a very long tail beyond that. Those players would be people you are very familiar with: Chubb, Travelers, Zurich, Liberty Mutual, groups that have in common very, very large balance sheets. And that's a bit of the difference between us.

And one of the challenges as we sort of build up our ranking and our presence in the U.S., as you get into that larger part of the market, you're competing with people with a lot bigger balance sheets. Usually, they're writing insurance across a whole bunch of different business lines, how their Treasury-listed balance sheet supporting a broader set of business. The difference in Trisura is that attractive part of business, that surety piece of the business is our main thrust, our main focus of the business.

So it's a double-edged sword for us. It's a very attractive high-margin piece of the business that has demonstrated over 20 years, in our practice here in Canada, how attractive it is to demonstrate your expertise there. It's a place that's very competitive, both in Canada and the U.S. And so that market, as we build up, the way we compete is candidly that focus and that dedication to just writing -- of our 3 or 4 lines, surety is a core pillar of it.

And so -- when we talk about competing, when we talk about building a business, this is an execution story, boots on the ground, going out and building relationships and building up the business. This is exactly how we build things in Canada from a 0 ranked player to a fourth ranked player. The U.S., we went from a 0 ranked player to about a 27th ranked player in the last 5 years. I think you would expect us over time that success starts to move us up. And that success is going to be driven by our ability to differentially service the brokers, to demonstrate our expertise and to show people that we're a permanent player in this market.

Okay. Really helpful overview there. Just last one on the U.S. surety business. I want to touch on the combined ratios, which I think have been on par with the Canadian business recently. Just wondering if there's any structural reason that those shouldn't remain similar to what you've seen in Canada or if it sort of depends ultimately on the specific risks in underwriting and what the exact policies that you have in place there?

No. No, I think on an overall basis, the business economics are pretty comparable between the 2. A little bit will depend on mix between commercial and contract at a high level and a year to year. But when you're modeling these businesses, we think about it very much as a North American practice. That North American practice should have very similar economics across the business.

Okay. Great. Really helpful. Sticking with surety but moving north of the border, I do want to talk about sort of the move into larger limit bonding, which I think has been -- we've talked about it a decent amount, and I think there's some optimism that you're positioning yourself for some of these larger nation-building projects over time. Could you just give us an update on the larger limit surety business because I think there's a lot of investor interest in the topic?

Yes. It's maybe worth turning back the clock for investors who may be newer to the story. Scott is referencing a concerted effort that we made in the last 12 to 18 months to build out the large limit contracting practice. And historically, Trisura as a fourth rank player in the Canadian surety market has played disproportionately in the small- and medium-sized contracting space. So we think, on average, we have access to about 60% of the surety market in Canada. And we have about 12% to 13% market share on that base -- on that -- of the overall market.

One of the real benefits of us getting larger, and you've seen that on a balance sheet basis over the last 5 or 6 years, as we get larger, we've got more capabilities, more appetite for moving up in that surety market. And so the first step for us to do that as we start to see our balance sheet expand was to bring on people with really specific relationships and expertise in that larger limit bonding space. That happened at the beginning of 2025.

Since then, we've seen a really interesting influx of, let's say, attention, which is followed by submissions, in that larger limit space. And I would say this is a multiyear project, a multiyear effort, where the early innings or the early stages of the potential of this practice have been quite compelling. We've already seen Trisura being included on some conversations, on some submissions, having opportunities to play in this large limit space.

As we continue building the balance sheet and building our practice larger and just get better known in that space, it's intersecting at a really exciting time for the Canadian market broadly, right? I haven't really seen the federal government in the time that we've been at Trisura be this focused on building out infrastructure. If they are successful in enacting that change in investing in this business, the surety market, specifically some of these larger limit spaces, but candidly, also the smaller and mid-sized space, it all benefits, right? More capital going into this, more projects, building out our infrastructure, those are all projects that require bonding.

Okay. Yes. There seems like a bit of good timing on top of a strategic expansion to move upmarket. So we'll keep a close eye on that one. I have a similar question that I asked on the U.S. business. But just on the competitive landscape in surety and as you look to move upmarket, if there's a different approach you need to take, who -- if there are certain other businesses that you think are ripe to take share from, I mean you probably don't want to put names on them, but like it's strategically how you look to sort of move upmarket from the way you run your business.

Yes. The first way, strategically we always think about this, is let's replicate the success we've had and the strategies we've adopted in the established piece of the business, the small- and medium-sized piece of the business. And that's really a focus on demonstrating our expertise and leaning into strong relationships in the broker community. So that's a very natural area. We often are asked by brokers if we can do or play in these other spaces. And historically, the answer has been no.

I think the change in the last couple of years is you've seen some changes or additions to senior leadership at Trisura, is we've brought on people with real expertise and familiarity in this space. And some of those changes in leadership have catalyzed groups of people moving over to our platform, so an ability to move teams of people over who have focuses in these spaces. That's now given us more credibility in the overall market to take market share, to be in those conversations with the larger players in this market.

And so without naming names, I think our overt ambition is to move from a fourth ranked player to a second or third ranked player. The people in the Canadian market who occupy those spaces as well as people in fifth, sixth and seventh who play in that larger space are all targets for us to be challenging for our seat at the table.

Great, yes. That makes a ton of sense. So I do want to move -- shift gears into the corporate insurance business. I think in your intro comment, you talked about the business starting to contribute more -- the U.S. business starting to contribute more meaningfully. I think the line was that the U.S. business grew more premium in Q1 than it did in all of 2025. So I'm just digging in on that U.S. expansion. Just -- could you just give us a nice sense of what stage you're at in the expansion of that business and what some of the key benchmarks or metrics you look at in the U.S. as you expand the corporate practice?

Yes. This corporate practice is very much following the playbook of our U.S. surety expansion. So the early innings, the early days of that expansion really focused on getting our infrastructure built up. So filing our rates, filing our forms, building out relationships with regulatory bodies, that's the work that we've been doing 2 years now in the U.S. of building up that base.

What's followed in the last year or so is building up the team, so attracting the right type of professionals to the organization who can bring on relationships in that local U.S. market and also fit in with the appetite or the underwriting appetite and approach of Trisura, which is that we are very much a profitability-focused underwriting shop in very specific parts of that market.

Those 2 legs of the stool have now been established. We've got sort of the right level of presence from a licensing perspective. We're getting critical mass on rates and forms being filed across the U.S. And now we're starting to go and build the business. And the one complexity I would highlight in corporate insurance versus, say, surety is, surety is one product, right? You're going out and filing one set of rates and forms. Corporate insurance is 4 or 5 products. So it's a bit longer ramp-up for you on that initial build period.

Now what we're seeing is you're getting through that investment phase. And I always talk about that initial period of being about a 3-year period to break even in the business. You're starting to see, in Q1 anyways, a little bit less of a drag from that U.S. build in corporate insurance. And my hope, as we go through the rest of the year, is you start to see more meaningful premium production, and that creates more meaningful contribution from the U.S.

We're not in the stage yet where the U.S. business will be writing anywhere close to comparable combined ratios to the Canadian business, but you put that flag of them saying, okay, this is the first time you've had an improvement in that business in its contribution. So that's really exciting. I think this rule for the U.S. in being substantially larger, and we generally think about the 10x rule from an opportunity perspective, is very much alive in that corporate insurance space.

Important for all of our investors to appreciate the lines of business that we are targeting, the types of practices that we're looking at look very much like our Canadian business. So we are not going out here to try to write something different. The underwriting authorities, head office functions are the same for both our Canadian and U.S. practices. So you've got consistency of approach and risk appetite. And there is a massive amount of premium in that U.S. market that we're very excited to compete for.

Yes. I mean, you answered a couple of my questions as we went here. But I do want to sort of -- maybe for the group or anyone who might not know, can you sort of -- can you touch on that -- on the lines that you do write in the corporate practice in both Canada and the U.S.?

Yes. So we always talk about this. We call it corporate insurance, but this effectively means products that small- and medium-sized enterprise need to operate. This generally means things like management and financial liabilities, so directors and officers insurance, errors and omissions insurance, professional liability, general liability products, fidelity products. So these are very typical insurance products for businesses.

The reason we qualify them as specialty products is that generally the types of clients that we are focused on are smaller entities than, say, public companies. So you're doing a little bit more diligence and work on private enterprises to adjudicate the risks. Your limits are generally smaller than the limits that you're putting out in that larger space. And that practice that we've established here in Canada for a long time is what we're looking to replicate now in the U.S.

Okay. That's helpful. And then as we talk -- you mentioned combined ratios and not being fully scaled up. But when you are fully scaled in the U.S., do you expect -- it sounds like you would expect the combined ratios to align with the Canadian business, or is there competitive dynamics, given it's a larger market that might impact the profitability?

Yes. I think we tend not to model individual combined ratios for the business because you're allocating expenses across the overall business. But I think the mix, if you were to segment them, combined ratios will be very similar between the 2. The composition of that combined ratio will likely be a bit different. Your loss ratio is probably a bit higher in the U.S., but your expense ratio is a bit lower. So the idea here is that on an aggregate basis, you're building practices that are consistent on a combined ratio despite having maybe different mixes in the composition of that combined ratio.

Okay. Interesting. And then you look further out, when you are fully scaled, I do get sort of -- I did get a question on this. And just the potential for operating leverage in the corporate insurance business beyond maybe as you add the U.S. practice, is there potential for further operating leverage as the full business is scaled up relative to what you've done historically in the corporate practice? Or -- again, you might not look at it that way if the expenses are being allocated across the business, but just -- yes, I got a question on operating leverage.

I think that -- I think at the highest level -- I mean, this is a constant focus and question, rightly so, at Trisura is that we always talk about operating leverage. But the operating leverage we've achieved, it maybe is diluted by the continued investments we make in building new platforms. And so we've got this great playbook in front of us, which is to scale the business.

And the best rule for insurance companies is the bigger your premium base and balance sheet, the more operational leverage that you can achieve, right? You can scale your appetite, you can scale your premium hopefully on the same group of people. Where I would say the near-term operating leverage comes from in our corporate insurance practice is having some contribution from that business. We talked last year at year-end of about a $2 million drag from that corporate insurance practice. That hopefully is starting to move something below $2 million, that you've seen some better premium.

As that moves kind of through a drag into a contribution, you've got then a business that just naturally as expense ratio lowers. And as that expense ratio lowers, that's a really good signal of operating leverage. The question, I think, which is a good one, which is in the longer term, let's say, 3, 4, 5 years from now, could you build a practice on a North American basis that actually looks more efficient than an individual Canadian or an individual U.S. business?

I think that's a really good focus for us and a good focus for investors, is the more scaled this practice becomes, the more natural economies of scale we should be pursuing. And that's a trajectory that most growing insurance companies would point to.

Yes, I think that's an important item to watch. So we will be doing that for sure. Just a reminder to the audience, if you do have questions, you can e-mail them to me and I will work them into our conversation. But we will move on now just to the warranty piece of the business, coming off of a very strong year in 2025 with 33% gross premium growth in warranty. We did still see 9% gross premium growth in Q1, but obviously hard to live up to those big numbers in 2025. So maybe we could just touch on what was behind that outsized growth in 2025 and what the continued growth levers are for warranty as we go forward because the business is still putting up growth?

Yes. We still are very excited about the trajectory of warranty. We think there's a lot of opportunity in that going forward. We saw, I mean, in excess of 30% growth in 2025 in this business, candidly, as a result of us winning some business, launching new programs with existing partners. So you can have these chunky step-ups in growth trajectory for the business as you bring on these new platforms.

There's still lots of opportunities for us to bring on new programs or launch new practices with our partners. So I don't think anyone should take the move from 30% to 9% as any concerning trend on that business. It's just now a much larger practice, right? So you're growing from a larger base. I think this entity has a lot of opportunities to continue growing, working with the dealer groups and warranty administrators that we've had for now 20 years.

Okay. Yes. It seems -- I mean, not complaining about the growth, especially against a very elevated base in '25. So good to see that there's still some momentum there. And then if we just think about combined ratios, how should we think about combined ratios for -- in both the short run and the longer run in this business, again, almost a similar question on forward-looking operating leverage as well?

Yes. I think combined ratios in the short term for warranty will be a bit elevated. So you'll probably see this in the low to mid-90s for the next quarter or 2. Long term, we think this is a low-90s combined ratio business. It's very structured, right?

Warranty, unlike some of our other products, is much more structured. And so you're almost designing the product to target that low-90s combined ratio, which you've seen very consistently over the life of our business. I think that in the long term, it returns to that low-90s level, maybe a little bit higher than the kind of 89%, 90% that we saw in recent years, but still very attractive as we build this business.

Okay. I'm just going to keep moving through the segments. I'll move over to Canadian fronting and close off this Trisura Specialty portion. Premium growth there, certainly been under pressure for the last 5, 6 quarters. But I don't think that really tells the whole story of the health of the business. So maybe you can give us a sense of how the Canadian fronting market has evolved and where we sit today and what sort of you're thinking about the market, given the premium growth has been under pressure?

Yes. I think this is a very natural navigation of a changing market, right? What we care about and what our partners care about most is underwriting profitably. And what we've seen in Canada, maybe uniquely across our practice -- Canadian fronting group, is in much more traditional P&C lines of business than the overall practice. This is where you see a lot of competition.

And I don't mean competition from other fronting companies, but I mean competition from traditional players, from Lloyd's just coming back into the market. So you've got a combination of rate coming down a little bit. You've got a combination of more aggressive behavior from traditional insurance companies. So naturally, we see a little bit of a reduction in top line.

The story here, what we focus on, is margin and contribution on the bottom line. And that has been pretty steady for us. We also monitor internally pipeline of this business. And we still continue to have a lot of good both conversations and formal dialogue around launching new relationships in this space. So we think that there's still an opportunity to grow this business in the short and medium term. We think that likely is probably not demonstrated in, let's say, the near-term quarters.

But given what we're seeing on the coalface of the pipeline and opportunity set that's coming to us, there are a lot of ways for us to grow and develop this business. And I think this is a great example of something that can flex as opportunities arrive. I think naturally, as those opportunities evolve in the context of the market, we're going to find other ways to grow this business. And that's what you see the team focusing on right now.

Okay. That makes sense. And then in an environment sort of, where you have this elevated competition driving lower growth, those opportunities were -- where are they coming from? If maybe you could just sort of unpack when you say you're seeing more opportunities? What does that means at an operating level, given you're not able to, I guess, profitably chase all of that?

Yes. So I would separate this maybe and nuance. The opportunities we see from a pipeline perspective are people interested in doing business in Canada who don't have, let's say, operating entities or capital in the country. And so we're a very natural partner for insurers or reinsurers who are outside of Canada, who want to launch a practice here. We've become a very commercial and natural partner for those groups. Those types of opportunities continue to knock on our door.

So there are groups, entities who are very interested in building practices, building businesses here in Canada along the same lines of the businesses we've built with other partners who are now seeing maybe a little bit less momentum on rate or opportunity as a result of competition in the marketplace. So despite having some, let's say, top line shrinkage -- and it's important to note net premiums earned or that insurance revenue line in this business is what we track. The gross level is going to move around a lot. That net line is what's going to drive opportunity and profitability in the business.

We still see lots of opportunity to bring on new players into this Canadian marketplace. And those are the conversations when I talk about references of new lines of business, that P&C space in Canada, which is much, much larger than the specialty line space that we play in today, there's still a lot of groups out there who are interested in building that practice. So market -- Really interestingly today, as the market has quite a bit of capital in it, lots of people are looking for ways to deploy that capital, we've become a very natural partner for groups looking to deploy that capital in Canada who maybe haven't done it in the past.

Okay. Great. That's helpful clarity. So I do want to move now to the U.S. programs business. I would say it's been 5 clean quarters now in a row. The impact of the exited lines look to be pretty firmly in the rearview at this point. So can you just give, maybe someone who's more new to the story, just a sense of what some of the changes you've made to stabilize things in the last stretch?

Yes. So I think very naturally, Trisura is in its 20th year, we're an underwriting company. We have a really strong track record of positive reserve development in Canada, a really strong underwriting practice here. We launched a new business, a de novo business in the U.S. in 2018 focused on this program space, which utilizes our coordinates relationships between MGAs and the reinsurance community as well as underwriting our own share of the business.

As we grew that business, what we saw, let's say, going into our fifth or sixth year, is some of the assumptions that originally we had made around the reserving needed to be revisited. And candidly, that's a very natural evolution of a growing business, especially one as you're growing in sort of an expanding part of a newer market. And we made those adjustments very proactively and very definitively in 2024, so new team, new resources, new infrastructure, looking candidly to make very direct improvements in that practice. We proactively took those adjustments in 2024.

I think you're seeing a lot of the industry make some of those adjustments even now and last year. And what it's allowed us to do is focus on the partners and the lines of business, we think, are long-term strategic partners of Trisura. Take out those groups who, maybe profitability-wise, we don't think are representative of the opportunity in the business.

And that's very easy for us to say in 2024, but I think a lot of people want us to see how that evolves. And what you saw through 2025 and now even through Q1 of 2026 is those movements are staying fairly consistent. Those changes are bearing fruit in consistency, predictability, profitability of that business, right? You've got pretty consistent now few quarters of that low to mid-80s combined ratio coming out of that business. That's exactly where we want it to be running.

Okay. Yes, I mean, it clearly looks like things have stabilized, as I mentioned in the question. So there was -- as you mentioned, there was a pause in the growth of new programs that you were adding, but I think in the last few quarters, there's been some momentum on adding new programs into the mix. Could you just give us a sense of what type of -- what kind of programs these are and whether that be the types of business or the MGA partners that you're working with? Yes, a little more color on that would be really helpful.

Yes, it's interesting. We -- this market is one that benefits a lot or utilizes a lot of reinsurance. And some of the comments you made earlier on cycle, I think, it's important for people to understand about Trisura, we generally don't follow traditional insurance cycles, right? Our lines of business that we underwrite directly are specialty lines. You're somewhat removed from the broader cycle. Really importantly, U.S. programs actually benefit from soft market cycles.

And what I mean by that is the lifeblood of the business or at least a real driver of the business is access to reinsurance partners. What we had seen really starting in 2022, but accelerating in 2023 and 2024 was an extremely firm reinsurance market. And so that really lowered our appetite to be launching a bunch of new programs if the quality and types of reinsurers that are out there are not up to our standards.

What we had seen starting at the beginning of 2025 and what we started signaling through some of our commentary was a real shift in reinsurance market appetite. And the area that we've seen it most definitively is the property space. So we hadn't launched a new property program probably in 2 or 3 years in that U.S. program space.

All of a sudden, in the latter half of last year, you saw us successfully launch a couple of new property programs with really high-quality rated panels of reinsurance. And that theme of higher quality reinsurance being available for both existing partners and potential new partners gives us just a bit more confidence in talking about the growth trajectory of that business.

So it's a real shift in the business, I think, catalyzed by that reinsurance market, which has driven us as we've gone through a number of, say, maturity milestones in the sophistication of the operations of the business, more confidence to lean in, right? And so we're talking pretty openly now about that business growing kind of mid- to high single digits for 2026. And the upside there -- the risk to the upside is does that reinsurance market continue to soften, does that capacity continue to come into the market? Because we've now got an environment that's a lot more supportive for the model that we've built.

Right. And I think we're seeing -- even on the midyear renewals, I think I saw earlier this week that the pricing -- the reinsurance pricing certainly still remains certainly soft. So hopefully, that momentum continues for the U.S. program side of the house. That sort of covers off the insurance businesses.

So I do want to just quickly pivot over to the investment income. I think you mentioned in your -- you gave us sort of a good summary in your initial comments, but I wanted to sort of talk about the near-term outlook for the investment portfolio. I think yields have generally been pretty stable for you as you look back across the history. We saw maybe some seasonally lower yields in Q1, but just wondering if there's anything structurally different in the approach on the investing side or if you're sort of comfortable with what you're doing at the moment?

Yes. We have been historically very, very conservative on the investment portfolio side. And I think the team has done a really great job of defending yields, as we saw last year especially, maybe at the beginning of this year, yields coming down. So a great job of efficiently redeploying, targeting that investment-grade bond yields being consistent.

I think as we've matured, as we've grown the platform, the natural question is what's the long-term asset allocation model for the business. And I think there's some clear opportunities for us of normalizing our approach maybe versus market peers. We've historically had a much lower equity allocation than broader peers. We've historically not invested that much in alternative products. And so we've avoided any sort of stress here in the market today talking about things like private credit or equity volatility. These really haven't applied to Trisura.

As the entity gets larger and continues to grow, I think a more mature spread of risk across the portfolio is a really exciting lever for us to pull to increase those long-term returns in the portfolio. And I think that's something we talk about a lot. Let's not only actively defend yield, but let's optimize it and talk about where the asset classes are that maybe we've under-invested in or under-allocated to in the past. Let's use this position of strength, which candidly is what we're sitting on, right? A short-duration investment-grade bond portfolio is a really great source of funds anytime we see market volatility.

So end of March, we saw relative equity volatility in the market, great opportunity for us to increase marginally our equity allocations. Those types of moves, which are gradual and appropriately risk-managed, are the types of things I would expect us to be evolving or navigating over the next year?

Okay. So yes, there's maybe some -- at the margin upside to yields, if the market gives you the opportunity. So certainly something to track there.

Well, and one thing maybe we've never talked about really in the past and you hear some other insurance companies talking about it, but the predictability and magnitude of contribution from a portfolio of investment-grade bonds at Trisura is meaningful. And it's meaningfully different proportionally than what our business used to be. So this is a real change in predictability and proportion of EPS that's represented by just an investment-grade bond portfolio.

Right. And maybe if you think about the portfolio as it stands in the short duration, as you -- as things roll over, do you feel relatively confident on the fixed income side that you can defend or maintain the sort of current yield levels with maybe some upside, like you mentioned on the margins? Do you feel good on the roll-over to stay there?

Yes. I'll be the first to acknowledge, fixed income volatility this year has been dramatic. That's actually given us more opportunities right now, right, because yields -- all-in yields are actually quite a bit higher than they were at the beginning of the year. So certainly, today, when we talk about deployment and building the business, that expectation for yield consistency is very much there. And we're going to take opportunity of that -- we're going to take advantage of that opportunity through the rest of the year.

Okay. Great. Yes. Certainly, I don't think you get any pushback that the fixed income market has been volatile. So just wanted to -- as we get closer to the end here, move on to sort of some -- a couple of questions on capital allocation. I think you mentioned in the past, you at least -- you're at least open to inorganic sources of growth.

And I think you have, as you mentioned earlier, some room to take on the capital structure to maybe look at something -- some other uses of -- whether that -- to take the debt-to-capital up. On the inorganic side, I think you mentioned in the past, likely on the smaller side, but I'm curious of how -- what your current thinking is on M&A and whether there's opportunities that could be attractive.

Yes. Our priority is going to continue to be on organic growth. I think maybe different than most P&C companies, and there's a lot of talk these days about the trajectory of P&C companies, especially in the context of a softer market. Trisura has a much different profile and posture than these groups from a growth perspective, right? There's not many entities out there launching de novo practices in sort of complementary business lines. That's going to be the core of our trajectory of growth.

That being said, I think we have a great track record historically of being really tactical on inorganic M&A, right, adding licenses, bringing on people, adjudicating sort of parts of the business that we think in 3 or 5 years can be meaningfully moved by pursuing something inorganically. Naturally, as we've gotten larger and built up, I think, a capital base, that opportunity set grows. And I think acknowledging that organic growth continues to be our main focus, we will always look for ways to scale the business opportunistically, inorganically. And this type of environment is a great one for us to be looking at that.

Yes, that was going to be my next question. Does this point we're in the cycle give you more optionality on the inorganic front? And it sounds like it does at some level.

Yes. I mean you're seeing it across the broader industry, right, a very natural corollary of the softer market is people look at these types of acquisitions more openly. I think people get a little bit more realistic around valuation in this type of market, and that gives us the specialty space, right? Let's acknowledge these businesses trade at premium multiples because their profitability is generally better than the broader market. And in the last few years, as those returns have been quite strong, it's been rare for people to want to part with those businesses. That may change in these types of environments.

Right. I think that only makes sense. And then just more broadly on capital allocation, is there anything you'd want to share on how you're bouncing? And I think growth is -- organic growth is clearly the focus. But is there anything else that fits into the capital allocation framework or puzzle that you look to communicate?

Yes. I think the strategic items we're always focused on is that organic growth, if we can supplement it tactically with inorganic, we'll look at that. You've seen and we've had some questions around buybacks. So we have been more active on the NCIB, candidly, mostly to offset dilution from equity awards. I don't think you'll see much more than that. Those types of initiatives are going to be our main priorities for the business in the near term.

I think longer term, we often get a question around dividends for the business. I think we've got a real opportunity here in the next couple of years to build a differentiated practice in the U.S. for the business. So until we establish those, I think the business is not yet one that you would expect to pay dividends near term. But in the long term and medium term, insurance companies, especially scaled ones, start to make a lot of sense as dividend payers.

Okay. That all makes sense. So as we come to the end here, you mentioned multiples in this space. And I think if you look at your own multiple and sort of the downward trajectory it's seen and given that sort of -- offset that against the growth of the business, which has continued to hold up, I'm wondering, from your seat, what do you think that the market or investors might be misunderstanding when they look at Trisura.

I think we've got -- listen, we've got a core group of really strong, really great partners who are shareholders of Trisura, but there are groups who are maybe more generalists or newer to Trisura who bucket the entity as more of a P&C company than a specialty company. I think that lack of -- it's tough, right? Let's acknowledge, we're a small cap in the Canadian market. There aren't a lot of peers for Trisura in the market, right? There's not a lot of entities out there, right, in the mid-80s combined ratio at a high-teens ROE for people to compare to.

And layer on top of that these trends of softer markets or concerns around softer market, it's sometimes difficult for people to wrap their head around a P&C business that doesn't necessarily get buffeted by those headwinds. And I think that's the disconnect today, right? You see a practice that by every measure is performing exactly the way that we hope it will. And the outcome of that is that we've grown the business substantially and growing into a much more -- let's say, a much lower valuation than we've had historically.

We believe if we put our head down and keep working on this business, that starts to get recognized. But the first step is for us to educate people on the difference of a specialty practice versus some of maybe the more general practices. And that's the work I think you're going to see us do a little bit more of now, right? The exercises like this, conversations like this, some other efforts that we have are meant to differentiate a little bit for people why Trisura is not a broad generic P&C company and why we have opportunities that are not the same as the broader market.

Right. And I think from my perspective, when I look at it, like you said, if you look at the peer groups that are doing mid- to high-teens ROEs with mid-80s combined ratios, they are trading at a premium multiple and a premium to where you're trading. So I think that if I left the audience, if anything, it would be -- the valuation, while it might not stand out against other P&C insurers, I think that in the specialty group that there's -- it's certainly an attractive time to take a look at Trisura.

So I think we've spent a good amount of time looking at the individual pieces of the business. But if we step back and look at the whole story, I think in summary, if there's anything you could -- outside of what you just said, sort of message to the audience and what you think Trisura is set up for the upcoming year, I think it's a good time to maybe just give us an idea of both 2026 and maybe even as near term as what the upcoming quarter and how the business is trending.

Yes. I think all of the -- in terms of quarterly check-ins, I think all the trends that we've been talking about for the last 5 quarters remain intact for this quarter. I think people should continue to expect us to be achieving that 15%-plus ROE. I think we've obviously demonstrated that we can outperform that. We're very excited that the goal we set out 4 or 5 years ago of reaching $1 billion in book value by the end of 2027, we look very well on track for that and hopefully to achieve that a little bit early.

I think those types of milestones for people tracking the long-term performance of the entity are really credibility-building. And if I take a step back from my seat, the vehicle is in the most powerful position it's ever been. Our balance sheet is the largest it's ever been. Our infrastructure base is the most significant it's ever been. Our licensing is the broadest it's ever been. We now just need to continue executing in the way that we've been doing it for 20 years. And the risk of that decreases every day. So it's a really exciting time for us at Trisura, and I think we can communicate that pretty clearly for investors.

Excellent. Well, I think that is a perfect time to wrap things up. So David, thank you again for joining us this morning, and thank you to everyone who joined the call and sent in some questions on what is definitely a busy day in the Canadian markets. So as always, if there's anything anyone wants to discuss in more depth, please feel free to call or e-mail. But again, thank you to everyone who joined, and have a great rest of the day.

Thanks, Scott.

Good morning. Welcome to Trisura Group Limited's First Quarter 2026 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. [Operator Instructions]

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 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 Trisura's filings with the securities regulators. [Operator Instructions] Thank you. I'll now turn the call over to Dave Clare.

Thank you, Daniel. Good morning, everyone, and welcome. We had a strong start to the year, extending consistent execution and momentum for 2025, underpinned by quality underwriting and a customer-focused approach. This is our best Q1 operating net earnings in our history, demonstrative of our ability to grow profitably through expansion. Underwriting performance was robust with an 84% combined ratio and book value per share growth over 16%, approaching $20 per share.

Our evolution continues, writing proportionately more primary lines business with attractive durable margins as we expand in both established and de novo segments. Primary Lines, Surety, Corporate Insurance and Warranty remain our foundation, growing 13% in the quarter. Surety grew 14% on a constant currency basis with success in Canadian contract surety and continued momentum in our U.S. expansion. We made meaningful progress in our U.S. licensing, receiving approvals in 5 states, including Florida most recently, one of the most active construction and infrastructure markets in the U.S. We continue to pursue 5 remaining state licenses and expect our expanding footprint to support growth.

Corporate Insurance demonstrated consistent growth and improved profitability despite a softer market, with GPW increasing over 5% and underwriting income nearly doubling, supported by a strong loss ratio and improved operational leverage in our U.S. practice. Progress in U.S. Corporate Insurance follows the approach proven in surety, expanding in areas we know well and attracting experienced talent supported by a centralized head office. We are seeing signs of momentum with Q1 premiums in U.S. Corporate Insurance exceeding full year 2025. While still early stage, this platform is expected to contribute meaningfully to profitability and scale over time.

Warranty net insurance revenue increased 19%, reflecting the maturation and expansion of existing programs after a strong 2025. U.S. program premium growth of 11% and net insurance revenues growth of 37% were strong, reflecting contributions from existing and new programs as well as the backdrop of a more supportive reinsurance market. We achieved an 80% combined ratio, benefiting from consistent performance and continued investment in infrastructure. Our scale, permanent capital and diversification increasingly position Trisura as a preferred long-term partner for strong profitability-focused MGAs.

Canadian Fronting underwriting income was steady at about $5 million despite pressure from a softening market. We expect decreased premium this year in Canadian Fronting, but remain committed to the line and its potential to contribute to growth and profitability over the long term. We continue to onboard new partners selectively, building a pipeline that we expect will increasingly support GPW over the coming quarters.

Investment income grew 16.5% to $21.2 million in the quarter, driven by ongoing contributions to the portfolio and mitigated by some seasonality and FX impacts. Defending yield and positioning the portfolio constructively through a period of elevated volatility was a key focus in the quarter. The portfolio remains conservatively positioned, ready to take advantage of market dislocation as attractive opportunities arise.

The completion of our $200 million senior unsecured notes offering in March was a meaningful milestone. It represents our largest capital raise to date and refinanced existing indebtedness, extending our maturity profile and strengthened the balance sheet in preparation for future investment. This was executed well by the team despite geopolitical volatility.

Trisura has scaled meaningfully, and we believe the opportunity ahead is significant. We remain committed to the pursuit of profitable growth through expansion of our primary lines and curation of a diverse, high-quality portfolio of programs in Fronting business. Above-average underwriting profitability, combined with enhanced investment income is expected to drive consistent increases in shareholders' equity.

Expansion into the U.S. builds on 2 decades of disciplined underwriting. As the platform matures, we expect them to equal or exceed the earnings contribution of their Canadian counterparts. The significance and profitability of our U.S. surety platform and early momentum realized in U.S. Corporate Insurance this quarter lends credibility to the attractiveness of our geographic expansion.

As we navigate the balance of 2025, our operating priorities remain consistent, scaling profitably in primary lines, expanding deliberately in the U.S. and maintaining the discipline that has underpinned our track record. The structural tailwinds supporting Surety remain intact, and we are confident in our ability to replicate our success in Corporate Insurance. Primary Lines continue to grow at attractive margins and investment income is adding meaningfully to earnings quality and predictability.

Volatility creates opportunities to demonstrate consistent insurance appetite, invest opportunistically and strengthen our reputation. With the strongest capital base in our history and a platform that continues to scale, we are optimistic about the years ahead. 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 walk through our financial results for the quarter. Operating EPS was $0.78 per share for the quarter, up 11%, contributing to strong operating return on equity of 17%, comfortably above our mid-teens target. Gross premiums written was $730 million for the quarter, reflecting continued disciplined growth.

U.S. Programs grew by 11% in the quarter, demonstrating continued growth, while Surety delivered strong growth of 13.8% in the quarter. Surety performance reflects ongoing strength in Canada and continued momentum in our U.S. platform, supported by distribution expansion and additional state licensing. During the quarter, we advanced our U.S. build-out, reaching 45 licensed states in our treasury listed entity with recent additions, including Illinois, Pennsylvania, Georgia, Florida and Washington State. We continue to see strong partner engagement and are progressing towards scale with Trisura ranked among the top 30 U.S. surety writers. We expect to support this growth with continued measured capital deployment into the platform over time.

Net insurance revenue, broadly consistent with net premiums earned, was $193 million for the quarter, reflecting solid growth of 12% over the prior year. This disciplined approach to growth is reflected in strong underwriting performance with a combined ratio of 84% in the quarter. The loss ratio in the quarter remained solid within our expectations. The increase compared to the prior year reflects a particularly strong Q1 2025 in U.S. Programs. The expense ratio was consistent with the prior year and within our expectations for the quarter.

Underwriting income increased modestly in the quarter, reflecting business growth, partially offset by a slightly higher loss ratio. Underwriting performance continues to support our mid-teens operating ROE objective. Net investment income of $21.2 million increased by 16% in the quarter, driven by new cash deployment to the investment portfolio. Our operating effective tax rate was 23% for the quarter, reflecting the composition of taxable income between Canada and the United States.

Overall, operating net income was $37.9 million for the quarter, reflecting consistently profitable underwriting and growing net investment income. Nonoperating results in the quarter primarily consisted of favorable movement in the yield curve in the period, partially offset by unrealized losses on the investment portfolio. Exited lines had an immaterial impact to net income for the quarter.

Strong earnings per share contributed to a 2.6% increase in book value for the quarter, resulting in a book value per share of $19.91 at March 31. This was partly offset by unrealized losses booked through other comprehensive income on the fixed income portfolio driven by higher interest rates. Book value has grown at an average rate of 26% over the past 5 years, ending the quarter just under $950 million. We are well on track to achieve our book value target of $1 billion by the end of 2027.

We successfully completed a $200 million senior unsecured notes offering in March, our largest issuance to date and a meaningful step in the evolution of our capital structure. The issuance was well supported by the market and executed on attractive terms, enhancing financial flexibility while maintaining a conservative debt-to-capital ratio of 17%, well below our target of 25%. The company remains well capitalized with capacity to meet regulatory requirements and support growth. As we progress through 2026, our diversified Specialty platform, disciplined underwriting approach and strong capital position enhanced by our recent debt issuance provide a solid foundation for continued profitable growth. David, I'll now turn things back over to you.

Thanks, Dave. Operator, we will now take questions.

[Operator Instructions]

Our first question comes from Doug Young with Desjardins.

Dave, can you quantify or maybe talk about the level of U.S. Surety written premium this quarter and put the growth in perspective as of the quarter. But also, as you talked about, you received 5 new state licenses. I'm hoping you can kind of just maybe talk or put in perspective what level of premiums like we could or should expect over the coming year or few years? And just some context as to what that -- what those 5 new states in Florida sounds like in particular, could mean for the business?

Thanks, Doug. Our mix of business in surety on a North American basis is pretty consistent with recent quarters. So about that 55% Canadian, 45% U.S. split. That growth over the last year has grown faster in the U.S. than Canada, and we can provide maybe some more detailed comments on that in the coming quarters.

If we think about the states that we've brought on, you're right, Florida is a very significant one, although the others are not insignificant as well. I think our guidance at this stage, our expectation for premium growth through this year is not changing meaningfully. That mid-teens expectation for growth, I think, is still a good anchor for you to think of. Our confidence in that level and potentially outperforming that level is increasing, although I'd like to see how the businesses perform as we onboard our capabilities in those states. For now, I'd stick with the mid-teens expectation for growth. And as we work through the rest of the year, we'll see how the platform navigates our launches into these states.

And just a follow-up on that. Is the profitability or the underwriting profit that we see in Surety, is it pretty evenly split between Canada and the U.S. as well?

The combined ratios in both entities are very comparable. So the profitability is following that similar proportional breakdown.

Okay. And then just second, on the U.S. Corporate Insurance, it sounds like we're at that J-curve point where growth should accelerate quite a bit. You've done a lot of the hard work, got the license, got the broker relationships, I believe, you can correct me if I'm wrong. But can you put what this -- what the growth could be in perspective?

And we typically think of when you launch something, it takes 2 to 3 -- sorry, 3 to 5 years to kind of reach underwriting profit. You did it faster in Surety. Maybe you can kind of give context as to what your expectation would be for that U.S. Corporate Insurance business? Because I do think it's still -- you can correct me if I'm wrong, a bit of a drag on underwriting profit currently?

You're right. So on your last point, there is still a drag from our build of that U.S. Corporate Insurance business. That's likely expected for the next couple of quarters, although I will acknowledge the underwriting profitability was quite a bit stronger in Corporate Insurance as a whole, partly because that drag has improved somewhat.

I would say, in total, our Corporate Insurance growth, we still expect as an overall unit to be in that sort of low -- high single to low teens level for the year. Part of that is going to benefit from some onboarding of new growth in that U.S. Corporate Insurance platform. At this stage, it's tough to talk about exactly what that timing is. But I can say the momentum that we saw in Q1 was meaningfully improved over last year. I think we talked about this in our comments, but first quarter of this year, meaningfully exceeded our full year 2025 premiums in U.S. Corporate Insurance.

So that build-out that you're referencing, that 3- to 5-year build-out for this platform to sort of reach our expectations from a profitability and premium perspective, it's certainly having some good momentum right now, which is the same theme we saw in the build-out of our U.S. Surety platform.

And then just a follow-up, like where are you seeing most of the momentum in the U.S. Corporate? Is there a particular region, a particular kind of segment of the market?

Yes. It is a little bit regional. It's a little bit dependent on where we get our licenses, where our people are from. So our base at this stage in the corporate insurance market is in the Northeast of the U.S. Our licenses and our rate filings differ a little bit by state and by product. So there's a little bit of nuance here, Doug, as you're onboarding the practice infrastructure where you get your first licenses and first ratings and first products filed is obviously where you're getting the most momentum. So a little bit of that is concentrated right now in the early areas that we receive that infrastructure.

I expect that will start to spread in the same way that most business does in the U.S. by population and business concentration. So at this stage, there's a little bit of focus and concentration in that Northeast area. I expect that starts to balance as we add both people and season some of the licenses and filings that we've navigated.

Our next question comes from Stephen Boland with Raymond James.

Just one question actually. Dave, just when we look at the MGA industry, it's grown materially over the -- I guess, in response to the hard market conditions over 6, 8 years. As the buzz around softer environment is coming into play, what do you think happens to the MGA industry? Is there a compression that we should expect? And I guess, two, when you look at your partners in the MGA world, how comfortable are you with rate adequacy? Do you have to step up your audit functions? I'm just trying to get an idea if anything is going to change with the coming softer markets.

Thanks, Stephen. on your first point, I would say as a general rule, the MGA community, the market is made up a very entrepreneurial group of professionals. And I would say that the caliber and quality of the talent and professionals in this space over the last 5 to 10 years has meaningfully stepped up.

So I think this industry, despite following similar cycles to the broader insurance industry is in a more significant position on a relative basis than it has been historically. We generally, as a Trisura entity, partner with groups we feel have specialized underwriting or distribution expertise. And certainly, there's going to be marginal impacts from cycle trends around the edges, but we really are trying to focus on groups we think have a differentiated approach to either underwriting or distribution.

Most of our groups are very substantial and significant players in the markets that they navigate. So I think it's fair to say this industry in this space is expected, at least on our end, to continue some growth. That rate of growth is probably different than it has been over the last couple of years, but we've got a lot of confidence in the quality of the partners that we're working with and the ability of this industry to continue navigating now that it's stepped up its overall proportion.

On your underwriting question, I think we've been fairly demonstrative in our focus on underwriting quality and sustainability of loss ratios. I don't think I would highlight anything different today than the actions that we've consistently taken over the last few years in monitoring and requiring strong underwriting performance from our partners. I think the nuances that you're talking about at a high level differ very significantly line by line.

So the patterns and, let's say, underwriting trends from a pricing perspective are very different in property than casualty today. It really depends on which part of the market, which part of the country, which business lines you're writing. And we very much focus in a detailed way on all of those differences.

[Operator Instructions]

Our next question comes from Bart Dziarski with RBC Capital Markets.

I wanted to start with the $200 million senior unsecured notes offering. So congrats on getting that done. And maybe you could just highlight for us what does that do for the business in terms of deploying it? And then a reminder on the capital structure. So you'll be at 17% leverage or you are at 17% leverage? Like what are you guys targeting kind of over time?

Thanks, Bart. This was actually a great milestone for us. So this is our largest capital raise in our history. It was our first index-eligible bond, a very strong offering navigated by this team. So first and foremost, I think, is a marker of how far we've come as a company, how much more significant the vehicle is in its capital raising capabilities. So I do thank you for noting that.

This is a nice derisking for us of future growth opportunities. And the biggest use or most immediate use for this will obviously be continued investment in our U.S. treasury listed platform. As we've seen these licenses continue to come on board, the trajectory and the premium expectations for that U.S. surety platform continue to grow. The expectation and the need for more capital in that vehicle also continues to grow. And we've now effectively derisked and internally funded, I'll say, now going forward, the capital for that platform.

We are still pretty conservatively leveraged. As you know, 17% is about our debt-to-capital right now. We've got appetite to take that up to about 25% in the fullness of time. So still some, I'll say, conservative posture on the leverage side as we look at, I think, prudently building out the platform.

Okay. Great. And then on the Canadian Fronting, so the premium slowdown there, and you had called kind of for the expectation this year to premiums declining. Could you maybe just unpack a bit more like what are you guys seeing on the competitive front? Is it new entrants? Is it accelerating? Are people writing silly policy? Like just help us understand what's driving that Canadian Fronting industry dynamic.

Yes. It's less so new entrants in this market or different models, companies adopting our approach. It's more so traditional players jumping back into the market in a significant way, and that would include players like Lloyd's and traditional P&C players coming back into the market in a real way.

So our focus is always on profitability, on appropriate underwriting. And we and our partners as we see that both rate softening and increased competition, see opportunities to I think, allow that business to price itself out of our appetite. So I don't think there's any real change here in terms of the types of people that are participating in the market. There's just more appetite in that market to write business more aggressively than we've seen in years past.

I will say we still have a relatively healthy pipeline and as recently as the last couple of months, are onboarding new relationships in this space. So there's still, I think, appetite and avenue to continue growing this business. We're just setting out sort of pragmatic expectation that in what we're seeing right now, it's likely that, that Fronting premium is a bit lower than 2025 this year.

I'm currently showing no more questions in queue at this time. [Operator Instructions] And our next question comes from Thomas MacKinnon with BMO Capital.

I jumped on the call late here. So sorry if this question was asked. But in U.S. Programs, maybe just the outlook there, some of the stamping data is out April slowed a little bit. Maybe you can talk about outlook for growth in both existing programs, some new partners. And you're growing more in the admitted market as well. And how is that profitability with respect to that? And what are the plans there?

Thanks, Tom. Maybe I'll take a few of these out of order. You did highlight some of the admitted growth in the platform. Some of the new programs that we onboarded last year actually were in that admitted space. And so we are seeing some of our highest premium production out of the admitted programs proportionately this quarter. So it is nice to see that platform expand.

It is worth noting for people on the call that our platform does span both E&S and admitted programs. And increasingly, we've got a more proportionate mix between those 2. The growth outlook for this platform, I think we talked about it at the beginning of the year being kind of mid- to high single digits for the full year. On a constant currency basis, we're above that this quarter. So I think there's some indication here that the accommodative or more, let's say, positive tone in the reinsurance market is driving a few more opportunities for us.

I think it's obviously a much larger platform than a few years ago. So the platform scale is a bit more significant. Those percentage growth rates are a bit less than they've been historically, but still a great outlook for this business and one we're quite excited about. I think what people often don't understand about our business is that in the insurance space, often people assume that a hard or soft market is inherently positive or negative. One, because our business is much more specialty focused than most, we navigate these markets a bit differently; and two, because we're a fairly large purchaser of reinsurance, as reinsurance markets get more accommodated, that can be a positive nuance for us, and that's what you're seeing a little bit in that U.S. Programs space.

So the outlook remains pretty consistent. I think a great start to the year and most importantly, in this platform, a very, very strong combined ratio right alongside our expectations. I think you'll continue to see that type of trajectory for the business for the next few quarters.

And retention was different in the quarter than I think your 10% to 15% guide. Was that addressed in an earlier question? Maybe you can just flesh that out? I'm sorry.

No, it wasn't, Tom. So it's a good question. There's a bit of nuance quarter-to-quarter in retention that can be impacted by the timing of reinsurance purchases, which, as you know, can reduce or impact net premiums earned levels. So what you're seeing this quarter is no real change from an average quota share percentage retention, but some nuances on the calculation of that figure. I think there's probably an opportunity for us to talk about this on a trailing 12-month average going forward, which will be a lot more consistent for people rather than quarter-to-quarter. So no signal for you to take out of the lower retention this quarter, just really nuances and timing of some of the tactical reinsurance purchases.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to David Clare for closing remarks.

Thank you very much, operator, and thank you to everyone for joining today. As always, if you have any further questions, don't hesitate to reach out, and we look forward to talking to you all soon.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, everyone, and we apologize for the delay this morning. Thank you for joining us on today's call with David Clare, CEO of Trisura Group; and Doug Young, Bank and Insurance Analyst at Desjardins. [Operator Instructions]

With that, I'd like to turn the call over to Doug. Thank you.

Yes. Good morning, and thanks for your patience. We had a little bit of technology issues, which we obviously got through here. So I want to say thanks, Dave, for joining us today and to dig into some of the themes here in the property and casualty insurance space and for Trisura. And what we're going to do here is we'll dive into some Q&A. I've got a bunch of Q&A I'm going to throw out there, but please do post your questions in the question section, and I can kind of read them off. I've got a few that have been e-mailed to me too, and I've got my e-mail up here, so you can always just e-mail me questions if you'd rather do it that way as well.

So maybe with that, David, I'll start with kind of throwing something out here just to kind of get the conversation going. Q4, just announced that last week. Yes, it was a good result. So good -- I was -- people were asking me what I thought was a good boring quarter. And in the P&C insurance space, I'd like to think boring is good and the stock react positively. But maybe I'll throw it over to you, like what were some of the themes in your view? What do you think was maybe missed if there was anything that was missed in the things that you've read in the conversations you've had?

I think, first off, thanks, Doug, for the acknowledgment. We did think it was a strong quarter and a good end to the year. I think thematically, what we saw in Q4 was an extension of a lot of the themes we've been talking about through the year. We've had an exciting build-out in the surety platform, especially in the U.S. that's extended, obviously, seeing some good growth in the Canadian space. We've got a lot of momentum that's continued through the year in the warranty platform that finished a very strong year in Q4. And I think that was capped off by pretty strong execution in some areas that have had maybe more market impact or cycle impact, as you've called it, in the past.

So Canadian fronting, obviously, a bit weaker on the top line, but very strong on the bottom line. Corporate insurance, it's a balancing market and the team was able to grow and do that at a very, very profitable level. And I think importantly, from a stability perspective, we saw very, very consistent results through the year at our U.S. programs platform. This is a large participant in the program space. This is a significant component of the business that has delivered quite a strong year for us, very low combined ratio business that importantly was a little bit more consistent this year, which we talked a lot about at the end of last year. And I think those items on the business side all fed into what was a pretty exciting narrative on the investment portfolio side.

So because a lot of our growth, which you've highlighted, has been coming from primary lines, the conversion of that premium into investment income has been quite strong. And that narrative for us, I think people can miss this, the prominence of investment income or the contribution of that part of the platform to our overall profitability has really increased. And for us, that just derisks earnings going forward. It makes us more confident, more able to pursue business opportunities and makes the platform more durable. So for us, I think there's a really nice end to the year with a lot of momentum going into 2026.

Perfect. And then a lot of conversations I have, and I've been marketing tail end of last year and this year, and this comes up a lot is just the property and casualty insurance cycle. Now it's a bit different for your business than it is for Intact and Definity. I think everybody knows the mix is very different, not in personal auto and personal lines. But maybe you can frame how you think about this, like where are we in the cycle for the businesses that kind of are impacted that you're involved in? And what's your outlook there?

And then b, like does it really matter as much for Trisura because 52% of your net written premiums is surety and warranty, which is not what I typically think are businesses that go through the normal P&C insurance cycle. But you can kind of correct me if I'm wrong. But maybe you can kind of frame what you're seeing from a cycle perspective.

Yes. So on that first question, at a really high level, I tend to think about insurance cycles first from the reinsurance lens. Like if you think about the ecosystem, they are the tip of the spear in capital flows and often impact or at least a preview of where the cycle is going. What we've seen certainly in the last couple of years has been a very, very firm reinsurance market, especially in the property space, especially in the U.S. And I would say 2022, 2023, 2024, even the beginning of 2025 was very firm in those spaces. That is changing. And definitively, I think you will have seen this from following commentary in the U.S., but more globally, reinsurers have had very, very strong years in the last couple of years.

Those high ROEs, that strong results has driven more capital in the industry. And really, let's ignore kind of business line nuances at this stage. But at the highest level, when you have more capital in the industry, there is generally more pressure to deploy that capital that's usually a precursor to softening in the insurance market. Now there's nuance to that this year. We certainly see that softening or at least initial stages of that softening starting very much in the property space in the U.S. We're not seeing it broadly in the casualty space just yet. But it is a much different feeling reinsurance market than it has been in years past. We saw that at the 1/1 renewals for us. We saw that kind of through the year.

We renewed reinsurance, especially in our programs business and our Canadian fronting business through the year. So you kind of get a touch point all the way along. All that being said, let's take a step back, we think we're on the cusp of a little bit more accommodative reinsurance market. All that being said, Trisura really experiences this market much differently than most insurers, which you highlighted at the beginning. We are not a personal lines company. We are not a majority property company. We utilize reinsurance quite a bit across our lines. But first and foremost, the majority of our business from -- at least from a contribution perspective, I would say, is in lines that maybe don't follow traditional reinsurance or insurance cycles.

So if you think about surety, for example, this is really outside of those cycles. If you think about warranty, this is really much more of a structured product. Think about more of our specialty lines in corporate insurance or the E&O, D&O space. This is maybe a derivative of some of the trends that you see in the broader markets. But I think very important for all of our shareholders to understand the specialty line spaces, one, tend to move around a little less than the broader market or two, are not following the same trends of the market and three, I think, importantly, should be expected through any cycle, whether it's hard, soft or balancing, should be expected to perform a bit better than the broader industry. And that's why we focus on the niche areas that we're in.

Yes. One thing I wanted to dig in because I think you've said this a few times, like accommodative reinsurance pricing could actually benefit you because you are a consumer of reinsurance in the U.S. program business specifically. Can you maybe just unpack that a little bit and maybe give an example of how you benefit from that?

Yes. I would extend that comment, Doug, beyond just pricing to capacity. So accommodative reinsurance pricing is great, especially if we're purchasing reinsurance beyond what is in the typical program. But I think importantly, and first and foremost, accommodative capital or appetite for the reinsurance is a really important precursor to the opportunity available to us in certain lines of our business. So you pointed out U.S. programs. This is a very heavy consumer of reinsurance. It was actually through the last few years, a relatively interesting time to be adopting a model that utilizes a lot of reinsurance.

The reinsurance markets were tightening. And so what that means is the opportunity available for you to go out and find new partnerships, build new relationships with reinsurers or help current MGAs expand their offerings was more difficult than the years past, right? And what we see now, and in fact, you saw it a little bit in Q3 and Q4 is all of a sudden, the reinsurance industry, so the capacity available or capital available in that industry has started to tick up. And that's driving more of an appetite for people to deploy capacity through business models like ours. And so you saw in Q3 and Q4, all of a sudden, you're seeing a bit more growth in that platform. And that candidly is as a result of a bit more appetite from the traditional reinsurance markets to support traditional property programs.

What you saw from us, right, you've known us for a while, what you saw from us kind of through 2022, 2023, 2024 is we leaned away a little bit from that property space in the U.S. programs. And that was because we couldn't find the right types of partners to work with in that space. What we're seeing right now is very traditional rated reinsurance come back to that market. We're very willing to jump into that space with the right types of partners in that environment.

If I take that conversation beyond just the capacity piece. So one, the upside for us when we talk about that U.S. program space, we think about that market or that piece of the business next year as mid-single digits to high single digits growth. The upside risk here for us is, okay, does the reinsurance market all of a sudden get more accommodative, more interested in the space.

Does that capital shift from just property to casualty lines? Does it extend into that space? So that's -- if I'm talking about the upside case, that would be levers that we could see the industry pull to expand that. That's not really priced into what we're talking about for the business. But your pricing point is also important because Trisura as a participant in this market as a relatively conservative steward of capital, we generally purchase reinsurance beyond what's just in the individual program. So your first point, reinsurance pricing as it moves around generally is a pass-through in these programs for us. So that may not directly impact the economics of Trisura, but for those reinsurance programs or policies that we purchase beyond those programs.

So for example, in all of our property programs in the U.S., we have vertical covers, vertical towers. We also have horizontal towers across those. The vertical towers are economically covered or supported by the programs that they are supporting. The horizontal ones are ones we purchased out of our own balance sheet, our own financials. And that means in these environments where that property pricing is coming down, that's a margin-accretive situation for Trisura.

I would extend this a little bit to more traditional lines for us. So if you think about surety, corporate insurance, we have very large treaties in these programs in both Canada and the U.S. This environment today, although it hasn't really extended to the specialty space in reinsurance, it is starting to get more accommodative for those businesses. So we saw a renewal season this year in the context of us growing that was fairly positive. I don't think anything you'll see come through on economics of the business, but just capacity is willing and available to support the business, which allows us to punch above our weight from an expansion standpoint.

So just to kind of paraphrase, like so it's just it's about capacity and dealing with probably higher quality reinsurance partners in the U.S. program business. And then from a financial perspective, as you buy kind of cat coverage and extra additional coverage to protect yourself, which you would do every year, that's just costing less.

Costing less or getting better protection for the same spend. And so there's wins on both sides of that right now.

Yes. Okay. I want to take this -- this is a question that did come in, and someone had met with Kinsale recently, and they've been vocal about a massive influx of capital into the fronting companies where MGAs assume loss ratios of 55% and then blow up at 100% to 150% as the years develop. And they believe this is Kinsale, apparently believes this is a classic late cycle bad behavior that should shake out bad actors and could lead to the next hard market cycle. So just maybe your general thoughts on that. Any concerns, how -- what are you seeing in the marketplace?

Yes. I think these observations are twofold. One, some of these observations speak directly to the MGA market, some of them speak to the fronting market. And in a lot of cases, we agree with some of the observations at a high level. I think there has been a lot of capital that's flowed into the space. This isn't new, right? The assertion that this is new capital flowing into the space is a bit dated. We saw a huge influx of capital into the space in 2020, 2021, 2022. That's when there was a lot of new entities being formed.

Trisura has been in this space since 2017. So we've got a bit of a benefit of a longer cycle and a bit bigger platform. But I think you've seen us very openly and proactively talk about how we think these businesses should be run. And the discussion that we had very openly last year about reserving and about being proactive and about navigating this appropriately as a true insurance company, I think, reflects the way that we think the entities should run. I think some of the quotes you see from these partners have cherry picked a little bit on statistics, but there are platforms out there that have done very well in building up businesses that have produced very low loss ratios.

Part of those for me depends a little bit on mix. So if someone's quoting 55% loss ratios in fronting companies, I would assume that's been a relatively property-heavy portfolio in the last couple of years. But if that's in the casualty space and especially in certain lines of casualty, that's likely something that needs to be watched. And for us, we've been fairly proactive and vocal about what we think the right levels of reserving are and candidly, very willing to adjust that if it's not appropriate. So I don't know that I can really comment on the fact that this is late cycle or about to catalyze some larger hard market.

I think these businesses are still a relatively small participant in that overall market. So it would be maybe optimistic of me to think that these business models drive the direction of overall market pricing. But I think from a discipline perspective, and let's call a spade a spade, Kinsale are very good operators. They are very strong loss ratios. We think that we have a similar approach to underwriting, especially in our primary lines, and we would extend that to the way that we adjudicate or evaluate lines that utilize a lot of reinsurance.

Are you seeing at all a shakeout in the MGA market in terms of bad actors kind of going away or number of the MGAs kind of falling? Or any kind of disruption there that you're seeing?

I would say we're not seeing a shakeout per se, but we see fewer new de novo launches recently and more momentum or success from groups that have some scale. So if you talk to me in 2021, 2022, 2023, there were de novo launches of MGAs all the time, right? Capital was relatively cheap. This has been a secular trend of MGA investment really catalyzed in 2010. So this isn't new. Capital has been flowing into the space and continues to flow into that space over the last 10, 15 years. I would say the difference recently, and this is partially, I think, impacted by reinsurance trends in the market has been that as capital or capacity has dried up a little bit, that environment for de novo MGAs hasn't been as accommodating.

That being said, I saw 2 press releases this week for new programs or new launches of MGAs in these spaces. I saw an announcement for a new reinsurer focused on supporting MGAs. So I think there are still narratives or still businesses getting support and capital. And I think the focus going forward is going to be on groups that have good data, good ability to underwrite and some scale. And those are candidly the types of people that we've been partnering with for years.

We do have another question that did come in, and this -- we're going to jump around a little bit here. But the question is, given the underlevered balance sheet, does initiating a dividend make sense if you can't deploy all the excess capital back into the business and maybe excess capital and I guess, your debt capacity. And maybe -- yes, I'll leave it there and...

Yes. I think when we think about capital allocation, as stewards of capital, we've always got to have that hat on what's the best use of our capital, what's the prioritization of that. And we still do think, at least in the near or medium term that we've got a lot of uses for that capital organically. So if I think about building out that U.S. surety platform, we want that balance sheet to be bigger. If I think about building out that U.S. corporate insurance platform, we certainly want that platform to start producing premium and be able to invest in that.

That being said, as the entity gets larger and larger and certainly as we maintain the types of returns that we've seen, I think those conversations around returns of capital become more interesting, become more valid. I just don't think that it's something that is likely in the next couple of years. I think we've got to stand up these businesses. We've got to build out these platforms in a way that's responsible.

And then I think you could very likely, like most P&C companies, as they mature and as they build, you'll see us adopt and consider other forms of more traditional return of capital. I think today, candidly, there's so much opportunity for us. We are still very small in a lot of the markets that we play in, and we'd like to capture that opportunity. And then as we gain that scale, I think we have those conversations, right? You've seen us be opportunistic on the NCIB to offset some dilution from equity-based awards.

I think that's the first time we've done something like that. So you do know that these tools and levers are things that are in the conversation. And as we move past, what I'll say is build phases of the business, especially in markets with a lot of opportunity like the U.S. as you get a little bit of scale and if you maintain these types of profitability levels, that capital discussion gets a lot more pressing.

Yes. And that would extend, I would assume, like would you be more inclined to start with an NCIB a little bit more aggressive than the dilution -- offset dilution and then move to a dividend? Or like how do you think about buybacks outside?

So let's acknowledge first and foremost, these are decisions and discussions for the Board. I can talk about what we think is logical academically. But I think first and foremost, organic growth is going to be the first thing we talk about inorganic opportunities after that, ways to grow the business accretively would be the next versions of those discussions. Opportunistic and nondilutive forms of share repurchases are always going to be a tool in a good corporate governance toolkit. So you do see us looking at that, and I think that will continue.

And then I think once you get to a certain size and scale, the conversation turns to those dividends. And my challenge a little bit, at least philosophically on the dividend conversation today is we continue to raise capital, right? We're talking about internally shifting capital to build the business. I don't mean raise capital externally, but we've got a debt maturity that's coming up that I would certainly expect us to refinance. So these scenarios where we've got a lot of capital to deploy or build, I think we'll take precedence over returning capital, at least in this phase where we still see there's a lot of opportunity.

And then check -- nothing else in the online here. But then I'll go back to just some other kind of topical areas, distribution. You addressed a question on the quarterly call around consolidation of brokers. You're a broker distribution model. You talked about consolidating more of your business with fewer brokers, which is a good thing, and you talked about getting more extension into national accounts, which I thought was quite interesting. Can you maybe unpack that a little bit and maybe provide a little bit of examples of how you're kind of winning with your brokers?

Yes. I think that this comment for us reflects a bit of a change in Trisura. We historically, as a very small player, even as recently as 4 or 5 years ago, you always wonder or worry about, okay, what happens if one of my big broker partners gets taken out by a larger partner that we don't have a relationship with, how do you continue to build the business? And today, that stress is a lot lower because our relationships and our relevance with the brokers are so much larger. We've gotten to be a bigger partner. We've gotten to be a bigger player in the space.

The advent of new business lines or expansion of business lines just makes us a little bit more important to the brokers that we're working with, and we are leaning into those relationships. I think the idea is always that we're going to have very specialized dedicated partners who tend to align themselves in the lines of business that we write. But there's a lot of upside for us still in markets that we haven't tapped. And you referenced this in the national brokers.

We work with the Marsh and the Aons of the world, but they're not our largest partners. And that means that for us, there's quite a lot of wallet share to be expanded if we can get a fair share of these types of partners. I think we're always going to have a great focus and respect and prioritization for the groups of people that we're working with today.

I think what I'm acknowledging is there's lots of space for us to keep growing with some of these larger groups, especially, Doug, as we start to be more of a North American platform, right? There are a lot of the partners that we work with most today are just Canadian or Canadian focused. One or 2 of them have North American platforms that we've had some success transferring relationships across the border. We'd really like to see that continue as we get larger. And if you think about the national brokers or the alpha houses, they are really natural groups that have relationships and businesses that cross borders alongside us.

Okay. There's another question. I'm going to apologize because we have to lean in to read this. Another question just came in online. So U.S. corporate insurance -- are you following I guess, the surety playbook in the U.S.? What lines of business are you targeting first? And when can we expect meaningful premium contribution? And can you size the target premium here for that business over the next few years?

Yes. I think that's a great question because from an inflection point perspective, we're hoping towards the end of this year to see that inflection point of premium production. You should think about this as the surety playbook that we're trying now to replicate in the corporate insurance space. I will say there's a bit more of a heavy lift on corporate insurance because you're going through and filing rates and policy forms for a broader set of products. So right now, people should feel very comfortable with the types of products that we are writing are very similar to the products that we write in Canada.

So this is miscellaneous E&O, private or charitable board, D&O products. The lower limit smaller types of business that we write in the Canadian space. We are today going through and have almost finished that rate filing policy form documentation process through the U.S. It's a big lift. It's been going on for 2 years. And so what you would hope is as you continue to build that, now that you have the infrastructure and the rails, we have been hiring, you can see this in our expense ratios. We've been hiring people to go out and bring their relationships to Trisura to originate that business. And the hope is towards the latter half of this year, you start to see that momentum from a premium perspective.

If we talk about what our premium goals are here, we've been very open on the surety space that we think that, that U.S. surety business can equal and eventually exceed our Canadian business. I think we were surprised at how quickly that happened. There's probably in our surety platform overall, about low 40s percent of the platform is now U.S. surety. So you're approaching that parity point. Our expectation would be in the next 3 to 5 years, that corporate insurance practice should equal our Canadian practice in terms of size. And eventually, given the opportunity in that U.S. market, we would expect that it eventually exceeds it.

Okay. Okay. I think we got another question here. All right. So another question online here. Can you comment on the reserve triangle that was published in the annual report? The trend looks improved. But if we were to separate the triangle for the U.S. only, how does it look?

Yes. I think we're very proud to see that reserve triangle showing favorable reserve development overall. I think that's a trend we've talked about a lot. Candidly, most of this reserve triangle from a positive development perspective is coming from the Canadian business. There is still a marginal bit, a much lower amount of, I'll say, reserve development in the U.S. That's kind of natural if you think about some of the lines of business that we're in. But the trend and the improvement here has been material. And I think you should continue to expect that as we go forward.

And we should get I guess we should be able to kind of split the 2 outcome March. Is that right?

Yes. We should be able to -- one, if we can provide that to you directly, those -- that data will become public very quickly. It is a much improved story and much less -- there's much less materiality to any sort of development you see in the U.S.

Yes. Maybe before I get into my business line questions, which there's nothing else on here. You stated this several times. We've had a lot of conversations about this, but I think it is really important. Your focus is on profitable growth. And I think you've really kind of tried to drive that message. And I think you've done a really good job driving that message on. Can you just unpack what that means to you?

Yes. I think for Trisura, and this is -- we're in our 20th year now for Trisura. So if you go back to the genesis of this entity back in 2006, the idea was always that we are a growth company. We are always pursuing and chasing growth. But in the insurance space and especially in our lines of business, that growth has to be anchored in an assumption and a requirement of profitability. I think, Doug, as you know, growth can be easy to find in the insurance space. And you can only really credibly pursue that growth and build businesses if you have a track record of doing that profitably.

So internally, we talk a lot at our budget sessions in building targets for the business. There is a real touchstone on this profitable growth concept. I started talking about this publicly probably in 2022, maybe a little bit before that, because we obviously were an entity that was growing very quickly on a percentage basis at that time. And I think for us, it's important for people to understand that this growth is always pursued, achieved in the framework of growth that we believe is accretive to the platform. So profitable adding NUI or adding profitability to the platform. You can see that this year, right? This wasn't our biggest growth year from a top line perspective, mostly because you had some movements around in those highly reinsured lines.

But you're growing mid-20s percent in a surety line at a low 80s combined ratio. Overall, you're growing 10% at a mid-80s combined ratio. These types of growth percentages, these types of metrics are rare in the space, right? It's hard to achieve. And one of the things I just want to make sure everyone understands is when we're pursuing this growth, it's not an attempt to gain market share with loss leaders and correct the business later on.

The assumption is all the business that we write is profitable and build the platform. So we talk about that, I think, because candidly, there are people in the space who maybe aren't as familiar with the insurance industry, and we always want people to understand growth could be -- growth is something we can always find. What's tougher to find and what's more important for us to prioritize is profitable growth.

Yes. Perfect. So let's go into some of the business lines and some of the questions have come out already. But maybe I'll start, like what are you excited -- most excited by over the next 3 to 5 years business line-wise?

Yes. It's an interesting question. I saw this, Doug. You sent this one through in advance. And we have really kind of 4 pillars of the business, right? It's surety, it's corporate insurance, structured solutions, which includes programs and fronting and then warranty. And so when I talk about those 4 pillars, we don't have a lot of business lines that I would prioritize one over the other. I think the most dramatic changes, if I can use that as a heuristic for exciting, are likely coming in the U.S. expansions of our established models. So if we can demonstrate some momentum in that corporate insurance practice in the U.S., I think that will be a big change.

I think there is still so much green space for us in the U.S. surety platform that those items will add over the next 3 to 5 years, maybe more substantially on a dollar perspective than some other groups. I think in the Canadian space, if we can get our fair share of that Canadian market by expanding into that larger limit contractor space, there's a lot of room for us to run. And then if we talk about that same concept of moving upmarket or building a broader offering, corporate insurance is a space where we can do that. And the Canadian market for us has been a very niche approach to this space. I think within those niches, there's abilities for us to expand our offering. And if we can do that pragmatically, there's a lot of runway for us to grow.

So those would be within our 2 kind of, I'll call it, most significant pillars, those would be the nuances that we're thinking about every day that when we talk about our 5-year plans, how we want to evolve. I think there's a real question in my mind on how warranty evolves going forward. This has been a great platform for us. We see a lot of momentum and opportunity in the Canadian market. There's a huge market in the U.S. And if you think about the playbook that we have navigated in both Canada and the U.S. at some stage, it would be natural for us to try and achieve something like this in the U.S. So I don't flag this because we've got some ace up the sleeve in an announcement that I'm going to make on warranty, but I think the opportunity there is pretty significant.

I think if we talk about Canadian fronting or U.S. programs, those will be a little bit more consistent practices. I think we've got a pretty great position in both of those markets. They tend to be maybe Canadian fronting more so than others. Canadian fronting tends to be lumpy. That's a business that's going to expand and contract as we see opportunities, but it's a great diversifier of the business, great add into the business. That U.S. programs model, I think there is a massive playing field out there in that business. And as we see maybe some of the comments you raised earlier, as we see the market coalesce around what we view as the real leaders in the space, groups with permanent capital bases, real claims departments, real underwriting and actuarial departments, there's likely room for us to keep winning space there. It's just the changes will be less dramatic.

Yes. So maybe we start with the Canadian surety because that's your big business, you're moving up market. There's some big players in front of you like Intact, Aviva, Travelers, you're #4. I think you've kind of stated a few times like you want to go into that #3, #2 spot. And like how do you get there? Like when you kind of sit there and put together your strategic plan and kind of blowing the others out and moving into that #3, #2, like what do you have to do? What are you doing to kind of to drive that?

Yes. I think we've talked a lot about our Canadian surety strategy from an expansion of appetite, expansion of size perspective. We talked about this a little bit at the Investor Day. We think today, we really have access to about 60% of the market in the Canadian environment. And for us to be a fourth ranked player in that market, playing in a relatively small sandbox or not the entire sandbox shows maybe the opportunity that we have in front of us. And so we've made some pretty targeted investments in those capabilities to build those items.

And so what we need to do now is see those investments, those people, those teams start to originate or capture that opportunity. And for us, that really means, are we able to adopt a model that encourages submissions in that larger limit bonding space. Can we win business here to build up the platform? Can we continue growing faster than the market in the lines of business that we already have.

So for us in Canada, this is an extension of the execution we've seen over the last 20 years in the surety space. We started from a standing start, built up into that fourth ranked player. I think now for us to go from a 4 to a 3 or 3 to 2, you've got to strap on a broader offering in the market. And then you've got to lean into broker relationships to get your fair share of those submissions. And the only way you do that, the only way you achieve that is servicing those brokers, proving that you are a consistent partner and building the business brick by brick.

So do you have products now? And are you dealing with distributors that would give you full access to 100% of the market? Or...

I wouldn't say we're all the way there yet. There is parts of the market that are just too big for us from a size perspective, but we've improved, right? I would say that, that 40% of the market that we're not accessing is shrinking. I could check in for the team on what they think is actually accessible today. But I think it is shrinking, right? We saw some momentum in Canadian surety in the fourth quarter as a result of that submission activity increasing because we've been very vocal about the capabilities and the team that we have.

That is a multiyear process, right, as you're building up in this. You can see how attractive these surety businesses are, right? It takes people years and years to build them and those relationships and market positions are hard one.

And then how many people or teams have you added in the last year to 2 years?

So in surety, if I talk about teams, like de novo teams with capabilities we technically didn't really have before, we've added one major team in that space, which is, I'll say, focused on that larger limit space. That being said, we've added a lot of people over the last 2 years, right? If you think about the buildup of our U.S. surety platform, even the buildup of our support functions in surety as we've built up the head office vehicle.

In Toronto, we support the overall North American platform, right? And so as the U.S. entity grows, so too does head office functions here in Toronto. So there's a lot of adds that have happened. What's nice now in that surety practice is generally, we are adding those people in that business accretively. So the combined ratios of that practice are right alongside our expectations for the overall business.

And how excited -- I mean, 75 -- I think 75% of your total surety business is contract surety. So that kind of lends yourself to contractors to government infrastructure investment. I mean I know this stuff lags before you get shovel in the ground, and I'm sure you've been asked this probably by me before, too, but how excited are you about that opportunity? Are you starting to see any movement there?

Yes. I would say we're seeing a lot of conversations, but dollars have not flown yet. The background for the surety market is pretty consistent right now. It's a healthy market. We do continue to see opportunities to grow. I think the upside is do governments, be they provincial or federal or even municipal do they actually get those dollars into the ground in the form of projects and approved projects. And certainly, they have a mandate right now for launching those projects, but we have not seen them really enacted just yet.

It's worth noting, Doug, most of our growth, most of our opportunity, most of our achievement in this platform has just been us taking existing market share. So we don't need the market to grow in an outsized way for us to continue to build the business. Certainly, if it does, that's a great backdrop for us to be building a platform. But we certainly believe and have demonstrated that we can build the entity in a consistent or flat market.

And you're not seeing any irrational activity in this market. You're not seeing any stupid money come in?

No. Surety is such a specialized specific space. It's a really dangerous one for people to launch into on a de novo basis. You can't really get reinsurance to do that. So no, it's a pretty sophisticated market.

Okay. And then I want to go back to U.S. surety because when you and I talked not long ago, I mean, this is probably in 2024. I mean this is a 3- to 5-year build-out and with the hopes of eventually kind of mid to the tail end of that, maybe getting towards, I don't know if it was $60 million or $80 million of premium and kind of breaking even. But here you stand today with 40%, 45% of your premium coming from U.S. surety. I mean it has happened a lot faster, obviously, than you anticipated. But maybe you can kind of talk a bit about like what drove that growth? And like -- and what really went right with that expansion? And what hasn't gone right?

I think you're right. We were -- it was a bit faster than we expected. And to give the team some credit, I think the opportunity in this U.S. market has been significant, and they've been successful in capturing a portion of that opportunity. Part of this is you get some wins early on, on the right distribution relationships, those partners of yours build up. There is a real scale difference in the U.S. market versus Canada. And so if you are successful in that market, it can move, especially for a company of our size, very quickly.

I think if I talk about what's not gone right here, I am constantly frustrated by the amount of time it takes us to build licenses in this space, right? We still don't have the full suite of licenses that we'd like to see in that U.S. market. And despite that, have built a practice that's been ahead of our expectations. So I don't want to take anything away from the opportunity of the team, but there is a still not insignificant unlock of opportunity in this market were we to get to a higher [ T-listing ], or we to get licenses in California or Florida. These types of things are just given at most surety entities, but there are things that we are continuing to tackle. And we have end dates on all of those. We expect to see them achieved.

But I think the difference for Trisura is we've been building all the way through that phase, doing so, I think, accretively and doing so sort of pragmatically, but it's not lost on me that you might see a different outcome if this entity had a larger balance sheet in the U.S., it would have more licenses upfront. So if I can criticize our build-out, I think that's the one area that I would say it's just not been quite as smooth as I'd hoped. The other side of that, Doug, candidly, is this is high-limit severity business. And so being prudent on the build-out is not a bad thing. And now it's been 5 years we've been building this U.S. surety practice. You can see the benefit of those investments now taking hold.

Yes, I always get worried when things grow fast, but -- and I can't see the reserve triangle or experience for just the U.S. Surety business. But has there been -- like has it been positive? Has it been in line with what your Canadian surety reserve experience historically has been, which is positive?

Yes, it's been very consistent across the group, right? I think you can see now that it's at scale, these businesses are very comparable.

Yes. And then can you size that? I think you said 40%. So if I just take 40%, 42% of total gross written premiums for surety, that's the U.S. Is that -- and then maybe I can add in to this. Like I think you talked about getting to 25 to 35 licenses in the U.S. surety market by the first half of '25. I don't think I've got an update on that. Like where are you in terms of the license?

Yes. So our licenses today, we're in the low 40s of licenses. So there's a few big ones that we'd like, but I would say the back has been broken on getting most of the entities that we hope for, 43, I think, is my latest count of licenses. And so you've got 7 more that we would like to see. Now of those 7, some are more critical or more impactful than others, ones like California or Florida would be on those lists. I think those are groups that we expect to come in time, but it's a real shift, right? If you talked to me at the beginning of last year, we were in sort of the low teens on licenses. So there's been a big move for the entity.

So what's the size like so can you double this in a period of 3 to 5 years? Because I think you've talked about being a top 30 player. You don't need to be a top 2 player in this market to have a huge amount of premium come in. You could be 25 and it can be real kind of attractive. But like can you size like where you go as you start to get the rest of those 7 licenses and further build out the team?

Yes. I think if you talk about our longer -- maybe medium- to long-term goals in this platform, we'd love to be a top 20, top 15 player. At the end of last year, a top 15 player would have had just under USD 200 million of premium. So there is quite a bit, we would view of upside and potential in this platform. We talked about -- I think Terry talked about on the Investor Day a couple of years ago, we think that there's opportunity in this business to have a pretty substantial North American platform.

A big part of that is going to come from the U.S. So if we can -- I think we're in the mid-20s now, maybe 25, 26 ranked player in the U.S. If we can pierce that top 20 range at some stage, and we'll need all of our licenses to do it, you should expect to see us in that multi-hundreds, maybe high hundreds of premium in the next, I don't know, 3 to 5 years.

And this is a very important question. Is that U.S. dollars?

These are U.S. dollars. Yes.

So real money.

Good question.

Okay. And then on the corporate insurance, I want to go back to the other question and the answer you had on the corporate insurance just as we kind of go through this because you said something that was really interesting. You've had to sit there and file and I assume file by state and get everything kind of lined up before you really start to write business. Like how many -- like can you just maybe kind of put perspective on like are you done -- you say you're done in all states that you want to be in terms of filing and therefore, the premium should start to come in on the U.S. kind of corporate insurance side?

No, we're not done yet. But I would say that we are -- let's say, on an E&O product, for example, we're probably in the low 40s of filed and approved rates. We're going through that process now in some other product lines. So I think overall, last year in the U.S. business, we were up between $1 million and $2 million in premium. So there's effectively no contribution from that platform. But now that we've got at least one product up and running there, you've got more opportunity to go out and solicit submissions.

And as more of those products now start to make their way through that licensing and rate filing process through this year, that's where we'd expect to start to see some uptick in that submission activity. So it is a similar challenge to when we were first building up surety, but more complex and that you've got more products and more rate filings to navigate.

Okay. I'll just throw it out there. If anybody does have questions, do please post them in here or flip me an e-mail. I'm happy to kind of read them off where you can listen to me throwing on here.

But -- and then maybe if we just keep on because I think warranty, we've got -- we've looked at warranty for a long time for those that have bought cars with the extended vehicle warranty or the key fob kind of marketplace and the margins are extremely attractive. What is the opportunity? Because it does sound like you feel like you could be bigger in that market.

In Canada, maybe you go into the U.S., and this is something we saw with Industrial Alliance. They were in Canada. They did go into the U.S. Unfortunately, they did it through COVID, which is a bit of a challenge. But maybe can you kind of just talk or unpack what you think the opportunity there on the warranty side is?

Yes. I think for us, there's still quite a lot of opportunity in picking up market share at that lower end of the market. Where we tend to play, right? If you think about the gorillas in the room, Industrial Alliance is a huge participant in this market. And we would qualify ourselves as a top 10 participant in this space, but that means that there's a lot of opportunity for us to grow. The Canadian dealer network or Canadian dealer space is relatively fragmented, and the warranty space has a lot of small players in it.

We're a good partner for those types of groups. And we think that as this industry continues to grow, as these products continue to be seen as useful products from a distribution standpoint, we're well placed, I think, to focus on growing it. So our warranty practice historically has grown quite well, but we haven't had a real ability to differentiate or step up in that marketplace. And I think now given the size of the business, given our willingness to invest, I think there is maybe an opportunity for us to lean into the space and build a little bit more definitively. And that's what I'd like to see.

We've got some great partners in the warranty space in Canada. I think the opportunity for them to expand with us is still material. And I think we'd like to get out more and more in that environment and show people that Trisura is an option to build the business.

So -- and I think it's massively fragmented and the returns are quite attractive. I guess one thing I've always worried about is just the pressure on inflation because this is a product where you write it and if it's on a new car, you typically -- your claims don't come until 4 years later. We've gone through a big kind of push on inflation. Like are you seeing any pressure on your loss ratios for this business? Because in talking to one other player, they are feeling a little bit of inflationary pressures on the loss ratio. I didn't see that in your Q4 numbers, but maybe I'll kind of pause and see.

I would say, Doug, this is a conversation we have with our partners every quarter, if not more, right? We've got actuaries driving focused pricing models on how they view things evolving, both from an inflation perspective, a pricing perspective, driver behavior perspective. So certainly, at this stage, we haven't seen any real change in the results of the business, but it is always something we're watching and making sure that as we see growth or as we navigate growth, it's something that's contemplated. So I will say pre and post-COVID are sort of 2 different environments in that warranty space.

There's been a lot of inflation. There's been some changes in driving behaviors. We try to be pragmatic and proactive on building that into our assumptions. But what you have in these models and certainly the way that we structure it is a relatively structured product. So if you see shifts in loss ratio, you generally have CPCs or contingent profit commissions that move around, right? And so what we are trying to build for Trisura is a targeted return on these products. And that targeted return should be fairly consistent unless you see really strange outsized behavior in either direction.

So I would say it's always something we're thinking of. We haven't seen that impact results at this stage. And certainly, should we ever see it start to, there's a real ability to both change that posture, but also absorb those changes through CPCs.

Okay. And then the other thing you heard is that there is potentially a push from regulators to push this business into the insurance market because it's not always done, I don't think through the insurance market. You can correct me if I'm wrong. Any sense that are you hearing anything about that? Because that would be an opportunity to grow the business.

Yes. Listen, we have heard -- there's always a conversation around the space and each province is different in how they treat these products. So I think it's an interesting conversation that would be an interesting opportunity to expand broker relationships, right, if these became broker-distributed products or you had some licensing discussion with dealers on how they distribute these products.

I think we would be a very natural partner to expand those relationships or enhance relationships with the connections that we have in the broker community. I haven't seen anything definitive yet from the regulatory groups, but it's certainly a conversation that every few months gets raised in the space.

Okay. Wanted to move into -- I wasn't going to go into anything more on the U.S. program. We've kind of talked a little bit at the beginning. There was a question that was posed online from it. But anything else that you kind of want to touch on the U.S. program business before I go on?

No. I think that, that business is evolving in a way that we've been describing it should for a while. So I don't know if there's anything more to say there.

Okay. Regulatory capital. I can see your MCT in Canada. It's hard to get a sense of -- maybe I missed it in terms of your regulatory capital position in the U.S. But can you frame your regulatory stance in both those? Do you need to downstream more capital into the U.S.? And any regulatory capital changes that you foresee or think could be coming down the pipe?

Yes. So on the last question, we don't see or nothing has been flagged to us on regulatory changes to expect from a capital perspective. Right now, in both -- in all our jurisdictions, we are at or above our regulatory targets, both internal and regulatory targets. So we've got a very healthy position from a regulatory capital perspective. I would say you shouldn't expect us to downstream capital specifically to like a U.S. programs business. But what I would like to see, and this goes back to our surety discussion, is capital at some stage being shifted into a U.S. treasury listed balance sheet.

And so in Canada, for example, this is a platform that is very healthily capitalized. We did have excess capital on that platform last year that was dividended up to the Canadian holding company, which was then sent down to the U.S. vehicle. More and more, as the entity gets larger, right, this is this is sort of the -- not to take a strategy that isn't ours. But if you talk to Brookfield, right, their big model is they take capital and opportunity from one jurisdiction and deploy it in jurisdictions that they think have greater opportunities. We have a microcosm of that at Trisura, where you've got maybe some excess capital being generated in certain pockets of the business.

You've got a structure now where you can dividend that to a holding company and redistribute it into other parts of the business. And that is a different posture, a different feel for the business than, say, 3 years ago when any time I talked about capital, the conversation was, okay, do I need to go out and raise it? And today, because of the maturity of the business, we see more opportunities to redistribute capital internally rather than pull it from external sources.

Okay. Perfect. Thinking of targets, you have $1 billion target of equity by the end of 2027. I mean that implies a 4% CAGR, which looks really conservative to me. So either it's really conservative or there are some headwinds that I should be or we should be thinking about. Can you maybe just frame that?

Yes. Let's frame that in the context of when it was announced, right? That target is quite old now. And I think when we set it out, that was viewed as an aspirational target. I think if you look at our expectations for this year, our ROE targets, I would hope that there's a fair amount of confidence in hitting that. I think we would like to refresh that at some stage and going through these planning processes and figuring out the right interval to communicate those is those are conversations that are happening right now. But you certainly shouldn't take that lack of update of that target as any lack of confidence in our side from hitting it.

We just want -- we don't want to -- I should say we don't want to be coming out every 2 years with a new 5-year plan, right? Like the purpose here is I think, one that we recognize we've overachieved or hopefully are on the path to overachieving that target, and we'd like to talk about what...

Okay. And then the operating ROE target of 15% plus, I guess it's kind of mid- to high teens. One of your peers in tax has kind of talked about structurally that ROE opportunity is just higher in terms of what they targeted before to what they can target today. You're underlevered, obviously, you're growing in businesses where the profitability is going to be lagged. Like do you see structurally a better ROE opportunity coming from this business? So similar to that $1 billion common equity target, it's old, probably get refresh. Is that something similar when we think about the operating ROE target?

Yes. I think I would put this in the category of if we get out of a phase where we are constantly investing and building the business, I think the run rate results of the business start to look a bit different, right? If you talk about right now, the drag on both ROE, combined ratio results of the business because we are making these investments in the future, they're not immaterial, right? We've got a pretty significant amount of capital sitting in the U.S. balance sheet right now that is underlevered. We've got an underlevered capital structure. We've got a couple of points, let's say, of combined ratio that's being invested into future business in the U.S. corporate insurance space.

So without stepping beyond what I'll view as the medium-term focus, I think there's a very natural question of what this business could look like without those types of dilutive investments. Now let's level set. We think those investments continue to build the business, and we think that's the best path forward for Trisura. But as you eventually scale and as you build that business, you should start to see -- or you could, I should say, start to see those improvements. The question will be, do you find something new to invest in? Do you find some modicum of operational leverage as you build it? And that's our goal, right?

The bigger you build this, the more -- the higher the hurdle rate becomes for making those decisions on capital allocation. So I would love to say we could see that at some stage. I just need to get through this build phase, right? When I'm not talking about navigating the license acquisition or a license build, I think we start to see those benefits more permanently in time.

What would be the drag -- if you're willing to put it out there, like what would be the drag right now?

I mean I can talk about it conceptually from a corporate insurance perspective, like there's a couple of million dollars a quarter going into investments in that platform with not any premium really being put against it. That's nothing to say of the work we're doing in the background on, let's say, licensing our surety platform, right? So your surety returns are probably a bit lower than they should be because of the platform. That's despite it achieving combined ratios that are equivalent to the Canadian business.

So other than that $2 million a quarter or so in the corporate insurance space, there's not a lot of hard numbers I can give. But I can tell you, we're hiring lawyers. We're hiring consultants to navigate these processes, which I'd love not to be doing.

Yes. I get it. And then, I mean, it takes us to the next question, the investment income line, right? So where you have been fairly conservatively positioned, but it's becoming a growing contributor to profitability. And part of that is you're focused more on primary lines and as you grow that business out, but maybe you kind of take a different stance and higher interest rates will help. And I assume that, that's been a drag to some degree, but is becoming more of a contributor to ROE. Can you frame that opportunity?

Yes. I think for us, the natural question would always be at what stage do you normalize asset allocation. And we were candidly a bit lucky and well positioned because a lot of our growth as an entity came at a time when interest rates were relatively high. And because of that, we were able to set up a portfolio that had probably comparatively a bit higher book yield than people with established portfolios. Today, what that means is that our portfolio is disproportionately versus other insurance companies, investment-grade bonds. And that's been a great environment for us, especially as you have U.S. rates that are a bit higher than Canadian rates on an absolute basis.

And the question will be, going forward, do you see better return profiles with some evolution even marginally of that asset allocation. And especially in Canada, right, if you think about the portfolio today, you're sort of looking at 3% on sub-5-year duration investment-grade bonds. And that's an environment but that's a hurdle that we feel there are opportunities to outperform. And so all of a sudden, the question will be come, where does that deployment go? And how does that optimize your returns? I think to your point on ROE, proportionately, that investment income has become a bigger contributor to ROE than it has been historically.

That's a great path for us, a great platform for us because it derisks the returns of the entity. And then if you look at the combined ratios of our insurance platforms, you've got this sustained or durable platform. This combination is the reason we can invest so much in the growth of the business and still produce 17% ROEs, right? When we compare ourselves to entities out there that are also producing these types of ROEs, they are generally a lot more mature, right? They're either not growing as fast or they have established platforms. We're achieving those in the context of a business that's investing quite a bit. And so this goes to your previous discussion as we get through that, I think there's a little bit of upside to it.

Yes. And what I'm going to finish off with because I don't see any other kind of lingering questions in here, but I always like to finish off, and I think last time we chatted, we kind of finished off with this. But when we meet in the year's time, like what are 5 things you want to be able to say, here's what we've accomplished?

I think, first and foremost, I don't want to be talking about licenses anymore. So I'd really like -- it's not an exciting one to talk about, but it's going to be impactful for us. If we navigate the critical mass of licenses and rate filings in that U.S., I think that will be a huge unlock for us in terms of building out in the market. The other piece that I think I'd love to be able to provide some more context or color on is how our build-out in that larger contractor space is going in Canada because I think that upside could be really significant.

I would love in a year's time from now to be able to point to some more material premiums coming out of the corporate insurance space. That's something that I think we've been very conscious of building pragmatically. And I think that inflection point should be coming soon. So if we could unlock the business from an infrastructure perspective, convince the market that we are a viable and strong partner on the large contractor space and then also demonstrate to ourselves and our partners that we can build the business in an appropriate way in the U.S. corporate insurance space. I think those will be 3 great updates.

Perfect. Well, that, we're just over an hour, and I do apologize for everybody for the delay in the start, but we pushed it a little bit longer past 11 to kind of get through everything. So -- but David, thank you very much. It was a great discussion. And for everybody that's on the line, if you have any follow-ups, please do feel free to reach out. So otherwise, have a great day.

Thanks very much, Doug, and thanks, everyone, for joining.

Good morning. Welcome to Trisura Group Limited's Fourth Quarter 2025 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 the applicable 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 Trisura's filings with the securities regulators. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]. Thank you. I'll now turn the call over to David Clare.

Thank you, operator. Good morning, everyone, and welcome. 2026 marks 20 years since Trisura began operations. Over the past 2 decades, the company has experienced transformational growth while remaining committed to quality underwriting and a customer-focused culture.

In 2025, we made significant progress towards our objective of becoming a leading North American specialty insurer as we delivered strong profitability, underpinned by an 85% combined ratio, expanded our footprint across North America and continue to shift our earnings mix towards Primary lines with attractive and durable margins. Consistent execution and compounding of book value per share, which grew 18%, reinforces the confidence we have in our strategy and ability to create value for our partners and shareholders.

Primary lines, Surety, Warranty and Corporate Insurance remain the foundation of our business grow net insurance revenue 20% in 2025. Surety was a standout, growing premium of 36% with continued success in our U.S. expansion and strength in Canada. In the U.S., momentum with distribution partners and expanded licensing drove growth with Trisura ranking among the top 30 Surety writers by Q3.

Early results highlight our team's strong relationships and disciplined underwriting, supporting the significant opportunity ahead. Warranty grew 17%, driven by deeper relationships with existing partners and improving auto purchasing activity. Corporate Insurance grew premium and delivered a strong 31% loss ratio in a balancing market demonstrating our focus on profitability and underwriting expertise despite shifting market conditions.

Continued investment in U.S. Corporate Insurance follows the approach, proven out Surety, expanding in areas we know well and attracting experienced talent or relying on established infrastructure and best practices. While still in early stages, this platform is expected to contribute meaningfully to profitability and scale over time. U.S. programs grew 17% in the quarter and 4% for the year, with an 81% combined ratio, benefiting from a strongly performing portfolio, growth in MGAs, improving Reinsurance capacity in a widely licensed platform with admitted and E&S capabilities.

Our scale, permanent capital and diversification increasingly positions Trisura as a preferred long-term partner for strong profitability-focused MGAs. Our investment portfolio performed well in 2025, interest and dividend income of approximately $83 million grew 18%, supported by profitable underwriting and active portfolio management. The portfolio remains conservatively positioned, ready to take advantage of market dislocation should attractive opportunities arise.

While Trisura has scaled meaningfully over the past 5 years, we believe the opportunity ahead is significant. We remain committed to the pursuit of profitable growth, increasing the proportion of Primary lines and creating a complementary and diverse high-quality portfolio of programs and Fronting business. Above-average underwriting profitability, combined with enhanced investment income is expected to drive consistent increases in shareholders' equity.

Expansion into the U.S. builds on 2 decades of disciplined underwriting experience. As these platforms mature, we expect them to equal or exceed the earnings contribution of the Canadian counterparts. The significance and profitability of our U.S. Surety premium in 2025 supports the attractiveness of our geographic expansion. Increased scale has enabled larger limit Surety bonding in Canada with strategic hires and a broader offering are driving broker engagement and producing a promising submission pipeline. MGA premium continues to grow as a proportion of the U.S. market and Trisura is well positioned to take advantage of this trend.

The second half of 2025 demonstrated renewed momentum as Reinsurance capacity returned and we move beyond the impact of non-renewed partnerships. Inorganic growth has been an important part of Trisura's evolution, and we remain well positioned to pursue opportunities should they align with our risk appetite and return thresholds. Our strategic initiatives are well funded with capital at the highest level in our history and significant financial capacity, Trisura is increasingly self-funding.

Progress through 2025 reinforces our long-term expectations of premium growth, operating return on equity and book value per share growth in excess of 15% and our confidence in outperforming our previously communicated $1 billion book value target. Our earnings are supported by a diversified mix of underwriting income, fee income and stable investment income. Through growth, we have expanded earnings while maintaining returns on equity in the high teens.

We continue to expect stability and durability in our earnings profile. We remain committed to the principles that have guided Trisura to success and strategic focus on specialty insurance, supported by structural tailwinds, disciplined profitable underwriting, consistent support for our partners and a prudent approach to growth, risk appetite and Reinsurance structuring.

Market volatility will create opportunities to win business and strengthen our reputation. With the strongest capital based in our history and a platform that continues to scale, we are optimistic for the years ahead. With that, I'd like to turn it over to David Scotland for a detailed review of financial results.

Thanks, David. I'll now provide to walk-through our financial results for the quarter. Operating earnings per share, which reflects core performance from the business, was $0.75 for the quarter. This drove a modest increase in full year operating EPS of $2.85 and contributed to operating return on equity of 17%, which exceeded our mid-teens target.

Gross premiums written was $786 million for the quarter, a 10% increase year-over-year, reflecting continued disciplined growth across the portfolio. U.S. programs maintained its growth in the quarter, posting a 17% increase in gross premiums written and Surety grew strongly at 36% for the quarter, but we expect that pace to normalize going forward.

Net insurance revenue, which approximate net premiums earned was $200 million for the quarter, reflecting growth of 11.8% over the prior year. Growth was driven by continued expansion in our Primary lines, which increased by 15%. The combined ratio for the group was 85% in the quarter, which was higher than the prior year. The loss ratio in the quarter was slightly larger as a result of a higher loss ratio at Trisura Specialty that was in the range of expectation and compared against a particularly low loss ratio in 2024.

The expense ratio was higher as a result of higher contingent profit commissions at Trisura specialty as well as a more normalized expense ratio at U.S. programs. At 85% for the quarter and 84.9% for the full year, these combined ratios demonstrate our disciplined underwriting focus and are supportive of our mid-teens operating ROE objective.

Underwriting income for the quarter was lower than the prior year as a result of a slightly higher combined ratio offset by growth in the business. Net investment income was $21.5 million, increased by 25% in the quarter as a result of an increase in the size of the investment portfolio, driven by new cash deployment. Our operating effective tax rate was 24.7% for the quarter, reflecting the composition of taxable income between Canada and the U.S. and consistent with previous quarters.

Overall, operating net income was $36.5 million for the quarter, reflecting consistently profitable underwriting and growing net investment income. Nonoperating results in the quarter and year-to-date period reflected primarily net gains associated with unrealized gains on the investment portfolio. Exited lines had an immaterial impact to net income in the quarter.

Strong earnings per share contributed to an 18% increase in book value for the year-to-date period, resulting in a book value per share of $19.42 at December 31, 2025. This was partly offset for the year-to-date period by FX movement associated with a weakening Canadian dollar against -- a weakening U.S. dollar against the Canadian currency.

Book value has grown at an average rate of 26% for the last 5 years, ending the year with over $920 million. We are well on track to achieve our book value target of $1 billion by the end of 2027. Earlier this year, we drew down on our revolving credit facility to further capitalize our growing U.S. Surety balance sheet. This increased our debt-to-capital ratio to 12.7% at December 31, 2025, which was higher than December 31, 2024, but still well under our conservative leverage target of 25%.

The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements and to continue to support our robust organic growth. As we enter 2026, our diversified specialty platform, disciplined underwriting approach and strong capital position provide a solid foundation for continued profitable growth. David, I'll now turn things back over to you.

Thank you, David. Operator, we will now take questions.

[Operator Instructions]. And our first question comes from Doug Young with Desjardins Capital Markets.

Just want to get an update on a few items within the Surety business. So maybe I'll just kind of tick them off as we go. But I guess the first is you've been moving upmarket in Canada. I think you brought a group in about a year ago. Just -- and in Canada, are you seeing at all a pickup in quote activity.

So Doug, on that Surety piece and the larger limit bonding initiative, we are seeing certainly towards the end of the year, some benefit of that, really manifesting at this stage and some increased submission activity. It's been encouraging. And I think we've started to see some of that activity translate into some early wins, but the best is yet to come in that practice.

Okay. And then expansion into the U.S. and -- sorry, I don't know if I got the number right. You said, I think you're now a top 30 Surety writer in the U.S. And so I think that's where, you can correct me if I'm wrong, but just maybe an update on how that expansion in the U.S. is going? And do you need to move more capital into the U.S. to support the growth?

I think the expansion has been going well. This is now -- we're in 5 years into this project of building out a practice in the U.S. and breaching that top 30 has been a nice metric for us to achieve. There is still some infrastructure buildout that we're excited to achieve that will help us continue to build that. That's separate from the capital piece, Doug.

So what we're doing right now is balancing the build-out of the platform, the offices or people with the licenses and the capital that will underpin this overall infrastructure. So I would expect as we continue to get some of these final licenses in the U.S., you'll likely see us in time drop a bit more capital down into that entity. It's worth noting that capital is capital that we have internally already earmarked for this expansion. So you shouldn't expect any material change in the approach.

Okay. And then just lastly, as we see in the Surety business, like how do we think about the loss ratio evolving with the mix shift as you're going upmarket as you grow in more in the U.S. is it around that 20%? Should that evolve higher or lower as we see this evolve?

Yes. Depending on the mix, you could see this. I think usually, we think about this as 20% to 21% over the long term. You kind see this go 20% to 22%, but nothing material in terms of a change.

Okay. And then just a few other items. Just you mentioned a few items in the Warranty, but the Warranty has been a pretty good growing business. It's a very attractive business from what I can see. Just wanted to dig into what you're seeing that's driving the growth a little bit more granularity there. And now this business used to contribute, I think, the underwriting profit was in the high single digits. It's now in the low double digits. I mean, is there room for this to be like a 15%, 20% contributor to underwriting profit for Trisura just hoping to get some color.

Yes. I think the Warranty business has been a great story for us, not only this year but for the last couple of years. The team has done a really good job leaning in with our partners. And our partners have done a great job at extending their businesses. So we should acknowledge the strength of that practice this year.

I think there is still opportunity in the Warranty practice, we think next year, it's something that can continue to grow in that -- growing in that mid-teens level, and I think that would imply increasing contribution to underwriting income. Our position in the Warranty space is still relatively small. And so in Canada, I think there's room for us to keep finding both expansion opportunities with our existing partners and new partners to build the business. So it is an area we're excited about and focused on continuing to grow.

Okay. And that takes me to my next question. It's just you have capital to grow organically, you've got some debt capacity. Can you just refresh us on your interest from an acquisition perspective? Because Warranty is a very fragmented market. There has been some transactions there. Were us, like would you be interested in that market? What other markets would you be interested potentially inorganically growing? And are you seeing more conversations happen in this current market around potential deals?

Yes. So the first thing I'd say, Doug, is our priority, as you've noted, is organic growth and we do have quite a bit of opportunities in that space. To the extent we find opportunities inorganically that align with our risk appetite and our focus, we very actively look at those. That would include things in the Warranty space. I think the U.S. is an interesting market for us if ever something was to appear that could be attractive to help us build that practice.

But I do note organic growth is our first priority. And you've seen us in the past, execute on inorganic opportunities creatively. So things like book rollovers license acquisitions to add to the platform. I think as we get larger, the opportunities for us to staple on initiatives that scale the platform, we will always be looking at those.

And when you say in the U.S., you're talking Primary lines, I would assume?

Yes. It's tough to find specialty lines businesses that are transactable and digestible for us. But if we found one in the Primary lines space, we would be very interested in it.

And then just lastly, you did release your reserve triangle. Maybe I'll just throw it open. Like what's the key message and there was positive developments and thoughts on how we should think about reserve developments as we're thinking through 2026?

Yes. I think we've got a long history, especially in the Canadian entity that we can track on a reserving basis. I think we talked a lot last year about the expectations around our U.S. practice improving. So worth noting this year on a consolidated basis, there's favorable development of our reserves, which we think demonstrates a lot of the strength of the platform.

That expectation is certainly our goal going forward on a consolidated basis, and we very much focus on our reserving practice and businesses that we think can achieve that.

Our next question comes from Jeff Fenwick with ATB Cormark Capital Markets.

Just -- I wanted to start my questions off with the subject of AI. I know it's topical for many firms these days. And Dave, I was just hoping maybe you could provide us a bit of color or context around maybe even more broadly on the technology front, how well you feel Trisura is positioned? Or are there areas here that you're thinking about investing into? And I know a number of your peer companies call this out as a strategic advantage. So maybe just some thoughts there you could offer up for us.

Yes. I think if we take a step back, today, things are moving very, very quickly in this space. And I think it's incumbent on all companies, including insurance companies to be armed and prepared to navigate this. We certainly think that there are opportunities for the industry and for us to improve operations or consider opportunities to evaluate these technologies. I think we have to be pragmatic that we're in a regulated industry that's highly complex.

And so the most immediate benefits we expect to see from these types of initiatives are around those operational efficiencies. Frequency lines likely are going to benefit first from this. And so you've likely heard some competitors talk a lot about this around underwriting in the frequency line space or operations in those more typical commoditized lines. That doesn't mean that companies like ours in the specialty space can't benefit from this, and we are very actively evaluating ways that we can look at this, although I wouldn't say that we would highlight anything just yet. That's moving the needle economically.

So it's an exciting time. Jeff, it's a time when a lot of people are testing out a lot of new things in the industry, and we have a lot of appetite to participate in that process.

And then on a different topic here, just -- I know one of the priorities had been to expand Trisura's presence in the broker channel. Over the last couple of years, really, and I know you've called that out as a benefit for growth. What's the outlook there now? We're seeing obviously some continued consolidation in the space. Just wondering if that maybe creates more opportunities or challenges and where you stand in terms of building that broker network.

Yes. On the second point, given our increased scale and size. The broker consolidation, we hope, is something we can navigate fairly calmly in some cases, it actually helps us as we consolidate business with brokers we've got bigger relationships with. So that's a nuance in the market that impacts sure probably differently today than it did 10 years ago.

I think what you're likely referencing is the opportunity for us to increase wallet share with larger brokers. We tend to do a lot of business with some of the regional or specialized brokers. And I think we're starting to get some opportunity to transact more with some of those larger national broker groups. I will say there's still a lot of opportunity ahead there.

So we've got a great set of broker partners and distribution partners in our current space. I think we're keen now as a North American player to expand those relationships on a broader geographic basis, and as we move up market in some of these lines start to build relationships with some of those larger brokerage houses on a more substantial basis.

Our next question comes from Tom MacKinnon with BMO Capital.

Question with respect to really outlook in terms of combined ratio and growth for like Surety and Corporate and Warranty, as well as some of the U.S. programs. You did say you expect Surety to normalize, certainly can't grow at the 36% rate going out. But if you can give us what you think would be a reasonable medium-term outlook for both top line growth as well as combined ratio in those 4 segments, Surety, Corporate, Warranty and U.S. programs, that would be great.

Thanks, Tom. I think at a high level, if you think about Trisura specialty, which includes Surety Warranty, Corporate Insurance and Canadian Fronting. That group should be writing or should be growing at about a mid-teens level in the top line next year. There's going to be some that are a little faster, some that are a little slower than that. But overall, that group, we think comes out at about the mid-teens level.

That combined ratio, we think, is anywhere between 86%, 87%. And so pretty consistent mid-teen or mid-80s combined mid-teens growth on that business for the next year. U.S. programs or target for next year or our expectation for next year is likely mid- to high single-digit growth in the top line. And I think that low 80s combined ratio is what you saw this year and that's what we would expect next year.

Okay. And anything with respect to net investment income as long as the premium growth keeps coming in, I mean, 25% growth year-over-year, it's at least in the fourth quarter, how should we be thinking about net investment income?

Yes. A great proxy for net investment income, Tom, is if you take a look at the rate of growth in net premiums earned. This is a great way to see as a preview, the capital that's available to be shifted into the investment portfolio. So what you've seen this year is the majority of our growth proportionately has been in those lines with higher retention. So those lines of higher net premium earned growth are feeding into that investment portfolio.

I would say for next year, that trend is of net premium earned gross feed into the investment portfolio. That's a great proxy for you to model the growth of that entity. We are working in this environment to make sure we're defending yields. So reinvestment yields in book yields are getting closer than they used to be, but we still think it's a good environment to be deploying.

Our next question comes from Bart Dziarski with RBC Capital Markets.

David, I wanted to ask, in your shareholder letter, you talked about the investment portfolio being well positioned to take advantage of market dislocation. And we're definitely seeing a market dislocation now. And so I wanted to just unpack how you're planning to kind of take advantage of that.

Yes. I think we've got a really interesting opportunity in the investment portfolio, Bart. We are historically, and I think going forward, expecting to be very conservatively positioned. This is a capital preservation and yield-focused portfolio. But as the market moves around, there's always opportunities to optimize that allocation or that positioning. So when we see opportunities or dislocations in the investment-grade market, it allows us to either high grade or optimize the yield on the portfolio by shifting around the margins of duration and credit.

We've also got a historically low allocation to equities. And so again, if you normalize or consider any changes in equity allocations. Those types of environments make it very attractive to be considering it. And the positioning and posture that we have today gives us a lot of dry powder to capture these opportunities around the margin side.

I do want to highlight, we don't think that the moves here will be dramatic. But given our positioning, our posture, our capital strength, the portfolio has been very, very strong in its performance, and it set us up on a really great platform to launch from into 2026.

Great. And then follow-up would be, in your prepared remarks, you talked about strategic hires and a broader offering, I think that was regarding Surety, but let me know if I missed that. But just wanted to sort of dive into that, what are some of the initiatives on the ground in terms of these hires and broader offerings? And how could that impact the growth outlook?

Yes. It actually -- I'm referring to a couple of things there, Bart. We do talk about bringing on some new talent as we move upmarket in a Surety practice, but we should also acknowledge we're building a de novo practice in a new market in U.S. Corporate Insurance and U.S. Surety.

So there's a lot of hiring activity that goes on there and then plugs into our established infrastructure. So those types of capabilities, experience, relationships -- it's just nice to see treasure being able to attract the high-quality people that have been joining the entity over the last couple of quarters. That type of initiative, our ability to bring on those people is really going to inform the next 3, 5, 10 years of us building these practices. And these types of investments that we make today, we're really excited about seeing what they can do in the next few years.

Our next question comes from Tomer Levitin with Raymond James.

I'm just filling in for Steve Boland at Raymond James here. But my first question is just on the admitted lines as a percentage of gross premium rating in the U.S. That seems to have gone up. And I was just wondering how the dynamics there. Was that an intentional push or just kind of a reaction to market dynamics at play. So just what's your outlook there?

I wouldn't say this is intentional or reactionary, Tomer, I would say this is more a function of maturity of some existing admitted lines programs that we've been writing now for a few years. So admitted tends to take a bit longer to build up. But once it builds, it's a very sticky, sustainable business. And we've just seen over a number of years now with established partners, the proportion of admitted premium has just continued to grow. I would say our outlook is that, that remains pretty consistent over the next year.

I think we have about 1/3 of our premium in the U.S. program space is admitted right now. We still see the majority of our submission activity in the E&S space. And given the opportunity, complexity and partners that we work with, I would assume that, that majority E&S submission activity continues to stand. But it's nice to see the admitted platform is something we invested in and build starting probably in 2019. So it's been a long build process. But the platform today is very widely licensed and able to provide solutions across both admitted and E&S markets, which gives us a great position in this market.

Appreciate the color. And then just my last question here. we saw some softening in Canadian Fronting and you mentioned some softening in specific Corporate Insurance segments or lines of businesses. So just kind of what's the outlook there? Do you see that continuing or potentially improving in the back end of fiscal year '26?

Yes. I would say we do continue to expect a competitive market in the Canadian funding space. I think that, that line will likely be on a premium basis, flat to down a few points next year. That being said, the top line there, we view as less relevant as a net underwriting income, and we've seen pretty consistent and sustained profitability out of that platform despite some moves up and down in the top line.

Corporate Insurance, as you've noted, it's a balancing market. We've seen some softening in certain lines. I think we expect this next year, it continues to balance in certain lines. We expect some lines will be a bit more constructive this year. But overall, I think if that trend will continue. That doesn't mean that we don't think we can grow in the Corporate Insurance space, and we've been doing a lot of work with our distribution partners and with our team to originate opportunities as well as building out our U.S. Corporate Insurance function. So despite those prevailing markets, we do still think we've got a differentiated ability to grow that platform.

[Operator Instructions]. Our next question comes from Jaeme Gloyn with National Bank.

First question on the U.S. programs business good to see a couple of quarters in a row here of high teens growth. Can you break down what's driving that growth? Is there the breakdown between new relationships between price increases, maybe it's all entirely existing relationships? So maybe talk through some of that.

I would say the majority, Jaeme, is expansion or maturity of existing relationships. But what we did see differently in Q3 and Q4 is as a result of a support of a more constructive Reinsurance market. we did launch a few new programs that started to get traction into the latter half of the year. You are seeing some benefit of that in the premium growth figures that you've seen in Q3 and Q4.

So the U.S. program space from a rate perspective, I would say the property space is gaining more capacity. So we've seen rates in both the Reinsurance space and marginally in the Primary space. decreasing a little bit. However, for us, the Reinsurance availability and the quality of partners there has been a real improvement over the last couple of years, which gives us confidence to lead into the space.

Casualty is still fairly firm on the front lines in the Primary lines space. Casualty rates, I would still firm to rising. And I would say the Reinsurance terms, Reinsurance partners that we have are consistent in that space. So it's -- it's been a nice year. It's been a consistent year in that business. And what's interesting to watch is that the Reinsurance market continues to unlock. There may be more opportunities in that space.

Yes. Great. Shifting to the Canadian front end. Obviously, another challenging quarter here. Can you give us a bit more detail in terms of how you're feeling for next year? Obviously, still down a little bit. I think you were saying. But what gives you that confidence that we -- the declines we've seen in 2025 are not repeated in 2026. Is there a levelly note? Is there -- a just comfort with the relationships you have? What gives you that confidence?

Yes. I think we're always doing work, James, to figure out what the portfolio is doing. The declines that we saw through 2025 were not a surprise given the state of the market, but we do see, I think, some expectations for those more dramatic declines to level out next year. Part of that is just looking at the portfolio of partners that we have, part of that is looking at the lines of business and the markets that we're in. So it's a mix and it's partly an exercise that we do with our partners for what they expect to see in the market for the next year or so.

So I would say, I think it's fair as you pointed out, to expect continued reductions in the top line. But I would say your comment that it was fairly weak, I would push back on underwriting income here is what we care about and the underwriting income sustainability or durability has been relatively stable here. And I think that's a factor or at least an item to make sure we're acknowledging is that as top line moves around, as long as we've got your visibility to continued contribution from an underwriting income perspective, it's a practice we continue to enjoy.

So just to dig into that last point around the underwriting income. I think it's important as well, flat in 2025 versus '24, is that the view in 2026 that we should expect flat underwriting income, and that would be driven by lower combined ratios than perhaps what we've seen in the last couple of years. Is it like a cost savings? Is it a scale benefit? Like how would you sustain stable underwriting income in a lower gross premiums written environment?

Yes. What we saw this year is a bit better loss ratio. So most of this is going to be a function of how the portfolio performs on a loss ratio perspective, which is what sustain the underwriting income this year. I think you're right to point out, listen, if premium declines, eventually, there's an impact on underwriting income. And that's a fair comment. And I think one that we acknowledge in the context of whatever loss ratio we achieved.

So it's our expectation, certainly, if premium declines eventually underwriting income declines, depending on what you achieved from a loss ratio perspective. So there's lots of opportunities in the Fronting space. I mean we have partners being evaluated all the time. This is a space that tends to be chunky. And so what can happen is all of a sudden a partner can come on midyear and change the structure of the business. And it's tough to predict that at this stage, but it's an opportunity in a practice that can navigate market sometimes in a surprising way.

Yes. Yes. Okay. And do you -- like in the U.S., we're seeing the Reinsurance capacity increase globally and that's helping to drive a bit of a return to growth in U.S. programs, like why or are you seeing similar dynamics in Canada? Or why is it different and you're not seeing that Reinsurance capacity flow?

Yes. The drivers of U.S. programs in Canadian Fronting are a little bit different. So the markets here that we talked about in Canada in terms of competition and a bit of softness in the space. it's really a different driver than what we're talking about in the U.S. from a Reinsurance capacity perspective.

So when we talk about the U.S. program space at MGA market being more supportive by the Reinsurance space. There's an ability here for these MGAs to continue growing or continue launching or bringing on new programs as Reinsurance appetite unlocks. So as capacity increases in the Reinsurance market, and people are looking for areas to grow or for partners to grow with. This space in our practice becomes very attractive for that group.

The Canadian space, the Canadian Fronting space is a bit different. This is really a function of foreign partner interest and ability to grow in the Canadian market. And as that Canadian space has gotten more competitive more partners, more people have entered that space. And so the nuances of capacity exist in both markets, but the execution and the evolution of those markets can be a bit different.

Thank you. I would now like to turn the call back over to David Clare for any closing remarks.

Thank you very much. I thank everyone for joining today. And as always, if you have any more questions, don't hesitate to reach out. We're looking forward to continuing to work with everyone in 2026. Thank you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Good morning. Welcome to Trisura Group Limited's Third Quarter 2025 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 Trisura's filings with securities regulators.

[Operator Instructions]

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. Q3 was another strong quarter for Trisura, underscoring our consistency and the growing opportunities across our platform.

Our high teens operating ROE and mid-80s combined ratio reflect continued underwriting discipline. Book value per share rose to $18.90, up more than 20% year-over-year, supported by both profitability and strong investment returns.

Primary lines, our surety warranty, and corporate insurance lines remain the foundation of our business, growing net insurance revenue 16% this quarter.

Surety delivered another exceptional quarter with net insurance revenue up 25% year-over-year. Although premiums declined relative to Q3 2024 due to timing nuances of premium onboarding in the U.S., growth year-to-date is 22%, and we expect to return to mid-teens growth in Surety in Q4 of this year.

Activity tied to infrastructure investment, manufacturing expansion, and data center construction across North America continues to accelerate.

These sectors are expected to provide multiyear tailwinds for contract bonding demand. Our contractor business is strong, and our U.S. platform continues to grow in scale and credibility with national brokers while expanding licensing with the recent addition of Texas in October.

Warranty growth has been significant, with 38% growth in written premium, driven by strong relationships with program partners and sustained demand in auto sales.

We have been successful in expanding our share with our partners, driving a step-up in our market presence. Although we expect growth to return to the mid-teens level in the future, our platform has scaled meaningfully.

Corporate Insurance was able to grow at a measured pace despite competitive pressure, with our selective underwriting and pricing discipline preserving margins.

We continue to invest in our expansion into the U.S., which impacted net underwriting income in the quarter by almost $2 million. This phase of build-out is expected to yield a practice of comparable size to our Canadian business in time, a precedent established by our successful build-out in U.S. surety.

Canadian Fronting saw an expected decline in premiums due to continued competition, though underwriting income improved through lower claims and enhanced efficiency.

We expect the same in Q4 and are evaluating a strong pipeline of opportunities for 2026. U.S. programs returned to growth with gross written premiums up 18% in the quarter and admitted business reaching a record $179 million, a 22% increase.

Increased capacity has improved reinsurance appetite and terms, setting up a constructive environment for growth. The quarter was particularly strong with several new programs contributing to growth, and we anticipate continued growth in Q4, albeit in the mid-single digits.

Investment income continues to be a key driver of earnings growth. Our portfolio and investment income reached new records with $1.8 billion in assets and $20 million of investment income, up 24% year-over-year.

That reflects portfolio expansion as well as prudent active management. Higher interest income, combined with disciplined duration and credit positioning, leaves us well placed in today's environment.

Investment contribution will continue to support earnings and book value growth into 2026. Conditions remain supportive for our strategy. Our focus on niche specialty lines experiences market trends differently than broad or commoditized lines.

Reinsurance capacity has improved, and this is a tailwind for our programs business as partners seek access to stable and strategic capacity. The potential for large-scale investment in infrastructure, clean energy, and data center construction across North America continues to expand the addressable market for surety.

These trends, combined with the depth of our underwriting talent and expanding broker relationships, position Trisura to benefit from secular growth.

At the same time, we remain focused on cost discipline and operating leverage. Our expense ratio reflects both a shift towards primary lines, which have higher commissions, and the investment phase we're in.

We expect efficiencies to emerge as our platform continues to mature. This has been demonstrated through the build-out of our U.S. surety platform, which contributes meaningfully to the top and bottom line.

Year-to-date, U.S. surety is over 40% of our surety premiums and operates at a combined ratio approaching our Canadian business. Q3 reinforces our ability to execute profitably while positioning for growth.

Primary lines continue to drive our performance, and U.S. programs are benefiting from improved market conditions. Investment income remains a significant contributor to earnings quality and book value growth.

As we look ahead, Trisura is well-positioned to compound book value through underwriting discipline, balanced capital deployment, and continued expansion in markets where we have proven expertise.

With that, I'll turn it over to David Scotland for a detailed review of our financials.

Thanks, David. I'll now provide a walk-through of our financial results for the quarter.

Operating EPS, which reflects our core performance from the business, was $0.71 per share for the quarter, reflecting growth of 4.4% over the prior year. This contributed to operating ROE on a rolling 12-month basis of 18% at Q3 2025, which exceeded our mid-teens target.

Gross premiums written were $853 million for the quarter, an 11% increase year-over-year, reflecting continued growth across the portfolio. U.S. programs returned to growth in the quarter, posting an 18% increase in gross premiums written.

Net insurance revenue, which approximates net premiums earned, was $197 million for the quarter, reflecting growth of 6.4% over the prior year.

Growth was driven by continued expansion in our primary lines, which increased by 16%. The combined ratio for the group was 86% for the quarter, which was slightly higher than the prior year.

The loss ratio for the quarter was slightly higher in Trisura Specialty and slightly lower in U.S. programs than the prior year. Both remained within our range of expectations.

On a consolidated basis, the expense ratio was slightly higher than the prior year, primarily as a result of the shift in the mix of business towards Trisura Specialty, which has a higher expense ratio than our U.S. programs business, but a lower loss ratio.

Underwriting income in the quarter was modestly lower than the prior year as a result of a slightly higher combined ratio offset by growth in the business.

Net investment income of $20 million increased by 23.8% for the quarter as a result of an increase in the size of the investment portfolio, driven by new cash deployment even as the broader interest rate environment continued to trend lower.

Our operating effective tax rate was 24.3% for the quarter, reflecting the composition of taxable income between Canada and the U.S. and consistent with previous quarters.

Overall, operating net income was $34.4 million for the quarter, which was greater than the prior year as a result of consistently profitable underwriting and growing net investment income.

Nonoperating results in the quarter and prior year consisted primarily of net gains associated with unrealized gains on the investment portfolio. Exit lines had an immaterial impact on net income in the quarter.

Strong EPS contributed to a 15% increase in book value for the year-to-date period, resulting in a book value per share of $18.90 at September 30, 2025.

Book value per share also increased as a result of unrealized gains through other comprehensive income due to favorable movement in our fixed income portfolio. This was partly offset for the year-to-date period by FX movement associated with the weakening U.S. dollar against the Canadian currency.

Book value has grown at an average rate of 26% over the past 5 years, ending the third quarter with over $900 million of equity. We are well on track to achieve our book value target of $1 billion by the end of 2027.

Earlier this year, we drew down on our revolving credit facility to further capitalize our growing U.S. surety balance sheet. This increased our debt-to-capital ratio to 13% as of September 30, 2025, which was higher than December 31, 2024, but still well under our conservative leverage target of 20%.

The company remains well capitalized, and we expect to have sufficient capital to meet our regulatory capital requirements and continue to support our robust organic growth. David, I'll now turn things back over to you.

Thanks, David. Operator, we would now take questions.

[Operator Instructions]

Our first question comes from Bart Dziarski with RBC Capital Markets.

I wanted to ask, David, about your commentary on the data center build-out, the infrastructure announcement. We had the Canadian budget recently passed as well. So would love to get your thoughts on how meaningful this opportunity could be for your surety business on both sides of the border.

Thanks, Bart. At this stage, it's tough to size these opportunities. What we do know is these types of commitments, if we talk about Canada first, for nation-building projects for large-scale infrastructure generally fit the types of projects that require bonding.

That bonding needs to the extent it's significant, would benefit the entire surety industry. And we've made a concerted effort over the past, I'll say, a year to expand our practice into some of that larger limit bonding space.

So at this stage, we're very happy to see the commitments, although the rubber is going to hit the road when we start seeing what those commitments actually mean for projects.

In the U.S., I think everyone has seen the level of commitment and activity around both manufacturing, data centers, and infrastructure spending as well.

I think all of those things are positive for demand at a high level for the surety industry. It's worth noting for us as Trisura, it's unlikely we'll be participating with the large general contractors who would navigate those projects.

But we do participate in the subcontractor space. And so, to the extent these types of projects lift that demand, we would be expected to participate in those types of activities.

And then just on the investment income, I mean, it was strong this quarter, up 24% year-over-year. But even year-to-date, it's still pretty strong at 14% over the year.

And so how should we be thinking about that in terms of the durability of that and its contribution to book value growth as we go into '26 and '27? I'm sensing there's a bit of a shift there in terms of its growth power, but I wanted to understand that a bit better.

Yes. I appreciate you pointing this out, Bart. It's something that we're excited about, and it's a very natural consequence of the proportion of our growth coming from these primary lines.

As you think about the big drivers of our growth, given the magnitude of expansion in lines like net premium earned, there's a faster recycling or a more significant contribution from those lines of growth into the investment portfolio.

So something we track very closely is obviously the level of net premiums earned growth in the organization. That translates relatively quickly into a contribution to the investment portfolio.

And given the nature of our portfolio as a majority investment-grade bond portfolio, we have fairly high confidence that, that is a very durable contribution and a new base for investment income going forward.

So for us, we always like to see predictable earnings, and that portfolio's significant growth over the last 3 or 4 years has just positioned us in a lot better spot than we've been previously.

Our next question comes from Doug Young with Desjardins Capital Markets.

Just sticking, David, with the investment income side. Obviously, a good quarter from that line.

As you mentioned, you tend to be more conservative in the investments that you make. Any plans to push a little bit more for yield duration, take on a little bit more risk within the portfolio? Or is it just steady under the current strategy?

Our priority in the investment portfolio is both capital preservation and optimizing for yield. We try to do that opportunistically, Doug.

So what you've seen around the edges is some active management around both duration and credit quality. So for us, the focus here is not changing materially the composition of the portfolio, but reflecting opportunities, for example, if there's a better term premium than there has been historically.

So you're not going to see us meaningfully change the composition of the portfolio. But around the edges, if we can add yield through an expansion of duration appetite or shifting asset allocations between investment-grade credit, we'll likely do that.

What we haven't done year-to-date, and we haven't done really recently in the last couple of years, is meaningfully change things like equity allocations.

So the portfolio gives us a lot of confidence in its durability, and the team has done a good job of defending yields as we've seen what I'd call a transitioning environment.

And then Lots of discussions, some having lots of discussions around the softening of the P&C insurance cycle. I know you and I have talked a bit about this, and I think you talked a little bit about it in your prepared remarks.

But to the extent that reinsurance pricing or the cycle does pull back, can you elaborate, maybe a little bit on how that impacts Trisura, and maybe just actually how it could potentially benefit you if reinsurance pricing in of itself does pull back a bit?

Yes. This is a question we get a lot, and it's worth level setting before we get into the discussion that, given our niche and specialty focus, the broad themes that people talk about and reference around cycle trends generally hit our business or impact our business differently than more commoditized lines.

So, surety, for example, would be outside of typical market cycles. We've talked a little bit in the past about corporate insurance, which is, I'll say, a competitive environment right now.

But the team is doing a great job of growing that business in that environment and maintaining the types of margins we expect. I think your comment around the program's business and the impact of reinsurance is likely underappreciated at Trisura.

We tend to benefit when reinsurance markets are more available and when reinsurance market capacity increases. That makes it a better operating environment for an entity that consumes a significant amount of reinsurance.

And our U.S. programs division is an entity that utilizes a lot of reinsurance. You saw this quarter that we were able to grow more meaningfully in that line than we have in other quarters.

Part of that is lapping sort of that exited lines period, but part of that is our ability to launch new programs this year that fit our risk appetite. And a good component of that is the return of capacity to those reinsurance markets.

So at a high level, it's at Trisura something that can be a benefit in that market cycle. And then in those specialty lines, it's something that we generally expect to have a less direct impact than more commoditized lines.

And then just lastly, in the U.S. program business, as you said, gross written premiums grew this quarter and were above us. I mean, can you just kind of walk through how many new programs were added this quarter?

I don't think they're all producing premiums yet. So I think there'll be a bit of a layering in of that, maybe correct me if I'm wrong, and retention rates, if you can paint the picture for us, how all of those things should impact gross written premium, net premium earned over the year or 2 years or so?

Yes. I can provide the program number on a year-to-date basis. We've added 8 or 9 new programs in that space this year.

A few of those programs started producing premium in Q3, which has helped us step up a little bit. As you're thinking about modeling the business, I think the best way to think about it is that the retention component will likely be in the low teens range.

It's going to bounce around by quarter, as you've seen this year. Your loss ratio is likely in the low 70s on a full-year basis. And then your expense is anywhere between 10% to 11%.

So the combined ratio of that business, you should think about in the low 80s on a full-year basis. That trend in that business, what we see going forward, likely in Q4, is growth, but probably at a lower rate than what we saw this quarter, and then a good opportunity to continue expanding in 2026.

[Operator Instructions]

Our next question comes from Jaeme Gloyn with National Bank of Canada.

Just on the surety side, I was wondering if you could, and I apologize if I missed this, if you could break down the performance of Surety Canada versus Surety U.S.

Yes. Jaeme, the combined ratios of these 2 are pretty comparable. So, on a profitability perspective, I think you should expect, and to the extent you model this, those businesses are contributing relatively equally on a profitability standpoint.

Premium-wise, year-to-date, the U.S. business has contributed, I'll say, just over 40% of the premiums for our surety platform across North America.

So it's becoming more significant, but our Canadian business is still larger.

Okay. And the trends in that premium growth?

I would say on a percentage basis, our U.S. business is growing faster right now, although we do have some great momentum in the contract space in Canada.

So the market opportunity for both is compelling, although the absolute size of the U.S. market is still quite a bit larger than the Canadian market.

Yes, of course. And then in terms of looking into the upcoming quarter, do you have any visibility on how that has performed?

The surety platform?

Yes, please.

Yes. I would say you should expect a return to growth in the surety platform in Q4. So certainly, we would expect something in the mid-teens level of growth from a top-line perspective.

It highlights the nuances of Q3 just on a comparative basis, but we've got confidence that returns to growth in Q4. From a loss ratio perspective, I think you should model this as per usual. So think about kind of a 20% or low 20s percent loss ratio for that business.

Shifting elsewhere in Specialty, maybe you can sprinkle these comments around the other lines. But I noticed clearly an uptick in loss ratios or combined ratios across corporate insurance and warranty.

Could you talk about maybe some of those drivers that are leading to that uptick? Is it something that we're at a higher level here, looking forward? Or is there something a little bit more unique in the quarter?

Yes. The quarter had a few nuances that are worth highlighting. So I appreciate the question. Warranty as a platform, you should think about running about a 90% combined ratio. And the big difference quarter-over-quarter this year is really that Q3 of 2024 was a significantly low quarter from a combined ratio perspective.

However, if you look year-to-date for warranty in both 2024 and 2025, you're pretty comparable. You're pretty close between those 2, which is generally the level that we expect this to run in the long term.

I think the growth in warranty is something we referenced a bit in our opening remarks. It's been spectacular. And so we have to congratulate the team and our partners on their success there.

We do expect that growth comes from these high 30s levels, likely down to the mid-teens levels in the near term, but it's a great new base level for the business.

Corporate insurance, I think you should model this business on a loss ratio basis in the low 30s. That's generally what we expect in the long term. We had a very strong quarter last year in corporate insurance. You had something in the high 20s from a loss ratio standpoint.

But I think more importantly, this quarter in driving what I'll call net underwriting income or profitability, there's a pretty significant investment in the expansion into our U.S. business. That impact on NUI for corporate insurance is probably approaching $2 million in the quarter.

So if you back out that type of investment, the results look pretty comparable to our long-term expectations for that corporate insurance line.

And sorry, just to dig in on that corporate insurance loss ratio, low 30s, historical trend here has been maybe more like high 20s.

So is the U.S. platform driving some of that shift? Or is there something else?

No, low 30s is pretty normal. I mean, we had some very strong years recently as we are expanding the Canadian business.

The U.S. is not material enough at this stage to really move around loss ratios. So I think what you're seeing here is just a return to long-term averages in Canada.

And then the last one for me. Just on the warranty growth side of it, I believe it's coming from new merchant wins as opposed to, let's say, like auto sales growth, which has been somewhat tepid.

Perhaps you can outline some of the factors that are leading to those wins and broader distribution.

You're absolutely right, Jaeme. I wouldn't qualify the growth in warranty as a result of a booming auto sales environment.

This is a win or expansion of relationships within our partnerships. I would say the factors here, or the drivers of this expansion, are candidly just strong relationships.

So we've had a number of these partners for a long time in the last 12 to 18 months, and we've been successful in moving some business from competitors to our own platform, which you're seeing the uplift of through the year as we onboard those programs. It's candidly just a testament to the length of time we've been in the business and the strength of those relationships.

So nothing spectacular, no change in risk appetite, no change in real product offering, just a consistent focus in the business on building with people that we know.

Our next question comes from Tom MacKinnon with BMO Capital.

A bit more of a broader question, just with respect to the program's business, thoughts as to where you want to see better growth. Do you see better growth in specialty versus programs? And then keeping with programs, is this something that you -- or what do you think would be the bigger growth driver of Trisura overall?

And then just with respect to programs, what are you seeing in terms of retention here, maybe fees as a percentage of ceding commissions, just trends generally in that marketplace that you might want to view as being positive or negative, or opportunities to capitalize on?

Thanks, Tom. I think from a growth perspective, there's quite a lot of opportunity right now in the primary lines. You're seeing more significant growth in those lines as we candidly expand into the U.S. So you're coming off a lower base in some of these lines to drive a higher percentage growth in things like U.S. surety.

We would expect, in time, U.S. corporate insurance to add to that. We do still have quite a strong expectation for growth in our Canadian platform, although the maturity of those lines makes that percentage look a bit different than the U.S.

I think there is an expectation for continued growth in our U.S. programs business. That's likely on a percentage basis, not as significant as growth in some of our primary lines.

And I would make that comment for the Canadian fronting business as well. There's clearly some competitive factors there that are limiting top-line expansion.

But it means that we expect a relatively consistent and attractive contribution from both of those lines. In U.S. programs, retention should be thought about at a low teen level.

It's going to bounce around by quarter, but modeling it over the full year at 12-ish percent should be fair. Fronting fees or fees as a percentage of ceded premium, about that 5% range, maybe high 4s should be pretty consistent with what we've done in the past and will be consistent with what we're seeing both on new programs and existing programs.

And what opportunities do you see in programs overall? What particular programs are you seeing better growth in? And which ones would you not be as excited about?

Right now, we see continued excitement around the MGA industry in the U.S. So most groups, be they single MGAs or groups of larger MGAs, are continuing to exhibit very entrepreneurial behavior, more sophisticated platforms, and strong abilities to retain and attract good people.

It means that there's quite a bit of opportunity expected to continue in that market. I would say for us, we try to target a mix of portfolio businesses. It's about 70% casualty and 30% property.

The difference this year, I would say, is that we see a more supportive reinsurance environment, especially in property. So the opportunities that we've onboarded this year have been a mix of both property and casualty.

But it's the first time in a couple of years that we've had both appetite and the types of support we expect to lean back into that property space. So the mix of business is, I'll say, pretty consistent with our overall segmentation of business, and the backdrop for both E&S, MGA demand, and supporting the reinsurance seems to be either consistent or improving.

[Operator Instructions]

Our next question comes from Stephen Boland with Raymond James.

Just one question. In the MD&A, it does talk about a higher expense ratio in the U.S. that you're investing in the business. I'm just wondering if you can give a little bit more specifics on that?

And that will be ongoing this quarter and even into 2026?

Stephen, we haven't made a lot of, I'll call it, de novo or new investments specifically this quarter in the U.S., but we made a number of them at the end of last year and the beginning of this year.

You're seeing some of those investments just play through the year. So I wouldn't expect a significant change in that line or that expectation going forward.

We're simply building the business and preparing that platform for growth, candidly in both programs and primary lines. So you shouldn't expect a meaningful change in the absolute dollar figures there.

The trajectory likely flattens out over the next year or so. But we've made a number of investments that we talked about a lot in Q4 of last year and maybe referenced in Q1 of this year that we just think help us set up for a durable platform in the long term.

Actually, I'll sneak in one. You're comfortable with the capital position in the U.S. I mean, you have to move some capital down there, do you think, over the next 12 months? Or you're set for the next little while?

No, we're very comfortable with our capital position across the organization. So despite having a bit of growth this quarter that was maybe ahead of expectation in programs, we're very well funded there.

I think the area to think about us injecting capital in time will continue to be that surety balance sheet in the U.S. So as we continue to see momentum in that platform, we want to continue to get bigger there.

That concludes today's question-and-answer session. I'd like to turn the call back to David Clarr for closing remarks.

Thank you very much, everyone, for joining today. And as always, don't hesitate to reach out if you'd like to speak through anything further. Thank you, operator, and thank you, everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.