Author Topic: TSU - Trisura  (Read 14500 times)

snowball82

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Re: TSU - Trisura
« Reply #20 on: February 17, 2019, 01:51:47 PM »
Post Q4, BMO estimates are $ 1.97 EPS for 2019 (9,7 % ROE) and $2.84 for 2020 (12,5 % ROE).

I don't know if those estimates are right or not. That said if they are right and the profitable growth continue, the current stock price isn't expensive. I think I will own my position for long term and add if the management executes the plan well.
« Last Edit: February 17, 2019, 02:17:17 PM by snowball82 »


snowball82

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Re: TSU - Trisura
« Reply #21 on: February 18, 2019, 07:43:43 PM »
Together maybe we could find some of the current 14 programs in US and next to come.

Those two had been mentionned in the Insurance insider journal :

USI Southwest has finalized an exclusive Intermodal Truck Insurance Program with Hybrid US fronting carrier Trisura Specialty.

https://www.insurancejournal.com/news/southcentral/2018/04/12/486312.htm

Hybrid US fronting carrier Trisura Specialty has put the first deal on its books with an agreement to provide its paper to Allstar Transportation's liability program business, The Insurance Insider can reveal.

https://www.insuranceinsider.com/articles/115192/usi-southwest-partners-with-trisura-on-truck-program
« Last Edit: February 18, 2019, 08:02:37 PM by snowball82 »

snowball82

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Re: TSU - Trisura
« Reply #22 on: February 19, 2019, 12:05:53 PM »
Is there someone here able to figure what could be the impact related to unearned premium growth at the end of 2018 ($182 623 000 vs $ 115 357 000 for 2017, balance sheet, note 8 ) for 2019 ?

Thanks

« Last Edit: February 19, 2019, 12:07:56 PM by snowball82 »

ourkid8

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Re: TSU - Trisura
« Reply #23 on: February 19, 2019, 12:32:47 PM »
Partners value investments LP 2017 annual report:

During the year, we acquired a 16% interest in Trisura Group Ltd., a specialty property and casualty insurance company as a
result of the spinout of this company by Brookfield. Together with our own unitholders, we collectively own an approximate
25% interest in Trisura. We are working with the management team of Trisura to build that company into a global specialty
insurance company and are excited about this opportunity.
Our Vice President, Mr. David Clare, has recently agreed to join
Trisura on a full‐time basis as their Senior Vice President responsible for Investments and Business Development. We wish
David much success in this exciting new role.

The Partnership acquired a 16% equity interest in TSU and has a management services agreement in place resulting in an
officer  of  the  Partnership  also  acting  in  the  capacity  of  the  Chief  Investment  Officer  of  TSU  and  directly  impacting  the
decisions and profitability of  the entity;
as a result,  the Partnership exercises significant influence over TSU. As such,  the
Partnership  records  its  proportionate  share  of  the  TSUís  income  as  income  from  equity  accounted  investment  in  the
consolidated statement of operations. Due to dilution resulting from issuing shares in a management buyout, the Partnership
owns 14.2% of TSU as at December 31, 2017.

Cigarbutt

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Re: TSU - Trisura
« Reply #24 on: February 20, 2019, 05:48:17 PM »
Is there someone here able to figure what could be the impact related to unearned premium growth at the end of 2018 ($182 623 000 vs $ 115 357 000 for 2017, balance sheet, note 8 ) for 2019 ?
Thanks
Thanks for the thread. There is a lot to like about TSU and I will keep it on a watchlist to see how it will develop a consistent operating history given its present vision and strategy.

The positives: niche and specialty market, room to grow in a fragmented market, management team appears strong.

Some areas to follow, mostly about their US business:
-partnering with program administrators
-fronting arrangement
-business model relies on access to reasonable reinsurance capacity

You may remember that Fairfax ran into trouble with their TIG acquisition which had about 50% of its insurance business tied to programs controlled by managing general agents who had authority to bind the company. TSU needs to partner with competent and diligent program managers because they are effectively "giving their pen away".

For fronting arrangements to work, you need to align incentives and have financial checks in place. Some years ago (70's and 80's) many US insurers ran into trouble for various reasons which involved fronting arrangements. You may want to get your hands on a report called "Failed Promises" which was produced in the early 90's by Mr. John Dingell (who died a few days ago) who was the longest-ever serving Congressperson in American history. The report describes the potential ways how fronting arrangements can go wrong and how regulation could be improved. But fronting arrangements can work very well in selected markets and it seems that TSU has found a model which meets market demand. They also maintain skin in the game (retained 4.7% of premiums in 2018)

A potential problem has to do with their reliance on reinsurance for almost all business written in the US. The model requires reinsurance capacity to be maintained in order to maintain business or to grow. It is possible that reinsurance capacity eventually diminishes and alternative capital has not made its way to this area of the insurance market. A bad scenario would involve an extrinsic reason that would both reduce reinsurance capacity and TSU's capacity to retain the business. It looks like they will reinsure themselves to some degree (Barbados unit) going forward.

Concerning your question, it's not clear what you're looking for. Unearned premiums means that the deferred premiums relating to periods subsequent to the balance sheet date will be recognized as revenue on a pro-rata basis over time (net of premiums ceded). So increasing unearned premiums leads you to expect higher premiums earned and the unearned premium account will increase if written premiums keep ahead of premiums earned. Note also that unearned premiums are recorded at gross levels and, for the US business, TSU mostly acts as a pass-through.

snowball82

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Re: TSU - Trisura
« Reply #25 on: February 22, 2019, 03:53:24 PM »
I try to see the futur earning power. Cormark has better EPS estimates than BMO mentioned earlier. They see the ROE at 12.1 % for 2019 and 14.4 % for 2020. 12.8 & 15.5 % for BVPS growth.

Please don't ask them for EPS estimates, some could think it is a small Graham stock!
« Last Edit: February 22, 2019, 03:59:03 PM by snowball82 »

ourkid8

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Re: TSU - Trisura
« Reply #26 on: February 23, 2019, 08:24:38 AM »
Oh my...

I try to see the futur earning power. Cormark has better EPS estimates than BMO mentioned earlier. They see the ROE at 12.1 % for 2019 and 14.4 % for 2020. 12.8 & 15.5 % for BVPS growth.

Please don't ask them for EPS estimates, some could think it is a small Graham stock!

snowball82

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Re: TSU - Trisura
« Reply #27 on: February 24, 2019, 10:55:47 AM »
Partners value investments LP 2017 annual report:

We are working with the management team of Trisura to build that company into a global specialty
insurance company
and are excited about this opportunity.



What this exactly mean ?

ourkid8

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Re: TSU - Trisura
« Reply #28 on: February 26, 2019, 12:59:49 PM »
I pulled the below details on Trisura's 3 subs:

1. Canadian subsidiary - currently with industry leading returns and started in 2006
2. US fronting platform - Founded in 2017 and this is in growth mode and what I am most excited about
3. Trisura International Insurance - Operated as a reinsurance company for almost 15 years but I do not have much details on this sub

Partners value investments LP 2017 annual report:

We are working with the management team of Trisura to build that company into a global specialty
insurance company
and are excited about this opportunity.



What this exactly mean ?

ourkid8

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Re: TSU - Trisura
« Reply #29 on: February 27, 2019, 08:22:44 AM »
Analyst Actions: Trisura Group Gets Higher Target Price at BMO Capital; Maintained with Market Perform
10:07AM ET on Wednesday Feb 20, 2019 by MT Newswires
10:07 AM EST, 02/20/2019 (MT Newswires) -- Trisura Group (TSU.TO) has received a higher target price of $32 from BMO Capital while keeping a market perform rating.

BMO said it likes Trisura's Canadian business and sees potential in Trisura's Q1 2018 launched US specialty business but sees Trisura as fairly valued at 1.4x P/BV, especially given its 10% 2019 operating ROE. While the broker recognizes there could be multiple expansion to 1.7x BV(or a $38 share price) should it sees significant growth in its well-capitalized nascent U.S. business, it prefers a near-term "wait and see" approach.