Trisura Specialty top line grows 140% in Q3

Hybrid fronting carrier Trisura Specialty wrote $171.0mn of gross premium from the 40 programs on its books in the third quarter of 2020 as it grew 140 percent year on year.

The rapid expansion came as the number of programs bound increased from 25 in the prior-year period, when it wrote $71.2mn of gross premium.

Fee income has surged with the top line growth at the program specialist, climbing from $2.4mn in Q3 2019 to $6.4mn in the most recent quarter.

The strong third-quarter growth rate took gross written premium (GWP) for the first nine months of the year to $436.5mn, up 159 percent on the comparable period in 2019, as the Trisura Group-owned platform has risen to become a meaningful player in the program fronting space.

The carrier only began writing business in the first quarter of 2018 but has grown rapidly in the last two years under the stewardship of Michael Beasley.

Almost half of Trisura Specialty’s book is commercial auto (47.9 percent in Q3), with commercial multi-peril accounting for 20.4 percent, primary and excess casualty 13.8 percent, homeowners multi-peril 7.5 percent, farm owners multi-peril 2.9 percent and other 7.5 percent of the total.

The carrier cedes a significant proportion of its commercial auto book but retains a larger amount of its primary and excess casualty portfolio on a relative basis.

Commenting on the growth trajectory in its most recent financials, Trisura Group said the US platform grew top line by adding new programs as well as the maturation of existing programs.

“Growth in NWP was slower than growth in GWP as our US operations continued to cede a larger share of its retained premium to our reinsurance business,” it explained.

As well as ceding business on programs written to external reinsurers, Trisura Specialty utilises a captive reinsurer.

The carrier typically targets retention of between 5 percent and 10 percent on all new programs, after which it will consider ceding to its captive reinsurer.

Fees as a percentage of ceded premium were 5.7 percent in Q3 2020, which was in line with the prior-year period, explained the company.

As previously reported, earlier this month Trisura Specialty had its A- rating from AM Best affirmed and its financial size category upped to VIII by the agency after its Canadian parent injected capital following a recent fundraise.

A category VIII financial size is the bracket for carriers with adjusted policyholders’ surplus in the $100mn to $250mn range.

The carrier is hoping the elevation to the higher category will grant it – and its MGA and program administrator partners – more access to business from the wholesale giants of AmWINS, RT Specialty and CRC.

In May Trisura Group raised an additional $50mn in Canada, around half of which was put into the surplus of its US specialty platform.

Added admitted capabilities

Trisura Specialty started out less than two years ago as an E&S-only platform and is licensed to write in all states on a surplus lines basis.

That gave it the ability to build momentum relatively quickly as it grew a portfolio that now stands at over 40 programs.

In February this year it secured an A- rating for its recently acquired admitted platform, which initially had 13 admitted state licences but had already increased that to around 30 by the summer and is on course to by fully licensed in all states.

Its business model has been built to allow it to scale up to over 100 programs, although it will continue to target mid-sized programs in the $5mn to $15mn initial size range.

Trisura Specialty is understood to have an optimal business mix of around 70:30 between casualty and property on a gross basis.

It typically looks to target broader relationships with multiple programs at each of its MGA and program administrator partners, then grow with those clients, adding companion programs across its E&S and admitted platforms.

The carrier has strong relationships with leading reinsurers, with Swiss Re, Munich Re, Lloyd’s and RenaissanceRe all understood to be meaningful players on its panels.

It provides reinsurer partners with in-depth and timely data and analytics on the performance of programs they are supporting via a dashboard interface it has set up on its platform.