Trisura Group (TSU) dropped 30% alongside its Q3 results, which showed pressure on underwriting income…

… driven by higher claims activity and reserve builds in its US Programs segment, which could get worse due to DryStone Capital’s bankruptcy in October. With the majority of US premiums ceded to reinsurance partners…

… a default could create losses well in excess of earned fees and the capital tied up in its retained share (DryStone’s reinsurance entity remains operational). With the company focused on growing contribution from its Primary Lines…

… management expects the DryStone earnings impact to be less than it saw in Q4/22 (~$82M), though uncertainty could keep a lid on the multiple in the near term.

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