Good morning. Welcome to Trisura Group Ltd. first quarter 2022 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 quarter and year. 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 in 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. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star zero. Thank you. I'll now turn the call over to David Clare.
Thank you. Good morning, everyone, and welcome. Our business performed well through Q1 of 2022, growing premiums 55% compared to Q1 of 2021. We recorded our highest quarterly net income to date of CAD 21 million, supporting a 19% return on equity despite continued investment in infrastructure. Our team continues to demonstrate momentum as we scale an increasingly diversified specialty insurance platform. Results again were particularly strong in Canada, with 63% premium growth in the quarter, supported by profitable underwriting. An acceleration of growth in the U.S. drove premiums to a new quarterly record, increasing 52% over the first quarter of 2021. In Canada, the standout continues to be risk solutions, where fronting and warranty programs drove an 82% rate of growth in the quarter.
It is striking to observe the growth in contribution to earnings from risk solutions, with a 216% increase in NUI versus Q1 of 2021. 48% growth in corporate insurance was supported by expansion of programs and sustained momentum with distribution partners, as well as a healthy but mitigating rate environment. Surety growth of 34% was strong as the business benefits from tailwinds in established lines and expansion of the U.S. practice. Importantly, loss ratio in Canada of 16% improved sequentially, driven by strong experience in risk solutions. Combined ratio in the quarter was 79.5% compared to 65% in Q1 2021, a very strong result in the context of a comparable period that benefited from significant one-time items.
The Canadian platform maintained a strong 30% return on equity and grew net income 24% over the prior year. With the expansion of our US-style fronting, our Canadian entity now generates attractive fee-based earnings to complement the heritage of profitable underwriting. We have made progress in our U.S. surety platform, which contributed $2.5 million of premium in the quarter, following the addition of experienced team members in Stamford, Denver, and Philadelphia. We are excited by the potential of expanding our surety line to a larger market with promising infrastructure tailwind. That being said, we continue to navigate regulatory licensing and expect a muted contribution from U.S. surety in the near term. U.S. fronting grew premiums 52% over Q1 2021. Maturation of existing programs drove top line.
U.S. fronting generated $342 million in gross premiums written and $14 million in fronting fees. We recorded $29 million of deferred fee income at the end of the quarter, indicative of future fees to be earned. Loss ratio in the quarter decreased as we benefit from diversification, while fronting operational ratio increased from a shift in mix of business as a larger share of net underwriting income was generated from business with a higher retention rate. The market continued to drive opportunities to excess and surplus lines, although we wrote $34 million in admitted premium in the quarter. Similar to our Canadian platform, the U.S. business may exhibit seasonality, making sequential comparisons less relevant than when the business was in startup mode. Annual growth potential remains strong, and we view results on a 12-month basis.
The strength of our growth has catalyzed historic levels of hiring, though we admittedly face the same difficulties in hiring that many industries are facing today. An important focus through this expansion continues to be increasing operational leverage while maintaining appropriate resources to manage and underwrite the business. Interest in dividend income increased 24% over Q1 of 2021, the result of a larger portfolio as we grow the insurance business. The substantial increase in interest rates year-to-date drove unrealized losses in our fixed income portfolios, though the impact was mitigated through a short duration posture and positive contribution from equity allocation. Although we never like to see a reduction in portfolio value, the market is presenting us with opportunities to deploy capital at yields not seen since 2018.
As a growing company, we are fortunate to have significant and consistent flow of capital to invest, enhanced by the maturation of our existing short duration portfolio of investments. Prevailing bond yields are accretive to current portfolio yield, meaning that we are improving our base of interest in dividend income on a risk-adjusted basis for years to come. The hardening market in corporate lines in Canada and E&S lines in the U.S. continued in the quarter, although we see reduced pace of increase versus last year. The majority of our growth has been achieved through enhanced distribution relationships and new volume. As such, we expect to navigate eventual rate normalization smoothly. Although excess and surplus markets remain strong, our admitted capabilities will be important going forward.
With the continued expansion of admitted lines, maturation of Canadian fronting and launch of a U.S. surety strategy, we have ample and attractive opportunities to grow. Our platforms have become complementary sources of lead generation for one another. As we gain market share in one geography, our presence and capabilities of companion offices provide opportunities to generate new business and service partners across the border. Increasingly diverse and fee-based earnings help reduce volatility and supports our access to capital. As we execute on our priorities through 2022, environmental, social, and governance considerations are front of mind, an important part of Trisura's development. We are focused on better communicating existing initiatives and believe we have taken a step in the right direction with enhanced ESG-related disclosure in our management information circular.
I'm excited to introduce Janice Madon, our newest director, to shareholders at our upcoming AGM, an important and skilled addition to our team. We remain an insurance company in growth mode and must focus on the skills and practices that brought us to this point, concentration in business lines we know, conservative underwriting, and detailed structuring. As we've acknowledged in the past, our business can experience volatility and severity in claims. Importantly, an increasing proportion of our business is now derived from fee-based earning sources. 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 brief walkthrough of some financial results for the quarter. Gross written premiums was CAD 481 million for the quarter, which reflects growth at 55% over Q1 2021. Fee income, which is primarily related to fronting fees from our U.S. operations, grew by 32% in the quarter, reflecting growth of fronted premium in the U.S. Net claims expense in the quarter was greater than the prior year, primarily as a result of growth in the business. We also experienced a claims recovery in Q1 2021 associated with our life annuity reserves, which have since been novated, with reduced claims experience in that quarter. Net commissions expense increased by 100% in the quarter, reflecting growth in the business in both the Canadian and U.S. operations, as well as a shift in business mix towards certain lines with higher commissions.
Operating expense in the quarter grew by 24% over Q1 2021, reflecting growth in both the Canadian and U.S. operations. Net underwriting income in Canada for Q1 was approximately the same as the prior year as a result of growth in the business and mitigated by an exceptionally low combined ratio in Q1 of the prior year. Net underwriting income for the U.S. in Q1 2022 was greater than Q1 2021, largely as a result of growth in new and existing programs. In Q1 2022, the combined ratio in Canada was 79.5%, and the fronting operational ratio in the U.S. was 75%. With the novation of the life annuity reserves in Q4 2021, we are now able to calculate a meaningful combined ratio on a consolidated basis. In Q1 2022, that combined ratio of the company was 72%.
Net investment income was greater in Q1 2022 than Q1 2021 as a result of an increase in interest and dividend income. The increase is primarily related to an increase in the size of the investment portfolio associated with growth in operations and contributions to capital from the debt offering in June of 2021. Net investment income in Q1 2021 was in a loss position as a result of movement in that quarter in the investments supporting the life annuity reserves, which was offset by the corresponding movement in claims expense in that quarter. Net gains were in a loss position of 500,000 in the quarter, which was less than Q1 2021, largely as a result of movement in derivatives used to hedge share-based compensation.
Income tax expense increased in Q1 2022 compared with Q1 2021, reflecting higher net income before tax in the quarter and a similar effective tax rate. Net income for the group was CAD 21 million in the quarter, which was greater than Q1 2021 as a result of growth in the business. Diluted EPS was CAD 0.50 a share in Q1 2022, which was greater than Q1 2021. Consolidated ROE on a rolling 12-month basis was 19% at the end of Q1 2022, which was greater than the rolling 12-month ROE at the end of Q1 2021. Assets in the year-to-date period grew by CAD 11 million. Cash in the quarter decreased as a result of a large number of payments in the quarter, as well as deployment of cash to the investment portfolio.
Investments have decreased, reflecting the transfer of assets from the novation in 2021, as well as unrealized losses incurred in the period. Recoverable from the insurers have increased primarily as a result of growth in the U.S. fronting business, where claims liabilities are largely offset by expected recoveries from the reinsurers to whom we cede the business. Liabilities in the year-to-date period grew by CAD 13 million, primarily as a result of growth in unearned premium and unpaid claims and loss adjustment expenses, which have grown as a result of both of growth in both Canada and the U.S. As discussed, growth in these balances is largely offset by growth in reinsurance recoverables.
This is also offset by a reduction in accounts payable and accrued and other liabilities as a result of the settlement of assets from the novation in 2021, as well as a large number of payments in the quarter. Equity is approximately the same at year-end, reflecting growth in net income offset by a reduction in other comprehensive income. Other comprehensive income decreased in 2022, primarily as a result of unrealized losses on the bond portfolio due to rising interest rates. Book value per share was CAD 8.66 at March 31st, 2022, and is greater than March 31st, 2021, as a result of profits generated year to date and mitigated by the unrealized losses on the investment portfolio in the quarter.
As of March 31st, 2022, debt to capital was 17.4%, which increased after last year's debt offering but remains below our long-term target of 20%. The company remains well capitalized and we expect to have sufficient capital to meet our regulatory capital requirements. David, I'll now turn things back over to you.
Thanks very much. Operator, we now take questions from the line.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Jaeme Gloyn with National Bank. You may proceed with your question.
Yeah, thanks. I guess first question, let's start on the U.S. fronting side. As I'm looking at growth in this quarter, pretty exceptional growth. I know we used to sort of think about like, you know, maybe CAD 10 million, CAD 20 million quarter-over-quarter would be sort of typical growth, and we've had pretty rapid growth here in the last few quarters. Maybe you could just sort of walk us through what's helping to drive that outsized growth. Is it more penetration and understanding of the programs with the MGAs? Is it hard market conditions and rising rates? What do you think is helping to drive that really solid growth and the sustainability of it?
Yeah. Hey, Jaeme Gloyn, thanks for the question. I would say it's a combination of those factors. We continue to see relatively strong tailwinds in the excess and surplus lines in the U.S., which is where the majority of our premiums come from in our U.S. fronting practice. That in combination with the maturing programs from MGAs that we've been working with for a long time has driven a relatively healthy pace of growth, especially in Q4 and Q1 in the US fronting business. We tend to look at this business on an annual basis. Any one quarter sequentially, those comparisons now that we've got a much more mature business tend to be less useful. I would say that the momentum that we've seen to start the year certainly gets us excited about the business.
Okay. Still thinking about growth here, we added one net new program in the quarter. Could you give us a little bit of, you know, color around, is there a pipeline on net new programs and maybe a little detail on the MGA market and in the U.S. in particular?
Yeah. We continue to see a pretty healthy pipeline of opportunities coming into the business. That's included a number of opportunities that are currently sort of going through our onboarding and risk committee process. I think the pipeline for us in the U.S. continues to be quite strong and has been strong to start the year. The net one new program again reflects a more mature business balance. We've seen some programs that weren't producing sort of a critical level of volume be rolled off, as well as sort of a net addition of new programs in the quarter. That nuance is very similar to what we saw in Q4.
The MGA market in the U.S. continues to be a pretty rapidly growing space, and that's been benefiting our business as a fronting participant. MGAs in the U.S., and specifically those who participate in the excess and surplus lines space, have been one of the faster growing components of the U.S. insurance market, and we certainly expect that secular trend to continue. That's been a market that over the last few years has outgrown the pace of the traditional insurance market and certainly has benefited our platform.
Okay, great. Last one from me on the U.S. side. The fronting operational ratio coming in at around 75%. Nice to see the loss ratio turning back into the mid-sixties as well. Is this the right level to think about for loss ratios and expenses and I guess that overall fronting operational ratio as we go forward here for the next several quarters? Are there other factors here to be thinking about in terms of that level?
Yeah. In the near term, that's gonna be close on our fronting operational ratio. We continue to make investments in the business. You've seen a bit of expenses going through the fronting operational ratio, as well as a bit higher proportion of our net underwriting income being tied to programs with a higher retention, which on a net basis increases that fronting operational ratio. Your loss ratio should be between a 66%-68% in the U.S., excluding any experience in catastrophe or weather-related losses. That's the one thing to think about in quarters like Q3 or Q4, where you tend to have a bit higher experience in those lines. Generally, Jaeme, you're right. The levels you're seeing right now should be a pretty good approximation of what we've got in the near term.
Okay, great. Thanks. I'll requeue.
Thank you. Our next question comes from Mario Mendonca with TD Securities. You may proceed with your question. Your line is now open, Mario.
Hello, can you hear me?
I can. Hey, Mario Mendonca .
Hey. I just want to start with a higher level question. The hard market has been around now for sort of getting on 2+ years, and that's certainly disproportionately benefited those U.S. lines as you were mentioning. What's sort of your confidence in the hard markets persisting for, say, the remainder of 2022? What sort of visibility do you have in terms of like, are you seeing any signs of slowing down? Because certainly from our perspective, given the growth this quarter, doesn't appear to be so.
Yeah, it's a difficult question to be precise on, Mario Mendonca. I would say we've continued to see strong trends in the E&S market in the U.S. We've seen some mitigation of those at least rate increases in our Canadian specialty lines in the corporate insurance practice. Given the uncertainty persistent in the market around things like inflation and loss cost trends, a lot of the expectations around that hard market are uncertain at this stage. I would say our business model has been able to thrive in both hard and soft markets. For us, we've certainly planned the business for this year anyways to not rely on a continuation of that landscape.
We would certainly have visibility at least in the next couple quarters of the current state of the market continuing, but I think that trend generally is mitigating versus what we saw last year.
Okay. Thank you. Secondly, kind of related to that, the growth rates really across all of your lines of business this quarter, you've referenced in the past what you consider long-term sustainable growth rates for each of those individual lines. 2021 exceeded those levels by quite a large amount. This year, my understanding is you thought that those might sort of trend down towards those longer term averages. Given this strong performance in Q1, are you rethinking those yet, or is it sort of too early in the year to say?
I think at this stage it's too early for us to say. Certainly we're very happy and excited about the growth that's been demonstrated year to date. Specifically, the U.S. really outperformed our expectations. I think if you look at the Canadian platform demonstrating a 63% growth rate over the prior quarter in Q1 of 2021, there's really substantial and significant growth there. We continue to expect sort of the general growth rates that we talked about in Q4 for the full year. I think it's important for people to model and view this business on an annual basis rather than just on any one quarter. We can probably revisit that question after the second quarter. From our perspective, certainly a very strong start to the year.
Okay, that's good. If I could just sneak in one more on the Canadian fronting operations. What's the landscape like there? Because you guys are one of the. You're basically making the market here. You said that this market doesn't really exist yet and kind of testing the waters. What is the appetite like on the reinsurance side? Does it seem like endless appetite, or are they sort of cautious right now and kind of giving you some to start with? Or what's sort of the runway here that you think this could grow into?
Yeah. I wanna be clear, there are other participants in the fronting space, so we're certainly not the only people doing this, in Canada. I would say that the style of our fronting participation, and certainly the novelty of the practice for Trisura, has been significant and important for our business. To date, the appetite of the reinsurers that we work with has been strong, so we are very excited about the programs that we have, this year with our reinsurers. We continue to search for new opportunities to find other areas to work with those reinsurers as well as new reinsurers who want to access this market. It is, for us anyway, it's a tough business line and a tough model to forecast because it's a relatively new structure for Trisura in this market.
Okay. All right. That's good. Thank you very much. I'll requeue.
Thank you. Our next question comes from Jeff Fenwick with Cormark Securities. You may proceed with your question.
Hi, good morning, everybody. David, I just wanted to start in Canada here. You know, a nice bounce back in profitability at Surety this quarter. Just hoping you give us a bit of an overview of the dynamics of the market. When you look at the performance in the quarter, the current period claims ratio crept up. It looked like it was near sort of the high levels over the last couple of years, and then that was offset by some pretty meaningful favorable development of prior years. You know, maybe just help us square what you're seeing in the market today versus that ability to be releasing reserves.
Yeah, it's a great question, Jeff. Thanks for calling in. It's important to note that there can be seasonality in the Surety loss ratio, and specifically that seasonality arrives in the first quarter of the year. Current accident year loss ratios tend to be high in Q1, as claims incurred in that period are generally not offset by reductions in IBNR, as IBNR for that accident year hasn't yet accumulated. So it's not uncommon for Q1 to experience a larger movement in prior year development. Sometimes claims incurred in the previous quarters experience movement in the subsequent quarters. In the case of Q4 or even Q3, this can span a year-end, which shifts segmentation of loss ratio between current and prior year development.
It's worth noting that this nuance can actually result in lower claims or lower estimates of claims driving higher loss ratios because of the segmentation at year-end between current and prior year. That's sort of exacerbated by a posture of conservatism in IBNR at the start of the year. In Q4, we had a larger dollar amount of claims than in Q1, but the impact of current year loss ratio was greater in Q1, given the timing of that reserving process and the movement in IBNR. It should be noted that given the short tail nature of Surety and Warranty businesses, frankly, the split between current year and prior year loss development is really less relevant than for longer tail lines. These metrics are more relevant for things like corporate insurance, where claims development is longer.
It also is probably worth repeating that our management team relies on the work of external actuaries to determine the timing and segmentation of these IBNR releases. There's a real collaborative approach here with external advisors to set these amounts.
Great. That's very helpful color. So why don't we maybe ask one on the U.S. business then with the nice continuation of the growth that you're seeing on your business on the fronting business in the U.S. I can see the run rate of the premiums to capital looks like it's creeping up here again and maybe a bit above what you've historically targeted, and I believe that target level can grow as you move up those AM Best size ratings. But how are you feeling in terms of capitalization in the U.S., and are we gonna expect to see some capital fed down there to keep supporting the growth?
Yeah, you're exactly right. We usually tend to run our U.S. business between five and six times premiums capital. We've pierced that six times level now, I think, for one of the first times. We'll likely look to inject a bit more capital into this entity. We've got that excess capital sitting up at the holding company, so we're fully expecting to fund that with internal resources. The pace of growth in the U.S. continues to impress us, and we're glad now to have some of those resources to fund that business available internally.
Great. Okay. That's all I had. I'll be quiet. Thank you.
Thanks.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. Our next question comes from Stephen Boland with Raymond James, and may proceed with your question.
Thanks. Maybe just a little follow-up on the prior year development in surety and corporate. You mentioned, you know, that's a collaborative process with your external actuaries, but both, you know, very favorable this year. I just wanna get a little bit more color. You know, is surety and corporate from the COVID years, claims years or, you know, is that favorable development from older claims years? Maybe you could just give a little color on that.
Yeah. It's gonna depend on the business line and the length of duration of those liabilities. Surety is a relatively short duration liability line, so most of the prior year development that you're seeing is as a result of strong performance in recent years, specifically 2021. Corporate insurance will be a mix. Some of those are recent years, 2021 and 2020, and a small amount from years before that.
Okay. With that, you know, say you depleted your, you know, your conservative IBNR from those years. Would we expect that, you know, favorable development to be ongoing at this level?
Yeah. It's tough to predict, Stephen, but I would say our track record and our history certainly is one that's had relatively strong favorable reserve development over time. We continue to reserve at a relatively conservative level given a little bit of the uncertainty that we see in a continued COVID environment. The growth that you're seeing, the new business that we're putting on is not coming with a lower or more aggressive reserving posture. We continue that same approach that we've had for the last few years. I would certainly hope and expect that our reserving practices and our results would look a lot like they've looked recently.
Okay. That's it for me. Thanks, guys.
Thank you. Our next question comes from Tom MacKinnon with BMO. You may proceed with your question.
Yeah. Thanks. Good morning. Just wanna ask another question with respect to the fronting operational ratio in the U.S. If we look in 2021, it was 73% or so. In 2020, it was 71%. The first quarter of 2022 being 74.7%, a little bit higher. I suspect that there may have been some higher commissions in the business that would have come into the Q1 2022 fronting operational ratio. Is that a little bit more unique just to the business that was placed that you've just written? Or how should we be thinking about maybe low 70s% going forward for the U.S. fronting operational ratio? Was there anything with respect to higher commissions that drove it up a little bit more in Q1 2022?
Yeah. Hi, Tom. That's right. There is a mix of business impact to that fronting operational ratio, and part of that mix of business does include lines of business with a bit higher commission. That does feed through to your fronting operational ratio. I think that low 70s% range in the long term is a good range to think about for that business. In the near term, in the next couple quarters, you might see that a bit higher, closer to low- to mid-70s%. You're exactly right. In the long term, that low 70s% is what we're targeting.
Okay, thanks. Just if I look on page 11 of the supplement, there's a bump up in corporate expenses, and also a bump up in the share-based comp net of hedges. Maybe you can just describe what happened in the quarter and how we should be thinking about those things going forward.
Yes. A few things are happening in those lines. First and foremost, you'll notice that with the novation of our life insurance policy, we have removed disclosure around our segment of the international business. A portion of those expenses have been allocated to the U.S. business in support of writing reinsurance for that business. A portion of them have been allocated to corporate expenses. There's a mix here of reallocation. On share-based compensation specifically, you've obviously got a moving share price in the last quarter, and we've got a market-based hedge. Which means any one quarter you've got some movement around the edges on that hedge. In this quarter, there's an imperfect match in that hedge given some of the volatility in the market. Certainly in the fullness of time, we anticipate that noise to mitigate.
Should we be thinking about the corporate expense run rate to be, I mean, not the share-based comp net of hedging, but the corporate expense run rate, to be kind of in line with what we saw in the first quarter going forward?
Yeah. I think you can probably use that as a good base. We'll update you guys at Q2 because sometimes Q1 there can be some one-off items in starting the year with licensing fees and regulatory fees. But I think that's a good starting point certainly for the year.
Okay. Thanks.
Thank you. I'm not showing any further questions at this time. As a reminder, to ask a question, you will need to press star one on your telephone. Please stand by while we compile a Q&A roster. Our next question comes from Jaeme Gloyn with National Bank. You may proceed with your question.
Yeah. Thanks. Just a couple of follow-ups. Wanted to get a little bit more detail on the Canadian fronting partnerships, so on both sides of the equation. First on the MGA side, is there anything you can share with us in terms of, you know, number of programs, what types of lines of business are being written, and potential like, I guess, addressable market on the MGA perspective in Canada? Then on the other side, who are the reinsurance partners? Are they the same relationships you have on the U.S. side? Are there different players that are operating in Canada versus the U.S.? Could you give us a little bit more color on that?
Yeah. We haven't talked in a lot of detail about the number and the types of programs that we have in the Canadian fronting space. I would say, we've got a bit different focus, a bit different market in Canada than we do in the U.S. fronting model. Some of these relationships are with distribution partners beyond traditional MGA. You've got a slightly different market here in Canada for that space. The lines of business that we focus on generally are lines of business that we don't write on a primary basis. We have to be very conscious of our market presence and channel conflict in that arena. From a reinsurance perspective, some of the partners that we work with are the same partners we work with in the U.S.
Some of those partners are a group that we've worked with for a long time in Canada. Generally, as a rule, the reinsurers that you're working with are reinsurers based outside of Canada and hoping to access Canadian premium.
Okay. As I'm looking at the Canadian fronting business, last 12 months did about CAD 230 million in gross premiums written. Is that, you know, a comfortable level? I know it's still early days, but now that it's broken out, I'm starting to think about how to look at this on a multi-year basis in terms of the potential for the platform.
Yeah. I would say, our fronting practice certainly had a very quick ramp in the last calendar year. We're thinking about that business as growing off a more stable base now. I think that starting point is a good base to think about the new long-term average levels of growth.
Okay. Maybe a bit higher level, you know, some thoughts for the Canadian and the U.S. markets. I'm just wondering if you have any observations around Lloyd's and their competitiveness. They, you know, a couple of years ago, had some issues and exited some markets that perhaps maybe created some opportunities for companies like yourselves. I also was wondering if you had any refreshed observations on how they're behaving.
Yeah. It's very interesting. You're right. The pullback in Lloyd's did catalyze, or at least was an input into some of the factors that drove a hardening market in a lot of lines. We are seeing certainly a continued hard market in many of the areas that Lloyd's participates, and we haven't seen that re-entry of new capacity yet from those types of participants. I would say that in the fullness of time, insurance tends to be a cyclical industry and tends to follow broad cycles. Without commenting specifically on where Lloyd's participates in that in that market, you would expect that in time, insurance markets as a rule will return to some normalized level of operation. It's really tough to predict where exactly any one player will participate in this.
Lloyd's is a big participant, so it's always interesting to watch what they're doing. That pullback that they started a few years ago, certainly we haven't seen a real reversal of that.
Okay. Great. Those are my follow-ups.
Thanks, Jaeme.
Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to David Clare for any further remarks.
Thanks very much. Thanks everyone for joining. If you have any further questions, don't hesitate to reach out to us directly.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.