How Trisura’s subsidiary purchase affects brokers

Trisura Group has acquired the remaining 40% management interest in its Canadian subsidiary that holds Trisura Guarantee Insurance Company, a move intended to provide the latter entity with more access to capital.

“Trisura Guarantee benefits from better and more flexible access to capital following the spin-out,” David Clare, chief investment officer with Trisura Group, told Canadian Underwriter Friday. “This transaction aligns Canadian management with shareholders and should only improve that access.”

Clare believes the transaction should not have a major impact on the Canadian broker market. “One thing we’ve highlighted to our broker partners is that, from an operational perspective and a day-to-day perspective, nothing is changing,” Clare said in an interview on Friday. “This is simply transferring or exchanging ownership in the private entity to the public one.”

Trisura Group currently holds a 60% interest in the Canadian subsidiary. Trisura Group agreed to acquire the remaining 40% interest from a group of current employees and directors of Trisura Guarantee—the TG Management Group—in exchange for common and preferred shares of Trisura Group, a publicly listed vehicle.

“The team at Trisura Guarantee is very pleased to now have a significant stake in Trisura Group and we look forward to participating in the future growth of the public company,” Mike George, president and CEO of Trisura Guarantee, said in an email to Canadian Underwriter.

“We believe Trisura Guarantee will benefit greatly from Trisura Group’s global platform, access to capital and strategic focus on insurance. It is otherwise business as usual and we look forward to continuing on our path of becoming the Canadian specialty lines leader working closely with our brokers.”

Clare describes the transaction as “really an exchange of private shares for public shares [that] simplified a lot of both accounting and the structure in general. We’ve got public shareholders now at Trisura Group and aligning the management team at Trisura Guarantee with the public shareholders of the broader entity just seems to make a lot of sense to us.”

The closing of the transaction is expected within the week, Clare said, adding that the Office of the Superintendent of Financial Institutions has been kept up-to-date on the transaction, but it is not one that requires their sign-off.