Hamilton Insurance Group, Ltd. (HG) Earnings

Management highlights

- Overall Q2 2026 Financial Results * Group net income: $144 million ($1.42 per diluted share), with an annualized return on average equity of 21%, compared to $187 million net income ($1.79 per diluted share, 30% annualized ROE) in Q2 2025. * Group operating income: $158 million ($1.56 per diluted share), with an annualized operating ROE of 23%, compared to $162 million operating income ($1.55 per diluted share, 26% annualized operating ROE) in Q2 2025. * Total group gross written premium through H1 2026 grew 14% YoY to $1.8 billion. Group combined ratio for Q2 2026 was 95.0%, up from 86.8% in Q2 2025, driven by $50 million in catastrophe losses (of which $46 million came from the Middle East conflict). * Investment income totaled $141 million in Q2 2026, compared to $149 million in Q2 2025. The Two Sigma Hamilton Fund returned 5.1% ($115 million) for the quarter, and made up 39% of total investments as of June 30, 2026. * Total assets hit $10.3 billion, shareholders' equity was $2.9 billion, and adjusted book value per share grew 8.5% year-to-date to $30.91. * The company repurchased $22 million of shares in Q2 2026, bringing full-year 2026 repurchases to $42 million, with $137 million remaining under the current authorization. - Market Environment & Mid-Year Renewals * The re/insurance market remains broadly competitive, with the highest pricing pressure concentrated in property lines. Casualty rates remain stable with ongoing rate increases, and most specialty lines are also competitive. * Recent loss activity from the Middle East conflict has created new opportunities with rising rates in select classes including Marine, Hull, and Cargo. * Contractual improvements for property catastrophe implemented during the 2023 market reset remain largely intact. Strong client and broker relationships continue to deliver desired business access and retention. - Hamilton Select Strategic Update * Hamilton Select is positioned to become the third core underwriting platform alongside the established Hamilton Global Specialty and Hamilton Re platforms, which each wrote ~$1.4 billion in premium in 2025. * In May 2026, AMBest upgraded Hamilton Select's rating to A from A-, enabling expansion of its underwriting appetite beyond hard-to-place U.S. E&S accounts to include broader mid-market risks, leveraging existing team expertise, wholesale distribution relationships, and proprietary technology. * Growth will be thoughtful and gradual: limited expansion is expected in 2026 as the firm hires additional underwriting talent, with more significant growth projected for 2027. - Strategic Underwriting Discipline * Management is focused on preserving margin quality, maintaining underwriting discipline, and allocating capital to lines that deliver strong risk-adjusted returns rather than pursuing broad growth. * The company's diversified portfolio across both insurance and reinsurance allows it to pivot nimbly to attractive opportunities across market cycles.

Guidance

- Full year 2026 full group gross written premium growth guidance is maintained at low double-digit, in line with year-to-date 14% growth through H1 2026. - Attritional loss ratio guidance is unchanged: International segment at 54.5%, Bermuda segment at 56%, and consolidated group at 55%. - Long-term average through-the-cycle guidance is maintained: combined ratio in the low to mid 90s, and return on equity in the teens percentage range. - No upward or downward revisions were made to any previously issued guidance metrics.

Segment performance

Hamilton Insurance Group reports two operating segments: International and Bermuda. 1. **International Segment** (includes Hamilton Global Specialty and Hamilton Select specialty insurance platforms): - Q2 2026 gross premiums written: $420 million, 22% year-over-year (YoY) growth. It contributes 50.5% of total Q2 gross written premium. - H1 2026 gross premiums written: $863 million, 21% YoY growth. - Q2 2026 underwriting income: $9 million, with a combined ratio of 97.0% (up from 89.3% in Q2 2025). The combined ratio increase was driven by $34 million in catastrophe losses from the Middle East conflict. - *Hamilton Global Specialty*: 22% YoY gross premium growth, driven by specialty and casualty classes (specifically accident and health, partially due to seasonality). The firm pulled back on large commercial DNF property insurance that did not meet return thresholds. - *Hamilton Select*: 18% YoY gross premium growth, driven by excess casualty, excess property, products, and contractors lines. The firm was more selective on medical and professional lines due to competitive pricing. 2. **Bermuda Segment** (includes Hamilton Re and Hamilton Re US reinsurance platforms): - Q2 2026 gross premiums written: $411 million, 12% YoY growth. It contributes 49.5% of total Q2 gross written premium. - H1 2026 gross premiums written: $908 million, 8% YoY growth. - Q2 2026 underwriting income: $20 million, with a combined ratio of 93.0% (up from 84.3% in Q2 2025). The combined ratio increase was driven by $16 million in catastrophe losses from the Middle East conflict and unfavorable prior year casualty reserve development. - Growth was driven primarily by casualty reinsurance, partially from business bound in prior quarters and modest share increases on select key client accounts. Property reinsurance premiums fell YoY due to lower rates, partially offset by better deal signings. Specialty reinsurance grew from aviation business wins with attractive pricing. Large account property DNF writings were reduced due to pricing pressure that did not meet return thresholds.

Risks & headwinds

- Ongoing geopolitical tensions (specifically the ongoing Middle East conflict) and persistent economic and social inflation create downside pressure on loss reserves and underwriting results. The Middle East conflict generated $46 million in pre-tax catastrophe losses for Q2 2026. * Excess casualty reinsurance lines carry elevated risk of adverse reserve development driven by inflation, though the Q2 2026 regular reserve deep dive resulted in only a modest $16 million reserve charge (less than 1% of total net casualty reserves, 0.5% of total net reserves). * Broad competitive market pressure, particularly in property lines, has pushed pricing lower in many segments, requiring disciplined underwriting to avoid writing business that does not meet required return thresholds. * Catastrophe loss exposure is a core risk for the business; higher than expected catastrophe activity could materially hurt quarterly and full-year results.

Analyst Q&A

• Q: Have full-year attritional loss ratio and consolidated guidance metrics changed from prior quarters, what is the outlook for casualty reinsurance growth after the Q2 reserve charge? /

  A: All prior guidance for attritional loss ratios and low double-digit full-year growth remains unchanged. Most casualty growth this quarter came from previously bound business and modest share increases for trusted key clients that retain significant net exposure. Drivers for casualty rate increases (economic and social inflation) remain intact, so attractive returns are still expected for new casualty reinsurance deployments. The $16 million reserve charge was very modest, with most tied to one 2018 loss and recent year development, and indicates existing reserve levels are appropriate given current market conditions.

• Q: What is the long-term growth outlook for Hamilton Select, and does management plan to spin off the platform? /

  A: The AMBest A rating upgrade enables a natural expansion into mid-market non-hard-to-place risks, which face less pricing pressure than many other segments. Growth will be gradual through 2026 as underwriting talent is hired, with faster expansion expected in 2027. Management views Hamilton Select as a core strategic part of the group that improves overall business diversification, and has no plans to spin it off.

• Q: How is Hamilton growing casualty reinsurance successfully when many larger peers are pruning their casualty books to avoid losses? /

  A: After re-underwriting its legacy portfolio, Hamilton had a very small casualty reinsurance footprint and only began growing again once rates started improving. The firm was able to access attractive targeted business when other overexposed market participants pulled back, with the A rating opening up additional deal access. Growth has been deliberate, focused only on pre-vetted key clients, and only pursued when rates meet required return thresholds.

• Q: What is the role of generative AI at Hamilton, and what benefits do you expect? /

  A: Management views AI as a productivity and intelligence multiplier that augments rather than replaces employee teams, allowing staff to focus on higher-value work like risk selection. AI is already used for submission ingestion and data extraction to accelerate underwriting intake and improve data quality. Smart queuing technology for Hamilton Select prioritizes the risks the firm is most likely to bind to the top of underwriters' queues. Management expects measurable productivity and operational benefits, and will only scale AI adoption when cost benefits are clear.