Hamilton Insurance Group Ltd. Q4 FY2024 earnings call

• 2024 was an excellent year for Hamilton with strong financial results in both International and Bermuda segments. Gross premiums written increased by 24% to over $2.4 billion, combined ratio was 91.3% with nearly $150 million of underwriting income. • Noted ongoing global risks, including devastating wildfires in Los Angeles with loss estimate of $120 million to $150 million net of reinsurance. • International segment: Hamilton Global Specialty had double-digit growth, Hamilton Select showed momentum in the U.S. E&S market. • Bermuda segment: Continued strong performance with combined ratio in the eighties for the second consecutive year. • Received ratings upgrades from A.M. Best, Fitch, and KBRA. • Repurchased 10.6 million shares at a total cost of $138 million in 2024. • Fared well in January 1 reinsurance renewals, with property cat having oversupply of capacity but intact terms and conditions, casualty re with improving underlying rates, and specialty reinsurance having mixed results with new credit bond and political risk offering meeting interest. • Anticipated higher demand for mid-year property cat renewals and stable renewals otherwise, with opportunities in international segment's specialty lines and marine, property insurance lines. • Continued favorable loss reserve development for the eleventh consecutive year.

For the full year 2024, Hamilton's gross premiums written were over $2.4 billion. The International segment wrote $1.3 billion of gross premiums with a combined ratio of 95.6%. The Bermuda segment wrote $1.1 billion of gross premiums with a combined ratio of 87%. International segment: In 2024, Hamilton Global Specialty wrote $1.2 billion of gross premiums, continuing double-digit growth, and Hamilton Select wrote $117 million in premiums. Bermuda segment: 2024 gross premiums written increased by 32% to $1.1 billion, with record underwriting income of $110 million and a combined ratio of 87%.

• Anticipated higher level of demand for mid-year property cat renewals and increase in rates for loss-affected accounts. • Saw attractive opportunities in international portfolio's specialty lines in early 2025, including expanding marine offering and adding underwriting talent in property insurance. • New credit bond and political risk reinsurance offering had take-up exceeding expectations. • Expect similar growth from A.M. Best rating upgrade in 2025 as in 2024, with about $160 million gross premiums written growth expected.

• Global risks remain prevalent, such as the devastating wildfires in Los Angeles, which are a reminder of the risks affecting individuals, families, and communities. The loss estimate for this event is within the company's modeled expense expectations and will be reported in the first quarter 2025 financial results.

Q: Elyse Greenspan asked about the insurance underlying loss ratio in the quarter and margin profile of the international segment.

A: Craig Howie said there were no large losses in the quarter, and encouraged looking at the full year attritional loss ratio of 53.5% as an indication of current book performance.

Q: Elyse Greenspan followed up on casualty reserves.

A: Craig Howie said there were modest movements, with very small numbers, including $1 million of favorable development in Bermuda and overall favorable reserve development for the group.

Q: Alex Scott asked about leaning into casualty business and property side competitive environment.

A: Pina Albo said Hamilton was opportunistic in casualty reinsurance with the benefit of rating upgrade and selective in business, and on property side, rates in property DNF had come off but were still attractive with terms and conditions remaining favorable.

Q: Michael Zaremski asked about reserves related to Russian war, aviation-related and on Hamilton Select pricing power.

A: Pina Albo said reserve for Ukraine loss was fulsome and comfortable, and Hamilton Select was in an attractive U.S. E&S market with positive momentum.

Q: Michael Zaremski asked about new demand from primary insurers after California wildfires.

A: Pina Albo said midyear renewals were early days and no new demand seen yet.

Q: Matt Carletti asked about California fires loss split between segments and investment portfolio NDCI.

A: Craig Howie said the California fires loss was predominantly reinsurance event for Hamilton, and NDCI related to incentive fees on Two Sigma, trued up each quarter.

Q: Tommy McJoynt asked about gross written premium growth and third-party fee income outlook.

A: Craig Howie said gross to net position growth was related to IPO proceeds and expected to be relatively flat going forward, and third-party fee income was related to Two Sigma platform performance and affected by catastrophe activity.