Hamilton Insurance Group Q3 2026 Earnings Results & Report

Hamilton Insurance Group EPS Results

• Actual EPS: $1.78
• Consensus EPS: $0.9060
• Beat/Miss: Beat by +$0.8740
• One Year Ago EPS: N/A
• EPS Beat Rate: 7 of last 8 quarters

Hamilton Insurance Group Revenue Results

• Actual Revenue: $828.04 million
• Expected Revenue: $693.46 million
• Beat/Miss: Beat by +$134.58 million
• YoY Revenue Growth: N/A

Hamilton Insurance Group (NYSE:HG) (NYSE: HG) is a Bermuda-based specialty insurance and reinsurance company. Through its operating subsidiaries, the company provides underwriting capacity for commercial and specialty risks, serving businesses, insurers and other clients in selected global markets.

Hamilton’s offerings include property and casualty insurance, specialty lines and reinsurance. Its business is conducted through platforms in Bermuda, the United States and the United Kingdom, with products and coverage tailored to complex or niche risks that may require specialized underwriting expertise.

Founded in 2013, Hamilton has developed a multinational operating platform that combines insurance and reinsurance capabilities. The group’s operations include Hamilton Re in Bermuda and specialty insurance activities in the United States and at Lloyd’s in London. Pina Albo serves as the company’s chief executive officer.

Hamilton Insurance Group Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong operating performance: Hamilton reported $180 million of operating income in Q3, a 25% annualized operating ROE, and 17% gross written premium growth. Book value per share has increased 83% since the IPO.
• Negative Sentiment: Catastrophe-related losses, particularly from the Ukraine conflict and the Middle East, pushed the combined ratio to 97.3% from 87.8% a year earlier and reduced underwriting income to $16 million. Hamilton also recorded a $42 million specialty loss estimate related to Ukraine aviation exposures, partly offset by favorable reserve development elsewhere.
• Positive Sentiment: Management expects January 1 reinsurance pricing to decline less than it did last year, with terms, conditions, retentions, and attachment points largely intact. It sees continued profitable opportunities in specialty, targeted casualty, smaller property risks, and Hamilton Select’s U.S. E&S expansion.
• Positive Sentiment: The Two Sigma Hamilton Fund returned 6.1% in the quarter and 16.3% year to date, while the fixed-income portfolio’s 5.6% yield to maturity and more than 5% new-money yield should support future investment income. Hamilton also retains $134 million of share-repurchase authorization after returning capital through buybacks and a $200 million special dividend.

Presentation

[Operator]

Hello, and welcome to the Hamilton Insurance Group Earnings Conference Call. As a reminder, this call is being webcast and will also be available for replay with links on the Hamilton Investor Relations website. I'd now like to turn the call over to Darian Niforatos, Head of Investor Relations. Please go ahead.

[Darian Niforatos, Head of Investor Relations at Hamilton Insurance Group]

Thanks, operator. Hi, everyone, and thank you for joining our earnings call. Before we begin, please note that certain statements made during this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed. These risks are provided in our earnings release and SEC filings. We will also refer to certain non-GAAP financial measures, which are reconciled to the most directly comparable GAAP measures in our earnings release and financial supplement available on our website at investors.hamiltongroup.com. Now I'll introduce the Hamilton executives leading today's call, Pina Albo, Group Chief Executive Officer, and Craig Howie, Group Chief Financial Officer. We are also joined by other members of the Hamilton management team. With that, I'll hand it over to Pina.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Thank you, Darian, and hello, everyone. Welcome to Hamilton's Third Quarter 2026 Earnings Conference Call. Before I speak about the quarter, I want to express how saddened we are at Hamilton, and indeed in Bermuda, about the loss of our colleague, Sergio Lottimore, who was our SVP and Head of Specialty Reinsurance at Hamilton Re. Our thoughts are with Sergio's family, his loved ones, and all those affected by this tragedy. Many in the industry have reached out with their condolences and prayers, and we wanted to let you know how helpful that has been in the healing process. So, thank you. Now, onto business. I am again pleased to report a very strong quarter of earnings for Hamilton.

[Pina Albo, Group CEO at Hamilton Insurance Group]

We delivered positive results with net income of $81 million and operating income of $180 million, equal to an annualized return on average equity of 11% and an operating annualized return on average equity of 25%. Since our IPO, we have grown book value per share by 83%, an exceptional result by any measure. Our third quarter results reflected a 97.3% combined ratio, including catastrophe losses related to conflicts in Ukraine and the Middle East, which Craig will speak to later, a 6.1% return from the Two Sigma Hamilton Fund, and 17% growth in gross premiums written, driven primarily by our specialty and casualty classes. Despite the transitioning market and continued geopolitical tensions, Hamilton is still able to deliver solutions, grow, and perform. This is a testament to our diversified platform, our team, and our ability to manage the cycle as we navigate current dynamic market conditions.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Next, I will share our takeaways from the various conferences we attended and our outlook as we get closer to the 1/1 reinsurance renewal season by class of business. Our discussions at Monte Carlo, CIAB, Baden-Baden, and WSIA reinforced how strongly our value proposition in insurance and our key client strategy in reinsurance resonate with clients. Starting with reinsurance, our responsiveness, broad product offering, consistency, and transparent and open dialogue has helped us earn a place at the table as well as desired signings with our targeted clients. We are proud of what we've accomplished and confident in how we are positioned going into 1/1. On the insurance side, long-standing relationships with our distribution partners and our diverse suite of products, both in Hamilton Global Specialty and Hamilton Select, give us reason to look favorably at the future.

[Pina Albo, Group CEO at Hamilton Insurance Group]

For Hamilton Global Specialty, the longevity of our underwriting expertise and presence in core lines enables us to grow in profitable areas. For Hamilton Select, in addition to the momentum we are enjoying for our hard-to-place business, the opportunity to grow our footprint in the U.S. E&S market beyond this offering is particularly exciting as we look out ahead. Next, let's break it down by class of business. I'll start with property. As you will have heard, property cat rates have been under pressure. That said, we do not expect price reductions at January 1, 2027, to match those seen at January 1 last year. We are also of the view that rates will remain adequate and terms and conditions largely intact. Based on the conversations we have had to date, we also expect to see some increased demand from certain clients.

[Pina Albo, Group CEO at Hamilton Insurance Group]

On the insurance side, large account property D&F business has been under pressure. The smaller accounts are seeing less competition, so rates are holding up better there. Turning to casualty, rates in casualty classes are not uniformly keeping pace with loss cost trends. On the reinsurance side, we therefore continue to concentrate our support on clients with the strongest data, pricing, underwriting, and claims culture. In insurance, we focus on the pockets that remain attractive. I will provide more detail on this when I go through our segments. Moving to specialty, as you know, the class has experienced a significant amount of loss activity. Rates in affected areas are therefore expected to remain healthy. That said, many view specialty business as an attractive diversifier, so we expect to see increased interest in this class.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Moving on to the segments, let's take a look at gross premiums written for the quarter for international and Bermuda. International gross premiums written grew to $456 million, or 20% over the prior period. By platform, Hamilton Global Specialty gross premiums written were up 20%, driven by specialty and casualty classes, including accident and health, professional lines, and marine hull, with the latter including the benefit of increased rating for war risks in the Middle East. On the other hand, we continued to pull back in areas where pricing, terms, and conditions did not meet our hurdles. For example, larger property D&F accounts. Instead, we are focusing on smaller property risks where, as I mentioned, there is less competition.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Moving on to Hamilton Select, the business grew 22% this quarter, driven by our new property offering, as well as excess casualty and small business, where we achieved attractive rates, terms, and conditions. Since market conditions are not uniform across all lines, as we further penetrate the U.S. E&S space, we will be more ambitious in lines that present conditions for profitable growth and moderate our writings in lines where conditions are less favorable. While on the topic of Hamilton Select, as I said earlier, the business is enjoying positive momentum. The recent upgrade of its AM Best financial strength rating to A not only allowed our E&S carrier to grow its hard-to-place book of business, but it is also proving beneficial as we continue the rollout of Hamilton Select's expanded underwriting appetite.

[Pina Albo, Group CEO at Hamilton Insurance Group]

As I mentioned on our last call, this includes additional classes of business and lower middle market risks. In this context, Hamilton Select also continued to invest in proprietary technology, wholesale distribution relationships, and underwriting talent. We are therefore excited about Hamilton Select's prospects and how it will contribute to the diversification and growth of our business. Lastly, in Bermuda, we grew to $363 million, or 14% over the prior period. We continued to grow in both our casualty and specialty reinsurance classes. Our growth in casualty continues to be driven by growth on existing business with our key clients. Our growth in specialty reinsurance was driven by financial risks and aviation. On the flip side, we continued to pull back in large account property insurance, where the metrics did not meet our return thresholds.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Before I turn the call over to Craig, I want to close by reiterating our priorities. First and foremost, we will continue to prioritize underwriting profitability over top-line growth, even if this means walking away from business. Second, we will continue to be reliable partners for our key clients and distribution partners, which we believe will help enable growth in targeted areas where margins are attractive. Third, we will continue to strengthen our team with exceptional talent and business-enabling technology. Success in this phase of the market cycle requires disciplined, thoughtful, and astute risk selection, deep, enduring client and broker relationships, and a team that is focused on the bottom line. We have all that, as well as a portfolio that remains well-positioned to deliver solid results, and the ability to opportunistically use outwards reinsurance to support profitability.

[Pina Albo, Group CEO at Hamilton Insurance Group]

With that, I'll turn the call over to Craig to review the financial results in greater detail.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Thank you, Pina, and hello, everyone. Hamilton had another very strong quarter of results, with net income of $81 million, or $0.81 per diluted share, and an annualized return on average equity of 11% in the third quarter of 2026. We had operating income of $180 million, equal to $1.78 per diluted share, producing an annualized operating return on average equity of 25%. These figures compare to net income of $136 million, or $1.32 per diluted share, an annualized return on average equity of 21%, operating income of $123 million, or $1.20 per diluted share, and an annualized operating return on average equity of 19% in the third quarter of 2025.

[Craig Howie, Group CFO at Hamilton Insurance Group]

As a reminder, Hamilton's operating income, which is a non-GAAP measure, adjusts net income for the net realized and unrealized results on our fixed income investment portfolio, but not for the results of the Two Sigma Hamilton Fund. Moving on to underwriting results, Hamilton continued to generate meaningful top-line premium growth. For the first nine months of 2026, the group grew top-line premium by 15% to $2.6 billion, up from $2.3 billion in the first nine months of last year. Hamilton had underwriting income of $16 million for the third quarter, compared to underwriting income of $64 million in the third quarter last year. The group combined ratio was 97.3%, compared to 87.8% in the third quarter of 2025. In the third quarter, our loss ratio increased to 62.0%, up 8.7 points from 53.3% in the prior period.

[Craig Howie, Group CFO at Hamilton Insurance Group]

This was largely due to catastrophe losses, specifically 8.0 prior year loss ratio points from the Ukraine conflict and 1.1 current year loss ratio points from the Middle East conflict. These losses were partially offset by favorable attritional prior year development of 4.6 points, primarily related to specialty lines. In the third quarter, we completed our regularly scheduled specialty reserve deep dive, which resulted in a modest net reserve charge of $12 million on certain specialty lines, comprised of $42 million of estimated specialty losses relating to the Ukraine conflict, partially offset by $30 million of favorable prior year reserve development on other specialty lines. Specific to the Ukraine conflict, the reserve adjustments resulted from additional information we received about reported losses, namely aviation reinsurance and retrocession. This revised loss estimate represents management's best estimate given what we know at this time.

[Craig Howie, Group CFO at Hamilton Insurance Group]

The total net reserve adjustment in these specialty lines represents only about 0.3% of our total net loss reserve position, which is a testament to the strength of our overall reserve position. The acquisition expense ratio increased 1.5 points to 25.5%, compared to 24.0% in the third quarter last year due to our changing business mix. Other underwriting expenses continued to decline year-over-year. Next, I'll go through the third quarter results and some year-to-date results by segment. Let's start with the International segment, which includes our specialty insurance businesses, Hamilton Global Specialty and Hamilton Select. For the first nine months of 2026, International grew to $1.3 billion, up from $1.1 billion, an increase of 21%. This was primarily driven by growth in our specialty and casualty classes.

[Craig Howie, Group CFO at Hamilton Insurance Group]

In the third quarter, International had underwriting income of $9 million and a combined ratio of 97.1%, compared to underwriting income of $12 million and a combined ratio of 95.4% in the third quarter last year. The increase in the combined ratio was primarily related to catastrophe losses of 3.6 points in the quarter, driven by the Middle East conflict for $7 million and the Ukraine conflict for $5 million, partially offset by lower prior year and current year attritional loss ratios and the lower expense ratio. The current year attritional loss ratio was 54.5%, down 0.8 points from the prior period. The prior year attritional loss ratio was a favorable 3.2 points, primarily due to favorable development in specialty lines as part of our specialty deep dive in the third quarter.

[Craig Howie, Group CFO at Hamilton Insurance Group]

I will now turn to the Bermuda segment, which houses Hamilton Re and Hamilton Re U.S., the entities that predominantly write reinsurance business. For the first nine months of 2026, Bermuda grew to $1.3 billion, up from $1.2 billion, an increase of 10%. The increase was primarily driven by growth in casualty and specialty reinsurance classes, partially offset by a decrease in property reinsurance and property insurance classes as a result of lower reinstatement premiums and pressure on rates. In the third quarter, Bermuda had underwriting income of $7 million and a combined ratio of 97.7%, compared to underwriting income of $52 million and a combined ratio of 80.7% in the third quarter last year.

[Craig Howie, Group CFO at Hamilton Insurance Group]

The increase in the combined ratio was driven by the loss ratio due to 15.1 points or $43 million of prior year catastrophe losses in the quarter related to the Ukraine conflict. Also, an increase in the current year attritional loss ratio and the expense ratio, partially offset by the favorable prior year attritional loss ratio. The Bermuda current year attritional loss ratio increased 5.2 points to 60.8% in the third quarter due to one large loss, which impacted our specialty and property classes compared to 55.6% in the third quarter last year. The prior year attritional loss ratio was a favorable 6.1 points, primarily due to favorable development on specialty lines as part of our specialty deep dive this quarter.

[Craig Howie, Group CFO at Hamilton Insurance Group]

The Bermuda expense ratio increased by 0.7 points to 27.9% compared to 27.2% in the third quarter of 2025, driven by an increase in the acquisition expense ratio due to a change in business mix. This was partially offset by the other underwriting expense ratio due to the Bermuda substance-based tax credit and an increase in net premiums earned. Now turning to investment income. Total net investment income for the third quarter was $88 million compared to net investment income of $98 million in the third quarter of 2025. The fixed income portfolio, short-term investments, and cash produced a loss of $56 million for the quarter compared to a gain of $43 million in the third quarter of 2025.

[Craig Howie, Group CFO at Hamilton Insurance Group]

As a reminder, this includes the realized and unrealized gains and losses that Hamilton reports through net income, given the way we classify our fixed income investment portfolio as a trading portfolio. This is why you see the change in interest rates that impact our fixed income portfolio in our income statement. As of September 30th, the key metrics for the fixed income portfolio were as follows. The average yield to maturity on this portfolio was 5.6% compared to 4.1% at year-end 2025. The duration was 3.8 years, and the new money yield was 5.1% on investments purchased in the third quarter. The new money yield and the yield to maturity on this portfolio will provide tailwinds for investment income.

[Craig Howie, Group CFO at Hamilton Insurance Group]

The Two Sigma Hamilton Fund produced a net return of $145 million or 6.1% for the third quarter of 2026, and a net return of $353 million or 16.3% on a year-to-date basis. The Two Sigma Hamilton Fund made up about 39% of our total investments plus cash investments at September 30th, 2026. Now turning to capital management. Starting with share repurchases, during the third quarter of 2026, we repurchased $3 million of shares, which brings our total repurchases for the year to $45 million. Our pace of repurchases was slower this quarter, largely due to prudent positioning during wind season. We still have $134 million remaining under our share repurchase authorization. Both the share repurchases and the special dividend, which we paid in March, reflect our ongoing commitment to active and effective capital management.

[Craig Howie, Group CFO at Hamilton Insurance Group]

We will continue to evaluate our capital position, with the full-year evaluation being the most important to our capital management plans. Next, I have some comments on our strong balance sheet. Total assets were $10.8 billion at September 30th, 2026, up 13% from $9.6 billion at year-end 2025. Total investments and cash were $6.4 billion at September 30th, and shareholders' equity for the group was $2.9 billion at the end of the third quarter. Our book value per share ended the quarter at $29.80. Our book value per share after adjusting for accumulated dividends was $31.80 at September 30th, up 12% from year-end 2025. Thank you. With that, we will open up the call for your questions.

[Operator]

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Elyse Greenspan with Wells Fargo. Your line is open. Please go ahead.

[Elyse Greenspan, Analyst at Wells Fargo]

Hi. Thanks. Good morning. My first question was on buyback. I just wanted to go back to, I know you mentioned that buybacks slowed in the quarter because of wind season. I just wanted to just talk to that a little bit more, and then just get a sense, did you guys return to buyback in October? Could you give us a sense of what you bought back in Q4? Was there anything else, blackouts, or Q3 was just essentially slowed down during wind season and picked back up now in the fourth quarter?

[Craig Howie, Group CFO at Hamilton Insurance Group]

Hi, Elyse. This is Craig. Thanks for the question. Yes, we bought back $3 million in the quarter. Subsequent to the end of the quarter, we got another $2 million, so to date. What I would tell you is we also have repurchased about $45 million year to date. If you remember, we also paid a $200 million dividend in the first quarter. We had the flexibility and the ability to do both this year, meaning buybacks and a special dividend. Together, as I mentioned, we've returned about 9% of our beginning of the year shareholders' equity so far this year. We have a good track record of being good stewards of capital. If we see strong business opportunities, we will deploy our capital there.

[Craig Howie, Group CFO at Hamilton Insurance Group]

For example, we've been able to grow our premium at double-digit levels for every year since 2017, including 17% this quarter and 15% on a year-to-date basis. Otherwise, we'll continue to return some of that excess capital to shareholders, and that'll be in the form of buybacks, and we will also consider special dividends as well. But we were just a little bit more cautious during wind season.

[Elyse Greenspan, Analyst at Wells Fargo]

Thanks. My second question, I guess, is maybe kind of on the underlying loss ratio. In reinsurance, can you quantify how big the large loss was in the quarter? That's in Bermuda, right? Then in international, you said, was there any Middle East marine breach premiums that impacted the underlying loss ratio there in the quarter? I guess I'm just trying to get a sense of one-offs in both segments. Is there any change? I know you guys have typically spoken about a mid-50s underlying loss ratio for the group, and you've given color by international and Bermuda. Would there be any change to kind of run rate expectations there?

[Craig Howie, Group CFO at Hamilton Insurance Group]

Hi, Elyse. I will definitely answer your question. The large loss that I referred to in Bermuda was the Ras Laffan loss, a large energy market loss with an industry loss estimate of $1.7 billion. Our group loss for that event was $17 million. We reserved that loss at a full limit. Your question was specifically about Bermuda. $13 million of the $17 million was in Bermuda, so that related to about 4.5 points. If you remove that from the attritional loss ratio that we posted or reported in Bermuda, we are right back down to a 56% loss ratio, which is what we had guided to for the Bermuda segment.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Elyse, you also mentioned Middle East breach premium, so I will add to that. We do write several lines relevant to the exposures in the Middle East, war and terror, marine hull, cargo. All of these lines have seen some healthy rate uplift given, of course, the ongoing nature of this conflict. This has contributed to some growth in the quarter, but it is not the majority of the growth in the quarter that we have had. While the rates are attractive for these lines, we are being very thoughtful in how much we are deploying, again, because of the ongoing nature of the conflict.

[Elyse Greenspan, Analyst at Wells Fargo]

Craig, one last one. Does a mid-50s underlying loss ratio feel like the right level for the group at the moment as well?

[Craig Howie, Group CFO at Hamilton Insurance Group]

It does, Elyse.

[Elyse Greenspan, Analyst at Wells Fargo]

Thank you.

[Operator]

Your next question comes from the line of Michael Zaremski with BMO. Your line is open. Please go ahead.

[Michael Zaremski, Analyst at BMO]

Hey, good morning. Thanks. I guess just dovetailing on that, I guess I know the answer, but the acquisition expense ratio trend as you kind of remix, should we be continuing to trend that and, as you just said, no change though to the kind of underlying overall company underlying loss ratio guidance, right?

[Craig Howie, Group CFO at Hamilton Insurance Group]

Thanks, Mike. Yes. To be clear, yes, no change in the guidance that we had originally given earlier this year. As Elyse said, mid-50s, we gave guidance of 55% for the group, 54.5% for international, and 56% for Bermuda. So, no change in that guidance for this year. As you mentioned, the acquisition expenses, that also changes with business mix as well. But even this quarter, I guess what you would really see as well is we had favorable loss reserve development on our specialty deep dive for $30 million of favorable development. So, what you will also see is profit commissions coming through as you would expect.

[Michael Zaremski, Analyst at BMO]

Got it. Okay. Maybe moving to Hamilton Select's continued excellent growth. Some peers that play in the smaller E&S space have just talked about competition there, continuing to increase on the margin as new entrants and existing players add capacity there. Obviously, you guys are small in the scheme of things, but just curious as we think about the glide path, rate of growth in the future, seeing any competitive dynamic changes there quarter over quarter that are notable?

[Pina Albo, Group CEO at Hamilton Insurance Group]

Sure, I'll take that. Yes, of course, the E&S space continues to be an attractive space in the market, but we feel that we've got our value proposition is very well understood. Given the strength of our underwriting bench and the addition of a new distribution head, we are playing a much bigger role with both in the hard-to-place space, but also as we roll out our expansion strategy. So, we feel good about our prospects, and as a matter of fact, if I look at the submission intake that we're seeing, it's constantly going up, and we're servicing more and more of this business.

[Michael Zaremski, Analyst at BMO]

Got it. Okay. Just maybe sneak one last one in. You made a number of comments about casualty, talked about in some instances, maybe rates not keeping up with trend, but overall, you guys are playing offense there. The data you guys are seeing, are you seeing any kind of improvement in the pace of casualty loss cost trend or the slope maybe kind of flattening? Anything notable there? Thanks.

[Pina Albo, Group CEO at Hamilton Insurance Group]

I'm going to speak to casualty insurance and reinsurance separately. On the insurance side, the majority of our business on the insurance side is casualty and specialty classes. There, on the casualty side, we take a very close look at trend and focus our attention on lines where we feel that the trend is, and the rates are still keeping pace with trend, and we're backing away from lines where it's not the case. For example, in Select, we stopped writing medical professional business due to persistent unacceptable pricing and terms. So, we are going to continue to do that on the insurance side, focus on the lines where we're seeing attractive rating environment in terms and conditions. On the reinsurance side, I think it's really important to note that we really only started writing casualty reinsurance from the end of 2022.

[Pina Albo, Group CEO at Hamilton Insurance Group]

We have limited involvement to prior years that have proven to be a little bit of a problem for others. We started leaning in when others with that poor experience were backing away, when rates were going up, and with the benefit of our AM Best upgrade. We did not take all comers that came our way for casualty reinsurance. We concentrated our capacity on key clients with whom we have a broad trading relationship across multiple lines, and we took very small shares of their large programs. While we enjoyed some nice targeted growth up to now in the casualty reinsurance lines, I think on a go-forward basis, you're going to see a much more tempered growth in casualty re. It'll just be like on the margin, an uptick in our smaller shares on these targeted clients.

[Pina Albo, Group CEO at Hamilton Insurance Group]

But you should rest assured that we're being very careful in monitoring this class overall on insurance and reinsurance.

[Michael Zaremski, Analyst at BMO]

Thank you, Pina.

[Operator]

Your next question comes from the line of Tommy McJoynt with KBW. Your line is open. Please go ahead.

[Tommy McJoynt, Analyst at KBW]

Hey, good morning. The business mix change has been pretty pronounced when you look at the year-to-date growth trends in casualty and specialty versus the contraction in property. You spent a little time earlier talking about the impact on the attritional loss ratio and the higher acquisition expense ratio. What about the impact on the lower cat ratio? Do you guys have an early indication for where you think we should be thinking about the cat ratio next year, given the mix shift change? Thanks.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Well, Tommy, thanks for the question. We continue to write property catastrophe business. It is just less pronounced as the overall mix of business has changed. Essentially, we have a cat loss ratio of roughly 6%-7% in our plan for the year.

[Tommy McJoynt, Analyst at KBW]

Okay, got it. When we look at the year-to-date results and the Two Sigma Hamilton Fund, really strong returns there. Can you remind me, do the outsized returns that you guys have in that portfolio stay with Two Sigma, or is there an opportunity for you guys to pull out capital and do something else with it, whether it be return shareholders in a one-time way or invest organically into the new business? Thanks.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Yeah, Tommy, for Two Sigma, we have an investment management agreement with them where we can take funds out should we want to or need to take funds out of the fund right now. Those funds have been returning pretty good returns for us, those excess returns. I think you heard me say in my prepared remarks that we had a 6.1% return in the quarter and a 16.3% year-to-date. The fund itself has historically outperformed in a volatile market, and that is the case this year as well.

[Tommy McJoynt, Analyst at KBW]

Thanks.

[Operator]

Your next question comes from the line of Matthew Heimermann with Citi. Your line is open. Please go ahead.

[Matthew Heimermann, Analyst at Citi]

Hi, good morning, everybody. Couple questions. First one was just with respect to Hamilton Select and growing wholesale relationships as part of the strategic plan there. I'm curious how technology and AI evolution is changing what wholesale partners might be looking for in a carrier partner, and how you feel like you fit in this changing landscape?

[Pina Albo, Group CEO at Hamilton Insurance Group]

Sure. Thanks for that question. I'll take that. I think you're right. The things that are most important to our wholesale broking partners are ease of doing business and responsiveness, and we are basically delivering on both fronts. On the first side, and it's something I mentioned in the past, we have a house-developed AI-assisted intake and smart queue technology. What this does is basically ingest the information, get it to the top of the underwriter's queue, and float those risks to the top of the queue with brokers and on risks that we've had the best chance of success, so we can respond very quickly to those brokers, and that is being very well received. In addition, we're advancing digital connectivity with these brokers. That means a very ease of transmission of business back and forth and communications.

[Pina Albo, Group CEO at Hamilton Insurance Group]

As we continue to do that, we're enhancing our underwriting platform. So, we're working very strong in Select on our technology investments to make sure that we are servicing these wholesale brokers as they deserve to be served.

[Matthew Heimermann, Analyst at Citi]

How do you feel like your capabilities stack up relative to maybe the incumbent landscape?

[Pina Albo, Group CEO at Hamilton Insurance Group]

We feel very strongly about what we've built and what we've delivered, and quite frankly, what we're hearing from brokers is exactly that. The turnaround time that we're giving to them, the ease of doing business with them, that is the very strong feedback that we're getting from the broker community. We feel we're neck and neck, if not, in certain instances, above, ahead of the pack.

[Matthew Heimermann, Analyst at Citi]

Thank you for that. Craig, I'm just curious, given obviously the last quarter, the interest rate environment changed pretty dramatically across the yield curve. Curious whether or not I guess I just love your thoughts on how to think about any potential ceiling in your asset duration, just from a risk management ALM perspective.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Thanks for the question, Matt. I would say it's really more about matching, the asset and the liability durations. As our book changes and our business mix changes, we have some longer tail lines. That's the reason that you've seen our asset duration tick up a little bit. We're now at 3.8 years. That's the whole goal, is to try to make sure that you're matching and maybe even staying on the lower end. But right now, that's where we are. We're slightly below where our liability duration is. Keep it that way as well.

[Matthew Heimermann, Analyst at Citi]

Yeah, no, that is helpful. I guess that is helpful in terms of explaining kind of where we are relative to what is happening in the liability portfolio. There is no tactical kind of increase in the duration yet. What would you need to see for that to potentially happen?

[Craig Howie, Group CFO at Hamilton Insurance Group]

Well, again, we continue to monitor where our liabilities and our reserves are to determine where we think the right appropriate asset duration is for the portfolio. You may have heard me say in our prepared remarks, we are now at yield to maturity in that portfolio of 5.6%. Our new money yield is now over 5% just for the fixed income portfolio, not for an alternative investment portfolio. Those will be tailwinds for us and this industry as we move forward.

[Matthew Heimermann, Analyst at Citi]

Thank you. The last one I just had was, just on Ukraine, it has been the gift that the aviation loss has been the gift that keeps on giving to the industry. I am curious whether or not is there any color you can give in terms of just like the limits that are left exposed within the company from your perspective? Or are the treaties just so varied and that is not a relevant way to think about any lingering risk on that estimate?

[Craig Howie, Group CFO at Hamilton Insurance Group]

No. What I would say, Matt, is when we took a look at this during our deep dive, we looked at all exposures in full. Meaning, we looked at war on land, we looked at political risk, we looked at marine, we looked at trade credit, and we looked at aviation. Yes, the movement was driven by the aviation reinsurance and retro. Certainly, that is the part which has the most uncertainty, and it is also the part where we have the longest reporting lag time. Then on the retro side, it is even a further lag from there. So that is what we took a look at this quarter. I do not think it is appropriate to talk about overall limits and things like that.

[Craig Howie, Group CFO at Hamilton Insurance Group]

What I think is probably more appropriate to talk about is that after looking at the full list of all those exposures, we put up what we think is management's best estimate for the information that we have at this point in time.

[Matthew Heimermann, Analyst at Citi]

Fair enough. Thank you for the time.

[Operator]

Your next question comes from the line of Bob Huang with Morgan Stanley. Your line is open. Please go ahead.

[Bob Huang, Analyst at Morgan Stanley]

Yeah, good morning. Just want to follow up on that, the business mix part, also the asset duration part. Is it fair to, I know you kind of talked about it. Is it fair to say that there is a business mix shift going on at the moment, given where property pricing is, given all the commentaries you've made thus far? And then is that shift going to maybe like change the way you're thinking about asset and liability duration going forward? I think you answered it, sorry, but you can just give a little bit more color on that.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Hi, Bob. To answer your question, yes, there is a shift going on. We have changed our business mix over the past couple years to be in Bermuda segment. We are writing more specialty and more casualty and less property, for sure. On the international side, you are seeing that we wrote more specialty business and also less property business. The duration of our liabilities will also change over time as well. That is the reason that you have seen the asset duration change over time as well. Before, we used to be at about 3.1, 3.2 years. We are now at about 3.8 years for asset duration.

[Bob Huang, Analyst at Morgan Stanley]

Okay. In that case, is it then fair to say that as the business shift is happening, even if your loss ratio could potentially be higher, but the reality is that you are likely to invest in higher duration assets, so consequently, the total return profile of these businesses are not actually lower. Even if loss ratio were to incrementally inch higher, your overall ROE is actually accretive. Is that the right way to think about it as this business mixture shift is happening?

[Craig Howie, Group CFO at Hamilton Insurance Group]

I think that is a good way to look at this, because we are writing where we get the best risk-adjusted returns on the business, and that is where we want to allocate our capital. We lean in when it is the time to lean in. For example, we leaned in on property when that market was strong. Now we are leaning out on the property when we do not see where there is pressure on rates.

[Bob Huang, Analyst at Morgan Stanley]

Okay, got it. Apologies, but I can just squeeze one last one in, is that, I might have missed this, but I know that you only bought back about $3 million worth of stocks, but is there a share count on that or no?

[Craig Howie, Group CFO at Hamilton Insurance Group]

I don't have a share count off the top of my head. About 70,000 shares, somewhere in that range.

[Bob Huang, Analyst at Morgan Stanley]

Okay. Really appreciate it. Thank you.

[Operator]

Your next question comes from the line of Alex Scott with Barclays. Your line is open. Please go ahead.

[Alex Scott, Analyst at Barclays]

Hi. Thanks for taking the question. As I was listening to the comments you were making about 1/1 and it potentially being a little bit better than 2026, can you just talk about what's giving you optimism? I think you've been one of the only companies that's been willing to sort of express that view relative to last year, and I just want to understand the underlying drivers of that.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Hi. I'll take that one. I don't think we're the only company expressing this view. I think that others of our larger peers are also of the view that we're going to see some pressure on 1/1, given the light cat year that we've had this year, but that we don't expect pricing to diminish as much as it did in the past renewal. Part of the reason for that is that the market, the traditional market's acting rather quite disciplined, and for some time has been acting disciplined. We also would note, again, that we believe that terms, conditions, retention levels, and attachment points will likely remain intact. So, while pricing is coming down, we still think it'll be adequate. There'll just be less premium out there. So that's on the property side.

[Pina Albo, Group CEO at Hamilton Insurance Group]

On the casualty side of business, casualty re, we're just going to focus on those key clients with strong underwriting and claims, and rating capabilities, the ones that keep a significant net retention so that they also have skin in the game. We think that commissions there will remain largely flat. On the specialty re side, if I look out to 1/1, there's the number of lines of business and specialty, and it's been pretty attractive class with some attractive profitability. It performed well. But at the same time, we've seen a number of losses in the recent past, so that should drive rates up in the affected classes. Having said that, as I said, I think in the script, there's a lot of interest in specialty as a diversifier.

[Pina Albo, Group CEO at Hamilton Insurance Group]

All in all, as we look out to 1/1, the value proposition that we bring to our clients, to the market, that clarity of appetite, that responsiveness, and especially for our key clients, that broad offering, we still think there's a market out here where we can still make money.

[Alex Scott, Analyst at Barclays]

Got it. I guess, just in the context of the environment you're expecting, any way to help us think through what you could achieve in terms of deployment and growth?

[Pina Albo, Group CEO at Hamilton Insurance Group]

Craig, do you want to start with that, and then I'll fill in some?

[Craig Howie, Group CFO at Hamilton Insurance Group]

Sure. Alex, we still expect to have low double-digit growth in premium for the full year. As a reminder, we've had double-digit premium growth each and every year since 2017. We understand that we started from a lower base compared to some of our peers, but at the end of the day, we've established an underwriting culture that will be reflected over time as we consider where and when to grow our book at the best risk-adjusted returns, as I said, and we're going to allocate capital appropriately. This is not a game of top-line growth. It's really about bottom-line profit.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Yeah, if I just pop into that, again, we won't be seeing as much growth. I think we messaged you this year would not be like the past, but at the same time, as we look out ahead, we do see still some continued pockets of growth that are attractive. On the reinsurance side, I think there, our key client strategy that's resonating so well, that ability to be more meaningful to a client across multiple classes, and then with that, to be able to inch up your shares over time. That is one area on reinsurance where we see prospects in the future. On our Hamilton Global Specialty platform, we have a track record of introducing some new lines. We just did one recently on the high-net-worth side, so we see some opportunity there.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Particularly, as we look at Hamilton Select, with the continued rollout of its expansion strategy and the benefit of the technology that we're developing in-house and how that technology is performing, there, I think, in percentage terms, is where you're going to see the most growth. But that'll be targeted to lines where we see attractive risk-adjusted returns.

[Alex Scott, Analyst at Barclays]

Thank you.

[Operator]

Your last question comes from the line of Matt Carletti with Citizens Bank. Your line is open. Please go ahead.

[Matt Carletti, Analyst at Citizens Bank]

Hi, thanks. Good morning. Craig, I just wanted to circle back to the Ukraine aviation, if I could. Maybe in a different angle, just looking to kind of understand it a little better. The charge taken in the quarter, is it more of the reporting lag related to kind of re and retro, maybe related to some of the lessor claims that feel a little more developed or finalized, and it's working through the system. Or is it more like new information, there was some action, some court action on the operator side, even during Q3, that came to light. Any color would be helpful. Thanks.

[Craig Howie, Group CFO at Hamilton Insurance Group]

Thanks, Matt. Yes, there was a high court ruling last year, and just that ruling clarified that the liability would be on war risk policies, not all risk policies, with respect to aviation. Until recently, we had only seen few actual reported claims since this ruling. You have to remember that we write aviation reinsurance and retro. We don't write aviation insurance. So, the information is reported on a lag to reinsurers and even a further lag to the retro market. The information flow that comes through the chain gets constrained a little bit because of confidentiality agreements and NDAs and other settlements. Essentially, at the beginning of this year, we still had over 70% of our original loss estimate as IBNR. This event was viewed a little bit more closely this quarter because it was our aviation lines that fell into our specialty reserve deep dive.

[Craig Howie, Group CFO at Hamilton Insurance Group]

That's the reason that we had to take into account this additional information and extrapolate it across our portfolio.

[Matt Carletti, Analyst at Citizens Bank]

Okay, great. That's very helpful. Thank you.

[Operator]

We have reached the end of the Q&A session. I will now turn the call back to Pina Albo for closing remarks.

[Pina Albo, Group CEO at Hamilton Insurance Group]

Thank you, everybody, for joining us today and also for your questions. Again, we've delivered a very strong quarter again, and we're positioned well for the future. We look forward to speaking to you with our next quarter results. Thank you.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Darian Niforatos, Head of Investor Relations
• Pina Albo, Group CEO
• Craig Howie, Group CFO

Analysts

• Elyse Greenspan, Analyst at Wells Fargo
• Michael Zaremski, Analyst at BMO
• Tommy McJoynt, Analyst at KBW
• Matthew Heimermann, Analyst at Citi
• Bob Huang, Analyst at Morgan Stanley
• Alex Scott, Analyst at Barclays
• Matt Carletti, Analyst at Citizens Bank