Hamilton Insurance Group’s Earnings Call: Growth Amid Challenges

Hamilton Insurance Group, Ltd. Class B ((HG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Hamilton Insurance Group’s recent earnings call painted a mixed picture, with strong investment returns and premium growth being overshadowed by significant catastrophe losses due to the California wildfires. The company celebrated a recent A.M. Best rating upgrade, which bolstered their market position, yet faced challenges with an increased combined ratio and underwriting losses.

Strong Investment Performance

Hamilton Insurance Group reported a total investment return of $167 million for Q1 2025, which played a crucial role in offsetting the financial impact of the California wildfires. The Two Sigma Hamilton Fund contributed a 5.5% gain, showcasing the company’s robust investment strategy.

Robust Premium Growth

The company experienced a 17% year-over-year increase in gross premiums written, reaching $843 million. This growth was driven by an 18% increase in the Bermuda segment and a 15% rise in the International segment, highlighting Hamilton’s expanding market presence.

Positive Net Income and Strong Return on Equity

Hamilton reported a net income of $81 million for the quarter, translating to a 13.7% annualized return on average equity. This performance underscores the company’s ability to generate shareholder value despite challenging market conditions.

A.M. Best Rating Upgrade Impact

The upgrade to an A rating by A.M. Best facilitated $40 million in new business opportunities, particularly in the casualty segment. This rating enhancement has opened new avenues for growth and increased the company’s competitive edge.

Significant Catastrophe Losses

The California wildfires resulted in $143 million in net losses for Hamilton, contributing to a catastrophe loss ratio of 30.2% for the quarter. These losses significantly impacted the company’s financial performance, highlighting the inherent risks in the insurance industry.

Increased Combined Ratio

Due to the catastrophe losses, Hamilton’s combined ratio rose to 111.6% from 91.5%, leading to an underwriting loss of $58 million. This increase reflects the challenges posed by natural disasters on the company’s profitability.

Higher Expense Ratio

The expense ratio increased by 1.2 points to 32.4%, attributed to higher acquisition costs and changes in the business mix. This rise indicates the company’s ongoing investments in growth and market expansion.

Forward-Looking Guidance

Looking ahead, Hamilton Insurance Group remains optimistic despite the global insured catastrophe losses exceeding $55 billion. The company maintained a stable attritional loss ratio of 51.9% and reported significant investment returns. With a strong balance sheet and continued growth in both Bermuda and International segments, Hamilton is well-positioned for future opportunities. The completion of a $10 million share repurchase also reflects confidence in the company’s long-term prospects.

In conclusion, Hamilton Insurance Group’s earnings call highlighted a resilient performance amid adversity. While the company faced substantial challenges from the California wildfires, strong investment returns and premium growth provided a buffer. The A.M. Best rating upgrade further strengthened their market position, setting the stage for future growth and stability.