Hamilton Insurance Group, Ltd. (NYSE: HG; "Hamilton" or "the Company") today announced financial results for the first quarter ended March 31, 2024.
Commenting on the financial results, Pina Albo, CEO of Hamilton, said:
"I am very proud of Hamilton's financial results for the first quarter. Not only did we generate strong underwriting and investment returns but also, this quarter marks our sixth consecutive quarter of underwriting profitability. I am also extremely pleased about our ability to take advantage of market opportunities with another quarter of double-digit growth, a momentum we expect will be enhanced by our recent AM Best ratings upgrade."
Consolidated Highlights ? First Quarter
|
For the Three Months Ended |
||||||||||
($ in thousands, except for per share amounts and percentages) |
March 31, 2024 |
|
March 31, 2023 |
|
Change |
||||||
Gross premiums written |
$ |
721,941 |
|
|
$ |
538,164 |
|
|
$ |
183,777 |
|
Net premiums written |
|
514,880 |
|
|
|
348,498 |
|
|
|
166,382 |
|
Net premiums earned |
|
385,303 |
|
|
|
283,902 |
|
|
|
101,401 |
|
Underwriting income (loss) |
$ |
32,522 |
|
|
$ |
34,063 |
|
|
$ |
(1,541 |
) |
Combined ratio |
|
91.5 |
% |
|
|
87.9 |
% |
|
3.6 pts |
||
|
|
|
|
|
|
||||||
Net income (loss) attributable to common shareholders |
$ |
157,174 |
|
|
$ |
51,492 |
|
|
$ |
105,682 |
|
Income (loss) per share attributable to common shareholders - diluted |
$ |
1.38 |
|
|
$ |
0.49 |
|
|
|
||
Book value per common share |
$ |
19.90 |
|
|
$ |
16.55 |
|
|
|
||
Change in book value per common share |
|
7.1 |
% |
|
|
2.5 |
% |
|
|
||
|
|
|
|
|
|
||||||
Return on average common equity - annualized |
|
29.5 |
% |
|
|
12.2 |
% |
|
|
|
For the Three Months Ended |
||||||
Key Ratios |
March 31, 2024 |
|
March 31, 2023 |
|
Change |
||
Attritional loss ratio - current year |
57.2 |
% |
|
49.1 |
% |
|
8.1 pts |
Attritional loss ratio - prior year |
3.1 |
% |
|
0.6 |
% |
|
2.5 pts |
Catastrophe loss ratio - current year |
0.0 |
% |
|
1.8 |
% |
|
(1.8 pts) |
Catastrophe loss ratio - prior year |
0.0 |
% |
|
0.8 |
% |
|
(0.8 pts) |
Loss and loss adjustment expense ratio |
60.3 |
% |
|
52.3 |
% |
|
8.0 pts |
Acquisition cost ratio |
21.9 |
% |
|
22.9 |
% |
|
(1.0 pts) |
Other underwriting expense ratio |
9.3 |
% |
|
12.7 |
% |
|
(3.4 pts) |
Combined ratio |
91.5 |
% |
|
87.9 |
% |
|
3.6 pts |
Segment Underwriting Results ? First Quarter |
|||||||||||
International Segment |
For the Three Months Ended |
||||||||||
($ in thousands, except for percentages) |
March 31, 2024 |
|
March 31, 2023 |
|
Change |
||||||
Gross premiums written |
$ |
320,841 |
|
|
$ |
247,114 |
|
|
$ |
73,727 |
|
Net premiums written |
|
185,033 |
|
|
|
122,019 |
|
|
|
63,014 |
|
Net premiums earned |
|
196,814 |
|
|
|
149,515 |
|
|
|
47,299 |
|
Underwriting income (loss) |
$ |
5,315 |
|
|
$ |
16,370 |
|
|
$ |
(11,055 |
) |
|
|
|
|
|
|
||||||
Key Ratios |
|
|
|
|
|
||||||
Attritional loss ratio - current year |
|
56.0 |
% |
|
|
49.9 |
% |
|
6.1 pts |
||
Attritional loss ratio - prior year |
|
2.9 |
% |
|
|
(4.2 |
%) |
|
7.1 pts |
||
Catastrophe loss ratio - current year |
|
0.0 |
% |
|
|
0.0 |
% |
|
0.0 pts |
||
Catastrophe loss ratio - prior year |
|
0.1 |
% |
|
|
1.4 |
% |
|
(1.3 pts) |
||
Loss and loss adjustment expense ratio |
|
59.0 |
% |
|
|
47.1 |
% |
|
11.9 pts |
||
Acquisition cost ratio |
|
24.2 |
% |
|
|
24.9 |
% |
|
(0.7 pts) |
||
Other underwriting expense ratio |
|
14.0 |
% |
|
|
17.1 |
% |
|
(3.1 pts) |
||
Combined ratio |
|
97.2 |
% |
|
|
89.1 |
% |
|
8.1 pts |
Bermuda Segment |
For the Three Months Ended |
|||||||||
($ in thousands, except for percentages) |
March 31, 2024 |
|
March 31, 2023 |
|
Change |
|||||
Gross premiums written |
$ |
401,100 |
|
|
$ |
291,050 |
|
|
$ |
110,050 |
Net premiums written |
|
329,847 |
|
|
|
226,479 |
|
|
|
103,368 |
Net premiums earned |
|
188,489 |
|
|
|
134,387 |
|
|
|
54,102 |
Underwriting income (loss) |
$ |
27,207 |
|
|
$ |
17,693 |
|
|
$ |
9,514 |
|
|
|
|
|
|
|||||
Key Ratios |
|
|
|
|
|
|||||
Attritional loss ratio - current year |
|
58.4 |
% |
|
|
48.1 |
% |
|
10.3 pts |
|
Attritional loss ratio - prior year |
|
3.2 |
% |
|
|
6.1 |
% |
|
(2.9 pts) |
|
Catastrophe loss ratio - current year |
|
0.0 |
% |
|
|
3.9 |
% |
|
(3.9 pts) |
|
Catastrophe loss ratio - prior year |
|
0.0 |
% |
|
|
0.1 |
% |
|
(0.1 pts) |
|
Loss and loss adjustment expense ratio |
|
61.6 |
% |
|
|
58.2 |
% |
|
3.4 pts |
|
Acquisition cost ratio |
|
19.5 |
% |
|
|
20.8 |
% |
|
(1.3 pts) |
|
Other underwriting expense ratio |
|
4.4 |
% |
|
|
7.9 |
% |
|
(3.5 pts) |
|
Combined ratio |
|
85.5 |
% |
|
|
86.9 |
% |
|
(1.4 pts) |
Investments and Shareholders' Equity as of March 31, 2024
Conference Call Details and Additional Information
Conference Call Information
Hamilton will host a conference call to discuss its financial results on Thursday, May 9, 2024, at 10:00 a.m. ET. The conference call can be accessed by dialing 1-888-350-3870 (US toll free), or 1-646-960-0308, and entering the conference ID 6439207.
A live, audio webcast of the conference call will also be available through the Investors portal of the Company's website at investors.hamiltongroup.com.
For access to either the conference call or webcast, please dial in/login a few minutes in advance to complete any necessary registration.
A replay of the audio conference call will be available at investors.hamiltongroup.com or by dialing 1-800-770-2030 (US toll free) and entering the conference ID 6439207.
Additional Information
In addition to the information provided in the Company's earnings release, we have also made available supplementary financial information and an investor presentation which may be referred to during the conference call and will be available on the Company's website at investors.hamiltongroup.com.
About Hamilton Insurance Group, Ltd.
Hamilton is a Bermuda-headquartered company that underwrites specialty insurance and reinsurance risks on a global basis through its wholly owned subsidiaries. Its three underwriting platforms: Hamilton Global Specialty, Hamilton Re and Hamilton Select, each with dedicated and experienced leadership, provide us with access to diversified and profitable markets around the world.
For more information about Hamilton Insurance Group, visit our website at www.hamiltongroup.com or on LinkedIn at Hamilton.
Consolidated Balance Sheet |
|||||||
($ in thousands) |
March 31,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Fixed maturity investments, at fair value (amortized cost 2024: $1,926,329; 2023: $1,867,499) |
$ |
1,877,130 |
|
|
$ |
1,831,268 |
|
Short-term investments, at fair value (amortized cost 2024: $351,035; 2023: $427,437) |
|
352,068 |
|
|
|
428,878 |
|
Investments in Two Sigma Funds, at fair value (cost 2024: $753,967; 2023: $770,191) |
|
953,659 |
|
|
|
851,470 |
|
Total investments |
|
3,182,857 |
|
|
|
3,111,616 |
|
Cash and cash equivalents |
|
1,085,038 |
|
|
|
794,509 |
|
Restricted cash and cash equivalents |
|
95,565 |
|
|
|
106,351 |
|
Premiums receivable |
|
856,111 |
|
|
|
658,363 |
|
Paid losses recoverable |
|
169,469 |
|
|
|
145,202 |
|
Deferred acquisition costs |
|
190,883 |
|
|
|
156,895 |
|
Unpaid losses and loss adjustment expenses recoverable |
|
1,167,504 |
|
|
|
1,161,077 |
|
Receivables for investments sold |
|
17,777 |
|
|
|
42,419 |
|
Prepaid reinsurance |
|
285,984 |
|
|
|
194,306 |
|
Intangible assets |
|
92,651 |
|
|
|
90,996 |
|
Other assets |
|
205,186 |
|
|
|
209,621 |
|
Total assets |
$ |
7,349,025 |
|
|
$ |
6,671,355 |
|
|
|
|
|
||||
Liabilities, non-controlling interest, and shareholders' equity |
|
|
|
||||
Liabilities |
|
|
|
||||
Reserve for losses and loss adjustment expenses |
$ |
3,148,782 |
|
|
$ |
3,030,037 |
|
Unearned premiums |
|
1,132,477 |
|
|
|
911,222 |
|
Reinsurance balances payable |
|
367,123 |
|
|
|
272,310 |
|
Payables for investments purchased |
|
55,071 |
|
|
|
66,606 |
|
Term loan, net of issuance costs |
|
149,859 |
|
|
|
149,830 |
|
Accounts payable and accrued expenses |
|
155,684 |
|
|
|
186,887 |
|
Payables to related parties |
|
75,797 |
|
|
|
6,480 |
|
Total liabilities |
|
5,084,793 |
|
|
|
4,623,372 |
|
|
|
|
|
||||
Non-controlling interest ? TS Hamilton Fund |
|
54,727 |
|
|
|
133 |
|
|
|
|
|
||||
Shareholders' equity |
|
|
|
||||
Common shares: |
|
|
|
||||
Class A, authorized (2024 and 2023: 28,644,807), par value $0.01; issued and outstanding (2024 and 2023: 28,644,807) |
|
286 |
|
|
|
286 |
|
Class B, authorized (2024 and 2023: $72,337,352), par value $0.01; issued and outstanding (2024 $56,813,977 and 2023: 56,036,067) |
|
568 |
|
|
|
560 |
|
Class C, authorized (2024 and 2023: 25,544,229), par value $0.01; issued and outstanding (2024 and 2023: 25,544,229) |
|
255 |
|
|
|
255 |
|
Additional paid-in capital |
|
1,255,055 |
|
|
|
1,249,817 |
|
Accumulated other comprehensive loss |
|
(4,441 |
) |
|
|
(4,441 |
) |
Retained earnings |
|
957,782 |
|
|
|
801,373 |
|
Total shareholders' equity |
|
2,209,505 |
|
|
|
2,047,850 |
|
|
|
|
|
||||
Total liabilities, non-controlling interest, and shareholders' equity |
$ |
7,349,025 |
|
|
$ |
6,671,355 |
|
Consolidated Statement of Operations |
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
($ in thousands, except per share information) |
2024 |
|
2023 |
||||
Revenues |
|
|
|
||||
Gross premiums written |
$ |
721,941 |
|
|
$ |
538,164 |
|
Reinsurance premiums ceded |
|
(207,061 |
) |
|
|
(189,666 |
) |
Net premiums written |
|
514,880 |
|
|
|
348,498 |
|
|
|
|
|
||||
Net change in unearned premiums |
|
(129,577 |
) |
|
|
(64,596 |
) |
Net premiums earned |
|
385,303 |
|
|
|
283,902 |
|
|
|
|
|
||||
Net realized and unrealized gains (losses) on investments |
|
255,371 |
|
|
|
35,133 |
|
Net investment income (loss) |
|
12,618 |
|
|
|
2,359 |
|
Total net realized and unrealized gains (losses) on investments and net investment income (loss) |
|
267,989 |
|
|
|
37,492 |
|
|
|
|
|
||||
Other income (loss) |
|
7,478 |
|
|
|
3,033 |
|
Net foreign exchange gains (losses) |
|
(2,125 |
) |
|
|
(2,046 |
) |
Total revenues |
|
658,645 |
|
|
|
322,381 |
|
|
|
|
|
||||
Expenses |
|
|
|
||||
Losses and loss adjustment expenses |
|
232,352 |
|
|
|
148,561 |
|
Acquisition costs |
|
84,554 |
|
|
|
65,140 |
|
General and administrative expenses |
|
54,855 |
|
|
|
45,806 |
|
Amortization of intangible assets |
|
3,252 |
|
|
|
2,770 |
|
Interest expense |
|
5,708 |
|
|
|
5,529 |
|
Total expenses |
|
380,721 |
|
|
|
267,806 |
|
|
|
|
|
||||
Income (loss) before income tax |
|
277,924 |
|
|
|
54,575 |
|
Income tax expense (benefit) |
|
592 |
|
|
|
1,573 |
|
Net income (loss) |
|
277,332 |
|
|
|
53,002 |
|
|
|
|
|
||||
Net income (loss) attributable to non-controlling interest |
|
120,158 |
|
|
|
1,510 |
|
|
|
|
|
||||
Net income (loss) and other comprehensive income (loss) attributable to common shareholders |
$ |
157,174 |
|
|
$ |
51,492 |
|
|
|
|
|
||||
Per share data |
|
|
|
||||
Basic income (loss) per share attributable to common shareholders |
$ |
1.42 |
|
|
$ |
0.50 |
|
Diluted income (loss) per share attributable to common shareholders |
$ |
1.38 |
|
|
$ |
0.49 |
|
Non-GAAP Financial Measures Reconciliation
We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. Some of the measurements are considered non-GAAP financial measures under SEC rules and regulations. In this press release, we present underwriting income (loss), a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. We believe that non-GAAP financial measures, which may be defined and calculated differently by other companies, help explain and enhance the understanding of our results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Where appropriate, reconciliations of our non-GAAP measures to the most comparable GAAP figures are included below.
Underwriting Income (Loss)
We calculate underwriting income (loss) on a pre-tax basis as net premiums earned less losses and loss adjustment expenses, acquisition costs and other underwriting expenses (net of third party fee income). We believe that this measure of our performance focuses on the core fundamental performance of the Company's reportable segments in any given period and is not distorted by investment market conditions, corporate expense allocations or income tax effects.
The following table reconciles underwriting income (loss) to net income (loss), the most comparable GAAP financial measure:
|
For the Three Months Ended |
|||||||
($ in thousands) |
March 31, 2024 |
|
March 31, 2023 |
|||||
Underwriting income (loss) |
$ |
32,522 |
|
|
$ |
34,063 |
|
|
Total net realized and unrealized gains (losses) on investments and net investment income (loss) |
|
267,989 |
|
|
|
37,492 |
|
|
Other income (loss), excluding third party fee income |
|
? |
|
|
|
29 |
|
|
Net foreign exchange gains (losses) |
|
(2,125 |
) |
|
|
(2,046 |
) |
|
Corporate expenses |
|
(11,502 |
) |
|
|
(6,664 |
) |
|
Amortization of intangible assets |
|
(3,252 |
) |
|
|
(2,770 |
) |
|
Interest expense |
|
(5,708 |
) |
|
|
(5,529 |
) |
|
Income tax (expense) benefit |
|
(592 |
) |
|
|
(1,573 |
) |
|
Net income (loss), prior to non-controlling interest |
$ |
277,332 |
|
|
$ |
53,002 |
|
Third Party Fee Income
Third party fee income includes income that is incremental and/or directly attributable to our underwriting operations. It is primarily comprised of fees earned by the International Segment for management services provided to third party syndicates and consortia and by the Bermuda Segment for performance based management fees generated by our third party capital manager, Ada Capital Management Limited. We believe that this measure is a relevant component of our underwriting income (loss).
The following table reconciles third party fee income to other income, the most comparable GAAP financial measure:
|
For the Three Months Ended |
||||
($ in thousands) |
March 31, 2024 |
|
March 31, 2023 |
||
Third party fee income |
$ |
7,478 |
|
$ |
3,004 |
Other income (loss), excluding third party fee income |
|
? |
|
|
29 |
Other income (loss) |
$ |
7,478 |
|
$ |
3,033 |
Other Underwriting Expenses
Other underwriting expenses include those general and administrative expenses that are incremental and/or directly attributable to our underwriting operations. While this measure is presented in Note 8, Segment Reporting in the unaudited condensed consolidated financial statements, it is considered a non-GAAP financial measure when presented elsewhere.
Corporate expenses include holding company costs necessary to support our reportable segments. As these costs are not incremental and/or directly attributable to our underwriting operations, these costs are excluded from other underwriting expenses, and therefore, underwriting income (loss). General and administrative expenses, the most comparable GAAP financial measure to other underwriting expenses, also includes corporate expenses.
The following table reconciles other underwriting expenses to general and administrative expenses, the most comparable GAAP financial measure:
|
For the Three Months Ended |
||||
($ in thousands) |
March 31, 2024 |
|
March 31, 2023 |
||
Other underwriting expenses |
$ |
43,353 |
|
$ |
39,142 |
Corporate expenses |
|
11,502 |
|
|
6,664 |
General and administrative expenses |
$ |
54,855 |
|
$ |
45,806 |
Special Note Regarding Forward-Looking Statements
This information includes "forward-looking statements" pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of terms such as "believes," "expects," "may," "will," "target," "should," "could," "would," "seeks," "intends," "plans," "contemplates," "estimates," or "anticipates," or similar expressions which concern our strategy, plans, projections or intentions. These forward-looking statements appear in a number of places throughout and relate to matters such as our industry, growth strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. By their nature, forward-looking statements: speak only as of the date they are made; are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
There are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from the forward-looking statements contained herein. Such risks, uncertainties, and other important factors include, among others, the risks, uncertainties and factors set forth in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K") and other subsequent periodic reports filed with the Securities and Exchange Commission and the following:
There may be other factors that could cause our actual results to differ materially from the forward-looking statements, including factors disclosed under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K. You should evaluate all forward-looking statements made herein in the context of these risks and uncertainties.
You should read this information completely and with the understanding that actual future results may be materially different from expectations. We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements contained herein apply only as of the date hereof and are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.
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