Hamilton Insurance Group Ltd B's Q3 2025 Earnings Call: Contradictions Emerge on Growth, Casualty Performance, and A.M. Best Upgrade Impact

Business Commentary:

• Strong Financial Performance:
• Hamilton Insurance Group reported net income of $136 million, representing an annualized return on average equity of 21%.

• The strong performance was driven by a balanced and diversified portfolio, disciplined underwriting, and significant investment income.

• Underwriting and Investment Income:

• Underwriting income was $64 million, with a combined ratio of 87.8%, primarily due to strong performance in casualty and specialty reinsurance classes.

• Investment income reached $98 million, supported by contributions from the Two Sigma Hamilton Fund and fixed income portfolios.

  

• Portfolio Growth and Market Diversification:

• Gross premiums written increased by 26% in Q3 2025, with strong growth in the Bermuda segment, led by casualty and specialty reinsurance classes.

• The growth was driven by a diversified portfolio strategy, enabling the company to navigate market pressures and capitalize on attractive opportunities.

• Management and Strategic Appointments:

• Hamilton welcomed Mike Mulray as Chief Underwriting Officer at Hamilton Select, and Susan Steinhoff was promoted to Chief Underwriting Officer of Hamilton Re.

• These appointments reflect the company's ability to attract top talent and leverage internal resources to strengthen its underwriting capabilities.

• Capital Management and Shareholder Returns:

• Hamilton's board authorized an additional $150 million in share repurchases, bringing the total authorization to $186 million.
• The company maintained a strong capital position, reflecting confidence in its financial health and commitment to shareholder value.

Contradiction Point 1

Growth and Business Objectives

It involves conflicting statements about growth targets and business objectives, which can influence investor perceptions and strategic planning.

Would property written premium decline in 2026? - Tommy McJoint (KBW)

2025Q3: We do expect to see, as I mentioned in the call, some more competition on Property Cat in the upper layers. - Pina Albo(CEO)

Are you facing premium growth headwinds from discontinued lines? - Thomas McJoynt-Griffith (KBW)

2025Q2: Double-digit premium growth is expected, maintaining disciplined underwriting for risk-adjusted returns. - Craig Howie(CFO)

Contradiction Point 2

Casualty Business Performance

It involves differing perspectives on the performance and pricing of casualty business, which is crucial for understanding the company's risk management and underwriting strategy.

Can you provide details on recent changes in loss trends within your casualty insurance and reinsurance portfolio compared to previous quarters, and how you manage these exposures? - Elyse Getsov (Wells Fargo)

2025Q3: The rates in that casualty class are in the high teens. They are probably, you know, that's why I'll qualify that with low to high teens. - Pina Albo(CEO)

What loss trend assumptions are you and your cedents using in the casualty line of business given ongoing social inflation concerns? - Michael Zaremski (BMO)

2025Q1: We are seeing low to mid-teens in terms of pricing for our clients. - Giuseppina Albo(CEO)

Contradiction Point 3

Impact of A.M. Best Upgrade on Business Growth

It highlights differing views on the impact of the A.M. Best upgrade on business growth, which is important for understanding the company's strategic initiatives and market positioning.

Can you quantify the increased renewal from Q2 to Q3 and note any significant AM Best contribution as growth moderates in this line? - Daniel Cohen (BMO)

2025Q3: We saw a little bit more in the third quarter, but we expect to see a similar amount come through again in the fourth quarter. After that, it would be difficult probably to attribute either any renewal business strictly to the rating upgrade compared to our ongoing client relationships. - Craig Howey(CFO)

What impact did the A.M. Best upgrade have in Q1, and is the $80 million annual expectation still valid? - Elyse Greenspan (Wells Fargo)

2025Q1: In Q1, we saw $40 million of new business, predominantly in casualty due to the upgrade. - Giuseppina Albo(CEO)

Contradiction Point 4

Casualty Insurance and Reinsurance Portfolio Growth

It involves differing perspectives on the growth and management of casualty insurance and reinsurance portfolio, potentially impacting underwriting strategy and risk exposure.

Can you explain changes in loss trends within your casualty insurance and reinsurance portfolio compared to prior quarters and how you are managing those exposures? - Elyse Getsov(Wells Fargo)

2025Q3: We have seen some growth both in our reinsurance portfolio and also, you know, to a lesser extent in our insurance portfolio. On the casualty classes from the reinsurance portfolio, let’s remember we started from a very, very low base of casualty and although we’ve had growth, that growth has been in recent years when the rates have improved. - Pina Albo(CEO)

Can you discuss the growth of your casualty line and address the impact of social inflation pressures? - Elyse Getsov(Wells Fargo)

2024Q4: Our casualty book of business grew by 38% to $545 million in terms of gross premiums written, driven again by increased client demand and business retention. - Pina Albo(CEO)

Contradiction Point 5

Impact of Rate Increases on Growth

It involves the impact of rate increases on growth prospects, which can influence investor expectations and strategic planning.

Can you provide details on changes in loss trends in your casualty insurance and reinsurance portfolio compared to prior quarters and how you are managing those exposures? - Elyse Getsov (Wells Fargo)

2025Q3: Now, what we did is we took the opportunity to increase our rate for some of those large accounts, and that's why you saw the gross premium written to be down. - Craig Howey(CFO)

Can you update the outlook for the $80 million Bermuda casualty growth target following the AM Best upgrade? - Dan (BMO Capital Markets)

2025Q2: Bermuda casualty growth benefited from AM Best upgrade. $50 million in growth achieved this quarter; future growth will be more moderate but will benefit from strong rate increases. - Giuseppina Albo(CEO)