Hamilton Insurance Group, Ltd. Class B Common Shares 2026 Q3 Earnings Call

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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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.