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Hamilton Insurance continues strong performance

Pina Albo, CEO of Hamilton Insurance Group (Photograph supplied)

Hamilton Insurance Group’s first-quarter announcement of more than $157 million in net income included news of the sixth consecutive quarter of underwriting income.

Pina Albo, the chief executive of Hamilton, said: “Not only did we generate strong underwriting and investment returns but 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.”

The rating agency upgraded the financial strength rating to “A” (Excellent) from “A-” (Excellent) and the long-term issuer credit ratings of “a” (Excellent) from “a-” (Excellent) of Hamilton Re, Ltd and Hamilton Insurance Designated Activity Company (Dublin, Ireland), each a wholly owned subsidiary of Hamilton Insurance Group, Ltd.

The outlook of these ratings has been revised to stable from positive.

Consolidated Highlights – First Quarter

Net income of $157.2 million

Annualised return on average equity of 29.5 per cent

Gross premiums written of $721.9 million, an increase of 34.1 per cent compared to the first quarter of 2023

Net premiums earned of $385.3 million, an increase of 35.7 per cent compared to the first quarter of 2023

Combined ratio of 91.5 per cent

Underwriting income of $32.5 million

Net investment income of $147.8 million, comprised of Two Sigma Hamilton Fund returns of $142.7 million and fixed income, short term, cash and cash equivalent returns of $5.2 million

Corporate expenses of $11.5 million, which includes $3.7 million of compensation costs related to the Value Appreciation Pool

The ratings reflect Hamilton’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Best commented: “The upgrade of the Long-Term ICRs reflects Hamilton’s trend of increasingly favourable underwriting results, leading to organic capital generation, increased stability and overall balance sheet strength.

“The group has shown improving underwriting results consistently over the past five-year period while conservatively reserving, with a five-year net favourable reserve development, outperforming peers.

“The very strong balance sheet strength assessment is supported by Hamilton’s strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio.

“Recent strategic shifts that have been executed by the company, including a transition towards a more diversified underwriting portfolio, have helped the group achieve underwriting profitability, which previously weighed on Hamilton’s balance sheet strength.

“The very strong balance sheet assessment considers the group’s largely favourable history of reserve development and its history of reserving conservatively, above actuarial mid ranges.

Meanwhile, the group has purchased 9,124,729 Class A common shares owned by funds affiliated with Blackstone Alternative Solutions LLC at $12 per share, representing a 12 per cent discount to the 30-day volume-weighted average price of the company’s Class B common shares.

The total purchase price for the shares was $109,496,748, funded by a loan under the company’s revolving credit facility, which the company intended to repay with funds withdrawn from the Two Sigma Hamilton Fund.

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Published May 20, 2024 at 4:50 pm (Updated May 20, 2024 at 8:33 pm)

Hamilton Insurance continues strong performance

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