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spk06: The Hamilton executives leading today's call are Pina Albo, Group Chief Executive Officer, and Craig Howey, Group Chief Financial Officer. We are also joined by other members of the Hamilton management team. Before we begin, please note that Hamilton financial disclosures, including our earnings release, include important disclosures regarding forward-looking statements. Management comments regarding potential future developments are subject to the risks and uncertainties as noted in these disclosures. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I turn the call over to Pina Alba, Hamilton CEO.
spk08: Thank you, John, and hello, everyone. Welcome to our inaugural fourth quarter and year-end earnings conference call. I'd like to start by saying how proud I am of Hamilton's results for both the fourth quarter and the full year 2023. These results exemplify the transformation of our business and our unwavering focus on our four business imperatives. First, sustainable underwriting profitability. Second, strategic growth. Third, technology enablement. And fourth, being a magnet for talent. Starting with the first imperative, our fourth quarter combined ratio of 90.2% and our full year results of 90.1% demonstrate our ability to deliver strong underwriting returns. Our year end result continues the improving trajectory in our combined ratio since we started our strategic transformation in 2018. Put more clearly, Our 2023 combined ratio was 35 combined ratio points better than 2018 and nearly 13 combined ratio points better than last year. Both of our reporting segments, International and Bermuda, contributed to our record underwriting results of $130 million for the year, a result that was achieved despite another year of significant national catastrophe losses for the insurance industry. Our strong underwriting results combined with solid investment returns resulted in a 26% annualized return on equity for the quarter and 14% for the year. Regarding our second business imperative, strategic growth, I'm happy to report yet another year of double-digit growth for Hamilton in this continued favorable market environment. Our 2023 gross premiums written were nearly $2 billion, an increase of 18.5% over 2022. I'm especially pleased by the well-balanced nature of this growth, with both of our segments, Bermuda, which is predominantly reinsurance, And international, which is predominantly specialty insurance, increasing premiums by this same percentage. As I said before, our business is global, nimble, and scalable. And 2023 demonstrated just that as we capitalized on continued strong market conditions by leaning in to the best price classes of business across the geographies we service. In this context, we took advantage of the primary capital we raised last year to capture more of the market and put more well-priced, well-structured business on our books. Underlying these strong results are continuous improvement in our processes and technology consistent with our third business imperative of investing in business-enabling technology. In addition to strengthening our core platforms, we've begun to embrace and reap the benefits of artificial intelligence to improve efficiency. 2023 demonstrated that Hamilton not only has the platforms and systems to grow our business, but also, and most importantly, a talented team that knows when and how to put their foot on the gas pedal while maintaining rigorous underwriting and risk management standards. Our team and our culture enable us to be a magnet for talent, our fourth business imperative. Our team is entrepreneurial and collaborative, a group that created an environment that allows us to attract and retain top talent professionals who want to be part of what we're building. On this note, and before handing over to Craig for a detailed walkthrough of the numbers, I want to extend my gratitude to the entire Hamilton family for their outstanding performance during 2023. As I said earlier, it was truly a year that exemplified the transformation of our business, our ability to deliver strong results, and to grow at the right time and in the right lines. Our 550 plus employees across the world work tirelessly and collaboratively to expand and strengthen our client and broker relationships, an achievement that has served us well and will continue to do so well into the future. Craig, now over to you.
spk01: Thank you, Pina, and hello, everyone. Hamilton had another strong quarter of premium growth, underwriting income, and investment returns to close out a very good 2023 full-year result. For the fourth quarter of 2023, Hamilton reported net income of $127 million, producing an annualized return on average equity of 26.4%, which includes an income tax benefit of 7.1% of annualized return on equity. This compares to a net loss of $59 million in the fourth quarter of 2022, largely resulting from unrealized losses in our investment portfolio last year which Hamilton reports through its consolidated net income. For the full year ended 2023, net income was $259 million compared to a net loss of $98 million in 2022. The 2022 results were heavily impacted by loss estimates for both the Ukraine conflict and Hurricane Ian, as well as the investment losses I just mentioned. If you haven't seen it already, I want to note that in addition to our earnings release, Hamilton published a financial supplement and an investor presentation, which are available on our investor relations website. With those numbers as our highlights, let me provide additional details around our income components for the quarter. Starting with underwriting results, as you heard from Pina, Hamilton continues to grow premium at a double-digit rate while improving our bottom-line performance. For the fourth quarter of 2023, gross premiums written increased $434 million from $341 million a year ago, an increase of 27%. As Pina mentioned, the full year 2023, the company grew its top-line premium to almost $2 billion, up $304 million, or 18.5% from 2022. I will note that the fourth quarter premium growth was particularly strong given the success of our targeted approach to business opportunities in this favorable market environment, namely new business that was written in our Bermuda segment. As always, I would encourage you to look at the full year results across all our metrics. The overall underwriting gain for the group was $36 million for the fourth quarter. compared to an underwriting gain of $39 million in the fourth quarter last year. For the fourth quarter of 2023, the group combined ratio was 90.2% compared to 87.6% in the fourth quarter of 2022. The primary driver was catastrophe loss estimates for the fourth quarter that impacted the loss ratio by 1.8 points compared to favorable catastrophe loss development a year ago of 1.5 points. The current year attritional loss ratio improved 4.6 points to 53.2% compared to 57.8% in the prior period, which was impacted by some large loss activity. We had favorable attritional prior year development of 1.7 points in the current quarter compared to 4.7 points of favorable development in the fourth quarter last year. so we continue our track record of favorable loss reserve development each year since the inception of the company. The quarterly combined ratio was also impacted by an increase in our other underwriting expenses compared to the fourth quarter of 2022, reflecting higher performance-based compensation accruals in 2023. Our overall expense ratio for the full year of 2023 continued to improve by 0.6 points compared to 2022. Our expense ratio has improved to each year since 2019. Corporate expenses were elevated in the fourth quarter, primarily driven by share-based compensation related to the value appreciation pool that was triggered by the IPO. According to this plan, essentially all employees at the time of the IPO will eventually own shares of the company, ensuring full alignment with our shareholders. We noted last quarter that this plan would be a fourth quarter expense item and to a lesser extent in 2024 and 2025 as the awards are fully vested into shares. The remainder of the increase in corporate expenses was mostly related to variable performance-based compensation costs. We also completed a rebudgeting exercise for our corporate expenses now that we have greater visibility into these costs as a public company. As a result, We expect corporate expenses to run in the range of $50 million a year for the next few years. This number includes the value appreciation pool expenses I just mentioned. Before I move on to the segment results, Hamilton also booked a $35.1 million net deferred tax benefit in the quarter as a result of Bermuda enacting a 15% corporate income tax in December of 2023. This economic transition adjustment was required to be recognized in 2023 under U.S. GAAP, even though Hamilton expects to meet the requirements to be exempt from the Bermuda corporate income tax and the global minimum tax until January 1, 2030. Next, let's look at the results by segment. As Pina noted, Hamilton reports its underwriting results through two reporting business segments, the international segment and the Bermuda segment. Let's start with the international segment, which includes Hamilton Global Specialty and Hamilton Select. International had an underwriting gain of $2 million and a combined ratio of 99.1% for the fourth quarter, compared to a combined ratio of 90.9% in the fourth quarter last year. The main drivers of the increase in the combined ratio were less favorable prior period development and catastrophe losses compared to the prior year. partially offset by a five point decrease in the current year attritional loss ratio due to less large loss activity in the quarter compared to the fourth quarter last year. International had favorable prior year reserve development of $2.7 million or 1.4 points for the quarter, primarily driven by the casualty and property classes. There were also catastrophe losses of $0.8 million or 0.4 points compared to favorable catastrophe loss development in the fourth quarter of 2022. Turning to the Bermuda segment, which houses Hamilton Re, Bermuda had an underwriting gain of $34 million and a combined ratio of 79.6% for the fourth quarter, a record result, compared to 83.6% combined ratio in the fourth quarter last year. The Bermuda attritional loss ratio for the current quarter improved 3.3 points to 51.8% compared to 55.1% in the prior year. This decrease is primarily related to less large loss activity in the quarter compared to 2022. Bermuda had favorable prior period reserve development of $3.7 million, or 2.2 points, primarily driven by the property and specialty reinsurance classes. There were also catastrophe losses of $5.7 million related to events from earlier this year. Now turning to investment income. Total net investment income for the fourth quarter was $114 million compared to an investment loss of $60 million in the fourth quarter of 2022. The fixed income portfolio, short-term investments, and cash produced a gain of $77 million for the quarter. compared to a gain of $21 million in the fourth quarter of 2022. This includes the realized and unrealized gains and losses that Hamilton reports through net income as part of our trading investment portfolio. Fixed income portfolio had a return of 4.3% for $74 million and a new money rate of 4.9% on investments purchased in this quarter. The duration of the portfolio was 3.3 years at December 31st, 2023, compared to 3.2 years at the end of 2022. The average yield to maturity on this portfolio was 4.5% compared to 4.7% at year-end 2022. The average credit quality of the portfolio remains strong at AA3. The Two Sigma Hamilton Fund produced a gain of $37 million and had a net return of 2.2% in the fourth quarter. The fund had a net return of 7.6% for the full year of 2023. The latest estimate we have for the Two Sigma Hamilton Fund year-to-date performance is 5.7% through February 29th, 2024. The Two Sigma Hamilton Fund made up about 43% of our total investments including cash investments at year end compared to 49% at year end 2022. As you know, there's been a lot of discussion lately about lost reserves, particularly as they relate to casualty business for accident years 2019 and prior. It's important to note that Hamilton has limited exposure to legacy liabilities for four main reasons. One, the company is only 10 years old. Two, when we purchased Pembroke Managing Agency in 2019, We did not assume the historical reserve liabilities, which were retained by the seller of the business. Three, at the same time, we purchased an unlimited loss portfolio transfer on certain casualty classes for years 2016 to 2018, written by our large syndicate. And four, we performed a deep dive of our remaining casualty reserves in Bermuda in 2022 and booked a reserve charge at that time. For these reasons and the fact that we engage in external actuary to review our reserves twice a year, while no one can make guarantees when it comes to reserves, I feel comfortable with our overall reserve position at year end. So to conclude my remarks with some comments on our strong balance sheet metrics, total assets were $6.7 billion at year end 2023, up 15% from $5.8 billion at year end 2022. Total investments in cash were $4 billion at December 31st, an increase of 15% from $3.5 billion at year end 2022. Shareholders' equity for the group was over $2 billion at the end of the fourth quarter, which was a 23% increase from year end 2022. As a reminder, a portion of this equity increase includes $81 million of net primary proceeds raised in our IPO which closed in November 2023, all of which has been deployed, which Pina will detail in a moment. Our net book value per share was $18.58 at December 31, 2023, up 15% compared to year-end 2022. Thank you, and now I'll turn it back over to Pina.
spk08: Thanks, Craig. I'll now provide some additional commentary on our business. Let me start with our growth during 2023 as well as our growth prospects going forward. As I touched on in my opening remarks, Hamilton's growth during 2023 continues the pattern of the past five years of being both double-digit and well-balanced. By well-balanced, I mean across both insurance and reinsurance and diversified by class of business. We ended the year with an enviable mix of business, 57% in our international segment, which again is primarily specialty insurance, and 43% in our Bermuda segment, which is mostly reinsurance. In terms of lines of business, 77% of our business is specialty and casualty, and 23% is property. This mix was achieved in large part due to our flexible and scalable platform with three distinct underwriting engines. two of which, Hamilton Global Specialty and Hamilton Select, focus predominantly on casualty and specialty insurance business. The hybrid nature of our business model allows each of our underwriting platforms to focus on their particular markets and distribution partners and facilitates our ability to lean in and out of various classes and products consistent with market cycles and where we see the most opportunity. Hamilton Global Specialty is our largest underwriting platform and is centered around Lloyd Syndicate 4000 and our Dublin underwriting entity, Hamilton Insurance DAC. Hamilton Global Specialty wrote over $1 billion of gross premium for the first time in 2023, compared to just under $900 million for the full year 2022. Casualty is the largest class at Hamilton Global Specialty, followed by specialty and then property. By the way, some of our casualty classes, for example, cyber or energy, are what others might define as specialty insurance business. The business is predominantly focused on medium to large-sized commercial accounts in the U.S. excess and surplus lines market, a market which continues to experience significant growth and favorable pricing. Some of our larger classes, such as financial institutions, political violence, and fine art and specie, are those where both the Lloyd's market and particularly our team have a rich history of expertise, access, and business flow. This allows us to form consortia or arrangements where we write on behalf of other parties and derive the income. Hamilton Select The newest addition to our underwriting family is a specialized writer of U.S. E&S business focused exclusively on the small to midsize commercial risk segment. It finished 2023 with $78 million of gross premiums written, nearly double the $40 million it wrote in 2022, and right on plan. As a startup, Hamilton Select has a higher growth trajectory versus our larger, more established platforms, and I'm pleased to report that we are attracting the talent necessary to support the strong momentum we are experiencing in our targeted niche, namely the hard-to-place casualty and specialty commercial E&S segments. Hamilton Select's growth comes together with a laser focus on underwriting profitability, an outcome which is supported by the fact that it can strictly tailor coverage to the risks it writes. Hamilton reads our Bermuda-based underwriting platform, which focuses predominantly on reinsurance. Hamilton-Rhee wrote nearly $850 million in gross premiums during 2023 as compared to $713 million during 2022. Hamilton-Rhee's largest class of business is now casualty at 47%, followed by property at approximately 38%, with the remainder being specialty classes. With respect to CatExpo's property business, the class experiencing very favorable market conditions and increased demand. We are fortunate that Hamilton Re is a well-recognized and respected writer of this class. With the benefit of increased capital, our talented underwriters took the opportunity to provide additional capacity to key clients and to develop new relationships, complementing our property CAT XOL reinsurance capacity with property quota share and per risk offerings. Clients and brokers not only appreciated our expanded product offerings, but also the clarity of appetite and responsiveness we have shown them over the years. As a result, in many cases we received our full signings or increased line sizes consistent with our stated ambitions. As mentioned at the outset, Hamilton is highly focused on sustainable underwriting profitability across all of our platforms, all classes of business, and all market cycles. Ensuring rate adequacy and resilient reserves is key in this regard. With respect to rate adequacy, we calibrate our pricing to reflect capital allocations to ensure we are achieving a required return on equity. And our pricing assessments reflect the risk environment as we see it, including what we believe to be cautious loss trend assumptions. All of our segments are meeting or beating pricing targets, so we feel good about the profitability of the business we are putting on the books today. With respect to reserves, we strive to set them prudently at the outset and then perform regular internal and external reviews, as Craig mentioned, to ensure they remain strong. In this context, we have been acutely aware of inflation, particularly social inflation, for several years and have performed deep dives into our book and have increased inflation assumptions for several years also with the benefit of third-party input. On this note, the most recent external actuarial review affirmed the robustness of our reserves as at December 31, 2023, and we remain proud of the fact that we have had favorable reserve development for 10 consecutive years. Turning to the January 1st reinsurance renewals, As I alluded to at the outset, we had great success across the board at Hamilton Re. Starting with CatExpo's property business, both excess of loss and our new quota share offering, we secured excellent signings and grew in the areas we had been targeting. This was also the case for our casualty reinsurance business, where we wrote a select number of new casualty quota share treaties getting the benefit of continued strong primary pricing and, in some cases, improving commission terms. We took advantage of dislocation in the market to broaden our relationships with select clients at the right rates, terms, and conditions. We also wrote a number of new specialty reinsurance deals where pricing, terms, and conditions remain attractive. Client response to and take up of our offerings validated Hamilton's position as an important, growing, and reliable business partner. It also allowed us to strategically deploy the additional capital we raised at the end of last year into an attractive market with increased buyer demand. Our ability to expand line sizes on targeted accounts shows that clients and brokers are rewarding Hamilton for our responsiveness and consistency over the years. We were also rewarded by being offered new reinsurance opportunities, notably with reputable global, national, and super regional insurance companies. This allowed us to quickly deploy the primary proceeds raised in our recent IPO into this attractive market. done through a combination of additional inwards business, as well as by retaining more risks on our balance sheet. We expect favorable market conditions and increased demand to continue as the year progresses, and we intend to continue to selectively grow our book during the remainder of the year, both in reinsurance and in specialty insurance. The good news is we have the balance sheet to do it. Turning to insurance, we expect the strong business flow and pricing in the U.S. E&S market to continue. Again, given its well-established specialist underwriting capabilities, Hamilton Global Specialty is well-positioned to capture more of this market, while Hamilton Select will continue to benefit from demand in the hard-to-place E&S subsegment it specializes in. To end my prepared remarks, Following our success in 2023, I am very optimistic for the future of Hamilton. Our strategy, our service, and the promise we make to everyone we interact with via our corporate tagline, in good company, is clearly resonating. Delivering on this promise starts with our amazing team and our inclusive entrepreneurial and collaborative culture. It continues with our ability to focus on our four clear business imperatives. We then add the strategic advantages of having three nimble, scalable underwriting platforms with broad product offerings across both insurance and reinsurance and talent that knows how to address client needs and manage market cycles. We are therefore confident in our abilities to find profitable growth opportunities as the year progresses and also in the years to come. With that, we will open the call for your questions.
spk03: At this time, I would like to remind everyone, in order to ask a question, please press star 1. We kindly ask that you limit yourselves to two questions and return to the queue with any follow-ups. Your first question comes from the line of Mike Zaramski with BMO. Please go ahead.
spk04: Hey, great. Good morning. You know, obviously a great return on equity level, but I wanted to dig into the expense ratio, including the corporate expense. I know, Craig, you gave a lot of color, so I might have missed some, but I heard a guidance of $50 million on the corporate piece of the equation. think for the next couple years and the consensus is you know with you've been thinking 36 million you gave some color around why it's going to be higher but so is there like a cliff where once we get past this and outer years it goes you know you it loses the corporate will lose some some you know a material amount or is this kind of the 50 million plus the the new run rate and any other you know color you want you want to give on the expense ratio of puts and takes to, not just to other people's questions, but in the overall segment.
spk01: Thanks, Mike. Yeah, I can answer that question for you. You know, what I would say to you is what we wanted to do is give a little bit of guidance for the next few years of that $50 million. That does include the expenses for the value appreciation pool. And what it did was we also did a re-budgeting effort or a reallocation effort for people that are essentially working on corporate-level items now for the organization that we didn't have in the past. You know, for example, SEC reporting or, you know, compensation discussion and analysis. So, in other words, now we'll have legal and compliance allocations to corporate as well as HR allocations. allocations to corporate as well as, you know, increased D&O and E&O insurance coverages and things like that. But that's the reason we wanted to put that in my prepared remarks. I would say to you over time, I would expect that to come down, you know, certainly from a percentage of overall indications. And the reason I say that is, you know, the value appreciation pool will only be for continue for 2024 and 2025 as those shares fest.
spk08: Mike, let me just add, just on the VAP, just as a reminder, we put that plan in place to secure this talented team that executed this transformation. And this is a way of tying the team in and aligning them, sorry, aligning them, the remaining shareholders in this company.
spk04: Okay. Understood. You know, I'll just I'll pivot to a lot of other people probably ask about the underlying loss ratios. I'll pivot to growth. You gave some color on the call and in the press release, but you don't offer kind of most companies offer kind of the business mix quarterly. So we can kind of see more granularly, you know, what what lines and, you know, what's you know, what specifically is growing and shrinking. So clearly sounds like your growth was robust. Sounds like you're excited about continuing to see opportunities in 24. Can you give us any context or flavor around pricing power? What's causing you to be much more bullish on growth? Is pricing power? I know you obviously operate in lots of different classes. Is it accelerating or is it just staying at great levels? And what's changed so much? from last time we spoke.
spk08: So I'm going to start on a high level to say that I think it's fair to say that this is one of the most sustained favorable market environments that anybody who's been in this industry for a while has seen for some time. And we're seeing that across both insurance and reinsurance. And as a reminder, we have three platforms. All three platforms write specialty insurance business, predominantly in the U.S. E&S market, where we're continuing that trend of flow into the U.S. E&S market at favorable terms and conditions. And also on the reinsurance side, it's predominantly Bermuda. We have seen year-over-year rate increases in commercial business, and that's where we concentrate our writings for several years now. As we sit here today and we include prudent assumptions in our trends, pricing is meeting or exceeding our hurdle rates, and that is why we feel comfortable leaning into this market. That's on a high level. If I look at Q4, we concentrated our growth both in casualty and property, and here, quite frankly, to take advantage of dislocation that we saw. You'll recall there was dislocation in the property market about a year ago as many players were pulling out. Well, that's when we started leaning in more on the property reinsurance excess of loss offerings. complementing those offerings this year with quota share capacity, which was very well received. This year, as the year progressed, and I think you know the reasons why, we started to see some dislocation in the casualty space, and particularly in casualty quota share business. And that's where we saw an opportunity where primary rates are increasing, commission terms are favorable. That's where we saw an opportunity to lean in and either increase some of our line sizes. By the way, you'll recall they start from a small level, so increase some of our line sizes from the small base we had, but also to bring on some new clients. And these are clients, you know, these are A-list clients that we've been supporting with our property insurance offerings for several years now. So that, I hope, gives you the explanation for our growth and the reasons why we feel comfortable growing.
spk04: Okay, that's helpful. Thank you.
spk03: Your next question comes from Tommy McJoynt with KBW. Please go ahead.
spk07: Hey, good morning, guys. Thanks for taking our questions. Is there anything granular that you can share on the either accident years or lines of business of the favorable prior year development that you booked in the fourth quarter?
spk01: Yeah, so, Tommy, this is Craig. You know, what I would say to you is we continue to see favorable development in the specialty lines. That's been consistent for many years now. Overall, across the group, I would say we took unfavorable development on the property side as well as the casualty side, but much smaller. But essentially, that would partially offset the favorable development that we saw on the specialty side.
spk07: Okay, got it. And then just another question about the loss ratio. It looks like the kind of attritional current year loss ratio came in a bit higher than we were expecting, but obviously the CATs came in lower, pretty benign quarter. Was there any evidence that you saw of any sort of weather creep just from more SCS, potential smaller storms that may have previously been part of CATs that ended up in the attritional loss ratio in this quarter? Any evidence of that?
spk01: Yeah, so first of all, I agree with you. Certainly we see some of that because our cap threshold is $5 million. So anything less than that $5 million threshold shows up in attritional losses. But the one thing I would say, Tommy, is, you know, I would encourage you and others to look at the full year metrics, you know, to get a better indicator, a long-term indicator of how these ratios and how you would expect them to look going forward and kind of remove some of the noise, you know, quarterly noise.
spk02: you might see in on a quarterly basis okay makes sense thanks your next question comes from elise greenspan with wells fargo please go ahead hi thanks um my first question um you know wanting to go back to the pricing discussion and i guess within both um insurance and reinsurance um so you guys are referencing right rate increases can you put um a magnitude on the increases you saw to start the year? And then just give us a sense, I know you said they're above loss trend, but how do you think, you know, rates, rate increases should materialize as we move through the balance of 2024?
spk08: So, hey, thanks, Elise, for that question. If I look at 1.1, This past one, one, we are still seeing favorable increases, and this is coming off of increases over the last couple of years. So that's a nice place to be. But we like to focus on rate adequacy. And if the rates are exceeding our assumption of loss trend, and that's important. I think one thing that people seem to relegate to the back benches but is equally important, if not more important, are the terms and conditions. And you'll recall there was a step change in terms and conditions and attachment points at last year's renewal, and those held up. If I flash forward a little bit, we think that the underlying reasons for these rates remaining favorable in terms and conditions remaining intact are still there. Geopolitical tensions are still all around us. We still talk about inflation and social inflation. And those two latter factors, quite frankly, we think will have a player role, particularly on casualty business. as we go forward where we think that will sustain a favorable market. Does that help?
spk02: That does. And then I guess, you know, my follow-up is you guys, you know, talking about rate adequacy, right, and prices exceeding loss trend. Would your assumption then be that the underlying loss ratios within both of your segments should improve in 24 relative to the, you know, full year 2023 levels?
spk01: Elise, what I would say to you is I'm not sure that I want to, you know, bring that through in my loss ratio at this point. You know, we expect it to increase or exceed that loss trend, but I'm not necessarily ready to recognize that yet.
spk02: Thank you.
spk03: Again, if you would like to ask a question, please press star 1. Your next question comes from Matt Carletti with Citizens J&P. Please go ahead.
spk05: Thanks. Good morning. I guess a follow up on Tommy's question. When I look at the international segment, the attritional current year loss ratio, it definitely just ran a little bit higher in the back half of the year versus the front half of the year. Is that some of that kind of small cat activity or is there anything else going on there in terms of mix of business or otherwise that we should be thinking of?
spk01: Thanks, Matt. Appreciate the question. And, you know, it always is related to business mix as well. But again, what I would do is encourage you to look at the full year numbers. I don't think that the back half of the year, you know, you may have seen that specifically in the international segment, it went down 5.5 points compared to the prior year, fourth quarter. And that was really due to fewer large loss events that happened in the Q4 of 2023 compared to Q4 last year. And as Tommy said, you know, some of those small weather events that don't show up as a catastrophe loss, international had zero catastrophe losses in the fourth quarter, those show up in attritional. You know, we still have to put those losses through, but if they don't meet our threshold of $5 million, they go through the attritional line.
spk05: Okay, perfect. Very helpful. And then one other, if I could, just on the Two Sigma Fund, you know, looking at the presentation, you know, past 10 years, kind of average return a little over 12%. As you think forward long term, is that a reasonable hurdle or do you guys think about it differently that your expected return over the long run at that level better, worse?
spk01: You know, that is a number that we use. We continue to use the 10% and that's, you know, gets recalibrated each year. But as you heard me say in my prepared remarks, Through the end of February, they're at 5.7% for the year so far. So there is some volatility in the fund, and we know that. It goes up. It goes down. But overall, a couple things. One is we've never had a calendar year loss out of the fund. And number two is we've always been able to beat the bond returns out of the fund as well.
spk05: Great. Thank you for the answers. Appreciate it.
spk03: Your next question comes as a follow-up from Mike Zaremski with BMO. Please go ahead.
spk04: Great. I might have missed it, but any commentary on, given the high pace of growth on how to think about operating leverage or debt leverage and whether you'll want to issue debt or anything on that front?
spk01: Mike, not at this point. I think that's a lever for us still to pull in the future. Right now, it's dry powder for me to be able to do that. I have capital that we can still continue to use for profitable growth, organic growth in the organization, but it still sits out there as a lever for us to pull.
spk04: Okay, got it. And lastly, I think you said the new money rate's just below 5%. Would you happen to know kind of the maturities expiring in 24, what the yield is approximately on those maturities so we can get better in our model at the investment income math?
spk01: I do not. Just for the year 2024 overall, I gave you the yield to maturity, which is about 4.6% on the remaining portfolio. Okay.
spk00: Thank you.
spk01: For yield to maturity.
spk00: your next question comes from mike ward with city please go ahead thanks guys um i was wondering if uh if you could maybe talk through any upcoming uh renewals uh that we should be mindful of them first uh moving through this first half of the year a seasonal concentrations
spk08: Yeah, sure Mike, happy to do that. Yeah, we've got four ones, six ones, seven ones coming up again in terms of what we are expecting. We are expecting some increased demand as we saw some of that at the 1-1 renewal on the property side. We expect that to continue as the year progresses and we will see that for these upcoming renewals. And again, we are of the view that the terms and conditions that we've seen to date and the structures with reinsurers attaching higher will remain intact. Those are very important factors. And we also see the market environment continuing to favor these strong returns and always ahead of a lost trend assumptions.
spk00: Thanks, Tina. And then maybe like specifically the growth outlook or or appetite in Hamilton select for 24 a specific line yeah happy to talk about
spk08: Yeah, happy to talk about that. Start off by saying, you know, and as I said it in my prepared remarks, we're really, really happy about how Hamilton Select is progressing. They are right on plan in terms of underwriting. But importantly, the momentum that those underwriters and the team there is seeing is We saw 40,000 submissions in our first year. We more than doubled that submission count in our second year. But the focus at that platform is going to be really ensuring we put the right business on the books. So where we're seeing the most favorable terms, conditions, and rating is in the general casualty, excess casualty, and allied med. And where we've seen things not reach our hurdles, we're backing off a little bit, and that's in the D&O side. So we're really excited about their prospects and really happy with what they've done to date.
spk00: Great, thanks. And if there's time for one more, just any update on the progress in terms of rating agency upgrades?
spk08: So, Craig, do you want to take that?
spk01: Yeah, sure. So, Mike, our meetings with the rating agencies are going to take place this month in March. You may recall that we have positive outlooks from both the rating agencies right now. So, we would expect to hear back from them on a normal basis, which would be by mid-year after we hold the meetings this month. Awesome. Thanks, Craig. Thank you.
spk03: There are no further questions at this time. I would now like to turn the call back to management for any closing remarks.
spk08: Thank you. As you've heard during this call, we are very proud of the results we've achieved in our first year as a public company. And given the strength of our team, I am very optimistic about our future. We appreciate your interest in Hamilton and look forward to speaking to you all in the coming months. Thank you.
spk03: This concludes today's conference call. You may now disconnect.
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