Hamilton Insurance Group, Ltd.

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.

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.

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.