Hamilton Insurance Group, Ltd.

$187 million for the quarter, representing an impressive annualized return on average equity of 30.2%. Before providing some more commentary on the quarter, I want to take a minute to speak about our recently announced management appointments. Megan Graves, CEO of Hamilton Re, decided to retire after five years of transformational leadership. Megan will be missed and we're incredibly grateful for her many contributions to Hamilton's growth and success during her tenure. As we announced, and as part of a seamless execution of our succession planning, Adrian Dawes, CEO of Hamilton Global Specialty, will succeed Megan as CEO of Hamilton Re from September 1st. At the same time, Alex Baker, our Group Chief Risk Officer, will take over from Adrian as CEO of Hamilton Global Specialty. Adrian and Alex are both seasoned industry professionals with strong track records and a clear alignment to our strategy. Given this and the strength of our broader Hamilton team, we are confident about continuing our positive performance trajectory. Additionally, Tim Duffin, Currently, our Chief Underwriting Officer for Bermuda will step into a newly created role of Group Chief Underwriting Officer as of January 1, 2026. Tim's proven leadership, business acumen, and strong industry relationships will provide further positive direction and momentum for our company. These appointments reflect the depth and breadth of talent in our organization. They also reinforce our commitment to our strategic imperative of being a magnet for talent by providing growth opportunities to employees within our organization. We are very pleased and indeed privileged to have such strong leaders in our group. While still on the topic of being a magnet for talent, it is important to note that in addition to being able to promote from within, We have also had great success in attracting exceptionally qualified external leaders for open positions, most recently for the positions of Group Chief Information Officer and Group Chief Risk Officer. We recently announced the appointment of Raymond Karrenbauer as Group Chief Information Officer. Ray has years of relevant industry experience and will join us in September. We have also hired Russ Buckley as Group Chief Risk Officer. Russ is an experienced industry professional who is known to many on our executive management team, including me, as we have worked together in the past. Russ will be joining us shortly. Turning now to some of the highlights of our impressive second quarter results. Hamilton delivered strong top-line growth with growth premiums written increasing by 18% in the quarter. This growth is reflective of the fact that we are still overall in an attractive underwriting environment and as always focused on proactive cycle management. This means that we leaned into areas or specific deals where the returns were attractive and pared back our writings or exited deals where this was not the case. Bermuda led the way on growth, up 26%, driven predominantly by targeted casualty reinsurance business and new specialty reinsurance classes, both of which benefited from our AM Best rating upgrade to A. More specifically, I can share that premiums directly tied to the rating upgrade were approximately $50 million in the second quarter and include growth in select casualty classes that are seeing healthy rate increases and in our new credit bond and political risk offerings, which are classified as specialty and had a great take up this quarter. We also moderately grew our position in PropertyCat during the 6-1 and 7-1 renewals. A combination of increased participations on our existing portfolio and new business. On the flip side, and consistent with what I said earlier about cycle management, we decreased our writings in property DNF insurance, and certain specialty reinsurance classes, which did not meet our return thresholds. Moving on to our international segment, which houses Hamilton Global Specialty and Hamilton Select, gross premiums written grew 11% in the quarter. Starting with Hamilton Global Specialty, gross premiums written were up 7%, which reflects targeted underwriting actions as the market evolves into one requiring a higher level of discipline. For example, we reduced our writings in cyber insurance where pricing did not meet our hurdle rates. At the same time, with over 20 lines of business in Hamilton Global Specialty, we targeted growth in areas which are more attractive. For example, personal accident business which is well priced and where we are a respected market leader. Hamilton Select continued its strong trajectory with growth of 52% over the same quarter last year. We are seeing a healthy flow of business into our U.S. E&S operation. This reflects the relevance of our offerings, the talent in our operations, and the relationships we enjoy with our producers. As you've heard from others, professional lines classes continue to experience some pricing pressure, so we wrote less of that business in select again this quarter. On the other hand, pricing in excess casualty, general casualty, and small business remains attractive, so we directed more of our growth towards those lines where we can also retain tighter terms. Next, I'll speak to the recent reinsurance renewals. However, I will be brief as I'm sure most of you will have heard a similar story from our peers. As we reflect on the mid-year renewals, there was a healthy balance of supply and demand. Property catastrophe deals saw some rate pressure mid-year, particularly in the middle and upper layers of core non-loss-affected programs. Despite this, Since we are coming off of historical highs and the effects of the market reset of 2023, pricing for cat business still remains attractive with terms and conditions holding firm and attachment points even increasing in some instances. The casualty market remains attractive, as you've heard from others, with continued strong underlying rate increases, And while not a big part of our portfolio, we are also starting to see rates flatten out in the D&O space. Our strong underwriting top line continues to drive growth in our balance sheet with our investment portfolio growing along with our loss reserves. With respect to the latter, and as we have consistently said, We remain vigilant on our loss reserve position so that we can continue to preserve our ability to have favorable reserve development, something we have experienced every year since the inception of this company. As we have mentioned before, the second quarter is when we conduct our regularly scheduled review of casualty reserves. Following this quarter's casualty review, we decided to strengthen some of our casualty reserves by $18 million in Bermuda, which was mainly related to discontinued business. We also released some event-specific property reserves this quarter as the claims experience has trended more favorably compared to our initial more prudent estimates. Overall, our reserve development was favorable for the quarter and year to date. In closing my remarks, I just want to say how proud I am of the results we delivered this quarter and that I look favorably to the foreseeable future for several reasons. Our well-diversified and well-scaled platforms, our strong balance sheet and ratings, the strong client and broker relationships we have established, and last but by no means least, the world-class team of Hamilton professionals who know how to navigate all market cycles. While the market may be coming off historic highs in some areas, there is no one market, and the key is to focus on rate adequacy. It is still an attractive place to do business, particularly for astute and disciplined underwriting organizations like ours. With that, I will turn the call over to Craig.

Thank you, Pina, and hello, everyone. Hamilton had another strong quarter with net income of $187 million equal to $1.79 per diluted share, producing an annualized return on average equity of 30.2%. We had operating income of $162 million equal to $1.55 per diluted share, producing an annualized operating return on average equity of 26.1%. We also increased book value per share by 8.3% this quarter to a record $25.55. These results compared to net income of $131 million, or $1.20 per diluted share, an annualized return on average equity of 23.6%, an operating income of $136 million, or $1.24 per diluted share, an annualized operating return on average equity of 24.4% in the second quarter of 2024. Turning to our underwriting results, Hamilton continues to grow top line at an impressive double digit rate. In the first half of 2025, Gross premiums written increased to $1.6 billion compared to $1.3 billion this time last year, an increase of 17%. Our first half combined ratio was 99.1%. All three of our operating platforms, Hamilton Global Specialty, Hamilton Select, and Hamilton Re, were able to strategically grow in lines of business that were most attractive while shrinking those lines that did not meet our underwriting targets. Now for some more detail on our quarterly underwriting figures. Hamilton had underwriting income of $67 million in the second quarter compared to underwriting income of $65 million in the second quarter last year. The group combined ratio was 86.8% compared to 84.4% in the second quarter of 2024. In the second quarter, the loss ratio increased 1.6 points to 52.8% compared to 51.2% in the prior period. The increase was primarily driven by the current year attritional loss ratio, which was 53.0% compared to 51.6% in the prior period. This increase was driven by a change in business mix toward the casualty class and a specific large loss in our Bermuda segment, which I'll cover shortly. We had favorable prior year attritional development of 0.5 points in the quarter, driven by specialty and property classes, offset by certain casualty classes, which I'll discuss when I cover the segments. This compares to 0.4 points of favorable development in the second quarter last year. The expense ratio increased 0.8 points to 34.0% compared to 33.2% in the second quarter last year. The increase was mainly driven by the acquisition expense ratio due to the shifting mix of business. As always, I'd encourage you to use the full year 2024 attritional loss and expense ratios as an indication of where we expect the current book to perform. Next, I'll go through the second quarter results by reporting segment. Let's start with the international segment, which includes our specialty insurance businesses, Hamilton Global Specialty, and Hamilton Select. For the first half of 2025, international gross premiums written grew to $715 million from $632 million, an increase of 13%. This was primarily driven by growth in all classes, meaning our property, casualty, and specialty classes. In the second quarter, International had an underwriting income of $27 million and a combined ratio of 89.3% compared to underwriting income of $19 million and a combined ratio of 91.0% in the second quarter last year. The decrease in the combined ratio was primarily related to the loss ratio decreasing by three points, mainly due to favorable prior year development partially offset by higher expense ratio. The prior year attritional loss ratio decreased by 2.8 points compared to the second quarter last year. This was driven by favorable development in all classes, meaning our property, specialty, and casualty classes. The expense ratio increased 1.3 points to 40.0% compared to 38.7% in the second quarter last year. The increase was primarily driven by the acquisition expense ratio due to increased profit commissions and a change in business mix. I will now turn to the Bermuda segment, which houses Hamilton Re and Hamilton Re US, the entities that predominantly write our reinsurance business. For the first half of 2025, Bermuda gross premiums written grew to $841 million from $693 million, an increase of 21%. The increase was primarily driven by both new and existing business in casualty and property reinsurance classes, including non-recurring reinstatement premiums related to the California wildfires. In the second quarter of 2025, Bermuda had underwriting income of $40 million and a combined ratio of 84.3%, compared to underwriting income of $46 million and a combined ratio of 77.4% in the second quarter last year. The increase in the combined ratio was primarily related to the loss ratio with increases on the current year and prior year attritional loss ratios. The acquisition expense ratio was also higher than the second quarter last year. The Bermuda current year attritional loss ratio increased 3.7 points to 54.2% in the second quarter compared to 50.5% in the second quarter last year, due to a change in business mix, including more casualty reinsurance business and the Air India airline loss this quarter. The Bermuda prior year attritional loss ratio increased 2.5 points to 2.0 points in 2025, compared to a favorable 0.5 points in the second quarter last year. As Pina mentioned, in the second quarter, we did our regularly scheduled casualty reserve reviews, which resulted in an $18 million charge on certain casualty lines, with the majority coming from our discontinued lines of business. This represents only about 1% of our casualty reserves and about a half a percent of our total reserve position. To be clear, we completed our casualty reserve reviews and strengthened our reserves based on our own review and not because of any third party review. Our actions are consistent with our reserving philosophy of being quick to react to adverse development trends and slow to release reserves until we have more certainty. The Bermuda expense ratio increased by 0.6 points to 28.0% compared to 27.4% in the second quarter of 2024. This was driven by an increase in the acquisition expense ratio due to the change in business mix partially offset by a decrease in the other underwriting expense ratio. Similar to my comment about the group ratios, I'd encourage you to use the full year 2024 attritional loss and expense ratios for the segments as a guide for how we expect the current segment books to perform. Now turning to investment income. Total investment income for the second quarter of 2025 was $149 million, compared to investment income of $96 million in the second quarter of 2024. The fixed income portfolio, short-term investments, and cash produced a gain of $62 million for the quarter, compared to a gain of $20 million in the second quarter of 2024. As a reminder, This includes the realized and unrealized gains and losses that Hamilton reports through net income as part of our trading investment portfolio. The fixed income portfolio had a return of 2.2% in the quarter, worth $58 million, and a new money yield of 4.3% on investments purchased this quarter. The duration of the portfolio was 3.4 years. The average yield to maturity on this portfolio was 4.3%, compared to 4.7% at year end 2024. The average credit quality of the portfolio remains strong at AA3. The Two Sigma Hamilton Fund produced an $87 million gain or 4.4% for the second quarter of 2025. The fund had a net return of 10.1% for the first half of 2025. The latest estimate we have for the Two Sigma Hamilton Fund year to date performance was 8.2% through July 31st, 2025, a decrease of about 1.9% in July. At this stage, the fund is still ahead of achieving our planned target of 10% for the year. The Two Sigma Hamilton Fund made up about 39% of our total investments, including cash investments, at June 30th, compared to 40% at March 31st, 2025. Now turning to capital management. In 2024, we announced a $150 million share repurchase authorization by the Hamilton Board of Directors. During the second quarter of 2025, we put a 10b-5-1 share repurchase plan in place. With that, we were able to repurchase $35 million of shares this quarter. After the close of the quarter, we repurchased an additional $15 million of shares as of the end of July. All shares were purchased at a discounted book value. With $62 million remaining under our share repurchase authorization, we're able to continue repurchasing shares and growing the business, all while maintaining our strong capital position, even during times of uncertainty. We will revisit additional share repurchase authorizations in the future, as appropriate. Next, I have some comments on our strong balance sheet. Total assets were $8.9 billion at June 30th, 2025, up 14% from $7.8 billion at year end 2024. Total investments in cash were $5.3 billion at June 30th, an increase of 11% from $4.8 billion at year end 2024. Shareholders' equity for the group was $2.6 billion at the end of the second quarter, which was a 10% increase from year end 2024. Our book value per share was $25.55 at June 30th, 2025, up 11% from year end 2024. Thank you. And with that, we'll open up the call for your questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press bar 1 on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw your questions, simply press star one again. For this session, we kindly ask you to limit yourself to one question plus one follow-up, and then rejoin the queue for any further questions. And our first question comes from the line of Christian Getza with Wells Fargo. Your line is now open.