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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hamilton Insurance Group Ltd | NYSE:HG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 16.89 | 0 | 01:00:00 |
Net Income of $43.6 million and Gross Premiums Written Growth of 18.3%
Hamilton Insurance Group, Ltd. (NYSE: HG; “Hamilton” or “The Company”) today announced financial results for the third quarter ended September 30, 2023.
Commenting on the third quarter 2023 financial results, Pina Albo, CEO of Hamilton, said:
“It has been a momentous few weeks for Hamilton having closed our initial public offering on November 14th, and we are pleased to be reporting our first quarterly results as a public company.
For the quarter ended September 30, 2023, Hamilton recorded net income of $44 million and a combined ratio of 92.6%. For the nine months year to date, net income was $132 million and the combined ratio was 90.2%.
These results reflect the remarkable transformation of our business over the past few years, notably our commitment to underwriting profitability. I am incredibly proud of the Hamilton team and what we have achieved together.
Hamilton will continue to lean into the current market with the benefit of newly raised capital. Our underwriting platforms in Bermuda, at Lloyd’s and in the US are focused on specialty insurance and reinsurance, and we see tremendous opportunity to expand our business and relationships with key customers and intermediaries.”
Consolidated Highlights – Third Quarter
For the Three Months Ended
($ in thousands, except for per share amounts and percentages)
September 30, 2023
September 30, 2022
Change
Gross premiums written
$
474,123
$
400,811
$
73,312
Net premiums written
383,566
300,811
82,755
Net premiums earned
337,036
294,943
42,093
Underwriting income (loss)
$
24,866
$
(66,075
)
$
90,941
Combined ratio
92.6
%
122.5
%
(29.9
%)
Net income (loss) attributable to common shareholders
$
43,583
$
(136,117
)
$
179,700
Income (loss) per share attributable to common shareholders - diluted
$
0.41
$
(1.32
)
Book value per common share
$
17.35
$
16.71
Change in book value per share
2.7
%
(7.1
%)
Return on average common equity - annualized
9.8
%
(30.4
%)
For the Three Months Ended
Key Ratios
September 30, 2023
September 30, 2022
Change
Attritional loss ratio - current year
54.8
%
49.6
%
5.2
%
Attritional loss ratio - prior year
(0.1
%)
10.2
%
(10.3
%)
Catastrophe loss ratio - current year
3.9
%
28.3
%
(24.4
%)
Catastrophe loss ratio - prior year
(1.8
%)
(0.6
%)
(1.2
%)
Loss and loss adjustment expense ratio
56.8
%
87.5
%
(30.7
%)
Acquisition cost ratio
23.3
%
22.3
%
1.0
%
Other underwriting expense ratio
12.5
%
12.7
%
(0.2
%)
Combined ratio
92.6
%
122.5
%
(29.9
%)
Segment Underwriting Results – Third Quarter
International Segment
For the Three Months Ended
($ in thousands, except for percentages)
September 30, 2023
September 30, 2022
Change
Gross premiums written
$
307,140
$
269,228
$
37,912
Net premiums written
234,621
184,319
50,302
Net premiums earned
178,632
156,307
22,325
Underwriting income (loss)
$
4,057
$
(1,363
)
$
5,420
Key ratios:
Attritional loss ratio - current year
54.6
%
46.7
%
7.9
%
Attritional loss ratio - prior year
(5.3
%)
(0.1
%)
(5.2
%)
Catastrophe loss ratio - current year
5.1
%
11.9
%
(6.8
%)
Catastrophe loss ratio - prior year
0.4
%
0.4
%
0.0
%
Loss and loss adjustment expense ratio
54.8
%
58.9
%
(4.1
%)
Acquisition cost ratio
26.4
%
26.8
%
(0.4
%)
Other underwriting expense ratio
16.5
%
15.2
%
1.3
%
Combined ratio
97.7
%
100.9
%
(3.2
%)
Bermuda Segment
For the Three Months Ended
($ in thousands, except for percentages)
September 30, 2023
September 30, 2022
Change
Gross premiums written
$
166,983
$
131,583
$
35,400
Net premiums written
148,945
116,492
32,453
Net premiums earned
158,404
138,636
19,768
Underwriting income (loss)
$
20,809
$
(64,712
)
$
85,521
Key ratios:
Attritional loss ratio - current year
55.1
%
53.0
%
2.1
%
Attritional loss ratio - prior year
5.7
%
21.7
%
(16.0
%)
Catastrophe loss ratio - current year
2.6
%
46.8
%
(44.2
%)
Catastrophe loss ratio - prior year
(4.2
%)
(1.8
%)
(2.4
%)
Loss and loss adjustment expense ratio
59.2
%
119.7
%
(60.5
%)
Acquisition cost ratio
19.8
%
17.2
%
2.6
%
Other underwriting expense ratio
7.9
%
9.8
%
(1.9
%)
Combined ratio
86.9
%
146.7
%
(59.8
%)
Investments and Shareholders’ Equity as of September 30, 2023
Conference Call Details and Additional Information
Conference Call Information
Hamilton will host a conference call to discuss its financial results on Wednesday, December 6, 2023, at 10:00 a.m. ET. The conference call can be accessed by dialing 1-888-350-3870 (US toll free), or 1-646-960-0308, and entering the conference ID 6439207.
A live, audio webcast of the conference call will also be available through the Investors portal of the Company’s website at investors.hamiltongroup.com.
A replay of the audio conference call will be available at investors.hamiltongroup.com or by dialing 1-800-770-2030 (U.S. toll free), or 1-647-362-9199, and entering the conference ID 6439207.
About Hamilton Insurance Group, Ltd.
Hamilton Insurance Group, Ltd. is a Bermuda-headquartered company that underwrites specialty insurance and reinsurance risks on a global basis through its wholly owned subsidiaries.
For more information about Hamilton Insurance Group, visit our website at www.hamiltongroup.com or on LinkedIn at Hamilton.
Consolidated Balance Sheet
($ in thousands)
September 30,
2023
December 31,
2022
Assets
Fixed maturity investments, at fair value
$
1,631,471
$
1,259,476
(amortized cost 2023: $1,730,262; 2022: $1,348,684)
Short-term investments, at fair value (amortized cost 2023: $347,623; 2022: $285,130)
348,968
286,111
Investments in Two Sigma Funds, at fair value (cost 2023: $891,791; 2022: $731,100)
979,986
740,736
Total investments
2,960,425
2,286,323
Cash and cash equivalents
804,548
1,076,420
Restricted cash and cash equivalents
98,979
130,783
Premiums receivable
689,042
522,670
Paid losses recoverable
138,314
90,655
Deferred acquisition costs
151,314
115,147
Unpaid losses and loss adjustment expenses recoverable
1,157,123
1,177,863
Receivables for investments sold
19,044
371
Prepaid reinsurance
232,211
164,313
Goodwill and intangible assets
89,589
86,958
Other assets
164,015
167,462
Total assets
$
6,504,604
$
5,818,965
Liabilities, non-controlling interest, and shareholders' equity
Liabilities
Reserve for losses and loss adjustment expenses
$
2,948,822
$
2,856,275
Unearned premiums
951,596
718,188
Reinsurance balances payable
367,954
244,320
Payables for investments purchased
117,836
48,095
Term loan, net of issuance costs
149,801
149,715
Accounts payable and accrued expenses
159,681
138,050
Payables to related parties
9,060
20
Total liabilities
4,704,750
4,154,663
Non-controlling interest – TS Hamilton Fund
129
119
Shareholders’ equity
Common shares:
Class A, authorized (2023 and 2022: 53,993,690), par value $0.01;
305
305
issued and outstanding (2023 and 2022: 30,520,078)
Class B, authorized (2023: 65,480,684 and 2022: 50,480,684 ), par value $0.01;
427
420
issued and outstanding (2023: 42,658,302 and 2022: 42,042,155)
Class C, authorized (2023 and 2022: 30,525,626), par value $0.01;
305
305
issued and outstanding (2023 and 2022: 30,525,626)
Additional paid-in capital
1,128,553
1,120,242
Accumulated other comprehensive loss
(4,441
)
(4,441
)
Retained earnings
674,576
547,352
Total shareholders' equity
1,799,725
1,664,183
Total liabilities, non-controlling interest, and shareholders' equity
$
6,504,604
$
5,818,965
Consolidated Statement of Operations
Three months ended
September 30,
Nine months ended
September 30,
($ in thousands, except per share information)
2023
2022
2023
2022
Revenues
Gross premiums written
$
474,123
$
400,811
$
1,517,247
$
1,305,421
Reinsurance premiums ceded
(90,557
)
(100,000
)
(400,475
)
(366,933
)
Net premiums written
383,566
300,811
1,116,772
938,488
Net change in unearned premiums
(46,530
)
(5,868
)
(164,374
)
(107,021
)
Net premiums earned
337,036
294,943
952,398
831,467
Net realized and unrealized gains (losses) on investments
47,343
(67,380
)
101,881
146,640
Net investment income (loss)
8,069
(5,255
)
17,719
(22,185
)
Total realized and unrealized gains (losses) on investments and net investment income (loss)
55,412
(72,635
)
119,600
124,455
Other income (loss)
2,386
2,727
7,838
9,117
Net foreign exchange gains (losses)
1,432
1,906
(3,953
)
15,382
Total revenues
396,266
226,941
1,075,883
980,421
Expenses
Losses and loss adjustment expenses
191,577
257,963
519,554
597,014
Acquisition costs
78,537
65,735
220,532
194,795
General and administrative expenses
63,035
46,344
158,075
135,290
Amortization of intangible assets
2,794
3,178
7,869
9,874
Interest expense
5,288
4,102
16,007
11,255
Total expenses
341,231
377,322
922,037
948,228
Income (loss) before income tax
55,035
(150,381
)
153,846
32,193
Income tax expense
2,387
1,054
6,908
3,103
Net income (loss)
52,648
(151,435
)
146,938
29,090
Net income (loss) attributable to non-controlling interest
9,065
(15,318
)
15,076
68,069
Net income (loss) and other comprehensive income (loss) attributable to common shareholders
$
43,583
$
(136,117
)
$
131,862
$
(38,979
)
Per share data
Basic income (loss) per share attributable to common shareholders
$
0.42
$
(1.32
)
$
1.27
$
(0.38
)
Diluted income (loss) per share attributable to common shareholders
$
0.41
$
(1.32
)
$
1.26
$
(0.38
)
Non-GAAP Financial Measures Reconciliation
We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate its performance. Some of the measurements are considered non-GAAP financial measures under SEC rules and regulations. In this press release, we present underwriting income (loss), a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. We believe that non-GAAP financial measures, which may be defined and calculated differently by other companies, help explain and enhance the understanding of our results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Where appropriate, reconciliations of our non-GAAP measures to the most comparable GAAP figures are included below.
Underwriting Income (Loss)
We calculate underwriting income (loss) on a pre-tax basis as net premiums earned less losses and loss adjustment expenses, acquisition costs and other underwriting expenses (net of third party fee income). We believe that this measure of our performance focuses on the core fundamental performance of the Company’s reportable segments in any given period and is not distorted by investment market conditions, corporate expense allocations or income tax effects.
The table below reconciles underwriting income (loss) to net income (loss), the most comparable GAAP financial measure:
For the Three Months Ended
($ in thousands)
September 30, 2023
September 30, 2022
Underwriting income (loss)
$
24,866
$
(66,075
)
Total realized and unrealized gains (losses) on investments and net investment income (loss)
55,412
(72,635
)
Other income (loss), excluding third party fee income
85
(517
)
Net foreign exchange gains (losses)
1,432
1,906
Corporate expenses
(18,678
)
(5,780
)
Amortization of intangible assets
(2,794
)
(3,178
)
Interest expense
(5,288
)
(4,102
)
Income tax expenses
(2,387
)
(1,054
)
Net income (loss), prior to non-controlling interest
$
52,648
$
(151,435
)
Third Party Fee Income
Third party fee income includes income that is incremental and/or directly attributable to our underwriting operations. It is primarily comprised of fees earned by the International segment for management services provided to third party syndicates and consortia. We believe that this measure is a relevant component of our underwriting income (loss).
The table below reconciles third party fee income to other income, the most comparable GAAP financial measure:
For the Three Months Ended
($ in thousands)
September 30, 2023
September 30, 2022
Third party fee income
$
2,301
$
3,244
Other income (loss), excluding third party fee income
85
(517
)
Other income (loss)
$
2,386
$
2,727
Other Underwriting Expenses
Other underwriting expenses include those general and administrative expenses that are incremental and/or directly attributable to our underwriting operations. While this measure is presented in Note 9, Segment Reporting in the unaudited condensed consolidated financial statements, it is considered a non-GAAP financial measure when presented elsewhere.
Corporate expenses include holding company costs necessary to support our reportable segments. As these costs are not incremental and/or directly attributable to our underwriting operations, these costs are excluded from other underwriting expenses, and therefore, underwriting income (loss). General and administrative expenses, the most comparable GAAP financial measure to other underwriting expenses, also includes corporate expenses.
The table below reconciles other underwriting expenses to general and administrative expenses, the most comparable GAAP financial measure:
For the Three Months Ended
($ in thousands)
September 30, 2023
September 30, 2022
Other underwriting expenses
$
44,357
$
40,564
Corporate expenses
18,678
5,780
General and administrative expenses
$
63,035
$
46,344
Special Note Regarding Forward-Looking Statements
This information may contain forward-looking statements which reflect the Company's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on management's current expectations and beliefs concerning future developments and their potential effects upon Hamilton. There can be no assurance that future developments affecting Hamilton will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts. These forward-looking statements are not a guarantee of future performance and involve risk and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including the following:
View source version on businesswire.com: https://www.businesswire.com/news/home/20231205056162/en/
Investor contacts: Jon Levenson & Darian Niforatos Investor.Relations@hamiltongroup.com
Media contact: Kelly Ferris kelly.ferris@hamiltongroup.com
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