Financial Performance - Gross premiums written increased from $571 million in 2018 to $2.4 billion in 2024, reflecting significant growth in the company's underwriting operations[22]. - For the year ended December 31, 2024, the company recorded $2.4 billion of gross premiums written, with a shift in the business mix from 32% insurance in 2018 to 53% insurance in 2024[34]. - The company generated $2.4 billion in gross premiums written for the year ended December 31, 2024, an increase from $1.95 billion in 2023[64]. - The International segment accounted for 54% of total gross premiums written in 2024, with $1.31 billion, while the Bermuda segment contributed 46% with $1.11 billion[68]. - The Bermuda segment accounted for 88% of gross premiums written for the year ended December 31, 2024, with total gross premiums written reaching $1,114,122,000, up from $845,516,000 in 2023[103]. - Property business represented 38% of gross premiums written in 2024, with property premiums increasing to $423,747,000 from $318,297,000 in 2023[106]. - Casualty business accounted for 47% of gross premiums written in 2024, with casualty premiums rising to $524,711,000 from $402,731,000 in 2023[108]. - Specialty business made up 15% of gross premiums written in 2024, with specialty premiums increasing to $165,664,000 from $124,488,000 in 2023[117]. Underwriting and Operational Efficiency - The combined ratio for the year ended December 31, 2024, was 91.3%, a reduction of 33.9 percentage points since 2018[39]. - The combined ratio has improved by 33.9 percentage points since 2018, reflecting the effectiveness of the disciplined underwriting approach[56]. - The company has consistently released reserves for loss occurrence every year since inception, reflecting a prudent reserving approach[26]. - The company expects to leverage its strong underwriting processes and analytics to capture attractive opportunities across all platforms in the U.S. E&S market[57]. - The Hamilton Select platform aims to grow in the hard-to-place niche of the U.S. E&S market, focusing on small to medium-sized risks[63]. Financial Strength and Ratings - The company has received strong financial strength ratings, including "A+" from A.M. Best and "AA-" from S&P Global, indicating robust financial health[26]. - Hamilton Re has been upgraded to an "A" rating by A.M. Best, positioning it to increase writings across various lines of business[53]. - The company maintains a low debt-to-capital ratio of 6.1%, providing financial flexibility for strategic execution[26]. - The company has a consolidated GAAP shareholders' equity of $2.3 billion and a financial leverage ratio of 6.1% as of December 31, 2024[46]. Investment Strategy - The investment-grade fixed income portfolio is complemented by the TS Hamilton Fund, allowing for optimized investment returns[44]. - The investment portfolio allocation as of December 31, 2024, is 50% in fixed income and short-term investments, 39% in the TS Hamilton Fund, and 11% in cash and cash equivalents[135]. - The fixed income portfolio is structured to focus on capital preservation and liquidity, managed by DWS Investment Management Americas, Inc. and Conning Asset Management Limited[136]. - The company plans to optimize its investment portfolio, benefiting from strong interest rates, to enhance shareholder value[62]. Technology and Innovation - The proprietary technology platforms, including Hamilton Analytics and Risk Platform, support business growth and competitive advantage[25]. - The company’s proprietary technology, including HARP, enhances risk management and decision-making capabilities[41]. - The proprietary technology platform HARP is used for catastrophe modeling and portfolio accumulation management, enhancing operational efficiency[144]. - The Timeflow system improves quote response time to brokers by digitizing the submission process, significantly reducing manual steps[151]. Client Relationships and Market Access - The company maintains long-standing relationships with clients and brokers, which are expected to provide increased access to attractive business opportunities[56]. - The company emphasizes its strong relationships with top insurance and reinsurance brokers, facilitating strategic expansion into additional lines of business[122]. - The company writes insurance business on a non-admitted basis through wholesale brokers, enhancing its market access[123]. - In 2024, the largest broker, Marsh McLennan, accounted for approximately 10% of the company's gross premiums written, while the second largest broker, Arthur J Gallagher, accounted for approximately 7%[125]. - The International segment's 10 largest brokers accounted for approximately 55% of gross premiums written in 2024[125]. - In the Bermuda segment, Marsh McLennan accounted for approximately 41% of gross premiums written, and Aon accounted for approximately 30%[126]. Regulatory Compliance and Governance - Hamilton Re is classified as a Class 4 insurer, required to maintain total statutory capital and surplus of not less than $100 million[159]. - The minimum solvency margin (MSM) for Class 4 insurers is the greater of $100 million, 50% of net premiums written, 15% of net aggregate loss provisions, or 25% of the enhanced capital requirement (ECR)[179]. - Hamilton Re must maintain a minimum liquidity ratio of at least 75% of its relevant liabilities[178]. - The enhanced capital requirement (ECR) is determined using the Bermuda Solvency Capital Requirement (BSCR) model, which assesses capital needs across 10 risk categories[181]. - Hamilton Re is required to submit annual audited financial statements within four months of the financial year-end[170]. - The company must file an annual statutory financial return, including calculations for the minimum solvency margin and liquidity ratio[171]. - The BMA requires all registered insurers to notify any changes in controllers or officers within 45 days of becoming aware of such changes[201]. - Non-compliance with the Insurance Act can result in fines of up to $25,000 for failing to notify the BMA of becoming a shareholder controller[200].
Hamilton Insurance (HG) - 2024 Q4 - Annual Report