Financial Data and Key Metrics Changes - Hamilton reported a record net income of $400 million for 2024, up 55% from the previous year, with a return on average equity of 18.3% compared to 13.9% in 2023 [37] - The company achieved gross premiums written of over $2.4 billion, a 24% increase from 2023, and a combined ratio of 91.3% [11][12] - For Q4 2024, net income was $34 million, or $0.32 per diluted share, with an annualized return on average equity of 5.8% [39] Business Line Data and Key Metrics Changes - The International segment wrote $1.3 billion in gross premiums, with a combined ratio of 95.6% for 2024, while the Bermuda segment wrote $1.1 billion with a combined ratio of 87% [15][17] - Hamilton Global Specialty wrote $1.2 billion in gross premiums, and Hamilton Select wrote $117 million, reflecting strong growth in the U.S. E&S market [16] - The Bermuda segment's underwriting income was $110 million, up from $93 million in 2023, despite increased catastrophe losses [57] Market Data and Key Metrics Changes - The insurance industry faced approximately $140 billion in insured catastrophe losses in 2024, with Hamilton's estimated losses from recent wildfires ranging from $120 million to $150 million [8][10] - The company noted a favorable environment for growth in both casualty and property insurance classes, particularly in the specialty reinsurance market [50][51] Company Strategy and Development Direction - Hamilton's strategy focuses on strategic growth, maintaining underwriting profitability, achieving ratings upgrades, and responsible capital stewardship [13][21] - The company aims to expand its marine offering and property insurance lines, leveraging its strong relationships and market position [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current market environment, highlighting strong client relationships and a well-diversified portfolio [24][29] - The company anticipates increased demand for reinsurance in the wake of recent natural disasters, particularly for midyear renewals [28][90] Other Important Information - Hamilton repurchased 10.6 million shares at a total cost of $138 million during 2024, enhancing shareholder value [22][68] - The company reported total assets of $7.8 billion at year-end 2024, a 17% increase from the previous year [70] Q&A Session Summary Question: What was the underlying loss ratio in the quarter? - Management noted that there were no large losses in the quarter, and the attritional loss ratio for the full year is a better indicator of future performance [74][75] Question: Can you provide details on casualty reserves? - Management indicated that there were modest movements in reserves, with a small adverse development of about $1 million in the Bermuda segment [77][78] Question: What is the outlook for casualty business? - Management sees this as an opportunistic time for Hamilton, especially as some competitors have backed out of the casualty reinsurance space [82][84] Question: How is the competitive environment for property insurance? - Management noted that while there has been some recent competition, rates remain attractive, and they expect to see increases for loss-impacted accounts during midyear renewals [88][90] Question: Any updates on reserves related to the Ukraine loss? - Management confirmed that the reserve for the Ukraine loss remains strong, with $80 million net to Hamilton, primarily related to reinsurance [94][96] Question: What is the pricing power in Hamilton Select? - Management stated that the U.S. E&S market remains attractive, with increased submissions and favorable market conditions for small to midsize hard-to-place risks [98][99] Question: How will the recent California wildfires impact demand for reinsurance? - Management indicated that while they have not yet seen increased demand, they expect insurers to underwrite exposure more carefully moving forward [101][102]
Hamilton Insurance (HG) - 2024 Q4 - Earnings Call Transcript