Hamilton Insurance (US:HG)2025-05-08 14:00Financial Data and Key Metrics Changes - Hamilton Insurance Group reported a net income of $81 million for Q1 2025, representing a 13.7% annualized return on average equity, compared to $157 million and 29.5% in Q1 2024 [19][22] - The gross premiums written increased by 17% to $843 million from $722 million year-over-year [21][22] - The combined ratio rose to 111.6% from 91.5% in the prior year, primarily due to catastrophe losses [22] - The attritional loss ratio decreased by 5.3 points to 51.9% compared to the first quarter last year [23] Business Line Data and Key Metrics Changes - The Bermuda segment's gross premiums written grew by 18% to $473 million, driven by casualty and property classes [26] - The International segment's gross premiums written increased by 15% to $370 million, primarily due to growth in property, casualty, and specialty insurance classes [25] - The Bermuda segment reported an underwriting loss of $59 million, while the International segment had an underwriting income of $1 million [25][27] Market Data and Key Metrics Changes - The catastrophe loss ratio for the quarter was 30.2%, with net losses from California wildfires estimated at $143 million [4][22] - The company noted that the property cat business remains attractively priced with improved terms and conditions [8][14] Company Strategy and Development Direction - Hamilton is focusing on selective growth in the casualty line, leveraging its AM Best rating upgrade to capture new business opportunities [7][38] - The company is maintaining a disciplined approach to underwriting, emphasizing strong relationships with key clients [9][52] - Hamilton is monitoring pricing trends closely and is prepared to adjust its underwriting appetite as needed [14] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic and geopolitical uncertainties, including potential recession impacts [16][17] - The company anticipates continued double-digit growth in its top line, supported by stable attritional loss ratios and a strong balance sheet [17][31] Other Important Information - Total net investment income for Q1 was $167 million, up from $148 million in the prior year [28] - The company repurchased $10 million of shares during the quarter, with $112 million remaining under its share repurchase authorization [30][60] Q&A Session Summary Question: Insights on casualty line of business and loss trend assumptions - Management noted a favorable market environment with low to mid-teens loss trends for casualty lines, emphasizing selective client partnerships [38] Question: Clarification on combined ratio movements - Management indicated that current year attritional loss picks align with expectations, influenced by the mix of business written [41] Question: Impact of business mix on expense ratio - The increase in acquisition expenses was attributed to a shift in business mix and higher profit commissions [47] Question: Confidence in casualty business quality - Management highlighted a selective approach to casualty growth, focusing on clients with strong underwriting cultures [52] Question: Clarification on Two Sigma returns - The reported return of 7.9% was a year-to-date figure through April [55]