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Hamilton Insurance Group, Ltd. (HG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered $80.9M net income ($0.77 diluted EPS), despite heavy catastrophe activity; total revenues were $768.8M and the combined ratio rose to 111.6% on California wildfire losses .
  • Gross premiums written grew 16.8% YoY to $843.3M; net premiums earned rose 29.5% YoY to $498.9M, reflecting strong underlying growth across International and Bermuda segments .
  • Investment results were a significant offset: total investment return of $167.3M, including $103.6M from Two Sigma Hamilton Fund (5.5% net return) and $63.8M from fixed income, short-term and cash .
  • Street expected a slight EPS loss in Q1; actual EPS was a large beat versus consensus (-$0.05 EPS est.; $0.77 actual). Revenues also exceeded consensus ($498M est. vs $768.8M actual). Values retrieved from S&P Global.
  • Management reiterated double-digit top-line growth opportunities, highlighted casualty momentum from the A.M. Best upgrade (~$40M Q1 uplift; ~$80M expected in 2025), and continued buybacks below book value ($10.3M in Q1) as capital deployment catalysts .

What Went Well and What Went Wrong

What Went Well

  • Double-digit premium momentum: GPW +16.8% YoY to $843.3M, NPE +29.5% YoY to $498.9M, driven by growth in property, casualty and specialty lines across both segments .
  • Investment outperformance: $167.3M total investment return; TSHF contributed $103.6M (5.5% net), fixed income/short-term/cash $63.8M, more than offsetting underwriting losses .
  • Attritional loss improvement: current-year attritional loss ratio fell 5.3 points YoY to 51.9% as large losses seen in Q1 2024 (Baltimore Bridge) did not recur . CEO: “Hamilton is off to a strong start with $81 million of net income... despite industry insured catastrophe losses well above the historical average” .

What Went Wrong

  • Catastrophe impact: Combined ratio spiked to 111.6% on wildfire-related cat losses; California wildfire losses were $142.8M net plus $16.9M reinstatement premiums; Bermuda’s combined ratio hit 122.8% with a $59.1M underwriting loss .
  • Acquisition cost ratio increased 1.5 points YoY to 23.4% on business mix and higher profit commissions; International’s acquisition ratio +1.9 points; Bermuda’s +1.4 points .
  • Underwriting loss: Group underwriting income was -$58.3M vs +$32.5M in Q1 2024, reflecting the cat headwind .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($USD Millions)$518.8*$570.5 $768.8
Net Premiums Earned ($USD Millions)$448.8 $481.9 $498.9
Underwriting Income ($USD Millions)$29.1 $22.4 $(58.3)
Combined Ratio (%)93.6% 95.4% 111.6%
Diluted EPS ($)$0.74 $0.32 $0.77
Net Income ($USD Millions)$78.0 $33.9 $80.9
ROAE (Annualized, %)13.8% 5.8% 13.7%
  • Consensus vs Actual (Q1 2025): EPS est. -$0.05 vs actual $0.77; Revenue est. $498.0M vs actual $768.8M; EBITDA actual $196.9M*. Values retrieved from S&P Global.

Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentMetricQ1 2024Q1 2025
InternationalGross Premiums Written ($M)$320.8 $369.96
Net Premiums Earned ($M)$196.81 $240.57
Underwriting Income ($M)$5.32 $0.82
Combined Ratio (%)97.2% 99.7%
BermudaGross Premiums Written ($M)$401.10 $473.35
Net Premiums Earned ($M)$188.49 $258.36
Underwriting Income ($M)$27.21 $(59.07)
Combined Ratio (%)85.5% 122.8%

Key Ratios (Group)

RatioQ3 2024Q4 2024Q1 2025
Attritional Loss Ratio (current year)53.2% 51.2% 51.9%
Attritional Loss Ratio (prior-year dev.)(0.7)% (1.3)% (2.9)%
Catastrophe Loss Ratio (current year)11.5% 11.9% 32.0%
Loss & LAE Ratio61.0% 60.1% 79.2%
Acquisition Cost Ratio22.8% 22.0% 23.4%
Other Underwriting Expense Ratio9.8% 13.3% 9.0%

KPIs

KPIQ4 2024Q1 2025
Book Value per Share ($)$22.95 $23.59
Tangible Book Value per Share ($)$22.03 $22.69
Total Invested Assets & Cash ($B)$4.8 $5.0
Total Investment Return ($M)$35.7 $167.3
TSHF Return (net, %)3.7% 5.5%
Fixed Income Portfolio – Avg Duration (yrs)3.4 3.4
Share Repurchases ($M)$18.1 (Q4) $10.3 (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GPW uplift from A.M. Best upgradeFY 2025~$80M (from prior commentary) ~$80M; $40M realized in Q1 Maintained
Share repurchase authorizationOngoing$150M authorized (Q2 2024); $140M remaining at Q3 2024 $112M remaining as of Q1 (used ~$10M in Q1) Maintained (continued execution)
Operating income disclosureStarting Q1 2025Not disclosed previouslyIntroduced as non-GAAP; commentary to begin next quarter New disclosure (not financial target)
Midyear property-cat pricingMid-2025 renewalsStable/firm after 2024 stormsLoss-affected accounts to see rate increases; stable supply/demand; pricing similar to YTD Qualitative outlook
Tariffs macro impactOngoingN/AExpect manageable property loss cost inflation; monitoring broader trading environment Qualitative outlook

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Casualty growth & social inflationLeaning in selectively post A rating; discipline; social inflation assumptions ~$80M 2024 uplift from AM Best; similar expected 2025; cautious trends embedded $40M Q1 uplift; selective growth; clients with strong underwriting/claims cultures Increasing, disciplined
Property-cat environmentStrong cat season absorbed; firm pricing expected 1/1 oversupply but elevated attachments intact; mixed specialty Loss-affected pricing up; 4/1 modest decreases in Japan, rate increases on loss-affected U.S.; increased demand midyear Stable to firm for loss-affected
Expense ratio leverageDown since 2019; continued scale benefits FY 2024 expense ratio down 2.8 pts Acquisition up on mix/profit commissions; other underwriting expenses trending lower with scale Mixed (acquisition up; other down)
Investment performance (TSHF, fixed income)Q3 fixed income strong; TSHF -0.6% in Q3; YTD strong FY 2024: $362M total; TSHF 16.3% Q1 total $167M; TSHF +5.5% Q1; +7.9% YTD thru Apr Strong, supportive
Capital returns (buybacks)$10M used in Q3; $140M remaining auth Continued below-book repurchases $10.3M Q1; window to lengthen as accelerated filer; capital sufficient for growth/returns Ongoing execution

Management Commentary

  • CEO framing: “Gross premiums written up 17%... attritional loss ratio was 51.9%... Investment results were significant, with a total investment return of $167 million” .
  • Segment strategy: International growth from U.S. E&S; specialty expansion in PA, fine art & species, marine; Hamilton Select up 51% in Q1 .
  • Reinsurance outlook: “Loss-affected accounts will see rate increases... increased demand and stable supply” into midyear .
  • Casualty positioning: “We continue to lean in, albeit in a highly selective and disciplined manner... focus on clients with strong underwriting and claims handling culture” .

Q&A Highlights

  • Casualty growth drivers: AM Best upgrade unlocked business; low-to-mid-teens pricing; selective client targeting; ~$40M casualty premium uplift in Q1 .
  • Attritional loss ratio mix: Higher picks tied to more casualty/pro rata; 2024 full-year ratios are the best guide for run-rate .
  • Reinstatement premiums: Quantified at $17M net in Q1 across insurance/reinsurance .
  • Expense ratio: Acquisition up on mix and profit commissions (e.g., property binders, quota share); other underwriting expenses declining with scale .
  • Buybacks: $10M used in Q1; short window due to timing; will extend as accelerated filer; ample capital for growth and returns .

Estimates Context

  • Q1 2025: Primary EPS consensus -$0.0488 vs actual $0.77 (large beat); Revenue consensus $498.0M vs actual $768.8M (beat); EBITDA actual $196.9M*. Values retrieved from S&P Global.
  • Q4 2024: EPS consensus $0.544 vs actual $0.32 (miss)*. Values retrieved from S&P Global.
  • Q3 2024: EPS consensus $0.714 vs actual $0.74 (slight beat)*. Values retrieved from S&P Global.
  • Target Price Consensus Mean: $28.5 (unchanged across periods)*. Values retrieved from S&P Global.
MetricQ3 2024Q4 2024Q1 2025
EPS Consensus Mean ($)0.714*0.544*-0.049*
EPS Actual ($)0.74 0.32 0.77
Revenue Consensus Mean ($M)——498.0*
Revenue Actual ($M)518.8*563.8*768.8

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Catastrophes drove an underwriting loss but strong investment income protected GAAP results; monitor cat exposure concentration (Bermuda) and wildfire seasonality .
  • Casualty remains a growth engine post-AM Best upgrade; social inflation assumptions embedded—expect higher attritional picks when mix tilts to casualty .
  • Midyear renewals: anticipate rate increases on loss-affected property-cat programs; overall supply/demand stable—supportive for pricing into H2 .
  • Capital deployment: continued below-book buybacks alongside double-digit premium growth; BVPS up 2.8% QoQ to $23.59 .
  • International portfolio resilience: combined ~100% despite catastrophes; diversified specialty and Lloyd’s platform underpin lower volatility .
  • Watch acquisition cost ratio: mix (quota shares, binders) and profit commissions can elevate acquisition costs; scaling should continue to reduce other underwriting expenses .
  • Near-term trading: EPS and revenue beats vs consensus support sentiment; headline combined ratio weakness is cat-driven, with investment returns offset—expect stock sensitivity to midyear pricing outcomes and further casualty growth clarity .

Citations: Press release and supplementary financial information .