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Hamilton Insurance Group, Ltd. (HG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong underwriting and investment performance: combined ratio 87.8%, underwriting income $64.1m, net income $136.2m ($1.32 diluted EPS), and book value per share up 6% sequentially to $27.06 .
  • Revenue modestly beat consensus and operating EPS materially exceeded: total revenue $667.7m vs S&P consensus ~$665.0m*, and Primary (Operating) EPS $1.20 vs consensus ~$0.67*; sequentially, Primary EPS outperformed Q2 estimates as well* [GetEstimates].
  • Segment mix: Bermuda combined ratio 80.7% (benefiting from no cat losses but impacted by mix shift and a large Martinez refinery fire loss), International combined ratio 95.4% with growth in smaller property and select casualty/specialty lines .
  • Management raised capital return flexibility: repurchased $40m in Q3 and authorized an additional $150m buyback (total remaining ~$186m), citing accretive buybacks and strong balance sheet metrics .
  • Near-term catalysts: continued EPS beats vs consensus, disciplined property/casualty cycle management, and stable Two Sigma fund performance (ahead of 10% full-year target) could support multiple expansion and book value compounding .

What Went Well and What Went Wrong

What Went Well

  • Underwriting and investment synergy: “Our combined ratio of 87.8%, which resulted in $64 million of underwriting income… Our investment results were also impressive,” said CEO Pina Albo .
  • No catastrophe losses in the quarter, driving 7.7pt YoY loss ratio improvement to 53.3% and a better group combined ratio of 87.8% vs 93.6% last year .
  • Strong net investment income ($97.6m) with Two Sigma Hamilton Fund returns of $54.2m and fixed income/cash returns of $43.4m, supporting ROE of 20.9% .

What Went Wrong

  • Mix shift raised attritional loss and acquisition cost ratios: current-year attritional loss ratio rose to 55.4% (+2.2pts YoY) and acquisition cost ratio increased to 24.0% (+1.2pts YoY) given more casualty reinsurance and business mix changes .
  • Bermuda’s attritional loss ratio up 4.6pts YoY to 55.6% due to mix shift toward casualty reinsurance and a large Martinez refinery fire (added ~2.8pts), while acquisition ratio rose 2.6pts .
  • International other underwriting expense ratio increased 2.4pts YoY, reflecting lower third-party fee income and FX/performance compensation accruals, partially offset by premium growth .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Gross Premiums Written ($000s)$553,401 $712,026 $698,845
Net Premiums Earned ($000s)$448,795 $511,163 $522,999
Total Revenues ($000s)$512,844 $745,278*$667,650
Underwriting Income ($000s)$29,094 $67,459 $64,089
Loss & LAE Ratio (%)61.0% 52.8% 53.3%
Acquisition Cost Ratio (%)22.8% 24.0% 24.0%
Other Underwriting Expense Ratio (%)9.8% 10.0% 10.5%
Combined Ratio (%)93.6% 86.8% 87.8%
Net Income to Common ($000s)$78,250 $187,000 $136,200
Diluted EPS ($)$0.74 $1.79 $1.32
Operating EPS (Primary EPS) ($)$0.16 $1.55 $1.20

Values with asterisk (*) retrieved from S&P Global.

Segment breakdown (Q3 2025 vs Q3 2024):

SegmentMetricQ3 2024Q3 2025
InternationalGross Premiums Written ($000s)$325,525 $379,957
InternationalNet Premiums Earned ($000s)$225,244 $252,302
InternationalUnderwriting Income ($000s)$5,423 $11,834
InternationalCombined Ratio (%)97.6% 95.4%
BermudaGross Premiums Written ($000s)$227,876 $318,888
BermudaNet Premiums Earned ($000s)$223,551 $270,697
BermudaUnderwriting Income ($000s)$23,671 $52,255
BermudaCombined Ratio (%)89.4% 80.7%

Key KPIs (Group):

KPIQ3 2024Q2 2025Q3 2025
Attritional Loss Ratio – current year (%)53.2% 53.0% 55.4%
Attritional Loss Ratio – prior year (%)(0.7%) (0.5%) (2.1%)
Catastrophe Loss Ratio – current year (%)11.5% 1.9% 0.0%
Catastrophe Loss Ratio – prior year (%)(3.0%) (1.6%) 0.0%
Loss & LAE Ratio (%)61.0% 52.8% 53.3%
Acquisition Cost Ratio (%)22.8% 24.0% 24.0%
Other Underwriting Expense Ratio (%)9.8% 10.0% 10.5%
Combined Ratio (%)93.6% 86.8% 87.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Share Repurchase AuthorizationFY 2025$150m authorization (Q2 status: $62m remaining) Additional $150m authorized; total remaining ~$186m Raised
Fee Income BaselineOngoingCeased managing third-party syndicates effective Jul 1, 2025 ~$2.0m/quarter International + ~$0.5m/quarter Bermuda; ~$2.5m/quarter group baseline (ex perf fees) New disclosure
Two Sigma Hamilton Fund TargetFY 2025Planned ~10% full-year target “Ahead of achieving…10%,” 14% through Oct 31 Maintained
Effective Tax Rate / GMTFY 2025+Low single-digit effective tax rate; global minimum tax deferred to 2030 Low single-digit; GMT deferral unchanged Maintained
Property Cat Reinsurance OutlookJan 1, 2026 renewalsMidyear: attractive pricing despite some pressure Supply > demand; rate pressure on upper layers but absolute pricing still attractive; terms/attachments intact Maintained cautious stance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2)Current Period (Q3)Trend
Casualty reinsurance growth & mixQ1: Leaning into casualty; ~$40m AM Best-driven growth; low-mid-teens rate increases . Q2: ~$50m AM Best-driven growth; $18m reserve strengthening on discontinued lines .Bermuda growth +40% driven by casualty; attritional loss ratio up due to mix and Martinez refinery fire; favorable prior-year development .Continued growth, cautious reserve posture
Property pricing & competitionQ1: Property cat still attractively priced; targeted growth -. Q2: More selective on larger property; midyear cat rate pressure but still attractive .Increased competition on larger property accounts; focus on small/mid property via new distribution; selective underwriting .Shift to smaller risks; disciplined selectivity
Investment returns (TSHF & fixed income)Q1: TSHF +$104m (5.5%) . Q2: TSHF +$87m (4.4%); YTD ~10.1% .Q3: TSHF +$54m (2.6%); ahead of 10% plan; fixed income +$43m; duration ~3.3 years .Consistent positive performance
Fee income & syndicate managementQ2: Ceased third-party syndicate management effective Jul 1 .Baseline fee income ~$2.5m/quarter group going forward .Lower but stable run-rate
Capital returnQ1: $10m buybacks; $112m remaining . Q2: $35m in Q2; +$15m in July; $62m remaining .Q3: $40m buybacks; additional $150m authorized; $186m remaining .Accelerating/expanded authorization
Regulatory/taxQ1: Tariffs could affect loss cost inflation; manageable . Q2: Low single-digit tax rate; GMT deferred to 2030 .No change in tax stance; focus remains on underwriting discipline .Stable

Management Commentary

  • “Hamilton’s strong quarterly performance, highlighted by net income of $136 million and an annualized return on average equity of 21%… Our investment results were also impressive” – Pina Albo, CEO .
  • “The Bermuda current year attritional loss ratio increased… due to… more casualty reinsurance business and… the Martinez refinery fire… adding 2.8 points” – Craig Howey, CFO .
  • “We increased book value per share by 6% in the quarter and 18% year to date to a record $27.06” – Craig Howey, CFO .
  • “We expect… property cat renewals to see supply outpace demand… rate pressures… but absolute pricing levels will remain attractive” – Pina Albo, CEO .

Q&A Highlights

  • Mix/attritional loss dynamics: Bermuda underlying loss ratio ticked up due to casualty mix and the Martinez refinery fire (~2.8pts); management urges viewing ratios on YTD/full-year basis rather than quarterly noise .
  • Casualty trends and guardrails: Strong rate increases and tight underwriting/reserving feedback loop; selective growth from a low base with modest participations and clients retaining significant exposure .
  • Fee income run-rate: International ~$2m/quarter and Bermuda ~$0.5m/quarter (group ~$2.5m/quarter) baseline excluding performance fees following syndicate management exit .
  • Property trajectory: Expect continued competition on larger property insurance accounts; targeting smaller/mid-market property risks where risk-adjusted returns remain attractive .
  • Capital return: Additional $150m buyback authorized; remaining capacity ~$186m; buybacks accretive to BVPS/EPS/ROE .

Estimates Context

Actual results vs S&P Global Wall Street consensus:

MetricQ1 2025Q2 2025Q3 2025Q4 2025 (Next)
Revenue ($000s)771,310 (Actual*) vs 498,000 (Est*)745,278 (Actual*) vs 519,500 (Est*)665,031 (Actual*) vs 665,031 (Est*)—
Primary EPS ($)0.47 (Actual*) vs (0.0488) (Est*)1.55 (Actual*) vs 1.0688 (Est*)1.20 (Actual*) vs 0.67185 (Est*)0.92941 (Est*)

Values retrieved from S&P Global.

  • Q3 2025 was a clear beat on Primary EPS (+$0.53 vs consensus) and modest beat on revenue; prior quarters also exceeded both revenue and EPS consensus materially* [GetEstimates].
  • With no cat losses and underwriting discipline, consensus may need to adjust upward for operating EPS trajectory, while acknowledging mix-related expense/attritional ratio dynamics* [GetEstimates] .

Key Takeaways for Investors

  • Strong EPS beat and underwriting profit in Q3; combined with investment returns, this supports continued ROE >20% and book value accretion — a supportive backdrop for multiple expansion .
  • Mix shift toward casualty reinsurance raises attritional and acquisition ratios; however, disciplined client selection, modest participations, and favorable rates underpin sustainability .
  • Property insurance competition is intensifying on larger accounts; HG’s pivot to smaller/mid property risks should sustain margins while reinsurance cat pricing remains attractive on absolute levels .
  • Capital return is accelerating (new $150m authorization, $186m remaining), and buybacks are accretive — a near-term trading positive, especially with shares below book value .
  • Two Sigma Hamilton Fund performance remains ahead of the 10% plan, offering an additional earnings/ROE lever with low correlation to equities .
  • Expect near-term estimate revisions higher for Primary EPS given repeated beats, no cats in Q3, and favorable investment returns; watch for expense ratio stabilization as mix normalizes* [GetEstimates] .
  • Risks/cautions: mix-driven expense/attritional ratio increases, large-loss volatility (e.g., Martinez), and property pricing pressure; management’s guidance indicates continued discipline and selectivity .

Values retrieved from S&P Global where noted with asterisk (*).